Category: Selling a Home

Sellers: How To Incentivize Home Buyers Inexpensively

Has your home been on the market long? Do you feel like selling your home is an insurmountable task? Selling your home can feel hopeless the longer your property sits awaiting a buyer. As sellers struggle to attract buyers, they are confronted with ideas like price slashes or full remodels to sell to their homes. These ideas would inevitably cost thousands, reducing the gain from the listing price, and leave a seller wondering if there is a better way. Perhaps what you’ve been waiting for is a 2-1 Buydown.

It’s Hard to Sell in the Current Market

Since the beginning of 2022, sellers may have noticed a decline in property purchases.

In fact, the National Association of Realtors says that

“existing-home sales declined for the fifth straight month to a seasonally adjusted annual rate of 5.12 million. Sales were down 5.4% from May and 14.2% from one year ago.”
https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-june

The national inventory of unsold homes is on the rise, almost parallel to the rise in interest rates from 2021 to 2022. The housing market interest rates have seen a steady increase from the average 2.96% in 2021 to 4.61% at the end of Q3 in 2022. Current buyers have now watched interest rates cross 5%, with no projections for drastic decreases any time soon.¹

¹https://themortgagereports.com/61853/30-year-mortgage-rates-chart

With increasing buyer fearfulness, how can you, a seller, stand out and encourage buyers to choose your home as their first option? Offer a 2-1 Buydown agreement.

What is a 2-1 Buydown?

The 2-1 Buydown: The seller contributes an upfront fee, which lowers the buyers effective interest rate by up to two percentage points for the first two years of their loan.

This lowers initial monthly payments, giving the buyer more funds to turn their new house into a dream home, or to use in any other financial goals, and gives them time to plan for the higher interest payment after the first, and then second year.

You, the seller, will have provided a unique experience by enabling the buyer to build equity as they ease into their new home.

2-1 Buydown Inspiration Story

The following story is fictional, loosely based on a real sale, and is used to explain how a 2-1 Buydown could help a seller incentivize a buyer.

A seller named Benjamin Smith, like you, dreaded each passing day as his property listing had no potential buyers.

After weeks of constant turmoil, he turned to his friend, a loan officer at Benchmark. After a lengthy conversation about market prices and interest rates and the awful feeling from not being able to sell his home, they discussed the idea of a 2-1 Buydown. The following week, Ben’s Realtor mentioned that a buyer had interest in the home, but wasn’t fully convinced yet.

Ben asked his agent to express that he would be willing to do a 2-1 Buydown. The buyer was very happy with the idea of two years of lower payments, and planned to use the resulting savings to remodel the garage into a home gym.

He had a $250,000 loan with a note rate of 5%. The monthly payments would be $1,342. After Ben’s temporary 2-1 Buydown of $5,232, here’s what the reduction in monthly payments would look like for the first two years. (APR 5.558% at 5.375%)

Year	Rate	Monthly Payment
1	3%	$1,054
2	4%	$1,194
3	5% (original rate)	$1,342

That left our homeowner Ben with an extra $288/mo for the first year, and an extra $148/mo the second year before the original interest rate begins in the 3^rd year. That’s a total of $3,456 saved in the first year, and $1,776 saved in the second year, for a combined savings of $5,232 (the 2-1 Buydown amount) for the first two years of homeownership. This also gave Ben the opportunity to buy now, and time prepare for higher payments later, rather than waiting to buy (which has its own costs).

Sell faster with a 2-1 Buydown from Benchmark

Ready to learn more? Get the sellers’ edge, and help your buyers start building family wealth with a 2-1 Buydown agreement with Benchmark.

Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.

Benchmark brings you home.

Benchmark Interview Series: Real Estate during COVID-19 pandemic

by I Am Benchmark

The current market is not the same one that existed only three months ago. Open houses are not as “open” as they were, and COVID 19 has impacted every aspect of the real estate market. We got with JD Tomlin, a realtor with the JD Tomlin Team (est. 2010) in the DFW area, to discuss some of the hottest issues that have come up with the changing industry.

Enjoy the series.

Benchmark Interview Series: Real Estate during COVID-19 pandemic, Part 1

May 14, 2020

The team you work with matters! The industry has changed a lot, and working with an expert who can navigate the changing guidelines is more important than ever. Lenders today are dealing with constraints that have taxed the entire industry with challenges, including long wait times on appraisals. In some cases, some lenders are just not sending funds to close their loans. Ultimately, how long is the home buying process taking? Overall, transaction times haven’t changed very much. Benchmark has a team dedicated to making sure loans close quickly, efficiently, and on time. Read more

Benchmark Interview Series: Real Estate during COVID-19 pandemic, Part 2

May 14, 2020

Home inventory helps predict whether it’s a “Seller’s Market” or a “Buyer’s Market.” When there are too many houses for sale, the buyer has the advantage. When there are not enough houses, sellers have the advantage. Home inventory changes based on location, so good advice in one city, may be harmful in another. No matter what inventory level your area is seeing, the important thing to note is that houses are still selling, people are still moving, and you can too! Ask your local Benchmark Loan Officer to connect you with one of their trusted realtor partners to get started today! Read more

Benchmark Interview Series: Real Estate during COVID-19 pandemic, Part 3

May 14, 2020

If you are considering listing your house for sale, you have probably considered the fact that people will want to come tour the inside of the house. This is where the realtor you choose can make a big difference. Photographs and 3D digital tours have become popular solutions to boosting your house listing, and allow potential buyers to see enough of the house that they may make an offer, site unseen. Realtors are also seeing that every protective measure is taken to make sure they enter a house with facemasks and sanitization before, and after, viewing a house. Read more

Benchmark Interview Series: Real Estate during COVID-19 pandemic, Part 4

May 14, 2020

It’s no secret that realtors work hard to create a great home finding process for their clients. For top notch realtors, this has not really changed. Restrictions have been put in place to ensure that visiting homes is done safely, and inline with the CDC’s recommendations. When home sellers have multiple people wanting to look at the house, Realtors will often try to access the house without their clients, providing a walk-through video, as well taking note of things the homebuyer may want to know about. This requires a lot of trust in your realtor partner, and borrowers may need to be ready to potentially purchase a house without actually stepping foot inside of it. Read more

Benchmark Interview Series: Real Estate during COVID-19 pandemic, Part 3

by I Am Benchmark

Facebook Introduces Targeted Real Estate Advertising

by I Am Benchmark

Calling it “Dynamic Ads for Real Estate,” Facebook describes the service,

Facebook’s dynamic ads for real estate leverage cross-device intent signals to automatically promote relevant listings from your inventory with a unique creative on Facebook.

This is the first time the social media giant has ventured into Real Estate specific advertising, raising potential concern for platforms specializing in the niche industry. With this move, Facebook offers direct advertising access to real estate professionals who can now show relevant properties to a target audience on a platform that they already use.

Benchmark’s own Marketing Director had this to say,

Facebook entering the real estate space is huge for the every day Realtor. They will now have the ability to reach targeted, potential buyers with accurate information that comes straight from the listing agent as the source. – Garrett Finkelstein

The Future of Real Estate Ads?

Whether this poses a threat to existing niche vertical advertising platforms remains to be seen, but one thing is for certain: the advertising landscape is changing at Facebook.com.

With more Millennials interesting in buying homes, this comes across as a step towards reaching the audience where they are, in a way that is automatically optimized for both advertiser and customer alike.

The EU Referendum, Brexit, and US Mortgage Rates

by Jason Haeger

“The sudden stop in employment growth rules out any chance of a rate hike from the Fed at next week’s FOMC meeting, particularly now that the UK vote on whether to leave the European Union appears to be going down to the wire,” said Capital Economics Chief Economist Paul Ashworth. (source: Housingwire.com)

Britain’s exit from the EU increases the value of the dollar, which will push U.S. mortgage rates still lower. “This would create another mini refinance mortgage boom at financial institutions as homeowners rush to lock in near-historic low interest rates,” says Steve Rick, chief economist for CUNA Mutual Group. (source: Bankrate.com)

Fed Not Expected To Raise Rates

As Paul Ashworth indicated in his quote in HousingWire, The Federal Open Market Committee (who determines monetary policy of the Federal Reserve) is not likely to raise interest rates in their next meeting in July.

Futures dropped in the wake of the UK’s vote to leave the EU today, June 24th. This lack of confidence puts more pressure on the FOMC to, once again, postpone a rate hike.

US Dollar Strengthens as Pound is Pummeled

The pound fell to near 1985 levels, making it the lowest value in three decades. According to the Federal Reserve of St. Louis, 1GBP is now down to 1.37USD. (source: WashingtonPost)

When our currency is worth more, it has more purchasing power, which is cause for suspecting that this could make the cost of housing cheaper still.

Is a refinance boom coming? That remains to be seen, but with the relatively high supply in the housing market coupled with a stronger dollar, we may begin to see the supply begin to normalize as homeowners cash out on their accumulated equity.

The Takeaway

No matter your opinion of the EU Referendum result, mortgages are still, historically speaking, ridiculously cheap.

Mortgage prices tend to follow Treasury yields, which have been trending down all year, too. Last week, the interest on 10-year Treasuries dropped to its lowest in four years on worries that Britain would vote to leave the European Union. When the political and economic outlook is uncertain, the world’s money tends to flow into safe investments like U.S. bonds, including mortgages. – Loraine Woellert, Senior managing editor for Redfin research (source: Forbes.com)

Notes:

FOMC(Federal Open Market Committee): http://www.federalreserve.gov/monetarypolicy/fomc.htm

Is More Housing Inventory On The Horizon?

by I Am Benchmark

There has been a lot of talk about the rising value of houses in recent years. While some have expressed concern over another 2008 style housing bubble forming, we have dispelled this notion. While economics is a bit more complicated, most moves are the direct result of what you may have learned in school: supply and demand.

The Buyers are Vying

While no-one doubts that the current economy is sluggish (with varying opinions as to why), the demand for single family homes has continually increased. To corroborate that this is not just a timely fad, surveys show that 80%+ still considers home ownership an essential part of the American Dream. (something that we have talked about before). A recent Gallup survey indicates that real estate is considered to be the best long-term investment.

The Owners are Holding

For several years, homeowners may not have been able to sell. Reasons were numerous, including issues such as family finances and lack of home equity. (which isn’t surprising, in the wake of a housing bubble collapse) As a result of this “holding”, the supply of homes is low, as is to be expected. With the steady increase in home values, however, there is reason to believe that incrased motivation to sell will possibly increase the supply. Do families want to sell?

Short of asking, we can look at how long homes have been held, on average, over time.

Forbes

As the economy continues to improve, even if slowly, and more families approach possession of significant equity (20% or more), we expect to see more homes on the market. As the supply increase reduces the gap with existing demand, home price increases may begin to slow.

The Takeaway

If you are one of those who have been holding onto your current home over the last few years, now may be a good time to cash in (sell), and find the home of your dreams.

Find A Great Real Estate Agent The Easy Way

by I Am Benchmark

Looking to buy or sell your home? You may have noticed the vast amount of information available in the news and on the internet about real estate. When trying to make sense of it all, one can easily get overwhelmed or confused.

You need an agent who can help navigate the current housing market. If you are looking to sell, you need an agent who can help you price your home correctly and appropriately. If you are looking to buy, you need an agent who can help you determine what to offer on your dream home (without overpaying or offending the seller with a below-market offer).

How high should you price your home? How much should you offer on a listing? A great agent can help you determine these numbers, and help you come out on top.

Financial guru Dave Ramsey says,

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

An Agent Who Knows Your Market Can Make Your Experience Easier

We admit, this seems rather obvious. But, how do you know whether an agent is really up-to-the-minute on what is happening in your real estate market? How do you know if they will take the time to simply and effectively explain what it all means and how it may affect you?

A simple way to find out is by searching through a real estate agent’s social media channels. What kind of material are they sharing? Are they using their social media platforms to share current, helpful information or are they just posting trendy recipes and inspirational quotes?

The best agents spend time educating and informing so you can be confident when buying or selling your home. What they share online will help you to determine whether an agent meets the description advised by Dave Ramsey above:

“…you should always look for someone with the heart of a teacher.”

Do you know a great agent like this? What other tips do you have for us? Share this article with your additions.

Is it a Good Idea to Rent Rather than Sell Your Home?

by I Am Benchmark

With more homeowners considering that now may be a good time to sell their home, we thought it would be a good idea to consider whether renting might be a better idea.

According to Fannie Mae’s June 2015 National Housing Survey, 52% of respondents said that now is a good time to sell. Perhaps more interestingly, 59% of respondents expect home rental prices to increase.

Naturally, when you are considering selling your home, and you notice rental prices elevating, you are likely to consider renting. And who wouldn’t? Residual income on an owned asset, or having your house work to pay for itself sounds pretty good, right? This is when it makes sense to ask the question:

Are You Ready to be a Landlord?

Before you jump head-first into the world of being a landlord, take a look at this list. Sometimes what seems to be an obvious benefit can come with some hidden challenges.

10 Questions to ask before renting your home

If your tenant says they can’t afford to pay the rent this month because of more pressing obligations, how will you respond? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
Because of the economy, many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?
Have you interviewed experienced eviction attorneys in case a challenge requiring one does arise?
Liability is greater in a non-owner occupied home. Have you talked to your insurance company about a possible increase in premiums?
Will you allow pets? Cats? Dogs? How big a dog?
How will you actually collect the rent? Electronically? By mail? In person?
Repairs are part of being a landlord. Who will take tenant calls when necessary and/or emergency repairs come up?
Do you have a list of licensed tradesmen readily available to handle these repairs?
How often will you do a physical inspection of the property?
Will you alert your current neighbors that you are renting the house?

The Takeaway

If you are prepared to handle the responsibilities that come with being a landlord, renting your home could be a great investment. Historically, renting residential real estate has been just that. However, if you are planning to sell before too long, the responsibilities that can come with renting your home may make any short-term economic benefit not worth the hassle.

Top 10 Reasons to Hire a Real Estate Agent

by Benchmark

Today we feature an infographic on the top 10 reasons to hire a real estate agent:

Top 10 Reasons To Hire A Real Estate Agent - Infographic

Courtesy of: Park City Real Estate – JensenandCompany.com

7 Quick Tips for a Smooth Move When Selling Your House

by Benchmark

Unless you only have a few things in your house, moving can be overwhelming. However, if you have a plan ahead of time, your move to your new abode can be a lot less stressful than you think. To get you on the right track to a successful move, here are seven smooth moving tips to keep in mind:

Get Organized

Try not to start organizing things the very last minute. The moment you know you’re going to move, it will be time to start gathering boxes, markers and other moving materials. By developing a strategy and sticking to it weeks in advanced, you won’t feel overwhelmed the day the moving truck arrives.

Arrange Transportation

Whether you’re moving across town or the United States, it’s important that you pick out the right transportation. If you’re going to move a short distance, don’t feel bad if you have to keep coming back. However, if you’re moving across state lines, just make sure that moving truck won’t be too small to fit all your possessions.

Get Rid of Clutter

There’s never a better chance to sell things than during the moving process. With every item you pack away, ask yourself if you’re really going to use it. Unnecessary items are going to take up precious cargo space and will just collect dust in your new home. Create a pile and even if you don’t have time to sell, consider donating it to a local charity.

Label Everything

When packing items, make sure that every box is labeled appropriately. When labeling, don’t just label it “kitchen.” Instead, be more specific. So for example, if it has pots, pans and some utensils, write this all down on the box. That way, when you arrive and start unpacking, you will know exactly what’s inside each box.

Keep Your Necessities

If you plan on moving hundreds of miles away, make sure that you set aside the items you will need when you arrive at your new destination. This box should contain toiletries, clothing, snacks and other essentials you may think you will need once you arrive.

Hire a Babysitter

If possible, try to hire a babysitter for your children and pets the day you plan on packing the truck. That way, you don’t have to worry about a pet running away through the open door or a child getting injured.

Treat the Movers

Whether you’re hiring the professionals or some friends, make sure that everyone is taken care of. Order a pizza, have cold drinks nearby and always take breaks. If hiring the professionals, don’t forget to tip.