Real Estate Information

Unfortunately, selling your Chester County PA home in the current real estate market can be both difficult and frustrating.  As much value as you may feel your home has, the current conditions might say differently. In this buyer’s market, accurate pricing of your home is imperative in getting your property sold quickly and for the best price possible. While this might sound simple enough, correctly pricing your property is far from easy and is a decision which requires time and effort on your part.  The following tips should help make the pricing process a smooth and beneficial one for you.

1. Do your research: It’s important to know what other homes in your area are selling for right now in order to get an idea of a price point for your own property, but you shouldn’t rely on that alone. An Automated Valuation Model, better known as an AVM, is a web-based technology that immediately generates home values based on data analysis of recent area comparable sales, tax assessments and price trends. Click here for free sites.
    
2. Find the right Realtor: Hiring the listing agent who quotes you the highest price isn’t always wise.  Interview at least 3 Realtors familiar with the area around your Chester County PA home and choose the agent who supports a suggested price with comparative market data. It is the job of your Realtor to know the current market and market trends inside and out, to be closely connected to the real estate market at large, and to be aware of other properties currently for sale in your particular neighborhood.
    
3. Cast emotions aside:   It’s important to remain as realistic and objective as possible when pricing your property. Although your home will most likely be invaluable to you, focus on the statistics from your research and on the advice given to you by your real estate agent for a satisfactory sale.
    
4. Avoid overpricing at the outset.  Because your property has the best chance of selling within its first seven weeks on the market, the longer it stays on the market, the less it will ultimately sell for.  In addition, you will lose out on savvy potential buyers who won’t even come by to look, and fewer knowledgeable Realtors will preview your Chester County PA home.  Lowering your price later will only result in delays and suspicions that something is wrong with the property.

There are many reasons to consider downsizing your present living quarters—retirement, an empty nest situation, financial pressures, a desire to have more free time, health conditions, etc.—but it is not a decision to be made without first doing extensive research, examining your finances, and evaluating the emotional impact of such a move.  As with any major change which affects your life, there are both pros and cons to be recognized and analyzed before taking—or not taking—the final step.  It is wise to consult a Realtor who specializes in downsizing and to read this article on the subject from Smart Money magazine as you investigate the possibility of leaving your Chester County PA home for a smaller residence.

Reasons to stay where you are might include:

• Needing the room you have in your current Chester County PA home for guests and visits from family, especially grandchildren!
• Being unable to part with so many treasured items or large furniture pieces
• Requiring a great deal of storage space
• Feeling comfortable in a large home where you have room to move around
• Belonging to a familiar neighborhood surrounded by friends
• Finding the task of packing and moving too daunting to consider
• Paying high HOA fees and living with restrictions in a condo or townhouse community.

Reasons to downsize include:

• Increasing your monthly cash flow.  Downsizing will result in a smaller mortgage payment; lower utility bills, maintenance costs, and property taxes; and less expensive insurance on your new home.
• Having extra free time once spent on cleaning, doing yard work, and maintaining a larger home.
• Enjoying an easier, less stressful lifestyle with fewer responsibilities.
• Moving to a neighborhood of like-minded individuals—a golf or tennis community, e.g.
• Planning ahead for unforeseen health problems and aging.

If, after weighing both the pros and cons, you decide to downsize your Chester County PA home, there are many sites on the Internet that can help you analyze your finances, estimate moving costs, deal with the emotional factor, and organize the downsizing process itself.  RISMedia offers five solid tips for efficiency, and About.com deals with market timing and when to sell your current home (answer: before you buy a smaller one!)

It is also helpful to personally talk with others who have downsized, Those who decided not to, a Realtor, and your accountant.  This is, after all, a major step in your life, and the more input you receive, the easier it will be to make an intelligent decision.

Yes, you realize that the economy is tough, and, yes, you’re well aware that it is a buyers’ market in the real estate world.  But your Chester County PA home has been for sale for a long time now, and similar houses in the area have been selling.  You’re asking what you consider a fair price for the property, and you allow your Realtor to have periodic open house showings, so what is going on?

Generally the problem lies in one of four areas:  price, condition, availability, and location.

• Price:  In today’s economy everyone is looking for a bargain. With access to so much information on the internet, buyers cannot be fooled because it is very easy for them to compare prices. Many people won’t even bother looking at a house if they believe it is overpriced. Therefore, you should make sure your Chester County PA home is not priced higher than similar homes on the market. However, if you are looking to sell your home quickly, you should set the price even lower than the competition.  For more help with pricing, visit RIS Media and Realtor.com
   
• Condition:  The condition of your home inside and out is critically important to making a sale. If your home doesn’t show well, a potential buyer is going to head elsewhere. Because most buyers are looking for a house they can move into without a ton of small repairs and cleanup, you should make any interior or exterior repairs on your Chester County PA home that may be noticeable. While some buyers may be willing to negotiate on the price when there are repairs that need to be done, there are many who are looking for a home with a “move in worry free” condition. Clean and de-clutter thoroughly, and eliminate all odors  For staging suggestions, go to About.Com
   
• Availability:   Getting as many people as possible to view your home is important. Too much restriction on viewing times will naturally lessen the chance of selling the house quickly. Also, restrictions on viewing times may make a buyer may feel that the seller is not flexible and would not be willing to negotiate on anything else.
   
• Location:  When it comes to buying a house location is everything. No matter how beautiful a home is, if it is in a bad location, it will be hard to sell.  To compensate for a bad location, you may reduce the price of your Chester County PA home substantially if it needs to be sold quickly. Click here for possible solutions to a location concern.

Few people can buy a home for cash. According to the National Association of REALTORS® (NAR), nearly nine out of 10 buyers of Chester County PA homes finance their purchase, which means that nearly all buyers -- especially first-time purchasers -- require a loan.  The real issue with real estate financing is not getting a loan (almost anyone willing to pay lofty interest rates can find a mortgage). Instead, the idea is to get the loan that's right for you -- the mortgage with the lowest cost and best terms.

Realtors routinely urge prospective buyers to get pre-approved for a loan before they even begin looking at Chester County PA homes. They also stress the importance of obtaining a letter of pre-approval rather than of pre-qualification.  Although many homebuyers use these two terms interchangeably, there are significant differences between the two.  Simply stated, pre-qualification lets sellers know that a prospective buyer of their Chester County PA home is likely to qualify for a loan, whereas pre-approval, although not an absolute guarantee, indicates that a loan officer has determined a borrower is credit-worthy and financially able to qualify for a certain loan.

The advantages of searching for a Chester County PA home with evidence of pre-approval in hand are many.  In essence, they include the following:

• Mortgage preapproval is going to tell you exactly how much money you can borrow. This way, you will know how much your mortgage payment is going to be ahead of time.
• You won’t waste time (or be sorely disappointed) by looking at houses you can’t afford.
• Sellers and Realtors will take you seriously.  They are much more comfortable with the certainty that you can obtain a loan (and that the deal won’t fall through), and thus may be more willing to negotiate.
• Once you find a home, the mortgage process can proceed more quickly because your lender will already have. 

Although lender requirements for pre-approval may vary somewhat, be prepared to supply the following information:

• Purchase Agreement
• Social Security Number and Date of Birth
• W-2/1040 Forms
• Recent pay stubs
• Bank account statements
• Credit card statements
• Debts and liabilities
• Mortgage or rental histories
• Investment properties
• Employers
• Asset statements
• Personal property
• Current and previous statements

Supplying all this information may seem like a time-consuming process, but in the end of your house-hunting journey, you’ll be glad you did it!

This article from Rismedia.com is great news for Chester County PA real estate:

Housing starts will nearly double and home prices will begin to rise in 2013, with prices increasing significantly in 2014.

Those rosy predictions come from a new semi-annual survey of 38 of the nation’s leading real estate economists and analysts by the Urban Land Institute’s Center for Capital Markets and Real Estate. The economists foresee broad improvements for the nation’s economy, real estate capital markets, real estate fundamentals and the housing industry through 2014, including:

• The national average home price is expected to stop declining this year, and then rise by 2 percent in 2013 and by 3.5 percent in 2014.;
• Vacancy rates are expected to drop in a range of between 1.2 and 3.7 percentage points for office, retail, and industrial properties and remain stable at low levels for apartments; while hotel occupancy rates will likely rise;
• Rents are expected to increase for all property types, with 2012 increases ranging from 0.8 percent for retail up to 5.0 percent for apartments.

These strong projections are based on a promising outlook for the overall economy. The survey results show the real gross domestic product (GDP) is expected to rise steadily from 2.5 percent this year to 3 percent in 2013 to 3.2 percent by 2014; the nation’s unemployment rate is expected to fall to 8.0 percent in 2012, 7.5 percent in 2013, and 6.9 percent by 2014; and the number of jobs created is expected to rise from an expected 2 million in 2012 to 2.5 million in 2013 to 2.75 million in 2014.

The improving economy, however, will likely lead to higher inflation and interest rates, which will raise the cost of borrowing for consumers and investors. For 2012, 2013 and 2014, inflation as measured by the Consumer Price Index (CPI) is expected to be 2.4 percent, 2.8 percent and 3.0 percent, respectively; and ten-year treasury rates will rise along with inflation, with a rate of 2.4 percent projected for 2012, 3.1 percent for 2013, and 3.8 percent for 2014.

The survey, conducted during late February and early March, is a consensus view and reflects the median forecast for 26 economic indicators, including property transaction volumes and issuance of commercial mortgage-backed securities; property investment returns, vacancy rates and rents for several property sectors; and housing starts and home prices. Comparisons are made on a year-by-year basis from 2009, when the nation was in the throes of recession, through 2014.

While the ULI Real Estate Consensus Forecast suggests that economic growth will be steady rather than sporadic, it must be viewed within the context of numerous risk factors such as the continuing impact of Europe’s debt crisis; the impact of the upcoming presidential election in the U.S. and major elections overseas; and the complexities of tighter financial regulations in the U.S. and abroad, says ULI Chief Executive Officer Patrick L. Phillips. “While geopolitical and global economic events could change the forecast going forward, what we see in this survey is confidence that the U.S. real estate economy has weathered the brunt of the recent financial storm and is poised for significant improvement over the next three years. These results hold much promise for the real estate industry.”

A slight cooling trend in the apartment sector—the investors’ darling for the past two years—is seen in the survey results, with other property types projected to gain momentum over the next two years. By property type, total returns for institutional quality assets in 2012 are expected to be strongest for apartments, at 12.1 percent; followed by industrial, at 11.5 percent; office, at 10.8 percent; and retail, at 10 percent. By 2014, however, returns are expected to be strongest for office, at 10 percent, and industrial, at 10 percent; followed by apartments at 8.8 percent and retail at 8.5 percent.

The forecast predicts a modest increase in vacancy rates, from 5 percent this year to 5.1 percent in 2013 to 5.3 percent in 2014; and a decrease in rental growth rates, with rents expected to grow by 5 percent this year, and then moderate to a growth rate of 4.0 percent for 2013 and 3.8 percent by 2014. This may be indicative of supply catching up with demand.

For the housing industry, the survey results suggest that 2012 could mark the beginning of a turnaround—albeit a slow one. Single-family housing starts, which have been near record lows over the past three years, are projected to reach 500,000 in 2012, 660,000 in 2013, and 800,000 in 2014. The overhang of foreclosed properties in markets hit hardest by the housing collapse will continue to affect the housing recovery in those markets. However, in general, improved job prospects and strengthening consumer confidence will likely bring buyers back to the housing market.