Over the past couple of years, the housing market has been operating at all-time highs primarily due to historically low mortgage interest rates, and employers allowing for remote work due to office closures.
While interest rate hikes are on the horizon, HomeLight notes in their Top Agent Insights for New Year 2022 report that 68% of agents report that inventory in their markets is lower than expected, and only 2% report that home prices are on the decline.
If you’ve been thinking of putting your home on the market, here’s some information to help make the process less overwhelming.
It’s Easy to Determine What Your Home is Worth
Thanks to the internet, it’s easier than ever to determine what your home is worth. Free home appraisal tools leverage robust automated home valuation models (AVMs) to assemble an appraisal in a matter of minutes.
After inputting details such as the home’s address and square footage, the AVM crunches data from sources such as tax records, MLS records of comparable properties in the area, and general details inputted by the homeowner to come up with a ballpark value of the home. Based on this initial figure, homeowners are able to quickly determine if now is a great time to sell their home.
Homeowners that choose to proceed with the sale process still need to have an in-person appraisal because AVMs don’t factor precise measurements of each room or general condition of the property. Both of which play a significant role in determining the home’s value. Still, AVMs are great at getting your bearings before working with an agent to sell your home.
Buying And Selling a Home at Once Isn’t as Hard as You’d Expect
One of the main challenges homeowners face when selling their home is timing their sale closing date with the move-in date of their new property. Fortunately, this year, homeowners have plenty of options to make buying and selling at the same time less overwhelming.
If you are buying a home before selling one of the simplest options is to purchase a home with a sales contingency, meaning if your home doesn’t sell by a certain date, the sale will be canceled. In today’s tight housing market, however, not all sellers will accept, however a real estate agent may be able to make it work by explaining that your home will sell quickly.
An alternative to sales contingencies are bridge loans. These are relatively high interest loans often secured by your current home, to cover the down payment on your new home, along with any associated expenses. After selling your home, you can then repay the loan in full. This process generally spans six months, during which the homeowner juggles two mortgages.
If you’re thinking of taking out a bridge loan to help enable your home purchase, you should take out the loan as soon as you find a property to purchase. By aligning the new home closing date as close to the bridge loan opening date as you can, that minimizes the time the loan is open.