Madolyn Greve, Broker Associate, Callaway Henderson Real Estate

Selling and buying a lower priced home in an "Up" market can be to your advantage. The advantage is to maximize the sales price on your existing home and replace it with a less expensive one.

Moving down in an "up" market may be to your advantage in multiple ways. It is possible that your present home doesn’t meet your current needs like it once did. Making a move can allow you to "re-balance" the equity in your home to better reach your future goals.

The "up" market maximizes the sales price you can expect to receive, and it will free the equity in your home. A lower priced home will result in reducing your housing costs with lower property taxes, insurance, utilities, and maintenance…while improving your liquidity position.

It is not required to reinvest the proceeds of the sale. You may decide to get an 80% loan-to-value mortgage on the replacement home to get the best interest rate and avoid private mortgage insurance. This would allow you to put the excess proceeds into an income producing or growth investment, start a business, fund an education, buy a second home, take a spectacular trip, gift a down payment to a relative, or any other different projects.

The expression "other people’s money" describes borrowing money and using it to invest with the expectations of earning more than the rate you’re paying. Mortgage interest is one of the most attractive ways to borrow money because it is generally the lowest rate compared to other types of loans while having the option to get a fixed-rate mortgage for up to 30 years. Most other borrowed funds involve short terms and floating interest rates.

Rental real estate could be a possibility to invest part of the funds. There is a shortage of available rentals which has caused rents to increase like homes have appreciated. Single family homes for rentals provide large loan-to-value mortgages at fixed interest rates for long terms on appreciating assets with defined tax advantages and reasonable control not found in many other investments. For more information, download our Rental Income Properties Guide.

Homeowners who have owned and occupied their principal residence for two of the last five years are entitled to exclude up to $250,000 of gain for single persons and $500,000 of gain for married persons filing jointly. For more information, see IRS topic #701.

Contact your real estate professional to find out more information like potential sales price, what net proceeds you can expect to receive on a sale, available replacement homes, and the types of mortgages and rates available.

The expression "putting your money where your mouth is" demonstrates a monetary sincerity to what could be empty words. In today’s competitive market where multiple offers are common, sellers want as much assurance as possible that the buyer is sincere and will close on the sale.

The seller who accepts a contract expects the buyer to follow through but, in most cases, doesn’t know the buyer either personally or by reputation. The earnest money submitted by the buyer with the contract shows their commitment to the terms of the offer.

If the amount is relatively small, the seller could be concerned that the buyer may walk away from the contract if they change their mind before closing. The lost time could be injurious to a seller who is trying to meet a deadline.

The more earnest money a buyer deposits indicates to the seller a higher level of commitment to the contract. Except for stated contingencies in the sales contract, if the buyer fails to close on the sale, the earnest money could be forfeited. Significant earnest money makes the seller feel more secure that the contract will indeed close.

There certainly are a lot of things that can dictate how much earnest money is appropriate. Local customs, price of the home and type of mortgage can all help to determine the proper amount. In some areas, it may be common for it to be one to five percent of the purchase price. In other areas, it might be a specific amount like $1,000 to $10,000 depending on the sales price. It really comes down to whatever the buyer and seller agree is the proper amount.

Another strategy is for the buyer to put up an adequate amount initially prior to inspections or other contingencies, and then, to put up an additional amount when the contingencies have been removed.

The earnest money demonstrates the buyers’ sincerity in making the offer and proceeding according to the agreement so the seller can take their home off the market and start making plans to move and give possession of their home. A higher-than-normal amount could also help the seller to choose yours in a multiple offer situation. Ultimately, both parties want to close as anticipated according to the contract and the earnest money helps facilitate that.

Your agent can explain what is customary for your area and price range. Many times, a disinterested party, like a title company, will hold the earnest money and the sales contract will provide how to dispose of it should the contract not close.

A current inventory of all the personal items in your home is important and even necessary, if you are faced with filing a police report or insurance claim. The homeowner is usually asked if they have a home inventory. If not, the homeowner can reconstruct one to estimate the loss.

Imagine you are in this position; would you be able to make an accurate list of your belongings and their value? As an exercise, pick a room of your home, and, while being in another room, list all the belongings and their value. When you’re finished with the list, go into the room, and check to see how you did.

This little project should demonstrate the difficulty of reconstructing a list and depending on whether you missed a lot of items and the importance of having an up-to-date home inventory. Not only will this help you purchase the right amount and type of insurance, having an accurate inventory will make filing a claim easier.

An accurate accounting of your belongings can also help you and your insurance agent to see that your belongings are properly insured. Other reasons for a home inventory include creating a maintenance calendar and helping you declutter by getting rid of items no longer needed. Over half of households do not have a home inventory and the majority of those who do have them, haven’t updated them with new possessions purchased since it was done.

The peace of mind having one can be a strong reason for having a home inventory. It provides confidence that this area is financially organized and prepared should you have need of proving losses. It will help you and your family return to your normal life after an unsettling event.

Download our Home Inventory for more tips on creating one along with alternatives for documenting your belongings. If you don’t have another media, this will allow you to take pictures and list individual items along with values in a fillable PDF that can be stored safely in your online cloud.

Buyers are becoming discouraged there are not enough homes on the market, especially, in certain price ranges. When they do find something they want, there may be multiple offers and they end up losing to another buyer.

Some buyers after experiencing several of these instances have decided to wait until the market changes. It is understandable but it may be a very long wait as well as being a very costly decision.

Inflation is affecting all sectors of the economy; prices on food, cars, and electronics are going up as well as housing and mortgage rates. Home prices rose 20.2% year over year in May 2022 over 2021, according to a recently released CoreLogic report.

The advantage to current homeowners wanting to move up is that their home is now worth more and it takes the sting out of the price they will have to pay for a larger home.

Unfortunately, first-time buyers and those who don’t currently own a home are seeing the prices continue to increase at a rate many Americans have never seen before. Waiting is most probably going to make it less affordable.

It is true that housing inventory is at very low levels but over six million homes sold last year so there was enough inventory available for six million buyers. For buyers, the problem was they sold fast and there was a lot of competition. The advantage for sellers is they sold fast and there was a lot of competition that increased the price they received.

It may not be as easy as if there were four to six month’s supply of homes for sale but when you purchase a home, these same dynamics will be working in your favor to build your equity with appreciation.

Successful buyers are positioning themselves to act decisively when the new listings hit the market.

1. Working with a trusted real estate professional
2. Pre-approved by a local lender
3. Developed a plan to write a competitive offer
4. Determined their limits financially and emotionally.

Six million people bought homes last year and you can be among the fortunate ones who buy one this year. Be committed to what it takes in a highly competitive market. Surround yourself with a competent and confident team that will produce the results you want.

For more information, download the Buyers Guide and schedule an appointment with us to get the facts about the best plan to get you into a home this year.

"I’d wish I’d known that before I picked a mover." Having a checklist of questions might have prevented this issue. This list of questions will provide you with things to discuss when interviewing a moving company.

Fees

• What is the charge for packing?
• Does it include boxes? If not, what do they cost and will you deliver them?
• Is there an additional charge to deliver some items to a storage unit?

Insurance

• How is a damage claim handled?
• What insurance do you provide and is there a cost?
• Does the insurance cover items packed by the owner?
• Can additional insurance be purchased?
• If items are covered by my Homeowner’s insurance, whose insurance pays first?

Unusual Items

• Can you ship my car(s)? Will they be in the moving van or towed?
• What are the charges for shipping cars, lawn tractors, etc?
• What items cannot be shipped?
• If a shuttle truck is needed because of the location of my house or size of the drive way, is there an additional charge?
• If packing and loading are on different days, can you leave the beds and other basics out for us to use?

Dates

• What dates are available for our move?
• What date will you pack and how long will this take?
• What date will you load the van?
• What date will the van arrive at my new location?
• If my new home is not ready for delivery, how many days can it be delayed before there is a charge?
• What is the charge for additional days or weeks?

Terms

• Are there any additional fees that I’m responsible for that have not been discussed?
• What are the terms of payment?
• Is a down payment required?
• When will the balance be due and who is authorized to accept it?

Download a Moving Guide with more suggestions and a link to change your address online with the United States Postal Service.