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Offering over asking price on a house often makes buyers wince. But let's face it, paying above list price is just a reality in certain circumstances—at least if you really have any hopes of getting that house!

So when exactly should you aim high and offer over asking? Check for these signs below that suggest this pricey move is essential.

1. It’s a seller’s market

seller’s market is when there are more home buyers than sellers—meaning demand outpaces the supply of homes for sale. As a result, home buyers in a seller's market face a tough challenge: Due to increased competition, they often have to act fast and bid high to woo sellers into accepting their offer, says Seth Lejeune, a real estate agent with Berkshire Hathaway in Malvern, PA.

Looking at a couple of key factors can help you determine whether you’re in a seller’s market, Lejeune says, starting with the average days on market.

A good rule of thumb: “If houses are selling in your neighborhood in less than 10 days, it’s a strong seller’s market,” Lejeune says. You can find what the average days on market is in your city using realtor.com's Local Market Trends tool.

You’ll also want to evaluate what homes are selling for compared with their list price. In a strong seller's market, Lejeune says, the final sales price is typically at least 10% higher than the asking price. (Your real estate agent can pull this data for you.)

2. You know, for a fact, you're going up against other offers

Bidding wars can erupt, even in a buyer’s market—sometimes all it takes is an aggressively priced home, which is why it’s important to find out whether there are other bids on a property before you make an offer. So go ahead and ask (or have your real estate agent ask on you behalf); generally it's in their interests to say if other offers are on the table since it might spur you to act fast.

3. The house is blatantly underpriced

Some sellers decide to list their home well below the property’s fair market value in an effort to spark a bidding war. In that instance, it may make sense for you to offer over asking price in order for your bid to outshine other offers.

To figure out if a house is underpriced, you and your agent should assess recently sold homes in the area (also known as comparables, or “comps”). This will give you a baseline that you can use to calculate a home’s true market value, which you can use as a benchmark when pricing your offer.

4. You’re competing with cash buyers

Home sellers swoon over all-cash offers for one simple reason: It means there's no doubt that you've got the coin to close the deal. Consequently, all-cash home buyers have a distinct advantage over those who need a mortgage, because there's no guarantee that lenders will fork over the money.

Cash offers made up 29% of single-family home and condo sales in 2017, according to ATTOM Data Solutions. So, if you know you’re competing against one, making a bid that’s over a home’s list price could persuade the seller to accept your offer.

5. The seller isn’t motivated

Some home sellers have to unload their house as quickly as possible, say, due to an imminent relocation for a new job or a need to raise cash to purchase their next home. Other sellers, though, aren’t quite as motivated—and they may just be listing their house to “test the market” and see what sized offer they can get, which is why it’s important to ascertain what the seller’s motivations are, says Diana George, founder of Vault Realty Group, in Oakland, CA.

“I always call the real estate listing agent and speak to them directly to get a better understanding as to what's driving the seller,” George says.

If you find yourself dealing with an unmotivated seller, offering above the home’s list price could make the seller bite. The caveat, of course, is you don’t want to offer so much above asking price to the point where you significantly overpay for the home.

6. You absolutely adore the home—and can’t risk losing it

Sometimes buyers simply fall head over feels for a house, says Chris Dossman, a real estate agent with Century 21 Scheetz in Indianapolis. If you find a house and feel your heart would be broken if you lose it, offering over asking price can help you lock down the property, Dossman says.

7. You can afford to pay over asking price

One word of warning: If you’re obtaining a mortgage, be aware that if you pay way over what a home is really worth, the home still has to pass appraisal in order for your lender to provide you with the loan that you need. Any difference between a home’s appraised value and your contract price would have to come out of your pocket. As always, you’ll want to rely on your real estate agent to help you craft a winning offer you can afford.

Contact The McLeod Group Network to start the search for your new home! 971.208.5093 or admin@mgnrealtors.com

By: Realtor.com, Daniel Bortz

2 Trends Helping Keep Housing Affordable

by Amy McLeod Group


Two positive trends have started to emerge that impact the 2019 Spring Housing Market. Mortgage interest rates for a 30-year fixed rate loan have dropped to new lows, right as reports show that wages have increased at their highest rate in decades!

These two factors have helped keep housing affordable despite low supply of houses for sale driving up prices. First American’s Chief Economist, Mark Fleming, explains the impact,

“Ongoing supply shortages remain the main driver of the performance gap as the housing market continues to face an inventory impasse – you can’t buy what’s not for sale.

 However, an unexpected affordability surge, driven primarily by lower-than-anticipated mortgage rates, rising wages and favorable demographics, has boosted housing demand.”

Mortgage interest rates had been on the rise for most of 2018 before reaching their peak in November at 4.94%. According to Freddie Mac’s Primary Mortgage Market Survey, interest rates last week came in at 4.20%.

Average hourly earnings grew at an annual rate of 3.2% in March, up substantially from the 2.3% average pace seen over the last 10 years.

These two factors contributed nearly $6,000 worth of additional house-buying power for median households from February to March 2019, according to First American’s research. Fleming is positive about the prolonged impact of lower rates and higher wages.

“We expect rising wages and lower mortgage rates to continue through the spring, boosting housing demand and spurring home sales.”

Bottom Line

Low mortgage interest rates have kept housing affordable throughout the country. If you plan on purchasing a home this year, act now while rates are still low!

Contact The McLeod Group Network for all your Real Estate needs! 971.208.5093 or admin@mgnrealtors.com 

By: KCM Crew

Selling Your Home? Make Sure the Price is Right!

by Amy McLeod Group


If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail price.

In today’s shifting real estate market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as they were able to just last year.

They will have to employ the same strategy: be the closest without going over!

As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!

Over the last six months, more inventory has come to market while the months’ supply of inventory available has dropped. This means that the demand for homes to buy is still very strong throughout the country!

Homeowners who make the mistake of overpricing their homes will eventually have to drop the price. This leaves buyers wondering if the price drop was caused by something wrong with the homes when in reality nothing was wrong, the price was just too high!

Bottom Line
If you are thinking about listing your home for sale this year, let McLeod Group Network properly price your home from the start! 971.208.5093 or 
admin@mgnrealtors.com

 

By: KCM Crew

Will Home Prices Continue To Increase?

by Amy McLeod Group

There are many unsubstantiated theories about what is happening with home prices. From those who are worried that prices are falling (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase. It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything greater than seven months will cause prices to depreciate (see chart below).


According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.

Let The McLeod Group Network assist you with all your Real Estate needs! 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

4 Reasons Why Fall Is A Great Time to Buy A Home!

by Amy McLeod Group

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights report reveals that home prices have appreciated by 6.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.1% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have already increased by half of a percentage point, to around 4.5% in 2018. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by half a percentage point to around 5.1% by this time next year.

An increase in rates will impact your monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home which you can then tap into later in life. As a renter, you guarantee your landlord is the person building that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Contact the professionals on the McLeod Group Network to start the search for your new home! 971.208.5093 or admin@mgnrealtors.com.

By: KCM Crew

4 Reasons Why Summer Is a Great Time to Buy a Home!

by Amy McLeod Group

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Let’s talk about your options! 971.208.5093 or mcleodgroupoffice@gmail.com.

By: KCM Crew

Why Home Prices Are Increasing

by Amy McLeod Group

There are many unsubstantiated theories as to why home values are continuing to increase. From those who are worried that lending standards are again becoming too lenient (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase.

It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything more than seven months will cause prices to depreciate (see chart below).

According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.

If you are thinking about listing your home for sale or starting the search for your new home, give The McLeod Group Network a call today! 971.208.5093

By: KCM Crew

Be Thankful You Don’t Have to Pay Your Parents’ Interest Rate!

by Amy McLeod Group

Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with affordability. In the first quarter of 2018, rates have increased from 3.95% up to 4.45% and experts predict that rates will increase even more by the end of the year.

The rate you secure greatly impacts your monthly mortgage payment and the amount you will ultimately pay for your home. Don’t let the prediction that rates will increase stop you from purchasing your dream home this year.

Let’s take a look at a historical view of interest rates over the last 45 years.

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

Let The McLeod Group Network help you evaluate your ability to purchase a home in today’s market! 971.208.5093 or mcleodgroupoffice@gmail.com.

By: KCM Crew

CoreLogic’s latest Equity Report revealed that 675,000 US homeowners regained positive equity in their homes in 2017. This is great news for the country, as 95.1% of all mortgaged properties are now in a positive equity situation.

U.S homeowners with mortgages (roughly 63% of all the properties) have seen their equity increase by a total of $908.4 billion since the fourth quarter 2016, an increase of 12.2%, year over year.”

Price Appreciation = Good News for Homeowners

Frank Nothaft, CoreLogic’s Chief Economist, explains:

Home-price growth has been the primary driver of home-equity wealth creation. The CoreLogic Home Price Index grew 6.2 percent during 2017. The largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years.”

He also believes this is a great sign for the market in 2018, saying:

“Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”  

This is great news for homeowners! But, do they realize that their equity position has changed?

A study by Fannie Mae suggests that many homeowners are not aware that they have regained equity in their homes as their investment has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 4.9% of homes are in that position (down from 6.3% in Q4 2016).

The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%) when in actuality, 83% do!

This means that 46% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizeable equity position, many homeowners could easily move into a house (either larger or smaller) that better meets their current needs.

Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

Bottom Line

If you are one of the many Americans who is unsure of how much equity you have built in your home, don’t let that be the reason you fail to move on to your dream home in 2018!

Let’s get together to evaluate your situation! 971.208.5093 or mcleodgroupoffice@gmail.com.

BY: KCM Crew

If you are considering selling your current home, to either move up to a larger home or into a home in an area that better suits your current family needs, great news was just revealed.

Last week, Trulia posted a blog, Not Your Father’s Housing Market, which examined home affordability over the last 40+ years (1975-2016). Their research revealed that:

“Nationally, homes are just about the most affordable they’ve been in the last 40 years… the median household could afford a home 1.5 times more expensive than the median home price. In 1980, the median household could only afford about 3/4 of the median home price.

Despite relatively stagnant incomes, affordability has grown due to the sharp drop in mortgage rates over the last 30 years – from a high of over 16% in the 1980s to under 4% by 2016.

Of the nation’s 100 largest metros, only Miami became unaffordable between 1990 and 2016. Meanwhile, 22 metros have flipped from being unaffordable to becoming affordable in that same time frame.”

Here is a graph showing the Affordability Index compared to the 40-year average:

The graph shows that housing affordability is better now than at any other time in the last forty years, except during the housing crash last decade.

(Remember that during the crash you could purchase distressed properties – foreclosures and short sales – at 20-50% discounts.)

There is no doubt that with home prices and mortgage rates on the rise, the affordability index will continue to fall. That is why if you are thinking of moving up, you probably shouldn’t wait.

Bottom Line

If you have held off on moving up to your family’s dream home because you were hoping to time the market, that time has come.

Let’s get together and discuss your options! 971.208.5093 or mcleodgroupoffice@gmail.com.

By: KCM Crew

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The McLeod Group Network
Keller Williams Capital City
1900 Hines St SE #220
Salem OR 97302
971-208-5093
Fax: 971-599-5229

**Disclaimer: Amy McLeod, and her team, do not initiate, process, or service mortgages.  And provide this information only as a service.  You should confirm information here with your Licensed Mortgage Lender.