3 Ways to buy a home with little cash out of pocket

Millions of would-be homeowners struggle under the misconception that they can’t buy a house without having a huge down payment to give the lender. In reality, there are several ways to realize the dream of homeownership with little cash out of your pocket.

1. No down payment loans

If you are a current or former member of the United States military or the spouse of a deceased member, you may qualify for what is one of the best loan programs in the country, offered by the United States Department of Veterans Affairs.

The VA doesn’t grant the loan, a conventional lender will do that. Instead, the VA offers a guarantee making the lender far more likely to trust borrowers with less-than-perfect credit and no down payment.

If you qualify, you also won’t have private mortgage insurance (PMI) tacked onto the loan, saving you a significant chunk of money every month. There is a one-time VA funding fee (waived for some borrowers) that you’ll need to pay and that amount varies, according to certain conditions.

There is also no mortgage insurance requirement, which saves you money on your monthly payment.

The U.S. Department of Veterans Affairs has published an online guide to help you learn all there is to know about their home loan program.

The U.S. Department of Agriculture (USDA) also provides home loan programs, one that is similar to the VA loan in that it offers a guaranty to the lender and another that is a direct loan from the USDA.

Both loans have no down payment requirement. The catch is that you must buy a home in an area that the USDA considers “rural” and the home must be “modest,” meaning it contains no extra bells and whistles.

Check all eligibility requirements online at USDA.gov.

2. Low down payment loans

Most homebuyers are familiar with the home loan program offered by the Federal Housing Administration, or FHA for short. Although conventional loans make up the bulk of mortgages nationwide, the FHA-backed mortgage is the most widely used loan program by first-time homebuyers.

Down payment requirements range from 3.5 percent to 10 percent, depending on how your finances look and the lender’s requirements. You will be required to purchase PMI and, unlike a conventional loan, you must continue paying the insurance premium for the life of the loan.

If your credit score is at least 620, you agree to take homeowner classes, completely document your assets, income and debt and you can pay for PMI, you may qualify for a Fannie Mae or Freddy Mac home loan. These have a 3 percent down payment requirement

3. Down payment assistance programs

Local, state and federal agencies offer an array of down payment assistance programs. Here’s a list of just a few:

Grants – Would-be homebuyers love grants and it’s easy to see why: unlike mortgage loans, grants don’t need to be repaid. Think of them as gifts with some requirements attached. You still need to meet the program’s eligibility requirements or fulfill certain conditions to receive them.

Low-Interest Loans – For many homebuyers, a low mortgage payment can significantly improve their monthly budget. Low-interest loans are exactly what they sound like home loans with lower-than-average interest rates that deliver the benefit of a low monthly payment.

Zero-Interest, Forgivable Loans – If you plan to live in your home for a while, a forgivable loan could be a great fit. After a set number of years–usually 5, but up to 20, lenders will forgive these loans entirely. But if you move out before the forgiveness period ends, you may need to pay back some or all of the loan. Visit Security National Mortgage Company’s website for details.

If you are interested in learning more about any of these programs, give us a call. Although we aren’t mortgage professionals, we are happy to refer you to several lenders who will gladly explain the terms of these home loan programs.


3 things you must know about buying a newly-constructed home

Home builders are back at work! In fact, according to the Census Bureau, permits for single-family homes increased 7.6% in February over January.

This is not surprising when we take into account the demand for homes of any age and the statistics that show 60% of homebuyers “…prefer a new construction home over an existing home.”

If this includes you, we’d like to share several aspects of new-home shopping and purchasing that you may not know.

1. The new-home mortgage

Just as when you purchase a pre-owned home, you’ll need to visit a lender for mortgage pre-approval consideration. This way you’ll not only know for certain that you can get a home loan, but also the amount you’ll be receiving, which helps you avoid looking at homes that are out of your price range.

Most new-home builders have established relationships with their own  “preferred lenders.” Depending on the builder you speak with, you may feel pressured to use that particular lender.

“The builder may make it seem like you have to use their preferred lender, but you always have the option to finance your home with someone else,” according to the experts at Better Mortgage.

“It’s often in the builder’s best interest for you to partner with their preferred lender, but it may not be in yours,” they conclude.

You may, on the other hand, get a better deal with the builder’s preferred mortgage company. That’s why it pays to shop around before settling on one.

2. Get your own real estate agent

The first person you’ll meet when you visit a new-home community will most likely be the builder’s real estate agent. Even though he or she may be a very nice person and knowledgeable about the homes and the community, resist any pressure to allow the agent to represent you in your purchase.

The builder’s agent represents the seller, the builder in this case. It’s important for you to have your own representation as well.

Since a buyer’s agent costs you nothing (the builder pays the buyer’s agent commission) you have nothing to lose and lots of protection to gain by working with your own agent who is looking out for your best interests.

3. How will you deal with deciding between standard options and upgrades?

The interior of the home will come with what are known as “standard” options. You will also be offered a choice of upgrades for most of these options.

If you fell in love with the model homes, you’ll pay a pretty penny to recreate them because they’re all furnished with upgrades.

Examples of standard vs. upgrade include:

  • Standard vs. high-end cabinets
  • Neutral paint colors vs. specialty paint colors
  • Carpet vs. wood floors

Keep in mind that upgrades are going to increase the sticker price on your home. Sometime significantly so.

This is where your buyer’s agent will be extra helpful. As you tour the design center and come across an upgrade you like, ask your agent if the upgrade is worth the investment and whether you’re likely to see a return when you sell the house.

You might also consider reaching out to vendors directly because you may get these upgrades after closing for much less than what the builder would charge. It’ll be even cheaper if you’re handy and can install the updates yourself.

This said, upgrading a kitchen (or bathroom) is not an especially easy project and — let’s be honest — do you really want to move into a brand-new home and already feel like your kitchen needs renovating? In some cases, it may be worth the splurge to get the materials and appliances you really want from the outset.

To help you make up your mind, visit this blog post at Realtor.com.

We can help you navigate the new construction waters and bring you to a successful close on your brand-new home. Feel free to reach out to us.


It’s important to know who will most likely buy your starter home

Before putting your home on the market, it’s important to focus on who your likely buyer will be. Now, you don’t necessarily need a crystal ball to figure this out; statistics abound on what different types of buyers are looking for, both in a home and a neighborhood.

Then, there are the basic needs that seem to cut across all demographics. Once you have a clear picture of your likely buyer, we can better focus our marketing efforts.

The first-time buyer

Believe it or not, despite still-inflated prices and higher interest rates than we’ve grown accustomed to, the Associated Press reports that homeowners with starter homes are still experiencing multiple offers from buyers.

The buyers included many first-time buyers who accounted for 28% of home sales in March.

Naturally, if you own a starter home, you’ll want to cater to these buyers.

A dedicated laundry room tops the list of what these folks want most in a home. If your home boasts one, staging it to appeal to these buyers will have them clamoring for your home.

Consider adding shelving and other storage solutions. If space permits, a laundry-folding table will be a hit with buyers.

Don’t be surprised if baby boomers fall in love with your home

Baby boomers are large and in charge in the current market. For years their number of homebuyers was swamped by Millennials but not anymore. Nearly half of homebuyers are among the older generation.

Luckily, for home sellers who plan on staging to appeal to their target market, boomers want a lot of the same things as Millennials. This includes:

  • Laundry room
  • Hardwood floors
  • Open floor plan
  • Outdoor space

There are a few minor differences, however. Boomers crave one-level living and aren’t at all interested in a basement, Paul Emrath with the National Association of Home Builders tells Michele Lerner at NewHomeSource.com.

He goes on to claim that this cohort is looking for a patio, a “small private yard” and an outdoor kitchen.

Tip: Energy efficiency, especially when it comes to heating and cooling costs, is a homebuyer hot button, so if you’ve made any improvements in that area, they will make perfect marketing points.

The time to get the home on the market is a.s.a.p.

Now that you understand who will be attracted to your home, get it on the market as soon as you can.

What’s the rush?

Home prices may be about to plunge, according to PNC Bank’s Senior Economist, Abbey Omodunbi. She tells Yahoo Finance Live that they “… are forecasting that we are going to get a 10% decline in house prices this year.”

“There will be more of a balance in the housing market. There will be less demand and more supply. And that will contribute to the decline in house prices,” she concluded.

If you hope to get the maximum amount of profit that you can from the sale of your home, you may be disappointed if you wait too much longer.

Questions? Feel free to reach out. We’re always happy to help.


Selling your home? Check out the 5 best home fixes for the money

A client called recently with a question that we frequently field: “We plan on putting our home up for sale next month and we’re wondering, aside from cleaning the home really well, are there any repairs that sellers commonly overlook? We want to make sure that the house is ready to sell for our price.”

Certain repairs simply must be made before putting your home on the market. A leaky roof, broken windows and an inoperable furnace aren’t going to fly with buyers. Other fixes, however, aren’t as important but they may help sell the house.

“You want to spend as little as you possibly can on the improvements that make the most sense, and ignore the ones that you’re really dreaming about because you’ll never get your money back,” Barbara Corcoran tells The Today Show.

First impressions matter

One of the best fixes you can make for the money is anything that is wrong with the home’s exterior, visible from the street. In other words, give the place some curb appeal by fixing all of the following:

  • Sagging and/or torn window and front-door screens
  • Peeling paint on railings or trim
  • Leaves, weeds in the gutters
  • Dead or dying landscaping
  • Dirty windows

Consider giving the front door a fresh coat of paint, adding a new welcome mat, new house numbers and freshening up the mailbox.

If the lawn is beyond help, installing sod will give the home’s exterior instant curb appeal. Keep in mind that “You can lay sod anytime during the growing season, although spring and early autumn are best—cool temperatures combined with occasional rain help sod quickly root,” suggests Viveka Neveln, garden editor at Better Homes and Garden.

What’s underfoot?

Unless they’re high-end and impeccably clean, it may be worth it to remove the carpets and install luxury vinyl plank flooring.


Not only has vinyl plank flooring landed at the top of the majority of young homebuyers’ wish lists, but “Homes with luxury vinyl flooring in the listing description can sell for 1.7 percent more and nearly 4 days faster than expected,” claims Terri Williams at RealSimple.com.

To put it in ROI terms, the experts at HomeAdvisor.com has “… the average homeowner paying $2,433 for vinyl …” flooring. The ROI on this project is more than $3500. 

Walls and Baseboards

New paint on the walls is an inexpensive way to completely change a room from dull and outdated to fresh and contemporary. Since you’re trying to sell your home and not prepare it for its 15 minutes of fame on HGTV, stick to neutral colors.

Now, this doesn’t mean you need to stick with the boring beige or even white. Neutral colors that are attractive on walls include different shades of gray or a gray-blue, a muted robin’s egg blue-green and some of the beige shades that lean to the color of café au lait.

Yes, they’re close to the ground and it’s easy to think that nobody notices them, but baseboards grab attention – especially if they are clean or freshly painted. Sometimes all it takes is a swipe with a Magic Eraser to remove the scuffs. If you paint the walls, don’t neglect the baseboards.

Lighten and brighten

Dim houses feel closed-in while light and bright spaces make the home look larger. There are lots of ways to fix a dark home. Open all the window coverings before a showing and wash the windows to let in as much natural light as possible.

If you’ll be marketing the home when the weather turns gloomy, consider buying new light fixtures and lamps. It may seem like an expensive undertaking but consider this: New lighting increases the home’s perceived value for buyers.

Fix plumbing problems

Leaky faucets and running toilets tell buyers two things: the home hasn’t been maintained and there may be a big repair bill down the line.

Minor plumbing repairs aren’t difficult to do yourself if you have the proper tools. Otherwise hire a plumber or handyman to fix the leaks and drips before the house goes on the market.

These are just a few minor fixes you may want to perform, before listing your home for sale. Take a walk around both the outside and the inside of your home and try to see it through a stranger’s eyes. You’ll be surprised what will catch your attention and, perhaps, make it onto your repair list.

It’s homebuying season and here’s what’s happening in the market

Yes, the housing market is confusing right now. Questions abound. Read on for some information that may help clear up some of the confusion.

The mortgage rate roller coaster

Will rates go up or down? That seems to be the question at the top of the list for homebuyers and sellers alike.

“Rates for home loans are still caught in a tug-of-war between high inflation and the Federal Reserve’s actions to restrain inflation, which often indirectly pushes long-term mortgage rates higher,” explains Robin Rothstein at Forbes.com.

The suggestion for homebuyers is to be prepared to jump into the market when there is enough of a dip in rates for them to be able to afford a home.

Ready for some forecasts from the experts?

  • Freddie Mac foresees a 6.2% rate for a 30-year mortgage by the fourth quarter of 2023.
  • A bit more optimistic is Compass U.S. president, Neda Navab. “A sustained drop [in U.S. Treasury yields] could push mortgage rates into the 5% range late in the second quarter or in the second half of 2023, but that’s definitely not guaranteed.”
  • “If inflation continues to slow down—and this is what we expect for 2023—mortgage rates may stabilize below 6% in 2023,” forecasts Nadia Evangelou, National Association of Realtors (NAR) senior economist.

When it comes to the current economy, with its multitude of moving parts, it’s wise to take any forecasts with a grain of salt. But do keep an eye on the economy if you hope to jump into the housing market quickly.

How’s the inventory of available homes looking?

The inventory of available homes dropped again and new listing activity is at all-time lows, according to Logan Mohtashami at HousingWire.com. Despite this, the homes that are on the market are selling quickly in many markets across the country.

These homes, by the way, are the turnkey style, in good condition with loads of curb appeal and in high demand. The fixers, the overpriced homes and those that aren’t appealing are sitting on the market.

In a nutshell? “Buyers can expect a shortage of well-priced, turnkey homes—and plenty of competition for the few that go up for sale,” according to Clare Trapasso at Realtor.com.

And home prices?

This seems to be the question that is top-of-mind for many buyers and sellers. The good news is that home prices dropped 12% “… to $363,000 in February from $413,800 last June,” says Dan Weil at TheStreet.com. Should we expect additional drops?

Mortgage rates can make or break a market. When they drop, markets turn “hot.” When they rise, activity slows way down; the inventory of available homes dries up and prices rise.

Here’s what the experts are forecasting when it comes to home prices:

  • “… how much further home prices dip in 2023 will likely depend on where mortgage rates go.” (Forbes)
  • “On a national basis, we expect home prices to decline about 4% both in 2023 and in 2024,” Moody’s analysts said. (The Street)
  • “By February 2024, the analysts at CoreLogic expect home prices to increase year over year by 3.7%.” (Business Insider)
  • The National Association of REALTORS predicts that home prices will be once again on the rise, beginning in the fourth quarter of 2023.

As you can see, the experts are as conflicted as the rest of us.

For buyers, the time to jump back into the market is when interest rates fit your comfort zone and before prices rise again.

The best thing you can do right now is get pre-approved for a mortgage, look into down payment assistance programs if you need help and keep an eye right here. We’ll keep you posted on what’s happening in the market.

How to buy a home after bankruptcy

The number of Americans filing for bankruptcy increased 20% this past January compared to January 2022.

There are a number of reasons for the increase, according to economists. Topping the list is the “end of pandemic funding,” but “… rising interest rates and high inflation continue to stress household budgets,” says Kristopher J. Brooks with Money Watch at CBSNews.com.

Tens of thousands of Americans went through the process, came out the other side and are chomping at the bit to buy a home. Let’s take a look at some answers to the more common questions about buying a home after bankruptcy.

Bankruptcy and your credit score

Yes, the fact that you discharged your debts in bankruptcy will end up on your credit reports and lower your credit score. In fact, your score may fall more than 200 points, according to Barry Paperno at Marketwatch.com.

“But for people in dire straits, bankruptcy is a last resort that can help them liquidate assets, discard or pay off debts, and get some financial relief.” In other words, it’s a good option if you’ve nowhere else to turn.

You are now considered a subprime borrower and will pay more for any credit that you receive, initially. To build a new credit rating, however, you will need to responsibly use credit, such as credit cards.

So, how long will this take?

The length of time it will take to purchase a new home after bankruptcy varies. A Chapter 7 bankruptcy will remain on your record for 10 years. A chapter 13, on the other hand, “… generally remains for seven years from the filing date,” claim the experts at Capitalone.com. Find out the difference between a Chapter 7 and Chapter 13 bankruptcy at RocketMortgage.com.

Then, there’s another waiting period, depending on the type of loan you choose.

If you used a Chapter 7 bankruptcy you’ll need to wait four years from the date the bankruptcy was discharged if you want a conventional loan.

If you will be pursuing a loan backed by the FHA or VA you’ll have a two-year wait. Chapter 13 bankruptcies are a bit different, but you’ll find the answer to your questions at the aforementioned Rocket Mortgage link.

How long you’ll wait to buy that home also depends on how much you want to pay for the mortgage. The higher your credit score, the lower the interest rate you’ll be offered. Borrowers with a FICO score of 620 to 639 pay, on average, 1.5 to 2 percent more interest on a mortgage loan than borrowers at the top of the FICO score range (760 to 850).

Once upon a time, a person that went bankrupt might have been forced to wear a basket over his head while in public, be thrown into debtor’s prison or even end up as a slave and sold at auction to the highest bidder. Although today’s penalty isn’t quite so harsh physically, it may be emotionally draining to be unable to obtain credit for an extended period of time.

Thankfully, with strategic planning, some hard work and the right lender, you will be able to purchase a home sooner rather than later.

We are not legal, mortgage or financial professionals, and the information provided in this blog post is for general education purposes only and is not intended to constitute specialist or personal advice.

Torn Between two houses: how to choose?

The home-buying process is full of decisions. From which lender and insurance agent to go with to which neighborhood to concentrate the search, it’s one long string of choices.

Occasionally, I’ll have clients that fall in love with two homes which leads to probably one of the hardest decisions they’ve ever made

One way to avoid this predicament is to get clear on exactly what everyone in the family is looking for in a home. Each person should make a wish list and then prioritize it by putting their three absolute must-haves at the top.

Then, compare lists. Anything that everyone agrees on should go on a master list – the one you’ll use when actually shopping for a home. The remaining items are those on which you’ll compromise, so be ready to do so.

Try to remove emotions from the process. Yes, I know this is easier said than done. But remember, the home is also an investment. If one home will hold its value better than the other, that’s a huge plus.

Make a list of pros and cons for both houses to help you in the decision-making process. Everyone gets input into the process so one person’s pro may be another’s con. Obviously, the pros and cons list works best for singles or couples.

Consider the neighborhood

Too many homebuyers fall in love with a home without considering the neighborhood. It’s important to investigate the area in which your future home is located. When it comes to a decision between two homes, comparing neighborhoods may just cinch the deal.

  • Check the school districts. Homes located in good school districts tend to hold their value better and sell for more than homes in poor school districts.
  • How close is each neighborhood to the conveniences you typically use? Which has a quicker commute to work?
  • How well do the neighbors care for their property?
  • Are homes in one neighborhood increasing in value faster than the other?

Check crime statistics in both neighborhoods. You can do this by calling the local law enforcement agency and there are several crime databases online, such as:

Compare the homes

This is where you’ll really need to remove your love hat and put on your business hat. Forget the gorgeous wall colors and the immaculate landscaping and look at the bare bones of each house.

If you are just planning a family, how will the house work with little ones tearing through it? If you’re downsizing, which house offers you enough space to not feel like you’re living in a shoebox but enough storage room to not have the garage packed floor to ceiling?

Compare features that can’t be changed (or can, but at a huge expense), such as the flow, the number of bathrooms and the size of whichever room you use the most.

If none of this helps you make the decision, look at both homes again and again and again if need be. Like certain movies, you may have missed something on the first viewing that you’ll catch on a subsequent one.

And do enlist your real estate agent’s assistance. Ensure he or she knows exactly what you’re looking for.

Of course, in a fast-moving real estate market, buyers don’t have the luxury to deliberate like this. Decisions are made on the fly and offers submitted at lightning speed. But in slower markets, if you find yourself torn between two houses, slow down and consider all the factors.



How pets can impact your home’s value

I once listed the home of a lovely woman who lived with the love-of-her-life, a young pit-bull, Jade.

Like most puppies, Jade had penchant for chewing – on EVERYTHING. My client came home from work one day to find her living room completely destroyed. The dog had torn the sofa to shreds – even the wood frame. The floor was a sea of shredded foam and chewed-up wood.

The dog had also taken a dislike to the baseboards and decided they had to go as well. Thankfully there were no showings that day and it took almost two weeks to get the unit back into showing condition (and a lock on the escape-artist dog’s crate).

Sure, this example is extreme, but pets damage homes, whether it’s the dark streak on a wall where they’ve rubbed themselves or cat urine in the carpet to even something as minor as hair everywhere. Pets can have a negative impact on your home’s value.

Other ways pets impact home value

Recently I read an interview with a Boston real estate agent who talked about selling a condo that belonged to a woman who owned multiple cats. It sold for $30,000 less than it should have because of the damage caused by her cats.

“When the damage is significant, however, a home could appraise at 2% to 5% less” than market value, appraiser Susan Martins-Phipps tells Beth DeCarbo at the Wall Street Journal.

Then there was an article in Business Insider that claims home values in a neighborhood with barking dogs are reduced between five and 10 percent. So not only might your pet bring down your home’s value, but your neighbor’s pets may impact it as well.

How to deal with existing and future impacts

Of course, you’ll need to repair pet damage before putting the home on the market. But you’ll also need to remove evidence of pets as well, such as hair, odors, stains, and pet paraphernalia, such as food dishes and litter boxes.

Urine in carpets is almost impossible to get out so you may want to think about replacing them. Painting the interior will get rid of rubbing marks on the walls and a lot of odor as well.

Here are a few other tips to ensure your home gives off a homey, not kennel vibes:

  • If pet odors are extra-heavy, consider hiring a professional to get rid of them.
  • Avoid the use of air fresheners, incense and scented candles. Certain scents can be turn-offs for some.
  • Keep your dog groomed during the marketing process.
  • Vacuum as often as possible.
  • Give your dog plenty of exercise and attention while the home is on the market. When he’s pooped out, he won’t be as likely to look for ways to beat boredom.
  • Don’t forget the backyard. If your pooch relieves herself there, you’ll need to ensure she hasn’t left any surprises for buyers who want to check out the area.

Finally, find a place to park the pets during showings. Ideally, that means removing them from the home. Park your pet at the groomer, drop it at the vet for a checkup, take it to doggie daycare, or hire a professional dog walker during showings and open houses.

Since it’s not always practical to remove the pet from the home, crate it, cover the crate with a blanket, and leave a note on the door that there are pets created in the room.


3 critical steps to a successful home sale

Closeup of person holding key to a new home

A friend who lives in another state sold her home last year. Long before she put it on the market and long before she chose a real estate agent, we talked about selling strategies.

Her home ended up selling in record time, at the best price she imagined. She suggested that I share my strategies with you.

So, here we go.

The successful sale of a home depends on the following strategies, and they must ALL work together:

  • Pricing
  • Presentation
  • Marketing

Read on for the breakdown of each of these strategies.

#1 Pricing your home

This seems so basic to me, so, when Clara (the aforementioned friend) decided to sell her home, I ran a quick market analysis for her to help us come up with a base price.

There was another home in her neighborhood for sale and another, about three blocks outside the neighborhood, that was also on the market.

Mary wanted to price her home comparable to the prices of these homes.

That’s mistake number one. The market value of a home is based on what a willing buyer pays for a home. Until her neighbors’ homes actually sell, what they are asking for their homes is a fantasy; who knows if the homes will sell for that price?

Keep this in mind: market value is based on the sales price, not the asking price, of homes comparable to yours

Yes, it’s hard to price your home higher or lower than the competition. It’s scary. But all you need to know is that their prices are a fantasy. Price yours at market value and you will be rooted in reality.

#2 Presentation

One of my colleagues sums this one up in one sentence: “Realize that little things do matter.”

Understanding the way real estate is evaluated is key to manipulating the end result. And, the way a property is presented is the key to everything.

PRESENTATION is paramount in the sale of everything from cars to, yes, homes.

You wouldn’t think of selling your car before detailing it, right?

Think a new kitchen faucet won’t be noticed? Think again. New knobs and drawer pulls? Buyers may not “get” them, but because they add to the overall appeal, they will contribute to a perceived value. And THAT is what “presentation” is all about.

Modern living area inside of a home

#3 Marketing

What are you expecting from a real estate agent when you choose him or her as your listing agent? Stick a sign in the yard and a lockbox on the door? A flyer box on the sign? Suggestions on how to stage the home?

In reality, marketing the home is a listing agent’s primary job.

And, when the price is right and the home is brilliantly presented and it still sits on the market, nine times out of ten it’s because of the lack of effective marketing.

It takes a lot more than a generic, one-size fits all template type of marketing plan, especially when online marketing is so important.

Forget about the hype you read about “how to hire a listing agent.” The number one criteria should be the agents’ plans to market your home. Ask for examples of past marketing efforts, including the home’s description in the MLS.

We’re happy to answer any questions you may have. Feel free to reach out!

Do open houses help sell homes?

Open house sign

Home sellers swear by them, while real estate agents have a love-hate relationship with them. Open houses, those typically-on-Sunday-afternoon soirees, wherein a seller leaves his home in the hands of his real estate agent who holds it wide open for the world to traipse through, have created an ongoing debate.

So, do open houses sell homes or are they a waste of time? Let’s take a look at some of the pros and cons.

Advantages to holding an open house

Open houses bring potential buyers to doors. What happens once they enter the door, whether they become among the 4% of buyers who actually purchase an open-house home, depends on several factors:

  • Price. Proper pricing of the home has a major effect on how quickly it sells and if it will sell to a buyer attending the open house.
  • The house. Even multiple open houses and a massive marketing campaign won’t sell a shabby house, especially if it’s overpriced.
  • The buyer’s real estate agent. The buyer’s agent’s experience weighs heavily on the outcome of the open house as well. Converting the looky-loo into a buyer takes a pro.

Home value graphic - decorative

And, the disadvantages

“Today’s buyers want to see homes on their own schedule,” a Colorado real estate broker tells Teresa Mears of usnews.com. And that’s well and good, as long as the market favors buyers.

Sellers’ markets, however, are a whole different breed. With a homeowner in the driver’s seat, buyers don’t have the luxury of looking at “homes on their own schedule.” Not if they want to be among the first to view a home. In this type of market, open houses are the ideal way to expose a home to the masses but they put buyers at a disadvantage.

Remember that 4% figure we mentioned above? (Courtesy of the National Association of REATORS) The chances are so small that an open-house attendee will actually put an offer in on a home, many real estate agents discourage the practice.

Consider why: the agent needs to clear her schedule for several hours on a weekend (our busiest time), and sit in someone else’s home as folks trickle in, knowing all the while that none of them are likely to actually purchase the home. So, for many agents, open houses are a waste of time. This may be time better spent on more promising marketing methods.

Many others, however, view them as a way to reel in new clients. So, again, there are advantages and disadvantages to most things.

The open house is a way to bring attention to a home, which is important when buyers have lots of homes from which to choose. In sellers’ markets, such as the one we’ve recently experienced when homes often sell before they’re even listed in the MLS, there may not even be time to hold the home open and, if there is, it still may be a waste of time.

Finally, the majority of homebuyers today turn to the internet first in their home search. They’ll look at homes, take virtual tours, and pore over floor plans, all at their leisure.

If you still have questions about the value, or lack of, holding an open house, feel free to reach out to us.