Real Estate News • June 21, 2024

The Costs of Selling Your Home (and How to Maximize Your Profits)

by Christopher DiToro

Let’s face it—between repairs, closing costs and commissions, the costs associated with selling your home can add up fast. Case in point: homeowners reported spending $54,616 when selling their homes, according to a recent survey from Clever Real Estate—an amount that was surprising to 42%.

Despite the costs, the majority (64%) made a profit on the sale of their home, with the median profit totaling $100,000.

With the right strategy, you can maximize your profits and minimize regrets. In fact, the study also showed that sellers who worked with a real estate agent walked away with an average of $34,000 more than those who went it alone. That’s a pretty compelling argument for having a pro in your corner!

Rather than just taking my word for it, let’s dive into:

The costs associated with selling a home
Regrets home sellers reported
How you can avoid common mistakes

The Cost of Selling a Home

Selling a home at the highest possible price involves various costs. Here’s what survey respondents said they paid for, on average:

Listing agent commission: $11,136
Buyer’s agent commission: $10,467
Repairs: $10,000
Closing costs: $8,000
Concessions: $7,200
Moving expenses: $3,250
Marketing: $2,300
Staging: $2,263

Keep in mind that every transaction is different—some of these costs are negotiable (like agent commissions), some may not be needed for every property, and some could be lower or higher based on the condition of the home or what’s happening in the local market.

Common Regrets of Home Sellers

Regret was a common sentiment among home sellers who participated in the survey, with 89% expressing some sort of regret post-sale, including 92% of those who sold without an agent.

The most common regrets about the home selling process included:

Selling too quickly (30%)
They miss their old home (29%)
Not selling for enough money (28%)
Not making enough pre-listing repairs (26%)
Making too many concessions (26%)
Failing to stage the home (25%)

Now, let’s get into something I’m really passionate about—the regrets home sellers had about their agent. Half of those surveyed say their agent “failed them” in some way. This is why who you work with matters so much.

Here’s what respondents had to say about their agent:

Agent’s advice let them down (57%)
Agent made mistakes with their listing (53%)
Agent didn’t communicate enough (50%)

So, with all these regrets floating around, how can you make sure these things don’t happen to you?

How to Maximize Your Home Sale

Making the most of your home sale starts with working with the right real estate agent (remember, agents help homeowners get an additional $34,000 for their home sales). I always encourage sellers to interview at least two agents, because when it comes to selling your biggest asset, having the right professional by your side is critical. That’s why I also recommend home buyers meet with more than one mortgage lender. —> 4 Mortgage Loan Mistakes That Could Cost You Money

When interviewing agents, look for the following:

Find a Professional: Look for an agent with deep knowledge about the local market, strong negotiation skills and a solid marketing plan.
Check References and Reviews: Ask for references and read online reviews to ensure the agent has a history of satisfied clients.
Discuss Your Goals and Expectations: Make sure your agent understands your goals and priorities for the sale. In addition, be sure to ask about their communication plan.
Evaluate Their Marketing Plan: A good agent will have a comprehensive marketing strategy to attract potential buyers, including online listings, social media promotion, and professional photography.
Understand Commission Structure: Discuss the commission upfront to avoid any surprises later.

Once you find a real estate agent you are confident with, work with them to learn what type of repairs or staging will make a difference. They will be able to walk you through the process and provide guidance on what matters most to buyers.

The Bottom Line

Selling your home comes with a series of big decisions. A real estate agent is your partner in the process, and their expertise can mean the difference between tens of thousands of dollars in your pocket.

For a free consultation or discovery call to chat about your goals, connect with me here.

Real Estate News • June 16, 2024

4 Mortgage Loan Mistakes That Could Cost You Money

by Christopher DiToro

There’s nothing like the moment when you’ve found your dream home. It’s easy to get caught up in the excitement and make moves to finalize everything as quickly as possible. And while timeliness is important, it can lead to mistakes that end up costing you thousands.

Here are the four biggest mistakes people make when securing a mortgage loan.

Mistake #1—Not Shopping Around for Mortgage Offers

It’s tempting to go with the first mortgage offer you receive, especially when you’re eager to close the deal on your new home. According to a LendingTree study, the majority of people (54%) do just that—they only get one offer.

Jacob Channel, Lending Tree senior economist, explains why this is a mistake. “Different lenders can offer different rates to the exact same borrower. With that in mind, the first rate you’re offered may not be the lowest one you can get. The more offers you can look at, the better.”

Think about it: if you only go to one store to compare prices, wouldn’t you miss out on potential savings? The same goes for mortgages! Different lenders offer different rates, and even a small difference in interest rate can translate to significant savings over the life of your loan. The same LendingTree study found that 45% of those who did shop around for a mortgage ended up with a better offer. This means almost half of the buyers who took the time to compare multiple offers saved money.

Last month, I helped a couple purchase a home together. Their “Big Bank” lender denied their loan at the last minute “1 WEEK BEFORE CLOSING!” I had them contact my lender, and within three, yes 3 weeks, we were clear to close and they were in their new home!

Mistake #2—Relying Solely on Recommendations

It’s great to trust your real estate agent’s recommendations. After all, we work to build strong relationships with lenders and vendors to best serve our clients. However, if your agent only recommends one lender, it can limit your options. Each lender will have different options and tools for securing a mortgage.

The lenders I recommend each offer unique benefits and always work to secure the best loan possible. However, even I don’t know which one will come in with the lowest rate on any given loan! So, checking in with each one is key to getting the best deal.

Aim to get at least two different mortgage offers to compare. Diversifying your lender options can help you find competitive rates and better terms.

Mistake #3—Ignoring Different Loan Types

Not all mortgage loans are created equal. Beyond the typical 30-year fixed-rate mortgage, there are various loan types like adjustable-rate mortgages (ARMs), FHA loans, VA loans, and USDA loans, each with its benefits and drawbacks. Ignoring these options might mean missing out on a loan that could better suit your financial situation.

This is another reason that it’s important to shop around. Each lender may have access to different types of loans. Discussing all of them will help you understand which one aligns best with your circumstances.

Mistake #4—Not Considering Future Financial Plans

When choosing a mortgage, consider your long-term financial plans. Are you planning to stay in the home for a long time, or might you move before 10 years is up? This can influence which type of mortgage loan (i.e., fixed vs. ARM) is a better option for you. Additionally, think about how your income might change over time and whether you might want to make extra payments to pay off the mortgage faster.

Aim to align your mortgage choice with your future financial goals to ensure you’re making the most strategic decision.

Conclusion

Securing a mortgage loan is a significant step in the home buying process, and avoiding these common mistakes can save you time, money, and stress. Remember—it all starts with shopping around! By doing so, you’ll be well on your way to getting the best mortgage deal possible.

Do you need some recommendations on vetted mortgage lenders in Staten Island ? Contact me HERE and I will connect you!

Real Estate News • June 4, 2024

Real Estate vs. Stocks: The Ultimate Long-Term Investment Showdown

by Christopher DiToro

When it comes to long-term investments, Americans have a clear favorite: real estate.

According to a recent Gallup poll, 36% of Americans believe real estate is the best long-term investment, outpacing stocks (22%), gold (18%), savings accounts (13%), bonds (4%) and cryptocurrencies (3%).

Why is that the case? Let’s dive into why so many people believe that owning property is the ultimate way to build wealth over time.

The Popularity of Real Estate as a Long-Term Investment

For 11 years running, real estate has consistently topped the list of preferred long-term investments in Gallup’s annual Economy and Personal Finance survey.

This preference for real estate is driven by several factors:

Tangible Asset: Unlike stocks or bonds, real estate is a tangible asset that you can see and touch. This physical presence provides a sense of security that is hard to match.
Appreciation Over Time: Historically, real estate values have shown steady appreciation. From the 1990s to the 2020s, home prices have consistently increased, making real estate a reliable investment.
Dual Benefits: Owning a home provides not only potential financial returns but also a place to live. This dual benefit is unique to real estate and adds to its appeal.

Gallup’s poll found this preference holds true across all income levels, with 33% of lower income households stating they believe real estate is the best long-term investment, along with 36% of middle income households and 40% of upper income households.

Real Estate vs. Other Investments

While real estate is the top choice for many, it’s important to consider how it stacks up against other investments. Stocks, for example, have historically offered higher returns. From 1990 to April 2024, the S&P 500 surged by 1,325%, while the S&P CoreLogic Case-Shiller U.S. National Home Price Index rose by 308%.

However, stocks come with higher volatility. Real estate, on the other hand, tends to provide more stable growth. Even during economic downturns, such as the Great Financial Crisis of 2008, real estate has shown resilience and recovery.

U.S. home price growth by decade:

1990s: +30.1%
2000s: +47.3%
2010s: +44.7%
2020-2024: +47.1%

Locally, home prices have risen 6.4% over the past year.

Is Real Estate the Right Investment for You?

Real estate can be a fantastic long-term investment, especially in a growing market like [Market]. But before diving in, consider your individual situation:

Long-Term Commitment: Buying a home is a long-term play. If you plan to move in a few years, it might not be the best fit.
Financial Strength: Real estate requires a down payment, closing costs, and ongoing maintenance expenses. Make sure you have a solid financial foundation.
Investment Goals: Consider your overall investment goals. If you prioritize high returns and easy access to your money, another investment might be a better fit.

And keep in mind that diversification leads to a balanced investment strategy. Financial experts recommend spreading investments across various assets to hedge against different market forces and increase the odds of a net profit over the long term. This means integrating real estate within a broader portfolio that includes stocks, bonds, and other investment vehicles.

Bottom line: While poll results show that Americans prefer real estate as a long-term investment, there is no one-size-fits-all answer. Always consult with your financial advisor when planning to invest for your future, as the best option depends on your financial goals, risk tolerance, and investment timeline.