Are you thinking about selling your house? If so, today’s mortgage rates may be making you wonder if that’s the right decision. Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home. If you’re worried about this too, know that even though rates are high right now, so is home equity. Here’s what you need to know.

Bankrate explains exactly what equity is and how it grows:

“Home equity is the portion of your home that you’ve paid off and own outright. It’s the difference between what the home is worth and how much is still owed on your mortgage. As your home’s value increases over the long term and you pay down the principal on the mortgage, your equity stake grows.”

In other words, equity is how much your home is worth now, minus what you still owe on your home loan.

How Much Equity Do Homeowners Have Now?

Recently, your equity has been growing faster than you might think. To help contextualize just how much the average homeowner has, CoreLogic says:

“. . . the average U.S. homeowner now has about $290,000 in equity.”

That’s because, over the past few years, home prices went up significantly – and those rising prices helped your equity to accumulate faster than usual. While the market has started to normalize, there are still more people wanting to buy homes than there are homes available for sale. This high demand is causing home prices to go up again.

According to the Federal Housing Finance Agency (FHFA), the Census, and ATTOM, a property data provider, nearly two-thirds (68.7%) of homeowners have either fully paid off their mortgages or have at least 50% equity (see chart below):

That means nearly 70% of homeowners have a tremendous amount of equity right now.

How Equity Helps with Your Affordability Concerns

With today’s affordability challenges, your equity can make a big difference when you decide to move. After you sell your house, you can use the equity you’ve built up in your home to help you buy your next one. Here’s how:

• Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy a new house without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. The National Association of Realtors (NAR) states:

“These all-cash home buyers are happily avoiding the higher mortgage interest rates . . .”

• Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money so today’s rates become less of a sticking point. Experian explains:

“Increasing your down payment lowers your principal loan amount and, consequently, your loan-to-value ratio, which could lead to a lower interest rate offer from your lender.”

Bottom Line

If you’re thinking about moving, the equity you’ve built up can make a big difference, especially today. Contact me today to find out how much equity you’ve got in your current house and how you can use it for your next home.

When it comes to selling your house, you want three things: to sell it for the most money you can, to do it in a certain amount of time, and to do all of that with the fewest hassles. And, while the current housing market is generally favorable to sellers due to today’s limited housing supply, there are still factors that can cause delays or even prevent a house from selling.

If you’re having trouble getting your house to sell in today’s sellers’ market, here are a few things to think about.

Limited Access – If You Can’t Show It, You Can’t Sell It.

One of the biggest mistakes you can make as a seller is limiting the days and times when buyers can view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ ability to view it. Remember, minimal access equals minimal exposure.

In some cases, some of the most motivated buyers may come from outside of your local area. Because they’re traveling, they might not have the luxury to adjust their schedules when faced with limited options to tour your house, so make it available as much as possible.

Priced Too High – Price It To Sell, Not To Sit.

Pricing is a critical factor that can significantly impact your home sale. While it’s tempting to push the price higher to try to maximize your profit, overpricing can deter potential buyers and lead to your home sitting on the market longer.

Jeff Tucker, Senior Economist at Zillow, notes:

“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”

Not to mention, buyers today have access to a number of tools and resources to view available homes in your area. If your house is priced unreasonably high compared to similar homes, it may drive potential buyers away. Listen to the feedback your agent is getting at open houses and showings. If the feedback is consistent, it may be time to re-evaluate and potentially lower the price. 

Not Freshened Up Before Listing – If It Looks Good, It’ll Make a Good Impression.

When selling your house, the old saying “you never get a second chance to make a first impression” matters. Putting in the work on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from Investopedia says:

“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”

But don’t let that stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.

For all of these things, lean on your real estate agent for expert advice based on your unique situation and feedback you get from buyers throughout the process.

Bottom Line

If your house isn’t getting the attention you feel it deserves and isn’t selling in the timeframe you wanted, it’s time to consult a trusted real estate agent for advice on what you may need to revisit or change in your approach. To get those expert insights, let’s connect.

When you’re ready to sell your home, doing a little preparation beforehand can potentially help your home sell quicker and for a higher price.

Maximize Curb Appeal
Getting buyers through the front door starts at the curb. Manicure the lawn, and trim the trees and shrubs. Pull weeds and plant some colorful flowers. Clear the walkways. Fix peeling paint and wind up that hose. Paint the address number on the curb.

Make Repairs to Visible Blemishes
Is there something that’s an eyesore, but an easy fix? If looking at it bothers you, it could bother a potential buyer and reduce the appeal of your home. Replace burnt-out light bulbs, fix that loose door handle, and make needed paint touch-ups.

Make a Buyer’s Entrance Inviting
Freshly paint the front door with a color that contrasts the house. Add a new welcome mat and hang a fresh wreath on the door.

Let the Light Shine In
Remove heavy window coverings to let in the natural light we all crave and add lamps to brighten up darker areas to add more cheer.

Remove the Clutter
This serves two purposes.

• First, you want your home to have an open and inviting appearance. Removing clutter will make rooms appear larger and more appealing.
• Second, it helps YOU prepare to move. Going through the clutter and getting rid of what you don’t need will make your move much easier.

Remove Personal Items
It will be much easier for potential buyers to imagine your home as theirs when they can envision their own items in it.

Highlight Special Features
Use accents and color to draw eyes to special features that you want potential buyers to notice—throw pillows, plants, or other eye-catching accessories.

Add Mirrors
Use mirrors to make rooms look larger and lighter. Position opposite windows for best effect.

Clean Out Cabinets and Closets
Buyers are nosy and they WILL open the cabinets. Make sure your contents are orderly and organized.

Eliminate Odors
Clean to remove any odors and do not cook any meals with heavy, lasting smells before a showing.

Add Aromas
You can easily add appeal by quartering an orange and adding it to a pot of water with a cinnamon stick. Simmer on low for an inviting aroma. Or bake a fresh batch of cookies (and leave a plate of them on the counter for visitors).

In some cases, insurance risks can drive up the overall cost of a home. Features like pools or outdated or damaged roofs can increase premiums. Since many lenders roll home insurance premiums into monthly mortgage payments, that can be a stumbling block for some buyers.

Conversely, some home features can save buyers in the long run because they can result in lower home insurance premiums. Learning about such savings could be just what a hesitant buyer needs to hear. If your home has these features, be sure potential buyers understand the beneficial impact they can have on lowering insurance costs:

– Location isn’t just important to your buyer; it’s also important to insurance carriers. – How close is the home to a fire department?

– How far away is it from a risky floodplain?

You’ll want to point out these to a buyer because they could lower the insurance cost. Security systems are a bonus in any home because they make the home safer. Items such as burglar alarms, deadbolt locks, and smoke alarms can lessen the likelihood that your home and family will suffer an adverse claim.

Another plus? These security items can earn discounts of up to 10% or more on home insurance. Green homes aren’t just earth-friendly; they also can be insurance-friendly. Some insurance providers offer discounts for LEED-certified homes because they are considered safer and more sustainable than traditional homes.

Qualities such as sturdy aluminum or steel roofs and low-flow plumbing are considered during the quote process because they lower the risk of hail, wind, and water damage. It’s not bad to point out that while your buyer is reducing their carbon footprint, they also could qualify for lower home insurance premiums.