Since the elections rates have gone up. Why? Four Fed Governor’s announced that the US Economy is strong enough to handle higher Fed Funds Rates, and they will be raising rates in December. READ: Rates will still likely be below the 5% mark in 2017 – but they are going some higher, and the demand from first time home buyers for homes in a “certain” price range will likely spike.
When markets move in a positive direction, you’ll hear it from real estate agents first. They see busier open houses, quicker sales or even multiple offers. By the time the news finally hits the mainstream media, buyers start to feel the pull to get back in the market.
Even though we’ve seen a small spike, Mortgage Interest rates are still at very low marks, and Inventory numbers are going down (especially for First Time Home Buyers) there are more people looking in North Carolina for houses under the $325,000 bench mark!
That’s exactly what we’re seeing in many parts of state right now. We are in a sellers’ market for the first time in years, and it’s helpful for buyers to understand today’s seller. You do not want to be one of those frustrated people we all see on HGTV who are making 4 or 5 offers before they get a house. Remember, in NC we have some “pockets” where you can still get a “STEAL” on a house, but it’s not that common anymore.
No two sellers are alike, of course. But there’s a certain mindset that many sellers these days share, and it’s a grateful one for many. They want to sell their house. They are listening to their Real Estate Agent, and they are pricing the home at the RIGHT PRICE for the neighborhood.
Houses that have been on the market for 6 months, or more, in North Carolina are probably just not priced right. Others… well, you might be surprised to find out that most of the First Time Home Buyers we work with make multiple offers on homes before they actually get one under contract!
Understanding the Sellers mindset can help First Time Home Buyers more successfully and easily navigate through the process of purchasing a home. The same holds true for sellers. They should be mindful of the buyers that stand before them. Programs like USDA Home loans in NC can take more than 45 days from the minute we get all of the documents until we can close. It’s NOT the First Time Home Buyer’s fault – the USDA Home Loans have to be underwritten by USDA Home Loan Underwriters – and they are “swamped.”
Here are five things First Time Home Buyers should know about today’s Home Sellers in North Carolina.
SOME Home Owners in NC are in a negative equity position
According to Zillow’s negative equity report, 28.3 percent of homeowners with a mortgage today are underwater, however, not all of those folks live in NC. Many folks who have been hoping and wishing for prices to increase just a little bit, are genuinely ready to sell their home, even if it means taking a “little bit” of money to the closing table to make that happen. Some have outgrown their current home, are forced into an hour-long commute (or longer) each day or simply want to move to a new town or area. But due to negative equity, they’ve been stuck.
The emergence of a sellers’ market provides them with a glimmer of hope. They just may be grateful for any offer that will allow them to get out at last. This does NOT mean that they will be willing to take a $20,000 loss on a home that is priced correctly. THAT would more likely be a Short Sale – and that means they have to be behind on payments for several months, and the bank that holds the mortgage has to approve the sale… that can be an HGTV nightmare.
We’re talking about folks who are going “in the hole” $3 to $5k. Now, if they are going in the hole like that – are you going to get an additional $5k in closing costs paid by the seller?? Ugh, no. There are other ways we, as the lender can help you in these really tight situations.
Sellers are often Home Buyers, too
Often, home sellers here in North Carolina feel the same amount of stress or excitement that First Time Home Buyers feel because they’re somewhere in the buying process, too. Though some Sellers will become renters after their sale is complete, many will get back in the homeowner game soon after the sale goes through, sometimes immediately. Sellers, as would-be buyers, want to capitalize on low-interest rates and home values that they feel are priced “right,” just like you!
Getting their home in Charlotte, or Raleigh sold quickly and at today’s value may be all a Seller needs to make a new home purchase. Though it may be a “Sellers’ market,” the Sellers we see today, usually aren’t greedy. They feel the First Time Home Buyers anxiety over getting the best deal possible, and likely want to get out cleanly and quickly so that they, too, can buy a new house!
Sellers are starting to feel relieved but are still cautious
Even the folks selling homes in Greensboro or Wilmington, who are above water or own their homes outright – are well aware of what’s happened in the real estate market over the past five years. They’ve watched their friends and neighbors have to take money to close on a home, or worse, forced to do short sales, most of us even know folks who lost their jobs and had their homes foreclosed.
Today’s Home Sellers in North Carolina welcome the news that the market is changing, and in their favor, at last…but many question how long this “market” will last, and are eager to price their home “right” for the market so that it will sell for the prices homes in their neighborhood are selling for.
The folks selling homes in Raleigh or High Point are more hopeful than they were even six months ago.Generally speaking, the Home Sellers we see – the ones who aren’t stuck in their homes (because of depressed home values or other reasons) are still feeling conservative and cautious. They’re more likely to take a bird in the hand than to risk losing a sale because of greed.
We are also seeing a trend, however, where some of these folks, especially the ones who are NOT getting the “golden nest egg” they’d planned on for their retirement – are getting more and more “cantankerous” when asked to make a 5 page list of small repairs. If you are buying an existing “used” home – figure out which items on the list are MUST haves, and which ones you can do yourself a little later down the road!
Our Advice for First Time Home Buyers in NC
Real estate is a business transaction, pure and simple. It’s like applying for a job, or deciding how much you are willing to pay for a car, or a trip to Europe. It’s an Investment – and yes, you want to get the best “Deal” you can on that Investment – especially if you live in the South, because we all take pride in getting a good price.
When First Time Home Buyers are negotiating, it’s important to know who you are dealing with, and what their motivation is. It’s also important to look at this transaction WITHOUT the Emotional Excitement of buying your first “Home.” Yes, there’s NOTHING in the world (except maybe getting married or having a baby) that’s going to be quite as exciting as walking into that home the very first time and realizing that you actually own every darn light switch!
Our advice, however, is that once you’ve figured out which house (it’s not your home yet!) is the one you want to make an offer on, figure out who the Home Seller is, how they got there and why they want to sell their home in Cary or Apex North Carolina. Don’t make assumptions. Take a step back. Put yourself in their shoes.
Things have changed. Don’t believe all of the stuff you read in the news about Home Sales are down, or it’s a Buyer’s Market – or a Seller’s Market in Raleigh for that matter. Real Estate is LOCAL. House sales are not the same as they were around 2005, when many were driven by greed as the market’s rise seemed endless.
Most Home Sellers have just weathered the worst real estate market crash in decades, so don’t go into this market, which is very different from even six months ago, assuming sellers are looking to take advantage of you.
Don’t let your real estate agent convince you that’s the case, either. Even though you might think they have a hot property that will sell quickly, the seller is usually willing to negotiate. They may even be grateful to receive a reasonable offer, especially if it at least comes close to the value their home had before the crash.
We work with some of the TOP Real Estate Agents in North Carolina – we close homes for First Time Home Buyers every week (literally). Call Steve and Eleanor Thorne to get the “REAL” scoop on when you SHOULD buy a house, what you need to know about the First Time Home Buyers Programs available in our state – and frankly, we’ll also tell you when you need to wait a while. Home Ownership is exciting – but we are NOT going to push someone who should NOT be buying a home into the process!
Remember – you don’t have to be holding a HUGE bank deposit to buy a house these days! There are Mortgage Tax Credits STILL available for First Time Home Buyers in North Carolina! There are no down payment loans available for Veterans, for folks who are willing to look a little further out in a Rural part of North Carolina (USDA Home Loans NC) and there are GRANTS available from the State of NC ** to help First Time Home Buyers who qualify. Not all banks offer these programs, or specialize in helping First Time Home Buyers – we do.
**A Quick Note
We refer to these programs as “mortgage grants” because there are no payments to be made, there is no interest charge, and there’s no expectation that you will have to repay ANY of the money you receive for down payment, unless you move out of the property or refinance prior to the dates assigned by your specific down payment assistance program.
The literal term for this down payment assistance program is a “forgivable loan.” Under the terms of the program that best suits you, a portion of this down payment assistance will be forgiven on a schedule that we will share with you when you make loan application. These funds are available to us through NC Housing (NCHFA) and are available through other lenders in the state as well. The interest rates for these programs, however, will not vary from lender to lender as that is set by NC Housing.