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How Low-Interest Rates Affect Property Values in Greenwich

If you’re thinking of buying a home, now is the time in Greenwich, CT!

Here’s why: Increased affordability for buyers. Low-interest rates offer real savings.

Interest rates for mortgages are at a two-year low right now. Currently, the 30-year fixed-rate mortgage is averaging 3.82%, which is the lowest point it’s hit since September 2017, according to Freddie Mac. With more homeowners eager to put their properties on the market, inventory has gone up in Greenwich, CT.

This has translated into more options and more negotiating power for home buyers.

If you are in the market to buy there has never been a better time in Greenwich, CT.

Low-interest rates increase affordability for home buyers

With lower interest rates, home buyers are going to be able to afford a more expensive home in the Greenwich, CT area.

Let’s walk through an example: 4% vs. 5% interest rate 

If you want a 4% rate on a 30-year fixed mortgage on a home worth $400,000, your monthly mortgage payment would be $1,900. But if you only qualified for a 5% rate on a 30-year fixed mortgage, your monthly payment would rise to $2,138.

A 1% increase in interest raises your monthly payments by $238, or roughly 13%. So, what does this mean for homebuyers?

From a home buyer’s perspective, as mortgage rates increase, affordability goes down. If you want to qualify for a $400,000 mortgage at 4% interest, but at 5% interest, lenders can only offer you a $355,000 loan based on your qualifications. A 1% increase in mortgage interest decreases your purchasing power by $45,000!

Did you know?
According to the latest Gallup poll, owning a home—whether in Greenwich, Connecticut or anywhere else in the U.S.—is Americans’ most trusted long-term way to grow wealth.

How mortgage interest rates are determined

Mortgage interest rates fluctuate depending on broader economic factors and investment activity too. The secondary market also plays an important role. Freddie Mac and Fannie Mae bundle mortgage loans and then try and sell them to investors looking to turn a profit. Whatever interest rate these investors are willing to buy the mortgage-backed securities for dictates what rates lenders can set on their loans. This drives up or down the average monthly interest rates on mortgage loans.

Securing a mortgage with a broker or lender

For many, securing a mortgage can be the most stressful part of home buying. You have to get your finances in shape, review your credit score, and shop around for the best rate when applying for a loan. You can choose to work with a direct lender or a mortgage broker.

Did you know?
Low interest rates make for a competitive market for brokers. You should shop around different mortgage brokers and lenders to get the most competitive rate.

You affect the interest rates offered to you

The exact rates you’re offered by a broker also depends on your own financial situation. Things like your credit history, debts, credit score, annual income, and other factors all play a role in what rates a lender can give you.

Considerations a lender takes into account

  • Credit score
  • Cash reserves and assets
  • Income and employment history
  • Repayment history and any collections, bankruptcies or other financial events
  • Debts
  • Down payment
  • Property location
  • Loan type, term, and amount

 Generally, the riskier you are as a borrower, and the more money you take out, the higher your rate will be.

The bottom line:

An easy way to research current interest rates is to use a mortgage calculator. Just keep in mind that buying a home and trying to decipher interest rates can be very confusing to the untrained eye. Don’t hesitate to ask your real estate agent about different brokers and lenders in their network.

Looking at homes in Greenwich, CT area, or just interested in knowing more about interest rates and how they affect home buying? Comment below, call or schedule a meeting with Longo Realty Group today.

Note: The home featured in this blog is currently available for purchase. $935,000, 3 bedrooms. Located in Greenwich, CT.

Located on a coveted street just steps from Greenwich Avenue and a short walk to the train. The sun-filled first floor offers an open floor plan with high ceilings, tastefully updated kitchen, and a full bathroom, all wrapped with an incredibly welcoming front porch. The upstairs includes 3 well-sized bedrooms and a full bathroom w/ attic access.

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The Home Buyer’s Checklist: Questions to Ask Before Buying a Home

Looking for home buying advice? We can help!

Generally, the type of information you want to gather before buying falls into four main categories:

Offering price: What do you base it on?  As a buyer, you should base your offer on the comparable completed sales nearby. Not necessarily what other sellers are asking for their homes.

What is the condition of the home? Ask about estimates for repairs and don’t assume everything will cost thousands. There’s also a chance the cost of anticipated repairs has already been factored into the sales price.

Location of Home: It’s all about location, location, location. Don’t be afraid to ask about negatives and nuances. A home’s location has a pretty significant impact on the sales price. Keep in mind if the location will make reselling difficult down the line.

Do you have a good buyers agent?  Committing to buying a home can feel like a pretty overwhelming task, but it isn’t if you find the right real estate agent.

We’ve broken down specific questions to ask for each of the categories listed below!

Attending open houses is a great chance to ask the listing agent questions about a home you are interested in.

7 Questions to ask about the listing price

Home buyers usually compare the prices of similar homes in an area before choosing a price, but keep in mind the asking price has very little to do with the actual value of the home.

  • How much did the seller pay?
  • Why is the seller selling?
  • How much does the seller owe?
  • How much have similar homes in the area sold for? When?
  • Has the seller received any other offers? How many & how much?
  • How long has the listing been on the market?
  • Has the house been relisted? If so, when & why?

5 Questions to ask about the condition of the listing

If you already know a home has deferred maintenance or structural issues, it’s important to consider the possible costs down the line before making your initial offering. Ideally, you want to direct these questions to the listing and buying agents you are working with.

  • How old is the roof?
  • What type of foundation does the listing have?
  • Does the house have insulation in the walls and attic?
  • What are the utilities like per month?
  • Have any appliances or systems been replaced? When?

5 Questions to ask about the location of the listing

Listings that are in more desirable areas are often worth more than similar listings in locations that are less desirable. Talk about the home’s location with your buying agent and listing agent, as well as the seller.

  • What type of properties are located nearby?
  • What is the neighborhood like? Demographics?
  • What type of noise does the seller hear from the house? (train tracks?)
  • Where are the schools?
  • What are other possible nuisance factors?

15 Questions to ask when hiring a real estate buying agent

Hiring a great buyers agent is key to buying a home. Keep the items below in mind when interviewing a realtor to represent you as a buyers agent.

  • How long have you had your real estate license?
  • Do you require buyers to sign any contracts or agreements?
  • How many listings did you sell as a buyers agent last year? This year?
  • How many prospective buyers are you currently working with?
  • On average, how many homes do you tend to show buyers?
  • What experience do you have selling homes in my target areas?
  • Can you provide any sort of testimonials or previous client contact information?
  • How do YOU (as an agent) determine which homes may match my wants or needs?
  • How do you provide information about these possible homes?
  • What methods of communication do you utilize?
  • Do you attend inspections?
  • How do you negotiate our requests from inspectors?
  • Do you have a real estate website or blog?
  • Are there any trustworthy professionals you can recommend me?
  • Do you require a pre-qualification or pre-approval before looking at listings?

Bottom line: always ask questions before buying

When the housing market is hot, you may not have enough time to ask any questions before that home is sold to somebody else.

Always be sure to ask your buying agent for professional insights into the type of market you are looking at!

Looking for a real estate agent to answer some questions you have as a first-time buyer? We service the greater Greenwich, CT area!

MORE NEWS:

Learn more about the Greenwich real estate market forecast for 2019.

12 reasons residents love living in Greenwich

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Thinking of moving? Here’s 16 Tips for Preparing Your Home For Sale

preparing to sell your home

Looking for simple tips for selling your home that have been tested and proven to work? We’ve got you!

Preparing your home for sale can be confusing and downright stressful. But it doesn’t have to be!

From replacing light bulbs and staging to declutter and depersonalizing, here are our top 16 things we help sellers do before trying to sell a home.

Before putting your home on the market – don’t stress out. Focus on what you can control. Do things proven to increase your chances of getting a great offer from a buyer, like deep cleanings and decluttering.

1) Prep your paperwork

Real estate agents, buyers, and sellers are all going to ask a lot of questions when they come to see your home so it can be helpful to start getting the paperwork ready sooner rather than later. Make sure you have all of your utility bills, tax bills, warranties, mortgage details, renovation details, survey, and rental contracts.

2) Find a good listing agent

When it comes to getting your home ready to sell- unless you are a realtor yourself- we highly recommend enlisting a professional real estate agent to list your home.  When interviewing and talking to different agents, be sure to ask about the experience they’ve had selling in your neighborhood, social media expertise, and potential buyers.

3) Get an extra set (or 2) of house keys made

Once your house is open for viewings, your agent is going to need access to your home to show it to potential buyers. Having an extra set of keys is worth it, so you don’t need to unlock a lockbox every time you want to go home.

4) Buy more light bulbs & update light fixtures

It’s easy to forget about bulbs that have burned out. Lighting makes a huge difference for prospective buyers – and you want your home to be as bright as possible. You are going to need more lightbulbs. Order them online or go pick them up in person. When bringing potential buyers through your house, all light fixtures and lamps will need to be turned on. For this reason, it’s crucial that all lights in your home have working light bulbs. If you’re unsure of what bulb an empty socket needs, snap a picture of the socket info – there should be some information a hardware store or google can help you decipher.

5) Give your house a deep (professional) clean

Within the first couple seconds of someone walking into your home, they have a first impression. Dirty floors, dusty surfaces, and clutter make for a bad one. Before and throughout the selling process, your home needs deep cleanings. Consider adding more hours for a housekeeper, getting someone to help out cleaner, and hiring carpet cleaners to make sure your house is in tip top shape.

 Unless your carpets are brand spanking new, you’ll want to get them professionally steam cleaned.

6) Declutter your home

A BIG part of keeping your house clean and attractive to prospective buyers is decluttering. To declutter, you are going to need packing supplies such as boxes and tape to clear stuff out you don’t need. It will also help with your stress levels. And know that decluttering and organizing your home will go a LONG way for potential buyers.

7) Donate, throw away, or store all the stuff you don’t really need

You may want to consider renting out a storage unit to get all the things you don’t need in your house while showing it out of the way. But keep in mind storage can be costly.  It may be a good time to consider donating, selling or throwing out things you don’t need that you’ve accumulated over time.

8) Make a list of all the things you’ve been avoiding repairing

This can range from replacing the water filter in your fridge to a leaky faucet or loud AC unit.

9) Hire a handyman ( & keep them on speed dial)

Not very handy yourself? You should hire a handyman or a friend who’s handy to help out.  Inevitably, there may be things you don’t realize need to be fixed (or break) while you are getting your house ready.  Buyers like to know you love your home enough to take good care of it! Seeing broken things in a home can be a red flag for a lot of buyers. You want your home to seem effortless to live in.

10) Re-paint and touch-up everything

Now’s the time to re-paint your home. Start by painting over any questionably loud walls (like a bright green) with neutral colors. Try and keep it simple. Stick with whites, light grays, light beiges, and “greige” wall colors. Neutral shades can make your house seem larger, brighter, and overall more welcoming and appealing Adding fresh coats of paint to your home helps cover little dents and imperfections found in the walls/ceilings – And buyers can better imagine themselves living there!

11) Stage your home

Staging your home really can help it sell faster and for more money – studies have proven it. The good news is, staging your home doesn’t have to be crazy expensive. There are companies we work with that specialize in bringing in anything you need for staging or helping you work with what you have, so you don’t waste time and money trying to playing interior designer.

12) Remember curb appeal

Do you have a lawn or front yard you need to worry about maintaining? If you do have a lawn, it’s important to make sure you have clean and crisp landscaping. The front lawn and outside the entrance to your home is the first thing any potential buyers see when they come for a showing. So be sure that your grass is trimmed and manicured- and make sure there isn’t anything lying around in the lawn- dog toys, dog poop, children’s toys….etc.

 

 It can help to stand on your street and take in your home. What do you see?

13) Hire a professional photographer/videographer

With most potential buyers doing their homework online, it’s essential you have high quality, professional photos and videos for your online listing. Without excellent high-resolution images and drone footage, potential buyers may not see the magic of your home. Before putting your home on the market it’s a good idea to get some footage snapped and shot. A good realtor should be able to help with finding a photographer, so be sure to ask who they use and if you can scope them out on social media when interviewing real estate agents for the job!

14) Depersonalize your home (get rid of family photos)

When you are trying to sell your home, you want to find the perfect balance between a warm, welcoming home that is depersonalized enough buyers can imagine themselves living there. It’s best to put away framed photos, magazines, kids toys, sports equipment, and awards throughout your house. But don’t put everything away! Leave a few around the house to make the home feel lived in and genuine.

15) Have a plan for pets (for last minute viewings)

When a buyer wants to see a house, it’s best you make it happen ASAP. You may be a dog person, but that doesn’t mean your buyer will be. No buyer enjoys being jumped on, peed on, or seeing tons of dog hair on the couch and dirty food bowls on the floor. Make sure you have doggie daycare or any sort of pet care lined up for last minute viewings.

16) Make sure your house smells good

When a buyer walks into your home, it’s crucial for it to smell good. If you have pets, you may not even realize there is an odor in your house. Every day make sure to use candles, Fabfreeze, incense, or other air fresheners. (But we careful of air fresheners that are overpowering and strong)

Wondering how much it will cost you to sell your home?

It’s vital you take into account the various (& random) expenses related to selling your home before you list it.

  • Home prep costs (stagers, painters, cleaners, and other handy work)
  • Storage units
  • Real estate commission (plus HST)
  • Legal fees (plus HST)
  • Pre-listing home inspection (if your real estate agent isn’t paying…they should)
  • Status certificate
  • Moving costs (moving companies, boxes & packing for moving)
  • Mortgage penalties or bridging costs
Your realtor should be able to offer you a pre-listing assessment and give you a good idea of what to price your home at- for free!

How long should you spend getting a home ready for sale?

On average, we recommend taking a month to get a home viewing ready, but we’ve helped our clients accomplish everything on this list in as little as a couple of days. 

Intimidated by preparing your home for sale? Don’t be! 

If you’re in the market to sell, the sooner you hire a REALTOR to help you prepare, the better and less stressful the process of moving will be!

Best of luck and happy house hunting!