Home equity has been a hot topic in real estate news lately. And if you’ve been following along, you may have heard there’s a growing number of homeowners with negative equity. But don’t let those headlines scare you. In truth, the headlines don’t give you all the information you really need to understand what’s happening and at what scale. Let’s break down one of the big equity stories you may be seeing in the news, and what’s actually taking place. That way, you’ll have the context you need to understand the big picture.Headlines Focus on Short-Term Equity Numbers and Fail To Convey the Long-Term ViewOne piece of news circulating focuses on the percentage of homes purchased in 2022 that are currently underwater. The term underwater refers to a scenario where the homeowner owes more on the loan than the house is worth. This was a huge issue when the housing market crashed in 2008, but it much less significant today. Media coverage right now is based loosely on a report from Black Knight, Inc. The actual report from that source says this:“Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, . . .”Let’s unpack that for a moment and provide the bigger picture. The data-bound report from Black Knight is talking specifically about homes purchased in 2022, but media headlines don’t always mention that timeframe or provide the surrounding context about how unusual of a year 2022 was for the housing market. In 2022, home price appreciation soared, and it reached its max around March-April. Since then, the rate of appreciation has been slowing down. Homeowners who bought their house last year right at the peak or those who paid more than market value in the months that followed are more likely to fall into the category of being marginally underwater. The qualifier marginally is another key piece of the puzzle the media isn’t necessarily including in their coverage. So, what does that mean for those who purchased a home in 2022? It’s important to remember, owning a home is a long-term investment, not a short-term play. When headlines focus on the short-term view, they’re not necessarily providing the full context. Typically speaking, the longer you stay in your home, the more equity you gain as you pay down your loan and as home prices appreciate. With recent market conditions, you may not have gained significant equity right away if you owned the home for just a few months. But it’s also true that many homeowners who recently bought their house are unlikely to be looking to sell quite yet.Bottom Line As with everything, knowing the context is important. If you have questions about real estate headlines or about how much equity you have in your home, let’s connect.

People say a lot of things about selling a home in today’s market. But unfortunately, some of it isn’t true—and buying into those myths can have a negative impact on your home sale. So what, exactly, are people saying about selling your home in today’s market that just don’t align with the facts? A recent article from realtor.com outlined common myths about selling a home in today’s market that simply aren’t true, including: “Buyers will take anything—so there’s no need to renovate or repair.” Many sellers think that low inventory means that buyers will be willing to pay top dollar for any property. But the truth is, many buyers are put off by homes that appear like they need a lot of work. So while there’s no need to completely renovate your home prior to listing, making small, cosmetic repairs (like tidying up the landscaping or repainting the walls) can make a huge difference in how attractive your home is to buyers—and ultimately, how quickly (and profitably!) your home sells. “There’s no need to invest in marketing my home; in this market, homes sell themselves.” It may be a seller’s market—but that doesn’t mean, as a seller, you don’t have to put in any effort to sell your property. Buyers spend a lot of time scouting homes online—so if you want your home to sell, you’ll want to invest time and resources into making your listing as attractive as possible (for example, getting professional photos of your property). “In a bidding war, choosing the highest offer is always the right move.” Bidding wars are a common occurrence in today’s market—and many sellers believe that, if their home inspires a bidding war, they should accept the highest offer. But that’s not always true. There’s a lot more to an offer than just the purchase price—and going with a slightly lower offer with better terms (for example, more flexible closing terms or an all-cash offer) is often a better option than just choosing whichever offer has the highest dollar amount. The Takeaway: So what does this mean for you? If you’re thinking about selling your home, it’s important to arm yourself with the right information about how to navigate the current market—and to avoid buying into myths that could potentially derail your sale.  

It’s highly possible that an experienced home inspector could fail to find something wrong with your house. So it isn’t out of the question that you might not know about something wrong with it. But considering you live there, unless it’s something truly lurking below the surface that only a trained eye could find, the chances are you know a thing or two that’s wrong with your house. And if you do, you should disclose the issue(s) to potential buyers. But, according to a recent REALTOR Magazine article, 94% of homeowners do not disclose known issues with their home, hoping buyers wouldn’t notice. Well, they do notice, because 90% of buyers surveyed reported finding issues with the home after closing, including: Electrical (88%) Fixtures (58%) Plumbing (58%) Exterior structures (like sheds) (54%) Leaks (54%) Basement (52%) Water damage (46%) Heating and cooling (43%) Exterior facade (42%) Mold or termites (39%) Major appliances (34%) Roof (31%) Foundation (27%) Even if it’s something you’ve tolerated for many years (a common excuse sellers make), it doesn’t mean it’s something the buyer of your house should be expected to figure out and be okay with once they’ve lived in the home for a while. For instance: Is there a light switch that doesn’t actually work? It might aggravate the heck out of you, but you never wanted to spend the money to get it fixed, and maybe you hope the buyer just won’t notice until they live there. Or perhaps there’s a pipe that clogs once or twice a year and requires a plumber to come out to professionally snake it. That could easily go unnoticed during an inspection. But you know within a year they’ll have to deal with it, and within two years they’re going to figure out it’s something that happens regularly, and probably has been for years. But at that point, you’ll be long gone. Does your basement flood when it rains really hard? You may be able to paint over any water damage and get the musty smell out before listing your house, but that doesn’t fix the fact that your buyers will need to put on some boots and wet-vac an inch of water like you did after a heavy rain. Those are just a few examples, but what are the things that aggravate you about your house and your buyer will have to deal with? Put yourself in your buyers’ shoes (or boots, if you will), and have some empathy. Ideally, fix it for them before even selling it. (Oh, and you should disclose a known issue even if you fix it, by the way!) But if you can’t, or just don’t want to fix something, at least disclose it and let the buyer make an informed decision. Why should you disclose known issues, when 94% of sellers don’t? While buyers should do their due diligence, and their home inspector should catch any issues (and could be liable for missing things), there’s still a responsibility on the owner to disclose any known issues. If you fail to disclose, you could be liable! Just because the buyer didn’t realize there was an issue before closing on the purchase of your house, does not mean they can’t come after you for not disclosing a problem. The Takeaway: Disclosing issues with your house to potential buyers isn’t just the right thing to do, it’s your legal responsibility. Just because “everyone else does it,” and you may get away with it, isn’t a good reason to throw caution to the wind. Besides, just because there’s an issue and you disclose it doesn’t necessarily mean you have to fix it. That’s always negotiable, and the buyer can take it into consideration when making their offer. It may not even affect how much they’re willing to offer for your house. But if you try to hide it and they find out, you could find yourself losing a deal, or worse…a future lawsuit!

    If you’re a person who spends a lot of time in their kitchen, chances are, at some point you may want to make some changes or upgrades to the space. But kitchen renovations can be expensive. So, the question is, how can you upgrade your space without spending tens of thousands of dollars to do so? A recent article from realtor.com outlined kitchen upgrades that can transform the look and feel of your space without breaking the bank, including: Swap out your hardware. Replacing kitchen cabinets can be an expensive, time-consuming project. But if you want to refresh the look of your cabinets, you can do it quickly and affordably by swapping out the hardware. Switching out your existing hardware for knobs and pulls that better fit your personal style is an easy way to upgrade your kitchen—and you can pull off the project with a budget of about $100.   Personalize with paint. If you’re looking to completely change the look of your space, you won’t find a better budget-friendly project than painting cabinets and/or walls—and you can complete the project in a few days and with a budget of about $300. For a luxurious look, consider painting the walls in a rich, dark hue. Or, to open up the space, consider painting your cabinets in an airy neutral tone.   Add a kitchen island. If you have a large space to work with—and you want your kitchen upgrade to not only change the look and feel of your kitchen, but the functionality and the way you utilize the space—consider adding a kitchen island. Not only are islands both attractive and functional, they’re more affordable than you’d imagine. (You can find budget-friendly options between $125 and $1,000.)