Western Mass Homes Lesley Lambert

Westfield

5 Ways to Write a Winning Offer in Today’s Real Estate Market in Western Massachusetts

5 Ways to Write a Winning Offer in Today’s Real Estate Market in Western Massachusetts

Our nation is in the midst of a serious housing crunch. Last year, a lack of inventory and soaring prices left many would-be homebuyers feeling pinched. But now, with interest rates climbing, many of them are also feeling desperate to lock in a mortgage—which has only added fuel to the fire.1

Fortunately, if you’re a buyer struggling to find a home in Western Massachusetts, I have some good news. While it’s true that higher mortgage rates can decrease your purchasing budget, there are additional ways to compete in a hot market.

Yes, a high offer price gets attention. But most sellers consider a variety of factors when evaluating an offer. With that in mind, here are five tactics you can utilize to sweeten your proposal and outshine your competition.

I can help you weigh the risks and benefits of each tactic and craft a compelling offer designed to get you your dream home—without giving away the farm.

1. Demonstrate Solid Financing

The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favor offers with a high probability of closing.

Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.2

If sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a big disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.

It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans.3 If so, you’ll want a lender who specializes in these types of mortgages. If you’re unsure who to choose, I am happy to refer you to reputable lenders known for their ease of doing business.

2. Put Down a Sizeable Deposit

Buyers can show sellers that they’re serious about their offer and have “skin in the game” by putting down a large earnest money deposit.

Earnest money is a deposit held in escrow by a title company or the seller’s broker or lawyer.  If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.

While an earnest money deposit is typically around 1-2% of the sale price, offering a higher deposit can help demonstrate to the buyer that you are serious about the property.4 However, this strategy can also be risky. I can help you determine an appropriate deposit to offer based on your specific circumstances.

3. Ask for Few (or No) Contingencies

Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.5

Common contingencies include:

  • Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.
  • Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.
  • Appraisal: Most lenders will not offer a mortgage on a home that costs more than it’s worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.
  • Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.

Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.

However, it’s very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit.6 I can help you assess the risks and benefits involved.

4. Offer a Flexible Closing Date and/or Leaseback Option

When it comes to selling a house, money isn’t everything. People sell their homes for a wide variety of reasons, and flexible terms that work with their personal situations can sometimes make all the difference. For example, if a seller is in the process of planning a significant move, they may prefer a longer closing timeline that gives them time to find housing in their new location.

Similarly, short-term leaseback options, in which the sale is completed but the seller retains the right to rent the home for a specified period of time, can be compelling.7 These arrangements enable the seller to use the money from the sale of their home to purchase their next house. A leaseback agreement also makes it possible for them to avoid moving twice when their next home is not yet ready to occupy.

Flexible closing dates and leaseback options can provide a powerful advantage for first-time homebuyers. If you have a month-to-month or easily transferable lease, for example, you may be able to offer a more flexible timeline than a buyer who is simultaneously selling their existing home.

Of course, the value of these terms depends on the seller’s situation. I can reach out to the listing agent to find out the seller’s preferred terms, and then collaborate with you to write a compelling offer that works for both parties.

5. Work With a Skilled Buyer’s Agent

In this ultra-competitive real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. I will make sure you fully understand the process and help you submit an appealing offer without taking on too much risk.

Plus, I know how to write offers that are designed to win over both the seller and their listing agent. The truth is, listing agents play a huge role in helping sellers evaluate offers, and they want to work with skilled buyer’s agents who are professional, communicative, and courteous.

Once your offer is accepted, we’ll also handle any further negotiations and coordinate all the paperwork and other details involved in your home purchase. The best part is, you’ll have a knowledgeable, licensed advocate on your side who is watching out for your best interests every step of the way.

Helping You Get to the Right Offer

In many cases, a competitive offer doesn’t need to be all-cash, contingency-free, or significantly above asking price. But if you’re serious about buying a home in today’s market in Western Massachusetts, it’s important to consider what you can do to sweeten the deal.

If you’re a buyer, I can help you compete in today’s market without getting steamrolled. And if you’re a seller, I can help you evaluate offers by taking all the relevant factors into account. Contact me  today to schedule a free consultation.

Sources:

  1. National Association of Realtors –
    https://www.nar.realtor/newsroom/pending-home-sales-dwindle-4-1-in-february
  2. National Association of Realtors –
    https://www.nar.realtor/newsroom/existing-home-sales-fade-7-2-in-february
  3. Forbes –
    https://www.forbes.com/advisor/mortgages/housing-crisis-tips/
  4. Realtor.com –
    https://www.realtor.com/advice/finance/earnest-money-deposit-mistakes-buyers-make/
  5. Bankrate –
    https://www.bankrate.com/real-estate/contingency-clause/
  6. Home Buying Institute –
    http://www.homebuyinginstitute.com/mortgage/risks-of-waiving-a-contingency/
  7. Realtor.com –
    https://www.realtor.com/advice/sell/what-is-a-rent-back-agreement

5 Gotta Do’s in Western Massachusetts during April for a Worry-Free Summer

5 Gotta Do’s in Western Massachusetts during April for a Worry-Free Summer

By: Kelley Walters

Battle bugs before they bite (or sting!) you — and check the attic for problems.

Tackling five simple tasks now gives you a head start on spring. That leaves you plenty of worry-free time to enjoy the warmer weather.

#1 Tell Insects to Bug Off

Early spring warmth awakens insects, so start to protect your home now. Seal openings in eaves, decks, and other structures to keep out carpenter bees.

Nix mosquitoes by eliminating standing water or treating it with larvicide. Call a pro to destroy wasp and yellow jacket nests, unless you’re experienced enough to engage in a bee battle.

#2 Prep Tools for Lawn Care

Ladies and gentlemen, start your mowers. April’s the month to get this vital piece of equipment ready to roll. An unmaintained machine can cost money, slow you down, and leave your lawn vulnerable to disease. So, before you pull the starter rope: 

  • Replace spark plugs and the air filter.
  • Change the oil and sharpen blades.
  • Fill the tank with fresh gasoline.

While you’ve got your gloves on, clean, sharpen, and repair your garden tools. When your azaleas are ready to prune, you’re not going to want to keep them waiting.

#3 Tune Up the Air Conditioner

With flip-flop weather comes another summer tradition: cranking up the air conditioning. Tune up your AC in April, before the mercury and service rates rise.

Ask your HVAC company if they have a twice-a-year maintenance plan. Often, you can get discounted rates if you join, and you don’t have to worry about finding someone to do it each spring and fall.

Now you only have to worry about which pair of Havaianas to wear.

#4 Check the Attic (and Garage)

How long has it been since you looked in the attic? Yeah, us too.

April’s the time to inspect this oft-ignored space — before it gets too hot. Look for signs of animal activity (raccoons love attics), and repair or replace damaged insulation or wiring.

Ensure stored items are still secure; tighten container lids and dust covers and replace moth repellents.

While we’re talking storage, how’s the garage? If soccer balls, bikes, and luggage have taken prime parking space, regain control with a storage system. Your car (and your partner) will thank you.

#5 Clean Up Bird Feeders

Besides spreading diseases to birds, dirty bird feeders attract rodents and hurt curb appeal. Gross.

Give your bird feeders a deep clean — not just a rinse-out.

Empty them, take them apart, and wash with a solution of one part bleach to nine parts hot water. Rinse well to remove all traces of bleach, air dry, and refill with seed.

Clean under feeders, too, because moldy or spoiled seed on the ground can make pets sick. Don’t forget the bird bath.

A pretty yard that’s a healthy haven for birds makes a good impression — one that says “this is a well-cared-for home.”

Hedge Against Inflation With These 3 Real Estate Investment Types

Hedge Against Inflation With These 3 Real Estate Investment Types

The annual inflation rate in the United States is currently around 7.5%—the highest it has been since 1982.1 It doesn’t matter if you’re a cashier, lawyer, plumber, or retiree; if you spend U.S. dollars, inflation impacts you.

Economists expect the effects of inflation, like a higher cost of goods, to continue.2 Luckily, an investment in real estate can ease some of the financial strain.

Here’s what you need to know about inflation, how it impacts you, and how an investment in real estate can help.

WHAT IS INFLATION AND HOW DOES IT IMPACT ME?

Inflation is a decline in the value of money. When the rate of inflation rises, prices for goods and services go up. Therefore, a dollar buys you a little bit less with every passing day.

The consumer price index, or CPI, is a standard measure of inflation. Based on the latest CPI data, prices increased 7.5% from January 2021 to January 2022.1 A little bit of inflation is considered healthy for the economy, but 7.5% in a single year is high.

How does inflation affect your life? Here are a few of the negative impacts:

  • Decreased Purchasing Power

We touched on this already, but as prices rise, your dollar won’t stretch as far as it used to. That means you’ll be able to purchase fewer goods and services with a limited budget.

  • Increased Borrowing Costs

In an effort to curb inflation, the Federal Reserve is expected to raise the federal funds rate. Therefore, consumers are likely to pay a higher interest rate on new mortgages, car loans, and variable-rate credit cards.3

  • Lower Standard of Living

Wage growth tends to lag behind price increases. According to Moody Analytics, when adjusted for inflation, average weekly earnings in January were down 3.1% from a year earlier.4 As such, life is becoming less affordable for everyone. Inflation can force those on a fixed income, like retirees, to make lifestyle changes and prioritize essentials.

  • Eroded Savings

If you store all your savings in a bank account, inflation is even more damaging. As of February 2022, the national average interest rate for a savings account is 0.06%, not nearly enough to keep up with inflation. And economists don’t expect that rate to go much higher.3

One of the best ways to mitigate these effects is to find a place to invest your money other than the bank. Even though interest rates are expected to rise, they’re unlikely to get high enough to beat inflation. If you hoard cash, the value of your money will decrease every year and more rapidly in years with elevated inflation.

REAL ESTATE: A PROVEN HEDGE AGAINST INFLATION

So where is a good place to invest your money to protect (hedge) against the impacts of inflation? There are several investment vehicles that financial advisors traditionally recommend, including:

  • Stocks

Some people invest in stocks as their primary inflation hedge. However, the stock market can become volatile during inflationary times, as we’ve seen in recent months.5

  • Commodities

Commodities are tangible assets, like oil, livestock, and minerals. The theory is that the price of commodities should climb alongside inflation. But the classic choice–gold–hasn’t risen consistently during periods of inflation since the 1970s, according to data from Morningstar Direct.6

  • Inflation-Indexed Bonds

Treasury inflation-protected securities, or TIPS, are U.S. government-issued bonds that are indexed to the inflation rate. Bonds are considered low risk, but the returns they offer are generally low, as well.7

  • Real Estate
    Real estate prices across the board tend to rise along with inflation and often rise faster than inflation.8 That’s one of the reasons demand for real estate is soaring right now.9

We believe real estate is the best hedge against inflation. Owning real estate does more than protect your wealth—it can actually make you money. For example, home prices rose nearly 17% from 2020 to 2021, 10% ahead of the 7% inflation that occurred in the same timeframe.10 

Plus, certain types of real estate investments can help you generate a stream of passive income. In the past year, property owners didn’t just avoid the erosion of purchasing power caused by inflation; they got ahead.

TYPES OF REAL ESTATE INVESTMENTS

Though there are myriad ways to invest in real estate, there are three basic investment types that we recommend for beginner and intermediate investors. Remember that we can help you determine which options are best for your financial goals and budget.

  • Primary Residence

If you own your home, you’re already ahead. The advantages of homeownership become even more apparent in inflationary times. As inflation raises prices throughout the economy, the value of your home is likely to go up concurrently. At the same time, you’ve locked in a set mortgage payment for the next 30 years, so you’ll be immune to rising rental costs.

If you don’t already own your primary residence, homeownership is a worthwhile goal to pursue.

Though the task of saving enough for a down payment may seem daunting, there are several strategies that can make homeownership easier to achieve. If you’re not sure how to get started with the home buying process, contact us. Our team can help you find the strategy and property that fits your needs and budget.

Whether you already own a primary residence or are still renting, now is a good time to also start thinking about an investment property. The types of investment properties you’ll buy as a solo investor generally fall into two categories: long-term rentals and short-term rentals.

  • Long-Term (Traditional) Rentals

A long-term or traditional rental is a dwelling that’s leased out for an extended period. An example of this is a single-family home where a tenant signs a one-year lease and brings all their own furniture.

Long-term rentals are a form of housing. For most tenants, the rental serves as their primary residence, which means it’s a necessary expense. This unique quality of long-term rentals can help to provide stable returns in uncertain times, especially when we have high inflation.

To invest in a long-term rental, you’ll need to budget for maintenance, repairs, property taxes, and insurance. You’ll also need to have a plan for managing the property. But a well-chosen investment property should pay for itself through rental income, and you’ll benefit from appreciation as the property rises in value.

We can help you find an ideal long-term rental property to suit your budget and investment goals. Reach out to talk about your needs and our local market opportunities.

  • Short-Term (Vacation) Rentals

Short-term or vacation rentals function more like hotels in that they offer temporary accommodations. A short-term rental is defined as a residential dwelling that is rented for 30 days or less. The furniture and other amenities are provided by the property owner, and today many short-term rentals are listed on websites like Airbnb and Vrbo.

A short-term rental can potentially earn you a higher return than a long-term rental, but this comes at the cost of daily, hands-on management. With a short-term rental, you’re not just entering the real estate business; you’re entering the hospitality business, too.

Done right, short-term rentals can be both a hedge against inflation and a profitable source of income. As a bonus, when the home isn’t being rented you have an affordable vacation spot for yourself and your family!

Contact us today if you’re interested in exploring options in either the long-term or short-term rental market. Mortgage rates are expected to rise, so you’ll want to act fast to maximize your investment return.

I AM INVESTED IN HELPING YOU

Inflation is a fact of life in the U.S. economy. Luckily, you can prepare for inflation with a carefully managed investment portfolio that includes real estate. Owning a primary residence or investing in a short-term or long-term rental will help you both mitigate the effects of inflation and grow your net worth, which makes it a strategic move in our current financial environment.

If you’re ready to invest in real estate to build wealth and protect yourself from rising inflation, contact me. Our team can help you find a primary residence or investment property that meets your financial goals.

Lesley Lambert, Western MA REALTOR with Park Square Realty. 413-575-3611

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. Bloomberg –
    https://www.bloomberg.com/news/articles/2022-02-10/u-s-inflation-charges-higher-with-larger-than-forecast-gain
  2. CNN –
    https://www.cnn.com/2022/01/01/economy/inflation-prices-2022-preview/index.html
  3. CNBC –
    https://www.cnbc.com/2022/01/26/the-fed-sets-the-stage-for-a-rate-hike-heres-what-that-means-for-you.html
  4. Reuters –
    https://www.reuters.com/business/us-consumer-prices-rise-strongly-january-weekly-jobless-claims-fall-2022-02-10/
  5. NBC News –
    https://www.nbcnews.com/business/markets/market-slide-dow-falls-700-points-sp-enters-correction-territory-rcna13304
  6. CNBC –
    https://www.cnbc.com/2021/12/20/gold-is-losing-its-status-as-an-inflation-hedge-two-traders-warn.html
  7. Morningstar –
    https://www.morningstar.com/articles/1079158/why-are-inflation-protected-bond-funds-losing-money
  8. The Washington Post –
    https://www.washingtonpost.com/business/2022/01/04/heres-how-inflation-could-affect-your-next-real-estate-move/
  9. Bloomberg –
    https://www.bloomberg.com/news/articles/2022-01-24/is-real-estate-a-good-investment-hedge-against-inflation-what-the-experts-say
  10. CNN –
    https://www.cnn.com/2022/01/20/homes/us-nar-home-sales-december-and-2021/index.html

With Mortgage Rates Climbing, Now’s the Time To Act on your Western MA real estate


Buying Myths, First Time Home Buyers, For Buyers, Housing Market Updates, Interest Rates, Move-Up Buyers

With Mortgage Rates Climbing, Now’s the Time To Act

With Mortgage Rates Climbing, Now’s the Time To Act

Last week, the average 30-year fixed mortgage rate from Freddie Mac jumped from 3.22% to 3.45%. That’s the highest point it’s been in almost two years. If you’re thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasn’t entirely unexpected. Experts have been calling for rates to rise in their 2022 projections, and the forecast is now becoming a reality. Here’s a look at the projections from Freddie Mac for this year:

  • Q1 2022: 3.4%
  • Q2 2022: 3.5%
  • Q3 2022: 3.6%
  • Q4 2022: 3.7%

As the numbers show, this jump in rates is in line with the expectations from Freddie Mac. And what they also indicate is that mortgage rates are projected to continue climbing throughout the year. But should you be worried about rising mortgage rates? What does that really mean for you?

As rates increase even modestly, they impact your monthly mortgage payment and overall affordability. If you’re looking to buy a home, rising mortgage rates should be an incentive to act sooner rather than later.

The good news is, even though rates are climbing, they’re still worth taking advantage of. Historical data shows that today’s rate, even at 3.45%, is still well below the average for each of the last five decades (see chart below):

With Mortgage Rates Climbing, Now’s the Time To Act | Keeping Current Matters

That means you still have a great opportunity to buy now with a rate that’s better than what your loved ones may have paid in decades past. If you buy a home while rates are in the mid-3s, your monthly mortgage payment will be locked in at that rate for the life of your loan. As you can see from the chart above, a lot can change in that time frame. Buying now is a great way to protect yourself from rising costs and future rate increases while also securing your payment amount for the long term.

Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“Mortgage rates surged in the second week of the new year. The 30-year fixed mortgage rate rose to 3.45% from 3.22% the previous week. If inflation continues to grow at the current pace, rates will move up even faster in the following months.”

Bottom Line

Mortgage rates are increasing, and they’re forecast to be even higher by the end of 2022. If you’re planning to buy this year, acting soon may be your most affordable option. Work with a trusted advisor to start the homebuying process today.

To reach me: LESLEY LAMBERT, WESTERN MA REALTOR please call or text 413-575-3611

Source: https://www.keepingcurrentmatters.com/2022/01/19/with-mortgage-rates-climbing-nows-the-time-to-act/?utm_campaign=Blog_Promo&utm_medium=email&utm_source=email-broadcast&utm_content=buyers_pack&utm_term=mortgage_rates_climbing&source=

680 Granville Rd, Westfield, MA | House for Sale by Lesley Lambert, Westfield REALTOR

680 Granville Rd, Westfield, MA

$259900

3bed – 2bath – 66211 acres lot
Photos | Maps & Local | Schools | Print

This country Colonial on 1.52 acres offers the best of privacy while still being close to town. You pass through the enclosed porch to the large mudroom which features access to a first floor full bath and the laundry area. Just past this space is the very large and bright kitchen with loads of counter space, updated cabinets and a dining area. Moving on you find a bright living room which leads to the first floor bedroom that has access to the full bath. The second floor features two bedrooms and another full bath. All of this great space is wrapped in a newer roof, vinyl siding, replacement windows and landscaping upgrades. A little bit of cosmetic work to suit your color palette and you have a fantastic home!

Follow This Home

agent
Lesley Lambert
Top Producing REALTOR, Park Square Realty
413-575-3611
Licensed In: Massachusetts
License #: 115441
Contact Me

Useful Links
Westfield Homes For Sale
Free Home Values
Lesley’s Website