How Long Does a Conventional Home Sale Usually Last?

In tabulating the total length of a conventional home sale, we must examine each separate phase of the transaction.

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What kind of timeline can buyers and sellers expect in a conventional home sale? For a comprehensive look, let’s break the process down into each separate phase.

The first phase is the attorney review. This takes place after an accepted offer has been put in place and both the buyer and seller sign off on the contract. The contract goes to both of their attorneys for review, after which the buyer’s attorney makes any revisions or recommendations they see fit and sends a rider to the seller’s attorney, which is basically a proposal in addition to the contract. The seller’s attorney then makes their own revisions and sends it back to the buyer’s side. Once both sides agree to the rider and sign off on it, you can exit attorney review. Phase length: five to seven days.

From there, we move on to the inspection phase. Generally, a buyer will have a right to an inspection where their inspector will look at the home and make any recommendations for repairs. That recommendation will go to both attorneys. They’ll then decide if any repairs need to be made by the seller, any credits are due from the seller, or if the buyer will accept the home as-is. Phase length: eight to 10 days.

After the inspection is completed, the appraisal phase begins. The appointed appraiser will reach out to the buyer or seller side and schedule the appraisal. They’ll measure the interior of the home and put a comparable report together to submit to the bank. Phase length: seven to 10 days.

The next step is the mortgage commitment phase. This is the phase in which the appraisal is sent to the bank and goes to underwriting for approval. The underwriting department examines all the financial factors and checks the buyer’s criteria to make sure everything lines up with the loan. Phase length: 14 to 21 days.

Conventional home sales take longer than cash purchases.

After the mortgage commitment has been issued, the title search phase happens. The title company will take a look at the transfer history of the property and see if there are any additional parties that claim ownership of the property that haven’t been involved in the sale up until that point. Once those variables are settled and the title company deems the title clean and clear, they’ll issue title insurance. Phase length: seven to 10 days.

From there, we come finally to the clear to close phase. This is the final review from the bank to make sure the buyer is financially stable. Phase length: five to seven days.

Once the clear to close phase commences, each side is free and clear to complete the home sale. If you’ve been keeping your math at home, your total timeline for a conventional sale is 46 to 65 days.

Keep in mind, a conventional sale means having a mortgage involved. If the home sale is a cash purchase, the appraisal and mortgage commitment phases aren’t necessary. Subtracting them makes a cash sale timeline anywhere from 20 to 27 days. Generally, you’ll see closing dates for those transactions set anywhere from 30 to 35 days out. Cash sales are typically more attractive to sellers.

As always, if you have any questions, please feel free to give me a call or send me an email. I’m happy to help.

How Have Rising Mortgage Rates Impacted Our Market?

Mortgage rates have risen lately, but as you’ll see, this shouldn’t stop both buyers and sellers from getting a good deal.

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What do rising mortgage rates mean for buyers and sellers in our market?

In case you don’t remember, mortgage rates were historically low last year. In August, they were as low as 3.44%, and now they’ve risen up to about 4.12%. What does that mean in real terms?

Basically, the same mortgage on a $250,000 house would’ve cost you about $100 per month less than it does this year. The overall term of that loan is also about $35,000 more on a 30-year mortgage. That’s a sizeable chunk of change, and I don’t want to downplay that, but it’s really not going to do too much harm to our market in the immediate future. Why is this?

If you look at it in a historical context, the same loans 10 years ago averaged over 6.3%. If you go back to the 90s, they hovered anywhere between 7% to 10%. In the 80s, they rarely dipped below 16%. As you can see, they’re still extremely low compared to the past.

Yes, mortgage rates have risen lately, but this is nothing to be scared of.

If you’re a buyer, now is still a great time to buy. You’ll still get a great rate and there are plenty of loan products available to you. It’s just a matter of connecting with the right agent and finding the right home.

If you’re a seller, now is a great time to sell as well. Your home will very likely sell quickly and you’re very likely to get top dollar since there are so many folks interested in buying and we currently have a limited inventory. The market did slow down in December, but that was more due to a lack of inventory than mortgage rates.

Whether you’re a buyer or seller, if you have any questions or are thinking about making a move in our market soon, please don’t hesitate to give me a call or send me an email. I look forward to hearing from you and I hope you have a great day!

Why You Should Never Trust a Zestimate

If you’re a serious buyer or seller, you should never trust a Zestimate. Here’s why. 

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Today I want to tell why you should never trust a Zestimate.

To clarify, Zestimates can be helpful to people who are dabbling in real estate, but if you’re serious about buying or selling a home, it can be very misleading and cause you to leave a lot of money on the table. I’ve seen this happen many times, and here are three recent examples that I’ve been involved with.

The first involves a home we recently sold at 49 Chestnut Street in Weehawken. The Zestimate for this home was $700,353. If we listed it at that price, the property would’ve been on the market for years because it wasn’t worth anywhere near that amount. Instead, we listed the property at $410,000, and in less than 10 days, we had three offers and eventually sold it for $425,000.

The second example involves a buyer I’m working with to close on a home on Lydia Drive in Guttenberg whose Zestimate is $632,407 but got listed at $609,000. We haven’t closed yet, but my buyer has negotiated the price down to $590,000, and you can be sure he’s happy the owner didn’t go off the Zestimate value because that may have led him to believe that $609,000 wasn’t a bad list price.

Trusting a Zestimate can cost you a lot of money in a transaction.

The third example involves a single-family home in Hoboken that we recently helped sell. The Zestimate for it was $1.433 million, but we listed it at $1.525 million, received multiple offers, and sold it in less than 10 days.

As you can see, these are huge swings in prices. The reason for this is that a Zestimate is a tool that’s based solely off an algorithm. In calculating the value of a single home, it takes into account the values of the surrounding homes but not much else. Crucial details like an upgraded kitchen or bathroom get left out of a Zestimate.

If you’re serious about buying a home or getting an accurate value of a home you plan to sell, please feel free to reach out to me. I’d be happy to help!