10 Steps To Selling Your Home

Steve LaMothe • June 24, 2021

Steve LaMothe breaks down the 10 steps to Prepare and sell your home

1. Identify your motivation for selling

Spend some time exploring your reasons for selling. The process can be arduous and expensive, so make sure you’re certain you want to sell before you get too far into it.

Address finances: Call your current loan servicer to discuss your remaining mortgage balance. It’s your first step toward understanding how much equity you’ll have when you sell. Knowing this figure can help you budget for improvements you’ll need to make before listing or help you plan for your future home purchase.

Make a list of nonnegotiables: Jot down your must-haves and deal breakers. What’s your time frame to move? What’s your budget for pre-listing home improvements? What’s the minimum sale price you will accept?

2. Research the best time to sell in your area

Understanding the state of your local real estate market — including whether you’re in a buyers or sellers market — can help you identify the best time to sell. If you have flexibility in your timing, you might consider waiting for a sellers market, which occurs when there are more buyers searching for homes than there are homes available. It gives sellers the negotiation power and can drive up prices.

Traditionally, the best time of year to sell your home, both to maximize your profits and to minimize time on market, has been the first half of May. Homes listed for sale in this window often sold six days faster than average and for $1,600 more, according to Zillow research. 2020, however, reset the rules, with the prime selling season extending well into the off season.

This selling window can vary based on your local real estate market, so check out your Zillow Owner Dashboard to learn which month is the best time to list in your local area. Your Owner Dashboard (which can be accessed after claiming your home), also shows your home’s selling price now, compared to the ideal selling month, and it’s based on seasonal sales patterns in your area.

3. Commit to a representation strategy

One of the first things you’ll need to decide is if you’re going to sell your house on your own (which is called “for sale by owner” or “FSBO”) or if you’re going to use a real estate agent. In 2018, just 10 percent of sellers who reported selling in the past year completed the sale of their home without ever engaging an agent. Another 10 percent tried to sell on their own but eventually turned to an agent or broker for help.

Consider the pros and cons of each option, including how quickly you need to sell, the temperature of your local market, and any challenging features of your home that may require expertise in negotiations.

If you plan to sell FSBO:

Allocate enough time to prepare your home for listing and market it across multiple channels — this is why real estate agents work full time.
Research recent comparable sales in your area.
Keep flexible hours for showings or use a lock box.
Listen to feedback from agents and buyers without taking it personally.

If you plan to hire an agent:

Ask for referrals.
Interview each potential agent.
Don’t hesitate to negotiate your contract.
Trust your agent’s home-selling advice.
Hire EXPERIENCE over cost.
Traditional listings sell on average 6-10% more than off market or Instant offer approach.

Instant Offer Approach

Can be very fast and convenient.
Select your closing date and move out date.
Provides certainty.
Most expensive route to sell your home.

4. Complete home improvements

Preparing to sell your home typically takes some work, whether that’s your own sweat equity or some professional improvements. After all, you want buyers to fall in love with your home, like you did when you first bought it. Spend some time getting your home move-in ready, in a way that will appeal to the broadest range of potential buyers.

According to research, sellers who bring in professional help spend an average of $4,953 preparing their home for sale, but the repairs and upgrades you decide to make will probably depend on the condition of your home and what buyers in your area are looking for. Your real estate agent can be a big help in identifying the items that should be on your to-do list. Whatever you decide to do, here are a few tips for home improvements.

Opt for a pre-inspection: While it’s likely that your buyer will do an inspection as part of the purchase process, sellers often opt to do their own pre-inspection. Among sellers who worked with an agent, 25 percent had an inspection done before contacting an agent. Why? A pre-inspection can help you avoid surprises down the road and gives you a chance to fix the items that an inspector would flag for a buyer.

Increase ROI with popular improvements: Consider adding some of the home features that today’s buyers love, like a steam shower, professional kitchen appliances, heated floors or radiant heating, or solar panels.

Don’t forget curb appeal: To make that all-important first impression, spend some time on your front yard. Powerwash driveways and sidewalks, add some seasonal plants to pots and garden beds, cut back overgrown plants and rake leaves.

Avoid improvements by selling as-is: While you will likely pocket less money in the end, selling a home as-is, without completing any major improvements, is a way to speed up your overall sale process and limit upfront out-of-pocket costs.

5. Price your home competitively

Finding the right listing price for your home can be a challenge, but it’s one of the most important factors in a successful home sale. Homes that are accurately priced are more likely to sell in a timely manner. According to Zillow research, 57 percent of homes nationwide sell at or above listing price when they accept an offer in the first week. In the second week on the market, that drops to 50 percent and trends downward as the weeks go on.

To sell quickly, use all the tools at your disposal to help you price your home for sale.

Research comparables: Also known as “comps,” comparables are records of recent homes that have sold and their sale price. It’s important that the comps you use as reference are of a similar size and condition as yours, and in a very similar area — the closer to your home, the better.

Hire an appraiser: Having a professional appraisal done on your home can cost between $300 and $700, but it can be a small price to pay if it helps you sell your home quickly and for an appropriate price.

Reference the Zestimate: Zillow’s Zestimate is the estimated market value for your own home, and you can find it by searching your address on Zillow. Your home’s Zestimate is computed daily, taking into consideration millions of public and user-submitted data points. It can be a great place to start your home-pricing conversation.

Lean on your agent: Your real estate agent should be an expert in home values in your area, so they’re a great resource for finding the right listing price. Plus, they can provide guidance on a pricing strategy that will spark the most interest and maybe even inspire a bidding war.

6. Stage your house to sell

Preparing your home to sell should also include arranging your furniture, organizing and decorating in a way that appeals to the widest range of potential buyers.

Staging your home can take many different forms and require varying levels of effort, but here are a few key tips:

Declutter, clean and depersonalize: Too much stuff in a room can make your home feel small, crowded and lacking in storage. And having too many personal items, like family photos, can make it hard for buyers to picture themselves living in the home.

Select a staging plan that fits your needs: There are multiple degrees of home staging to choose from, based on your budget, timeline and how valuable staging is in your local area. Some staging can be done in a DIY manner, while other larger staging projects are typically completed by a professional.

Pare down pets’ and kids’ belongings: While many buyers are pet owners or parents of young kids, they want to visualize their own families in the home, not yours. Take the time to repair pet damage, remove pets’ belongings, and clear away kids’ items like gates, highchairs and piles of toys.

7. Market your listing effectively

Once your home is ready for buyers, the next step is getting your listing in front of as many buyers as possible. Here are some tips for how to list a home for sale.

Advertise across multiple channels: Today’s home buyers search for homes in many ways, from surfing online listings, to looking for ‘for sale’ or ‘open house’ signs in front yards. The more places your listing shows up, the more buyers will see it — and the more likely you are to find a buyer.

Invest in professional marketing photos: With the majority of buyers (and their agents) searching online, your home’s MLS or Zillow listing is your home’s first impression, and professional photos can go a long way toward making your home stand out. Make sure the photos are realistic and high quality. You might even consider doing a video tour.

Craft an enticing listing description: Your listing description should highlight your home’s best features and the amenities that buyers in your area are looking for. If a rooftop deck, backyard pool, access to public transit or nearby green spaces are popular where you live, make sure to include them. Overall, though, keep your listing description short and avoid confusing real estate jargon.

Schedule showings: You’ve done all the work to get your home ready for buyers, so make sure you accommodate as many showings as possible, whether that’s remote viewings, private tours or open houses. And there’s more to a showing than just a clean house. Make sure there’s a way to let shoppers leave feedback. Keep records of who visits, and if you’re selling on your own, consider having a third-party representative host your tours so buyers feel comfortable speaking their mind.

8. Watch for closing hurdles

If your home has been on the market for a while and isn’t selling as quickly as you had hoped, you may need to rewind and address some of the steps discussed above, such as making home improvements, setting a competitive price and marketing effectively.

Getting that great offer is probably the biggest hurdle to the home-selling process, but once your home goes under contract, that doesn’t necessarily mean the challenges have ended. Consider these potential issues that can come up between the time you accept an offer and closing day.

Bad home inspection report: The home inspection a buyer does on your home can raise all kinds of red flags, and when major issues are uncovered, a buyer might decide the fixes are too expensive and walk away from the deal. Whether the inspection report reveals small fixes or big problems, be prepared to negotiate after the report is completed.

Home appraisal too low: If your buyer is financing the home, their lender will typically order an appraisal to make sure the home is worth the amount being financed. If the value of the home comes in below the loan amount, the buyer will have to come up with the difference in cash or walk away from the deal.

Financing failure: During the underwriting process, it’s possible that your buyer’s financing could fall through. This can be caused by many different things, such as new debt, missed credit card payments, or a change in employment that makes the bank feel like there’s too much risk in financing the home.

9. Move out

Plan for moving costs: No matter where you’re moving, moving is expensive and time-consuming. Even a local move of less than 100 miles, serviced by two movers and a moving truck, has an average charge of $80 to $100 per hour.

Make sure you take steps to prepare to avoid any costly surprises on moving day.

Time it right: Not only is moving expensive, but the timing is crucial — according to the Zillow Consumer Housing Trends Report 2018, 61 percent of sellers also buy within a 12-month period. If you’re buying and selling simultaneously, you might consider temporary housing so you don’t have to worry about timing your sale and purchase perfectly, which rarely happens.

Be prepared to move quickly: The average time it takes to sell a house in 2018 is between 65 and 93 days, from list to close, so you’ll need to be prepared to move out in a short period of time. It’s a must that you be out of the home by the closing date.

10. Fulfill closing obligations

When it comes time to close on the home, you as the seller are responsible for some legal documents and processes.

Complete repairs and obtain certifications: If you are obligated to complete repairs as a condition of your post-inspection negotiations, it is your responsibility to complete those tasks before closing. Additionally, if the buyers asked for (and you agreed to) any specific inspections or certifications, like a sewer line inspection or roof condition certification, those should be completed as well.

Submit property disclosures: In most states, as a seller you’re required to disclose any known defects or issues that could affect the value or safety of the home — this is known as a property disclosure. These must be documented in writing prior to closing, and the specific rules and procedures vary based on where you live.

Review expected closing costs: Selling a house can be expensive, so review your estimated closing costs ahead of closing day to prepare for the charges you’ll see. Closing costs for sellers can be as high as 8 to 10 percent of the sale price of the home, and that amount is made up of your agent’s commission, the buyer’s agent’s commission (which is typically paid by the seller), and taxes and fees. But, assuming you have some equity in the home you’re selling, these costs will come directly out of the profits you’ll be receiving upon closing.

Sign documents: One of the very last steps is showing up for your closing appointment, where you’ll sign all the legal documents related to the sale of your property. Depending on the state you live in, you may sign during the same appointment as your buyer, or you may do it separately.

Hand over keys: The keys are handed over to the buyer once you vacate the premises, and as dictated in your contract with the buyer. If the buyer is taking immediate possession, you might hand over the keys at the closing appointment. Or, depending on the terms of your agreement, it could be much later.

Close the transaction: At closing, the settlement agent (either the closing attorney or escrow company hired at the outset of the transaction) will record the new deed for the home with the county, pay off your remaining mortgage balance, pay all closing costs and make sure you receive your profit.

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Why 2025 Is the Best Time To Buy a Home in 3 Years

By Steve LaMothe • June 6, 2025

With fewer bidding wars, price drops, and more negotiation power, homebuyers finally have the upper hand after years of intense competition. Is now the best time to buy a home in the last three years? Lately, we’re seeing more homes come onto the market, and they’re staying available a bit longer. This shift is opening up new opportunities for buyers who have been waiting for the right moment. Let’s dive deeper to see why this could be the best time to buy. Buyers are in a better spot. Inventory is up about 30% to 35% compared to last year. At the same time, the number of homes going pending has dropped sharply, especially over the past 60 days. When you put those together — more homes available and fewer are selling quickly — deals are starting to happen. Sellers are dropping prices to compete, and buyers are getting offers accepted well below asking, which hasn’t been common in recent years. This is a change from the last three years when buyers often had to compete with multiple offers or submit very high bids just to be considered. "Sellers are dropping prices to compete, and buyers are getting offers accepted well below asking, which hasn’t been common in recent years." I believe this is the best window we’ve had to buy since the pandemic started. If you’ve been on the fence or wondering if buying is possible, now might be the time to take a closer look. We can help break down the numbers for you. We can also build a plan to help you save and prepare over the next year. A shift sellers didn’t expect. Sellers have held the upper hand for about six years, so this change in the market feels significant. While they’re still getting solid prices and we’re not seeing a major drop in home values, the momentum has shifted. Based on current trends, it wouldn’t be surprising to see values dip by 1% to 5% this year. Buyers are finally gaining some leverage again —and that’s a welcome change. If you’ve been thinking about buying, now’s a great time to explore your options. We’re happy to help—at no cost to you—by putting together a personalized purchase plan. Just give us a call at 916-436-SELL , or check out homesbyelevate.com . We’ll walk you through the steps to save and prepare.

2025 Sacramento Real Estate Mid-Year Market Update

By Steve LaMothe • May 21, 2025

Sacramento’s inventory is up 25%, but buyer demand is dropping. Know what’s driving the shift and how it affects home prices for buyers and sellers. What’s going on with the Sacramento real estate market halfway through 2025? This year has been moving fast, but what’s really interesting is how much the market has shifted in just the past couple of months. After a relatively quiet start, things have started to change in ways that are important for both buyers and sellers. Over the last 60 days, some significant trends have emerged that could shape the rest of the year. It’s definitely worth taking a closer look at what’s driving these changes and what they mean for the market right now. Let’s dive in. Looking back: from a slow 2024 to a hopeful start in 2025. Last year, 2024, was one of the slowest on record for home sales in Sacramento, setting a quiet tone for the market. Going into 2025, I expected things to stay fairly similar, with no big changes in interest rates or sudden surges in buyer activity. However, the first few months surprised us a bit— sales picked up by about 10% compared to last year, and buyers seemed noticeably more motivated and confident. This early momentum gave hope that the market might be warming up after a sluggish period. Inventory is rising as buyer demand slows. Over the past 60 days, the Sacramento real estate market has taken a noticeable turn. Buyer demand has slowed down, with fewer people going under contract and purchasing homes. Meanwhile, the number of homes listed for sale has risen sharply. "This isn’t a market crash—it’s simply the housing market rebalancing after being inflated by low inventory." When fewer buyers are buying but new listings keep coming, inventory starts to build up quickly. For example, if 1,000 homes are listed in a month but only 300 go pending, that leaves 700 homes still available the following month. Add another 1,000 new listings on top of that, and you end up with a growing backlog of homes sitting on the market. This increase in inventory alongside slowing sales is exactly what we’re seeing right now. Shifting dynamics are putting pressure on home prices. With more homes hitting the market and fewer buyers actively looking, smart pricing has become more important than ever. A well-priced home might get three to five showings each week, but if it's even slightly overpriced, showings can drop to one every couple of weeks—or none at all. That’s a big change from previous years, when buyers were more aggressive despite high interest rates because there weren’t many options available. Back then, homes went under contract quickly, often within two weeks. Now, inventory is up roughly 20% to 25% compared to this time last year, while pending sales are down 10% to 15% over the past two months. If this continues, inventory will keep rising, and home prices will face more downward pressure. At this point, I expect prices to remain mostly flat or dip slightly for about 1% to 3% in some neighborhoods. That said, this isn’t a market crash—it’s simply the market rebalancing after being inflated by low inventory. If you’re thinking about selling, it’s really important to price and present your home right to attract buyers. For buyers who have been hesitant over the past few years, now is a great time to jump in. We’re seeing homes sell under their asking price, and despite higher interest rates, there are still some great deals available. If you want to learn more, give us a call at 916-436-SELL , or check out homesbyelevate.com . We’re happy to keep you updated about the market.

How We Transformed This Bedroom Into Every Little Boy’s Dream Space

By Steve LaMothe • May 15, 2025

We partnered with Sweet Dreams Foundation to make a Pokémon-themed bedroom and firehouse playroom for a brave young boy. This month, the Elevate team had the immense honor of partnering with the Sweet Dreams Foundation for our second dream bedroom transformation project. Sweet Dreams Foundation is a nonprofit in Folsom, CA, dedicated to creating safe havens called “DREAM ROOMS” for medically fragile children to forget treatments and find joy. Their mission is to spread peace, hope, and love while encouraging a healthy lifestyle to lift each child’s spirit. We collaborated to support Leo, a bright, brave young boy courageously battling a life-threatening illness. With Sweet Dreams leading the vision and Elevate lending our hands and hearts, our shared mission was to bring light, comfort, and joy to Leo’s world by creating a bedroom and playroom that reflected his favorite things and gave him a space to feel safe, playful, and loved. With the help of volunteer firefighters, generous vendors, and the dedicated Sweet Dreams team, we unveiled a completely transformed space for Leo. His new bedroom featured a Pokémon theme and a custom firehouse-themed playroom. It was complete with imaginative details and interactive elements that turned the space into his dream come true. This partnership with Sweet Dreams Foundation is one we deeply value. At Elevate , we believe in using our skills and resources to uplift the communities we serve , and nothing means more than making a difference for children like Leo. If you’d like to learn more, get involved, or explore future partnership opportunities, please don’t hesitate to reach out. 916-436-SELL , or check out homesbyelevate.com to learn more. We’d love to hear from you.

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Why Stock Market Dips Shouldn’t Stop You from Buying a Home

By Steve LaMothe • March 27, 2025

See how real estate remains stable even when the stock market dips, giving homebuyers confidence to move forward. Are you wondering if the stock market has any impact on the real estate market? It’s a question I get a lot, especially when the stock market takes a hit—which it just did! With a recent 10% pullback, I’ve seen more buyers holding back from buying a home. Some even ask if they should wait for a possible recession. Big financial shifts can really make anyone second-guess a major purchase. But let’s take a step back and look at the bigger picture. I’m breaking down how stock market activity can potentially impact real estate. Stock dips don’t stop real estate growth. The stock market may have dipped recently, but it’s still far higher than it was in 2020 and remains n ear record highs. The same is true for real estate, as home values in Sacramento have nearly doubled over the past five or six years. This shows that a 10% to 15% drop in stocks is normal and hasn’t historically caused home prices to fall. Even though a major crash could impact decisions, smaller dips like this are common and don’t mean home values are at risk. Both markets follow long-term growth trends despite short-term fluctuations. "Even though a major crash could impact decisions, smaller stock market dips are common and don’t mean home values are at risk." How the stock market can impact home-buying decisions. Even though home prices don’t change directly with the stock market, there are two main ways it can affect real estate. First, some buyers use their investments or retirement savings for a down payment. If the stock market is down, they might not want to sell their investments. Doing this could delay their home buying. Second, when the stock market is unstable, people feel unsure about their finances. They opt to wait before making big decisions like buying a home. Real estate is a long game. After all, most people don’t buy a home for just a year or two—they plan to live there or hold the investment for a decade or more. Over time, both the stock market and real estate tend to go up. That’s w hy short-term market swings shouldn’t be the deciding factor in a home purchase. Stock market corrections are a normal part of investing, just like ups and downs in real estate. What matters most is looking at the long-term tr ends. If you have questions about how today’s market conditions could affect your real estate plans, give me a call at 916-436-SELL , or check out HomesbyElevate.com to learn more. I’m happy to help.

What Prop 19 Means for Homeowners Looking to Relocate in California

By Steve LaMothe • March 17, 2025

Learn how Prop 19 allows eligible homeowners to transfer their low property tax rate to a new home. In California, property taxes are based on your home’s purchase price, so longtime homeowners often pay much less than new buyers. But what if you want to sell and move to a new home without your tax bill skyrocketing? That’s where Proposition 19– or simply Prop 19– comes in. Let’s break it down. How does Prop 19 work? Prop 19 lets eligible California homeowners transfer their current property tax rate to a new home anywhere within the state. This means you can sell your home, buy a new one, and keep your lower tax rate instead of paying based on today’s higher values. "Prop 19 provides the flexibility to move without facing a massive tax increase." Who qualifies for Prop 19? This program is available to California homeowners who are 55 years old or older, people with disabilities, and those affected by wildfires or natural disasters. If you’re downsizing, you get to keep your lower tax rate. If you buy a more expensive home, your tax basis adjusts, but you still receive some savings. For many longtime homeowners, high property taxes are a major reason they feel stuck in their current homes. Prop 19 provides the flexibility to move homes without facing a massive tax increase, making it easier to relocate, downsize, or find a home that better suits your needs. So if you’re moving soon and need some advice, reach out to HomesbyElevate.com or call 916-436-SELL . I’m happy to talk anytime!

5 Reasons Behind Skyrocketing Home Insurance Costs

By Steve LaMothe • February 24, 2025

Why home insurance companies are losing money, leading to rising costs. Why are insurance rates increasing? If you've recently reviewed your home insurance bill, you may have experienced some serious sticker shock. Rates are rising rapidly, with some homeowners facing increases of 80%, 110%, or even 126%. It’s an alarming trend that leaves many wondering what’s driving these sharp increases. Let’s take a closer look at the key factors behind the surge in insurance rates. 1. Weather-related losses are at an all-time high. Natural disasters have always played a role in insurance costs, but in the last few years, the situation has gotten worse. It’s not just major hurricanes and wildfires, but also smaller events like hail storms and flooding are happening more frequently and causing widespread damage. The Midwest is seeing more hail, the East Coast is dealing with stronger storms, and in California, wildfires have increased by up to 40%. More weather-related claims mean insurance companies are paying out more money, which leads to higher premiums for everyone. 2. Construction costs are driving up claims. The cost of rebuilding has nearly doubled in the past seven years and is therefore another major factor in the rising insurance rates. Materials and labor are more expensive than ever, which means insurance companies are paying out significantly more when covering claims. As a result, they’re adjusting premiums to keep up with rising costs. 3. Insurance companies are losing money: Despite what some might think, insurance companies aren’t making massive profits. The truth is they’ve been losing money for years. In 2023, analysts estimated that insurers needed to raise rates by at least 35% just to stay financially stable. For every dollar they collected in premiums, they were paying out $1.36 in claims. That’s not a sustainable business model, and major disasters only make things worse. "If premiums become unaffordable, it could cool off the housing market in high-risk areas. " 4. Regulations are making things even harder: In some states, like California, strict regulations limit how quickly insurance companies can raise premiums. While these laws aim to protect homeowners, they’ve also led some insurance providers to pull out of the market entirely. When fewer companies offer coverage, competition decreases, and costs rise even further. 5. Reinsurance companies are passing down their costs: Most people don’t think about reinsurance companies, but they play a huge role in the industry. Large insurers—like AIG—act as a safety net for smaller providers by covering major claims when disasters strike. But these reinsurance companies are also losing money, so they’re increasing their rates. Those added costs eventually get passed down to homeowners. Unfortunately, this isn’t just a temporary spike—more price hikes are coming and it’s turning into a full-blown crisis. States like California, Florida, and South Carolina are at risk of losing access to affordable home insurance altogether. If premiums keep climbing—potentially reaching $15,000 a year—it could even affect home values. Buyers take insurance costs into account when purchasing a home, and if premiums become unaffordable, it could cool off the housing market in high-risk areas. While this situation isn’t ideal, there are steps you can take. First, understand that this isn’t price gouging because insurance companies are simply trying to stay afloat. If your policy is up for renewal, lock in your rates now because prices are only going to rise over the next year. If you need help finding a reliable insurance provider, we can help you find one. Just call us at 916-436-SELL or send an email to steve@homesbyelevate.com .

What Lower Interest Rates Mean for Buyers and Sellers

By Steve LaMothe • February 21, 2025

Learn how lower mortgage rates are improving affordability for homebuyers. Have you been waiting for interest rates to come down before making your next move? We just saw one of the biggest drops in 30-year fixed mortgage rates in over a year, which brings them back to 2022 levels. Let’s break down what’s happening, why it matters, and what it means for buyers and homeowners. Positive movement in interest rates: Mortgage rates have dipped to their lowest levels in the past 12 months, now hovering around 6% - 6.5%. That’s a significant shift, especially in a market like California, where interest rates have a huge impact on affordability. Even though the Fed hasn’t officially lowered rates, the mortgage market is already responding. That’s because mortgage rates tend to move based on the 10-year Treasury yield, which predicts where rates are headed in the future. Right now, the market is signaling that lower rates are coming. Stock market & interest rates: One major reason for this shift is the stock market. As stocks trend downward, investors are betting that the Fed will ease up on rate hikes, which puts pressure on mortgage rates to drop. It might seem counterintuitive, but when the economy slows down, interest rates often follow. "Rates will likely continue fluctuating, but the overall trend seems to be moving in a positive direction." Implications for buyers & homeowners: For buyers, lower rates mean more affordability. If you’ve been waiting for a better time to buy, this could be it. If you purchased a home in the last year with a 7%-8% mortgage, it’s also a good time to start looking at refinancing options. Future predictions & market volatility: Rates will likely continue fluctuating, but the overall trend seems to be moving in a positive direction. The market is always looking ahead, and right now, it’s predicting that rates will keep easing. If you’re considering refinancing, keep an eye on the market and check in with your lender to time it right. If you’ve been on the fence about buying, now could be a great time to jump in. For sellers, demand is still strong, and homes are moving quickly. The market remains competitive, and this shift in rates could bring even more buyers back. If you have any questions, don’t hesitate to call us at 916-436-SELL or visit www.HomesByElevate.com to get started.

How Does Private Mortgage Insurance Affect Homebuyers?

By Steve LaMothe • January 21, 2025

A homebuyer’s guide to PMI: what it is, who it’s for, and why it matters. If you’re looking to buy a new home or have bought a home in the past, you’ve probably heard of private mortgage insurance. There are many misconceptions about PMI, like how it’s impossible to get rid of or that it’s better to avoid it altogether by saving for a 20% down payment instead. However, is it really better to put off homeownership just to avoid PMI? In my opinion, the answer is no, and if you understand what PMI is, you’ll understand why. That’s why today, I’m explaining what PMI is, how it works, and why you shouldn’t let it stop you from purchasing a home and building equity. Is everyone required to pay PMI? No. PMI is an insurance policy that you pay to protect the lender if you stop making mortgage payments, and it’s required only when you put down less than 20% on your home. If you're putting in more than 20%, then you won’t need PMI. How do you drop PMI? The good news is that PMI can be removed once you’ve built up 20% equity in your home. Even if you didn’t put 20% down, you might already have 20% equity in your house if you’ve owned it for a few years. You can then contact your lender and ask them to remove PMI, but they may need an appraisal to confirm it. "It’s quicker and easier to manage PMI than to wait until you’ve saved up a full 20% down payment for your home." On the other hand, if you don’t want to wait for your home’s value to increase, you can make a lump sum payment to reduce your loan balance. This will boost your equity and allow you to ask your lender to remove PMI right away. Dropping PMI can save you $200 to $400 a month. That’s money you could use for other things or put toward paying off your mortgage faster. However, is this cost work putting off your home purchase? In my opinion, the answer is no. The reality is it’s often quicker and easier to manage PMI than to wait until you’ve saved up a full 20%. Home values rise over time, so if you wait, you might miss out on equity. Often, the equity you’ll gain will more than make up for your PMI payments. I hope this information was helpful. But if you still have more questions, or better yet, ready to take the next step in buying your home, give us a call at 916-862-5463 . We're here to help guide you through the process.

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