Here’s an explanation of earnest money and the role it plays in a sale.

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Today I’m answering a common question: “What is earnest money?”

Earnest money is a deposit made by a homebuyer to confirm a contract when entering into a real estate transaction. Typically, it’s known as “good-faith” money. This is held by the listing agency or attorneys, and it will go into an escrow account. The money will then be credited to the buyer at closing so they can utilize the funds towards their closing costs or down payment.

"In Connecticut, both parties need to agree to release earnest money."

Buyers almost never lose their earnest money. If you’re going through an inspection and there’s a big issue, you can back out without losing your deposit. If the property doesn’t appraise and you can’t work out an agreement, you also will get your money back. 

A lot of times, there's a misconception that the seller automatically gets the money if something doesn’t work out. That’s not necessarily the case here in Connecticut. In our state, both parties need to agree to release the money from the escrow to one another.

If you have questions about earnest money or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

Some Highlights

According to a Gallup poll, real estate has been rated the best long-term investment for eight years in a row.

Real estate tops the list because you’re not just buying a place to call home – you’re investing in your future. Real estate is typically considered a stable and secure asset that can grow in value over time.

Let’s connect today if you’re ready to make real estate your best investment this year.

Though interest rates are climbing, they’ll remain very low in 2022.

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Interest rates are expected to increase two to three times minimum in 2022. The good news is that they’ll still be very low compared to what they’ve been historically. Though rates are rising, buyers are still out in full force. 

Don’t be afraid to buy a home; if you’re considering it, it’s still a wonderful time. Take advantage of these low interest rates—they’ll give you much more buying power than you’ll have if you wait another year or two when they’ll likely be higher. 

If you have questions about interest rates or anything else, call or email us. We would love to help you.

When you’re selling any item, you usually want to sell it for the greatest profit possible. That happens when there’s a strong demand and a limited supply for that item. In the real estate market, that time is right now. If you’re thinking of selling your house this year, here are two reasons why now’s the time to list.

1. Demand Is Very Strong This Winter

A recent article in Inman News explains:

“Spring, the hottest time of year for homebuyers and sellers, has started early, according to economists. . . . ‘Home shopping season appears to already be in full swing!’”

And they aren’t the only ones saying buyers are already out in full force. That claim is backed up with data released last week by ShowingTime. The ShowingTime Showing Index tracks the average number of monthly buyer showings on active residential properties, which is a highly reliable leading indicator of current and future trends for buyer demand. The latest index reveals this December was the most active December in five years (see graph below):

As the data indicates, buyers are very active this winter. Last December saw even more showings than December of 2020, which was already a stronger-than-usual winter. And remember – you want to sell something when there’s a strong demand for that item. That time is now.

2. Housing Supply Is Extremely Low

Each month, realtor.com releases data on the number of active residential real estate listings (listings currently for sale). Their most recent report reveals the latest monthly number is the lowest we’ve seen in any January since 2017 (see graph below):

And don’t forget, the best time to sell an item is when there’s a limited supply of it available. This graph clearly shows how extremely low housing supply is today.

Even Though Supply Is at a Historic Low, Home Sales Are at a 15-Year High

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), existing-home sales totaled 6.12 million in 2021 – the highest annual level since 2006. This means the market is hot and homeowners are in a great place to sell now while sales are so strong.

NAR also reports available listings by calculating the current months’ supply of inventory. They explain:

“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.”

The current 1.8-months’ supply is the lowest ever reported. Here are the December numbers over the last five years (see graph below):

The ratio of buyers to sellers favors homeowners right now to a greater degree than at any other time in history. Buyer demand is high, and supply is low. That gives sellers like you an incredible opportunity.

In Conclusion 

If you agree the best time to sell anything is when demand is high and supply is low, let’s connect to begin discussing the process of listing your house today.