Whether you're the homebuyer or the seller, the current housing market requires you to be prepared, decisive and ready to move forward swiftly. That was the message emphasized at the Chatham Area Chamber of Commerce's February luncheon, held at Illinois Realtors, which focused on the area housing market. The panel discussion included Jane Hay of Jane Hay Sales & Staging at The Real Estate Group; Todd Musso, Musso Real Estate Team at The Real Estate Group; Tracy Formea of Formea Insurance Group; Frank Stefano, Bank of Springfield; and Sherry Shaffnit, First Bankers Trust. Kathy Nichelson of Capital Area Realtors moderated the discussion.
Jane Hay, broker and partner with The Real Estate Group and leader of the Jane Hay Sales & Staging Team, said, "Homes are selling so quickly that if a buyer has a house to sell, they may need a bridge loan if they find the house they want to purchase prior to selling their home."
The Springfield-area market is also very competitive for homebuyers. Hay said sellers are getting multiple offers, and the majority of offers accepted are cash or conventional loans with a local lender. Sherry Shaffnit of First Bankers Trust recommends a buyer meet with a local lender to get pre-qualified for a mortgage before meeting with a real estate agent.
It's important that buyers understand all aspects of the mortgage application and what they can afford prior to shopping for homes. Shaffnit advises her borrowers to bring two years of taxes, pay stubs, bank statements and two forms of identification with them for the first meeting to get pre-approved. Once approved, she said, "I like to touch base about every 30 days."
While a buyer is figuring out how much they can afford in a mortgage payment, they also need to include their home insurance premium in that figure. Tracy Formea of Formea Insurance Group said before inquiring for quotes, know the date the roof was updated, the age of the furnace and the above ground square footage of the home you intend to purchase. For homeowners wanting to save on their premium, Formea recommends bundling auto and home insurance, having a centrally monitored alarm system and automatic water shut off. She said it's worth asking if occupation, education and credit score are considered when quoting insurance. Formea added that it's advantageous to call on independent agents who can shop quotes from a variety of sources as compared to a captive agent that works with one agency exclusively.
In 2023, there were 1,372 homes in Sangamon County purchased with conventional loans and 543 purchased with cash. Although there are programs available for those who do not qualify for conventional financing, the path of least resistance is what's best for the current market, said Frank Stefano of Bank of Springfield.
Hay agreed, "The cleaner the offer, the better." A seller looks more favorably on a buyer's contract when that buyer is offering cash or conventional financing with a local lender. It gives the seller extra assurance that the financing is solid, and real estate agents have relationships with area bankers. Hay said, "It's easier to work with a local bank. I have their cell numbers, and can get ahold of any local banker in the evening or on the weekend. They understand our market." Above all, there is the element of trust, since both are working on behalf of the buyer.
Musso reported that the data shows there is not much difference between the list price and the sale price in Sangamon County. Last year, 97% of single-family homes sold for 97% or more of the original list price, and that figure was 99.5% for a single-family attached home. Therefore, the listing price is generally close to what the seller will get for their home, and what the buyer can expect to pay.
It's a tough time to be a buyer, but a great time to be a seller. Whichever side of the transaction you're on, it helps to educate yourself about the current market conditions and work with local professionals to ensure a smooth process from start to finish.
