A Look at Buying Now vs. Buying Then; Why You Can’t Afford to Wait

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It is widely known around the world that real estate in the US is at the best point it has been in decades – especially from the standpoint of a buyer.  But when you look at how the numbers work out – it REALLY looks good and it is a great way to see just why buying now is the best it has been for the past five to ten years. 

Here are the facts.  We know that interest rates are so low that buyers are walking away with practically free mortgages.  We know that housing values have declined to a point that buying a home now is a surefire investment that will come back later and mature very nicely once the market bounces back.  We know that housing inventory is largely overstuffed because of the plethora of foreclosures on record the past few years plus other factors contributing to the fact as well.  But how does all this look when you plug in actual selling prices, interest rates, down payments and monthly payments? 

To help show you why buying now will yield the best ever deal quite possibly in your entire lifetime, we have put together a comparison of a home that was sold in 2002.  Considering the market environment in both 2006 and 2011, we see how the owners got very different results on each respective selling date.  The numbers are staggering! 

Home Bought in 2002

Price of home when originally bought in 2002: $285,000

Interest rate: 6.5%

Conventional loan 20% down payment amount: $57,000

Monthly payment: $1,441 (principal and interest)

Loan payout for the life of the loan: $575,803

Sold to Another Owner in 2006

Selling price: $580,000

Interest rate: 6.5%

Significant remodeling changes made to the home

Conventional loan 20% down payment amount: $116,000

Monthly payment: $2,932 (principal and interest)

Loan payout for the life of the loan: $1, 171,800

Sold Again in 2011

Selling price: $245,000

Interest rate: 5%

Conventional loan 20% down payment amount: $49,000

Monthly payment: $1, 052 (principal and interest)

Loan payout for the life of the loan: $427,782

The savings are astronomical when comparing market conditions then to now.

If you bought this house ten years ago, the savings add up to over $148,000!

And if you bought the house while it was at the top of the market, the savings are an unbelievable $750,000.  That’s three quarters of a million dollars in savings alone.

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This is the same home.  When you realize how much the prices, payments and payouts fluctuate – it makes you wonder why you haven’t gone out and grabbed the opportunity to buy now, doesn’t it? Either way you look at it, buying now will end up in a fantastic return on your investment.  What’s more is that there is no telling how long this phase in our real estate industry will last.  We are starting to see some upward changes in the housing market, with prices coming back up very slowly and the depreciation cycle beginning to level off.  

Ten AWESOME Reasons Why You Should List Your Home During the Holidays

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Traditional school of thought dictates that selling a home during the holidays is a bad idea.  People are busy celebrating with their families and will hardly go shopping for a home, right?  Not so!  There are numerous advantages to listing a home during this season and below are ten great reasons to put a home on the market now.

More serious buyers – Less time wasted

These are people who are interested in buying so there is a far greater chance of actually selling the property.  Nothing is more promising to a seller than a motivated and qualified buyer that knows what they want and is actively seeking to get it.

Fewer Homes On the Market

The less competition there is, the higher the chance there is for homes on the market to sell. Where during the peak season sellers might be dealing with some interest from buyers on their home, nonetheless there is more selection for buyers to choose from and they can stray to another property.

In January Inventory Increases – Chances of Selling Decreases

With so many homeowners assuming the holidays is a taboo time to sell there is a plethora of new listings in January, resulting in a diminished chance of your home selling.  Also, there is a risk that the price you may receive on the home can be less.

Decked Halls Look Great!

Homes are very appealing to prospective buyers when they are decorated for the holidays.  With all the festive décor, lights, greenery and added beauty of the season – the home shows very well and attracts buyers faster than if shown during other times of the year.

More Time To Browse Homes

Buyers have extra time off from work and are on vacation, which translates to a more aggressive buying pattern and more chances of your home being viewed.

Tax Advantages That Benefit the Buyer

Some buyers need to buy a property before the year ends so that they are able to claim a particular credit or exemption on their tax return.  The biggest tax benefit is filing for homestead. This requirement means that they are going to seek out a home and definitely purchase it prior to the New Year.

Show The Home With Flexibility

Sellers that have their home listed prior to the holidays have the added advantage to be able to “pause” the process so they can celebrate the holidays, essentially not showing the home during a period of time during the break.  When the festivities die down, things can pick up again and the seller has not only managed to save potentially lost time but can also jump right back into the market.

Sell Now For More Money Then Delay Closing

Extended occupancy can be negotiated, leaving both parties the leniency to get through the holiday season and past the New Year so that all sides can rest assured the deal is done but it can follow through at a more convenient time.  For sellers this option is great because they are able to secure a higher selling price on the property before the market is inundated with new listings come January when the selling values drop.

Enjoy Non-Contingent Buyer Freedom

With the home sold, sellers can enjoy non-contingent buyer status during the rest of the slow season and take advantage of the market when there is a flood of new listings upon the New Year.

Fewer Foreclosures On the Market

Many banks will suspend foreclosure listing during this time of year, especially on properties where there are still families occupying the home.  As a result of this, some of the competition that arises for sellers from low-priced foreclosures can be avoided during the holidays.
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Keep in mind that the idea of your home’s value increasing significantly over the next several months is a myth.  The truth is that housing values likely only go up when consumer income rises.  Pay rates increase at a rate of three to five percent each year and that is about the maximum yearly increase we can expect to see in a home as well.  So if you are wondering whether or not to put your home on the selling market now, or to wait – one important factor is that waiting will not provide much benefit.

Is It the Right Time to Sell or Stay Put and Wait For Change?

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These days so many homeowners are wondering if it’s the right time to move on and move up into a better home.  So many questions ensue. How long will it take for the market to be back to normal again?  Will today’s interest rates go on indefinitely?  How can I tell before they begin to climb again? If I wait long enough will my home’s value come back up to what it was just a few years ago?  The answers are not so simple but one thing is for certain.  Property values take time to climb up and rebound after bouts of the situation that we are facing at present.  Here are some pointers that will provide further insight as to why selling sooner may make more sense.

When Incomes Go Up – So Do Property Values

Many industry experts believe the only way for home prices to go back up is for buyers to have higher incomes.  Based on this assumption, a good number of homeowners’ expectations that their property will miraculously gain 20% to 30% of value on the market within the next year or so are sufficiently unrealistic. Keep in mind that the average annual income increase nowadays is anywhere from three to five percent, which translates to a waiting period of until at least 2017 before you will regain housing values from a few years ago.

How Long Will It Take For the Job Market To Improve?

As we find ourselves in yet another double dip recession and the nation is struggling to deal with the economy, the unemployment rate in many states continues to plummet or stay where it’s at; a dismally low level. No one can say how long it will take for the job market to improve but analysts predict that though the process will be slow it will happen.

Interest Rates Are At “Go Get ‘Em” Levels

Being able to finance a home was much easier just a few short years ago but having said that the fact of the matter is that now, interest rates make up for the otherwise detailed and careful application and approval process.  While in the midst of a 30-year low, interest rates at about 4-4.5% clearly indicate this is a very good time to buy a home.  Of course, for owners of existing homes this can mean a loss on the property they sell, but by moving into a home that will most likely increase in value in a few years’ time it offsets the loss.

Keep Living But Live Happier

Why not wait for the market to improve before selling your existing property and moving into another?  The return on investment can be significant when you factor in the changed interest rates regardless of improved property values.  Consider this: Sell an existing home for $200,000 today and buy up into a new home worth $320,000 at the current low interest rates, versus wait for 5-7 years to sell the home, which by then might be worth $220,000.  The interest rates by then to purchase the same new house worth $350,000 will be at least a couple percent higher.  The end result is about $12-$15,000 in savings by selling and buying sooner – and that many more years of happiness.

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A few other things to consider are whether or not you are willing or able to maintain your existing home or would you prefer moving into a condominium or relocating to a warmer climate?  Would this be a perfect time to sell your property and invest in a dual home that can also be rented out for some additional income?  Also, how can you be sure your property value will not dip even further as you wait the market out?  Wouldn’t you want the freedom to at least be able to get into a newer home, at a great price because of the current housing prices?
The best way to really know what steps to take is to contact your Realtor for an in-depth consultation and to learn whether now is the perfect time for YOU to sell.

Million Dollar Home Sales Are On the Rise – Market Stability On the Horizon

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As people begin to flock down south to Florida this season there is a lot of interest in how the market is performing lately.  Tourists love our Florida waterfront homes and while it’s cold in many parts of the country we are lucky enough to enjoy fabulous weather tourists want to get in on that warmth and sunshine too.  So what’s happening with our market and how can we expect the coming season to perform?

The biggest news is with inventory.  Though some media reports are inaccurately reporting a 14% jump in housing prices – there is some promising activity that will drive our market toward stronger stability and toward an upswing.

Inventory Down As Much as 40% In Some Areas

At the moment we are reporting inventory levels down about 30% in Fort Myers, Bonita Springs and Estero.  The Cape Coral and Lehigh area is experiencing an inventory drop of a whopping 40%! Even though sales have been strong and we are doing better than just a couple of years ago when there was a plethora of foreclosures and distressed sales, this inventory drop is for a reason.

For much for the previous two years and more – the majority of our inventory down in Florida has been that of bank foreclosures.  As those properties continue to dry up we will continue to see active changes in our inventory levels and a corresponding shift in statistics that might not make sense for a while till things stabilize completely.

High-End Home Sales Up

The most well received change in our market has been the increase of upper-end homes that have recently gone into pending or sale status.  To give you an idea, last year’s home sales in this category were a total of 75 around this time of year.  The same category reported a spike in sales this year with over 126 million dollar homes sold or coming into pending status.  This is almost double the previous year’s sales in this real estate niche!

Condos, Mid-to-High Level Single Family Home Prices Down
This activity is having a stabilizing effect on our prices for most areas of the county.  In fact, we are only seeing property price increases in single-family waterfront homes that are on the low-end of the pricing spectrum.  Single-family homes in the same lower-priced bracket in the rest of the area regardless of not being located on or near the water are also going up in value.  Still hard hit with oversupply, however, are condominiums and homes in most gated communities.  We also continue to experience a slight decline in housing value for vacant land lots in our area.

Reading Between the Lines

With all this activity in one segment of the industry, naturally the statistics will be inaccurate for a while as the rest of the market stabilizes.  In fact, one media source reported a jump in average home prices in this area of as much as 14%.  Though that would be fantastic it is unfortunately not true.  The only reason home prices appear to be higher is because of the spike in high-end sales versus lower priced foreclosed property sales. There are fewer bank foreclosures selling, skewing the numbers down from those of last year and there is increased high-end selling that is skewing the numbers up.

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With low inventory, low prices and low interest rates – the market condition presents a perfect situation for buyers and as the months go on there will be increased selection to choose from.  Sellers are encouraged to list their homes for sale sooner rather than later.  As the holiday’s approach there is a consistent spike of inventory that results from sellers listing their home in the last 90 days of the year in time for the season.  The sooner a home is listed, the better the chances for a successful and prosperous transaction. At the end of the day, it is important to keep our focus on the fact that a lot more expensive homes have sold – news that is promising everybody.

Stuck in a Rut With People You Know Who Want to “Buy” Your Home?

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A lot of us have been through this scenario:  we think of selling our home, in fact we made the decision and before we have even listed it on the market our friends, family and coworkers are aware and someone or the other expresses interest in the home.  Sounds pretty harmless, right?  For the most part yes, except when you consider the fact that nine times out of ten when someone in our social or professional circle shows interest in our property, the sale does not pan out.

So how can you deal with this?  There is a solution, believe it or not: listing your home with a named exclusion. We explain how this works below, but first – it is a good idea to understand the types of issues you may encounter if you do not entertain this type of work-around to this potential problem.

“I Just Need Three More Weeks, I Promise!”

That is a common sentiment heard by sellers entertaining a sale to someone they know or even someone two or three degrees away from someone they know.  The buyers end up repeatedly asking for more time, without ever really putting a solid offer on the table.  They seem to think that because they know you, they can take weeks, even months, to make up their mind.  You, meanwhile, are anxious to sell the home before the value dips even further.

“But I Thought You Would Give Me a Deal Since We Know Each Other”

The natural inclination of anyone thinking of buying from someone they know is to expect some concessions – extra things that may not have been part of a sale to strangers.  The biggest concession buyers are hoping for by going through someone they know is on price.  But you are selling your home and chances are you want the best price you can get out of it – especially in today’s market with continuously declining home prices.

“Can’t You Put the House on Hold For Me?”

The idea that someone will hold off on a sale of something as large as a home is unbelievable but still, there are cases where buyers have actually expected that of sellers who they know.  As a seller, what are you supposed to do if another offer comes along that is serious, a good price and it seems like it will close with a very quick turn-around?  How can you skirt around the careful social stigma of not ruining the relationship with one person or party, without shooting yourself in the foot?

A Solution Where Everyone Is Happy

So how do you handle these situations?  What do you say to your dad’s best friend who really wants to buy your home but can’t decide between your home and the one they were already looking at?  Listing your home with a named exclusion allows you to proceed with a sale as initially hoped with the people you know – with some concessions such as a sale with little or no commission.  The key is that the people you have been engaging with aside from outside offers will benefit if they buy it since it would be outside the listing agreement.  This maneuver forces the buyer to take some action, since the listing is also open to everyone else in the market to buy a new house.
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Using this savvy selling technique, you can get in on offers potentially made by people you know, provide a concession of sorts in case it does sell to them and keep the listing open for others at the same time – all without shortchanging yourself during the process.  And there is no negative social stigma attached.

How To Prepare Your Home For Sale – Spruce It Up and Sell It Fast!

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If you have made the decision to sell your home and will be listing it soon, especially as we continue to experience this challenged market lately, you want your home to sell as quickly as possible and at a price closest to your asking price.  By following these tips, you are sure to be successful in your home-selling endeavor, and most likely with an edge over other sellers who may not have taken the time to prepare their property for sale.

Get Your Home Ready So It Shows Its Very Best

Curb appeal is a very important aspect of attracting serious buyers.  Beginning with what they see as they drive up, to what their experience is walking up to the front door – as a seller, your greatest opportunity to grab their interest lies in those very first moments.  Make sure there are no dirty corners, cobwebs, mildew, stains or other unattractive visible signs of neglect that will catch prospective buyers’ eyes.

Tip: Pressure-wash the area, clean up weeds, add shine to pavement blocks with some sealant, make sure the storm door is in good shape and that the door bell operates.

Clean, Mark-Free Walls and Windows Are Essential

Regardless of whether you are still living in the space or the house is vacant, it’s important to have the house cleaned and devoid of all marks and blemishes.  Windows and glass should be clean and smudge-free.  Walls should be without any scuffmarks, moving dents or other signs of wear and tear.

Tip:  Hire a cleaner to clean the house, the bathrooms, fixtures, kitchen, appliances, floors, walls and windows -- patch up dents in the wall and apply a fresh coat of paint throughout the home.

Address Aged Aspects of the Home

If you have some areas with older appliances, tiles with loose grout or any other things that need some updating, try to do so before putting up the house for sale.  Without taking on too large an expense, do make an effort to make the home presentable.

Tip:  Clean grout on older tiles, have loose tiles re-grouted, and freshen up shower stalls and bathtubs with new caulking.

Don’t Ignore Hard-To-Reach Areas

Pool cages are often ignored within a home because homeowners cannot easily access the insides where mold and mildew can accumulate.  Cleaning the pool cage will make all the difference when a buyer walks through the home and imagines their family using the space.

Tip:  Pressure-wash the inside of pool cages for a quick, bright spruce up.

The Home Should Be Warm and Inviting

Depending on where you are located, keep the temperate of the home at a comfortable level.  If it is too hot or cold, buyers will leave too quickly without getting ample time to walk through, see all the features and visualize themselves in the home.  If the home is still occupied, cook a pot of apples and cinnamon on the stove a few hours before the showing, so there is an inviting aroma throughout the house.

Tip:  In the summers, keep the air conditioning on at a comfortable 68 to 70 degrees.  In winters, leave the heating on at about 73 or 74 degrees.

Exterior Aesthetics Are Also Important

Pay attention to overgrown shrubs, trees, flowerbeds and hedges.  When the outside of a home looks unkempt it can give off a false impression of the rest of the home too.  You want your prospective buyers to see the home and fall in love at first sight – and that begins from the exterior.

Dealing With The Hazards of Chinese Drywall

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RECOGNITION, REMOVAL AND REMEDIATION

Most homeowners have no clue what Chinese drywall is – in fact, if you looked at it, you can’t even tell that it is different than regular drywall.  The key, however, is knowing what the telltale signs are so that if they do show up, you can be prepared to immediately take steps to resolve the problem. If you’re considering a home with signs of Chinese drywall – run for the hills!  Here are some signs for the cheap but ineffective material as well as next steps.

What You See Is Not What You Get

You can’t recognize Chinese drywall just from looking at it – rather you would have to know what the smell is.  The material emits a very strong sulfur smell that is not only potent but also as much as a hundred times stronger than the regular concentration of any sulfur in building materials.  As the name implies, the material is imported from China and the primary reason it is installed is to save money.

Looking Closely To Confirm – A Quick and Informal Test

You can spend at least a thousand dollars to professionally verify the presence of this toxic material in the property but with a few simple steps you can quite easily determine whether it exists, at no cost at all.

- First, turn your power off through the circuit breaker.
- Second, examine your electrical outlets beneath any plates or covers.  If you see green metallic corrosion, you are seeing signs of Chinese drywall.
- Next, review all air conditioner ducts for the same corrosion, which is from the sulfur.
- Take a look at the copper tubing that is installed with plumbing.  Blackened tubing or black plumbing fixtures is another confirmation.

Dealing With Chinese Drywall Once It’s Been Confirmed

CONFIRMATION IN AN EXISTING HOME

If you live in a home that is showing signs of sulfur corrosion, you suspect you have Chinese drywall and are able to confirm it – then you should contact an attorney. Since this is not something covered by homeowners’ insurance, any financial reparations would likely come through legal channels. There may very well be a lawsuit waiting to happen, through which you may be able to recover funds to manage the problem or recover any punitive damages you may have incurred.

Any repairs or renovations you have had completed may be used in your quest to gain legal ground against this violation of safe living conditions, therefore save all receipts that show you attempted to correct some or all of the problem.

Submit an application with your property appraiser’s office to have it reappraised so the assessment can be changed on it.  If the County decides to reassess the value of the home, it can result in lower taxes.

Unless you decide to move out of the property due to the serious health hazards at stake such as bloody noses and respiratory problems, you will need to completely replace any and all systems that are affected by the defective material.  While this will likely be an expensive endeavor – keep in mind that the value of a property can dip as much as 50% when the presence of Chinese drywall is confirmed.  You will need to replace all electrical fixtures, safety devices such as smoke detectors and get to the heart of any corrosion or surfaces where there may have been exposure to sulfur.  Since nearly every material absorbs sulfur, true remediation lies in the complete systemic replacements.  This means new cabinets, appliances, flooring, plumbing and even wiring.

POSSIBILITY IN A POTENTIAL HOME OR PROPERTY

If you are considering the purchase of a home or property that has Chinese drywall, you can safely do one of two things:  first, walk away from the property, as it is completely inhabitable.  Second, you can opt to purchase the property from an investment standpoint, assuming you will resolve the problem and then resell or live in the home afterward.
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The bottom line is that you can never be too safe.  Now that you know what to look for it is always a good idea to keep your eyes open for signs of this hazard so you can be in control if it happens to be present.

How To Win When There Is More Than One Offer On The Home You Want To Buy

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Are you finding yourself in the position of having to deal with multiple offers being made on the home that you want to buy?  Are there others who want that property just as much as you do and you need to find a way to gain an edge over those other prospective buyers?  With these tips, you will have a much better chance at providing an offer to the seller that they can’t refuse.  It does take being a little flexible, but then if you were not willing to bend a little, someone else will and the keys to “your” home will end up with someone else.

Make An Offer They Can’t Refuse

These days, the lines at mortgage companies are lining up with people wanting to seize the opportunity of the current buyers’ market.  Almost everyone will be financing their new home with either FHA or a straight bank loan – both of which take time and involve signing a lot more papers, and a lot more back and forth.  So right off the bat, if you can offer cash instead of financing – do it.  It does not matter what your source of income will be; whether the cash comes from an equity line of credit, your retirement fund or elsewhere, being able to offer cash will definitely set you apart from other buyers.

It goes without saying that the highest offer would most likely be the one to be accepted.  This does not mean that there aren’t sellers out there who base their decision on factors other than price alone, but the general likelihood of the highest offer being accepted almost always rings true.

Demonstrate A Range of Financial Flexibility

If you can increase the size of your escrow deposit, regardless of whether this is done through installments, it will be a major attraction to the other side.   At a time when most home buyers are pinching for every single penny (even obtaining financing that allows them to put down as little as a few percent deposit), try to go higher to as much as ten percent of the purchase price.

The best time to do this is during the initial period after you have made your offer or right after that 7-10 day inspection period.  Offering this extra flexibility and amount clearly demonstrates your ability and strength to perform under the contract.

Handle The Inspection In Advance To Reduce or Eliminate Contingencies

Be sure to complete your due diligence before you make your offer on the home so you can shave off the extra time (and hassle) of going back and forth over inspection contingencies.  This is one of the best ways to stand alone in a group of potential buyers who have made an offer on the property.  If needing to choose from a simple offer with no stipulations as opposed to one that states that X, Y and Z needs to be addressed prior to closing, it is very likely the seller will choose the simpler of the two.  Not to mention that Asset Managers also prefer property offers with no inspection strings attached.

Be Specific About the Closing Date

This may not sound like a big deal but it can make things more convenient for everyone, including the sellers, listing agent and the lender.  Knowing in advance what your expected closing date is and including it on the offer provides a frame of reference for parties.  Further, it is a requirement on most banks’ application forms that, if not completed, can only add additional waiting time to the entire process.  Just like you, the seller, are likely interested in a quick close, chances are the buyer is also anxious to complete the transaction quickly.  Even though all parties would ideally like a close immediately after an offer is made and accepted, it is simply unrealistic.  So one way to add some points to your corner is to provide a realistic but firm closing date on the contract.

Provide Complete Documentation As Required

This is one area where being organized truly pays off.  If the offer you make is accompanied with all the necessary supporting documentation and/or requirements that may be set forth by either the listing agent or the lender, you are making everyone’s job easier. An example where this will apply is supplying proof of your right to enter a contract if you are acting on behalf of a partnership or corporate entity.  For sellers and agents anxious to sell the property to be presented with a complete package of everything they require versus an incomplete one, the choice is an easier one to make.
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Remember that there is only so much you can do, but as long as you do whatever it is that you DO have control over, if the house is meant to be yours there is a good chance you will get it.  Be prepared for a rejection to your offer so that if it does happen, at least you are not so emotionally vested in the would-be property that it hinders your ability to move on and seek another, better one afterwards.

"D.O.M." Your Way to better Value When Buying a Home!

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Generally speaking, the longer a home is on the market, the more willing a seller is to negotiate. And that means you might be able to get a good deal!

However, notice that I said “generally speaking.” I put in that disclaimer because there are several reasons a home might be on the market for a long time.

One is that it might simply be overpriced. If that’s the case, then you’re in an excellent position to negotiate since the sellers may be anxious to sell the home.

A second reason may be someone has already put an offer on the property, but their financing, credit rating, etc. hasn’t met the requirements of the deal. In short, there was something wrong with the buyers, and nothing wrong with the home. Again, there may be an opportunity for you in this situation.

A third reason is that someone made a simple mistake in the Multiple Listing Service (MLS)! Perhaps the home got listed in the wrong ZIP code or the wrong neighborhood, or the price was simply wrong and listed too high. Now, normally, MLS is very accurate, but, as always, it’s dependent on humans entering information into the system, so mistakes happen!

Fourth, the house may have stayed on the market for so long because the owners simply refuse to negotiate! A real estate agent can help you identify these individuals for you so you don’t waste time and energy on a sale that will never happen.

Finally, a home may stay on the market for a long time because there is something wrong with it either structurally or cosmetically or both!

Depending on the situation, this can also be an opportunity for you as a buyer! You can use it as a bargaining tool; that is, either the home seller fixes the defects or lowers the price to account for the cost of repairing those defects.

However, you should always, always get a home inspection done on such houses! (Or on any house you’re considering, for that matter!). It prevents you from buying a “money pit,” in which you have to throw a small fortune in order to get defects repaired.

Here’s the short and long of it: DOM can sometimes get you a great value in a home; however, you need the expertise and guidance of an experienced real estate agent to pinpoint such values! I can provide you with that expertise. Contact me today!

Is It the Right Time to Sell or Stay Put and Wait For Change?

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These days so many homeowners are wondering if it’s the right time to move on and move up into a better home. So many questions ensue. How long will it take for the market to be back to normal again? Will today’s interest rates go on indefinitely? How can I tell before they begin to climb again? If I wait long enough will my home’s value come back up to what it was just a few years ago? The answers are not so simple but one thing is for certain. Property values take time to climb up and rebound after bouts of the situation that we are facing at present. Here are some pointers that will provide further insight as to why selling sooner may make more sense.

When Incomes Go Up – So Do Property Values

Many industry experts believe the only way for home prices to go back up is for buyers to have higher incomes. Based on this assumption, a good number of homeowners’ expectations that their property will miraculously gain 20% to 30% of value on the market within the next year or so are sufficiently unrealistic. Keep in mind that the average annual income increase nowadays is anywhere from three to five percent, which translates to a waiting period of until at least 2017 before you will regain housing values from a few years ago.

How Long Will It Take For the Job Market To Improve?

As we find ourselves in yet another double dip recession and the nation is struggling to deal with the economy, the unemployment rates in many states continues to plummet or stay where it’s at; a dismally low level. No one can say how long it will take for the job market to improve but analysts predict that though process will be slow it will happen.

Interest Rates Are At “Go Get ‘Em” Levels

Being able to finance a home was much easier just a few short years ago but having said that the fact of the matter is that now, interest rates make up for the otherwise detailed and careful application and approval process. While in the midst of a 30-year low, interest rates at about 4-4.5% clearly indicate this is a very good time to buy a home. Of course, for owners of existing homes this can mean a loss on the property they sell but by moving into a home that will most likely increase in value in a few years’ time it offsets the loss.

Keep Living But Live Happier

Why not wait for the market to improve before selling your existing property and moving into another? The return on investment can be significant when you factor in the changed interest rates regardless of improved property values. Consider this: Sell an existing home for $200,000 today and buy up into a new home worth $320,000 at the current low interest rates, versus wait for 5-7 years to sell the home, which by then might be worth $220,000. The interest rates by then to purchase the same new house worth $350,000 will be at least a couple percent higher. The end result is about $12-$15,000 in savings by selling and buying sooner – and that many more years of happiness.
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A few other things to consider are whether or not you are willing or able to maintain your existing home or would you prefer moving into a condominium or relocating to a warmer climate? Would this be a perfect time to sell your property and invest in a dual home that can also be rented out for some additional income? Also, how can you be sure your property value will not dip even further as you wait the market out? Wouldn’t you want the freedom to at least be able to get into a newer home, at a great price because of the current housing prices?

The best way to really know what steps to take is to contact your Realtor for an in-depth consultation and to learn whether now is the perfect time for YOU to sell.

Understanding the Difference Between Online Resources and a Realtor When Pricing Your Home

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The Internet can be a great resource for a host of things centered on buying or selling your home but in some cases, the most you can expect to gain is a basic understanding of things. For something as serious and important as pricing your home to either value it or sell it, relying on the Internet can only go so far. Here we’ve outlined some key differences between the figures you will yield from online sources versus those that have been compiled by your local Realtor.

ACCURACY IS VITAL

In today’s market especially, accurately pricing your home to sell is essential. With it being a buyers’ market, you will have to gain a solid understanding of all factors that contribute toward your property’s value. There can be negative repercussions of pricing a home either too low or too high. One such scenario is if there was a seasoned buyer who had taken the time to research in advance of searching for homes. That buyer’s knowing what to expect in the local market seeing your overpriced home could result in a turn-off and you could lose the sale. By the same token, you stand to get the shorter end of the stick in case of not knowing what you could have charged. Spending a little more time and/or expense can make a huge difference in the end outcome.

ONLINE TOOLS AND CALCULATORS

There are more than several websites where anyone can log on, put in their zip code and be given an instant “analysis” of their real estate value. The figures that appear as results from searches made through online resources stem from a conglomeration of several weeks and sometimes months of data collected from a particular region.

Websites such as www.zillow.com, www.realtytrac.com orwww.trulia.com offer a great way to get a generic idea of the value that homes in your region are going for or have gone for recently. As an added resource to other services also offered on these sites, the goal is not to assist homeowners in assigning a selling price on their property based on the data, rather to offer a snapshot on sales and pricing data for the area. In fact, for many people it is the perfect tool to add an extra edge when determining the fair market value of your home, along with other factors.

PROFESSIONAL COMPARABLE MARKET ANALYSIS

While online real estate tools are a great way to get a preliminary idea, they are only going to yield a figure that will show you where to start. To get an accurate assessment, you will need to avail the professional services of a Realtor. The only way to get an accurate “reading” of what the market rates are for homes in your vicinity and your neighborhood in particular, is to have a comparative market analysis conducted by a Realtor who understands your neighborhood. There is a good chance that they have dealt with properties in the area on a first-hand basis, regularly interact with the agencies and organizations that deal with very homes in your neighborhood and are familiar with the people in various facets that you will end up needing to interact with yourself, as the seller of your home.

Realtors conduct a detailed Comparable Market Analysis (sometimes also called Competitive Market Analysis) through a series of data compilation of area homes and properties, considering factors such as amount of land, the square footage and number of bedrooms or typical amenities in the neighborhood. But homeowners can also opt to delve into accurate detail about their property’s value by relying on an independent appraiser. Also, through the use of CMA data the County Tax Assessor determines the value of your property taxes.
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When you are pricing your home to sell, it is vital that you use all available resources. At first, it makes sense to “shop around” and get to know the generalities before you head for the specifics. And as with most transactions dealing with your real estate world, it is always best to rely on your Realtor for quality, effective and accurate information that is relevant to you and YOUR market.

Real Estate Trends On Both Sides of the Fence; Here’s What’s Happening

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We are definitely seeing a plethora of lengthy reports about the real estate market these days, whether on a national level or honed in on a particular local area. But the fact remains that the market is in an unstable state and keeping track of indexes, watching over home sales and how they fluctuate from month to month or year over year, is giving us a glimpse into what to expect. It is these very measures that allow us to foresee the greater trends that exist so we can act accordingly. Here, according to which side of the transaction you are on, are some happenings in the industry and what they mean to you as a homebuyer or home seller.

Buyers Don’t Beware

Buyers Trend #1

Foreclosures have slowed down. For the most part, whatever foreclosures that had flooded the market have either slid into transition stage, where the banks are reviewing documents and going through the sometimes lengthy review process that comes before accepting applications to purchase a foreclosed home – or there are fewer properties available. There was indeed a flood of distress sales in the market that occurred in the recent past but banks have now shifted away from foreclosures and they are favoring short sales instead. Short sales are a far better option for many reasons, but the two main benefits remain 1. Homeowners are either able to retain some of their credit while buying back their home at less than its current value and 2. Banks are spared the added expense and risk that goes along with foreclosures.

Buyers Trend #2

Prices remain historically low. One thing that has not changed for the duration of our current recession, even as we have headed into a double-dip economic downturn, is that as a result home prices continue to be at their lowest level in years. In the S&P Case-Shiller Home Price Index, it is indicated that housing prices these days rival a 30-year low and they seem to be hanging there in place as the market remains unsettled. Even though prices are as low as they are, the fact remains that these transactions that are taking place are happening with regular homeowners and simple sales deals, rather than banks for foreclosure sales.

Buyers Trend #3

Rates are still at an all-time low. Interest rates, depending on the day, are still as low as a little under 5% for the average 30-year fixed rate mortgage loan. For potential homeowners and those who want to move up or seize the opportunity to move into a luxury residence, this could not be a more perfect time to invest in that property. For those people willing to remain in the mix for the long haul, the current market trends will predominantly not affect them in terms of return on investment. The market will indeed bounce back, whether 6, 7 or even more years later. And when it does, you will end up having much more house (in terms of value), while still paying that very low interest rate.

It’s a Small (Selling) World After All

Sellers Trend #1

There are lots of buyers looking to buy. When you are selling your property, the more the potential buyers the merrier. With the number of buyers who are looking for a great deal your chances of selling are a lot better these days and if you have a home that has unique or upgraded amenities you can further avail the opportunities that will come with having that edge over other sellers.

Sellers Trend #2

Inventory is down. With the number of pending sales in limbo on a day-to-day basis, inventory figures are relatively low. This is great news for people looking to sell their properties, because that translates to more buyers for the taking and the ones that do come looking at your property are far more impressionable.
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To sum things up, right now is a great time to be a buyer – especially with all the incentives out there ranging from super low interest rates to housing prices that are closer to those from 7 or 8 years ago. If you can afford it now, buy now.

As a seller, the main advantage you have these days is that there is less inventory for those buyers out there looking for a deal now – which means you have the edge and better chances of selling that property.

The trends keep fluctuating a bit here and there but the major things remain: low rates, low housing prices, low inventory. And now is the time to seize the opportunities that lie within these trends.

Should I Wait Till Prices Rise Or Does Selling My House Now Make Sense?

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Many people are of the impression that waiting for six months to a year will result in a more stable market and a higher property value. This may not be entirely true, depending on how much equity you are expecting on your property. Looking at past real estate trends, the average number of years homeowners must wait may be longer than you think. Here are a few things to think about when deciding the right time to sell your home.

Do You Have a Choice?

Often people don’t have a choice in the matter. So, the first thing you should do is to assess whether you are able to withstand either staying in your home or selling it right away. If you are facing a new job that would require relocation and maintaining two households is not practical, then it may be a good idea to sell your home now, regardless of the current value. On the other hand, if the reason you would like to sell is in your hands, such as retirement, then you may want to wait a few years till the value matures and the return on your investment is stronger than it is today.

History Helps Us Gauge The Future

To understand where we are headed, it’s important to understand the history. With respect to the real estate industry, the lending market has seen significant changes over the past ten years and this intense shift in trends has affected the housing market of today. 

Specifically, a closer look at the market between 2001 and 2006 reveals that buyers were getting into homes with little to no money down, regardless of bad credit with some buyers actually falsely reporting the amount of money they earned per month. Still, these buyers were qualified for loans by most lenders and the end result was an influx of homeowners who couldn’t afford their homes. 

In hindsight, that housing phenomenon, which is a thing of the past now, was a trend that redefined the housing market, as we know it today.

By early 2007 the national “mortgage meltdown” occurred. Lending institutions realized the loan programs and application parameters were way too lax, causing far more damage than they had anticipated. As a result of the loans that were being approved without much consideration of buyers’ qualifications, homes were over valued and sellers had no equity plus couldn’t afford payments. Further they were losing their properties and even today many people are suffering the mortgage meltdown because of those lending trends.

Looking At The Here And Now

Lending institutions today process “full documentation” loans, something that is far different from the overly lenient loans of the previous decade. The level of detail and depth that goes into researching applicants’ qualifications now, is much higher than before. Lenders now perform detailed background checks, making sure that your salary is what you say it is, checking tax returns and references and also carefully reviewing your credit history. Very importantly, buyers that are getting into homes through loans obtained from lending institutions are people who can actually afford the home. This never mattered before. 

Keeping this very important fact in mind, it makes sense then that the only way for prices to go back up is for buyers to have a higher income. Based on this, many homeowners’ expectations that their property will miraculously gain 20% to 30% of value on the market within the next year or so are unrealistic. Unless they suddenly experience a significant jump in income, the chance that their properties will gain that much value is next to impossible. The average annual income increase these days is around three to five percent. 

Once our market is completely at the bottom in terms of prices, we can expect home prices to rise to somewhere in the 3-5% range, which is about the same as the average salary increase.

What Does This Mean Exactly?

The best way to illustrate how this plays out in terms of property value versus time needed to increase the value, is through this example: 

With a property valued currently at about $450k, the homeowners are looking to retrieve at least $600k on it when they sell, the value of the home when they purchased it during the housing market boom. Their misconception is that the home’s value will return to its original purchase price value, within a year or so. 

Given that property value increases coincide with the job market and wages earned, based on a 5% appreciation per year – on the $450k property it would take about six years for it to reach the hopeful $600k value again. So, to get to that price, the homeowners would have to hold on to the property until 2017 before they sell. Not a mere six months to a year.
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Prior to making any decisions about whether to sell now or later – it makes sound financial sense to begin looking at your options today. Consult with your real estate agent to ascertain where you stand in the market today, how your home’s value compares to your expectations of when you sell it and when would be the best time for you to sell.