Tuesday, January 3, 2012

How Sellers Can Earn Tens of Thousands More On the Sale of Their Home

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These days, even though interest rates are at an all-time historic low and inventory is high – many buyers are in a situation where they cannot easily obtain financing from a traditional lender.  But there is a solution that works for these buyers in something called “owner financing”.  What this means is that the seller of the home also finances the home, yielding the seller several benefits that they would not be able to enjoy otherwise.

Sell Your Home for As Much As 10% Above Market Value

Since the buyers that have little to no credit, are unable to secure regular financing due to bad credit scores or negative credit history – you will be able to charge a premium on the list price of the home.  Not only that, you will be able to go as much as 10 percent above the market value, depending on which market you are selling in.  This works especially well during a time when housing values are at their lowest they have been in years and can be a great option for sellers with no choice but to sell for reasons out of their control such as job relocation or change in family dynamics.

Earn As High As 2% More In Interest Than Traditional Lending Rates

With the economy as tough as it has been, investing your cash in the stock market is a hit or miss maneuver.  But with owner financing there is a potential for a significant return on your investment.  In fact, most people that engage in this type of alternative home selling transaction end up earning 5 to 6 percent on the whole deal just in interest.  As an example, consider a home that might have been appraised at $200,000 on the market, sold for 12% higher at $229,000 and then financed with a 5-year balloon at 5%.  When you factor in the higher selling price with the added percentage points of interest, the seller ends up with almost $80,000 profit!

High Demand Among Many Buyers Seeking Owner-Financed Situations

Given the plethora of families in distressed situations, there are many previous homeowners that are looking to get into another home but may not be able to because of a short sale situation.  Though a short sale does not have as harsh ramifications as foreclosures, the impact on credit lasts at least several years.  So during that time of credit rehabilitation, these prospective buyers welcome the chance to grab an owner-financed home.  This means that as a seller your property will not last on the market very long – making it a win-win situation for everyone.

Another often-overlooked set of buyers that would be interested in a home being financed by its owners is those people that are self-employed.  Lending practices are still very tight for those that do not have at least two years of solid employment on record.  Self-employed buyers regularly seek owner-financed properties, another reason that such listings do not last long on the market despite the current buyers’ market.
Not only is it difficult to get financing for those with less-than-perfect credit but fewer buyers against higher levels of inventory has driven prices down.  So at the end of the day, both sides of these transactions have it tough.  But with owner financing – it doesn’t have to be that way.  To find out more about this alternative form of financing and investment opportunity call your Realtor for a custom consultation to see whether this may be an option for you.

Thursday, December 8, 2011

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.

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.  

Tuesday, November 22, 2011

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 d├ęcor, 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.
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.

Wednesday, November 2, 2011

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.

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.

Thursday, October 20, 2011

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.
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.

Monday, September 26, 2011

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.
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.

Thursday, September 15, 2011

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.