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Thinking of Selling? 5 Reasons You Shouldn’t FSBO

21 Jun 2016 Posted by NooshiAdmin in Blog

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In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where did buyers find the home they actually purchased?

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Source : KCM.com

What’s Happening in the Real Estate Market?

18 Jun 2016 Posted by NooshiAdmin in Blog

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This is a pretty common question that a potential home buyer or seller may be asking themselves. Leading economists in real estate converged in New Orleans this past week as they presented their answer to this question at the 50th Annual Real Estate Journalism Conference for the National Association of Real Estate Editors.

Here are the top takeaways from the week of presentations:

Many of the conversations at the conference came back to the impact that Millennials and first-time home buyers will have on the market in the future. Jonathan Smoke,Chief Economist for realtor.com had this to say: 

“At any given time in our history, demographics would explain 60-80% of what’s happening [in the market], and we are in a period of time where Millennials make up a largest demographic group according to the Census, at 84 million.”

According to the National Association of Realtors (NAR), the median first-time home buyer age is 30 and many millennials are entering a prime age to drive the housing market into the future.

Lawrence Yun, Chief Economist for NAR shared that myths and affordability may be holding back potential buyers:

“84% of current renters have the desire to own. While 36% believe they cannot afford a home and 60% of renters believe it would be ‘difficult’ to qualify for a mortgage.

Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: 

“Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO Score and a 20% down payment to buy.”

The National Multifamily Housing Council (NMHC) revealed that Millennials and Baby Boomers are often competing for the same housing inventory, causing a challenge as these two groups are the largest generations by population.

Both groups are looking for affordable, convenient homes close to city centers and ‘what’s happening.’

Bottom Line

The experts agree that homeownership is still desirable across all demographic groups, with Millennials and Baby Boomers having a great impact on available supply. If your dreams include owning your own home, meet with a local real estate professional who can evaluate your ability to buy now!

Source: KCM.com

US Housing Market Swings in Favor of Homeownership

15 Jun 2016 Posted by NooshiAdmin in Blog

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According to the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Indexhomeownership is a better way to produce greater wealth, on average, than renting. The results from the first quarter index showed that “16 of the 23 metropolitan markets investigated moved in the direction of buy territory.”

The BH&J Index is a quarterly report that attempts to answer the question: Is it better to rent or buy a home in today’s housing market?

“The U.S. housing market, when considered as a whole, has swung marginally more in favor of home ownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds.”

The latest results were released shortly after the S&P/Case-Shiller Home Price Index, which reported that home prices had climbed 5.4% nationally since March 2015.

Ken Johnson Ph.D., Real Estate Economist & Professor at Florida Atlantic University, and one of the index’s authors states:

“This [growth] appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds.”

Dallas and Denver are two of the major cities that continued to move deeper into rent territory, but they moved at a slower rate than they had in previous quarters. Johnson believes that, in these two markets, “strong economic support…should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property.”

 

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increase substantially in the next year, so lock in your housing cost with a mortgage payment now.

 

To Find Out More About the Study: The BH&J Index and other FAU real estate activities are sponsored by Investments Limited of Boca Raton. The BH&J Index is published quarterly and is available online at http://business.fau.edu/buyvsrent.

Source: KCM.com

Single Women Make Up 2nd Largest Home Buying Group

10 Jun 2016 Posted by NooshiAdmin in Blog

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According to the National Association of Realtors’ (NAR) 2015 Profile of Home Buyers and Sellers, single women made up 18% of all first-time homebuyers last year, second only to married couples who made up 54% of total buyers.

 

Whether they are young, single and no longer want to rent, or newly divorced, the amount of single women becoming homeowners greatly outnumbers single males (11%). A survey of recent home buyers revealed some interesting trends about this rapidly growing group:

 

  • Average Age: 32 years old
  • Average Income: $49,400
  • Single women are more likely to become preapproved for a mortgage in order to know their budget at the beginning of the home buying process and to be able to make a move if they find their dream home.
  • Many female homebuyers think long-term when considering buying a home, often considering what amenities they may need in the near future.

“So what do women like best about homeownership? They believe that they are investing in their future by building equity and financial security. They are also very happy to no longer be paying their landlord’s mortgage payment. Being independent and having control over their environment is a key factor.”

 

It appears that it is not marriage before mortgage any longer, for either gender. As we reported yesterday, unmarried couples make up 13% of buyers, while single males account for 11%.

Bottom Line

If owning a home of your own has always been your dream, meet with a local real estate professional who can help determine if your dream can become a reality sooner than you think.

Source : KCM.com

Serious About Home Buying? Get Pre-Approved

09 Jun 2016 Posted by NooshiAdmin in Blog

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In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

  1. Capacity:Your current and future ability to make your payments
  2. Capital or cash reserves:The money, savings and investments you have that can be sold quickly for cash
  3. Collateral:The home, or type of home, that you would like to purchase
  4. Credit:Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

Source : KCM.com

A Possible Housing Meltdown? These Experts Respectfully Disagree

01 Jun 2016 Posted by NooshiAdmin in Blog

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We want to let you know that “rumors of a new market meltdown” are not based on any reputable data. As proof, we offer you the comments of the following experts who have a totally different view on the current housing market.

Lawrence Yun, Chief Economist at NAR:

“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”

Jonathan Smoke, Chief Economist at realtor.com:

“We had a triple crown of April home sales reports, so 2016 is in the pole position to earn best year of home sales in a decade.”

Andrea Riquier, MarketWatch housing reporter:

“I’m calling the end of the housing “recovery.” On to ‘expansion.’”

Freddie Mac:

“Despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”

Steven Russolillo, Wall Street Journal housing reporter:

“A recent gauge of home builder sentiment held firmly in positive territory, according to the National Association of Home Builders. Perhaps more important, expectations for sales in the next six months jumped to the highest level of the year.”

Fannie Mae:

“Our latest housing tracker shows that the first quarter of 2016 was the second fastest first quarter pace of home sales in the past decade… Home sales typically rise in the spring and summer months, and we anticipate an acceleration in home sales that will surpass 2007’s pace by late summer.”

Source : KCM.com

Unparalleled Trust Necessary Before Listing Your House

27 May 2016 Posted by NooshiAdmin in Blog

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You and your family have decided to sell your house. It is now time to choose a real estate professional to help with the process. One of the major attributes this agent must possess is trustworthiness. To what degree do you need to trust them?

You must have enough trust in them that you feel comfortable they will accomplish all four things below: 

1. Sell possibly the largest asset your family owns

In many cases, a home is the largest asset a family has. Studies have shown that the equity many families have in their home is the largest percentage of that family’s overall wealth. 

2. Set the correct market value on that asset

Pricing is crucial even in the best of markets. You want to get the best price for your home without putting your house at a value that buyers will have little interest in.

3. Set the time schedule for the liquidation of that asset

Your family probably has a certain timetable for the sale of your house and the move into your next home. Coordinating the home selling process to meet certain schedules can be tricky.

4. Set a fair fee for the services required to liquidate that asset

You will need to pay a commission to an agent for selling the home and coordinating all elements of the selling transaction, including possible future negotiations (ex. with a home inspector or appraiser).

That’s a lot of trust. Make sure you pick a true professional to help with the sale of your home.

Source : KCM.com

Sell NOW Before Competition Hits the Market

26 May 2016 Posted by NooshiAdmin in Blog

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In their current edition of the Home Price Expectation Survey released last week,Pulsenomics asked this question of the 100+ economists, real estate experts and investment & market strategists they surveyed:

“In your opinion, what is the primary driver of recent home value growth in the U.S.?”

Here are the top four reasons given by those surveyed:

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As we have stated before, the current lack of inventory in most housing markets has caused home appreciation to increase at greater percentages than historical averages. This means that this is a great time to sell your home as supply is low and demand is high.

However, things may be about to change…

The fortuitous situation sellers see themselves in may soon change for three reasons:

  1. As more homeowners realize their equity situation has dramatically improved over the last four years, they will be more likely to put their homes on the market.
  2. With the residential real estate sector outperforming a sluggish economy, more home builders will be looking to add new construction inventory to a depleted supply of housing stock.
  3. Many banks are just now foreclosing on loans that have been delinquent since the housing bust. These houses will also be coming to market.

According to Daren Blomquist, senior vice president of RealtyTrac, in the Q2 2016 U.S. Residential Property Vacancy and Zombie Foreclosure Report:

“Lenders have been taking advantage of the strong seller’s market to dispose of lingering foreclosure inventory.” 

Bottom Line

In most housing markets, don’t wait for this additional competition to hit the market. If you are considering selling your house, now may be the time.

Source : KCM.com