Nov. 2, 2017
Hiring an Agent to Sell Your House May Cost You NOTHING!
There is no doubt that it is easier to sell your house when using the services of a local real estate professional. The agent will provide:
- Greater exposure to more buyers
- The skills of a professional negotiator
- A layer of protection from possible legal liabilities
- Professional guidance in navigating any pitfalls that may arise
- A level of safety while showing the home
There is no doubt that these services are valuable to any family that decides to sell. The only question is – how valuable? One of the main reasons For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe these services are not worth the fee an agent charges. But, what if those services didn’t cost the seller a penny?
A study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything and, in some cases, may be costing themselves more by not listing with an agent.
In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money on their own than if they used an agent?
The study makes several suggestions:
- “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
- “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
- “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Three conclusions from the study:
- FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
- The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
- The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.
If you are thinking of selling, FSBOing may end up costing you money instead of saving you money.
Nov. 1, 2017
Don't Let Fear Stop You from Applying for a Mortgage
A considerable number of potential buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific cause for concern tends to be mortgage qualification.
For many, the mortgage process can be scary, but it doesn’t have to be!
In order to qualify in today’s market, you’ll need to have saved for a down payment (73% of all buyers made a down payment of less than 20%, with many buyers putting down 3% or less), a stable income and good credit history.
Throughout the entire home buying process, you will interact with many different professionals, all of whom perform necessary roles. These professionals are also valuable resources for you.
Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests you follow:
- Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO® Score of all closed loans in September was 724, according to Ellie Mae.
- Start gathering all your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
- Contact a professional – your real estate agent will be able to recommend a loan officer that can help you develop a spending plan, as well as determine how much home you can afford.
- Consult with your lender – he or she will review your income, expenses, and financial goals to determine the type and amount of mortgage you qualify for.
- Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and demonstrates to home sellers that you are serious about buying!
Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.
Jan. 8, 2017
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage - either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
Christina Boyle, Senior Vice President and Head of Single-Family Sales & Relationship Management at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:
“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”
This holiday season, why not give yourself the gift of homeownership? Lock in your housing costs for the next 30 years and guarantee you are the one building wealth.
Jan. 8, 2017
Housing options have expanded in Benson Place to include homes and homesites in Benson Place Woodchase, Benson Place Fieldstone and, the most recent addition to the neighborhood, Benson Place Village.
An aggressive housing market, home buyer demand and the growing population of baby boomers and first-time home buyers has led to expanded housing options in Benson Place, one of the Northland’s most popular new home communities.
“We’re pleased to offer homes and homesites in Benson Place Woodchase, Benson Place Fieldstone and, the most recent addition to the neighborhood, Benson Place Village,” explains Rob Elsey, ReeceNichols agent and co-community manager. “Benson Place Village will include 33 single family, maintenance provided villa homes, while Fieldstone and Woodchase continue to offer traditional single family homes that begin in the upper $200,000s.”
A new entrance at 96th St. and N. Eastern Ave. winds through the maintenance provided Village neighborhood and leads visitors and residents to the newest single family phase of Fieldstone.
Aug. 4, 2016
If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.
Answering the following 3 questions will help you determine if now is actually a good time for you to buy in today’s market.
1. Why am I buying a home in the first place?
This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.
For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”
This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons why people buy a home have nothing to do with money. They are:
- A good place to raise children and for them to get a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.
2. Where are home values headed?
According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.
What does that mean to you?
Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait till next year. Your down payment will need to be higher as well to account for the higher home price.
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.
The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase over the next twelve months as you can see in the chart below:
Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.
Aug. 4, 2016
The residential housing market has been hot. Home sales have bounced back solidly and are now at their second highest pacesince February 2007. Demand has remained strong throughout the summer as many real estate professionals are reportingbidding wars with listings actually selling above listing price. What about your house?
If your house hasn’t sold, it is probably because of the price.
If your home is on the market and you are not receiving any offers, look at your price. Pricing your home just 10% above market value dramatically cuts the number of prospective buyers that will even see your house. See chart below.
The housing market is hot. If you are not seeing results you want, sit down with your agent and revisit the pricing conversation.
Aug. 4, 2016
If you are debating listing your house for sale this year, here is the #1 reason not to wait!
Buyer Demand Continues to Outpace the Supply of Homes For Sale
The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage:
“With demand holding firm and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale.
Realtors are acknowledging, with increasing frequency lately, that buyers continue to be frustrated by the tense competition and lack of affordable homes for sale in their market.”
The latest Existing Home Sales Report shows that there is currently a 4.6-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and 5.8% lower than June 2015.
The chart below details the year-over-year inventory shortages experienced over the last 12 months:
Anything less than a six-month supply is considered a “Seller’s Market.”
Let's get together and discuss the supply conditions in your neighborhood to be able to assist you in gaining access to the buyers who are ready, willing and able to buy now!
April 19, 2016
Last week, the inaugural “Homebuyer Insights Report” was released by the Bank of America. The report revealed the reasons why consumers purchase homes and what their feelings are regarding homeownership.
Consumer Lending Executive, D. Steve Boland, explained:
“Homebuyers today are motivated by both emotional and practical reasons. Nearly all want more space, but a majority of homebuyers, especially those purchasing their first home, are also looking for a place to call their own, put down roots and make memories. They value the emotional benefits of owning a home as much as the financial ones.”
Boland went on to say:
“The path to homeownership is a journey and can be as overwhelming as it is exciting. For many people, this is the single most significant financial transaction they will ever make.”
This was evidenced in the report when they asked today’s homebuyers to define homeownership. Their answers tell the whole story.
Homeownership has always been a part of the American Dream and survey after survey confirms this will always be the case.