What is going on with the real estate market this December? During a time that typically slows down due to the holidays, there is still plenty to look at that may predict good things to come for next year. Whether you are a buyer or seller, the real estate market is surprisingly great right now.
November 2010 – A Surprising Month
November, another month that can be slow, our office moved 6% of our inventory. Why is that significant? We typically move 6%-8% of our inventory during good real estate months, such as the summer months. So, November, generally is a slower month, was actually on par with the other busier months this year. That is excellent news!
December 2010 – Predictive of What 2011 Holds?
What do November trends have to do with December’s trends? Surprisingly, another month that is typically slower due to the business of the holidays, is showing a similar trend of last month. This trend shouldn’t be ignored and should have everyone who knows the value of a healthy real estate market extremely excited.
The bottom line is this: homes are still selling despite the busyness this time of year brings. This can only lead to better times in the future.
Sellers & Buyers – A Less Competitive Market
Both buyers and sellers have less competition this time of year. For sellers, this means you are competing with a significantly fewer number of homes than you would during peak times. Less competition means your home will be much easier to sell. Who wants to try to sell a home when homes aren’t selling?
For buyers, there are fewer buyers looking for a new home right now. This means you may have an easier time finding and purchasing a home than you would during other times of the year. Less competition means you can negotiate a better deal on your next home.
Less competition is always a benefit for both buyers and sellers when it comes to the real estate market. This can mean significantly better deals for both buyers and sellers. That is great news!
It might not seem that there is much going on in the real estate market as we close 2010, but there actually is. The trends are much better than expected and will hopefully predict a great 2011 for the real estate market.
The term “D.O.M” refers to the number of days a house is listed for sale on the market; thus, “DOM” or “Days on Market.” 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!
Foreclosure properties have always been a little esoteric, and in years past you had to attend a sheriff sale or auction (with check in hand) to have a shot at getting one. Since they seldom made their way onto the open market, you had to have some inside information and deep pockets, and you had to act fast.
You still have to act fast—it's a competitive market—but because of the large numbers of foreclosures and distressed properties on the market, they are easier to find and easier to buy. Tapping into this market doesn't have to be an intimidating process, and you don't have to be a millionaire to do it.
Finding the deals
Banks are in the business of lending money, but in recent years, they've been put in the position of being in the real estate business. Bankers of course, don't want to spend their time trying to sell properties they've acquired through foreclosure—they just want to lend out money, and collect payments, interest and fees. But over the past few years, their portfolio of properties has skyrocketed. As a result, they've made it easier for you to find those properties and make offers on them. Foreclosure lists are easy to come by (and no, you don't have to pay somebody a big subscription fee to get them). It's just not in the banks' best interest to keep these deals hidden—after all, they want them out of their portfolios.
Homeowner paradise
Foreclosures are no longer simply investment vehicles. In fact, the glut of foreclosed and distressed homes is opening up a window for more renters to become homeowners than ever before! Homes today are affordable across the board, and picking up a foreclosed property can net you a deep discount off of an already low price. Programs like the "First Look Initiative" put in place by Fannie Mae and Freddie Mac are geared specifically towards homeowners looking to buy a primary residence. What this deal does is gives prospective owner-occupants the first crack at a foreclosure, before the investors come in and start bidding. Isn't that great? That means you don't have to worry about an investor with deep pockets coming in and outbidding you for your dream home! And that's not all, the program also provides homeowners with an opportunity to put down as little as three percent, with a good interest rate—and you can also finance in any repairs and upgrades you want to make into the same loan.
Be prepared! There's no doubt you can find great deals today, but if you're looking at foreclosures, short sales and distressed properties, there are a few things you need to do to be prepared. Buying a foreclosure is a little different. But keep these three things in mind and you'll ready to deal:
1. Get pre-approved. The foreclosure market is highly competitive, and having your financing lined up ahead of time will give you a timing advantage—so you can grab that great deal on the perfect home as soon as you see it!
2. Work with a real estate agent who is skilled in the foreclosure market. Not all real estate professionals are familiar with the special processes involved in purchasing foreclosures, short sales and distressed properties. We specialize in foreclosures and are ready to guide you.
3. Have contractors ready to inspect homes when they become available, so you know what needs to be done ahead of time.
Most importantly, remember that if you're looking at a house that's in good condition and it's being offered at a below market price, chances are you're not the only one. If you're prepared—and if you have a real estate professional ready to spring into action to seal the deal for you—you'll have a much better chance of getting the home you want, at the price you can afford.
There's no reason to wait. The foreclosure and short sale market is hot. I encourage you to contact us today, and we can get you set up with a list of available foreclosures so you can start looking for the perfect home.
There’s no doubt about it – there are a great many bargains in the real estate market today if you’re a person looking for a new home.However, I highly recommend that you don’t get dazzled by all the opportunities and make a potentially expensive and poor decision. To that end, I’d like to offer you some common-sense guidelines to follow. Guideline 1: Pay Attention to Your Budget Before beginning your search for that new home,sit down and come up with a monthly payment you can handle with ease and then look for the house that fits that budget. Guideline 2: Save Up for a Down Payment Due to the “mortgage meltdown,” lenders are currently much more cautious about giving out money. Depending on the situation, they mayinsist on a minimum down payment of 10% or one that’s all the way up to 25%. So, start saving! Guideline 3: Improve Your Credit Score A good credit score is a great way to make the whole process easier when you apply for a loan.Today’s lenders scrutinize such scores more closely today than in the past.If you don’t have a good score, work hard to get it up into an acceptable range. It’ll save you money on interest charges and down payments in the long run! Guideline 4: Get a Pre-Approved Mortgage Loan If you’re a first-time home buyer or simply a buyer who wants to make sure you stay within your means, it’s awise idea to get a pre-approved mortgage.This is simply the process of applying for a mortgage and getting approval for the loan prior to buying a home. A“pre-approval” is an indication that the lender is ready to extend a mortgage to you once you’ve located the right property. And it has several benefits.First of all, it saves time and energy.Once you have a pre-approved loan amount, you’rerequired to stay within the limits of that loan in terms of the price you’ll pay for a house. First, when working with a realtor,ask him or her to limit the choices to those stated in the loan.This prevents the agent from showing you properties which are out of your range. By the way, they’ll really appreciate those parameters because it’ll help them zero in on properties with the best chance of sale! Second, you can spend more time looking at homes you really like and, simultaneously, not wasting time on houses that aren’t within your budget.This allows you to focus on the details of the homes you do like in order to make sure you select the right one;for example, kitchens, baths, garages, etc.
Third, you can bargain more effectively with sellers once they know you’re pre-approved. In the current market, that’s a great relief for many sellers because they realize they have areasonable certainty of selling their property when working with a pre-approved buyer. Fourth,you can close faster with a pre-approved loan because there’s no time lost in the usual processing period for loans.For example, an appraisal can be ordered right away, andyou have the potential to cut a 30-day closing to two or three weeks. Finally, the seller will prefer to deal with you, particularly if he or she needs to move quickly. Now, you have somecommon-sense guidelines to follow when seeking a new home in today’s market!You can learn even more by contacting me today
The real estate market, in general, is bipolar. Ups and downs keep home buyers and sellers guessing. Sometimes, all people can rely on are statistics and trends that can lead them in the correct direction.
While sales and prices may be on the rise -- a good indication of recovery -- the same can be said for repossessions and interest rates, which is not a good sign. Furthermore, other factors such as unemployment, underemployment and a rise in foreclosures seriously impact the health of real estate.
It’s important to know all the market facts before buying or selling a home if you want to have a successful and profitable experience. More particularly, there are ten market numbers that everyone should know even before listing your house. These include:
Property Taxes– Though sometimes overlooked,property taxescan really cost you. So if it’s higher than normal in your neighborhood, simply emphasize all the incredible perks like school, parks and other features that make the area more valuable.
Interest Rate – This number is vital when it comes to knowing when to sell, and the tiniest increase can alter your mortgage more than you would think.
Average Sale Price – In real estate, conformity is wise when it comes to matching the price of other houses in your area, or even on your street. So keep tabs on the average sales price of homes within the last couple months.
Average Listing Price – Again, be sure to keep your house within 5% of other listings in your area, otherwise you home is sure to be pushed aside when buyers recognize it as overpriced!
Average Days on Market - Often times, buyers have other factors like work, the kids’ school schedule or move-out deadlines that impact the speed at which they must purchase. This useful statistic comes in handy in such situations, and provides the average number of days houses have been on the market.
Marketing Fee – You might be dying to get that house sold, but it’s important to be aware of how much it will cost you to get it the attention it deserves. Whether you’re selling it yourself or with the aid of a professional, extra marketing efforts could affect your final profit deeply if you don’t pay close attention.
Absorption Rate - This rate is the number of weeks it takes to sell the current inventory at the present rate of sales. It is not an exact science; it is based on real estate market trends in your area. You need two figures: the number of listings and the number sold last month. The absorption rate will give you a better idea of how much time will need to be invested in the selling of your home.
Sell Price to List Price Ratio– After figuring the average selling and listing prices, comparing them side-by-side will help you to better expect what to list the house for and what offers to expect.
Inventory – Knowing exactly how many properties are for sale in your area will give you a better grasp on your competition.
Seller’s Net – You obviously want to know how much you’ll be walking away with after everything is said and done. Incorporating all the selling and buying factors into a functional equation of your net profit is of the utmost importance to you and can be done with the assistance of a professional.
I'm Here to Help!
Obviously there are many elements that play into the market equation, and many facts that are more important to know than others. Don’t you wish someone else could sort it all out for you in one, convenient database so you can better utilize these patterns in the buying or selling of your home?
Basically, a home's worth is determined by its market value. How is "market value" determined? Most often, it's figured by a comparison ("comp") with homes similar to yours in the surrounding area. So, if the homes in your neighborhood average, say, $250,000, then it's likely that the value of your property will fall in the same range. But market value is also determined by a number of factors including the following:
External Factors
There can be several external factors influencing the value of your home. One is "curb appeal", or the first impression your property makes upon prospective buyers. A home that's in excellent condition on the outside will make a great first impression; a home in poor repair instantly loses its appeal to buyers. Other factors can include lot size, popularity of an architectural style of property, water/sewage systems, paved roads, sidewalks, etc.
Internal Factors
The condition of a home's interior also has a huge influence on prospective buyers. When you've demonstrated "pride of ownership" and kept up the maintenance (quality paint, trim, molding, etc.), a buyer's interest will immediately perk up for the simple reason that they know your care and concern will result in less cost and maintenance for them. Other internal factors include construction quality, condition of appliances, size and number of rooms, heating/cooling type, energy efficiency, etc.
Supply and Demand
"Supply and demand" simply refers to the number of homes for sale versus the number of buyers. When there are more homes than there are buyers, prices tend to be lower. When there are a lot of buyers chasing few homes, then prices tend to rise. In effect, supply and demand affects how quickly your home will sell. Location More than likely, you already know the old saying, "There are three main factors in real estate - location, location, location." While that's not the whole story, desirability is a big factor for home buyers. They may want to live in particular school district known for its education excellence…a great and safe neighborhood with rising property values…etc.
But I Know My Home Is More Valuable Than a Lot of Comparable Homes in My Neighborhood?
Aren't Allowances Made for This? Definitely! Sometimes, it can be difficult to find homes exactly comparable to your own. So, dollar adjustments are made for the differences between your home and comparable properties.
Where Do I Find Sales Comparison Information?
The easiest source to access is your Realtor. After all, it's his or her business to know such information! But, there are also other sources you can tap into in order to get a complete picture of your home's value in comparison to others in your neighborhood. Here's an overview of them:
1. ) The Local Assessor's Office
It's very likely that your local assessor will be able to provide the sales history of a particular house, neighborhood, or style of architecture. Many assessors also provide lists of recent sales which you can browse and compare to the assessment roll. Today, many municipalities provide local sales and assessment information online making it very easy to access. Check with your local government agency to find out if they provide this service.
2.) Online Private Companies
You can search for these companies using the Google search engine and the keywords "comparable home sales" or "comparable sales." Some companies offer free information; others charge a nominal fee. If you wish to get more specific, you can Google "real estate database" and type in the name of your particular state to get additional property information.
3.) Your Local Newspaper
It's likely that your local newspaper is a great source of specific real estate information. Look for quarterly sales reports in the real estate or business sections.
The Key to Getting the Price You Want (or Close To It) for Your Home The key to getting the best value is finding and matching the right buyer to your home. And that's the job of the Realtor! He or she should work hard to qualify those buyers upfront so the right people are viewing your property! In other words, the Realtor should weed out "lookers" and other unsuitable buyers as a first step in working with you. See how I do that for you by calling me today!
