1. There Are Too Many People to Negotiate With
Here is a list of some of the peoplewith whom you must be prepared to negotiate if you decide to FSBO.
- 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
- Your bank in the case of a short sale
2. Exposure to Prospective Purchasers
Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% 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 do buyers find the home they actually purchased?
- 43% on the internet
- 9% from a yard sign
- 1% from newspapers
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 9% over the last 20+ years.
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 commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000. This doesn’t mean that an agent can get $46,000 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.
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.
Home prices take biggest leap in 7 years
Corelogic: Prices in January up 9.7 percent from a year ago
By Inman News, Tuesday, March 5, 2013.
National home prices in January were up 9.7 percent from a year ago, the biggest annual increase since April 2006, according to data aggregator CoreLogic's home price index.
The index, which tracks repeat sales of single-family homes, rose 0.7 percent in January from December, marking the 11th consecutive month of month-over-month increases.
"Home prices continued to gather steam across a broad swath of the country in January, continuing the positive trend we saw during most of 2012," said Anand Nallathambi, president and CEO of CoreLogic, in a statement.
"Many states across the western U.S. and along the East Coast saw average price gains of more than 6 percent, which is likely to boost home sale activity into the first half of 2013," Nallathambi said.
All U.S. states but Delaware (-0.1 percent) and Illinois (-0.4 percent) saw year-over-year increases in January, according to the index.
Arizona (20.1 percent), Nevada (17.4 percent), Idaho (14.9 percent), California (14.1 percent) and Hawaii (14 percent) topped the chart of states with home price increases in January from a year ago.
Asking Prices and Inventory for Homes in New York New York
As of March 11 2013 there were about 34,235 single family and condo homes listed for sale in New York New York. The median asking price of these homes was approximately $339,900.
Since this time last year, the inventory of homes for sale has decreased by 24.5% and the median price has decreased by 2.9%.
Asking Prices and Inventory for Homes in Long Island New York
As of March 11 2013 there were about 29,009 single family and condo homes listed for sale in Long Island New York. The median asking price of these homes was approximately $374,900.
Since this time last year, the inventory of homes for sale has decreased by 20.5% and the median price has decreased by 0.0%.
Is the Housing Market Finally Rebounding?Copyright Â© 2012 U.S.News & World Report LP All rights reserved.Positive signs emerge, but full recovery remains years awayBy David FrancisOctober 19, 2012 RSS Feed PrintÂ Throughout the country, homes that once sat on the market for years are now in demand. According to a survey conducted by housing research firm Metrostudy that covers 65 percent of the country, there are less than 30,000 vacant new homes on the market. In the pre-bubble housing market, there were typically 100,000. Last month, builders constructed new homes at the fastest pace since 2008.These are just a few of the growing number of signs that the five-year-long housing slump might finally be coming to an end.Some others: Earlier this week, the Commerce Department reported that the construction of new homes accelerated by 15 percent in September, the fastest rate in four years. In a research note entitled "House Price News Continues to be Good," Goldman Sachs predicted housing prices will increase by 2 percent in 2012. Jamie Dimon, CEO of JPMorgan Chase, said recently that the housing market has "turned the corner."The government and big banks aren't the only ones seeing a housing recovery. According to Fannie Mae's September 2012 National Housing Survey, which measures public attitudes about the housing market each month, just 11 percent of Americans believed their home's value will decline."Consumers are showing increasing faith in the nascent housing recovery," says Doug Duncan, senior vice president and chief economist of Fannie Mae. "Home price-change expectations have remained positive for 11 straight months." A housing rebound is also good news for the wider economy, as housing recoveries typically coincide with broader economic recoveries. However, according to experts, these small pieces of good news are just the start of a housing recovery that could take more than a decade, paving a long road for the housing market to return to its pre-bubble strength."Everyone is so ready to call this a recovery," says Kevin Finkel, executive vice president of Resource Real Estate, a national real estate management firm based in Philadelphia. "They may actually delude themselves into changing the psychology enough to move prices up."Even if optimism about the housing market is bloated, the string of positive housing indicators is undeniable and has helped buoy the economy in recent weeks. Construction companies have been one of the main beneficiaries, with stocks of building companies like PulteGroup, Lennar Corp, and D.R. Horton surging. Such increases restore investor confidence in the rest of the stock market: If stock prices of building companies are surging, more people are building homes, which indicates an increased confidence in the future of the economy.An increase in home construction also means an increase in construction jobs, many of which were lost during the Great Recession. This also translates to more jobs for specialists like plumbers and electricians. Despite the good news, real estate expert Steve Harney says not all areas of the country are rebounding. Home prices in states in the northeast remain flat. "Most of the country is doing very well, but the Northeast still has to work through some shadow inventory," Harney says.The first phase of the sales recovery is just beginning, he says. Houses are relatively cheap and people are feeling better about their economic prospects. They're consuming excess supply that has weighed down the market for years. "In a down market, there's an overabundance of supply and there's not enough demand. The recovery means that the demand and supply are getting toward more normal numbers," Harney says. "In the past few years, the demand was down because there were so many questions about the economy."The pricing recovery, Harney says, will take years. According to a recent report from the analytics firm Fiserv, prices won't return to their pre-bubble levels until 2023.Harney says this lag is due to the way people viewed housing during the boom years. "In the past, if you stayed in a home you bought, you're going to walk away with a package for your retirement. No one saw housing as an investment," he says. "Then 2004, 2005, and 2006 came along, and everyone thought it was a six-month investment. They thought that you could buy a house and sell it the next year for a big dollar amount. That feeling permeated the country."Like Harney, Resource Real Estate's Finkel remains relatively unmoved by the positive housing signs. He says housing has been in decline for so long that people desperately want it to improveâ€”and they'll ignore information that points to a flat market."I'm very skeptical that we're in an environment where housing prices are going to rise. There are a lot of foreclosures that are in process right now. There's a lot of supply overhang," he says. Finkel adds that he doesn't think housing can fully recover until the broader economy improves. "In the short term, the dire jobs situation is more important than housing prices. Until you get real job growth and get real pricing power with incomes, it's hard for me to see a real housing rebound," he says. "People have to pay their mortgages somehow
The KCM Blog - House Prices: Looking for the Bottom? We May Be There
House Prices: Looking for the Bottom? We May Be There Posted: 15 Oct 2012 04:00 AM PDTWith sales and prices increasing in most regions of the country, it looks as though housing recovery is in full swing. There are more and more housing analysts declaring that we have turned the corner. A recent article on money-rates.com explains that now may be the time to act if you are thinking of purchasing a home.â€œRight now, conditions for buyers are exceptionally good, because current mortgage rates are at record low levels, and housing prices are still well off their peaks. Already though, recent numbers indicate that housing prices are starting to move. If this continues, mortgage rates might follow. In particular, if lower-end housing prices are now making the strongest gains, people looking to enter the housing market for the first time should prepare to act.â€ Others Are Also Calling a BottomIn a Chicago Sun Times article, co-creator of the Case-Shiller home price index Robert Shiller agreed saying that, even though there are still questions in the overall economy, â€œitâ€™s a good time to buy a houseâ€.Ivy Zelman, chief executive at research firm Zelman & Associates, has also said:â€œ[Housing] is turning positive and we see the data reflecting that.â€Writing in the Financial Times, Roger Altman, former deputy Treasury secretary, said: â€œA turn in the [housing] market is occurring now and it should become a boom by 2015.â€And Jamie Dimon says the U.S. housing market has â€œturned the cornerâ€ as JPMorgan Chase and Wells Fargo, the two biggest US Banks have seen a surge in mortgage demand. He also warned that interest rates would â€œprobablyâ€ rise â€œsometime in 2013â€.What Does That Mean to You?If you have been waiting for the bottom in real estate prices, it seems your time may have arrived. As the Money-Rate article concluded:â€œThe housing market may be better off than people know. As many found out during the housing boom, waiting until everyone knows the market is healthy before you buy can be an expensive proposition.â€
Had to share this....
Distressed or Distraught: The Process of a Real Estate TransactionOn October 1, 2012, in Consumer Advice, Mortgages, Ron Phipps, Uncategorized, by NARby Ron Phipps, 2012 Immediate Past President, NAR So if you are like me, you have been working in real estate for a long time. You think you have seen it all. Your body of work includes lots of transactions, and some amazing human stories, both happy and sad. In real estate we deal with the full range of life experiences.Our collective experience right now of getting to closing is an obstacle course. Doesnâ€™t it feel like the stars are conspiring to knock your transaction off track? Just closed one that ended up with 4 appraisals and weeks of heartache before we got to closing.So what is happening behind the Wizard of Mortgage Ozâ€™s curtain? Am I the only one who struggles to get my buyer to the closing table? The answer is absolutely not.What we do know is that we have over corrected from the free-flow capital, no underwriting standards of 2004-2006. I repeatâ€¦over corrected. Prior to 2004, the average credit score for Fannie Mae and Freddie Mac mortgage was 720; today it is 760. This means that 15 percent of potential buyers cannot qualify.In the past, pre-approval letters actually meant something. Now, they are a single yellow brick on the road to homeownership. The sad part is that they do not have a lot of value.So what is going on? The problem is that the market for mortgage backed securities is very limited. The federal government continues to buy or insure most of them, upwards of 9 out of every 10 mortgages. In other words, the government provides the capital to keep the mortgage market, and, in turn, the real estate market alive.As a result, the mortgage package needs to be perfect and complete. Three years of tax returns and back statements are not enough. Explanations of all deposits and expenses over $1,000 are now required.You know all of the new requirements. You also know the reality of conditional commitments. Is the lender really committing to the buyer if the â€˜commitment letterâ€™ really isnâ€™t a letter of intent? What does that mean for a seller? What does that mean for you? How can a commitment be rescinded two days before closing?What you need to know is that strict underwriting standards are being applied precisely and aggressively. Some investors will penalize the origination loan company $30,000 if a mortgage defaults in the first year. Yes, that will make the processor obsessive.We have not even talked about the appraisal process. In general you need direct, like kind sales within six months and within a few miles of the subject. If not, it will be a problem. What is also true is that the â€œappraisal reviewâ€ is where the real problems occur. Someone in the process looks at the appraiserâ€™s work as something to just pick apart.All of this is part of the process of complianceâ€¦to make sure the package is â€œperfect and complete.â€When Dorothy was lost in the Land of Oz and wanted to get back home, she just clicked her heels three times. I wish it were that easy for REALTORSÂ® and consumers to get back to a place where closings would make it to the table.In the meantime, what can we as REALTORSÂ® do? Here are a few recommendations:1. Understand the process, particularly underwriting criteria.
2. Educate the buyers (and sellers) to process and requirements.
3. Be realistic in timelines.
4. Manage buyer and seller expectations.
5. Help buyers identify the lenders that are most likely to provide them the loan.
6. Be proactive in real time with the process.
7. Be active in NAR with Calls to Action and RPAC to improve the situation.We will get through thisâ€¦sooner rather than later. See you at closing.