tips for buyers
Homes in America are selling like hot cakes, with the exception of some properties in the luxury market like the $19.75 million “Versailles in Manhattan” nobody wants to buy.
The time it takes for a house to go from listing to sale keeps falling, because there are’s an abundance of buyers waiting to pounce and even stretch their budgets for their dream homes. According to Trulia, list-to-sale on its platform fell to 64 days in April from 77 days a year ago, the shortest time since it started keeping track in 2010.
The quicker pace of the market is proof that the economic recovery has, a decade after the housing crisis, inspired confidence that home prices will increase, and created many jobs so people can pay their mortgages.
But it’s also created a new crisis of affordability for buyers, as greater demand and competing offers push prices higher.
Trulia found that premium homes are on the market for 13 days more than starter homes and 15 days longer than trade-up houses. This creates some advantages for those buyers looking in the premium market.
“Sellers generally appreciate getting their home sold as quickly as possible, while buyers can benefit from having some breathing room to make decisions and negotiate,” said Felipe Chacón, a housing economist at Trulia. “Nationally, this makes the trend of home moving faster off the market over the past eight years tougher and tougher for those looking to buy a home.”
Buyers on the West Coast are having the toughest time nationally. Trulia found that listed homes moving the most quickly — in 45 days or fewer — were in Seattle, San Francisco, and San Jose.
And so, it’s clearly a better market for sellers than buyers.
In a recent blog post, NerdWallet highlighted some of the hurdles that buyers can expect to jump when they’re looking for a new home.
For example, some sellers are putting up surveillance cameras in their homes during listing, to get a sense of who’s looking before accepting an offer. Of course, this raises concerns about discrimination, but some people see it useful for security and for getting feedback on showings.
Also, some prospective buyers are pitching homeowners directly by writing personalized letters. These sometimes include family photos and other details that could emotionally appeal to the seller and make the offer about more than just money.
And finally, normal buyers coming in with mortgage pre-approvals are having to compete with investors and other wealthy house hunters who make all-cash offers.
Interest Rates are a great reason to buy right now, and soon, this will not be the case. Here we are the the beginning of 2018 and current mortgage rates are now just above 4.15% , or somewhere thereabouts according to Freddie Mac. Just a month ago the interest rates held below 4% for 26 straight weeks. Fortunately for you, if you are considering buying a house, or refinancing your current home, mortgage rates are still about half of their historical average.
So what does this mean?
If you want to pay more for the same house in a year, then you should take your time and wait to buy. If you are like me, and enjoy money, then you should pull the trigger and start shopping. Get your mortgage pre-approval worked out with your local lender, or call me and I will give you some great contacts who will give you a qualified pre-approval that you can go literally “take to the bank”.
There are a variety of ways to save on your home purchase, and I posted a great article on The Impact Your Interest Rate has on Your Buying Power back in December and also back in March 2017 with my Dont Let Your Luck Run Out post
Why FSBO Sellers Should Hire a Real Estate Agent? While selling your home by yourself, without getting a seller’s agent involved, may seem like a great way to save money on a commission fee, the fact is that most potential FSBO sellers end up regretting the decision. If you’re considering going FSBO, or you’re already listing your home that way and things aren’t exactly working out as planned, then keep reading. Using recent National Association of Realtors statistics, here are a few reasons you may want to reconsider.
According to the most current data from the National Association of Realtors (NAR), FSBO sales accounted for only 9% of all home sales in 2013*. Not too impressive, is it? Well, it gets even worse when you take into account that FSBO sales seem to have been steadily declining over the past decade from a 2004 peak of just 14%*.
While “location, location, location” might be the home buyer’s mantra, as a home seller, that’s one variable you really can’t change. Instead, the key factor to selling your home in a reasonable amount of time is pricing it correctly, which isn’t nearly as easy to do as you might think. Sure, you can go online and see what nearby homes have sold for, but are you really comparing apples to apples here? An experienced Realtor will be able to perform a detailed market analysis which not only takes into account your home’s condition and any improvements you might have made, but can generate an up-to-the-minute temperature reading of just how hot (or not) your local market really is.
Believe it or not, many FSBO home sellers still believe that all they have to do is throw up a “For Sale” sign in the yard and the world will beat a path to their doors. Sorry, but today’s tech-savvy buyers (See reason #4) prefer to house-hunt in more methodical ways than simply driving around the neighborhood. And yet, according to the NAR, this is still the top FSBO marketing method, as 36% of would-be sellers rely on yard signs*. The key word here is “would-be”, since only 10% of all buyers actually find their homes via yard signs**( Statistics are even more dismal for sellers who choose print media, since only 1% of buyers find homes through newspaper ads.
Okay, so you’re internet-savvy, you know all about Craigslist and similar online, free classified listings. That’s fantastic, since NAR’s 2014 housing market profile shows that 92% of all home buyers use the internet to help them in their search***. But (and it’s a really big but) – these online classifieds are also seen as a happy hunting grounds for scammers, criminals, and dangerous people you really do NOT want to be admitting to your home. Realtors don’t have to resort to dubious bargain-basement listings, but can instead list your home on highly-qualified sites such as Zillow or Realtor.com. (See reason #6 for more on what resources Realtors have available.)
Marketing via social media, what could be more up-to-the-minute? Sure, you may have hundreds of Facebook friends and Twitter followers, so that’s a potentially sizable audience if you decide to advertise your home that way. Think about it, though – how many of them actually live in your area? And of these, how many are actually looking for a new home? If you do manage to sell your home that way, you’ll be one of the lucky few.
91% of all Realtors make use of social media sites as a marketing tool. Just about everyone browsing their page is interested in buying a home in the local area. What’s more, Realtors are actively engaged in driving traffic to their own websites and they also have the capacity to list homes on the Multiple Listing Service (MLS). In order to list a home on the MLS, an FSBO seller will have to pay an outside agency several hundred dollars, as well as having to cover the cost of the buyer’s agent fee. At present, NAR data shows that only 7% of FSBO homes are listed on an MLS website.
One thing you might not be taking into account as a potential DIY home seller is just how available you’ll need to be in order to show your home. Are you really going to be able to call in sick or cancel your plans every time someone wants to look at your home? Potential buyers aren’t going to want to work around your convenience. A professional Realtor, however, doesn’t need to take a day off work in order to show your home, since this IS his/her job.
If you’re acting as your own sales agent, how do you decide who’s a legitimate buyer and who’s just going to be wasting your time? Seller’s agents have the necessary tools to determine whether a buyer is pre-qualified with a home loan sufficient to cover the cost of your listing. What’s more, FSBO homes are more likely to appeal to the type of buyer who’s out for a rock-bottom bargain-basement deal and may even go so far as to want you to give them a cut of the commission you’re saving by foregoing a Realtor’s services.
In case you’re not already getting the picture, selling a home is pretty hard work! Not only do you have to find and vet potential buyers, but once you’ve found that buyer, then the real headaches begin. Every detail must be attended to in order to make the sale go through…and what’s more, if you neglect something crucial like a mandatory disclosure or inspection report, you may find yourself facing not just the loss of the sale, but also potentially serious legal repercussions. There is some paperwork to go through even if you work with an agent, but that’s still a lot easier than doing it all yourself.
What? How can this be? Don’t all seller’s agents work on commission? Well, yes, they do. But real estate agents themselves bear many of the costs you might otherwise have to pick up, like marketing your home and screening buyers. A savvy sales agent can also build the cost of his/her commission right into your home’s asking price, so you won’t feel a thing. Here are some tips on choosing an agent.
And the survey says…bottom line, the average FSBO home last year sold for $208,700 while the average agent-assisted home sale was $235,000. This means that an agent-assisted home sale can net you an 11% larger profit. Assuming you paid a 5% agent commission on a $235,000 home, or $11,750, you would still come out $14,550 ahead! Looks like a win for everybody.
If you’re willing to put up with all the headaches of listing, selling, and closing on a home, and you don’t mind settling for what may well be a lower price, then an FSBO sale may be for you. If, on the other hand, this all sounds like too much work for too little payoff, you’re in good company. It seems that, according to a Massachusetts Real Estate News article, over 80% of all FSBO sellers eventually wind up choosing to sell their homes by using an agent instead (and this number applies nationwide, not just in Massachusetts). If you’d like to skip the headache and proceed straight to the happy ending, Shawn Penoyer with Keller Williams is here to help. Connect with a top performing agent, and compare multiple proposals today.
The question is, how to go about Choosing an agent to Sell your home? You’re thinking of selling your home, and you’re faced with a myriad of decisions on where to start—luckily, we’re here to help! To get started, you’ll want to carefully agents and find someone who will be most effective in helping you with your particular needs.
Where to start? Submit a request on AtlantaRealEstatesale.com which gives you access to top local real estate agents. You can compare your options and select the real estate agent who will best represent, market, and sell your property at a competitive commission rate! When comparing agents, it’s helpful to keep the following guidelines in mind:
As you start to take a closer look at potential real estate agents, it makes sense to find one who is familiar with your particular neighborhood. This allows them to interact more effectively with buyers and share details regarding the area’s amenities, public transportation, and housing statistics. They will also have more accurate information regarding similar houses for sale in your area, and how to make your home stand out from the competition. Most cities and suburbs have a number of real estate agents who only specialize in property in a particular area.
Aside from looking at location, however, you’ll want to take a look at their experience and whether or not you have a good rapport with them. When it comes to something as important as selling your house, it’s a good idea to work with someone who makes you feel valued and comfortable. Just because one agent has the most listings in your area doesn’t mean that they will best represent your needs. You’ll be interacting with the agent for weeks and maybe months—make sure that you are comfortable communicating with the agent.
Asking for references is also an integral part of the screening process after you’ve narrowed down your initial list. Make sure to read about the agents’ online reviews and past client testimonials. As you narrow down the field, speaking with former clients through reference checks can point you in the right direction.
It’s natural for sellers to be anxious about feesm anbd by choosing an agent that explains their fees and costs clearly is an important consideration. One of the first questions many sellers ask is what the real estate agent’s commission rate will be. If you have submitted a proposal request on our site, then you can sit back and wait for top local agents to submit personalized proposals with competitive commission rates.
It’s important to remember that commission rates on their own can be deceptive, so make sure you’re comparing the services offered by the different agents when reviewing their commission rates.
It’s typical that a real estate agent will cover professional photography, general marketing such as flyers and post cards, ads on popular real estate sites like Trulia and Zillow, and open-house services. The big-ticket items up for negotiation are dedicated websites for the property and staging. A simple vanity website may run $100-$200, whereas a more robust website with virtual tours may run from $300-$500. Depending on the size of your property, staging can cost anywhere from $500 to $2000 or more each month, so that’s a substantial cost to consider. If you and your Realtor decide that staging is beneficial for your sale (sometimes it’s not realistic if you or tenants are living at the property during the sale), it is an expensive item that should be considered commission-rate calculation. For example, a 4.75% commission rate on a $500K home without staging services isn’t really a “saving” if you compare that to a 5% commission rate that includes staging services presuming the staging services cost $2000 per month.
In the end, it’s important to focus on the big picture—a small commission-rate difference doesn’t matter as much as having a top agent who can negotiate the highest price for your home. It’s more important to find an agent who you trust and sell your house for top dollar than someone who will list your home for the lowest commission.
In addition to comparing all of these features described above, as you whittle down your list of candidates you’ll want to meet with a few agents in person.
When selling a house, you’ll want to choose an agent to appraise your property, and that agent should be well skilled at this important process. This should include the estimated sale price of your home, which real estate agents base on similar homes that have sold recently in your area. Ask for a comparative market analysis, or CMA, for your property. This will give you the following info:
This will help you determine how each real estate agent reached the figures given in their appraisal, and how realistic their anticipated sales prices might be.
There is a lot of work that goes into selling your house, and choosing the right real estate agent to represent you to buyers involves several decisions, before the selling process can even begin. With the help of a fully qualified professional on your side, the process can be made far easier and worry-free. Interested in having top local agents compete for your listing? Submit a FREE, no-obligation request, or Call 404-984-7900.
FSBO is “down,” but is it really?
The 2016 Profile of Home Buyers and Sellers by the National Association of Realtors found that for sale by owner sales are at an all-time low, at only eight percent, versus the all-time
The 2016 Profile of Home Buyers and Sellers by the National Association of Realtors® (NAR) found that for sale by owner (FSBO) sales are at an all-time low, at only eight percent, versus the all-time high set back in 1981 at 21 percent.
Considering it’s easier and less expensive to market a home today versus the pre-web era, how is it possible that FSBO sales have been declining since the advent of the internet? This runs contrary to trends experienced in other vertical markets, such as investing, travel and tax preparation, which have all experienced significant do-it-yourself growth bolstered by web services. How is it possible the real estate market has defied such trends?
A deeper look at the data in NAR’s report reveals that while there has been a decline in true FSBO, self-directed real estate has actually increased over the past 15 years — it’s just a matter of semantics that need to be analyzed to see this trend.
If a home seller uses any realtor service, even something as minimal as just having an agent upload their listing to the MLS to advertise their home sale, NAR actually includes them in a comprehensive pool of sellers (89 percent) engaged in “agent-assisted” sales. This oversimplification of the “agent-assisted” category blurs the lines and doesn’t accurately represent the volume of sellers moving away from traditional real estate brokerages and their higher commission rates.
Another recent survey (conducted by Redfin in August 2016) tells a different story. It found that 25 percent of people who sold a home in the past year did so without the help of a full-service agent, with 15 percent of sellers using a limited service agent and about 10 percent listing without an agent’s help, slightly higher than NAR’s findings of eight percent. Those who would have formerly been inclined to conduct a FSBO transaction have traded up to the better option available today and are paying a nominal fee to advertise their properties on the MLS. So, if you sum up the percentage of FSBO and quasi-FSBO (aka “limited service”), the self-directed segment has actually increased almost 20 percent since the ’80s. This makes sense when you consider the growth of more self-directed behavior in other industries due to the efficiency and options that online services offer.
Due to important antitrust legislation surrounding NAR and the MLS, which has brought about the rise of web-based real estate service models, self-directed sellers have more options today than they did in the early ’80s.
During the mid-2000s, the Department of Justice ruled that NAR must make the MLS and all of its data accessible to any brokerage service and its customers. Subsequently, self-directed consumers inclined to FSBO-type behavior started flocking to alternative internet-based “minimal” and “limited” service brokerage models and their more attractive selling options. These sellers still self-manage their sale and consider themselves conducting a FSBO-type transaction.
Future sellers should carefully consider the experience of the growing share of sellers today using self-directed methods. There is major opportunity for today’s savvy seller to retain much of their profit through tech-enabled innovation in the real estate industry, and it’s important to understand the evolution of FSBO and what has changed.
Here are a few considerations for home sellers looking to take control of their home sale.
Analyzing savings: The bulk of savings for FSBO-oriented sellers will come from savings on seller’s agent commissions. According to the U.S. Census Bureau, the average home in 2015 was valued at over $350,000. Sellers choosing to handle most of the process on their own — and therefore paying just a buyer’s agent fee to get their home listed on the MLS — have the potential to save up to 2.5 to three percent on commissions. Based on the above value this would amount to $8,750 to $10,500, usually less a transaction fee. Some online brokerages offer a full-service package in which the seller works with a professional agent but pays a lower seller’s agent commission than the traditional model. In that case, the seller will net less overall savings, but this option might be worth it for first-time sellers or those too time-constrained to manage the process on their own.
Determining the list price: There are a lot of variables that come into play when determining the list price of a home including local inventory, interest rates, average market price for comparable homes, appraisal value and the sellers’ personal and financial objectives. Many online real estate services will offer valuation tools and allow sellers to research comps to determine the right asking price.
Considering sweat equity: Managing a home sale requires a time commitment. Depending on what parts of the process sellers want to take on, they should expect to spend time on the front end determining the list price, preparing the home for showing and hosting open houses and on the back end negotiating the sale and seeing the financial transaction through to completion. Many online real estate services offer solutions to assist with some or all of these steps.
Here’s the takeaway. The first FSBO platforms were meant to simply eliminate the middleman — and some home sellers struggled as a result because they didn’t have access to an agent network to market their listings or professional support when needed. Today, the FSBO model has evolved and will continue to do so, further disrupting the industry to the benefit of consumers.
Selling Your Home Yourself Could Cost You BIG TIME!
Are you really thinking of selling your home yourself? In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.
However, a study by Collateral Analytics 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. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many casesbelow the average differential represented by the prevailing commission rate.”(emphasis added)
The study makes several suggestions:
As Dave Ramsey, America’s trusted voice on money, explains:
“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”
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