Tag: home seller

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When will move-up homebuyers return to the housing market

by Dan Krell
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DanKrell.com
© 2013

Move-up home buyers missing from housing recovery; when will move-up home buyers return to the housing market?

home for saleI recently came across an interesting article about “move-up” home buyers online titled, “Move-up Buyer Provides The Base For A Recovering Housing Market.” The piece, published by the Chicago Tribune, is not unlike the many articles you might find today about the missing move-up buyer in the housing recovery. However, this article is different – it was published August 17, 1985 (article can be found here: articles.chicagotribune.com/1985-08-17/news/8502240441_1_interest-rates-trade-up-market-home-resale-market).

The striking similarities between the current housing recovery and a real estate market that was recovering from one of the deepest modern recessions up to that time (during the early 1980’s), includes home buyer behavior and economic concerns. And of course, the affected move-up buyer sector and the dearth of inventory appear to be familiar.

Home buyer behavior doesn’t have seemed to have changed much as many would-be home buyers are trying to time their purchase with the market bottom. At that time, like today, interest rate pressures are helped home buyers decide to jump into the market; additionally, then like today a significant number of buyers were first time home buyers. Downward pressure on mortgage interest rates, combined with the fear of rising rates affected home buyers to get off of the fence. However, peek mortgage interest rates averaged about 15% in the early 1980’s.

Another similarity between both periods is the missing move-up market. The typical move-up home buyer is sometimes described as a home owner who decides they need more space, which results in the sale of their smaller home and the purchase of a larger home. Then like today, the move- up home buyer was the missing piece to the housing recovery; the move-up home buyer provides much of the housing inventory that first time home buyers seek. However, it seems as if a “psychological barrier” (as described by the Chicago Tribune piece) holds back many move-up buyers today as it did in 1985. During the current housing recovery, many potential move-up buyers have remained in their homes.

Like other housing recoveries, one of the main issues holding back the move-up buyer is housing appreciation. During an early recovery, home owners may have a difficult time rationalizing buying a larger more expensive home when the new home could depreciate the first year of ownership, let alone the thought of a perceived loss of equity in their current home.

As home prices stabilize it would be reasonable to think that there will be an increased presence of the move-up home buyer. A good example of this was in the housing recovery that took place during 2003-2004. At that time, low mortgage interest rates helped first time home buyers back to the marketplace, and the move-up buyer sector took off relatively quickly when rapid home appreciation was realized. Of course rapid home appreciation was a function of “easy money” that generated real estate speculation that produced the “go-go market” of 2005-2006, the housing bubble, and the subsequent financial/housing crises.

The similarities of a post recession housing recovery might indicate there is currently progress. However, the move-up home buyer sector may be one of the final pieces to the recovery puzzle; and until the move-up home buyer presence is felt in the marketplace, we may yet to endure a few more years of “recovery.”

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published the week of April 1, 2013. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

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Buyer and seller expectations can affect real estate sales

by Dan Krell
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DanKrell.com
© 2013

Home SalesBuyer and seller expectations can affect the housing market

Recent positive housing news has raised expectations for many home sellers, but not for some home buyers who are looking for a great deal. This combination of seller and buyer expectations can make for an interesting spring market.

Expectations, much like beliefs, are influenced by your experiences as well as information to which you’re exposed. A combination of media reports and stories by relatives, friends, and co-workers could create an expectation about the home buying process that could be practical or unrealistic.

Regardless of your expectations, the home selling/buying process is full of pitfalls and surprises. If you’re not prepared, your expectations could set you up for disappointment. Of the many components of the sale/purchase process, the highest expectations are typically placed on pricing and the home inspection.

Home sellers obviously want to sell their home for the highest price. News of low inventory and increasing average home sale prices nationally and regionally would lead you to believe that your home could fetch a higher price. Of course, expectations of a higher price should be reality checked with factual neighborhood data.

Home buyers, on the other hand, want to buy a perfect home and feel as if they bought for a good price. For many buyers, stories of homes purchased at serious discounts are fresh in their memories and may set an unrealistic expectation. Once again, factual data can be a reality check; and depending on the neighborhood, savvy negotiation could be warranted. For example, buyers are encountering fierce competition (not unlike the market just before the financial crisis) in some neighborhoods. And although home buyers are rushing to see homes recently added to the inventory, many are not interested in paying the list price. And although some homes are getting multiple offers, many are not. And of those receiving multiple offers, many of those offers are below list price.

Additionally, appraisals can be an issue too; buyers and sellers alike typically expect that the home appraises for the contract price. If not properly prepared, some home sellers can react to low appraisals by initially finding fault with the appraiser’s comparables and methodology, as well as wanting the buyer to pay the balance; while home buyers may experience increased uncertainty and doubt about their purchase.

High expectations are typically had for the home inspection by all. Home sellers who put forth the effort to prepare their home for a sale, often spending money for updates and upgrades, expect the home inspection to reveal a perfect home. If not prepared, the seller can become headstrong when confronted with an inspection that is other than exemplary. Buyers wanting a perfect home may also be demanding of even inconsequential repairs to be made by the seller.

Buyers and sellers sometimes choose to work with agents who offer promise to meet their sometimes unrealistic expectations, only to be let down by the reality of the sale/purchase process.

Veteran real estate agents often appreciate the novelty of each real estate transaction, due to the ever changing market, circumstances of the transaction, as well as the personalities of the parties involved. Your real estate agent can help you set the tone of your expectations; an experienced and skillful real estate agent can prepare you for the ups and downs of the selling/buying process by reframing your expectations to fit the reality of your neighborhood housing market.

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published the week of March 25, 2013. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

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Pricing your home to sell 2013

by Dan Krell
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DanKrell.com
© 2013

home for saleIt has been a while since home sellers have felt optimism about the housing market. Although many would be home sellers continue to wait before jumping into the market; a combination of inventory shortages and reports of appreciating home prices are making some home sellers push the limits of home pricing.

Consideration for an appropriate list price is vital in any market. However, regardless of current market conditions, setting the right list price today could prove challenging. If your home sells quickly, you might feel as if you priced the home too low; while setting the price to high could make your home languish in an otherwise active real estate market.

Since the home seller decides on the list price, you might be tempted to use the most recent neighborhood sale or list price as a guide for your home sale. However, without deeply examining these comparables, this methodology may result in over or under pricing your home.

As public information is widely available on the internet, you might find yourself searching the ‘net for recent neighborhood sales to assist you in making a decision on a list/sale price. However, public records usually post dates of deed transfers as recorded in the courthouse, which are usually after the actual closing (sometimes several months or more).  Additionally, public record home descriptions can sometimes contain incorrect or outdated data on home interiors and living area. Relying solely on data found on the internet could make you miss out on more recent and significant sale comps –again possibly leading you to under/over price your home.

For relevant comparables, ask your real estate agent to prepare a market analysis based on comps found in the local MLS (which contains real-time data). Although the market analysis is not an appraisal, its purpose is to assist home buyers and sellers in deciding on a list/sale price. An experienced agent preparing a market analysis will search for comparables that are most similar to your home by considering home factors such as: location, type, style, size, age, condition, interior amenities, exterior amenities, room count, basement, updates, etc.

Additionally, since the comparables used in the market analysis are as analogous to your home as possible, finding recent comps within your neighborhood are ideal not only because of the proximity to your home, but also because homes within the same subdivisions usually have many similarities (including age, style, lot size, upgrades, additions, as well as functional obsolescence).

Even though many home sellers are optimistic about home prices, you could still encounter appraisal issues. Appraisals are opinions of value by an independent party typically requested by lenders to verify the home’s market value in underwriting a home buyer’s mortgage application. And although appraisers use a standard methodology to derive a market value, some appraisers may exercise caution and seek the conservative value in ensuring the appraisal meets the loan guidelines. Issues can also arise when the assigned appraiser is unfamiliar with your neighborhood and surrounding area.

Pricing a home to sell has been described as a skill by some and an art form by others. Deciding on an appropriate list price not only establishes buyers’ expectations for an offer, it can also set the tone for a smooth sale or a bumpy protracted ride in the marketplace.

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published the week of March 11, 2013. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

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Real estate integrity on the internet

Real Estate integrityThe internet is brimming with information.  And although a lot of information is based in fact, there’s plenty that is not.  People often fall prey to internet half-truths because information is often presented convincingly with conviction by websites claiming to be the authority.  The internet can be such a quagmire that even some trusted and reliable media outlets have been fooled. How about real estate integrity?

Home buyers and sellers are increasingly depending on the internet for information to assist them in buying and selling real estate.  Many real estate websites that are visited not only contain current homes listed for sale as syndicated by the local MLS; they may also post homes for sale by other sources that include homes for sale by owner, fake listings posted by desperate real estate agents, and advertisements from other websites.  Unless you know what you’re looking for, you might never know the posting source or how long it has been posted on the site. Real estate integrity may be lacking.

The MLS syndication is usually updated to ensure accuracy, even if it’s not always timely.  However, it’s the list of FSBO’s, sham listings, and advertisements that can be out of date and/or used to lure consumers to visit other sites.  Some home buyers/sellers can be lured to occasionally spend money for bargain homes for sale and home sales information.

Sometimes, real estate integrity is intentionally substituted for salesmanship. Some real estate websites post advertisements as “teasers.”  The teaser may show a home for sale at a great price, but could lead to another website that may charge for the full information about foreclosures or bargain homes.  Once on these sites, some consumers misunderstand that all the homes listed are for sale.  The reality is that although these sites provide a service of collecting and posting public information about homes that have foreclosure notices and other related information (and sometimes even list MLS listings for sale), not all the homes are for sale.  In fact some of the homes listed as distressed properties may never be offered for sale as a foreclosure because the home owners resolve their issues without losing their home.

The internet continues to be a source of real estate related scams.  Internet real estate scams continue to prey on susceptible home buyers and sellers, as new and sophisticated cons are devised.  Scammers often post fake names and photos to present themselves as being local, when they are not.

Yes, many property websites have taken steps to maintain real estate integrity by monitoring postings, and allowing user feedback to flag problem listings; and some of the leading real estate websites strive to continually improve on the consumer experience.  However, if you want up to date and accurate home listing and sales information, talk to a real estate agent.  Your agent has access to the local MLS and can not only provide you with timely home listings and contract status; they can also provide you with an up to date home sales analysis.

Just because you found it on the internet, does not necessarily mean it’s accurate.  Practice due diligence and check out the source.  A lot of real estate related information posted on the internet can be verified through public records.  Public information is often readily available on the ‘net, and can be found on public websites maintained by State and local jurisdictions.  For more information on protecting yourself on the internet, visit the “scams and safety” link on the FBI website (FBI.gov).

Original located at https://dankrell.com/blog/2013/02/28/real-estate-and-the-internet-its-gotta-be-true/

By Dan Krell
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This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

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Rude home buyers take note

rude home buyersHas increasing incidents of rudeness become tolerated, or is there an epidemic of narcissism? Rude home buyers are growing in numbers. Regardless, home buyers and their agents should be respectful of the home seller and their property.  After all, they are “guests” while viewing the home.

Rude home buyers take note

Although the majority of home buyers and real estate agents adhere to the “golden rule” and are polite and courteous, it’s not uncommon for a few to be bad-mannered and disrespectful. Of course, it’s alright for you to be honest about your feelings towards a home; and home sellers appreciate honest feedback. However, if the home is not to your taste or is not in the condition you expect; there is no need to lay on the insults as you peruse the home – rather, be honest to yourself and your agent, do the polite thing and excuse yourself. Don’t waste your time and energy walking through a home that is not for you.

Contrary to belief, “insulting” is not a negotiation tactic; there is a difference between being outright aggressive and assertive. Insulting the seller and their home can be counterproductive; there is a difference between being offensive about living conditions versus stating objective and factual information about the home’s condition. Rather than offering a lower price for a home based on your opinion of the home owner, a lower price makes more sense if you can make a case that the home needs updating and/or repairs.

Although most home buyers view homes with their real estate agent, many ride home buyers attend open houses alone. If you view homes with your agent, they may remind you of etiquette and behavioral expectations. However, if your agent acts disrespectful toward the seller and/or their property, it is not an excuse for you to follow suit.

Home sellers deserve respect

Being respectful of home sellers and their properties is not only expected, it is a good strategy. If you’re unsure about a situation, ask your agent how to act/respond. However, here are some general etiquette tips while viewing homes (alone or with your agent): Be respectful of the occupants by adhering to showing instructions; don’t show up unexpected and demand to see the home; if you cannot keep an appointment, make sure the occupant is notified; be respectful of the property; follow showing instructions in the home seller’s absence, such as requests to remove shoes; in the case of potentially dangerous situations, such as a gas odor, a tripped security alarm, unexpected power failure, etc – alert your agent and/or the proper authorities immediately; if you bring children with you – always keep an eye on your children; never eat in the home, as it could leave a mess in the home; leave the home as you entered it by locking all exterior doors and shutting off the lights as necessary; criticism is best left for a later time – your comment s may be overheard by others; if the home is not to your liking – politely excuse yourself from the home.

Rude home buyers often sabotage their transaction

Remember that even though you are rightly focused on your housing needs, you are a guest while viewing others’ homes. And although there is no expectation for you to offer positive feedback – there is an expectation for you to be respectful of the owners and occupants of the home. At some point the roles may be reversed and you will be the home seller expecting others to respect you and your home.

Original published at https://dankrell.com/blog/2013/01/31/rude-and-narcissistic-home-buyers-take-note-home-sellers-need-respect-too/

by Dan Krell
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This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2013 Dan Krell.

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