home seller Archives - Page 9 of 31 - Real Estate News and Commentary

October 3, 2018April 26, 2019

Winter home sale profits

If you are planning to sell next spring, don’t wait! Consider a winter home sale. A National Association of Realtors survey indicates that a surge of home sale inventory is on the horizon. The NAR third quarter Housing Opportunities and Market Experience survey indicated that 77 percent of Americans believe it to be a good time to sell (Homeowners Ready to Sell in the Third Quarter of 2018, says Realtor Survey; September 25, 2018; nar.realtor)! This happens to be a record high for the survey. NAR Chief Economist Lawrence Yun believes that the strong sentiment is due to recent home price appreciation. He stated:

“Though the vast majority of consumers believe home prices will continue to increase or hold steady, they understand the days of easy, fast gains could be coming to an end. Therefore, more are indicating that it is a good time to sell, which is a healthy shift in the market.“

A winter home sale has less seller competition

The housing market conditions are such that we are on the verge of experiencing a déjà vu. Two years ago, winter home sales were fueled by rising mortgage interest rates, low inventory and pent up demand. As I predicted in a November 2016 column, rising interest rates and pent up demand were credited for the almost 10 percent jump in home sales by the end of January 2017! The massive jump in home sales occurred during the deep winter, when existing home sale inventory dropped about one-third of the summer inventory. Sellers who had a winter home sale during 2016-17 were greeted by eager home buyers and faced little competition.

Fast forward to 2018. Yes, admittedly, home sales have slightly dropped off during summer. But many are attributing this phenomenon to the lack of inventory. Consider that Montgomery County existing single-family home sale inventory was almost 20 percent lower than that of the summer of 2016. Although summer home sales dropped off, indicators point to a hot winter housing market. Moderating home prices, combined with pent up buyer demand and a strong economy could make a winter home sale ideal.

It’s clear that home buyers facing rising interest rates have taken a pause. But as rates approach 5 percent, positive economic sentiment is lessening the shock and many are planning to buy before rates creep higher. Giving perspective to the mortgage rate hysteria, current mortgage rates are about the same as they were during 2014. Additionally, the last time we saw mortgage rates above 5 percent was in 2010. Rates exceeded 6 percent when home sales broke records during the market buildup of 2006.

Current sentiment is good for a winter home sale

Another indicator that a winter home sale may be primed is the most recent Fannie Mae Home Purchase Sentiment Index (No Thanks to Housing, Home Purchase Sentiment Edges Up; fanniemae.com; August 2018). Home buyer sentiment increased the first time since May. Economists attribute this uptick to a strong economy along with the awareness of the recent market slowdown. The job and income related index components increased significantly indicating that buyers feel financially more secure with a home purchase. There is also a belief that home prices may moderate due to the summer sales slump.

Winter home sales tend to have less competition and serious home buyers. As I said in 2016, don’t wait until spring to sell your home! If you wait until spring to list your home, you’ll be faced with a profusion of seller competition.

Original located at https://dankrell.com/blog/2018/10/03/winter-home-sale-profits/

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

September 20, 2018November 23, 2021

The copious home sale contract

If you’ve recently bought or sold a home in Montgomery County MD, you probably recognized that the home sale contract was quite lengthy. In fact, depending on the situation and additional addenda, a contract can be fifty-plus pages. It seems as if that the home sale contract gets fatter as every year passes. It’s no wonder why I am often asked “Why are home sale contracts long winded?”

Why is our home sale contract so long? Our local home sale contract has a number of required addenda and disclosures. There is a simple reason for this, but let’s look at the foundation and need for the contract.

It’s important to mention that property sale contracts around the country are not the same. Every jurisdiction has their own criteria for a home sale contract. A recent client who relocated from New Jersey shared their home sale contract, which was a fraction of the size of our local contract. Likewise, a colleague asserted the same about the property contracts in Arizona, where he was licensed for a number of years.

Property sale contracts go back into antiquity. Most likely, ancient contracts formed a basis of ancient record keeping. These ancient contracts were also “promises” that were enforced in some manner that was keeping with the time. For example, The History Blog (thehistoryblog.com) tells the account of the Mogao Caves which are located in the Gobi Desert and date back to the fourth century. One of the caves held a cache of financial documents from medieval China, including property sale contracts and records!

According to the legal historian A. W. B. Simpson, modern English contract law has roots in the middle ages (A History of the Common Law of Contract: The Rise of the Action of Assumpsit; Clarendon Press; 1987). The contract was founded in the concept of “assumpsit,” which was the basis for resolving “broken promises.” Assumpsit allowed individuals to bring claims of broken promises to local courts. Although the practice was traced back to the thirteenth century, court hearings were routine in the sixteenth century. This model became the basis for enforcing a private contract.

It wasn’t until 1677 when the English Parliament enacted “An Act for the Prevention of Frauds and Perjuries,” known today as the Statute of Frauds. According to Russell Decker, the Parliament enacted the law that required contracts to be written, because parties obliged by a contract were not allowed to provide testimony in court (The Repeal of the Statute of Frauds in England; American Business Law Journal; 1973; 11:1 p55). The written contract was the “witness” to a promise. However, most of the Statute of Frauds was mostly repealed in England in 1954.

The Statute of Frauds is still alive and well in the US and the basis for the real estate contract in Maryland. Statute of Frauds is a subtitle of the Real Property Act of the Code of Maryland. Section 5-104 Executory Contracts states: “No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him.”

So ok, home sale contracts need to be in writing, but why are our contracts lengthy? The reason is because many of the addenda and disclosures are generated because of statutory requirements to provide specific information in a contract of sale. Besides the expected list of notices and disclosures (such as property condition), there is a compendium of additional required notices and disclosures that is found in Code of Maryland Miscellaneous subtitle of the Real Property Act section 14-117 Contracts for Sale of Property. Additionally, jurisdictions around the state include additional addenda and notices for home sales within the respective county and/or locality. Of course, Montgomery County has added a number of disclosures and notices (such as the Utility Cost and Usage History Form and the Real Property Estimated Tax).

Make sure your agent is knowledgeable about the jurisdiction in which you are buying or selling. As a buyer, you need to make sure you receive all the relevant notices and disclosures. As a seller, you may incur a fine for non-disclosure of certain notices.

Original published at https://dankrell.com/blog/2018/09/20/copious-home-sale-contract/(opens in a new tab)

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August 29, 2018June 3, 2020

Hire a reputable mover

mover checklist — Moving Checklist (from Federal Motor Carrier Safety Administration fmcsa.dot.gov)

Moving is stressful enough without having to deal with a rogue mover. Before your hire a mover, do your research and know your rights. Your rights may vary depending if your move is intrastate or interstate. An intrastate move is within the same state, while an interstate move is between states. Although intrastate movers are not licensed by the state of Maryland, there are a rules and consumer protection laws governing their business. However, interstate movers must comply with Federal regulations.

Hiring a mover to move within Maryland (intrastate)

The Consumer Protection Division of the Maryland Attorney General published The Consumer’s Edge: Hiring a Mover? Protect Yourself! The publication outlines your rights for a move within the state of Maryland (marylandattorneygeneral.gov). The pamphlet advises that estimates must be written, and must specify if it’s binding or non-binding. Binding estimates are prohibited to change, while non-binding estimates in Maryland are capped and cannot exceed 25 percent of the original estimate. Be wary of low-ball estimates, or a mover who does not ask a lot of questions about your possessions. Don’t sign a blank or incomplete estimate.

If your move is within Maryland, consult the Maryland Movers Conference. The MMC is a non-profit organization that is part of the Maryland Motor Truck Association, and works with “governmental authorities and consumer groups to promote the highest standards for the moving industry in Maryland.” The organization established a Registered Mover Program, where movers abide by a code of ethics and other rules. You can view valuable consumer info and the MMC’s list of member movers at their website (mdmovers.org).

Hiring an interstate mover

mover pamphlet — FMCSA Ready to Move Brochure
(fmcsa.dot.gov)

If your move is interstate, your mover is regulated by the Federal Motor Carrier Safety Administration of the US Department of Transportation. The FMCSA website “Protect Your Move” (www.fmcsa.dot.gov/protect-your-move) provides an abundance of information to help you choose a reputable mover as well as tips and a checklist to help make your move less hectic. The FMCSA maintains a registry of legitimate interstate movers from which you can search and view licensing, insurance, as well as complaints.

During the planning stage of your interstate move, Federal regulation requires your mover to provide you with a copy of the booklet “Your Rights and Responsibilities When You Move” and a copy of FMCSA’s brochure “Ready to Move.” These publications (available on the FMCSA website) offer insight to make an informed decision, as well as understand your consumer rights in case something goes awry.

The FMCSA suggests that estimates that sound too good to be true are often a way for scammers to get your business. What are the red flags for which to be on the lookout? Be wary of:

Estimates given without onsite inspection of your possessions
A demand for cash or a large deposit
Blank or incomplete documents
Refusal to provide a written estimate
Movers who claim to be insured without providing proof
A mover who generically answers the phone “movers” instead of using the company’s name
No address or insurance info on the company’s website
Use of a rental truck instead of a company branded truck.

Moving Rights and Responsibilities — Rights & Responsibilities Booklet (fmcsa.dot.gov)

Movers must deliver your possessions. Call the police if a mover threatens to not deliver for any reason. Interstate movers may be in violation of Federal law if they hold your shipment “hostage.” The FMCSA offers some recourse if you feel victimized by an interstate mover or broker. The Protect Your Move Website has an online tool to make complaints. A complaint may trigger a Federal enforcement investigation against the mover.

By Dan Krell.
Copyright © 2018.

Original published at https://dankrell.com/blog/2018/08/29/hire-reputable-mover/

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August 16, 2018November 23, 2021

Fast home sale tips

Although the volume of home sales is below last year’s figures, most homes are still selling. Of course, home sellers would prefer to have a fast home sale. When meeting with potential listing agents, home owners are typically overwhelmed by agents promoting their broker’s technology. But the research is clear that it’s not technology that sells homes, but rather your MLS listing content and the audience that can sell your home fast.

Three years ago, I introduced cutting edge research by Allen, Cadena, Rutherford & Rutherford (Effects of real estate brokers’ marketing strategies: Public open houses, broker open houses, MLS virtual tours, and MLS photographs; The Journal of Real Estate Research; 2015; 37(3), 343-369). Although the study focused on the listing agent’s motivations about spending money on promoting your home, it did shed light on the effectiveness of marketing staples such as: broker open houses, public open houses, MLS photos, and MLS virtual tours. Although these tactics may not promote a fast home sale, the study revealed that all four methods used together positively influence the home sale price.

They found that having six or more MLS photos increases the probability of a selling your home, as well as positively influencing the sale price. Having a virtual tour can decrease the home’s time on market as well as increasing the probability of selling. Having open houses can help sell your home at a higher price, but can take longer to sell. Contrary to conventional wisdom, having public open houses can increase your home’s time on market up to twenty-five days, while reducing the chances of it selling by 6.1 percent! Broker open houses also adds to the time on market, however increases the likelihood of selling your home. The conclusion was that all four tactics should be considered as a package if your goal is to get top dollar. However, if your goal is a fast home sale, your focus should be elsewhere.

Do pictures help with a fast home sale? A number of studies found that MLS photos and virtual tours have positive effects to home sale price, but are conflicted with regard to time on market. However, a study conducted by Benefield, Cain & Johnson (On the Relationship Between Property Price, Time-on-Market, and Photo Depictions in a Multiple Listing Service; The Journal of Real Estate Finance and Economics; 2011; 43(3), 401–422) indicated that having more photos of the home’s interior can increase the time on market.

A study published this year suggests that getting more real estate agents to view your MLS listing can sell your home faster. Allen, Dare, & Lingxiao (MLS Information Sharing Intensity and Housing Market Outcomes; The Journal of Real Estate Finance & Economics; 2018; 57(2), 297-313) found that just increasing the MLS listing view by one unit can increase the probability of selling your home by 5.7 percent, increase the sale price by 0.2 percent, and reduce time on market by 1.6 days.

A fast home sale

So, what does all this research mean to you if you’re selling your home? First, consider that your agent’s marketing strategy will certainly affect your home’s sale price and days on market. While possibly helping to get a better sale price, the research has demonstrated that having a broad marketing plan could increase your home’s time on market. To decrease the days on market and increase the probability of a sale, pay attention to the pictures and audience. Make sure your agent places high-definition photos of your home in the MLS, but limiting shots to the most relevant. Also, make sure your agent has a plan to get your MLS listing in front of other agents.

Original published at https://dankrell.com/blog/2018/08/16/fast-home-sale-tips/ ‎

By Dan Krell.
Copyright © 2018.

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July 19, 2018November 23, 2021

Open house and carry on

Open House Still Part of Home Buying Process

The tradition of having an open house, like other real estate customs, has recently become a source of debate over its value and effectiveness. According to Rachel Stults, the tradition began over one hundred years ago when brokers allowed prospective buyers to “inspect” the house by having it open to the public (A Brief History of Opening Our Homes to Total Strangers; realtor.com; April 21^st, 2015). The house was advertised as “open for inspection.” Of course, it was a much different time. Home buyers were not represented, and there was no home inspection as we know it today. Hence, the “open house,” as first conceived, served an important function for the both the buyer and the seller.

As the housing industry evolved, visiting an open house morphed into a Sunday tradition. Open houses were not just for home buyers, as it also became a form of Sunday afternoon entertainment for the general public. The internet changed the tradition by virtually opening the house to the public through pictures and tours and allowing buyers to identify the specific homes they want to visit.

There is disagreement among real estate agents and other housing experts on the merit and effectiveness of the open house. Additionally, home buyers have significantly changed how they use the open house over the last two decades. According to the National Association of Realtors’ Profile of Home Buyers and Sellers (nar.realtor), twenty-eight percent of home buyers surveyed in 1999 indicated they found their home by visiting an open house, compared to only seven percent in 2017.

Adding doubt is a recent study that indicates having a public open house actually decreases the probability of selling a home by about 6.1 percent (Allen, Cadena, Rutherford & Rutherford; Effects of Real Estate Brokers’ Marketing Strategies: Public Open Houses, Broker Open Houses, MLS Virtual Tours, and MLS Photographs. Journal of Real Estate Research: 2015, 37:3, 343-369). The authors indicated that having a public open house can increase your home’s days on market up to twenty-five days.

Although the open house may have lost its clout as a selling tool, it is still a major aspect of the home buying process. Open house data from NAR’s 2015 Profile of Home Buyers and Sellers indicated:

-48 percent of all buyers surveyed used the open house as part of their home search process.
-Repeat home buyers are more likely to find their home from an open house compared to first-time buyers.
-The income bracket most likely to frequent an open house has a median income between $250,000 and $499,999.
-Home buyers below the age of 65 (but older than 24) are more likely to frequent an open.
-The Northeast and West regions of the US have more successful open houses.
-Buyers seeking a new home visit open houses more than those seeking a re-sale.
-Couples (married and unmarried) are more likely to visit open houses than single home buyers.
-And, ninety-two percent of home buyers surveyed indicated that open houses were at least “somewhat useful.”

If you decide to have an open house, put away your valuables and medications so as not to tempt thieves who may wander into your home. Have a discussion with your agent about focusing on selling your home, instead of trying to get more clients. And finally, don’t distract from your home by having an “event,” which employs food trucks, bounce houses, and other open house gimmicks.

By Dan Krell.
Copyright © 2018.

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