Most sellers ask the question, "How can I help to sell my home in today's challenging real estate market?". At different times in history, homes have flown off the market quickly. In today's market, which is made up of REOs (bank owned properties) and short sales, how can homeowners best position their homes to compete?
An important action step is to bring in an expert to help. Finding the best Realtor to guide you through the real estate transaction can be the difference between a real estate dream or nightmare.
Another important step is to make your home stand out. In a challenging market you have to highlight and advertise what makes your home stand out. The upgrades, the location, the amenities, the curb appeal, the well-maintained landscape and the outdoor living space you've created. Take a pad of paper and do a walk through of your home. Look for all the things that buyers would see as a benefit and list them. When you meet with your Realtor share these details.
You have to be competitive on pricing. This step is among the most important. Let your Realtor guide you. In the past I've written blogs about how pricing a home too high is a painful and humbling lesson. An over priced home will sit on the market. A qualified Realtor studies the market and understands realistic pricing for your home. The Realtor isn't emotionally vested in the home and therefore can help you compare to others that have sold so that you can see how the property should be priced.
Unclutter. Realize when you're selling your home, that buyers want to see the home as theirs. That's really hard to do when it's cluttered. Buyers need to see their own items in the home and that is hard to do if it is cluttered. Unclutter so that the true value of your home can be seen. The rooms will look larger. Buyers will appreciate being able to see each room without getting lost in your nick knacks, memorabilia, and other stuff.
When offers come in be sure to give careful consideration even the low ones. If the home is priced right, you will see offers come in and you must be ready to take action. Respond to all offers, even the low ones. A little inconvenience in preparation to facilitate a faster sale is really worth it. Take the action steps needed, make your home stand out, unclutter and sell your home faster.
Good buyers know that once you're truly interested in purchasing a home an inspection needs to be done by a professional inspector. This important step can keep you from making a big mistake on one of the largest purchases of your life. Yet did you know there are things you can look for before a professional inspection that can clue you into the condition of a home? Listed below are things that home buyers should be on the lookout for when viewing a home for a possible purchase.
Be on the lookout for water damage, leaks, or mold. Look beneath counters and around sinks. Do you see evidence of leaks or of moisture build-up? Are there tiles rotting off walls or dampness under sinks? Look closely in the basement. These spaces are notorious for harboring mold, leaks, and moisture. This is also a great way to inspect joists for rot or termite issues as well as basement walls for damage, which could indicate foundation problems. Don't forget to use your nose. You can smell moisture as soon as you enter some homes.
Next, make your way to the top of the house and view the attic. You can tell a lot about a house by looking at the attic. Is the house properly insulated? If not, what are the average heating and cooling bills? Does the wiring look safely installed? Any evidence of squirrels or other rodents?
Mechanical items to look at are the age and state of the furnace, appliances and water heater. Knowing when you'll need to replace these items can help you negotiate a fair price as comparable sales don't address most of these issues. Also look at the paint or siding if the home is not brick. Will it need replaced or painted soon?
Next walk around the perimeter of the house. You want to be able to see the foundation and look visible cracks and where the landscaping dirt line is to be sure it's not too high on the house, which can cause moisture issues. Trees too close to the home can also cause root issues for both plumbing and foundations.
Last point is to take a good look at the neighborhood and walk around it. What state are the neighboring houses in? Some will have been built in the same period as the home you are considering. How do they look? Are people taking care of their yards? Is the neighborhood noisy or quiet?
Of course the tips above are no substitute for a professional inspection, yet they can give you some real clues as to whether this home is what you're looking for.
Some of the most asked about properties in Northern Kentucky real estate are short sales. A short sale simply indicates an owner is selling their home in a real estate market that will not support what they owe. Many people have been led to believe that short sales are the best way to buy a property, yet that is not usually the case.
In a market where values have fallen as they have for the last 4 years, banks are less and less likely to take a offer significantly under the homes value. What many buyers do not realize is that the bank will appraise the property before approving the short sale, and they know what it is worth in today’s market. Since the lender is already taking a loss from the original mortgage, they are more likely to stick to approximate market value. I've actually seen cases where short sales are priced a little over the current market, yet people assume it is a good deal.
Lender owned (REO) properties are often better deals. Banks and lenders are not in the business of owning real estate. They would much rather collect money. So lender owned properties are often aggressively priced, yet as of late we have noticed that they too are priced close to market value and are not willing to give up too much ground. Lender owned properties often have maintenance issues that have to be factored into the price as well. Although margins have gotten smaller, lender owned properties are still easier to purchase for a good price, than a short sale.
A more traditional option is a straight sale. Despite the buzz, a traditional seller with equity is often your best bet for a great price on a well maintained property. When looking for your next home, don’t limit your search to short sales, or lender owned properties. Your dream home may be waiting with its owner still living in it!
Short sales and sales of foreclosed REOs totaled just under 1 million homes in 2011. Foreclosure-related transactions made up 23% of all residential sales in the U.S. last year, with short sales accounting for 9%lender owned properties accounting for 14% of all 2011 U.S. home sales.
During the last quarter of 2011, a total of just over 88,000 homes were in default or scheduled for auction. Short sales sold for an average of $184,221 in the fourth quarter of 2011. The average sales price of a short sale in the fourth quarter was 21 percent below the average sales price of a non-foreclosure home. That being said only 25% or 1 in 4 of all short sale transactions actually closed. Short sales that sold in the fourth quarter of 2011 took an average of 308 days to sell.
There was over 115,000 lender owned homes that sold in the fourth quarter of 2011 in the US. Lender owned home sales increased 20 percent or more on a year-over-year and sold for an average of $149,686 in the fourth quarter of 2011. Lender owned homes that sold in the fourth quarter took an average of 175 days to sell after completing the foreclosure process. Sales of foreclosures in the fourth quarter of 2011 continued to be slowed by questions surrounding proper foreclosure paperwork and procedures. Even so, bank owned homes accounted for nearly 1 in every 4 sales during 2011. Recent forecasts suggest an increase in short sales and bank owned properties in 2012 as lenders start to aggressively dispose of distressed assets.
A slow shift toward short sales took place in 2011 as they increased 15 percent from a year ago while lender owned homes sales decreased just slightly. That trend will likely show up in more in 2012 as lenders recognize short sales as a better option for many of their non-performing loans. Yet with a 1 in 4 success rate Realtors may question how many of their clients they wish to put through the short sale process.
Buying a home can be one of the more stressful experiences in life. It is often a long and sometimes intimidating process, lasting up to six months on average. The Real Estate market is huge and changes often with swings up and down. It's easy to become overwhelmed by how much is ahead of you and how little you know about the process. But with the right attitude, it can also be an enjoyable, even exhilarating experience.
Here are some tips to make your home-buying experience positive and less stressful.
Preparing to Move
Be prepared by becoming knowledgeable. Educate yourself on each step of the process so you know what to expect. Get organized ahead of time. Keep a notebook and calendar dedicated exclusively to the home-buying process. An Excel spreadsheet is a great way to organize and compare all the information you gather, such as the homes you are interested in, potential lenders, and different mortgage rates.
Finances
Assess your financial situation before you begin looking for a home. Come up with a solid number for the maximum amount you can afford, as well as a target amount you would like to spend, ahead of time. Overestimate the closing costs (interest rates can change). This is also a good time to begin gathering the financial documents that you'll need when applying for a loan. Keep your finances in order until you close on your new home, which could be as long as six months away. Do whatever you can to help improve your credit score; don't acquire new debt (no major purchases, new loans or new credit cards), reduce or eliminate any current debt, and pay your bills on time. It is never too early to begin improving your credit and is best started as early as two years prior to purchasing a home.
Find a Realtor
Find a Realtor who you trust and connect with on a personal level. Communication in this relationship is fundamental. Some questions to ask yourself: Are they good at translating industry jargon into terms you can easily understand? Do they communicate well using media that works for you, such as email, cell phone, or video conferencing? Choose an agent with expertise in both the type of property and property location that interests you.
Getting Pre approved for a Loan
Taking out a loan can be the most stressful part of the home-buying process. Transactions typically take at least a month to complete. Having your financial situation scrutinized can be an uncomfortable process. Worrying about whether you will be approved is an added stressor. It helps to gather your financial records (credit card balances/statements, bank statements, investment statements) prior to meeting with a loan officer. Obtain a copy of your credit report; you're entitled by law to one free credit report per year. A copy of your 4506 T form (IRS Tax Return Transcript), which includes a summary of your tax information, is also available online for download.
Don't lose sight of the fact that you have options when choosing a lender and a mortgage. This can help restore a sense of control when so much of the home-buying process is out of your hands. Talk to several lenders; don't just go for the first lender you talk to. Consult with your Real Estate agent to help you through the process of securing a mortgage. Don't hesitate to ask questions until you understand the answer.
Finding a Home
"Think with the end in mind," is a common phrase heard. See yourself in your new home. How does it make you feel? What does it look like? Keep a journal to record these thoughts. Be as descriptive as possible. This can help to not only narrow down precisely what you are looking for in a home, but it can also help anchor you emotionally during a potentially unstable time by keeping the big picture in mind.
While dreaming of your new home is an important first step, keeping your expectations in check is equally important. Keep in mind that the criteria of what you are looking for in a home will change along the way. No house is perfect. Be willing to compromise on some of your requirements. Make a list of your top priorities (must-have's) and lower priorities (nice-to-have's). This will help identify areas where you can be more flexible. Once you've found a home you like and know what you can work with financially, don't let the latest market news influence your decision to move forward. If you start second-guessing the housing market or interest rates, you risk losing the home to another buyer. Choose a home because you love it. Listen to your heart.
Waiting for Acceptance
Once you've made an offer on a new home, try to relax and engage in your routine activities while you wait to hear whether the seller accepts your offer. During this waiting period, there are many potential stressors that could send your mind reeling. What if the seller rejects your offer, or comes back with an unreasonable counter-offer? Was your offer too little, or too much? Be prepared to make several offers before one is accepted. Try to remain detached from the outcome until after the property has been inspected and you've been approved for a mortgage.
Inspection Period
Hire experienced and certified inspectors to conduct a thorough inspection of the property including possible insect damage. Be present during inspection, so you can ask questions regarding the home and become knowledgeable about any issues that are discovered.
Moving In
Congratulations! You've successfully negotiated yourself through the complex maze that is home-buying and now find yourself at last kicking back on your couch with your favorite drink in the home of your dreams.
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Our staff is dedicated to simplifying your process of buying or selling real estate in The Northern Kentucky Area. Visit us at www.HerbJohnson.com
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