ARE YOU GOING TO LEAD OR CHASE THE MARKET?

The old saying of buy low, sell high is something everyone is thinking about today as prices seem to have stabalized a bit.  BUT, have we hit the low yet?  There is no way to know this answer until it’s too late.  Today is a great time to buy a home and is certainly not a bad time to sell if you price your home properly.  We still have historically low rates…you can still lock in a 30 year loan for under 5% interest.  As the economy improves and mortgage banking reforms are put in place, this may be the best chance you have to make a real estate investment. 

Remember, that the COST of a home, not the price of a home is what you want to pay attention to as you make your decisions.  Your interest rate is one of the biggest factors in the final cost of your home.  Assume you purchase a home and take out a $150,000 mortgage at 5% today.  Your monthly payment would be $805.50.  BUT, if you wait and interest rates go up just 1%, your monthly payment would be $900.  This $95 change in monthly payment could mean that you would have to settle for a home in a lower price range and obviously less desirable to you. 

This is good information to keep in mind as you analyze whether you want to sell now or wait until the price of your home recovers to pre-2009 prices.  First of all, all experts expect the market to slowly recover, not rebound in great leaps.  Secondly, if you wait for the market to recover, you will also be buying your home at the higher prices and most likely higher interest rates. 

If you would like to discuss your particular situation and develop a strategy to make the best of this great market opportunity, give me a call so we can get together to discuss.

I just attended a lunch and learn this afternoon to get up to speed on a new (revised) product that Wells Fargo is offering.   It is an FHA loan, so if you would normally qualify for an FHA loan, you would qualify for this one.   This is renovation loan which means you can buy a house that you see great potential in and get a loan that is for the improved value of the property. 

There’s lots of uses for this product:

1.  You are looking at a property, but it has some water damage, poor roof or needs to have the basement finished.

2.  You are a seller that just can’t seem to get a property sold.  Comments have been that the house is outdated and needs some improvements. 

3.  You want to stay in your current home, but need additional space and want to add a new family room or update the kitchen.

This financing product can address all these issues and you get the loan at very competitive pricing.  I was certainly glad I attended the session and came away with lots of information.

Let me know if you think this is a product that may work for you.  Don’t miss out on a great opportunity to improve your current home or buy a house with great potential and see that potential realized sooner than you think.  Call me today with your questions.

Are people telling you it’s not a good time to buy/sell a home?  I believe they are wrong.  We are living in unheard of times right now.  Many real estate professionals that have been in the business for over 30 years are remarking that they have never seen times like this.  Generally, the market has low housing prices with higher interest rates or low interest rates with higher home prices.  We have the best of both worlds right now…unheard of low interest rates and lower housing prices than we have seen in probably 10 years.

SO, this would mean now is a perfect time to buy or sell.  I personally just sold my townhome.  I priced it right, still making a profit from when I built it 7 years ago and sold it within 1 week of listing.  People have to have a home to live in and with all the doom and gloom people are hearing in the media, there are less houses to choose from, so if you have a home in good condition and priced right, now is the time it will sell.

According to an article in the Super Shopper, more people selling their home without the help of a real esate professional plummeted over the past year.  According to the NAR 2009 Profile of Home Buyers and Sellers, “for sale by owner” transactions dropped to a record low  11% and almost half of those sellers sold their homes to someone they already knew such as relatives, friends or neighbor.

If you look around Council Bluffs and Omaha, you will certainly see fewer homes for sale by owner as well indicating we are no different than national statistics.  Do you wonder why this is happening? 

I believe the answer is very easy:  1) The market is more complex and difficult in the tighter credit market.  2)  A Realtor can save a seller time and money by assisting the seller in setting realistic prices which are key in a tight and competitive market.  3) Managing the sale to closing has been much more complex and precarious in this tougher credit market.  4)  Without the market knowledge and professional assistance a Realtor provides, sellers are faced with a marketing disadvantage.

In past years, you saw lots of  for sale by owner properties out there because the market was booming, credit was available to everyone and the appraisal process was streamlined.  Sellers deemed it not important to have a professional involved in the process.  This actually may have contributed to buyers paying too much for homes that are now even further down in value.  As in many cases, now these people are looking to the real estate professional to get them out of the problem they got into by themselves.

Statistics have always shown that having a professional market your home results in better sales prices.  In 2009, a typical property without professional assistance sold for $172,000 compared with a $215,000 sales price for the typical agent assisted property.

The next time you are considering buying or selling a home, please give strong consideration to using a professional agent and hopefully me.  I take my taxes to a tax specialist, I see a doctor for my health issues, and a dentist for my teeth because they have been trained in their field and I have confidence that I will get the best results for the situation.  I hope you can look at what I do for a living in the same way.  I consider my career a professional career and as such I continue to seek new knowledge so I can best represent my clients and I work hard to accomplish the goals of my clients with the least amount of stress and fuss.

I just listed a house in Omaha Saturday and it sold this week!  Pretty incredible considering the horror stories you have been hearing in the news.  The reason I think we were so successful is PRICING.  I viewed the home and made a few staging suggestions for the homeowner which she implemented, but the most important step was looking at the current market and making an informed decision on how to price the property to sell it. 

There is a tendency, especially in today’s market, to say “Let’s price it here and we can always come down”.  Not necessarily so.  Did you know that buyers tend to look at homes in $5,000 price increments?  So, if you price your home at $154,500 and it’s really a $145,000 house, you are getting entirely the wrong group of people in the home to look.  Your home will be compared to other homes ranging from $149,500 to $159,500 and most likely won’t stack up against the competition well.  Generally, buyers will not embarrass you by making what they consider to be a low ball offer.  You miss out on getting the right buyers into your home during the most important marketing time…the first 2-3 weeks from listing.  When you finally make the decision to reduce the price, many buyers will have already found another home and your home will look “worn” because of the days on market.

I can’t stress enough how important it is to price right.  Then, when you receive an offer, consider it carefully as your best offer is generally the first offer you receive.  Not necessarily the price being offered, but the most motivated buyer, so you should negotiate this offer with great care.  We all have a number in our heads that we think is right for our home…remember it’s just a house to the buyer!  When considering offers, consider the time factors, cost of staying in the home and the inconvenience of not being able to move on to where you want to be.  Is is worth $1,000-2,000 ?  Buying and selling a home is an emotional process, but I encourage you to try to step back and make the best business decision you can make.  That’s why I am here….to provide you with a nuetral opinion and help you keep perspective as you go through the process.

In case you don’t know what a short sale is…it is when the bank agrees to release the owner of a property from their mortgage obligation for less than what is owed.  There are plenty of people in situations where they must do a short sale on their property because the value of their home has declined and they have no equity in the home.  Many of these people are ones that took out 100% loans or have taken a 2nd mortgage and used their equity for other purposes.

Banks will accept short sales, but you must be PATIENT whether you are a seller or  buyer.  If you are getting behind on payments and feel like the ball is starting to roll down hill, DON”T WAIT, contact a Realtor that can work with you and your bank to get a short sale approved.  If you are a buyer, don’t expect to get a response from an offer within 48-72 hours as the banks have a process to go through.  There is nothing you can do to speed that process up.  The bank will get financial information from the bank, then get an appraisal on the property.  It depends on the type of loan and mortgage insurance on what the bank will accept.  It is usually somewhere in the 88% level.  If an offer is received, it’s not uncommon for a bank to tell the Realtor not to even submit it unless it meets their financial objectives.  They usually will not respond in writing so it’s frustrating as anybody with business sense knows that this is not the way to do business.

So, today reminds me of why customers feel so alone in dealing with this difficult process.  The banks are not real responsive, they have generally hired someone that quite frankly doesn’t care about the house or whether it sells, it’s just another file on their desk.  I am working on just such a case today.  I am so frustrated that I wrote to my representative and the Majority Leader to express my frustration with the current environment.  Probably won’t change things, but I feel a tad bit better.

We have all heard how terrible things are in the real esate market,  how now may not be the right time to sell, and that it is a buyer’s market.  All of this information may be true depending on where you live.  To satisfy my own curiosity, I did some research on the market today (1-1-10 until today) compared to last year at this same time.  In Council Bluffs, we have nearly 100 less homes on the market today as the same time last year, we have sold about 20 less houses with the samedays to close as last year, BUT the average sales price is actually up slightly.  Houses continue to sell for about 96% of their list price. 

 This all leads up to me saying…  What we need are some new properties.  If you know anyone who may be thinking of selling, please have them contract me….NOW IS THE TIME!!!  Don’t wait until everyone else is selling.  There are only 3 things that are considered when purchasing a home:  Location (can’t do anything about that it is where it is), Condition (future blogs will give you some good ideas on staging and presentation…the owner controls this!)  and Pricing (The most important factor and the one the owner definitely controls!)  In this market place, correct pricing is key.  Let me design a marketing plan that will get your home sold quicker than the average 121 days!  First time buyers have less than 90 days to have a contract on a new home in order to qualify for the $8500 tax credit!!

This is a tough question for me to answer because, on one hand, any exposure you can get for your home will only help sell the home.  However, in most cases a home does not sell from an open house rather from a realtor showing the home to an individual client.  Open houses are a chance for people to come through the home without any strings or prequalification, so you really don’t know if the people looking can even purchase your home.  A good agent will market your home in several ways, the web (as many sites as we can possibly get), the paper, real estate magazines, the Southwest Iowa Association of Realtors MLS site, the Omaha Area Board of Realtors website and direct mail campaigns in addition to one on one marketing with their own clients and other realtors that they have cultivated realtionships with.  I think if you have too many open houses, it can give the impression there is something wrong with the home.  You can glean comments that may be helpful in staging the home from people coming through the open. 

In summary, I would say, don’t count on an open house to sell your home, rather look at it as a way to gain feedback from the market place.  On thing I know for sure, you may not like what the market place tells you, but it is never wrong.

The answer is YES!  If you qualify for the $6500 tax credit, you must have a purchase agreement accepted no later than April 30, 2010, but you have until June 30, 2010 to close on that property.  To qualify for the tax credit you must have lived in your current primary residence 5 of the last 7 years.  There are no stipulations on what type of new primary residence you must buy, so this is a great time for those thinking of downsizing to their retirement home to make a move.  What’s better than getting $6,500 from the government! 

It’s also a great time for those that are thinking about moving up to their dream home.  It’s likely that your current home is in a price range that would be attractive to first time buyers who can qualify for up to an $8,000 credit which brings more buyers to the market than otherwise would have been AND you will buying/building your dream home at a time when prices have come down and stabilized.  It’s a win-win situation that shouldn’t be missed if you are thinking of making a move.

For those that are thinking of listing and worried that this is a bad time, not necessarily.  With these incentives, the market should have more buyers than normally expected.  Why wait until the press says it’s ok to make a change when everyone will be flooding the market with houses for sale?

I just got back from a training session on reverse mortgages and feel even better about their use in today’s market for seniors.  If you are a senior (age 62+) with substantial equity or no mortgage, this important asset may not be working for you as it could.  A couple of the biggest fears seniors have is running out of money and controlling expenses that just seem to keep going up every time they turn around.

Did you know you can take the equity from your home today to buy a home that may be more suitable to your needs and not have to make any mortgage payments?  Did you know you can use the equity in your current home to make repairs or improvements to make you home more suitable without having to may a payment?  A reverse mortgage can be used to purchase a new home or to finance other needs you may have.

A reverse mortgage enables you to tap into your equity in your home without selling it or increasing your monthly expenses…in fact it can add to your monthly income without paying income tax.  You still own your home and can remain there as long as you want without making a payment.  Then, when you no longer need the home, it is sold to pay off the mortgage and any additional amount received goes to you or your estate.

Sound too good to be true?  It’s not.  This is a FHA loan program insured by the government.  Call me today to see if this might make sense for you or click on my financial partner’s link to get more information.  www.wfhm.com/gregg-bailey.  This method of funding isn’t for everyone, but it definitely has it’s place.