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  • The Top 5 Reasons You Should Not For Sale By Owner | Simplifying The Market

    The Top 5 Reasons You Should Not For Sale By Owner

    In today's market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

    Here are five of those reasons:

     

    1. There Are Too Many People to Negotiate With

    Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

    • The buyer who wants the best deal possible
    • The buyer’s agent who solely represents the best interest of the buyer
    • The buyer’s attorney (in some parts of the country)
    • The home inspection companies, which work for the buyer and will almost always find some problems with the house
    • The appraiser if there is a question of value

    2. Exposure to Prospective Purchasers

    Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you? 

    3. Results Come from the Internet

    Where do buyers find the home they actually purchased?

    • 44% on the internet
    • 33% from a Real Estate Agent
    • 9% from a yard sign
    • 1% from newspaper

    The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

    4. FSBOing has Become More and More Difficult

    The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

    The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

    5. You Net More Money when Using an Agent

    Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

    Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

    Bottom Line

    Before you decide to take on the challenges of selling your house on your own, let's meet up so we can discuss the difference having an agent can make.

     
  • Further Proof This Isn’t a Housing Bubble | Simplifying The Market

    Further Proof This Isn’t a Housing Bubble

    Two weeks ago, we posted a blog which explained that current increases in home prices were the result of the well-known concept of supply & demand and should not lead to conversations of a new housing bubble. Today, we want to look at home prices as compared to current incomes.

    Here is a graph showing the monthly mortgage payment on a median priced home in the U.S. over the last 25 years:

    Further Proof This Isn’t a Housing Bubble | Simplifying The Market

    Mortgage payments are currently well below the historic average over that time period. Purchasers are not overextending themselves to buy a home like they did on the run-up to the housing crash.

    Lawrence Yun, the Chief Economist at the National Association of Realtors, recently explained in a Forbes article:

    “Even though home prices are climbing far above people’s income, exceptionally low mortgage rates have permitted people to buy a home without overstretching their budget. For someone making a 20% down payment, the monthly mortgage payment at today’s mortgage rates would take up 15% of a person’s gross income. During the bubble years, it was reaching 25% of income. The long-term historical average is around 20%. Therefore, a middle-income household does not need to overstretch their budget much if at all to buy a typical home.”

    Bottom Line

    Due to low interest rates, demand for housing has dramatically increased. This has caused a jump in home prices. However, low interest rates have also allowed the monthly cost of buying a home to remain well below historic norms. We are in a strong housing market, not a housing bubble.

     
  • 3 Charts That Scream ‘List Your Home Today’ | Simplifying The Market

    3 Charts That Scream ‘List Your Home Today’

    In school we all learned the Theory of Supply and Demand. When the demand for an item is greater than the supply of that item, the price will surely rise.

    SUPPLY

    The National Association of Realtors (NAR) recently reported that the inventory of homes for sale stands at a 4.4-month supply. This is considerably lower than the 6-month inventory necessary for a normal market.

    3 Charts That Scream ‘List Your Home Today’ | Simplifying The Market

    DEMAND

    Every month NAR reports on the amount of buyers that are actually out in the market looking for homes, or foot traffic. As seen in the graph below, buyer demand in February significantly outpaced the last six months.

    3 Charts That Scream ‘List Your Home Today’ | Simplifying The Market

    Many buyers are being confronted with a very competitive market in which they must compete with other buyers for their dream home (if they even are able to find a home they wish to purchase).

    Listing your house for sale now will allow you to capitalize on the shortage of homes for sale in the market, which will translate into a better pricing situation.

    HOME EQUITY

    Many homeowners underestimate the amount of equity they currently have in their home. According to a recent Fannie Mae study, 37% of homeowners believe that they have more than 20% equity in their home. In reality, CoreLogic’s latest Equity Report tells us that 72.6% actually do!

    3 Charts That Scream ‘List Your Home Today’ | Simplifying The Market

    Many homeowners who are undervaluing their home equity may feel trapped in their current home, which may be contributing to the lack of inventory in the market.

    Bottom Line

    If you are debating selling your home this year, let's meet up to evaluate the equity you have in your home, as well as the opportunities available in your market.

     

  • The Importance of Using an Agent To Sell Your House | Simplifying The Market

    The Importance of Using an Agent To Sell Your House

    When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

     

    In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

    However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

    Buyers search for a home online, but then depend on an agent to find the actual home they will buy (53%), or to negotiate the terms of the sale & price (48%), or to help understand the process (60%).

    The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

    Bottom Line

    If you are thinking of selling your home, let's meet up to discuss the process!

     
  • The Mortgage Process: What You Need To Know [INFOGRAPHIC]

     

    The Mortgage Process: What You Need To Know [INFOGRAPHIC] | Keeping Current Matters

    Some Highlights:

    • Many buyers are purchasing a home with a down payment as little as 3%.
    • You may already qualify for a loan, even if you don't have perfect credit.
    • Take advantage of the knowledge of your local professionals who are there to help you determine how much you can afford.

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