5 Reasons You Shouldn’t For Sale by Owner

5 Reasons You Shouldn’t For Sale by Owner | Keeping Current Matters

Some homeowners 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 FSBO.

  • 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
  • Your bank in the case of a short sale

2. Exposure to Prospective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?

3.  Actual Results also come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspapers

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 9% over the last 20+ years.

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 commission. The seller and buyer can’t both save the same commission.

Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 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, sit with a real estate professional in your marketplace and see what they have to offer.

5 Reasons to Hire a Real Estate Professional

5 Reasons to Hire a Real Estate Professional | Keeping Current Matters

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened in recent months due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t hike up Mt. Everest without a Sherpa, or replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

You’ve Played the Housing Market Perfectly. Don’t Blow it Now!

You've Played the Real Estate Market Perfectly! Don't Blow It Now! | Keeping Current Matters

Many people suffered through the housing crisis. We realize that most of the heartache was the result of a housing and mortgage market gone wild. Many consumers were swept away by the waters of a frenzied real estate market that resulted in a crisis even the experts didn’t see coming.

However, some of the suffering was caused by home buyers and home owners simply making bad decisions. NOT YOU! You didn’t buy that house that stretched your family finances past the point of sustainability. You didn’t take out a home equity loan and buy new water skis. You didn’t do a cash-out refinance for the maximum amount possible.

Instead, you bought a home your family could enjoy – and afford! You waited for interest rates to drop to historic lows and then refinanced your mortgage; not for the sake of taking cash out but instead to lower your monthly payment.

You have equity in your house and a nice, low mortgage payment. You played the housing market perfectly.

Don’t Miss the Last Move

Yet, there is one more move many should consider. With interest rates still at historic lows, and prices projected to increase by almost 20% over the next four and a half years, this may be time to buy a new home.

Whether, you are a growing family ready to move-up to that waterfront home you always wanted or an empty nester downsizing to a home that makes more sense, now may be the time to buy. If you have considered buying a vacation/retirement home, there may never be a better time to move forward with that plan.

You have been fiscally astute enough to navigate the treacherous waters of a housing market that sank many a homeowner. Now, that the seas have settled, don’t think there aren’t even greater opportunities on the horizon.

Home Prices…Where are They Headed?

Home Prices... Where are they Headed? | Keeping Current Matters

Today, many real estate conversations center on housing prices and where they may be headed. That is why the Home Price Expectation Survey is seen to be a reliable source. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. 

The results of their latest survey

  • Home values will appreciate by 4.6% in 2014.
  • The cumulative appreciation will be 19.5% by 2018.
  • That means the average annual appreciation will be 3.6% over the next 5 years.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 11.2% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Bigger Ads Don’t Make Dumber Buyers

Bigger Ads Don't Make Dumber Buyers | Keeping Current Matters

Being ‘in and around’ the real estate business for over 30 years, we are still confused about the importance both sellers and real estate agents put on advertising.  Decades ago, advertising a home was important to attract a buyer because there was no other way for an individual real estate office to announce to the world that a house was now on the market.

But times have changed.  With the development of the Multiple Listing Systems (MLS), as soon as a listing is taken the entire agent population of that area or region is informed. Instantly! Every agent working every buyer is put on notice that a new opportunity to sell a home is here. In many cases, through new technologies, the buyers are directly informed of the new listing before the agent can even reach out to them. Buyers already in the market will know the home is up for sale immediately. No ad is required to do this.

You may ask – what about the buyer who is not yet actively engaging an agent in search of a home? Those future buyers are searching the internet months before they are ready to commit. In most areas, once a home is placed on the MLS system, the listing populates a plethora of real estate internet sites where a buyer can easily find it.

Why are no buyers looking at the house? I will argue that it is probably not because they are unaware of the listing. In 99% of the cases, it is about pricing. They know of it and, for some reason, have decided it is not worth seeing. The value was not there for them.

Look at the Price

You may think there are just no buyers in the market for your type of home at the present time. Well, let’s take a step back and ask a question. Would someone buy it at $1? How about $100?  $1,000?  $10,000?  $100,000? Of course!! But, that proves our point. There is a price that buyers will pay for each and every home that is for sale today. You must decide if you are willing to take what the current value of your property is. That is entirely your decision.

But, let’s not believe the house hasn’t sold because it wasn’t advertised more aggressively. You could put it on the front page of your large, regional paper for the next 365 straight days. If it is not priced right, a buyer will not buy it.

Does that mean that you don’t need an agent to sell your home? Actually, we are saying the exact opposite. You need a well-informed real estate professional who knows the proper price for your house and has the courage to tell you the truth. It was great to see that a recent survey by the National Association of Realtors revealed that the number one benefit a seller wants from their agent is assistance in setting a competitive price. That truly is the most important thing an agent can deliver to a seller in this market.

Bottom Line

Get a great agent. Price your home appropriately. And don’t believe that running more ads will create a group of buyers that don’t understand value!!

The Importance of Using an Agent when Selling Your Home

The Importance of Using an Agent when Selling Your Home | Keeping Current Matters

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. Today, 92% of all buyers use the internet in their home search according to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers.

However, the report also revealed that 96% 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 the agent to find the actual home they will buy (52%) or to help them handle the paperwork (24%) or understand the process (24%).

It is true that the percentage of buyers that are using the internet to search for homes and information on the home buying process has increased dramatically over the last decade. But the plethora of information now available has also 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, don’t underestimate the role a real estate professional can play in the process.

Zillow + Trulia: Why it is NOT the End for Agents

Zillow + Trulia: The Death of the Real Estate Agent? | Keeping Current Matters

KCM founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. Enjoy! – The KCM Crew

Yesterday, Zillow announced the acquisition of Trulia. Some industry experts are predicting the end of the real estate business as we know it. They used words like “checkmate” and “kill shot”. Though we agree that aspects of the industry will be forced to evolve perhaps quicker than they had hoped, we believe this will be an evolution…not a revolution. No one needs to die.

THE EVOLUTION

Will companies and agents need to massage the way they do business? We think so. Marc Davison, the co-founder of 1000WATT Consulting, put it best when he explained that companies needed to:

“…focus on brand marketing, content marketing, data-driven advertising and other more intelligent means of engaging homebuyers and sellers.”

Sites like Zillow/Trulia give the consumer the dots (data) of real estate. Like Davison, we believe the consumer needs the real estate professional to ‘connect those dots’.

I did not have to go far to find anecdotal evidence proving this hypothesis. I just needed to look at my own family.

Massapequa, New York

Five years ago, my older son and his wife bought their first home. They found that home on Zillow and told their agent, “this is the home we’d like to live in”. The agent helped them decide on a target price. She helped them negotiate that price with the seller. She found the industry professionals they needed and coordinated the inspections, the walk-throughs and the appraisal. She helped them work with an attorney and a mortgage professional.

She was their agent and represented them throughout the entire purchasing process. She made sure that they were confident and comfortable at every stage.

They found the house online; that was the easy part. They needed an agent to help them with the hard part: actually getting the house without headaches or stress. My son and his wife truly believe she was worth every penny of her commission.

South Beach, Miami

Two years ago, my wife and I were thinking about buying a winter residence in South Beach. Every day, my wife searched the listing portals for condos for sale. We got a really good feel for South Beach and even picked out a few buildings we liked. However, even though I have been in the industry for over 30 years, we called a real estate agent who specialized in South Beach.

She explained to us how the fiscal responsibility of each building’s board would impact future “special assessments” (something we hadn’t even considered). She explained how proposed new construction might impact the ocean views of certain properties. She helped us find the perfect spot and guided us through the entire buying process.

The nights my wife and I spend eating dinner on our balcony overlooking the ocean would not have been possible without our agent.

Meadville, Pennsylvania

Just this month, my younger son got his dream job; coaching women’s basketball at the collegiate level. It required him to relocate out of state. He needed a twelve month rental. He searched Zillow, Trulia and Craig’s List. He got a feel for the types of units available and the rental costs. But when it came down to it, a local real estate agent named Vic Kress found my son a great place in a sensational building in a perfect location. My son is signing the lease today.

Just the other day, when someone questioned my son on how difficult it was to find a place so far away in such a short period of time, he answered:

“I have a guy down there that is looking out for me.”

That’s what real estate professionals do. They ‘look out for’ their customers and help them through the process.

BOTTOM LINE

Technology has definitely given consumers easier access to information about the housing industry.

However, we believe that buyers and sellers need more than just information. They need an analysis of how that information impacts their family. Every family should feel confident when buying or selling a home. Real estate agents must reach out to these families and simply & effectively explain a complex housing market to them.

That is what will guarantee their existence.

What is holding back the Real Estate Market?

What is holding back the Real Estate Market? | Keeping Current Matters

Though the housing market is recovering nicely, it is not doing quite as well as some analysts had predicted. There has been no shortage of excuses offered as to why this is: the rise in interest rates, more stringent lending standards, the weather.

However, we feel that there is one factor that is most responsible for curtailing the number of houses sold – the number of houses available for sale!

Inventory Levels are BELOW Historic Norms

In a recent economic forecast, Freddie Mac addressed this exact issue:

“Including newly built homes in the inventory count, the total number of homes offered for sale relative to the number of households in the U.S. has been running at the lowest level in more than 30 years, as shown in the second exhibit. The relatively low for-sale inventory reflects several features of today’s market.”

“A supply-constrained market (holding other factors constant) will result in a decline in the volume of sales and an increase in real transaction prices.”

NAR Report Confirms Inventory Constriction

History shows us that a balanced real estate market requires a six month supply of available housing inventory. The National Association of Realtors released their Existing Homes Sales Report earlier this week. The report revealed that we are still only at a 5.5 month supply of homes for sale. We have not reached the 6 month mark in over two years.

The recent increase in buyers now looking will again put a strain on this number.

Bottom Line

While inventory levels remain below historic norms, it will remain a seller’s market. This being the case, if you are considering selling your home, now may be the time to list it for sale.