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We believe these are the good ol’ days for reasons that we are happy to share. One of the most exciting changes is the big supply of homes available to choose from. Instead of taking what you can get and compromising your true wants and needs as was happening to Buyers in 2005, Buyers now have a wide variety to choose from so they get exactly what they want in a home. This is well illustrated by the fact that in July of 2005 there were only 3 homes under $300,000 in the Ranchos part of our Valley. Today there are 64 homes offered under $300,000, 13 of which are under $200,000!
In 2005 Buyers were being “shoehorned” into homes at the edge of, and sometimes over, their ability to pay. This was done with subprime loans, teaser rate loans, and sometimes just plain fraud. Buyers were happy to buy, but many are now paying dearly for their stretch. Today’s borrower has some wonderful loan opportunities that make their home purchase a comfortable, safe endeavor. These include increased FHA loan amounts and enhanced loans that are easier to get with scaled down guidelines.
In the height of the market run up we often had to extend the time for closing because vendors, i.e.- physical inspectors, appraisers, etc., were so backed up. What took 3-4 weeks to schedule then can be done in a few days now. Escrows can close in a short period of time even with a new loan instead of the drawn out uncertainty of overworked and often overwhelmed staff and underwriters.
Interest rates are about the same today for a 30 year fixed loan as they were in 2005. The benefit for Buyers is the down and monthly payments are less. Consider these statistics provided by Jake Fair of Bank of America, the $325,000 home in 2005 required $65,000 down, $1,247 monthly payment, and an annual income of $33,253. In some neighborhoods the same home can be purchased for $225,000, a down of $45,000, $1,079 monthly payment, and an income requirement of $28,000 – a savings of $20,000 up front and almost $200 a month!
Neighborhood characteristics are changing as the Buyers are changing from investors to happy homeowners that show pride of ownership. In a wave of change investors are pulling back and primary residence homeowners are outpacing investors. Homeowners typically have an interest in the property not demonstrated by transient tenants that aren’t as concerned about the yard. It’s a good time to get in to transitioning neighborhoods at an affordable price.
Our Advice: Real estate is a good long term investment, especially a primary residence where you enjoy not only the financial return, but also the emotional return of living in and enjoying the property. People are buying now with reasonable expectations, one might say normal expectations. There is less competition today from the “get rich quick” artists that were buying wildly and driving prices up in the “hey day”. Your offer will be reasonably considered by a Seller today – be reasonable with your offer and you will have a healthy escrow.
These are the “good ol’ days” … make the best of them. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , or www.carsonvalleyland.net 775-781-5472
No, they aren’t, but that should improve in the near future. The Real Estate Standards Organization, RESO, has recently approved a standard format for distributing real estate listing information. The solution is known as Real Estate Transaction Standard, RETS, a process that simplifies sending real estate information by allowing brokers and MLSs (Multiple Listing Services) to send their data to multiple real estate advertising Web sites without dealing with different data formats.
This is the culmination of a coordinated industry effort that has sought such a universal solution since 1999. Until now technology and software vendors were not coordinated and there were many software codes that could not exchange information with one another. This Standard allows software developers to write their code so they may exchange information back and forth online. The RETS working group, sponsored by the National Association of Realtors, will continue to meet and update the Standard as technologies change and new vendors come to the group with new ideas. For the techie reader wanting to know how the Standard works, the data feed is actually a data pull that is initiated by the subscriber using the RETS interface. RETS is an XML based query language that gives a developer the ability to create custom queries to pull MLS listing data from an MRIS server.
The Standard will be implemented immediately by many of the partner organizations. A partial list of partner organizations includes many MLSs across the country, Move Inc., eNeighborhoods, sShowings, Google, Yahoo, Homescape, Oodle, RealEstate, Realtracs, Threewide, Trulia, Zillow, etc. This is exciting for consumers and real estate practitioners alike. More consumers than ever are seeking real estate information online, and the standardized data format will make it easier for Realtors to feed their clients’ property listings to multiple real estate sites in one form saving them time and expense. Realtors can also get information on the traffic of real estate listing websites with more than 500,000 unique visitors including unique visitors (new, not repeat), visits per month, average minutes per month, avg. page views per visit, total visits, and total minutes the site was viewed. This will allow them to place their marketing information most effectively.
Our Advice: Enjoy the many opportunities to study the real estate inventory online in any community in the United States from your computer keyboard. Each commercial site has a different objective so be aware of what information is being directed to you, and where you are being directed. Also, be very careful with the information you receive – all is not always what it may appear to be. When comparing properties it is important to involve a real estate professional that is familiar with the area as there are often mitigating circumstances in sales or listings that must be interpreted so you are comparing apples of the same color and variety to one another. A lot premium surcharge, property condition, ownership status, property characteristics, etc. can all have an impact on value and must be considered in the valuation process – whether selling or buying.
Different sites have different updating policies resulting in some sites being slow to update, i.e.- changed pictures, denoting a property as sold or off the market, price changes, etc. Use the Internet to get your general information then call your real estate professional for current specific information relative to your wants and needs. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.casonvalleland.net , email us at carsonvalleyland@hotmail.com or phone 775-781-5472.
Incentives in sales have been around a long time, but never in our experience have they been so prolific as they are now in our industry. They come in a variety of forms- from whopping selling fees for the selling agent to give-aways for the Buyers. It is important to evaluate the nature of the incentive and what it really means to a Buyer.
A free trip, luxury car, or plasma television are always welcome … as long as they are truly free. If the Seller won’t come off of the $325,000 purchase price for a $300,000 home, a $5,000 television isn’t going to change a Buyer’s mind. Most noteworthy incentive programs are by builders marketing entire subdivisions. It is important for them to maintain their higher “comp” values for the rest of their project, and to protect their customers that have already bought. Some incentive packages of this nature are quite substantial, but not of public record. It is important for Buyers and Sellers to know what is really going on in those situations since those sales aren’t indicative of the real market. The effective price the Buyer is really paying is much less than the public records show. It isn’t necessary for the typical homeowner to camouflage their reduced price – market is as market is.
Homemade auctions that have made the internet rounds recently offer a different type of incentive – a very low starting price. The Buyer thinks he can steal a home at auction. The Seller is told he can sell his home in 5 days. When they come together and the Buyer won’t pay market and the Seller has a reserve it has proven to be disappointing for all parties. We have an agent friend that does real estate auctions on a national level with a professional auctioneer. They have a specific formula that works for unique properties – not something to appease a frustrated Seller in a typical residential market.
Extreme enticements have become interesting of late. Consider the couple offering that the Buyer of their home be the beneficiary of a $500,000 life insurance policy on the Sellers. If the Sellers die within 10 years of the close of escrow the Buyer will receive $500,000, the price of the home. Then there is the essay approach to selling – prospective Buyers submit an essay and $100. The essays are reviewed by an impartial panel and a winner declared who is then deeded the house. The essay funds are held in an escrow account until either there are enough submittals by the deadline, or they are returned to the submitters.
Our Advice: Enticements are designed to generate traffic or interest, but it is important to remember what is really on Buyers minds … the cost of their home and their monthly payments. Price is something that appeals to everybody – price your home right. No gimmick will overcome price in this market. If you want separation in the market, and you are priced right, consider a good faith gesture incentive, i.e.- lawn service for a year, pay a year’s Homeowner’s dues, or buy a Home Warranty. Really want to reach a Buyer? Help buy down their rate for the term of their loan, pay some of their closing costs, or contribute to their down payment. These are real items that will benefit every Buyer where they are most sensitive right now … in the wallet.
Serious Buyers are looking to buy a home, not a trip or new car. Sellers don’t show your desperation by jumping on the incentive bandwagon. Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.
Congratulations on getting an offer! Something you and your agent are doing must be right for a Buyer to find your home and think enough of it to make an offer to buy it. Now…what to do with it? Low offers often create emotion and frustration. Nothing will be accomplished if you get mad at the Buyer. Buyers are doing the best they can for themselves … like you and your agent will do for you on your side of the negotiations.
The first thing to do is to assess the Buyer’s motives. Is this a Buyer that is reaching, hoping to buy your home at a price he can really afford? Such a Buyer reaches beyond his means, but with a little luck, and your price acquiescence, he can enjoy such a home one “upgrade” sooner than he would otherwise be able to. This Buyer is maxed out at the low offer price.
Other Buyers are simply “bottom fishing”, looking for the deal of a lifetime. They are going to offer low regardless of how well you are priced. This type of Buyer uses your list price as a starting point rather than looking at where you are priced relative to the market. A home priced right in this market is not a sign of weakness, in fact most often it is just the opposite – it is a sign of someone that is not upside down in their property, is realistic about what is going on, and is ready to get on with his life. It is amusing when a low ball operator makes a low offer on a well priced home- their tactics are pretty well exposed. If you are priced right – stay your course.
There seems to be yet another category of low-offer Buyers these days – those claiming that they are topped out at where they are offering. We’ve had this happen several times lately where we received a very, very low offer, made a counter, received a little adjustment from the Buyer and were told they were maxed out. In one case the Buyer later came back $40,000 higher when he had competition (he was too late and lost the house!). In another, the transaction didn’t close, and the Buyer bought a home for $50,000 more than the “most they qualify for”. Both of these homes were in the low $200k range so these amounts were significant relative to the total price. Your agent can help you decide what to do if your Buyer “can’t pay more”. Can’t … or won’t?
Our Advice: Work with your agent to determine the Buyer’s situation/motivation. If they are playing games and you quit you’ll never close with them. If you play with them- stick to your goals, and if the transaction is meant to be it will go together. There’s nothing wrong with a little “ping pong” negotiation if your objectives are ultimately met - it just takes a little longer. Don’t blame them for making a low offer – many Buyers think they have to try it. What happens afterwards is what counts. If they are trying to steal something, and you won’t let go, they will have to find another home. If they aren’t realistic, you didn’t lose anything by not working/playing with them – you never had them to begin with. Appreciate that your agent is doing a good marketing job to have your home be selected as the one they offered on.
Be honest with yourself – is the offer closer to the real value than your list price? Maybe the Buyer is checking your “expectations vs. reality” in hopes you will come to your senses and they can buy it at a fair price. It’s a good time to go over your own goals and objectives.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com email us at carsonvalleyland@hotmail.com , 775-781-5472.
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We believe these are the good ol’ days for reasons that we are happy to share. One of the most exciting changes is the big supply of homes available to choose from. Instead of taking what you can get and compromising your true wants and needs as was happening to Buyers in 2005, Buyers now have a wide variety to choose from so they get exactly what they want in a home. This is well illustrated by the fact that in July of 2005 there were only 3 homes under $300,000 in the Ranchos part of our Valley. Today there are 64 homes offered under $300,000, 13 of which are under $200,000!
