Download pdf - Selling Your House Summer 2014

8/12/2019 Selling Your House Summer 2014

1/11EDITION

SUMMER 2014

THINGS TO CONSIDER WHEN

SELLINGYOUR HOUSE


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TABLE OF CONTENTS

7 SHOULD I RENT MY HOUSE IF ICANT SELL IT?

6 5 REASONS TO HIRE A REAL ESTATEPROFESSIONAL

5 WHERE ARE MORTGAGE INTERESTRATES HEADED?

4 FUTURE HOUSE PRICES:A LOOK INTO THE CRYSTAL BALL

3 EVERYONE AGREES:YOU SHOULDUSE AN AGENT

1 5 REASONS TOSELL NOW

9 FSBOs MUSTBE READY TONEGOTIATE


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Many sellers are still hesitant about putting their house up for sale. Where are prices headed?

Where are interest rates headed? Can buyers qualify for a mortgage? These are all valid

questions. However, there are several reasons to sell your home sooner rather than later.

Here are five of those reasons.

1. Demand is StrongThere is currently a pent-up demand of purchasers as many home buyers pushed off their

search this past winter & early spring because of extreme weather. According to the National

Association of Realtors(NAR), the number of buyers in the market, which fell off dramatically

in December, January and February, has begun to increase again over the last few months.

These buyers are ready, willing and able to buyand are in the market right now!

2. There Is Less Competition Now

Housing supply is still under the historical number of 6 months supply. This means that, in

many markets, there are not enough homes for sale to satisfy the number of buyers in that

market. This is good news for home prices. However, additional inventory is about to come in

to the market.

There is a pent-up desire for many homeowners to move as they were unable to sell over the

last few years due to a negative equity situation. Homeowners are now seeing a return to

positive equity as prices increased over the last eighteen months. Many of these homes will

be coming to the market in the near future. Also, new construction of single-family homes is

again beginning to increase. A recent study by Harris Pollrevealed that 41% of buyers would

prefer to buy a new home while only 21% prefer an existing home (38% had no preference).

5 REASONS TOSELL NOW


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EVERYONE AGREES:YOUSHOULD USE AN AGENT

BuyOwner.comis one of many websites that

tell home owners they do not need to enlist

the help of a professional agent to be able

to sell their home. They encourage sellers to

instead For Sale By Owner(FSBO). As per their

website:

BuyOwner.com allows you to reach the most

potential buyers in the shortest amount of time,

in the most effective (the Internet) and most cost

effective manner (no commission!) possible.

However, perhaps not everyone at the firmbelieves this. It has been reported, in a

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recent Herald Tribunearticle, that when it came to selling his Florida mansion, Al Bennati,

the longtime chief executive of BuyOwner.com, has chosen to list his home with a local real

estate agent.

This doesnt surprise us. The most recent Home Sellers and Buyers Profile Reportfrom the

National Association of Realtorsrevealed that, though 92% of buyers search for a home on

the internet, 90% still use a real estate professional.

This isnt the first time that a CEO of a major FSBO website has enlisted the help of an agentwhen it came time to sell their own home. In August of 2011, the Wall Street Journalreported

on Colby Sambrotto of forsalebyowner.comwho, after failing to sell his home using FSBO

websites, needed an agent to sell his NYC apartment.

Even Fannie Maesuggests using an agent is the best alternative. Here is a quote directly from

the Know Your Optionssection of their website:

Unless you are experienced at selling homes, it usually makes financial sense to get professional

help - homes sold by agents typically sell at a higher price and spend less time on the market.

Bottom Line

Two separate people made fortunes convincing others to sell their home through their FSBO

sites. Yet, when it came to selling their own home, they recognized the value of using a real

estate professional.

There is a reason the real estate industry has been around for centuries: it performs a

valuable service.



Today, many real estate conversations center on

housing prices and where they may be headed.

That is why there is tremendous value in the

Home Price Expectation Survey. Every quarter,Pulsenomicssurveys 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:

Values will appreciate by 4.4%in 2014

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 almost 9.4%by 2018

Individual opinions make headlines. This survey

is a fair depiction of future values.

FUTURE HOUSE PRICES:A LOOK INTO THE CRYSTAL BALL

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There has been a lot written about how buying a home is less expensive than renting one in

most parts of the country. Rents are skyrocketing and homes are still at great prices. These

two situations are also causing some sellers to consider renting their home instead of selling

it. After all, a homeowner can get great rental income now and perhaps wait until housevalues increase even further before selling.

This logic makes sense in some cases. There is a strong belief that residential real estate is a

great investment right now. However, if you have no desire to actually become an educated

investor in this sector, you may be headed for more trouble than you were looking for.

Before renting your home, you should answer the following questions to make sure this is

the right course of action for you and your family.

10 Questions to ask BEFORE renting your home

1. How will you respond if your tenant says they cant afford to pay the rent this month

because of more pressing obligations? (This happens most often during holiday season

and back-to-school time when families with children have extra expenses).

2. Because of the economy, many homeowners cannot make their mortgage payment. What

percentage of tenants do you think cannot afford to pay their rent?

3. Have you interviewed experienced eviction attorneys in case a challenge does arise?

4. Have you talked to your insurance company about a possible increase in premiums as

liability is greater in a non-owner occupied home?

SHOULD I RENT MY HOUSE IF I CANT SELL IT?


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FSBOs MUST BE READY TO NEGOTIATEIn a recovering market, some sellers might be tempted to try and sell their home on their

own (FSBO) without using the services of a real estate professional. Real estate agents are

trained and experienced negotiators. In most cases, the seller is not. The seller must realize

their ability to negotiate will determine whether they get the best deal for themselves andtheir family.

Here is a list of some of the people with whom the seller must be prepared to negotiate if

they decide to FSBO:

The buyer who wants the best deal possible

The buyers agent who solely represents the best interest of the buyer

The buyers 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 termite company if there are challenges

The buyers lender if the structure of the mortgage requires the sellers participation

The appraiser if there is a question of value

The title company if there are challenges with certificates of occupancy (CO) or other

permits

The town or municipality if you need to get the COs permits mentioned above

The buyers buyer in case there are challenges on the house your buyer is selling.

Your bank in the case of a short sale