When you buy a new house, do you need the services of an experienced real estate agent?
The answer is yes, and here’s why.
2015 NORTHERN KENTUCKY BUILDING PERMITS
The Northern Kentucky building industry is experiencing extreme growth for the first six months of 2015 in almost every category year to date compared to 2014. The report covers Boone, Campbell, Kenton and Grant Counties. The only areas of decline were condos and number of Multi Family permits but the dollar amount of both of those categories was up significantly.
Category 2014 2015 CHANGE
Residential permits 348 474 + 36%
Residential $ Volume $54,750,494 $ 86,50,531 + 58%
Condo permits 25 19 - 24%
Condo $ Volume $3,836,206 $7,759,508 + 102%
Commercial permits 18 98 + 444%
Commercial $ Volume $36,085,240 $53,734,170 + 49%
Permits 272 332 + 20%
$ Volume $68,086,898 $144,414,019 +112%
Permits 538 862 +60%
$ Volume $12,638,889 $15,972,577 +26%
Multi Family permits 25 19 -31%
Multi Family $ Volume $3,836,206 $7,759,508 +102%
7 Reasons Why You Should Use a REALTOR to Sell Your Home
Thursday, August 27, 2015 4:00 PM
RealtorSelling your home can seem a daunting task. When you close that deal, you want to make sure that your home goes to the best buyer for the best price. It may seem cheaper to sell your home yourself, and many do; however, there are a lot of details to work through.
"Selling your home through a REALTOR can help you make sure you get the best value overall," says Kimberly Nicole, a REALTOR based in The Woodlands/Houston, Texas metro area who caters to luxury homes and their clientele.
Nicole offers seven reasons why you should use a REALTOR instead of selling your home yourself:
1. REALTORS Know How to Navigate the Process A REALTOR is the manager of your home buying process. Nicole explains that you and your REALTOR will begin with extensive discussions to head off any road blocks later on. Your REALTOR is aware of your concerns, needs and priorities. They are there from the beginning to end, navigating each step of the way with you. Selling real estate can be a tricky business, full of regulations and involved steps. Your REALTOR works for you, staying on top of the latest regulations and helping you meet them.
2. REALTORS Know How to Professionally List the Property In the age of web 2.0, it's not enough to upload your phone photos to a few random sites. Buyers expect professional photos, videos and flawless online presentation. To get the most exposure, you also need to manage your listing across multiple channels. REALTORS will do all this for you, including coordinating with photographers and videographers to make sure your listing is top-notch. "Hitting the right emotional and responsive chords with buyers is the goal," says Nicole. "Determine who the likely audience is, and market directly to that audience."
3. REALTORS Know How to Prepare Sellers Before you sell, your home must be in the best condition possible. Your REALTOR can advise you on what repairs need to be done, and they frequently know good contractors. You may have to have inspections done before you sell, and will probably have to do repairs. A REALTOR can set up any required inspections and instruct you on how to prepare. Sometimes homeowners will take out a loan against the house to finance costly repairs, but this can't be done while the house is on the market. A REALTOR may help assess the situation, and then wait to list it until the repairs are completed.
4. REALTORS Can Help Sellers Prepare for Showings "Staging is extremely important," says Nicole. "That first impression is vital." Not only do all of the repairs need to be done, but if you still live there, the place must be kept clean and staged. This means everything from maintaining curbside appeal to the little details, like placing out a plate of cookies or laying out your best dishes in a table setting. She advises that a home must be open and inviting, and that smells, pets and lighting must all be taken into consideration. "We don't want a home not selling because a buyer can't see their own furniture in the home." Your REALTOR may also advise you to de-clutter certain closets and rearrange rooms. They may explain which personal touches add a "homey" look and which things detract from a potential buyer envisioning their own decor.
5. REALTORS Can Help Get Buyers through the Doors REALTORS not only get the traffic in, they know how to manage it. They can arrange and hold open houses in a way that gets as many visitors as possible. They also work with buyers so that showings are more convenient for you. This is especially important if you still live in the house. REALTORS may also help weed through potential candidates so that you don't waste your time with no-shows or non-serious buyers. "If a person needs to sell a house before buying another, the seller needs to know this," says Nicole. This all factors in to final decisions and net proceeds.
6. REALTORS Know How to Objectively Negotiate You may think preparing and showing your home may be stressful, but receiving offers can be difficult. "The goal is to get the most money as the seller, and as the buyer the goal is to look at market value and if it's priced appropriately. You don't want to present an offer that's an insult to the seller," says Nicole. A REALTOR can help you stay reasonable, without letting you take a lowball offer either. They will also be there to navigate a multi-bid and renegotiations. "Renegotiations fall apart all the time, and deals frequently don't come through," she says. "Each side has different concerns, and each party needs to know where the other stands." Closing can be a confusing process, and there is a lot of paperwork to sign. Your REALTOR has been through this many times and can explain everything you are signing and why. If you have any questions on anything, your REALTOR is right there.
7. REALTORS Know the Area "The key to a good agent is knowing the area," says Nicole. They know what the property values are, and have a good idea of future market fluctuations. They also know where and how to list your property for best results. Having a home listed on MLS is not enough. A good REALTOR that is knowledgeable of the area is essential to getting the best deal on your home.
August 28, 2015
Home sales ride out stock market roller coaster
NAR’s Pending Home Sales Index about to hit 12 months of consecutive increases
Amy Swinderman, Inman News Contributor Aug 28, 2015
Despite the recent volatility of the stock market, the U.S. economy is growing and the job market continues to improve, and home sales are holding steady, according to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI) for July.
The PHSI, a forward-looking indicator based on contract signings, marginally increased 0.5 percent to 110.9 in July from an upwardly revised 110.4 in June and is now 7.4 percent above July 2014, NAR said.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5 million to 5.5 million, which is considered normal for the current U.S. population.
This marks the 11th consecutive month that the index has increased year over year and is this year’s third-highest reading, NAR noted.
The PHSI saw solid gains in the Northeast in particular last month, NAR said. The Northeast index increased 4 percent to 98.8 in July, and is now 12.1 percent above a year ago. In the Midwest, the index remained unchanged at 107.8 in July and is now 5.7 percent above July 2014.
Contract activity is likely to hold steady as summer comes to an end.
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Contract activity is likely to hold steady as summer comes to an end, said Lawrence Yun, NAR’s chief economist, but he warned that inventory shortages may persist into the fall, and median existing-home prices may continue to increase.
Yun said he expects the national median existing-home price to increase 6.3 percent in 2015 to $221,400, and total existing-home sales this year may increase 7.1 percent to around 5.29 million, about 25 percent below the prior peak set in 2005.
“In light of the recent volatility in the stock market, it’s possible some prospective buyers may err on the side of caution and delay decisions, while others may view real estate as a more stable asset in the current environment,” Yun said.
“Overall, the prospects for ongoing strength in the housing market remain intact for now. “While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust. ”
According to a new survey from the National Association of REALTORS®(NAR), the so-called millennial generation – depending who you ask, it’s defined as those born between the early 1980s and late 1990s – comprised the biggest segment of homebuyers across the country last year, making it the second year in a row to hold this key market-driving status. The survey found that these 18 to 34 year olds made up 32 percent of the market the previous year. As rental housing prices continue to climb, more millennials are looking to buy their first home.
There are more millennials than there were Baby Boomers. So, if they want to own homes, they will be a significant force and boom to the real estate market.
But this generation of homebuyer is unlike other generations we have dealt with. They typically come to brokers with most of their research already done through Internet searches and online searching tools. They typically know what they want by the time they seek out a broker, Cummins says. They are definitely technology driven, they do their own research, but surprisingly they rely more on agents than any other buyers. They want to use a Realtor.
Lending policies are beginning to be adjusted to allow for easier qualifying and down payment requirements. All of this is pointing to an extended healthy real estate market.
November 11, 2014
Northern Kentucky Economic Snapshot
On this Veteran’s Day, let me start by thanking all of our veterans who have made extreme sacrifices for all of us so that we can enjoy the life that we have.
The following economic indicators tell the tale of our Northern Kentucky economy.
As of July, 2014
Northern Kentucky 6.1 % (down 1.1% over 2013)
Boone County 5.8% (down 1.1% over 2013)
Campbell County 6.3% (down 1.1% over 2013)
Kenton County 6.2% (down1.0% over 2013)
Northern Kentucky 186,414 (down 0.9% from 2103)
Boone County 63,118 (down 0.9% from 2013)
Campbell County 43,207 (down 0.9% from 2013)
Kenton County 80,089 (down 0.9% from 2103)
CONSUMER PRICE INDEX
USA 237.9 up 2% from 2013
Northern Kentucky 223.7 up 1.1% from 2013
July 24, 2014
Northern Kentucky New Home Market
Builders in Northern Kentucky are reporting new home starts for 2014 at a pace similar to 2013.
Month by month fluctuations exist but year to date is very similar across the region.
County Single Family Permits Dollar Volume Permits
Kenton County 18/33 2.8 mil/6.4 mil
Campbell County 9/5 1.6 mil/.64 mil
Boone County 36/34 6.0 mil/ 4.8 mil
YEAR TO DATE COMPARISON
All 3 counties 221/219 36.9 mil/35.2 mil
July 21, 2014
Cash Purchases On The Rise
The latest Confidence Index, published by the National Association of REALTORS® (NAR), found that more home buyers are paying cash – 33 percent in the first quarter of 2014. Usually when that number goes up, it’s because the number of distressed home sales has gone up. But in this case, the number of distressed home sales has actually gone down, a fact that has economists puzzled.
“Distressed home sales, most popular with investors who pay cash, have declined notably in the past two years, yet the share of all-cash purchases has risen,” said Lawrence Yun, NAR chief economist. “At the same time, investors have declined as a market share, indicating other changes have been under way.”
A number of factors could explain the increase in cash purchases:
Mortgage lending regulations.
The baby-boom generation, and its accumulated equity, is retiring and trading down.
Individual investors and purchasers of second or vacation homes usually pay in cash.
Foreign buyers typically pay in cash.
July 9, 2014
Looking back on real estate news... This article was published in the Kentucky Post in 1984.
Home Sales Still On The Rise
By Tom Williams
Home sales in Northern Kentucky have remained brisk despite a rise in interest rates.
The number of sales in the first half of the year was 32 percent higher than in 1983, according to figures from the Realtors Multiple Listing Service.
Kent Dailey, president of the Kenton-Boone Board of Realtors, said about 90 percent of the sales were for existing homes sold by Realtors. The figures do not include new homes sold by builders.
In the second quarter of the year, the listing service recorded 543 sales, a 23 percent increase over the same period in 1983.
The average price rose to $56,000, or $2,900 higher than in the second quarter a year ago.
Current interest rates on home mortgages are a little more than 1 percent higher than a year ago.
Dailey said a few lenders still are offering fixed-rate mortgages with rates from 14 1/2 to 14 3/4 percent.
Rates on adjustable mortgages start at 11 1/2 percent for mortgages with rates that change annually. Mortgages with rate changes at three-year intervals currently are about 12 3/4 percent and five-year adjustables are about 13 1/4 percent.
Most of the adjustables provide for maximum changes of 2 percent each time the rate is reviewed and a limit of 4 to 5 percent over the life of the mortgage, Dailey said.
The difference between a rate of 11 1/2 percent and 14 1/2 percent translates into $119 a moth for the buyer of the average-priced home. With a 10 percent down payment, the buyer's mortgage loan would be $50,400. At 11 1/2 percent, the monthly payment on a 30-year mortgage would be $499. At 14 1/2 percent, the monthly payment would be $618.
June 20, 2014
RE/MAX Affiliates, one of the most successful real estate companies in Greater Cincinnati, ranks among the 50 most productive real estate brokerages in the U.S., based on home sales data in the prestigious 2014 REAL Trends 500 survey. RE/MAX Affiliates was one of only 3 Kentucky real estate brokerages included among the top 50 brokerages when measured by the number of transaction sides per sales associate. Of the 50 brokerages, an impressive 41 were affiliated with RE/MAX.
“Our agents always put the customer first,” said Rod Fussinger, Broker/Owner, RE/MAX Affiliates. “And when your buyers and sellers are happy, they refer you to their friends and family. In the world of real estate, a referral is the greatest compliment.”
RE/MAX Affiliates ranked 20th out of 50 with 26 transaction sides per agent. The survey ranked 1,451 participating brokerages by the total 2013 residential transaction sides. Among the top 500, RE/MAX calculated the 50 brokerages averaging the most transaction sides per agent.
The high level of performance consistently exhibited by RE/MAX Affiliates agents reflects the quality training provided by RE/MAX University (RU). The recipient of over 150 international film/video awards, RU delivers comprehensive on-demand education to more than 94,000 agents worldwide. As a result, RE/MAX agents lead the industry in performance and professional designations.
RE/MAX Affiliates has 3 offices in the Greater Cincinnati area. For more information, to see the latest property listings, or to contact an agent, please visit www.NKYRealEstate.com or call (859) 372-6000.
To find out more about the REAL Trends 500 survey, please visit: www.realtrends.com.
April 23, 2014
The real estate market has shown recent signs of cooling a bit after the higher volume of 2013.
March closed sales were down 8% nationally according to the National Association of Realtors.
Locally, sales were off as well. Both the Northern Kentucky Association of Realtors and the Cincinnati Area Board of Realtors reported a decrease in sales in March compared to March 2013.
Inventory issues and a lack of first time buyers still seem to be what is driving this slow down.
The good news however is that the number of SHOWINGS is up over last year. It seems that the harsh winter had an effect on buyers. It could be that we have compressed the early spring market into a shorter period.
Sale prices continue to be stable and some areas are showing some moderate increases.
March 4, 2014
The early indicators point to a good year for Greater Cincinnati homebuilders.
After years of below market production, Northern Kentucky homebuilders are reporting a significant increase in the number of building permits issued.
The larger homebuilders are in position to benefit the most in this upturn due to the fact that they generally have an abundant supply of buildable lots. The medium and smaller sized builders are reliant upon developers to produce new available lots. Many of the developers who developed the homesites in the 2000's are no longer in business. Those that are still in business are finding that financing for these projects is extremely hard to get. The lenders are not yet looking favorably at subdivision development loans. The lack of homesites will restrict the smaller builders. Further hampering the smaller builders will be the challenge of finding construction financing for their homes.
In general though, there will be demand for new homes driven in part by the lack of available homes on the resale market.
Boone County, specifically Union, Richwood, and Hebron should experience the greatest growth.
Campbell County will see an uptick in new homes in the Alexandria area. Drees and Fisher Homes have begun their joint venture development that was on hold during the downturn.
Kenton County will experience increased activity in the Independence area.
Blog: Jan 28, 2014
Broker/Owner RE/MAX Affiliates
Recap of 2013.
2013 finished almost exactly where we had been predicting. Closed sales were up considerably over 2013.
RE/MAX Affiliates experienced the highest number of sales since the crash of the mid 2000’s.
Let’s take a look at the numbers for our company.
Total closed units 1,666 1,937 + 16.2%
Total Closed Volume 244,980,393 299,606,583 + 22%
Another indicator of strength of market comes from reviewing the number of showings of homes that we have For Sale. In 2012 we set up 17,531 showings. In 2013, we set up 19,536 showings. That was an increase of 11.5%.
The challenge that we have to deal with is that the listing inventory is not keeping pace with the demand for housing. We are beginning to experience a shortage of quality listings in good locations. The weather certainly is not helping that situation either. Hopefully, the inventory issue will not have a serious impact on the Spring market. There is still plenty of demand out there.
January 6, 2014
By: Kent Dailey, RE/MAX Affiliates Broker/Owner
Northern Kentucky Real Estate Projections for 2014
All signs seem to point to another year similar to 2013 when we recorded the highest number of sales since the meltdown of the mid 2000’s.
2013 saw a return of multiple offers on many homes in desirable areas. Buyers for homes in Edgewood Kentucky, for example were often biding against other potential purchasers. The days of deeply discounted offers being accepted, appears to have ended in most neighborhoods. Home prices have stabilized and have begun to inch upward over the past two years. What is driving this increase is the same thing that always drives home prices. Real estate pricing is driven by Supply and Demand . When there is little inventory to choose from as is the case in Edgewood, KY., price naturally tend to rise.
Keys to watch for in 2014 that can impact the market.
The government purchase of bonds has kept the interest rates at extremely low levels.
The Federal Reserve has begun scaling back these purchases and intends to halt the purchases entirely within the year. Increases in interest rates could cool off the still fragile housing recovery. With Janet Yellen as the new chairman of the Federal Reserve, we will need to watch carefully to see if she follows the path of the previous chairman.
The percentage of sales to first time buyers has dropped considerably. It now stands at 28% nationally which is considerably below the peak of 40% in the early 2000’s. The rise in rates and in more difficult mortgage financing has taken it’s toll on this group. This is significant in that this group generally buying their first home, set off a domino effect of moves of other sellers who become move up buyers.
Investors are beginning to pull back on their purchases. As housing prices begin to climb, the investors will find it more difficult to find a good deal. They have represented a huge percentage of the purchases over the past several years. In many cases they have purchased run down and neglected properties and rehabbed these homes for resale, bringing the prices back up in all neighborhoods of Northern Kentucky. These sales were not just in inner city neighborhoods like Covington, KY or Ludlow, KY., but also occurred cities like Fort Mitchell, KY. and Florence, KY.
Boomerang buyers could be a key to this year as well. Many lenders are setting up new mortgage criteria making it easier for someone to obtain a mortgage if they had lost a home through foreclosure. The Federal Housing Administration’s “Back To Work” program will shorten the amount of time that someone has to wait to borrow after a foreclosure to as little as one year. The criteria is that they must have had a specific event that caused it such as a job loss. And it must be the only blemish on their credit. Typically, they had to wait 7 years to qualify for a new mortgage. So this could have a great impact on all segments of the housing market.
Time will tell. Here’s hoping that we have a healthy economy and a prosperous 2014!
December 30, 2013
When you buy a new house, do you need the services of an experienced real estate agent?
The answer is yes, and here’s why.
That’s because a furnished model is filled with beguiling features that enhance the basic house. The to-die-for kitchen, the four-foot extension that makes the family room feel so spacious, the classy Brazilian cherry hardwood floors, and the bay windows that give character to the front rooms and look swell from the street are all optional upgrades. When their cost is added in, the seemingly affordable $400,000 advertised base price quickly balloons out to $500,000, far more than you can afford.
When you check out a more affordable version of the model — a nearly completed house down the street that has only $30,000 worth of upgrades — it’s not the same house that has become the stuff of your dreams.
Had you been working with an experienced real estate agent, you would have avoided such a disheartening experience, because the agent would have directed you to new construction that fit your budget in the area where you want to live. As you toured models together, the agent would have helped you distinguish the upgrades from the basic house and pointed out the options that are prudent choices, said David Zadareky, the broker/owner of Re/Max Evolution in Alexandria.
Though option choices never come up in a resale transaction, they are central in a new-home purchase because the basic house is almost always very spare, Zadareky said. The challenge is to keep option choices to an affordable limit, which he caps at 15 to 20 percent of the base price. If your total budget is $400,000, as in the example above, you should be looking at houses that are base-priced about 15 to 20 percent lower, or about $320,000. That would give you $80,000 for options, an amount that would seem to cover everything you might want, but, in fact, will not go very far. “If you’re not careful, the final sticker price that you are trying to keep at $400,000 will quickly balloon up to $440,000 or even $480,000,” he said.
When choosing specific options, Zadareky advises his buyers to get features that will be difficult or costly to add later; in our earlier example, this would be the four-foot family room extension and the bay windows on the front. The to-die-for kitchen and the hardwood flooring can be future remodeling projects, and some options should be nixed outright because they will not translate into a better resale price. “No one will pay extra for a fireplace in the master bedroom,” he said.
In addition to helping buyers negotiate the purchase, Zadareky said he nudges them to budget for the cost of new-home ownership — a concern a builder’s agent is unlikely to mention. For example, once you move in, you’ll realize that you’ll have to purchase window treatments because the neighbors will be closer than you realized.
And he raises critical issues that do not occur to most buyers, such as finding out what is planned for the acreage adjacent to the community where they want to buy.
Why don’t most new-home buyers use real estate agents to help them navigate a brand-new house purchase?
It requires planning ahead, and most new-home purchases begin spontaneously when the buyers chance upon a “Grand Opening” for a new-home development and stop to take a look. When asked to “register” by the model sales agent, they fill out a card with their name and contact information. Should the buyers then decide to bring an agent on board, the builder will demand that the buyer pay the agent’s fee, usually 2 to 3 percent of the base price. (For the $320,000 house noted above, the fee would be $6,400 to $9,600.)
To get the real estate agent’s help and have the builder pay the agent’s fee, the agent must register the buyers on their initial visit. But if you visit the model and decline to register, you should be able to return later with an agent in tow, Zadareky said.
December 16, 2013
Since the housing crisis began in 2008, approximately 4.6 million homes were lost to foreclosure, according to CoreLogic. The vast majority of those homeowners became renters. Even as housing recovered, credit tightened, pushing even more potential buyers out of homeownership and into rentals, both apartments and single-family rental homes.
There are now 43 million renter households, or 35 percent of all U.S. households, the highest rate in over a decade for all age groups, according to Harvard's Joint Center for Housing Studies; 4 million more renters today than there were in 2007. For those aged 25 to 54, rental rates are the highest since the center began record keeping in the early 1970s.
As a result, rental vacancies have fallen dramatically, and rents have skyrocketed.
"We are in the midst of the worst rental affordability crisis that this country has known," said Shaun Donovan, U.S. Secretary of Housing and Urban Development.
Half of all U.S. renters today pay more than 30 percent of their incomes on rent. That's up from 18 percent a decade ago, according to the Harvard center. For those in the lowest income brackets, the jump is even worse.
(Read more: Rising mortgage rates a boon to smaller lenders)
"Over four years, a 43 percent increase in the number of Americans with worst-case housing needs," said Donovan. "Let's be clear what that means, they're paying more than half of every dollar they earn for housing."
The numbers are not lost on Annie Eccles, who is in her late 20s. She has been renting for over two years, and the rent on her Bethesda, Md., apartment has increased by the maximum the county allows every year.
"It's frustrating because we pay for rent, we also pay for parking, and just knowing that every June it's going to increase significantly, it's frustrating," said Eccles.
And Eccles pays almost as much each month on student loan debt as she does in rent. Put together, it makes it very hard for her and her husband to save up enough to buy a home of their own.
"It would be hard buying in this area, just because it's so expensive," she added.
(Read more: Soaring new home sales: Not what they seem)
Most younger Americans, like Eccles, want to be homeowners someday. While so-called millennials favor mobility and city living, they still see homeownership as a goal.
"Nineteen out of 20 people that are surveyed say that they intend to buy a home at some point in the future, if they're under the age of 30," said Eric Belsky, director of Harvard's Joint Center for Housing Studies. "There is no question that the will toward homeownership remains there, it's the way."
Home prices are rising faster than expected, due to heavy investor demand, ironically in single-family rental housing. While more than 3 million owner-occupied homes are now investor-owned rentals, there is still a lack of supply in the market. New rental stock is coming soon, but demand is not easing. Renters may want to be buyers, but many still can't, due to rising home prices and mortgage rates.
"You add in other things, like higher student debt for many people, you add in the fact that incomes for low- and moderate-income people have not been going up as fast as inflation, and you have a situation where it's going to be very difficult to buy homes," said Belsky.
—By CNBC's Diana Olick.
December 9, 2013
Real estate agents see it all.
From the unmade beds to the overstuffed garages to the "What were they thinking?" decor. Over the years, they learn a thing or two: Why some houses sell, while others linger on the market. Why some promising buyers never make it to the closing table. How to get a better deal on the mortgage. Even just how much the other agents stand to make on your home. And the good news is, they want to share. Whether you're a buyer, seller or both, here are six things real estate agents wish you already knew.
|1. Want to sell quickly? Price it just under the market|
In today's market, sellers are again optimistic on the value and price of their homes -- "but buyers aren't," says Ron Phipps, principal with Warwick, R.I.-based Phipps Realty and past president of the National Association of Realtors. "Your challenge as a seller is to price the house so that it is compelling," he says.
What that means in dollar signs: "Set a price slightly below market value," he says. Just "a fraction."
For example: If similar homes in your neighborhood are clustered around $210,000, you might price yours at $200,000 or $198,000, he says.
Read More on Bankrate: 6 open house erros to avoid
What the agent wishes you knew:"The longer a house is on the market, the less likely you are to get fair value," Phipps says. "So you really want to position yourself to be the one that sells, not the one that languishes."
And that old adage of not wanting to leave any money on the table? Still valid.
If you're turning around and buying a home, and you already have cash in hand, thanks to a fast sale, "that puts you in a very powerful position," Phipps says.
|2. The preapproval letter is just the beginning|
For many potential buyers, frugality ends the minute they get preapproved for a mortgage, Phipps says. That's when they start running up the cards and opening new lines of credit to buy things for their home-to-be.
But that preapproval letter is just one of the first refreshment stations of the homebuying marathon, not the finish line.
Just before closing, a lender will re-examine a prospective buyer's financial situation -- complete with a recent copy of the credit history and other updated information.
Read More on Bankrate: How to pick a real estate agent
If those numbers have changed for the worse (salary decrease, higher card balances, new lines of credit), then the applicant could get clocked with a higher interest rate or even lose the loan. "The number of buyers who get denied is significant," Phipps says. What the agent wishes you knew: Never get new loans or start using credit cards more heavily until after you've actually closed on the home.
Even better, retain your frugality until you've been in the home for a few months and have a good sense of how homeownership affects your finances, Phipps says.
|3. Selling a house probably takes longer than you think|
If you're selling a home, it's important to understand the timeline, says Jeffry Wiren, principal broker with Re/Max Equity Group and past president of the Portland, Ore. Metropolitan Association of Realtors.
"And that's something most people don't understand," he says.
Underestimating the time it takes -- and building a schedule around those unrealistic expectations -- adds stress, Wiren says. Instead, realize how long the process takes in the real world (not just your head) and plan accordingly. Another important factor: Different markets (and prices) move at different speeds, he says.
Wiren's sales schedule breakdown:
• Getting your home in shape: two weeks
• Average time on the market (varies widely with location and price): 2 1/2 to three months
• Negotiating after an offer: one week
• Preparing to close (assuming a traditional transaction): 30 to 45 days
What the agent wishes you knew: A smart seller allows a minimum of four to six months to sell, Wiren says. And that's if you have a home that's priced right in a good market with one solid offer that makes it to the closing table.
|4. Not all 'buyers' are able to buy|
To prove their worthiness, sometimes prospective buyers will show a prequalification letter, Wiren says. "And that means nothing." That's because in a prequalification, lenders usually don't verify buyers' information. A preapproval, on the other hand, involves third-party verification.
"'Prequalified,' that means they've talked with a lender and said, 'I have good credit and I make X number of dollars a year,'" Wiren says. Based on that, the lender responds that the buyer can reasonably expect to borrow a certain amount -- if those self-supplied facts are accurate and there aren't any negatives, he says. Most lenders don't research those details until the buyer applies for a loan, he adds.
What the agent wishes you knew: Serious (and smart) buyers are "preapproved." That means they've already applied for the loan, the bank has verified their financial information and (if the numbers remain the same until closing) it promises to loan a specific amount at a specific interest rate.
Still, after an offer, smart agents will call the lender and verify that the prospective buyer is preapproved for the necessary amount, Wiren says. At the same time, that agent will verify that the lender would have no problem closing in the expected time period -- usually 30 to 45 days.
|5. Yes, it really does have to smell good|
Sellers sometimes drag their feet on little details that make a big difference, Wiren says. He can't count the number of clients who asked, "Does it really matter if we have the carpets cleaned or take the family photos off the wall?"
"The answer is yes," Wiren says. "A buyer needs to walk in and have it look good, feel good and smell good."
Read More from Bankrate: Don't sell a stinky house
Sellers should put themselves in the shoes of prospective buyers -- and try to see the house for the first time, he says.
The home should be kept showroom-ready. "It's a regular occurrence that I walk into a home with a buyer" and find "beds unmade and underwear on the floor," Wiren says. In spite of an appointment, "I don't see a home that's ready."
What the agent wishes you knew: A mess leaves an impression that's "hard for a buyer to overcome," Wiren says.
His checklist for a showing:
• Home: Clean. (And smelling good.) • Temperature: Heated (or cooled) for comfort. • Lights: Left on to welcome guests. • Snacks or soft drinks: A nice touch. The impression you want: "Warm, inviting and comfortable," Wiren says.
|6. We don't make as much as you think|
Chances are the agent you hire to sell your house -- or find a new one -- isn't getting as big a cut of the deal as you might think, says Graham Stiles, senior vice president with Alexander Chandler Realty and HighRises.com. "Six percent isn't anywhere near what we're taking home," he says. In fact, it's more like "1 percent to 1 1/2 percent," on average, he adds.
While the two sides will split that commission, those agents, in turn, each split their share with their broker, Stiles says.
What the agent wishes you knew: Unless your agent is handling both sides of the transaction, figure he or she is getting roughly one-quarter of the commission, Stiles says.
Read the original story on Bankrate.com.
And that 6 percent commission is by no means a given in this day and age, Phipps says. "There's always a range of fees in the marketplace. Each broker sets his or her own fees independently."
"I spend a lot of time on the topic of commissions," Stiles says. And still, the idea that agents are getting all or even half the commission, he says, "is still one of the biggest misconceptions."
This work is the opinion of the columnist and in no way reflects the opinion of ABC News or RE/MAX Affiliates.
December 3, 2013
Next year will likely be the first year since 2000 that home purchases outpace refinances, according to Freddie Mac’s expectations. Furthermore, the rallying housing market should set the broader economy on a brighter path, according to Freddie Mac’s U.S. Economic and Housing Market Outlook for November.
“Led by a resurgent housing sector, 2014 should shape up to be better than 2013,” Freddie Mac stated in its outlook.
Housing starts, which have been slow, should rise to a pace of about 1.15 million in 2014, according to Freddie Mac.
This is more in line with the historical average of 1.1 million per year reported by the Census Bureau. In comparison, the Census Bureau recently reported household formation over the first three quarters of this year at just 380,000.
Freddie Mac expects home sales to increase 5 or 6 percent in the new year, but tight inventory will prevent further increases.
Home values will continue to increase, albeit at a slower pace. Freddie Mac expects home price growth to be about the same as home sales growth—5 or 6 percent.
Rental prices will also continue to rise, but like housing prices, their pace will moderate. Freddie Mac expects rents to rise at a pace of about 5.3 percent next year.
Mortgage rates will reach about 5 percent for 30-year, fixed-rate mortgages by the end of 2014, according to Freddie Mac. While this will not threaten affordability in most markets, it may dampen affordability in a few higher-priced markets, according to the outlook.
Also, Freddie Mac noted there may be “some volatility in the short-term” resulting from uncertainty surrounding fiscal policies, such as the debt ceiling and the Federal Reserve’s tapering of its MBS purchases.
The overall good news for the housing market translates to good news for the broader economy, according to Freddie Mac.
The rise in housing starts should translate to 700,000 new jobs, according to economists at Freddie Mac.
These new jobs will help bring the unemployment rate below 7 percent “perhaps by mid-2014,” Freddie Mac stated.
Economic growth is expected at 2.5 to 3 percent for the year, which is “more than 0.5 percentage points better than is projected for 2013,” according to Freddie Mac.