Why Won't My House Sell?!?!

You have Heard that "Cash is King," well "Price rules the Roost." In many if not most cases, the reason a property doesn't sell is price. In the market we find ourselves in today you can price a home correctly at the inception of listing your home for sale, but if you're in the wrong price point your property won't sell. The reason? The credit crunch on jumbo properties and high inventory levels.

When talking home sales in the sub-$200,000 range, first time buyers have kept this segment of the market alive due to the first time buyer tax credit of $8,000. Higher-end homes that require "Step-up Buyers" which are generally homes that require financing over "conforming limits," are piling up on the market and inventory levels are growing in certain areas of the marketplace.

In many areas the highest loan amount you can obtain for a conforming loan is $417,000. Therefore if your property is priced more than $450,000, one key reason it may not be selling is that buyers are unable to obtain financing. I mentioned the words "Step-up Buyer" a minute ago. In this price range properties are definitely step-up properties where buyers may also have a home to sell before they can purchase your home. Compounded is this problem for the Step-up Market in that a high percentage of sellers today have no equity in their current homes. This can render the Step-up market all but impotent.

Does your house show "like new" or is it a train wreck? How is the curb appeal? Does the exterior need pressure washing? Is clutter all you see? Then your potential buyers are seeing it too. START LOOKING at your home in the eyes of a buyer. Remember your objective is to help the buyer your home as "their home."

Real estate comes down to three things: "location, location, location." If you have bought on the wrong side of town, a neighborhood full of foreclosures, or just a bad lot, at this point there is not much you can do about property location. You CAN make sure the price is adjusted accordingly based on the location. "Now wait, wait, wait Hank." I can hear the objections coming. Yes, adjust your price based upon a lesser location. For example, if homes in a given subdivision are priced at $120,000-$130,000 and your home sits on a lot off the entrance of the subdivision and backs up to another main road, then you should adjust down the price of your property. IT WILL NOT sell for what an interior property that backs up to trees might sell for in this market. Not with 12-13 months of inventory on the market for sale. Buyers have too much to pick from and your home will sit if you price it with the other listings in the neighborhood.

Do you, if selling FSBO, or your Realtor have a written marketing plan? Did he or she have a virtual tour made of your property? What's more, did they do a VIDEO tour? How many photos are online? Is it less than 20? If your answers are no, no, no, and less than 10, then you have some issues. Is your home being marketed on at least 30 major Web sites? Any you have ever heard of or do online home shopping on yourself?

Is your home on Realtor.com, your local MLS, Georgia MLS, Yahoo Real Estate, Trulia and Zillow? If not, find out why and make sure your Realtor immediately gets your home marketed on these locations as they are the most-visited online real estate sites according to Hitwise.com and other traffic analytic sources. If your agent has no idea how to do this and looks cross-eyed when you mention the word "Zillow," you might need to have a heart to heart chat with them.

If you are having trouble selling your home, figure out where you are on each issue. Also, address any issue you are short on today to get your home sold as soon as possible!

Reasons 6-10 on Why to Buy a Home Now…an Athens GA Broker’s opinion

Posted on May 11, 2009 by hankbailey

10. The news is bad…for a reason

Quick…which is the more exciting scenario?

A man walks slowly down a flight of stairs, sometimes pausing or retracing his steps until he reaches a floor. After trudging along for while, he notices another staircase and begins ascending, occasionally pausing or taking a step back before methodically proceeding upward.

A second man hurtles down a terrifically high flight of stairs. Ignoring the safety railings, he runs recklessly downward, dodging obstacles in his path as he goes. He suddenly cries out as he loses his footing, sails through the air, tumbles down several flights of stairs in a spectacular crash. The badly injured man is bandaged from head to toe and attached to a variety of beeping, flashing medical devices that monitor his vital signs. Experts debate his condition but agree that the situation is dire and prospects for recovery are uncertain.

…and that’s why more headlines say “Home values off the cliff in Phoenix, Miami and Las Vegas” than “Things aren’t bad in Seattle, Portland and Charlotte.” Most readers just find sensational headlines more interesting. And while they may help sell newspapers, they also scare buyers and sellers to the sidelines, though the news may be very positive for home buyers in particular.

9. Uncle Sam wants you…to be a homeowner!

Wouldn’t it be great if the government kicked in some money to help make home ownership more affordable? Because of deductions on mortgage interest and property taxes, the practical effect is that the government is subsidizing your home purchase. In fact, home ownership provides two of the best ways to reduce your tax bill.

Speaking of tax smarts, be sure to also consult your advisor about tax breaks that may be available on the proceeds from selling your current home, and on any “points” paid when taking out a mortgage loan.

In another move to help restore confidence and stabilize the housing market, in late July President Bush signed a far-ranging housing bill into law. The legislation provides funds to shore up finance giants Fannie Mae and Freddie Mac, who guarantee a large portion of the nation’s mortgage loans. The law also provides help for troubled borrowers struggling with mortgages and tax credits for first-time homeowners.

8. Long term, owning usually beats renting

In recent years, the cost of buying a home in most markets has increased while the cost of renting remains flat. But it’s never a good idea to base long-term investment decisions on short-term conditions. If you decide to rent instead of purchasing a home, you may be in a bad spot if the cost of rentals in your area shoots up.

Typically, a weak housing market corresponds with a strong rental market. If the rental market is strong in your area, it may indicate weakness in the local housing market, which typically favors buyers over sellers.

When you buy a home with a fixed-rate mortgage, you can lock in a predictable monthly payment for 15 or 30 years. That means the largest part of your housing costs, principal and interest, are fixed. For some people, that stability, along with the sense of community that comes from being a homeowner, is enough to tip the scales toward home ownership.

If the monthly cost of buying vs. renting is comparable, you may consider some related factors to help you decide. When you rent, your landlord receives any appreciation and tax breaks associated with owning the property. If you plan on any significant remodeling, buying may be also preferable to renting.

7. Home ownership builds equity

Some people just don’t have the discipline to set aside money each month to save and invest. In this case, a home is more than a shelter, it acts as sort of an automatic savings account. You can build your savings in two ways:

First, each month a portion of your payment goes toward the principal to build equity in your home. In the early years of the mortgage, most of your payment goes toward interest. Over time, however, that turns around and your equity growth begins to accelerate.

Second, U.S. home prices have always appreciated over the long term. Average appreciation on a home is, 5-6 percent annually, according to the National Association of Home Builders. Over time, history has shown that owning a home is a solid financial investment despite periodic market downturns.

6. Market timing is far from perfect

No one wants to purchase a home only to see its value decline. But should you wait to buy a home until prices bottom out? A quick web search will yield a number of articles and opinions for and against timing the real estate market, but beware of those in favor of market timing who also want to sell you a how-to book or system.

Many people who have tried to time the market miss out on the chance to build equity by waiting to buy until prices rise again. The chart below shows the gradual increase – along with typical ups-and-downs – of home values over nearly 40 years. The arrows indicate market low points when home values dipped before continuing their historical rise.

The problem? Market cycles only become clear in retrospect. In the midst of a market slowdown, it’s very difficult to predict when housing prices hit their low points. In addition, this trend line represents home prices at the national level, which may be very different than housing prices in your neighborhood. Broad national indicators may lag the market by months – meaning the actual price floor would not show up in reports until weeks or months later.

The longer you own your home, the better chance you have of building wealth and protecting yourself from the market’s ups and downs.

Reasons 1-5 on Why to Buy a Home Now…an Athens GA Broker’s opinion

Posted on May 11, 2009 by hankbailey

5. There’s no such thing as “the real estate market”

Most media reports about the housing market focus on national statistics such as sales volume and median home prices. The often-repeated statement that all real estate is local is often repeated because it’s true. It’s interesting to hear about the ups-and-downs of the U.S. real estate market, but those reports really are only useful in the context of local real estate markets.

In reality, the national real estate market is made up of thousands of local neighborhoods, each with its own unique circumstances. The local economy, employment picture, tax situation and government policies will have more influence on local housing markets than any national trends.

That’s why homes in some neighborhoods continue to sell for the asking price, while across town other languish on the market despite multiple price cuts.

The difference might be better schools, an exclusive location or just a neighborhood with a prestigious name. Even within the same neighborhood, Victorian-style homes may be selling well, while Colonial models sit unsold. A condo with a striking skyline view will sell better than an identical unit facing a parking lot and a dumpster. That condo doesn’t have much impact on the national real estate market – and vice versa.

The best way to protect against buying at the wrong time? Sell at the right time. In many cases you can’t control when to sell, but you should plan on keeping your home at least six or seven years.

4. Finding value is easier in a tough market

Rich Dad Poor Dad author Robert Kiyosaki uses the example of a sale at the local supermarket to illustrate a common investor mistake – focusing on price movements instead of value. He notes that if a supermarket held a “25% off everything in the store” sale, the store would be packed.

But when prices plunge in the stock market or real estate market, many investors hear the bad news and head for the sidelines until prices begin climbing again. In any market, it’s important to consider value along with price. Supply and demand dictates that real estate values are easier to find in slow periods and become harder to find when markets heat up.

So what’s lasting value? Here’s a list of homebuyers’ most sought-after features, according to the NAR:

If you have looked in the past and not found these features in your price range, it may be time to check again, while properties are “on sale.” Be sure to consider features that will make homes more valuable in the future, such as energy-efficient construction and appliances and shorter commuting times. Features like water or mountain views, good schools, recreation opportunities and unique architecture never go out of style.

Source: NAR 2008 Profile of Buyer’s Home Feature Preferences

3. There is more than one yardstick

How slow is the real estate market? It depends whom you ask, and how they measure. Real Trends, one of the industry’s most respected research organizations, recently reported year-over-year changes range from -4.6 percent by the Office of Federal Housing Enterprise Oversight (OFHEO) to -20.01 percent by a group called Integrated Asset Services.

The wide range doesn’t necessarily mean one index is more accurate than another. It means that indexes use different methods of gathering data, and often different sample populations. For many real estate professionals, it’s important to know the details of housing price trends. For home buyers, it’s more important to put the broad numbers in perspective. They may provide a good indicator of market trends, but they will never be as important as what’s happening in your neighborhood and your personal situation.

2. The concession stand is open

Home buyers can always ask for concessions, but in today’s market they have increased leverage to get them. In many parts of the country, buyers are not only getting price concessions, but often help with closing costs. Agents who understand the nature of seller concessions can often help buyers get a better deal above and beyond reductions in sale price.

But in today’s market where homes sell slowly and lots of inventory is available, the advantage shifts to the buyer side. In some areas of the country, sellers are not only paying closing and prepaid costs, but also some creative additions such as luxury cars, boats and furnishings. Sellers may be willing to make concessions other than dropping the home price, as there are often tax advantages involved. With some assistance from their real estate and mortgage professionals, buyers and sellers can often put together concession packages that benefit both parties and get the home sold quickly.

1. Financing is favorable…for now

Getting nervous buyers off the fence is one of the toughest challenges facing real estate pros right now. People are concerned about buying a home that will drop in value in the coming months. But buying a home is a long-term investment, and there’s more to consider than the just the purchase price.

Depending on the rate and the amount financed, the price of financing can easily exceed the price of the home. Rates have continued to drop in recent months. In historical terms, mortgage financing has never been a better bargain. From 1980 to today the 30-year fixed rate mortgage has ranged from more than 18 percent to less than 5 percent, says Jim Elfelt, a mortgage banker in Virginia Beach, Virginia. If you’re waiting for home prices to come down another $10,000, you may pay more in the long run if mortgage rates rise in the meantime.

When you’re looking for a bargain, don’t lose sight of the big picture. If you try to time the market to save a few thousand on the price of a home, you could end up with a higher monthly payment and total overall cost of home ownership. At the end of the day, your personal and family situation will determine when it’s the right time to buy a home. As you weigh the pros and cons of owning versus renting, do some research as to exactly what you can afford using some of the affordability calculators available on the Internet. At the same time, your local real estate professional can help you research and understand your local market and the types of homes available.