Posted on Mon, Jul 12, 2010
In a down economy, sellers must compete not only with other homes in the market, but also with buyer's fears and concerns. Selling incentives have always been a way to create additional interest in your property. Today, incentives can help motivate reluctant buyers to make that next step in the face of the present environment.
Below are a few of the more frequently used incentives that can be used to draw attention to your home.
Paying Points
Lenders charge fees known as points, with each point equal to 1 percent of the total loan amount. The base fee charged (called origination points) typically ranges between 0 and 3 points, depending on the interest rate given and other terms of the loan. Points can add up to a significant up-front cost for the buyer, particularly for larger mortgages. Offering to pay some or all of the origination points on behalf the buyer can help generate offers from cash-conscious buyers.
Buying Down the Interest Rate
Many buyers don't understand that they can receive a lower interest rate from their lender by paying additional points at the outset. Buyers can typically pay up to four "discount points" to bring down the interest rate. Offering to pay discount points can increase your home's affordability for many prospective buyers.
Providing a Home Warranty
A home warranty can help assure wary consumers that they won't be stuck with expensive repair costs shortly after buying a home. Home warranties usually cover the repair or replacement of core systems such as plumbing, heating and electrical, along with major appliances. Providing the first year (or two) of a home warranty can add to your home's appeal, especially if you are competing against newer homes on the market. The relatively low cost of home warranties ($250 to $600 annually) offers great value as an eye-catching incentive.
Paying for Closing Costs
Closing a real estate sale can result in a long list of charges, from inspection costs to attorney's fees. Closing costs for the buyer can easily total several thousand dollars - adding to the up-front cash required as a down payment. Sellers can offer to pay for the buyer's side of closing costs to help ease the burden. When doing so it is wise to either put a cap on the dollar amount you will contribute to closing costs, or specify exactly which individual costs you will be paying for.
Upgrade Allowances
Offering cash allowances for specific upgrades can sometimes be a creative way to appeal to buyers. Upgrade allowances are commonly offered by new home builders, and some homeowners are now employing the technique to help set their properties apart from the competition.
For example, if your home has older carpet you may offer to pay the price of new carpet and installation. By not replacing the carpet yourself ahead of the sale, you avoid the hassle of having the carpet installed and the pain of keeping the new carpet clean during showings. You also give the buyer the chance to select a carpet that matches their taste.
Other upgrades offered by sellers include allowances for kitchen facelifts, bathroom remodels and new landscaping.
New Appliances
Another flashy way for sellers to sweeten the deal is to provide buyers with their selection of brand new appliance packages. Updated appliances help your home compete with newly built properties. Allowing the consumer to choose their desired appliance gives them another opportunity to personalize the home to their liking. You can even lay out brochures of some example appliances to help buyers visualize your home improved with the newest gadgets.
Posted on Mon, Jun 21, 2010
One of the most common and costly mistakes made by sellers is setting an unrealistically high asking price. Every seller wants to receive the highest closing price possible for their house, but losing sight of fair market value can have serious repercussions.
In some cases a lack of objectivity results in overpricing the home, other sellers may subscribe to the theory that pricing high initially leaves room to negotiate lower later. Overpricing from the outset could actually force you to end up settling for a lower price than you would have received by setting a realistic asking price based on market research.
Common Results of Overpricing
Fewer "Eyes" on Your Listing - Mispricing your home can prevent it from ever being seen by a certain percentage of potential buyers who might otherwise be interested in your home. Savvy buyers today research the local market even before acquiring an agent. Buyers will search available listings both online and offline in real estate publications, and in most cases they will set a price range to limit the listings they review. If your home is outside of their range even by a few thousand dollars, it may not be on the buyer's radar.
Most buyers will then hire a specialized buyer's agent, and together they will develop a strategy to evaluate homes that match the buyer's needs within their acceptable price range. Occasionally an agent will provide information on a home above the buyer's maximum price point, but rarely will they stray too far above that boundary.
Lack of Showings - Agents who work with homebuyers will know local market conditions and the listing prices of comparable homes. If they feel your home is overpriced, they will be reluctant to show your home to their clients for fear of wasting their time.
Helping Competing Listings - It may not be your first thought, but overpricing for your home for the market can actually help the competition. Your home's higher asking price will make other nearby homes of equivalent size and quality look like steals in comparison. Astute selling agents for other properties will use the price gap between your home and their own as a further selling point of their listings.
Stagnation and Stigmatization - If your home is priced higher than what buyers in your market are willing to pay, it runs the risk of sitting on the market for a longer period. The longer your home sits on the market, the more likely it will become stigmatized as "overpriced" in the real estate community. Once that happens, removing the stigma and restoring interest in your home can be a difficult task. Even dropping the price later will not have the same level of impact as the initial, negative, impression of your listing.
Tough Negotiations - A high listing price can be a warning flag that buyers use for leverage during the negotiation process. If the asking price seems high without home improvements or features to warrant the difference, buyers may assume that you are either A) not well informed about the market, B) not a highly motivated seller, C) have a need for money (perhaps forced by a move to a higher-priced area), or D) are simply creating some bargaining room. If the buyer believes any of these, they are likely to fish to determine how low of a price you will accept.
On the other hand, if your home has languished on the market as a result of a high price, buyers may believe you are becoming desperate. Interested buyers will make lower offers as a result.
Appraisal Problems - Should you be fortunate enough to find a motivated buyer willing to pay your overestimated asking price, you still run the risk of having the deal fall apart prior to closing. Most buyers will use some kind of financing to pay for their home purchase, and every lender requires an appraisal of your home's value.
The appraiser will review your home in person to assess its value based on similar homes that have sold (usually within the last six months). If the appraised value is below the agreed selling price, the lender will only approve a loan for the lower amount. You may be forced to reduce the selling price or risk having the deal collapse, and your home return to the open market.
Overpricing and Today's MarketToday the tendency to overprice relative to the current market can be even more tempting. Home prices have dropped since the high peaks in the summer of 2006, and as a result many are in denial about the current market value of their home. Homeowners who bought within the past five or six years in particularly may be overly influenced by the purchase price they paid during the real estate boom.
This comes at time when overpricing couldn't be a worse strategy. There is a smaller pool of highly motivated buyers, and today's buyers tend to be well educated about the market. Without the assumption of price appreciation, few buyers are willing to gamble and overpay for a home. In addition, credit tightening has reduced both the number of buyers who can qualify for a mortgage as well as the size of the mortgages available.
Creating a Pricing PlanWhen pricing your home, the best strategy is to remain objective and compare your home closely to similar properties on the market. Take the opportunity to visit open houses and pay attention to recent sales in your area. Are you more focused on selling quickly, or on receiving the highest possible selling price? Is the price you have in mind reasonable when compared with what other homes are asking for and selling for?
Priced Too High: CorrectionsIf your home has been sitting on the market with few offers or showings to its name, consider whether or not it is priced correctly. Review recent sales of comparable listings, especially those that have sold since your home went on the market. Another method is to ask agents who have shown your property for feedback they received from their clients. Have buyers who looked at your home in person purchased other homes in the area instead?
Acting quickly to adjust the asking price is the best way to keep as much of your marketing momentum as possible. Depending on how long your listing has been on the market, additional marketing may be needed to help repair some of the "damage" done to the reputation of your home's listing at the higher price. In some cases, you may be forced to slightly under price your listing to create additional interest.
Posted on Mon, Apr 12, 2010
Prepping For a Last-Minute Showing
It's nearly impossible to keep your home in a "show-ready" state day in and day out. In many cases you may find that your home will be shown to a prospective buyer with very little advance notice.
Even if you're keeping things as clutter-free as possible, a little preparation for the actual showing is probably in order. Here are some short-term ways to get your home looking and feeling its best.
Step 1: Cleaning Frenzy
- Scrub tile in the kitchen and bathrooms.
- Thoroughly clean hardwood floors.
- Vacuum carpets. If time permits, rent a steam cleaner to shampoo carpets, particularly in high traffic areas.
- Dust all wood furniture, TV screens and computer monitors.
- Clear counters of all clutter. If time permits, move unnecessary appliances and decorating touches into storage areas.
- Clear the kitchen sink and counters of all dirty dishes.
- Pick up all dirty laundry. Avoid over-filling any open air hampers - laundry is better kept out of sight inside your washer or dryer.
- Remove stains from bathtubs, toilets and sinks.
Step 2: Critical Eye Test
- After doing the first round of cleaning, take a walk through the house with the perspective of a buyer. Look for clutter, excess furniture or highly personal touches that might turn off prospective buyers.
- Try taking pictures of main rooms with a digital camera for an "instant review".
Step 3: Curb Appeal Checkup
- Sweep the entryway, porch and walkways.
- Mow and water the lawn.
- Store any toys or garden equipment.
- Clean up pet droppings.
- Clean gutters and downspouts.
- Add potted plants to the porch or deck.
Step 4: Closing Touches
- Turn on all lights.
- Open drapes and blinds.
- Open windows to let in fresh air.
- Burn scented candles or open jars of lightly scented potpourri. If you don't have either on hand, you can always bake cookies (the oldest trick in the book) or simmer a few drops of vanilla extract on the stove.
- Turn off all TV's, stereos and computers.
- If possible, relocate pets to a friend or neighbor's home during the showing.
- Clean the litter box thoroughly to rid your home of smells. If pets can be temporarily relocated, remove the litter box entirely.
- Hang fresh towels in every bathroom.
- Put fresh liquid soap or bar soap in each bathroom.
- Remove rugs to showcase hardwood floors.
- Put out fresh flowers and fill candy dishes.
Posted on Fri, Feb 19, 2010
Check out the new houses in the February Houston Home Showcase. For further information you can look at all of
our listings in the Memorial Town and Country area.Don't forget to also chek out
our home finder!
Posted on Mon, Feb 08, 2010
MyHouseDeals.com surveyed residential real estate investors in the Houston area about the current investing climate and outlook for the real estate market in 2010. According to the survey, Houston investors have a positive overall outlook on the market. Seventy-seven percent of the 122 investors surveyed believe now is a good time to invest in Houston real estate, while 23% of them are neutral. Only 3% of investors surveyed believe now is not a good time to invest.
When asked about Houston home values, 36% of investors believe values have already hit a bottom and will be flat or up in 2010. Fifty percent believe home values will hit a bottom sometime in 2010, and 13% believe home values will decline beyond 2010.
Fifty-six percent of investors surveyed indicated an overall optimistic outlook for the year, with 5% of investors rating themselves as highly optimistic. In comparison, 2% feel highly pessimistic, with an overall 20% indicating a negative view on the market. Twenty-five percent of investors surveyed had a neutral outlook for 2010.
When asked about their feelings regarding the Houston market for the next five years, the percentage of investors who are optimistic jumped to 81% (56% rated themselves optimistic while 25% indicated they feel highly optimistic). Fourteen percent of investors feel neutral and only 5% feel pessimistic.
Investors were also asked if the housing crisis was good or bad for the Houston housing market in the long run. Thirty-eight percent of investors believe the crisis will have an overall positive long-term effect in the housing market, while 28% think the housing crisis was bad for the future of Houston real estate. Thirty-four percent of the surveyed investors were neutral on the subject.
Of those surveyed, 74% were experienced investors who have owned or wholesaled at least two investment properties. The majority of respondents, 66%, invest part time.
Source
Posted on Thu, Feb 04, 2010
This past November Congress extended the benefits for first time buyers, all you have to do is buy your house before April 30th and you could be eligible for up to $8,000 back from the government.
If you're a current homeowner who is looking to trade up or down you could be eligible for up to $6,500 back.
Below are the monthly housing trends update that includes national and regional real estate trends.
Posted on Thu, Dec 03, 2009
Our monthly housing trends update includes national and regional real estate trends.
We're seeing all-time low interest rates, and many people are sitting on the sidelines. How much house can you afford? Well, at 5% interest, for every $100,000 you borrow, you need about $33,000 in pre-tax annual income. The Home Coach Team is happy to be a trusted resource for you. Please let us know if we can help.
National Housing Indicators
Existing Home Sales (October 2009):
6.10 millions units*
Existing Home Median Price (October 2009):
$173,100
Housing Starts (October 2009):
529,000 units*
New Home Sales (October 2009):
430,000 units*
*seasonally adjusted annual rate
Source: NATIONAL ASSOCIATION OF REALTORS®.
National Economic Indicators
Homeownership Rate
| 3rd Qtr 09 | 3rd Qtr 08 |
| | |
| 67.6% | 67.9% |
Thehomeownership rate (67.6 percent) for the current quarter was notstatistically different from the third quarter 2008 rate (67.9 percent)or from last quarter's rate (67.4 percent).
New Home Sales
| Oct 09 | Sept 09 |
| | |
| | |
| +6.2% | -2.4% |
Salesof new one-family houses in October 2009 were at a seasonally adjustedannual rate of 430,000. This is 6.2% above the revised September 2009estimate of 405,000.
National Home Sales
National Sales Price of Homes
| | Homes
$173,100 | Single Family
$173,100 | Condo/Co-op
$172,900 |
| vs. last year: |  -7.1% | -6.8% | -10.4% |
Regional Home Sales
| | U.S.
6,100,000 | Northeast
1,060,000 | Midwest
1,430,000 | South
2,300,000 | West
1,310,000 |
| vs. last month: |  10.1% | 11.6% | 14.4% | 12.7% | 1.6% |
| vs. last year: | 23.5% | 27.7% | 28.8% | 25.7% | 12.0% |
Regional Sales Price of Homes
| | U.S.
$173,100 | Northeast
$235,400 | Midwest
$146,600 | South
$151,100 | West
$220,200 |
| vs. last year: | -7.1% | -2.6% | 1.1% | -6.3% | -14.7% |
| Click Here to view details |
Regional Single Family Home Sales
| | U.S.
5,330,000 | Northeast
770,000 | Midwest
1,290,000 | South
2,080,000 | West
1,190,000 |
| vs. last month: | 9.7% | 10.0% | 13.2% | 13.0% | 0.8% |
| vs. last year: | 21.4% | 24.2% | 27.7% | 23.1% | 11.2% |
|
Regional Sales Price of Single Family Homes
| | U.S.
$173,100 | Northeast
$239,500 | Midwest
$145,900 | South
$153,000 | West
$225,700 |
| vs. last year: | -6.8% | -1.2% | 3.1% | -5.2% | -15.0% |
Regional Condo/Co-Op Sales
| | U.S.
770,000 | Northeast
290,000 | Midwest
140,000 | South
220,000 | West
120,000 |
| vs. last month: | 13.2% | 16.0% | 27.3% | 10.0% | 9.1% |
| vs. last year: | 40.8% | 38.1% | 42.9% | 52.8% | 26.3% |
Regional Sales Price of Condo/Co-Ops
| | U.S.
$172,900 | Northeast
$224,400 | Midwest
$153,200 | South
$133,300 | West
$165,400 |
| vs. last year: | -10.4% | -6.3% | -16.7% | -13.3% | -11.5% |
Posted on Mon, Nov 23, 2009
Comparison to hurricane-battered market and 2009 homebuyer tax credit are factors |
HOUSTON — (November 19, 2009) — The lingering effects of Hurricane Ike back in October 2008 combined with recent homebuying activity spurred by the federal government’s $8,000 first-time homebuyer tax credit produced positive numbers for the Houston real estate market in October.
For the second month in a row, both property sales volume and pricing recorded gains. According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), October volume of single-family home sales across the greater Houston area rose 13.8 percent compared to October 2008. Total property sales climbed 14.1 percent in October on a year-over-year basis.
At $149,000, the October single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 5.0 percent from one year earlier, representing the sixth straight monthly increase in median price. The average price of a single-family home in Houston was $198,639, up 3.2 percent last month versus October 2008. Both figures reached the highest levels ever for a month of October in Houston.
Foreclosure property sales were flat month-over-month in October, making up 18.6 percent of all single-family home sales in the Houston area, but down compared to 25.8 percent in October 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of October foreclosure sales reported in the Multiple Listing Service (MLS) rose 3.8 percent to $88,293 on a year-over-year basis.
Sales of all property types in Houston for August totaled 5,716, up 14.1 percent compared to October 2008. Total dollar volume for properties sold during the month was $1.0 billion versus $942 million one year earlier, representing an increase of 15.9 percent.
“Hurricane Ike had a lasting effect on the greater Houston real estate market last fall, so it’s no surprise to have the kind of year-over-year improvement we’ve now seen for two months in a row,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “Many Houston REALTORS® have reported that the first-time homebuyer tax credit was extremely effective at drawing consumers to the marketplace, and we believe momentum will build with the federal government’s extended and expanded incentive program.”
October Monthly Market Comparison
The month of October brought Houston’s overall housing market positive results when all listing categories are compared to October of 2008. Total property sales, total dollar volume and both median and average single-family home sales prices were all up on a year-over-year basis.
The number of available properties, or active listings, at the end of October fell 7.3 percent from October 2008 to 45,424. That housing inventory represents 96 fewer active listings than one month earlier, in September 2009.
October’s month-end pending sales—those listings expected to close within the next 30 days—totaled 3,673, which was 2.6 percent higher than last year. An increase typically signals that the next month’s sales will improve further, however because this data compares to a period in which Hurricane Ike interrupted many local real estate transactions, that signal is unclear. The months inventory of single-family homes for October came in at 6.1 months, down from 6.3 months one year earlier, and remains healthier than the national months inventory of single-family homes of 7.8 months, reported by the National Association of REALTORS® (NAR).
|
| |
| CATEGORIES | OCTOBER 2008 | OCTOBER 2009 | PERCENT CHANGE | | Total property sales | 5,010 | 5,716 | 14.1% | | Total dollar volume | $942,371,320 | $1,092,415,904 | 15.9% | | Total active listings | 49,016 | 45,424 | -7.3% | | Total pending sales | 3,579 | 3,673 | 2.6% | | Average single-family sales price | $192,453 | $198,639 | 3.2% | | Median single-family sales price | $141,950 | $149,000 | 5.0% | | Months inventory* | 6.3 | 6.1 | -2.8% |
|
| * Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market. |
| |
Single-Family Homes Update
At $149,000, the median sales price for single-family homes rose for the sixth consecutive month, up 5.0 percent from October 2008. That represents the highest median price ever recorded in a month of October in Houston. The national single-family median price reported by NAR is $174,900, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market. The average price of single-family homes in October was $198,639, an increase of 3.2 percent from one year earlier. That represents the highest average price ever recorded in an October in Houston.
October sales of single-family homes in Houston totaled 4,834, up 13.8 percent from October 2008. This is the second consecutive monthly increase in sales volume.
HAR also reports existing home statistics for the single-family home segment of the real estate market. In October 2009, existing single-family home sales totaled 4,049, a 15.6 percent increase from October 2008. At $140,000, the median sales price for existing homes in the Houston area rose 7.7 percent compared to last year. The average sales price of $185,117 climbed 7.0 percent from its October 2008 level.
Townhouse/Condo Update
The number of townhouses and condominiums sold in October rose compared to one year earlier. In the greater Houston area, 514 units were sold last month versus 418 properties in October 2008, translating to a 23.0 percent boost in year-over-year sales.
The median price of a townhouse/condominium rose 1.1 percent year-over-year to $126,340. The average price edged up 0.6 percent to $159,853 from October 2008 to October 2009.
Lease Property Update
Demand for single-family home rentals fell 12.4 percent in October compared to a year earlier. Year-over-year townhouse/condominium rentals declined by 5.6 percent.
Houston Real Estate Milestones in October Single-family homes sales increased for a second consecutive month, by 13.8 percent; Existing single-family home sales increased for a second consecutive month, by 15.6 percent; Total property sales increased for a second consecutive month, by 14.1 percent; The median price of a single-family home was up for the sixth straight month, reaching the highest level ever recorded in an October ($149,000); The average price of a single-family home reached the highest level ever recorded in an October ($198,639); Month’s inventory of single-family homes dropped from 6.3 to 6.1 months compared to the national average of 7.8 months. Founded in 1918, the Houston Association of Realtors® (HAR) is a 24,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest local association/board of Realtors® in the United States as well as the largest individual membership trade association in Houston. Source |