You might think buying or selling on your own will save money, but it could be more costly in the long run. By Tara Struyk of Investopedia
The proliferation of services that help homebuyers and sellers complete their own real-estate transactions is relatively recent, and it may have you wondering whether using a real-estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commissions that many real-estate agents command, for many, flying solo may not be the way to go — and could end up being more costly than a commission in the long run. Buying or selling a home is a major financial and emotional undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better access/more convenience
A real-estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents and will know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real-estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating is tricky business
Many people don't like the idea of doing a real-estate deal through an agent and think that direct negotiation between buyers and sellers is more transparent and allows the parties to look after their own interests better. This is probably true — assuming that both the buyer and seller are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real-estate agent can convey your concerns to the seller’s agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real-estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that sellers can reject a potential buyer's offer for any reason — including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real-estate agent who will represent his or her interests without turning off potential buyers who want to niggle about the price.
3. Contracts can be hard to handle
If you decide to buy or sell a home, the offer-to-purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale — and you aren't approved for the mortgage — you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract. (Keep in mind that the details of any contract may vary based on state law.)
An experienced real-estate agent deals with the same contracts and conditions on a regular basis and is familiar with which conditions should be used, when they can be removed safely and how to use the contract to protect you, whether you're buying or selling your home.
4. Real-estate agents can't lie
Well, OK, actually they can. But because they are licensed professionals, there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real-estate agent under an agency agreement, such as a conventional, full-service commission agreement in which the agent agrees to represent you, your agent will be bound by law to a fiduciary relationship. In other words, the agent is bound by law to act in his clients' best interest, not his own.
In addition, most real-estate agents rely on referrals and repeat business to build the kind of client base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker or professional association or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can — and should — seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not everyone can save money
Many people eschew using a real-estate agent in order to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets to keep the percentage of the home's sale price that might otherwise be paid to the real-estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
The bottom line
While there are certainly people who are qualified to sell their own homes, taking a quick look at the long list of frequently asked questions on most “for sale by owner” websites suggests the process isn't as simple as many people assume. And when you get into a difficult situation, it can really pay to have a professional on your side.
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Yes, even with months of inventory languishing on the market, some real-estate experts see a day coming when demand for new homes will exceed supply.
By SmartMoney
With all the talk of excess inventory and a flood of foreclosures, the idea of a looming housing shortage sounds unrealistic, if not downright fanciful.
After all, data from the National Association of Realtors showed a 5.1% decline in existing-home sales in June. Meanwhile, total housing inventory increased 2.5%, to 4 million homes available for sale -- an 8.9-month supply, up from an 8.3-month supply in May.
Foreclosures, too, are an issue, with a vast backlog of distressed properties and "underwater" loans sitting just below the surface, according to RealtyTrac, an online foreclosure marketplace. The company forecasts that more than 3 million properties will get hit with foreclosure filings by the end of the year.
But if you step back from the doom and gloom of foreclosures and declining sales and focus on the low construction levels of the past few years, some economists say a housing shortage might be in the offing. A 2009 report by Massachusetts Institute of Technology economics professor William Wheaton says that despite the glut of existing homes, with current depressed levels of construction, there might be "excess demand" for new homes.
How could there be too few?
In the past seven years, housing starts first exceeded -- but then fell short of -- the historical norm of 1.6 million, according to the National Association of Realtors, with a deficit expected to grow into 2011. The chief economist of the Realtors group said last month that the big drop in home construction suggests a shortage could become an issue later.
Longer-term demographics support this theory, says Ross DeVol, the executive director of economic research at the Milken Institute, an independent think tank in Santa Monica, Calif. The U.S. is adding only about 600,000 housing units a year now, and the long-term growth in new households is 1.3 million to 1.4 million per year, DeVol says.
Rumors of a recovery
That household formation rate has fallen off somewhat because of the recession. But that decline is misleading because many college graduates have chosen to live with their parents while they find their financial footing, and some couples have deferred getting married.
But long term, that household growth says that "if we build substantially less than that amount, which we're doing now, in four, five or six years, if we don't ramp up housing starts, we could see a shortage," DeVol says.
We're still growing
There's a tendency in any market that when you overshoot on the upside -- which the U.S. did through 2007 in real estate -- you undershoot on the downside, DeVol says. But underlying growth in population demographics -- namely, how many people will enter the work force -- is somewhere in that range of 1.3 million to 1.4 million, he says. One risk is that so many homebuilders will leave the field during the current downturn that there could be "capacity constraints" in the long term as the U.S. population continues to grow, says John Vogel, a professor of real estate at the Tuck School of Business at Dartmouth.
Consider that at the peak of the housing bubble, in 2005, nearly 2.1 million new housing units were built. In 2006, that number dropped to 1.81 million; in 2007, as the bubble deflated, new units fell to 1.34 million. By 2009, only 550,000 new units were built, DeVol says.
There won't likely be constraints in overbuilt places such as Las Vegas, Phoenix, Miami or Riverside, Calif. But if the pace of home construction doesn't pick up, "we are going to begin to see some tightness in some areas of the country that didn't have the boom and bust occur," DeVol says.
The regions most likely to be undersupplied by mid-2012 are those where supply and demand are now in balance, says Celia Chen, a senior director of housing economics at Moody's. Chen includes Washington state, Oregon, New Mexico and Utah in this group. This is where strengthening demand, combined with construction that will remain below trend, is likely to result in undersupply, she says.
This article was reported by Lisa Scherzer for SmartMoney.
As a former Social Worker I am reminded of Elizabeth Kubler-Ross book "On Death and Dying' and the five stages a terminally ill patient goes through when informed of their life threatening illness.
The five stages she identifies in her book are:
- Denial ( this isn't happening to me!)
- Anger( why is this happening to me?)
- Bargaining ( I promise I'll be better person if...)
- Depression ( I don't care anymore)
- Acceptance ( I'm ready for whatever comes)
As I reviewed these five stages and relate them to Sellers I have worked with or am currently working with I am drawn to how these same stages are exactly what sellers go through when selling their home in a short sale.
Stage 1 Denial:
Many sellers who are falling behind in their mortgage payment often do not get help or seek help because they are in total denial. They often think nothing is going to happen to them even after the bank has sent them the Notice of Default letter.
Stage 2 Anger:
This is a very difficult stage. Many homeowners remain angry through the Short Sale/Foreclosure process. Reports of homes being trashed and appliances missing are usually the signs of people who have a lot of anger and direct this anger onto the property.
Stage 3 Bargaining:
This is the stage where sellers exhibit a lot of ambivalence. They do not want to loose their home and will do almost anything to keep it. Some sellers will contact their lenders and try to negotiate a loan modification while you are doing a short sale. You have to be aware of your seller in this stage because they are very vulnarble and will sabotage any efforts you have initiated because they have not truly accepted the need to sell their home.
Stage 4: Depression:
Sellers in this stage just stop caring about the house and will withdraw from you as their agent. It is important to maintain contact with your sellers during this stage and give them support and assure them that what they are doing is in their best interest.
Stage 5 Acceptance:
This is when you see your seller come out of their shell and begin to prepare for a life after the Short Sale.
This post courtesy of Jack Lewitz as posted on Active Rain.
Check out this clip! CNBC’s Ron Insana, author of “How to Make a Fortune From the Biggest Bailout in U.S. History,” has tips for gaining back some of the investments your retirement savings may have lost in the last year.
http://today.msnbc.msn.com/id/26184891/vp/34724700#34724700
Our Century 21 office handed out more than 1200 pieces of candy during the recent Treat Street on Main on October 31st. I have attached some pictures of the fun for you all to see.
TALLAHASSEE, Fla. – Aug. 24, 2009 – Florida’s Office of Financial Regulation took more action Friday against Ocala-based Taylor, Bean & Whitaker Mortgage Corp., ordering the company to cease foreclosures, late charges and adverse reports to credit bureaus about customers.
It is state regulators’ second move this month involving the Ocala operation. On Aug. 7, they ordered Taylor Bean to cease mortgage lending activities after federal housing officials announced it was under investigation for possible fraud.
The Ocala company still operates as a holding company for Illinois-based Platinum Community Bank.
Taylor Bean’s mortgage unit is also now under order to move its customers’ existing loans to other mortgage servicers within 60 days. Regulators are holding Taylor Bean accountable for safeguarding customer payments, escrow funds and accounts.
U.S. Treasury agents raided the company’s Ocala offices earlier this month as part of a multi-faceted investigation by the Office of the Special Inspector General for the Troubled Asset Program, the Federal Bureau of Investigation and the U.S. Department of Housing & Urban Development.
Earlier this year, Taylor Bean agreed to provide troubled Colonial Bank with a $300 million capital infusion. The deal fell through in late July, and Colonial failed last week. Its deposits, branches and most of its assets were acquired by BB&T Corp. of Winston-Salem, N.C.
Copyright © 2009 The Orlando Sentinel, Fla., Richard Burnett. Distributed by McClatchy-Tribune Information Services.
AMY SMITS EARNS PRESTIGIOUS DESIGNATION TO HELP HOMEOWNERS IN DANGER OF FORECLOSURE
Amy Smits of CENTURY 21 Gold in Frisco, CO has earned the prestigious Certified Distressed Property Expert (CDPE) designation, having completed extensive training in foreclosure avoidance and short sales. This is invaluable expertise to offer at a time when distressed homeowners are in, or attempting to avoid the foreclosure process.
Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.
In the Summit County area, more than 100 homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.
“This CDPE designation will be invaluable as I work with sellers and lenders on complicated short sales,” said Smits. “It is so rewarding to be able to help sellers save their homes from foreclosure.”
Alex Charfen, founder of the Distressed Property Institute in Boca Raton, Fla., said that Realtors® such as Amy Smits with the CDPE designation have valuable training in short sales that can offer the homeowner much better alternatives to foreclosure, which virtually destroys their credit rating. These experts also may better understand market conditions and can help sellers through the emotional experience, he said.
The Distressed Property Institute opened in January 2008 and provides training on-site and online. The CDPE is the premier designation for Realtors helping homeowners in distress and handling short sales.
“Our goal is to educate as many people as possible so we can help as many homeowners as possible,” Charfen said.
“I wish we had staged my house sooner!”
I hear this all the time from clients after I’ve staged their condo/house for sale. Most recently at a $6.2 million listing in Breckenridge, but also at a $100,000 condo in Boulder.
Unfortunately, many homeowners employ the following strategy: We’ll list the home vacant or tired-looking, then we’ll wait and see if it sells before we decide to stage it.
All realtors can tell you that the traffic of potential buyers is greatest when a home is newly listed. That’s when your home should look its’ best to appeal to the greatest number of buyers. Imagine the perfect person viewing your home, but not seeing the potential of the home because it’s vacant, only partially furnished, or because it just looks lived in.
The cost of staging is much less than the extra mortgage payments while your house is on the market longer. We do not charge to preview your home and give you our list of recommendations for staging (general, not specific) and estimates on the cost of staging.
This is the strategy all homeowners should employ: Stage your house at the time you list it for sale, to highlight the positive features of the home, eliminate distractions and help buyers visualize themselves and their furnishings in your home. Your house will sell quicker!
Nancy Ewing at Creative Angle REdesign and Staging can be reached at 970.333.4349 or www.creativeangle.net,
Here is some great info from a survey that was just completed.
The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more.
When asked about their reasons for purchasing a vacation home, 89 percent of buyers wanted to use the home for vacation or as a family retreat; 27 percent to diversify investments; 27 percent to rent to others; 26 percent to use as a primary residence in the future; and 17 percent for use by a family member, friend or relative.
In terms of location, 26 percent of vacation homes were purchased in small towns, 23 percent in a rural area, 23 percent in resorts, 20 percent in a suburb, and 8 percent in an urban area or central city.
Seventy percent of vacation homes purchased in 2008 were detached single-family homes, 18 percent condos, 5 percent townhouses or rowhouses, and 7 percent other.
Sixty-nine percent of vacation home buyers and 84 percent of investment home buyers purchased existing homes; the rest purchased new homes.
Investment-home buyers in 2008 had a median age of 47, earned $85,000, and bought a home that was fairly close to their primary residence – a median distance of 19 miles.
When asked about the most important reasons for purchasing an investment home, 58 percent said to provide rental income; 38 percent to diversify investments; 19 percent for use by a family member, friend or relative; and 15 percent to use for vacations or as a family retreat.
Twenty-eight percent of investment homes were purchased in a suburb and another 20 percent in an urban or central city area, 23 percent in a rural area, 22 percent in a small town, and 6 percent in a resort area.
Sixty-four percent of investment homes purchased in 2008 were detached single-family homes, 22 percent condos, 8 percent townhouses or rowhouses, and 6 percent other.
Vacation-home buyers plan to keep their property for a median of 12 years; 58 percent plan to keep their vacation home for 11 years or more. Investment buyers plan to hold their property for a median of five years.
Eight in 10 second-home buyers consider it a good time to invest in real estate, compared with 71 percent of primary residence buyers.
The size of the second-home market is significant. NAR’s analysis of U.S. Census Bureau data shows there are 8.1 million vacation homes and 40.5 million investment units in the United States, compared with 75.5 million owner-occupied homes.
NAR’s 2008 Investment and Vacation Home Buyers Survey, conducted in March 2009, includes answers from 1,924 usable responses. The survey controlled for age and income, based on information from the larger 2008 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.
• 977 sq. ft., 2 bath, 2 bdrm single story - 
MLS® $629,000
Keystone, Summit County - Rare 2 bedroom lock-off. Live or vacation in one and rent the other. All the amenities you would expect in River Run. Overlooks the pool. Underground parking w/ convenience of an elevator. Ski lockers. Steps away from the new gondola! Rentals!!!!!!!!!
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• 1,792 sq. ft., 2 bath, 3 bdrm 2 story - MLS® $319,900
Fairplay, Park County - Great 3 bedroom 2 bath home in Valley of the Sun. Big wrap around deck with nice mountain views and easy access to HWY 9. Sound proof insulation between levels. Fully furnished to sleep 10 people. Too many improvements to list~
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• 897 sq. ft., 1 bath, 1 bdrm single story - MLS® $307,000
Breckenridge, Summit County - What a location! Views! Rentals! In town, near base of Peak 9 pool & hot tubs. One bedroom + spacious loft. Gas log fireplace, top corner unit. Deck off living room. Hardwood floors, infloor heat in tiled bathroom. WiFi includedMountain Views! Light and Bright Priced to Sell!
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• 1,030 sq. ft., 2 bath, 3 bdrm single story - MLS® $289,000
Wildernest, Silverthorne - Walk into equity in this Fixer upper or fix and flip 3 bedroom, 2 bath condo with great views from the large deck, a huge storage closet, wonderful open floor plan and a washer and dryer in the master bathroom. This property is perfect for that get awayweekend, or a wonderful family home. Lowest priced 3 bedroom in Wildernest!
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Cheapest 2Bd in Summit CO
• 552 sq. ft., 1 bath, 2 bdrm single story - MLS® $185,000
Wildernest, Silverthorne - Located in the heart of Wildernest this condo is a fantastic buy. Vaulted ceilings, top floor solitude all add up to an amazing value at only $185K. Cash flow from day one if you choose to rent it or a great weekend getaway if you are from the Front RangeLocals will find the location perfect for hopping on the Summit Stage or heading to the slopes. Don't wait....this one won't last long!
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