Category Archives: Real Estate 101
In today’s market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own. In the industry, this is referred to as a For Sale by Owner, or “FSBO”. While being a FSBO might seem to have its advantages, there are reasons why nearly 9 of every 10 homes are still sold with the help of a REALTOR®.
If you are thinking of selling your home on your own, first consider these challenges you will face by not using a REALTOR.
1. Setting the right price
Overpriced homes don’t sell. On the other hand, no seller wants to risk underpricing their home. FSBOs frequently misjudge the value of their home, basing their pricing decisions on inaccurate information they find online or the common misconceptions about the current state of home prices and the overall real estate market. REALTORS® have the expertise, knowledge, and resources to help sellers choose the best price for their home.
2. Being available for showings
Are you going to be available on short notice to show your home to prospective buyers? Your job, family, and personal life can make for a very busy schedule. This makes it very unrealistic for many of us to simply drop what we are doing and rush home to meet buyers for a showing. One of the roles of a REALTOR is to take the demands away from sellers and be there to represent your house any time a buyer wants to see it.
3. There’s more to negotiating than you may think
Negotiation is a normal part of any real estate transaction, but many FSBOs do not consider all the different people they must be prepared to negotiate with, including:
- The buyer who wants the best deal possible for themselves.
- The buyer’s agent who solely represents the best interest of the buyer.
- The home inspector(s) who works for the buyer, not the seller, and will almost always find some problems with the property.
- The appraiser if there is a question of home’s value.
4. Exposure to prospective buyers
The days of considering a good marketing plan to be a sign in the front yard and some flyers are long gone. Studies have shown that out of 10 buyers 9 use the Internet to search for homes while just 2 are looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
5. Results come from the Internet
How do we know the Internet is an effective marketing tool? Because it generates real results! A recent study from the National Association of Realtors showed 43% of buyers found the home they actually purchased on the Internet. That is in comparison to only 9% from a yard sign and 1% from a newspaper. Having a strong Internet strategy when selling your home is crucial.
6. FSBOing is not what it used to be, the process today is difficult and complex
Over the years more and more requirements have been set in place and the paperwork involved in selling and buying a home has increased dramatically as industry disclosures and procedures have become mandatory. This has made the process of real estate transactions a complex one, giving reason for why we have seen a drop in FSBOs from 19% to 9% in the past two decades. If you are thinking of not using a REALTOR to sell your home, ask yourself, how familiar are you with reviewing contracts and negotiating contingencies?
7. Using an agent will net you more money
Many homeowners are drawn to try selling on their own because they believe they will save the real estate commission. However what they don’t realize is that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. In reality, the seller and buyer can’t both save the commission.
Studies have shown that the typical FBSO home sells for $208,000 while the typical house sold by an agent sells for $235,000. FSBOs are more common in lower price point markets so this doesn’t mean that an agent can get $27,000 more for your home. However, it does show that selling on your own might not make sense.
Before making the decision to try selling your home on your own, contact a REALTOR in your area and see what they have to offer.
Winter has officially left us and we are entering real estate peak season. Buyers are ready and eager to get out and start shopping for their next home, but there is just one problem…there aren’t enough homes for sale. When the number of buyers exceeds the number of homes for sale, it is seller’s market. Right now in this kind of market, sellers are getting 100% of their asking price or more, and many are receiving multiple offers forcing buyers into a bidding war which ultimately drives the sales price up. Not only are sellers getting the money they want for their property, but they are also selling extremely fast. Homes are literally flying of the market, some selling within days or even hours of being listed. Realtors around the area are claiming that a home will sell before they even get a chance to schedule a showing for their buyers. It cannot be stressed enough that if you have been considering the idea of selling your home, NOW is the time because the market is literally starving for inventory!
The term “Months of Inventory” considers the number of homes on the market and the pace at which they are selling. The number basically means that if existing homes were to continue selling at the same rate as the most recent month of data, the current inventory of homes would be sold by that many months. Housing experts consider a market to be ‘normal’ or balanced when months of inventory is around 6. A number higher than 6 would mean there is too much inventory and we would be in buyer’s market. The Market Watch chart on the right shows that in March the months of inventory took a dip in the Greater Louisville market, reaching less than 4.5. Many of real estate professionals in our region who have been in the business for years have never seen inventory this low.
While sellers may reap the benefits of a low inventory market, buyers experience frustration with not being able to find the right house, or finding the right house and the seller accepts another offer. Many homeowners are hesitant to list their home right now in fear of not being able to find another one, however receiving a higher sales price in ample amount of time and little effort makes selling very appealing in this type of market.
CLICK HERE for market information updated every Tuesday afternoon.
No one ever wants to think about something bad happening to their home, such as being destroyed in a fire or severely damaged by another catastrophe. However, such things do happen whether you are expecting them or not. Many homeowners take comfort in their homeowner’s insurance policy, but the truth is that insurance policy may not be as protective as you might think if you don’t know or can’t remember everything that was destroyed in your home. Think about this for a moment. Without looking, can you list every kitchen utensil or cookware item you have in your drawers and cabinets? How about every cleaning product under the sinks or in closets? Do you know the brand and model of your appliances and electronics? To receive the proper amount of money from your insurance company after a fire or other disaster, you will need to answer each of these questions and many, many more. You may think, “Oh, that will never happen to me”, but we guarantee that neighbor or friend, or family you know from church or school, thought the exact same thing before it did happen to them. Creating a detailed home inventory is a responsibility that every homeowner should take the time to do.
To start creating your home inventory, go around your house and make a list of each major item, including as much detailed information as possible. For appliances and electronics be sure to make note of the brand, manufacturer, model and serial number, when you purchased it and the price you paid. For other big ticket items such as collectibles, art, and jewelry, try to keep sales receipts or appraisals together and even scan them for further safe keeping. It may take some time, but it is important to go through this process diligently, making sure no valuables, such as silverware, china, or even tools, are overlooked. Create a spreadsheet on your computer by using a program like Microsoft Excel or downloading a template or app from the Internet to create and save this information in an organized spreadsheet.
After larger items are documented, go from room to room and take pictures of the rest of your belongings on your camera or smart phone. Open up drawers, closets, and cabinets and take snapshots to quickly capture everything that is in your home. Store these photos, as well as your spreadsheet and any scanned documents, on jump drives and store them in multiple places other than your home, such as in a drawer at the office or in a safe deposit box at the bank.
Keeping a thorough inventory of your belongings can be invaluable if you are ever faced with a disaster and have to file a claim. It will also enable you to ensure your insurance coverage is sufficient enough to protect all of your family’s belongings. Supplying these documentations of lists and photos to your insurance provider can help you receive a settlement fast and avoid any insurance nightmares.
HomeServices Kentuckiana Insurance is a part of Semonin’s family of services. Contact a representative today to learn more about your homeowners insurance policy!
In addition to the launch of the brand new Semonin.com, an assortment of short informative videos are now available for you to watch anytime from our new video library on Semonin.tv! A part of our vision at Semonin Realtors is to teach relentlessly. This new video library, stocked with real estate information and expert advice, is a convenient reference for any homebuyer, seller, or homeowner. Whether you are thinking about remodeling your home, or want to know how you can improve your credit score, Semonin.tv can provide some insight. If you cannot find a video that touches on a topic you are interested in, continue to check back! The inventory of videos will continue to grow throughout the year, so you can continue to revisit the library and see what is new.
CLICK HERE to start watching!
As the frosty weather and holiday chaos moves in many people choose to stay put. This explains why there is usually a dip in real estate sales during the winter months. It is a common theory that the warmer, more relaxed spring and summer seasons is the best time to sell a home. Temperatures warm, the school year comes to an end, schedules open up, and everything blooms back to life. It is understandable why many buyers plan their home shopping around this time. But that doesn’t mean all of them go into hibernation after Labor Day and are completely dormant until spring.
Here are 3 advantages to buying or selling real estate in the winter:
During the winter, many sellers take their home off the market until the spring when buying activity picks up again. As a result, sellers who decide not to follow this trend will experience less competition, given buyers have less inventory to choose from. The decreased competition may mean more money for sellers because there are less active listings to compare prices to. Yes, there may be fewer people actively shopping for a home during this season, but those who are tend to be serious buyers.
Many buyers and sellers take a break from their real estate journey during the winter, meaning those who remain active typically have a reason for buying or selling a home that cannot be postponed. When time is a key factor, buyers and sellers are looking for a fast sell. This desire to speed up the process can often cause for easier negotiations as both parties have more willingness to compromise. As a result, not only can the process be quicker but both the buyer and the seller could get more of what they want.
The Appeal of Holiday Homes
When buyers are shopping for a home, they want something that feels like a home. While the winter weather is cold and gloomy, homes decorated for the holidays helps create a cheery and cozy welcome. Homebuyers—who often base their decisions on emotion—will appreciate the inviting warmth of tasteful holiday décor. This allows them to picture their own family celebrating future holidays in the space.
Buying or selling a home during the winter may seem out completely overwhelming with all the holiday festivities going on. However, given these advantages it may be the time when real estate transactions are the most hassle free!
Leading up to 2014 real estate experts had very high expectations for the year’s market performance. Throughout the first half of 2014, however, those expectations were not met. Despite the lag in activity in the beginning months, which is likely due to the harsh winter weather and high consumer doubt, over the summer the national housing market has shown a steady increase in activity. HomeServices of America has developed and released a national perspective of the residential housing market, stating “we anticipate a robust second half of 2014” as housing inventories approach healthier levels.
During and after the recession, housing marketing throughout the country had an extremely high amount of distressed properties. It was private equity and investors that primarily drove the real estate market into recovery. This tactic of fueling market recovery, however, was a short-term resurgence. While investors removed a large amount of distressed properties from the market—which helped return property values to where they should be—once they did, recovery depended on the more traditional cycle. Fortunately, consumer confidence is on the rise. This is vital for the real estate market, because if people are fearful about buying and selling homes, than they simply won’t. According to HomeServices of America along with this increase in consumer confidence, the real estate activity is being led more by homeowners, instead of driven by investors or banks dealing with distressed properties. They have noted that more consumers are buying homes as their own residences and more homeowners are selling their own properties. This trend is a great sign that the real estate market will only continue to thrive.
The housing industry is made up of a number of segments, each of which is experiencing different paths to recovery. For example, luxury properties have displayed a strong sense of recovery, with good sales recorded in many markets nationwide; however, the sales of mid-priced residential properties have not been showing the same enthusiasm. Buy looking at the most recent price-branded reports for the Louisville, Southern Indiana, and Elizabethtown markets shown at the bottom of this post, you see that the majority of homes that sell in the area are in the $125k-$150k range, with less than 3% of homes selling for more than $500k in the Louisville market. This could be why we hear of many other markets undergoing a quicker recovery than we are.
Strong sales of luxury properties is most likely due to a number of factors that affect the buyers and sellers in this market segment. A large portion of this segment are made up of first-time homebuyers who are struggling with getting a loan due to strict credit standards and student loan debts, which has recently shown a dramatic uptick cross the country. The mid-market segment is also facing lower inventory levels which cannot keep up with the demand that is higher than other market segments. Real estate experts are hopeful that these issues will subside, especially as more and more buyers are seeking professional and quality loan officers to assist them through the process of getting a mortgage loan. With the guidance and expertise of such loan officers, more homebuyers are taking the right steps, such as getting pre-qualified for a mortgage prior to shopping for homes.
Americans are beginning to once again become confident and enthusiastic towards real estate. According to a 2014 survey by Gallup, more Americans consider real estate to be the best long-term investment, ranking above gold and stocks. The fact that consumers are still seeing the value in homeownership is a great indicator that things will continue to improve. While we are still a ways away from achieving full recovery, the signs are pointing in the right direction. Assuming that job creation and the overall economy will continue to grow, the momentum of real estate market is anticipated to continuously pick up speed through the rest of 2014.