Four Mistakes Sellers Make

Watch on your mobile device >>

Many homeowners do not know how to accurately determine the value of their home.  Owners often use unsound methods when setting their price and these miscalculations can greatly disrupt the selling process.  There are four deadly mistakes sellers make when determining the value of their home.
 
The Price You Paid When You Bought Your Home Is Not the Price It is Worth Now

The first is that they base their price on what they paid when they bought the home.  The real estate market is just like any other market; it is subject to supply and demand.  Prices in the real estate market, though not as efficient or instant as the Stock Market, are subject to going up and down based on the supply and demand.  The real estate market is more than four years into a buyer’s market so prices have been coming down.  This means that what you paid for your property in 2006 or 2007 does NOT have a bearing on what your home may be worth.
 
An Appraisal Should Never Be Used To Determine the Value of Your Home

The second biggest mistake in determining the value of your home is basing it on an appraisal, whether it is an appraisal for tax purposes or for a refinance.  These appraisal values are not an indicator for what a buyer is willing to pay for your property.  If the appraisal is for a refinance, the bank is looking to do whatever they can do to make sure you are able to refinance your home so they can make more money.  If the appraisal is done by a taxing authority, it is likely that they are going to overvalue the home so they can increase their revenue base.
 
Looking at the Cost and Features of Other Homes on the Market is Key

The third mistake a homeowner will make when setting the price for their home is adding together the value of the property and the cost of improvements.  Many homeowners think that if they paid $250,000 for their property and put in an extra $75,000, then the property must be worth $325,000.  This is not the case.  Your property does not stand alone; it is competing with the other properties in the neighborhood.  This is why it is important to know your competition.  An understanding of the amenities and features that a buyer can purchase in the resale market and in new construction can better equip a home seller to understand the supply and demand factors of the market.
 
What You Owe on Your Home Will Not Factor Into What Your Home Is Worth

The fourth and final crippling mistake a home owner makes when determining the value of their home is looking at what you owe on the property.  Prices in the real estate market have dropped significantly in the last four or five years.  You may have refinanced your property when property values were higher across the board or you may have taken out a second mortgage or home equity line during this time.  If this is the case, you may owe more than what your home is worth.  If you need to move and your home is worth less than what you owe on it, this is a special situation.  It is at this time that you need to consult a real estate agent.

ATTITUDE OF GRATITUDE

Watch on your mobile device >>

If you have food in your fridge, clothes on your back, a roof over your head, and a place to sleep, you are richer than 75% of the world.

If you have money in the bank, your wallet, and some spare change, you are among the top 8% of the world’s wealthy.

If you woke up this morning with more health than illness, you are more blessed than the million people who will not survive this week.

If you have never experienced the danger of battle, the agony of imprisonment or torture, or the horrible pangs of starvation, you are luckier than 500 million people alive and suffering.

If you can read this message you are more fortunate than 3 billion people in the world who cannot read it at all."

We would all be more happy and have plenty to be grateful for...if only we would count our blessings rather than our problems.

Do You Know the Rewards AND Risks of Buying a Home?

Watch on your mobile device >>

Every financial decision you make in your life has its rewards and its risks. Home-buying is no different. The key, of course, is to maximize the rewards and minimize the risks. That calls for objectivity on your part. So, to help you make an objective decision, I've provided a list of both rewards and risks below. Review the list to see if you're a good prospect for owning a home!

Rewards

The "intangible" reward of buying a home is, of course, the joy of owning it and creating a home for your family. Nearly everyone desires this reward! However, there are also several concrete financial rewards that can be earned through home ownership.

The first financial reward is appreciation. In spite the recent "mortgage meltdown" and price declines, it's a fact that, on a historical basis, your home is worth more when you sell it than when you bought it. A home purchase is a great long-term financial investment.

Financial flexibility is the second benefit and is derived from appreciation. When your home appreciates, you can sell it at a higher price. You can then use the profit to buy a bigger and better home…tap into the equity (what your home would sell for minus what you owe on the mortgage)…pay college tuition for the kids…use it to fund your retirement…or any other goals you have in mind.

The third goal is leverage. Buying a home allows you to use borrowed money (the mortgage) to profit on later price increases (appreciation) on property you haven't paid for.

The fourth and final benefit is that of tax breaks! You can deduct property taxes and mortgage interest and keep up to $500,000 of capital gains!

So, as you can see, home ownership is a wise investment in your future!

Risks

As I stated earlier, every financial decision has its risks as well as rewards. Therefore, it's wise to know what those risks are upfront, so you can decide how you want to deal with them. Review the following risks to make sure you're ready for the responsibility of home ownership.

The first risk is a decline in value. We've seen this risk come true in the recent "mortgage meltdown." The value of homes declined from 2006-2009.

Although, historically, this doesn't happen often (and prices are on the rebound), it still tells you there's no guarantee that the value of your home will appreciate.

Over the long-term, however, home prices do tend to appreciate, and, believe me, home ownership is far less risky than the stock market!

The second risk is maintenance costs. It takes money to maintain a home - roofing, heating, cooling, siding, paint, etc. This fact means that you must have the income to pay for routine maintenance costs as well as the inevitable big-ticket items (water heaters, furnaces, etc.) that come with long-term home ownership.
The third risk is the loss of other investment opportunities. In the short-term, alternative investments (stocks, bonds, etc.) may give you a greater return in less time if their value rises faster than that of the homes in your neighborhood.

In such an event, you might do better as a renter or investor. However, keep in mind that, as stated above, this is a short-term strategy.

The fourth risk is lack of flexibility. Purchase of a home ties you down to a specific neighborhood and city. Many people like this fact because it allows them to "set roots" in a community. However, if you're a person who prefers to be "foot loose and fancy free," then home ownership may not be for you.

For example, home ownership doesn't make it easy for you to take a new job elsewhere or move to a different location. And, if you have to put the home on the market in a hurry due to a divorce, job loss, etc., then you can take a heavy financial hit.

The final risk lies in the fact that if you have a large mortgage payment, it can make it hard to invest money elsewhere (savings, investments, vacations, etc.).

So, there you have it - a complete list of the rewards and risks of home ownership. If you'd like help in analyzing how these factors apply to your specific situation, contact me at today!

Mecklenburg, Union Counties – Mid-May Market Status Update

Watch on your mobile device >>

Hello! And thank you for joining me here today where I’m bringing you relevant information about our real estate market – that is easy to read, informational and provides useful insight.  Once again, please find below key statistics reported at this point in our market in the middle of May 2012.  Using this will provide you with an understanding of where we stand today and where we are headed in the future of buying and selling properties in our region.

Mecklenburg County

SALES PENDING
With 7,079 homes on the market right now, right now we are reporting 2,458 pending sales and 4,621 active listings.  The pending sales ratio is 34.7%, showing an even greater likelihood for a balanced supply and demand market.  The higher the ratio, the more that listings are in demand.

The highest number of pending contracts fall within properties in the $100,000-$200,000 price range.  The same price range bracket of $100,000-$200,000 has a relatively large inventory of properties for sale at 1,413 listings.  Mecklenburg County’s average list price for all price ranges is $363,461.

CONTRACTS CLOSED
The previous six months have shown a total of 3,889 closed contracts with an average sold price of $215,613 – the most sold listings coming under the $100,000-$200,000 price range.  Conversely, 3,438 listings remain on the market and have remained so for the last six months for a multitude of reasons ranging from overpricing and inadequate marketing to properties shown in less-than-optimal condition.  The highest number of off-market listings at 1,162 properties also falls within the $100,000-$200,000 price range.

DAYS ON MARKET
The higher the number of Days On Market, the stronger a buyers market it is and in Mecklenburg County the current average DOM is 118 days, slightly lower than as of last month’s market update.  The average DOM over the last 6 months is 110 days with the fastest selling homes during this time frame in the $1.2M-$1.3M price range. The average sold price for the last 30 days was $215,613 with a DOM average of 106 days.

ABSORPTION RATE
We currently have 7.1 months of inventory according to the previous 6 months sales figures.  Assuming that it would take this much time to sell all the current inventory if market conditions remained the same, this indicates a reasonably balanced market leaning toward buyers at the present time.

Union County

SALES PENDING
The total number of homes on the market in Union County is currently 2,089 with 609 sales pending and 1,480 active listings.  The pending ratio is 29.2%, indicating more supply than there is demand.  Like last month, homes available in the $100,000-$150,000 price range are still experiencing a relatively large number of contracts pending sale.  Similar to Mecklenburg County, the price range of $150,000-$200,000 is reporting a larger inventory of properties for sale at 257 listings.  The average list price for all price ranges in Union County is $335,737.

CONTRACTS CLOSED
The last six months have had 1,106 closed contracts with an average price of $252,811 – with the highest number of sold listings in the $100,000-$150,000 price range.  Conversely, 995 listings remain unsold during the last six months for the same reasons afflicting unsold properties in Mecklenburg County.  The highest number of off-market listings at 180 properties are in the $100,000-$150,000 price range.

DAYS ON MARKET
The average number of Days On Market for property listings in Union County is 135 days, with the DOM during the last six months reported at 117 days.  The previous six months reveals an average sold price of $252,811 with the fastest selling properties selling in the $450,000-$500,000 price range.

The Union County average sold price during the last 30 days was $240,376 with an average DOM of 117 days, indicating a changing trend toward a sellers market in our marketplace.

ABSORPTION RATE
Slightly down from last month, we are at 8.7 months of inventory in Union County as per the last 6 month’s sold properties.  This would indicate a sellers market given that it would take that much time to sell all existing property listings on the market assuming conditions remain the same.
~
I invite you to contact me if you would like to explore your options, look further in detail at the market statistics provided above or to assess your real estate outlook – contact me and I will be glad to assist you with all your real estate endeavors!

For More Information See These Documents Below:

Buyers click here >>

Sellers click here >>

3 Reasons Overpricing Your Home is a Bad Idea

Watch on your mobile device >>

We’ve all seen them – homes that are on the market and priced so high that one wonders what decade the owners were comparing their home value to.  But if you think about it – the goal of these people is to end up with more money in their pocket at the end of the day.  The truth is that when sellers price their home for more than what the market dictates it is worth, there are some pretty dire circumstances.  Here are three reasons why you should shy away from pricing your home too high, instead making a strong effort to price it effectively.

Buyers Don’t Like to Deviate Too Much From the Asking Price

Whether because of perceived rigidness on the part of the sellers or to save themselves the embarrassment of their offer being rejected, many buyers shy away from bidding on homes that are overpriced.  They have no idea of the reason you may have priced your property so high and the last thing they want to do is get tangled in a bidding tug of war only to be the loser at the end of the day – so they don’t make an offer in the first place.

There is a Misconception That Sellers Knows Their Home is Overpriced

Thinking that the sellers deliberately have overpriced their home, many buyers feel that if the seller is willing to accept a lower value then they just priced the home accordingly.  This is a turn off to serious buyers so rather than mess with it they move on to other properties and an offer for the overpriced home never makes it to the table.

Buyers Assume That Previous Offers Have Been Rejected By the Seller

A home that is priced higher than it should be makes the impression that the seller is not willing to budge.  Buyers take one look at such properties and assume that other offers were probably made based on the property’s fair market value but the seller likely leaves no room to negotiate.  In actuality, these homes almost never receive offers, leaving the seller in the dark and buyers to move on to other properties.

~

The single biggest financial disadvantage of listing a home too high is that it won’t sell and the seller will either have to channel more money into the home to get some offers on the table or they will have to reduce the price to get it sold.  The interesting thing is that the reduced price is often lower than what would have been the asking price had the home been priced effectively in the first place.

Homeowners that end up pricing their home too high usually spend thousands of dollars more than they were trying to save in the first place. By practicing our tips and remaining aware of the reasons that overpricing is the worst thing you can do, you can sell your home for a great price instead of being one of the last houses on the block yet to sell.  To learn more about great pricing strategies visit your Realtor to get customized, professional consultation.  Nothing beats working with those that know the industry well!

~~

TIPS ON HOW TO PRICE A HOME 

* Do your homework to find the current home value of your home. A Comparative Market Analysis (CMA) is best done by a professional Realtor and also you can get an appraisal done – something that will help in the lending process plus as you try to justify your selling price)

* Give your home the TLC it needs so it is an attractive catch to potential buyers.  That’s a great way to justify your price.  If you can’t get to the items that need fixing or if you would rather leave the aesthetics to your buyers’ so they can cater to their own tastes once they move in, be sure to reflect that in your price.

* Don’t get caught up in old prices that are no longer relevant in today’s buyer’s market.  Price your home based on today’s statistics and be prepared to corroborate the figure with current market data that supports your number.