Recently, while I was away on vacation, someone in my neighborhood, listed their home for sale with another agent for 199,900. This home is clearly priced 52,000 dollars more than any other home in the neighborhood and based on it's size and age, should sell for right around what a recent listing of mine (a perfect ten, just a primo beauty of a home) sold for in the subdivision, 120,000. That listing of mine took only 40 days to sell, based on the fact it's averaging 157 days to sell a home in my neighborhood and it appraised for 121,500, 1500 dollars over the sales price, which is very, very good!
So with this in mind, it's time again for a little lesson in what happens when you price your home and put it on the market for sale. You get an offer down the road. That offer includes a mortgage the buyer has to take out from a bank or mortgage company, in order to purchase the home. That bank or mortgage company then sends someone out called an appraiser, to appraise the property's value, based entirely on recent sales prices in the neighborhood. That appraiser comes up with the homes value and turns their findings over to the bank or mortgage company.
So if the house is priced at 199,900 and the buyer wrote an offer for 180,000 and the seller accepted it, you then hope that the appraiser accepts it. In the case of my neighborhood in Troy, the appraiser would more than likely appraise the property for about 120,000. That's a difference of 60,000 between the sales price offered and the appraised value of the home. That also means, the buyer now must way overpay for the home, by coming up with that 60,000 dollar difference out of pocket, or the deal is off, unless of course, the seller is willing to lower their sites just a bit and accept the appraised value of 120,000.
And so it goes and it's always gonee that way, frankly! Price your home to sell when you put it on the market. Look at the comparable properties your real estate agent presents to you. If you way, way, way overprice your home, it will just sit there for month after month and will not sell! The house will eventually get word spread that the "houses is not selling because there's something wrong with it" and thus buyers and their agents will stay away in droves!! Buyers, with good buyers agents, will stay away in droves anyway, knowing the house is way, way, way overpriced!
Monday, August 8, 2011
Monday, May 30, 2011
Here Comes Summer!
Well, it's summer again! A happy time for many folks, although, I prefer fall myself with the beautiful colors Mother Nature puts out there for us to admire!
Summer means warm days, warm nights and it also means, we survived the great rains of the spring of 2011! I know many have flooded basements because of the oversaturaton of the land and with that, comes cleanup problems. If you're thinking about marketing your home, better get that basement spotless! While women among buyers will eyeball the kitchen and the baths, the men will spend most of their time, eyeballing the basement. Better have it ready for that "eyeball inspection."
Interest rates are still low, but not at the all time record low levels they were at a year ago. Still, rates are wonderfully reasonable compared to where they were say, 5 years ago and some banks and mortgage companies are even rolling out adjustable rate mortgages again. But shop cerefully, if your looking to buy a home or refinance your current home. Check into at least 3 mortgage companies or banks before making your borrowing decision.
As far as listing a home for sale, inventories are actually down as we "clean out" all of the foreclosures and short sales. But, it's still a buyers market out there and until the economy shows definate signs of improving, buyers are fearful of committing and sellers aren't putting their homes on the market unless they absolutely have to, due to things like an impending job transfer to another part of the country.
So whether you're listing, selling or just refinancing, or even if you're just going to stay there with a pat hand, enjoy the upcoming summer of 2011.
Summer means warm days, warm nights and it also means, we survived the great rains of the spring of 2011! I know many have flooded basements because of the oversaturaton of the land and with that, comes cleanup problems. If you're thinking about marketing your home, better get that basement spotless! While women among buyers will eyeball the kitchen and the baths, the men will spend most of their time, eyeballing the basement. Better have it ready for that "eyeball inspection."
Interest rates are still low, but not at the all time record low levels they were at a year ago. Still, rates are wonderfully reasonable compared to where they were say, 5 years ago and some banks and mortgage companies are even rolling out adjustable rate mortgages again. But shop cerefully, if your looking to buy a home or refinance your current home. Check into at least 3 mortgage companies or banks before making your borrowing decision.
As far as listing a home for sale, inventories are actually down as we "clean out" all of the foreclosures and short sales. But, it's still a buyers market out there and until the economy shows definate signs of improving, buyers are fearful of committing and sellers aren't putting their homes on the market unless they absolutely have to, due to things like an impending job transfer to another part of the country.
So whether you're listing, selling or just refinancing, or even if you're just going to stay there with a pat hand, enjoy the upcoming summer of 2011.
Thursday, April 28, 2011
Wake Up America!
I recently listed a home for sale in my subdivision and as I usually do, I sent out postcards to my sub, heralding the good news. A couple of days after sending the cards out, I get a phone call. It's from someone who also lives in the subdivision and they asked "Is that asking price you have listed on the postcard, correct?"
Well, I replied "Why, do you think it's to high?"
The response was a stunner..."No, I think it's way to low."
So we chatted. Turns out this fellow subdivision homeowner had paid about $200,000 for their current home 5 years ago and had put quite a bit of money into the home in upgrades since then. Now, here I was, their local, friendly Realtor, telling them their house was worth 35% less than what they paid for it. I could hear the current homeowner hyperventelating over the phone!
I asked "Haven't you been following the news for the last 4 or 5 years. We've been in a deep recession here in our area and home prices have fallen drastically as a result. There have been many foreclosures and short sales driving prices down." The homeowner asked, so I offered my explanation of a short sale.
I was next asked, when this situation would straighten out. I said predictions are that home prices won't rebound to their 2005-'06 levels for at least a decade. The homeowner was stunned. "I and my spouse are in our early 50's now. By the time that decade is up, we'll be in our early 60's." I told the homeowner that I often joke with friends that I paid $72,000 for my current home in 1984 and pretty soon, it's going to be worth.....$72,000. Right now, it's probably worth about 120,000 after having been up to about 190,000 5 years ago!
Hopefully this was a lesson learned for the hyperventelating homeowner, don't live in a fishbowl. And, everything I've posted here is all true!
Well, I replied "Why, do you think it's to high?"
The response was a stunner..."No, I think it's way to low."
So we chatted. Turns out this fellow subdivision homeowner had paid about $200,000 for their current home 5 years ago and had put quite a bit of money into the home in upgrades since then. Now, here I was, their local, friendly Realtor, telling them their house was worth 35% less than what they paid for it. I could hear the current homeowner hyperventelating over the phone!
I asked "Haven't you been following the news for the last 4 or 5 years. We've been in a deep recession here in our area and home prices have fallen drastically as a result. There have been many foreclosures and short sales driving prices down." The homeowner asked, so I offered my explanation of a short sale.
I was next asked, when this situation would straighten out. I said predictions are that home prices won't rebound to their 2005-'06 levels for at least a decade. The homeowner was stunned. "I and my spouse are in our early 50's now. By the time that decade is up, we'll be in our early 60's." I told the homeowner that I often joke with friends that I paid $72,000 for my current home in 1984 and pretty soon, it's going to be worth.....$72,000. Right now, it's probably worth about 120,000 after having been up to about 190,000 5 years ago!
Hopefully this was a lesson learned for the hyperventelating homeowner, don't live in a fishbowl. And, everything I've posted here is all true!
Thursday, March 31, 2011
Here and There, Financially Anyway!
Well, spring is upon us and the thoughts of buying a new home are entering peoples minds. There are some real bargains out there, especially with prices continuing to fall. I joke to people that I paid $72,000 for my home when I baught it in 1984 and if prices keep dropping like they have been, in a couple of years, my home will be worth......$72,000!
2 stories on this recently caught my eye. First, was the announcement in late February that home prices continued to fall in 2010, over 2009. As an example, between October 1, 2009 and September 30, 2010, the story said, home prices in Troy, fell another 7.5% over the figures they were priced at for the previous year. It was stunning, yet interesting reading. And those price falls were everywhere in southeast Michigan. No community escaped the price fall!
The second story was in the newspapers just the other day, predictions that no one knows when prices will stop dropping. Homes are now selling for the prices they were fetching in 1994! I would not call it a "free fall" but don't believe anyone who tells you the real estate market has "bottomed out." No one knows. Even I for the past year plus, have been telling people the market has hit bottom, but I was just going on what economists were predicting.
My best prediction now, we are seeing foreclosures and short sales selling for higher prices than they were a year or two ago, a sure sign that eventually, the foreclosure and short sale market will dry up, leaving room for the private sale home to creep back into the marketplace. However, my feeling is that the "drying up" of the "problem" homes won't be complete until the end of 2012 or midway thru 2013. But what do I know, I've been wrong, along with everyone else on this issue, for a year and a half!
2 stories on this recently caught my eye. First, was the announcement in late February that home prices continued to fall in 2010, over 2009. As an example, between October 1, 2009 and September 30, 2010, the story said, home prices in Troy, fell another 7.5% over the figures they were priced at for the previous year. It was stunning, yet interesting reading. And those price falls were everywhere in southeast Michigan. No community escaped the price fall!
The second story was in the newspapers just the other day, predictions that no one knows when prices will stop dropping. Homes are now selling for the prices they were fetching in 1994! I would not call it a "free fall" but don't believe anyone who tells you the real estate market has "bottomed out." No one knows. Even I for the past year plus, have been telling people the market has hit bottom, but I was just going on what economists were predicting.
My best prediction now, we are seeing foreclosures and short sales selling for higher prices than they were a year or two ago, a sure sign that eventually, the foreclosure and short sale market will dry up, leaving room for the private sale home to creep back into the marketplace. However, my feeling is that the "drying up" of the "problem" homes won't be complete until the end of 2012 or midway thru 2013. But what do I know, I've been wrong, along with everyone else on this issue, for a year and a half!
Friday, January 28, 2011
Happy 2011
Well, the New Year is here and yes, if you've followed my blog, the helical piers are in! The job took about a week and a half because of the cold weather, the frozen clay earth and the dryness of that earth, but yes, the piering was finished and my family room was raised a little over half an inch on Wednesday, January 26, 2011 and then stabalized so that it will never sink again! It's almost level in my family room now, after having been way off level and the exterior cracks have closed somewhat. They also sealed a major crack in my basement in the opposite corner from the family room, which had been there for years and years, probably since my home was built in 1967.
Please also note, if you've been following the newspaper reports, home prices in our area have now sunk to 1994 levels. In other words, if your home was worth $200,000
in 2006, but was worth 120,000 in 1994, well then, you should put it on the market for the 1994 price, or somewhere close to it. You'll never get even close to that 2006 figure. Some people try, but then find out the house will never appraise for a mortgage and right now, the buying and selling of real estate is being run by appraisals. It just shows you how badly the economy affected Michigan and like I've been telling people all along, the country may have been in a recession, but Michigan was in it's worst depression since the 1930's.
I do believe sincerely that we have hit bottom and the economy in our state is turning around. But it's going to take a while for a noticable increase in home prices. The big thing is to get current inventory down and also purge the available
homes list of foreclosures and short sales. That is slowly but surely happening, but frankly, most of the home sales today are still foreclosures and short sales. And with interest rates rising to around 5% from historical lows closer to 4%, home buying and selling, just got a little tougher!
Please also note, if you've been following the newspaper reports, home prices in our area have now sunk to 1994 levels. In other words, if your home was worth $200,000
in 2006, but was worth 120,000 in 1994, well then, you should put it on the market for the 1994 price, or somewhere close to it. You'll never get even close to that 2006 figure. Some people try, but then find out the house will never appraise for a mortgage and right now, the buying and selling of real estate is being run by appraisals. It just shows you how badly the economy affected Michigan and like I've been telling people all along, the country may have been in a recession, but Michigan was in it's worst depression since the 1930's.
I do believe sincerely that we have hit bottom and the economy in our state is turning around. But it's going to take a while for a noticable increase in home prices. The big thing is to get current inventory down and also purge the available
homes list of foreclosures and short sales. That is slowly but surely happening, but frankly, most of the home sales today are still foreclosures and short sales. And with interest rates rising to around 5% from historical lows closer to 4%, home buying and selling, just got a little tougher!
Friday, December 10, 2010
Got A New Problem At My House!
Well, the last time I was on board here, I blogged about my roof replacement and how much the extra wood needed, cost me out of pocket. Well, a week or so after the roofers left, I had my satellite company come out to "refocus" my dish, because the roofing people had to move it. Well, during that process, I'm watching the satellite guy staple some wiring to the side of my house and I note that some cracks, which had long been there between bricks, had really widened. Of course, I had not been watching them closely, but it was far worse than needing some tuckpointing. At one spot near a windowsill under a picture window, the crack was nearly an inch wide! In the main part as the crack zig zagged down to ground level, it was half an inch wide!
So, I approached a local home inspector with some pictures and he told me I needed piers put under my house and he recommended I get 3 estimates. So, I checked the Yellow Pages and found 3 companies that did helical piering and over the period of a week, got all 3 estimates, ranging from $9500 to $15,500. The $15,500 guy wanted to pier the entire back of my house with 12 helical piers, while the other two companies said that was not necessary. Just the family room had sunk an inch and a quarter to an inch and a half over it's 43 year life, while the other back corner of the house, had barely sunk a quarter of an inch at most. Something to watch the other 2 compnies said, but it doesn't need fixing right now.
So my choice was the mid price guy, about $9900. They'll put in 7 helical piers around the sides and back of my family room and raise it back up to level. After that, I can't have any repairs to the interior for about 6 months, because the house, the beams, the interior, all need to get used to the new "settings" as it were. And oh yes, the interior cracking is horrible, right in the same spot where the exterior brick cracking was going on with big splits in my drywall inside.
So I suggest you be observant of the exterior of your home, especially if you have cracking where mortar used to be between the bricks, if you have a brick exterior. And if your family room is on a slab, like mine. I have a nice basement, but a slab under that family room. Be aware, that the slab under the family room can sink, creating this cracking problem!
'Tis the season again. Seems just like yesterday that it was Christmas, 2009 and now, it's 12 months later. So from my "cracked" house to your "healthy" home, my wishes for a Happy Holiday! Seasons Greetings to all!
So, I approached a local home inspector with some pictures and he told me I needed piers put under my house and he recommended I get 3 estimates. So, I checked the Yellow Pages and found 3 companies that did helical piering and over the period of a week, got all 3 estimates, ranging from $9500 to $15,500. The $15,500 guy wanted to pier the entire back of my house with 12 helical piers, while the other two companies said that was not necessary. Just the family room had sunk an inch and a quarter to an inch and a half over it's 43 year life, while the other back corner of the house, had barely sunk a quarter of an inch at most. Something to watch the other 2 compnies said, but it doesn't need fixing right now.
So my choice was the mid price guy, about $9900. They'll put in 7 helical piers around the sides and back of my family room and raise it back up to level. After that, I can't have any repairs to the interior for about 6 months, because the house, the beams, the interior, all need to get used to the new "settings" as it were. And oh yes, the interior cracking is horrible, right in the same spot where the exterior brick cracking was going on with big splits in my drywall inside.
So I suggest you be observant of the exterior of your home, especially if you have cracking where mortar used to be between the bricks, if you have a brick exterior. And if your family room is on a slab, like mine. I have a nice basement, but a slab under that family room. Be aware, that the slab under the family room can sink, creating this cracking problem!
'Tis the season again. Seems just like yesterday that it was Christmas, 2009 and now, it's 12 months later. So from my "cracked" house to your "healthy" home, my wishes for a Happy Holiday! Seasons Greetings to all!
Thursday, October 28, 2010
The Leaves Are Falling, The Vote Is Coming
I love the fall. It's my favorite season. And we've been blessed in Southeast Michigan the past few years, with some glorious, warm, sunny autumns, well into November. So far as I type this, 2010 has not been an exception. We've had great weather leading up to halloween and more importantly, up to voting day, November 2. The recent "breezes" aside, it has been great and as for those breezes, well, something has to knock the leaves off the trees, right?
It's time for a voting pitch. No matter what party you're a member of, exercise your franchise on November 2 and get out and vote. If your candidate doesn't win and you didn't vote, you've only yourself to blame. The founding fathers gave us this priviledge and to me, it's the most important thing one can do for one's government, voting in the people you feel can run that government best. So, as an old radio jingle used to say, "be a good citizen, get out and vote."
Enjoy the fall and I look forward to future blogging about all things real estate. And if you have the opportunity and are inclined to either buy your first home or move up into a new one, you can't beat the mortgage rates we're seeing right now. All time, historical lows. Why, people are even taking advantage of 15 year fixed rate mortgages, to pay their homes off faster, at rates well under 4%. Nows the time to buy, as the economy finally appears as if it's starting to trend upward!
It's time for a voting pitch. No matter what party you're a member of, exercise your franchise on November 2 and get out and vote. If your candidate doesn't win and you didn't vote, you've only yourself to blame. The founding fathers gave us this priviledge and to me, it's the most important thing one can do for one's government, voting in the people you feel can run that government best. So, as an old radio jingle used to say, "be a good citizen, get out and vote."
Enjoy the fall and I look forward to future blogging about all things real estate. And if you have the opportunity and are inclined to either buy your first home or move up into a new one, you can't beat the mortgage rates we're seeing right now. All time, historical lows. Why, people are even taking advantage of 15 year fixed rate mortgages, to pay their homes off faster, at rates well under 4%. Nows the time to buy, as the economy finally appears as if it's starting to trend upward!
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