How Market Value is Determined

We recently added this to some of our promotional packets, and I thought it was great info to post here as well!

 

           The Market value of your home is determined in several ways

 

           The market value of your home is not:

1.  What you have in the home

2.  What you need out of it

3.  What you want

4.  What it appraised for

5.  What you heard your neighbor’s home sold for

6.  What the tax office says it’s worth

7.  How much it’s insured for

8.  Based on prices of homes where you are moving

9.  What Zillow says it’s worth

 

The true market value of your home is...what a buyer is willing to pay for the property based on the number of competing homes:

1.  Based on today’s market

2.  Based on today’s competition

3.  Based on today’s financing

4.  Based on today’s economic conditions

5.  Based on the buyer’s perception on the condition of the property

6.  Based on the location

7.  Based on normal marketing time

 

Properties that sell in today’s market:

On a scale of 1-10 (“10” are the ones that are selling)  How can your property be a “10”?

1.  By improving the condition dramatically

2.  By offering good terms

3.  By improving the way the home shows

4.  By adjusting the price

 

As you advance through your marketing period, you may observe some warnings:

Realtor elimination– if the Realtors are not previewing it and do not show it, they are eliminating it

Buyers elimination– if it is being shown with no results, the buyers are finding better properties to buy and they are eliminating the property

 

If I Sleep Here...

Ladies and gentlemen, this weather is NOT affecting the real estate world in the Triad!  We are busy busy busy with both buyers and sellers.  Negotiations are happening, homes are being listed, showing appointments are being made.  It's pure chaos, but oh how we love it!

So, I'm considering sleeping in the office tonight to catch up on paperwork.  Just kidding -- but I sure could use the extra hours! 

I feel the need to post a disclaimer, though... sellers, just because you read this, do not think it means you can price up, be inflexible in negotiations, etc.  Savvy buyers know that the next few weeks will see inventory skyrocket, so take advantage of that bird in hand!  Listen to your trusted advisor as they counsel you, and don't take it personally when they give you "just the facts ma'am".  We are basing what we are advising on experience, and that is priceless!

Thank You, Heather!

A fellow agent had a GREAT post this am on her blog (TheTriadAgent.com), and it absolutely hit home with me. I have so many times suggested to folks new to the area "you know, if you like this home because of the commute, maybe you shoould drive it one morning at 8am...". Definitely a point to ponder!

Ultimately... None of that Matters!

Lisa and I recently had a wonderful Clemmons home go under contract. Without going into specifics, I'll just say that the contract price is significantly lower than what we expected. Even now, I can't quite grasp how it is selling for what it is. It's just defying the supposed data and market trends.

So why did the sellers take the offer?  When I first saw the offer, it was even hard for me, as the professional, to be objective. I thought "yeah, right"!  I had gotten word from another agent that an additional offer was coming, so we were confident we could wait for that one and it would be much better. The next day it came in, and it was within striking distance of the first one. What???  Then, I got a verbal offer from an out of area agent. I usually don't even listen to verbals but was thinking someone would have to throw us a bone. Guess what?  It was between the first two!

My point in saying all of this is that we can analyze, strategize, and categorize all we want, but BUYERS determine value. You must work with your Realtor to determine the most beneficial market value and aggressively market, but honestly, you are still at the mercy of the market.

So why do I use a Realtor if they aren't even right???". Mr. Consumer, I hear ya I hear ya... that's a different post, but how many unrepresented sellers do you know in this market getting three offers in one week??

Blessed

I have been (trying to) finish up some packaging of some Christmas surprises for my first time buyers (and some sellers!) this year as I have been here at Warren's Gate today... WOW. Lisa and I have been really blessed this year. When we first partnered up in January, we set a goal for ourselves as a team. Even in this down market, we have surpassed that goal. I am not saying that to brag but because I am so truly thankful to my past and present clients, customers, service providers, and fellow agents... without you, and the challenges (some good, some bad!) you bring to the table every day, I would not have a career that I literally LOVE. I am blessed. I get to interact and meet new people every day, I am never in the same old routine day after day, I help people achieve their dreams, I work with other people who truly love what they do (believe me, if they don't... well, they don't last long!), and the possibilities are endless for where our business can go. If my children are sick, I can be with them. If my husband has a ballgame, I can be there. (That isn't to say I'm not carrying on 4 conversations with clients via text and email the whole game, but you get my point!). I have "easy" transactions and I have hard ones, but I learn something new every single day. I'm just blessed. Did I say that already? :-)

Lisa, you are the best. Thank you for enriching my business and my life with your smile, your work ethic, and your laughter (even if it is AT me instead of WITH me). You motivate me not just to work hard but to do it the right way and for the right reasons. My only regret is that we didn't find each other sooner.

So, how can YOU be blessed this year? Did you know rates are a full point lower than they were a year ago? This means you could potentially buy MORE home for the same amount of money you were thinking you would have to pay before you got cold feet due to the media critics. Sellers, did you know your home CAN sell, and even better, at a good price? It IS possible, if you take things in perspective and have your home in top notch shape. Remember, sometimes the blessings are not the dollars at the end of the stay but the enjoyment you got out of it at the end of the day.

Again, I am blessed. Just wanted to share...

WOW Time is FLYING

I can't believe it's been 2 weeks since my past post! I have meant to sit down and write numerous times but have just been soooooo busy... with all the negative news in the media in the housing market, it's hard to believe Lisa and I are this slammed. The news is always right, isn't it?? :-)

Buyers, rates are rising, so hop to it!
Sellers, buyers are looking and more foreclosures are coming, so hop to it!

Everyone have a wonderful and blessed Easter. I thank God for a career that I truly enjoy! And I promise to do better on my posting next week...

What Buyers Want

I just read an interesting article in REALTOR magazine about what buyers want in a home. It hammered home the point that so many sellers today still have a hrd time swallowing... buyers want to feel like they are getting a DEAL. Even if a home is priced below market, they are going to want to negotiate on pricing. They want incentives -- closing cost assistance, HOA dues paid for a year, a home warranty -- everything AND the kitchen sink! They want a home in move in condition. Gone are the days of offering allowances so that buyers could do work themselves, because folks today just don't have time. So, Mr. or Mrs. Seller, what can we do to get more folks looking at your home?

Changes in the Offer to Purchase!

1/1/11 brings many changes to many people in many ways, but in MY business, it brings GOOD change! The standard NC Offer to Purchase has drastically changed, and in my opinion, it's for the better. The following is from Tom Gongaware on At Home in the Carolinas, the Allen Tate Company blog.

"The biggest change facing Buyers, Sellers, and REALTORS® in North Carolina is the form’s introduction of the Buyer’s “Due Diligence” process. During a negotiated due diligence period, the Buyer must complete all of the inspections, surveys, and appraisals typically performed by a diligent Buyer. In addition, the Buyer needs to be satisfied with the documents governing the home, the availability and affordability of insurance for the home, and their own ability to be approved for a mortgage. Should the Buyer not be happy with the investigations…or if they simply change their mind about completing the purchase…the Buyer will be able to unilaterally terminate the contract and be entitled to a return of their earnest money deposit, assuming notice of termination is delivered to the Seller prior to the expiration of the due diligence period. After that expiration date, the Buyer loses their ability to terminate the contract and receive a refund of the earnest money deposit (except in the case of a Seller’s breach) and the power of the contract shifts to the Seller.

The new Offer to Purchase and Contract allows for a negotiated, non-refundable fee to be paid by the Buyer directly to the Seller in exchange for the amount of time associated with the due diligence period. While the “due diligence fee” is not a requirement of the Offer to Purchase and Contract, it will serve as further evidence of the Buyer’s sincerity in pursuing the property. The “due diligence fee” is not refundable to the Buyer except in the case of the Seller’s breach. The fee will serve as a credit to the Buyer should they complete the purchase."

Buyer Expectations

This weekend I had several instances of buyers with unrealistic expectations (all were working with other agents, so I am not talking about any of my folks here!). I hear a lot "the market is down, so they can't expect that price." But guess what? A lot of sellers are educated and are priced for this market already. So, before you lowball just because "it's a down market," please have your agent do a market analysis. You may still choose to lowball, but at least you will recognize that many homes are already priced for THIS market and not for a booming one. If you need a market analysis done and don't have a Realtor, contact me asap!

Why Being a Mom Makes Me a Better Realtor

As I sit here watching my daughter blissfully nap in her swing and await the arrival of my husband and son home from a long day, I can't help but think about how being a mom has changed me. I knew it would change how I planned my daily life and how I spent my money, but I didn't realize that it would change the fundamental ways in which I look at everything, even my job. I have always worked with clients with concerns regarding neighborhoods, schools, etc. Those two things, among others, are important factors for home buyers with children. I have always understood that. I used to get that a certain school was important, or a neighborhood pool, for example, but now I GET IT. The welfare of your children colors every decision you make, from deciding where to eat supper to where to buy a home. We no longer come first, and I wouldn't have it any other way. Being a mom has made me more compassionate, empathetic, and patient (life was simpler when I didn't care so much!), and hopefully my clients will see that I really do GET IT now.

New FHA Guidelines!!!!

This is taken from an email alert sent out by Jennifer Tuttle with Allen Tate Mortgage:

FHA now insures about 30% of all new loans and is nearing the limits of loans they can make based on their capital ratio. In an effort to fix this problem, FHA is going to raise their upfront mortgage insurance premium fees from 1.75% to 2.25%.

This will bring more money into FHA thus meeting their Capital Ratio requirements to continue to lend. They also want to limit the high loan to value financing to borrowers with a 580 credit score; a score under 580 will now require at least a 10% down payment. All of the investors that Allen Tate works with will not purchase a FHA loan with a score below 620 so that change will not affect us. From my conversations with other loan officers in other companies, I don't know of an investor that will go below 620 at this time.

The bottom line... FHA loans, which have been the saving grace for so many folks, are now becoming stricter in their guidelines. This may affect your "borrow-ability"! All the more reason to find a home BEFORE April, when these guidelines take effect. If you have more questions or would like a copy of the new mortgagee letter from FHA, please contact me at Amanda.Shore@allentate.com!!

New Listing in Clemmons!

If you need large rooms, all bedrooms and laundry on second level, and a fabulous neighborhood, check this home out! 6810 Gray Moss Court in Doublegate has multiple living spaces on the main level as well as a beautifully remodeled kitchen with quartz countertops and stainless appliances. The sellers have enjoyed making memories with their growing family here, but they are being relocated... are you in need of somewhere to make some memories? It's 4 bedrooms, 2.1 baths, and just a moment from the heart of Clemmons. View the link to find out more, and visit AmandaShore.com for an appointment.

First Things First

I am often told "I have never bought a house before and I have no idea where to start." If you are in this situation, here are some tips...
Before you even start searching online, making sign calls, driving around neighborhoods, etc., talk to a lender. This could be the bank where you have your checking account, a credit union, the one closest to your office, etc. You can also find many lenders online, but I caution folks (especially first timers!) against finding a lender this way. There are a lot of reasons for this, but to put it simply, you need someone you can go to face to face who will be accountable to you and your agent for present and future business. (My local Allen Tate rep is great... just email jennifer.tuttle@allentate.com).
A lot of times people respond to this advice by saying they want to look around, find a house, and then speak to their lender. Don't do this! Nothing is worse than finding your dream home, making plans, and then realizing you don't qualify for the mortgage needed to purchase it. From that point on, nothing will look as good as that "first love." You may even find out you can afford more than you thought. At least get a pre-qualification so you will have a ballpark figure of what you can afford, and often, this can be done over the phone.
Next, hire a buyer agent. All agents in NC are assumed to work for the seller (even if they have never met the seller), and you need someone on your side, working for you and looking out for your best interests. Buyer agency costs nothing and can save you a ton.
There are many many things you need to know, but with an honest and responsible lender and agent by your side, you are ready to go!

Is it a Deal or Not?

I'm writing today about buyer expectations... I showed property to a man this morning who is, unfortunately, pretty typical of a lot of buyers today. So as not to give away too much, I'll call him Jay. Jay is looking at a home priced (hypothetically) $100,000. From my market analysis, the home is worth $95,000-$100,000... so the list price is pretty dead on. Jay wants to offer $70,000 though, because it will need a roof in the next few years, the trim needs painting, the hardwoods need refinishing, etc. What I couldn't get Jay to understand was that the list price takes those things into account. In other words, if it had a brand new roof, refinished floors, no needed exterior maintenance, etc., it would be listed at a price much higher.

My point in writing about this is really just to emphasize that buyers need to be educated. Our market is definitely being affected right now by the nationwide housing crisis, but that doesn't mean you can buy every home out there for 80% of the list price! Many agents, particularly those with experience, are cautioning their sellers and advising them to price homes right for their condition, so $100,000 may be a good deal... even if that is the list price. The important thing to remember is that not all sellers are out to make a huge profit. This validates further the importance of having an agent (shameless plug!). With so many homes priced under market right now, it is hard to know what is a great investment and what isn't. Your local real estate agent can help you through this process.