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Some homeowners may consider trying to sell their home on without the assistance of a real estate professional, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.
Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?
Where do buyers find the home they actually purchased?
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the same commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000. This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.
Join us on Thursday, November 20th for the RE/MAX SuperCharge event with keynote speaker, Terry Watson. Terry, the “A-ha” guy will speak live from Denver via a stream on RE/MAX University – RE/MAX Realty Specialists and RE/MAX Advantage will be hosting a tailgate and viewing at the Zeus Theatre in Waynesboro! You’ll learn solutions for improving relationships with your clients and receive ingenious advice for working smarter, not harder. Terry Watson was the speaker at the closing session at this year’s BOC convention. In his presentation, “Why Be Normal!” Terry highlights the simple things you can do TODAY to be the person you know you are. Learn why you should never let perfect get in the way of better. It’s a great message for every business person – and your agents and prospects will appreciate you providing it to them.
SUPERCHARGE? WHAT’S THAT?
Think of it as a mega sales rally, recruiting event and motivational shot in the arm – all rolled into a single amazing day of networking and fun! It’s a one-time-only special RE/MAX University production, available online or through TV via Roku box.
WHO IS SPEAKING?
It’s Terry Watson, who rocked the closing session at the 2014 BOC. He’s back to share even more ridiculously effective strategies. Bonus: He does it in the funniest way imaginable!
WHAT WILL HE TALK ABOUT AT SUPERCHARGE?
Normal equals average. Greatness comes from doing things differently.
In an entertaining and eye-opening presentation, keynote speaker Terry Watson – the “A-ha” guy – offers solutions for improving relationships with clients and consumers along with ingenious advice for working smarter, not harder.
ONE TIME ONLY
LIVE on RE/MAX University on November 20 at Noon ET- Be there – WHY BE NORMAL??
– See more at: http://charlottesvillevarealestate.blogspot.com/2014/11/toy-story-4-coming-in-2017.html#sthash.z1D0DV5S.dpuf
Job growth fell short of forecasts in October, but other employment indicators showed modest improvements for the labor market.
U.S. employers added 214,000 jobs last month, the Bureau of Labor Statistics (BLS) reported Friday morning. Economists had expected payrolls would increase by 240,000, a slight decline from September’s preliminary estimate of 248,000 new jobs added.
Meanwhile, the government revised its estimates for payroll growth in August and September, bringing those totals up to 203,000 and 256,000, respectively. With the latest revision to August, job growth has topped 200,000 every month this year except January.
As of the end of October, BLS estimates the national unemployment rate was 5.8 percent, down from 5.9 percent to a new six-year low. Economists had anticipated no change.
Among the nearly nine million Americans counted as unemployed in the government’s survey, an estimated 2.9 million were jobless for more than 27 weeks, down slightly from September. Over the past year, BLS says the number of long-term unemployed has dropped off by 1.1 million.
The number of Americans classified as “marginally attached” to the labor force—defined as those who are not in the labor force but who have sought work in the last year—also fell slightly, dipping to 2.2 million after a jump in September. At the same time, the number of people who gave up looking for work climbed, hitting an estimated 770,000.
Overall, the labor force participation rate nudged up, though it still remains historically low at 62.8 percent.
The drop in the unemployment rate came in the same month that policymakers at the Federal Reserve made the decision to end the central bank’s bond purchasing program that began more than two years ago.
While broader labor indicators (including the U-6 unemployment rate, which figures in marginally attached workers and those employed part-time for economic reasons) still show some slack, the direction of the market may spur the Fed to move its timeline for raising interest rates forward.
“This is a strong report that suggests the first rate hike is coming sooner than many expect,” said Paul Ashworth, chief U.S. economist for Capital Economics. “We expect the Fed to start tightening in March next year.”
The First-time Homebuyer savings accounts got two steps closer to reality in the last few days.
First, on January 29 VAR’s First-Time Homebuyers Savings Plan bill (HB331, introduced by Del. Tag Greason) unanimously passed the Agriculture, Commerce, Technology, and Natural Resources subcommittee.
Then on February 3, it passed the House Appropriations Committee — again, unanimously. Now it heads to the floor of the House for a full vote. If it passes there, the Senate will then act on it and hopefully it will be sent to Governor McAuliffe for his signature.
The bill would establish First-Time Homebuyer Savings Accounts allowing a contributor to deposit up to $50,000 principal into a banking or investment account, and have all the earnings on that account be free of state taxes. It could then be used for a down payment and closing costs on a first home.
The unanimous support the bill received on both the subcommittee and committee levels bodes well for its future — and for future Virginia homebuyers.
First-time homebuyer savings plans. Establishes first-time home buyer savings accounts that are to be used for saving funds for the purchase of homes by first-time home buyers. Moneys in the account are required to be used solely for the down payment and closing costs for the purchase of a home by a first-time home buyer. The bill establishes an individual income tax subtraction for income earned on contributions to the account. However, if moneys are withdrawn from the account for purposes other than to pay eligible costs, any income previously subtracted would be subject to recapture by the Commonwealth and a five percent penalty would be imposed. There would be no recapture and addition to taxable income if the amounts withdrawn were (i) withdrawn because of the death or disability of the account beneficiary, (ii) a disbursement of assets pursuant to a filing for protection under federal bankruptcy laws, or (iii) transferred to another first-time home buyer savings account.
The bill limits the amount of principal that can be contributed to any account to $50,000 and limits the total amount that can be retained in an account at any time to $150,000. Persons would be allowed to contribute only cash or marketable securities to a first-time home buyer savings account.
There will always be plenty of foreclosures on the market across the country. Though the rate of foreclosures has been dropping annually for the past few years, foreclosed homes are in no danger of becoming extinct.
Most of these homes are priced below market value, making them a smart buy. But with great buying power, comes great responsibility. Here’s what you should know before ma
king the big investment.
Before making any offers, set a baseline for what you want in a residential property. Include what you cannot live without. This decision will be influenced by your intention for the property. If you are planning to flip the house and make a profit, you might be in the market for a residence that’s more of a project.
If you are buying a home as a rental, it might be wise to look for houses with multiple bedrooms to accommodate more renters. If purchasing a house to live in and your spouse wants their own bathroom sink, your real estate search should accommodate that. Knowing what you want will help guide your search and you will know which properties to look at and which to avoid.
It’s easy to get caught up in making offers and counter-offers, so know how much money you are willing to invest before playing the game. Though the market can be hard to predict, you should also assess the current value of the property and its potential for profitability over time.
A house you are looking to flip in three months will put you in a much different market value range than one you intend to rent out for three years before selling. Here is a helpful resource to help you estimate the market value of a home.
While purchasing a foreclosure can be a savvy financial investment, make sure you’re investing through a reputable source. Times are a-changing in the real estate market and nowadays it’s not necessary to go directly through a realtor to purchase a home.
Instead, there are real estate sites online that allow you to bid on houses from the comfort of your own sofa. While sites like Auction.com are credible, trustworthy and established, other sites selling homes via online auctions may be less reputable or just too fresh to trust. It’s prudent to beware of any retailer (internet or otherwise), but consider that thousands of folks just like you bid and buy homes on the internet every month.
More important, perhaps, than what you want in a home is what you can work with. If you aren’t a very good handyman, or just lack real estate experience and confidence, be realistic by looking for houses within your working abilities. Housing projects can be great ways to learn valuable, practical skills, but don’t get in over your head and saddle yourself with projects that will cost you more than you bargained for.
Any RE/MAX Realty Specialists agent can help you buy, rent, sell, or flip foreclosure properties. No one sells more real estate than RE/MAX and the agents at RE/MAX Realty Specialists have been trained in any distressed property sale: both short sales and foreclosures. We even have a couple of agents that list foreclosure properties! Contact us today to start buying foreclosure properties!
Applying for and getting a mortgage is one of the most daunting obstacles to overcome when shopping for a home. The process can be especially scary and confusing for first timers who may be unfamiliar with the various programs out there, or the advantages and disadvantages of each. Here is a quick rundown of the types of mortgages available, to help decide which may be the best option for your own situation.
This is the most common type of mortgage these days, and although it comes in a variety of lengths, they typically run either 15 or 30 years. Generally, banks want a sizable down payment and a good credit score, both of which can make them difficult to get for a first-time buyer. The typical down payment is 20% on one of these loans, but now that lending markets are beginning to loosen a bit, I have seen mortgages advertised with as little as 5% down.
With a traditional mortgage, the lower your down payment is, the higher credit score the bank will typically want. Every bank is different, but if a FICO score of 680 is required if you put 20% down, a 740 might be expected with just 5% upfront.
Another decision to make is the time frame. A 15-year mortgage carries with it a higher monthly payment, but you’ll pay a lot less in interest over the life of the loan. For example, a $200,000 loan at 4.5% would have monthly payments of $1,410 and $1,013 for 15- and 30-year terms, respectively. However, over the life of the loan, the 15-year option would save you more than $110,000 in interest.
Similar to fixed rate in terms of qualifications, adjustable-rate loans can be a good choice in certain economic climates. Basically, it means that your interest rate will change over time, and will be tied to an index that reflects how much it costs the lender to borrow money. This can be beneficial when rates are at cyclical highs, but that is certainly not the case now. If you can lock in a low rate for the life of the loan, why take the chance with an uncertain interest rate?
Even though rates shot up in the latter half of 2013, they are still relatively low on a historical basis. Consider the highs and lows in the following chart for a better idea of when an adjustable-rate mortgage might be a good idea. I would say that once the average 30-year rate moves close to 6% (maybe a few years down the road), adjustable-rate mortgages may be worth a look.
The Federal Housing Administration’s lending standards are designed to allow buyers who either don’t have a lot of cash to put down, or don’t have a high enough credit score to be able to buy a home. This makes FHA loans very popular among first-time buyers. As of this writing, the FHA requires just 3.5% down and a FICO score of 580, or even lower if the down payment is higher (although specific lenders may have slightly higher requirements). This flexibility does not come cheap, and there are several costs to be aware of before applying for an FHA mortgage.
The FHA charges a 1.75% upfront fee when issuing a loan, in addition to requiring borrowers to pay FHA mortgage insurance as long as they have the loan. This is charged at an annual rate of 1.35% of the average loan balance.
So, on our $200,000 example, this means an upfront fee of $3,500 plus a mortgage insurance payment of $225. This adds more than 20% to the monthly principal and interest payment, a significant expense.
The U.S. Department of Agriculture guarantees mortgages offered to buyers of homes in rural areas. Just like FHA loans, they have relatively easy qualifications when compared with traditional loans, and offer up to 100% financing. However, you must purchase in a rural area as defined by the USDA, and be under the maximum income requirement for the particular county you’re interested in.
If you or your spouse ever served in the armed forces, a VA loan could be a very attractive option for you. VA loans are available with no down payment whatsoever, and have similar credit requirements as FHA loans. Unlike FHA loans, they require no mortgage insurance, making them a very attractive option to those who qualify.
Foolish final thoughts
If you can afford the down payment and have the credit necessary to obtain a good interest rate, it almost always makes more sense to get a traditional mortgage.
However, the FHA has been increasing its fees and lending standards for a few years now, and we are already seeing 5% down payment traditional mortgages designed to compete with the FHA. As the economy improves and credit loosens a bit more, we’ll begin to see a shift away from FHA loans, which seems to be the government’s goal. In the meantime, if it’s all you can qualify for, an FHA loan still may be cheaper than paying rent.
Author: Rob Alley
With a decrease in the amount of Homes Listed For Sale in the Charlottesville VA area, some buyers are asking to see homes considered “Fixer Uppers.” There is a tremendous opportunity to buy a home that needs work, get it at a great price and be able to fix it the way you want. The problem is a lot of Buyers do not have a realistic expectation of what a “fixer upper is, until they start seeing some. The second problem is many buyers can not estimate properly what repairs cost. A home that needs the most cosmetic work, can cost less than a better looking home that needs more repairs such as roof, furnace, electric or plumbing.
What you can see is easy to estimate such as paint, carpets and cosmetics. It is what you can not see between the walls that should scare you.
A “fixer upper” is NOT for every buyer. They have to have the time, resources, ability to get a mortgage that will allow you to buy a home in need of work and lastly have the ability to see through the work and imagine what the home will look like finished.
Buyers should know that All Agents are nNOT created equal and every buyer or seller should take the time to hire the BEST not just the biggest Agent or Company. It is important to Hire the BEST Agent. In Charlottesville that could be RE/MAX Realty Specialists.
Our TOP TIPS FOR BUYING A FIXER UPPER
1. CHOOSING THE RIGHT BUYER BROKER: As a home Buyer in this market you need every advantage you can to get find, buy and close on your DREAM HOME. It starts with choosing the right agent – the Realtors at RE/MAX Realty Specialists have been trained and many have been flipping properties themselves. They know what to look for and properly evaluate a fixer upper.
a. Using a Full time agent whose sole job is in Real Estate – RE/MAX Realty Specialists have a large number of agents that work full time.
b. Using a Full service agent who will guide you through each step of the BUYING process. Discount brokers often equal discount services, RE/MAX Realty Specialists are full service, with a primary vision of providing better service than any other Charlottesville Real Estate Company or Agent
c. Using a Local agent who knows your neighborhood and is readily available when you need them is a must. Out of town agents can leave you high and dry in your time of need.
d. Using a well experienced Buyer Agent can give you the advantages you need when Buying your home. Not all agents are created equal. Choose only the best..
2. GET PRE-QUALIFIED: Before even looking at a home you should get pre-approved for a loan. Few Sellers will look at your offer without it. Meet with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any mortgages that you may qualify for. You should then tell them you are looking at bank owned homes so they can provide you with a list of what condition the property needs to be in for you to be able to get a mortgage. RE/MAX Realty Specialists has partnered with Movement Mortgage. You can get prequalified fast, free, and online by clicking here.
IN CONCLUSION: There is a lot of behind the scenes work going on with the purchase of a home. If you did not notice most of these steps, I did a great job. With the decrease in Listings, there is pressure on Agents to provide more service. For agents who have been providing a great service to their clients throughout the last 4-5 years they are being rewarded as home sellers and buyers talk, they let each other know who did the great job or who dropped the ball. As you see it is no accident a home sells. It is through the hard work of the agent.
As a consumer you have a choice. Avoid the thinking that bigger is better. You deserve the Best and that is having some one guide you through each step of the Buying process. If you are looking to purchase a property in Charlottesville, you can choose RE/MAX Realty Specialists. We strive to offer the best in personal and professional service through EACH step of the BUYING process
We at RE/MAX Realty Specialists pride ourselves with being on the cutting edge of technology. As such, we have redesigned our website to make it more user friendly, provide more information, and give our customers a global MLS search. The new website will provide consumers around the world with centralized access to all property listings.
The new RE/MAX Realty Specialists website features:
To view our new website, CLICK HERE.
Here is a screenshot of the new website: