Top 5 Reasons You Should Not For Sale By Owner

Top 5 Reasons You Should Not For Sale By Owner

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 51% on the internet
  • 34% from a Real Estate Agent
  • 9% from a yard sign
  • 1% from newspapers

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.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

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 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

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 estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 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.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, let’s get together and discuss the options available in your market today.

Listing in the Winter Attracts More Serious Buyers

Listing in the Winter Attracts More Serious Buyers

A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close.

It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest season for real estate. What is surprising, though, is that listing during the winter came in second!

“Among spring listings, 18.7 percent of homes fetched above asking, with winter listings not far behind at 17.5 percent. While 48.0 percent of homes listed in spring sold within 30 days, 46.2 percent of homes in winter did the same.”

The study goes on to say that:

“Buyers [in the winter] often need to move, so they’re much less likely to make a lowball offer and they’ll often want to close quickly — two things that can make the sale much smoother.” 

Bottom Line

If you are debating listing your home for sale in 2017, keep in mind that the spring is when most other homeowners will decide to list their homes as well. Listing your home this winter will ensure that you have the best exposure to the serious buyers who are out looking now!

The study used the astronomical seasons to determine which season the listing date fell into (Winter: Dec. 21 – Mar. 20; Spring: Mar. 21 – June 20; Summer: June 21 – Sept 21; Autumn: Sept 21 – Dec. 20).

Homeownership Offers Stability & Wealth Creation

Homeownership Offers Stability & Wealth Creation

The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:

  1. They want the opportunity to build equity.
  2. They want a stable and safe environment.

Building Equity

In a recent article by The Mortgage Reports, they report that “buying and owning a home is the essence of ‘The American Dream.’ Each month, your housing payments go toward owning your home instead of renting it; building your personal wealth and assets instead of someone else’s.

History has shown that homeownership is a clear path to wealth-building, with homeowners boasting a net worth [that is] multiples higher than the net worth of renters.”  

Family Stability 

Does owning your home really create a more stable environment for your family?

survey of property managers conducted by rent.com disclosed two reasons tenants should feel less stable with their housing situation:

  • 68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%.
  • 53% of property managers said that they were more likely to bring in a new tenant at a higher rate than to negotiate and renew a lease with a current tenant they already know.

We can see from these survey results that renting will provide anything but a stable environment in the near future.

Bottom Line

Homeowners enjoy a more stable environment, and at the same time are given the opportunity to build their family’s net worth.

Buyer Demand Is Outpacing the Supply of Homes for Sale

Buyer Demand Is Outpacing the Supply of Homes for Sale

The price of any item is determined by the supply of that item, as well as the market demand. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.

Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

Buyer Demand

The map below was created after asking the question: “How would you rate buyer traffic in your area?”

Buyer Demand Is Outpacing the Supply of Homes for Sale | MyKCM

The darker the blue, the stronger the demand for homes in that area. Only six states had a weak demand level.

Seller Supply

The Index also asked: “How would you rate seller traffic in your area?”

As you can see from the map below, the majority of the country has weak Seller Traffic, meaning there are far fewer homes on the market than what is needed to satisfy the buyers who are out looking for their dream homes.

Buyer Demand Is Outpacing the Supply of Homes for Sale | MyKCM

Bottom Line

Looking at the maps above, it is not hard to see why prices are appreciating in many areas of the country. Until the supply of homes for sale starts to meet the buyer demand, prices will continue to increase. If you are debating listing your home for sale, let’s get together to help you capitalize on the demand in the market now!

 

Love it or List it

Love It or List it is a home design TV show currently on HGTV. If you have ever watched it you would know the show is designed to help homeowners choose between keeping their newly renovated home or to buy a different home. Have you ever considered such a challenge?

Reconsider your home and what you love and what you wish you could change. You can draw a simple two column chart labeled, “Love it” or “List it”. First of all, do you love your location? Do you wish you could live in a different area of town, nearer to your child’s school, or your work? Obviously changing the location of your current home is very impractical. If living in a different neighborhood is important to you, make a check in the “List it” Column. Otherwise, if you love your location, check in the “Love it” Column.

Is your home big enough? Or too big? Adding an addition to a home is often a good way to improve your home for your needs. But practicality is depending on lot size, floor plan, budget, and vision. If you need more room for a growing family you can reinvent spaces too. For example, finishing the basement with egress windows for an extra bedroom. If there is no room to reinvent or you simply have too big of a house, consider checking in the “List it” column.

What current need isn’t being met in your house? Do you need main floor laundry? Or a place for coats and boots so they don’t litter the living room, possibly a garage? Explore ideas for how this could be added. Sometimes closets you have in your home already could be set up for laundry for a couple hundred dollars. But what about a mud room? Depending on your home and the space you have, this might mean an addition, or not possible at all. Reconsider how valuable it would be, whatever your need, and the difficulty/expense of implementing it in your own home. If you feel it isn’t a possibly to add to your home, put a check in the “List it” Column.

What about that layout? Do you dream of a open concept floor plan? Or a master bath? Sometimes a wall knock out can open up an entire home. Figure out what can be done to accomplish your dreams. And decide whether you feel it is feasible or not. Don’t forget to check the column that applies to your decision.

How do you like the style of your home? Floors, cabinets, doors? If you love your home but just wish it was more modern, go for the upgrades! If cabinets scream 90’s with golden blonde wood, you can ditch them all together, paint or stain them. Sometimes just new counter top, cabinet hardware and new flooring can modernize your kitchen while keeping your blonde cabinets. Install new paneled doors and replace your golden door knobs with oil rubbed bronze. These upgrades don’t have to break the bank and can be done over time as your budget allows. If these type of upgrades are all you need to Love It, then put a check in the “Love it” column.

Continue to do this for all of your needs/wants. You might find that your home just needs a few upgrades or that your home doesn’t work for you anymore and it is time to List It.


If you think it is time to List your home and find one that better fits your needs, Give me a call! Angie Uttecht 605-350-2553

 

 

 

 

Maybe Someday….

Image result for someday quotes

Remember the first time you lived away from your parents? You likely lived in a small apartment or in a dorm room. It usually doesn’t take very long of writing rent checks to realize that you would like to own a home, someday.

Years go by and you still don’t have a down payment. Your credit still isn’t high enough.

But when the time is right, when the stars align, someday, you will buy a house.

You find a house that seems just right, in a great neighborhood, great price, it is perfect, but…  You still don’t have a down payment? 

That’s okay. The time just isn’t right for you. You just got to wait until the time is right.


Here is the problem. Time alone doesn’t make you more eligible for home ownership.

It does, however, take time to accomplish down payment and credit score goals. Don’t waist the following years waiting for it to happen on its own. Be proactive in your goals.

  1. Find out what you can afford. You can always buy cheaper but you must always stay in a comfortable range. Use this tool to help. http://acerealty.net/buying/affordability-calculator/
  2. Calculate 10% of your price point. For an example, if you figure you can afford a $100,000 house you should be making at least $2600/month. You should start to save $10,000 for a down payment.
  3. Make a Savings Plan. Set aside 10% of your paycheck a week before you pay your bills. You more than likely will find that you can live on 90% of your income just fine. Do you know how long it will take to save $10,000 at that rate of $260/month? 3 Years and 2 Months. If you can save more than that, great! The sooner you will be ready. Can’t save 10% a month? Then you need to be looking into cheaper priced houses.
    Your numbers will actually look very similar no matter what price range you are in. If you are buying a house that is within the affordability calculator suggestion, and save 10% of your monthly income, you should have enough in 3 years and 2 months for the down payment.
  4. Get your credit score up! Here are some suggestions right from FICO.
    http://www.myfico.com/crediteducation/improveyourscore.aspx

What is easy to do is also easy not to do — Jim Rohn


When you are ready for the next step of shopping for a house, contact me! I would love to help.

Angie Uttecht 605-350-2553

It’s Not an Investment

Scrolling through your news feed, you might have noticed a couple articles here or there that states “buying a home is not an investment” or that “home ownership is not part of the American Dream anymore”.

It is very good to broaden your thoughts and challenge what you know to be true. But lets look into the points that are made on these articles and think it through for someone considering buying in our market, Huron, SD.

Let me summarize these articles for you.

Investments make you money, not cost you money.

 

But isn’t it true that if you were to invest in the stock market, it would actually cost you money? Often when investing you would contribute monthly, even. What’s the difference?  You will not find an investment that doesn’t cost you money. The very definition of investment is “The action or process of investing money for profit or material result.”

After cost of maintenance you will end up paying more than renting.

 

This of course is different for every single house purchase. But if you buy a house in disrepair you can get a good deal on it!

Lets look at an actual situation that happened in Huron recently.

A landlord bought a house for $29,000. It looked really bad. The siding was falling off, it was dirty, had a bad central air unit, broken windows, etc. The landlord puts less than $4,000 into the house and 2 months later had tenants renting it for $650/month.

Hypothetically, the tenant could have bought the house and fixed it up. If they did that they would only have to pay $250 a month instead. That would have been a savings of $400 a month.  Now I’m sure the landlord will have to go in and fix things on occasion. $100 here, $200 there. Over 5 Years how much do you think the maintenance would cost? Over 24,000? Of course not! But that is the break even point.

If you over pay for a house that needs a lot of work, it is possibly a bad investment. But realistically, you will pay less for a house you own then a house you rent in the Huron Area.

Who wants to go to jail for 30 years? You can be mobile and nimble if you rent.

This is an actual statement pulled from an anti-home buying article. This is very misleading. Signing up for a 30-year mortgage in no way obligates you to stay in a house for 30 years. It is just a payment plan that guarantees your interest rate for 30-years, and if paid consistently every month, it will be the end of your mortgage.  That is a very long time, so please see attached inspirational quote by Earl Nightingale. If during this time your home needs change you can always sell and buy somewhere else.

Image result for time will pass anyway quote

 

 

 

How to Stop Worrying & Start Living!

The title of this post has been borrowed from Dale Carnegie’s book of the same name and all of these quotes are from his books. 

Many many people live their entire life without ever owning a home because fear got the best of them. The intentions here are not to push you into doing something you don’t want to do, but to nudge you to actually do the things you have always wanted to do. Read these quotes and apply them to your life in anyway that helps.

One of the worst features about worrying is that it destroys our ability to concentrate. When we worry, our minds jump here and there and everywhere, and we lose all power of decision. However, when we force ourselves to face the worst and accept it mentally, we then eliminate all those vague imaginings and put ourselves in a position in which we are able to concentrate on our problem.


Take a chance! All life is a chance. The man who goes farthest is generally the one who is willing to do and dare.


One of the most tragic things I know about human nature is that all of us tend to put off living. We are all dreaming of some magical rose garden over the horizon instead of enjoying the roses that are blooming outside our windows today.


 

If you are not in the process of becoming the person you want to be, you are automatically engaged in becoming the person you don’t want to be.

 

 

The American Dream

Have you thought much about your goals and dreams lately? Where would you like to be in 5 years?  Take a moment and actually think about that.

Would you be happy if you were in the same exact spot, but 5 years older? If not, what would you like to see change? Would you like a better job? Would you like a better home?

Why not strive for it? We live in a great country. And if you work hard, are determined, and have initiative you can achieve anything. That is the American Dream.

No matter what that dream is, whether it is home-ownership, having a successful business, or retiring in Florida, you can start your path there today.

Here are a couple reasons Home-ownership is part of the American Dream, and it can be part of your dream too.

  • It doesn’t matter how old you are. As long as you are an adult, finances permitting, you can buy a house.
  • Financing makes home-ownership more realistic for the common person.
  • You cannot be kicked out of a house you own, as long as you make the payments you will have stability.
  • Owning a home is like a savings plan. You will build equity over the years, to cash out of or to pass on as an inheritance.
  • You make your rules. You can have pets, or not. Paint your room whatever color you like, change whatever you want, and play the drums as loud as you can.
  • Rent prices will likely rise but your fixed mortgage will not.
  • Someday the house will be paid in full. No more mortgage!

Here are a couple steps to get going in the right direction.

  1. Start Saving – You will need a down-payment. If you don’t have any extra monthly income to save, cut back on what’s unnecessary. Stop buying things, and start selling things. Get rid of cable. Drive around an older, cheaper car. Be creative and you will find some money to tuck away.
  2. Build your Credit – Keeping a Credit Card paid off, and having a contract cell phone will help build credit if you have none. But don’t fall trap and get into debt. That will hurt your chances of qualifying for a loan.
  3. Build Relationships – It’s never too early to start talking with a loan officer and a real estate agent about your goals. Building good relationships with these people can benefit you greatly. A loan officer can give you more specifics on what you need to qualify and can alert you to lower interest rates or changes in loaning guidelines that will affect you, while a Realtor will be able to alert you to a particularly good deal that comes on the market.

If you would like to start the conversation of home-ownership with a Realtor, feel free to contact me. Angie Uttecht 605-350-2553