Over Pricing Who does It Help?
It seems as if overpriced homes are everywhere here in the lakes area these days. They are beginning to dominate the Q&A sections of many real estate web sites.
One of the great things about having a real estate blog is that I get to see much of what my customers are thinking and doing in their efforts to buy a home or sell a home. Just the other day, I saw the following question that was entered into a search engine which pointed the searcher to my site:
How do you make an offer on a home that is overpriced?
While this seems like a simple question that should have a very simple answer, it made me realize that this home buyer, like many soon-to-be home buyers, does not understand the different types of home sellers that exist in today’s real estate market here in the lakes area.
Understanding Home Sellers
With nearly 60% of the homes on the Brainerd market failing to sell, it is important for a prospective home buyer to understand that there are home sellers out there with many different levels of motivation. Choosing the sellers with the highest motivation(that’s what my job is) will allow the buyer to make a safe purchase in today’s crazy real estate market.
I like to classify seller motivation levels in three distinctly different categories:
- Considering Selling – This homeowner does not really need to sell the home. If they can get their price, they will sell. If not, they will stay in their home. This type of homeowner will not sell their home in today’s market, so home buyers who actually view the property are just wasting time. This is where you will find many an overpriced home.
- Want to Sell – This homeowner has a real need to sell, but has not priced the home correctly for one of many possible reasons. Often times, this homeowner feels as if they have plenty of time to sell, so they are “starting high and will lower the price if it does not sell.” Due to the extreme glut of homes on the market, this homeowner will most likely join the ranks of the 80% “Failed To Sell” group. This is yet another example of where to find overpriced homes.
- Must Sell – This homeowner absolutely must sell the home, and the asking price of the home for sale demonstrates this. It is the best buy in its category, and all realistic home buyers view the house. This home has an excellent chance of selling, even in a very difficult real estate market.
Make the Right Choice
Whenever you buy or sell your home here in the lakes area you may be like all of the other people out there, in thinking that you don’t need a real estate agent. Most people, who buy or sell homes, generally think that a real estate agent is a waste of money. Those who choose to buy a new lake home, think that real estate agents only add to the cost of purchasing the home.
What most people aren’t aware of is the fact that real estate agents are normally paid by the seller, not by the buyer. As a buyer, you’ll get to work with a professional real estate agent without really having to pay for it yourself.
A lot of local agents out there may work with both buyers and sellers, although most specialize in working with either the buyer or the seller. If you are buying a home, make sure that the agent you choose has prior experience of working with buyers.
You can also make a list of real estate agents that you can interview based on referrals from friends, lenders, and even family. Lender referrals are normally a great choice as most lenders have worked with their recommendations in the past and both are already familiar with each other. Choosing a lenders referral can also prevent you from encountering any obstacles or surprises.
When you interview a real estate agent, make sure that you have the agent explain his fees. This way, you’ll know exactly how much he will be getting from the purchase. You should also find out how much experience he has in the field, and how long he has been working with real estate.
If you are buying a home, you should make sure that the agent works with buyers. If you happen to be selling your home, then you’ll want to make sure that the agent works with sellers. Agents that are dedicated to one or the other are the best to choose, as they will have more experience than agents who work with both buyers and sellers.
Find a real estate agent is an easy task – providing you know what to look for. If you take things one step at a time and carefully make a decision, chances are that you’ll end up with an agent like me who has the experience you want. You should always be careful when you choose, and never rush the process. Real estate agents are easy to find, although finding one who fits your needs and has your budget in mind is a little tougher to locate. When you make that final decision, you should always choose an agent who has your best interest in mind – and isn’t just after the money.
So tell your friends and relatives that you “know” the guy to talk to and have them contact me. It is going to be a good solid year for real estate here in the Brainerd area.
The current administration wants too!
Photo taken by D.M Strong
Raising down payment requirements now is like throwing a life-preserver to a drowned man. What the lakes area housing market needs now is STIMULUS. For some reason, they’ve figured that out as far as the economy is concerned but not regarding the housing market. Underwriting standards need to be raised when values are rising NOT when they are falling! Two more things.
1. Fannie Mae allowed 95% financing back in the 80′s, maybe even before that. FHA was completely self funded for decades while allowing 2.75% down.
2. This really gets my goat - If a PMI company is willing to insure loans to 95%, what right does the government have to not allow that?
This government has gotten way out of hand. All they have accomplished with all the new regulations is to have completely eliminated consumer choice. It concerns me that so few people recognize this.
Smiles all Around!!
I have spent the last week or so visiting with local business owners here in the Brainerd Lakes area and was pleasantly surprised to hear how many of them are coming off of a ”much better” year than they had the previous two years.
Having the local merchants feeling good about their business’s is such a positive mind-set heading into what will hopefully be a great spring and summer all around our area..
The Real Estate market here in the Lakes area is rebounding some from a colder than normal winter with signs of buyers and sellers getting back into the game.
I think with the added customer confidence that is showing and with some timely good press along with a little mouth to mouth of “talking up the market” that should be all it takes to make 2011 a good solid year of recovery.
Why is it so cold??
You might already know that the Earth travels around the Sun, but did you know that when it does, the Earth is actually tilted? Just like a person can lean, so does the Earth!
During its summer months, the north part of the world is tilted toward the sun, but during the winter, it is tilted away, making it harder for sunlight to reach it. When the sun shines, it gives off a lot of energy in the form of heat.
The more a place is tilted( and we all know that Brainerd is ) away from the Sun, the chillier it will get!
It’s all about the angle of the tilt! It might seem like it should be colder when the Earth is farthest from the Sun, but the Earth is actually as close to the Sun as it gets when the northern half of the planet has winter! I am not sure how tilting helps or hurts the walleye fishing I only know I am tired of the cold and wish all things would “level-out” and start thawing this winter wonderland soon!
What’s the difference??
One of the best descriptions I have found ..posted by fellow blogger Martha Brown
A Short Sale is a home where the owners owe more on the property than todays market will give them.
They may need to sell and so they put it on the market at today’s market value and then when they receive an offer they send it to their bank in hopes of the bank accepting at a price that is ‘short’ of the current mortgage amount. The process can be a long one and certainly requires a listing agent who is familiar with working short sales, a buyer who has patience as a bank decides if this is a workable solution for them and sellers who will protect the property while the process takes place.
A foreclosure is a home where the owners no longer own the property and the bank has foreclosed on and are now the owners.
Depending on the owners and the bank the condition can be anywhere from OK to deplorable. You see…many homeowners who go into foreclosure are angry over doing so and so they may take their inability to stay or work things out with their bank on the house. Appliances may be gone, carpets torn up, electrical fixtures gone or worse. Sometimes months go by between the time a homeowner moves out and a bank takes over and without electric /heat or air working floods happen, pipes break, mold takes over. On the other side of the coin are those banks who actually work on the homes they take back and fix them to some degree. So bottom line is a foreclosure can come in all kinds of conditions but the process to purchase is usually much shorter than a short sale.
The Secret is Knowning your Market
Real estate is local, that has been a mantra here in the Brainerd Lakes area even as I try to learn about national real estate trends and issues. While macro economic issues affect the general market, the pricing of homes just one lake or block apart for essentially the same sized home can be miles apart.The need for a great “local”appraiser with lots of local knowledge is more important than ever for a real estate agent like myself or appraiser to truly deliver exceptional service, the lesson is I have to know the market especially well in these tough times here in the lakes area. Otherwise there will be lots of work for few sales until lending restrictions lighten up.
The bad news is that even appraisers and local real estate agents are having a harder time discerning a home’s worth. The old rule of thumb, that houses appreciated 3 to 5 percent annually, no longer applies, although there are areas where home values have remained stable.
Here’s the shameless plug If you need,(or know anyone else) that needs help with buying or selling of any type of property here in the lakes area please call or refer them to contact me
Great day today
Just met with new clients..just recieved two referrals and was involved in two social media webinars..I really do like to be busy.
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