Wednesday, April 11, 2012
Tuesday, April 10, 2012
HomeGain Survey Finds Home Sellers Fare 50% Better in Getting Their Homes Sold Using a REALTOR® Than Selling On Their Own
HomeGain’s For Sale By Owner (FSBO) vs. REALTOR® survey reveals home sellers’ success rates and satisfaction. Home sellers have greater success and higher satisfaction with the home sale process using a REALTOR® than going FSBO.
HomeGain surveyed over 1,000 homeowners asking whether they used a REALTOR® to sell their home or whether they attempted to sell it themselves. Eighty-three percent said they used a REALTOR® to sell their home and 17 percent said they tried to sell their home on their own.
Fifty-nine percent of home owners that used a REALTOR® to sell their home were successful vs. 39 percent of FSBO’s, reflecting a 50 percent higher closing rate for those home sellers using a REALTOR®.
Eighty-one percent of homeowners that used a REALTOR® to try and sell their homes said they would use a REALTOR® again for their real estate needs.
Seventy-one percent of FSBOs who managed to sell their homes on their own said they would try and sell their home on their own again.
“It is especially striking that homeowners fare significantly better in selling their homes using a REALTOR® than selling on their own.” said Louis Cammarosano, General Manager of HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”
Twenty-four percent of FSBOs eventually decided to enlist the aid of a REALTOR® to help sell their homes.
The survey was conducted from February 7-15, 2011.
Read Full Story at HomeGain.
HomeGain surveyed over 1,000 homeowners asking whether they used a REALTOR® to sell their home or whether they attempted to sell it themselves. Eighty-three percent said they used a REALTOR® to sell their home and 17 percent said they tried to sell their home on their own.
Fifty-nine percent of home owners that used a REALTOR® to sell their home were successful vs. 39 percent of FSBO’s, reflecting a 50 percent higher closing rate for those home sellers using a REALTOR®.
Eighty-one percent of homeowners that used a REALTOR® to try and sell their homes said they would use a REALTOR® again for their real estate needs.
Seventy-one percent of FSBOs who managed to sell their homes on their own said they would try and sell their home on their own again.
“It is especially striking that homeowners fare significantly better in selling their homes using a REALTOR® than selling on their own.” said Louis Cammarosano, General Manager of HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”
Twenty-four percent of FSBOs eventually decided to enlist the aid of a REALTOR® to help sell their homes.
The survey was conducted from February 7-15, 2011.
Read Full Story at HomeGain.
Thursday, April 5, 2012
Sellers: 6 disclosures you must make, or it could cost you
What you don't say could come back to haunt you, in the form of blown sales or lawsuits.
These days, the trend among cash-strapped home sellers seems to be to say less in hopes of getting more at closing. But in the long run, this less-than-full disclosure can prove costly.Lawsuits stemming from nondisclosure of a property's problems are becoming a bigger issue, according to respondents in the National Association of Realtors 2011 Legal Scan survey. Of the agents who responded, about 75% ranked this issue among their "top three current and future issues."
While the rule with homebuying was once "caveat emptor," or "buyer beware," an increasing number of sellers are finding themselves on the hook for nondisclosure.
"I think a lot of sellers don't have a full understanding of what the seller disclosure statement means when they fill it out," says Illinois home inspector Jack McGraw of Jacks Home Services. "You can often tell there has been work done" on a house, he says, but these fixes don't show up anywhere on paper.
Indeed, sometimes there is a big effort to cover up any signs of trouble. Omaha, Neb., appraiser John Bredemeyer says he recalls one home that had a giant console television pushed up against a door angled in one corner of the basement. Once the property was sold and the TV hauled away, the new owners found a big surprise.
"They opened up the door and the foundation was crumbling," Bredemeyer says. Ultimately, the home's original owners wound up paying to fix it.
Sellers must disclose anything that could affect the property's value or desirability, from big problems such as a compromised foundation to — in some states — simple neighborhood nuisances such as that dog next door that barks every night.
Disclosure laws vary. Some states require sellers to look for and cite certain problems even if they are not aware of them.
No one gets out of these disclosures: Even those marketing a home "as is" have to obey state disclosure laws, says Ilona Bray, real-estate attorney and co-author of "Nolo's Essential Guide to Buying Your First Home." As-is sellers are simply advertising that they're not going to negotiate on price because of these issues.
Here are the six things that a seller must reveal about a home to avoid legal trouble down the road.
1. Repairs
This is a pretty broad category but one that a lot of buyers seem confused about. If you have made repairs to your property, you should disclose them, even if the problem has been resolved.
That could be something as major as a crack you had sealed in the foundation, or something as minor as snaking your sewer line every year to clear tree roots.
Any repairs to the roof, plumbing, electrical system or heating and cooling unit that you are aware of — including any repairs disclosed to you by previous owners — should be laid bare, as well as any drywall or structural repairs to remedy water damage.
"If you knew that there had been hail on the roof and it was leaking, you should disclose that," Bredemeyer says. "If you knew last fall that the A/C didn't work, that's something you should disclose to a buyer."
The bottom line is that sellers should disclose anything that is not readily identifiable by the buyer.
2. Termites
One such invisible problem is termites. If your home has a history of termite infestation, especially if it has been treated more than once, it should be disclosed to the buyer, because it can greatly affect the value of the home.
To lessen the impact of this disclosure, sellers can get another termite inspection before listing their home that shows it to be clear of the pests. This disclosure, along with any information about treatment warranties that could be transferred, should be given to the buyer at closing.
3. Water damage/mold
If the home has had a leaky roof, a flooded basement or dampness and mold in certain areas, these water issues must be disclosed.
A good home inspector can often spot the signs of water damage, even if they have been painted or plastered over, McGraw says. But it's no sure thing. That's why water damage is one of the biggest causes of disclosure-related lawsuits, says Joseph Rand, managing partner and general counsel for Better Homes & Gardens Real Estate Rand Realty in Nyack, N.Y.
One buyer that Rand's firm represented had to call out a plumber soon after the purchase for some serious flooding in the basement. Once there, the plumber told the buyer, "I was just out here six months ago for the same thing."
The sellers were successfully sued for not disclosing this fact. "It was one of the few times that the buyer caught the seller red-handed," Rand says.
4. Lead
If you are selling a house built before 1978, you must comply with a federal law that requires disclosure of all known lead-based paint and hazards in the house.
Buyers must receive a copy of the Environmental Protection Agency pamphlet "Protect Your Family from Lead in Your Home" and they must be allowed a 10-day window to test the house for lead.
The contract must include that warning as well as signed statements from all parties verifying that the requirements for disclosure were met. If a seller doesn't comply with these requirements, the buyer can sue for triple the amount of damages suffered. More information from the EPA on lead disclosure is available here.
5. Natural hazards
Some states, such as California, require sellers to disclose any risk of natural disasters such as a flood plain or earthquake zone or susceptibility to wildfires. This disclosure is meant to warn buyers of the financial risk and danger they face from these catastrophes, as well as alert them to trouble they may face in getting insurance for a home in that location.
6. Infamous past
Even a home's notorious past must be disclosed. One New York case many years ago involved a home that reportedly was haunted and was the subject of many articles and tours. When that ghoulish past wasn't disclosed to the new buyer, the seller was successfully sued for nondisclosure, because that notoriety was likely to diminish its resale value, Bray says.
The same holds true for a home's criminal past. Some states require disclosure of murders on the property, others do not. But since these horrific events tend to lower the value of a property, most real-estate agents choose to disclose them rather than risk legal action. In fact, the NAR even published a field guide for agents to deal with these "stigmatized" properties.
Other special disclosures might include a historical designation that restricts remodeling, or any other special zoning or local environmental concerns.
The bottom line is that if there's a question in your mind about whether or not you should disclose something, you probably should. "Anything that the buyer would feel misled by is something that you should disclose," Bray says.
However, disclosure does not mean sellers are obligated to fix a home's problems, Bray says. Rather, the disclosed issues can merely become a point of negotiation between buyer and seller.
How can sellers protect themselves without blowing a sale?
To find out which disclosures your state requires, you can contact its department of real estate. Bray also suggests sellers get a home inspection before listing the home. It's not required, but it can help you figure out what to disclose.
If repairs must be done, McGraw suggests getting bids from a few contractors so you can negotiate more effectively. If a problem was fixed, disclose it and let people know what you have done to resolve it.
McGraw suggests preparing a binder for potential buyers of repairs, permits and warranties. It makes you look like a conscientious seller. And if you're not disclosing something on a form, remember to document it in writing, even it's just an email copied to a witness, Rand says.
It might seem strange, but sometimes a heavy dose of disclosure can actually make a buyer more ready to act. "They will say, 'This is an upfront person that I can work with,'" Bray says.
In a depressed housing market, no one wants to give up money from the purchase price, but full disclosure is one way to make sure you're not giving up a lot more of it later on.
Article from MSN Real Estate
Wednesday, April 4, 2012
This Spring Could Be The Best Home-Buying Season In Years
The lion’s share of home sales typically come in the spring and early summer. April, May, June and July account for more than 40% of all housing transactions annually, in large part thanks to weather. Economists, realtors and Wall Streeters have been quick to surmise that 2012 will be the year of the market bottom, and with that prognosis circulating, it begs the question of what sellers and buyers can expect in housing as that high season nears.
“The spring home buying season looks bright because of an elevated level of contract offers so far this year,” Lawrence Yun, chief economist of NAR, said in a statement earlier this week. February home sales, despite a slight dip from January to February, remain well above 2011 numbers. The Pending Home Sales Index, which reflects signed contracts that have yet to close, from the National Association of Realtors (NAR) was 9.2% higher than February of 2011 and existing-homes sales, or closed contracts, were 8.8% higher than last year.
That increased demand from buyers has pushed inventory levels 19% lower than they were this time last year, with an estimated 2.43 million homes available for sale. In fact, housing inventory is at a five-year low nationally right now. It means owners tinkering with the thought of selling have less competition to contend with, compared to the past five years. It also means housing may be inching toward a long-awaited recovery.
Here are five factors that will affect what the spring season brings and ultimately, whether 2012 is truly the year of recovery.
Weather
The mild winter weather played a big role in the relatively strong sales numbers with which 2012 has kicked off. ”Right now it’s hard to say whether the housing market is recovering or whether it’s warm weather,” asserts John Canally, an economist and investment strategist for LPL Financial. “But there are a couple factors that suggest the rising number of home sales are indeed for real: home builder stocks are way up since last October, lumber prices are higher, and home builder sentiment is getting higher.”
(Building permits, which rose 5.1% from January to February, were 34.3% higher than February of 2011, according to the U.S. Census and Department of Housing and Urban Development. Housing starts were 34.7% higher than last year.)
The Midwest has welcomed the most sales activity since 2012 commenced. The region clocked the most newly signed contracts, jumping 6.5% from January to February, with a 19% increase year-over-year. It was also one of only two regions that welcomed an uptick in completed sales as well.
“If it’s 30 below and snowy that doesn’t inspire people to go look at houses, but this year it has been so mild that our market didn’t slow down,” says Ellen DeHaven, a Realtor with Coldwell Banker Burnet in Minnesota. ”So we’ve been selling many more houses this year than we typically would at this time and it’s brought down our inventory levels both in foreclosures and in general.” DeHaven expects that sales surge to only grow as the year unfolds.
One concern may be whether the warm winter’s relatively strong sales have been pulling activity forward, meaning whether buyers who would typically have purchased in the spring have done so already, translating into less sales later on. Canally and others suspect that that’s not the case. NAR predicts sales will rise 7% to 10% this year, reaching the highest numbers seen since the housing bust began five years ago.
Tight Lending
Interest rates hover at record lows. Housing affordability is at record highs. However, lending remains tight. NAR estimates that 31% of all pending contracts collapsed in February due to failed financing. Compare that to a 9% cancellation rate in February 2011.
Jed Smith, managing director for quantitative research at NAR, says stringent lending practices are a reflection of two things: either a potential buyer whose credit may not be strong enough according to post-bubble standards or a lending institution whose portfolio remains bogged down by poorly underwritten mortgages in years past. He notes that many of the larger lending institutions, like Bank of America for example, suffer from this, whereas the smaller, community banks and savings and loan associations may be more willing to underwrite mortgages.
Tight lending has led many buyers to pay in cash (approximately 30% of all buyers), a purchasing method that may have more benefits than taking out a mortgage. This is especially true of investors, who have been successfully using cash to land accepted offers, even if it means the seller accepts less money. This cash-is-king phenomenon has caused many a mortgage pre-qualified first-time home buyer to lose out on properties, as investors and first-time buyers tend to compete for lower priced homes in a market.
“The single biggest obstacle for a home buyer right now is availability of credit,” asserts Canally. If prospective buyers can find a way to finance their purchases, sales will arguably continue to grow. Smith estimates 500,000 more sales would be completed this year than projected if lending standards eased even just a little bit.
A Flood Of Foreclosure Sales
Now that the $25 billion foreclosure settlement has been reached, the uncertainty banks have felt about processing foreclosures is expected to subside. RealtyTrac estimates that there will be one million completed foreclosures, or REOs, in 2012 — a 25% increase from 2011.
That doesn’t mean we will see 25% more homes slide into default; it means the foreclosures that stalled in the processing pipeline after 2010′s robo-signing debacle will finally make their way into the hands of buyers in short sales and onto bank books as REOs (bank-owned properties).
“We will see more foreclosed homes come to the market later this year,” predicts Jed Kolko, chief economist at Trulia. He and Canally both think banks will list larger percentages of their REO inventory this year, a move that, depite being a long-term positive for housing, could further depress home prices in the immediate future. Since distressed property sells for about 30% less than non-distressed property on average, those discounts pull both listing prices and appraisal numbers down on non-distressed property in response.
However, investors have been eagerly snatching up distressed properties, which typically account for one third of all sales each month. So even if more short sales and foreclosures make their way to the sale block, there may be a market for them. The sooner they are cleared from banks’ books, the sooner prices can stabilize and begin an upward march.
Read entire story at Forbes
“The spring home buying season looks bright because of an elevated level of contract offers so far this year,” Lawrence Yun, chief economist of NAR, said in a statement earlier this week. February home sales, despite a slight dip from January to February, remain well above 2011 numbers. The Pending Home Sales Index, which reflects signed contracts that have yet to close, from the National Association of Realtors (NAR) was 9.2% higher than February of 2011 and existing-homes sales, or closed contracts, were 8.8% higher than last year.
That increased demand from buyers has pushed inventory levels 19% lower than they were this time last year, with an estimated 2.43 million homes available for sale. In fact, housing inventory is at a five-year low nationally right now. It means owners tinkering with the thought of selling have less competition to contend with, compared to the past five years. It also means housing may be inching toward a long-awaited recovery.
Here are five factors that will affect what the spring season brings and ultimately, whether 2012 is truly the year of recovery.
Weather
The mild winter weather played a big role in the relatively strong sales numbers with which 2012 has kicked off. ”Right now it’s hard to say whether the housing market is recovering or whether it’s warm weather,” asserts John Canally, an economist and investment strategist for LPL Financial. “But there are a couple factors that suggest the rising number of home sales are indeed for real: home builder stocks are way up since last October, lumber prices are higher, and home builder sentiment is getting higher.”
(Building permits, which rose 5.1% from January to February, were 34.3% higher than February of 2011, according to the U.S. Census and Department of Housing and Urban Development. Housing starts were 34.7% higher than last year.)
The Midwest has welcomed the most sales activity since 2012 commenced. The region clocked the most newly signed contracts, jumping 6.5% from January to February, with a 19% increase year-over-year. It was also one of only two regions that welcomed an uptick in completed sales as well.
“If it’s 30 below and snowy that doesn’t inspire people to go look at houses, but this year it has been so mild that our market didn’t slow down,” says Ellen DeHaven, a Realtor with Coldwell Banker Burnet in Minnesota. ”So we’ve been selling many more houses this year than we typically would at this time and it’s brought down our inventory levels both in foreclosures and in general.” DeHaven expects that sales surge to only grow as the year unfolds.
One concern may be whether the warm winter’s relatively strong sales have been pulling activity forward, meaning whether buyers who would typically have purchased in the spring have done so already, translating into less sales later on. Canally and others suspect that that’s not the case. NAR predicts sales will rise 7% to 10% this year, reaching the highest numbers seen since the housing bust began five years ago.
Tight Lending
Interest rates hover at record lows. Housing affordability is at record highs. However, lending remains tight. NAR estimates that 31% of all pending contracts collapsed in February due to failed financing. Compare that to a 9% cancellation rate in February 2011.
Jed Smith, managing director for quantitative research at NAR, says stringent lending practices are a reflection of two things: either a potential buyer whose credit may not be strong enough according to post-bubble standards or a lending institution whose portfolio remains bogged down by poorly underwritten mortgages in years past. He notes that many of the larger lending institutions, like Bank of America for example, suffer from this, whereas the smaller, community banks and savings and loan associations may be more willing to underwrite mortgages.
Tight lending has led many buyers to pay in cash (approximately 30% of all buyers), a purchasing method that may have more benefits than taking out a mortgage. This is especially true of investors, who have been successfully using cash to land accepted offers, even if it means the seller accepts less money. This cash-is-king phenomenon has caused many a mortgage pre-qualified first-time home buyer to lose out on properties, as investors and first-time buyers tend to compete for lower priced homes in a market.
“The single biggest obstacle for a home buyer right now is availability of credit,” asserts Canally. If prospective buyers can find a way to finance their purchases, sales will arguably continue to grow. Smith estimates 500,000 more sales would be completed this year than projected if lending standards eased even just a little bit.
A Flood Of Foreclosure Sales
Now that the $25 billion foreclosure settlement has been reached, the uncertainty banks have felt about processing foreclosures is expected to subside. RealtyTrac estimates that there will be one million completed foreclosures, or REOs, in 2012 — a 25% increase from 2011.
That doesn’t mean we will see 25% more homes slide into default; it means the foreclosures that stalled in the processing pipeline after 2010′s robo-signing debacle will finally make their way into the hands of buyers in short sales and onto bank books as REOs (bank-owned properties).
“We will see more foreclosed homes come to the market later this year,” predicts Jed Kolko, chief economist at Trulia. He and Canally both think banks will list larger percentages of their REO inventory this year, a move that, depite being a long-term positive for housing, could further depress home prices in the immediate future. Since distressed property sells for about 30% less than non-distressed property on average, those discounts pull both listing prices and appraisal numbers down on non-distressed property in response.
However, investors have been eagerly snatching up distressed properties, which typically account for one third of all sales each month. So even if more short sales and foreclosures make their way to the sale block, there may be a market for them. The sooner they are cleared from banks’ books, the sooner prices can stabilize and begin an upward march.
Read entire story at Forbes
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