Top 5 Reasons Homeowners Should Avoid Going FSBO  

There are Top 10 Lists aplenty that detail just why any homeowner should think twice before planting one of those For Sale by Owner signs in their front yard. One of them is that when you sell your home all by yourself, the sheer amount of time you’ll have to devote to mastering processes that are already fully handled by full-time real estate professionals is a true waste of time. It’s one wheel that doesn’t need reinventing.

If you are among those considering how you will sell your own property this spring, since your time is important, let’s start saving it now by cutting those top 10 lists down to the Top 5 Reasons to Avoid FSBOs:

1.   You’re involved. It may sound like a good idea to be your own salesperson since you are the most intimately acquainted with the product—your house—but logic rules against it if for no better reason that buyers will be automatically skeptical of your impartiality. Why? Because you aren’t! You also don’t get the benefit of a professionally trained pair of eyes helping prepare your property to appeal to today’s buyers, nor the benefit of honest feedback that buyers won’t share with a FSBO seller.

2.   Legal peril. Throughout this year’s political debate, a frequent refrain from candidates (both local and national) has been the need to cut down on over regulation. Without getting into those weeds, it is certainly the case that federal and state laws require a number of very specific disclosures. If you aren’t a real estate attorney, that lack of familiarity could make a FSBO sale an open door to after-sale litigation. When that happens, there goes any commission dollars saved (and maybe a lot more!).

3.   Expense. That’s right, one of the Top 5 Reasons to Avoid FSBOs is that a FSBO can actually amount to an extravagance. It’s logical, too—because most buyers take one look at your asking price, mentally subtract the commission, and proceed from there (wouldn’t you?). The most recent studies bear out the bottom line: only 8% of successful sales were made via FSBO, and on average, they sold for 15% less than the agent-assisted sales.

4.   Marketing Oomph. We professionals market homes all year long, 24/7. As a result, we know which marketing approaches are currently bringing in results, and which are wasting time and money. We also have open channels with the media companies we deal with regularly—an advantage that FSBO sellers can’t hope to match.

5.   Expert Opinion. The open secret is that those who know the most about how to get the best results from a house sale tend to rely on expert help. A good example came in 2014, when Al Bennati, the CEO of the “BuyOwner” dot-com (“the strongest For Sale by Owner marketplace”) decided to sell his own St. Petersburg home. He listed it with a Realtor^®.

            There! Time saved already—who needed a Top 10 list when you have these? I bet you agree: these “Top 5 Reasons to Avoid FSBOs” are more than sufficient reason to avoid the FSBO route…and to give me a call instead!

Notes On The Ins And Outs of Short Sale Listings

Any dedicated bargain hunter who scours the local real estate listings is not surprised to find among the most deeply discounted entries one of two notations: foreclosure or short sale.

Everyone knows what the “foreclosure” designation means—it’s been repossessed by the bank. It’s an REO (real estate owned). By discounting the asking price, the lending entity invites buyers to take the property off its books. It is here that the economists’ favorite acronym, “TANSTAAFL” (There Ain’t No Such Thing As A Free Lunch), comes into play. Foreclosed properties have frequently been neglected by their previous owners, who are not happy campers. So the cost of rehabilitation must be factored in before any offer is made. Still, foreclosures can represent real opportunities for buyers with patience and determination.

Slightly different are foreclosures’ first cousins: short sale listings. There are any number of unforeseen circumstances that can cause an owner to fall into financial distress, but when their home has to be repossessed, the impact on the borrower’s credit is immediate and drastic. It can make finding a new place to live difficult, and can even make future employers hesitate to hire someone whose record includes that kind of hefty unpaid debt.

Local properties which fall in the “short sale” category are those in which the borrower has been unable to keep up with the mortgage payments, but who is arranging for the lender to agree to accept a payoff that’s less than the full amount owed. When a short sale is finalized, the result is still some damage to the original borrower’s credit, but less than had a foreclosure proceeded. The buyer will benefit from what should be a substantially lower price than a comparable  property would bring—and a home that is usually in better condition. An eager lender can also sometimes offer favorable financing terms, too.

But remembering what the economists say about TANSTAAFL, there are also these points to keep in mind:

·       Short sales involve extra bureaucratic red tape. The fine print includes items such as the lender having to approve details of the sale—and that can result in nerve-racking delays.

·       Although the owner is usually trying to keep a short sale property in good shape to facilitate the deal, banks won’t allow a short sale until the borrower has seriously fallen behind in payments. That can mean an inability to keep up with the expense of proper maintenance. As in a foreclosure, canny short sale buyers make certain they know the cost of rehabilitation.

·       The possibility of sticky legal issues needs to be recognized. For instance, if the seller has filed for bankruptcy, it could squelch the whole deal. Negotiating a short sale can be considered a “collection activity”—and those aren’t allowed in most bankruptcy courts.

If one of our local foreclosure or short sale-denoted listings has grabbed your attention, I can help because I have bought and sold many foreclosures and short sales. It will require attending to some technical issues attached to the specific property—but I’ll be pleased to help you navigate the process from beginning to end!  

Officials Unworried By DTI Outbreak Among Homeowners

It might sound shocking, but local homeowners—present and future—have DTIs!

Although the press has been largely silent, it’s important that the public be fully educated on the subject. But before anyone calls an emergency meeting to see what can be done…

The good news is that, despite how dire it may sound, having DTIs isn’t a health menace (even though it is true that local homeowners have both front-end and back-end DTIs). In fact, they’re not only not a problem, the truth is that without DTIs, it’s doubtful any of us could qualify for even the simplest home loan.

You needn’t bother Googling “DTIs”—they are Debt-To-Income ratios. So everyone with debts and an income has them. They are quite useful when it comes to predicting the maximum home loan amount that can be handled comfortably. Knowing your DTI will clue you in on how much home you can easily afford. It will also tell the bank or other mortgage lender the same thing—once they verify from your credit history that you are an established bill-paying good citizen.

DTI computations are wonderfully simple. In fact, even without formally knowing how they are calculated, most local residents have a feel for what they measure—it comes with paying the bills every month.  

The front-end ratio is easy to arrive at. By taking a home loan payment (all-in: principal, interest, taxes and insurance) and dividing it by the monthly before-tax income, you come up with a percentage. A $2,000 mortgage payment with an $8,000 income yields 2000/8000, or 20%. Most lenders would smile on that number; but a maximum of 28% is considered standard for the front-end ratio (although no debt ratio rule is carved in stone).

The back-end ratio is broader. It’s what’s usually meant when “DTI” is cited. Among the bills included are those for credit card and car loan payments, alimony and/or child support, student loans, personal installment loans and payments for co-signed loans (even if the co-signee is paying them). NOT included are other monthly expenses like utility bills, health insurance payments, cell phone and cable bills.  

To finish calculating the back-end ratio, just take those debt payments, add them to the home loan payment, then divide that total by income: the resulting ratio comes out as a percentage. An income of $6,000 with debts of $2,500 would yield a DTI of 41.67%, which is within the federal “qualified mortgage rule.” Forty-three percent is the top number officially allowed.

So, a rule-of-thumb like “no more than 28% of debt should go toward servicing a home loan” actually just restates the front-end DTI guideline. Other factors—like credit history and liquid assets available for a down payment—go into the banks’ decision-making, but as soon as you familiarize yourself with your DTIs, you’re talking the lenders’ language!

Call me when it’s time to buy or sell, and we’ll soon be talking all of the dialects that make up the area’s real estate language!    

Local House Hunters Find Bargains in ‘Reduced’ Listings

When you are skimming through the local listings, now and then you come across attention-grabbing terms like “one of a kind” or “extremely motivated seller.” “Reduced” is another one.

After all, who doesn’t like a bargain? Especially when that bargain is associated with a major commitment, who wouldn’t think it’s worth looking into? Today’s listings may no longer be saturated with short sales, foreclosures, and scores of listings reduced by enormous percentages, but patient local house hunters can still strike pay dirt if they are diligent and methodical. Nevertheless, there are some tried-and-true cautions that need to be observed to ensure that the “penny-wise, pound foolish” saying doesn’t wind up describing the result.

 Most of what is being written on the subject of real estate bargain hunting falls into the common sense category—for instance

·       Low-balling the offer seldom works. The hope that you can create a bargain just by making a shot-in-the-dark low-ball offer is much more likely to result in a resentful homeowner than a successful deal. As in most business transactions, success is more likely to develop when both sides understand the motives and goals of the other. Since any seller whose local property is on the market is assuredly quite well aware of the likely value of his offering, unless the seller is in desperate need of a deal, this tactic is counterproductive (and if the seller does really need to move on, odds are the property has already been reduced to reflect that).   

·       ‘As-Is’ also means ‘Heads-Up!’ A home that’s been “reduced” simply means the market is suggesting that an asking price correction is needed. When “as-is” is appended, it could also indicate that the place probably needs work—maintenance work (and work from potential buyers to discover how costly that maintenance is likely to be). In some cases—when a home has been perfectly maintained—it could mean that some features that are expected in today’s local homes are missing. In any case, “as-is” means “heads-up.”

There is one more caution that isn’t usually written about, but which can be easy to overlook when an epic bargain looks to be within reach. Since the process of buying a house takes some time to accomplish, it’s one that often occurs before it’s too late, anyway—namely, it’s not a bargain if it’s not what you really want! It can happen that the asking price is so affordable for a home that has more (or better) features than you thought you could manage, that you are in danger of being charmed into making an offer on something that’s not a very good fit. When you discover a property that’s been reduced to bring it within your price range, it still needs to fit your family’s most important requirements. An Olympic-sized swimming pool can add an exciting and unexpected dimension, but if the place is one bedroom short, in the long run, it might not be such a bargain, after all.

This spring, many sensational offerings are out there for local home hunters. Give me a call when you are ready to take a tour of the ones that meet your requirements!   

Homeowner Tax Deductions: Real Estate’s Ace in the Hole

Sure, even the idea of homeownership is appealing for all of the traditional emotional and lifestyle reasons. Having proprietary control over your family’s center of operations is a goal for most local residents—just as most of us would consider it a necessary evil if professional obligations make frequent moves unavoidable. Travel may be broadening, but most rolling stones (no matter how moss-less) eventually hanker to settle down.

But aside from the lifestyle aspects, another major advantage to settling down and owning your home gets its turn in the limelight at least once a year. This advantage is anything other than abstract. The time of year is April 15, when the concrete financial benefits are tallied up in the very welcome form of homeowner’s tax deductions.

Tax advice is not my specialty—for that, you should always defer to your qualified financial advisor, whose full time job it is to do all that’s humanly possible to keep track of the ever-changing Federal Tax Code. But even non-specialists know that some of the most beneficial provisions in the Code’s 75,000 pages do relate to the range of significant homeowner tax deductions.

In the National Association of Realtors’ periodical houselogic, writer Dona DeZube recently surveyed some of the major ones—tax tips that deserve to be investigated by any  homeowner who will soon be charting out their own mid-April strategies.

The list was headed by the most obvious one, the mortgage interest deduction, which applies to interest paid on a loan secured by the place you live in. That doesn’t have to be a house—it could also be a trailer or a boat. As long as you sleep and cook in it, if it also has toilet facilities, interest paid for its purchase falls into the category.

Likewise, there is the prepaid interest deduction. Prepaid interest (aka “points”) you pay in when you take out a mortgage or refi can usually be deducted in the year it is originated. An exception is when you refinance and use the proceeds for other than home improvements, in which case the deduction is spread out over the life of the loan. If you refinance again, it gets a little more complicated (may be time to ring up that qualified advisor again).

Another hefty deduction is the one for property taxes you have paid. If your mortgage lender required you to insure repayment through private mortgage insurance (PMI), if your income is less than a set amount, the premiums may be fully deductible (otherwise, a reduced deduction will apply). Even more complicated rules apply to government insurance premiums (qualified advisor time).

More homeowner tax deductions can be applicable, too, with varying degrees of complication—particularly those which relate to vacation homes. And there are also tax credits for things like energy-efficient home systems.

The bottom line - deductibility of many aspects of homeownership can be a major reason why April 15 causes many renters to do some serious examination of their residential futures. I’m here to help with any of your own real estate plans!    

Mystery of The 184 Things A Real Estate Agent Does For Clients 

As its name clearly implies, The 184 Things a Real Estate Agent Does for You is an exhaustive list of the actions a real estate agent is called upon to perform on behalf of a client. It is an authentic real estate Golden Oldie.
     Whenever someone wonders aloud what it is that real estate agents do to earn their commissions, many of us agents have the option of digging around in a drawer for a wrinkled printout of The 184 Things. If there were a Real Estate Hall of Fame, The 184 Things would be sure to have its own spot-lighted exhibit…or even an interactive video display (so the kids could push colored buttons that would seem to make the list interactive).
     Since the list is 184 items long, it’s a good bet that, given the option, very few of our clients would have read the whole thing (if they had, they’d probably be so exhausted they might  reconsider selling their house at all).
     Actually, the truth is real estate agents don’t perform all 184 in the course of any single home buying or selling transaction. Some items refer to specific kinds of deals; some others aren’t always necessary. But they’re all authentic, and for most transactions, we really do execute on a lot more than half of them. To give you the flavor, they are actions like “Verify legal description,” “Confirm lot size via owner’s copy of certified survey, if available,” “Prepare detailed list of property’s ‘inclusions & conveyances’…,” and so on.
     Like so many other epochal historical events, the birth of The 184 Things seems shrouded in mystery. You might think that the reason is because it happened so long ago—but 2006 isn’t really that long ago. Perhaps the mists of time haven’t actually had a chance to fully enshroud the event…so maybe simple confusion is responsible. Most historical citations credit its origin to a 2006 House of Representatives Financial Services Sub-Committee hearing, during which the president-elect of the NAR presented the Things at the conclusion of her testimony. This could have happened after some House member made the innocent mistake of asking what real estate agents do to earn their commissions…but the actual exchange that provoked the list has been lost for all time.

At any rate, despite the House hearing being often credited as the point of origin for The 184 Things, there are problems with that story. The House archives’ transcript of the hearing shows a written Attachment that has 180 Things—not 184! But that’s not the only mystery, because the Attachment has a footnote, which seems to credit the Orlando Regional Realtor Association. It’s only after you consult the ORRA’s web site that you come upon what may be the original list, with all 184. If they ever do build a Real Estate Hall of Fame, it could be a reason to put it in Florida…

I don't need to do each one of The 184 Things every time I set about helping a client buy or sell their home - but it's certain I do an awful lot of them. My own list is simply one with all of the things that need to be done - and turns out to be different for every client and every property. The first item is always the same, though-and it's all yours: call me!

 

 

Foreclosure Listings are Bargains Worth Investigating

It is entirely possible to think of a residence that’s been the subject of a foreclosure as the real estate equivalent of a cute, cuddly orphaned kitten or puppy—one that deserves to be adopted by a loving family. You can think of the bank as the temporary animal shelter. With a little tender care, the adopted foreclosure can resume its place in the neighborhood, and all is well…

Or, a foreclosure can be the real estate equivalent of a snarling mutt that turns out to be a menace to anyone who comes near it…with the possible exception of a wild animal trainer (the real estate equivalent would be a remodeling contractor—one with lots of time on his hands).

For anyone who might consider checking out the local foreclosure listings in 2016, the paramount skill will be the ability to make sure any property they pursue is one of that first kind of ‘orphans.’ That’s because of the fact that the kind of quality protections that are taken for granted in a regular residential real estate transaction are not in force.

Since banks are under no obligation to disclose information about a foreclosure’s flaws, it is always a true ‘buyer beware’ situation. No matter what the time pressure might be, it’s imperative to make a physical investigation of any foreclosure offering as early as possible. The more thorough the inspection, the more confidence you will have that any budget forecast accounts for all the expenditures you are likely to encounter in the course of turning a foreclosed property into a move-in ready residence.

The good news is that despite the reality that the local real estate market has tightened up a good deal since the days of the real estate meltdown, foreclosure properties are still coming onto the market. Since would-be bargain hunters are no longer intimidated by the fear of falling housing values, timing becomes important. With sharp-eyed competitors regularly on the lookout for promising foreclosure listings, it’s important to be alerted to new opportunities as soon as possible. In this regard, there is also another ‘buyer beware’ situation—this one having to do with some of the online dedicated “foreclosure” websites. Avoid any that wind up providing outdated and/or endlessly repeated ‘bargains’—for fees billed in advance. If you decide to try them out, see if they offer a free trial. You will quickly find out if you are being directed toward wild goose chases instead of what’s been advertised.

A better way to start is to give me a call as I have sold hundreds of foreclosure properties to  bargain-minded buyers. If you wish, I will be happy to include local foreclosure listings along with other new entries as they come onto the market—as well as to offer the kind of prudent advice and guidance that helps turn ‘orphans’ into family-friendly residences. A foreclosure may not be for everybody—but the rewards for those who are able to take advantage of them can be substantial!

Talk of Local “Property Values” Requires Further Explanation

Every local homeowner knows that the state of local property values is important. But regardless of how important property values are, it’s also true that the term itself is hard to pin down. It’s more elusive than most of us assume—it literally means different things to different people.

One of the odd things about the English language (or any language, I imagine) is how it can convey an impression of being more specific than is actually the case. For example, if you say, “This year there’s been more rain than usual” everyone thinks they know what you mean—which is probably not that since January 1, 2015 until today rainfall has totaled more than the annual average. What you mean is that since the end of summer (or perhaps since October) it’s been rainy. The difference in that example isn’t all that important. But when it comes to local “property values,” delving into what is meant is more worthwhile.

The term means subtly different things to different people (or even to the same person, depending on their intentions). To most homeowners, for instance, if you say that local property values have been on the rise, their first interpretation is likely to be that their home can now be sold for more than before—in other words, they equate ‘property values’ with ‘market values.’ They don’t mean that it has now become a better place for their family to live in: that would be its ‘use value’ or ‘utility value’—a different thing altogether.

On the other hand, to a lender, a home’s ‘property value’ usually means its current market value. To an investor, ‘property value’ could well mean its ‘future value’ or its ‘liquidation value’…which could be different numbers depending on whether the speaker is imagining a forced liquidation or an orderly liquidation. The upshot is that “property values” is one of those precise-sounding terms that’s a lot more slippery than it seems.

Especially when it comes to major transactions like the purchase and sale of local real estate, it’s a good idea to be as precise as possible. In that regard, more useful are terms like “asking price” or “selling price.” They describe actual numerical values in a particular currency at a specific time. Although it’s certainly not bad news if we hear that local property values are likely to keep rising in the new year, that needs a lot more detail to be very meaningful (give me some neighborhood comps, thank you very much). And since we’re on the subject: anytime you are ready to investigate the current state of our local real estate market, I hope you’ll decide to give me a call! 

In Search of the Most Accurate Real Estate Listings

Have you ever wondered about the way local real estate listings appear on your screen when you search for houses for sale through one of the search engines? If you have already found a local Realtor’s^® website (like this one!), it’s easy to search the local listings right from that site without bothering further. You’ll come up with the most current accurate information because it represents direct updated information from the local multiple listing service.

But whenever you go searching for local listings through Google, Bing, or any of the other search engines (there are scads of them), you will see that what comes up will be quite different. You may find individual house listings, alternating with real estate agency home pages, mixed in with aggregators like Zillow and real estate magazine ads. Depending upon which search engine and the way you phrase your inquiry, you might actually come up with an interesting listing…or one that’s peculiarly inappropriate—like a listing from another town or state—or one that’s been out of date for months.

There are reasons for such disorder. They have to do with a historical scramble that has been going on ever since computers and the web started making house-hunting something you could do from your own living room. The logical first stage came about rapidly, as local realtors everywhere started putting their listings on their websites, then working out the technical details to allow the whole area’s MLS listings to appear.

Then came the original aggregators: Trulia, Zillow, Realtor.com—the deep-pocketed media companies that worked out ways to combine web data from all over to make listings into one gigantic national database. Except for house-hunters who weren’t set on moving to a particular area, the advantage to nationalizing the listings did not really go to the consumer—it went to the aggregators (also called ‘syndicators’). Since they could offer their information to a nation-sized audience, they could afford nation-sized advertising budgets to attract more views. Since they got more views, the search engines automatically found them to be ‘more popular’ than mere local agency sites, so their listings moved to the top of the search engine results pages.

It was a self-perpetuating cycle, especially once the aggregators started selling ‘spaces’ for local listings back to my colleagues, who were watching their own sites lose out in the race to attract web searchers. The aggregators were actually charging real estate agents to place their own listings on the aggregators’ pages! Realtors did not see the humor in this—and there are some ongoing legal challenges to illustrate their lack of appreciation.

The reason that this makes a difference to you is that the original purpose of the big aggregators was to make searching easier for you, the local homeowner or listing searcher. One problem is that keeping listing data current and error-free has always been a problem for anyone with a nation-wide database to administer. Another is that data from other sources (like Craigslist ads) has been known to appear mixed in with verified listings. Since their authenticity is a sometimes thing, that can be downright misleading.

The upshot is that for serious house hunters, the best place to look for local listings is right here, on a site like mine—where I have a daily local connection with the properties that appear. Then, when you find the homes that look like they could be what you are looking for, all that’s left is to give me a call!     

Features Designed to Inspire Luxury Home Buyers   

When it comes to selling luxury homes, you really can’t pigeonhole who the ‘typical’ buyer is likely to be. The 9% of buyers that make up the pool of ‘affluent’ prospects are themselves pretty much profile-proof—and the dollar value that 9% represents fluctuates substantially from one end of the country to the other. On the other hand, it is possible to take advantage of features that are growing in popularity with today’s luxury home buyers.

Realtytimes researchers found that affluent buyers are increasingly attracted to features that belong in the smart-home technology category. Smart thermostats that owners control right from their smartphones, wireless homes security camera arrays, and fully tricked-out home theaters are draws. To qualify at the high end, an entertainment center really should be controlled by a single device. Let’s face it: no matter how fancy a home theater might be, if three or four remote controls are visible, they’re certain to draw scowls!

Kitchen tech—of the kind that marries function with fashion—continues to gain in popularity. Bringing professional-level tools into domestic kitchens is a goal being incorporated in more and more top kitchen appliance offerings. On the leading edge: ovens with high-performance steam generators as well as blast chillers with touch-sensitive, intuitive user interfaces. All are designed “to create the kitchen that’s right”—one to match a buyer’s “level of culinary daring.” Digital Interiors found that 94% of such buyers “would sacrifice 1,00 square feet of living space for more technology…”—but keep in mind that most researchers find that, with few exceptions, 3,500 square feet is the non-urban baseline for qualifying in this market. 

Selling luxury homes used to begin with location, location, location. But that may be undergoing a subtle shift. In Luxurydefined, one leading point is made that traditionally prominent ZIP codes are “no longer the defining baseline” for luxury homes. Newly included are areas where there is a “slower perceived tempo of life”—which fits in with the emerging interest in homes with ‘experiential’ features (like meditation gardens or outdoor showers).

 Few local luxury homes have those particular features, but being turnkey-ready is another matter. Brand new homes qualify automatically, but as has always been the case, existing residences that compete with other high-end homes in the local market can be expected to do best when they qualify as one of the ‘just bring your toothbrush’ properties.

Affluent prospects may be well-heeled, but they are also increasingly attentive to energy-efficient features. Some new homes designed with the luxury market in the crosshairs boast of ‘super-efficient’ floorplans built to consume 50% less energy than typical new homes. The draw is not entirely economical, either. That’s evidenced in how the current dip in energy costs hasn’t resulted in a proportional tapering in demand for homes reflecting conscious living (features reflecting environmental awareness and sustainability).

Luxury home owners, like their prospective buyers, have a pretty clear idea of what they demand when it comes to selling their properties. First and foremost: an agent with comprehensive knowledge of the local market—and experience with luxury homes. According to Money magazine, sales at the high end are growing faster than in any other market segment…which is another way of pointing out that if you are looking to get into a luxury home, now is a pretty good time to give me a call!

Elderly Housing Wider than Ever Before

As we residents age, we grow wiser—at least we hope we will. If we take good care of ourselves, are lucky enough to have inherited good genes, and have some luck, too, we hope to be able to stay physically and mentally active long past many of the birthdays that used to mark old age—or even “advanced old age.”

But if wisdom does actually accrue along the way, even the spryest seniors eventually begin to consider whether it might not be a good idea to explore some of today’s alternative post-retirement residential directions. Advil or not, the most physically active seniors will tell you the morning after a full round of golf or a couple of sets of tennis: ouch! Even copious amounts of positive thinking can’t match the persuasive power of aching joints and muscles. Some accommodations to Father Time are going to be called for…

It turns out that on this front, there is a lot of good news developing out there. Probably because the massive wave of Baby Boomers is sweeping into traditional retirement age, more and more residential options are opening up. Local residents approaching retirement have more choices than ever before. Some of the major headings include—    

·       Staying with family. This used to be the hands-down leading choice when infirmity was at hand: moving in with care-taking relatives (or the reverse). This can be a terrific solution when the family situation fits and doesn’t create unworkable demands on family members.

·       Roommates. Sometimes sharing living quarters is an alternative that isn’t given much consideration, but a homeowner who could use help with daily living chores can choose to share their home in exchange for help with shopping, cooking, cleaning, etc.

·       Board-and-Care Homes are usually small-scale: residences that provide room and board and varying degrees of daily activity support.

·       Congregate Housing caters to seniors able to take care of themselves; providing meals, communal activities, and/or housekeeping services. Retirement Communities can add resort-level facilities and activities into the mix.

·       Assisted Living residences—all the way to full Nursing Homes—provide levels of care from minimal all the way to skilled nursing support.

·       Continuing Care Retirement Communities—are designed to meet the reality that residence and assistance needs change over time. CCRCs consist of separate apartment-style or condominium units as well as full assisted-living facilities. Residents can move from one to the other if more independent living becomes impractical. Residents pay an entrance fee and monthly charges (they can be hefty)—but CCRCs have the advantage of allowing residents to remain in a familiar community at junctures when a greater dislocation would be much more stressful.

Of course, many local seniors are not about to even consider moving away from the area, choosing instead to simply look into downsizing—or switching to a more [knee-friendly] stairless neighborhood home. For those and other real estate endeavors, I’m here to help!

Real Estate Listings Are Designed For Simplicity

 

The first stop for anyone looking for a new home in the local area—or for anyone who is even mildly curious about what properties are currently available—is the local real estate listings. Like those you find here on my site, today’s online real estate listings are updated regularly all across the internet. It’s a coordinated system that appears deceptively simple on the surface, bringing you what you ask for from within the mind-bogglingly vast amount of detail that encompasses all the properties being offered throughout the country at that moment.  

When a prospective buyer goes online to get a feel for the local properties being offered, the real estate listings she or he sees appear to be straightforward enough. The information is clearly formatted, presented in a way that makes it easy to compare with other properties’ attributes. That apparent simplicity might be a little bit misleading, as anyone who has recently put their own home on the market knows.  

Before any listing goes online, all the property’s physical details have to be determined and verified. It’s your agent’s job to make sure the paperwork is complete—including the legal documentation that says, yes, this property is for sale at this amount. The 2015 NAR^® handbook on multiple listing policy (MLS) fills 152 pages for good reason. ‘Under the hood’ of the neighborhood listings is the structure of legal agreements that stitch together the cooperative framework that enables the smooth functioning of the modern real estate industry. Stripped of all its legal bells and whistles, it’s really an agreement among brokers and agents who agree to the way work will be apportioned and commissions shared. 

As you might expect, those 152 pages also cover some special kinds of real estate listings. Homeowners, for instance, can create local real estate listings that are not made public. This is done when the seller withholds consent for a listing to be published within the MLS compilation. Although that might seem to be a particularly bad idea—like a candidate running for office who decides it would be a good idea to keep his name off the ballot—there are circumstances when it makes sense. Such ‘office exclusive’ listings can serve a useful purpose when maximum confidentiality is important. Celebrities and other public figures sometimes use this approach, as do sellers who’d rather not publicize their plan to jump ship until it’s a fait accompli.

All this is made as simple and straightforward as possible for the benefit of all. If it were too complex, sellers and buyers would hesitate to get involved. The market would suffer. In fact, today’s local listings—especially as they are presented online, on sites like this one— represent a standout example of how technology can make even complicated commercial undertakings easier and more efficient than they have ever been. To find your next home, for instance, you need only check out the current local listings, and then there’s only one other thing you have to do: call me up!

Greater Cincinnati Homeowners Should Prepare For An El Niño Winter

With fall newly arrived, it’s a time of year when local homeowners can breathe a sigh of relief; relax and take it easy. With summer behind us, most gardens require less attention. The demands harsh winter weather will make are off in the distant future— or are they?

This year it might be prudent for local homeowners to mentally remove a month or two from their home maintenance timetables. The reason comes in two familiar words (and they aren’t English): El Niño.

According to the government’s NOAA climate forecasters, there is “an approximately 95% chance that El Niño will continue through Northern Hemisphere winter 2015-2016…” Since that  definitely includes southwest Ohio, they’re speaking to us.  They answer the question, “How strong is this El Niño now?” with, “it’s pretty strong.”  In August, it ranked second all-time (behind August 1997) in the Equatorial Southern Oscillation Index, which is one way of measuring its power. El Niño is the condition where weather shifts occur due to a change in warm ocean currents in the Pacific.

What this means to local homeowners is as unpredictable as…well, as the weather! What is acknowledged is that normal patterns can be disrupted to varying degrees. The reason we can never get much clarity about how it’s going to affect us is that (unsatisfying though this answer may be), winter could be markedly more—or markedly less—stormy than usual. Since the maximum effect is expected in late fall through December (hence the Christmas allusion of the ‘El Niño’ name), local homeowners might consider getting on with their winter maintenance preparations earlier rather than later.

So here—a bit earlier than usual—are some regular fall maintenance heads-ups:

·       Check and fill the exterior gaps where critters, bugs, and cold air might enter

·       Chimney maintenance: if you sweep once a year, schedule now

·       Rain gutter check: even though leaves haven’t begun to fall in earnest, cleaning out the mucky old debris now will make later leaf removal a breeze

·       Inspect the roof: if damage has happened, now is the time to schedule repair

·       Ditto the driveway: fill cracks before winter

·       Now is the perfect time to clean and stain the deck. Depending on how much sunlight it gets, it may need to be renewed annually (no matter what the stain can says!)

·       Replace worn weather stripping around doors and windows—your winter heating bills will reward the effort.

As a check of comments on the weather sites confirms, local homeowners have differing memories of how previous El Niños have affected them. But since we are now officially in an El Niño year—it can’t be a bad idea to prepare ahead of time (and if you have  real estate plans in the offing, now would also be a good time to give me a call)!

Tough Sell: Think about Selling Your Home…to Yourself

If you are at all typical, you probably won’t put even minimal thought into planning for selling your home until there’s a good reason to do so. One of the best parts of being a homeowner is the comfort you feel from having a stable home base. For a lot of us, thinking about selling your home (and then finding another; then moving) produces the opposite reaction. If we don’t have to start planning for migrating the whole household, we’d just rather not, thank you very much.

 In truth, doing this theoretically-only kind of thinking won’t be so disquieting. Since an actual sale and move is nowhere on the horizon, thinking about how you would prepare isn’t nearly as stressful as the real thing. And there are a couple of practical reasons why it can be worthwhile:

REASON 1: When it comes to actually selling your home, you will almost certainly find some minor (and even major) features that must be changed to make the place more appealing to prospective buyers. It might be upgrading or expanding a backyard deck; it might be turning a shopworn kitchen island into a butcher block showpiece.

Some of those upgrades might involve a level of expense that we’d postpone until it was absolutely necessary. Yet as a business proposition when you’re selling your home, such improvements may be just what’s needed to make your place an irresistible buy.

So the first good reason to plan for selling when you have no intention of selling is that, instead of passing on a more livable place to the next owner, you get to benefit from living in the much more livable place yourself! This is really the best reason. It’s amazing how often I hear sellers say, “(big sigh) I wish I’d done that years ago. Why didn’t I do that years ago?”  

REASON 2: When you’re not planning to sell your home anytime soon (or perhaps anytime at all), you have an advantage that won’t be available when selling is imminent. That’s the ability to think about how the place will look and feel five or ten or twenty years down the line—and doing something to make it the best it can be. Most often, this involves landscaping decisions that can be made now for a next to nothing—and yield big dividends later on. Saplings that are inexpensive to plant this year can grow to provide shade and peaceful beauty a decade hence. Likewise, a problem tree that’s perfect right now (but whose roots will one day undermine your front walkway) might be mitigated by a young replacement nearby. When the offending tree has to be removed, the area won’t left barren.

Thinking about the selling of your home long before you have any serious plans to do so is a little like selling your home to yourself. You’re a discriminating prospect, after all. If a few improvements will make the place a richer environment for all the years you and your family will be living there, it’s certainly worth thinking about—and acting on—before the time comes to move on. 

P.S. And just in case the time for selling your home arrive sooner rather than later, I’d be delighted if you will consider giving me a call!

Deciding If “Fixer-upper” Is The Right Deal For You

You know them when you see them—especially when going through the home-for-sale listings, where their photos probably lack quite the allure of the others. You can also spot them by some cautiously-phrased tip-off language. They are “handyman specials” that are offered “as-is” or that “need attention” or “TLC”. A perplexingly low asking price is a dead giveaway, too. Most often, if, considering the features listed, the number is too good to be true, you’re looking at a fixer-upper.

If you are house hunting, are they worth looking into? Or if you own one, should you do the fixing-up? How do you make a rational decision?

First, about whether to get to work before you offer your own fixer-upper to the world:

It’s true that a fixer-upper can be a serious magnet for prospective buyers, particularly when those buyers aren’t averse to putting in some old-fashioned elbow grease. If you are able to accept the kind of low sales price that will make yours a standout from competitors, it’s bound to attract a lot of interest from budget-minded householders—as well as professional house-flippers and contractors who work on their own account.

The rule of thumb for owners readying a property for sale is to investigate whether smaller replacement projects—the kind that add curb appeal and/or kitchen glamor—are likely to boost the home’s value above the cost of the undertaking. Most reports on the subject find that large-scale projects seldom return even 80% of their cost, although when chosen strategically, per the NAR^® “…they can improve the market position of the property in relation to the competition.” (Translation: move it out of the ‘fixer-upper’ category).

From a non-professional buyer’s point of view, though, the question is whether the fixer-upper route is a better choice than the costlier home buying options. If you have little interest in extensive DIY projects or decorating overhauls, you already know the answer: skip the fixer-uppers. You have to be enthusiastic to make one of those worth the undertaking. You needn’t bother with any of the super bargains with listings that admit “needs some TLC.”

If you are on the fence, the answer may well lie in a careful appraisal of what will be needed to bring the candidate up to neighborhood standards. If you are an experienced DIYer, there are software packages available that can help you estimate expenses. If not, our contractors will be able to provide an itemized ballpark estimate for such a project. If the combined cost of purchase and upgrades still create an attractive package—and you are prepared for some dislocation as major work is being done—a fixer-upper is worth serious consideration.

This fall, the local market has offerings with real value in every category. Always remember that every home that is listed on the market has a story or history that can’t be  gleaned from perusing the home’s marketing description… Call me at (513) 659-2284 to get the complete low-down on any and all homes that pique your interest!       

Stock Market in Turbulent Contrast to Serene Real Estate

Last week was a head-swiveling version of a follow-the-dots puzzle for those who keep tabs on national news related to local real estate. Children like following the numbered dots to reveal a picture. You can’t be sure what it will turn out to look like until the end. The week was a lot like that:

 Monday led off with the release of housing-builder sentiment: its best reading in 10 years! It was given credit for reversing an early-day 100+ point stock market drop. When the Dow closed up 68 points for the day, real estate performance got the kudos.

Monday’s dot connected to the next one, which appeared as USA Today’s early Tuesday dispatch pointing out that the previous day’s market rescue was hardly a flash in the pan. The Money section’s lead story, “Housing Provides Much-Needed Lift to Wall Street” drew a broader picture. In a ho-hum year for the broader stock market, housing-related stocks were uniformly “among the best-performing shares.” The S&P 500 may have been up less than 2% for the year, but homebuilders’ shares were up 13%; home-improvement retailers, 11.1%; home furnishings stocks, a blistering 26.1%! The reason was “the power of the resurgent real estate market to generate positive action in the stock market.”

Then, on Wednesday, CoreLogic provided the next dot with its release of the August MarketPulse roundup, pointing to a 6.5% increase in its national home price index. This was the logical next dot—one that was hardly unexpected. The predicted continuation of price increases was again explained by lean inventories, continuing low mortgage rates, and consumer confidence rated “the most optimistic in eight years.”

Thursday’s dots had been anticipated, too: the morning announcement of July existing-home sales marked the 41^st consecutive month of year-over-year price gains. Volume was up, too, as sales topped an annual level of 5.5 million for the first time since early 2007. The Street took that as “just the latest confirmation that the housing nightmare is mostly over.”

By Friday, the last dots appeared in calm contrast to the frenetic news from Wall Street, which completed its worst week in five years. Even the real estate industry stocks which had rescued the day on Monday couldn’t buck the outrushing tide of equity losses. But the last dot for local real estate watchers was found in the analysts’ post mortems after the market’s close, as speculation increased that the carnage on Wall Street might well be sufficient to nudge Federal Reserve decision makers away from raising interest rates in September. Real estate trackers were able to put their pencils down and relax for the weekend.

So, what was the picture the follow-the-dots puzzle revealed? The real estate industry dots seemed to trace a simple circle…with a curved line near the bottom that looked a lot like a smile.

Whether or not local real estate offerings continue to benefit from historically low mortgage interest rates (they dropped again last week!), there are definitely great opportunities for buyers and sellers. Give me a call whenever you feel the time is right to take advantage of today’s market!  

Important Tips To Know About Cincinnati MLS Listings

Wouldn’t it be great if high schools started a Driver’s Education kind of class for real estate? At some point—I think it was in the 1930s—Americans realized that it would be a good idea for the public schools to offer Driver’s Ed, just as a matter of public safety. If you’ve ever tried to deal with a clutch and stick shift built before the mid-50s, you’ll understand the need. Too bad the damage that can result from lack of real estate knowledge isn’t as obvious as a dented garage door.

The first Realty Ed class session could deal with the history of MLS listings. Even given the void in the school system, a teenager wouldn’t need much real estate exposure to have at least heard of “the listings.” “The Multiples” is more obscure, as is “MLS” (when you Google that, you get a lot of major league soccer sites).

They are all jargon that refer to the information published by “the” Multiple Listing Service. “The” is in quotes because there isn’t just one Multiple Listing Service in the United States; there are many different ones, run by different companies. Our Cincinnati MLS Listings are produced by our MLS Listing publisher, who cooperates with others across the country to come up with the not-quite-exactly-uniform format you see when you go searching online for greater Cincinnati homes for sale.

If the high school kids’ first homework assignment is to go online to check out the local MLS listings (like the ones I provide), what they find looks quite straightforward and self-explanatory. They see pictures and descriptions of each property for sale, an asking price, and details that a future owner would want to know. Square footage, lot size, the year built, number and types of rooms are all there, making it easy to compare properties. There may be more details in some of the listings than in others, but the real estate agent who prepares the MLS listing makes sure the most important elements are covered.

What will not be obvious to the students (but what will make excellent Friday quiz material) is how the Cincinnati MLS listings embody other elements that are commercial and legal. Behind each of the listings (under the hood, in Driver’s Ed terms) is the fact that an MLS listing ordinarily represents a contractual offer by the listing brokerage to compensate other real estate professionals who represent potential buyers…which means it also is ordinarily evidences that the owner of the listed property has made a separate “listing agreement” with the listing broker.

Later on in the semester, there will need to be a discussion of FSBOs and the whole “For Sale by Owner” situation. It’s likely that one of the more troublesome ‘A’ students will then certainly raise her hand to ask something like, “Well then what happens when there is a Cincinnati MLS listing for a FSBO property? Doesn’t that mean there isn’t a listing broker to make the offer to compensate other real estate professionals who represent potential buyers?”

That will be the moment when it is again demonstrated why teachers need three months off every year.

Our Cincinnati MLS listings are a superb way to organize today’s active real estate offerings—but they are only one of many elements. Call me for expert assistance in getting all those elements fall into place!  

Homeowners Cheer U.S. Return to Housing Value Highs

For homeowners, the news was a long time coming. The bounce back from last decade’s dizzying plummet in the nation’s residential housing values has been underway for quite a while now—but those values hadn’t quite returned to their former heights.

Until last month!

The Wall Street Journal was early to break the long-awaited headline, “Existing-Home Prices Hit Record: $236,400.” Using just-released June sales numbers, the Journal reported that the nation’s average housing prices now topped the previous high water mark set in 2006. It meant that a lot of paper losses have been obliterated—and the return of full nights’ sleep for many U.S. homeowners who have long been underwater.

Another aspect of June’s housing report card could also ease nerves on a wider scale. USA Today led with it: “Existing homes were sold at the fastest pace in eight years…” It quoted the NAR’s Lawrence Yun as pronouncing this year’s spring buying season “the strongest since the economic turndown.”

That’s where the current housing market profile seems to differ in kind from the previous peak of $230,400, registered in July 2006. That mark was reached after sales volume had started to fall. Prices then followed, starting with a slow decline that continued until the spring of 2008, when the slump became a nosedive—unleashing the subprime mortgage crisis. The “bubble” of unsupported high prices had burst.

There was more glad tidings in last week’s news, as well. U.S. home builder confidence levels hit its highest mark in “nearly a decade” (WSJ). A rise in demand for apartment housing caused a jump of 9.8% in housing starts.

But the biggest news was the existing-home price rise, reported as having “rocketed” 35% since 2011, “benefiting current homeowners by giving them an opportunity to trade up to better homes or sell and cash out.” That’s the kind of spur that can stimulate the entire housing market.

With one economist (Andrew Hunter of Capital Economics) quoted as saying “the housing recovery has shifted into a higher gear,” it wasn’t surprising that other analysts were in agreement. “Don’t Laugh” read one headline from international observer Quartz.com; “the U.S. housing market is the best story in the global economy right now.” Reuters agreed about the implications. Their headline: “Strong U.S. housing data boosts dollar.”

Greater Cincinnati residents don’t have to be global investors to take advantage of this summer’s home values. A simple call to my office is all it takes to get things started!

Mortgage Rates Projected to Rise Sooner Rather than Later  

Now that we are deep into July, with summer in full swing, there might be vague thoughts running through your mind about some potential real estate moves—but certainly not until the fall. Right now all most of us are thinking about is whether another chilled glass of summer-something-or-other is in order. Mortgage rates and what the folks in Washington might be doing to affect them are not exactly what occupies an idyllic July afternoon.
         But if you’ve been paying attention to any newscasts long enough to reach the dull-as-dishwater economic stories they throw in toward the end of the broadcasts, you may also have an inkling that conditions are about to change. And the evidence does suggest that mortgage rates face a likely increase come fall. If your vague suspicion does come to pass, and if you’re among those considering buying or selling a home this year, now should be the time to stop “thinking” and start “doing”.
          Exhibit A for that proposition comes from one Michael C. Fratantoni, who happens to be the Chief Economist of the Mortgage Bankers Association (MBA). When he recently spoke at the National Association of REALTORS^® office in Washington, he made no bones about it: mortgage rates will continue upwards, with a first significant Fed hike likely in September. September! The 30-year fixed mortgage, which we all know has lingered at historic lows—below 4%—for several years, is likely to hit 4.4% by the end of 2015 , then move beyond 5% next year.
         It’s enough to stifle any thoughts about that frosty beverage.
         The good news for homeowners planning to list is that Fratantoni doesn’t believe any of these factors will keep the nations’ buyers away. After a pretty lackluster 2014 performance, the MBA forecasts a 14% year-over-year increase in purchase-money mortgage originations in 2015—and nearly 9% in 2016.   Nationwide, incomes are also expected to rise, and with new household formations on the rise, the national real estate market looks to remain in fairly good balance.
         While it seems there’s no instantaneous need to drop all your summertime activities to rush your home onto the market, with mortgage rates expected to rise sooner rather than later, it’s certainly worth making it a priority to give me a call this week.  After that, there will definitely be ample time to finish enjoying that delightful chilled summer beverage.

4 Foolproof Steps to Increasing the Value of Your Home

 As soon as you decide that you will be putting your home up for sale—whether soon or at some point in the foreseeable future—it’s also time to get strategic about growing your property's value—starting with a generous dollop of objectivity.

The difficulty stems from a truth about how everybody perceives much of their property’s value. We escape from hurly-burly of daily living by retreating to the comfortable confines of our home—our place. A good part of its value to us and to our family is its sheer familiarity—the “hominess” that makes it our personal haven. But some of the very things that make it so comfortable to us will be off-putting to outsiders—and they are the prospective buyers.

Our great leather easy chair (the dark brown one that’s gotten a few shades lighter where we sit, and a little off-color where the spills happened) may look a bit peaked to the untrained eye, but it’s been that way for years: who cares? The back door needs to be bolted to stay shut…we do that without even thinking about it—hardly an issue! The sofa may sag, but it sags exactly right (for us)! The bathroom window that’s sort of stuck (okay, maybe it’s painted shut)…etc. etc. etc.

Professionals are of one voice about the real value you add to a property when you go to the trouble of systematically depersonalizing it. It helps to approach doing that seriously and deliberately—to tackle it in an organized manner. There are any number of ways to go about that, but here is one way that will pay off:

Step 1

      Make a list... Review your home from top to bottom. Identify every nit-picky detail in your home that requires repair or renovation. Prioritize your list of repairs or renovations from the easiest (defined as least expensive/time consuming) to the most difficult (defined as most expensive/time consuming). Memorialize the list of repairs/renovations in writing and assign realistic completion dates for each item on the list. For "big ticket" repairs or renovations, get an opinion from a full-time real estate professional on whether the repair/renovation will, in fact, improve the market value of your home before you incur any expense.

Step 2

After a decent interval, sit down with the list and re-classify each item into an Easy Self-Fix List and a Professional-Attention-Needed List.

Step 3
      Get bids from the appropriate professional tradespeople, calculate which fit your budget, then schedule the work.

Step 4
      Get started on your own endeavors to address the Easy Self-Fix List. You’ll be able to organize your own efforts to finish up about two weeks after the last of the tradespeople are scheduled to finish their projects (a two week grace period is realistic: you are aiming to finish everything about the same time).

Following these four steps will put you well on your way to increasing the value of your home. And at any point in the process—from before Step 1 to the satisfying moment that closes Step 4—give me a call to discuss how to convert all that increased value into a profitable home sale!