Putting off buying could be a mistake.

Many buyers have put off buying due to the holidays and the cold weather. First time homebuyers eligible for the tax credit have also put off the decision to buy now that the program was extended until April 30th, 2010. Delaying buying a home though until Spring could be a mistake for the following two reasons.

As some of you know, the Federal Reserve has been buying mortgage obligations for the past few months which has artificially kept rates low. The Fed has recently indicated that this program will be coming to an end. Consequently, expect the rates to slowly creep up to a level of around 6%.

Another reason not to delay buying is the anticipated demand for houses always goes up after the holidays. As demand increases early in 2010 and this time accelerates as we get closer to the April 30th deadline, buyers can lose the home of their dreams or pay more for it than today.

Paying 6%? You're also paying up to $595 extra at closing.

Most high commission companies charge an administrative fee as high as $595 at closing. THIS is ABOVE and beyond the 5%, 6% or 7% commission one pays with these companies. Of all the large real estate companies, Homeowners Concept is the only one that invoices a low $95 administrative fee (actually the fee is charged by the Title company - anything charged over that goes to the broker).  

It is a travesty that so many sellers blindly pay these fees on top of an excessive commission. These sellers either do not know any better or they are in a frame of mind of paying over $12,500 for the average priced home that they figure what's a few hundred more. Bottom line: a few hundred dollars on top of the thousands ONE SAVES by using Homeowners Concept adds up to a substantial amount of money. And even if one wants to be a big spender why not take the savings and make a big donation to your favorite charity. YOU WILL feel good rather than spending it on unnecessary commissions and excessive administrative fees. 

PAYING A HIGHER COMMISSION WAS A COMPLETE WASTE OF MONEY.

This property at 1813 N. 56th in Washington Heights was listed with Homeowners Concept until 9/30/08 when it expired at $249,900. Our very successful agent tried repeatedly to get seller to pay attention to the declining market, to no avail (yes, despite our 25 yr expertise in the market, some sellers have a tough time coming to grips with the current market). After a couple of months off market she listed with a First Weber agent who had sold only one other property in the last 12 months, MLS #1057682 (there are some sellers that for some reason believe that another less successful, less seasoned broker will do a better job...?). Seller proceeded to do a number of price reductions all the way down to $214,900 by late September, 2009.

At that price, a Homeowners Concept Realtor who was working with a buyer showed the property and got an Accepted Offer for $208,000. Eventually Homeowners Concept sold the property and seller paid a much higher commission to us via the "co-broke" of 2.4% (this actually came out of the listing broker's 6% commission). That is about $1,872 more the seller had to pay to us plus an additional $7,488 to the listing broker for a total of $9,360 more than our 1.5% commission.

The irony of this very real transaction is that by backing away from Homeowners Concept's overwhelming and successful record of 25 years, this seller found out that the market controls the price the home sells for. The seller only has control of how much commission one pays. Had the seller stayed with Homeowners Concept this seller would have walked away with $9,360 more at closing. Buyer would have paid the same amount for the home regardless!

Which seller are you?

Getting your home sold in SE-WI right now, is not as tough as you might think despite the market. The key is understanding a few things about yourself and how you approach the market that determines if and how quickly you sell.

What Home Buyers Want

Right now, there are roughly half the number of buyers in the market as we would normally see. As a general rule, they are conservative and concerned due to the state of the economy and tough lending requirements. They are looking for value. Ultimately, they are going to buy the home that is the best value on the day they make their purchase decision… Wouldn’t you if you were buying today?

Understanding The Housing Competition

Knowing that buyers are looking for value, another key factor if you want to sell a home is knowing who your true competition really is. For you to determine “good value,” you have to know what to compare with. This takes working with a real estate agent that understands the market better than the others. Choosing your initial market position is perhaps the most important factor when deciding to put your home on the market.

Your Motivation To Sell A Home.

So you know what buyers want and you understand your competition and how to value your home, the next and final step is to understand your current situation. Are you motivated enough to sell your home? Here’s a simple test:

Pick which of the below choices best describes you. Think seriously before you decide, as this will help you greatly.

1. The Casual Seller - The casual seller says things like “We are not in a hurry,” or “We don’t want to give it away.” You can expect this person to say “We will sell if we can get $X ….”
2. The Serious Seller - The serious seller says things like “I understand the market and I’m willing to sell my home for what I’m seeing out there.” This seller is ready to sell at “perceived market value” and they expect to price their home with the competition to get it sold.
3. The Very Serious Seller - The very serious seller must sell now. They are willing to create a perception of value and entice buyers to select their home before all others.

Who will sell their home in the next few months?

So, what kind of a seller are you?

If you answered the above question as honestly as you could, you need to know that the casual seller is not going to sell their home in today’s market. There are just way too many homes for sale and the casual sellers are doing themselves and the very serious sellers a dis-service by adding to the inventory.

The market will eventually recover and there will again be great times to sell, but today’s buyer pool is looking for value. Even the serious seller is most likely not going to sell their home. With over 11 months of supply in SE-WI plus new short sales and foreclosures entering the market, only the very serious sellers have the best chance of being successful over the next 12 months. Luckily with our very low commission of 1.5% a seller listing with Homeowners Concept has quite a few thousands of dollars in savings to play with. A serious seller can take the savings and deduct it from the list price making their home much more attractive to buyers.

THE SAVINGS IN COMMISSIONS IS YOUR BONUS

25 years ago Homeowners Concept started as a real estate office to save sellers the huge 5, 6 or 7% commission. Today Homeowners Concept has evolved into a company where sellers can turn to for great service, top notch real estate expertise and great marketing. The savings in commissions is really a bonus.

Over the years we have developed a program that we can guarantee as the most efficient and effective way for selling homes. We have done this by providing more in marketing properties (having the most widely distributed homes magazine and a great website, among others) and having highly skilled, full time, long term agents who are truly dedicated to real estate. You see, the traditional high commission model of just hiring agents regardless whether the business is there or not saddles the system with mediocre agents who spend most of their time competing with each other offering the same thing and charging 5-6% commissions (see post of 8/26/09). There are way too many agents for the amount of sales and one can understand why the average agent does only a few deals a year and has just a few years in business. We on the other hand, limit the hiring to just the best in the business so our Realtors do a lot of sales saving you money from excessive commissions.

When you work with Homeowners Concept, you work with some of the most successful and most active agents in the area. Our Realtors know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals. The savings in commissions again is your bonus.

The futile way of selling FSBO

The very reason we exist is a result of For Sale By Owners (FSBO). It was early 1984 when our founder walked away from buying a For Sale By Owner (FSBO) after he realized the legal cost involved and time away from work necessary to meet with a lawyer during business hours. He wondered how many other buyers walk away from buying a FSBO if Realtor assisted homes are easier to get. A little research at the central library consisted of calling 100 FSBOs from the newspaper ads of 3-5 months before, showed that very few sellers were successful (at that time only 12% of FSBOs were able to sell without any Realtor help - most recent national survey shows that only 9% are successful). Either way these numbers are dismally low. It was then that he realized that there has to be a better way for real estate to be sold and our Concept was born as the "missing link" for FSBOs to achieve the Realtor advantages without the hefty commissions.

This year alone we have tracked FSBOs in Wauwatosa (one of the healthiest in sales in the metro area). So far only one home out of 14 has sold this way. All others have turned to Realtors and 2 w/Homeowners Concept - one of which has sold, the other is pending.

Ordinarily, FSBO is the cheapest way to sell most of the time BUT that is only if you sell (although there have been cases where FSBOs have spent far more than our fee, mainly on attorney costs). Factoring in the extremely low probability of selling as a FSBO the cost of selling is substantially higher. It is the time one loses trying as a FSBO (usually 8-9 weeks) that damages the home's chance of getting sold at its highest price plus the money a FSBO spends on marketing. It is the buyers' reluctance to enter negotiations with the seller directly and spend hundreds if not thousands of dollars in legal fees plus maneuver through the transaction on their own that dooms the FSBOs. One of the fallacies sellers have is that a buyer will use "their" lawyer to do the buyer contract, counters, amendments, etc. That is extremely rare and besides, attorneys list their homes with Realtors at the same rate as any other profession (they know better). Over the years we have had hundreds of sellers who were trying completely on their own, then turn to our company and within a number of days to a few weeks got an accepted offer as a result of having someone the buyers could turn to.

Every year, $100s of millions of dollars are wasted by sellers trying to sell as a FSBO before they turn their home over to a Realtor to eventually sell it. If sellers knew all the facts, they would never resort to sell a property as a FSBO not as long as companies like ours are around.

Mortgage information you should be aware of.

More than ever we are finding that a mortgage banker has many more options to finance a purchase than a direct lender such as a bank, mortgage company or credit union. Just in the past few days we had 2 loans approved that had been rejected at a local direct lender.

The first was an FHA loan for a Wauwatosa home that Bank of America will not approve due to issues on the condition report which the buyer was accepting. Our preferred mortgage Banker Netcentral Mortgage placed the loan with a lender that does not require the condition report.

The second buyer was not getting approved for a Waukesha condo at Westbury Bank due to an association assessment. Again Netcentral Mortgage was able to place the loan with an underwriter that accepted the assessment restriction.

We suggest to buyers to avoid hassles, delays and even rejection of their loan by using a reputable mortgage banker. Mortgage bankers work with multiple lenders and know which underwriter will approve what. Furthermore, a mortgage bankers oftentimes have better rates or closings costs as different banks compete for loans. Netcentral Mortgage has beat or reduced closing costs for many buyers over the years.

A recent testimonial letter says it all

When we decided to sell our house in this current uncertain housing market we knew we were taking a risk, however, after our first meeting with Mary Skanavis from Homeowners Concept we knew we were going to have a knowledgeable and experienced professional by our side.

From the beginning Mary gave us straight-forward facts about our home sale.  Unlike some of her competitors, she wasn’t telling us what we wanted to hear; she gave us a clear understanding of what our house was worth and what we could get for it.  Together we came up with a “game plan” for how we were going to tackle our home sale.  We really appreciated this type of approach because it left no mystery to how we were going to handle things going forward. 

Like a good coach, Mary had almost daily correspondence with us informing us how showings went, how other houses in the market were doing and advice on how we could improve the success of selling our own home.  Through that dedication we were able to sell our house remarkably fast and we sacrificed very little in the process.  I cannot stress enough how thorough and involved Mary was, especially with answering all of our questions.

When it came time to buying our new house the decision to use Mary as our buying agent was an easy one.  We ended up buying the house of our dreams and she negotiated the price saving us a substantial amount of money. 

Working with Mary goes way beyond her expertise in the real estate industry.  You can easily tell she enjoys her job and the challenges that come with it.  She is very encouraging and charismatic and I would encourage anyone to work with her for buying or selling a home and the savings in commissions is a bonus.

Lisa and Mike G.

Sold in Wauwatosa/Bought in Pewaukee Using Homeowners Concept

Tax Credit Deadline is Approaching

First-time home buyers have just 10 weeks left to find and close on a home to qualify for the $8,000 Federal tax credit before the November 30th deadline. 

The Federal tax credit has proved to be extremely popular already, since taking advantage of it is cited by 10.8% of the buyers as the most important reason for purchasing a home, according to a recent study. In fact, approximately 1.14 million buyers have already filed for the credit. Many more are expected to file for the credit when income taxes are due in April 2010. 

On average, first-time buyers search for 12 weeks to find a home, while closing can take between 30 to 60 days depending on the lender or issues with the property, appraisal, etc. So, it is going to be a challenge for the buyers who are just beginning the process. Smart buyers though, can make extensive use of our website to narrow down their choices, work with one of our extremely experienced real estate Professionals and use our preferred lender Netcentral Mortgage so that they can make sure the purchase closes on time.