Do You Know the Cost of Renting vs. Buying?

1

Some Highlights:

  • Historically, the choice between renting or buying a home has been a close decision.
  • Looking at the percentage of income needed to rent a median priced home today (30%) vs. the percentage needed to buy a median priced home (15%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

Think You Should FSBO? 5 Reasons to Think Again!

1In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers. Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 44% on the internet
  • 33% from a Real Estate Agent
  • 9% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

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

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

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

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

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission. Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Thinking You Should FSBO? Think Again [INFOGRAPHIC]

Some Highlights:

According to NAR’s Profile of Home Buyers & Sellers:

  • 88% of buyers look for their new home online.
  • Using a real estate agent can net you $39,000 more than FSBO’ing.20160624-ENG-STM-1046x1415

There is a long list of people that you will have to negotiate with when you decide to sell your home, using an experienced professional can help ease the process.

To learn more about the benefits of using a real estate agent call our agents at 303-225-3378 or visit us online at www.CornerstoneHomeTeam.com

Why Do-It-Yourself Real Estate Isn’t Wise

Why Do-It-Yourself Real Estate Isn’t Wise

I have posted many resources on selling your home or buying a home on your own.  If you read through my posts and articles, you will see why I am against it…and it never has to do with the fact I am a Realtor…it’s all about your protection!  I found this article recently and feel it does a good job shedding some insight on why it is a bad idea.

Why Do-It-Yourself Real Estate Isn’t Wise

Written by Phoebe Chongchua on Friday, 14 June 2013 00:00

fsboI am all for do-it-yourself projects. If you can save a little money and learn how to do something that will be a useful skill in the future…I say, go for it! But not all projects should be tossed into the pool of do-it-yourself (DIY) tasks.

There are a number of reasons why some DIY projects turn into a nightmare that results in more time, energy, and money spent trying to clean up the mess than if you’d hired a professional in the first place. As a business owner of a video production company, I’ve seen this happen too many times. Professionals who work in specialized fields are used to doing their jobs. They can create a video, for instance, quickly and efficiently whereas a novice might take months to get it done and then it looks like amateur work. That can mean lost time, money, and, in the end, the main gain is tons of frustration.

This same idea is why DIY real estate isn’t likely to be a wise choice for most people. Shopping for a home or selling a home requires a good amount of knowledge about the industry, the neighborhood, marketing, negotiation, home staging, and more. Most consumers simply don’t have all those skills and when it comes to buying or selling their own home, whatever skills they have can be compromised because personal emotions get involved.

A common mistake DIY (or for-sale-by-owners) sellers make is pricing their homes too high. Often sellers look at how much they owe on their homes and try to work backward from there to determine a price. The problem with that is, the buyer isn’t concerned with how much the seller owes. The buyer is comparing the home to those in the neighborhood. But often cash-strapped sellers are looking to make a bit more so they may try to push the price higher in hopes of creating more cash flow.

Listing a home for more than its competitive value can prove to be very unsuccessful. A lot of times, an overpriced home will get very few showings. The longer it sits on the market, the more “stale” it gets. When buyers and their agents see this, they often know to play the waiting game and let the humble fall begin for the seller. Eventually, there will be price reductions. How quickly this happens will depend on how motivated the seller is to close on the home.

Another reason hiring a professional real estate agent to handle your real estate transactions is smart is that it gives you an ally and someone to answer your questions. These days, real estate paperwork is getting more complicated and plentiful. When you attempt to go it alone, you’re taking on a lot of responsibility and risking making some very big and potentially costly mistakes.

I always recommend getting a firm understanding and education about any project you’re working on even if experts are hired. For instance, I had a water pressure plumbing issue recently and learned that even our own city officials didn’t completely understand the plumbing solution that was needed. By talking with experts and doing some research, I may have saved myself from some even bigger plumbing issues down the road. But I didn’t tackle this problem alone… I hired experts who had the job done in a few hours. The difference was not only receiving peace of mind but also quality care and expertise. A home is a major purchase/sale. Choose wisely how you proceed through the transaction.

Can’t I Just Do It Myself? (Buyers)

A few days ago I wrote about selling a home on your own and talked about the truths and myths, the pro’s and the con’s and the statistics.  Today I want to talk about buying a home on your own.

Can you find and buy a home without the use of a licensed real estate professional?  Yes you can.  However, why would you want to?  why would you want to go through the process of trying to locate a home, set up times to see it (with the Seller’s Agent walking you through the home) and then negotiating the terms of the sale without an agent, not to mention dealing with home inspectors, appraisers, lenders, title companies and the risk of not knowing what to do next and losing the deal altogether!

Did you know you can get a Buyer’s Agent to do all this for you…and typically for free?  That’s right…FREE!  Majority of the time, a Real Estate Agent working on your behalf to help you locate, negotiate and buy your next home gets paid a portion of the commission paid to the Seller’s Agent, this means little to no money out of your pocket for all that support! Now, there are some situations where you, as a buyer, will pay your Buyer’s Agent out of your pocket.  Typically, this is for mileage from driving you around town to look at homes, hourly for handling all the ‘particulars’ or paperwork, or even a closing appearance fee.  Regardless, you come out ahead if you don’t try to do it on your own.

Many of the same reasons mentioned in “Can’t I Just Do It Myself (Sellers)” are true for buyers.  In the current market, the inventory is scarce (homes on the market), buyers are ending up in bidding wars over properties and sometimes, by time you locate the home for sale and set up a time to see it, it is sold.  It helps having a professional lead you through this.  They know what the trends are, what a home is worth, how to negotiate a deal to improve your chances of winning that bid war and can locate homes faster than you can.

Risk still applies on the buyer’s side as well.  If you default or miss a deadline, they can keep your earnest money, cancel the contract with you and even sue you!  There have been times that a unrepresented buyer innocently missed a deadline and defaulted on the contract and the seller’s got to keep the earnest money (sometimes $5,000 to $8,000).  An Agent has the tools and systems and experience to mitigate this risk for you.  Why not use one?

Feel free to contact me about anything in this post or with questions.  You can call me at 720-204-8596 or by email at JustinPSheets@KW.com

Thank you,
Justin P. Sheets
Broker Associate
Cornerstone Real Estate Team
Keller Williams Preferred Realty
720-204-8596
http://www.JustinPSheets.com

Can’t I Just Do It Myself? (Sellers)

So I heard an ad the other day on the radio from an attorney that is also a licensed real estate agent claiming that seller can save on average $18,500 selling their homes themselves.  As this may be true to a degree, there is a lot that is not telling sellers.

Yes, if you sell your house yourself you save paying a commission to an Agent.  However, on average, an Agent can typically get you a higher offer and sales price than you can selling it alone.   Also, short of paying a high price to a company to list your property in the MLS, For Sale By Owner properties don’t end up in the MLS which drastically reduces the number of buyers seeing you home.
Besides the reasons mentioned, a major difference between doing it all your self or with an Agent is liability.  As licensed agents, we have to take a lot of training on laws, contracts and regulations.  As a private seller, unless you have years of experience buying and selling real estate, you can be held liable for any misrepresentations, errors, contract issues and more.  This could result in civil or criminal issues (mostly civil).  Licensed agents carry insurance because of the risks associated, take some of the liability off yourself and put it on us.
Err on the side of caution, hire a licensed real estate agent.  You may get a higher selling price, make more money and have a layer of protection when selling your home.
Contact me with any questions:
Justin P. Sheets, Realtor
Broker Associate
Cornerstone Real Estate Team
Keller Williams Preferred Realty
Justinpsheets@kw.com