Posted by admin on Feb 24, 2010 in Naples Homes Blog | 5 comments
The most common “motivated seller” is someone who has already bought his or her next home or is relocating to a new area. They will be under the gun to sell the home quickly or face the prospect of making two mortgage payments at the same time. Since that can drain a bank account quickly, most sellers want to avoid such a situation and may be willing to negotiate more.
There are also family crises that can motivate a seller to make a quick deal. However, when you see a real estate ad that mentions “divorce,” “motivated seller,” “relocation,” or something to that affect, beware. Although the facts may be true, that does not necessarily mean the seller is motivated to make a quick and costly sale. Most likely, the ad is more designed to generate phone calls and leads rather than sell that particular home.
However, there are times when a seller is truly distressed and willing to make a quick sale. With the seller’s permission, the listing real estate agent will pass this information on to interested parties and post the information with the listing in the Multiple Listing Service.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 0 comments
A hot market is a “seller’s market.” During a seller’s market, properties can sell within a few days of being listed and there are often multiple offers on the same home for sale. Sometimes homes even sell above the asking price. Though most buyer’s want to get a “deal” on a home, reducing your offer by even a few thousand dollars could mean that someone else will get the home you desire.
A “buyer’s market” is a different story completely. During a buyer’s market properties may stay on the market for some time and offers may be few and far between. Prices may even decline or level out. Such a market would allow you to be more flexible in offering a lower price for the home.
More often than not, the market is simply “steady,” or in transition. When a market is steady, no real rules apply on whether you should make an offer on the high end of your range or the low end. You could find yourself in a situation with multiple offers on your desired house, or where no one has made an offer in weeks.
Transition markets are more difficult to define. If the economy slows unexpectedly, as it did in the early nineties, people who buy on the high end of a seller’s market (like the late eighties) could find their home loses value for several years. So far, no one has proven reliable in predicting when markets change or how good or bad the real estate market will become.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 0 comments
Home improvement additions or big upgrades should be considered when comparing similar homes you are considering making an offer on.
Cosmetic changes should be largely ignored, but major improvements should be taken into account. Most important would be room additions, especially bedrooms and bathrooms. Other items, like expensive floor tile or swimming pools should be taken into account too. A pool that costs $45,000 to install may or may not add that much value to the home.
Rely on your real estate agent to give you guidance on which home features add the most value to a home locally.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 4 comments
Since you have toured the property you are interested in, you should know how it compares to the general neighborhood. All you have to do is put the home in one of three categories – average, above average, or below average.
When evaluating a home’s condition, there are a number of things you should consider. Structural condition is most important – items such as walls, ceilings, floors, doors and windows. Then paint, carpets, and floor coverings. Pay special attention to bathrooms and bedrooms and whether the plumbing and electricity work efficiently. Look at the fixtures, such as light switches, doorknobs, and drawer handles. The front and back yards should be in reasonably good shape.
The missing ingredient will be information on the condition of the homes from your comparable sales list. Provided you chose the right real estate agent to represent you, they will be able to provide key insights into the conditions of the home and how it compares to others in the community.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 3 comments
Comparable Sales and Your Offer Price
Gathering and analyzing information from comparable sales helps to establish the price range you should consider when making an offer to buy a home. More weight should be given to the most recent sales (in the last 3 to 6 months), but even so, you need to do a bit more analysis before setting upon the price you will offer.
You also need to consider the property condition, improvements, the current market and the circumstances behind the seller’s decision to sell.
When you have all this homework complete, then you can see the complete picture and make an offer based on all the available data.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 2 comments
Obviously, the most valuable information when looking at comparable sales would be the most current sale possible. A sale last week has more validity in helping you determine a purchase price than a sale from six months ago. The problem is that there is no actual record of the sales price until the transaction is completed. The information is not available in the public record because no deed has yet been recorded.
Neither is the information available in the Multiple Listing Service. Once a property is sold, it becomes a “pending sale” and all pricing information is removed from the listing. Prices are not posted until it becomes a “closed sale.” This protects the seller in case the transaction falls apart and the property is placed back on the market. It would give an unfair advantage to future potential buyers if they already knew what price the seller had been willing to accept in the past.
The listing agent can only divulge the contracted sales price if the seller agrees to allow it.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 3 comments
Most of the public is aware that the Multiple Listing Service is a private resource where Real Estate Professionals list properties available for sale. Recently, the public has been able to access some of that information on such sites as Realtor.com, Zillow.com, Trulia.com and others.
Once a property is sold and the transaction has closed, the selling price is posted to the listing in the Multiple Listing Service and eventually on the public property records for the county.
Over time, the MLS has become a huge database on closed sales, containing much more information on individual homes than can be gleaned from the public record. This information is only available to real estate agents who are members of the local Multiple Listing Service.
Your agent can provide you with the closed sales data from the local MLS to help determine your offer price.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 3 comments
The most accessible source of information on comparable sales for the public are closed sales is the county’s public record system. The public records include all sales, even ones that don’t go through Realtors and are thus not entered into the MLS.
When someone buys a home the property is deeded from the seller to the buyer. In most circumstances, this deed is recorded at the local county recorder’s office. They combine sales data with information already known about the property so they can assess property taxes correctly.
The information available from the public record is usually correct regarding sales price, square footage, and numbers of rooms, but additional details that available in the MLS are not readily available on public records.
Accessing the data is another matter, at least for the general public. Real Estate Professionals can generally look up this information through their MLS system. The public can access the information through certain county websites. For example, in Collier County, Florida everyone can access closed property information using the Collier County Appraiser’s website.
One problem with the public record is that it tends to run several weeks behind. Data from the MLS is almost immediate. When a property closes it is entered in the same day or close to the actual closing date.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 0 comments
When you prepare an offer to purchase a home, you already know the seller’s asking price or list price. But what price are you going to offer and how do you come up with that figure?
Determining your offer price is a three-step process.
First, look at recent sales of similar properties or comparable sales to come up with a price range. Then, you analyze additional data, such as condition of the home, improvements made to the property, current market conditions and the circumstances of the seller. This will help you settle on a price you think would be fair to pay for the home. Finally, depending on your negotiating style, you adjust your “fair” price and come up with what you want to put in your offer.
Comparable Sales
The first step in determining the price you are willing to offer is to look at the recent sales of similar homes in the area. These are called “comparable sales.” Comparable sales are recent sales, within the last 3 to 6 months, of homes that compare closely to the one you are looking to purchase. Specifically, you want to compare prices of homes that are similar in square footage, number of bedrooms and bathrooms, garage space, lot size and type of construction.
There are two main sources of information on comparable sales, both of which are easily accessed by your real estate agent. It is somewhat more difficult for the general public to access this data, and in some cases impossible. The two main sources are of closed sales data are the public records and the Multiple Listing Service or MLS.
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Posted by admin on Feb 24, 2010 in Naples Homes Blog | 0 comments
The Business Cycle and Buying a Home
Should you try to time the market? Just like investing in the stock market, the short answer is always, no.
One problem with attempting to time your purchase of real estate to the business cycle is that no one can accurately predict the future.
Why You Should Not Wait to Buy
It tends to equal out. People who already have a home usually need to sell it in order to buy their next one. If a “move-up” buyer wants to buy a home during a depressed market, that means they usually have to sell one during the slower, buyer’s market too. The will get a great deal, but they will likely have to give a great deal as well. On the other hand, if a seller wants to sell his home to take advantage of a “hot” market when prices are fairly high, they generally have to buy their next home during that same hot market. The only other choice would be to rent and wait till prices come down, but then they lose the tax advantage of a mortgage.
Trying to buy at the lowest point of a real estate cycle or sell at the highest point is a sure recipe for disaster. Nobody knows those points until long after they happen. Instead, do your best to buy your home right in the market you’re in and pay down any mortgage as quickly as possible. Don’t be tempted to take out unnecessary home equity lines that deplete your home’s equity.
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