PRICING

I cannot possibly stress enough how critical it is to price your home APPROPRIATELY. I put that word in all caps because (believe it or not) some homeowners still believe their home is worth more than the comparable sales show. No one is going to beat the market. No one. I just had an appointment the other day with some nice folks who were "disappointed" in my suggested list price. Even though when we met, they said "we want you to give it to us straight". Which I did. But sometimes when sellers are faced with the facts, they don't want to believe them. I don't set the market. Buyers do. I never sugar-coat the numbers and information as it doesn't do anybody any good. Buyers these days are fairly savvy and have most likely been looking for a while and have seen just about all the inventory out there that meets their needs. So when sellers first put their home on the market, this is the most valuable time EVER. If you are over-priced, they will know it and all you are doing is helping your neighbor get their home sold. My suggestion is this...look at truly comparable homes in your specific neighborhood that have closed in the last 90 days. Take what those homes sold for and price just below those figures. Create value. Buyers need to perceive your home as a VALUE. Otherwise, they will not buy. Plain and simple.

Interest rates…everyone talks about them so let’s do just that. They have been historically low for some time now. They went up, then they went down (to the lowest ever in recorded history) and now they are back on the rise. In fact, they have gone up about a half point in the last six weeks alone. So what does this mean to you? Well, let’s break it down.

Say you want to buy a $250,000 house, have excellent credit and plan to put down 20%. Calculating just principal and interest at a rate of 4.75%, that puts your payment at $1043. If the interest rate goes up to 5.25%, that will increase your monthly payment to $1104. So buying now instead of waiting will not only save you about $61/mth, it will also be $22,000 less in interest you will pay to the bank over the 30 year life of the loan!!!

If you really want to save even more money (who doesn't these days...) pay your mortgage every two weeks instead of once a month. That will equate to you paying one extra mortgage payment a year and save you thousands of interest as well over the life of the loan. If you get paid every two weeks (as many people do), this should be a feasible option in terms of budgeting.

Let me start by saying this…the market absolutely had to correct itself. It couldn’t sustain its momentum and unfortunately greed got the best of the market and our country...for the time being. I still continue to hold on to the idea of real estate still being the best way to create wealth. You just have to be shrewd about it. Just because someone is standing around the work water cooler touting they flipped a home and made $50K doesn’t necessarily mean they actually did it and second, that you can do the same thing. You must practice due diligence and also listen to your gut. If a deal doesn’t feel right, it usually isn’t. Real estate is, and always should be, a long term investment.
Regardless of market conditions, there will always be buyers and sellers. That being said, it is never a bad time to do either. Let me explain…

If you are a seller, odds are you are going to be a buyer as well. Since the market is depressed, you will most likely take a hit on the front end, especially if you bought between 2002 and 2007. That being said, when you go to purchase your new home as a buyer, you will be able to make up for most, if not all, of your loss. I have had a handful of clients over the past year that either broke even, or took a loss on the sale of their home; however, they were able to buy a bigger place in a nicer neighborhood then they would have been able to a few years back. If it would have been a hot market, they would have made money on the front end, but paid dearly on the back end. Make sense?

There still continues to be low interest rates, depressed markets and lots of inventory. If you have patience, there are short sales out there that are very good deals and if you have money to invest…this is a great time to build your portfolio.
Hopefully in 2011, the economy will start to recover, people will get back to work and inventory will slowly be absorbed stabilizing pricing and the housing market overall.