Should You Rent Rather Than Buy?

August 18, 2010 | Author: Eric Deeter

“It’s always a good time to buy real estate.” It’s a Realtor’s® favorite line. But if you talk to a true real estate professional he may tell you that it’s not a good time for you to buy real estate. Owning your own home is part of the American Dream. It’s a great way to build personal wealth. And home ownership has a lot of intangible benefits as well. But you need to be sure it’s the right decision for you now.

Here are a few things to consider when deciding whether to rent rather than buy.

Are you going to be in the house for only a short time?

If your job or life situation is likely to cause you to move in a couple of years then you might be better off renting. Back in the real estate bubble you could expect the price of a house to go up enough to resell in a couple of years and you’d make some money on the equity increase. But those days are gone and prices will probably stay flat for the foreseeable future. Renting may be the smart choice because you can quickly make a transition to a new neighborhood or city.

Does it make financial sense to buy?

You can find rent vs. buy calculators online. Keep in mind that most of these are put there by mortgage companies to sell you a loan. Again, you are best to talk to a professional real estate agent who will give you the straight scoop for your situation. One method you can use to get an idea of renting vs buying is to use the price to rent ratio. You take the price of a home you’d try to buy and divide it by the amount of rent you pay for a year for a comparable home. If the number is higher than the average of 15, you might be better off to rent.

Sometimes the intangibles will outweigh the financial part of renting. When you rent you’re subject to the whim of the landlord about home improvements and painting. So find a good Realtor® who will listen to what you want and will help you make a plan on how to get it done.

Posted in For Buyers | Leave a Comment

Can Commercial Real Estate Stay Above Water?

August 13, 2010 | Author: Eric Deeter

photo credit: SFTHQI’ve been reading reports for over a year that the commercial real estate market is about to implode and take the economy down another notch. But some experts are now saying the commercial crash may not be as bad as was feared. There are still problems and the commercial market will probably fall more before it finds the bottom. But the crash and burn forecasts of a few months ago may have been overblown.

As with the residential real estate market, some areas are suffering more than others. In the Kansas City metro we have been fortunate in that our market for both commercial and residential real estate hasn’t taken the drastic hits that have happened in other parts of the country.

Investors in both residential and commercial real estate have a great buying opportunity. The market will recover. Now is a great time to buy if you can.

To read full article click HERE

Posted in KC Area Real Estate Market | Leave a Comment

6 Reasons to Reduce Your Home Price

July 25, 2010 | Author: Eric Deeter

photo credit: *Sally M*

Article From BuyAndSell.HouseLogic.com

By: G. M. Filisko
Published: March 19, 2010

While you’d like to get the best price for your home, consider our six reasons to reduce your home price.

Home not selling? That could happen for a number of reasons you can’t control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control: your home price.

These six signs may be telling you it’s time to lower your price.

1. You’re drawing few lookers

You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

2. You’re drawing lots of lookers but have no offers

If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

3. Your home’s been on the market longer than similar homes

Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

4. You have a deadline

If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.

5. You can’t make upgrades

Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.

6. The competition has changed

If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.

More from HouseLogic

How to ready your home for sale at little cost (http://buyandsell.houselogic.com/articles/5-tips-prepare-your-home-sale/)

How to review offers on your home (http://buyandsell.houselogic.com/articles/6-tips-choosing-best-offer-your-home/)

Other web resources

Setting the right price

More on setting the right price (http://public.findlaw.com/abaflg/flg-4-4a-1.html)

G.M. Filisko is an attorney and award-winning writer who made strategic price reductions that led to the sale of a Wisconsin property. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics

Posted in For Sellers | Leave a Comment

6 Tips for Choosing the Best Offer for Your Home

July 20, 2010 | Author: Eric Deeter

photo credit: spaceamoeba

Article From BuyAndSell.HouseLogic.com

By: G. M. Filisko
Published: February 10, 2010

Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers.

You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers.

1. Understand the process

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures-such as appliances, furniture, or window treatments-to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attached a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

G.M. Filisko is an attorney and award-winning writer who has survived several closings. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.