Wednesday, July 25, 2018
Wednesday, July 18, 2018
Selling Your House On Your Own Could Cost You
In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.
However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money than if they had used an agent?
The study makes several suggestions:
“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The data suggests the average price was near 6% lower for FSBO sales of similar properties.
Bottom Line
As Dave Ramsey, America’s trusted voice on money, explains:
“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”
However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed home sales in a variety of markets. The data showed that:
“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” (emphasis added)
Why would FSBOs net less money than if they had used an agent?
The study makes several suggestions:
“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.
Conclusions from the study:
FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The data suggests the average price was near 6% lower for FSBO sales of similar properties.
Bottom Line
As Dave Ramsey, America’s trusted voice on money, explains:
“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”
Wednesday, July 11, 2018
Millennials are saving more than you think
Source: Realtor Mag
Millennials have been stereotyped as a generation that lacks savings or money management skills. But the data isn’t backing that up.
Sixteen percent of millennials ages 23 to 37 have $100,000 or more in savings, which is double the number of young people who had that much stowed away in 2015, a newly released survey from Bank of America shows. Nearly half—or 47 percent—have $15,000 saved, up from 33 percent in 2015.
Millennials came of age during the Great Recession and the financial crisis. They’ve faced high levels of student loan debt. But still, the survey shows that many are getting their financial lives in order, and home buying is increasingly on their to-do list.
Millennials have been stereotyped as a generation that lacks savings or money management skills. But the data isn’t backing that up.
Sixteen percent of millennials ages 23 to 37 have $100,000 or more in savings, which is double the number of young people who had that much stowed away in 2015, a newly released survey from Bank of America shows. Nearly half—or 47 percent—have $15,000 saved, up from 33 percent in 2015.
Millennials came of age during the Great Recession and the financial crisis. They’ve faced high levels of student loan debt. But still, the survey shows that many are getting their financial lives in order, and home buying is increasingly on their to-do list.
Thursday, July 5, 2018
Would Amazon's HQ2 exacerbate L.A. and Southern California's housing crisis?
Source: The Mercury News
While Amazon choosing to locate its second headquarters in Southern California could benefit the region’s economy, the new facility could also stress an already under-supplied housing market, experts say.
A California Association of Realtors report released Monday showed the state’s available supply of homes hit its lowest level in 13 years in December.
Due to a lack of home building and an increasing population from people coming from out of state, CAR President Steve White said California is already 1 million housing units below what’s needed.
“We expect that over the next eight years that could grow to 2 million,” White said. “It’s supply and demand. There just isn’t enough housing available for folks in all economic sectors.”
Economist Christopher Thornberg, a founding partner at Beacon Economics, said leaders in the city and county of Los Angeles are “panicked about the rising cost of housing” and the low supply of affordable housing at a time when many low-income people already can’t afford homes.
“So we’re going to plop 50,000 high-tech workers down in the middle of all this?,” Thornberg said. “Are you kidding me?”
While Amazon choosing to locate its second headquarters in Southern California could benefit the region’s economy, the new facility could also stress an already under-supplied housing market, experts say.
A California Association of Realtors report released Monday showed the state’s available supply of homes hit its lowest level in 13 years in December.
Due to a lack of home building and an increasing population from people coming from out of state, CAR President Steve White said California is already 1 million housing units below what’s needed.
“We expect that over the next eight years that could grow to 2 million,” White said. “It’s supply and demand. There just isn’t enough housing available for folks in all economic sectors.”
Economist Christopher Thornberg, a founding partner at Beacon Economics, said leaders in the city and county of Los Angeles are “panicked about the rising cost of housing” and the low supply of affordable housing at a time when many low-income people already can’t afford homes.
“So we’re going to plop 50,000 high-tech workers down in the middle of all this?,” Thornberg said. “Are you kidding me?”
Sunday, July 1, 2018
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