Myth 2/7: Buyers should never offer full price

It’s impossible to have an across-the-board strategy for pricing and negotiating real estate. For starters, every real estate market is different, as is every seller’s approach to pricing. In many parts of the country, for instance, it’s a red-hot sellers’ market. Many times, sellers will purposely price their property right at or just below market value to get multiple buyers interested. When buyers try to offer, say, 5 percent under market value when everyone else is offering full price or more, they might be looking for a home for months.

Also, if a listing is brand new, the seller may expect not a penny under asking. The first two weeks to a month are when the seller sees the strongest activity. When a buyer offers too far under asking out of the gates, they’re likely to lose out.

In slower markets, it’s not uncommon for a seller to price a home well over the market value and wait it out. If a buyer offers 5 percent off a home that is overpriced by 10 percent, the buyer risks overpaying. This is why it’s important that buyers work with an experienced local agent and never take a one-size-fits-all approach to pricing and negotiating.

Excerpt from Zillow Article

3% Down Payment Loans May Come Back

A Fannie Mae and Freddie Mac regulator has said that 3% down payment loans are just as safe as loans with higher down payments!


For More Info, Click Here!

Myth 1/7: Working directly with the listing agent will get the buyer a better deal

Many people today figure that with real estate listings published online, the buyer’s agent’s role is irrelevant. By searching and researching independently, buyers going directly to the listing agent assume they can negotiate a better deal by cutting out the middleman—the buyer’s agent.

The role of the buyer’s agent was never solely about accessing listings, of course. A good buyer’s agent has always had their feet on the street and keeps a finger on the market’s pulse. They know the comps and the other agents, so they can add an incredible amount of value simply through sharing their experience and knowledge.

Buyers, left to their own devices, “don’t know what they don’t know.” A good buyer’s agent can step in, track the buyer’s process and help uncover some of the unknowns about a particularly house, an agent or the market in general. A good agent has years of market and transaction experience in their head. Additionally, the seller is going to pay the commission whether or not there’s a buyer’s agent. For the buyer, then, there’s rarely any savings by going without an agent. Instead, the listing agent simply makes double the commission. There’s no savings to the seller, either, when the buyer doesn’t have an agent.

Also, by having a listing agreement with the seller, the listing agent is looking out first and foremost for the seller’s interests, not the buyer’s. By working with an agent (at no cost), the buyer gets an advisor/advocate working to represent their best interests.

Excerpt from Zillow Article

Go West Young Man! (Or at least get warm)

The famous cry of our ancestors seems to be the way people are moving lately.  Since this is a story by a moving van line, I would think we can discount DC because of all the moving in and out there.  However, there aren't too many people moving from Arizona to Maine...
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Prices are Flat since last year, However...

January 23 - The average list price per sq. ft. for Greater Phoenix non-distressed listings under contract is just under $145 today. One year ago it was also just under $145. This shows us that pricing for homes going into escrow has been close to flat for the last 12 months.

However we are seeing fewer price cuts for active listings than we saw in January 2014. The current weekly rate of price cuts is about 2,300 per week while last year 2,900 per week was typical.

Overall we would say pricing is holding steady, as you would expect with the Cromford® Market Index close to 100.

Return on Home Improvement Projects

So many people do big projects - like updating a Bath - that costs thousands of dollars.  Unfortunately, they don't really imporve teh vallue of their home.  Many times, the least expensive projects provide the greatest return on the dollar.

Here are some examples:

Home Improvement Advice

Current Median and Average Prices Artificially High

If current indicators continue, this year is going to be very interesting. The Median Price and Average Price are unnaturaly high because the number of homes in the lower price ranges are low.  From the Cromford Report:


January 18 - Overall we have fewer homes available for sale than at the same time last year, but the picture varies a lot by price range:

Active listing counts above exclude those in UCB status Over $300,000 we see plenty more supply than last year at this time but under $200,000 there is far less. When demand grows it is likely to grow at the bottom end first, creating a shortage. The top end of the market has plenty of supply and this would remain true even if demand were to increase significantly in this segment. The other implication of this change in the mix is that the average price for active listings has increased a lot since since year even though the asking price of any specific home has not. This effect can lead to a lot of misunderstanding by sellers who can easily get over-optimistic.