El Paso Real Estate

Here we are, end of July and the media just can't shake off the tendency to make some sort of hysterical news out of the real estate market.  First they insisted that there would soon be a crash and prices would plummet.  Then they admitted that prices were stabilizing but that the future was "shaky".  Now, all of a sudden, it's a "buyer's market".

The truth is that NONE of the above is true.  There will be no real estate market crash, prices are still in flux and it certainly is NOT a buyer's market.  The facts simply don't support any of these views.

What's happened in recent months is that the long-running rapid rise in real estate market prices finally ran out of steam.  It was due, and necessary for the health of the market.  When the market began to slow, several things happened:

1. The market prices of existing homes and new homes coming onto the market stopped increasing at the rate they had been increasing.

2. Buyers, who previously had to snap up homes as fast as they came on the market if they wanted any chance of getting one, notices the slowdown and began to take more time to make their decisions.

3. Sellers were slower to accept the changing market place and kept their prices above the market in anticipation of continuing rapid price rises.

4. Consequently the inventory of existing and new homes with "old" prices began to increase significantly and the time to sell began to increase rapidly.

5. Next, some sellers adjusted their prices and experienced normal sale times while most new properties coming into the market were priced lower than they might have been in recognition that the prices had stopped increasing.

6. With "lower" prices (not actually lower, but either at the true market or reduced from previous highs to the true market), the media began to predict a crash (rather than an adjustment).

7. Prices stabilized in most areas, with some decrease in average prices due both to the proper adjustment of overstated prices to the true market and due to a natural slight sag in prices as a result of the correction.  Whenever a market trend stops or reverses there is always a brief "backlash" that is in the opposite direction, then another correction to the true new trend.

8. With buyers taking more time and sellers trying to hold on to their older, higher prices the market pace definitely slowed and inventories have grown considerably.  More adjustment of formerly high prices is needed to meet the current market trend.

9. Newly introduced properties that have been priced properly are selling in normal times and at normal markdowns.  The overall trend of prices is slightly up, at an annual rise of from 3% to 5% for the forseeable future.

10.  The bottom line - it's a balanced market.  There is now a good inventory to choose from with mostly fair market prices and willing sellers.  Buyers are coming back to the table and making offers again, but don't have to act as quickly as before.  Unlike the previous market trend which was marked by selling frenzies and unhealthy rapid price growth, the current market is solid, growing and good for both sellers and buyers.  Interest rates are still low by historical standards.

It's a good time to sell and to buy, if that's what you are ready to do.  So, ignore the media hype, select a responsible and experienced real estate professional and go forward with confidence!

Very often when people are approaching me about selling their property they ask, "Ok, what is my property ‘worth'?" ‘Worth' is a very misleading concept and very often confused. ‘Worth' is often confused with appraisal values and personal factors. ‘Listing Price' is the real question. ‘Listing Price' is driven by what people are willing to pay for your property at any given point in time. This is mostly driven by sales in the immediate area of properties with similar makeup and features. ‘Listing Price' is extremely important to reaching the goal . . . selling the property. There are pitfalls that many fall into when it comes to the "list price":

1. Upgrades. There are many types of upgrades (i.e. pools, flooring, windows, etc.) to a property, but the common misconception is that they contribute equally to the list price with what the owner paid for the upgrade. For example, a $25,000 pool should add $25,000. Not true. The "value" of the upgrade is of ‘worth' what it means to the buyer. For someone not interested in a pool, but it's a "nice thing to have" the pool doesn't add "value" to their buying decision. So what do upgrades do for a seller, they add attractiveness to potential buyers and can add some onto the list price, but not total price paid for them.
2. We will just lower the price if it does not sell immediately. Not the best strategic move especially in a highly competitive market with a lot of properties for sale. For one, consumer behavior shows us that people are not coming back to a property they don't have an interest in. Therefore, if the price is not within their range they will move onto the next. Second, price reductions can create the perception that there is "something wrong" with the property. The thought process with this is that others must have seen it and weren't willing to buy it, what did they see that's wrong.
3. That's my price and I'm sticking to it. Real Estate is all about offers, and sellers must be open to reasonable offers if they want to sell. I am not suggesting anyone should ever just take what is offered. Offers can be "unreasonable". The ultimate decision is always the seller's. But flexibility is very important. We got pretty spoiled, I think, a few years ago when a property would go on the market and sell at the list price a short time later. That was very abnormal, but has never been the norm. Negotiating is back, and we have to be open to it.
4. Pride. We all take pride in our properties, and rightfully so. A lot of our heart goes into where we live. But when it comes to list price, again, it is about what others are willing to pay for your property in the area. It's difficult, but one has to approach the pricing decision objectively and open to the information presented to them that goes into determining the price.
5. Every situation is different. We hear alot about how the neighbor's house sold for$xxx,xxx and that is what the person expects to sell their's for. 99% of the time, there very obvious reasons for this namely different features that the subject property doesn't have. It's not all about square footage and the number of bedrooms and bathrooms.
6. What's owed. What someone owes on a property cannot go into what the list price is. That is a factor in the determination of whether that point in time is a good time to sell or not. Again, it's about what others will buy at.

It really is a great time to buy real estate. The news reports of the "bubble bursting" never happened. Sure, the market did slow down and prices are down also, but far from a burst. We just finished off the best five years in the history of tracking real estate in America. This year was worse than those but still in the top 10. So, if I'm a buyer I have lower prices, more motivated sellers (which mean lower prices, and bonuses like paid closing costs, etc.), and some of the greatest interest rates in 30 years. Why would I wait any longer?

The problems is, we have a tendency to do what everyone else is doing. After all, everyone else couldn't be wrong, right? Well, if you look from an investment point of view, (Real estate is the biggest, and most important investment you will ever make) the best thing to do is buy when everyone else is selling - and sell when everyone else is buying. That's how you make money in stocks, real estate, anything! Now everyone is selling - you should buy. Get a great price, incentives, low interest rate. Then you should sell when everyone's buying and hardly any houses are on the market. Get a high price because the market will be hot and buyers are desperate to find a house and will make big offers the first day and over asking price.

Same goes with stocks. Prices drop when everyone sells off a stock - you buy. Prices rise when everyone starts buying it fast - you sell. Always be the opposite of a market and you will make money.

So, don't let the media fool you - now is a great time to buy. You'll regret it when interest rates jump and then prices start to go up, it will happen fast and you just might spend a lot more money following the masses.

Offering Incentives to Hasten a Sale

Sometimes cash incentives are as effective as lowering the price, especially in the lower price range where buyers may be "cash poor." You may offer to pay some or all of a buyer's closing costs and discount points required by the buyer's lending institution.

If you haven't had much traffic through your house and you're in a hurry to sell, you may want to add the offer of a bonus to the selling broker, in addition to their commission. An example of the wording for such an offer may be "to the broker who brings a successful offer before the summer is over."

For more tips on selling your home, keep checking my blog or visit my website at www.JeseSellsHomes.com

Market Conditions - Is it a Buyer's Market or a Seller's Market?

A CMA often includes a Days on the Market (DOM) value for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months. Your Realtor can tell you whether your area is currently in a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.

If You Price High, Set a Schedule for Lowering the Price

Some sellers list at the rock-bottom price they'd really take, because they hate bargaining. Others add on thousands to the estimated market value "just to see what happens." If you want to try that, and if you have the luxury of enough time to feel out the market, sit down with your Realtor and work out an advance schedule for lowering the price if need be. If there haven't been many prospects viewing your home after three weeks, you may need to lower your list price. If that doesn't bring any prospective buyers, you may need to lower your list price again. Plan on doing that regularly until you find a level that attracts buyers. Make a written schedule in advance, before emotion takes over and you're tempted to dig your heels in.

For more information on selling your home, keep checking my blog and my website at www.JeseSellsHomes.com.

Price Against Comparable Sales in Your Neighborhood

No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market.

Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood. Your Realtor can furnish data on sales figures for those comparable sales and analyze them to help you come up with a suggested listing price. The decision about how much to ask, though, is always yours.

Competitive Market Analysis (CMA): The list of comparable sales a Realtor brings to you, along with data about other houses in your neighborhood that are presently on the market, is used for a "Comparative Market Analysis" (CMA). To help in estimating a possible sales price for your house, the analysis will also include data on nearby houses that failed to sell in the past few months, along with their list prices.

A CMA differs from a formal appraisal in several ways. One major difference is that an appraisal will be based only on past sales. Also, an appraisal is done for a fee while the CMA is provided by your Realtor and may include properties currently listed for sale and those currently pending sale. For the average home sale, a CMA probably gives enough information to help you set a proper price.

Formal Written Appraisal: A formal written appraisal (which may cost a few hundred dollars) can be useful if you have unique property, if there hasn't been much activity in your area recently, if co-owners disagree about price or if there is any other circumstance that makes it difficult to put a value on your home.

TIP: If you do order a market value appraisal, make it clear you don't need an elaborate or full narrative report, i.e., the kind that's complete with photos of the house and neighborhood. Floor plans and a site map are sufficient in most cases.

For more information on selling your home, keep checking my blog and visit my website at www.JeseSellsHomes.com.

Setting the list price for your home involves evaluating various market conditions and financial factors. During this phase of the home selling process, your REALTOR^® will help you set your list price based on: 1. Pricing Considerations; 2. Comparable Sales; 3. Market Conditions; 4. Offering Incentives; and 5. Estimated Net Profits.

 Pricing Considerations - Find a Balance Between Too High and Too Low

When setting a list price for your home, you should be aware of a buyer's frame of mind. Consider the following pricing factors:

If you set the price too high, your house won't be picked for viewing, even though it may be much nicer than other homes on the street. You may have told your REALTOR^® to "Bring me any offer. Frankly, I'd take less." But compared to other houses for sale, your home simply looks too expensive to be considered.

If you price too low, you'll short-change yourself. Your house may sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

TIP: Never say "asking" price, which implies you don't expect to get it.

For more tips on selling your home, keep checking my blog or visit my website at www.JeseSellsHomes.com.

When searching for a new house to buy, a large selection to choose from can be a great thing and it can be very frustrating as well. In a buyer's market, where there's a lot of inventory, buyers can easily get overwhelmed in an online search which would produce almost 2,000 different properties. Here are some tips for preparing for a successful property search:

1. List your specifc "needs" in one column and your "wants" in another. "Needs" will be things like location (i.e. close to schools, distance from work, etc.), number of bedrooms, garage size, price range you can afford (a pre-qulaification prior to beginning a search is always recommended). "Wants" are those things that would be nice to have but not necessary at the present moment or can be added later (i.e. pool, on a golf course, any type of upgrade, room sizes, etc.). The point here is to be very specific as this will allow you to narrow your search a great deal more.
2. Performing an Online Search - When searching click the "Advanced Search" option. This will allow you to add in all that specfic "needs" criteria you came up with. Do not put in the "wants" criteria at this time. Next sort the resulting properties by price from lowest to highest. Now you have a list that is more manageable and in regards to prices you have a cutoff point as the price goes up. Then make a list (or print out) of the properties which are of interest to you noting the MLS Listing number as well. Now take the properties left and start scanning through to find ones that may have some of those "wants" eliminating the others. The goal now is to be able to get a core list of about 10 properties to choose from. Then . . . call your Realtor to arrange for showings.
3. Having a Realtor assist you - This is a great option also, since you now don't have to do all that work above. Before calling a Realtor find out what you are pre-qualified for as far as price range and have your list available from #1. The more specifics you can provide to your Realtor the better. Obviously you may call your local Realtor, and many have a feature on their website which allows you to easily fill out a form describing your needs and wants. This form is then sent electronically to the Realtor and they can get to work for you right away. The Realtor will most likely call you (if you haven't spoke already) asking some additional questions depending on the resulting list size. Then schedule an appoint to go tour some properties! I recommend setting aside at least one full day for house touring.
4. Viewing Houses - This is the real fun part. Now you're out there seeing these properties first hand. Bring your list of "needs" and "wants" you have made previously and each property print out or list. If working with a Realtor they should have handouts for each property. As you visit each property make notes of likes and dislikes on each specific property handout highlighting any property which really stands out to you. Just a few notes on each is usually enough. Don't worry about feeling like you have to make a decision before seeing all of the properties. Simply go through each one, make our notes and ask questions. Then move on.
5. After the Viewings - Go back through each individual property either alone or with your Realtor eliminating the properties that are definitely not of interest. You will probably be able to narrow that list down to about 2 or 3 at this point and this is the goal. You can now make a decision to go back through the remaining properties or you may feel like your mind is made up on one and are ready to make an offer!

Searching and buying a house can feel like it is a lot of work. It is, but it can be (as it should be) a lot of fun and virtually stress-free when it is organized and planned out. Working with a Realtor will take much of the work off of your shoulders. In addition, many Realtors now use online transaction management which allows for easy document exchange and many time grants you access to those documents 24/7 without having to sift through piles of papers later on.

Don't buy if you can't stay put:If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.

Start by shoring up your credit:Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

Aim for a home you can really afford:The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

Don't worry if you can't put down the usual 20 percent:There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.

Buy in a district with good schools:In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

Get professional help:Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive agent, who will have your interests at heart and can help you with strategies during the bidding process.

Choose carefully between points and rate:When picking a mortgage, you usually have the option of paying additional points - a portion of the interest that you pay at closing - in exchange for a lower interest rate. If you stay in the house for a long time - say five to seven years or more - it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

Before house hunting, get pre-approved:Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

Do your homework before bidding:Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.

Hire a home inspector:Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

The main reason that home owners decide to sell their homes themselves is to save the commission charged by a real estate agent. The commission rate varies, depending on which marketing package you choose. Weighing against that commission rate are the advantages that having an agent offers.

Advantages of using a real estate agent:

1. Handling your own sale means you will be responsible for placing ads, answering phones and showing your home to strangers, a real estate agent has marketing systems in place for listing and selling homes.
2. An agent will take the potential buyer through the home at scheduled times, an agent can sell the house, not just show the house.
3. Your house is on the market 24/7 via multiple websites, virtual tours and more.
4. Modern technology allows agents to use electronic lock boxes. When they are used, information is uploaded to the agents access site where he/she is able to look at who, where, and when. Your house is available for showings at all times, not just when you are available to let someone in.
5. The Agent is experienced in the local market and will help you determine a proper selling price.
6. The agent will negotiate with the buyer for you.
7. The agent can find qualified buyers.
8. An agent can offer advice on preparing the house for a faster sale, and closer to the asking price.
9. When you are selling on your own buyers who know you are saving on an agent's commission may offer less for your home, wiping out the financial incentive to do it all yourself.
10. Remember: a real estate agent probably knows a lot more about the business of selling a home than you do.

In the end the decision is yours. If you have lots of spare time, and some experience that will allow you to research the market, establish a competitive price and then show and sell your home, you may feel going it alone is the answer. If your time is valuable, the commission a real estate agent takes will more than pay for itself.