September 2014 Market Update

From the Desk of Josh Barker

Happy September! This year home appreciation is likely going to slow to a modest 3-5% and the Redding real estate economy is going to feel more stabilized. Home inventory will continue to increase slowly and fewer and fewer distressed properties will be on the market. The cost of purchasing real estate will likely increase slowly as interest rates increase, and the average days it takes to get a home sold will also likely increase. Well priced homes and “quality properties” will continue to sell quickly with the right marketing strategy in place. YOU CAN VIEW OUR MARKETING PLAN HERE…INSTANTLY!

This month I will review several issues being discussed in our local market…

Enjoy!
Josh Barker

Click Here to watch Josh's video blog for the month of September.

FSBO's Must Be Ready to Negotiate

In a recovering market, some sellers might be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional. The real estate agent is a trained and experienced negotiator. In most cases, the seller is not. The seller must realize the ability to negotiate will determine whether they get the best deal for themselves and their family.

Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies which work for the buyer and will almost always find some problems with the house.
• The termite company if there are challenges
• The buyer’s lender if the structure of the mortgage requires the sellers’ participation
• The appraiser if there is a question of value
• The title company if there are challenges with certificates of occupancy (CO) or other permits
• The town or municipality if you need to get the COs permits mentioned above
• The buyer’s buyer in case there are challenges on the house your buyer is selling.
• Your bank in the case of a short sale

The Two Things You Don't Need to Hear from Your Listing Agent

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

1. Set the market value on possibly the largest asset your family owns (your home)
2. Set the time schedule for the successful liquidation of that asset
3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family in order to garner that degree of trust. Make sure this is the case.

Be careful if the agent you are interviewing begins the interview by:

• Bragging about their success
• Bragging about their company’s success

An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house. However, you first need to know they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important.

Look for someone with the ‘heart of a teacher’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home. Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick someone who truly cares.

How Interest Rates Impact Family Wealth

With interest rates still in the low 4%’s, many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year.

If you look at what the experts are predicting for 2015, it may make the decision for you.

Predictions for 2015 3Q:

• 4.6% - Fannie Mae
• 4.8% - Freddie Mac
• 5.2% - Mortgage Bankers Association
• 5.2% - National Association of Realtors

Even an increase of half a percentage point can put a dent in your family’s net worth.

Let’s look at it this way…

The monthly payment (principal & interest only) on a $250,000 home today, with the current 4.1% interest rate would be $1,208.

If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4% making that home cost $10,000 more at $260,000.

If we take Freddie Mac’s rate projection of 4.8%, the monthly mortgage payment climbs to $1,364.

Some buyers might not think that an extra $156 a month is that bad. But over the course of 30-year mortgage you have spent an additional $56,160 by waiting a year!

Thank you & make it a great September!