Price It RightSell It Now!

Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research. Dr. Johnson explained that proper pricing has been studied by John R. Knight:

“The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties…

Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start. Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight. Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors. Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.”

As you can see from the graph to the right, properties in Broward County, Florida are selling within 91% of the original listed price and the days on market are getting shorter.

What Has It Cost To Own A Home For The Past 20 Years?

Notes from the report: Prices and mortgage payments are based on the median existing single-family home price, averaged from quarterly data to obtain annual prices. Mortgage payments are calculated using the interest-rate average for that year and assume a 20% downpayment and fixed 30-year term. Rent is the median gross monthly rent from the 2010 American Community Survey, indexed using the CPI for rent of primary residence. Income is median household income.

Sources from the report: JCHS tabulations of National Association of Realtors®, Composite Affordability Index (NSA) and Existing Single-Family Home Sales via Moody’s Analytics; Freddie Mac, Primary Mortgage Market Survey; US Census Bureau, American Community Survey; Moody’s Analytics, median household income estimates.

Source: KCM Blog (June 30, 2012) (with permission)

 

What about The Mortgage Forgiveness Act?

Source: The Kcm Crew, May,2012
MMany of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007 will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

In February, DSNews reported:

“Obama’s FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007…

What Is Happening With Short Sales?

II have been saying, “Short Sale is the way to go”. It is less costly then foreclosure in the long run for the banks and less humilliating for the homeowner.It is the better of the two evils during this ravishing recession.

Source:(KCM May 2012)
It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

The Mortgage Industry is Changing Again!

I have previously been the president of Landis Mortgage Financing, Inc. for 28 years. Unfortunately, I have seen many uninformed borrowers given information that was not in their best interest. Hence, they were allowed to exend their credit way beyond safe limits.

This recession has impacted many responsible consumers. Now these new proposed QM standards threaten to penalize these very same browers who are trying to reinstate their credit. Read below!

Source: (KCM Blog May 2012)

We often discuss the difference between the PRICE and the COST of a home. We want buyers to realize, in many ways, the cost of a home is more important to them than the actual price. Obviously, price is part of the cost equation. The other piece, available financing, is also crucial. Soon, there will be major decisions finalized by the government regarding house financing moving forward. These decisions could negatively impact many buyers.

Innovation

Mobile Technology Is IT!

A ccording to Rismedia.com: (May 5, 2012)

As smartphones and tablets continue to be employed for every conceivable service, mobile customers are demanding fastand reliable ways to access information in the real estate industry. . . .

‘Our research shows that nearly all homebuyers who used a mobile device in their search process consider it a valuable tool. Homebuyers are becoming more fast-paced, and require technology that can keep up with them. Our mobile platforms are streamlined and efficient, and they provide instant access to valuable information. With a few finger swipes, a homebuyer can see extensive details about a home, as well as find out exactly how to contact the advertiser,’ says Scott Dixon, president of NCI’s Real Estate Division, who offers the following tips for harnessing mobile shoppers:

1. Fill in the Blanks. A majority (68 percent) of mobile shoppers shared details such as prices, locations, amenities, and photos of potential homes. The best way to capitalize on this trend is to be complete when filling out profiles, and optimize on a homebuyer’s want for information.

2. Keep it Simple. The peak traffic for mobile searches occurs from Friday to Sunday, when people are on the go. Knowing that, it follows that a mobile platform must be kept simple and easy to use, something that can provide a shopper with information they need in an instant.