Understanding the Difference Between Online Resources and a Realtor When Pricing Your Home

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The Internet can be a great resource for a host of things centered on buying or selling your home but in some cases, the most you can expect to gain is a basic understanding of things.  For something as serious and important as pricing your home to either value it or sell it, relying on the Internet can only go so far.  Here we’ve outlined some key differences between the figures you will yield from online sources versus those that have been compiled by your local Realtor. 

ACCURACY IS VITAL
In today’s market especially, accurately pricing your home to sell is essential.  With it being a buyers’ market, you will have to gain a solid understanding of allfactors that contribute toward your property’s value.  There can be negative repercussions of pricing a home either too low or too high.  One such scenario is if there was a seasoned buyer who had taken the time to research in advance of searching for homes.  That buyer’s knowing what to expect in the local market seeing your overpriced home could result in a turn-off and you could lose the sale.  By the same token, you stand to get the shorter end of the stick in case of not knowing what you could have charged.  Spending a little more time and/or expense can make a huge difference in the end outcome.  

ONLINE TOOLS AND CALCULATORS
There are more than several websites where anyone can log on, put in their zip code and be given an instant “analysis” of their real estate value. The figures that appear as results from searches made through online resources stem from a conglomeration of several weeks and sometimes months of data collected from a particular region.  

Websites such as www.zillow.com,www.realtytrac.com or www.trulia.comoffer a great way to get a generic idea of the value that homes in your region are going for or have gone for recently.  As an added resource to other services also offered on these sites, the goal is not to assist homeowners in assigning a selling price on their property based on the data, rather to offer a snapshot on sales and pricing data for the area.  In fact, for many people it is the perfect tool to add an extra edge when determining the fair market value of your home, along with other factors.  

PROFESSIONAL COMPARABLE MARKET ANALYSIS
While online real estate tools are a great way to get a preliminary idea, they are only going to yield a figure that will show you where to start.  To get an accurate assessment, you will need to avail the professional services of a Realtor.  The only way to get an accurate “reading” of what the market rates are for homes in your vicinity and your neighborhood in particular, is to have a comparative market analysis conducted by a Realtor who understands your neighborhood.  There is a good chance that they have dealt with properties in the area on a first-hand basis, regularly interact with the agencies and organizations that deal with very homes in your neighborhood and are familiar with the people in various facets that you will end up needing to interact with yourself, as the seller of your home. 

Realtors conduct a detailed Comparable Market Analysis (sometimes also called Competitive Market Analysis) through a series of data compilation of area homes and properties, considering factors such as amount of land, the square footage and number of bedrooms or typical amenities in the neighborhood.  But homeowners can also opt to delve into accurate detail about their property’s value by relying on an independent appraiser.  Also, through the use of CMA data the County Tax Assessor determines the value of your property taxes. 
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When you are pricing your home to sell, it is vital that you use all available resources.  At first, it makes sense to “shop around” and get to know the generalities before you head for the specifics.  And as with most transactions dealing with your real estate world, it is always best to rely on your Realtor for quality, effective and accurate information that is relevant to you and YOUR market. 

Benefits and Drawbacks of Short Sales

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Whether you’re on the buying side of the fence or selling, getting involved with a short sale might be the perfect situation for you.  Though they have been around for a long time it wasn’t until the housing market crash of 2007 that more and more distressed sales came up to the surface. In fact, the influx of short sales that took place in our housing market skyrocketed after millions of homeowners suddenly found they owed much more on their properties than they were worth. 

But if you are careful and mindful of all the benefits and drawbacks of selling (or buying) a short sale, you can enjoy the best of both worlds. Here are a few reasons to consider before making a decision:

Short Sales For Sellers

BENEFITS

Ability To Salvage Credit

When homeowners engage in a short sale as opposed to letting their home go into foreclosure they are causing much less damage to their credit than if they were to walk away from their mortgage commitment.  Not only do short sales harm a credit report less but they also demonstrate commitment, accountability and responsibility to your debt.

Can Purchase A New Home In About 2 Years

Homeowners that opted for a short sale are able to recover financially in far less time than if they had allowed foreclosure.  Where a foreclosure will remain on your credit report for up to 14 years, the negative impact of a short sale only lasts about 24 months, allowing the homeowner to recuperate and get back into a home relatively soon after the short sale.

Little or No Agent Fees

Given that it is a matter of distress, many agents will not charge any fees to process a short sale transaction.  In fact, these types of real estate transactions can only be performed by licensed, certified short sale experts.

DRAWBACKS

It May Take a Long Time To Sell the Home

Since banks are involved in every step of the process it can take many months to turn the sale around.  Even if you receive a good offer on the home, unless your bank processes the offer, accepts it and puts it through several approval procedures, you will not be able to sell the home as quickly as a conventional sale.

Banks May Not Accept Your Chosen Selling Price

Selling a short sale home entails the homeowner deciding on a price to list the home.  Even though most people utilize the services of a Realtor to assist with setting the list price, banks will not always accept the price. Whether or not it will be accepted will be determined once an offer goes through the pipeline.

Complicated When Multiple Mortgages/Lenders Are Involved

In many cases homeowners facing foreclosure that are contemplating a short sale have taken out more than one mortgage on their property. Going through a short sale when it involves multiple lenders can become tedious and complicated since moving ahead with the transaction requires the approval of each lender.

Buying Short Sale Properties

BENEFITS

Great Deal On A Good Home

The single most compelling reason to buy a short sale property is because it allows buyers to afford the home of their dreams at a very affordable price.  Though sellers of short sales are interested in getting as much money as possible for the property, the selling price is less than standard sales.  Also, since the homeowners still live on site in many cases, chances are the condition of the home will be better than what a buyer might find in a vacant foreclosure property.

Strong Potential For Solid Return On Investment As Value Will Go Up Eventually

Getting the house for a lower price amounts to being able to cash in on a greater return on your investment later on.  As long as the buyer plans to remain in the property for a while the home will appreciate eventually, rewarding them with a good financial return on their purchase.

DRAWBACKS

No Disclosure Statement

One of the first things short sale buyers must come to terms with is that the short sale home they are considering will not have a disclosure statement as is with standard sales.  This can be a difficult thing for buyers since they would have to rely on the home inspection and appraisal rather than the otherwise required by law disclosure sellers must provide to buyers in regular real estate transactions.

Unknown Processing Times

The most commonly asked question Realtors specializing in short sale transactions hear is “how long will the process take?” and the answer is always “it depends”.  If a buyer is in a hurry to get into their new home they should strongly consider whether a short sale property is right for them.  A lot of patience is required since it can take months to follow through with all the processes involved and to obtain approvals from each department involved at the bank.

Lots of Negotiating And Re-Negotiating

Banks may or may not agree or accept the offer made by a buyer so the result is a lot of going back and forth during negotiations.  This can add a significant amount of time to the transaction, end up in frustration possibly leading to the deal completely falling through.

If you are in a tough situation and are considering putting your home up for a short sale to avoid foreclosure – or if you want to take advantage of the great interest rates coupled with lower home values right now, call us today and we will get your questions answered.  We look forward to helping you achieve the best outcome possible!

Real Estate News – Extended Mortgage Debt Relief Act, PMI Tax Relief and Capital Gains Tax Rates

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Now that we are well into 2013, there will be some changes to our real estate outlook with some familiar programs back in action. With all the talk about the impending Fiscal Cliff, it is no wonder that homeowners everywhere are wondering how the outcome will impact them individually.

But first, we want to congratulate our lucky friends from Facebook that have won some exciting prizes in our latest drawing! We hope you have a great time enjoying your prizes and we appreciate your support, keeping up to date with us on Facebook!

Now, back to the latest and great news in real estate. Here are three recent changes and/or updates to the programs available out there that will have a significant impact on our marketplace this year and moving forward. This is good, folks!

Mortgage Debt Forgiveness Act Extended Through 2013

On the minds of many homeowners that have mortgages falling short of the current value of their homes, the Mortgage Debt Forgiveness Relief Act was set to expire on December 31, 2012. Among the many issues discussed within Congress during the last few hours of 2012 was the extension period of this important tax relief for distressed homeowners. Primarily as a means to help consumers faced with hardships overcome their financial difficulties when they incur forgiven debt – the Act serves to waive tax implications on what otherwise would be considered taxable income.

Private Mortgage Insurance Tax Relief Now Applies to Fiscal Years 2012 and 2013

Each year millions of homeowners look forward to the tax relief that comes with being able to write off their private mortgage insurance premiums. By the end of 2012, no one was sure the American Taxpayer Relief Act of 2012 would be extended to include the coming year. Once again, at the final hours of negotiations the Act was extended through fiscal year 2013 to allow homeowners paying private mortgage insurance to deduct that amount when filing their income taxes.

Capital Gains Tax Rates Increased from 15% to 20%

A topic of confusion for many, the capital gains tax increase set for higher income levels is more lenient than most people realize. Though the theory is that this increase in tax impacts individuals and households with higher income levels, the truth is the income and gains cap is relatively high. The capital gains tax increase will only apply to individuals earning an Adjusted Gross Income of $400,000 or more. Furthermore, people in these income brackets will incur the capital gains tax only on income earned above and beyond the cap which is $250,000 or more for individuals and $500,000 or higher for households. 

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If you would like to discuss these or any other issues in the real estate marketplace or if you are considering buying or selling a home – contact us today! We would love to help make your real estate dreams become a reality!