Some current statistics for the Pensacola, FL area real estate market:
286 sold in February with 149 average days on Market at 93% list price ~ median Price $128,250
209 sold to date in March with 379 Pending 580 Contingent. 161 average days on market at 94% list price ~ with a median price $131,500
Our team has personally seen a tremendous pick-up in activity in our real estate market! It seems many are sensing the urgency to buy while the prices are low as well as the interest rates!
Tuesday, March 22, 2011
Wednesday, March 9, 2011
Spending Your Commission Money...
Where We Stand On Commission Issues and How it Affects YOU
This is designed to inform those interested in selling their home how to best use the commission they pay to their advantage and to accomplish their main purpose—to sell their home! Where do you want your commission money to go? We have seen, what we consider, a great lack of ethics when it comes to the purpose and use of the commission money that sellers pay in order to get their home sold. This is a growing problem in the real estate sector, as agents are tired of being “burned” by other agents and are jumping on the bandwagon in using commissions solely for their own gain—instead of the intended, and fair, purpose. As Realtors, we have sworn to uphold our clients’ best interest above our own, and we feel that we have a great responsibility to our clients in order to best use the money entrusted to us in the form of a sales commission. We are committed to doing what is best and most fair to all involved when it comes to commission.
Following are a couple of questions you should ask any Real Estate Agent before listing your home with them:
1. What percentage split do you offer the buyer’s agent?
If the answer is anything less than 50%, you should consider using another agent. The percentage going to the buyer’s agent is designed to get them excited about your home. You must insist that they split the amount equally in order to have the best chance to sell your home. The chances of them selling your home, even the experienced agent is, at best, just above 5%. That means there is a 95% chance that another agent would be bringing the buyer to your home; therefore, you need the buyer’s agents on your side and excited about your home. That money shouldn’t be designed so the listing agent will make more than the buyer’s agent. The listing agent will try to tell you that they have expenses, be they advertising, sign, lockbox, additional marketing, etc. However, on the other side of the issue, the buyer’s agents statistically spend four times more time with the buyers as the listing agents spend with the sellers. The time issue alone should show that the time spent by the buyer’s agent is worth half of the percentage. These are expenses that should be budgeted in their half of the commission not taking away from the saleability of your property. If you are going to list for any certain percentage, insist that it be spent wisely to try to draw the buyer’s agents, not overpay the listing agent. We have seen several agents lately who will, for instance, list for 7.5% and offer 2.5% to the buyer’s agent--keeping 5% for themselves! You decide whether that is greed, ego problems, or the best use of your commission dollars! Another will list for 6% and offer 2.25%, and still others will list for 6% and offer 2.5%. Our stand on this issue is that we will NOT do this to our clients! In order to be the best stewards of your money, we will use the commission for its intent—to bring a buyer and get your house SOLD, and therefore use it to entice the buyer’s agents. As a seller, it is difficult to see the amount of money that is given to agents to sell their home, so our advice is to be sure you don’t overpay your listing agent—you are in control of the commission and the sale of your home. Don’t allow the ego-driven agent to run over you when it comes to how to spend your money. Put yourself in a buyer’s agents’ shoes. You are showing two homes, one is offering 2.25%, and the other is offering 3.5%. You show both because you know you should, ethically, but which home would you be more excited about selling? The obvious answer for anyone would be the home that would pay you more handsomely for your time.
Some agents will tell you that they keep the larger part of the percentage to themselves because of their experience, but what they are not telling you is that they will only price your home at the best price for it to sell—if you don’t list at their price, they won’t list it; and the price is what sells the home, not their “experience”. You could price it as aggressively with another Realtor, and quite possibly sell it more quickly had you listed it to offer more to the buyer’s agent, because then you had two factors on your side—price and agents.
2. Are there any other fees involved in your services?
Specifically, be sure they do not charge any transaction fee to the buyer. The commission that you pay is how they get paid. Real Estate Agents are paid handsomely for their expertise and services, so to think that anything additional is necessary from the buyers is to your disadvantage and counters the methods used to sell your home. The buyer should not have to pay any fees for writing a contract on a home, whether it is a short sale or not. The reason that a fee should not be charged is that chances are extremely great that you will lose buyers to your agent insisting on a fee for their services. The buyer can go find another home on the market and not be charged the additional fee by the listing agent. We, personally, have had clients who have withdrawn their offer on a home because they were not willing to pay the additional fee charged by the listing agent.
The Bottom Line: Make sure you are educated on how the commission and splits work. The best option for you when choosing an agent to effectively market your home is to offer a fair percentage, but insist that it be split equally with the buyer’s agent.
This is designed to inform those interested in selling their home how to best use the commission they pay to their advantage and to accomplish their main purpose—to sell their home! Where do you want your commission money to go? We have seen, what we consider, a great lack of ethics when it comes to the purpose and use of the commission money that sellers pay in order to get their home sold. This is a growing problem in the real estate sector, as agents are tired of being “burned” by other agents and are jumping on the bandwagon in using commissions solely for their own gain—instead of the intended, and fair, purpose. As Realtors, we have sworn to uphold our clients’ best interest above our own, and we feel that we have a great responsibility to our clients in order to best use the money entrusted to us in the form of a sales commission. We are committed to doing what is best and most fair to all involved when it comes to commission.
Following are a couple of questions you should ask any Real Estate Agent before listing your home with them:
1. What percentage split do you offer the buyer’s agent?
If the answer is anything less than 50%, you should consider using another agent. The percentage going to the buyer’s agent is designed to get them excited about your home. You must insist that they split the amount equally in order to have the best chance to sell your home. The chances of them selling your home, even the experienced agent is, at best, just above 5%. That means there is a 95% chance that another agent would be bringing the buyer to your home; therefore, you need the buyer’s agents on your side and excited about your home. That money shouldn’t be designed so the listing agent will make more than the buyer’s agent. The listing agent will try to tell you that they have expenses, be they advertising, sign, lockbox, additional marketing, etc. However, on the other side of the issue, the buyer’s agents statistically spend four times more time with the buyers as the listing agents spend with the sellers. The time issue alone should show that the time spent by the buyer’s agent is worth half of the percentage. These are expenses that should be budgeted in their half of the commission not taking away from the saleability of your property. If you are going to list for any certain percentage, insist that it be spent wisely to try to draw the buyer’s agents, not overpay the listing agent. We have seen several agents lately who will, for instance, list for 7.5% and offer 2.5% to the buyer’s agent--keeping 5% for themselves! You decide whether that is greed, ego problems, or the best use of your commission dollars! Another will list for 6% and offer 2.25%, and still others will list for 6% and offer 2.5%. Our stand on this issue is that we will NOT do this to our clients! In order to be the best stewards of your money, we will use the commission for its intent—to bring a buyer and get your house SOLD, and therefore use it to entice the buyer’s agents. As a seller, it is difficult to see the amount of money that is given to agents to sell their home, so our advice is to be sure you don’t overpay your listing agent—you are in control of the commission and the sale of your home. Don’t allow the ego-driven agent to run over you when it comes to how to spend your money. Put yourself in a buyer’s agents’ shoes. You are showing two homes, one is offering 2.25%, and the other is offering 3.5%. You show both because you know you should, ethically, but which home would you be more excited about selling? The obvious answer for anyone would be the home that would pay you more handsomely for your time.
Some agents will tell you that they keep the larger part of the percentage to themselves because of their experience, but what they are not telling you is that they will only price your home at the best price for it to sell—if you don’t list at their price, they won’t list it; and the price is what sells the home, not their “experience”. You could price it as aggressively with another Realtor, and quite possibly sell it more quickly had you listed it to offer more to the buyer’s agent, because then you had two factors on your side—price and agents.
2. Are there any other fees involved in your services?
Specifically, be sure they do not charge any transaction fee to the buyer. The commission that you pay is how they get paid. Real Estate Agents are paid handsomely for their expertise and services, so to think that anything additional is necessary from the buyers is to your disadvantage and counters the methods used to sell your home. The buyer should not have to pay any fees for writing a contract on a home, whether it is a short sale or not. The reason that a fee should not be charged is that chances are extremely great that you will lose buyers to your agent insisting on a fee for their services. The buyer can go find another home on the market and not be charged the additional fee by the listing agent. We, personally, have had clients who have withdrawn their offer on a home because they were not willing to pay the additional fee charged by the listing agent.
The Bottom Line: Make sure you are educated on how the commission and splits work. The best option for you when choosing an agent to effectively market your home is to offer a fair percentage, but insist that it be split equally with the buyer’s agent.
Wednesday, February 23, 2011
First Time Home Buyers
Because of the drop in housing prices and the interest rates still being low, now is a super-great time to buy! I know many have waited for more signs that the market has “bottomed out”, but will you be risking more money in the long run?
I’ve heard it projected that housing prices may continue to fall over the next year, but interest rates are also projected to be rising this year. Over the life of a 30-year loan, you need to weigh the benefits of going ahead and purchasing your home now at the lower rates rather than waiting for a possible “bottoming out” of the housing prices.
There are some terrific deals on the market right now that you could take advantage of. Make sure you are staying on top of the real estate market as well as the mortgage market as you consider the purchase of your first home! Your dream of home-ownership may be closer than you think!
I’ve heard it projected that housing prices may continue to fall over the next year, but interest rates are also projected to be rising this year. Over the life of a 30-year loan, you need to weigh the benefits of going ahead and purchasing your home now at the lower rates rather than waiting for a possible “bottoming out” of the housing prices.
There are some terrific deals on the market right now that you could take advantage of. Make sure you are staying on top of the real estate market as well as the mortgage market as you consider the purchase of your first home! Your dream of home-ownership may be closer than you think!
Tuesday, February 22, 2011
FHA releases info about premium increase
We received word of this today...
WASHINGTON – Feb. 22, 2011 – Effective April 18, the average FHA-backed mortgage will cost new borrowers about $30 more per month. In a letter sent yesterday, Assistant Secretary for Housing/Federal Housing Commission David H. Stevens explained the change, which will increase the mortgage insurance premium (MIP) on all 30-year and 15-year loans by a quarter of a percentage point (.25).
The increase impacts FHA loans with a case number assigned on or after April 18, 2011.
According to Stevens, FHA must increase its Mutual Mortgage Insurance (MMI) fund reserves – a two percent capital reserve ratio – to comply with current law.
“The MMI fund has been below the two percent threshold in our last two annual actuarial reports to Congress,” Sevens says; and that at the current rate, MMI will not meet its mandated level until at least 2015. “Raising the annual premium will enable FHA to increase revenues … Based on current volume projections, the annual MIP increase would generate an additional $2.5 - $3 billion annually.”
Stevens defended the increase’s unveiling during a down real estate market by calling the quarter-point increase “a responsible step towards meeting the two percent threshold, while allowing FHA to remain the most cost-effective mortgage-insurance option for borrowers with lower incomes and lower downpayments.
“I understand the concerns of those in the industry about this increase,” he says. “While I do not expect all to agree, we have made these moves to protect FHA so that it can continue its vital mission.”
While the monthly payments on the average FHA loan will go up about $30, it shouldn’t impact closing costs. The upfront MIP remains unchanged at one percent.
To read the Department of Housing and Urban Development’s Mortgagee Letter explaining the change (PDF format), visit HUD’s website.
© 2011 Florida Realtors®
WASHINGTON – Feb. 22, 2011 – Effective April 18, the average FHA-backed mortgage will cost new borrowers about $30 more per month. In a letter sent yesterday, Assistant Secretary for Housing/Federal Housing Commission David H. Stevens explained the change, which will increase the mortgage insurance premium (MIP) on all 30-year and 15-year loans by a quarter of a percentage point (.25).
The increase impacts FHA loans with a case number assigned on or after April 18, 2011.
According to Stevens, FHA must increase its Mutual Mortgage Insurance (MMI) fund reserves – a two percent capital reserve ratio – to comply with current law.
“The MMI fund has been below the two percent threshold in our last two annual actuarial reports to Congress,” Sevens says; and that at the current rate, MMI will not meet its mandated level until at least 2015. “Raising the annual premium will enable FHA to increase revenues … Based on current volume projections, the annual MIP increase would generate an additional $2.5 - $3 billion annually.”
Stevens defended the increase’s unveiling during a down real estate market by calling the quarter-point increase “a responsible step towards meeting the two percent threshold, while allowing FHA to remain the most cost-effective mortgage-insurance option for borrowers with lower incomes and lower downpayments.
“I understand the concerns of those in the industry about this increase,” he says. “While I do not expect all to agree, we have made these moves to protect FHA so that it can continue its vital mission.”
While the monthly payments on the average FHA loan will go up about $30, it shouldn’t impact closing costs. The upfront MIP remains unchanged at one percent.
To read the Department of Housing and Urban Development’s Mortgagee Letter explaining the change (PDF format), visit HUD’s website.
© 2011 Florida Realtors®
Tuesday, April 6, 2010
Short Sale...Forclosure...REO...Bank Owned
Where do we start?
Short Sale/Pre-Foreclosure - A home owner who is selling their house for less than what they owe the lender.
Foreclosure - Lender is taking steps to take full possession of the house, usually because of lack of payment.
REO/Bank Owned - The lender has taken possession of the home and is in the process of selling it to get it off their books.
The long and the short of it is if you are trying to buy or sell a distressed property it will require time & patience. Some of the pitfalls you may find in the purchase of distressed properties are a lack of disclosures and important information about the house. The lender is going to tell you it does not know anything about the house and will not be held liable for any problems the house may have.
On the selling side there is a mountain of paper work the lender is going to require you to submit for a short sale/pre-foreclosure. When you are going through this difficult time don't be afraid to ask for help, find someone who is knowledgeable in the short sale process that can help you avoid potential problems.
Live Joyfully!
Short Sale/Pre-Foreclosure - A home owner who is selling their house for less than what they owe the lender.
Foreclosure - Lender is taking steps to take full possession of the house, usually because of lack of payment.
REO/Bank Owned - The lender has taken possession of the home and is in the process of selling it to get it off their books.
The long and the short of it is if you are trying to buy or sell a distressed property it will require time & patience. Some of the pitfalls you may find in the purchase of distressed properties are a lack of disclosures and important information about the house. The lender is going to tell you it does not know anything about the house and will not be held liable for any problems the house may have.
On the selling side there is a mountain of paper work the lender is going to require you to submit for a short sale/pre-foreclosure. When you are going through this difficult time don't be afraid to ask for help, find someone who is knowledgeable in the short sale process that can help you avoid potential problems.
Live Joyfully!
Tuesday, March 16, 2010
Okay, so I guess I'll go ahead and begin this blogging thing! =) There really is so much to share when it comes to real estate, as well as just life in general. My holdup is finding the time and making it a routine to blog. So here it goes. The first of many, I'm sure...
I guess the most urgent information right now is the deadline for the tax credit! We only have 45 days to finalize any contracts for buyers in order to meet the deadline for the tax credit. First-time homebuyers can get up to an $8000 tax credit for contracts written before April 30, 2010, and which close by June 30, 2010. That is a pretty good incentive to go ahead and buy! Great interest rates, along with affordable housing, with a tax credit on top makes it hard to beat finding that perfect home in the next month and a half!
If you are interested in purchasing a home, be sure to be on top of the market for good buys! Many other buyers are looking now as well, and when you find a good buy, don't wait around! Make up your mind and go ahead and get the contract in, so you don't lose it to another savvy buyer!
Just a little advice for today! Hope you all are living joyfully!
I guess the most urgent information right now is the deadline for the tax credit! We only have 45 days to finalize any contracts for buyers in order to meet the deadline for the tax credit. First-time homebuyers can get up to an $8000 tax credit for contracts written before April 30, 2010, and which close by June 30, 2010. That is a pretty good incentive to go ahead and buy! Great interest rates, along with affordable housing, with a tax credit on top makes it hard to beat finding that perfect home in the next month and a half!
If you are interested in purchasing a home, be sure to be on top of the market for good buys! Many other buyers are looking now as well, and when you find a good buy, don't wait around! Make up your mind and go ahead and get the contract in, so you don't lose it to another savvy buyer!
Just a little advice for today! Hope you all are living joyfully!
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