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Will it be a Buyer’s or a Seller’s Market in 2015?

 Dice buy sell

 

    A serious look into an ever-changing Real Estate Market, like the one projected for 2015, indicates we should be up for anything. Ann and I are reading trends and forecasts which suggest market conditions slightly favoring sellers in the coming months. Low inventory with an increase in consumer activity (once the weather clears) will support modest price increases and the likelihood of more competitive bid situations.

 

The housing marketplace is a non-linear force that is not subject to the laws of gravity. Described as less volatile and easier to understand than the stock market, housing is equally as unpredictable and more subject to the emotional whims of a consumer. The buyer vs. seller advantage may not be as it appears from one month to the next; real estate is locally driven, so it is area specific, and will also cycle according to price points.

 

For instance, conditions changed several times during the course of 2014; as the market improved buyers and sellers were anticipating home sales to favor sellers. There were subtle changes in the fall market that evolved to favor purchasers late in the year. This seems to have happened in spite of generally low inventory in the resale market. Conservative purchasers were taking their time when considering what to buy, without any perceived pressure to purchase quickly, and did not turned out in as high numbers as hope in order to favor sellers.

 

Although modest in terms of value increases, the total volume of projected home sales is very positive for 2015.  While it is still early in the year, a noticeable uptick in activity is present in the marketplace. So hang on, things could start moving at a rapid pace very soon – we are on the cusp of the spring market, when not only the temperatures heat up – improved consumer confidence, pent-up demand, low mortgage interest rates, and new homes coming on the market are a good recipe for activity.

 

Contact your trusted real estate advisor for the most accurate evaluation of Real Estate and housing trends available in the marketplace today. We are happy to assist you too!

 

Ann & John VanderSyde
Ann & John VanderSyde

This Blog will be featured in RTD “Ask the Expert” Article on Sunday 3/1/2015

“Q&A – Some of what to consider when it’s time to place your home in the 2015 Real Estate Market”

Ann & John were recently asked to put together a presentation for people contemplating the sale of their home. Here are a few quick questions they generated in order to spark an interactive conversation about the selling process. We are happy to expand on any of these talking points, as we do in our presentation.

Home-pencil-on-the-sky

TEN thoughts to ponder if you are thinking about selling your residential property:

  1. “What are the basic steps involved in selling a house?”

We feel there are three BASIC phases of the real estate sales process:

  • Preparation – begin planning early
  • Marketing – strategies for getting buyers
  • Contract to Closing – you have a buyer, what next?

 

  1. “I am considering putting my house up “for sale” and want to know, when is the best time for me to engage my realtor?”
  • If you are thinking about selling your house, then it’s time to call your agent.
  • Involve your Realtor ASAP; they have the knowledge and experience to guide you intelligently from the very beginning.
  • Start early; give yourself plenty of time to get the house ready to sell; it may take longer to get the house “market ready” than you think.
  • Realtors can see past the present condition of a house, and provide powerful suggestions that will get you started productively. Don’t wait until you “think” you’re ready before calling.
  • IF you haven’t yet selected a Realtor, start even sooner!

 

  1. “You’re a Realtor, how much is my house worth in today’s market; you have this information at your fingertips, right?”
  • Realtors can quickly gather information in order to give you an overall idea about what houses in your area/neighborhood are selling for at a particular time, BUT an accurate CMA (Comparative Market Analysis) of your particular home will require deliberate research – no two homes are exactly alike.
  • An agent will NOT likely be able to guide you in pricing you house until they know how it is going to “show” while it’s on the market. They can see past pre-market conditions, so invite them into the house soon.
  • Your Realtor will prepare a professional market analysis of the property, allowing you to make an informed decision about where to set the sales price.
  • Your Realtor will help you understand the difference between “market value”, “appraised value”, “tax assessment”, and “AVM” estimates.
  • Realtors do not set sales price, you do; they provide accurate information on order for you to make informed decisions about your property.

 

  1. “What Three Things sell a house?   location, location, location of course!”
  • Location, Price and Condition are the three key factors you need to consider when selling a home. PRICE is absolutely the product of location and condition, but the only thing you cannot change is the location.

 

  1. “I know purchasers are likely to offer me less than my asking price, shouldn’t I build-in a cushion in order to get what I want for my house?”
  • Homes typically sell within 97% of the list price, but 47% report reducing the asking price at least once.
  • Overpricing or building in a “price-cushion” does not benefit the seller; price the home competitively, at or near when you believe it will sell, and it will generate more offers at a higher price, and in a shorter period of time.
  • Homes that are priced well sell quickly, sell at or near list price, and are more likely to generate multiple offers.
  • Consider a “compelling price”, one in which a purchaser knows that if they do not make a strong purchase offer the house will not be there for them later.
  • Unless purchasing an investment property, in our area of Richmond, VA, purchasers are more likely NOT to make a purchase offer if they perceive the sales price as being unrealistic or overpriced for the market.

 

  1. “Why should I spend time and money sprucing up the exterior of my house when I know it is the interior that’s really going to sell it?”
  • Your first impression to a purchaser is the most important.
  • You cannot sell your house if a purchaser will not get out of the car and come inside.
  • Dollar for dollar, the biggest return on your investment is in your yard and landscaping, but don’t overdo it for the neighborhood.
  • Cost VS Value.com Report is an excellent resource when attempting to understand the dollar return on repairs and upgrades to a property.
  • Think “Consistency” when understanding what sells.

 

  1. “We haven’t painted the inside of the house in ten years, but it’s not all that bad, really; why spend money on something that a purchaser is likely to change anyway?”
  • YES! Because paint is worth $30 dollars in the can, and worth $3,000 dollars on the wall!
  • Consider things like painting, or replacing worn out carpets, or changing out dated fixtures or appliances to improve your appearance.
  • You don’t need to “renovate”, but fixing the obvious objections will save you time and money in the long run.
  • Ignoring the simple fixes will be reflected in the days on market, as well as the final sales price.
  • Understand that your house is no longer your “home”; it is best if you can look at your property as a “consumer product” for which you seek to get the highest price, in the shortest period of time, with the least inconvenience to you and your family.
  1. “Our furnishings are just fine, why do we need to worry about staging the house; they’re not buying the furniture, are they?”
  • There are misconceptions about what “staging” is, and what it costs.
  • Setting the stage in your house is critical to improving your bottom line. It doesn’t necessarily mean changing everything in the house.
  • There are different levels of staging depending on each seller’s need.
  • Staging doesn’t need to cost the seller a lot of money.

 

ADVANTAGES to setting the “Stage”:

  • It’s easier for buyers to visualize their future home if they see themselves in that environment; if the can mentally “move-in” to the property.
  • Buyers are willing to spend more time in the house if they are comfortable and inspired.
  • Buyers tend to overlook other property shortcomings when emotionally stimulated.
  • The 3 most important rooms to consider: Kitchen, Living Room, Master Bedroom are the most important rooms to stage – followed by baths.

 

  1. “Who has the advantage in today’s Real Estate Market, Buyers or Sellers?”
  • The housing marketplace is a pendulum that is constantly moving.
  • The advantage may not be as it appears, and may vary with location.

Advantage Seller:

  • Lower inventory is available for sale
  • Prices are slowly improving, but each market area varies
  • Interest rates remain low, but are expected to increase slightly

Advantage Buyer:

  • Fewer buyers in the market. People appear to be content. Consumer confidence is slowing improving
  • Purchasers are taking time to evaluate their options – no sense of urgency
  • Purchasers are still looking for the diamond and the deal
  • Purchaser’s expectations are high

 

  1. “The last time we bought or sold a home was ten years ago, things haven’t really changed all that much, have they?”
  • Change is constant; the real estate and lending markets have changed drastically since 2008.
  • The average time a home owner stays in their current home ranges from 5-9 years according to the National Association of Realtors (up from 3-5 years during pre-bust market conditions)
  • Chances are, if you have not bought or sold a home in the last five to seven years, then you can expect a very different experience.
  • Your Realtor can provide a complete guide to the Selling process today.
  • Changes have also influenced Home Inspections, Appraisals, The Lending Process
  • Written Disclosures as of July First, 2012

 

 

Based on what the experts are saying, what can we expect to the in the coming year?  Although we won’t know until the end of the year if these predictions are true, here’s what the experts predict for 2015: (National predictions listed on the NAR website)

  • Prices Will Increase – existing home prices will increase 3% in 2015, and 2% in 2016. (Bloomberg Businessweek)
  • Mortgage Rates May Increase – 30 year fixed mortgage rates are expected to increase in 2015, but will still be considered low (NAR) – [The 1% to 10% affordability rule]
  • Homes Will Be Flying Off the Market – [maybe not], but home sales in 2015 are expected to reach their highest levels in two years (Fannie Mae)
  • New Homes Are Being Built – housing construction will reach 1.4 million in 2015, an uptick from past years and closer to the average number needed to balance the market (NAR)
  • Property Is Becoming More Valuable – for the 27th consecutive month, new home prices increased on a year-over-year basis, increasing a total of 20.7% over the past two years (NAHB)

 

 

What questions do you have about selling a home in 2015?

We hope this information generates some questions about the selling process for you. For explanation, clarification or expansion on any of these topics contact us at your convenience.

Yours truly, Ann & John

 

By:   Ann & John VanderSyde

Real Estate Sales/Service – Associate Brokers Virginia Properties/Long & Foster

412 Libbie Ave, Richmond, VA 23226

February 5, 2015

Ann & John VanderSyde
Ann & John VanderSyde

Your Representation

Representation: Full Service vs. Limited Service – In Virginia
   
Excerpt from my BLOG;   http://insydehomes.blogspot.com/

I am a full service REALTOR® so I believe you should always seek Full Service representation when selling or purchasing a home. The benefits far out weigh the risks, and the security of having a true real estate professional’s guidance is worth the cost of this service. Why would you wish anything less for your most valued asset?

It used to be that “Discount” Brokers seemed to offer Sellers the same level of service that Full Service Brokers provide, but for less cost to you; now, in accordance with Virginia law, they must call themselves “Limited Service Representatives”. They must disclose what services you are or are not receiving, at whatever cost you agree to do business with them. Surprising to some, there is no guarantee a Seller will be saving money through a lack of representation. In fact, statistics show, in most cases they are leaving money on the table!

Limited service disclosure was legislated into effect on July 1st, 2007. Law makers felt it was necessary to eliminate any confusion that existed as to exactly what services one should expect to be provided in real estate by a limited service agent as defined in Virginia agency law. This law of “disclosure” requires limited service representatives to tell sellers they are contracting with exactly what services they will and will not provide to you.

A Limited Service Brokerage Agreement must include: a) a list of duties NOT provided; b) a list of duties TO BE Provided. They are also required to furnish sellers all required disclosure forms along with disclosure of all rights and obligations with regard to: 1) The Virginia Residential Property Disclosure; 2) Condominium Resale Certificates; 3) Property Owners’ Associations Act. Beyond these requirements, the Limited Service Representative may or may not submit property information to the area Multiple Listing Service, and a Seller should not expect to receive any representation with regard to the home they have on the market. One can pay more to get more from their menu of services, but you are otherwise on your own!

While this article is targeted at Sellers, the same applies for Purchasers believing a better deal is available without using a Realtor. This is most often not the case. It is customary for the commission to be negotiated with the Seller prior to a home being put on the market. Further more, without representation most purchasers don’t know what to look for, what questions to ask, how to review and negotiate a contract, or what the actual value of a property is under current market conditions.

In contrast, the security of knowing you have a Full Service Real Estate Professional helping you is priceless. We are working on the job to serve you continuously from start to finish, and we know market trends. A Full Service provider will have a comprehensive plan of representation available to you along with their marketing plan for both Sellers and Purchasers.

For more insight, information and any questions on this and other important issues, please contact your most valued real estate professional, we are here to serve you!

Sources: Virginia Legislation (HB 316) Chapter 627 of the Code of Virginia; Central Virginia Regional MLS Limited Service Representation, CVRMLS_LSLA form REV. 6/07

John VanderSyde, Associate Broker, Virginia Properties, A Long & Foster Company