Confusing and deliberately misleading

Turret

The world of marketing homes for sale on web sites is misleading, sometimes deliberately so. I saw an advertisement in a neighborhood newspaper about how many visits the web site of a local real estate company gets and how home sellers should have their home listed on it.

The ad more or less says that if you want your home listed for sale on our website then you need to list it with one of our agents. What the add doesn’t say is that if you list your home with any agent from any local real estate company it will end up on our site and appear to be one of our listings.

When someone lists a home with a local real estate company, and we can use my company as an example, the same information appears about the home appears on like a zillion web sites. Usually, the listing information is fed directly to participating sites directly from the MLS. The same feed also sends it to Zillow and Realtor(dot) com and many other sites.

As a home seller if it is important to you to have your home listed on the web sites of the largest local companies or on the web sites with the most traffic listing your home with any REALTOR® from any real estate company should work.

The system may be confusing but it also gets all of the agents in the area competing to find a buyer for all of the homes that are listed. Your house is also used as bait by agents who pay to get “leads” from sites like Zillow.

Real estate agents pay to have their contact information next to the listings. In fact, the reason the sites are free to consumers is because of advertising revenue from real estate agents. Yet consumers often see the site as an alternative to real estate agents.

People who are selling their home without listing it with an agent can and should list it on Zillow. There is no one place where all of the homes that are for sale by owner are listed so it is important to go where the traffic is.

The spring market is heating up. The number of homes for sale was up slightly from record-breaking lows but in the last few weeks home buyers have been shopping again and making offers. We are still in a strong seller’s market.

Also see: Broker reciprocity

Also, see:  Agency

looking for a real estate bargain?

Almost everyone wants a bargain when they buy real estate. Most home buyers look for bargains in the wrong places. They choose that one house that is priced just right that everyone wants to buy. After the house gets multiple offers it won’t be a bargain.

The bargain is the overpriced house that has been on the market for a long time. Homeowners often believe that if they price their real estate high that they may not get the asking price but they will get more for their home.

Instead of making offers buyers avoid even looking at the overpriced house. Eventually, that house will sell and in most cases, the seller ends up accepting an offer that is less than the asking price. Sometimes that offer is significantly less than the asking price.

The bargains are the houses that have been on the market for 4 to 12 months. Buyers looking for opportunities should look for overpriced vacant houses that have been on the market for several months. There is little competition because most buyers won’t make an offer.

Right now there are about 80 homes on the market in St. Paul that have been on the market for 90 days or more that do not have an offer on them. These houses can be found in all St. Paul neighborhoods and the listed prices are between 75K and 560K.

If you would like to learn more about these opportunities you know how to contact me.

Wood is better than carpeting

Back in the 1950’s and 60’s carpeting over hardwood floors was common. Sometimes the carpeting was put in right after the home was built and the floors underneath it are in mint condition.

Home buyers prefer hardwood floors. I have known this for many years. National Association of REALTORS® found that 54% of home buyers were willing to pay more for a home with hardwood flooring. (study was done in 2016)

I am not suggesting that people who want to sell their homes run out and replace the carpeting with hardwood floors. Sometimes the carpeting needs to be replaced and there is hardwood flooring under it. Even hardwood floors that need a little work are better than old carpeting and usually better than new carpeting.

From experience, I know that there are certain types of homes that people expect to see hardwood flooring in. People expect older homes to have hardwood floors. That doesn’t mean that hardwood is preferred in bedrooms, kitchens, and baths or that every room in the house has to have hardwood floors.

It should also be noted that a buyer’s willingness to pay more for a home with hardwood doesn’t mean that they will be willing to pay enough to cover the cost of the hardwood floors. There is quite a price range for the flooring and it doesn’t always have to be oak.

Some of the most popular flooring options include mid-priced varieties such as teak, American cherry, and oak, which costs $5 to $10 per square foot for materials and another $4 to $8 per square foot for installation. Carpeting costs a lot less, which is one of the reasons why it became so popular.

There are a lot of choices even composite wood floors. Dark wood floors have made a big comeback.

Nothing is really all that black and white when it comes to making improvements that will have a positive impact on resale value. There are shades of gray but it is good to know home buyers will pay more for homes with hardwood floors.

Market house condos

How much did the current owner pay?

There is no relationship between the value of a house today and what the current owners paid for it. Home buyers like to find out how much the sellers paid for the home. Some want to use that information as the basis for an offer.

craftsman style dining room
Dining room with built-ins

It is interesting information but there is no relationship between what the current owner paid for a house and the current value of that house. Sometimes it is good to know that the seller paid more than you want to offer. Some sellers can not afford to accept an offer that won’t pay off their mortgage.

When someone purchases a home and uses financing the lender who is providing the financing has the property appraised. The appraiser looks at how much similar properties in the area have sold for in the last year or so. The subject property is compared with comparable properties and adjustments are made.

If the home buyer offers more money than the appraised value the buyer may have to bring more cash to the closing. Sometimes the buyer and seller renegotiate the sale price. Sometimes the buyer decides not to proceed. What happens when a property does not appraise for the amount offered depends upon how the purchase agreement is written and on what kind of financing is being used.

Minnesota appraisers have training and licenses.

Low appraisals happen. Pricing a property correctly is important. Even in today’s market, we are seeing houses that do not appraise for as much as they are listed for or as much as the buyer offers. It is possible to get multiple offers for more than the appraised value of a home for sale.

Renting is alway an option

People who rent rather than own their homes are buying flexibility. For some flexibility means having a better job. Home ownership isn’t for everyone.

The National Association of Realtors conducted a survey to study non-home owners. Most would like to own a home at some point in the future. I aspired to be a homeowner from the time I graduated from college. I was 29 when we bought our first home. At the time the challenge was saving up for a downpayment.

Non-homeowners

To some buying real estate is an investment. To me, it was always about owning a home that I could call my own. A place to live with neighbors and a garden and a front porch.

 

How important is the previous sale price?

Home buyers like to know how much the current owner paid for the home. Sometimes they take the information into consideration when making an offer.

blue house
small house

It is wonderful that there is so much information out there for home buyers. it is easy to find out who owns a home when they bought it and how much they paid for it.

Knowing how much someone paid for a home is interesting but what someone paid for a house in the past does not impact the current value. The owners may have gotten the house at a bargain basement price or they may have paid too much for it. Maybe they bought it for a song and then made expensive improvements.

If the house is in St. Paul it is easy to look it up on the city of St.Paul website property look-up and see if there were permits for work on the house. Maybe there is a permit to put on a roof and a few for plumbing and for a new heating plant. Each permit will list an approximate dollar value.

Determining the current value of a house is not an exact science. The best way to come up with a number is to compare the home to three houses in the immediate area that were sold in the last year. Location, condition, and size determine the value of a house.

Buyers who are working with a REALTOR® should ask for a comparative market analysis before making an offer. Home sellers should do the same before setting the asking price.