Supply and Demand

Have you ever heard someone say "They're not making any more land!" They probably mean to say that since there's only a limited supply of land available, the price goes up as the supply goes down.

That IS the way prices are set on land and housing. As demand for housing in a particular area rises, with a limited supply available for purchase, prices also rise. If there is an over-supply coupled with little demand, prices will fall.

The location of land can also make a difference in the price the public is willing to pay. A home located near shopping, schools, and recreation in a growing city may bring a higher price than one located on the fringe of town away from family activities.

Another phenomenon of valuing real estate is the principle of "highest and best use." Under this concept a house on a corner lot currently used as a family residence might, if located near a business district, be worth much more as the location for a restaurant or other business if the house is removed and replaced with a commercial building.

You can imagine how many other factors might cause the value to change as well. Learning to place a value on homes and land is a skill learned from long experience. Don't leave the pricing of your home to chance. Use the skills of the best real estate agent available.

Five Pricing Pitfalls

When it's time to sell your home, it's very easy to be snared in the overpricing trap. After all, you want top price for your home, don't you? And we all know that prices have risen dramatically in recent years. Given that, it's logical that the asking price you set could be higher than "fair market value." Unfortunately, you probably won't realize it's too high until much later.

Here are just a few of the disappointments you'll be facing with an overpriced house:

1. Responses to your ads will probably be slow, since the public recognizes overpricing. Remember, people buy by comparison.
2. Some prospects who are attracted may be the wrong ones. They will be attracted because they're looking for a home priced the same as yours – but with MORE features.
3. Very few buyers will even make an offer on an overpriced home. The reason? Even if you accept their lower offer, they aren't getting a bargain since the final price is probably no less than "fair market value."
4. Your home will help buyers make a favorable decision on other homes that are priced fairly. Do you really want to be the example that drives people elsewhere?
5. If you do find a buyer at your price, their mortgage application could be rejected because of a low appraisal; the house simply doesn't meet the standards that the price indicates.

This all sounds rather bleak, so what can you do to solve the pricing issue? Work with an experienced professional who knows the market in your neighborhood. Take advantage of the research and advice your real estate agent can offer, and you'll be on your way to setting the right price for your home.

Go Ahead…Take the First Step!

When you're ready to buy a home, what's the first step you'll need to take? Start looking at homes? No, here's a better suggestion.

You probably have a pretty good idea of what type home you'll be wanting to buy, don't you? Do you know how many bedrooms and baths will be needed? What style home do you prefer and in what location?

Do you know how much home you can afford to purchase, how much cash you have available for a downpayment, and what monthly payments will be satisfactory?

Once you know the answers to all these questions, your first step should be in the direction of the office of the best real estate agent you can locate. You see, there are numerous details involved in locating the right property for you. Those details center around the agent's knowledge of your family's wants and needs. That's why it's so important to meet first at the agent's office, then plan to inspect homes.

During the first meeting with your agent you'll have the opportunity to explain the importance of school locations, shopping, and other amenities; close proximity to your employment may also be a factor in making your housing decision.

By understanding your living style, your real estate agent can choose a variety of homes for you to see. Then you can be confident that the home you purchase will have what is important to you and your family, now and in the years to come.

One is Enough!

When you are ready to buy a home, how many real estate agents should you use to find the perfect home – one, three, five? A recent survey showed that 79 out of every 100 buyers use only one or two agents before they find a home. But perhaps the best answer is one and only one. Here's why.

First, it's important to understand that real estate agents are business people with a very special talent. That talent is the ability to really understand the needs of their homebuyers. After listening carefully and asking questions, the agent can ferret out and identify specific homes which meet those needs, and then help the homebuyers complete the purchase of the home of their dreams.

Thus, success as a real estate agent is contingent upon serving all the homebuyer's needs. This includes offering a wide selection of homes from which to choose, and being able to provide a wealth of knowledge in areas such as financing, construction, taxation, and the complexities of today's real estate closing.

Secondly, once you have found such a dependable sales agent, the need for a second one vanishes into thin air. After all, how many homes will a typical buyer purchase?

Take whatever time is necessary to locate that "right" agent in the beginning, before you start house hunting. When interviewing an agent, question their success, and assure yourself that you'll be receiving only top quality service. Then put them to work for you – exclusively!

When Will the Market Change - February Update

In January, I wrote a blog entitled "Knowing Exactly When the Market will Change" that received many comments, replies and supportive feedback. In that blog, I stated that as soon as we have 3 consecutive months when more inventory is going off (under contract) than is coming on (new listings) we can expect to once again experience an appreciating market.

So where do we stand so far this year? In January, in my 22 town Massachusetts North Shore area, 404 single family homes came on the market and 209 single family homes went under contract (off market).

In February, 377 single family homes came on the market on the North Shore and 242 homes went under contract.

February was better, certainly, than January, but not enough so that we can say the current trend has reversed. So based upon the statistics thus far this year, we continue to remain in a depreciating (buyers) market . . . and we can expect it to remain a buyers market for at least 3 more months.

I will provide another update again in the beginning of April and we'll take a look and see if the market is changing or if we can expect more of the same for a while.

Regards,

Jay Burnham, VP
Coldwell Banker Residential Brokerage
North Shore, Massachusetts

Curb Appeal = Buyer Appeal

I'm sure you've heard the saying "You only get one chance to make a great first impression." Sure, it's a bit of a truism, but that's because there's a lot of truth in it. Here's some information to improve your chances of making that great first impression with buyers when selling your home.

Take a look at the exterior of your home from across the street, the way a buyer might view it. Start with the yard. Is it in order, and neatly trimmed? Is the yard absolutely free of trash or other discarded items?

Next, look at the windows. Are all screens or storm windows in place? Are there any broken panes of glass that need replacing? Are they sparkling clean?

Now, on to the exterior of the house itself. Is the exterior in good repair? Are gutters and downspouts in good shape? Is paint needed?

Do you get the idea? Look at your house the way the buyer would, then become your own worst critic. Try to find all the visible faults your home currently exhibits – then get them corrected! This is where your professional Realtor® can help, too, with suggestions and an unbiased opinion. And by all means, do this before you offer the house "For Sale." Making apologies after the fact does nothing to improve that first impression.

Did you know that many buyers make the decision to inspect the inside of a home based on their ten-second appraisal of the outside as they drive by? It's true! When that happens, your house either scores high or low on the buyer's scorecard. By the way, low scores invite low offers.

Take the time to give your home an exterior inspection, listen to your agent's suggestions, then do whatever it takes to improve your curb appeal. Invest in that first impression, and the result will be more showings and better offers.