Bob Posner

I did a search of the number of houses  and condos in the Dayton area that have sold or are sale pending since January 1 of 2008. So far as of Valentines, day February 24th,  the number is 1037 homes. That is a big number. Every day the media is reporting bad news about real estate around the country but the market here is bustling. If you ask any local agent worth their salt, they will tell you that market activity is growing just like it does every year at this time. Houses are going on the market and there are a plethora of buyers out kicking the tires and writing offers. There are buyers out looking for good quality homes at fair prices.

The big difference I have experienced is there are a lot more bank owned properties on the market. So what, my buyers have more opportunities  if they are patient.  Bank owned are a little more competitive, and sometimes involve multiple bids but to the right buyers they can be very beneficial.

There are strategies that can help you sell your home-for a fair price during these slower times.

BEST MOVES FOR SELLERS

You might have to be very aggressive in the current environment, because the  local real estate market has an oversupply of homes for sale. Here’s how …

Don’t start with a high price. Asking price is the single most important reason that a property does not sell. In this buyer’s market, it is a mistake to set a high price and assume that you can lower it later, if necessary, in negotiations. Area real estate agents pay the most attention to listings when they first appear on the market. These days, they may not even bother to show your home to buyers if it is overpriced.

If you start out too high, by the time you do lower your price, real estate agents will have newer listings to show buyers. The buyers who do see your home will view your price cut as a sign of desperation and bid low.

The correct price to ask for your home in this market is toward the low end of the range of prices being asked on comparable homes currently for sale in the neighborhood.

Pricing your home as a slight bargain ensures that as many potential buyers as possible will walk through your door. This is crucial at times like these when home sellers outnumber buyers.

Recheck the asking price of comparable listings every two to four weeks if your home has not sold. When you do a price reduction, make it large enough so that the new price is very competitive with comparable homes or is even a “best buy.”

Important: The amounts your neighbors sold their homes for a year or two ago should not even enter your thinking when you set your asking price. It was a very different market then, and those prices are irrelevant today.

Helpful: If your home is not attracting many showings, the price is probably the problem. If it is attracting showings but not offers, the home itself is most likely to blame.

 Fix it up first. “Fixer-uppers” tend to be ignored in slower real estate markets because buyers can find good deals without breaking out their tools. If your home is in need of substantial repairs, it is best to get the work done before placing it on today’s market

 Pay attention to curb appeal.  Home buyers have so many options that if a property doesn’t look attractive from the street, they will drive past it without even stopping.

What to do: Spend a weekend beautifying the front of your home. Replace damaged window screens…

tidy up the lawn and landscaping … pressure-wash the sidewalk … add mulch around trees and in flower beds. If necessary, have the home’s exterior repainted, particularly the front door and trim … and upgrade outdoor lighting fixtures, doorknobs and your doorbell switch or knocker. These small details can evoke an emotional reaction in a home shopper that can lead to a sale.

Freshen up inside. A fresh coat of paint and new carpet or refinished wood floors can make a big difference. It also pays to hire a professional cleaning service to remove years of grime from your kitchen and bathrooms.  Smell matters, too. It is extremely difficult to sell homes that reek of cigarette smoke or pet and cooking odors. Perfuming the house with scented candles or potpourri doesn’t fool anyone

Offer incentives to buyers and brokers. Many home sellers are “bribing” buyers with cash, cars and flat-screen TVs. Most effective incentives …

Help with closing costs. Cash-poor buyers might have trouble paying upfront mortgage expenses. Offer to pay a portion of these costs, and buyers have a reason to choose your home.

Important: If you offer a sales incentive, disclose this in your sales contract with the buyer. If the incentive is not mentioned in the contract and the buyer later defaults on the loan, the lender could claim that you and the buyer engaged in fraud by manipulating the sale price of the home to include an asset that the lender could not foreclose upon.

  Don’t overnegotiate. If a potential buyer’s first offer is reasonable, consider accepting it, rather than making a higher counteroffer. Buyers have so many homes to choose from today that they sometimes move on to other properties, rather than make second offers when sellers don’t accept their initial bids. If you do not need to sell quickly or your home is garnering lots of showings, counter-but if you need to sell fast and the initial offer is reasonable, do not risk losing the sale over a relatively  small amount of money.

The local Dayton area real estate market was effected by national trends with a downturn in sales activity in 2007, but not to the extent that many area markets  around the country experienced. This applies especially in the area of local home values.The average sales price for a single family home in the area for 2007 showed less than  1% depreciation from the average sale price for a single family home in 2006. $134,763 compared to $136,008.The total number of single family home sold in 2007 was less than 10% fewer than the number of single family homes sold in 2006.  2007 was the forth best year ever in terms of overall sales activity in the Dayton area market.

This shows remarkable stability in the greater Dayton area.  Many areas around the country are experiencing double digit declines in both home values and homes sold. If you are thinking about selling your current home and buying a new one, you may get a little less for your house, but you will be able to purchase a property for less.

Consumers are often misled when it comes to the subject of the Federal Reserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. In the last few years, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short−term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate. These factors have a direct impact on the Prime rate. If you took only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage−backed securities, which trade on a daily basis. The real dynamic at the heart of interest rate movement is the relationship between stocks and bonds. 

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage−backed securities. 

Unfortunately, selling mortgage−backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage−backed securities which cause mortgage rates to drop.

The daily ebb and flow of money is what matters most when it comes to the movement of mortgage interest rates. I make it a point to continuously monitor interest rates for my clients, and advise them of opportunities to manage their mortgage debt at a better rate.