When Selling Your House For More $ Makes Sense

Perhaps the most challenging aspect of selling a home is listing
it at the correct price. It's one of several areas where the
assistance of a skilled real estate professional can more than pay
for itself. Listing the home to high can be as bad as too low.
If the listing price is too high, you'll miss out on a percentage
of buyers looking in the price range where your home should be priced.
This is the flaw in thinking that you'll always have the opportunity
to accept a lower offer.
Chances are the offers won't even come in, because the buyers who would be
most interested in your home have been scared off by the price and
aren't even taking the time to look. By the time the price is
corrected, you've already lost exposure to a large group of potential
buyers.
The listing price becomes even trickier to set when prices are
quickly rising or falling. It's critical to be aware of where and how
fast the market is moving both when setting the price and when
negotiating an offer.
Homes are searched for by locale, by price, by characteristics, and sometimes
School districts.
When your home is searched by price, it should fit into
the range that the locale sustains. If it is too high, many people may ignore the
home as being unrealistically too high, but many will check out the pictures to
see what the home seller is so proud of.
If the home is priced too low, people will check it out thinking that it is a bargain
or that the home seller may be in some financial distress and need to sell fast.
Both of these can be good. Here's why, it brings eye's of potential buyers to check out your home.
Let's take the harder of the two… you are priced high for the market. People look at your
home listing and they see that the terms of your sales price are very favorable to the buyer.
ex. Home Seller pays all closing costs and is offering a discounted mortgage rate. Which means
that the buyer will actually pay less for the home.
Here's the math:
Let's assume seller decides to sell the home at $200,000 but is willing to
buy the rate down for the buyer by paying for two (2) discount points. Cost
to seller depends on buyer's down-payment, but max is $4,000. For two
discount points the buyer will get approximately a half point discount
on a conventional loan mortgage rate. In today's market 5% would be reduced to 4.5%.
The benefits to buyer:
Lower monthly payment $1,013 vs $1,074
More principal paid each month, as a result of lower rate
Balance is reduced faster
Buyer could use the discount points paid by seller to reduce taxes for the year paid.
So is this a benefit to the seller you might ask? Well, One, we established that his home is price
in the upper range for the neighborhood, so seller is getting more. Two, the seller
has separated their property from the competition by talking about something other than price.
Three, it is generally perceived by buyer that seller is actually helping the buyer get the
best deal possible by contributing to closing costs and buying down a lower mortgage rate.
Side note; there are two ways to buy a note rate down, the permanent rate buy-down
described above and a 2-1 buy-down when the initial rate is actually two (2) points less
than the normal market rate in the first year, and 1% better in the second year. In the third year
the rate goes to the normal fixed market rate that was available when the mortgage was
initiated. Imagine what kind of attention you might get advertising 3% interest rates, when the market is at 5%.
Again, an experienced, well-trained real estate professional, whether it is a Realtor, or Mortgage Professional is always in touch with market trends - often even to a greater extent than appraisers, who typically focus on what a property is worth if sold as-is, right now.
To find out more information regarding how to sell your home faster and for more money
check out Mike Durr's http://www.HomeSoldQuickly.com/blog


WASHINGTON, D.C. (New York Times) It was the most optimistic assesssment of the economy in more than a year. Still, the term the Federal Reserve used Wednesday to describe the good news was 'leveling out.
The Fed said it will keep its benchmark short-term interest rate at effectively zero for some time. At the same time, it announced it would finish the program to buy $300 billion in Treasury bonds by the end of October. (The 300 billion was going to buy mortgage and treasury bonds. This announcement that they will cease to buy treasuries will effect mortgage rates in a negative way.)
The Fed's move to keep rates unchanged was no revelation, said Mark Dotzour, Real Estate Center chief economist.'The federal government appears to have decided to postpone the recognition of the losses that banks have incurred. It appears that we are now going to amortize those losses over a period of years, and keep interest rates low to allow banks to earn their way out of the losses they have incurred. I would anticipate rates to remain near zero easily through the end of this year.