6 Reasons Why Selling Your House on Your Own Is a Mistake

There are many benefits to working with a real estate professional when selling your house. During challenging times like the one we face today, it becomes even more important to have an expert help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale By Owner or FSBO, please consider the following:

1. Your Safety Is a Priority

During this pandemic, your family’s safety comes first. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings, but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, agents are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.

2. A Powerful Online Strategy Is a Must to Attract a Buyer

Recent studies have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumped to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?

3. There Are Too Many Negotiations

Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The inspection companies, which work for the buyer and will almost always find challenges with the house
  • The appraiser, if there is a question of value

As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.

4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage

Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress that’s being made toward a purchaser’s mortgage commitment. Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was there yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.

5. FSBOing Has Become More Difficult from a Legal Standpoint

The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

6. You Net More Money When Using an Agent

Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission. A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance a bidding war will take place.

Bottom Line

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.

Posted on May 27, 2020 at 10:09 pm
Denise Hallerbach | Category: In-The-Know Real Estate Blog | Tagged , ,

Summer 2020: The New Spring for Real Estate

With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the “busy spring real estate season” is shifting into the “summer real estate season.”  In 2020, summer is the new spring for real estate.

Joel KanEconomist at The Mortgage Bankers Association (MBA) notes:

“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks…Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”

Additionally, according to Google Trends, which scores search terms online, searches for real estate increased from 68 points the week of March 15th to 92 points last week. As we can see, more potential homebuyers are looking for homes virtually.

What’s the Opportunity for Buyers?

Another reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac indicates:

“For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30%, giving potential buyers a good reason to continue shopping even amid the pandemic… As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.”

With mortgage rates at such low levels and states gradually beginning to reopen, there’s more incentive than ever to buy a home this summer.

What’s the Opportunity for Sellers?

Finding a home to buy, however, is still a challenge, as this spring sellers removed many listings from the market. Though more people are now listing their homes for sale this month as compared to last month, current inventory is still well below last year’s level.

According to last week’s Weekly Economic and Housing Market Update from Realtor.com:

“Weekly Housing Inventory showed continued tightening.  New Listings declined 28% compared with a year ago, as sellers grappled with uncertainty and hesitated bringing homes to market.  Total Listings dropped 20% YoY, a faster rate than in prior weeks, leaving very few homes available for sale. As Time on Market was 15 days slower YoY, asking prices moved up 1.5% YoY.”

If you’re thinking of selling your house this summer, now may be your best opportunity.  With so few homes on the market for buyers to purchase, this season may be the time for your house enjoy limited competing properties.  Buyers are looking, and your house may be at the top of that short list.  Your trusted real estate professionals can help you list safely and effectively, keeping your family’s needs top of mind.

Bottom Line

If you’re thinking of selling, many buyers may be eager to find a home just like yours. Let’s connect today to make sure you can get your house in on the action this summer.

Posted on May 27, 2020 at 9:26 pm
Denise Hallerbach | Category: In-The-Know Real Estate Blog | Tagged , ,

Weekly Watch (Week Ending May 16, 2020)

As many Nevada business are beginning to enter Phase 2 of re-opening, we at Intero Real Estate Services are continuing to keep a very close eye on when is happening in the Greater Reno-Sparks real estate market. “The Weekly Watch” provides you with the most current information on a weekly basis to help you make informed decisions regarding your investments.   The graphs below represent activity for single-family residences (excluding condos, townhouses and new construction) from the week ending May 16, 2020 compared to the previous week and year.  The numbers are subject to change slightly, due to late reporting by real estate agents to Northern Nevada Multiple Listing Service.

 

At $389,500, the Median Sales Price the week ending May 16, was slightly lower (-1.6%) than the previous week, and 7.4% higher than the same time last year.  The median sales price has not dropped below the $390,000 threshold since mid February.  Overall, the Median Sales Price in Reno-Sparks has been holding fairly steady through the COVID-19 crisis.

 

The # of Closed Sales rose 22.2% from the week ending May 9 to the week ending May 16.  Sales volume is still about 36% down from the same period in time last year.  This lower sales volume has also been a fairly consistent statistic since early to mid April.

 

While sales volume is down, many Sellers are still receiving a high percentage of their list price.  Sellers received an average of 99.1% of list price the week ending May 16.

During the week ending May 16, single family homes that sold took an average of 32 days to go into contract.  Week-over-week, there was no significant change in the # of Days to Contract and compared to this same week in 2019, the # of Days to Contract has increased 17.7%.  This stat is representative of properties that went into contract about 30 days ago, a customary timeframe for escrow.

 

The # of Active single family homes available for sale dropped slightly (-2.6%) week-over-week.  The Active Inventory mirrors the # of Sold Properties this week compared to last year, in that we have 32.4% fewer active listings available for purchase year-over-year.

 

After a significant spike in the # of Withdrawn, Temporarily Withdrawn, or Expired Listings a few weeks ago,  this pull-back activity has drastically dropped another 71.4% from the week ending May 9.  While only 4 properties were removed from the market this year, 20 single family homes where pulled this same time last year.

 

Once again!!  The brightest news of the market is the 6-week upward trend of the # of New Contracts/Pending Sales.  The week ending May 16 saw a 23.7% leap compared to the week ending May 9, and a slight increase of 1.4% since mid-May 2019.

A more detailed look at the # of New Contracts/Pending Sales in the chart above shows that, the $300k to $800k priced single family homes showed an increase of New Contracts week-over-week.  And 4 of those 5 price ranges revealed an increase in New Contracts from this same week last year.  VERY encouraging news!

 

The # of New Listings is still lagging a bit, with 13% fewer homes being listed the week ending May 16 compared to the week ending May 9.  Consistent with the # of Sold Units this week AND the # of Active Listings, the New Listing count is down about 34% compared to this same week last year.

Summing It Up…

  • With the re-opening of businesses across the states, and increased activity of potential buyers over state borders, the real estate market in Northern Nevada continues to forge ahead through the current global health crisis.
  • While Sales Volume, Inventory and the # of New Listings are all down about 36%, 32% and 34% respectively compared last year, the market is concurrently experiencing a upward trend in new contracts that should result in an increase in sales volume in the coming months.
  • Buyer demand continues to keep pace with the rate of sale in the low inventory climate, and Sellers are receiving an average of 99.1% of their list price. Therefore, the Median Sales Price has been bopping above and below the $400k mark for several weeks.  The rate of market appreciation appears to be on idle through this strange COVID-19 time.
  • According to Bankrate.com, the average benchmark mortgage interest rate today (May 21, 2020) is still low… At 3.54% the average rate is down 2 basis points over the last 7 days.  Naturally, rates can fluctuate from day to day, and are reflective of the borrowers strength of employment history, credit score and debit-to-income ratio.  If you are looking to purchase now and need to connect with a great lender to find your best mortgage rate, contact me.  I’ll point you in the right direction!
  • For more information about specific property values and to search real estate for when YOU are ready to purchase/sell, please do not hesitate to call me at 775-233-0682 or email dhallerbach@intero.com.
Posted on May 21, 2020 at 12:33 pm
Denise Hallerbach | Category: Reno-Sparks Market Report | Tagged , ,