Magnolia Realty's Auburn Area Real Estate Update: November 2010

Value in Homeownership


by Carla Hill

Is there value in owning a home? The recently released 2010 National Association of REALTORS® Profile of Home Buyers and Sellers brings us some promising results. Today homeowners are living in their homes longer, and after several years of price declines, are seeing rises in home equity gains.

It was only earlier this decade that so many buyers jumped on the investment bandwagon. They bought and sold within incredibly short time frames, and walked away with profits. But as the booms busted, many sellers found they had bought at the top of the market and as prices corrected, they lost more than just dollars. Foreclosure rates skyrocketed. Historically, however, homeownership is a long term investment, and one that brings many rewards.

"Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who are able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase," NAR 2010 President Vicki Cox Golder said. "Despite swings in the housing market in recent years, the fact is most long-term owners see healthy gains in the value of their property."

Golder also says the pattern of home buyers taking a long-term view has solidified over the past few years. "This underscores two simple facts – home ownership encourages stability, and the longer you own, the better your investment."

Current market and economic conditions have created a shift from the house flipping ways of the boom. "The primary exception is for experienced investors, many of whom pay cash and are making renovations or improvements after a careful study of properties, neighborhoods and market demand," Golder explained. "The house flipping and quick gains which occurred during the boom period were abnormal, driven by risky, easy-money financing that should never have been allowed in the market."

American are still buying, however. And surveys have found there are particular reasons behind these purchases. These include the desire to own a home, the desire for a larger home, a change in family situation and taking advantage of the home buyer tax credit, a job-related move, and then the current supply of affordable homes.

And once they buy, homeowners are staying put longer. A typical seller has been in their home for 8 years, but the survey reveals first-time buyers are planning to stay for 10 years, and repeat buyers for 15 years.

Even with several years of price declines, the typical seller who purchased a home eight years ago experienced a median equity gain of $33,000, a 24 percent increase, while sellers who were in their homes for 11 to 15 years saw a median gain of 40 percent. So, once again buying for the long-term is steering its way back into value.

Published: November 9, 2010

Blog Post provided by Ellen Faurot, REALTOR

By: G. M. Filisko

Published 2010-02-10 11:32:13

Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers. Selling your home will go a lot smoother if you think of it as a business transaction and don't let emotions get in the way.

You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers.

1. Understand the process

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures—such as appliances, furniture, or window treatments—to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attached a prequalification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

G.M. Filisko is an attorney and award-winning writer who has survived several closings. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

“Visit Houselogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®."

http://www.houselogic.com/

Lovely 4 BR, 3 bath home in the desirable Cary Woods neighborhood in Auburn features a number of updates including hardwood floors, ceramic tile and granite countertops. The 4th BR is currently being used as a den but has a nice closet and full bath to allow it to serve as a large BR. The living room features a tongue & groove wood ceiling and wainscoting for a lot of character. There's a wood-burning fireplace and a whole-house water filtration system. The home has been well maintained. There's a nice size lawn bordered by a natural area out back, an outside storage building, a deck and a patio for entertaining. You'll want to see this home so that you can appreciate all it has to offer. Call Ellen at 334-332-3359 for your personal showing.

There’s an interesting article posted at Yahoo! Finance -- Financially Fit that lists “The New Best Places to Retire.” See http://financiallyfit.yahoo.com/finance/article-111089-7110-5-the-new-best-places-to-retire?ywaad=ad0035&nc. Of course, Auburn is mentioned there along with some of the reasons why it’s a good place to retire. It mentions golf, cultural events, and OLLI along with cost of living and climate as nice things about Auburn. There are also plenty of shopping opportunities in town and it is in close proximity to the cities of Atlanta (and it’s airport), Birmingham, Montgomery and Columbus--all of which also offer many opportunities for shopping, entertainment, etc., within a couple of hours drive. Auburn isn’t too far from the beaches of the Florida panhandle or the beautiful Alabama Gulf Coast either. Auburn has a number of organizations that offer opportunities for friendship and/or service to the community. There are churches of many denominations in the area. You can join a farm cooperative and get fresh fruits and vegetables practically year round and you can purchase fresh produce grown in the area at The Market on Ag Hill most of the summer. There are all sorts of sports one can either participate in or watch. An example is tennis offered at the new complex on Richland Road. Auburn University offers football, tennis, golf, swimming, baseball, soccer, and equestrian events to name a few. The local high schools also offer many opportunities for sporting and cultural events. Then there is the neighboring, historic Opelika which hosts the annual Victorian Front Porch Christmas, a unique event showcasing the local historic district. The Arts Association of East Alabama’s Performance Arts series brings a number of cultural events to the area each year. The City of Auburn Parks and Recreation Department offers a number of programs such as art instruction, dance instruction, bingo, and travel opportunities that are enjoyed by many people of all ages. There is no reason to be bored or lonely in Auburn. Check it out. I think you will find that it is a great place to live, work and/or retire. If you have questions, feel free to contact Ellen Faurot who will try to provide the answers you seek.