Thinking About Selling Your House Yourself?

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I have seen an increase lately in For-Sale-By-Owner properties.  I believe one reason is price, sellers just do not accept the market price Realtors are quoting.  Another reason is that home owners think they do not need a Realtor to sell their property.  What can be so difficult about selling a house?  To use a popular marketing slogan “Even a cave man can do it”.  This perspective is easy to arrive at if you are not involved in the business and do not see what does and can go wrong with a real estate transaction.

One of the most important decisions to make when selling real estate is the price.  Today’s market is very price sensitive and the buyers know they can get a bargain if they look for it.  So how do you decide on a price if you are not in the business?  Do you use the price your neighbor is asking for their house?  Do you use that bank appraisal that you had done a couple of years ago?  Do you use the tax assessed value or does your tax authority offer a fair market value on your tax bill?  Well, if you use any of these processes for pricing your property chances are you have the wrong price.  How do Realtor’s determine a price?  By talking to the only people who count, buyer’s.  How many buyers do you talk to every day?

You probably watch HGTV so you may think that you know how to stage your property and how to effectively market it.  But do you understand what today’s buyers are looking for?  Remember, only the buyer counts when determining the desirability of your property and they are constantly changing their minds.  Buying trends are very cyclical, sometime changing every 3 months.

Have you considered the work involved in showing your house?  If you are not working with a Realtor you will need to do this all by yourself.  Make yourself available to receive the calls, schedule the appointments, follow-up, decipher the buyer’s comments and use all this information to change your marketing strategy if necessary.

If you decide to sell your house yourself do you have access to all of the resources you need?  Realtors pay a lot of money to belong to multiple listing services, realtor associations and marketing groups.  Do you have access to all of these real estate marketing outlets?

So let’s assume that you do find a buyer and an offer is presented, are you prepared to take your transaction to close?  Do you understand the offer?  What are the  contingencies in the offer?  What will your net be after all closing costs?  What happens if the offer is falling apart, can you keep it together?  If your buyer’s financing is denied do you have contacts that can put the offer back together again?

If you still want to go it alone, I wish you luck, sincerely.  And if you find that selling your real estate is more than you want to tackle, feel free to call your local Realtor.

Buyers – Do Not Let The High Inventory Numbers Fool You

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It has been thoroughly documented that the number of properties on the market is high.  The number of days that properties have been on the market is through the roof and if a
calculation is made of how long it would take to sell the existing inventory only gloomy predictions would result.  But, don’t let the numbers fool you.  The inventory of desirable properties is actually low.

For example, there are currently 80 single family homes for sale in the Wisconsin Dells community.  This is a very large number considering only 15 single family homes sold
in all of 2011.  However, if the 80 properties are further analyzed only 18 properties are listed near market  price.  Last year in the city of Wisconsin Dells the highest price paid for a single family home was $125,000.  Eliminate those properties listed over this price and the number of homes for sale falls to 18.  The most desired single family homes by buyers are 3 bedrooms, 2 baths with a garage.  Of the 18 homes for sale under the high sell price of $125,000, there are only 6 homes that have the desired bedrooms, baths and garage.  If the buyer has one more requirement, that the house be in the city, the number of choices falls to 2 houses.

So there are really not that many desirable houses on the market.  I have found this conclusion to be verified by actual buyer experiences.  I know of many buyers who have been looking for a property for quite a while, some longer than a year.  Further proof is the Offer activity that occurs when a house is listed at market price; buyers are quick to submit their Offers.  I have buyers who have consistently lost out on a property they wanted because their Offer was too late or too low.

So, here is some advice for today’s buyers.

  1. Do not assume that the property you want will be there when you are ready to make an Offer.  Chances are that if you like it so do other buyers.
  2. Before you start looking make a list of requirements for the house you wish to purchase.  Divide this list into two sections, must haves and would like to have.  The must haves will be used to search for properties.  The would like to haves will be used as you are viewing selected properties.
  3. Interview lenders.  You do not know what you can purchase until you have talked to a lender so don’t even try to look at houses until you finish this step.
  4. Select a Realtor to work with.  Don’t waste your time trying to find the right property, let a qualified Realtor do the work for you.  All Realtors who are members of the MLS can show any property listed on the MLS.
  5. When you are ready to start looking be ready to make an Offer.
  6. Do not assume you can Offer a low price.  If the property is properly priced you will need to make a good Offer for it to be accepted and to beat out other buyers.

2011 Market Analysis for the Wisconsin Dells, WI Area

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Last year 223 properties sold in the Wisconsin Dells Area.  This is a 13% increase in
properties sold over 2010.   Single Family custom built homes accounted for 97 sales, condo’s 55 sales, land/lots 44 sales and manufactured homes 26 sales.  This is a pretty healthy mix of properties being sold and matches up exactly to the mix of sales in 2010.

Property prices are down for all types of properties in 2011 compared to 2010.  Single family custom built homes are down on average 8%, single family manufactured homes are down 6%, condo prices dropped 18% and land values dropped 24%.  However, there are neigborhoods where property prices did increase.

The inventory of homes to be sold is still a drag on the market.  There are currently 670
properties for sale.  This is a 3 year inventory.  A healthy market should have no more than a 6 month inventory of unsold properties.

Land has the highest projected days on market with 7 years required to sell the current inventory.  At the current pace of sales condo’s would require 2 years to sell the current inventory, manufactured homes 28 months and single family custom built homes 23 onths.   On a state level there is 15.5 months of housing inventory available.

Sales have been spread out pretty evenly throughout the year.  45 units sold in the first
quarter, 53 units in the second quarter, 67 in the third quarter and 58 units sold in the 4thquarter.  In january of this year 14 units sold indicating the sales trend of 2011 is ontinuing.

Of the 223 properties sold last year 46 units were real estate owned (REO) properties, this is the MLS designation for foreclosed properties.  This represents 21% of the local market which is close to the national rate of 27%.  Of the foreclosed properties 13%  ere single family custom built homes, 4% were condo’s, 2% were manufactured homes and 1% was land.  Economists would like to see this number come down to 5% to consider the real estate market healthy.

The outlook for 2012 is mixed.  Foreclosed properties are projected to increase as are short sale properties and even if the increase in units sold continues there will still be too much inventory on the market to sell within the year.  Property values for vacation
homes and land decreased substantially during 2011 and will most likely continue to decrease in 2012.  There has been a spurt of vacation homes sales in the 4th quarter and if this trend continues it will be good news for this maket.  There needs to be revitalization in new home construction for lots to start selling again and there has been little sign of new construction activity in the area.  Single family home sales should be healthy if priced correctly.  However, sellers trying to get top dollar for their homes will most likely not be successful in this market.

The market continues to be a good value for buyers.  There is ample supply, prices are low and the cost of a mortgage is at an all-time low.

October 2011 Wisconsin Dells Area Real Estate Report

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Everyone I meet always wants to know how the real estate market is and they scrunch up their faces when they ask the question expecting bad news.  The market in Wisconsin Dells is actually pretty good.  The volume of activity has stayed steady for the past 4 years.  This year there were 192 properties sold thru October compared to 167 last year and 170 in 2009.  There is still a lot more sales potential in the market, but buyers are cautiously active.

The big story is the number of active listings on the market.  Signs are on every corner and first impressions would tell you that there is a flood of properties for sale.  However, look closer at the listings and you will see that many of the properties listed for sale are overpriced.  In general, single family non manufactured homes are listed 29% over market price, Condo’s are 18% over market, land/lots are 38% over market and manufactured homes are 33% over market.  This means that these properties will not sell unless the seller lowers the price.  Sellers are still reluctant to accept the market price of their property.    Single family non manufactured homes sell on average in 157 days, Condo’s in 153 days, land/lots in 215 days and manufactured
homes in 103 days.  This Days On Market is a result of sellers listing their properties over market price and then eventually lowering the price and selling.  If the properties were listed at market price first they would be selling much faster.

Condominium sales have seen a deep drop in price this year.  Some associations are experiencing a 40% to 50% decline in the median sell price.  This is a huge drop in value in a 1 year time frame.  I have to believe that this is an anomaly and will be corrected.  I advise anyone thinking of buying a condo in the Dells to take advantage of this period of low prices.  These properties are the biggest bargain in the market right now.

Buyer activity picked up during the fall season with many second home properties sold in September and October.  This is a welcome change in the market after 2 years of very slow vacation property sales

Land is pretty much a non-seller.  New construction has been absent in the Dells for many years now.  Half acre to 2 acres lots are not moving unless the price is very low.  Only investors are buying these properties waiting for the day when construction starts again.  Recreational land is selling but the window of opportunity to move this land is going by fast.  We are in the beginning of the hunting seasons and many hunters have already lined up their land.  The average sell price for acreage is $2,000 to $2,500 per acre.

The best news about the market is for buyers.  The cost of a mortgage is ridiculously cheap and property prices are very low.  There is no reason to wait any longer, get in the market while it is this good

Mortgage Money is Available, Why Do You Think It Isn’t?

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I attended a closing yesterday and my sellers commented on how tough it is for buyers  get a mortgage.  I thought this was a strange comment since the buyers in this
transaction financed the purchase without a problem.  But, next to “Real Estate Really Stinks Right Now” the second most common comment I hear is about banks not lending.

I have not experienced this problem , in fact I had one recent buyer who was able to finance with no money down and a seller credit to pay for closing costs.  So I am confused why the public still thinks that banks are not lending.  My experience is that if the buyer is qualified mortgage money is readily available.  Maybe the word “qualified” is the issue here.  Are we still suffering from the real estate market hangover of the last decade?  Is the public still remembering the unqualified lending practices of the past?  Many people blame the over aggressive lending of the 2000 to 2007 period for much of the market woes we are today experiencing, and there is some truth to this.  So is it a bad thing that buyers must be qualified to be granted a loan?  Does qualification equal tight lending practices?  In my opinion the answer to both questions is no, it is a good thing that lenders are taking a closer look at buyers before providing a mortgage.

The danger with buyers thinking that mortgage money is not available is that they will sit out the market and not try to make a purchase.  There is an unwarranted hesitancy among buyers today to purchase real estate.  The number of sales for all types of
properties is down and it does not make sense.  Mortgage rates are at all-time lows, property values are down- it is just a great time to buy real estate.  For buyers to sit out the market because they do not think they can get a mortgage is something  we do not need.

So, whenever asked about the availability of mortgage financing I always answer, YES mortgages are available, banks are lending.  All you need is a steady job, good credit and enough money to cover closing costs and a decent down payment.  For me, this is normal.

Beat the Market by Becoming a Buyer

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The current real estate market is a happy place if you are buying, not so happy if you are selling. So to get to your happy place in this market you need to become a buyer.  Prices of properties are very low and the price of a mortgage is even lower.  This situation will not last forever.  If you need to sell a property before you can move on and buy that next property of your dreams, you need to do whatever it takes to sell and get out of that unhappy place.

The biggest obstacle most sellers are struggling with is the price the market will pay for their property. This is holding many sellers hostage and they are missing a great buyer’s market opportunity.  Sellers today need to forget what they think their property is worth and sell for what the market will bear.  And once that sale is made a seller is free to become a buyer and take advantage of a great buyers’ market.

If you are a seller who plans to upgrade to a larger or more expensive property the numbers actually work in your favor.  Yes you will sell your property for a low price but you are also buying a great property for an equally low price.  Just look at the numbers.  Assume that the market value of your property has dropped 30%.  That means it is very
likely that the property you want to buy has dropped an equal amount.  Using the 30% number you are profiting $15,000 for every $50,000 you upgrade in value.

If you are in a situation where you are disposing of a property or plan to buy a smaller property the economics do not work in your favor but you still want to buy in today’s market which means you have to sell your current property or make a different arrangement such as renting.

Whatever your situation is, if your plans include buying, you cannot afford to wait.  You have to get into the market as a buyer today. Wait until tomorrow and you may find a whole different market not so buyer friendly.

September Wisconsin Dells Area Real Estate Market Report

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In the Wisconsin Dells real estate market the first quarter showed very good growth over last year.  Sales slowed down in the second quarter, but is picking up in the third quarter.  YTD numbers are up over last year.  The current Buyer trend is to look for discounted properties.  Does not seem to matter what the quality of the property is, as long as it is a deal.  Full priced buyers are staying home and are not active in the market.  This makes it tough for sellers; they must continue to reduce their price to sell.
For buyers, the market just keeps getting better and better.  Low prices on good properties and the cost of money is almost a steal.
July and August saw an increase in interest in vacation homes.  This market is very important to Wisconsin Dells and has been slow, almost dead, for the past 2 years.  If the July/August results continue and the vacation buyer becomes active again expect the condo market to revive.
We are entering the fall hunting season and interest in good hunting land has picked up.  However, building lot sales are still in the dulldrums.