Friday, April 18, 2014

The Right Place to Find Home Buyers

Peter Fiore knew he wanted to sell his home on his own for one simple reason: He knew he could find a buyer. Fiore says he didn't even bother to list his Manhattan apartment on his local Multiple Listing Service (MLS). "That's how confident I was," says Fiore. "And I didn't want to have my place used as leverage so someone else could get a better deal on another apartment in my building or something up the street."

Fiore felt like he knew what would sell his residence better than anyone. "I lived there for 14 years," says the 48-year-old marketing consultant. "I know what kind of people live in a place like mine. I know who they are."

Fiore is quick to point out that what he knew about potential buyers had nothing to do with any social or cultural identifiers. In a nutshell, Fiore was looking for someone who was in love with New York, specifically the Upper East Side and the Carnegie Hill neighborhood where he lived.

"Look, living in the city, especially in Manhattan, is expensive. It's crowded, it's loud, it's a pain, and I know it's not for everyone," says Fiore. "I wanted to filter out the people who had no real intention of buying my place. I know there are always people who like to go through the motions of looking at places like mine but have no intention of buying them. It's like playing dress-up for them. I wanted to avoid all of that."

Confident that he could get every penny of his asking price, which was in the ballpark of $1.5 million, Fiore made it clear up front that he wasn't going to haggle over price. "When people would call or email, I told them it was like buying a Saturn back in the 1990s," Fiore says. "They would give customers a list price, and they'd take it or leave it. That's what I wanted."

So how did Fiore go about finding potential buyers looking for homes for sale in New York City? Two ways: word of mouth with friends, as well as the occasional post on different Facebook groups that appealed to New York-based attorneys, academics and executives. "This wasn't an inexpensive little starter home," Fiore says. "Once you get past $1 million, you're pretty much hanging out a sign that says 'rich people only.' I get that. I'm OK with that. That just makes me a realist, not a jerk. And as a realist, you have to know where to look for the people who'd take an interest in your home."

Although he sold his place within five weeks, Fiore thinks he could have done better. "I could have sold it sooner, but I had to spend a week in Sarasota, Florida to help my parents get set up in their new condo."

Fiore says he only heard from serious potential buyers and ended up getting more than he listed the property for, thanks to a bidding war between the eventual buyer and another owner in Fiore's building, who wanted to purchase a second unit as an investment.

All in all, he says the decision to sell his home on his own was incredibly lucrative. He estimates he saved about $75,000 in commission costs, although that number could have been even higher considering the usual three to six percent commission real estate agents collect.

"I had real estate agents beating down my door," Fiore says. "They'd get wind of my place, and they'd offer to sell it for two percent commission. When they're low-balling their take, you know you have something worthy on your hands."

Read this: More Home Buyers and Sellers Are Choosing FSBO

Wednesday, April 16, 2014

Top U.S. Real Estate Markets: Boston

Boston is the ninth city featured in our series that takes a look at the top U.S. real estate markets from a new angle. How were the cities chosen? Using three criteria: the size of the buyer population, the number of homeowners and the average number of days houses are on the market.


Boston's Housing Shortage Puts Home Sellers in an Advantageous Position
A strikingly low inventory of homes for sale in Boston continues to drive area home prices up at a record pace. The inventory of single-family homes was down more than 20 percent in January 2014 from a year earlier. This low supply, coupled with a rising demand, has prompted double-digit monthly increases in the median sale price of a single-family home in seven of the last 12 months, pushing prices to a level not seen since 2008.

Seeking to ameliorate the housing shortage, Boston Mayor Martin Walsh announced the creation of a housing task force in April 2014. Its assignment is to come up with a four-year plan to produce new senior, low-income and middle-class housing options. But until such plans are implemented, Boston's housing costs and scarcity are expected to increase. Despite projected below-average population growth, the Boston area's economic growth will continue to be propelled by a strong job market backed by the healthcare, construction and technology industries. The Boston home seller will maintain the upper hand in the current market, and FSBO (for sale by owner) sellers listing their homes without the services of a real estate agent will further benefit, saving the agent’s 6 percent commission, an average of $19,806 in the Boston market.

Hot Buttons and Deal Breakers for Boston Home Buyers
Driven by the low availability of housing and high cost of renovations, Boston-area home buyers put a high premium on houses in top shape. According to a 2014 Survey of Home Buyers and Sellers conducted on behalf of ForSaleByOwner.com, the most important consideration for home buyers in the Boston market is that the home is in move-in condition. Tied for second place on the list of key features in a prospective home are a new or renovated kitchen and a garage or carport. A yard and central air round out the top five home amenities for Boston buyers. The most common deal breakers are a home not being in move-in condition and a lack of a garage, yard, central air and natural light.

Boston offers a wealth of architectural styles in its residential neighborhoods, which date back to the city's establishment by Puritan colonists in 1630. Beacon Hill, where the founding families and such New England luminaries as Louisa May Alcott made their homes, features brick Federalist rowhouses along gaslight-lit streets with red-brick sidewalks. Back Bay offers beautifully preserved 19th-century Victorian brownstones, such historic buildings as the Boston Public Library and a wealth of shopping and dining options. West Roxbury, the site of a mid-19th century transcendentalist Utopian community, has well-maintained examples of Georgian and new Gothic architecture. The waterfront community of Charlestown offers the feel of a small town with the benefits of proximity to the city.

A range of suburban residential communities surround Boston. To the west are Worcester, the "Heart of the Commonwealth," which hosts historic examples of Victorian-era mill architecture, and Wellesley, a charming college town with distinctive architecture and a walkable downtown. The city of Dover offers a wide assortment of recreational opportunities and equestrian events and has become a sought-after residential community featuring expansive estates and new housing construction. Brookline and neighboring Newton host some of the state's most expensive homes, including a Georgian Revival manor dating back to the late 1920s, on the market in 2014 for more than $17 million.

Up next: Seattle, where an increasing inventory of homes will likely ease recent record-setting prices, but higher interest rates will create affordability challenges.

See what other cities made our Top Real Estate Markets list.


Tuesday, April 15, 2014

Selling a Home FSBO Today vs. a Year Ago

It's spring, and compared to this time last year, everything's coming up roses for sellers who choose to go the for sale by owner (FSBO) route.

Despite some concern about fluctuation in mortgage rates, economic activity indicators are lining up for a surge of real estate activity. "Growth is expected to pick up in the second quarter and build throughout the summer, firming to approximately 2.7 percent for all of 2014," reports Pete Bakel of Fannie Mae, a government-controlled company that helps provide money for the U.S. housing market.

Bakel adds, "The return of weather to seasonal norms should help boost growth in the second quarter, supported by consumer spending, business investment and housing starts.”

Zillow notes that rates for 30-year fixed mortgages fell the last week in March, with the current rate borrowers quoted on Zillow Mortgage Marketplace standing at 4.25 percent, down from 4.27 percent the previous week. At this time in 2013, according to Bankrate Inc., the rate was about 3.57 percent. Polyana da Costa, writing for Bankrate.com, notes that mortgage rates could jump higher if an upcoming employment report shows a stronger labor market.

Experts at LendingTree see similar variability in mortage rates. Writing on the lender's blog during the second week in April, Gina Pogol notes that corporate earnings reports could drive stock prices significantly higher or lower and affect mortgage rates. "It could be a roller-coaster week for mortgage rates, so if you're floating an interest rate, keep your loan officer on speed dial," Pogol advises.

How high will the rate go and how will it affect buyer inclination to sign on the bottom line? Da Costa notes that the last time the fixed rate was in the 6 percent range was back in November 2008. Although the rate will "eventually get there," she says, that probably won't happen this year.

So overall, U.S. consumers emerging from hibernation basically want to buy everything — including homes. And when house hunters search online for homes, they'll find fewer easy-picking foreclosures.

"The stock of seriously delinquent homes and the foreclosure rate are back to levels last seen in the first quarter of 2008," says Anand Nallathambi, president and CEO of CoreLogic, which tracks real estate and businesses trends. "The shadow inventory (foreclosed or delinquent homes kept off the market) has also declined year over year for the past three years as the housing market continues to heal, including double-digit declines for the past 16 consecutive months."

About 752,000 U.S. homes were in some stage of foreclosure as of February 2014, compared to 1.2 million in February 2013, a decrease of 35 percent, CoreLogic notes.

Eddie Tyner, general manager of ForSaleByOwner.com, one of several online services that help sellers bypass real estate agents and their 6 percent commissions, agrees with that assessment.

"Now is a great time to sell a house because there's little to no inventory," Tyner says. "If you have a good house, there are a lot of buyers out there for it — and not enough houses on the market for them to choose from."

This situation isn't going to last forever, Tyner warns. "At some time in the next year, there will be a lot more inventory because (homeowners) will realize there are a lot of buyers out there, and home prices will probably begin to increase, too. It's a better time to sell now than in six months."

The real estate market is always in motion, but for the moment, sellers are in the driver's seat. If you're prepared to sell, testing the market with a for sale by owner (FSBO) listing could result in a quick home sale.

Friday, April 11, 2014

Green Home Improvements Take Root with the Right Buyer

Tammy Young says she spent at least five years and more than $25,000 making her house as environmentally friendly as possible. "Before I bought the house, I spent a few years traveling overseas for my job and was always horrified at the way Americans wasted so much of our resources," Young says. "I vowed that I would do everything I could to live as resourcefully as possible when I returned for good to the States."

When it was time to sell her home, Young says she soon learned that the environmental add-ons were part of a filtering process for prospective buyers. "You know what kind of people will enjoy your home," she says. "Our real estate agent viewed anyone with the money to buy the house as the same. We went a little deeper, and it worked out incredibly well for us."

Young, who was born in Australia and moved to the United States to attend Stanford University when she was 18, eventually moved to Minneapolis, where she lived with her partner, Valerie, until the two decided to go their separate ways in 2012. "We both loved that house, and we knew it just made sense to sell it," Young says. "The thing was that Val and I learned a lot and put so much care into that house that we were both determined to sell it to someone who would appreciate the changes we made and would continue to work on making the house as green as possible."

Young says the house was listed initially with a local real estate agent, who assured them that she would target the exact sort of home buyer they discussed. In a matter of weeks, Young knew that the decision was a mistake. "When she looked at our house, she loved all the things we'd done, but as soon as one week went by, she had asked us to move the compost bin, move the rain barrels essentially get rid of all the things we worked so hard to create."

Young maintained the house and tried to accommodate the agent but soon realized that it wouldn't be possible. Young decided to stick firm to her higher asking price and immediately opted out of the deal when the contract with the real estate agent had expired. "I took the house off the market, made some changes, waited a few months and then listed it again, but this time on my own," she says. "Val and I planted a garden, painted the shutters and added a couple more rain barrels."

The rain barrels, of course, collect rain that is then used to water the grass and plants. The compost bin was moved back to the side of the house to serve as a green option for food scraps, coffee grounds and biodegradable trash, but now does so for a new homeowner.

"When we listed the place ourselves, we actually targeted environmentally conscious people through some ads, through some organizations I belong to and through word of mouth," says Young. "Turns out there is a pretty large group of people who are very interested in homes with amenities like our old house low-energy lighting, radiator heat, low-flow faucets and toilets all of those things and more."

Within two months of listing on their own and advertising through an online property ad, the house was sold to a University of Minnesota counselor who had just started a family. "They are the cutest couple with the cutest two little boys," Young says. "The mom and dad were all about teaching their kids how to respect the earth in all aspects of their life. They found our home on Craigslist and made an offer less than an hour after walking through it. It was this perfect little bow on our house and our relationship, a perfect little ending."

Read this: 5 more features that turn house hunters into home buyers

Thursday, April 10, 2014

Set a Selling Season Plan of Action

This 3-bed home is listed on ForSaleByOwner.com.
Spring brings many things: tax time, Earth Day and home-selling season among them. Here's how to get the most out of a spring home sale. 

1. Capitalize on Tax Time: While buyers will be eager to put their tax returns towards a down payment, you might be doing some home repairs and improvements. Save those Home Depot receipts! Your costs may be tax deductible.

2. Go Green to Get Green: It's spring cleaning time. Recycling or donating items you no longer need makes sense for the planet and could also help come tax time, too. Make every day Earth Day by creating your own natural cleaning products.

3. Strike While the Market Is Hot: As we leave winter in the rear-view mirror, take heart that home buyers will be coming out of hibernation this spring. Get ahead of the competition by taking control of your personal selling timeline.

4. Set the Stage for a Sale: Think of buyers as your audience, and stage your home inside and outdoors as if you're putting on a production. Remove any obstacles that might block buyers from seeing the best version of your home.

5. Capture Your Home's Best Angle: Springtime means flowers in bloom, longer daylight hours and prettier views, no Instagram filter needed. Take advantage of the season, and shoot some new home photos with these tips for taking impressive images that will get your listing noticed.

Wednesday, April 9, 2014

Top U.S. Real Estate Markets: Denver

The Denver area is the eighth featured market in our series that takes a look at the top U.S. real estate markets from a new angle. How were the cities chosen? Using three criteria: the size of the buyer population, the number of homeowners and the average number of days houses are on the market.


Denver's Housing Market Growth Stabilizes
Coming off of a record-setting 2013, Denver's housing market growth has perhaps inevitably plateaued. But by most national measures, it remains robust. The number of transactions closed increased 26.3 percent in 2013 over 2012, and the median price of houses for sale in Denver in 2013 jumped 10 percent. Though this level of increase won't be sustained, analysts predict the market will continue to show impressive stability and moderate growth. Real estate data website Zillow.com predicts a 2.1 percent increase in Denver home prices in 2014, a healthy increase but a significant cut from the estimated 9.3 percent gain in the previous year.

The Denver area's economy gains support from its stable and diverse industrial sector, offering good job opportunities for the younger demographic. The Millennial (20-to-34-year-old) population is projected to increase by 7.3 percent over the next five years, bringing a crowd of new home buyers to the Denver market. The city's housing inventory -- the time it would take to sell all properties on the market, an indicator considered "balanced" at six months -- averaged less than three months in 2013, lower than the national average of about five months. A strong economic outlook, rising home prices and a tight inventory will keep the Denver home seller in the driver's seat. FSBO (for sale by owner) sellers listing their homes without the services of a real estate agent will further benefit, saving the agent's 6 percent commission, an average of $14,786 in the Denver market.

Hot Buttons and Deal Breakers for Denver Home Buyers
The most important features driving a purchase for Denver home buyers are in the areas of home amenities and floor plans, according to a 2014 survey by ForSaleByOwner.com. Nearly half of Denver home buyers list a garage or carport as the most important feature in a home they are considering purchasing. A house in move-in condition was next on the list, followed by an open floor plan. Central air and a single-level home round out the top five important features. The most common deal breakers for buyers are a lack of a garage or carport, a house that is not in move-in condition and a lack of central air.

Popular neighborhoods within the city of Denver include Capitol Hill, the city's most densely populated community, which offers residential options ranging from historic mansions to new condominium and apartment buildings. The Highlands, established in 1858, is one of the most sought-after residential areas within the city because of its proximity to downtown. Hilltop and neighboring Crestmoor are among the wealthiest communities in Denver and include two-story colonials, English Tudors and Georgians, as well as newer-construction properties that are replacing homes from the 1940s and 1950s.

Communities outside of the city include Cherry Hills Village, an affluent suburb with some of the state's most expensive homes as well as an extensive system of hiking trails and a wide variety of recreational facilities. Castle Rock, named for a rock formation near the center of town, lies between Denver and Colorado Springs and includes homes with stunning views of the surrounding rocky buttes and pine forests. Boulder, 25 miles northwest of Denver, is the home of the University of Colorado and frequently appears on lists of the best places to live based on its rich variety of cultural, educational and recreational offerings.

Up next: Boston, where robust healthcare and technology industries boost the economy, but high costs of living and below-average population growth temper the boom.

See what other cities made our Top Real Estate Markets list.