Real Estate Watch: New tactics for relisting a home

Relisting a home isn't an enviable position for any seller. Something went wrong the first time, and for many sellers, trying again to sell the home raises more questions than answers.

While it's common for real estate agents to handle relistings, data on just how common the situation is can be hard to come by because some agents pull listings for a week or two and then relist. It's a tactic designed to make a home listing look fresh. But increasingly, a true relisting is defined as having a 90-day gap between the time the property goes off the market and when it comes back. In that scenario, many real estate agents say it isn't always price that kept the property from moving.
"When relisting a home, the first objective should be to tackle the questions of why the home was removed from the market in the first place," says Aaron Mighty, a real estate broker in central Florida. "Clearly, in this economy and recovering housing market, it can be one of many reasons, but the best answer is always the truth, no matter what it may be."

Listen to broker comments. If you're relisting your home after three or more months off the market, the best place to start is with a post-mortem on what went wrong the last time.
After the original listing ends, ask your agent how the market perceived the home, said Paul LeJoy, founder of Pacific Realty Partners in Newark, Calif. What you hear should guide future strategy, especially if a number of agents and buyers raise the same issues.
Consider low-cost improvements. But don't go overboard, says Cannon Christian, president of Renovation Realty in San Diego.

"Painting, whether interior or exterior, is relatively low-cost and adds a quick revamp to your home," Christian says.

But that doesn't mean customizing the property to your tastes. Paint in neutral colors, and avoid making improvements beyond cosmetic changes. Expensive repairs seldom pay for themselves.
Stage it right. Sellers who relist their homes without rethinking staging aren't setting themselves up for success, according to David Kean, a real estate agent in Beverly Hills, Calif.
"A well-presented house can make all the difference," says Kean, who advises clients to keep a listing "clean and clear" by decluttering. "If you don't need something, store it, sell it or give it away," he says.

He advises clients to air out their homes because every dwelling has a distinct aroma that may not be pleasing to all buyers.
Hire the right agent. If your home didn't sell, consider hiring someone else to handle the listing. But, says Deb Tomaro, a Re/Max agent in Bloomington, Ind., it's the seller's responsibility to do the due diligence.

"People tend to pick a Realtor because he's their parent's neighbor, or she's their hair stylist's cousin, and a lot of times, it doesn't end up being a good match," Tomaro says. "What they need to do is ask a lot of questions to make sure the agent is on the same page."
Change the marketing. Ask if the previous marketing plan's ads and photos drove enough prospective buyers to your property.

A good place to start, says Houston Realtor Sissy Lappin, is with the photos in the old listing.
"Some of the pictures I see on the (multiple listing service) look like a drunk took them with a flip phone," she says, adding that all sellers need quality pictures in their listings.
In addition to more professional photos, Lappin says it's critical that sellers make sure their agent markets the property widely online.

Should you reduce the price? That's perhaps the most common question sellers face when they return to the market after an unsuccessful first attempt to sell a house.
Sellers should consider cutting the price if some or many of the market conditions remain the same as when the house was on the market the first time. A general rule of thumb is if 40 buyers have seen your home and you have not received a single offer, your home is overpriced.
Mortgage rates this week

Mortgage rates skyrocketed this week as the market reacted to hints that the Federal Reserve may taper its bond-buying program soon.
The 30-year fixed-rate mortgage rose 25 basis points to 3.99 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage rose 24 basis points to 3.21 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 21 basis points to 4.2 percent.
The 5/1 adjustable-rate mortgage rose 11 basis points to 2.81 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

Full Story

7 Real Estate Risks: Are They Over- or Under-Estimated?

We tend to speak of the risks of various courses of action in black and white, as risky or not. But the truth is, everything in life has risks - even doing nothing! Behavioral experts, economists and my dear old Dad agree: we’re most likely to make decisions we later regret when we under- or overestimate the risks of the outcomes we hope to avoid. So, outside of extremely high-risk endeavors like base jumping and going on blind dates, the real challenge in life is not to avoid risk entirely, but to assess it accurately and manage it accordingly.

This need to assess and act on risks appropriately, neither overblowing them or blowing them off entirely, is particularly critical when it comes to real estate risks. It’s easy to let your personality determine how you view and manage real estate risks. But that’s a costly approach: if you let your personal tendency to be risk averse stop you from ever owning a home, you will also miss out on the personal and financial advantages of home ownership, and the opposite is true. If you take a devil-may-care attitude toward your real estate and mortgage matters, you’re highly likely to make some highly regrettable decisions along the way.

So, instead of going on risk assessment autopilot, let’s take a quick, yet deep, dive into seven of the real estate-related risks that come up the most often in the minds of smart buyers, sellers and owners like you and how you can manage each of these risks wisely.

Risk #1: The Risk of Foreclosure. The risk of losing a home has only recently moved to the front of our collective national consciousness. Foreclosure was once a very, very rare event, seen as an unlikely worst-case scenario. But it became a vivid nightmare come true for an all-time high number of home owners during the recession. The risk and fear of foreclosure is largely due to this increase in foreclosure rate over the past few years, and to the vivid, catastrophic nature of the event. Also, almost everyone knows someone who either lost a home or had serious mortgage distress, so it seems like a very common occurrence.

When we take a look at the facts behind this risk, we realize that the risk of foreclosure appears to be much higher than it truly is. There are roughly 76 million owner-occupied homes in the U.S., according to the Census Bureau. Earlier this year, real estate data firm CoreLogic revealed that there had been 3.4 million foreclosures since 2008. That would mean only about 6 percent of homes in America had been through a foreclosure - and this, through the very worst recession of most of our lives.

The more probable risk is the risk of ending up underwater, which more than 25 percent of American homes were at some point during this past 5 years.

The fact that home values rise and fall cyclically is not a risk or a probability - it’s a fact of the real estate market, and one that you can’t do anything about. Your aim should be to manage and minimize the risk of serious mortgage distress (i.e., struggling to make the payment) or foreclosure. And you have the power to manage these risks by:

• Making smart mortgage choices. Buying at a price well within what you can afford, selecting a mortgage that your household finances can sustain over time, and not overleveraging by borrowing cash against your home equity for things like cars, clothes or ready cash.
• Making smart financial moves over time, including building a cash savings cushion you can turn to if a job loss or disability interrupts your income.
• Buying a home in as desirable a location as you can afford - and in an area with strong prospects for economic and population growth.
• Making small, extra payments to bring down the principal balance on your loan, if and when you can afford to.

Risk #2: The Risk of Overextending Yourself. This is a very real risk - more real, even than the risk of actually losing a home. Home buyers can overextend themselves when they take loans that give them falsely low upfront payments;. This was common in the subprime era that many believe led to the recession, but is less likely with today’s tighter lending guidelines and narrow loan programs...
Full Story