How To Spot A Home That Might Sell Below Its Real Estate Value

Want to increase your chances of buying a home below current real estate value? Just look for a seller who didn’t listen to his agent.

The best real estate agents encourage their sellers to do whatever it takes to get the home in its absolute best condition before going to market. The better the home shows, the more likely the seller will get top dollar.

Sometimes, this could be as simple as removing personal items or decluttering. Other times, an agent will suggest bigger fixes, such as painting, replacing carpet or upgrading countertops or cabinets. Savvy sellers listen to their agents, make the changes suggested and go to market in top form. That’s not always how it plays out, however.

For any number of reasons, many sellers protest suggested fixes. Either they don’t want to be inconvenienced, don’t believe the fixes will matter or don’t have the financial resources to make it happen. Inevitably, this means the buyer will get a discount on that property.

How to spot a home that might sell below its value
Is there a home for sale in a good neighborhood and in the desired school district that seems to be well-priced but for some reason isn’t selling? This is the home you want to investigate, because chances are the seller didn’t listen to his agent. Specifically, here are some tell-tale signs to look for.

Big furniture or a lot of furniture
Most people don’t buy furniture to use when staging their home. Often a seller may have a lot of furniture in one room, which makes the room look small to potential buyers. Real estate agents and professional home stagers know this all too well. For example, stagers always suggest a small loveseat over a full-blown couch or sectional sofa. Also, in the bedrooms, king beds often take up too much space. So a stager will often push the seller to swap it out for a queen or full-sized bed.
When you enter a house that seems crowded with furniture, imagine the rooms with fewer or smaller pieces. Be aware that plenty of potential buyers won’t get past the sense that the rooms are too small, and they’re likely to move on to a home that feels bigger. In turn, this could give you room to negotiate a good deal with the seller.

Dark rooms
There was a home in West Hartford, CT on a great block, but the interior was dark. Three large French doors in the living room led to a deck, but the doors were stained black, and the carpet was brown. On top of that, the window coverings were big, heavy and overtook the room.
The house sat on the market for months, even though the price wasn’t far off the real estate market value. Here’s why: Every buyer walked in and out because the house was so dark. After the home had been on the market for three months, a smart buyer made an offer $40,000 below asking and ended up getting it.
Before the buyer moved in, he removed the window coverings, stripped the stain on the doors and painted them white, pulled up the old carpet and had the floors stained to a lighter oak. Right away, the dark room became light, bright and welcoming. The buyer’s total cost: $9,000, which instantly added $31,000 to his equity.

Grandma or Bambi staring down from the walls
Buyers are looking to see themselves — and not the current owners — in a home. Too often, however, the seller hasn’t “depersonalized” his home enough, or at all. Even though the listing agent may have told the seller to clear the house of his possessions, the seller may be proud of his accomplishments and resist.
And so potential buyers are treated to walls decorated with diplomas, family photos, awards and trophies. Moose and deer heads hanging on walls are surefire deal killers, especially when the hunting rifle used to kill Bambi is proudly displayed, too. At best, buyers tend to see such highly personal stuff as clutter that takes the focus away from the home. They’re turned off by it all, and they walk away.
They might also be walking away from a great deal. Are the bones of the home good? Does it have the floor plan you like? Are the kitchens and baths in acceptable condition? Is it in the area where you want to live? If you say “yes” to all of these, hang around a little longer. Imagine the home without the seller’s junk. Picture yourself living there, without Bambi.

A good home that doesn’t show well = a great opportunity
Ultimately, sellers who don’t listen to their agents or stagers inadvertently give savvy buyers a discount. For you to see that potential, try to understand as much as you can about why the seller is selling. Look for sellers who have ignored their agent’s advice. While conventional wisdom says that a buyer would be turned off by a home that shows poorly, go against this. Imagine the potential. And then, once the home is yours, make those small changes the seller should have made. Right away, you’ll have a little bit (maybe even a lot) of equity, thanks to the seller.


Read more: http://www.zillow.com/blog/2012-10-22/how-to-buy-a-home-below-current-real-estate-value/#ixzz2ADulUmkK

U.S. mortgage rates continue to fall

Long-term mortgage rates moved lower this week, with the average rate on a 30-year fixed-rate mortgage just above an all-time low, according to the Washington Business Journal.

Freddie Mac’s weekly rate report says a 30-year fix averaged 3.37 percent in the week ending Oct. 18, down from 3.39 percent last week. A 15-year fix averaged 2.66 percent this week, down from 2.70 percent.

A one-year adjustable-rate mortgage rose to 2.60 percent, from 2.59 percent.
Housing data continues to show a strengthening housing market.

This week, the National Association of Home Builders said builder confidence this month rose for the sixth consecutive month and is now at its highest level in more than six years.

In Dayton, the number of new home building permits is up 5 percent so far this year, according to the Home Builders Association of Dayton.

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Time right to buy a home

In the article the writer cites three major reasons to support the opinion; home prices, supply and mortgage rates. Home sales the past several months in northeast Wisconsin support the conclusion.


For most of us we have never seen home prices as low as this in our lifetimes. Low home prices have led some buyers to get the “deal of the decade,” and lend support to the theory that purchasing now reinforces the benefit of home ownership as a long term investment as values rise. Housing is cyclical and as the supply and demand effect begins to affect the market it’s reasonable to conclude values and prices will rise.

The National Association of Realtors continues to report their housing affordability index at the highest level on record. The index tracks average family incomes compared to the affordability of the average home. As rents rise the affordability gap between renting and owning shrinks and in some cases becomes inverted where home ownership costs less than renting.

There is still an abundance of homes on the market in most price ranges. As sales rise and homeowner’s who have wanted to sell list their homes it provides buyers with a continuous flow of inventory from which to choose their new home. The inventory has declined as sales increase but there are still many homes on the market.

The third element in the trifecta is mortgage rates. The 30-year fixed rate mortgage for home purchases continues to hover around 3.50 percent. The astute buyers who lock in the interest rate now will save thousands if not tens of thousands of dollars over the life of the loan. With home prices, the low rates contribute significantly to housing affordability.

Homes sales in Wisconsin were up 17.3 percent in July and 20.3 percent in August compared to the same months in 2011. These positive sales statistics support the notion that many astute consumers are taking advantage of the benefits of purchasing now.

Who are these buyers? Many are first time buyers leaving renting for the benefits of homeownership. Some are move-up buyers who have successfully sold their existing home and they’re purchasing the next home. Some are baby-boomers downsizing; leaving the two-story, four bedroom, family home for the single level ranch or condominium with less required maintenance.

Some buyers are purchasing second homes and leveraging the market to fulfill that dream of owning a second home. Some buyers are relocating from other parts of the country and have either sold their previous home, or in some cases, rented it until the market from which their relocating improves and the previous home sells.

It appears the greatest activity is in the lower price ranges but home sales have improved in all price ranges. With the expert assistance of Realtors, sellers listing their homes at prices commensurate with the marketplace have provided for quicker sales and less issues with appraisal values when buyers and sellers agree on terms.

Home purchase and financing tip: When planning on buying or selling, seek the best advice from the professionals in the market. Enlist the help of friends, relatives, neighbors in indentifying the professionals with the best reputation based on performance. This is the best guarantee for a positive experience.

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Low rates encourage shorter mortgages

As mortgage rates hover near record lows, a growing number of homeowners consider shorter-term loans to pay off their mortgages earlier and regain equity at a faster pace. Is this a smart move or risky game? 30 year fixed rate mortgage – 3 month trend The benchmark 30-year fixed-rate mortgage rose to 3.62 percent from 3.59 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.41 discount and origination points. One year ago, the mortgage index stood at 4.38 percent; four weeks ago, it was 3.7 percent. The benchmark 15-year fixed-rate mortgage rose to 2.91 percent from 2.88 percent. The benchmark 5/1 adjustable-rate mortgage rose to 2.72 percent from 2.68 percent. +

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