Investors Losing Interest…

BY JANN SWANSON

Investors Losing Interest in Housing, Despite Rise in Distressed Sales Share

Institutional investors appear to be losing interest in purchasing foreclosed properties for rentals in the face of rising property prices and interest rates and increased competition from homebuyers.   According to RealtyTrac's January 2014U.S. Residential and Foreclosure Sales Report, the share of home sales tied to institutional investors – entities that purchase ten or more properties in a calendar year – dropped to 5.2 percent in January, down from 7.9 percent in December and 8.2 percent in January 2013.  The January number was a 22 month low.

Daren Blomquist, a RealtyTrac vice president said, "Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening.  It's unlikely that this pullback in purchasing is weather-related given that there were increases in the institutional investor share of purchases in colder-weather markets such as Denver and Cincinnati, even while many warmer-weather markets in Florida and Arizona saw substantial decreases in the share of institutional investors from a year ago."

The fall back in institutional investors occurred in nearly three-quarters of the metropolitan areas tracked by the Irvine California company.  Areas with particularly large declines from a year earlier included Cape Coral-Fort Myers, Florida (-70 percent); Memphis (-64 percent), Tucson (-59 percent), and Tampa (-48 percent).  Institutional activity increased in 23 of the 101 areas with Austin, Texas notable for a 162 percent rise while Cincinnati was up 83 percent and Dallas 30 percent.

Institutional investment remains a major factor in sales in several areas including Jacksonville, Florida at 25.5 percent, Atlanta, (25.1 percent), and Austin (18.0).

Sales of all U.S. residential properties including single family homes, condos, and townhomes were at an estimated annual rate of 5.126 million units in January, a less than 1 percent increase from December and up 8 percent from a year earlier.  The rate of sales declined in seven states and 17 of the 50 largest metropolitan areas.

RealtyTrac said that foreclosure-related and short sales accounted for 17.5 percent of all residential sales in January, up from 14.9 percent in December.  In January 2013 distressed properties accounted for 18.7 percent of sales.  The distressed sales breakdown in January as a percent of all sales was 5.9 percent short sales, 10.2 percent bank owned real estate (REO) and 1.5 percent properties sold at foreclosure auction.

All-cash sales accounted for 44.4 percent of all U.S. residential sales in January, the seventh consecutive month where all-cash sales have been above the 35 percent level.  In several metro areas the majority of sales were all-cash; Miami (68.2 percent), Jacksonville, (66.2 percent), Memphis (64.4 percent) Tampa (61.5 percent) and Las Vegas (56.5 percent.)

The national median sales price of U.S. residential properties – including both distressed and non-distressed sales – was $165,957 in January, down 3 percent from December but up 1 percent from January 2013. The 3 percent monthly decrease was the biggest monthly drop since February 2013.  Some of the markets which had shown the fastest appreciation posted declines in January.  Some cities where prices fell 1 to 2 percent were San Francisco, Sacramento, Memphis, Cincinnati, Phoenix, and San Jose.  Prices in each, however, were a minimum of 19 percent above year-ago levels.

Best Regards, Chris Mesunas.

 

Negotiating Repairs…

How to Negotiate Repairs After a Home Inspection

AUTHOR:BRENDON DESIMONE 

 

Most would-be buyers and sellers believe the real estate “deal” is negotiated at the signing of the contract. By that point, the counteroffers have been made and the back and forth has happened, so it’s easy to assume that the deal will go on auto-pilot until closing.

The reality, though, is that in many cases, the deal-making and negotiations only start at the contract signing. Even in more competitive real estate markets, negotiations still happen once in escrow.

For example, if you’re a buyer, the property inspection or sellers’ disclosures — maybe the HVAC system has some issues — may prompt you to seek a credit. But where do you go from there?

Here are three tips for negotiating repairs after a home inspection.

1. Ask for a credit for the work to be done

The sellers are on their way out. If the property is moving toward closing, they’re likely packing and dreaming of their new home. The last thing they want to do is repair work on their old home. As a result, they may not approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority. If you take a cash-back credit at close of escrow, you can use that money to complete the project yourself. Chances are you may do a better job than the seller, too. Finally, if you get the credit, there will be less back and forth to confirm the work has been done.

2. Think ‘big picture’

If you know you want to renovate a bathroom within a few years, then you likely won’t care that a little bit of its floor is damaged, that there’s a leaky faucet or that the caulking needs to be redone. These things will get fixed during your future renovation. However, the repairs are still up for negotiation. Asking the seller for a credit to fix these issues will help offset some of your closing costs.

3. Keep your cards close to your chest

A good listing agent will walk the property inspection with you, your agent and the inspector. Revealing your comfort level with the home or your intentions, in the presence of the listing agent, could come back to haunt you in further discussions or negotiations.

For example, if you mention you’re planning a gut renovation of the kitchen, the sellers will certainly hear about it. And they’re going to be less likely to offer you a credit back to repair some of the kitchen cabinets. Also, if the listing agent hears you tell the inspector that you love the home so much you don’t mind replacing the HVAC system, the agent will surely let the sellers know about that.

Eyes wide open

A word of caution: You should never complete the original contract assuming that you can negotiate more as a result of the property inspections. If it’s a competitive market and the property inspection comes back flawless, there’s nothing to negotiate. If you attempt to negotiate anyway — to recoup what you lost in the initial contract negotiations — you risk alienating the sellers and possibly giving them an incentive to move on to the next buyer.

You need to go into escrow with your eyes wide open. A real estate transaction is never a done deal until all the money has been wired in and the deed transferred. Prior to signing the real estate contract, your main concern is that you may be competing with other buyers. Once you’re in escrow and doing inspections, however, it’s just you and the sellers. Stay on your toes. Otherwise, you may risk losing out on further viable negotiation opportunities, which could lead to buyer’s remorse.

Related:

• What to Expect When Inspecting?
• Why You Should Have Your Home Inspected Before Selling
• Most Important Things to Do Before & After Closing

 

Best Advice Now for Homebuyers and Sellers

 

Chris Mesunas , 

Wondering how to sell your home faster and get more money? Or have you always been unsure how to win a bidding war? Well Barbara Corcoran helps explain all of this to us.

 

Barbara Corcoran

Sell your home fast 
Underprice it from the start. If you list your home for at least 10% less than it's worth, you'll often sell it for 10% more.

Buyers notice a house that's underpriced: They'll take it by storm and drive up the price with a bidding war.

People worry that setting the price low will deter bidders. That's not the case. If you don't get competitive bids, you didn't truly underprice the house to begin with. 
— Barbara Corcoran, founder, real estate firm the Corcoran Group and panelist on ABC's "Shark Tank"

Win a bidding war 
Go as high as the maximum price you'd ever be willing to pay — if someone outbids you, you'll feel confident you gave it your best shot.

Sometimes it's not just about the money. Give the seller some breathing room too. Buyers often signal their interest by offering to close quickly, but that move might backfire in this market: If the sellers haven't found a new place yet, they may be unable to accept your offer.

Instead, propose a seller's residential lease. You close on the house quickly, then rent it back for 60 or 90 days. That gives the sellers a chance to look for a home in a nonpanicked way — and gets you the house you want. 
— Mary Beth Harrison, founder and realtor, Keller Williams Elite, Dallas

source: CNN Money

Hopefully this article helped you learn how to sell your home faster and how to win a bidding war.

Chris Mesunas

Top 5 things today’s home buyers are looking for

 

Chris Mesunas ,

Have you always been wondering what today's home buyers are looking for? Well here is a great article that will tell you the top 5 things today's home buyers are looking for!

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  REUTERS

Many people shopping for real estate today are younger than previous generations of home buyers, and they’re extremely tech savvy. They grew up with smartphones, apps, and Google searches. And they want to use technology not only in their search for a home but throughout the home itself.

A recent survey by Better Homes & Gardens Real Estate shows that 77% of Gen X & Gen Y home buyers want their homes “equipped with the technological capabilities they have grown accustomed to.” And it doesn’t stop there. This new generation of home buyers is “rewriting the rules to home ownership and reinterpreting traditional norms to fit their values,” says Better Homes & Gardens Real Estate.

These aren’t your standard-issue young home buyers from 30 or 40 years ago, who were often married couples looking for a starter home in the suburbs to raise a family. Today, single women make up a large percentage of first-time buyers, as do gay couples and the always-connected mobile professional.

As the home buyer evolves, so does the home. Here are five major shifts in homes you can expect to see today and in the coming years.

1. Man Caves and Smart Homes

The media room or “man cave” emerged in real estate marketing a few years back. Many buyers now prefer high-tech rooms with surround sound, large-screen TV’s, and the most up-to-date A/V equipment to the coveted formal dining room of a generation’s past.

But some aren’t limiting technology to just one room. They’re transforming an entire property into a “smart home” with home automation systems.

At a recent Maple Ridge, N.J. open house, the real estate agent demonstrated the features of the home automation system to excited buyers. With one tap on a touch screen, the owner of that home could remotely lock/unlock doors to let in their kids from school, automatically turn on the A/C or heat before they leave work, or monitor the family dog via webcam.

Given how technology is only going to be more important in our lives, transforming a home into a “smart home” is likely to be a good investment.

2. Carrie Bradshaw Closets

In the first Sex and the City movie, Carrie Bradshaw excitedly tours her future Manhattan apartment with Mr. Big — and is woefully disappointed at the tiny closet space. He surprises her by dramatically remodeling the cramped space into a dream closet, with glowing, glass-enclosed sub-closets.

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That 2008 movie raised the bar and set the tone for closets. Today, the walk-in closet is a must-have on many buyers’ wish list. Some homeowners are paring down a four-bedroom home to three by transforming one bedroom into an oversized walk-in closet. It’s a far cry from the Victorian era, when bedroom closets were often the size of a coat closet today.

A large closet will probably never go out of style. If you intend to expand a closet or bedroom into a grand walk-in closet, just be careful not to overly customize it. The more specific you get with your taste, the fewer people your closet will appeal to when you go to sell later.

3. Home Offices

Even though a few companies (most notably Yahoo!) are instituting a ban on working from home, most encourage it. And so, in our always-on culture, many people entering the real estate market are tethered to email well into the evening hours and on weekends.

A home office tops this buyer’s wish list. Depending on the number of bedrooms, some will create a home office with built-in desks, shelving and cabinets. The customized home office with built-ins could deter some buyers, however, who feel they’ve lost a bedroom or other space. But many prefer to have one place dedicated to their laptops, printers and work-related stuff. (A dedicated home office is better for tax purposes, too). Either way, try to make your home office as appealing to the next buyer as it is to you. And keep in mind that, provided you don’t create a built-in a desk or bookshelf, the space can easily be reverted back to a bedroom.

4. Hardwood Floors

If you walk into a home that hasn’t been on the market for decades, you’ll probably see a lot of wall-to-wall carpeting. This was common in the mid 20th century. Not only did carpeting help reduce heating bills, it was seen as physically comforting and less sterile.

Fast forward 50 years, a time when most buyers prefer gleaming hardwood floors. Hardwood floors make a space feel less confined and give it a new, clean feeling. No matter how many times the carpet has been cleaned, there’s something about stepping on someone else’s carpet with your bare feet that turns off today’s buyers.

If you see a home you love, with wall-to-wall carpeting you don’t love, ask the agent what’s underneath it. You might be surprised to find a hardwood floor that, with some sanding and polishing, will give the home that updated, lighter look you want.

5. Urban Homes With Amenities

Home buyers used to covet a three-quarter acre lot. Today’s buyers — both the Gen X and Gen Y generations as well as empty-nest retirees—see that same lot and think “maintenance.”

Instead, they’re opting for city living in big cities like New York as well as smaller urban centers such as Baltimore, Pittsburgh, and San Jose. These buyers seek active lifestyles and opportunities to socialize. They want to be near transit hubs. And they’re looking for buildings with amenities. They want a full-time concierge, a full-service gym, even an in-house spa or business center. If this type of property appeals to you, make sure you’re fully aware of the homeowners’ dues and other associated costs. You might be willing and able to absorb those expenses, but future buyers might not be.

Think Long-Term

Trends in kitchen countertops, paint colors and bath fixtures come and go. They’re based on larger design or style trends and even fashion trends. However, as our society and our culture changes, the larger fixtures and features of our homes change more gradually. They don’t mirror the latest trends so much as they reflect shifts in how we live. As a result, investing in long-term home shifts will usually be a better idea than paying extra money for the latest home fad.

Though the world has changed dramatically in the past 30 years, some things will always remain the same. People will always need a place to rest their head at night. And real estate, despite its recent ups and downs, is still a good investment — if you’re in it for the long haul. 

source: Fox Business By Brendon DeSimone

Hopefully this article helped you. 

 

Chris Mesunas