Agents frequently suggest that homeowners paint before placing their homes on the market. Don™t be offended!
Agents understand œcolor psychology, which focuses on color™s effect on human behavior and emotion. Since people™s reaction to color is immediate, color has a tremendous influence on the choices they make every day.
œColor choices are very personal and when selling your home, it™s critical to appeal to the greatest number of potential buyers, said Allegra Dioguardi, president of Styled and Sold Home Staging in New York. œWith so many people beginning their search for a home on the Internet today, your home and listing photos must stand out from your competition. Color is one very simple way to do this.
Added Eric Brown, one of the authors of House Selling for Dummies: œPainting your house™s exterior before you put it on the market will give the biggest bang for your fix-up buck, as long as you are using colors that conform to the neighborhood™s decorating norm.
Colors affect human beings in many ways, and by using the principles of color psychology, you can make your home stand out from the competition, sell more quickly, and at a higher price. In short, the stimulus and effect of colors normally cross cultures. Blues will feel cool, reds and oranges feel warm. Deeper shades of color imply intimacy and serenity.
Your home™s exterior color is the first thing most potential homebuyers see when they drive up or inspect the property on the Web. The correct color may be the most powerful and cost effective design tool at your disposal.
What is œcorrect these days? Brown™s research shows that homes painted in pale yellows with cream or beige accents have sold fastest during the past few years.
In general, lighter colors are favored for exterior as they make the property seem larger. Conversely, painting your sideboards with a darker color will make the house seem smaller, though dark colors can draw more attention to home™s details.
For those painting an older home, you may want to consider historical accuracy, as this could be a big selling point as well. When choosing interior colors for the home, consider the purpose of each room. Kitchen and dining areas painted in œfood colors such as coffee browns, celery greens and scrambled-egg yellows will make the rooms feel more natural. Hallways are a great place to bring in the exterior colors for overall harmony.
According to Jeanette Fisher™s book Joy to the Home: Secrets of Interior Design Psychology, since, deeper shades of color imply intimacy and serenity, she recommends painting master bedrooms a medium shade of green or blue for warm selling seasons, and rouge red for cooler weather. Other bedrooms can be painted in creamy tones of green, blue, or a pale shell pink.
For your bedroom and bathroom, cool colors can form a relaxing atmosphere with paint. Consider shades of blue, green or even lavender.Of course, common sense should help you with any color choices. You need to match other things in your home and keep a comfortable environment as well.
Corelogic noted finally some positive news on the housing sector in a recent report. CoreLogic noted that in May of this year excluding distressed sales, i.e. foreclosures, pre-foreclosures, and short sales, home prices only dropped 0.4% from a year ago.
The report continued and said that this was “another very positive sign is that even while including distressed sales, the HPI increased between March and April ” the first time in more than six months ” and was up again between April and May. These increases represent the resumption of seasonality in home prices and are a positive sign for the market.”
“Given that the recent declines in auction filings and current shadow inventory levels are the drivers of future distressed sales, the level of distressed sales should, all things equal, begin to decline late in 2011 and into 2012,” the report said.
According to a press release issued this past week by Zilllow, “Current home sellers who purchased their home in 2007 or later are overpricing their homes by an average of 14.1 percent, according to analysis of for-sale listings on Zillow.”The study also pointed out that sellers who purchased their homes before the ‘bubble’ or run-up in home values as well as those who bought after the bubble burst also overprice their homes, but not nearly as much. Sellers who bought before 2002 price their homes about 12 percent over market value, and those who bought between 2002 and 2006 price their homes about 9 percent above market value by comparison.
“Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today,” said Zillow Chief Economist Dr. Stan Humphries. ” The story goes on to point out, “2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago.”
“Overpricing homes causes them to stagnate on the market and keeps inventory from decreasing “ not a desirable outcome for either the sellers or the market as a whole.”
This is a tough issue. I have had listings recently in which we have had to sit down and look deeply at this issue of pricing. One was a home that we mutually felt was priced to ‘market.’ We received a contract within three (3) weeks and yet per buyer’s bank appraisal they said market value was 16 percent below our contract! Needless to say, the deal fell apart. Now don’t get me for pricing it too high! In my book if in this market a home goes under contract within three weeks in an arm’s length transaction then buyer is telling you what is fair marketing value to them! Yet, once again the deal died. My seller’s had an appraisal done thereafter and what the appraiser told me was that he could place a value on the home himself between almost 9-16 percent below our previous contract based on which comparable sales he chose to use.
Appraised values always show a range and depending on what sales comparables are used, he said he could agree with the previous buyer’s bank appraisal too. My sellers agreed to lower the price by almost 5 percent. Hey, you need some room to negotiate!
The second issue is a listing that as the appraiser told me who did the pre-listing appraisal, always a good idea when selling, that based on the range of sales in the neighborhood he could place a value between two different points on a scale. All points in that range in value as it turns out were 3 percent to 23 percent higher than a sale that closed within weeks of our appraisal and new listing of this property.
Incidentally another listing comparable which was priced about 6 percent higher than this new sale lowered their list price to just below the sales price on this other home. My sellers chose to price within the appraisers range of values but beyond my recommendation priced the home almost 19 percent higher than this new comparable sale. We reduced in recent weeks, but are still about 12 percent too high in my opinion.
So what do you do? If it were me, you price on the low end of a range of value per a pre-listing appraisal and get the house sold. There are so many good deals out there in today’s market that if you are serious to buy, then you have to get what you currently own sold. The Zillow study goes on to note that purchase price is the biggest motivating factor to buyers today. No doubt. This means that if you are too high, and all it takes is a Zillow ‘zestimates’ and see whether you are priced right or not. Many times a higher than market price is a turn off to buyers as they think the seller is not ‘serious’ or ‘motivated.’ This may not be the signal you want to send.
At the end of the day, and as a wise old Realtor once told me, all that really matters is the answer to this question, ”Do you want to sell or you want to stay.”
Home sales rose sharply in May of this year. This was the first year over year sales increase in more than 18 months according to a report from the National Association of Realtors.
The Pending Home Sales Index, tool used by the NAR to gauge home sales activity, increased by more than 8 percent month-over-month and more than 13 percent year-over-year in May.
In the South, the NAR’s index rose more than 14.5 percent year-over-year and 4 percent month-to-month ending May.
What is “the better bargain.” According to an article by bankrate.com it was the short sale. Statements made in support of the value of a foreclosure, “in April, the median price of a move-in ready foreclosure was $185,000, according to the article. A nondistressed property’s median price was about $267,300.”
The negatives to buying REO, “As a buyer, you could encounter scarred walls, carpets or appliances that were damaged by the former owner. Sometimes, time and neglect are the culprits. Turned-off utilities coupled with the house sitting empty for months can do a good share of harm. However, some foreclosures are “immaculate.” And if you scope out a property that’s run down, there’s still hope.” Well certainly that is my experience. Buying a foreclosure can be a ‘hunt.’ Some are move-in ready and ‘new.’ I cannot tell you how many foreclosures I have walked through that were pristine and bank owned ‘new’ homes for sale that were built from 2007-2011! Some are going to be of issue, but even if the walls are scarred, the carpet needs replacing, and the appliances are missing, if you are saving per the figures in the article somewhere in the range of $80,000 on a foreclosure purchase, I think most can rationale the expense of some new carpet or an appliance or two!
Regarding auction foreclosure purchases, they do make a valid point, “If you buy a foreclosure at auction sans research, you won’t get to take a peek to see if the plumbing works, if the walls are cracked — or if there’s a lien against the property. You’ll be responsible for these cosmetic and legal issues, so many investors research the property’s history before the auction. Usually, savvy investors take on these types of sales.”
Now this is where the short sale propaganda beings. One Realtor interviewed who happened to be a “Certified Distressed Property Expert,” meaning she paid $599 to take an online course for a certification and meaning she is supporting her trade stated, “The short sale is, in my opinion, far better than buying a foreclosure because the home is generally in better condition because it’s been occupied,” she says. “The utilities have been maintained, usually the lawn is maintained, those kinds of things.”
“In April, the median price of a short sale home was $218,500. By comparison, a nondistressed property’s median price was about $267,300, according to the article.”
Now here is the real story. It is a foolish idea that a short sale is simply better because it is assumed to be in better condition with utilities and maintenance being paid for by the Seller or property owner. I was at a home yesterday where this seller who was short selling his home did not have the lawn perfectly manicured per the article’s quote above. The home was in miserable disrepair because this seller who was attempting a short sale DID NOT HAVE THE MONEY to maintain the property and if he did WHY WOULD HE SPEND IT ON A HOUSE that he was getting rid of by selling short of his debt? Who benefits if he maintains the short sale during the listing period? The bank does, not the seller!
Reality is that short sales are “As-Is” purchases just like foreclosures. The reality is that neither a bank on a piece of bank inventory nor the seller of a short sale are “generally” putting any money into either. Both can have their problems and issues. The short sale is not necessarily “going to have perfect carpet” as opposed to the foreclosure or a lack of “scarred walls” or missing appliances or leaks or HVAC and other mechanical sytems that are going to need work and money to make functional again.
My concern is an article like this that over generalizes. I can find and have found for my clients foreclosures that are pristine move in ready. I have rarely if ever seen a short sale that was perfect. Once again, if the bank is going to repair or fininsh a home to be relisted for sale once in their inventory, the bank has money to do this with so at times you can find some really great bargains and steals from buying REOs. The fellow short selling his home is just not going to spend the money. If the short sale home is vacant, then odds are the utilities are turned off as well.
Don’t buy this kind of message that one is necessarily better than the other. It depends house by house in terms of condition, value and I don’t mean off list price but some discount off market value, and terms as far as what you can get from the seller to repair or fix something on the house. I have never yet had any seller give one of my buyers money towards closing costs or credits or fix something of issue with a short sale. I HAVE HAD BANKS on an ”As-Is” foreclosure purchase give my clients anywhere from $1,000-$5,000 as a credit against additional closing costs or the price of the house for items found to be of issue on a home inspection. This includes carpet that had seen its better day and for scarred walls!
According to a June 28, 2011 press release from Case-Schiller, there is shown to be monthly increase in prices for both the Case-Schiller 10- and 20-City Composites for the first time in the past eight months. These indexes gained 0.8% and 0.7%, respectively in April over March.
œIn a welcome shift from recent months, this month is better than last – April™s numbers beat March, says David M. Blitzer, Chairman of the Index Committee at S&P Indices. œHowever, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the Spring-Summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather. œOther housing statistics show the same trends. Single-family housing starts were up in May, but still well below their 2010 levels and still very close to their 30-year low. Existing home sales rose in May, but are still about 15% below last year™s pace and about 35% below their 2005 pace. While foreclosures remain a large factor in most parts of the country, the S&P/Experian Consumer Credit Default indices show a small decline in the pace of new defaults since last November. Other reports confirm that banks have tightened lending standards in the past year making it harder to qualify for a mortgage despite very low interest rates.
œIn the monthly details, we saw home prices increase in April over March. The 10-City was up 0.8% and the 20-City rose 0.7%. Only seven cities experienced lower prices compared to 18 in March. However, the seasonally adjusted figures saw less dramatic improvement. The annual rate of change for the 10-City remained the same at -3.1%; whereas the 20-City fell further from -3.8% reported for March to -4.0% for April. For a real recovery we would need to see several months of increasing home prices, large enough to shift the annual momentum to the positive side. In short, better news, but still a lot of questions and a long way to go.
The city of Atlanta, GA saw gains or increases in sales values by 1.6 percent in April over March. For the past year prices in Atlanta are only off 3.5 percent as compared to year over year losses of 3.1 and 4.0 percent for both Case-Schiller Composite Indexes. Those gains in the month of April were the third largest gains for any of the top 20 Metro Statistical Areas that Case-Schiller follows.
Gwinnett County Transactions and Foreclosure Activity
The following information is based on single family detached residential properties(See Chart Below). During First Quarter 2011 preforeclosures in Gwinnett County totaled 1934 and foreclosures totaled 921. These event types represent potentially negative pricing pressure on a given market as eventually these properties can migrate into either short sales or bank owned sales.
On the demand side of the equation, during Q1 – 2011 their were a total of 1934 sales in Gwinnett county. It is important to note the difference in seller types that make up this data component. 1118 sales were bank/government owned properties while 816 sales were Market Sales, or qualified transactions where the seller was not a bank or government entity. For Q1-2011 in Gwinnett county 57.81% of all sales were bank or government properties. For more information about this report or to take a test drive of our service click on the link below.
If I have heard her say it once, I have heard my Managing Broker state a dozen or more times that “the only unsuccessful Open House is the one you don’t hold.” Sounds great, if we are in 1988. However today, I am convinced that homes do not sell via the Open House as they once did. In holding an Agent Open House the other day I had a real estate veteran of 30+ years walk through the door and propose to me that ‘agents were not curious anymore.’ She said that neither agents nor buyers were curious to get out into Open Houses to check out these homes that had doors open wide begging for traffic and exposure!
Over the past few days I have thought about this comment. You know, there is another way to look at it. I don’t know that agents and buyers are lacking curiosity. I think that in this era of the all consuming web when listings are on hundreds of websites, Twitter, Facebook, You Tube, etc… that agents and buyers ‘have already had their fill!’ Why would a potential home buyer want to view Open Houses door to door in the 100 degree temps (we live in the South) on a summer weekend day, in lieu of the pool, when they can see dozens of photos, slideshows, and even streaming video of homes for sale online today?
We show them everything they want to see upfront! There is no curiousity because there is nothing left to hide or surprise them with because they have seen enough to make a valuation on whether a listing has enough interest to see in person!
The honest fact is that they don’t. Most would rather look online at the wealth of information available to develop an interest in the homes they do want to see and this is ‘okay.’ Nothing wrong with that. People don’t write letters like they used to either and society is not going downhill because of it. There are a lot of things we do today that we didn’t do five, ten, or twenty years ago because we don’t need to operate in the same way. Technology and progress have made the process of home buying and selling much easier than it used to be.
No, I don’t think people have lost their curiosity regarding seeing homes listed for sale. I think they have made a massive shift toward viewing more information and consuming more details online. This also at a time when gas is at $3.50-$3.75 a gallon which makes a lot more sense as well.
A few years ago I had another Broker tell me that in her 35+ years she had done hundreds of Open Houses. She told me with pride that she had done more than most. She sold more houses that most too! She then stated that in her 35+ years however that she had only sold one (1) home from holding an Open House. There she stood with her single solitary finger upraised showing the combined successes of decades of experience with the strategic selling idea called “The Open House,” yet we are still told that this is expected in our ranks even though they don’t typically produce the results for which they are intended. On a personal level I think the Open House is going the way of the printed ad, MLS ‘books,’ and Realtor post card canvassing.
I had a gentlemen tell me once that he had held Open Houses at his FSBO (for sale by owner) listing for more than 18 months. Every weekend for a year and a half he had been spending his Sunday afternoons chained to strangers coming and going with never a sale. Now if the Open House worked, he sould have sold his home within 18 months! He finally gave up and I listed his home for him. In 22 days we had an offer and closed it by day 30! I never did an Open House at this listing.
I simply got it online.
How long do you have to sit on the sidelines until you can secure future financing to buy a home again after a foreclosure? This question comes up it seems weekly to “every day of the week” some weeks.
An article in The New York Times notes that in general the longest wait to buy again will come if there is a foreclosure on your credit.
For a loan guaranteed or backed by Fannie Mae and Freddie Mac, and they do back about three-quarters of outstanding loans in America today, a three-year period following a foreclosure, two years for a short sale, three years for a deed in lieu, discharge, and dismissal due to bankruptcy. Now with this said, if borrowers can justify that the circumstances for the foreclosure occurred because of illness or job loss, or any other issue that is classified as œextenuating circumstances, that may help reduce the wait. I have seen someone with a foreclosure on their credit that had some of these extenuating circumstances obtain a new FHA loan in two years!
With no extenuating circumstances, if you have a foreclosure on your credit some former home owners have had to wait longer. Some up to seven years after a foreclosure and four years after bankruptcy, the article goes on to point out.
How about FHA? The New York Times goes on to note that for loans insured by FHA, borrowers with good credit after a foreclosure or bankruptcy will have to wait three years after the foreclosure and two years after the bankruptcy is discharged. The caveat is that the date of title transfer on the foreclosure through bankruptcy must change from the previous owner’s name on a timely basis. I have seen instances where someone looking to buy again with a bankruptcy discharge found that even though their bankruptcy had been discharged for three years, that the home foreclosed on through the bankruptcy had a title that was not transferred by the lender over to themselves for 6-12 months after the foreclosure. This meant for these home buyers that they had to wait another 6-12 months to have that foreclosure age off their credit.
œThe key is to avoid the foreclosure, Andrew Wilson, a spokesman for Fannie Mae, told The New York Times. œThat is what will help you be eligible for the shorter period.
Via a press release this month from RealtyTrac, its U.S. Foreclosure Market Reportâ„¢ for May 2011 showed homes in the foreclosure process, meaning home with foreclosure filings ” default notices, scheduled auctions or sale dates, and bank repossessions ” were reported almost 215,000 strong across the U.S. in May of this year.
This was a 2 percent decrease from the previous month and a 33 percent decrease from May 2010. This means that one (1) in every 605 U.S. households received a foreclosure notice during the month of May. œSecond, while the inventory of properties in the foreclosure process has declined steadily over the past six months ” thanks in large part to 16 consecutive months of year-over-year declines in new default notices ” the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months, Saccacio continued. œThat points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month.
Non-judicial foreclosure activity accounted for almost 70 percent of national total
The report also went on to detail that close to 150,000 properties received foreclosure notices “in states where lenders primarily use the non-judicial foreclosure process.”
Some non-judicial foreclosure states however posted large monthly increases in REO or bank repossession activities. Georgia for one had a 79 percent increase in REOS for the month of May followed by Virginia, with a 36 percent increase.
Source; The RealtyTrac U.S. Foreclosure Market Report
In Georgia 1 in every 387 housing units received a foreclosure filing in May 2011. This was a total of slightly more than 10,500 properties in May as compared to 1 in 605 housing units nationwide.
Fulton County, Georgia led the way with 1,385 foreclosures in May followed by Gwinnett with 1,216. Dekalb, Cobb, and Clayton rounded out the top 5.
For more questions or to find out information regarding any Georgia foreclosures please contact me. I would count it a privilege to be able to be of service!