The Top 5 Reasons You Should Not For Sale By Owner

In today's market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of those reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

• 44% on the internet
• 33% from a Real Estate Agent
• 9% from a yard sign
• 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

The Importance of Using an Agent To Sell Your House

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. For the past three years, 92% of all buyers have used the internet in their home search according to the National Association of Realtors’ most recent Profile of Home Buyers & Sellers.

However, the report also revealed that 95% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know.

Buyers search for a home online, but then depend on an agent to find the actual home they will buy (53%), or to negotiate the terms of the sale & price (48%), or to help understand the process (60%).

The plethora of information now available has resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious, as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

Bottom Line

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Lack of Inventory Challenging Many Housing Markets

Going into the 2016 spring market, the biggest challenge the real estate industry has is the lack of available housing inventory for sale. Here are a few experts and their thoughts on the subject:

David Crowe, Chief Economist for the National Association of Home Builders:

“Many sellers may not have an absolute decision as to whether to buy an existing home or a new home. So the low inventory of existing homes is locking them in place.”

Ralph McLaughlin, Chief Economist with Trulia:

“We are in a time of short supply, which is great news for sellers because they will likely be faced with multiple offers due to the little inventory out there…Buyers will be up against a lot of other people and against a short supply of existing homes.”

Lawrence Yun, Chief Economist with NAR:

“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors. Without a much-needed boost in new and existing-homes for sale in their price range, their path to homeownership will remain an uphill climb.”

Fitch Ratings:

“One important issue that has restrained sales and starts is inventory. On an absolute basis, inventory has not expanded as much as in past recoveries, leading to less selection for buyers. This is especially true for existing home sales but is evident for new home construction as well. When it comes to U.S. housing inventory, more is better." 

Jonathan Smoke, Chief Economist for Realtor.com:

“The increase in sales is resulting in continued tighter-than-tight supply—measured by NAR to be four months in January.  For you non-economists out there, that metric measures the number of months it would take to sell the current inventory of available homes, at the current pace. Got it? Six to seven months’ worth of homes on the market is considered normal; four months is cray-cray.”

Home Prices Up 5.76% Across The Country! [INFOGRAPHIC]

Some Highlights:

• The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
• In the report, home prices are compared both regionally and by state.
• Based on the latest numbers, waiting to move may end up costing you more!

5 Most Popular Things to Do with Your Tax Refund

By Michael McDonald

RISMEDIA, Monday, March 07, 2016— (TNS)—With tax season here, many people are looking forward to the possibility of a big refund and pondering the best way to spend the extra cash. A recent GOBankingRates survey revealed some interesting differences in how people plan to use their tax refund check — including those between men and women, age groups and income levels. Ultimately, there is no right or wrong way to use a tax refund. Here are five of the most popular things to do with your refund. Pay Off Debt Among women who were polled, the most popular use of a tax refund is to pay off high-interest debt. That’s a smart plan, according to Jared Snider, a financial advisor at Exencial Wealth Advisors. “For the average person, using a tax refund to pay down outstanding unsecured higher-interest debts, like credit card debts, is a great way to use the extra cash,” he said. Nearly 30 percent of women said they plan to use the refunds to pay off debt, compared to about 25 percent of men. Put the Money in Savings Women and men are about equally likely to plan on saving their tax refunds, but that view varies somewhat among age groups. People age 65 and up, and those age 25 to 34 are the most likely to plan on saving their refund, according to the GOBankingRates survey. “I would look at using a tax refund to ensure that folks have an emergency fund for expenses,” said Snider. “At least three months’ (worth) is important.” Put it Toward a Vacation After a hard year of work, many people are simply ready to settle down and take a nice vacation. Sometimes cash can be a little tight, though. That’s where a hefty tax refund can come in handy. The third most popular use of a tax refund, according to the survey, is putting the money toward a vacation. Nine percent of people choose this option. Setting a budget for vacation, and sticking to it, can help you make sure you don’t overspend and potentially go into debt. Major Purchase A big tax refund can also be used to help fund the down payment on a major life investment, like a house or a car. In the survey, 5 percent overall said they planned to put their refund toward a major purchase. However, men were a little more likely (4.7 percent) to use their refund this way than women (4.2 percent). People with incomes from $50,000 to $99,000 were slightly more likely (5.6 percent) to use their refund this way, compared to either people making less than $50,000 (4.1 percent) or $100,000 to $149,000 (2.6 percent). Splurge on a Purchase  Another popular way to use a tax refund is to splurge on some small luxury you have been wanting for a while. From a new TV to shoes or a purse, the little things in life can make a big difference. Men were more likely than women to use their tax refund this way, according to the survey. Younger people, especially in the 18 to 24 age bracket (7 percent), were more likely than people 65 and up (2 percent) to splurge on a purchase with their refund. Finally, those with a lower income were much more likely to splurge on something for themselves than those in higher income brackets. © 2016 GOBankingRates.com, a ConsumerTrack web property Distributed by Tribune Content Agency, LLC