Oahu Home Sales

“If I could get you a home for the same price as in July of 2004, would you be interested?”

What do we mean by 2004 prices? The median price of single family homes has changed very little since 2005. For simplicity, let’s say $600,000. Interest rates have dropped 2 points in the last 30 days or so. That is the same as a 20% drop in purchase price. That means you can now buy that $600,000 home for the equivalent of $480,000. The last time the single family home median price was $480,000 was in July of 2004.

So pick up the phone, and call me today at 808-728-1230 and let me know that you would like to get a home for the same price as in July of 2004, and we will get the process started….It has been nearly five years since we have had such buying opportunities…..I look forward to speaking with you soon…..Aloha, Jon.

O’ahu’s housing market ended 2008 on a surprise up note with a rise in the median sale price for previously owned single-family homes. The median rose 2.7 percent to $626,500 from a year earlier, according to the Honolulu Board of Realtors.

Though the gain was attributed to more sales in a few higher-priced neighborhoods boosting the islandwide median price, it was the first year-over-year growth for any month since October 2007.

Still, the full year recorded a 3 percent decline in the single-family home median price, and there is agreement between local economists and some top real estate brokers that buyers and sellers should anticipate prices will fall this year by a greater, but still moderate, amount.

The University of Hawai’i Economic Research Organization projects the median single-family home price will decline 5.2 percent this year, and 2.6 percent next year.

Local brokerage firm Prudential Locations anticipates the median price could fall 6 to 10 percent by midyear. It notes that price movements, which vary by neighborhood, could be down more than 15 percent in some areas.

Nationally, the median single-family home price was on pace to drop 9.3 percent last year after slipping 1.4 percent in 2007, according to the National Association of Realtors.

“The Honolulu housing market shows remarkable price resiliency, even with the number of reduced sales,” Sandra “Sam” Bangerter, Honolulu Board of Realtors president, said in a statement.

Bangerter said some Mainland markets have had median price declines of 18 to 30 percent.

One positive trend for housing is interest rates that are falling and acting as a counterweight to poor consumer confidence that has deterred many people from buying property.

Prudential Locations in a recent report said reduced interest rates and other moves by the federal government to stimulate the national housing market could lead more people to buy homes, which increases demand that helps support prices.

“Such loan products would have a tremendous impact on the Hawai’i market, making forecasted price reductions less drastic,” Prudential said in its report.

Prudential also cited efforts to reduce foreclosures, which depress property prices, as another positive prospect for the local housing market this year.

Content provided by Andrew Gomes at agomes@honoluluadvertiser.com.

In response to the Federal Reserve’s cut in the federal funds rate to near zero, Freddie Mac reports that the 30-year fixed mortgage rate fell to 5.17 percent during the week ended Dec. 18–down from 5.47 percent last week and the lowest since the survey’s inception in 1971. That is 37 years for those of you counting at home……Wow!

Interest on 15-year fixed loans slipped to 4.92 percent from 5.20 percent.

Meanwhile, the five-year hybrid adjustable mortgage rate dropped to 5.6 percent from 5.82 percent; and the one-year ARM dipped to 4.94 percent from 5.09 percent.

A year ago, the 30-year fixed rate stood at 6.14 percent, the 15-year fixed rate at 5.79 percent, the five-year hybrid ARM at 5.9 percent, and the one-year ARM at 5.51 percent.

When interest rates fall, as a potential homebuyer, your purchasing power increases…….Call me if you would like me to explain how this works……Aloha, Jon.

Robert Freedman is a senior editor of REALTOR® magazine and he recently wrote an article about the First-Time Buyer Tax Credit…….Here are the highlights of his article:

The $7,500 home ownership tax credit that the federal government created earlier this year (2008) as part of the Housing and Economic Recovery Act (H.R. 3221) is something that should help first time buyers to make the leap into real estate ownership.

When a buyer combines the tax credit with today’s low interest rates, wide selection of for-sale inventory, and affordable home prices, many of the pieces are in place for first time buyers to consider buying now, rather than waiting.

Here are 6 Facts about the First-Time Buyer Tax Credit:

1. Buyers have until July 2009 to make a purchase that qualifies.

The tax credit was passed in July of this year (2008) as part of the Housing and Economic Recovery Act (H.R. 3221). It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so if your customers wait to buy in the first half of 2009 they can take the credit on their 2009 tax return. Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9.

2. Buyers don’t really have to be “first-timers.”

The tax credit is actually available to any individual or household that hasn’t owned a home for at least three years. And the NATIONAL ASSOCIATION OF REALTORS® has asked Congress to expand the credit to all buyers, not just those who haven’t owned a primary residence in recent years.

3. Even if buyers exceed the income limit, they can benefit from the credit.

The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500. Sounds like a great deal. But what if your clients make more money than the income limit of $75,000 for individuals and $150,000 for households? Good news: Individuals whose income exceeds the $75,000 limit but don’t make more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000. By the way, any house is eligible as long as it’s a primary residence and is in the United States.

4. Think of it as an interest-free loan.

The federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable. NAR is pushing congress to remove the repayment provision, making this tax credit a true tax credit rather than an interest-free loan.

5. You don’t have to be authorized before making a home purchase.

There is no pre-purchase authorization, application, or other approval process. Eligible buyers simply have to claim the credit on their IRS Form 1040 tax return and/or any form that the IRS might devise.

6. New-home construction qualifies.

For a home that a buyer constructs, the purchase date is the first date the buyer occupies the home. However, any home that is not a primary residence, such as a vacation home or income property, does not qualify.

If you have any more questions about this Tax credit, please do not hesitate to give me a call sometime……Aloha, Jon.

Finally, part 8 of 8. I wrote this 8 part blog to give you, the Oahu home seller, guidance to know whether you should do it alone, or hire a competent professional for your needs. And speaking of competent professionals…

Do you remember the old riddle that goes, “What do you call the person who graduated dead-last in their medical school class?”

Answer: “DOCTOR!”

Well, it’s the same with REALTORS®. Someone with vast experience and extraordinary professionalism usually costs the same as someone with little or no experience, or with compromising standards. You need to know how to tell the difference up front.

Bringing competence and experience into your transaction may mean the difference between a higher negotiated sales price and losing money, selling in less time or in more time (costing you potentially thousands in added interest), and experiencing problems and hassles or a problem-free transaction.

Our little island community is loaded with agents who are WRONG for you, your area, and your home. Some agents are in business part-time for a little extra cash. Others are subsidizing other businesses or careers. And then there’s your “cousin Harry,” who you may feel obligated to because he “really needs your business.”

Selling your home is probably the most important financial transaction you will ever make. That’s why I take my business so seriously. It’s also why I have developed customized home marketing programs meant specifically for your situation.

WHY ME?

Here’s why you should consider my services to market your home:

 For an average of 1.4% More Than the MLS Average (each year).

On the surface, it may seem there are many Realtors from which to choose. But just because there are lots of Realtors out there doesn’t mean they can all do the same job for you.

All Real Estate Professionals Are NOT The Same!

I have enclosed with this 8 part blog a special online coupon. By simply calling my office number at 808-728-1230, I’ll share with you my exclusive “Maximum Home Value Audit.” Here’s what you’ll get, absolutely FREE and without obligation whatsoever:

 I’ll conduct a careful, thorough valuation of your home, based on real world facts, in a EASY to understand format. You won’t get any inflated values just to pressure you into listing with me.

And you won’t get anything like “I have a buyer right now who’s interested in your specific home, and if you list with me, I’ll bring him by right now.”

With me, you’ll get NO pressure. No arm twisting. Just a real world, honest, fact-filled analysis.

 I’ll tour your home to identify items that could negatively affect your selling price. As I mentioned earlier, many of my findings could bring as much as $10 in extra sales price for every $1 you invest. By the end of my tour, you’ll have a checklist of strategies designed to “position” your home to sell for the most money possible.

 I’ll share with you my 79 Step Exclusive Home Marketing Plan. My plan will give you insider secrets on how to promote your home properly, how to handle buyers, how to avoid crime, and much more.

 I believe in incentives, so here’s one just to “sweeten the pot.” If you call before the expiration date marked on the coupon, AND if you select me to market your home, I’ll provide a FREE HOME INSPECTION by a licensed inspector to identify potential problems that could kill a sale. That’s a $450 value I’ll include absolutely FREE.

 When selling your home, the LAST thing you need is added pressure. That’s why I’ll answer all of your questions. And give you one less thing to worry about during these hectic times.

But Don’t Wait!

You’ll notice I placed an expiration date for your Free Home Inspection on the attached coupon. I did this for a very good reason. I enjoy working with clients, and sometimes my practice gets booked up fast. In order to make sure I have undivided time for you, I need to hear from you immediately so there are no conflicts in scheduling our meeting.

Plus, I know there’s a natural tendency to procrastinate, and put off important decisions. But the more you procrastinate, the more pressure ultimately rests with you.

By Not Acting Now, You Could Lose Thousands Of Dollars In Our Currently Slumping Real Estate Market

So call today at 728-1230, and I’ll immediately arrange a convenient time to meet, and share with you my Maximum Home Value Audit. It’s Free. It’s FAST. And it could save you thousands on your home sale.

Thanks for reading my 8 part blog on this important topic…….Warmest Aloha, Jon.Jon S. Mann,

Seller Client – Online Coupon

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Sell Your Home For TOP DOLLAR, Eliminate Costly Pitfalls, And Get A FREE Home Inspection ($450 value)…

Maximum Home Value Audit ONLINE COUPON

The bearer of this coupon is entitled to receive a Free, No Obligation Maximum Home Value Audit. Your audit will include:

 A complete, fact filled, easy to understand valuation of your home.

 I’ll tour your home to identify items that could negatively affect your selling price. Many of my findings could bring as much as $10 in extra sales price for every $1 you invest.

 Reveal to you my exclusive 79 Step Home Marketing Plan designed to sell your home for every penny it’s worth, in YOUR time frame, and with the least pressure and hassles!

 SPECIAL BONUS: There’s no obligation whatsoever, but if we end up working together, I’ll provide a FREE HOME INSPECTION, a [$450 value.] to identify potential pitfalls that could jeopardize a successful sale and cost you thousands. You’ll feel confident your home’s ready to sell!

But don’t delay, this coupon expires 30 days from today. Call now at 808-728-1230.

Jon S. Mann, Broker, REALTOR®
Prudential Locations LLC

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Negotiate The Best Deal And Close Your Sale

You’ve been handed an offer. It’s so close to your desired price, but not quite there.

What now? How do you negotiate your way to the deal you’re looking for?

If you’re using a REALTOR®, they will guide you though the negotiation, providing support documentation and other helpful back-up to justify your price. But if you’re going it alone, you will have to hone your negotiating skills.

The first step to a successful home negotiation is when you priced your home to begin with. If you set a fair asking price, you should have the confidence to justify it.

If you overpriced your home (remember… “so I can come down in the future”), you will have trouble convincing a bona fide buyer to up their offer.

Now, the second step for negotiating is to KNOW THE BUYER.

Years ago a real estate expert told me that the party who is less motivated almost always gets the better deal. The ONE single element that will determine how well you negotiate your offer is…

How MOTIVATED Is The Buyer, And How MOTIVATED Are YOU?

And if you’ve been trying to sell your home for nine months, your kids are late for starting school this year because you haven’t found a home yet, your spouse has moved on to another city to start their job, and you now have a bona fide offer, YOU may be very motivated to sell!

Nevertheless, here’s a tip you MUST bring to any real estate transaction…

Move Heaven And Earth To AVOID Emotional Attachment To The Transaction

If you’re desperate, or if you found another home, and can’t hold back your excitement about buying it, then you’re going to get clobbered when negotiating your current home’s sale.

And that’s one reason why you need a REALTOR® representing you during any transaction. The middle person alone will help save you money.

So take a look at your BUYER. Pay attention to their comments and body language when they’re visiting your home.

 Did they make positive comments when viewing your home?
 Did they come back to visit your home at least three times?
 Did they make positive sighs and other body language when walking through your home?
 Here’s an important tip: TAKE NOTES about the features buyers like about your home. Then, turn the features into Lifestyle Benefits of living there to “wet their appetite.”

If a young couple looks starry-eyed because they feel they’ve found their dream home, YOU will most likely have more negotiating power. Clearly, THEY are more emotionally motivated.

So you decide to make a counter offer to your buyers. Make sure you back up your offer with FACTS…real reasoning. Show examples of similar home sales in your neighborhood. Look at the notes you took by observing the buyers, and REMIND them of the features and benefits they like about your home.

You may go back and forth several times before arriving at a price. But remember, if a buyer comes within 3% of what you want for your home, you’d better think hard before turning it down!

Once you’ve agreed upon a price, you should call in the help of a professional, such as a real estate attorney. If you have a REALTOR®, they’re usually trained to handle further items for negotiation, and have excellent contract forms that have been tested for years.

But remember, NEVER sign a contract until you completely understand ALL of the terms and conditions. A lot of real estate “mumbo-jumbo” can make you feel overwhelmed. Using a real estate attorney or a REALTOR® can make the process easier for you.

OK, you’ve now arrived at a sales price. You’re now about to enter into a new phase of the transaction: ESCROW and CLOSING YOUR SALE.

If you’re using a REALTOR®, they will be worth their weight in GOLD with the next phase of the deal (if they haven’t already saved you thousands in pricing, dressing, and negotiating your home).

Here’s a list of items you (or a REALTOR®) needs to handle:

1. Opening of an Escrow account with a reputable and affordable escrow/title company.
2. Examination of Title of the home, and the purchase of title insurance to protect against any flaws or deficiencies in clear title.
3. Coordinating the completion of contract requirements: Home Inspections, Termite Inspections, Seller property disclosure statements, etc. – with reputable inspectors.
4. Verifying buyer financing is secure (this one is HUGE!).
5. Ensuring any contingencies have been completed: Remodeling, repairs, etc.
6. Ensuring any hold-backs or reserves are met.
7. Coordinating cleaning and maintenance that may be stipulated in the contract.
8. Handling any other special contingencies that may arrive up to the final hour.

It can be an awesome task. Don’t take this process lightly. If you’re going it alone, make sure you get educated, and use a real estate attorney if you’re not using an agent.

Now, at this point, you’re probably wondering how on earth you’re going to handle all of these tasks all-the-while maintaining your job…

…packing your home
…interviewing moving companies
…getting the kids in school
…coordinating repairs and cleaning
…stressing out about the new job, or community
…and searching and buying a new home.

It’s absolutely daunting, and you will need all the help you can get.

That’s one reason why I wrote this 8 part blog: To help you sort out the important issues that translate into a Top Dollar and Hassle Free sale of your home.

So check back tomorrow for Part 8 of 8…….Aloha, Jon.

Prepare Your Home To Show And Sell For Top Dollar

Here’s another moneymaking marketing fact you need to know…

The Way Your Live In A Home, And The Way You SELL A Home………Are TWO Very Different Things!

When you’re showcasing your home for sale, it’s going to look very different from the way it looks when you’re living there. Here are a few tips for showcasing your home for sale:

 First impressions set the tone for a buyer visit, and they’re LASTING!
Approach your home in your car like any buyer would. Examine the outside as you’re approaching. How does it look? Are shrubs away from the home? Oil in the driveway? How does the grass and landscaping look? Cluttered looks detract from the architecture of the home. A clean, polished landscape says your home is valuable and well-maintained!

 Take a look at your actual home.
Is the paint fading or chipping? Is the color outdated or impersonal? How does the roof look? As you drive up to or away from your home, what do you see first?

 Now go inside just like a buyer would.
You want to be aware of four senses: smell, touch, sight, and hearing. Go through room by room and test all four senses. Check flooring and carpet for stains, overall wear, and odors.

Most importantly: Pack away all appliances, get rid of excess furniture, put away useless dishes, and make your home neat and orderly. If you’ve ever visited a model home, you’ll notice it’s clean and uncluttered. You have to move anyway, so you might as well pack early, and make your home more saleable. Go to the garage and make sure it’s neat.

 Hire someone to professionally clean your home.
Top to bottom! Cleaning and cosmetic fix-ups, especially in the kitchen, bathrooms, and master bedroom, can many times yield you up to $10 in extra sales price for every $1 you invest.

 Pets should be out of sight (and smell!).
Get rid of pet odors for showings. Remember the four senses. Also, some people are uneasy around pets, and they may distract attention from the features of your home.

 Pay particular attention to lighting.
During the day, open all your blinds and curtains. If it’s cloudy out, turn on all lights for showings. At dusk, leave your front drapes open and turn on all the lamps and lights. At night, do the same, but close your blinds and curtains. When showing your home, turn off all appliances, television, radio, and anything that will distract attention from your home. You might want to play a little light music to enhance the emotional experience for your buyers. Remember, you want it to feel like “home.”

Most importantly, if there are any problems with the home or clear title, you must DISCLOSE them to any potential buyers. If you’re using a REALTOR®, they can help you sort out these issues, and disclose them in a way that will minimize their impact on a buyer.

Stay tuned for part 7 later tonight……Aloha, Jon.

The Pacific Business News reported this week that in their bleakest assessment yet of the Hawaii economy, University of Hawaii economists say the state is in a recession that started last quarter and will remain “deep and drawn-out” at least through 2009.

Hawaii, is projected to lose about 8,800 jobs next year and have visitor arrivals fall nearly 6 percent next year, according to the quarterly forecast released today by the University of Hawaii Economic Research Organization.

That would mean about 835,000 fewer visitors this year and 385,000 fewer next year.

The report was one of three forecasts released this week, all of which found the state’s economy to be on much shakier footing than even 90 days ago, the result of powerful turbulence from the global financial crisis.

The three forecasts also said Hawaii will not see any meaningful recovery from the downturn until 2010 at the earliest.

“The global financial crisis and widening global downturn have materially worsened prospects for the Hawaii economy,” wrote the authors, UH economists Carl Bonham and Byron Gangnes. “The Hawaii economy is now in recession, and as the downturn continues into 2009 we will see larger job and income losses than we have experienced to date.”

“We really think the fourth quarter of this year is going to be pretty bleak,” Bonham said and the first quarter of 2009 may be even worse, especially for the visitor industry.

“The consumer problems aren’t going to disappear after Christmas,” he said. “We really haven’t seen the full repercussions of a 20 percent drop in visitors.”

Hawaii’s unemployment rate, which had been historically low only a few quarters ago, is forecast to peak at 6.2 percent in the second half of 2009, and then remain above 5 percent through 2011.

My only personal thoughts on this report is that is not a surpise that the economy is in recession and will be for awhile, as anyone trying to make a mortagage payment and feed his family knows, but with that said……I still see the glass as half full……we may have 6% unemployment and 20% fewer visitors, but that means we HAVE 94% employment and 80% of the visitors are still coming to Hawaii…..each of us is responsible for keeping a positive attitude despite challenging times, so I urge you today to overcome the economy with a positive attitude and a smile, and remember, this too shall pass…..Aloha, Jon.

Step #4: Advertise And Market Your Home For Maximum Exposure

I want to reveal four marketing secrets that can help you make thousands more profit from your home. And the first one is this…

Purchase Decisions Are Emotional, Not Logical

Think about that. People never buy homes because of logical reasons. If they did, one four bedroom, two bath home would sell just like any other. But they don’t.

They don’t because people discriminate by nature. One home will always appeal to them over another based on their DESIRES.

They buy homes because of the FEELINGS the home gives them. Nearly everyone buys a home thinking of the LIFESTYLE BENEFITS they’ll get by living there.

Lifestyle benefits are the memories of watching your children play in a safe area. While getting a good education at local schools. Where your home is decorated as an extension of your individual personality. Where you enjoy Sunday dinner with the family, and Thanksgiving reunions.

It’s the place where you relax in your favorite hammock on Saturday afternoon. The place where you can hold summer barbecues under the shade of a beautiful mango tree.

The place where you finally send your children off to college…and eventually off to live a life of their own.

Your house is NOT going to be evaluated as a “house.” It will be evaluated for its potential to become a HOME.

So it’s important to recognize and appeal to buyer’s EMOTIONS when marketing your home.

Now, the second marketing secret you need to know about marketing your home is this…

Buyers Are Looking For A Bargain

And looking for a bargain is again, subjective. What one person sees as a bargain, another may see as overpriced.

Nevertheless, you need to “position” your home as “priced right” in the market…another reason to do your homework when pricing your home.

If you price your home right, you can promote it as such. Buyers clearly respond to promotions that state “priced to sell,” “a unique bargain at this price,” “act now, won’t last long at this price.”

And getting as many buyers to respond is your goal, right?

The third marketing secret you need to know about is this…

Buyers Are Attracted To Affordability

Affordability appears the same as a “bargain,” but it’s not…

Affordability relates to how inexpensively someone can live in your home…more to do with FINANCING than anything else.

What have you done to make your home affordable? If you’re selling your home without a real estate agent, are you willing to carry back financing on your purchase price? How EASY will you make it for a buyer to buy your home?

And if you use a REALTOR®, they should put together several financing “packages” with a local mortgage lender. This will make the home appear special, and affordable to buyers.

The fourth and final marketing secret you need to know is this…

The Best Way To Motivate A Sale Is To Create URGENCY

Have you ever noticed the dynamics of a bidding war?

Buyers are scrambling like lunatics to put in the highest offer in order to get the home they desire. But what’s really happening is the bidding war takes on a momentum of its own.

In other words, the mere shortage of the home makes people frantically WANT it. People naturally value what’s in short supply…what they cannot readily have. And what more could a seller want than a bidding war on their home!

But did you know that you can create the very same dynamic with YOUR home?

Anytime you want to increase the value of your home, or the overall demand, CREATE A SHORTAGE.

A shortage can be limited time, limited supply, or limited financing. Anytime you create a limit, you motivate people to act.

Very few real estate agents know about this, yet it’s one of the most important elements of successful marketing.

Successful Marketing Of Your Home Requires A Complete, Systematic Approach

The four marketing secrets I mentioned above are very important. But to motivate a successful sale, you need to employ a systemized approach to marketing your home. There’s no ONE single method that will automatically make your home sell immediately.

Here’s a sampling of my 79 StepTop Dollar Marketing Plan I employ. You’re welcome to use any of these elements to market your home.

- Submit your home listing for exposure to over 10,000 active agents on Oahu via Multiple Listing Service databases.
- Present copies of your home listing to quality agents who each day work with bona fide buyers.
- Provide you with PROVEN professional advice on dressing your home to show exceptionally well, and to sell for the highest possible price.
- Create custom email publicity flyers about your home for personal distribution to top selling agents in the neighnorhood.
- Create a custom color flyer of features and lifestyle benefits of your home for use by cooperating agents showing your home.
- Maximize showing exposure through professional signage—ALSO specifically designed with proven strategies to motivate buyer calls.
- Enhance convenience of buyer viewing, yet maintaining security for you and your family by placing your home on a lockbox.
- Educate you and your buyers on the numerous financing plans to make buying your home EASY!
- Suggest constructive changes to your home to make it more appealing…and a higher-priced sale more likely to interested buyers. Many of my suggestions can capture up to $10 for every $1 invested.
- Keep you educated and up-to-date on listing and selling market conditions in your area.
- Update you on all activity regarding your home: agent showings, open house attendance, agent tours, sign inquiries, etc.
- Promote your home through websites available around the country..
- Ensure your home security by tracking all home showing agents.
- Follow-up on all agent showings to answer questions and motivate interested buyers to purchase your home.
- Ensure than any offers from buyers are pre-qualified and capable of closing on the purchase —saving you time and money from unqualified buyers.
- Actively represent YOU in contract negotiations with buyers to help get the highest selling price for your home, and minimize any stress incurred in selling your home.
- Coordinate escrow, financing, and closing activities on your behalf to ensure a smooth, hassle-free closing.
- Personally deliver your proceeds check at the closing of your home.

Stay tuned tomorrow for Part 6 of 8…..Aloha, Jon.

Step #3: Calculate The NET Proceeds From The Sale Of Your Home.

Here’s a fact you need to understand up front:

Never attempt to price your home based on what you “want or need” to net out of the proceeds.

If you spent $40,000 on a remodeling job that will only increase your homes value $30,000, you will lose $10,000. If you paid too much when you bought your home, and need to sell it within a year or two of buying it, chances are you will lose money on your net proceeds.

I’ve seen these sad situations, but there’s little anyone can do about it.

Never Confuse The Difference Between Cost And VALUE

That said, however, you DO need to understand what your net proceeds will be from a sale of your home. And to calculate them, you need to consider five factors.

1. Take the gross listing price of your home.
2. Subtract the amount buyers will discount to arrive at sales price (Step #2 above).
3. Subtract your estimated real estate commission.
4. Subtract contingency costs and repairs/personal property stipulated in a contract.
5. Subtract closing costs: appraisals, attorney’s fees, escrow and title fees, etc.

In many cases, the net proceeds can be as much as 10% or more off your listing price. And interestingly, this amount does NOT change even when sellers attempt to sell their homes WITHOUT a REALTOR®.

Guess what the first thing any buyer is going to do with a “For Sale By Owner?” They’re going to knock off the equivalent of the real estate commission you would normally pay anyhow. They hate the fact that you’re trying to pocket that money…and they’re going to fight over it.

Then they’re going to keep discounting based on other home and market criteria.

Before you know it, you’re back at the same place as if you used a professional. Only now, you’ve lost the resources a REALTOR® could have brought to the transaction…negotiation power, important home value information, market power, marketing resources…and much more!

So be careful. There’s a reason why 94% of all For Sale By Owners end up using a professional to market their home…It pays off in the net proceeds!