Fluctuations in the real estate market have made headlines across the country for the past year. Many for the down turn have blamed sub-Prime lenders and secondary market loans in the real estate market. Lenders who allowed the processing of home loans to individuals who just simply could not afford “that much house” prompted a multitude of real estate foreclosures from the east to west coats, leaving virtually no area of the nation unscathed.
All of the media hype, which surrounded the down turn of the market over the past year, may have influenced the overall state real estate sales. Summer is traditionally the high time of the year in the real estate market, and industry experts are predicting a turn around for both homebuyers and sellers. Many real estate companies are sponsoring television commercials and print ads promoting the stability of the real estate market. Leery homeowners are once again feeling secure enough to put homes back on the market in the hopes of a quick sale. The largest obstacle to overcome for homeowners is the fear of earning market value on their property. Real estate appraisers are legally bound to utilize sales data, which is a maximum of one year when appraising any type of property to ascertain the comparable market value.
For the real estate market to get back on its feet, a median number of listings must become available. Lenders are remaining a bit hesitant when approving loans, with stricter guidelines surrounding the applications process. Those who do receive loan approval are entering a buyer’s market. Such a market dictates lower prices than the norm, with sellers facing a disadvantage when attempting to gain top market value for a piece of real estate.
Many of the homes placed on the market at this time are from buyers who need to get out from under a payment they perhaps cannot afford, and are attempting to avoid foreclosure themselves. Real estate auctions on foreclosed homes are also a large portion of the market at this time. Some homeowners are in a difficult situation, finding themselves holding two mortgages. Homeowners who were in the process of relocating, or purchased another home are a large part of the current market.
Potential real estate buyers can get a quality home at a bargain when purchasing a foreclosed property, but need to enter into such a transaction fully informed. When purchasing an auction home, the ability to inspect the home prior to purchase usually is not an auction. A buyer should research the possibility of back due real estate taxes, liens, and condition of the home before placing a bid. Homeowners who loose a home due to a foreclosure can often leave the home in less than pristine condition. The owners before the sale often strip foreclosed homes of light fixtures, flooring, and appliances. The court cannot issue transferable title until all bank owed, or other liens are satisfied. The new owner assumes all such encumbrances when purchasing foreclosures.
A large numbers of homeowners are considering selling a home without the aid of a real estate agent by sticking a “For Sale by Owner” in the front yard. Websites such as www.forsalebyowner.com are attractive at first glance. The possibility of saving money paid in commission to a real estate agent, and establishing their own asking price entices many homeowners to try selling piece of property on their own. By averting the appraisal process, the true market value of a home remains an unknown variable. It is entirely a misconception that such an option is a good idea. Lenders absolutely will not approve a loan for an amount higher than the home is valued. While asking $269,000 for a home in initially sounds good to an owner, it often leads to a dead end when attempting to complete a transaction. Finalization of a purchase contract cannot occur if a buyer cannot secure funding.
Further drawbacks with attempting to sell real estate without a licensed professional involve a lack of marketing, and buyer confidence. Ethical restraints which real estate brokers and agents must adhere to, do not apply to individual homeowners. Prompt and full disclosures of latent defects, deed restrictions, and permit violations. Buyer confidence in the integrity of the home is worth far more than a commission of the sale price to a real estate agency.
Industry experts are once again placing their faith in the market. Listing a home or other piece of real estate will result in an eventual sale, but at a likely less inflated value than in recent years. The most successful sellers will be those who adequately prepare their property for showing, and enlist sales professionals to market the home. Buyers themselves can also secure the assistance of a real estate agent, to ensure their potential home is a good buy, and free of defects.