It is important for buyers to understand the changing rules in the market. 

* It is now officially OK to offer above asking price for the right home.  Many homes will have a multiple offer situation.  If you want the home, you may have to bid over the list price.

* Be prepared to bridge the gab between your sales price and the appraisal value (because if you don’t, the next buyer will).  Getting a satisfactory appraisal is sometimes not easy if you overbid to get the home.   Appraisers must use valid comparatives which is sometimes tough to do if the recent sales do not support the sales price you offered.  Sometimes, the solution is to bring the difference in sales price and appraisal value.

In working with my clients to list their homes, my directions for getting their home ready to sell are simple.

1.Declutter and Clean.  It is important to make the most of the space in your home.  Personal items should be put away and no more than three objects on any one surface.  If your home is cluttered with your stuff, how do you expect the potential new owners of your home to see themselves living there?  Deep cleaning is a must:  Get rid of that spider web in the corner and wash those windows.

2. Fix and repair items that you have learned to just live with.  Small items such as a leaky faucet or broken electrical outlet suggests to the buyer that you have not maintained your home and they will have to do lots of repairs.  Repairing  big items like water issues or tidying up the electrical system shows that you care about your home and have maintained it throughout the years of ownership.

3. Curb appeal.   Shrubbery original and overgrown?   Remember, first impressions are important and curb appeal is that first impression.

Wanted to share this conversation between Steve Havey of the KCM Crew and Jason Finn, a realtor in the Chicago area:  

http://finnproperty.blogspot.com/2011/02/we-agree-now-is-great-time-to-buy-real.html   

I totally agree with Jason comments and could not have said it better.

My job as a listing agent is first to educate my sellers as to the marketplace and what that means to them.  Second, my job is to put the property in the best possible position to attract buyers.  Third, I educate potential buyers.

Great article that I wanted to share from DSNEW.com:  http://www.dsnews.com/articles/fiserv-after-five-years-of-record-declines-home-prices-begin-to-stabilize-2011-02-01

Snapshot of the local area. Let’s take a look at a subdivision in Ypsilanti Township (the Township was one of the hardest hit with foreclosures in Washtenaw County). This 275 home subdivision was built in the early 2000′s with square footage of individual homes ranging from 2,000 to 3,200 square feet. The first resales were in 2004.

During 2006, 12 homes sold ranging from $249,000 to $350,000 in sales prices.  With 12 sales in 2010, sold prices ranged from a low of $140,000 to a high of $245,000. Six of them were privately owned, 1 short sale and 5 were bank owned properties..

Four homes that sold in 2010, had also sold in the last four years. Two privately owned homes sold for $245,000 and $240,000 respectfully,; one having sold in 2007 for $299,000 and the other sold for $309,500 in 2006. Two foreclosures that sold this past year; one for $182,500 had previously sold for $319,900 and the other, missing it’s kitchen, furnace, hot water heater, some interior doors and water pipes sold for $140,000 and had sold previously in 2006 for $289,000.

Housing is a good long term investment.   Besides having a place to call home for your family, owning your own home makes sense.  I agree with the recent December 6, 2010 Forbes article and applaud the perspective.  Did you know that since the year 2000, homes across the United States have had an average appreciation of 4.3% per square foot per year.

I have felt my geographic market stabilize over this past year.  As I finalize my 2011 business plan, I realize that I am looking forward to the new market that 2011 will bring.  Mind you, we will still have challenges, yet, the mysteries that the last 3 years have brought, many are defined and some even come with directions. 

I think of the initial challenges of the first short sale  that I did.  My buyers waited for 4 months with basically no information only to have the first mortgage foreclose. The second mortgage refused to settle for a small amount.  Much of that has now been defined by the lending industry with procedures in place.  I had another client who waited on a short sale only to have the bank refuse the offer outright (that home eventually went into foreclosure).

I recently submitted a short sale offer on behalf of a client.  The lender is one that I am familiar with and has a procedure in place with estimated time lines.  Another short sale offer just submitted this week is with a small bank and is estimating 2 months for approval.  Of course, we will see how these offers both go – The difference I see in then and now, is that there is much more specific information on what to expect.  We now have a history of short sale activity and experience.  My buyers have a better understanding of what a short sale is and the risk that is part of the offer.

The best indicator on number of future foreclosures is how many mortgages are now 90 days past due. The states with at least 10%  of their mortgages past due are Florida at 19.5%, Nevada; 17.8%, Illinois; 10.8%, Arizona; 10.8% and New Jersey; 10.7%.  It’s nice to see that Michigan, while still facing foreclosure problems is no longer on the list of worse performers. 

source:  Real Estate One, Nivember’s Did You Know That…, 11/30/10

 Here are the August 2010 housing stats pulled from the Ann Arbor Area Board of Realtors Multiple List Data.  Check out this link to the the second quarter Case-Shiller reports. The numbers are upbeat, with the major influence being the effects of the tax credits ( Case-Shiller uses a closed sales analysis). However, great prices and low interest rates are also positively influencing the statistics as well. The report does indicate some caution going forward, which makes sense. Note that unlike much of the rest of the country, our listing inventories have fallen rather dramatically (from a peak of nearly 70,000 in 2008 to under 30,000 today), so we do not have the oversupply issues much of the rest of the country has (meaning for once, we are one of the better places to own real estate in the country)!.

Active listings

One of the interesting facts is that inventory is not down as much as it feels working in the marketplace. According the our local Board of Realtors, the number of active listings is 12% down from one year ago. I know that the number of foreclosures is not what it has been and it doesn’t seem like every other house on the market is a short sale. More privately owned homes are currently on the market – supporting consumer confidence to get back in the market.

Median SOLD Prices

Overall, the statistics that I pulled from the Ann Arbor Area Board of Realtors show a 19% increase in pricing in general over one year ago. From a buyer perspective, there are still great deals as we still have foreclosures, short sales and motivated sellers

Maslow's Hierarchy of Needs

2010 is our year of stabilization in my corner of the world.  The KCM blog  says it well.  It does make sense to consider moving forward with your housing goals.  Real Estate is a long term investment in family.   Quality of life and financial stability are on the top of my list of family values.  For many years, I taught a Leisure Lifestyles class where quality of life was the underlying theme – sometimes considered an easy class by students, it really was setting the stage for life goals.  In setting up my course curriculum, I used Maslow’s Hierarchy of Needs as my guiding principle.

Over the ten years that I taught this class, I truly realized that life is what you make of it.  In order to achieve your goals, you have to make them.  To take advantage of opportunities, you need to recognize them.  Try applying the principles of Maslow’s Hierarchy of Needs to your life – amazing how it helps you set those priorities.  One lesson I learned about time.  I started taking my watch off when I got home after my day of work was done.  At first it was a challenge as I constantly wondered what time it was.  As time went on, I realized I did need to switch and turn off that work life and not let the stress of work affect my personal life.  Of course, stress is still there – for me, this little lesson has helped.   When you see me, you will notice that I don’t wear a watch anymore.

 Thought I would share…a comparative for the Greater Ann Arbor Area for residential properties by School District.  Each month, I take a look at the Median SOLD Price as it compares to the month before as well as to one year ago. 

Overall we are seeing a trend of the Median SOLD price rising as buyers switch to higher priced retail or short sales properties.  In my own July stats, I had 75 % of my sales as privately owned properties with 25% being short sales.  I did not have any closings in July 2010 with a bank owned. 

As we move away from sales generated by the tax credit,  we will get a true snapshot of the market reality.  Anticipate that the October stats will help us predict our future market.  Watch the shadow market as the bank owned inventory does not match the number of homes going into foreclosure.