Feedback from my weekly newsletter

Question:
Aren't all agents in a real estate transaction are ultimately paid by the buyer. Granted no "extra" money needs to come out of the buyer's pocket at the beginning of a house search, but in the end we are paying for it. Right? - Rachel

Answer:
Rachel, Thank you for your feedback.

You could look at it that way, but then you would have to say that a person who buys an automobile pays the salesperson's salary, or that you are paying the toll booth worker's salary when you cross the Tobin bridge.

Whenever you buy something, you are ultimately paying for (or at least part of) someone's salary.

A buyer's agent does not get paid directly from the Seller. They are paid by the Listing broker. In most cases the Seller pays the same amount whether there is 1 or 4 agents involved in the sale (and yes, there are many times when there are more than 2 agents invloved in a transaction).

I think what you are inferring to is that if there were no agents involved, a buyer would pay less for a home. A good buyer's agent can actually save you money, whether it is on the price of the home itself, inspection issues, knowing where to get the best mortgage, or any number of things that may be missed by the average homebuyer.

I am always open to hearing some feedback about any of the emails I send out. Please feel free to write to me any time you have a comment, suggestion or question.

Jim Armstrong
jim@armstrongfield.com

Real Estate Outlook: Market is Stirring
by Kenneth R. Harney

April 3, 2008
Affordable mortgage money is the fuel that is going to pull the real estate market out of the woods. And there are some encouraging signs that may be happening right now. Read the rest of the story at:
http://realtytimes.com/rtpages/20080403_realestateoutlook.htm

See the Real Estate Video News here for the latest updates on what is happening in the real estate market.


Video Real Estate Market Conditions for Salem Massachusetts

Real Estate Outlook: Existing Home Sales Rise

We don't want to overplay the significance of this, but we actually got some positive economic news this week: Sales of existing homes last month rose for the first time in half a year, adding fresh evidence that the housing cycle may finally be bottoming out after nearly three years of correction.
The national gains in resales announced on Monday were not huge -- 2.8 percent for single family homes and 3.7 percent for condominiums. Total sales hit 5.03 million units, though Wall Street economists had predicted another DECLINE to a consensus estimate of around 4.8 million units.
So breaking the 5 million mark is pretty good, given where we are in the overall economy.
Now in fairness, the latest sales gains were accompanied by a decline in the national median price of homes sold -- down by 8.2 percent from year-earlier numbers.
You might think an 8 percent drop in prices is terrible. But let's face it: The only way we're going to burn off that 10-month overhang of unsold houses on the market is through more affordable, more realistic prices pulling buyers off the sidelines.
There's another factor at work pulling down the national median number: Relatively more houses are selling in places like Texas, North Carolina and Utah, where prices are moderate and affordable, while there are relatively fewer sales in ultra-high-cost California.
So the median price may be lower, but it's not just because home values across the country are crashing. The mix is different, so the median price is a lower number.
Low-cost mortgage money is also definitely helping to fire up sales. Average 30-year rates declined to 5.875 percent last week -- and any time mortgage money is under 6 percent, you're going to see more homebuying.
By the way, sales in California, which have been a leaden weight dragging down national market numbers for more than a year, are likely to improve in the coming months as the new "super-jumbo" FHA, Fannie Mae and Freddie Mac mortgages start hitting the street.
FHA's mortgages should be especially popular in California, where the median home price in some local areas like San Francisco exceeds $700,000. Thanks to FHA's low 3 percent minimum downpayment requirement, Californians should be able to buy a $700,000 house with just $21,000 down -- and walk away with a 6.5 percent 30-year fixed rate.
Fannie Mae and Freddie Mac, by contrast, want a minimum 10 percent down for their new jumbos.
So let's take our good news about sales and interest rates … and look to better days as the Spring buying season kicks off.

By Kenneth R. HarneyMarch 27, 2008
Copyright © 2008 Realty Times. All Rights Reserved.

See more real estate news at: http://realtytimes.com/customnews/JimArmstrong.htm

Is State Crawling Out Of Housing Slump?

National Expert Says Region Moving In Positive Direction
UPDATED: 6:53 pm EST March 3, 2008

BOSTON -- A national real estate expert said Monday that the Massachusetts region could soon start moving in a positive direction. The chief economist for the National Association of Realtors offered a ray of sunshine to his New England members.
"The worst in the sub-prime foreclosures is probably peaking at this point, but most of the mortgages -- 90 percent of the homeowners -- are not exposed to sub-prime loans. A vast number of neighborhoods are doing fine," said Lawrence Yun, of the National Association of Realtors.

Massachusetts is just below the national average when it comes to foreclosures due to sub-prime mortgages.

Read the full story at The Boston Channel

PRICING YOUR HOME IN A DECLINING MARKET

When do you drop the price on your home?

If you are receiving a lot of buyers through your home but aren't receiving offers, then it is either priced too high or shows poorly. In this market, orice is the driving force. If you have receive offers, but they have been low-ball offers, then maybe you should look at the price. It's impossible to say when you should consider reducing your price without knowing all the circumstances, but if you haven't received an offer in 30 days, it's time to re-evaluate your price.

I just attended meeting of all the mortgage officers for one of the larger regional banks, and their treasurer and ecomomist was finding home prices dropping at 1-2% per month, and expected it to continue through this year. While I think this is a pessermistic outlook, what it could mean to you is that for every month your home sits on the market, it is worth 1-2% less. If you have a $400,000 home and it doesn't sell in 2 months, it could be worth $16,000 less. So even if you dropped the price by $10,000 you are still behind the eightball. You could be playing catch-up with the market for months.

An example of this is someone I know who was selling a condo in Florida (be glad you are not trying to sell there). They placed their property on the market in 2005 at just above what others had recently sold for (at the height of the market). Other units came on priced lower, and sold. They lowered their price to that level, but now the market had dropped even more. This scenario went on for 2 years until they dropped the price fast enough to catch up with the market. The bottom line - they originally listed their condo at $280,000 when they could have sold it for $250,000. Instead they played the waiting game and ending up selling for $140,000! This is an extreme example in a market that is much worst then we have here on the North Shore of Massachusetts (we actually have it pretty good for the most part)., but I have seen this same thing happen locally.

If you home is not selling, there is only one reason - marketing... and pricing your home correctly is an intergral part of marketing. Determining the correct price in a declining market isn't easy, though. But if your home is not getting many showings, or a lot of showings without offers, drop the price quickly if you are really serious about selling.

- Jim

IS IT POSSIBLE TO BUY A HOME NOW

AND SELL IT AT A PROFIT IN 2 YEARS?

It's possible, but there are so many variables that it is impossible to give you a definate answer. I will give you a couple of hints, though.

1. Buy low. Nobody can predict what is going to happen with the market in the next 2 year. Yes, some people try, many with very impressive credentials, but there are so many different opinions, who do you believe? The fact is, real estate will always go up in value over time. How much time is the big unknown right now. But if you buy low enough, you have a better chance of selling for a profit. And by low, I don't mean low-priced. I mean below current market value. Look at bank owned (REO) properties to find some great deals.
2. FInd homes that mainly need cosmetics. A coat of paint, new flooring, and a spruce up of the kitchen and baths will dramtically raise the value and lower market time. Don't buy a home that needs major renovations unless you can do most of the work yourself to keep the costs down.
3. Make sure the home is located in a desirable, fast-selling neighborhood. It doesn't matter how nice you make the place, if no one likes the neighborhood, they won't even want to see it, let alone buy it.
4. Concentrate on curb appeal. Make sure the outside of the house is immaculate. Spend some money on landscaping.
5. Enjoy the tax benefits in the meantime (assuming you are going to live there for the 2 years). Not only can you deduct the mortgage interest and some other expenses, when you sell you can make up to $250,000 profit and not pay any taxes on it! ($500,000 for couples). Please talk to your tax advisor for full details.

Remember - real estate is more than an investment when you are living in it. It is also your home. Whether you live there for 2 years or 30 years, buy something that you really like.

- Jim

Trade group lifts outlook for 2008 home sales,
insists US housing market is stabilizing

WASHINGTON (AP) -- Bucking conventional wisdom, a trade group for real-estate agents on Monday said the battered housing market is on the verge of stabilizing and inched-up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million -- the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year, down from 6.48 million last year.
The Realtors' group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million.

See the full story at Yahoo Finance...

21 Rules That Will Bring Good Karma to Your Life,

And Make you Happier.

1. Give people more than they expect and do it cheerfully.
2. Marry a man/woman you love to talk to. As you get older, their conversational skills will be as important as any other.
3. Don't believe all you hear, spend all you have or sleep all you want.
4. When you say, 'I love you,' mean it.
5. When you say, 'I'm sorry,' look the person in the eye.
6. Be engaged at least six months before you get married.
7. Believe in love at first sight.
8. Never laugh at anyone's dreams. People who don't have dreams don't have much.
9. Love deeply and passionately. You might get hurt but it's the only way to live life completely.
10. In disagreements, fight fairly. No name calling.
11. Don't judge people by their relatives.
12. Talk slowly but think quickly.
13. When someone asks you a question you don't want to answer, smile and ask, 'Why do you want to know?
14. Remember that great love and great achievements involve great risk.
15. Say 'bless you' when you hear someone sneeze.
16. When you lose, don't lose the lesson.
17. Remember the three R's: Respect for self; Respect for others; and Responsibility for all your actions.
18. Don't let a little dispute injure a great friendship.
19. When you realize you've made a mistake, take immediate steps to correct it.
20. Smile when picking up the phone. The caller will hear it in your voice.
21. Spend some time alone.