Owners and Renters Agree That Owning a Home is a Smart Decision

Washington, January 19, 2011

A substantial majority of both home owners and current renters agree that owning a home is a smart decision over the long term. That’s according to the results of a National Association of Realtors® survey of 3,793 adults conducted online by Harris Interactive.
The American Attitudes About Homeownership survey found that in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home. In addition, an overwhelming majority of home owners are happy with their decision to own a home – 93 percent of owners surveyed would buy again.
“Home owners and renters agree that home ownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy,” said National Association of Realtors® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “The results of this survey illustrate just how important issues related to home ownership are to people in this country.” Read the rest of the article at:
http://www.realtor.org/press_room/news_releases/2011/01/owning_home

Do I Need a Buyer’s Agent for Home Purchase?

 Do I Need a Buyer’s Agent for Home Purchase?

Q: We own a home now in town for 14 years. We’ve done a drive-by and are interested in a different home in a rural setting. We have made an appointment with the listing agent to see the house on our own. If we are still interested after seeing the house, we will need to sell ours in order to buy it. We may or may not continue looking if that one is not “the one.” A friend is urging us to have our own REALTOR® now to represent our interests before our appointment next week. I don’t see the need until we’ve decided that we’re ready to give up our current home for another. What do you advise?
~ Brenda
A: Brenda, there are a couple of problems with looking at homes without your own Realtor (working as a Buyer’s Agent). First, the listing agent is representing the seller, and cannot give you any information on the property other than what the seller would allow.

The other issue is that the compensation for representing a buyer typically goes to the agent who first showed the property to the buyer. So, if you go to see a home with the listing agent, then your agent could possibly be cut out of receiving any compensation from the transaction if you decide that you want to make an offer. Your agent may not even want to represent you because of that fact, or you may have to pay your agent out of your own pocket.
If you want to see homes without your agent, then you could go to open houses. If you need to make an appointment to see a property, then you should go through your own Realtor. As a Realtor, this is part of our job. So don’t hesitate to give him/her a call.
~ Jim Armstrong


Jim Armstrong is a Realtor-Broker with Armstrong Field Real Estate in Essex County, MA.

Are you interested in having a qualified REALTOR® answer your questions? Click through to Ask a REALTOR® now.

Do I need a REALTOR? A Question From a Home Buyer.

Question: I'm paying cash for a home, so I don't need a REALTOR, right?
- Rachel from Texas

Answer: Paying cash would be even more of an incentive to use a REALTOR. You will not have any other professionals, other than the closing attorney, to help protect your interests and investment. Our job isn't just to show a person properties, but to help out in all aspects of a home purchase. The last thing you want to do when buying a home is to deal directly with the listing agent. That agent represent the seller of the home, and is trying to get the best deal for his/her client. That means he/she is going to try to get as much of that cash from you as possible. A REALTOR Buyer Agent, on the other hand is there to protect you and help you pay the least amount for a home. Your REALTOR also provides a host of other services, also. Best of all, there is no cost to you for the service!

For more information on the advantages of using a REALTOR, please go to:
http://armstrongfield.com/buyers_files/whyrealtorbuying.html

Jim Armstrong

What's Really Happening with Real Estate Market

I'll be the first one to tell you that I'm no expert on the national real estate market. All I am concerned about is what is happening in the local market and how it will affect my clients, my agents, and ultimately...my business. Keep in mind that real estate is local. What is happening in California, Florida or Texas has no bearing on what is happening in the real estate market on the north shore of Massachusetts.

During the first 2 quarters of this year (2008), things were looking dismal, with a continued downward slide in prices, number of units sold, and traffic (number of inquiries received, open house attendees, web site visits, etc.). But something happened in the third quarter beginning in July. Buyers started making offers...and suddenly our business is up 85% year to date over 2007, and over 200% for the quarter. The fourth quarter has started off with the same gusto.

THE PERFECT (BUYING) STORM

What has caused this complete change? I believe it is the result of several ideal buying factors all occurring at once:

• Home prices have come down to a point where they haven't been in years. Add in the bank owned and short sale properties that are on the market and there are literally hundreds of bargains out there. The price that homes are selling at are equal to 2002.

• The inventory of homes on the market is still high. Though the number has come down compared to last year, it is still considered historically high, giving the home buyer plenty to choose from.

• Home sellers (including banks) have come to realize that if they want to sell their property, not only will they need to price it aggressively, they need to give some concessions to the buyer. You can get pretty much ANY seller to pay your closing costs, and even prepay your mortgage insurance to reduce your monthly payment!

• Banks and Mortgage companies have money to loan...still at historically low interest rates. (under 6% just a couple of weeks ago) And you do not have to have perfect credit! You do have to come up with 3% down, but this can come from a gift (from a relative, etc.) or your retirement account (401K, etc). There are several government programs that will also match your down payment, so you only have to come up with 1.5% down.

The local real estate stats show that the number of units sold during the last 3 months is about equal to last year, with the average price down from last year (single family) but up from the previous 3 month period this year.

The smart home buyers are going out and looking at potential properties, and jumping on the ones that meet their needs and budget. You could wait another year to see if prices will drop any further, but in the meantime you continue to pay rent and will not be reaping the tax benefits of home ownership.

Jim Armstrong

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