itJohn Cleek, Ph.D.., REALTOR ®
The Real Estate Doctor
Education and Marketing Consultant
All the Talk About Foreclosure Causing You to Worry?
… According to the Associated Press, More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81% increase from 2007. And according to RealtyTrac, a foreclosure listing firm based in Irvine, California, more than 860,000 properties were actually repossessed by lenders. That's more than double the number of properties repossessed in 2007. If that's not scary enough, RealtyTrac also reported that an average of 3,100 foreclosures per day in the U.S. in the month of November, which according to the Federal Reserve Bank of St. Louis was triple the 1,000 per day average in 1933, the worst year of the Great Depression. Moody's Economy.com, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18% this year before tapering off slightly through 2011.
If you're at a point where you simply cannot keep up on your mortgage payments -- regardless of the reason -- the worst thing you can do is to stop making payments altogether and ignore the efforts of the mortgage company to contact you. Sure, it's tempting to think, Well, if I'm going to lose this house anyway, why pay anything at all toward the mortgage. If you do that you will greatly incease the likelihood of foreclosure and reduce your chances of keeping your home. Regardless of how little you can pay, never skip a payment. If your mortgage is $500 per month and you can only pay $100, at least pay that amount. That shows a good faith effort on your part.
Then take the initiative and contact your lender, in writing, and describe as clearly and honestly as possible the exact nature of the problem that is making it difficult or impossible for you to stay current with your mortgage payments. Don't sugar coat your problems. If you are out of work, tell the mortgage company how long you have been out of work. Tell them how deep you are in debt and, even if it is embarrassing to do, how you got into this much debt.
Every situation is different and I would not presume to offer a one size fits all solution. My point here is that there is help available. It may come in the form of re-financing, deed in lieu of foreclosure, a short sale, or some other form of relief that fits your circumstances. But the worst thing to do is suffer in silence and pretend the problem will take care of itself.
If you want to discuss your situation, I am here to help. Call me at 913-709-4423 to make an appointment or send me an email at JohnCleek@mac.com Be sure to mention when you call or send an email that you want to talk about the mortgage crisis you are facing.
Is this a good time to Sell My Home?
… Regardless of the reason you have decided to sell your home, there are four elements that will determine how successful you are in selling in a reasonable period of time, at the highest price the market will bear, with a minimum of hassle and frustration for you.
The first element is one over which you have little or no control and that is LOCATION. You may find it strange that I would suggest you have any control at all. Well, the small bit of control you have is over the condition of the locale. For example, if you are on a cul de sac and there are homes with clutter and debris constantly decorating the front yard, you may want to check with the city to determine if this is a zoning violation and maybe, just maybe, you can get the city to warn them about the violation. Maybe that is a bit of a stretch but it is about the only thing you can do to location.
The second element is one over which you have extensive control and that is the CONDITION of your home and property. While you don't want to go overboard and invest money that will have minimal impact on the selling price of your home, there are improvements that cost less than they are worth in terms of impact on the value they bring to the market. If you can invest $5,000 and raise the ultimate selling price by $10,000, obviously you will want to consider this improvement very seriously.
But you should not limit your thinking to physical improvements to your home. Take a hard look at your home from the perspective of a buyer. What will a buyer see as they approach your home? What is the curb appeal of your home? What impression will they form of your house as they stand outside the front entrance? Does the front door need a coat of paint to brighten it up? Does the door stick on the threshold?
To be honest, you probably need to ask your Realtor® to give you a candid assessment of ways to improve the appearance, the perceived value, of your home. He or she should be able to provide you with a list of things ranging from clearing the weeds from the front flower beds to changing the lime green paint in the bedroom to replacing the leaky faucet in the kitchen as well as providing you with a professional assessment of the impact of installing granite counter tops in the kitchen to repainting the exterior of the house.
The third issue is price. It is by design that I place this issue third. Before you can talk about price you have to consider location and condition of the property because they have a direct impact on the price you can expect from the sale of your home. In today's volatile market, determining the listing price for your home may be more important than it has ever been. With an inventory of homes on the market being higher than normal, buyers usually have plenty of properties from which to choose. You don't have to be the lowest price home in your price range but you probably don't want to be the highest priced home either.
Remembering that location and condition are powerful elements in deterining it's market appeal, a professional market price analysis is essential. Your Realtor® has access to data regarding the selling price of comparable homes in the recent past as well as the offering prices for all comparable homes in your subdivision and surrounding areas. With this report in hand, you will want to have a conversation with your Realtor® regarding how long you have to sell your home. If time on market is more important than price, then you must be willing to set a price that will put your home high on the list of all prospective buyers of homes in your neighborhood. You cannot have it both ways, high selling price and a quick sale.
And, regardless of how competitive you think the price you and your Realtor® have selected is, be prepared to negotiate with prospective buyers. Buyers and their agents have come to expect that no matter how attractive the offering price, they should make an offer to buy for less. Don't be intimidated by the fear of losing a buyer if you do not accept their offer. Even when the buyer's agent informs your agent that this is the client's last and final offer, keep negotiating! Show some flexibility but don't feel you have to accept their first offer as if it were in fact their final offer. It almost always is not.
Finally, and most importantly, how long your home stays on the market and the price at which it sells, is determined by the quality of the MARKETING of your home. This is where your Realtor® earns their commission. Some agents describe themself as a listing agent. You want an agent that describes themself as a marekting agent, and can provide you with references to prove it.
There are literally thousands of agents who would dearly love to list your home on MLS, put a For Sale sign in your yard and wait for another agent to bring a buyer. But if your home is to sell quickly at an acceptable price your Realtor® must use all the tools available to make sure that the buyers for whom your home is a perfect fit are aware that it is on the market. That involves above all else, electronic marketing -- a separate website for your home that is widely promoted and gives prospects a chance visit your home virtually. The overwhelming majority (86%) of home buyers today start looking for a home on the Internet before they ever contact an agent. Even those who are working with agents are most likely going to virtually tour dozens of homes before they select properties to visit. You want your home to be on that list.
Ask your Realtor® to share their marketing plan for your home. Ask them for examples of other homes they have marketed that you can see actual examples of the website, the color brochures, the online listings, etc.
So, is this a good time to sell your home? It can be if you pay attention to Location, Condition, Price, and Marketing. Give me a call (913-709-4423) or send me an email today and I will visit you in your home and provide you with a personalized answer to the question.
©2009-2010 John Cleek, Ph.D., REALTOR® Webmaster and Marketing Consultant