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Real Estate & Finance News That Affects Your Home                                                         Page  1 2 3 4

May 2009 - Page 1

TRUE OR FALSE? How Much Do You Really Know About Buying And Selling A Home? You've heard the myths about buying and selling real estate. Now it's time to separate fact from fiction. Many things that were true 20, 10, even five years ago are not true today. You can't depend on the old beliefs to serve as accurate guidelines in today's market. Test your know-how with this true-or-false quiz. Buying Buying the most expensive home I can afford makes economic sense. True False During a period of rampant inflation -- and with it, assured appreciation on your home -- that makes sense. But in days of slower appreciation, buyers should exercise greater caution. If you feel comfortable maxing out on your monthly mortgage payment, that's your decision. Just make sure you don't bite off more, financially, than you can chew. (Answer: True and False.) I can get a better deal working without a real estate agent. I'll save on the commission. True False Long ago, you may have been able to buy a home without professional help. In today's litigious times, however, buying a home without a professional in your corner can be a costly mistake. There's more to buying a home than just signing the bottom line. Can you be sure what the home is really worth? Who will ensure that you are taken care of in the process? Do you know what disclosures are required? Do you know what the seller's agent is not allowed to tell you that a buyer's agent must tell you? When you're dealing with the most expensive investment of your life, you should get help from someone who has your best interests at heart. (Answer: False.) I don't need more than one real estate agent to do a thorough house search. True False With today's computerized multiple listing service and cooperation between real estate companies, buyers don't have to work with several agents to get to all the inventory. In fact, today, with buyer representation, agents preview the best properties to their clients first. Buyers who link up with an agent and show loyalty to that agent get better service than the buyer who skips from agent to agent. (Answer: True.) I don't need an agent. I can get all the information I need on the Web. True False There's a difference between information and knowledge. Unless you can decipher the mountains of information on the Internet, all you have are printed pages with addresses and pictures on them. With such an important decision, buyers need to know everything there is to know about a property -- and that includes seeing it firsthand. Your agent's know-how is critical in preparing an offer, negotiating a contract and following through from financing to closing. (Answer: False.) Selling Frequent newspaper and magazine advertising isn't the best way to sell a home. True False Some home sellers believe advertising their homes two or more times a week brings the best results. Though homes can be advertised effectively, most sales (about 65%) are made either to buyers referred to an office by previous clients or buyers already on tap through individual agents' networking and personal marketing. (Answer: True.) I should only choose a company and agent who recommends the highest listing price. True False Pricing is merely a starting point. The best criteria for choosing who lists your home is not opinion on price, but a firm's reputation for giving home sellers an edge. In addition, you need a neighborhood specialist who can negotiate well because, no matter what price you set, many buyers will want to bargain. (Answer: False.) I should fix up my home before placing it on the market. True False While most buyers will personalize the home they buy, they still need a clean slate on which to plan their ideas. Most buyers simply don't have the time, imagination or money to cope with a run-down, untidy property. Painting and clearing clutter will give your home a fresh look. (Answer: True.) How did you do on our quiz? If you have more questions, feel free to call us at your convenience, and we'll be happy to set you on a successful path to a home purchase or sale. GOOD NEWS Studies Show Improvement In Housing Affordability While some homeowners may be concerned about lower home prices, many would-be buyers are encouraged by the recent trend toward more-affordable housing. The National Association of REALTORS® (NAR) affordability index measures the extent to which a typical family could qualify for a mortgage loan on a typical home. As of February 2009, the index showed the median household income was 173% of the median mortgage payment, up from 108% in 2006 when the housing market peaked. (The NAR index does not include costs such as property taxes, insurance and other home-related expenses and assumes buyers make a 20% down payment and that the monthly payment cannot exceed 25% of the median family monthly income.) Also showing improved home affordability is an index from Standard & Poor’s Chief Economist David Wyss. It showed that the ratio of average home prices to average income dropped from 3.41 in 2006 to 2.45 in late 2008 -- meaning homes became less expensive compared with incomes. Page: 1 2 3 4 Back to Scottsdale Real Estate Web Site