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Rapid Rise of Homebuyer’s Remorse

Posted by GuruDan on April 30, 2014

1 in 4 homeowners regrets buying a house

By Mandi Woodruff | Yahoo Finance – April 29, 2014

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When Jennifer Berry, 41,  purchased a home in Grand Rapids, Mich. with her husband in 2001, they had a simple plan: live there for 10 years or so, cash in on the equity and upgrade. Thanks to the financial crisis, things didn’t quite go as planned. Her husband’s business failed, they separated and she was forced to sell the home at a loss.

“Instead of gaining equity, [our home] actually lost equity and I ended up literally paying someone to buy it just so I could get out from under it and save my credit score,” says Berry, who now rents her home. “I’m looking at retirement in 20 years and thinking about having to take out a 30-year mortgage now and worry about [the upkeep] drives me crazy.”

Berry isn’t the only one suffering from homebuyer’s remorse. One out of four homeowners admit they wouldn’t buy their home again if they had the chance, according to a recent survey by real estate brokerage Redfin.

The biggest factor contributing to homebuyers’ remorse appeared to be affordability. Nearly one-third of homeowners who reported a household income of less than $100,000 said they were unhappy with their decision. In contrast, just 14% of homeowners who earned more than $100,000 said they were unhappy, according to the survey.

Younger homeowners were also more likely to have regrets. About 28% of homeowners under 65 said they regretted buying their home, compared to 14% of senior homeowners. And one in five homeowners with kids still living at home said they regretted their home purchase as well.

Redfin’s findings come around the same time as new home sales have begun to lag in the U.S. Sales of single-family homes fell by 14.5% to an eight-month low in March, with just 384,000 units sold. Experts have blamed slow sales on bad weather, low home inventory, rising mortgage rates, and a rise in vacant homes (homes that are under repair or being rented).  Whatever the case, one thing is certain  — buyers today are at a distinct disadvantage when it comes to finding a home that meets every point on their checklist.

[Click here to check home loan rates in your area.]

“One of the biggest regrets homeowners have is feeling pressured [to buy],” says Marshall Park, a Redfin agent based in Washington, D.C. “There aren’t enough homes on sale now, they’re sort of under the gun to buy their home.

Half of homeowners admitted to having regrets about their home purchase in a similar study by Trulia released last August. The majority of people with buyer’s remorse said they regretted choosing a home that wasn’t large enough for them. One in five homeowners said they wish they’d inspected the home more carefully before moving in — a trend that doesn’t surprise Park.

In order to compete with other bidders, he’s seen many homeowners signing contracts and moving in without getting a professional home inspection.

“In competitive markets like D.C., it’s not rare to just forego a home inspection or say you won’t ask for any repairs,” he says. “People are doing that and purchasing properties they could possibly have to dump tens of thousands of dollars into later.”

This is the kind of mistake that Trulia real estate expert Michael Corbett says is a “disaster waiting to happen.”

“I would never waive an inspection,” he says. “I would pass on the house before I’d waive on an inspection, mainly because I may get to a house and realize [too late] that there are issues.”

In other cases, owners said they loved their home but were unhappy with their chosen neighborhood. Neighborhood-related complaints made up four of the top 20 homeowner regrets in Trulia’s report. Fourteen percent of homeowners said they wish they’d vetted their neighborhood more, and 15% wished they had picked one closer to work.

“Very often our clients fail to do basic research and end up living in the right house but the wrong town,” says Ali Bernstein of Suburban Jungle Realty Group, which specializes in helping New York City renters transition into suburbia. “Agents are there to sell you the house, but the way the real estate market is set up, they don’t tell you about the towns. You’ve got to find a town that fits your personality.”

So how can you make sure you get through the whole home buying process without disappointment? Here are a few tips.

Don’t bite off more than you can chew. Your housing costs should typically take up less than one-third of your total household budget (or 40% for those who live in high-cost areas like New York or San Francisco) — property taxes and homeowner’s insurance included. Free mortgage calculators are plentiful online and can give you a pretty good estimate of what you can afford in your area.

Think beyond the inspection. In addition to a home inspection, don’t kid yourself into thinking maintenance costs end there. “People forget about the ongoing homeownership costs,” says Corbett.  “Not just the closing costs, but the ongoing homeownership costs and keeping a slush fund for ‘invisible systems’ like electric and plumbing that will eventually break down.”  Keep an emergency savings account flush with at least $1,000 to handle any unexpected maintenance issues.

Hire a good real estate agent. In Redfin’s survey, more than 30% of homeowners said they felt like their real estate agent wasn’t very helpful, and another 8% said their agent was the worst part of the homebuying process. Always vet your real estate agent. Ask trusted friends and family for recommendations and come up with a list of your top picks. It’s wise to arrange to meet in person at their office. Not only will you get a sense of their personality, but you can take a look around their workspace to see how seriously they take their job.

Get to know your neighborhood. With such low inventory out there, buying a home can feel like a dog-eat-dog competition. Take the time to vet your choice of neighborhood before rushing a bid on a home there. That means driving by at several times throughout the day — morning, noon and night — to get a feel for the environment. You might discover a nearby highway makes too much noise at night, or morning school bus traffic that could make your commute a disaster. 

Test your homeowner smarts — take this quiz to find out if you’re smart enough to own a home.

Have a real estate horror story or question? Let us know.

Posted in Financial Planning, Real Estate | Tagged: , , , | Leave a Comment »

These 10 secrets will help you get top dollar for your home

Posted by GuruDan on April 16, 2014

10 Best-Kept Secrets for Selling Your Home

By HGTV Family of Sites | At HomeMon, 14 Apr, 2014 11:22 AM EDT

These tricks of the trade from HGTV.com will help you get top dollar when selling your home…

Selling Secret #10: Pricing it right
Find out what your home is worth, then shave 15 to 20 percent off the price. You’ll be stampeded by buyers with multiple bids — even in the worst markets — and they’ll bid up the price over what it’s worth. It takes real courage and most sellers just don’t want to risk it, but it’s the single best strategy to sell a home in today’s market

Selling Secret #9: Half-empty closets
Storage is something every buyer is looking for and can never have enough of. Take half the stuff out of your closets then neatly organize what’s left in there. Buyers will snoop, so be sure to keep all your closets and cabinets clean and tidy.

Selling Secret #8: Light it up
Maximize the light in your home. After location, good light is the one thing that every buyer cites that they want in a home. Take down the drapes, clean the windows, change the lampshades, increase the wattage of your light bulbs and cut the bushes outside to let in sunshine. Do what you have to do make your house bright and cheery — it will make it more sellable.

Selling Secret #7: Play the agent field
A secret sale killer is hiring the wrong broker. Make sure you have a broker who is totally informed. They must constantly monitor the multiple listing service (MLS), know what properties are going on the market and know the comps in your neighbourhood. Find a broker who embraces technology — a tech-savvy one has many tools to get your house sold.

Selling Secret #6: Conceal the critters
You might think a cuddly dog would warm the hearts of potential buyers, but you’d be wrong. Not everybody is a dog- or cat-lover. Buyers don’t want to walk in your home and see a bowl full of dog food, smell the kitty litter box or have tufts of pet hair stuck to their clothes. It will give buyers the impression that your house is not clean. If you’re planning an open house, send the critters to a pet hotel for the day.

Selling Secret #5: Don’t over-upgrade
Quick fixes before selling always pay off. Mammoth makeovers, not so much. You probably won’t get your money back if you do a huge improvement project before you put your house on the market.
Instead, do updates that will pay off and get you top dollar. Get a new fresh coat of paint on the walls. Clean the curtains or go buy some inexpensive new ones. Replace door handles, cabinet hardware, make sure closet doors are on track, fix leaky faucets and clean the grout.

Selling Secret #4: Take the home out of your house
One of the most important things to do when selling your house is to de-personalize it. The more personal stuff in your house, the less potential buyers can imagine themselves living there. Get rid of a third of your stuff — put it in storage. This includes family photos, memorabilia collections and personal keepsakes. Consider hiring a home stager to maximize the full potential of your home. Staging simply means arranging your furniture to best showcase the floor plan and maximize the use of space.

Selling Secret #3: The kitchen comes first
You’re not actually selling your house, you’re selling your kitchen — that’s how important it is. The benefits of remodelling your kitchen are endless, and the best part of it is that you’ll probably get 85% of your money back. It may be a few thousand dollars to replace countertops where a buyer may knock $10,000 off the asking price if your kitchen looks dated. The fastest, most inexpensive kitchen updates include painting and new cabinet hardware. Use a neutral-color paint so you can present buyers with a blank canvas where they can start envisioning their own style. If you have a little money to spend, buy one fancy stainless steel appliance. Why one? Because when people see one high-end appliance they think all the rest are expensive too and it updates the kitchen.

Selling Secret #2: Always be ready to show
Your house needs to be "show-ready" at all times — you never know when your buyer is going to walk through the door. You have to be available whenever they want to come see the place and it has to be in tip-top shape. Don’t leave dishes in the sink, keep the dishwasher cleaned out, the bathrooms sparkling and make sure there are no dust bunnies in the corners. It’s a little inconvenient, but it will get your house sold.

Selling Secret #1: The first impression is the only impression
No matter how good the interior of your home looks, buyers have already judged your home before they walk through the door. You never have a second chance to make a first impression. It’s important to make people feel warm, welcome and safe as they approach the house.
Spruce up your home’s exterior with inexpensive shrubs and brightly coloured flowers. You can typically get a 100-percent return on the money you put into your home’s curb appeal. Entryways are also important. You use it as a utility space for your coat and keys. But, when you’re selling, make it welcoming by putting in a small bench, a vase of fresh-cut flowers or even some cookies.

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Posted in Real Estate | Tagged: , | 1 Comment »

Vancouver home sales drop sharply in June, hit 10-year low, local board says

Posted by GuruDan on July 6, 2012

By The Canadian Press | The Canadian Press – Wed, 4 Jul, 2012 5:40 PM EDT

 

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Canada’s hottest real estate market takes nosedive

Sales in one of the most popular cities to purchase plummet to a 10-year low, ahead of mortgage rule changes.

 

 

 

 

VANCOUVER – Vancouver home sales hit their lowest level in more than a decade in June, falling 17.2 per cent from May, and tilting the market in favour of buyers, the city’s real estate board said Wednesday.

However, despite a drop in the number of sales, prices in what was once the country’s hottest real estate market have remained firm, the board said.

The Real Estate Board of Greater Vancouver reported 2,362 sales in June, which is a decline from 2,853 in May and also off 27.6 per cent from a year earlier when there were 3,262 sales.

However, despite the lower sales numbers, the housing price index for residential properties in Vancouver was still up 1.7 per cent from a year ago.

"Overall conditions have trended in favour of buyers in our marketplace in recent months," board president Eugen Klein said.

"This means buyers are facing less competition and have more selection to choose from compared to earlier in the year."

The board said June sales were the lowest total for the month in the region since 2000.

June sales of detached properties in Vancouver totalled 921, down from 1,471 in June 2011, while the price for detached properties increased 3.3 per cent from a year ago to $961,600.

Sales of apartments slipped 19 per cent to 1,026 in June from 1,266 a year ago. The benchmark price of an apartment increased 0.3 per cent from June 2011 to $376,200.

Meanwhile, there were 415 attached property sales in June, down from 525 a year ago, while the benchmark price decreased 0.1 per cent from a year ago to $468,400.

Vancouver has been one of the country’s hottest housing markets, but has shown signs of cooling in recent months.

New listings for detached, attached and apartment properties in the Greater Vancouver region totalled 5,617 in June, down from 6,927 new listings in May and from 5,793 new properties a year ago.

The total number of residential property listings on the board’s MLS service was 18,493, up 3.27 per cent from May and up 22 per cent from this time last year.

The slow down in sales in Vancouver comes ahead of changes by Ottawa to tighten mortgage lending in Canada.

Finance Minister Jim Flaherty moved last month to cool the red hot condo markets in Toronto and Vancouver by tightening the rules for borrowers including cutting the maximum amortization period for government insured mortgages cut to 25 years from 30.

As well, the federal regulator of financial institutions has told lenders they can only issue home equity loans up to a maximum of 65 per cent of the property’s value, down from the previous 80 per cent.

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DIY home selling: Wise or a fools’ folly?

Posted by GuruDan on June 18, 2012

By Liam Lahey | InsightTue, 12 Jun, 2012 2:11 PM EDT

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When selling one’s home, the desire to hire a real estate agent is waning in Canada, according to a new survey commissioned by PropertyGuys.com.

Canadians say real estate commissions are too high, agents don’t have their best interests in mind and bidding wars are engineered by the industry, say respondents in the survey conducted on the Angus Reid Forum.

The survey found:

  • 82 per cent of homeowners agree that the average five per cent commission real estate agents charge is too much.
  • Fifty per cent say that agents don’t have their best interests in mind when selling their home.
  • Another 60 per cent believe that property bidding wars are engineered by real estate agents.

"There’s an overwhelming sentiment that the status quo, and the commission rate that seems to sustain in Canada at around five per cent; folks don’t like that and they find it too much," says Walter Melanson, director of partnerships at PropertyGuys.com in Moncton, N.B.

"We know there’s a sentiment among Canadians to try something new and different … so many are disgruntled towards the amounts they paid in the past (to real estate agents) and they’re likely to consider alternatives."

Melanson says there’s a genuine consumer desire for change in the Canadian real estate industry.

"If we look at the traditional real estate industry, there hasn’t been any great deal of reform and the little box they built about 100 years ago operates quite the same as it did then.

"You’ve got an industry today that doesn’t want change and … those that suffer the most are the folks that choose traditional agents and are waiting for something big to happen within that space that helps them start to save money."

Want to go it alone? Here’s what you need to know

While it’s true you could sell your own home without a real estate agent, there are a number of factors to consider before doing so.

For starters, understand that real estate agents generally charge a five per cent fee for their services that include having forms and contracts approved by lawyers to execute a sale contract.

Real estate agents also advertise that your property is up for grabs beyond sticking a sign on your front lawn and they’re front and centre whenever a potential buyer shows up to take a tour of your house or property to highlight the unique features and/or renovations you’ve done to the building. And agents also handle the negotiations with a potential buyer.

"Buying or selling a home is the single largest investment a purchaser or seller will make in his or her lifetime. As such, the services of a full-time real estate professional are required to ensure the best possible outcome," says Christine Matysiewicz, director, RE/MAX Ontario-Atlantic Canada Inc. "Surprises can arise at any given time during the home buying/selling process. From legal issues such as easements, encroachments and grandfather clauses to the negotiation table, the process is not without pitfalls."

If you’re selling, your realtor will set a price based on comparable sales in the area. He or she will likely get a higher price for your property than if you tried to sell it yourself.

"Your home will also sell faster because of the exposure it will receive. Your realtor is also connected to your neighbourhood — he or she will continually assess market conditions and how they impact your property," she continues. "Your realtor is also a skilled negotiator and has been educated on the complex laws and regulations in real estate and is trained to put together a legally binding contract … and if you’re buying, your realtor can open doors to thousands of properties through the MLS system."

If considering alternatives, one should weigh their own needs and goals, as well as their own abilities, Matysiewicz advises. "They should know what level of personal involvement they are interested and available in having in the transaction process. Most of us have very busy lives," she points out.

Some questions consumers might want to ask themselves may include:

  • Do you have the time, energy, know-how and motivation to sell/buy on your own?
  • Will you be able to effectively market your home?
  • Do you feel comfortable showing you home to strangers and can you make your home available to potential purchasers when needed, given your hours of work and other commitments?
  • Will you be able to deal with a parade of potential bargain hunters and tire kickers?
  • Can you overcome the emotional attachment you have to the property? Would you be able to negotiate effectively and accept criticism of your home?

Are you able to manage technical issues related to contracts and negotiations?

If you’re selling and mulling over which realtor to turn to, Matysiewicz recommends touring your own neighbourhood to see who has a strong presence. It’s ideal to engage someone who is very active in the local marketplace.

"Doing so assures they’ll have the right mix of knowledge and experience to meet the challenges and identify the opportunities within that specific area. It’s also more likely that they have established links to potential buyers in the area as well," she adds. "Family, friends and colleagues can also be a great source for a referral. Visit the local real estate offices that services your area. Don’t be afraid to ask questions. You can also ask for and check references for your own peace of mind."

Meanwhile, the PropertyGuys’ survey findings also shows 67 per cent of respondents agree traditional real estate agents, and their commission fees, are one of the factors contributing to home price inflation. In Ontario, this number was higher at 70 per cent.

This survey also finds:

  • 66 per cent of homeowners polled say alternatives to traditional real estate agents will benefit home sellers.
  • Only 19 per cent of homeowners think their real estate agent was definitely worth the commission paid.
  • 87 per cent believe that how much money they have at the end of the day is most important when selling a home.
  • 50 per cent of Canadians disagree that real estate agents have your best interest in mind when selling a home.

While those in the traditional agent/broker segment may want buyers and sellers to believe that it is dangerous not to use an agent, the truth is that the real estate market has changed and savvy consumers, with the right tools, technology and know how, can sell their home without the use of an agent, Melanson adds.

"The folks that connect best with our concept are those that are comfortable with showing their house themselves and in engaging with others," he says. "These are confident sellers. They lean more on process and systems than they do on people."

The Canadian Real Estate Association politely declined to be interviewed for this article. However, for undecided consumers, the CREA’s How Realtors Help website provides information about realtors and the services they provide.

 

Posted in Insurance related, Non-insurance, Real Estate | Tagged: , , , | Leave a Comment »

 
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