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Three Real Estate Myths?

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Posted 04-14-2013 at 05:50 PM by Roy Sanborn

Three Real Estate Myths?

A recent article on the Fox Business News website by Brendon DeSimone cautioned readers not to be fooled by three real estate myths. Hey, what do you know, Real Estate Mythology! The first myth was that spring is the best time to sell a home. It has long been the conventional wisdom that spring was the time when buyers with families are out looking so they can find a new home to be into by the time the new school year started. No one wants the kiddos traumatized by starting mid-year at a new school. We've got video games for that! In the Lakes Region spring has always been a big selling period. Buyers finally have been able to dig themselves out from under the snow banks and are excited that they can actually see the properties they might want to buy.

But the article says that the best time to sell is actually the holiday season and right after. I can certainly agree that the buyers out looking for property on the second day of Christmas or when the weather is a balmy twenty four degrees are definitely serious! And, many buyers feel that a new year brings bright, new possibilities in home ownership leading them to embark on the search for a castle to call their own.

The following chart shows how many homes were sold each month in the twelve towns in this report. Our biggest sales months come during the summer and the fall. But homes sell all year round. I really think the best time to sell your home is when you have it ready to sell. Make sure it is in the best possible condition with all repairs taken care of, a fresh coat of paint where necessary, and above all make sure it is clean, clean, clean. And, I can also guarantee that no one is going to buy your home unless it is on the market.

The second myth is for buyers and that is always to start with your lowest offer on a property. The truth is you don’t necessarily want to start with your highest and best, but you almost certainly won’t get anywhere with a low ball offer on a well priced home. You will most likely anger the seller to the point where you won’t get as good a deal as if you had come in with a more appropriately thought out offer. Now, it is true that some homes are overpriced and probably will sell well off the asking price, but those sellers are generally not very receptive to low ball offers. You may be better off pursuing a more reasonably priced home. That’s why you should have the advice of a REALTOR® to help you determine property values and seller motivation before you make an offer. Most of the time, low ball offers will get you nowhere.

The third myth is that a cash offer will trump all others given the risk involved in getting financed today. Buyers always tend to believe that a cash offer is something that seller’s can’t resist. The article asks you to consider that you received two offers on your home that is listed at $399,000. One was cash for $375,000 and the other was at full price but financed with 25% down, a pre-approval letter, and quick contingency periods. The article recommends that the agent for the buyer with financing provide the seller with everything possible to prove that his client can meet the terms of the financing contingency and make the case that his deal is better. He might even arrange that the seller or seller’s agent talk with the buyer’s lender. It also helps a lot if the lender is someone local and that has a reputation of being able to provide superior customer service and be able to work through the glitches that always seem to pop up.

Other things to consider in the deal would be how much of a deposit that the cash buyer is putting down, the condition of the property, and how well it will fair in a home inspection. Is the cash buyer likely going to try to negotiate more on defects found in the home inspection? Is the value of the home questionable at all and does the cash offer request an appraisal to be done? There’s a lot to consider in either offer! Getting financing on any home today can be a little daunting to say the least. But, any deal that can eliminate financing altogether certainly carries a lot of weight by eliminating the appraisal and underwriting process. And that’s another reason why you need a REALTOR® to help you evaluate and give you assistance in the decision making process. Maybe next week we’ll get into legends…

As of April 1, 2013 there were 936 residential homes on the market in the twelve communities covered by this Lakes Region real estate market report. The average asking price was $513,337 and the median price point was $249,900. Our inventory is down a bit from last April when there were 994 homes available which is great news, but the average price and median price point is also a bit lower as well. Our current inventory represents just a little over a 12 month supply of homes on the market. Not too bad...

Data was compiled as of 4/1/13 using the Northern New England Real Estate MLS System.

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