Keeping Memories and Selling the House

The school bus stop was at our corner on Shadows Ct. Kids would begin to congregate in our yard at least ten minutes before the bus churned up the hill. Patrick always had his place in line held by his backpack so he could mess around with the other boys. Middle School-Aaron was rarely out the front door before the bus door was opened. Our boy's places were taken over by younger boys over the years... but the routine and chatter never changed. The bus stop is a memory of home with the boys that I'd like to keep long after the house has been turned over to another family. But keeping the house to hold the memories was not an option.

Entering a new era of our lives, unlike our parent's generation, we are leaving the homes where we brought our new-born children home, raised them, and from where we sent them off to pursue their lives. A few years ago the shakeup of our economy disrupted our best laid plans and a vast majority of the 50+ age group went into a holding pattern with respect to house selling and buying. The early expectation of a "months not years" recovery has given way to a reasonable understanding of the complexity of economic recovery. With understanding has come an adjustment in plans and new directions for homeowners who's homes have outgrown them. In 2011, more people got on with the business of living instead of waiting for things outside of their control to get better. Letting go of houses that were homes and taking advantage of low prices and lower interest rates may be a trend on its way to becoming a wave over the next 24 months.

With exceptions, the value of your home is going to be less today than six or seven years ago. In fact, the value of your property may be less in the spring of 2012 than what you could have received in 2009. Unprecedented interest rates have gobbled up buyers as the 8% mortgages have refinanced into rates below 5%. Those people may be comfortable for a long time in their 4% interest rate mortgage, even if their home is not just right.  As real estate sellers, even a threat of another buyer is helpful to shift the imbalance of power. Without a threat of competing demand, people who submit offers to purchase are negotiating in a position of strength. In some cases, another buyer coming forward any time soon is so remote that the buyer with an offer on the table may be in a position of super strength. These buyers have no fear of loss, no reason to flinch, no reason to concede on anything of real value.

If we paid attention this year and believe what we have seen, the way to sell a house is simple, but not without pain. While the work we need to do to get the house ready for sale is physical, the real pain is usually in the net. Repairs, upgrades, paint, landscape work, etc., all of that is necessary and, (sit down now) none of those items will move your home beyond its market value. The days of poorly maintained homes selling for the market value of well maintained homes (which were selling for over-value) are over. Your home must be priced right AND well maintained to get an offer. Then, and only then can you negotiate. If you have no leverage, (competition, don't need the money...) you will be negotiating on items of insignificant value and conceding significantly on price.

If there is any chance you might sell one of the properties you own in 2012, use this time to get the place in tip-top condition. Preparing your house for sale takes time. December might be a great time to plan the work, January and February are perfect for getting work done. March is ideal for letting family and friends know, sharing memories, and boxing up what doesn't need to be displayed. It's also the right time to determine a selling price and moving strategy. Once the house is sold, finding your next home is a pleasure. Where you live in the interim, if there is an interim, is part of the fun. Have a deadline in mind. It helps to stay focused, in control, and keeps you from wavering.

National Association of Realtors--A profile of home buyers and sellers

DID YOU KNOW?

According to the 2011 National Association of REALTORS (NAR) Profile of Home Buyers and Seller which surveyed 5,708 home buyers and sellers this summer, the average American home buyer has changed in the last year.

 

A shift in the age of buyers

The largest share of home buyers is aged 25 to 32 (27 percent), but this share of buyers is down 9 percent in the last year, a considerable drop for a group that continues to dominate the buyer pool. The median age of home buyers has jumped from 39 years old to 45 years old as first time home buyers have dropped to a third of all buyers, down from half of all buyers. (Predictable: Attribute much of this decline to the end of the tax stimulus for first time buyers)

 

A shift in buyers' incomes

The median household income of buyers in America is now $80,900, an increase in income after the previous two years' decline. (Predictable: A smaller percentage of the market going to first time buyers would cause the average income result to be higher)

 

A shift in married couple buyers

For ten years, single people were accounting for an increasing share of buyers, as married person's purchases dropped by 10 percent in that time. In 2011, NAR reports a drop in single home buyers. Married persons accounted for 64 percent of the 2011 sales, the highest number since 2001. 

 

This is worth noting: The trend of single women buyers making a mark in the market has slowed. Eighteen percent of home buyers were single women, the smallest share in six years.

 

The takeway

According to the 2011 NAR Profile of Home Buyers and Sellers, the average American buyer is now older, has a higher income, and is likely married. Single and lower income buyers are sitting on the sidelines as unemployment continues to concern the nation.  Home buyers are now "staying well within their means". Imagine that!

 

Why the drop in first-time home buyers? NAR 2011 President Ron Phipps notes that first time buyers had more challenging financial obstacles to overcome. Phipps said, "First-time home buyers fell from a record high of 50% in 2010 (Tax Credit induced)  to 37 percent market share in the past year. That's just about right where first-time buyer activity should be for the market to be in line with typical years. 

 

For more information, and to read 33 facts every Realtor should know about the NAR 2011 Profile of Home Buyers and Sellers,  click here.