Why Buy during a Recession?

There are many reasons that you may want to consider buying your home during a recession. Of course, this is not something that you want to wait around for. If you are lucky enough to be purchasing during a recession then you are going to be able to get a good deal. But since there is no way of knowing when this will happen, you should simply go about your business. If you wait around because you think a recession is on the way you may never buy a new home. You would be much better off taking this into consideration, but not hinging your decision on what the market is offering.

The number one reason to buy a home during a recession is that you can save money. In many cases a situation like this will drive down home prices five percent or so. This is not to say that you will see this decrease across the board, but it is surely something to keep in mind. After all, five percent is $5,000 on every $100k worth of asking price. This can really add up; especially if you are spending several hundred thousand dollars on your new home.

Another good reason to sell during a recession is that sellers may begin to get anxious. They know that they are not going to get a great deal, but at the same time they are afraid that things could get worse in the near future. For this reason, they may be more so inclined to work with you on finding a mutually agreed upon price.

Keep in mind that a recession works in your favor as a buyer. You should know this when searching for a home so that you get the best of the deal, not the seller. This does not mean that you should be insistent on an absurdly low price, but you should know that a recession works in your favor.

It can be nice to buy a home when the real estate market is in a recession. This will allow you to save money, and hopefully get into a nice home. But remember, you should buy when you are ready to do so. If you put the time into finding a nice home, you will be happy with the end result no matter the market standing.

© Allison Van Wig

The Magic of the MLS

When you list your home for sale, one of the most important tools your realtor will use is the Multiple Listing Service which is commonly called the MLS. By listing your home in this massive database, other realtors will be able to find it. The MLS acts as a system for matching buyers to suitable homes.

Originally, the MLS was a print system with books published showcasing the area’s homes for sales. As technology improved, the MLS moved to a computer-based model. Today, realtors can log on to the MLS, enter new listings, remove sold listings, and perform detailed home searches.

The MLS isn’t necessarily a national system. Rather each region maintains its own MLS which makes it crucial that your agent lists your home in the right MLS system. If your home is in San Diego, you’ll want to be in the San Diego area MLS, not an MLS that caters to LA realtors.

Not all homes are entered into this database. The MLS is a member based system. Realtors must pay for access. If you are trying to sell your home on your own, you can’t simply add it to the MLS. You may be able to contract with a broker to list the home in the MLS for a flat fee.

The MLS offers realtors access to a huge inventory of homes currently on the market. For example, if an agent has a buyer looking for a three bedroom, two bath home with an attached garage and a large lot in a particular price range, the agent can input the buyer’s criteria and target the search. The MLS creates a listing of all suitable homes that meet that buyer’s needs. Now the agent can show each of the targeted homes to the buyer.

What if your home isn’t listed? It won’t be displayed in the list and the buyer will never see it –- even if your home is the perfect one!

What information does the MLS contain? The MLS is incredibly detailed with your home’s address, square footage, age, upgrades, number of bedrooms and bathrooms, special features, school district, financing options offered, photos, and links to your home’s website or “virtual home tour” if you have these tools online.

When interviewing potential real estate agents to list your home for sale, one of the most important questions you can ask is whether or not they intend to list your home in the MLS. If an agent responds by saying they don’t use the MLS, keep looking! This agent may be hoping to find a buyer on her own, doubling her commission. However, the MLS exposes your home to far more potential buyers than one single agent can possibly hope to find on their own. It is a cooperative marketing tool that works!

Not only will you have a larger sales force showing your home to potential buyers: the laws of supply and demand kick in. Can you imagine having several qualified buyers interested in your home? When this happens, you maintain the upper hand when it comes time to negotiate. Your home will sell faster and at a better price when it is listed in the MLS.

Allison Van Wig©.

The Internet -- Best Marketing Media for Home Sales

Whatever anyone may have told you a few years ago about which media is most effective for marketing a home, it's all about the Internet today. There simply is no more effective way to advertise a home for sale, both from a cost and a results perspective. The advantages of Internet advertising are numerous:

80+% of home buyers use the Web -- According to a survey by the National Association of Realtors®, more than 80% of home buyers now begin their search for a home on the Internet. Reasons include the anonymity of the Web, extensive information on each home, and multiple photos and virtual tours. Whatever their reasons, it's very likely that the future buyer of the home you want to sell will be seeing it first on the Internet.

It's economical media marketing -- With many of the real estate specific websites also syndicating to many others, it's possible to place a home for sale on one site and have it appear on many others within hours to a few days. Your real estate agent or broker has resources for syndication, as well as a group of sites on which they list your home soon after the listing becomes active.

The Internet is immediate -- While placement in most print media is delayed due to production requirements, getting information onto the Web is relatively immediate. It can take a month to get a listing into one of the Homes Magazines, and generally a week to get one into the newspaper. It's easy to get a home listing into one or more web sites in just hours.

Space isn't an issue, so more information is possible -- Unlike an ad in a newspaper that is set up based on a pre-determined space requirement, an internet home listing can just expand to accommodate the amount of information you want to show to prospective buyers. In a Homes Magazine ad, you might have to limit your information to a paragraph, while the Web allows almost unlimited selling ability.

Visual marketing of your home is best on the Web -- Many newspaper ads use black and white photographs, while magazines and other print media will usually only have one or two property photos. The Internet allows almost unlimited photos, and virtual tours are commonplace. With advances in video technology, and less expensive storage space, video tours with audio and music are also common. The Internet buyer can virtually walk through your home.

Changes are also easy and immediate -- With print, changes to an ad can be impossible past a certain deadline. With long lead times, changing your price could still leave the old price out there for a month or more in print. With the Web, changes can usually be made the same day, or within hours. The most up-to-date information is always presented to potential buyers.

The Web is 24/7/365 -- Unlike pre-determined times for radio or TV spots, and issue release dates for newspapers and print, the Internet is out there and open for business every hour of every day of the year. There has never been a more direct and continuous media in history.

As a home seller, it's important to you that your home be marketed in multiple media. So print is still something that real estate agents and brokers will use. However, the Internet has radically changed the real estate marketing world. Your home will be visible worldwide to potential buyers via multiple web sites, web logs or blogs, and national property aggregator web sites like Realtor.com®, Google Base, and others.

Allison Van Wig©.

Take it or Leave it?

In the sale of a home, certain items are considered "fixtures" or "real property", and others are items that can be removed by the sellers. Knowing the difference, and making sure that any borderline items are mentioned in the purchase contract is quite important. Misunderstandings in this area account for a great many disputes between buyers and sellers. Unfortunately, if not addressed earlier, there is usually no inkling of a problem until the walk-through a day or two before closing. By then, the sellers may have already shipped the items with their movers.

Normally, appliance items that have some type of hard connection to the home are considered fixtures and should remain. A range or oven generally has a gas connection or substantial wiring. They are also normally "built-ins." If an item appears to have been built into the cabinets, it would generally remain. This would include a built-in microwave oven. However, a microwave that stands on the counter would normally be something the sellers would take with them. Generally, unless built into the wall or cabinetry such that removal would cause damage, a refrigerator would be personal property subject to removal. However, in some areas of the country, it has become customary to leave the refrigerator. This is one item that likely should be mentioned specifically in the listing, in the contract, or both. Almost always, a chest or upright freezer is not a fixture and would be taken by the sellers unless otherwise negotiated. Clothes washers and dryers are normally taken by the sellers.

Believe it or not, light fixtures hanging from ceilings are involved in a great many disputes. It seems that sellers forget to tell their listing agent that the chandelier hanging in the dining area is a family heirloom. The buyers arrive for the walk-through and find the chandelier gone with a cheap fixture in its place, or nothing at all. Many states have incorporated language in their purchase agreements specifically stating that all mounted lighting is to remain in the home unless buyer and seller agree on removal. If that wording is present, you probably do not need to worry about a really ornate ceiling or wall-mounted fixture. Remember though that anything can be written into a contract, so have it put in if you're concerned.

Window coverings are something that are normally mentioned in the listing, the standard purchase agreement language, or both. There isn't normally a fixed rule for them, so make sure that you know what the seller intends with regards to blinds, drapes or other window coverings. Of course, if you don't like them, then you might want them taken by the sellers. Otherwise, look for the specific disposition of window coverings in writing.

Another area of dispute involves mirrors and shelving that appear to be attached to walls. Many mirrors are hung like artwork with wire on a picture hanger. This is not a permanently attached fixture, and the seller will probably take it with them. When you've made a decision to make an offer on a home, a second walk-through is a good idea. Carefully try to move shelving and mirrors that appear to be attached to the wall and that you would want to stay with the home. If they're firmly attached and you cannot move them, they're probably a fixture. If that mirror moves around, it likely will be removed by the sellers. If you like it and feel that it is the perfect piece for that room, have your real estate agent write into the contract that it is to stay.

Landscaping planted in the ground, rocks used for landscaping, in-ground watering systems, and edging around flower beds will usually be considered permanent and remain. However, yard statuary and plants in pots may be removed by the seller. Swing sets and outdoor play equipment are personal property and subject to removal by the sellers. A hot tub built into a deck would normally be a fixture, while a free-standing hot tub, even if there's a water line piped to it, would be an item to negotiate. Otherwise, it could result in a dispute. Pool equipment, awnings and mailboxes are usually considered fixtures to remain with the home. Satellite TV equipment is a variable. Sometimes it's rented from the satellite provider, and at other times it's owned by the sellers. This is one item that almost always needs to be addressed somewhere in the purchase agreement.

You're about to make a very large purchase, likely mortgaged with many years of payments. Don't be shy about asking questions and having items written into the contract if there is any doubt as to who will end up with them after closing. You may find that, far from being upset, the sellers will thank you for bringing up an item that they expected to take but hadn't excluded in the listing. At least the negotiation will be at the time of the purchase offer, not 24 hours before closing. As the buyer, you also have a bit more negotiation power in the offer process.

Allison Van Wig©.