Survey: Sellers Fare Better With Agents

Survey: Sellers Fare Better With Agents
Sellers have a better chance at getting their house sold by using a REALTOR® than opting for the do-it-yourself approach, according to a survey of 1,000 home owners by HomeGain.com, an online real estate resource. Nearly 60 percent of home owners who used a REALTOR® to sell their home were successful compared to 39 percent of FSBOs, the survey found.

In the survey, 83 percent of home owners said they used a REALTOR® to sell their home, whereas 17 percent said they tried to sell it themselves. This corresponds to results from NAR's 2010 Profile of Buyers & Sellers, which found 88 percent of sellers were assisted by a real estate agent. (Additionally, 83 percent of buyers bought their home through an agent.)

“It is especially striking that home owners fare significantly better in selling their homes using a REALTOR® than selling on their own,” says Louis Cammarosano, general manager at HomeGain. “Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR® than those who try to sell their homes on their own.”

Among the findings in its For Sale by Owner vs. REALTOR® survey:

• 88 percent of home owners who sold their homes using a REALTOR® said they would use a REALTOR® again.
• 24 percent of FSBOs eventually contacted a REALTOR® to help sell their home.

Source: “HomeGain Survey Finds Home Sellers Fare 50% Better in Getting Their Homes Sold Using a REALTOR® Than Selling on Their Own,” HomeGain.com (Feb. 24, 2011)

Existing-Home Sales Rise Again in January

Washington, DC, February 23, 2011

The uptrend in existing-home sales continues, with January sales rising for the third consecutive month with a pace that is now above year-ago levels, according to the National Association of REALTORS®.

Existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010. This is the first time in seven months that sales activity was higher than a year earlier.

Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” Yun said. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”

A parallel NAR practitioner survey² shows first-time buyers purchased 29 percent of homes in January, down from 33 percent in December and 40 percent in January 2010 when an extended tax credit was in place.

Investors accounted for 23 percent of purchases in January, up from 20 percent in December and 17 percent in January 2010; the balance of sales were to repeat buyers. All-cash sales rose to 32 percent in January from 29 percent in December and 26 percent in January 2010.

“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.

All-cash purchases are at the highest level since NAR started measuring these purchases monthly in October 2008, when they accounted for 15 percent of the market. The average of all-cash deals was 20 percent in 2009, rising to 28 percent last year.

The national median existing-home price³ for all housing types was $158,800 in January, down 3.7 percent from January 2010. Distressed homes edged up to a 37 percent market share in January from 36 percent in December; it was 38 percent in January 2010.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the median price is being dampened by unusual market factors. “Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” Phipps said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”

Total housing inventory at the end of January fell 5.1 percent to 3.38 million existing homes available for sale, which represents a 7.6-month supply⁴ at the current sales pace, down from an 8.2-month supply in December. The inventory supply is at the lowest level since December 2009 when there was a 7.3-month supply.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.76 percent in January from 4.71 percent in December; the rate was 5.03 percent in January 2010.

Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.69 million in January from 4.58 million in December, and are 4.9 percent higher than the 4.47 million level in January 2010. The median existing single-family home price was $159,400 in January, down 2.7 percent from a year ago.

Existing condominium and co-op sales increased 4.7 percent to a seasonally adjusted annual rate of 670,000 in January from 640,000 in December, and are 7.9 percent above the 621,000-unit pace one year ago. The median existing condo price⁵ was $154,900 in January, which is 10.2 percent below January 2010.

Regionally, existing-home sales in the Northeast fell 4.6 percent to an annual pace of 830,000 in January from a spike in December and are 1.2 percent below January 2010. The median price in the Northeast was $236,500, which is 4.0 percent below a year ago.

Existing-home sales in the Midwest rose 1.8 percent in January to a level of 1.14 million and are 3.6 percent above a year ago. The median price in the Midwest was $126,300, which is 3.2 percent below January 2010.

In the South, existing-home sales increased 3.6 percent to an annual pace of 2.02 million in January and are 8.0 percent higher than January 2010. The median price in the South was $136,600, down 2.1 percent from a year ago.

Existing-home sales in the West rose 7.9 percent to an annual level of 1.37 million in January and are 7.0 percent above January 2010. The median price in the West was $193,200, down 5.7 percent from a year ago.

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Obama Budget Seeks Cap on Itemized Deductions

Obama Budget Seeks Cap on Itemized Deductions

President Obama is targeting the tax deduction for mortgage interest payments and charitable contributions made among high-income earners.

The proposed budget cuts call for taxpayers in the 33 percent and 35 percent tax brackets to be limited in deducting charitable contributions and mortgage interest payments at the 28 percent rate. The deduction would affect households with taxable income of $250,000 or more. The White House says the move would bring in $321 billion within 10 years.

"NAR will remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest," National Association of REALTORS® President Ron Phipps has said in opposing any MID cuts. (Get the latest news on MID and NAR’s stance at REALTOR.org.)

Other real estate industry and nonprofit sectors are also joining in the resistance, arguing that capping the deduction will hurt an already battered housing market even more.

"This is an attack on the middle class," says Jerry Howard, chief executive of the National Association of Home Builders.

At a time when charities continue to struggle with a drop in donations, limiting the charitable deduction will likely cut large donations for the arts, environment, education and other sectors even more, says Tim Delaney, head of the National Council of Nonprofits, a network of charities.

In the past, the Obama administration and several tax deficit commissions have unsuccessfully called for limiting or eliminating MID. MID costs the Treasury Department an estimated $131 billion a year.

Source: “Slash Mortgage Deductions for the Rich? Fat Chance,” CNNMoney.com (Feb. 15, 2011)

Home Ownership Offers Plenty of Tax Benefits

Home Ownership Offers Plenty of Tax Benefits

While renting offers zero tax breaks, buying a home offers several tax benefits that can make homeownership more affordable. Real estate professionals need to be careful in providing detailed tax advice to clients to avoid lawsuits, but you can ensure clients have the information they need to understand the all of the tax benefits of home ownership.

The following is a few of the tax benefits to home ownership, according to Stephen Fishman, an author and lawyer who specializes in small business, tax and intellectual property law.

▪ Home mortgage interest deduction: Home owners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.
▪ Property tax deduction: Home owners can deduct from their federal income taxes the state and local property taxes that you pay on the home.
▪ Deductible home buying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.
▪ $250,000/$500,000 home-sale exclusion: Home owners who have lived in their home for two of the prior five years prior to its sale do not have to pay income tax on the majority of their profit — $250,000 for single home owners and $500,000 for married homeowners who file jointly.
▪ 14 days of free rental income: Home owners can rent the home up to 14 days during the year and pay no tax at all on the rental income.

Source: “The Tax Benefits of Homeownership,” Inman News (Feb. 4, 2011) (log in required)

Sellers Grow Impatient Waiting for Buyers

Sellers Grow Impatient Waiting for Buyers
Living in a home on the market that must always be ready at a moments notice for a showing can be unnerving for home owners. And as homes linger on the market for months upon months, begging children to keep their rooms tidy, keeping pets hidden, and maintaining sparkling clean sinks and tubs can take its toll, according to a recent article in The Washington Post, which chronicled four families trying to sell a home and how they’ve coped with the wait for buyers.

Some of the buyers expressed frustration with real estate professionals for not better preparing them for the wait. Here are a few things these sellers mentioned they wanted from real estate professionals:

1. Be courteous during showings.
Liz Dordal of Haymarket, Va., says she wishes real estate professionals would always be sure to contact her in advance of showings. She has a security system that she needs to disarm and a cat to hide. Angie Howard of Fort Washington, Md., agrees. She says real estate professionals don’t always call before a showing, which doesn’t give her enough time to get the dog caged and the house ready.

Dordal also says visitors don’t always remove their shoes to protect her carpets and cherry wood floors when they visit.

2. Offer constructive advice about making the home more competitive.
Scott Laisney of Kensington, Md., is trying to sell a 1958 four-bedroom, split level and wishes his agent would have recommended to him on how to get his house in better showing shape. He now realizes that his house needs to be decluttered and repainted in a neutral color. "The kitchen counters were all scratched, and we asked if we should fix that . . . and the [agent] said no, that people will see that it can be done. We asked about painting, and she said no," Laisney said.

But after 60 days the couple had no showings and dropped the price by $10,000, which still made no difference.

"With no action at all, we realized, 'we're doing something wrong here,' " Laisney said.
They took the home off the market and consulted a stager and another agent.

3. Don’t treat all sellers like they're desperate.
Dordal says real estate professionals need to educate buyers more about how different seller situations can be. For the past five months, Dordal has been trying to sell a three-bedroom, luxury townhome, and she’s frustrated that real estate professionals treat all sellers like they are desperate to sell.

“People assume that you're in distress if you have a place for sale and that you'll take a lot less,” Dordal says. “I just look at them and say, 'No, I'm not.' "

Source: “Home Sellers Cope With Houses in Limbo,” The Washington Post (Jan. 21, 2011)