Discussing the perils of selling your home yourself, possible cuts to FHA mortgage premiums, derivatives problems, a possible boom in housing, and more…
Incredible amount of news today but first a little warning about selling your home without the assistance of a REALTOR:
Why You Should Not For Sale By Owner
I can totally understand why some people may want to sell their home on their own. Because house prices are rising and they keep hearing about the limited number of homes for sale, it seems reasonable.
But there are several reasons why you may want to reconsider For Sale By Owner:
1. Exposing Your Home to The Most Prospective Buyers
There is no doubt that the internet is changing how business is done. It used to be to find a job you looked in the newspaper. Same thing with buying a car. Pretty much everything from the news to buying or selling real estate or cars involved newspapers.
But today, only 17% of home buyers are looking in the news paper. Compare that to the almost 90% of buyers that use the internet for their home search.
Experienced real estate agents have a comprehensive internet strategy to promote the sale of your home. From using social media to using programs to send listings to all of the real estate websites, we have it covered. Do you?
2. The Internet Is the Number One Source of Home Sales
If you are selling a home, then you want to make sure you are where the home buyers are! Check out the recent statistics of where people found the home they bought:
- 51% on the internet
- 34% from a Real Estate Agent
- 9% from a yard sign
- 1% from newspapers
Sticking a sign in the yard and putting an ad in the newspaper is NOT as effective as it used to be.
You may think you are pretty good at negotiating but with so much on the line, why would you risk coming up short? Experienced REALTORS assist with more sales per month than you will in a lifetime!
This is why you must have experience to dealing with:
- Home buyers
- Buyer’s agent
- Appraisers, surveyors, unsoectors, etc etc etc
4. It Is Was Easy, Everybody Would Do It
Did you know that the percentage of people selling their own home has dropped from 19% to 8% in the last 20 years?
8% is the lowest percentage of FSBO home sales since 1981 (according to NAR records).
If selling a home is easy, then why is the number of people doing it dropping?
5. It IS All About the Money
The number one reason that people try to sell their own home is to save money. And that commission does sound high…
Studies have shown that the typical house sold by the homeowner sells for 13% less than the typical house sold by a real estate agent.
This shows you that the commission you pay may be much lower than the extra money the agents gets for your home! Remember that the commission varies from one agent to another. Sometimes you pay less commission but get more for your money!
The reason that some buyers look for FSBOs is because they think they can save the real estate agent’s commission. Or even worse, they are looking for someone that does not have the experience to know when they are getting screwed over!
The Ugly But Honest Truth About For Sale By Owner
I hope you will be honest with yourself. Think long and hard about selling your house on your own.
There is so much to selling a home for the most money in the shortest time possible with the least amount of headaches.
And now on to the latest real estate, housing and economic news!
Rumors have been circulating for the past few months that, in a grand parting gesture to aid homebuyers, the outgoing administration may again cut the mortgage insurance premium charged by the Federal Housing Administration (FHA). Based on our analysis of the previous premium cut, this would be a serious mistake.
Should the government focus on the supply side as this article suggests? Or would the potential savings of cutting the mortgage insurance premium be offset by increasing home prices?
We may see serious changes in 2017. I hate that some of the changes may be negatives for home buyers such as continued increases in house prices and mortgage rates.
It would be nice to see more affordable homes but there is no guarantee that decreasing “burdensome zoning laws and regulations” will lead to more affordable home being built.
Each quarter the Office of the Comptroller of the Currency (OCC) releases a detailed report showing the exposure to derivatives at U.S. banks. The most recent report for the quarter ending June 30, 2016 indicates that U.S. bank holding companies have a total notional amount (face amount) of derivatives of $252.6 trillion. Of that total, just five Wall Street banks hold $230 trillion or 91 percent, underscoring how massively concentrated this high risk game has become. Those five banks are: Citigroup, JPMorgan Chase, Goldman Sachs Group, Bank of America and Morgan Stanley.
The OCC urgently needs to defog its lenses and defang the derivative entanglements at the biggest Wall Street banks.
It amazes me that this type of stuff continues. I guess the banks have too much power over regulators and our elected officials.
From Robert Shiller:
I think we’re at a turning point. The numbers that we’re reporting today are October, before the Trump election, and everything looks different now. There might be a Trump boom coming.
I’m not forecasting a boom. I find it very hard to forecast at this point in our history because it’s such an important change in government and we just don’t know where it’s going. I want to see Trump’s actual policies and see how successful he is in getting them through.
Just remember that a boom can lead to a bust…
Good news from AAR:
For this week, total U.S. weekly rail traffic was 496,633 carloads and intermodal units, up 27 percent compared with the same week last year. Total carloads for the week ending December 24 were 243,917 carloads, up 17.9 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 252,716 containers and trailers, up 37.2 percent compared to 2015.
Let’s hope this continues into 2017!
How will home sales be impacted by the toxic combination of sky-high home prices that even on a national basis exceed the crazy levels of the prior bubble, and mortgage rates that have soared nearly a full percentage point since late October, to nearly 4.4%?
That’s what everyone wants to know. The industry was hoping that soaring rates would trigger panic buying to lock in current rates before they go even higher. But the opposite seems to be happening.
It takes months between looking at a home and closing the sale. The home sales data reported so far covered home sales that had been negotiated before the rates jumped. But more immediate data, such as home viewings, writing offers, and pending home sales, do not look promising.
First, DO NOT PANIC!
There are so many variables and we do not know what changes the incoming administration could make that will help the housing market.
Besides, mortgage rates are STILL low. How long that remains true is hard to say…
Yet another settlement:
United Shore Financial Services has agreed to pay the United States $48 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements.
As much as I hate to sound like a broken record, this stuff will continue as long as the bank and financial company execs do not go to jail.
The convulsions to come in 2017 are the political manifestations of much deeper forces in play. In much of the developed world, the trend of aging demographics and declining productivity is layered with technological innovation and the labor displacement that comes with it. All these forces combined will have a dramatic and enduring impact on the global economy and ultimately on the shape of the international system for decades to come.
Folks, the future is hard to predict. Stratfor goes on to talk about many different scenarios for 2017 in this must read forecast.
Stay informed and be prepared! In the words of my very wise Grandmother: “You are never more than a day away from the poor house.”
House flipping, a potent symbol of the real-estate market’s excess in the run-up to the financial crisis, is once again becoming hot, fueled by a combination of skyrocketing home prices, venture-backed startups and Wall Street cash. After nearly being felled by real-estate forays almost a decade ago, a number of banks are now arranging financing vehicles for house flippers, who aim to make a profit by buying and selling homes in a matter of months.
For the love of sweet baby Jesus, let’s not repeat the mistakes of the past!
In the week ending December 24, the advance figure for seasonally adjusted initial claims was 265,000, a decrease of 10,000 from the previous week’s unrevised level of 275,000. The 4-week moving average was 263,000, a decrease of 750 from the previous week’s unrevised average of 263,750.
There were no special factors impacting this week’s initial claims. This marks 95 consecutive weeks of initial claims below 300,000, the longest streak since 1970.
From Freddie Mac:
Despite the recent jump in mortgage rates since the election, the annual average for the 30 year fixed rate mortgage was 3.65% in 2016. This is the lowest annual average ever recorded by Freddie Mac since 1971.
- 30 year fixed rate mortgages averaged 4.32%
- This is up from last week when it averaged 4.30%
- A year ago at this time, the 30 year fixed rate mortgage averaged 4.01%
- 15 year fixed rate mortgages averaged 3.55%
- This is up from last week when it averaged 3.52%
- A year ago at this time, 15 year fixed rate mortgages averaged 3.24%
Sean Becketti, chief economist, Freddie Mac said:
On a short week following the Christmas holiday, the 10-year Treasury yield was relatively unchanged. The 30-year mortgage rate rose 2 basis points to 4.32 percent, closing the year with nine consecutive weeks of increases. As mortgage rates continue to increase, home sales and affordability will continue to be a concern for housing in 2017.
Check out the chart:
They commit the worst crimes in history, crimes which harm millions and sometimes billions of people. Do they receive the worst punishments in history? No, normally they receive no punishment at all. They’re called bankers.
It is a verdict which we see over and over when it comes to the crimes of the Big Banks, the central banks, and their minions. These felons are caught committing serious offenses, again and again, yet receive either no punishment, or at worst some token slap on the wrist.
The banking felon to escape punishment this time is IMF criminal, Christine LaGarde . LaGarde’s criminal conviction came while she was still France’s Finance Minister. It involved a $400 million government pay-out authorized by LaGarde, against the advice of several other Finance Ministry officials, to “French tycoon” Bernard Tapie. LaGarde announced she wouldn’t appeal being let off the hook for her crime. How magnanimous.
I guess this just shows the crap that bankers get away with in the U.S. happens everywhere..
If we had to guess which areas will likely experience the smallest declines in prices and recover the soonest, which markets would you bet on?
Though housing statistics such as average sales price are typically lumped into one national number, this is extremely misleading: there are two completely different housing markets in the U.S. One is hot, one is not so hot.
Just as importantly, one may stay relatively hot while the other may stagnate or decline.
But consider what happens to average sales prices when million-dollar home sales are lumped in with $100,000 home sales. The average price comes in around $500,000– a gross distortion of both markets.
Good article and points out something that I see in the Anderson area. This is why you must remember to only compare the property in question to other recently sold comparable properties.
Also, national statistics often mislead people about the realities of their local real estate market. Even local statistics can be tricky!
The SC Department of Commerce released their latest Economic Outlook and here are a few of the highlights:
The South Carolina Leading Index rose last month:
South Carolina enjoyed a 1.2 percent gain in personal income in the third quarter, putting it first among the 12 states in the Southeast region for growth during the period. The state’s personal income growth ranked 16th in the US overall for the period.
South Carolina’s total non-seasonally adjusted, nonfarm employment was 2,070,800 in November. This is 1.79% higher than one year ago.
Last month, the number of building permits issued in South Carolina for new residential construction rose 10.3%. This is up 30.4% compared to November 2015. Valuation for the permits rose 1.5% compared to the prior month, and was up 21.7% from one year ago. Foreclosure activity was also positive, having dropped off significantly both month-over-month and year-over-year.
Overall, a positive report for the economy in South Carolina!