11 HOME FEATURES BUYERS WILL PAY EXTRA FOR

8. Stainless steel appliances

Percentage of home buyers willing to pay more: 41%

Amount willing to pay extra: $1,850

Like most features, stainless steel appliances are most important to people between the ages of 35 to 54, with 23% considering them to be a “very important” investment, compared with just 16% of those under the age of 35 and a mere 11% of those over the age of 55. From a cost perspective, stainless steel appliances are not necessarily the best investment. Stainless steel wears out far easier than most other common materials. Also, the children in the house can also get their fingerprints on the appliances, requiring more cleaning. However, people are primarily driven to buy stainless steel appliances because they look more attractive.

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11 HOME FEATURES BUYERS WILL PAY EXTRA FOR

9.  Home  less  than  5  years  old

>  Percentage  of  home  buyers  willing  to  pay  more:  40%

>  Amount  willing  to  pay  extra:  $5,020

Some  people  simply  want  a  newer  home.  For  those  willing  to  pay  more  for  a  newer  home,  the  median  that  people  would  dole  out  was  more  than $5,000.  Although  this  is  a  lot  of  money  compared  to  most  features,  that  money  could  be  a  wise  investment  in  the  long  run.  Maintenance  costs  are considerably  less  in  newer  homes  compared  to  older  homes.  Newer  homes  tend  to  be  much  more  efficient, attracting  people  who  are  environmentally  conscious.

11 HOME FEATURES BUYERS WILL PAY EXTRA FOR

10.  Eat-­in  kitchen

>  Percentage  of  home  buyers  willing  to  pay  more:  40%

>  Amount  willing  to  pay  extra:  $1,770

The  people  most  interested  in  an  eat-­in  kitchen  tend  to  be  in  the  35-­to-­54  age  range,  with  30%  of  those  prospective  home  buyers  indicating  this  is “very  important”  in  a  house.  Meanwhile,  just  21%  of  those  under  35  years  of  age  and  20%  over  55  feel  the  same  way.  More  people,  especially  those who  are  raising  families,  want  kitchens  that  look  into  family  entertainment  rooms.  Some  have  even  made  it  a  family  hangout  by  placing  big-­screen  TVs and  other  electronics  in  the  kitchen.  Buyers  who  are  in  families  want  to  be  in  one  space  and  do  it  all.

11 HOME FEATURES BUYERS WILL PAY EXTRA FOR

11.  One  or  more  fireplaces

>  Percentage  of  home  buyers  willing  to  pay  more:  40%
>  Amount  willing  to  pay  extra:  $1,400

Some  40%  of  home  buyers  without  a  fireplace  said  they  would  spend  additional  money  for  at  least  one  and  cough  up  an  extra  $1,400.  The  fireplace, while  always  popular,  was  less  necessary  when  several  TVs  were  going  in  the  house  all  at  once. Having  a home  with  fireplaces  may  become  more  popular  in  the  future  as  people  spend  less  time  watching  TV  and  more  time  on  tablets  and  e-­readers.  These people  may  find  the  fireplace  a  good  place  to  cozy  up  and  use  their  devices.

Mortgage Lending Standards Too Tight, Bernanke Says

I posted this on July 14th, 2011.

Bernanke says home price stabilization necessary to wo buyers

In my humble opinion the problem is with the lending “establishment”. They are stingy with loans and very slow in their approving of short sales.

And they created this fiasco in the first place.

In over 30 years in Real Estate I have never seen anything like this. Additinally there isjust too much inventory to stabilize anything.

Come on lenders; get real already!!

I am posting this today, November 19th, 2012; seems as though nothing’s changed except inventory; in SOME markets it is low and in others still high.

Mortgage Lending Standards Too Tight, Bernanke Says

Mortgage lending standards are preventing responsible would-be homeowners from purchasing homes, said Federal Reserve Chairman Ben Bernanke last Thursday.

Bernanke said that while tighter standards were appropriate after the financial collapse, “at this point the pendulum has swung too far the other way, and that overly tight lending standards may now prevent creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”

While Bernanke said the housing market has made recent strides, he was cautious to add, “The housing sector is far from being out of the woods.”

Short Sale Listing Prices are Irrelevant in Today’s Market

As we all know, or should know, is that the banks will always counter the offer that is sent to them on a short sale. The initial selection of the winning offer (in California anyway) is done by the seller with or without the listing agent’s blessings. Sure, some sellers will actually listen to their agent’s recommendations during this very difficult period, however many don’t. So the decision is up to the seller to choose, and is based on their lack of knowledge of the short sale system and their difficult current emotional state.

The listing agent also plays a role in this pricing game. I have found in almost every short sale listing that the price isn’t even close the the final offer submitted to the bank. They are priced as “loss leaders” and are only meant to mislead the public into making an offer on the home they have listed. And while there is nothing illegal (unfortunately) about doing this is certainly raises questions of ethics.

A couple of examples: 1. Listing price $204,000; listing agent’s full knowledge that the bank had approved a price of $250,000. 2. Listing price of $170,000, reduced to $150,000, and then the bank countered, interestingly enough, at $170,000. In this case the buyer paid $155,000 for the home. My client had offered $157,500 and didn’t get the home. 3. Listing price of $175,000 bringing in 14 offers. Final winning offer seems to have been $225,000!! Two days after the winning offer was selected the priced in the MLS was raised to, you guessed it, $225,000. That is over a 25% increase. When I emailed the listing agent and asked why the price was raised to $225,000 she said it was because that was the value of the home.

If that was the value of the home why wasn’t it listed at that value initially? Simply and unethically to bring as many offers as possible. Of course the bank will counter and this may close at a price over $225,000. We’ll see.

Finally if you buyer is bringing an FHA loan your offer will be at the bottom of the list. Agents and sellers are not well enough informed to understand that and FHA loan, like any other, will turn into cash well before the short sale is finally approved by the bank. But they are concerned that the FHA appraisal will require repairs. They might. They might not. But the buyer can, if they choose to, put 150% of the cost of repairs into escrow to cover those repairs and do those repairs after the COE. They have a set time period and have to put 150% of the estimate into that escrow account. It’s called a “hold back” and it’s done all the time when agents are knowledgeable and work with their lenders.

A recent short sale listing had 6 holes in the ceiling for the seller’s surround sound system. He removed them and their covers. The seller and the agent were worried that they would have to be fixed before closing. However the buyer would have happily replaced the speakers and the covers after closing, had the inspector come out, approve the work, and the buyer would have received their refund. Simple. 

I think I want to be a short sale listing agent. I like my buyers but the agents on the other side seem to be ill prepared for the short sale process and make it almost impossible to have the winning offer. Even when its $18,500 over the asking price of $175,000!

Sad reality in today’s market.

Listing Prices Become Irrelevant

Having shown many properties to prospective buyers one thing has become very apparent.

Listing prices have little to do with the actual selling prices especially on short sales or foreclosures. Here’s the problem.

The listing price is set by the agent and the owner. Often that price is simply “made up” and is a “loss leader”. The banks then enter the picture and their approved price may be 10% higher or even more.

Recently my client’s had a back up offer in place on a condo listed at $215,000. The banks counter was $240,000 or more. Not even close to the listed price.

This only hurts the consumer and continues to reinforce the “Realtors can’t be trusted” perception.

One bank is now offering a pre-approval on short sales by setting the price before any offers come in. We’ll see how that plays out.

For now it’s business as (un)usual in the real estate business.