Wednesday, August 27, 2014

Survey Reveals Majority Of Single Homebuyers Know The Importance Of Buying

CENTURY 21 Real Estate, the iconic brand and franchisor of the world’s largest residential real estate sales organization, announced last week the results of the CENTURY 21® commissioned “Singles Homebuyer Survey.” There are some key findings in the survey. Three-quarters (75 percent) of single homeowners aged 25-50, believe being a homeowner is at least fairly important. Almost half (45 percent) of single homeowners said being a homeowner was “very important” for them.

Buyer Motivation – Single homeowners had three main factors that best described their motivation for purchasing a home. They viewed the purchase of a home as an investment in their financial future. They got tired of paying rent. They felt now is the right time to buy a home. In addition, nearly two-thirds of single homeowners (64 percent) say they overcame a roadblock in order to purchase their home.

“We are in the midst of a shift in the home-buying population,” said Rick Davidson, president and chief executive officer of Century 21 Real Estate LLC in a press release. “This survey shows that homeownership is a major life decision for singles, and that it is just as important a part of the American Dream for singles as it is for married couples.”

According to the National Association of REALTORS® (NAR), nearly one-third (32 percent) of all real estate purchases in 2013 were made by a single homebuyer. NAR also reported that one-person households rose from 17 percent in 1970 to 27 percent in 2013. Not only are people getting married at an older age than previous generations, they are more apt to live by themselves, as shown by data from the U.S. Census Bureau.

“Real change, innovation and market growth stems from understanding consumers’ drive, motivation and sentiment, and how these can shift from person to person,” added Davidson. “Knowing this, CENTURY 21 affiliated sales professionals are able to build customizable action plans that better meet the needs of today’s buyers, sellers and investors.”

Paying For The Home – According to the CENTURY 21 survey singles are finding ways to achieve homeownership even if that means making certain lifestyle sacrifices. As an example, three in five (60 percent) of single homeowners say they would dine out less to purchase a home. Over half would cut back on entertainment (54 percent) and spend less on vacations (51 percent).

There are also gender differences. Single female homeowners are more likely than single male homeowners to say they would cut down on clothes (48 percent versus 36 percent). Interestingly, one out of four (24 percent) of single buyers indicated they wouldn’t make any lifestyle sacrifices to achieve homeownership. This compares to one out of five married buyers (19 percent) who felt the same way.

Important Decision Factors – Among the most important home buying considerations for single homeowners were space and square footage (59 percent). The yard (57 percent) and proximity to work or school (47 percent) are also important factors in deciding which home to buy.

Another theme that CENTURY 21 discovered in the survey is that many single homeowners found certain aspects of the home buying process are intimidating. The most intimidating part of buying a home to a single home buyer is making an offer and negotiating a price with the seller (38 percent).  Obtaining a mortgage intimidates more than a third (36 percent) of single home buyers. Moving (31 percent), the closing (30 percent) and searching for and locating a home (25 percent) also scares single home buyers.

Surprising Decision Point – Single homeowners aged 25-35 were also more likely than those aged 36-50 to say an important consideration when looking for a home was good cell service (28 percent vs. 11 percent) and proximity to public transportation (19 percent vs. 11 percent).

Not surprisingly, single homeowners aged 25-35 are more likely than those aged 36-50 to use an online real estate website on their phone (21 percent vs. 9 percent) or used an app on a mobile phone (14 percent vs. 5 percent).

“With attracting more unique visitors than any other real estate franchise brand website, and cross-platform mobile apps, CENTURY 21 sales associates are positioned to meet the needs of these online and mobile consumers,” explained Davidson. “Simplicity and mobility are the keys, and we make the process of searching for a home clear, simple and convenient.”

Methodology – CENTURY 21 conducted this survey online within the United States between May 27 and June 13, 2014. A total of 1,462 respondents aged 25-50 participated. Of the 1,642 respondents, 675 were single homeowners. Harris Interactive conducted the survey on behalf of Century 21 Real Estate LLC. Harris weighed the figures for age, sex, race/ethnicity, education, region and household income where necessary to bring them into line with their actual proportions in the population. They used propensity score weighting to adjust for respondents’ propensity to be online.

Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Tuesday, August 26, 2014

Casual Versus Serious Home Buyers

Real estate professionals have a very easy time identifying a serious home buyer with a real intent to purchase a house versus someone who is only “looking” or “window shopping.” A serious buyer has a mortgage pre-approval letter. One that “wants to find the house I like and then get pre-approved” is a casual buyer. The second type of buyer wastes everyone’s time, including their time. Let’s examine some common misconceptions about the pre-approval process.

Why Is Home Buying Different Than Buying Other Things – Actually mortgage pre-approval is no different than buying any other good or service. It just seems different. How many times have you walked into a shoe store? Probably plenty of times. That makes this a good example. You have experience buying shoes.

Suppose you have no money in your wallet. Sure you can look at the different styles of shoes. That is where it stops. How many times did you take off your shoes try on a new pair of shoes? Probably never. How many times would you try on different styles of shoes without any money to buy any pair of shoes? Probably never. Why?

Because you’d be wasting your time trying on shoes that you cannot buy. What does a person actually do when they try on shoes? They are giving it much closer scrutiny than just a casual looker with no intent to buy. Why? Because they are going to exchange something of value (money) for something of equal or greater value (shoes).

Isn’t pre-approval the same thing? Let’s stay in the shoe store, but now you suddenly found some hidden money.

Do you try on the shoes and walk around to see if they fit? Sure! Are you obligated to buy shoes there? Of course not. You may want to look in a different store before making a final selection.

The money you found is your pre-approval to buy shoes. We just never think of it that way. All the money in your wallet really does is separates a casual looker from a serious buyer. You have assurance you can buy a pair of shoes.

What Pre-Approval Is Not – Mortgage pre-approval is not a formal and legally binding loan application. If it were, the lender would need the actual street address, the actual purchase price, the anticipated final purchase date, the type of mortgage, any terms of the sale and so forth. There is something else a lender needs – and at this point the buyer does not have it. The lender needs the seller’s signature on a contract stipulating all the items in the previous sentence That’s the formal loan or mortgage application.

Pre-approval is just a written commitment that is valid for a specific period of time. That commitment states the lender examined certain financial records the borrower provided. Based on those records the financial institution promised to lend a certain amount of money, when the time is right.  Here is why that is important.

Importance Of Pre-Approval – Pre-approval shortens the time it takes to buy a house. Let’s use this example.

Suppose there is a nice looking house with a “for sale” sign in the front yard. The seller wants $175,000 for it. The buyer fell in love with it. The buyer went to a bank. The bank will loan only $125,000 to the borrower based on financial information and did not know the address of the $175.000 house. Clearly this $175,000 is unaffordable to this buyer/borrower.  The buyer must now look for a less expensive house knowing that the features in the house priced below $125,000 are inferior to the house costing $50,000 more. This buyer just wasted his time and the time of the seller.

Advantage of Pre-Approval – Pretend for a moment that you are the seller. You have two purchase offers in your hand. They are basically identical except that one has a pre-approval letter and one does not. Which will the seller likely accept? The one with the pre-approval letter is a stronger offer because the seller knows this is a serious buyer with the financial ability to buy the house.

Let’s change the example slightly. You have two purchase offers in your hand. They are basically identical except that one has a pre-approval letter but also states purchase price is $10,000 less than the list price. The one without the pre-approval letter is for the full list price. Which will the seller likely accept?

Why should a seller negotiate with a person that might not have the financial ability to buy the house? In this example, the seller will probably negotiate with the pre-approved buyer, even though it is for less than the seller wants.

Suppose the seller and buyer agreed to split the price difference. The buyer came up $5000 and the seller went down $5000.  Why should a seller reveal his true bottom line to a buyer that can’t afford the house anyway? Why should a seller risk losing a pre-approved buyer who might purchase a competing listing just to please a casual buyer?

Andy Kalinowski is a REALTOR, an Accredited Buyer’s Representative®, a Short Sales and  Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Monday, August 25, 2014

Rural Development Mortgage Gets Tougher To Obtain

One of the two mortgages that require no money down from the buyer is now a bit tougher to obtain. That is because the US Department of Agriculture, who administers the Rural Development Mortgage changed their loan guidelines to make it more difficult to get 100 percent financing. Let’s to the rationale and also the changes.

Rationale – Like all loans, many existing borrowers who obtained a Rural Development mortgage ended in foreclosure. No one buys a house thinking foreclosure will happen to them. Foreclosure happens to someone else. That is just not the case. Factors change with regard to employment, salary, marital status and so forth to everyone. No one is immune.

If a mortgage borrower stops making a mortgage payment, the lender has no alternative. They must foreclose. The lender does not really want the house. It’s really a liability in their financial portfolio. The house should be making money based on the loan interest. It no longer is because the borrower stopped making payments that include repaying the debt and also the interest on the unpaid debt.

Identifying Common Traits – Before USDA announced the change, the reviewed every recent loan. Every loan means the good ones. It means those that got behind on their payments. It means those that ended in foreclosure.

A trend does not necessarily mean that a borrower will or will not go into foreclosure. It does forecast the likelihood that a borrower with certain financial characteristics or financial patterns has a certain percent chance of honoring his entire loan or breaking the repayment promise. What are those traits?

Changes To Future RD Loans – A borrower needs a solid credit history that is actually theirs versus someone else’s. Let’s explain that sentence.

Getting a credit card and repaying the monthly debt is a great way to establish good credit. That is exactly what borrowers want. Here is what they don’t want.

A parent adds an adult child to an existing credit card account as an authorized signature or as a co-signer. In the eyes of USDA this is no longer an acceptable form of credit if the child wants to buy a house with a Rural Development Mortgage. Why?

Its mom or dad’s credit history being evaluated, not the younger borrower. If that younger person cannot get his own credit card and also demonstrate a pattern of prompt debt repayment, why should USDA risk making a 100 percent purchase price loan probably worth six digits of money?

There is more. USDA instructed underwriters to evaluate a minimum of 12 months repayment history. The instructions also stated that it is no longer acceptable to include “closed” accounts into the lending decision-making equation.

USDA instructed underwriting to “ensure open authorized user trade lines reported on the credit report are an accurate reflection of the applicant’s independent approach to credit repayment and credit history.”

If underwriting must remove a portion of credit history from the loan application, there is a cost. The cost of reevaluation is time. That cost might severely impact others. A buyer planning to close at the expiration of a lease might have a problem with a landlord.

Also remember the forgotten person who has a keen interest to close. It’s the seller. Most sellers are not rich. They have to sell in order to buy something else. The delay in this closing can have a ripple effect of multiple other closings.

Minimum Credit Score – It becomes easier to qualify for a Rural Development mortgage the higher the credit score.  At the present time, 640 is the minimum credit score required. That does not mean a borrower with a 640 credit score has the right to a Rural Development mortgage. The 640 is the minimum threshold. It is possible that someone with a 650 or even a 660 may not qualify for a Rural Development mortgage. Why? Underwriters look at other factors such as the debt to income ratio, length of employment and amount of savings before making a decision.

Immediate Impact – Expect local mortgage originators to give even greater scrutiny on USDA loans in the future. Remember, this is nothing personal. It is business. There is another advantage to working with a local mortgage lender. They know of other mortgage options that require an extremely small down payment. One of these options is available only to local lenders, rather than out-of-state lenders but licensed in Mississippi.
Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of REALTORS®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Friday, August 22, 2014

The Return On An Old Friend

Summer is almost over. Next weekend is Labor Day. That means there are only a few activities in Columbus, Mississippi this weekend. Let’s see what is on tap.

There is a huge social occasion locally each Friday night. If’s high school football. The season actually kicked off last night with two local teams meeting each other in a rare public school versus private school game. The Heritage Academy Patriots visited the Caledonia Confederates. The Feds came from behind to win 32-26.

Tonight the Montgomery County Hornets of Kilmichael visit the West Lowndes Panthers.  The Columbus Christian Academy Rams travel to Marks, Mississippi for their season opener with the Delta Academy Raiders. The Hebron Christian Eagles come to New Hope for the season opener with the Victory Christian Academy Eagles. The Columbus High School Falcons and the New Hope High School Trojans take the week off.

Here is something to get the blood pumping early Saturday. The Wicks Community 4-H Club hosts a 5K walk and health fair on Wicks Road, which is off Gilmer-Wilburn Road in the southern part of Lowndes County. Walk pre-registration begins bright and early at 6:00 a.m. The walk starts an hour later with the health fair following the walk. Vendors will provide everything from blood testing, diabetes education, sight screening and many other health related issues.

Need some fresh vegetables? There is only one place to shop. Visit the Hitching Lot Farmers’ Market on the corner of Second Avenue North and 2nd Street. Local farmers sell the freshest tomatoes, peppers, squash, radishes, eggs, honey, fresh cut flowers, blackberries, blueberries, peaches and watermelons around. Plus there are baked goods and arts and crafts vendors.

The Coffee House on 5th Street donates the coffee each Saturday morning for market shoppers. There is also a juice bar with watermelon and apple juice, peach and carrot juice, kale, pineapple and cucumber juice or apple, carrot and ginger juice.

While talking to the farmers and meeting your friends there, enjoy the music of Aidan Dunkelburg. The market opens at 7:00 a.m. Saturday and is also open Monday after work and Thursday before work.

It’s time for the annual Southern Cruisers car show at the Stennis Lock and Dam on Wilkens-Wise Road off US-45 North all day on Saturday. Stop by and join the 24th annual pride and joy cruise. The show features King of the Hill Gravity Slow Drag Races, commode races, poker walk, concessions and more. Proceeds benefit area charities.

Columbus Speedway hosts the Mississippi State Championship Challenge Series (MSCCS) with Super Late Models battling for $3,000-to-win/$400-to-start.

In addition there is added bonus money for the top three highest combined point finishers from Friday night's races at the North Alabama Speedway and Saturday night's Columbus Speedway event. The bonus money pays $500 for 1st, $300 for 2nd and $200 for 3rd.

The 602 Late Models, Street Stocks, Limited Late Model, and Mini Stocks are also competing at the Baddest Bullring in the South. The drivers meeting starts 7:00 with hot laps an hour later about two miles north of US-82 near the Alabama state line.

Anyone have a real estate need this weekend? Please make a private preview appointment least 24-hours in advance. Your REALTOR® knows how to do that.
Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Thursday, August 21, 2014

How to Use a Programmable Thermostat to See Real Savings

A programmable thermostat can help you rake in the energy savings, but there’s a hitch: You’ve got to pick one you’ll actually use.

It’s official: The programmable thermostat is the VCR of our day. Why? We think they’re too complicated.

According to a study by the Lawrence Berkeley National Lab, nearly 90% of Americans say they’ve rarely (or never) programmed their thermostat because they’re not sure how to do it.

But it’s really not that hard, and it’s definitely worth doing because it can save you up to 15% a year on energy costs.

The first step is to pick the thermostat that best suits your scheduling needs so you can “set it and forget it,” an approach the U.S. Energy Department advocates to get the most savings.

Picking the Right ThermostatThere are four types of programmable thermostats, each with a distinctive scheduling style:

 – 7-day programming. Best for individuals or families with erratic schedules, since this is the most flexible option. It lets you program a different heating/cooling schedule for each day of the week.  Average price range: $55-$125.

 – 5-1-1 programming. One heating/cooling schedule for the week, plus you can schedule a different heating/cooling plan for Saturday and Sunday. Average price range: $35-$78.

 – 5-2 programming. Same as 5-1-1 programming, except Saturday and Sunday will have the same heating/cooling plan. Average price range: $28-$30.

 – 1-week programming. You can only set one heating/cooling plan that will be repeated daily for the entire week. Average price range: $20-$23.

You’ll need a program for both the cooler months and the warmer months.

TIP: Before buying a programmable thermostat, identify the type of equipment used to heat and cool your home so you can check for compatibility. For example, do you have central heating and cooling, or just a furnace or baseboard heating? Otherwise, you may not reap the rewards of energy savings and may risk harming your heating and cooling equipment.

Need to convince someone to program the thermostat for savings? Here’s how to convince the doubtful about energy efficiency.

Programming the ThermostatMost programmable thermostats have a pre-programmed setting that’s supposed to be for the typical American family. But what family is typical these days? You need to adjust the thermostat’s settings so it’s in sync with the life you and your family lead instead of some mythical family.

Programming options are based on:
 – Wake Time
 – Sleep Time
 – Leave Time
 – Return Time

The U.S Department of Energy suggests the following settings in order to shave up to 15% off your energy bill:

Winter months
 – For the hours you’re home and awake, program the temp to 68°F.
 – Lower by 10° to 15° for the hours you’re asleep or out of the house.

Summer months
 – For the hours you’re home, program air conditioning to 78°F.
 – For the days you don’t need cooling, manually shut off the AC. Keep in mind, it will kick back on if the house gets too warm.
 – Program the AC to shut off during the hours you’re out of the house.

Here are a few programming timing tips that can help you create the best set-it-and-forget-it heating and cooling schedule for your home:
 – Shut down heat or air conditioning 20 to 30 minutes before you leave home each day.
 – Turn on heat or air conditioning 20 to 30 minutes before you come home each day.
 – Reduce the heating or cooling 60 minutes before you go to sleep each night.
 – Increase heating or cooling about 30 minutes before you wake up each morning.

Spend time tweaking your program for a few days to make sure it feels right.
TIP: With a Wi-Fi-enabled thermostat, you can control your home’s temperature while on the go. That way, you’re not wasting energy if you’re running late or forgot to create a new program before going on vacation.

FYI: A furnace does NOT have to work harder to warm a house after the temperature has been set low during the day.

Thermostats That Make Programming EasierWant something that’s simpler? Newer more high-tech models have simplified the process:

The Nest Learning Thermostat: It creates a custom heating and cooling schedule for your home based on motion detection technology. Plus since it is Wi-Fi, it can be controlled remotely. Price: $250.

Honeywell Wi-Fi Smart Thermostat: This device makes it easy to create a custom heating and cooling plan. Unlike conventional programmable thermostats, it has a large color interface that displays a simple menu that walks you through all the programming steps. It also “learns” your home and will send you personal notifications if the temperature is not right, or if there’s a power outage. Price: $199.

FYI: Thermostats made prior to 2001 may contain mercury. To see if your programmable thermostat contains mercury, check with the manufacturer. If you decide to dispose of a thermostat that contains mercury, check out how to do so safely in your area at Thermostat Recycling Corporation. (Not sure why mercury is so bad? Here’s the skinny: It’s toxic and it never breaks down. When it enters the waste stream, it permanently damages the ecosystem.)


Have questions or need help programming your thermostat? Below are tech support numbers for popular manufacturers:

Honeywell: Wi-Fi Models: 1-855-733-5465
Honeywell: All other thermostats: 1-800-468-1502
Hunter: 1-888-830-1326
White Rodgers: 1-800-284-2925
Trane: 1-877-288-7707
Deirdre Sullivan wrote this copyrighted article that appeared on National Association of Realtors® web site and is used with permission. She is an NYC-based writer who’s obsessed with maximizing every inch of her urban dwelling. She’s a former fashionista who has worked for Lucky Magazine and InStyle. She recently traded her high heels and Fashion Week pass for a drill and bandsaw. Follow Deirdre on Google+.

Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Wednesday, August 20, 2014

Keys To Selling Your House

There are some common milestones that a serious real estate seller has. Let’s take a quick look at those goals to get a house sold quickly.

First Impression – The first impression starts at the curb. Realize that all the information in the world does not match the 10-15 seconds it takes for a buyer to drive slowly by the house. They want to see what the house looks like and make some general impressions of the neighborhood.  It is difficult to impossible for a seller to get a buyer inside the house if the outward appearance of the house and neighborhood are less than appealing.

Second Impression – Most buyers want to purchase a move-in ready house. They do not want to buy a house requiring any type of maintenance project, unless the seller prices the house well below market value.

A seller can make the house more attractive to the buyer by addressing all the maintenance issues. This includes painting. Unless the seller does not use neutral colors, most buyers will take exactly what they see.  They are not going to quibble because the paint is one shade too light or too dark.

Here is what buyers do spot – inferior or substandard workmanship. If the house needs a coat of paint, splurge. Buy some masking tape to give the house a professional appearance and eliminate stray painting accidents.

Staging Is Important – Remove all excess furniture, and pictures. The buyer is purchasing a house not the personal belongings. How can a buyer see the beauty of the house if family pictures cover the wall? A house crowded with too much furniture appears smaller. Why would anyone want to buy a house that looks smaller than it really is?

Start the moving process by thinning out as many personal possessions as necessary. Consider renting a temporary storage unit for the excess personal property.

Staging is a long and tough process. Spend half a day on one room. Then pick up the staging process the next day in another room.  Seeing the progress provides positive energy and motivation to continue the job until completion.

Great Photographs – In today’s real estate market, nearly nine of ten buyers find a house on the internet before they pick up a phone and call a real estate agent or a seller. The days of having a single snapshot for a listing are over. That went out with the rotary phone.

Take photos of each room at different angles. The goal is to have the ceiling and floor in the same picture. Capture room features such as countertops, cabinets, lighting and so forth. Watch the angles of light. Too much or too little much light tend to hide the very features that justify the price.  Stand at a slightly different angle, adjust the blinds or even retake the photo at a different time of day, if necessary to get a perfect picture.

Do not have people or pets in the marketing photo. Keep the toilet seat down. Have clean countertops and refrigerator doors. Turn the television off.  Make the photographs reflect the project goal. The goal is selling a very valuable capital asset. The goal is to sell a house probably worth six digits of money.

Communicate The Value – Sellers must recognize that a buyer considers many houses. What differentiates one house from another? Be able to communicate the positive features in your house so that a buyer remembers them. Will they remember the new roof? How do they recall the new air conditioning unit? What about the dates of upgrade and modernization projects? Most sellers want some form of compensation for those expenses.

Being able to clearly articulate the features in an understandable way makes it easy for a buyer to see and remember those during the preview stage. Writing down those features for a brochure ensures the buyer has it available when they get to the deliberation phase. That brochure might also come in handy during contract negotiations.

Find A Great Listing Agent – The listing agent really has only two jobs. The first is to market the house so the buyer finds it. That means using descriptive words that motivate someone to act. That means placing it on various internet real estate portals. That means making sure other agents know about the features in the house.

The listing agent also has the job of representing the seller’s best interest in every phase of the transaction. There are some REALTORS® that work well with sellers, while others work very well with buyers.

Take time to interview listing agents. Ask about their marketing plan. What is their experience in listing houses at that price point? What type of price do they think will attract a buyer? How long do they think it will take to find a buyer? What type of follow up do they do with buyers that have previewed the house? What type of status reports does the seller get? Those are the logical questions to ask a listing agent.

Aren’t those questions just as important as asking about a brokerage fee? Finding out how the agent will find the buyer naturally leads to the compensation discussion.
Andy Kalinowski is a REALTOR®, an Accredited Buyer’s Representative®, a Short Sales and Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.

Tuesday, August 19, 2014

Considering Selling In The FSBO Market?

When a property owner wants to sell his house, the first decision they make is whether to go it alone or hire a real estate professional. Some sellers try to tie in two transactions together. They need to sell their present house at the fair market value but also have enough of the net proceeds remaining for their new home. The only corner they seemingly try to cut is listing a house with an agent. Money is an important factor but not the only factor.

Time – Most property owners, whether it is a For Sale By Owner seller or a seller that hires a listing agent have very little experience in the amount of time it takes to conduct a real estate transaction. There is a reason. To a seller, there is only one house on the market.

Most property owners fail to prepare an effective marketing phase. A market plan is more than sticking a sign in the front yard or putting an ad on a web site.

Price – Sellers often fail to justify the rationale for the price.  It’s not enough to just say, “My house is worth this much. Take it or leave it.” A seller might have a $10,000 investment in his back yard called an in-ground swimming pool. A buyer may see that as a liability. It is the buyer that makes a decision on the value an in-ground pool brings.

Highlight all the features and upgrades that support the price. At the same time realize some improvements can become counterproductive. As an example installing pull out kitchen cabinet draws in a house priced under $125,000.  Perhaps it’s adding a 400 square foot bonus room to a 1200 square foot house in a neighborhood with only 1200 square foot houses. Don’t expect a buyer to pay for a seller mistake.

Advertising – More than nine of ten homebuyers find a house on the internet. Then they drive by the house. Then they pick up a phone and call a REALTOR®. Marketing is extremely important. Knowing what to say in a real estate ad and what to highlight is more of an art than a science.

Here is a tip for any FSBO seller considering advertising on any FSBO web site. Before taking out an ad, look at every existing ad. Drive by each house. Here is what you will see in the front yard of more than half of the listings.  Nothing!

There may not be FSBO sign. There may be a real estate company sign. But in less than half the ads, there will be a FSBO sign. Less than a 50 percent accuracy rate turns a lot of buyers off. That is why buyers turn to a real estate professional.

One Time Showing – Some FSBO sellers are willing to work with a real estate agent providing the agent brings the buyer to the house. Remember the agency relationship.

A one-time showing contact does not give the seller client privileges. The buyer’s agent works in his client’s best interest. So who is the client of the buyer’s agent? It’s the buyer. A buyer’s agent will paint a picture that is favorable to the buyer – not the seller. The picture must only be fair to the seller but not necessarily in his favor.

Legal Terms – A seller pre-occupied with price often overlooks the terms of a sale. Let’s quickly discuss a few.

A wise buyer may insist on hiring a home inspector. A wise buyer may insist that the seller repair certain deficiencies identified by the home inspector. Most FSBO sellers fail to factor in this cost.

A wise buyer may insist on a one year home warranty. This is nothing more than a seller standing behind his product. Yet many sellers overlook this cost.

Some buyers want the seller to “sweeten” the deal. Those are normally seller concessions that can be up to five percent of the purchase price.

Most closings where the buyer pays for everything, does not mean the buyer literally pays for everything. There are some seller financial obligations such as paying for a termite inspection or preparing the deed.

What happens if one party or the other breaches the contract? What constitutes a breach for the buyer? What constitutes a breach for the seller? The simple answer to each of these questions is the same. Those are the written terms of the contract.

Selling a house is not as simple as sticking a sign in the yard. Simple mistakes are mistakes. Mistakes cost money.

Andy Kalinowski is a REALTOR, an Accredited Buyer’s Representative®, a Short Sales and  Foreclosure Resource® and a Military Relocation Professional with CENTURY 21 Doris Hardy and Associates, LLC in Columbus, Mississippi. He has a Mississippi Real Estate license. Andy is also a member of the National Association of Realtors®. Contact him by cell (or text) phone – 662.549.3421 or by e-mail –  He is also available for web video chat.