For Sale By Owner – A $65,000 Mistake!?

Recently overheard at the next table in a restaurant:

“We’re thinking about selling the house ourselves. We worked with a Realtor to buy the house, but I think we can save a few bucks putting it on the market on our own. Every little bit helps, right?” 

To be fair, I overheard just a snippet of this conversation, so maybe there is more to the story. As a licensed Realtor, of course I believe all buyers and sellers should seek professional representation for their Real Estate transactions. The buying and selling of property is a binding legal transaction. I wouldn’t recommend that you show up to court without a lawyer, nor would I recommend selling a home without a Realtor. In regard to the purchase or sale of property, there is more at risk than dollars, and it pays to have someone on your side who can make sense of the legalities of the transaction. 

According to 2011 NAR {the National Association of Realtors} statistics, FSBO’s accounted for 10% of all home sales. While the average home sold {with Realtor assistance} for $215,000 in 2011, the average home sold by the homeowner sold for just $150,000. Ouch! These statistics put a different spin on the situation, that’s for sure. 

If a potential $65k loss still doesn’t sell you on the need for Real Estate representation, call me or drop a line. I’d love to chat about your personal Real Estate purchase or sale, whether or not you choose to work with me. I might just have a few useful tidbits to share in terms of your Real Estate goals. 

Jack Meyers

jackestate@aol.com

303.263.3050

Twitter: @jackestate

The Direction Things are Headed

“The great thing in the world is not so much where we stand,                           as in what direction we are moving.”

~ Oliver Wendell Holmes

 

My work as a licensed Realtor keeps me immersed in Denver area Real Estate day in and day out, and my handy dandy market thermometer is telling me there is something to the recent rising temperature of in our local Real Estate market.

As autumn approaches and we begin to feel a chill in the air, local Real Estate sales will likely slow a bit. Don’t let this likely shift in the market scare you away. Seasonal changes are to be expected, including a decline in sales month over month as the leaves begin to turn. The important statistics to follow are year over year, and in this sense Denver area Real Estate statistics have improved measurably over 2011.

Call me to learn more about the market in your area,

Jack Meyers

jackestate@aol.com

303.263.3050

Twitter: @jackestate

How do you know what you should spend on your Residential Real Estate Purchase?

Back in May, New York City reached a Real Estate milestone when its first million dollar parking spot was listed for sale. {http://n.pr/KCS79K}  The 12 by 23 foot space in lower Manhattan’s East Village comes with its own deed and maintenance fees just like the luxury condo it’s attached to. The New York Post calculates the investment this way: It’s the same as paying $115 parking ticket every day for the next 24 years.
As an active member of the Real Estate profession in the real world, I may not be the go to guy for your next million dollar parking purchase, but I can definitely share some resources with you in terms of how much house you should plan for and how to decide what you can afford. *I offer my opinion with this caveat: while I am experienced in the Real Estate industry, I am not a financial adviser nor a mortgage expert. Consult a licensed mortgage/lending professional before making financial decisions in terms of a home purchase. You can check out your lender’s licensing status here: http://bit.ly/NbBo07
  • Know your debt to income ratio. Most lenders will allow up to 36% debt to income ratio in order to qualify you for a home mortgage. Do the math. Simple math tells us that if your household income is 100,000/year, you may have outstanding debt of up to $36k in order for a mortgage lender to qualify you for a loan. Determine your gross annual income and multiply this number by .36 – the result will be the total of how much debt a lender will allow.
  • Lenders will likely calculate your maximum allowable monthly loan payment based on 28% of your gross monthly income. Let’s do some simple math again. At a total household income of $100k, you’d be grossing $8333.33 per month. Multiply by .28 for an estimated allowable monthly mortgage payment of $2333.33. This number is what the mortgage industry says you can afford as a maximum monthly payment. What matters is what your household is comfortable paying, but the 28% will give you a starting point for discussion.
  • Understand PITI: Principle Interest Taxes Insurance. Your actual monthly payment will consist of payment toward the principle, interest, property taxes, and home owners insurance. The 5th possible factor in this equation is PMI, or private mortgage insurance. If you are able to put a 20% or more down payment into the purchase of your home, you will forego this additional cost. If you finance 100% of your home purchase, or put less than 20% down, PMI will contribute $50-80 per month (on average) to your monthly payment. Nationally, average annual property taxes are $3500 and average annual homeowners insurance run about $481. Each of the previous two numbers divided by 12 will tell you how much taxes and homeowners insurance will add to your total monthly payment.
  • One of the best pieces of advice I can share is to meet with a lender before you begin the home search process. When friends call to begin their home search, the first question I ask is, “have you been prequalified for a home purchase by a licensed mortgage pro?” This is one are in which the cart definitely needs to follow the horse.

Call me – let’s chat about your Real Estate needs. I can refer you to several licensed, experienced mortgage professionals, and as always I am happy to assist with all of your Real Estate buying and selling needs.

Happy to be at your service,

Jack Meyers

jackestate@aol.com

303.263.3050

Twitter: @jackestate