SELLING YOUR HOME in a cooling market is stressful at best. A couple years ago, headlines screamed of bidding wars and of homes moving off the market within days. No more. Across the country, new home prices are now down slightly from one year ago. And many predict housing prices will fall farther before they're done.
So if you plan to sell your home in the near future, call a handyman to make sure everything is in working order. Then take a close look at your local real-estate market and find out what's selling, what's not and why. Finally, don't expect to get more for your house than your neighbor got a year ago. This is a different market, warns Nelson Zide, co-owner of ERA Key Realty Services in Framingham, Mass. Look at more recent sales data and price your home accordingly.
That said, can you still get a good price? You bet. Here are some more tips to help you get top dollar for your house.
Price, Price, Price
Selling a house is all about price. Ask too much, and you could get stuck with a home that languishes on the market. The longer it sits, the harder it is to unload. "The first question a buyer asks is how long the house has been on the market," says Pamela Liebman, chief executive of New York-based real-estate firm the Corcoran Group. "If it's been on a while, they ask what is wrong with the house."
Ironically, homeowners who ask more for their homes tend to get less in the end. According to Liebman, studies show that if you price your home properly it will sell faster and at a higher price than if the home was priced aggressively. "Overpricing leads to low bids," Liebman says. "Proper pricing leads to high bids."
So how do you set the right price? First, take a look at recent sales in your neighborhood. And don't forget to factor in the condition of your house. A home buyer in a more neutral market is still going to pay up for a new kitchen with Poggenpohl cabinets and a Sub-Zero Refrigerator. But if you failed to notice that Harvest Gold stoves and countertops went out of style with bell bottoms and love beads, you had better be prepared to drop your price by about as much as it would cost a new owner to renovate your relic.
Curb Appeal
First impressions are everything. The last thing you want is to turn off a potential buyer before he or she walks in the door. So make sure the house is painted, and call a landscaper to get your lawn in tip top shape. "If your grass isn't green, make it green," Liebman says. "If you have weeds, get rid of them. If the shrubs are overgrown, cut them." Even small, inexpensive potted flowers can make your home seem more inviting.
Renovations
Some renovations are worth an investment. An extra bathroom makes a home more saleable, says Jim Cory, senior editor at Remodeling Magazine. A few cans of paint and new carpeting could also provide a handsome return. An outdated eight-room home in South Philadelphia, for example, might go for roughly $130,000, says Cory. Pull the shag carpeting and wood paneling — a project that costs roughly $15,000 — and that same home could list for $180,000.
Fix Everything
Make sure everything works. Have an inspector assess everything from your water heater and furnace to your central air conditioning system. "If there are any doubts about the mechanical functions, a buyer will walk," Remodeling Magazine's Cory says.
Even minor repairs are crucial. Hire a contractor to go through your home with a fine-toothed comb. Make sure the gutters are cleaned and the tub has new grout and caulk in the joints. Every window must slide open, and kitchen cabinets should open with ease. And don't forget to paint over ugly water stains. If you don't, a potential buyer could see it as a warning sign of a larger issue.
If you're inclined to leave your home as is, prepare to drop your asking price. "I hate to say it, but price cures everything," says Era Key Realty's Zide. Historically, buyers negotiate two dollars for every dollar of reported deficiencies, according to home-inspection company HouseMaster.
Additional Tips
There's some basic advice that's worth repeating. Keep your home as clean and as pristine as possible. This means cleaning out your closets and getting rid of excess clutter and furniture. You want your home to look as spacious as possible. The Corcoran Group's Liebman even suggests fresh flowers. "Baking cookies could be a bit silly and obvious," she says.
How long will all this take? Give yourself a good six months. It takes time to plan, and then to coordinate projects with a contractor or handyman. Just know that the hassle will be worth it. With a little hard work, you can get the best price for your home in any market.
Nick Woodard
Keller William Realty Franklin,TN
www.nickwoodard.com
Showing posts with label Blog. Show all posts
Showing posts with label Blog. Show all posts
Wednesday, October 17, 2007
Sunday, September 16, 2007
INTREST RATE CUT EXPECTED
Fed Ready to Lower Rates This Week for First Time in More Than 4 Years
WASHINGTON (AP) -- For the first time in more than four years, the Federal Reserve appears ready to lower interest rates to prevent a housing meltdown and a painful credit crunch from driving the economy into a recession.
A rate cut would affect millions of borrowers, with the intention of getting them to spend and invest more, which would revitalize the economy.
In one of their most important and anxiously awaited decisions, Fed Chairman Ben Bernanke and his central bank colleagues meet Tuesday to determine their next move on interest rates. Those policymakers are widely expected to cut an important rate, now at 5.25 percent, by at least one-quarter of percentage point. Some analysts predict a bolder step, a half-point reduction.
If the Fed drops the rate, then the prime lending rate that commercial banks charge many individuals and businesses would fall by a corresponding amount. It now is at 8.25 percent.
"It's no longer a debate over whether they will ease but by how much," said Mark Zandi, chief economist at Moody's Economy.com. "The economy is soft and getting softer," and the Fed has come under economic and political pressure to act.
Should the Fed go with a quarter-point cut, analysts expect policymakers will lower the rate again in October and in December, their final meeting of the year.
Fed action would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for people to finance certain credit card debt and for homeowners to take out popular home equity lines of credit, which often are used to pay for education, home improvements or medical bills.
Also, it should help some homeowners whose adjustable-rate mortgages reset in the fall.
"Borrowers facing a rate reset Oct. 1 might see their ARM rates adjust to 6.7 percent, for example, rather than the 7.5 percent that a borrower whose loan adjusted back on July 1 experienced," said Greg McBride, senior financial analyst for Bankrate.com. "Still a big increase, but not the knockout punch it could have been," he said.
Less immediate would be relief for the country's economic health. An expected series of rate decreases could take three months to nine month before rippling through the economy and bolstering activity.
"It's like taking an antibiotic. After you take the first dose, you don't feel immediately better. But after a series of dosages accumulate, there will be a more positive effect," explained Stuart Hoffman, chief economist at PNC Financial Services Group.
Over the short term, a rate cut would provide an important psychological boost. It could make investors, businesses and others less inclined to clamp down or make drastic changes in their behavior that would hurt the economy.
Fears that the deepening housing slump and a spreading credit crisis could short-circuit the six-year-old economic expansion have shaken Wall Street over the past few months. Stocks have swung wildly, with sharp drops reflecting investors' bouts of panic.
A recent government report showing that the economy lost jobs for the first time in four years delivered a fresh jolt. The biggest fear is that individuals and businesses will cut back on spending, throwing the economy into a tailspin.
By Zandi's odds, there now is a 40 percent chance the economy will fall into a recession -- the highest probability since the last recession, in 2001. Just two months earlier, Zandi believed there was only a 12 percent chance.
So far, though, consumers have not cracked. Retail sales rose a modest 0.3 percent in August, after a 0.5 percent gain in July, the government reported Friday.
Problems have been most pronounced in housing.
But, Fed Governor Frederic Mishkin said recently, "economic activity could be affected more severely in other sectors should heightened uncertainty lead to a broader pullback in household and businesses spending." He added, "That scenario cannot, in my view, be ruled out, and I believe it poses an important downside risk to economic activity."
Analysts expect the economy will slow to a rate of about 2 percent in the current quarter, from July through September. That would be just half the rate of the three previous months. Growth in the final three months of this year could turn out even weaker. The employment climate is starting to deteriorate. Employers eliminated 4,000 jobs in August, intensifying calls by politicians and others for the Fed to cut rates. The unemployment rate, now at 4.6 percent, is expected to climb close to 5 percent by the year's end. The weakness in employment was troubling because job and wage growth have served as shock absorbers for people coping with the housing slump.
After a five-year boom, the housing market went bust more than a year ago. Higher interest rates and weaker home values clobbered homeowners, particularly "subprime" borrowers with spotty credit histories or low incomes. Foreclosures set records and late payments spiked. Lenders were forced out of business. Hedge funds and other investors in subprime-related mortgage securities took a huge financial hit.
A credit crisis ensued, spreading beyond the subprime market to more creditworthy borrowers.
"If current conditions persist in mortgage markets, the demand for homes could weaken further, with possible implications for the broader economy," Fed Governor Randall Kroszner said in a recent speech. The situation for the Fed, though, could become even more complicated. Oil prices recently surged past $80 a barrel, a record. Persistent increases could rekindle inflation worries.
Much has changed since the Fed's previous meeting on Aug. 7, when it held its key rate steady. But days later, the Fed was forced to begin pumping billions of dollars into the financial system to stem worsening credit problems and market turbulence.
Then on Aug. 17, the Fed slashed its lending rate to banks and issued a more grim assessment of the economic climate.
Bernanke repeatedly has pledged in recent weeks to "act as needed" to keep the housing and credit mess from sinking the economy. "It seemed like the Fed was behind the curve. Now it is going to bring out the big gun" on Tuesday and cut its most important rate, the federal funds rate, said Scott Anderson, economist at Wells Fargo. The last time the funds rate, which is the interest that banks charge each other, was lowered was in late June 2003. The rate is the Fed's main tool for influencing the economy.
"The cut is really needed to improve the cost and availability of credit for the average business and consumer," he said.
For information about the Nashville, Tennessee Housing Market go to www.nickwoodard.com
WASHINGTON (AP) -- For the first time in more than four years, the Federal Reserve appears ready to lower interest rates to prevent a housing meltdown and a painful credit crunch from driving the economy into a recession.
A rate cut would affect millions of borrowers, with the intention of getting them to spend and invest more, which would revitalize the economy.
In one of their most important and anxiously awaited decisions, Fed Chairman Ben Bernanke and his central bank colleagues meet Tuesday to determine their next move on interest rates. Those policymakers are widely expected to cut an important rate, now at 5.25 percent, by at least one-quarter of percentage point. Some analysts predict a bolder step, a half-point reduction.
If the Fed drops the rate, then the prime lending rate that commercial banks charge many individuals and businesses would fall by a corresponding amount. It now is at 8.25 percent.
"It's no longer a debate over whether they will ease but by how much," said Mark Zandi, chief economist at Moody's Economy.com. "The economy is soft and getting softer," and the Fed has come under economic and political pressure to act.
Should the Fed go with a quarter-point cut, analysts expect policymakers will lower the rate again in October and in December, their final meeting of the year.
Fed action would mean that borrowers who can obtain credit would see rates drop on a variety of loans. It would become less expensive for people to finance certain credit card debt and for homeowners to take out popular home equity lines of credit, which often are used to pay for education, home improvements or medical bills.
Also, it should help some homeowners whose adjustable-rate mortgages reset in the fall.
"Borrowers facing a rate reset Oct. 1 might see their ARM rates adjust to 6.7 percent, for example, rather than the 7.5 percent that a borrower whose loan adjusted back on July 1 experienced," said Greg McBride, senior financial analyst for Bankrate.com. "Still a big increase, but not the knockout punch it could have been," he said.
Less immediate would be relief for the country's economic health. An expected series of rate decreases could take three months to nine month before rippling through the economy and bolstering activity.
"It's like taking an antibiotic. After you take the first dose, you don't feel immediately better. But after a series of dosages accumulate, there will be a more positive effect," explained Stuart Hoffman, chief economist at PNC Financial Services Group.
Over the short term, a rate cut would provide an important psychological boost. It could make investors, businesses and others less inclined to clamp down or make drastic changes in their behavior that would hurt the economy.
Fears that the deepening housing slump and a spreading credit crisis could short-circuit the six-year-old economic expansion have shaken Wall Street over the past few months. Stocks have swung wildly, with sharp drops reflecting investors' bouts of panic.
A recent government report showing that the economy lost jobs for the first time in four years delivered a fresh jolt. The biggest fear is that individuals and businesses will cut back on spending, throwing the economy into a tailspin.
By Zandi's odds, there now is a 40 percent chance the economy will fall into a recession -- the highest probability since the last recession, in 2001. Just two months earlier, Zandi believed there was only a 12 percent chance.
So far, though, consumers have not cracked. Retail sales rose a modest 0.3 percent in August, after a 0.5 percent gain in July, the government reported Friday.
Problems have been most pronounced in housing.
But, Fed Governor Frederic Mishkin said recently, "economic activity could be affected more severely in other sectors should heightened uncertainty lead to a broader pullback in household and businesses spending." He added, "That scenario cannot, in my view, be ruled out, and I believe it poses an important downside risk to economic activity."
Analysts expect the economy will slow to a rate of about 2 percent in the current quarter, from July through September. That would be just half the rate of the three previous months. Growth in the final three months of this year could turn out even weaker. The employment climate is starting to deteriorate. Employers eliminated 4,000 jobs in August, intensifying calls by politicians and others for the Fed to cut rates. The unemployment rate, now at 4.6 percent, is expected to climb close to 5 percent by the year's end. The weakness in employment was troubling because job and wage growth have served as shock absorbers for people coping with the housing slump.
After a five-year boom, the housing market went bust more than a year ago. Higher interest rates and weaker home values clobbered homeowners, particularly "subprime" borrowers with spotty credit histories or low incomes. Foreclosures set records and late payments spiked. Lenders were forced out of business. Hedge funds and other investors in subprime-related mortgage securities took a huge financial hit.
A credit crisis ensued, spreading beyond the subprime market to more creditworthy borrowers.
"If current conditions persist in mortgage markets, the demand for homes could weaken further, with possible implications for the broader economy," Fed Governor Randall Kroszner said in a recent speech. The situation for the Fed, though, could become even more complicated. Oil prices recently surged past $80 a barrel, a record. Persistent increases could rekindle inflation worries.
Much has changed since the Fed's previous meeting on Aug. 7, when it held its key rate steady. But days later, the Fed was forced to begin pumping billions of dollars into the financial system to stem worsening credit problems and market turbulence.
Then on Aug. 17, the Fed slashed its lending rate to banks and issued a more grim assessment of the economic climate.
Bernanke repeatedly has pledged in recent weeks to "act as needed" to keep the housing and credit mess from sinking the economy. "It seemed like the Fed was behind the curve. Now it is going to bring out the big gun" on Tuesday and cut its most important rate, the federal funds rate, said Scott Anderson, economist at Wells Fargo. The last time the funds rate, which is the interest that banks charge each other, was lowered was in late June 2003. The rate is the Fed's main tool for influencing the economy.
"The cut is really needed to improve the cost and availability of credit for the average business and consumer," he said.
For information about the Nashville, Tennessee Housing Market go to www.nickwoodard.com
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