questions about real estate

[Gibson486]

1. Listing realtor....how does this work? I mean, you hire a realtor to sell your house, it gets an MLS number. If a different realtor sells it, does the listing agent not get the commision anymore? If so, why does it matter who you hire?

2. What's with the media saying prices are going up? I am loooking for a condo/townhouse and all I see is "price reduced". Are they trying to artificially stabalize the market? Heck, even Boston prices are falling now (although, still pricey).

3. What with owners reducing the price by $1k? Really, do they think $1k will make a difference?

4. Who usually pays closing costs?

 

[TheKub]

1. Sellers and buyers realtor split the commision. Seller realtor may offer a higher split to the buyer realtor to get more realtors to look at it.

2. Some areas are showing improvement (even if its just Bobstown IA).

3. By droping it 1k they get that eye catching price reduced badge

4. Usually buyer but can be negotiated if the seller is really motivated.

<- Not a home owner.

 

[mshan]

California may have bottomed: http://realestateconsulting.co...tter=Local/local200905


Rest of country (probably not till next summer):

"Several months ago, we told our clients we thought we were entering a "W" shaped recovery, with the "first leg up" in the W driven by four things:

Tremendous affordability for those who are currently paying rent,

The $8,000 federal tax credit, which is currently set to expire on 11/30/09,

Government-backed FHA, USDA, Freddie Mac and Fannie Mae lending programs that offer far more aggressive loans than a bank would make, and

Positive media reports about rising median home prices, which are primarily driven by a location mix shift away from the poorer areas of town, but also driven by price stability at the lower end of the market.

Since then, sales volumes and pricing have stabilized in many areas. Our monthly survey covering about 2,000 new home communities (and available for free to all participating home builders) shows that:

Sales rates have stabilized at about 1.5 sales/month/community,
Prices net of incentives are relatively flat in California, Texas, the Northeast and the Midwest, and primarily at the lower price ranges in most areas,
Standing inventory per community has fallen from 6.0 homes last July to 3.2 homes today, and
Builders are starting more homes per community than they have in a long time.
(E-mail us here if you would like to be a part of our builder survey)

However, traffic through the sales offices remains low, and most of the buyers are first-time buyers motivated by the $8,000 tax credit and monthly payments that are comparable to their rent. Without the tax credit, sales and pricing would still be declining.

Our best estimate is that sales slow substantially in December and throughout the first quarter of next year because of the demand "pulled forward" by the tax credit, and that the market stabilizes when job growth turns positive, which will hopefully be next spring or summer. The recovery will be driven by the pace of job growth, mortgage rates and decisions made by the government on whether to continue or discontinue the incentive programs.

While we believe there is another leg down, we don't believe that the decline will be that much further, so smart investments made with a long-term perspective should pay off handsomely. With plenty of short-term money chasing deals right now, smart investments are tough to find. Longer-term investments tend to be more appropriately priced."

(don't have direct link - from same John Burns as above)

Home Buying For Dummies: http://www.amazon.com/Home-Buy...&qid=1252506373&sr=8-1 :thumbsup:

 

[vi edit]

The answer is "it depends".

A seller will enlist the services of a selling agent to list, market, and negotiate the sale of their home.

This service is done at either a negotiated flate rate or flat %. Negotiated is a loose term as there usually is little negotiating to do unless you really know the realtor well.

The commission is split between the selling agent and buying agent. How that is split is clearly laid out at the time of the contract signing.

As far as who you go through, I believe that there is some value in selecting the right agent. I'm an advocate of going with the highest selling volume agent you can find. It's no coincidence that these agents will have the highest commission. The higher commission usually has a higher amount paid to the buyers agent. This gives the buyers agent more incentive to encourage viewings and possible offers.

In regards to price...it's completely market specific.

 

[dullard]

TheKub did a good job answering the questions. I'll chime in with a bit more info.

1. When you sign up to sell your house, you sign an agreement. For example, I just sold my house with a realtor a couple weeks ago. My agreement was that the reator gets $295 + 6% of the highest price mentioned in the purchase agreement. The realtor had 3 months to sell the house, otherwise he gets nothing. My realtor brought in multiple people to help him (other selling agents, buyer's agents, etc.) What his agreements were with these other people is basically immaterial to the buyer and the seller. He probably paid the other people flat hourly fees for assitance (such as during an open house). I know for a fact that he paid many buyer's realtors with food (he cooks them regular lunches at the house to get buyer's realtors to see the house). Ultimately, since he found the buyers, he probably kept most of that 6% fee (minus his expenses).

Who you hire will affect who your real estate agent can bring in to see your house. Generally, go with an agent who works at a company with lots of sales. This is since there are (possibly illegal) strong tendancies for buyer's realtors to steer buyers towards sellers with seller's realtors that are more favorable to the buyer's realtor.

2. The average price of houses sold in the US in Jan 2009 was $164,800. The average price of houses sold in the US in July 2009 was $178,400. Plain and simple. Prices DID go up on average. But remember, generally higher priced homes sell only in the summer, so it skews prices in the summer (average prices almost always rise in the summer).

Real estate is also a local thing. Businesses close down in your area, people move out, demand drops, and prices fall. Businesses do well in your area, people move in, demand increases, and prices increase. Nationwide averages are nearly meaningless to you personally. Here are local price trends in almost all areas in the US.

3. $1k isn't usually enough to do anything. It might help with a "price reduced" sign, or it might give it a stigma of a unwanted house. I think generally a price reduction is worthless unless the reduction is at least 2% of the house price (often 3% is needed).

But, there is one major exception. Most people look for houses online. When you look online, you choose a price range (say $250,000 to $274,999). By moving the price $1000, you might put the house into a whole new category of buyers who never looked in your price range. For example, moving a house from $250,000 to $249,000 will allow a lot more people to see it as now it is in the $225,000 to $249,999 range. Alternatively INCREASING your house price may even help. Instead of being the most expensive house people see at $249,000 (when they search the $225,000 to $249,999 range), increasing the price to $250,000 will make it the cheapest house people see (when they search the $250,000 to $275,000 range).

4. Closing costs are paid by the buyers. The trend right now is for buyers to ask the sellers to pay a good chunk of the closing costs. Ultimately that is often a bad idea though. All it does is have the sellers sell the house at a higher price to get the same amount in the end. So the sellers get the same amount, the buyers have a more expensive loan (and pay higher real estate taxes), and the winners are the real estate agents who collected 6% on a higher price.

 

[DesiPower]

1. The seller generally pays 6% commission for selling the house to the listing/selling agent. If some other agent actually sells it then he gets 3%. There is no additional cost to the seller. If you list the house yourself a selling agent will try to negotiate 3% deal with you.

2. Its still a buyer's market. Homes are selling below their market prices in, I guess it will be safe to say, 95% of US real estate markets. You can see how much a home was sold for in a particular neighborhood. Anyone buying a house now get the data, calculates the average $/sqft for 10 or so homes sold in the last 6 months or so and then try to get a price lower than that - that's pretty much today's market.

3. Homes, much like cars come with lost of additional features or upgrades, Lets say you are selling one with additional 20% upgrades over the base price and your neighbor selling same size home with only 5% upgrades over the base price. Now the $/sqft of his home will be lower and his sells in a week. This sale sets a market value and now your home will only less if you come close to that price OR if you find someone how really cares about the additional bells and whistles. So ppl wait and wait for that buyer and this is one of the reason why some home are listed for months and price falls little by little.

4. Its negotiable, you generally submit an offer with 5 to 10% less than the listing price and/or ask the seller to pay closing cost. Sometime they do sometimes they make counter offer. They bottom line is that you try to get the homes atleast 5% below the list price. The discount may be cash or in form of Closing costs. Closing costs are negotiable and differ from bank to bank so a smart buyer generally does not ask for it from the seller.

 

[Capt Caveman]

Originally posted by: Gibson486
1. Listing realtor....how does this work? I mean, you hire a realtor to sell your house, it gets an MLS number. If a different realtor sells it, does the listing agent not get the commision anymore? If so, why does it matter who you hire?

2. What's with the media saying prices are going up? I am loooking for a condo/townhouse and all I see is "price reduced". Are they trying to artificially stabalize the market? Heck, even Boston prices are falling now (although, still pricey).

3. What with owners reducing the price by $1k? Really, do they think $1k will make a difference?

4. Who usually pays closing costs?

1. Most has been covered by everyone else but who you hire as your agent can make all the difference.

2. Depends on the area of the city, some areas are still hot. Prices in Cambridge were up 16% last year.

3. From a marketing stand-point, yes. The listing will now appear with a Price Reduction status and will appear on more searches and listing sheets. On some searches and listing sheets, just reduced listings go to the top of the list.

4. Depends

 

[Mermaidman]

I've also wondered about why buyers ask sellers to pay closing costs. I think this is because the buyer would then need less up-front cash (And as Dullard points out, the selling price would be higher, but the addn'l amount goes into the loan).

 

[dullard]

Originally posted by: Mermaidman
I've also wondered about why buyers ask sellers to pay closing costs. I think this is because the buyer would then need less up-front cash (And as Dullard points out, the selling price would be higher, but the addn'l amount goes into the loan).

The buyer is essentially borrowing additional money from the bank. The additional money can help pay for the down payment, pay for the closing costs, pay for furnishing the new home, pay for remodelling, etc. Mortgages tend to have really low interest rates. So, this is a good way to get a small loan at a low interest rate.

When I sold my house, I did pay for their closing costs. In the end it only cost me a couple hundred dollars more in realtor fees. I essentially told them that I'd give them the ~$5000 in cash that they asked for if they raised the offering price by ~$5000. But, the appraisal came through too low and both of those numbers were reduced to $4000 to let the deal go through. Why did I pay their closing costs? They were very young, looked about age 19 and 20. I doubt that they had any money for a down payment. I felt that the cash up front would really help the deal go through.

But, the catch is that you will pay far more money back in the long run. You'll be paying for that loan for 30 years if you stay in that house. It'll cost you 2x-3x the price. Plus real estate taxes and other fees will be higher. You might not want this cash if you think about all the costs. But with buyer's realtors getting larger commission, you can bet they are pushing their clients to get that loan.

 

[Gibson486]

Originally posted by: Capt Caveman

Originally posted by: Gibson486
1. Listing realtor....how does this work? I mean, you hire a realtor to sell your house, it gets an MLS number. If a different realtor sells it, does the listing agent not get the commision anymore? If so, why does it matter who you hire?

2. What's with the media saying prices are going up? I am loooking for a condo/townhouse and all I see is "price reduced". Are they trying to artificially stabalize the market? Heck, even Boston prices are falling now (although, still pricey).

3. What with owners reducing the price by $1k? Really, do they think $1k will make a difference?

4. Who usually pays closing costs?

1. Most has been covered by everyone else but who you hire as your agent can make all the difference.

2. Depends on the area of the city, some areas are still hot. Prices in Cambridge were up 16% last year.

3. From a marketing stand-point, yes. The listing will now appear with a Price Reduction status and will appear on more searches and listing sheets. On some searches and listing sheets, just reduced listings go to the top of the list.

4. Depends

Yeah, Cambridge actually costs the same as Boston's Back Bay now for a small 1 bedroom condo. I do not understand it. Why you'd want to live there instead of teh back bay....i have no idea.

That said, A condo in boston has dropped to around 350K...although it's still on the small side. For that price, I can get a 2 bedroom room townhouse in watertown.....but when you look at, you kind of wonder what it will take to buy a house. Being a property noob sucks. So many questions, but realtors do not want to take time to answer tham.

 

[RyanPaulShaffer]

Originally posted by: dullard

Originally posted by: Mermaidman
I've also wondered about why buyers ask sellers to pay closing costs. I think this is because the buyer would then need less up-front cash (And as Dullard points out, the selling price would be higher, but the addn'l amount goes into the loan).

The buyer is essentially borrowing additional money from the bank. The additional money can help pay for the down payment, pay for the closing costs, pay for furnishing the new home, pay for remodelling, etc. Mortgages tend to have really low interest rates. So, this is a good way to get a small loan at a low interest rate.

When I sold my house, I did pay for their closing costs. In the end it only cost me a couple hundred dollars more in realtor fees. I essentially told them that I'd give them the ~$5000 in cash that they asked for if they raised the offering price by ~$5000. But, the appraisal came through too low and both of those numbers were reduced to $4000 to let the deal go through. Why did I pay their closing costs? They were very young, looked about age 19 and 20. I doubt that they had any money for a down payment. I felt that the cash up front would really help the deal go through.

But, the catch is that you will pay far more money back in the long run. You'll be paying for that loan for 30 years if you stay in that house. It'll cost you 2x-3x the price. Plus real estate taxes and other fees will be higher. You might not want this cash if you think about all the costs. But with buyer's realtors getting larger commission, you can bet they are pushing their clients to get that loan.

We've been through this before in a previous thread...it is not "far more, like 2x-3x". It is slightly more. 😛

I don't feel like digging up the old threat from OT a little bit ago, and I don't feel like doing the math again, but having the seller pay closing costs and financing a little more if you don't have the cash upfront for closing costs + down payment is not a bad option. Just don't do it unless you have to.

 

[Capt Caveman]

Originally posted by: Gibson486
Yeah, Cambridge actually costs the same as Boston's Back Bay now for a small 1 bedroom condo. I do not understand it. Why you'd want to live there instead of teh back bay....i have no idea.

That said, A condo in boston has dropped to around 350K...although it's still on the small side. For that price, I can get a 2 bedroom room townhouse in watertown.....but when you look at, you kind of wonder what it will take to buy a house. Being a property noob sucks. So many questions, but realtors do not want to take time to answer tham.

My guess is that in Cambridge you could get a more square footage and parking. Property taxes are also lower.

Watertown will force you to drive or take the bus if you work in Boston.

Keep looking or ask friends/family for a Real Estate agent they can recommend. If you were looking in Cambridge, I could give you the number of mine.

 

[Gibson486]

Originally posted by: Capt Caveman

Originally posted by: Gibson486
Yeah, Cambridge actually costs the same as Boston's Back Bay now for a small 1 bedroom condo. I do not understand it. Why you'd want to live there instead of teh back bay....i have no idea.

That said, A condo in boston has dropped to around 350K...although it's still on the small side. For that price, I can get a 2 bedroom room townhouse in watertown.....but when you look at, you kind of wonder what it will take to buy a house. Being a property noob sucks. So many questions, but realtors do not want to take time to answer tham.

My guess is that in Cambridge you could get a more square footage and parking. Property taxes are also lower.

Watertown will force you to drive or take the bus if you work in Boston.

Keep looking or ask friends/family for a Real Estate agent they can recommend. If you were looking in Cambridge, I could give you the number of mine.

Not the places I saw....325K can't get you anything good in either area...even at 400K, it still mind boggling for what you get in either 😉 You need atleast 700K to get something decent.

I am in engineering, so there are no jobs for me in Boston. My gf on the other hand....she wants to get back to working in Boston. She works for a software company now and she hates it.

 

[dirtboy]

California has not bottomed.

 

[Gibson486]

Originally posted by: Capt Caveman

Originally posted by: Gibson486
Yeah, Cambridge actually costs the same as Boston's Back Bay now for a small 1 bedroom condo. I do not understand it. Why you'd want to live there instead of teh back bay....i have no idea.

That said, A condo in boston has dropped to around 350K...although it's still on the small side. For that price, I can get a 2 bedroom room townhouse in watertown.....but when you look at, you kind of wonder what it will take to buy a house. Being a property noob sucks. So many questions, but realtors do not want to take time to answer tham.

My guess is that in Cambridge you could get a more square footage and parking. Property taxes are also lower.

Watertown will force you to drive or take the bus if you work in Boston.

Keep looking or ask friends/family for a Real Estate agent they can recommend. If you were looking in Cambridge, I could give you the number of mine.

if he is any good..., yeah, get me the number....