Buying A Home: Lessons From Buyer's Remorse After Closing

Buying a home is the largest single purchase any of us will ever do in our lifetime. So, whether it is your first house or your seventh house there is a natural tendency among us to question are we making the right decision now. Being on both ends of this I can tell you that there is no clear cut answer to this question. If there was i would be traveling the world right now giving lectures on how to be positive you bought the right house. But a recent study of home buyers across the United States polled what they thought were the biggest regrets (if any) about the house they ended up buying. Quite honestly I was a little surprised by the top answers. First, the size of the home was too small. over 34% of home buyers who had a regret of the house they bought said it was due to the size of the house. They had wished they purchased a larger home. I know some people had this regret because they bought their first home and now a few years later they are realizing they have outgrown it and need to move to a larger home. It usually is just when you get the house to the way you want it and like the home. Then a change in family dynamics causes you to need more space. Most people are buying a home as an investment for their future and plan on move on average every seven years according to the National Association of Realtors. I always ask buyers what is their long term goal with this house. Are they looking at it as a first step to get into home ownership or a long term investment they can grow with? Those answers help me point out things with the house and the space that either help ease their minds that they are making the right decision. Or whether we should keep looking. Second, not doing enough remodeling when they moved in. I can say without a doubt that this ranks first for me. I bought my last house and said to my wife I will get this and that done. Then I started and said i will get to it a little later and that little alter has turned into years. So, if you are planning on buying a house that needs paint, flooring, or updating. Sit down and decide what you are going to do now and what you are going to do later. But set a realistic timeframe and stick to it. Otherwise you will be like me saying I wish I did that before I moved in. Third, not having more information about buying. I pride myself on giving my clients all the information they need and sometimes too much information. But I believe that you can never have too much information when it comes to buying a home. A large investment like that requires careful planning and thought....Do not buy if you have any doubts is what I tell my clients. I have sat down and talked through their doubts and sometimes it was just nerves and other times they were valid and we moved on from that transaction onto another one....Just do not be afraid to say NO. Fourth, putting more money down. With interest rates as low as they are today i usually advise my clients to seek the advice of a financial planner before putting a large sum of money down on a house. Rates are historically low right now and you may get a better return in the market. but the drawback is when you go to sell the house you have less equity to play with when you want to upgrade to your next house. So, looking at it and seeing that you need a larger space but will not have enough money out of your home to buy...the first thing you say is I should have put more money down. But it is relative. Depending on when you bought a house you may be in an equity position right now and not know it. Last, not waiting until they were more financially secure. I think this tends to hold true now and was a little surprised it was fifth on the list. Considering we just came out of an economic depression where people were unsure about their futures and jobs daily. but over thinking this too we all do not know what the future holds for us. I believe if you want to buy and are unsure of your financial stability right now buy smaller and more affordable. It still is less expensive to own than it is to rent in most of the United States. I think this survey was a good one for buyers to look at. If they had regret these were there top five. Now, it does not say how many of the respondents did not have any regrets but I imagine there were a few.... but always make sure you are 100% sure before buying and talk to your Realtor and seek advice for him/her on your concerns. Dave diCecco Realtor/Broker Coldwell Banker United Cell;704-519-7895 ddicecco@cbunited.com www.davedicecco.com

Overpricing Your Charlotte, NC. Home Can Hurt Your Eventual Sale

Going out and looking at a lot of homes over the past few months with prospective buyers in a variety of price points has led me to a few conclusions. The most striking and common I am seeing right now is overpriced listings. We all know as Realtors that the inventory of available homes has shrunk and we want every listing we can get. But is it worth it to take a listing and over price it just to have a listing? I contend that you are doing yourself and your client a disservice. Let me explain. The home is nice and attractive. It sits in a desirable area and if priced correctly should sell in a couple of months. However; you have spent money over the years updating the house and getting it ready for this day so you can either upgrade or down size. You want to take full advantage of the market and maximize your return in this market. When you interview two to three realtors for the exclusive right to list your home; they give you an idea of what your home is worth. Then we discuss the pricing in the area. We go over the comparable sales in the past few months and active homes currently on the market that is comparable to yours. Based on those numbers we give you a recommended price that your home should sell for and based on that a price you should list your home on the market for. Now one of two things is going to happen. Either one or two agents will tell you that the home is worth between $30,000 and $40,000 more than the market is currently bearing because of limited inventory and you should list with them to get the most money out of your home. Or you are going to want to get a price that maybe you paid for the house in 2006 or 2007 when the market was at it's peak. A realtor because of the limited inventory agrees to take the listing You get numerous showings because the inventory is low. But no offers. You ask your agent for feedback and they tell you it is the price. Buyer's agents like me are looking at the comparable in the area and telling their buyers that we cannot justify that price for the house and move on to one that is fairly priced for the market today. So, you agree now to lower the price to attract an offer on the house because mentally you have moved. Another 30 to 60 days pass and you are in the same position. You agree again to lower the price. However; now your home is showing to being on the market for 60 to 120 days and you have had one or two price reductions. You get an offer. Unfortunately the offer you are receiving is substantially lower than you anticipated and even lower than the one that the agent that gave you the true comparable told you they would be. And the buyer will not come up to the price you feel the house is worth an maybe not even the fair market value price of the house. Realtors and home buyers have access to houses on a variety of various websites out there. One factor that plays in for home buyers today is days on the market. The longer a home is on the market; the harder it is to sell at the number you want. Because now all of sudden home buyers are being told we are in a sellers’ market and homes are moving quickly. But your home has been on the market for 60 to 120 days...there must be something wrong with the house. So, in anticipation of finding a potential issue (that probably does not exist) the buyer needs to purchase this home for less than the market value to compensate for the days it has been on the market. No matter what you say or your realtor tells the buyer's agent; it has been on the market for an extended period of time when homes are selling. Either it is overpriced or it has issues. Either way; by pricing a home above the fair market value is going to be detrimental to the sale of your home. Perception is everything and in the day of the internet where information is readily available at our fingertips an overpriced home is going to sit and not sell as quickly as if it were priced right from the start. Because in the long run even if someone agrees to over pay for the house...it still has to appraise. no one is going to pay more than the appraised value for a house.... pricing your home right from the start with a Realtor who knows the market will in the long term get you a better return on your investment than hoping to get a number that the house is not worth. Dave diCecco Realtor/Broker Coldwell Banker United Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com

5 Things To Consider If Buying A Home In Charflotte, NC. In 2013

Last week I wrote about the five things sellers should be doing to help sell their homes in this market today. Today I am addressing the things buyers should be doing or questions they should be asking their agents when buying a home in today's market. The paradigm has shifted away from the buyers and towards the sellers. In some pockets of Charlotte you are seeing multiple offer situations as well. But do not over pay just to own a home. That is financially no smart. A home is the largest purchase you will make in your lifetime; ensure it is the right one. So, if you are looking to buy a home today in the Charlotte, NC. area here are things to consider when looking at homes: First, be realistic on your offer on a house. The market is tighter and sellers are more apt to turn away a low price offer rather than counter it. Last year I would have recommended going in really low just to see what the seller is willing to come down on the price. Because I believe that you can go up but cannot go back down. However; the market has shifted and if you are offering a low price on a house some sellers are not even offering a counter offer. I have had a few sellers tell me that it is not even worth their time to entertain the offer because we were so far apart and the traffic was great. That also leads you to the issue that if you come back with a higher price you have just passed the leverage to the seller mentally. They now think that you really want this house and are willing to step up the price and may try to hold out for more money from you. (I had two sellers do that recently and both got the price). The sellers know inventory is limited but they also are looking to be fair with the price. Second, look at the comparable in the neighborhood for the past three months, six months and year. I know that going back a year is not going to help in this market. But it does help give you an idea of how the neighborhood is trending. I like to run the numbers from one year ago, then six months and then three months. With this information I can see fi home prices are increasing and by how much. But more importantly I can see how close to asking price they are getting for their house as well.... This helps me in pricing an offer on a house. If the trend over the past few months is the homes in a particular neighborhood are selling for 97% of asking price and the house you are looking at is in line with the average asking price over that time; then it holds true that a fair final price is going to be somewhere around 97% of the asking price. But also this will give you an idea if a Realtor put a house on the market and overpriced it as well. Unfortunately I am running into more and more homes that when a buyer says I like this one run the comparable numbers we are substantially apart from what the house should sell for. Approaching the listing agent with this question; I generally get well the market is improving and that is what they want for the house. Reality is the house will not appraise and then you have an upset seller and buyer because the agent did not do their due diligence upfront. Third, check the type of sales in a particular neighborhood. If the last few sales have all been foreclosed homes and you are looking at a resale form a home owner then the pricing is going to be different. But also, you want to be weary that you are not over paying for the neighborhood either. I have talked to a couple of appraisers who have said a good rule of thumb is to factor 10% to 15% more for non-foreclosures to the price. You also want to know if the neighborhood is getting bought up by investors or home owners. A neighborhood that is rental driven tends to lose value over time because of the lack of pride of home ownership. Fourth, be flexible on your closing date or give enough notice. Chances are if you are buying a home that is owner occupied that family is going to be looking for a house as well. If the process took you a couple of months it probably is going to take them a little time to find a home as well. A flexible close date or one that allows for at least 60 days in this market has gained strength with sellers looking to sell. A short non-negotiable time frame for closing with the seller not knowing where they are going could lead the seller to ask for more money or cost a deal. A couple of week’s flexibility should not cost you a home sale. Start early and leave enough time for the seller to find a place....it will help with the negotiations. Fifth, shop your mortgage rate and fees around. Playing one against another for your business is just good business practice. I helped one single mother save over $24,000 by having her shop one against the other and then comparing the two and negotiating for her with each one until they both said they were at their best. From the initial offer she got form the bank to the final numbers we received she saved $4000.00 up front and if she stays there for 30 years she will save over $20,000 in interest over that time as well.. Yes banks are getting tighter; but buyers still have some leverage. These five things should help you in your pursuit of home ownership in this ever changing housing market.... Dave diCecco Realtor/Broker Coldwell Banker United Cell: 704-519-7895 ddicecco@cbunited.com www.davedicecco.com