Online home listings don't tell whole story

This is a very good overview of things to be aware of when looking at online listings and more importantly, what you should be requiring of your agent about YOUR listing online...

Online home listings don't tell whole story

What buyers should know before making offer

BY DIAN HYMER, MONDAY, NOVEMBER 24, 2008.
Inman News

The Internet has changed the way we buy and sell houses. Most listings of homes for sale can be found on the Internet. Realtor.com, the world's largest real estate database of homes for sale, carries information on more than 3 million listings.

According to the 2007 National Association Profile of Home Buyers and Sellers, 84 percent of home buyers used the Internet for information at some point during their home search. This is up from 37 percent in 1999.

Real estate Internet sites allow home buyers and sellers to peruse the inventory of homes for sale relatively effortlessly. Many sites allow visitors to set up a notification system that will alert them when new listings that fit their search criteria hit the market.

Sellers also find it useful to use the Internet to learn more about the local inventory before setting a list price for their home.

HOUSE HUNTING TIP: There is inconsistency in the quality of what you see and read about listings online. The Internet is not regulated, so you may find that some agents adhere less to trust-in-advertising guidelines than they do in print ads. However, many professional real estate companies scrutinize their Internet advertising for accuracy before it's uploaded to the Internet.

A huge benefit of Internet home-sale advertising over print advertising is the ability to easily and inexpensively include photos. Many sites allow agents to put dozens of photos of a listing online. This gives visitors a lot more information about the property than can be conveyed with words.

A common complaint from home buyers is that some listings show no photos at all. Studies have shown that visitors often ignore these listings. They may assume that something is wrong with the property; otherwise there would be photos.

However, the fact that there are no photos, although disappointing, may be due to the fact that the agent hasn't bothered to provide them. There could be nothing wrong with the property. While this is clearly a disservice to the seller who is trying to attract as much attention to his home as possible, it's not necessarily a reason for discarding the listing.

Sellers should make sure, before they hire an agent to represent them in the sale of their home, that they will be provided with high-quality Internet advertising. It should be easy for buyers to find your home listing online. Ad copy and photos should accurately portray what you have to sell.

The quality of the photos online varies significantly depending on who took the photos and what kind of camera lenses they used. Photos taken with a wide-angle lens show more, but they can also make a room appear larger than it is. A standard lens doesn't give you the whole picture.

Dark photos may not mean the home is dark. It could indicate that the photos were taken by someone who lacked expertise.

While it might be tempting to buy a home based solely on what you see on the Internet, it's usually not a good idea. Keep in mind that you probably won't see the worst aspects of the home displayed photographically online. The Internet doesn't give you any information about how the place smells or if it's in a noisy location. It could smell moldy, or be located on a busy street or next to a freeway. Photos online may not give you a sense of how well maintained the neighbors' homes are or what the neighborhood in general looks like.

THE CLOSING: Always plan to visit any home you're interested in buying in person before you make an offer.

Dian Hymer is a nationally syndicated real estate columnist and author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

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Its a Buyer's Market...but is it a good time to sell?

It has been said time and again that it is a buyer's market in real estate. That is certainly true as there are good values all over. On the other side of the equation, perhaps because of what is going on in the bigger picture of the economy and the stock market, perhaps now is a great time to be a seller?

This opinion by industry consultant, Matthew Ferarra is a very interesting take. I follow him and his commentary closely and this makes a lot of sense to me:


Here’s a question you’re unlikely to hear asked in real estate companies these days: Is the stock market drop a GOOD or BAD thing for the housing industry’s current slump? At a time when nobody seems to have the answers - not the Fed, not Congress, not the Detroit auto makers - to turn around the economy, could it be that the market itself has found a way to revive the housing industry and jump start the economy.

And all it takes is a good, old fashioned market crash?


So is the market’s crash this fall really good for selling real estate? Well, If you’re a true contrarian, and don’t just go with the knee-jerk reaction, you know the answer is ……. the Crash is good for real estate sales. Yes, that’s right: it’s GOOD!

Now, the reason:

What does it mean when the stock market loses 400 or 500 points in a day? It means somebody - a lot of somebodies, actually - is selling stock, right? That means they are turning STOCK into CASH.

Now, what are they going to do with that cash? Put it in:

a) the Bank?

b) more Stocks?

c) under their Pillow?

Answer: d) None of the Above!

It the economy is in worrisome times, and people are pulling out of Stocks, especially out of BANKING stocks (which are the big sell offs this week) they certainly aren’t just “depositing” the cash into accounts that could be at risk of disappearing with the bank itself. And they’re not buying more stock, because most stock is falling faster than inflation is devaluing the currency (yes, it’s hard to believe, considering our inflation is so high).

But savvy investors know exactly what they are doing. They are moving capital to safe havens. They are willing to take minimal growth - like fractional-interest Treasury bills - rather than continue to take a pounding in the stock markets. And they most certainly aren’t feeling “confident” in the FDIC, Treasury or Federal Reserve - so putting it in the bank is out, too.

Therefore, the ONLY sensible investment for the capital is …. drum roll, please….. real estate.

Here, I tore this off of the Wall Street Journal’s website:

...Every great fortune in history is based upon real estate. Most were started during recessions, too. In the last century, every boom has started with real estate - even the dot-com boom which relied upon rising real estate appreciations to create excess capital that could be diverted into other industries, notably technology)...

...Boomers are creating the cash to revive the housing industry from their stock sales - to be used as “downpayment” assistance to their children. As vacation homes. As rental property to substitute for their 401ks which won’t be enough to retire on in the future.

So don’t get down as the market keeps falling. It’s actually a sign that the CASH people need to buy homes is being GENERATED through commodity/equity sales of stock. If the BANKS won’t LEND it, then the capital has to come from somewhere. The markets always keep moving; the proof is the 5 million transactions we will STILL have this year. That’s the historical norm for three decades; and it means the market is fine...

To summarize:

1. Falling stock markets mean CASH is flowing OUT of Wall Street and onto Main Street.

2. Poor options in stocks, banking, corporate bonds and currencies mean the cash has to seek other returns.

3. Smart investors know real estate is ALWAYS going to give a long-term return (sorry, flippers).

4. Now it’s the REALTORS’ job to find the people who are cashing out (Boomers) and start talking to them about the SAFE HAVEN of real estate investing today.

Oh, and look! No need for government money!

Funny how the market works!

How Bad Is The Market?

I know that I have said on more than one occasion that the real estate market isn't as bad as people think as long as they have the proper perspective.  The more have to I keep saying it, the more I begin to question even my own conviction...until now.  

I have a client who just got a contract on a house that was on the market for a mere twelve days.  How'd they do it, you ask?  Simple.  They had the right out-look on the market, they were prepared to deal with a lengthy listing, but they priced their property smack dab in the heart of the comparable market.  Even though they KNEW that the property was worth more in the heyday of the real estate bubble, they also KNEW that those days were long over.  They asked for advice about where the proper price was for their neighborhood and the listened to that advice and even though their home was in better shape than some of those higher priced comps, they put themselves right in the middle knowing that they would show better than their higher priced competition.  

This isn't a success story for me...this is a success story about a seller who had all of their bases covered and has now been rewarded with a quick sale.  They invested in property and made smart upgrades and additions that would make add value when it was time to sell.  They staged the home beautifully so that it would show better than their competition.  They knew the realities of the market and had cash on hand to cover their costs for a lengthy time on the market.  And most importantly, they priced their property according to the CURRENT marketplace and not some dream of what once was.  

This should be used as an example of how to deal with a tough market in all of the actions that they took and also as an example that even in a difficult environment, you have still have successes.  

How Does A Wall Street Bail-Out Affect Main Street?

This information was provided to me by a Wells Fargo Mortgage Consultant.  It is a fairly good overview of the benefits of the Wall Street Bail-Out: 

How Does A Wall Street Bail-Out Bill Affect Main Street? 

Large and small companies across the globe rely on access to money markets to finance their daily operations, including inventories, and payrolls.  Lenders routinely make loans to these companies, and to each other, to make it all happen.  When lenders have confidence in these markets, and investors have confidence in this system, we have a functioning marketplace that, for the most part, is sustained by competition.  When confidence in this system is shattered, however, like it has been recently, credit becomes expensive and scarce to all parties, and small and large companies alike can choke to death waiting for the short-term capital it needs to fund its long-term success. This directly affects you and your family.  It means a slower economy.  It means more lay-offs and less new job creation, which often means lower home values.  It also fuels volatility in the financial markets that, as we've seen, can wreak havoc on your savings, retirement, and other investment accounts.  

It is estimated that some $70 trillion in total global investment capital is available, which would be great news if our financial system were functioning with confidence--and that's what the Rescue Bill is basically about.  Like it or not, the US Government has been given unprecedented power to invest $700 billion in our financial systems in two ways.  First, as much as $250 billion to purchase stock in US banks, providing the banks with badly needed money.  Second, through the purchase of certain assets to help stimulate more liquidity in the credit market.  Another initiative will provide government guarantees for the short-term loans banks make to each other to run their daily operations.  More importantly, these actions are in concert with similar practices by other governments and central banks.  

None of these actions will solve our problems completely or save us from recession, but here's the good news.  It is a positive step in the direction of stabilizing the markets.  

Two-day, $2,000 room makeover not reality

Behind the scenes of home-improvement TV shows

By Paul Bianchina, Inman News
Q: When I watch those TV reality shows about room makeovers, I wonder if there is anything "real" about them. Can you really do a complete makeover in two days with $2,000? --Gayle K.

A: Yes and no -- and therein lies the problem of the contradictions and false expectations of some of these phenomenally popular reality home-improvement shows.

On the positive side, these shows can provide viewers with a tremendous wealth of information and ideas for redoing rooms that they might not have the experience or imagination to come up with on their own. If you're looking to give a complete new look to a bedroom through the addition of some interesting new paint colors, new window coverings, some moldings, the revamping of some existing furniture and maybe building a simple bookshelf, that is indeed possible to do in two days with $2,000 -- but not by the average homeowner.

The kind of accelerated pace depicted on these shows requires that absolutely everything has been thoroughly planned in advance and meticulously organized, and that all of the materials have been prepurchased and are waiting on-site. Remember also that the $2,000 budget is for materials only -- often purchased at heavy discounts -- and that the very expensive fees, salaries and services of the on-site decorators, the highly skilled carpenters, the supervisors and coordinators, the delivery services, the cranes, the rental equipment, the professional shoppers, and all the rest of the vast network of other peripheral people and companies are not coming out of that money.

Reality home-improvement shows are great, but viewers really need to realize that this is not reality. For example, the average homeowner certainly will not have a building inspector standing by to blitz through (or waive) inspections on a moment's notice, and they won't have access to all of the hundreds of off-camera personnel and all of the freebies that these shows have to rely on.

One of the problems today is that we have become a society of instant gratification, and these shows play into that. They raise false expectations of what is possible for contractors and especially do-it-yourselfers to accomplish, and while I think the average homeowner understands that they won't be able to have a crew of 75 people re-roof their house in an hour or get the local fire department to fill their swimming pool, they probably don't always understand that many of the other instantaneous makeovers they see materialize on the screen are virtually impossible in real life as well.

I would strongly advise homeowners to enjoy these shows for their entertainment value, and for the lessons they provide on how colors interact, or how a simple bookcase or the rearrangement of some furniture can make a huge difference in a room's flow. But don't take these shows as a glimpse of reality, and don't expect that you or your contractor can perform the same feats of magic without a very extensive -- and very expensive -- infrastructure to back you up.

Q: I would like to have insulation blown into my exterior walls. What can you tell me about compaction and settling, and about the lack of a vapor barrier? --Gilbert M.

A: Most of the information and studies I have seen on this subject has shown a good success rate for retrofitted wall insulation, providing the installation is done properly. The most common material used for this process is cellulose, since it is dense enough to completely fill the cavities without sagging, but it does not tend to get hung up on nails and other obstructions inside the wall the way that blown fiber materials such as fiberglass and mineral wool might do.

As to the vapor barrier, in the average home the application of a semi-gloss paint or a specialized vapor-barrier paint or primer to the inside of the exterior walls is typically enough protection. Talk with an experienced paint store for recommendations on paints with low vapor permeability -- in other words, ones that form a film that will not allow moisture to pass through it easily.

All that being said, there are definitely some potential problems associated with blowing insulation into sealed wall cavities, including possible moisture problems and even damage to electrical wiring. Whenever possible, wall insulation should be done while the wall cavities are open. If that's impossible, be sure to talk with a licensed and bonded insulation contractor with specific experience in retrofitting wall insulation, check on their references and warranties, and contact the manufacturer of whatever insulation product they are using to get additional technical information, precautions and other information specifically related to retrofitting in walls.

Is now a good time to condsider investment property?

Forbes has a pretty decent round table discussion here about this topic. 

The long and short of it are that prices are low and if you have the investment capital AND a good, long-term outlook there are values out there and profits to be made.   Sounds like sound advice to me.  Here is just one excerpt that sums up the advice of the professionals quoted: 

Spencer Rascoff, Zillow.com: I do think this is a great time to be buying residential real estate, with two caveats. First, you need financing, which is much more difficult than in the past. Second, you need to be smart about it. The good old days when anyone could make millions flipping homes in their spare time are over.

Things To Consider Before You Buy A "Fixer"

There is a home for just about anyone. You can purchase a resale home in an established neighborhood, buy raw land and have a custom home built, or select new construction in a brand-new development.

There are also "fixers." And while some buyers wouldn't dream of tackling a major remodeling job, others love the fact that with imagination and plenty of elbow grease, they can convert a tired home with "good bones" into the home of their dreams.

All houses are different, but here are some guidelines to help you find a fixer with good potential:

* Look for a house that is structurally sound and requires only cosmetic changes.
* Have the home inspected to help you pinpoint mechanical, structural, or system upgrades that may be necessary.
* Ask yourself if the neighborhood can support the improvements you want or need to make. In other words, will you be able eventually to recover the value of your investment in time and fix-up costs?
* Consider whether the existing home is worth a fix-up. In areas where building lots are scarce, the value may be in the land. Then your best course may be tearing down the old structure and rebuilding.
* Think about who will do the work. Can you do much of it or will you hire it all done? How much time do you have?
* Determine how you will finance both the home and the cost of repairs.

These are the first considerations that you need to make.  Also you need to be sure that you talk to experts in all of these areas to be sure that you are going about things the right way.