Back to my point how do you as a home owner not miss the best selling time with a bogus offer? We’ll you take a little piece of the short sale addendum allowing the property to stay on the market active because the offer is not binding. You can have multiple offers to buy the seller can accept all in order. The seller accepts an offer in first position and gives them a first offer the right to match the offer. Match what you say Price and ability to close. So there is no binding contract until the buyer shows the ability to close. Make the primary offers earnest money (at least 1% of sales price) non-refundable unless the inspection finds an undisclosed pertinent and substantial fact that affects the value of the home such that it will deter future home buyers, that he seller is unwilling to correct. So not the first offer ready to close force the primary offer to step up and match it or lose their earnest money if they back out. You may want to do 2% that how strongly I believe seller will be take advantage of in this crazy buyer purring in multiple offers. Some buyers will not disclose they have a home to sell. All listing agent should put a Q & A addendum do you own another home. Will you have to sell or rent the home to qualify? Then get a Pre Qualification letter stating the lender knows of this and they buyer qualifies without selling the home.

If you’re an agent or sell take this to heart it will be happening making offer on multiple property. It’s probably unethical if you don’t disclose it to the seller but agent think they can just put in contingency that will allow the buyer to back out. Like financing oh they can’t buy 2 home so they don’t qualify. Right we need to hold this kind of activity accountable but how?

Utah Legislature has used the last 1/3 of the Utah People TARP funds, allocated to the state of Utah, for New Construction Home Buyers Grant. I guess they had to give the development companies more assistant to sell their overpriced, new construction home!!!! There are a lot of programs that really would have benefited home buyer a lot more if the legislator really wanted to stimulate the real estate recovery in Utah. Like why doesn’t Utah have a, loan of the first time home buyers tax credit, so they can use it for their down payment? HUD has approved this and Utah housing, the administrator of the Home Run Grant, is really the only entity in Utah that could do it and their answer to me when I ask them why it wasn’t being provided as a program? Was they didn’t have any Money to do these loans! So why didn’t the legislator allocate the fund for this up front loan of the $8,000 first time home buyers Tax credit I don’t know?  Were creating our own Home Buying Program the Realty As Is Grand Slam Rebate 1/2 of Our the Buyers Agent Commission.   An Home Any Price Any Use Just buy with us.  Short Sales Bank Owned Tax Credit Utah Housing Loans we Just want you to get a home and a real incentive!!!

The reason why many home buyers don’t buy now FHA requires a 3.5% down payment from their own fund or a gift form a blood relative. HUD did away with 100% purchase gifting down payment plans and raised the down payment requirement form 3 to 3.5% in the last tax credit for first time home buyer legislation. Sure Utah Housing has a 106 % program but the rate is 1% higher on the 97% first mortgage and 2% on the 6% 2^nd mortgage above the going FHA Rate. People what to buy a home with no money down and have a 5% 30 year rate that is it. Is that right or wrong I don’t know but it is real and that is what we’re about on this blog, Reality! We had the opportunity to do that and use that money from the Tarp to fund a real first time home buyers program and we didn’t. So instead what we have done is give the home builder more incentive to build home that we don’t need. We’ll I don’t get! We have thousands of short sale on the MLS in Salt Lake County and only a few hundred existing new construction homes that are complete and ready for home owners to buy. People are trying to sell their home and avoid foreclosure and the public wants to buy these homes and no help from Utah! I see this is a way to line home builder pockets so they can sell there over priced inventory and we pay for it, it’s a real sucker punch to the Utah people. I’m not even sure how well this will go over. Why buy a new home $15,000 to $50,000 overpriced to get a $4,000 Grant.  I’m sure Miss Utah and the home builders will be advertising the Heck out of it.

We’ll I have a grant for you home buyers!

I will give you a free grant of ½ of my buyers commission so on a $250,000 shot sale that is $3,750 free money and you can buy a existing home or a new construction no income limit, investment or primary residence. How is that for a grant? I’m calling it the Grand Slam Home Run Grant!

Listing details of the home Lets look at how it works compared to the home Run. You can buy a listing like my short sale in West Jordan. You could offer $275,000 with seller paying $8,000 in closing costs and you would get a rebate of $4,200 on my Grand Slam Home Run program. If your would rather than buy the same home in the same development from Ivory who built this one for $350,000 and get a $4,000 Home Run grant rather then get my Grand Slam grant form me you can! Here is what you would get each way.

Grand Slam Rebate

1. Get a FHA 5% fixed 30 year going rate and have all your closing costs paid and help out a short seller.
   
2. You get the home for $275,000 not $350,000 so you have $75,000 less in loan @ 5% your saving is $402 a month or $4,831 a year in payment!
   
3. You’ll have equity in your home from the start as opposed to being upside down.
   
4. You home payment will be P % I $1,476 as opposed to $1,878 Wow.
   
5. You get a cash rebate of $4,200 after closing. Spends it on whatever you want, probably the back yard on this home!
   

Who is Eligible for the RealtyAsIs.com Grand Slam Grant!!!

• Every one that buys from me as their realtor.
  

Home Run

1. You get a home buying grant of $4,000.
   
2. You get to be the first to live in your home.
   
3. You may get to pick the carper and paint form a few choices the builder gives you.
   
4. You get to say you built the home?
   
5. You P& I payment is $1,878you have to pay your own closing cost or add them on top and use your grant.
   

It you really want to see the details on the Utah Home Run Grant hear your go.

The Home Run Grant FAQ Home Run Program PDF Link

Eligible Listed Property Link

Who is eligible to receive a $4,000 Home Run 2 Grant?

• Home buyers (any person taking title) must meet the following income restrictions:
  

  • Single person, maximum income, $75,000

    Married couple, maximum income, $150,000

  • If more than one unmarried person is taking title to the Eligible Home, each such single person is subject to the $75,000 income limit.
  • Income calculations will be determined by the Adjusted Gross Income as verified by the Approved Lender using the 2008 IRS Federal Income Tax transcript obtained directly from IRS or from an authorized third-party vendor.
  • Home buyers must occupy the purchased home as a primary, permanent residence.
• If home buyers need a mortgage loan to purchase the home, the loan must be a fixed interest rate, amortizing mortgage loan with a term of 30 years or less.
• The Home Run 2 Grant Program is effective only for home purchases closed after a Home Run 2 Grant Commitment has been issued for that specific transaction. The grant funds may not be issued for homes purchased prior to obtaining the Home Run 2 Grant Commitment and may not be used by Home buyers who received the $6,000 grant under the previous Home Run Grant Program.

Who is a first time home buyer? People that haven’t owned a home in the last 3 years. Married couples I’m sorry if you spouse has owned one but you have not you don’t qualify. Even if you got divorced and gave the spouse the home if your name was on a home as an owner you don’t qualify. If you co-signed for a home you’re on as an owner and you don’t qualify. If you don’t have the income and you need a non-occupying co-borrower that’s Ok you do qualify for the credit because the credit can be split or moved around to any qualifying buyer of a home. You can have a Mom, Dad or Grandparent co-sign on a FHA loan and as long as your not married to them it all good. You don’t even have to have a job to qualify for an FHA loan as long as your co-borrower is well qualified.

Can my down payment come for the Tax credit? No in Utah we don’t have a program to loan you the tax credit so you can use it for your down payment. You can borrow form a 401 K or get a gift form a blood relative and use the Tax credit to pay back the person. No gifts can be required to be paid back but nothing says you can pay them back. So how do you buy a home with no money down; we’ll if you qualify you can do a Utah Housing Loan. How do you qualify you don’t make more than the limit. Salt Lake is $64,000 family income up to 2 people in the family. Sure the rate is 5.7% but that’s not too bad.

How do you get the tax credit? We’ll you fine an amended tax return and have it in a few of weeks. Actually I have seen on line from 4 to 16 weeks. I don’t know way some take so long. It might ne shorter now that was for May and June of 2009.

So let’s get you out and shopping for a new home this month. For the month of august I will give you ½ of my commission back as a rebate if allowed by your lender

How do you get more of a Tax Credit we’ll we at Spotted Home have put our own stimulus Package together to give you a Rebate. We’ll give you 1/2 of our commission or on a 3% buyer agent commission you get 1.5% of the sales price as a gift. We won’t even make you qualify as a first time home buyer. So buy a $200,000 home with the 3% Buyer Agent Commission and you get $3,000 as a thank you. State administrative code 6.2.12 allows me to give you a gift for buying with me. As long as your lender says it is ok. The minimum commission the company can earn is 1.5% of the sale price so if the commission is 2.0% you would receive 1% of our commission as a gift. Wow now that a stimulus package.

6.2.12. Gifts and Inducements. A gift given by a principal broker to a buyer or seller, lessor or lessee, in a real estate transaction as an inducement to use the services of a real estate brokerage, or in appreciation for having used the services of a brokerage, is permissible and is not an illegal sharing of commission. If an inducement is to be offered to a buyer or seller, lessor or lessee, who will not be obligated to pay a real estate commission in a transaction, the principal broker must notify the party who will pay the commission that the inducement will be offered. This rule does not authorize a principal broker to give any type of inducement that would violate the underwriting guidelines that apply to the loan for which a borrower has applied.

First time home buyer don’t wait until the last month get out while the shopping is good and you may be able to get a short sale if you have a great agent like me.

More info on the First time home buyer Tax credit of 2009

Here is where the Real Market Pricing Study differs from the CMA.   You do and analysis on Active and Under Contact homes in your area including like area that a buyers would look at.  What does that mean?  For Homes for sale in Salt Lake County let’s look at West Jordan.  A buyer would probably look at South Jordan and maybe, Salt Lake City unincorporated, Taylorsville, and part of Kerns.  Most buyers draw a mental box in the area here and say “all the home between this road and that road, this far south and that far west, that are x years old, with at least x bedroom, and x bath and of course a 2 car garage.   So you have to look at your competition form a buyer’s perspective as opposed to the appraiser’s perspective of 6 to 10 blocks.   Appraisers work in a very small box of rules the buyer doesn’t.  You price your home on the active homes justified by the under contract not the homes that have been sold.  They aren’t looking or comparing the active to the sold homes. They are comparing them to the home they have seen.  With sold homes they can’t look through them and make a comparison.  You pull all the homes that are for sale in your general area or like areas of the town that are 20% or $20.000 below and above that CMA sold price.  You pull a search with all the styles for sale.  A normal buyer for your home would look at all homes in a price range that are at least the minimum buyer’s criteria for your home.  You have to think buyer what do they want in your area, SQFT and average bedrooms for the area.   Most buyers want to look at 3 beds 2 bath or 4 beds 3 bath for higher priced homes and up. Yep, all want a 2 car garage.   Most buyers look about $15,000 to $20,000 higher then they qualify for.  You don’t just pull ramblers to ramblers or town homes to town homes.  Buyers look at Price ranges and Bang for the Buck, rather the just a style.  The average buyer  in this market want a great deal, not a ok deal, or even a good deal they want to get at least 20% off the market price of a home.  With those criteria you probably will have a pretty large amount of active homes in your search.  Using the same criteria pull a sold search for 60 days and take that # and divide by 2.  Why 60 days because most homes close at the end of a month and take 5 or so days to be updated so you do 60 to keep from missing a good time of the month. While still keeping the sampling close in days back.  You now have your 30 day sold average and you divide the active property by the “30 day sold average”.  It looks like this 100 active homes by 15 sold a month you have 6.66 month of inventory; Known as absorption rate.  Now use the same criteria less the 60 days and change to under contract.  How many do you have?  Probably only 50% will close.  Now use the list to sold price % to calculate, what the under contract should sell for on the spread sheet.    So if it’s 89% list to sold and you have a $335,000 list price under contract you get an estimated sales price of $289.150 after seller concessions.  So you can add 3% to that for seller concessions your sales price is about $307,094.  You can see if the # of closed will be higher than the # sold.  If it is that is a good trend.  If not it is a continuing market.  Less may decrease pricing.

In real estate we have a concept of “Absorption Rate”  easy stated as,  A markets ability to  sell off all of the houses that are for sale at a given time express in months.  An example of this is.

A market is selling 5 homes every month and there are 120 homes for sale, it will take 20 months to sell all of those homes currently on the market today. The absorption rate is  24 months or 2 years.  That is not good!

If you are a seller you should take the absorption rate into account when pricing your home!  It’s a good indicator of the trending of a market.  In the above scenario with 100 homes for sale, we know that only 1/2 of them will sell in the next 12 months. Honestly more home will come on the market so the homes that will sell are the most aggressive sellers.  But it dose tell you where the market is going!  It’s nto the beat all end all but it is a tool of pricing like many other tools.

More on The Absorption Rate see this link on a great real estate site Outer Banks Real Estate Sales

Well that all sound well and good but most people don’t have 12 months to sell their home because the market is not static it is either declining or increasing you can’t really price off that formula.

Now that we have the economics 101 out of the way let’s look at the Reality As Is way a market behaves, or in this case misbehaves.  Markets for housing are constantly in flux, having homes sell and new home come on the market and how that relates to pricing.  To price a property correctly in this type of market with an absorption rates less than 8 months but not less than 3 months, you would have to be an attractive home in the lower 30% of the price range for similar properties in order for it to sell in the next 12 months. To sell in the next 6 months it would have to be priced in the lower 20% of the competition. Why the lower # then 50% and 25%?  Because you have 15 buyers they will be looking at best priced homes not all 120 homes.  They probably won’t look at 30 homes more like 15 to 20 before they buy.  So many of the higher priced home will not be looked at as a viable buy.  They may look at the higher priced home but not to buy them.  They want to justify their favorite lower priced homes bang for the buck.  Example: If I do this and that to this home, I want the buy; it will be really good and worth as much as the most expensive homes in the market are.  I know it a crazy to think a home will be worth more than you are willing to buy one for.  Human beings tend to think their home is always the best home in the neighborhood and worth more than the others.  So if you’re priced in the middle well you sit and sit.  You get a few showing but no offer showings begin to taper off to almost none.  So you lower your price 5% and you’re still in the middle because the market has moved a full 5% lower over the 60 days you had it on the market.  You’re strolling behind a decreasing market not even chasing it.  Currently the Salt Lake market is moving between 1 to 3% downward a month depending on location.  I know there’re lots of you saying I’m one of the 80 in the middle to high range strolling along, in that scenario.  The good news for you is you can do something about it.

What you can do is price your home in the money based on Bang for the Buck!  Calculate your sales time.  I need my home sold in 4 months.  You subtract the month you will be under contract and you have to have the home under contact in 3 months you have 90 days to market.  Find the most similar active properties based on the market activity and its bang for the buck factor.  If you’re in a desirable neighborhood with above average quality pick the best quality homes and price to one of the best bang for the buck in that group.  Now if you find no one is buying that quality of home or zero high quality buyers are in your market, you’ll have to be the best priced of the group.  You should look at the middle of lesser quality home price. Remember that is the top of the seriously considers homes getting looked at by buyers.  Homes with less finished % in the basement, less bedroom and baths, or the best priced rambler need to be close to the price of tri-multi levels.  You have to also consider the Estimated Appraised value never be higher than that, try to be lower.  So if you are now saying that’s not fair my home is nicer and worth more.  Remember bang for the buck, you have to give them a reason to come up to your slightly higher price.  Buyers aren’t fair that is not a concern for them in this market.  They are on a foreclosure feeding frenzy ravenous feeding on the great deals. Ok it’s Dawn of the Dead Home but I have buyer don’t ask me what do you think is fair to the seller.  More realistic would be what do your think the lowers priced offer we can make without insulting the seller is.

The Reality of pricing most Sale Lake City homes for sale using my formula guidelines will fall into the feared Decreasing market 8 plus month inventory.

Get the numbers form the MLS or your agent or me of course. Do the spread sheet sort your price per sqft of active low to high and look at the distribution.  Look at what you consider the best comparables make them as green cell color.  The lowest 20% in price are yellow cells.  This is what you are really looking at.

In a decreasing market with absorption rate of under 8 months:

30 to 60 days price is the average of the lowest 10% of the lowest reasonable comps.  You have to be in a full tilt bogie to sell in that time frame. Remember you competing with short sale and bank owned.  Your only advantage is your not one of them.  Be the lowest of the best comparables for your home by at least by 5%. Why because you’re creating bang for the buck, you’ll get looked at and offers to work with.  You’ll get the attention of owner occupied shopping buyers that are tired of short sale and bank owned. Drop the price every 20 Days by 5%.

60 to 90 Days price at the lowest 15% of best comps.  Be close to slightly above the best comparables for your home evaluate and re-price every 20 days at least 3%.

90 or more days price in the lowest 30% of the market and evaluate every 25 days change to a different pricing lowing it 3 to 5%.  When you enter 90 day time frame change to a more aggressive pricing of the 30 to 60 model make sure you reevaluate at that time things have changed.  Pricing any higher with new comparable property coming in the market is futile if you can’t sell at this pricing strategies you probably won’t sell so don’t list.  If you can’t price so that the home can sell chasing the market won’t help.  Save a lot of frustration for you and look at renting to owner, owner financing.  Don’t rule out a short sale it may be the best alternative.

In a decreasing market with an absorption rate of over 9 months:

This is a very dangerous market teetering on the brink of a large plummet of home prices.  All experts say that a market with over 8 months of inventory is a market that will have to go down to sell the home.  Let’s be realistic if you have 8 month inventory most of the home will just not sell.  There are not enough buyers in the market.  The market will be set by the home that sell and will go down with each month’s sales.  Similar to a market with 1 or 2 months inventory Like 2006 going up with each month new sold comps.  .  The danger is chasing a downward trending market but never catching it or going ahead.   I saw a neighbor lose $60,000 chasing a downward trending market in 2008.   In salt lake homes for sale market the price point that is in jeopardy of seriously downward trending is homes that are 20% above the median home sales price of $236,000 anything over $289,200 will be in fear of a serious downward trend the higher you go.  The further you fall.  That is until we get more qualified buyers in that market who’s income justifies that price of the home.

Your best target is those buyers tired of making offer on bank owned only to be beat out and disgusted with the state of buying short sales.  These are people that need to move are relocating or have sold their home.  Make sure your sign and all advertising says not a short sale on it, in Big Bold Red Lettering.  The reality of pricing is you have to be willing to be at that price point of what is selling.  You won’t be able to appraise for more than the comparables will allow anyway.   You won’t be able to sell for more, so why kid yourself and price your home higher to have bargaining room.  Those “Reindeer Games” just don’t make a difference.  Buyers will make an offer and you work from that point.  They know value and don’t want to lose a good deal.  Remember you have to be a good deal.  Don’t price your home out of the range buyers are seriously looking at, because you want bargaining room.  Now the # for a decreasing market.

30 to 60 days.  Price in the lowest 5% it will take an effort to sell. Fast because you will see a drop of pricing cause by bank owned property.  Drop the price in 30 Days by 5%.  Will you be the one lowering the market?  No you will be keeping up with a market in free fall.

60 to 90 Days price at the average of the best priced 10% re-price every 20 days.  Suggested re-pricing is 5%.

90 or more day’s price:  Be priced in the lowest 20% of the market and evaluate every 25days. If you don’t sell you will need to drop 5% every 30 days.  Chasing a market is futile if you can’t reduce the price enough to catch up with this pricing strategy you probably won’t sell.

You now have the knowledge to make a Real Market Price Analysis.  Most real estate agent don’t have that knowledge.  Oops now they do!  You should be able to price your home for sale in Salt Lake County such that it will sell.  One last thing unfortunately For Sal By Owner is just not effective in this market because buyer want bank owned and short sale great pricing on a home and have to work with an agent to get it.  Buyers are working with agents to look at those listed homes.  If your for Sale By Owner your not in that game.  I feel your pain after getting this dose of reality so to help you all I have a new way to list homes.  Go to my site http://saltlakecity.helpmesell.com/ and sign up for one of the 3 flat fee listing the Silver, Gold or Platinum  packages which will get you to the mls for an affordable $299 to $999.  If you sign up for silver and email me saying my market is may market because that is what is selling I will do a market pricing analysis with you, for reading this far.  If you go for the Gold or Platinum I will take $150 of the price.  But you have to email me!

What the near future will bring in homes for sale in Salt Lake!

I do think the Tax Credit expiring will drive more buyers in the market over the next 4 months.  We will see most of them at or below the medium price point.  We may see the lower priced homes go up.  What we won’t see in Salt Lake homes for sale is a lot of buyers in the $400,000 range, because first time home buyers don’t usually have that kind of qualifying income.   But it would be a prime time to move up and sell your home quick if it’s in the $230,000 range and you can get a killer deal on a $400,000 home that use to sell for $800,000 from a bank?  Now you’re thinking like a buyer!!!!!

If you’re looking to move up and sell your home and steel a bank owned or short sale we’ll do I have an offer for you.  The Buy Form ME Sell Free program is a full service Platinum package for free you keep the listing commission to put into your new home. All you do is use my expert service to buy a new home within 6 months.  So the seller of your new home pays your selling commission I love it!!!!  Give me a call it’s a great time to be a buyer