Statistics for the 2012 Real Estate Market

Fannie Mae and the National Association of Realtors predict approximately 4.5 million residential real estate transactions in 2012. The majority of these transactions occur with the aid of a realtor – typically both parties in a real estate transaction are represented by an agent. With an expected 4.5 million transactions in 2012, that translates to a potential for 9 million agent commissions. This real estate company felt it was important enough to get its agents involved in those transactions to spend Super Bowl money advertising, just for the chance to get their agents on one side or another of these transactions.

Do You Need a Realtor When You Buy?

If you saw this commercial (or even just hearing about it!) you may wonder whether you really need a realtor when you buy. The reality is that there are pros and cons either way. A good realtor can save you money by understanding the market, negotiating a reasonable purchase price and helping to advise you on important things to consider. You could go it alone, but then you’d miss out on the experience, advice and listings that an invested realtor can offer.

Whether you watched the Super Bowl or not – think about working with a realtor when you buy or sell a home this year. Agents bring some great things to the table, and can help be your advocate when it comes to buying or selling your home.

Research Home Prices in the Area

Research home prices in the area you’re considering before you start shopping. If the area is expensive and you have a low budget, you may want to look elsewhere. If a neighborhood or region is borderline for your price range, there’s still a chance you could find a deal there, but it will be slim. Be prepared for the home prices you’ll encounter, and know when to give up and look in a different area.

Prepare a Checklist of Things You Want to Remember

Checklists are your friend. Prepare checklists for things you want to remember, so you know you cover them in conversations and when viewing a home. Have a checklist for your call with the realtor so you know you can ask the questions that are important to you. Have a checklist for when you view the home, so you can remember to do things like check the faucets, light switches and windows and ask about amenities.

Set Aside Time for Home Shopping

Build time into your schedule for home shopping. Shopping for a home can take a lot of time, so it’s important to schedule certain periods for looking at listings and doing research. When you reach the end of your scheduled time, stop. Too much looking early in the process can overwhelm you and force you into a home you wouldn’t buy otherwise.

Prepare for the Emotional Onslaught

Buying a home is emotionally taxing. Searching for homes, viewing homes, imagining your life in these places, thinking about the commitment that is home ownership – all of these things carry an emotional burden. Be prepared for unexpected emotions during the home search process. Make sure you have some coping mechanisms available if the process becomes overwhelming, and communicate your needs to the people close to you.

Beware of Nationwide, Sweeping Generalizations

Nationwide, statisticians can draw conclusions about the number of home sales versus previous years, the trending of home prices and other data that professionals use to say whether the real estate market is “good” or “improving.” But those nationwide trends may have nothing to do with your local real estate market. Industry professionals predict 4.5 million real estate transactions in 2012, but those transactions are not distributed evenly around the United States. The real estate market in some areas continues to suffer, while real estate in other areas is picking up. Nationwide trends don’t reflect conditions in your region.

Regional Trends may Directly Contradict One Another

Beware of making assumptions based on regional trends. A Central Minnesota news outlet reported recently that the Central Minnesota real estate market showed a dramatic jump in 2011, demonstrating a direct reversal of 2010 data. But a news source in Connecticut reported that the state’s real estate market in 2011 was the worst in two decades, with the biggest drop on record for home sales. Don’t read a regional update and assume the same thing is happening in your area; consult local news sources, or a real estate agent experienced in your area, to find out what’s really going on with the real estate market in your region.

Consider Downsizing Your Home Needs

One way in which you can make room in your budget for a vacation home is to consider downsizing your home needs. Maybe you don’t need as much space in a vacation home, since you won’t be living there year-round. Maybe even a condo would make a sufficient vacation home; condos can be much cheaper than single-family dwellings. You could also downsize your primary home to make room in your budget for a vacation home, if there’s a place you particularly love and you feel it would be worth the compromise.

Look for Alternate Financing Options

Many people would have trouble qualifying for traditional financing for a vacation home, but alternate financing options may represent a good option. Things like seller financing, rent-to-own and other special loan financing may be a good way to build up a downpayment, or give yourself time to build up your income to qualify for traditional financing. Explore your financing options to determine whether there might be an alternative to traditional financing for your vacation home.

Rent the Home When You’re Not There

One thing many people don’t consider when they think about buying a vacation home is the income potential. That’s right; your vacation home could be earning you money when you’re not there! If you buy your vacation home in a particularly popular area, you could earn income that would cover the mortgage payment or other costs by renting it out when you’re not staying there. This gives you the best of all worlds; a place of your own to stay when you’re on vacation, and a way to earn income when you’re not!

Timing The Real Estate Market

A lot of people think about buying real estate “at some point” but don’t really put a plan into place because they’re waiting for finances to settle, for a better deal to come along or a million-and-one other things. Realistically, ideal timing for a real estate purchase doesn’t exist. You just have to decide to buy, and then do it. If you’ve been holding off on buying because you’re trying to time your purchase to maximize your profit on the transaction – don’t. Trying to time the real estate market only leads to speculation and missed opportunity, and can cost you a great deal.

Look for Great Deals – Not Timing

Great deals on homes exist in all markets. They’re usually a result of someone needing to sell a home quickly; often due to relocating, the purchase of a new home, or a change in family situation. A great deal may be a fabulous home at a reasonable market rate, or a good home at a below-market rate.

When you shop for a home, look for a good deal and don’t worry about market timing. In a vigorous housing market, home prices are often higher for buying, and you may have trouble getting the home you want because of competition. Don’t wait for a vigorous market; buy when you’re ready to buy, and look for the great deals – ignore the state of the market.

Timing the Market Can Cost You Money

A real estate expert that is currently in the process of putting together seminars for first-time buyers was recently quoted as saying: “The people who lose money are usually the ones who try to time the market. By the time you realize the market is coming back, it has already come back.” Don’t worry about whether the market is in an upswing or a downswing; find a home you like or a deal you like, and buy it. You’ll lose more money if you wait for the right deal and end up waiting for years to buy.

Ask Permission Before Opening Doors

If someone else lives in the home – especially if that person is present during showings – ask permission before you go opening doors. Most homeowners expect you to poke around in the house when you’re viewing it, but be respectful and ask. It’ll help put the homeowner at ease. If the homeowner isn’t present, check with the realtor before opening doors, and make sure the realtor is present in case the homeowner later complains about anything being moved or missing.

Don’t Touch Personal Belongings

When you’re viewing someone’s home, never touch their personal belongings. You might want to move something out of the way so you can see how it would look without it, but it’s a big breach of etiquette to move personal belongings. General exceptions are closets or hanging curtains, but ask before you go moving things around and make sure the homeowner or realtor is present in case there are complaints later.

Wipe Your Shoes or Take Them Off

When you’re viewing a home, make sure you wipe your shoes off thoroughly, or take them off when entering the home. In winter, you could track snow into the home on your shoes. In the warmer months, you could track mud, grass or rain. Be mindful that this is still someone else’s home, and treat it respectfully.

Be Sensitive When Asking Questions

You’re going to have questions about the home, but if you’re asking the homeowner directly, be sensitive. Don’t pry into the homeowner’s personal situation; if the homeowner says he’s relocating or dealing with a life change, don’t press for details. Don’t ask rude or brash questions – be aware of the owner’s comfort level and know when to stop asking.

Improve Storage Options

One of the biggest problems many homeowners have is a lack of storage. It feels like homes never have enough closets to hide away clothes, vacuum cleaners, mops, carpet shampooers, out-of-season clothes, coats and jackets, sports equipments – you get the idea. And when it comes to storing things for lawn and garden care, and all the other stuff that gets piled up in your garage – space gets even more cramped. Be creative about adding to your storage options, and remember that a little organization goes a long way.

Maximize Garage Storage

The garage is one of the most easily cluttered areas of the home, and unfortunately, it has to do triple-duty. You store your cars in your garage. You also store lawn and garden equipment there. And outdoor equipment, such as bicycles, sporting equipment, vollyball nets, baseball bats, fishing stuff – all gets stored in the garage, too, most of the time. And then there are the tools.

Fortunately, a little organization can help you maximize your garage space. Workbenches add workspace, and you can store things like tool chests and sporting equipment under them. Pegboards on the wall enable you to hang garden and lawn-care tools, like rakes, shovels and hoses – instead of having to find floor-space for them. Think creatively about your organization options and you can fit a lot more in the same space – as long as you put everything away.

Consider Adding a Shed or Outdoor Storage Options

A shed or outdoor options can go a long way toward relieving the storage issues for your garage. Sheds can be used to store things like lawn mowers, yard care tools, hoses, bicycles, sporting equipment, camping supplies – all the detritus that seems to pile up in a garage. A small investment in a shed can free up your garage for other things, like your cars and your tools.

Even if you can’t invest in a shed for financial or homeowners’ association reasons, most home supply stores carry small outdoor storage units; everything from the size of a chest to a vertical outdoor closet. These units can ease the burden of your garage without investing in a more permanent – and expensive – shed, and help solve your organization problems.

Helpful Tips

Showing your house in the winter can become an uphill battle. People may be less inclined to come out in the cold; if it’s raining or snowing, people may already be in a neutral or unhappy state when they arrive. It takes more work to make a good impression when you’re showing your house in the winter. But, if you’ve got the right attitude and a few tips and tricks; showing your home in the winter can actually give you an opportunity to stand out and make a great positive impression on potential buyers.

Counter the Outside – Inside

The most common issue with showing a home during the winter is that it’s cold, rainy, snowy or dark outside. All of these things can make a negative impact in potential buyers’ minds, and make them less likely to look favorably upon your home – even if your home is fantastic. But to counter this influence, and actually make more impact on potential buyers than you might otherwise – counter the outside – inside.

What does this mean?

If it’s cold, rainy or snowy outside, make it warm and cozy inside. Not stifling, but comfortable and inviting. If you have a fireplace, light it. Woodburning stove – light it. Show your buyers that your home can be a cozy and inviting haven in winter conditions, and you’re on your way to making a positive impression.

If it’s dark outside, close the curtains and light plenty of lights in the house. Make sure all of your rooms are well-lit; re-arrange or add lighting as needed to chase those shadows away. Warm, yellow bulbs create a cozier atmosphere than fluorescents; even if you normally use a fluorescent bulb, swap it out temporarily while you’re showing the home.

The smells of baking can make a huge positive impression on a chilly or snowy winter day. Freshly baked cookies, brownies or bread can make your home smell delicious and inviting, and evoke images of coziness and the warm, comfortable lifestyle that buyers could have in your home. Stay away from cooking, though – baking smells are generally delicious to most everyone, but cooking certain foods can be much more polarizing, and create the opposite impression.

Also, things like hot cocoa or coffee are great to offer buyers when you show your home on a snowy day, and make a great companion to fresh-baked smells.

Vehicle Storage

Vehicle storage may not seem like a big deal to you when you’re shopping for a home – or you may find a two-vehicle garage firmly entrenched on your list of must-have amenities. Even if you don’t think it’s important, you may later change your mind and wonder why you didn’t put more thought into your garage. When you’re viewing homes, make sure you consider your vehicle storage needs and evaluate whether the property can offer what you want.

Measure, Measure, Measure

It may sound silly, but measure your existing vehicles. You can fit two compact cars and a fair amount of stuff in a two-car garage, but two large vehicles, such as Buicks or even trucks, take up a lot more space. Something like a Hummer may not even clear an average garage, and certainly won’t leave you with enough space left over for a second car.

Measure your vehicles, and know how much space you need. Then, don’t be afraid to measure the garage when you’re viewing a home. Make sure you give yourself clearance for the mirrors, and for opening car doors. Think about how much space you have leftover, and whether it will be sufficient for your lawnmower, your fishing pole collection or other typical garage-stored items.

Consider Your Future Vehicle Storage Needs

You may only be a two-vehicle house now, but do you have a teenager approaching driving age? Do you intend to add a motorcycle to your household, or other vehicle best stored indoors? Try to give yourself some breathing room, and be realistic about your future vehicle storage needs. Ask yourself if you have the space and ability to add on to the garage, or build additional driveway to store more vehicles. Will a vehicle stored outside be in the way when you need to pull cars in and out? All of these factors play a role in whether a property offers enough vehicle storage.

Yard Tips

When you buy a home, you’re making a long-term investment. Most people are likely to remain in a home for anywhere from 5 to 20 years, and some people stay longer. So when you’re thinking about whether a home meets your needs, you have to not only consider today, but to consider your future plans. This is true both inside and out. Your yard is almost as important as the home itself. Is it big enough for what you might want to do with it? Is there a homeowners’ association that can limit what you can do with your yard? Consider your future when you’re home-shopping, and ask yourself what you can do with your yard.

Consider Future Landscaping Projects

Have you always wanted a deck overlooking a restful koi pond in your back yard? A rock garden? Want to watch a beautiful tree grow from a sapling to a majestic size? Ask yourself whether the yard you’re considering supports your landscape projects – and whether you live in an area governed by a homeowners’ association that can limit what you can do. Given the length of time most people spend in a house, your “someday” landscaping projects will probably happen right where you’re buying. Think about that when you do.

Consider Kids or Pets in Your Household

Have you discussed having children? Or have an infant now that’s quickly growing into a child who might want a swingset, a slide, a treehouse or some other backyard play area? Ask yourself if the yard has space, and if you can safely enclose it for your child. Also, again, you’ve got to ask the question about whether a homeowners’ association will restrict what you can do.

The same thing goes for pets; do you have dogs right now, or think you might want to add one or more in a future? Does your new yard have a fence, or can you add one? If there’s an existing fence, is it safe enough to contain your pets? Don’t just think about your current yard needs when you buy; consider the future, and how your family might expand.