Where Is Your Next Buyer Hiding?

Tomorrow’s Home Buyers? Check the Basement.

The housing market needs an influx of new buyers.  Don’t hold your breath waiting for today’s new college grads to get house hunger any time soon They simply can’t afford it, considering that their starting salaries are about 10% less than that of the last few classes.

What about young families, the classic first-time buyer demographic? Many millennials are still living in their parents’ basements, and household formation has been weak. But one analysis says that the problem isn’t as much the buyers lingering in the shadows. It’s that the shadow buyers are overshadowed by the still-growing number of foreclosures lingering just off stage.  As new buyers ease into the market, those foreclosed houses will enter the market even faster. Supply will continue to outstrip demand for the foreseeable future.

Not a pretty scenario. Which is why we recommend that you track local pricing trends so you understand the demographics, job growth and housing trends in your own neighborhood. Start with the ForSaleByOwner.com Pricing Guide. Decide which factors are most likely to affect demand, and prices for houses in your area. The more facts you have, the less you will fear what’s lurking in the shadows.

Image courtesy  of Morguefile contributor ktambler.

Appraisers Fight Back

Appraisers are a tad testy these days, judging from the defensive tone of their otherwise homeowner-friendly new tip sheet.

"Credible opinions of value can help to stabilize the real estate market," said Appraisal Institute President Joseph C. Magdziarz. said. "Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."

Welcome, appraisers, to our point of view!

Sellers need every scrap of data they can get their hands on to support the asking, the selling, price of their home. Smart sellers think like potential buyers: what pricing data does the buyer have to bring to the lender to get financing? That’s the data that sellers get before putting the house on the market, and that’s the data that sellers use to price their house.

The very best pricing data comes from an independent appraiser who is familiar with your neighborhood. An appraiser who drives 100 miles to spend 20 minutes in your house is not going to produce the most accurate appraisal, and that could jeopardize your sale.

The Institute has just produced a tip sheet for consumers

Here are its highlights:
•    Understand the role of appraisals.
•    Make sure their lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute).
•    Accompany the appraiser during the inspection of the property if possible.
•    Request a copy of the appraisal report from the lender.
•    Examine the appraisal report and ask questions.
•    Appeal the appraisal if appropriate.
•    Ask the lender to order a second appraisal by a qualified and designated appraiser.
•    File legitimate complaints with appropriate state board or professional appraisal organizations.

What’s your house worth? Find out before you put it up for sale. A buyer’s market is no place to test the market with a guess.

Image courtesy of Morguefile contributor mhrubin.

Appraisals, or Guesses?

Here's a short case study in the art -- never a science - of home appraisal, from our sister site, the Baltimore Sun. Three appraisals, three different values. The lender ended up taking the average...but what does this say about the current state of the housing market? That, literally, your guess is as good as any as to what your house is worth.