Seller’s Market Favors By-Owner Transactions
Nasty winter weather across much of the U.S. has failed to cool the upward trend in home sales; as spring nears, buyers will continue to hunt a smaller pool of properties.
The numbers prove that this is great news for by-owner sellers.
Sales for the year just ended were the highest since 2006, and overall median prices grew steadily, according to figures compiled by the National Board of Realtors. Nationally, the median existing-home price for 2013 stood at $197,100 — an 11.5 percent increase from 2012’s $176,800.
The supply of foreclosures is also drying up. In its National Foreclosure Report for December 2013, financial and real estate analysts at CoreLogic point to 45,000 completed foreclosures, a 14 percent drop compared to December 2012. The analysts also note that the serious delinquency rate is at its lowest since November 2008.
Mirroring real estate industry optimism, CoreLogic’s Home Price Index Report for December 2013 shows home prices climbed 11 percent over the previous year.
Average mortgage rates remain relatively low, encouraging house hunters to act now. On Feb. 6, Freddie Mac reported mortgage rates lowered for the fifth week in a row. Thirty-year fixed mortgages averaged 4.23 percent, down from 4.32 percent in the previous week, and down from 4.53 percent at the beginning of the year.
If these warming numbers aren’t enough, the spring and summer selling season is about to add its own heat to the 2014 housing market. Schools will be letting out, families will be preparing to move, and getting to the closing table will be at the top of their to-do lists. Traditionally, data shows that more than half of all homes are sold during the summer.
Armed with this knowledge, for sale by owner (FSBO) sellers can take advantage of this flood of buyers.
According to Eddie Tyner, general manager of ForSaleByOwner.com (one of several online services that help homeowners bypass real estate agents as well as their 6 percent commission), by-owner sellers have distinct advantages in this landscape:
- Even when represented by an agent, today’s home buyers use the Internet to find their ideal home.
- An online by-owner listing lets buyers conducting their own home searches quickly connect directly to FSBO sellers to view and make offers on homes without relying on an agent.
“In a tight market like this, home buyers are aggressively using every resource they can to make sure they find the best house at the best price possible,” Tyner says. “Low inventory creates a great opportunity for home sellers. If sellers use all the marketing resources available to them to position their listings everywhere buyers are looking, they are more likely to sell without an agent.” Tyner notes that the reality is that in most cases, for sale by owner sellers reach the same amount of buyers with the same marketing resources and exposure that agents provide.
The worst thing a by-owner seller can do is become complacent, Tyner says. Prospective home buyers are more numerous now, but that’s no reason to skimp on the details. Tyner emphasizes that it’s still important to price your home realistically, stage and photograph your home so that it looks better online than competing properties, and to continue to insist upon pre-approved buyers (not merely pre-qualified) as a condition of showing your property.
Keep all of this in mind and you — and your bank account — will benefit from this rebounding housing market.