12 reliable real estate tips for 2012
By Steve McLinden • Bankrate.com
To buy or sell in 2012, what with Armageddon coming and all? Absent any ancient Mayan wisdom on real estate strategies, let’s just hope the real cataclysmic event in the real estate market already has passed, even if the rubble from the bubble remains.
A stubborn overstock of households with loans higher than their value will continue to restrain prices and create some major obstacles for sellers in 2012, a year that’s shaping up to be another home buyer’s market. In fact, recent studies indicate that more than 20 percent of all residential properties with a mortgage are still underwater, hinting that many foreclosures and workouts are still to come.
However, even the most conservative forecasts call for growth in home sales in 2012, with some select pockets around the country already busting out where there are competitive offers on new listings. More than one-third of home resales were made to first-time buyers in 2011 — another good sign.
Meanwhile, here are 12 tips for 2012, aimed largely at the group that needs the most help — home sellers.
Price it right from the get-go
The old-school strategy of real estate sellers crossing their arms and holding out for a better offer will be brushed off by most homebuyers. Consider that of the homes that took four months or more to sell in the past year, almost half of their owners accepted less than 90 percent of the asking price, according to the National Association of Realtors. For a gauge, have your agent produce the latest comparable sales including short sales and foreclosures as well as a recent summary of sales prices versus original list prices. But be wary that such information doesn’t reflect the homes that failed to sell.
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Commentary from Bob Karp of Karp Properties LLC: The old saying about the three most important aspects of real estate – location, location, location. Now, I believe, it is price, condition, location. Buyers are most interested in price. If you do not have your house priced competitively it will probably not sell. If you know the value of your home in 2007 or purchased your home between 2007 and the end of 2010, take 20 – 30% off its value for your current market value. Brutal? Yes, but that’s the reality. Without a good price, you will not get buyers to even look!
Buyers will overlook less than acceptable condition if the price is rock-bottom. However, to compete against other homes in your area that are not foreclosed or bank-owned, your house should be in pristine condition. This includes exterior as well as interior. Finally, location does play a part. A desirable location may get a buyer to overlook a higher price or poor condition; but buyers today have many options and will often expand their desired area to get a better price. Consult you real estate professional when deciding on the sales price of your property.
