What's Driving Buyers To Buy Homes?

By Phoebe Chongchua


January 21, 2011

The Wall Street Journal is reporting that “affordability” is the top reason for home buying in 2010.

That makes sense, especially in unstable market conditions. Buyers, as always, are looking for a bargain but, more than ever, they’ve been enticed by low home prices and low interest rates, according to a survey by Weicher Realtors, Inc.

The survey gathered information from 1,261 of the company’s customers who bought homes between July 1 through December 31, 2010.

What about pride in homeownership? it appears that buying a home because they didn’t want to rent, was not the driving force. Instead, it came down to price. This differs from survey results five years ago when respondents (26%) said, “the desire to own their home and stop paying rent” motivated them to buy, according to the Wall Street Journal.

Another influencer was the desire for more living space. According to the Wall Street Journal the survey reported that 28% of the respondents said, “ they bought a house because they wanted more living space or a larger property”. However, 11% of those surveyed said that “potential financial growth” motivated them to purchase a home. This response is similar to the answers received in the survey’s first year (2005) when respondents answered the question, “What motivated you to purchase your home at this time?”

A sharp drop (12%) was reported by respondents who said they bought a house in 2010 due to relocation. The figure was the same as 2009. However, it’s a decrease from 20% in 2008.

Real estate experts believe that buyers are still motivated by the potential financial growth, but indeed a good value in the form of low interest rate and discounted home prices is the driving force these days. So, if you are listing your home for sale, focus on value. Detailed marketing materials that showcase your home’s amenities, walking-distance retail outlets, and neighborhood parks and schools will also help create value.

Don’t underestimate the importance of valuable upgrades such as new appliances, water heater, solar panels, green technology, smart wiring for commonly used technology, and, of course, any energy-saving lighting and/or heating/air conditioning systems that you might have installed.

Light up your house as much as possible when showing or holding an open house. Even if you typically keep the shades drawn, open them up, turn on light fixtures and, if you have skylights, make sure they’re clean.

Value increases for buyers the more they can see themselves living in your home. So, make it cozy, comfortable, and attractive. In the bathrooms, hang color-coordinated towels; some fresh flowers in a vase. And if the walls are scuffed, try using a Magic Eraser. If that doesn't work, touch up the paint or paint the entire bathroom.

In the dining room or the kitchen, set the table. But don’t overdress the table. Too much stuff on a table makes it look crowded, small, and can be a turn-off.

Remember, selling your home is about creating value for buyers. That means how you live in your home may not be the way you show your home. You may have to put away a lot of the clutter such as trinkets, family photos, pet toys, electrical cords, kids’ toys, and anything else that is personal to you. By doing this you’ll create a greater chance of buyers viewing your home as theirs. And that's value.

Copyright © 2011 Realty Times. All Rights Reserved.

Consequences of Defaults and Foreclosures

by Carla Hill




The economy has put a strain on thousands of households across the nation. In these tough times, many homeowners are struggling in the face of foreclosure. What are the consequences of defaulting on your loan? And what can you do to prevent this loss?

One of the most startling impacts of a foreclosure appears on one's credit report. Your credit score may plummet by 200 to 300 points. In this economic climate, where credit lending standards are already tightened, you may then find it difficult to do everything from buying a car to renting an apartment. What's worse is that the notation of foreclosure stays on your report for up to seven years.

Next, you may owe the lender money. They backed a loan on a home worth X amount. If they sell your home at foreclosure for less than that amount, you may be responsible for the difference. Many states have laws protecting you against this action, but speak with an attorney to find out for what you may be liable.

Lately, after the sudden drop in property values in certain markets, investors have been guilty of strategic defaults. This is when an investor purposely defaults on a property, because the time it will take for them to recoup their money is perceived as too great. A word to the wise: courts are now ordering deficiency judgements in some cases, where the investor must pay the lender back their losses.

There really is no winner in a foreclosure. With homeownership comes increased family stability. The loss of a home can be a trying time on all members of the family. Beyond your own family, a foreclosure can mean lowered property values for your entire neighborhood.

Avoiding default and foreclosure is not always possible. If you are not able to make your payments, be sure to be honest with your lender. They may be able to present you with an alternative. In addition, here are a few tips to get you thinking.

1. Short Sale. A short sale occurs when a borrower is unable to pay their mortgage loan. Both the homeowner and lender consent to a short sale, which means selling the home at a moderate loss, avoiding foreclosure and its associated frees and havoc on credit reports.

2. Talk to your lender. They may be able to offer you programs, refinancing, or counseling that can help you avoid losing your home. Most banks don't want you to foreclose, as it would mean they take a loss.

3. Selling if not underwater. If you are not underwater on your home loan, meaning you don't owe more than you can sell for and owe, then now is the time to employ a real estate agent and get your home sold. Downsizing or even renting is a better option than ruining your credit for the next seven years.

4. Budgeting. There are non-necessities that can be cut out of your expenses. Cut down and live as simply as possibly. You may have more money than you realized!

5. Financial counseling. Defaulting is serious business. You would be wise to meet with a financial counselor to see if they can help you avoid losing your home.

6. Refinancing or loan modification. Your bank or lender may be willing to allow you to refinance. This can translate into lower monthly payments.

The bottom line is this. Defaulting on your mortgage has severe consequences. Try your best to balance finances before your mortgage becomes an issue. And be honest and upfront with your lender in the event that a default is likely.

Buyers are hit hard by first impressions, and sellers take advantage of this fact, aiming to amp up their curb appeal.

Curb Appeal Projects Remain Cost-Effective

by Carla Hill

This is, after all, where they get the most bang for their buck. According to the latest Remodeling Cost vs. Value Report, the National Association of REALTORS® (NAR) reports that "nine of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects." These exterior projects are outperforming their remodeling counterparts.


Interior projects should not be forgotten, however. These spaces earn returns on costs, as well. Many times interior updates can make you stand out from the competition in your area. It is simply that in today's economy, "remodeling projects, particularly higher cost upscale projects, have been losing resale value in recent years because of weak economic conditions." (NAR)

With curb appeal projects, however, a little money can go a long way. Topping the list? Steel entry doors are returning 102.1 percent of their cost upon resale.

What other projects are sellers tackling? While most projects don't bring the profit returns of steel entry doors, sellers have some other great options for attracting buyers.

• Siding and window replacements - 70 or more percent of costs recouped

• Midrange garage door replacement - 83.9 percent of costs recouped

• Upscale fiber-cement siding replacement - 80 percent of cost recouped

• Wood deck additions - 72.8 percent of costs recouped

“It’s important to remember that the resale value of a particular improvement project depends on several factors,” says National Association of Realtors® President Ron Phipps. “Things such as the home’s overall condition, availability and condition of surrounding properties, location and the regional economic climate contribute to an estimated resale value."

Yet, says Phipps, "Curb appeal remains king – it’s the first thing potential buyers notice when looking for a home, and it also demonstrates pride of ownership."

Published: December 21, 2010