865 Real Estate

East Tennessee Real Estate & Neighborhood Source

Thinking about buying a Knoxville home? Nervous? Ask yourself WHY to both.

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Buying a home in KnoxvilleAre you in the market to buy a home in Knoxville or beyond?  Are you worried about whether you are buying at the right time and scared that prices may continue on a downward trend? If you are thinking about buying, the number one question you have to ask yourself is WHY?

The question of WHY, seems like it should be easy enough to answer but make sure you think about the real reasons. Many experts are predicting that, in many markets across the country, home prices will continue to decline. This news, which is so prevalent in the national media, has caused many buyers to stay on the fence of indecision hoping to find that perfect time to buy. If you are planning on purchasing a home to flip or sell quickly as an investment, waiting makes perfect sense.

However, what if your reason for buying a Knoxville home isn’t necessarily about making money?  Does it still make sense to wait? Ultimately that depends on WHY you are buying. Perhaps the real reason you are buying a new home is to improve the quality of life for your family. Maybe you are moving across town into a school district where you feel your child could be better served. You could be trying to get closer to friends and family. Delaying these moves may end up costing you more than money.

Sure, no matter why we are moving we want to be sure we are making a good financial decision, but delaying and hoping to ‘time’ the market might not make sense.  A recent article by John E. Girouard on Forbes.com last week addressed this issue:

“Trying to time the housing bottom is as much folly as trying to time stocks or any other investment vehicle. In fact, it’s greater folly because if housing prices do fall further, it’s likely to be because mortgage rates are rising, which would mean that over the long term that slightly lower price you may have paid could end up costing more in carrying costs than you saved.”

He went on to say:

“My answer to those who ask whether now’s the time to buy a house is that the American Dream is and always was alive and well. It has nothing to do with the direction of housing prices but everything to do with your financial situation, income stability, ability to shoulder the costs, and if the home you have your eye on is your version of the American Dream—a home you love that you hope to live in for an extended period.”

What does all this mean?  It means that you shouldn’t base your decision on buying a home solely on finances.  Look at the real reason you want a new Knoxville home and let that weigh at least equally in the decision.  Oftentimes getting in that new school district, or closer to family and friends, and improving your quality of life can make a POSSIBLE financial loss seem inconsequential. Ask yourself what is really important.

What are the long term benefits of buying a home vs. renting a home in Knoxville?

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This infographic from Forbes.com explains pretty clearly the long term benefit of buying a home in Knoxville versus renting.  The American dream is alive an well and as this shows can in turn help you save for retirement.  Renting may be a good option if you are planning to stay in a location for a short term, but if you plan to live in your home for an extended period, buying is the right move.

Buy vs. Rent in Knoxville, TN

Why waiting and getting a lower price on a Knoxville home may end up costing you more!

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Don't Wait to buy a Knoxville HomeCouple today’s ultra-low interest rates and the low home prices being offered by the Knoxville housing market  and you get “perhaps the best deals of a generation,” notes a recent article by Bloomberg Businessweek.

With mortgage rates that have been hovering at record lows for the past few weeks (4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac’s mortgage market survey) and Knoxville home prices that are down double digit percentages since the boom in the market.   “It’s hard to see the possibility of losing on a home purchase right now, with these mortgage rates,” says economist Dean Baker. “Prices may go lower, but not by much.”

The article notes the following scenario: Buying a $300,000 Knoxville home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012 but mortgage rates will INCREASE by a half-point. So for that same loan under that scenario, a Knoxville home would sell for $289,000 while the monthly mortgage bill would be $1,171–only a $26 difference.. HIGHER.

Actually waiting for the lower sales price would cost you $18,037.50 more in interest payments and $9,237.50 more in total payments over the life of the loan.  Couple these numbers with the price of lost time in enjoying a Knoxville home that may offer you and your family a better standard of living or a better school district and the cost increases exponentially.

Run the numbers yourself and you will see that now is the time to buy.  BEST TIME EVEEEEERRRR!  🙂

How to avoid pricing incorrectly when selling a home in Knoxville

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Pricing your home to sell in KnoxvilleWhen you are selling your home in Knoxville, your strategy for pricing will be the #1 determining factor for getting a quick sale. Listing your home at the correct price can almost guarantee that a buyer will scoop up your property. On the flip side listing at the wrong price can cause your home to languish on the market for months and months with little to no showings.

Pricing is not a simple process, and Knoxville home sellers are likely to make mistakes that waste both time and money.

 

Don’t let this happen to you! Read below and avoid these common pricing errors to give yourself the best shot at a fast sale:

ERROR #1: Not doing your research

Often times sellers will base the price of their home on the listing price of the house down the street or something they have heard regarding pricing in the neighborhood.  While knowing the prices of your competition is important, in many markets, listing prices are not a good indicator of what your home will actually sell for.

“Currently in Knoxville you will find that homes typically sell for 7% to 9% less than they’re listed for,” says Leslie Sellers, president elect of the Appraisal Institute. “So sellers who list their homes based on other listing prices are already almost 10 percent too high about what they expect to get out of their house.”

TO DO: Price your home based on a “comparative market analysis”. This is a report prepared by a Knoxville real estate professional that looks at the recent sales of similar homes in your area. For a fee, you can also get an estimate of your home’s value with a professional home appraisal.

ERROR #2: Hiring the Knoxville real estate agent who tells you highest list price for your home

It never fails. You talk with several Knoxville listing agents about how much they think they can get for your home, and one gives you a significantly higher listing price than the others. WARNING: the agent may be trying to “buy” your listing by suggesting an unrealistically high asking price. This practice is unethical and will cost you time and money.  You will ultimately end up having to reduce your price significantly after your home has sat, without interest for many months.

TO DO: Always interview at least three agents and choose one who backs their suggested listing price with comparable sales data.

ERROR #3: Getting Emotional

You have probably spend significant time, money, and energy turning your house into your home, so it is only natural to be invested emotionally in it’s sale. Here is the bad news, buyers won’t have the same feelings for your home as you do.   So regardless of what you “think” your home is worth, this should not be a factor in determining your listing price.

TO DO: You must stay objective during the pricing process by focusing on data spelled out in the Comparative Market Analysis. Do not take personal offense to low offers.  Think of them as the starting point of a negotiation that could ultimately result in the sale of your home and transition into your new home.

ERROR #4: Pricing High Early

You only have one chance at a first impression when selling your home in Knoxville and those first impressions are crucial to a fast sale.  Research shows that the first 10 days of a listing generate the most activity.  If your home enters the market overpriced, it will often be overlooked by many buyers because it will not fall into their price range.  Then when you ultimately reduce the price to fair market value, those potential buyers will have already made an offer on another home. The buyers who may be interested in your new lower price will also see that your home has been sitting on the market for a while, which could lead them to perceive that there is something wrong with the home.

TO DO: Price your home correctly the outset to get the attention of serious buyers and sell faster. Keep in mind the additional costs of ownership that you will be paying if your home sits on the market for multiple months at an unrealistic asking price.

ERROR #5: We have “time to sell” so we can price it higher and see what happens

Sellers who are not pressed to sell often choose to test the market by listing their homes at a higher price and waiting to see where the market goes. Unfortunately in most markets, where home prices are dropping, waiting may actually cause you to lose money.

“It’s key to price properly right away because you have a greater chance of selling if you’re just on the market,” says Wendy Sarasohn, senior vice president of The Corcoran Group in New York ” Everybody wants something that’s brand new, not been shopped around, and not on sale.”

TO DO: Price your Knoxville home based on current home values and you will ultimately sell if faster and for more money.

ERROR #6: Market Chasing

If you overprice your home early, you could find yourself making incremental price drops but never quite catching up with the market.

Here is an example:  Sellers insisted on putting their Knoxville home on the market for $250,000, despite the fact that comparable homes in the neighborhood were selling for around $225,000. Four months and no showings later, the sellers finally decided to drop the price to $225,000. However, by this time home values had declined significantly in those months, so the reduced price was still four months behind the market. Since then, the sellers have been reducing the price on the home about every three months, but never catching up with their competition.

In a potential buyer’s eyes multiple price reductions not only make a home appear stale, but that there may also be something wrong with it.

TO DO: Price your home competitively to begin with. If you don’t get any activity, don’t hesitate to lower your price quickly.  Work with your Knoxville real estate agent to reevaluate market conditions and determine the fair market value of your home.

Don’t hesitate to contact me if you are thinking about selling and would like me to put together a Comparative Market Analysis on your home.  I look forward to helping you price it right and get it sold FAST!

If a tree falls over your property line and no one is around to hear it… Who Pays?

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If a neighbor’s tree falls over your property line, file an insurance claim for repairs and cleanup. No house damage? Check if chopping and hauling debris is covered.

When a tree falls

Your neighbor is responsible when a tree falls over your shared property line only if you can prove he was aware that his tree was a hazard and refused to remedy the problem. Regardless, your insurance company restores your property first, and later decides whether or not to pursue reimbursement from the neighbor or his insurer if the neighbor was negligent in maintaining the tree.

Before a tree falls

Write a letter to your neighbor before his dead, diseased or listing tree falls through your roof or over your property line.

The letter should include:

  • Description of the problem
  • Photographs
  • Request for action
  • Attorney letterhead–not necessary but indicates you mean business.

Trim their trees

If the limbs of a tree hang over your property line, you may trim the branches up to the property line, but not cut down the entire tree. If a tree dies after your little pruning, the neighbor can pursue a claim against you in civil or small claims court. Depending on the laws of your state, your neighbor may have to prove the damage was deliberate or caused by negligence, but may also be able to recover up to three times the value of the tree.

Before you cut, tell your neighbors what you intend to do to protect your property. They may offer to trim the whole tree instead of risking your half-oaked job.

Your tree falls

It’s always a good idea to take care of your big and beautiful trees, and keep receipts for trimmings and other care.

But if your tree falls over a neighbor’s property line, do nothing until their insurance company contacts you. You may not be liable unless you knew or should have known the tree was in a dangerous condition.  If you pruned a tree or shored up trunks to prevent problems, gather your receipts to prove your diligence.

By: Ann Cochran

Published: March 23, 2011