Plano Homes and Price Reductions

Plano home price reductions, price adjustments, price improvements, it doesn't matter what you call it, sellers don’t wants to hear that they may need to lower their price. In slow markets it's not unusual for sellers to put the blame on the real estate agent for their home not selling. They real culprit is that the seller has unrealistic expectations for the price of their Plano real estate. Many times sellers will say, "Why don't do you do more to sell my house?"

Before Reducing Your Listing Price

• Review Your Marketing and Answer The Following Questions

1. How many ads have been are running for your home in the Collin County real estate section?

2. What kind of direct mail campaign has been launched, if any?

3. How many open houses have there been?

4. Does the house show well online, are there a lots of pictures?

5. Is your for sale signage in a good visible location?

6. Do you have a virtual tour?

7. What kind of feedback have you received from DFW Realtors and prospective buyers?

8. Are you offering enough commission to selling agent to make showing your home worth their while?

9. How many showings have you had so far?

• Are You Selling in a Buyer’s Market?

1. When the market is slow, inventory is high and demand falls. If that's the case, and you don’t have to move, maybe you can take your home off the market.

2. It doesn’t make sense to put an overpriced home on the market that is not going to receive any showings.

3. If you're not motivated to sell, you may be better off renting your house or staying put until the market corrects.

Choose the Right Price from the Start

If you're price is too high, you'll need to continually reduce it until your price hits the magic number, and by then buyers will begin wondering:

1. What is wrong with your house?

2. Are you hard to deal with?

3. Are you in a distress situation?

4. How much lower will you go?

The reality of it is that you will end up with less money than you would have if you priced the home properly from the beginning. Ideally, you want one price reduction. Here are guidelines to consider:

• Realize your agent is not your adversary but is on your side; enlist his help.

• Review the pending sales and examine the market history. How many days on market were the homes before the price was reduced and how much of a price reduction was made? You won't know the sold price, but you can determine average price reduction percentages.

• Compare the sold prices with active listings. Are sold prices higher or lower?

• Compare the history on the active listings to determine how many days on market before they were before the prices were reduced.

• Run a side-by-side comparison with active listings near the price point you are considering. Price yours so it falls in the bottom two to five listings or, if you're really motivated, price it less than anything else on the market.

Is Your Plano Home Price Too Low?

• Even in distressed markets, as home prices are declining, homes that are priced below the average sold prices will receive multiple offers and sell quickly.

• With multiple offers it's common to have price wars among competing buyers, which will generally result in an accepted offer for more than list price.

The Final Word - Every House Will Sell if the Price is Right!

Mortgage Companies and Dallas Foreclosures

Mortgage Companies and Banks own Dallas real estate because they have acquired these properties through the foreclosure process. Properties on the bank's books are called REOs, which stands for "real estate owned." When banks receive property through a Dallas foreclosure, it's because no one bid the minimum amount of the existing mortgages at the courthouse steps. These foreclosures may not seem like a good value, especially if the bank wants to sell these properties for the amount that was owed to the bank by the previous property owner. With all that said, here are at least two reasons why an REO can be a great Dallas home value for you:

If there were two mortgages on the property the second lender may not want to foreclose on the property. If the second lender does not make up the back payments and cost to the first lender and that first lender goes forward with its own foreclosure, the second lender will get wiped out in the foreclosure, a devastating loss to that lender.

The bank does not, and cannot sit on its foreclosed property. Since the bank did not receive its minimum bid from a buyer during the foreclosure sale at the courthouse, the bank is likely to price that REO property for less than what is owed to them just to get that property of its books.

Negotiating for REO Properties

If the DFW home listing is new to the market, it is very likely that the bank will not come off much from its listed price. You will have better negotiating power if you go after properties that have been on the market for more than 30 days. Here are a few more tips:

Many banks will not paying typical closing cost for the property buyers. Some fees such as title policies, county and state fees, are paid by the buyers and not the bank. Banks generally will not pay for termite inspections, repairs or home warranties.

Banks often negotiate bulk-rate discounts with title and escrow companies. If you choose to use the bank's title/escrow company, check the fees of those companies. Typically, fees not paid by the bank but paid by the buyers will be higher because title and escrow companies often make up those discounts by charging the buyers more.

Some banks will not sign a counter offer until all the terms are mutually agreed upon between all the parties verbally.

Expect that the bank will require you to sign its own addendum to your standard purchase contract. Read it thoroughly and ask a real estate attorney for advice if you do not understand everything in it. You can bet the bank's lawyers drew up that addendum, and it's not in your favor.

If the bank won't budge on its price and you receive a rejection, wait 30 days and then resubmit your original offer.

You might wait 10 days, or more, for a response to your offer from the bank: be patient.

The bank may ask for you to submit a loan application to them so they can prequalify you so they will be sure you can close on the property. You will not be obligated to obtain your mortgage from that bank.

If you cannot close by the closing date listed in the contract, the bank may charge you a penalty for each day you don't close pass that date. Make sure you have get a mortgage pre-approval from your own lender before submitting an offer to the bank so you will have assurance that you will receive the financing from your lender without running into unexpected delays.

There are some drawbacks to buying a foreclosure property. In almost every case you will likely be required to buy the property in "as is" condition. You still have the right to make your offer subject to a home inspection though.

It is in your best interest to retain the services of a professional Dallas Realtor to guide you through the ins and outs of the Dallas foreclosure market. The best thing is that you get 100% representation and it cost you nothing because the bank pays the Realtors commission. You Win!

Tips for Buying Your First Plano Home

There are only 5 basic steps to buying your first Plano home.

Hire a Buyer's Agent

It is best to hire a buyer's agent first but if you prefer start looking for Plano homes online or visit open houses first. If you retain a Plano Realtor first it will save you a lot of time and frustration. Your buyer's agent will know and do the following:

•• Agents many times know of new listings coming up that are not yet in the MLS.

•• An agent can send you listings directly from the Realtors MLS that meet all of your search criteria, and you won't waste time looking at listings that are already under contract.

•• You can save your gas and go to view home in your Realtors car and not your own.

•• Some agents will preview homes for you to ensure the homes that they show you meet all of your needs.

•• An agent can usually spot over priced listings and advise you accordingly.

Find the Right Home to Buy

Buying a home can be an overwhelming process and emotionally draining. Finding the right home is not an easy or fast task. Buyers are advised to look at a maximum of 7 homes at a time because any more than that will make your head spin and all of the homes will start blending together. Most buyers do a lot of online research before ever stepping foot in a home. According to the National Association of REALTORS, buyers spend an average of 6 to 8 weeks, trying to figure out where they want to live. But once the community is chosen, most buyers end up buying a home after 2 or 3 home tours.

Get a Mortgage

It's not always necessary to have a approved loan in your back pocket before looking at homes, but it is paramount to get a mortgage pre-approval letter in advance. This way you know for certain how much home to you can afford and it shows the seller that you are a serious, qualified buyer. Many sellers won't look at an offer if the seller doesn't have assurance that the buyer can get a mortgage to buy their home.

FHA financing is becoming more and more prevalent because the minimum down payment requirement is much less than a conventional loan. However, if you are thinking about buying a Plano foreclosures home, for example, buyers with cash or conventional mortgage tend to get priority with REO banks. You can ask your agent for a referral to a mortgage broker or check with your own bank/credit union.

Negotiate Your Home Offer

Plano real estate buyers sometimes make the mistake of comparing the sales price of a home they are interested in to other homes they have seen, active listings. It's a mistake to compare sales prices among homes for sale that have not sold yet. That's because sellers can ask any price they want but it doesn't mean the home will ever sell at that price. An agent can provide comparable sale information and look at pending sales. Comparable sales are similar type homes in the same condition and location that have sold within the past 3 months. Pending sales will become the comparable sales by the time your home closes. In some markets you may have to pay over list price especially if many buyers are going after the same homes. Your agent can give you a price range and help to manage your expectations. A good buyer's agent knows there is always more to an offer than its price, but price is the main factor.

Do a Home Inspection

A home inspection is a contingency in the sales contract. A contingency means that a buyer has the right to cancel the contract for different reason like a low appraisal, financing falling through, etc. You might not want to be locked in to buying a home that has a faulty foundation or other structural problems, for example. When repair items turn up it opens up the door for more negotiations. Maybe you can get the seller to pay for, or give you a credit for, certain repairs. If a home inspection uncovers a major defect you will have the right to back out of the sales contract.

DFW Real Estate – Buying Foreclosures, Short Sales and REO’s

Dallas foreclosures, short sales and REOs are all dangerous animals but they are different from each other. However, they are also similar because without knowledge about how each of them work you could find yourself in dangerous territory and in trouble. As an example, while most short sales are foreclosures, not all foreclosures are short sales. To further complicate things, REOs are not short sales either, but some intended DFW Real Estate short sales can end up as an REO property. Retain the services of a professional Dallas Realtors with experience in these areas to advise you.

What is a Foreclosure Home?

A foreclosure home is when a notice of default has been filed in the public records by the mortgage company. It means the owner has stopped making their mortgage payments and the lender has given notice that unless the payments are brought up to date, it will sell the home at auction to the highest bidder. Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is two or more payments in arrears. If the home owner does not bring the mortgage current, the lender will file to take the property away from them.

Not all homes that fall into foreclosure go to public auction because owners have the right to make up back payments up to a certain point; this time varies from state to state. Real estate investors and home buyers see profit in buying foreclosed homes because they can often buy the property for the amount owed on the mortgage, picking up the home owner's equity for free. Even high end areas like Highland Park homes are not exempt from foreclosures, short sales and REO’s.

What is a Dallas Short Sale Property?

A short sale generally occurs when a home owner is in foreclosure but before the property goes to public auction. With a short sale, a lender must agree to accept less than the amount that is owed on the mortgage balance. Unlike with a foreclosure, investors generally buy the home for even less because investors are not paying off the existing mortgage and they aren’t making up the back payments. Investors attempting to make a deal with the existing mortgage company to take less than what the lender was originally due in order to avoid dealing with the time and expense of a foreclosure.

It's a myth that mortgage companies are not going to accept an offer from an investor unless the seller has fallen behind on their obligation to make timely mortgage payments. Sellers don't need to be in default for a short sale to occur. For a buyer who wants to live in the home, buying a short sale makes financial sense but the short sale time line may pose a challenge for some.

What are REO Propertied - Real Estate Owned?

• Buying an REO is similar to buying a short sale except the property is already owned by the mortgage company.

• The property was acquired by the lender through a foreclosure action where no one bid higher than the amount owed on the mortgage.

• Many time lenders will sell repossessed homes for less than the past mortgage balance to get them off their books.

• Bank-owned properties are called REOs, meaning “real estate owned” by the lender.

Mortgage companies end up owning the property when no one at the foreclosure auction bid high enough to cover the amount owed against the property. REO homes are often considered one of the best ways to buy a distressed property. This is because the seller is already out of the home and of the picture. It's just the investor or person wanting to live in the home, the real estate agent, the bank and the bank's asset manager who are negotiating the transaction.