Here’s a Cheatsheet to Understanding House-Pricing Indexes

Heres a Cheatsheat to Understanding House Pricing Indexes- 150x150House-pricing indexes measure changes that occur in the pricing of residential homes. The most commonly used house pricing index is the Case-Shiller Index, put together by Karl Case, Robert Shiller and Allan Weiss in the 80s. After developing the housing index, they started a company to help them sell the research. Their company was later purchased by Fiserv, Inc., which records the data behind the index. After the data is recorded, it is distributed by another financial services company called Standard & Poor’s.

The Case-Shiller index is actually composed of several indexes, such as the national home price index, which is determined quarterly and published in February, May, August and November. Another index is the 10-city composite index, and it covers the following cities: Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, DC. A third index is the 20-city composite index which, besides the cities listed above also includes: Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa. Also, all the cities in the 20-city composite index have 20 individual indexes.

What Does the Case-Shiller Index Do?

The Case-Shiller index analyzes the changes in the pricing of single-family homes by comparing the prices for which the same properties have sold over time. Because newly built homes don’t have a pricing history, they are excluded from the analysis conducted by the Case-Shiller index. New homes usually must have had 2 owners before it can be determined how their pricing has changed over time. Condos are also excluded from the Case-Shiller index, although there is an index that analyzes condominium pricing in five major areas: Chicago, Boston, Los Angeles, New York and San Francisco.

The Case-Shiller house-pricing index tracks homes sold at market value for prices that can be used to accurately determine the state that the housing market is in. Transactions where homes have been sold far under market value, for example between close family members, won’t be included in the case-Shiller index, because they don’t accurately represent the housing market activity in that area. However, foreclosure sales are included in the Case-Shiller index because they are considered regular transactions.

Home-pricing indexes help both home sellers and home buyers. Buyers who look at indexes and see that home prices tend to increase will know that they have to hurry up and make their purchase before prices go up significantly; sellers who notice that prices are increasing can wait a while longer until they put their house on the market and increase their chances of getting a better price.

Other House-Pricing Indexes

The Case-Shiller house-pricing index might be the most popular, but there are a few other indexes that track home prices. One of them is the United States Federal Housing Finance Agency (FHFA) which, besides sales, also includes refinances. The FHFA includes 363 metro areas and covers mortgages for single-family residences which are backed by Freddie Mac or Fannie Mae.

Other indexes are the LoanPerformance Home Price Index, which covers almost the whole country, and the IAS360 House Price Index, which is published with a smaller lag than the Case-Shiller index, making it more accurate.

The Case-Shiller and other house-pricing indexes can help, whether you are looking to buy a home or sell one. Keeping a close eye on these indexes before getting involved in a real estate transaction can help you get a better deal, or, at the very least, help you better understand the housing market.

The Big Question in Selling Your Home: For Sale by Owner or by Realtor?

The Big Question in Selling Your Home- For Sale by Owner or by Realtor- 150x150Selling a home takes a lot of preparation and work, and it’s not as easy as it would seem to be. The process of selling your home should be treated with seriousness, as this will make the difference between getting a good deal or a bad one. By selling a home without the help of a realtor, it is possible to save money on commissions, but this shouldn’t be the only factor in your decision to go with a realtor or sell the property yourself.

Before making your choice, make sure that you know what the home selling process involves, so you can decide if you can handle it yourself or hire a realtor. Weigh in the advantages of each option before making a decision. This article will present the most important pros of selling by owner or by realtor, helping you make the best choice.

Advantages of Selling Your Home by Owner

If you are considering selling your home yourself, then you should know that this comes with some pretty appealing advantages, both financial and practical. Here is why selling by owner is a great choice:

  • Save money. Real estate commissions can be fairly large, but they can be avoided by selling your home without hiring a real estate agent. For example, a 6 percent commission on a $180,000 house will be over $10,000, and that’s a significant amount of money you would be saving if you handled the sale yourself. Some of the selling costs may even be tax-deductible, so you will be saving some money there, as well.
  • Sell faster. When selling by realtor, there is a big chance that your home won’t sell as fast as if you did it alone. This may be caused by the fact that the price will probably have to be higher in order to compensate for the realtor’s commission. The buyer will offer less when finding out that you are using a realtor, which will probably lead to negotiations that can further delay the sale. An overpriced house will sit on the market a lot longer, and possibly lead buyers to believe that there is something wrong with it since it hasn’t sold yet.
  • Market immunity. Selling by owner won’t be very difficult in both buyer’s and seller’s markets. In a buyer’s market, by selling your home on your own, you can afford to be more competitive with the price, and sell faster than owners who have hired a real estate agent. Selling by owner in a seller’s market allows you to hold on to a maximum amount of equity.
  • More convenient. When selling your own home, you can schedule appointments whenever it is more convenient for you; you don’t have to keep your home extra clean just in case an agent wants to show it on short notice and you don’t have to leave the house while an agent is showing. Knowing when someone is going to come and see the house will save you a lot of hassle and will allow you to prepare your home in time for the showing without being hurried.
  • Less stressful. Finding a new home and moving is stressful enough, without having to worry if your real estate agent is doing their best to sell your home. By being in control when selling your home, you will have fewer things to worry about because you will be the one who is meeting the potential buyers and finding out how interested they are. Not having to wonder what is going on all the time or why no one has made an offer yet will save you headaches.

Advantages of Selling Your Home by Realtor

There are many advantages to using a realtor in order to sell your home. The biggest benefit to working with a professional is that you don’t have to go through the complex process of selling a home on your own, which requires much more of your time and energy. Realtors have the necessary training and experience to deal with the complex and often intimidating details of selling a home. Here are some of the most important advantages of working with a realtor when selling your home:

  • Pricing your home easier. Real estate agents have proper knowledge of the current housing market conditions, meaning that they will know what similar properties are selling for in the area. Knowing how much to ask for your home without having it sit for months on the market is really important when selling. With their marketing resources and real estate connections, a realtor can better establish what the best asking price for your home will be.
  • Better exposure. Selling by realtor will help get your home more exposure on the market. Your realtor will know how to do this best, whether by creating flyers or posters, having an open house, or by other means. He or she can also use his contacts in the real estate industry network to get the word out about your property.
  • More security. When selling a home on your own, you will have to show it to potential buyers. While this can be very convenient, you must keep in mind that you are inviting strangers in your home. A real estate agent has experience in dealing with buyers, and they will usually screen them through their real estate agency before allowing them to see your home.
  • Less emotional involvement. Selling your home can be a very emotional process, which can interfere with good decision making, causing you to sell your home for less than it’s worth or holding on to it because no one will buy it at the price you think it’s worth. Having a professional that has no emotional involvement and looks out for your best interests might be the better choice when selling your home.

As you can see, there are advantages to both selling your home by owner and by realtor. In the end, it is up to you to figure out your situation and decide if you want to go through the home selling process alone or with the help of a professional. Either way, you should inform yourself as much as possible on this matter so you make the best decision for you and save as much money as possible.

Spring Cleaning and Maintenance: 10 Handy Tips and Tricks You Should Know

Spring Cleaning and Maintenance-150x150Another cold winter has passed, the weather is finally getting warmer, the days are getting longer, and it looks like the time to do a little spring cleaning has arrived. Cleaning your home sometimes involves professional help, but most of it can be done by you and your family.

Whether you are thinking of listing your home on the market, or just want to clean your home from top to bottom, here is a list of 10 handy tips to help you get through your spring cleaning much faster and efficiently:

Cleaning and Maintenance- Tips and Tricks

1. Planning. Spring cleaning and maintenance involves more than the usual cleaning that you do around the house once or twice per week. A piece of paper and a pen will save you a lot of headaches, especially if this is the first time you’re doing spring cleaning. Of course, this operation will involve tasks that you usually do, like dusting and vacuuming, but you will also have to go further, and clean the walls, the windows, the baseboards. Spring cleaning will also require moving the furniture in order to clean under and behind it. Making a list of everything that needs to be done will be very helpful, will keep you focused, and make sure that you don’t miss any parts of your home.

2. Don’t rush things. Trying to do everything quickly will most likely result in an unsuccessful spring cleaning, plus it will give you a headache. So look over your list and try to figure out how much time each task will take. If it takes a few days, then so be it. There aren’t any rules regarding how long spring cleaning and maintenance should take. After estimating how much time you will need to clean each part of your home, try to incorporate spring cleaning into your daily routine. Taking a break is equally important, so make sure you take breaks into consideration when coming up with a schedule.

3. Be ready. Once you have come up with a list and a schedule, you should start buying all the products that you need for cleaning. Having to change your cleaning/maintenance schedule last minute because you forgot to pick up a product that you need is unproductive and, by the time you come back from the store, your spring cleaning mood might be gone. Products needed include an all-purpose cleaner, rubber gloves, oven cleaner, wood oil, and many others that you don’t use regularly when cleaning your home. Tools like brooms, mops, dusters and a vacuum cleaner are also important, so make sure you have everything you need before you start.

4. Organize your things. De-cluttering your home and organizing your things, like CDs, books, kids’ toys, or clothes will make your job a lot easier. Having access to your furniture, carpet, windows and walls without having a bunch of stuff in the way will save time, and make spring cleaning a little easier. Until the job is finished, you can store your items in boxes then decide what to do with them.

5. Ask for help. If you think you can’t handle spring cleaning and maintenance on your own, don’t be afraid to ask for help. Things like moving large pieces of furniture can prove to be difficult, if not dangerous, if you do them by yourself. If you have family, then asking for their help should not be an issue, as they have contributed to the mess that needs to be cleaned. Friends can also help, and maybe you can return the favor when they need help with cleaning their home.

6. Start from the top. Especially if you have high ceilings, cleaning from the top down is better. Clean the dirt and any cobwebs from the ceiling, dust the crown moldings and the lighting fixtures, then continue by cleaning the walls and windows. Pay more attention to pictures on the walls, as they might require more attention in order to be cleaned. After cleaning the walls, move on to your furniture and finish up with the floor.

7. Pay more attention to high-traffic areas. Some areas in your home, such as the kitchen, the bathroom, or even the living room, are rooms that see a lot of traffic daily and they will probably be the ones who need the most attention. If you are putting your home on the market, keep in mind that kitchens and bathrooms are often some of the biggest selling points to buyers/renters, so be sure to invest time and money as necessary here.  Other parts of your home, like bedrooms and closets, don’t require that much cleaning because the bedroom is used mostly for sleeping, and the closets are usually pretty organized.

8. Start early. After a long and cold winter, spring seems like a blessing and you will most likely want to spend more time outside rather than cleaning inside. So start spring cleaning as early as possible so you won’t have to enjoy spring by looking out the window while you work around the house. If you finish cleaning the inside of your home before spring arrives, you will get to enjoy the first warm days of the year while doing some outside spring cleaning and maintenance.

9. Throw out what you don’t need. While cleaning your home, make sure that you check places like your pantry or fridge for expired products. All food, whether it is in a bag or a can, has an expiration date, so throwing expired products away is a good way to make more room for new supplies. The medicine cabinet in your bathroom should also be checked for any expired products.

10. Check and repair your house. You shouldn’t limit yourself to just cleaning your home. Check appliances for any issues as well as the house for any damage. You wouldn’t want April showers to catch you with a leaky roof or summer to catch you with a broken air conditioner. Finding an issue before it becomes a big and expensive problem is very important, so do your best to avoid major mistakes that could lose money for you if you are selling or renting out your home. Many minor problems can be repaired easily without having to hire a professional.

Spring cleaning and maintenance might be a hassle and take up a lot of your time, but by using these 10 tips, you will become more efficient and finish up everything in time to enjoy the first warm and sunny days of the year.


10 Tips to Maximize Your Home Sale in a Buyer’s Market

Top 10 Tips for Sellers in a Buyers' Market- 150x150When the number of homes available on the market is higher than the number of potential home buyers, prices are lower and sellers have a harder time selling due to high competition. Being a home buyer in a buyers’ market will save you the trouble of trying to buy a home that has received multiple offers, like you would in a sellers’ market.

A buyers’ market is bad news for sellers. As a seller, you are facing a lot of competition, because the supply exceeds demand, giving buyers the upper hand over sellers. The housing market crash created a buyers’ market, which made buyers expect to buy homes in better shape for less. This made home sellers struggle to get the most money for their home in the shortest period of time. If you price your home realistically and follow a few tips, you shouldn’t have a problem finding a buyer. Here are the top 10 tips for home sellers in a buyers’ market:

Tips for Home Sellers

1. Have a Home Inspection. Home inspections are usually made after you have found a potential buyer for your home, but having it done before you find a buyer can help you identify and take care of small problems that your home might have. Small issues like the ones that are identified in a professional home inspection can become a problem at closing time. Also, offering your home with a pre-inspection lets the buyers know that you have taken care of small issues, and gives them more peace of mind.

2. Ask for the Right Price. Selling your home in a buyers’ market is tough, so pricing it less than similar homes in your area will put you at an advantage. Luckily, current mortgage rates are quite low, so buyers are more motivated than ever to find a great home.

3. De-clutter. In order to attract buyers, you need to show off your home at its fullest potential. Put away anything that may distract the potential buyers from seeing all that your home has to offer, such as toys, clothes, misplaced furniture, and even personal photos.

4. Curb Appeal. First impressions are very important when selling a home, so your home’s curb appeal needs to be as attractive as possible since this is what the buyer will see first. Having an adequately maintained landscape and clean gutters are definitely a good start to improving the exterior appearance of your home.

5. Fix the Exterior. Issues or negligence with your home that you may have become acclimated to over the years, such as chipped paint or dirty windows, can make a very bad impression on a buyer. Buyers will be wondering what the issues will be inside, if the exterior is so neglected. You can easily clean up and improve the exterior of your house without too much effort and money.

6. De-personalize. Buyers have their own vision of how their new home is going to look. Things like collectibles or family photos can be a distraction for buyers, so it’s best to put them away and make the home as neutral as possible.

7. Update Your Kitchen. The kitchen is one of the most important parts of your home, and it should make an especially good impression on the buyer. Unfortunately, fully upgrading a kitchen is typically very costly, but simple and cheap updates like fresh paint  and new hardware on cabinets can make a big difference. You also may have the option of taking out a home equity line of credit to help pay for renovation work if needed.

8. Update Your Bathrooms. Like kitchens, bathrooms are expensive to upgrade. However, making a few select small changes, like changing fixtures or adding new lighting, can vastly improve a bathroom and create a better first impression.

9. Clean Up. Whether your kitchen and bathrooms are upgraded or not, your whole home needs to be sparkling clean from top to bottom when showing to potential buyers. Things like vacuuming, dusting, washing windows, general pickup, or taking out the trash should be no-brainers when trying to sell your home.

10. Pets. While pets are great additions to a home, they might get in the way of you selling your house. While buyers inspect your home, it’s best have little evidence of pets present. Pets may create unwanted odors, leave hair all over, damage the carpeting and/or walls, or trigger a potential buyer’s allergy.

Preparing your home for selling is time consuming and may involve a small investment, but, in a buyers’ market, you need to do everything you can to be at an advantage over the other sellers. This list of the top 10 tips for home sellers in a buyers’ market will help you sell your home quicker and, possibly, for even more money.