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Some positive signs for 2012. We saw a slight improvement in home sales starting in October last year and it seems to be building some momentum through the winter. That is a good sign.

Last year over 35% of our sales were cash which is unheard of in our market over the last several years.

Our inventory has dropped dramatically since the end of 2011 which is a good thing. Buyers had been confused and frustrated with all the homes on the market. The inventory has not been this low since 2006 when property was selling about as fast as it was listed.

Other markets are starting to improve which helps our buyers to purchase here. Most of the sales I had this past year were people finally selling their home somewhere else.

Several people have lost jobs or have reduced incomes which has reduced their ability to purchase. Several folks have lost their homes and can not get financing. This has created a boom in the rental market for residential homes and management companies have waiting lists for rental homes. A careful investor can do well right now.

Condo sales are still slow with a large inventory for the amount of sales. Several finance companies do not loan on condos since the financial meltdown which has directly reduced the values.

Land sales are very slow. Almost no development going on right now.

Commercial sales are still slow and we expect that to continue through 2012.

We need residential listings since most of ours have sold. Please tell a friend to give us a call. We are excited to talk with them.

Rob

This is an interesting topic and one that may be hard to understand. The market has slowed down over the last 3 years due to several reasons and economists argue over them everyday. You could make a long list.

The number one reason property values have dropped is very simple. Buyers are not buying. You can start a long list of reasons but still it goes back to number one every time.

Three years ago I could understand why a buyer should be cautious and the news media was all bad. Today, the news media is still negative but things have changed quite a bit since then. Prices of property has dropped 15 - 50% depending are where you are, interest rates are super low and most people are working.

For example, in the Branson area you can easily purchase a home for 30% less than in 2008 and interest has dropped another 1.5 %. I had a seller take his home off the market to refinance it. Most of the time I would say that does not make any financial sense when trying to sell your home. The seller had two mortgages, a fixed rate primary loan and a secondary ARM loan. They have excellent credit scores and were quoted 3.6% interest rate combining both loans and lowering their monthly payment by $ 500.00 per month. I told them to go for it.

I am not sure why buyers are not taking advantage of the opportunity they have right now. I wish I was buying a home now. I could get almost twice the home for the same monthly payment. Is that cool or what?

Hopefully the buyers figure it out soon before interest rates go up and the government increases qualifications for loans and down payments. They are trying to do that right now.

It will take some time for the market to work out of this slump but wow, how good are the buyers going to feel that purchased when property and interest rates were cheap.

Till next time,

Rob

HUD homes are the topic today due to the increase in HUD homes on the market. First, what is a HUD home?

In simple terms, this is a home financed by FHA that has been foreclosed on and now our government owns the home.

Thanks to our government, these homes have not been marketed as most foreclosures which make them hard to find and more difficult to purchase. Today, at least some of them are being marketed through Realtors which makes them much easier to find. They have also revised how you make offers and the hoops you have to jump through. As I write this, it is just crazy how the process works and all of their rules you have to follow to purchase the home so the government has one less home they own sitting empty, costing the tax payers more everyday.

I am helping a buyer purchase a home through HUD right now. It takes attention to detail and interpretation of HUD instructions to fill out their contracts.

The process: The homes are offered for a period of time. This allows several bidders to make offers on the property before the time period is over. They may at anytime decide to accept an offer which is done on a website. There are several websites, depending on whether another company is managing the asset. Initially the home will only be offered to someone that is going to move into the home. Investors have to wait until the home is open to investors bidding. You can go to jail if you lie about it being your primary residence. Once you have an accepted offer, you write the offer and all addendums required using their forms. It takes several days before you get the contract back with HUD signatures. Once you receive them they will be setting it up with a contracted Title company somewhere in your state. There are several processes that have to be preformed by the title company and HUD which may take 45 days. A buyer should expect possibly 60 days before being able to close and move into the home. If you are in a hurry this may not work for you.

The home: The home will have been inspected by a Contactor hired by HUD to check out the home. This check list will be available to you prior to writing an offer. This in no way replaces a Home Inspection since it may have been done months ago. The home will have had an appraisal done at the time HUD received the property back and will be available to you after the Contract is signed by both parties. The starting price is the appraised value when they put it on the market. The home will not have utilities on and usually they need some repair or updating. HUD will not pay for any repairs. In a down market like we have had the last few years, the home generally will be priced attractive. This home will be approved for FHA financing in most cases and will state that on the marketing material.

To make this process work smoothly I highly recommend using a Realtor that has experience with HUD homes. These homes can be purchased with patience and generally you get a pretty good deal. It can be done!

Rob

This is the question every buyer or investor ask themselves when looking at homes especially after the market we have experienced over the last three years. What should we do? Will they get cheaper? The seller is asking too much I think. Wouldn't want to make a mistake.

I think you would agree with me. Sometime it is going to be the best time to buy. How will I know? Can you really pick the bottom of the market? Most experts don't agree. Some say the bottom was 12 months ago and some would like you to think it has not happened yet. Here is what I am pretty sure of. The chances of predicting the bottom of the market precisely and acting on it is pretty slim.

All indications I keep track of are showing some positive signs and that usually means the bottom has past. Here is a link I think you will find interesting that may give you a better perspective on housing.

http://www.marketwatch.com/story/why-your-best-investment-is-a-house-2011-01-26  If you have trouble with this link just type in the address.

After reading this information --- what do you think?

Rob

It has been a while since I updated this. The good news is the fall of 2010 was busy and we have good activity for the beginning of 2011. The buyers are confident and are looking for that good deal.

This fall we worked with buyers that we had not seen since the fall of 2007. They are making plans to retire or are retired with the Branson area as their future destination. These buyers have financial ability to purchase what they want and know this is the time to buy it right. They do not need to wait on their current property to sell and are looking for quality over cheap. That is good news!

Sellers are understanding the market and know if they really need to sell, it has to be priced aggressive and in good repair. We have property that is not being shown and other properties going under contract is less than 30 days. Showings are limited but there are buyers. That is refreshing.

We have many things that need to happen before we have the big turn around in the real estate market but I feel 2011 will start the process. I expect things to be much improved throughout the year into 2012.

Talk to you soon,

Rob

November 2nd is a very important date for Americans to voice their opinions on who they want to represent them and how they feel on specific issues. We have a very important vote for the State of Missouri on Amendment 3.

Amendment 3 in simple terms is to stop our state from adding new taxes to real estate sales in the future. We are surrounded by states that charge a transfer or sales tax when someone sells a property. The reason they do this is to increase the state income so they have more to spend or cover what they have already spent.

In Missouri, this has come up for a vote several times in the past and has not passed. They keep trying because they need the money. This is a double taxation where you pay real estate taxes and they want additional tax when you sell.

In the Branson area market using an average of what other states charge ( 2%-4% ) it would average about $ 4000.00 per single family home when you sell. Think what it could be for higher priced properties and farms.

The homes that I have been selling this year have sellers that are distressed and buyers with limited funds to close. If we added $ 4000.00 to most of those sales they would not have happened.

Vote yes on Amendment 3 and stop double taxation! The Amendments will be on the back of your ballot.

Rob

The market has experienced a slow down in July and August which is a direct reflection of the Fed tax incentives even in our market. First time home buyers and some move up buyers took advantage of the tax incentives in the spring and put homes under contract by April 30th to close by June 30th, 2010.

Most of these buyers would have purchased a home anyway. It just moved up there time table and as a result lowered our sales in July and August.

It will be interesting to see how September turns out. Historically, September would be slow until mid month when fall buyers start coming to town. We have 90 days of generally good market activity until the slow down for winter.

Internet activity is strong and especially on properties over $150,000 which reflects our fall buyer's buying habits.

Our residential inventory has dropped some which is a good sign when there are new listings added almost everyday. Prices are still dropping and the good deals are not staying on the market. There are still buyers not buying anything due to unrealistic expectations on pricing and not trusting their REALTOR. The savy buyers using the tools REALTORS provide understand the market and are purchasing. We have helped 3 buyers purchase property in the last 3 weeks. All three have purchased wisely.

There seems to be some interest in commercial property while land and lot sales are almost nonexistent.

Rob

This information below is from my most recent Newsletter.

The Dangers of an Unreasonable Asking Price

One of the most common and costly mistakes made by sellers is setting an unrealistically high asking price. Every seller wants to receive the highest closing price possible for their house, but losing sight of fair market value can have serious repercussions.

In some cases a lack of objectivity results in overpricing the home, other sellers may subscribe to the theory that pricing high initially leaves room to negotiate lower later. Overpricing from the outset could actually force you to end up settling for a lower price than you would have received by setting a realistic asking price based on market research.

Common Results of Overpricing

Fewer "Eyes" on Your Listing - Mispricing your home can prevent it from ever being seen by a certain percentage of potential buyers who might otherwise be interested in your home. Savvy buyers today research the local market even before acquiring an agent. Buyers will search available listings both online and offline in real estate publications, and in most cases they will set a price range to limit the listings they review. If your home is outside of their range even by a few thousand dollars, it may not be on the buyer's radar.

Most buyers will then hire a specialized buyer's agent, and together they will develop a strategy to evaluate homes that match the buyer's needs within their acceptable price range. Occasionally an agent will provide information on a home above the buyer's maximum price point, but rarely will they stray too far above that boundary.

Lack of Showings - Agents who work with homebuyers will know local market conditions and the listing prices of comparable homes. If they feel your home is overpriced, they will be reluctant to show your home to their clients for fear of wasting their time.

Helping Competing Listings - It may not be your first thought, but overpricing for your home for the market can actually help the competition. Your home's higher asking price will make other nearby homes of equivalent size and quality look steals in comparison. Astute selling agents for other properties will use the price gap between your home and their own a further selling point of their listings.

Stagnation and Stigmatization - If your home is priced higher than what buyers in your market are willing to pay, it runs the risk of sitting on the market for a longer period. The longer your home sits on the market, the more likely it will become stigmatized as "overpriced" in the real estate community. Once that happens, removing the stigma and restoring interest in your home can be a difficult task. Even dropping the price later will not have the same level of impact as the initial, negative, impression of your listing.

Tough Negotiations - A high listing price can be a warning flag for buyers that they use for leverage during the negotiation process. If the asking price seems high without home improvements or features to warrant the difference, buyers may assume that you are either A) not well informed about the market, B) not a highly motivated seller, C) have a need for money (perhaps forced by a move to a higher-priced area), or D) are simply creating some bargaining room. If the buyer believes any of these, they are likely to fish to determine how low of a price you will accept.

On the other hand, if your home has languished on the market as a result of a high price, buyers may believe you are becoming desperate. Interested buyers will make lower offers as a result.

Appraisal Problems - Should you be fortunate enough to find a motivated buyer willing to pay your overestimated asking price, you still run the risk of having the deal fall apart prior to closing. Most buyers will use some kind of financing to pay for their home purchase, and every lender requires an appraisal of your home's value.

The appraiser will review your home in person to assess its value based on similar homes that have sold (usually within the last six months). If the appraised value is below the agreed selling price, the lender wills only approve a loan for the lower amount. You may be forced to reduce the selling price or risk having the deal collapse, and your home return to the open market.

Overpricing and Today's Market

Today the tendency to overprice relative to the current market can be even more tempting. Home prices have dropped since the high peaks in the summer of 2006, and as a result many are in denial about the current market value of their home. Homeowners who bought within the past five or six years in particularly may be overly influenced by the purchase price they paid during the real estate boom.

This comes at time when overpricing couldn't be a worse strategy. There is a smaller pool of highly motivated buyers, and today's buyers tend to be well educated about the market. Without the assumption of price appreciation, few buyers are willing to gamble and overpay for a home. In addition, credit tightening has reduced both the number of buyers who can qualify for a mortgage as well as the size of the mortgages available.

Creating a Pricing Plan

When pricing your home, the best strategy is to remain objective and compare your home closely to similar properties on the market. Take the opportunity to visit open houses and pay attention to recent sales in your area. Are you more focused on selling quickly, or on receiving the highest possible selling price? Is the price you have in mind reasonable when compared with what other homes are asking for and selling for?

Priced Too High: Corrections

If your home has been sitting on the market with few offers or showings to its name, consider whether or not it is priced correctly. Review recent sales of comparable listings, especially those that have sold since your home went on the market. Another method is to ask agents who have shown your property for feedback they received from their clients. Have buyers who looked at your home in person purchase other homes in the area instead?

Acting quickly to adjust the asking price is the best way to keep as much of your marketing momentum as possible. Depending on how long your listing has been on the market, additional marketing may be needed to help repair some of the "damage" done to the reputation of your home's listing at the higher price. In some cases, you may be forced to slightly under price your listing to create additional interest.

Rob

With all that has went on over the last three years we often forget what it was like before that. In fact, we have enjoyed low interest rates for quite a while.

Caution! This market is not always going to be like this. What a perfect world if you are buying real estate and have money for the down payment. It is not as enjoyable for someone that needs to sell their property now.

We have some issues coming that will change our market.

1. We are experiencing some of it right now with buyers financing. If you need more than 90% financing and do not have good credit, you may not be buying a home in 2010 or 2011. Some would say that is the way it should be. In our market, we do not have first time home buyers with that kind of savings.

2. Interest rates will not stay low-meaning under 7% - through next year without government intervention. When I bought my first home we thought 10% interest was a good deal.

3. Government spending is going to cut future government housing program funding.

We are all guilty of taking things for granted and then are really upset when they are gone.

If you are looking to purchase property in the next 12 months or wanting to sell your home in the next 12 months I would encourage you to not delay. If you have to get your finances in order then I would make it a priority. If you are not sure where you would move to if your home sold, I would rent.

Government spending is going to affect us all and many things we have grown to expect from our government is going to suffer.

I will have better news next time ( I hope ). I have had several deals not happen this year and that used to be very unusual.

Rob

The is a reminder! To qualify for the government tax credit you must have your home under contract by April 30th which is the first step. The property must close by June 30th, 2010.

Heads Up! Foreclosed and short sale properties take longer to close than normal closings. You need 30 to 90 days to close on these properties in general. Some will close more quickly with local banks being involved.

Don't miss this opportunity if you were planning on purchasing in the next 6 months for your primary residence. Do it now!

Rob