I have a number of people who have been following the local real estate market for many months, and in some cases, more than a year.  I watch as these folks search my website for listings, and we  have actually looked at homes, from time to time, in some cases. According to an article in the Wall Street Journal, yesterday, some people are finally deciding that the time is right to take advantage of the glut of inventory of houses to choose from, as well as low interest rates, and are taking the plunge.

As the article points out, the housing bust, appears to be creating a new group of winners; first time home buyers.  People who watched as friends rushed to buy homes several years ago, are now in a position to take advantage of what look like, incredible deals.  According to the National Association of Realtors, first time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006. 

First time home buyers are in a great position.  They are lured by home prices that are obviously depressed.  In some markets, prices have fallen by as much as 40% from peak levels.  Fortunately, in Bucks County, prices have not fallen as significantly, but they are definitely lower.  Houses are clearly more affordable.

In addition, mortgage rates are near historic low levels. 

On top of low prices, and low mortgage rates, it appears as though there is going to be a great tax break specifically for first time home buyers, in the financial rescue plan.  As the plan is currently presented, first time home buyers may be eligible for an 8,000 tax credit, if they buy in 2009. 

First time home buyers are in a great negotiating position when making offers.  Having nothing to sell, makes them extremely strong buyers.  Often sellers are willing to accept lower prices, knowing that a first time home buyer, with strong credit, is presenting offers that are clean, meaning that there is no worry about the sale of another house. 

Because of the amount of inventory, buyers can be patient and selective.  Although we won't know where the bottom of the market is, until it is too late, it appears to be an ideal time for first time home buyers, to get into the real estate market.

For those who read my blog, I have to apologize for not being very diligent about posting, recently.  Believe it or not, I have actually been pretty busy practicing real estate.  I thought it would be interesting, to offer a brief review of some of the transaction challenges, along with some successes we have seen, of late.  This may help to provide a more accurate indication of what is really happening in the Bucks County/Mercer County, and surrounding areas.

With regards to my listings, I am fortunate in that I am marketing homes in a very diversified price range, from the 200,000 range to well in the millions.  In my opinion, the higher priced market has been impacted more significantly than more modestly priced homes.  An indication of this, is that in Upper Makefield Township, it would actually take years to sell all the houses that are currently on the market, priced over 1 million dollars, based on the current rate of sales.  I recently listed a house priced at 294,900, and we negotiated an offer within the first 2 weeks that the house was on the market. 

I recently listed another property in New Jersey, and we got an offer within the first 4 days of putting the house on the market.  We are still waiting to see whether this will work out. 

If you are wondering what I attribute the fast turnaround to, with regards to both of these recent listings, it is that the homes showed incredibly well, and were priced to reflect current market conditions.  I think that is the single biggest obstacle that we face right now.  I believe that many sellers still are not realistic enough about what happening in the market.  If a house is not priced appropriately, there is no doubt that it will sit on the market for a long time.  There is a lot of inventory competing for the attention of buyers, and there are not enough qualified buyers to absorb all of the inventory.  On top of that, in many areas we are seeing more short sales and bank owned properties than at any time since I have been in real estate. 

I recently had a buyer make an offer on a short sale, and it can be a long and arduous process, since the ability to close the transaction is entirely dependent on the lender accepting the offer.  Depending on the lender, that process can take weeks, or longer. 

Another transaction that I am currently working on, brings up another potential challenge.  I am working with a buyer who made an offer on a property that was absolutely gorgeous.  Totally upgraded, move in condition, and priced at what we thought was a very realistic value.  We wrote an offer, negotiated the price, and thought the process would be quick and easy.  That is until the appraisal came in below the contract price.  Basically that means that the buyer would not be able to get the loan as per the mortgage contingency on the contract.  Somewhat in response to the mortgage crisis, appraisers are now being extremely conservative, so this is not an unusual problem.  Based on the appraisal, we had to re-negotiate the price, and were able to work out a combination of a lower price, and some additional buyer funds to ensure that the house will go to closing.  It was just not an easy process.

I could go on and on with a variety of stories about what is happening in our market.  Prices are challenging for sellers to deal with, but there are houses selling every day.  If you are a seller, be realistic, make sure your house shows as well as it possibly can, and be pro-active in responding to the market.  I have a book that I can email, called, "450 ways to get your house sold quickly".  If you are thinking about selling, I highly recommend reading through this booklet, it offers great advice about getting a house ready to show. 

For buyers, you can be selective, and there are great opportunities in the market.  Interest rates are at all time, historic lows.  Have we reached the bottom of the market?  Only time will tell, but I do know that by the time we know for sure whether we have reached the bottom, it will be too late. 

Visit my book website http://buckscountyrealestatetips.com/

In a recent post, I had a home inspector with whom I work on a regular basis, post an article about the entire home inspection process.  Considering the fact that the market for sellers is very weak right now, I can't emphasize enough how important it is for sellers to give themselves the best possible opportunity to make sure that their home shows as well as it possibly can.  To help with this process, I frequently recommend a process we call "staging".  Essentially, staging is a step we take to maximize the emotional appeal of the house to prospective buyers as the house is shown.  To elaborate on the benefits and explain how staging works I asked Wendy Kokinda of Larsen Redesigns, (http://www.LarsenReDesigns.com) to write a post describing what her company does.  From personal experience working with Wendy and her partner Colleen, I can say that they do a fabulous job.  My thanks to Wendy for her help with this.

STAGING . . . The New Buzz Word in Real Estate                     

As I go forward with my business, I find it incredibly amazing that the concept of staging has not truly penetrated the real estate industry on the East Coast as extensively as it has on the West Coast.   In this very difficult selling market, there is an elevated inventory from which a buyer can shop. Presently buyers, in essence, have “the pick of the litter,” and that is exactly the issue at hand. How does one make their listing stand out from the rest? As you know, buyers purchase most everything on emotion. They buy things they like or even things they fall in love with. Real estate property is not differentiated from other things that buyers purchase, it’s just more expensive than a pair of jeans or a car. If the house doesn’t create an emotional bond with the perspective buyer, the buyer will “walk” and they will just look at the next house on the list. Notice I am referring to the “house” not the “home.”  One thing I always encourage my staging clients to do is to realize that they need to consider that their “home” becomes a “house” and this “house” is now a product.  Our objective is to market that product the best way that we possibly can.

How do you do that . . . you ask? STAGE your listings!

Visual appeal creates an emotional bond between the buyer and the “house.”  You only have one chance to make a good first impression. The expression is so true. From the front curb to the back property line, it is imperative that the entire property display itself in the best possible manner. A house with a well maintained lawn and trimmed trees is going to translate a subconscious message that the “house” is well maintained and will lure the buyer to the next step . . . to see the inside of the “house.”

Creating better visual appeal is the ultimate goal of a Real etate staging professional. De-cluttering and de-personalizing are all natural and obvious changes that need to be made to a home to help the sale of a property. But it goes much deeper than that. Furniture placement, adding decorative elements and creating a model home effect are just a few things Stagers can do to make a difference in a “house” that needs some esthetic help.

Staging a house can make a tremendous impact in the success of a timely sale of a property in this present climate. Staging statistically increases the profit $$ to not only the seller but also to the real estate agent as well. In addition, staging will help to decrease the days the house is on the market. The fact is, a staged house is more desirable than one that has not been staged.

For a reasonable fee, the staging professional will do an initial evaluation of the property by gathering important information and taking numerous pictures of the house. A report is then produced and presented to the homeowner defining the issues that exist in the property that may inhibit a timely sale. A “to do” list is given to the homeowner along with a proposal and contract to have the staging professional return to stage the property. The staging fees are extremely variable and dependent upon the amount of work to be done and time invested by the staging professional. Rental furniture can be obtained for vacant homes as well.

The time period in which this entire process will occur can be a week or two. It is advisable to bring the staging professional in after the listing agreement has been signed but before all multiple listing pictures have been taken. Wouldn’t you want the photos to have the best possible appeal and your listing to display itself the best manner possible?

Staging can make a tremendous impact on the increased salability of a home. Staging = a quick sale & higher profits = a happy seller = more referrals = future business! You come out a winner! Staging works!

Wendy Kokinda is an Interior Redesign Industry Specialist and a Certified Interior Staging Specialist. Colleen Stasinchak is an Accredited Staging Professional. They are partners in Larsen Redesigns, an Interior Redesign and Staging company located in Bucks County, PA  www.larsenredesigns.com  215.752.9021