Monthly Archives: October 2013

Is By Owner Good For Buyers?

 

 

With limited inventory, buyers and their agents are scrambling to find homes for sale.

Homes listed for sale by owner are a tempting option to buyers, but are they really a great choice?

 

BY OWNER – THE WHO AND WHY

To begin, the purpose of this post isn’t to be negative about those who sell by owner. It is their right to do so and we respect that. We do want to educate buyers though on this segment of the market and what is means to them should they entertain buying a home listed by the owner.

Let’s start with the basics: Someone who tries to sell their home without using an agent is termed a “FSBO ( pronounced Fizbo ) – For Sale By Owner”.  It is legal for someone to do this and represent themselves in the real estate transaction.

There are a few reasons why someone would want to sell by owner. The main reason is to save money.  There are, however, a small percentage of owners who have controlling personalities and prefer to do most things on their own, including selling their home.  Based on experience though, saving money is still the number one reason why someone would attempt to sell by owner.

With the popularity of the internet, someone selling by owner now has the ability to advertise on popular sites, like Zillow. Therefore, it is not unusual for a buyer to see these types of homes listed for sale while doing an on line search. Most “by owners” are willing to pay a buyers agent who brings them an offer. These listings are certainly something we consider when searching for a home for one of our buyer clients.

A GOOD OPTION FOR BUYERS?

With low inventories, we agents need to do everything we can to find homes for our buyers. This includes communicating with FSBO’s and bringing these homes to the attention of our buyers.

The problem with this situation is that most “by owners” are not overly motivated. Basically, they will sell if they get their desired price. Otherwise, most don’t need to sell and will simply stay in the home. This dynamic certainly doesn’t favor a buyer as they simply have no leverage here.

If the seller needed to sell or had a decent level of motivation, they would hire an agent, knowing their success rate would then be exponentially higher.

This situation leads to one where a buyer will likely have to overpay for a home, sometimes well above market value.  Basically, if they fall in love with a “by owner” home, they will have to pay  “retail” instead of “wholesale”.

Also, since most sellers lack experience dealing with the complexities that come with a real estate transaction, the process can be quite trying at times.  Buyers need to consider if it’s worth overpaying and jumping through hoops for the right home.

THE FINAL WORD

Whether buying a home listed “by owner” is a good or bad option is up to the consumer to decide. In our personal experience, many of our clients who have purchased directly through the owner have admitted to overpaying. However, they justified the price because they fell in love with the home. Sometimes the heart wants what it wants even if that means paying extra.

In the end,  I would advise a buyer to tread cautiously in this situation.  There is nothing wrong with looking at a “by owner”provided you have realistic expectations of the possible end result.

 

————————————————————————-

ABOUT THE AUTHORS

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services. They specialize in Solon luxury homes, relocation, and first-time buyers.

They can be reached at 216-346-3235 or 216-403-9189 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Aurora, Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

Is By Owner Good For Buyers is the property of The Schuman Team and may not be duplicated or used without their written consent.©October, 2013

 

 

 

 

 

Solon Ohio Real Estate – 3rd Quarter Market Report

 

 

 

With the third quarter officially over,  we now have the data to complete our quarterly market report for Solon OH  for the zip code 44139, excluding Glenwillow.

First, we will provide market statistics for the past month of September. We will then offer a look at the third quarter as well as year to date statistics.  We will also make a comparison between this year and 2012 and give an analysis of the market as to where we are headed in the future.

Within the report, we will also include a breakdown for the Solon luxury home market  ( those priced over $500,000 ).

 

SOLD HOME STATISTICS SOLON OHIO

 

Date                                         # of homes sold         Ave. Sales Price             

September 2013                        24                            $281,150

September 2012                        25                            $318,575

 

Third Quarter 2013                     98                            $319,277

Third Quarter 2012                     99                            $320,052

 

YTD    2013                             240                            $306,681

Jan-Sept  2012                        200                            $306,846

 

SOLON LUXURY MARKET

Third Quarter  2013                    16                            $619,747

Third Quarter  2012                    16                            $652,219

YTD  2013                                37                            $642,255

Jan – Sept 2012                         31                            $639,426

 

*source NEOHREX ( Regional MLS )

 

COMMENTARY:

As predicted in our bi-annual report, we did see things slow down over the last few months, after a blistering start to the year. However, sales are still up a whopping 20% from last year and 2013 will end up being a great year in Solon real estate.

Overall,  the buyers who were looking to get into their new homes before the start of the school year dominated the market until July. Once school started, things have slowed down considerably. Why has this happened?

The slowing of the market is a result of low inventories, raising rates, and the lack of urgency of a typical fall buyer.

To begin, it was only natural that things would slow down. We saw some incredible months where homes were flying off the market and bidding wars were not uncommon. For a short time, we saw a sellers market in Solon, one we haven’t seen for years. However, there are not enough nice homes to satisfy the demands of today’s buyers.

I know what you’re thinking, “doesn’t low inventory drive up values?” Initially yes, this did happen through the first half of the year. The buyers who had a high sense of urgency to get into their new home ended up supporting higher values and quicker sales.

Now, the buyers left in the marketplace have a much lower sense of urgency. Sure they’d like to buy, but they don’t have to do it now.  Therefore, the lack of available homes for sale is actually hurting the market even more than before.

Here’s a perfect example: we have a buyer client who has 2 very young children and lives in another east side suburb. They would love to buy a home in Solon and have actually seen everything in their price point and just haven’t found anything they love. They don’t need to move now and are not willing to “settle” for a home that they only like, but not love.

The problem from a sellers’ perspective is that the buyers that are left will only make a move for a great home or a deal.  Many homes on the market were originally priced a tad high to take advantage of the hot market. Now, the time has passed and many active listings now appear overpriced and outdated.

Add to this an increase in interest rates and things have slowed down.

Moving forward, sellers can take advantage of the lack of competition by putting their home for sale now, rather than wait until the spring.  Rising interest rates and an always uncertain economy may make now a better time to sell and buy a home.

Overall, we anticipate 2013 ending up to be one of the best years we have seen in real estate in a long time.

 

————————————————————————-

ABOUT THE AUTHORS

The above information is compliments of The Schuman Team, Amy and Dan, of Howard Hanna Real Estate Services. They specialize in Solon luxury homes, relocation, and first-time buyers.

They can be reached at 216-346-3235 or 216-403-9189 or via email, danschuman@howardhanna.com or amyschuman@howardhanna.com.

The Schumans service the following Cleveland area suburbs: Aurora, Bainbridge, Bay Village, Beachwood, Bentleyville, Chagrin Falls, Cleveland Heights, Gates Mills, Highland Heights, Hunting Valley, Lakewood, Lyndhurst, Mayfield Heights, Mayfield Village, Moreland Hills, Oakwood Village, Orange, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, Westlake, Woodmere.

Solon Ohio Real Estate  -3rd Quarter Market Report is the property of The Schuman Team and may not be duplicated or used without their written consent.©October, 2013