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5 Reasons That You May Want to Avoid FSBO

It is time to sell your home. You can’t wait to find the perfect buyer who will pay your asking price so you can move on to owning another home. Yet you still have to overcome the major obstacle in selling the house. While other neighbors on the street are using agents, you are wondering if placing a “For Sale by Owner” (FSBO) sign up in the window and handling the work yourself is the better option.

Why Do People Get Involved with FSBO?

One of the main reasons is that they believe they can save on agent costs. A homeowner is looking for every shortcut where they don’t have to pay more money to sell their house so they can reap in the most profits. They often see the real estate commission paid to the broker as an unnecessary expense.

Another reason is that a homeowner feels that they want to be in more control of the sale. Some homeowners are afraid that the real estate agent will not provide them any appropriate updates regarding marketing and selling the house. The homeowner may also feel that the agent isn’t putting in enough work to get buyers into the house, or that those tasks are easy enough for the homeowner to do themselves.

Reasons Why You Should Avoid Going the FSBO Route

1: You won’t really save on the commission.

This reason is because there is a history of homeowners overpricing the value of their homes to make up the commission costs that they will pay to the broker. So a buyer will go into the deal by giving a lower quote to compensate for that higher price. If you end up agreeing to the lower quote, you end up losing in the end based on all the added expenses you take on in marketing and advertising the home — along with other extra fees.

2: You may accidentally underprice the house.

Real estate agents are always paying attention to the comps in a particular neighborhood. Unfortunately, market prices can fluctuate, as the price you decided to place on the house a year ago might not be what the house value is today when you finally list the house on the market. So you can lose out on money and not discover the discrepancy until after the deal is complete.

  1. You won’t have access to a large buyer audience.

Many agents have a marketing and advertising strategy they use to reach the widest audience of potential buyers. In addition to advertising in print and the MLS, they will have dedicated real estate listing pages on their websites, video tours posted on YouTube, and periodic sales pitches on many social media platforms. Unlike an agent who already has a large online following of potential buyers, you may not have the same online marketing reach.

  1. You can’t screen people before they look at the house.

There are real buyers, and then there are just people who want to browse through a house because they have nothing better to do for the weekend. An agent can review the buyer’s information to ensure they are financially capable and committed to buying a house today. This can save you time, money and work.

  1. You may not be good at house negotiations.

You don’t want to scare off a buyer when they give you a price that is significantly lower than what you expect. Most often, taking the FSBO route will put you into negotiations that can become intense and create hard feelings because you are still emotionally-attached to the house. Having someone else perform the negotiations who is experienced and calm can help you sell the house quickly.

There are many challenges in selling a house as an FSBO. Consider all your options and then get the professional help you need from a Bend real estate agent.

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Duke December 2018 Trend Report

As we settle into what appears to be a rather mild winter, we continue to see a steady market in the Central Oregon Real Estate scene. The trends for December show a continuation of a steady market in both Redmond and Bend. We closed out 2018 with an active market in Bend and Redmond for sellers and buyers alike. As we begin the new year, we see steady numbers across the board and look forward to an exciting year with the Central Oregon market.

Inventory

The number of active listings in Bend dropped slightly from 457 in November to 398 in December. In Redmond, there were 199 active listings in November and then a few less with 182 active listings in December. The numbers in December for Bend show us that there are plenty of homes to choose from. There were 20 active listings in the $225,000-$325,000 range, 97 in the $325,100-$425,000 range, 102 in the $425,100-$525,000 range and 41 in the $525,100-$625,000 price range. Both Bend and Redmond’s market had fewer price reductions in December than we saw in November and fewer pending homes at of the end of December, for both cities. Redmond’s new, active listings increased slightly from 58 in November to 59 in December.

With the steady market, buyers look for competitive pricing as they compare properties. If you are a seller and you aren’t sure what to list your home or property for, consult with your Duke Warner Broker for great advice, they will share their expertise and let you know how to price according to the market and competition.

Sold and Pending Listings

The number of pending listings dropped slightly in December from November, in both Bend and Redmond markets. For Redmond, we saw 58 pending homes in November and 46 in December. Bend had 163 pending homes in November and it dropped a bit to 137 pending in December. For sold listings, we’ve seen a slight drop during the winter months with November showing 170 sold homes in Bend and 160 sold in December. Sold listings in Redmond dipped from 73 in November to 63 in December.  We aren’t seeing too much of a fluctuation in the market which is great for this time of year. Winter is in full swing; the holidays are behind us and we start the new year with a renewed sense of excitement for future market trends.

Looking Ahead          

2018 market trends were consistent and encouraging, which paves the way to hopefulness for the new year in the Central Oregon markets. Be sure to take time to compare properties and gather as much information as necessary to make educated decisions about the market. Get out and see what’s available and give us a call if you’d like one of our brokers to show you around! There is a wonderful selection of bare land, residential properties as well as commercial properties.

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Examples of Mortgages You Can Get

Different Types of Mortgages

If you’re looking at becoming a first-time home owner, you may need to brush up on your mortgage knowledge. Talk to your real estate broker and see if they can recommend a lender for you to talk to about your mortgage options. Getting pre-approved when you’re house hunting can be a great advantage to getting the home that you want. If you’re pre-approved you already know what sort of financial situation you are in, and what sort of mortgage you can afford. Check out the following list and learn about different types of mortgages available. Then, talk to a lender to see which mortgage option works best for you.

Fixed-Rate Mortgage

A fixed rate mortgage means that the interest rate for the loan, is locked in at the beginning of the mortgage agreement. Fixed rate mortgages can come in terms of 10-15-30 years. The most common of mortgages is a fixed rate 30 year mortgage. This provides the owner with the lowest mortgage payment per month, as it divides the loan into 30 years of payments, with a fixed rate of interest.

Fixed rate mortgages are also popular because they are the most predictable; the owner knows what their payment will be month to month for the entire timeline of their term in years.

Adjustable Rate Mortgages

There are many different types of adjustable rate mortgages(ARM), but the essential idea is that the interest rate can change over time.  If a home buyer gets a one year ARM, the interest rates on their loan change to the current market rate, once a year on the anniversary of their loan. This can be risky as you could wind up paying different amounts of mortgage payments from year to year. They payment amount may go down, but it also may go up.

10/1 ARM’s also change in interest as time goes on. This features a fixed interest rate for the first 10 years, but then is subject to change every year to the current market interest. This loan is typically for 30 years, and is typically used by homeowners who intend to pay their home off before the initial 10 years have passed.

Balloon Mortgages

Balloon mortgages feature a much shorter term and a fixed rate of interest, much like a fixed rate mortgage. The difference is that balloon mortgages feature a larger or balloon payment at the end of the loan. The monthly payments are lower and typically go to interest being accrued. Balloon mortgages are great for responsible borrowers, and typically are for people who intent to sell the house before the balloon payment is due. These mortgages can get tricky, as you’ll be required to re-finance if you can’t afford the balloon payment when it’s due.

Check out the different types of mortgages and see what you can afford, and how long a payment schedule you want to commit to. Talk to a lender to see what your options are and what makes the most sense for you. We also suggest checking out our monthly Trend Report to learn more about the local market trends.

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Rent or Buy: Pros & Cons

The current real estate market housing prices have increased, and in most areas rental costs have done the same. In some areas, it is cheaper to rent than to buy, but not in all markets. There are many other factors to consider when you’re weighing your options on buy vs. rent a home.

In most popular cities and suburbs, home prices are climbing fast, which can make renting look like a better alternative. Rental prices can also climb in the same areas, if the demand exists. This makes the cost of renting vs. buying quite similar.

RENTING

Renting is appealing because it requires less responsibility. If something breaks down in your home, you can simply call up the property management company or landlord. You’re not on the hook for unexpected financial commitments, like fixing the dishwasher or sprinkler system.

The monthly cost of renting can also be lower than a monthly mortgage payment. Typically, the cost of owning vs. renting eventually becomes cheaper, whereas the cost of renting continues to stay the same and has the potential to go up, depending on rent trends.

BUYING

In the long term, whether or not your real estate market is in the up and up or not, buying can save you money. Over time, the money that you’re putting into your own home is less than a renter is investing. Another point to consider, the renter isn’t actually investing any money. When you’re putting money into a mortgage payment, you’re putting equity into something, into your home. You’re adding value to your home, value that you someday could get back. It’s essentially the same as adding something on to your house that would make it more appealing to future buyers. If you added a pool, it would entice more future buyers, and therefore would increase the value of your home.

Your home can also increase in value due to the local real estate market. When you buy it, it may be worth a set sum, but then after years of market change it could be worth significantly more. In some current real estate markets, home prices have doubled in the last four years, which is great for home owners but not as great for those seeking to purchase a home.

Many home owners and property owners also have plenty of tax benefits to consider when purchasing a home. You can deduct a mortgage from your income tax bills amongst other options.

When you own your own home, you also don’t have to worry about rent increases coming out of nowhere. Your monthly mortgage payment will stay the same, unless you refinance or choose to pay more than the agreed upon amount every month.

Another long term benefit to owning your own home is paying off your mortgage. Once your mortgage is paid off your monthly housing costs drop significantly.

CONSIDERATIONS

Renting and buying each have their own set of pros and cons. It depends on what you’re looking for a property and commitment. If you’re seeking something more long term, the advantages of buying outweigh renting. Over time, the financial benefits to owning a home can trump renting as well.