National Association of Realtors Reports on 3rd Quarter Housing

The National Association of Realtors has released their report for the third quarter of 2006, and the numbers support the real estate market transition felt nationwide.

Existing home sales were down 12.7% from a year ago, yet some states experienced an increase in sales activity, with the largest sales increase occurring in North Carolina.

The median existing home price is $224,900, representing a 1.2% decrease over the same number one year ago.

To read more:

http://www.realtor.org/press_room/news_releases/2006/mhp_2006q3_sales_confirm_market_transition.html

Freddie Mac Introduces New Loan Limits


http://www.freddiemac.com/news/archives/singlefamily/2006/20061128_loanlimits.html

Discount Real Estate Companies

Isn't it how much money you net in the end?

A little over six months ago, a woman called me because she wanted to list her home. She said that she had driven around the neighborhood and saw that I had multiple listings. That was how she got my number. I met with her and gave her my listing presentation. I told her that not only would her house be placed in the listing services, that I would actively market her home. She said that she was also looking at discount services that would place her in the same listing services for a flat fee. Yes, I explained. They will stick a sign in your yard and put you in the system. And that's all.

A day or two later I drove by her house to check on my other listings. There it was. A sign in her yard from a discount company.

Last weekend I was drinking my morning coffee and checking the listing services to see what's new in the system and what has expired the day before. Lo' and behold, there's that house. Six months in the system and still not sold. Remember all those listings I had when she first called me? SOLD...months ago.

Let me explain how all of this works.

When a new house is listed in the system, it's hot. In fact, it's the hottest on day one. But, guess what? Guess how many other houses in that same price range were also listed that same week? Folks, the market is flooded! So, which houses will Realtors® take their buyers to?

The ones's they know about.

The one's that have been marketed to them. After all, there is only so much time in the day to see the houses that meet their clients needs. And, that is so important. Because every day that a house sits on the market, the temperature cools. Buyers wonder, "What is wrong with that house?" It becomes stale.

Let's look at this from a financial perspective...

House listed with Full Service Realtor®

List price - $100,000
Days on Market - 9
Purchase Price - $98,000
6% Commission Paid - $5880

Net - $94,120


House listed with discount broker

List price - $100,000
Price drop after 30 days to - $96,000
Price drop after 60 days to - $93,000
Price drop after 90 days to - $90,000
Price drop after 120 days to - $87,000

Purchase Price - $84,000
3% Commission to buyers agent - $2520
Flat fee to discount broker - $500

Net - $80,980

That is a big difference! So, don't get caught up in the "look at all the money I can save by not paying a full commission" mentality.

It's just not the case.

Look at the forrest, not the trees...