Existing-Home Sales Fall Again

Existing-home sales were down again, according to the latest report from the National Association of Realtors (NAR).

This is part of the "uneven recovery" that NAR chief economist Lawrence Yun reports. "Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers." Tight credit has hit both sides of the real estate market, affecting both buyers and builders.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said buyers should look into loan availability as soon as they decide they want to buy. “Despite very affordable mortgage interest rates, credit remains a challenge – buyers should check their personal credit, and mortgage availability in their area,” he said.

“Realtors are an excellent resource to learn about all of the marketplace factors, but in this tight credit environment it’s important to learn up front what a lender might be willing to offer as well as specific programs that might be available in your location,” Phipps said.

There's other good news on the horizon, as well. The economy is recovering, albeit slowly.

Changing industry climate has brought about numerous changes this month and season. According to the NAR, first-time buyers now make up 34 percent of homes sold. This is up from January's rate of 29 percent. Just a year ago this rate was 42 percent, but was then fueled by the first-time buyer tax credit.

All-cash sales were a record 33 percent in February, up from 32 percent in January; they were 27 percent in February 2010. There is a "record level of all-cash purchases where buyers – largely investors – are snapping up homes at bargain prices,” Yun explained. “We’d be seeing greater numbers of traditional home buyers if mortgage credit conditions return to normal.”

And how much are people spending these days? The national median existing-home price for all housing types was $156,100 in February, down 5.2 percent from February 2010.

Distressed homes still accounted for a large percentage of total sales. Total distressed sales were 39 percent of the market.

And finally, total housing inventory at the end of February rose 3.5 percent and is now a 8.6-month supply.

Top 5 Reasons a Home Buyer Needs There Own Agent

When Real Estate is listed for sale the listing contract calls for the seller to pay a set commission to the Realtor’s involved in the transaction regardless of whether that is one real estate agent or two. This means the seller has to pay the same real estate commission whether the property is sold directly through the listing agent or through a buyer’s agent. In Michigan, the standard real estate commission is 6% of the sales price and this is typically divided 3% to the Listing Agent and 3% to the selling Agent. In the event that the Listing Agent also sells the property to a buyer then the seller pays the whole 6% to the Listing Agent – known as a “double dip.”


As a home buyer you need to have your own representation – an agent specifically working on your behalf. Here are the top 5 reasons to have your own agent:




1) A professional working specifically in your interest and on your behalf to help you find the right home at the right price.



2) The Buyer’s Agent‘s fiduciary responsibility (their loyalty) is to his/her client (you). The Listing Agent has already signed a contract to represent the seller and their first loyalty is to the seller. How can they represent the seller and you at the same time and still get you the best price on the home?


3) A stronger negotiating position and better contract protection for you. You have a separate agent negotiating the price on your behalf with the seller. You also get an independent purchase agreement contract drawn up by your agent to protect you. Plus, your agent holds the earnest money deposit as opposed to the listing agent controlling your money.



4) More candid comparable sales and market transparency. You have your own agent showing you recent sales of similar homes so you can determine the correct offer price.



5) Having your own agent comes at no additional cost to you! The seller has to pay the real estate commission on the sale of real estate so it is costing the buyer nothing to retain the services of a professional realtor.



The bottom line is that it is foolish to not utilize the services of a trained professional Realtor to help you unlock the door to your new home. As a buyer, you have nothing to lose and everything to gain. So, if you’re in the market to buy a house the first step should be to find the right Realtor to work with!