What’s Your Competition When Selling Your New Orleans West Bank Home?
January 26, 2010 by Lisa Heindel
Filed under For Sellers, Real Estate Talk
The first thing that we advise a potential home buyer to do before beginning their home search is to determine how much they are qualified for and what price range makes them the most comfortable with their monthly mortgage payment. Once they have done that, we start narrowing the search based on location, condition and amenities.
While the old real estate mantra is location, location, location, the primary driver in most home purchases is price, price, price.
Here’s a quick look at the 2009 home sales on the West Bank, broken down by price range:
There are some interesting statistics here when you review 2009 sales, because we are seeing not just a reduction in the overall number of homes sold in the area, but also a shift by buyers into lower price ranges. Some of this shift may be due to the first time home buyer tax credits that were offered in 2009 and then extended into 2010. Generally, first time home buyers purchase at or below the average sale price in an area. In 2009, the West Bank average was a little over $156,000 and homes in the $120,000-$160,000 range made up almost 30% of the annual sales.
The real issue now is inventory. If you are considering selling your West Bank home in 2010, you may be in for some stiff competition depending on where your home is located and what condition it is in.
Some of these number are just downright disheartening, especially in the over $250,000 range where the number of homes currently for sale exceeds the total number sold in 2009 in that same range.
What else does this chart tell us?
Buyers have a LOT to choose from in our current market. If I was in the market for a home priced around $180,000, I would look at homes that were a little above my price range (assuming that the seller is willing to negotiate) and those that cost less than my budget (assuming there might be a bargain to be had).
With that criteria, there are over 175 homes currently for sale that could potentially be on my list. Of course, this is before narrowing down to the neighborhoods I like the best, the number of bedrooms I need and the condition of some of the homes. But, that’s still a big old number and looks like an awful lot of supply when compared to the current demand.
What’s a home seller to do?
Be realistic. Knowing that you are up against a lot of competition means that you must be priced competitively from the moment your house goes on the market. Do your research and take advantage of all of the information that your agent can provide to help you pin point the right price for your home.
Be flexible. With the anticipated reduction in the amount of seller assistance allowed by FHA, I expect to see more buyers asking for the maximum amount between now and this summer. Offset that with the move up tax credit available for homes under contract by April 30th, and you may have a little more wiggle room in your negotiations. (NOTE: This is not financial advice – check with your tax preparer to determine if you qualify for the move up credit)
For more information about home buying or selling on the West Bank of New Orleans, or relocating to or from NAS JRB New Orleans, please contact the West Bank Living Team. It would be our pleasure to have the opportunity to assist you with any of your real estate needs and have a little fun while doing it!
What West Bank Home Buyers and Sellers Need to Know About the New FHA Guidelines
January 22, 2010 by Lisa Heindel
Filed under Blog, For Buyers, For Sellers, Real Estate Talk
This week, David Stevens, the Federal Housing Administration (FHA) Commissioner, announced policy changes to how FHA loans will be handled later this year. We don’t have specific dates or all of the fine print yet, but here is the gist of the changes:
The upfront Mortgage Insurance Premium (MIP) will be increased from 1.75% to 2.25% of the loan
This cost is typically rolled into a home buyer’s loan, increasing the monthly payment. The additional half percent MIP charge will result in negligible changes in payment amounts for most borrowers. This change is expected to go into effect in the spring.
New borrowers will now be required to have a minimum 580 FICO (credit) score in order to take advantage of the 3.5% down payment program
This is change is unlikely to impact very many buyers simply because the majority of lenders have been requiring a minimum 620 FICO for some time now. If, however, a lender is making loans to borrowers with credit scores of less than 580, the down payment requirement will be increased to 10%. These changes are expected to be put into place this summer.
A reduction in the allowable amount of seller assistance to FHA borrowers
Currently, the maximum seller contribution towards closing costs and pre-paids is capped by FHA at 6% of the purchase price. The new guidelines will reduce this amount to 3% of the purchase price. This change is also expected to be put into place this summer.
Of the three changes, the reduction in the amount of seller assistance is most likely to impact buyers in 
the New Orleans area. FHA loans made up 43% of the single family home sales on the West Bank of New Orleans in 2009. 53% of the FHA borrowers received some type of seller assistance with their purchase. Of buyers receiving seller contributions in 2009, a whopping 64% received in excess of 3%.
Now, this does not mean that none of the sales would have taken place under the new guidelines. There were many that were just over the 3% threshold that I’m sure would have still closed if the new rules were in place. However, there were a substantial number of buyers who appeared to get almost all of the money needed to close (except the down payment) in the form of seller assistance. These are the buyers that may be pushed out of the market in 2010 as they will be forced to save longer and have more of their own cash invested in their home purchase. Don’t get me wrong…I don’t think that having more of a financial stake in a home purchase is a bad thing, as it tends to result in buyers who are truly ready to be home owners.
What’s the possible impact on West Bank home sales?
For buyers, this means you will need more cash on hand for your FHA home purchase. Not only do you need the 3.5% down payment, but the cap on seller contributions towards your closing costs and prepaids (taxes, hazard insurance, flood insurance, lender fees, etc) means that you must have a larger amount of money saved before attempting to purchase a home. For some people, this will result in a longer waiting time until you can buy.
For sellers, this could possibly mean a decrease in the number of qualified buyers for your home. A smaller pool of buyers equates to a reduction in demand. A reduction in demand usually equates to lower selling prices.
If you have been waiting to put your home on the market until later in 2010, my recommendation is to do it as soon as possible – before these changes go into effect, since we do not know what the fall out might be. This advice only applies to those sellers that fall within the current FHA loan limits.
- For more details, read the entire HUD release here
As always, your lender is the best source of detailed mortgage advice for your particular situation. If you need a referral to a local FHA lender, please contact the West Bank Living Team and we would be happy to help you.
For more information about home buying or selling on the West Bank of New Orleans, or relocating to or from NAS JRB New Orleans, please contact the West Bank Living Team.
It would be our pleasure to have the opportunity to assist you with any of your real estate needs and have a little fun while doing it!
Home Staging Tips | Cleaning and Clearing the Clutter
January 1, 2010 by Lisa Heindel
Filed under Blog, For Sellers, Real Estate Talk
No one really likes to clean (well, no one that I know anyway). But getting your house sparkling clean and free of clutter is one of the first steps in getting it ready to sell.
To start the new off on the right foot, our friend, Amie Chaney of Home Staging by Amie, recently provided us with another list of home staging tips designed to address some of the problem areas that exist in almost every home:
Use neutral colors of paint which are not just beige but include taupe, green and gold.
Use the highest possible wattage light bulbs in all fixtures.
Make sure your home has a pleasant smell. If you can’t tell get an objective third party you can trust to answer the question.
Check to make sure the baseboards are clean and free of nicks and dings.
A Mr. Clean Magic Eraser works wonders for removing fingerprints and other discolored areas of woodwork and walls.
Whatever type of flooring you have – make sure it shines.
If you have several layers of window treatments consider removing all but the sheers to create more light and a less heavy feeling in the room.
What about your walls – are there holes that need to be patched and painted?
If you have personal collections pack them away.
Remove all personal photographs.
Do you need a little help getting your home ready to sell? Contact Amie for a professional home staging consultation. Her advice can help make the difference between listing your home and selling it.
Do you have questions about the New Orleans West Bank real estate market? Are you considering buying or selling a home? The West Bank Living Team provides local, professional real estate services to home buyers and sellers on the West Bank of New Orleans and military personnel relocating to and from NAS JRB New Orleans. It would be our pleasure to assist you with all of your real estate needs.
Real Estate Resolutions for Home Buyers and Sellers
December 30, 2009 by Lisa Heindel
Filed under Blog, For Buyers, For Sellers, Real Estate Talk
Yep, it’s that time of year again when we all decide that we are going to lose weight, quit smoking, start exercising and become more organized. Calendars and planners are flying off the shelves as everyone tries to start the New Year off on the right foot, hoping for an improvement over last year. Whether it was a good year or not, we always want more, more, more and the beginning of the year is the time that we plan out our paths for the next twelve months.
While making my own list of resolutions, I put together some suggestions for home buyers and sellers that might help your real estate goals for 2010 come true.
Home Seller Resolutions
Make your home the best value in the neighborhood
Your home may be the most beautiful, with the most updates, but if it’s not priced to attract the buyers looking in your area, then you’ll be starting the year out disappointed. Ask your agent to provide a new list of competing listings and recent sales and review them carefully. Be sure that you know what the successful sellers in your neighborhood did and follow their lead. Did they provide closing cost assistance to the buyer? Did they offer a home warranty? Did they allow the purchaser to assume their flood insurance? These are all incentives for a buyer to choose your home over the one right down the street. A good place to start your research is with a free online report of listings and sales in your neighborhood.
Be prepared for all showings
Beyond the common sense advice of keeping the beds made, the dishes out of the sink and the toys picked up and put away, there is more to being prepared for buyers. Have you cleaned out your closets and made them appear as roomy as possible, or will those old tennis rackets fall out and hit someone in the head? Did you clear out the garage to showcase the storage space or is it jammed to the rafters with 20 years of stuff that you can’t bear to part with? Do you have seasonal plants in the garden or is it overgrown with the leftovers from summer? From the moment a buyer pulls up in front of your house, you want them to feel at home. Read Home Staging Tips for more advice on preparing your home for sale.
Make your house easy to show
When an agent is scheduling appointments to show homes to potential buyers, don’t give them a reason to skip over yours because it’s difficult for them to get in. With the large number of competing homes in most neighborhoods on the West Bank, it’s important to be flexible and not turn down appointments. If your showing instructions read something like “All appointments must be scheduled 10 days in advance of the new moon”, you are going to be in for the long haul trying to sell your home. Have your agent install an electronic lockbox and get those buyers through the door at their convenience.
Home Buyer Resolutions
Save, save and save some more
The guidelines for mortgages are becoming more and more stringent, with higher down payments than we have seen in several years being required. It’s important to save as much as possible before you starting house hunting. Not only will you need cash for a down payment and closing costs, but you don’t want to move into a home without the resources to furnish and maintain it properly. Read Are You Ready to Be a Home Owner?
Don’t buy more house than you can comfortably afford
While lenders are getting stricter, they will still qualify you for the maximum mortgage that fits their lending model. This may not be the same amount that you are comfortable spending each month. It’s tempting to want to buy more house than fits your budget’s comfort zone, but don’t do it! You’ll soon find yourself dipping into your savings for an unexpected home repair only to find that there is no more savings because you are stretched too thin.
Be realistic about your wants and needs based on your budget
When you decide to buy a home, your agent will ask you a lot of questions about your wants and needs. This is the time to make a list of the things you absolutely cannot live without and those that are just nice-to-haves. Space for everyone to sleep is a need; a 3 car garage is a want. A functional kitchen is a need; an in-ground pool is a want. Bells and whistles are nice to have, but staying within your budget is more important than those granite counter tops that you can always put in later.
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The West Bank Living Team provides professional real estate services to home buyers and sellers on the West Bank of New Orleans. Contact us for assistance with any of your real estate needs. It would be our pleasure to help you!
Home Staging Tips | 10 Easy Tips for Staging Your Living Room
December 8, 2009 by Lisa Heindel
Filed under Blog, For Sellers, Real Estate Talk
Once again, our resident staging expert, Amie Chaney, is back with more tips for staging your home.
Making your living areas appear inviting and spacious can be an easy task with just a few changes. Amie’s tips are in green, while our recommendations are in italics.
Tips for Staging Living Rooms and Dens
Make shelving appear larger by packing up 80% of what is currently there. A good rule of thumb is that if it has eyes, it has to go. This means packing up the family photos!
Remove anything that might be off putting to potential buyers such as mounted deer heads, skeletal remains of animals or religious items. Some people have very strong feelings about this. You don’t want to turn off a buyer who is a member of PETA or who has different religious beliefs than you do.
Add splashes of color by using throw pillows and throws. Use discretion though…choose one accent color and use it sparingly.
Use only healthy, thriving green plants in your home — remove straggly or overpowering plants. This is the place where we remind you about getting rid of (or packing away) those dusty, fake house plants. No one is fooled by them, so out they go.
If you have a fireplace, this is a great selling feature. Make sure it is cleaned and well maintained. During the winter months, place a few logs in the fireplace. During the spring and summer, a few large candles can fill the space and make it appear appealing year round. Also, have the chimney cleaned before you get an offer and it comes up during inspections.
Your fireplace mantle should not be overburdened with items. Less is more when it comes to mantles – a pretty flower arrangement or several candles will do the trick. Remember, neutral is the key. No family photos, no knick-knacks, no strings of lights and no collectibles.
To maximize floor space there should be no magazine racks, baskets or piles of books on the floor. Now is the time to sort through all of your reading material and pack what you want to move and either toss or donate the rest.
The use of current issues of beautiful home magazines such as Veranda, House Beautiful and Traditional Home on the coffee table is acceptable. Again, everyone has different taste, so those back issues of Hunting Guide will need to be removed.
If you have 8 foot ceilings, do not put anything on the top of bookcases or cabinets. This will make the ceiling seem lower than it actually is. Making buyers feel a little claustrophobic is not part of the marketing plan.
Group like items in odd numbers such as 3 candle holders or 3 prints. Don’t overdo it! Just a couple of groupings is enough for all but the largest of rooms.
Thank you, Amie, for continuing to provide great information to our readers. If you are looking for professional home staging services in southeast Louisiana, please visit Home Staging by Amie for more information on how Amie can help you prepare your home to appeal to even the most discriminating of buyers.
The West Bank Living Team provides professional real estate services to buyers and sellers on the West Bank of New Orleans. Making your home selling or buying experience fun is our goal!
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