From February 2011 to January 2012, Naperville's Real Estate median home price was $320,750, down 4.3% compared to the previous year when it was $335,000.  To bring it all in perspective, Naperville's median home price in 2008 was as high as $375,000.  Home prices have declined due to increase inventory and rising market times.

So with median home prices falling, if priced right, what should you expect your market time to be?  Again, with more inventory, homes will simply take longer to sell as well.  Average market times in Naperville have increased as well.  This past year, market times increased 13% from the previous year.  Ready for some good news?  The average months of supply has actually dropped 10% to 6 months.  What does that mean for you?  It means that if home supply continues to drop, home prices can once again rise in 2012 and market times should trend to a lower number.

Depending on the value of your home, market times and competition does change a bit.  For example, closed homes under $250,000 was up 7.1% this past year.  Home prices from $250,000 to $372500 were up 3.4% while home priced from $373,000 to $540,500 were down 5% from the previous year.  Homes priced from $545,000 and up were down 14.5% from the previous year.

We keep track of these number to better serve our clients in Naperville.  It's our job to understand the market and help educate our clients on what to do in this tough market.

Look for our upcoming Naperville Real Estate blogs.  You can also get daily information by "Liking" us on Facebook at www.Facebook.com/DickersonTeam.  We post daily local and national real estate news that is important to you.  You can also visit us at www.DickersonTeam.com and learn more about us.

As of today, unemployment has dropped to a 6 year low of 8.3% due to better than expected job growth in January of 2012.  Now many people will debate on whether it means more people have received new jobs, or whether people have lost unemployment benefits.  I'm not here to get into a political discussion, but from what we've seen in the past 6 months, there are more buyers today than a year ago.  With rising rent costs, read, able and approved buyers are now realizing that it is simply more cost effective to own a home than to lose thousands of dollars a month to rent.  This, along with realistic home prices and low rates have made more first time homebuyers eager to purchase again.  We're hoping that this creates that domino effect that we've all been waiting for.  Unfortunately we've also seen people downsizing their home purchase, making larger and expensive homes harder to sell.

So now we're back to our original question, can buyers keep pace with the housing market?  In my opinion I believe so.  In Illinois, we've seen the average days on the market hit under 10 months.  That is the best it has been in 5 years.  When homes start to sell quicker, we start seeing home prices increase.  Many real estate economists believe 2012 will be a stable year in real estate and that we'll start seeing significant increases in home prices by 2014.  I know 2014 seems far off, but compared to not seeing a light at the end of the tunnel for many years, it's a nice guiding light to look forward to.

What can we all do to help this market?  Encourage people to start buying homes once again.  Americans who have a stable job, low debt and high rent, should really be encouraged to get into this market.  Let's face it, we're never going to see this kind of market again in our lifetime.  The possibilities to buying a home for pennies on the dollar and then finance those pennies for less than 4% is incredible.  Tell everyone what you know and have read and do the numbers.  It makes sense more now than any time in history to buy a home.  Remember, owning a home is a big investment and is meant to be a longer term purchase.  And in the long term, it will now be the best investment you'll ever make.

If you're thinking of buying a new home or know someone who is.  We represent the Chicagoland area.  Please visit us at www.DickersonTeam.com for our information and we would be honored to help.

Foreclosures were a HOT TOPIC among buyers the past few years.  But again, lenders and in my opinion, some realtors have spoiled it for many active buyers.  Banks have not distributed their foreclosure list among many realtors in the market, placing a lot of burden onto a few chosen realtors who have had a hard time catching up.  In turn, foreclosures come on the market with wrong information and very slow turnaround time, making buyers frustrated with the process.  Paperwork and lack of effort have turned very willing and able buyers into disgruntled and annoyed buyers.  Now are every bank and realtor causing this problem?  The answer is no.  But overall, the majority have made the process more difficult than it should be. 

The same can be said of short sales.  Short sales are sales in which the seller is trying to sell their home for less than what is owed on the property due to falling home prices.  This is sometime referred to as a "Distressed Sale".  Buyers have to remember, short sales are voluntary.  Both seller and lender are doing this voluntarily to help avoid foreclosure.  This doesn't mean the bank will accept your, or any, offer than comes on the home that's for sale.  It simply means, the bank will review the file after an offer comes in and from there, decide on whether they will approve, or not approve a short sale.  By not approving it, it doesn't mean the home will go into foreclosure anytime soon, but in time it will.

So getting back to 2012's market, will existing home sales do well?  In my opinion, the answer is yes.  We've talked to many realtors in the Chicagoland area and they feel as we do.  Buyers are now more focused on getting a pre-existing home that isn't a short sale or foreclosure.  And I must say, our buyers feel the same way.  With the Fed now saying they will keep interest rates low until 2014 coupled with rising Rent costs, I believe 2012 will be the year that the pent up demand for housing will finally break through.  Rent costs now are higher than owning a home, which simply doesn't make sense for the approved home buyer.  When your mortgage payment can be less than the home you're renting, it only makes sense to buy.

I may be looking at the glass half full, but I don't know about you, but I'm tired of looking at it half empty.  Here's to raising our half full glasses and toasting to a bigger and better real estate year.

If you're looking to buy or sell in the Chicagoland area, call the Dickerson Team at 888-777-1165 or go to our site at www.DickersonTeam.com.

Good luck in 2012 everyone!!

So what do you need to ask yourself when you purchase your new home?

1. Does the home have most of my needs in a new home?
2. Is it in the price range that I desire?
3. What are the negatives in this home?
4. Are these negatives something I can fix or am willing to fix?
5. How is the location?  Would this be easy to sell in the future?
6. Is the floor plan desirable for most people or is this something that could be a future problem?
7. Is the home located in an area of typically good resale values?
8. Am I the most expensive home in the neighborhood or the cheapest?
9. Does this home "fit" in the neighborhood that I'm purchasing in?
10. How long has it been on the market?  If a long time, then what were the issues?
11. Is the home priced correctly for the market or is it too high?
12. When you do a home inspection, are there major issues?
13. The lot, is it a typical lot or an "odd" lot?

• When purchasing a new home you have to be part Psychic and look into the future.  If you're working with an experienced Realtor, don't be shy, be sure to ask them these questions.  An experienced Realtor should be able to give you honest and straightforward advice to the home you're looking to purchase.  Believe me, a Realtor does not want to sell you a home that will be an issue to sell in the future.  The Realtor doesn't want to have to tell you in the future the problems you'll have when selling the home.  The same problems they should have told you when you were buying the home.  We can't reiterate how important it is to work with knowledgeable and experienced Realtors when purchasing a new home.  Experienced agents should know possible future resale issues and tell you before you sign on the dotted line.  This is also critical when purchasing New Construction.  An agent can be pivotal in helping you choose the right lot, and upgraded in the home that will benefit your future sale.

In Real Estate there is also an X Factor involved in selling your home.  Does a buyer want to see the same 'ol thing they've seen from house to house?  Or do they want to see something fresh?  Something different?  Something Unique?  Something that speaks to them and says, "This is the house for me".  Now will you get a $5 Million contract when you sell?  Only if you're home is worth $5 Million.  But for most of us the answer is no.  But you will raise the odds in selling your home quicker and for more money.

What do I believe the X Factors are to selling a home?  I give some ideas below that may help...

1. Try professional staging to get the home sold.  Staging can help your home look like a showroom and help the buyers imagine what their life would be in living in such a home.  It sets the stage for the buyers dream.
2. Curb appeal is key.  How the outside of your home looks will draw in the buyers.  Is your landscaping in great shape?  Does the grass need to be fertilized?  Does the home need to be painted?  Look at your home through a buyers eye and make it stand out.  Hardscape can add a special touch.  Updating outside coach lights can also jazz it up a bit.
3. How updated is the interior?  Ask your realtor what the HOT TOPICS are right now for buyers.  Is it granite counter tops?  Stainless Steel Appliances?  Deciding what to do to the interior can also come from the stager.  A good stager and give you inexpensive tips like painting the cabinets and trim that will help make your home seem more updated than others in your neighborhood.
4. Fresh and clean!!  Don't do this yourself, hire a professional to clean the carpets and deep clean the home.  From there it's about maintaining the home and keeping it looking and smelling fresh.  Buyers use all their senses and the sense of smell is just as important as what the home looks like.
5. De-Clutter..  no one wants to see your garbage.
6. The light touch of music.  We've already covered the eyes and nose, now it's time to appeal to the sense of hearing.  Make the music light and not overpowering.  If you have surround sound, show it off and make sure the system is on.
7. Pictures on display.  If you have beautiful pictures of the home through the seasons, make a scrap book and set it out for the buyers to see.  This gives them the sense of what THEIR home will look like.
8. Hire the right realtor.  Simon Cowell is an expert in his field, so why would you not want to hire an expert in the field of real estate?  Not that the realtor should be as rude as Simon, but a good realtor should be honest with you about price and what it should take to get the home sold.
9. Marketing!  Make sure the agent markets your home correctly.  Since 93% of all home buyers are online, make sure you're there too.  Make sure you have a virtual tour, good photo's and information and easy to access realtor information.  Make it easy for the buyer to choose your home FIRST!

Don't be in such a hurry!  Make sure you're home is ready before putting your home on the market.  Putting your best foot forward will help guarantee a home sale.  Yes, it cost's money to make money and when selling a home you'll have to reinvest in your investment.  But do you actually think these talented singers on X Factor don't invest in their future?  If you want to win the prize, you have to put in the time and yes, money.

Here's to hoping that the X Factor helps you sell your home.  Good luck and let us know what you think of our blog.  We would love to hear from you.

What is staging?  Home staging is about illusions. It's how David Copperfield would sell a house. It's beyond decorating and cleaning. It's about perfecting the art of creating moods. Staging makes your house look bigger, brighter, cleaner, warmer, more loving and, best of all, it makes home buyers want to buy it.

Contrary to what you might think, it's about more than preparing the house for sale. Staging is what you do after you've cleaned, decluttered, painted, made minor repairs; it's all about dressing the house for sale.  Remember, buying a home is an emotional purchase.  You have to create an environment that is appealling to most home buyers.  Once you've decided to list your home for sale, it simply isn't your home anymore.  It's a product that you're trying to sell to a large group of buyers who are willing and able to buy today.  So in order to do so, you have to creat the "illusion" of the perfect home that is right for the majority of buyers in the current market.

What accessories does a stager use?

• Mirrors
• Plants
• Silk Flowers
• Floor & Table Lamps,
• Area and Throw Rugs
• Small Love Seats
• Ottomans
• Afghans
• Pillows
• Inflatable Queen-Size Beds

What are some tricks of the trade?

• Apply orange oil to cabinets that appear dry, which will renew their original luster
• Put out large bowls of fruit such as polished apples, bright oranges, luscious grapes
• Arrange colorful and fun cookbooks on the counters

Other Tricks:

• Towels, tied with ribbons
• Scented soaps
• Creamy lotions
• Moisturizing & Facial jars

As I said, some homes need it more than others.  I've witnessed Million dollar listings that showed very poorly with bad furniture (or lack of) and bad decorating.  It doesn't matter about the price of the home, it matters about the style and taste of the seller.  Many homes we list simply need a little decluttering, paint and carpet.  While others need a total overhaul including: Paint, Carpet, Cleaning, Decluttering, furniture staging, new lighting and simple staging.

How much does staging cost?  Staging can run anywhere from $500 to $5,000, but in our opinion, it could be the BEST money ever spent when trying to sell your home.  Most professionally staged homes sell for more money and quicker than others on the market. 

Have you tried to use a stage when selling your home?  Did your realtor suggest staging the home when trying to sell?  Let us know what you think and join in on the discussion.  We're eager to hear from you and get your thoughts.

What is a short sale?  Click on short sale to find out...

Before listing a short sale, we must first find out if the seller qualifies.  So often we find sellers doing a short sale and they don't even qualify.  Some uneducated realtors, not familiar with short sales, are advising their clients to list and sell their home as a short sale, and most often they don't qualify.  What qualifies you for a short sale?  There are many aspects to qualifying for a short sale, but in basic terms, if you can show a hardship such as divorce, job downsizing, job loss, lost wages, balloon loan rates, job relocation etc. you may qualify.  You must first show that due to these circumstances, you can no longer afford your current mortgage loan.  Most lenders will want you to do a loan modification, but in most cases, the payment doesn't lower enough to help with the overall monthly payment.

Once you have your home listed as a short sale and have an accepted offer on your home, the contract along with all of your financial statements go to the sellers lender for short sale approval.  We have seen these approvals take anywhere from 60 days to 8 months.  There are dozens of reasons why it takes so long, but depending on whether you have a single loan or you have two on the home, it can take awhile.

Short sales..

The Good:  Short Sales can help save your home from foreclosure.  Foreclosure is by far worse than a short sale.  Any many cases with a short sale, you can purchase a new home within 2 years as long as your credit is repaired.  With a foreclosure, it can take anywhere from 7-10 years to regain a good credit standing which can help you purchase a new home.  Also short sales sell for approximately 30% more in price than a foreclosure, which helps the neighborhood and the overall market.

The Bad:  Short sales are never easy.  Be prepared at the end of all of this hassle and months of waiting, the end lender may not accept your short sale.  As a seller, you have to get the approval from all lein holders which means your tax's, mortgage(s), neighborhood association and anyone else attached to the home that hasn't been paid.  Just one of those leins could hinder your short sale.  If just one decides not to release the lein, then your home can face foreclosure.  Our advice is to try to keep up with association payments and tax's even if you can't pay the mortgage.  That will ease the short sale process.  The less you have leined on the property, the better.

The Ugly:  The ugly is exactly what it is.... UGLY!  Even though you clearly qualify, you've done all the right things to guarantee a successful short sale, the reality is your lender doesn't have to cooperate.  We've seen so often that lenders just simply don't cooperate and decide to foreclose on the property anyway.  The two major culprits to this is Chase and Bank of America.  These two institutions are the most difficult to work with when it comes to short sales.  They promote that they work with homeowners, but the fact is that they do, but they make it very difficult.  Many times it depends on the negotiator you get on the other end of the transaction.

In summary, is a short sale great?  No, not by a long shot, but in my opinion it's a better solution that a foreclosure.  Many foreclosures could be avoided if more people knew about short sales which in turn would help home prices stabilize.  My wish is that banks like Bank of America, Chase, Wells and others would be more proactive and pre-qualify sellers for a short sale.  Once qualified, the process would be easier.  But until Banks decide to do more, the American people will continue to lose their homes to foreclosure.

What do you think?  Have you or anyone you know been through a short sale or foreclosure?  Let us know your experience.

So where does the housing market stand today?  After 3 years of foreclosures, short sales, sliding home prices, lender fraud, stimulus acts and big bank bailouts, lending institutions still don't get it.

This past July (2011), home sales dropped again 1.3% after a 2.4% gain in June.   So why the drop after such a good June market.  Did buyers fall off the face of the earth?  We're more jobs lost in that month?  Did interest rates jump higher slowing down purchase contracts?  Nope... analysts blame lender stricter underwriting standards, low appraisals and looming foreclosures.

Personally, we have witnessed lenders sabotaging mortgage loans.  We have witnessed unthinkable underwritting issues, incredibly low appraisals and just flat out saying no to well qualified buyers.  We sit there and watch the news and read the reports where large banks complain about the foreclosures in our market, and how much it's costing them each month.  Wouldn't it make sense that if you ease lending back to "normal" levels, buyers could purchase homes quicker and in return ease upcoming foreclosures and eventually raise home prices again?  But since lenders continue to place stricter regulations on borrowers, things can only get worse.  There are a lot of homebuyers out there right now wanting to be able to take advantage of this historical real estate market.  But without normal lending practices, these buyers can't get approved.  It's pretty simple really, no approval... no purchase... no purchase... longer market times... longer market times...  lower prices... lower prices... lower equity...  lower equity...  foreclosure.

But like anything else, what goes up, must come down.  As homeowners, we were spoiled of having it our way, or the highway, for many years during the real estate boom.  I'm not telling you anything you don't already know. 

But what I will tell you is, that in this market, setting the right price is critical to getting your home sold.  What we tend to find, especially with realtors who typically don't sell many homes in this market, is that their listing prices are all over the board.  Either their price is too high (which happens when they list the home at what the owner "thinks" it's worth), or it's way too low. 

One way to figure out what your home is worth is to know your market.  You can get to know your market by driving around and writing down homes that are for sale in your direct neighborhood.  You can then call the listing agent or go online to find out the price.  After that, find 3 realtors to interview and have them do a CMA (Comparable Market Analysis) on your home.  But before you let them in the door, be sure to ask them a few questions first.  Find out how long they've been in business, how many homes they have sold in the last 12 months and how many of those homes were listings.  It's important to find the right realtor before you can find the right price.

When you have a CMA done, be sure that the listings are from your neighborhood.  Make sure that the realtor has a price per square foot analysis and photo's of the properties so you can compare their home to yours.  Don't get stuck on the price's of your competition.  Look more at the homes that have sold in the past 6 months.  This will determine what buyers are actually willing to pay for a home comparable to your s in your local market.

A good realtor should be able to outline through an excellent CMA presentation exactly what your home is worth and what you need to do to get it sold.  Be sure to always keep an open mind when it comes to selling your home.  We have never met a person who didn't believe their home was worth more than what it actually is.

If you're looking for a realtor, be sure to follow our blogs.  We also have a blog about how to hire the right realtor for your home.

My wife and I are always amazed how homeowners will do tons of research when choosing a dentist, doctor, lawyer, accountant etc.  But when it comes to real estate, their largest investment, they don't do the proper research and hire the right realtor to represent them in their sale. 

So what questions should you ask a realtor before hiring them to sell your home?  Below is a list of questions they may help.

• How many home sales do YOU, not your Broker, sell on average per year?
• How many homes do you sell per month?
• How many of those sales are listings?  How many are buyers?
• Do you consider yourself more of a buyers agent or a listing agent?  (*there is a difference*)
• Are you a full time realtor?
• How many years have you been doing real estate?
• Have you sold any homes in my area?
• What do you know about my neighborhood?
• What marketing are you going to do to promote the sale of my home?
• What commission do you charge and how much do you pay the buyers agent?
• Are there any hidden fees and do I pay anything if you Don't sell?
• How long of a listing contract do you require?

When a realtor does a CMA (Comparative Market Analysis) on your home, the CMA should have their Broker information, their recent sales history, comparable listings of solds, pendings and active listings, marketing plan and commission structure.  If a realtor can not show you the difference of what they can do for you for 6% compared to 5%, then something is wrong.  As a business, we all have overhead, and in real estate, our overhead is marketing and broker costs.  If a realtor is going to do the same for you whether it's a higher commission or lower commission, then the odds are they aren't true listing agents.

What is the difference between a listing agent and buyers agent?   A huge difference...!  A buyers agent simply works with potential buyers looking in a wide variety of areas and price ranges.  There is no cost to a buyers agent except for time and transportation costs.  A listing agent is a realtor who not only has the money to spend on selling your home, but that they actually invest in the sale of your home.  This is what I mean.  A listing agent uses their resources to design a marketing plan that best fits your homes desired sale.  Each home my be different and require different types of marketing to sell it.  For example, a low cost condo typically attracts first time home buyers.  While a luxury living estate home attracts buyers who typically have purchased many homes over the years and know exactly what they're looking for.  Each buyer group has a different way of how they look for their new home.  A first time home buyer will look online and in print ads to find their new home.  They will be looking for incentives such as "no down payment", "low interest rate", "free closing cost's", etc. because they are typically  short on cash.  While an Estate buyer is more strapped for time, not cash.  They will either hire a realtor to tour the desired homes for them.  Or they will go online to look at luxury homes with numerous photo's, virtual tour and community and school information.

When hiring a listing agent, they should have different marketing plans set up already for different segmented market listings.  If I were listing a home in a retirement community, I would most likely put most of my marketing efforts into local print ads.  I do this mainly because older generations still use newspapers and magazines to look for new homes they are interested in.  As a listing agent you MUST know the market of each home you're trying to sell.

A good thing to remember as well, most true listing agents aren't the cheapest.  This is because they are actually invest their money along with their time to sell your home.  They are usually in the top 5% in sales in your local market.  The old phrase is still true today, "the top 5% of realtors do 90% of your local business".

In closing, I wouldn't always recommend going with your relative or a "friend of a friend", unless they are good.  And if you ask the questions above and remember some of the key points we've touched on in this blog, you will know right away, who the best realtor is to list, market and SELL your home! 

Good luck on choosing the right realtor for your home, after all, it is your largest investment you'll ever make.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.