Thursday, May 11, 2006

Take a bite out of Real Estate Commissions...

1) Empower yourself with good info - here's a new site Real Estate ABC which offers some pretty valuable insights into recent sales and prices paid. In the past, you had to track this info down through some ancient county filing system. Their pricing guides are clearly flawed, but it's worth clicking around.
2) Understand that commissions are negotiable. Right now in Jefferson, Lewis, St. Lawrence County there is a perception that the market is "hot" and realtors often act as if their fees are standard and non-negotiable. Everything is negotiable. I've never paid over 4% total commission in a home sale or purchase, yet I frequently see commissions listed at 6%, 7% or even 8%.

3) Be aware of the US market as a whole. I can home prices in Upstate quickly adjusting back down 20-40% if
  • Long bond rates continue to rise pushing up mortgage rates.
  • A domestic economic slowdown impacts tax receipts leading to lower defense spending (ie, scaled down expansion of Ft. Drum)
  • Inventory continues to build in upstate as less experienced builders jump on the construction bandwagon.

Last week I was told by a realtor that my home had appreciated more than 100% from my purchase price in 2003 less than 3 yrs ago. That's not sustainable.

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