Changes in family and employment status, as well as adjustments to monthly mortgage obligations, played significant roles in California homeowners' decisions to sell their homes in 2009, according to the California Association of REALTORS® (C.A.R.) "2009-2010 Survey of California Home Sellers." The report states 67 percent of all sellers in California sold their homes as a result of difficulties related to meeting their mortgage obligation.
"Tighter underwriting standards and a decline in equity continued to impact the market in 2009," said C.A.R. President Steve Goddard. "Many homeowners chose to sell last year because their adjustable-rate mortgage reset at the same time home prices were experiencing an unprecedented decline, leaving them with little equity and difficulty in qualifying for a refinance."
Recognizing the value of working with a real estate professional, 99 percent of sellers chose to work with a REALTOR®, according to the survey. Of those, 72 percent cited the ability of an agent to sell the home at a higher price point as the primary reason. Other reasons included better marketing and exposure (38 percent), while 28 percent reported it was too difficult to sell the home independently.
"Navigating the increasingly complex real estate transaction is much easier when sellers have professional help," said Jeff Bell, president of the Silicon Valley Association of REALTORS®. "There is a growing awareness among sellers that the current market is complicated."
Bell explained today's sellers must compete not only with their fellow homeowners who are selling, but also with the increased inventory of distressed properties offered in short sales or foreclosures. Without professional assistance, it is difficult for sellers to actively promote their homes to potential buyers.
"Most of today's buyers are online and unrepresented sellers have no access to major online marketing avenues such as REALTOR®.com and other Web sites with large pools of listings to which buyers are attracted," Bell explained. "Although there are sites that cater to unrepresented sellers, their total listings are in the tens of thousands in contrast with more than four million homes showcased on REALTOR®.com."
Professional experience and insights also pay off, according to Bell. The National Association of REALTORS® reports in 2009, a typical property without professional assistance sold for $172,000 compared with $215,000 for the typical agent-assisted property.
Bell also noted all real estate licensees are not the same. "Only real estate licensees who are members of the National Association of REALTORS® are properly called REALTORS®. They proudly display the REALTOR® '®' logo on the business card or other marketing and sales literature," Bell explained. "REALTORS® are committed to treat all parties to a transaction honestly. They subscribe to a strict Code of Ethicsand are expected to maintain a higher level of knowledge of the process of buying and selling real estate."
On average, homes sold for $20,958 less than the original asking price in 2009. The median difference between the selling and listing price was $32,315; the list-to-sold-price ratio was significantly larger between first-time sellers ($30,000 below list price) and sellers who had previously sold a home ($8,000 below list price).
The percentage of first-time sellers grew to nearly half of all sellers (44 percent) in 2009, a 33 percent increase from 2008, and nearly three times the 2007 percentage of 15 percent.
Sellers in 2009 cited difficulty meeting the monthly mortgage obligations (30 percent); job loss (18 percent); and "mortgage payment increased" (15 percent) as primary motivation to sell. By comparison, in 2008, one in five sellers cited the ability to meet their mortgage payment obligation; while 11 percent sold due to financial difficulties.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.