The newspapers continue to report that home sales are relatively stable in Rochester and Buffalo and that prices are even on the rise.  I just read that in the Buffalo News this morning. A reason for this “news” is that Buffalo and Rochester are not large enough to be included in a very important index- the case-shiller home price index. This index reports on the change in sales price of homes that have sold multiple times.  It is the best way to gauge what is actually happening.  So let us look at an example of a home in Lancaster, NY.

219 Enchanted Forest North is being reported as being sold through a traditional real estate company charging 6% in November of 2008.  Let me give you some history.  This home was marketed through America’s Choice in the Summer of 2003.  It was listed at $239,000 and sold for $236,000.  The sellers walked away with over $235,000 because they sold commission free.  The buyer decided to sell three years later in 2006 and listed with a full commission real estate broker at 6%.  The home sold at $252,000.  That is a 2% per year increase in value.  However, the entire increase in value was eaten up by a commission of approximately $16,000.  So after closing costs the seller lost money. 

219 Enchanted Forest North went back for sale in the Spring of 2008 with a full commission real estate broker.  The list price was set at around $269,000, which amounts to about a 2% per year increase.  Guess what price the home is being reported sold in November of 2008.  I think you would be shocked to learn that the sale price is only $220,000.  Yes, $220,000.  The commission is about $13,000.  So the seller here is walking away with about $207,000.  Remember, this seller purchased this home in 2006 for $252,000.  There are many other examples that demonstrate the same.  I’ve reported on this before.  The newspaper stories come from real estate agents that are asked to comment on the market.  Ask yourself if you were a real estate agent, how would you respond to a reporter asking you for your comments on the market?  Would you like a story mentioning your name where you are quoted as saying you are selling homes for less than the buyer paid for them, and you are charging tens of thousands of dollars for your service?

Without being salesy, I must emphasize that either America’s Choice or 2.5% Real Estate Direct offer the absolute best systems to retain as much equity as possible or to limit your loss.