Truths About the Mississippi Real Estate Markets

Home buyers and sellers are hearing a lot of distracting information about the real estate market today. Reports that prices are still too high, there are too many houses on the market, loans are difficult to get and housing just isn’t the investment it used to be all discourage consumers from entering the market. The good news is that Mississippi real estate markets remain a stable and responsible marketplace for home buyers and sellers.

  1. All real estate is local. There is no such thing as a national real estate market. If you pay attention to the news media, you might think that real estate markets are troubled everywhere. Not true! If you’re considering buying or selling a home, pay attention to sales price trends, volume and inventory in your target market. Get the facts straight by talking to a local REALTOR®

  2. Purchasing a home in Mississippi is a great long-term investment. Homeownership is still the number one way that Mississippi families build wealth. Did you know that 60 percent of the average homeowner’s wealth comes from their home’s equity? The average renter’s net worth is $4,800, while the average homeowner’s net worth is $171,000. And the average return on a five percent down payment over 10 years is usually three to five times greater than stock market returns. Real estate has delivered the most consistent positive return over any investment over the past 40 years.

  3. A house is not a place to make a quick buck. It’s a place to call home. Despite the recent popularity of television shows like “Flip this House”, real estate was never meant to be a quick-in, quick-out proposition. Homeownership provides shelter, a place to raise a family, a greater sense of community and a better quality of life – not to mention savings accumulated through equity and tax benefits. No paper investment can claim all of these benefits.

  4. Now is a good time to buy. Housing inventory levels in many markets are high and interest rates are at historic lows. Contrary to perceptions, conventional mortgages are widely available at favorable interest rates for the bulk of homebuyers. Buyers with good credit and a realistic view of what they can afford should have no difficulty obtaining mortgage approvals.

  5. REALTORS® add value to the real estate transaction – and your bottom line. Studies show that sellers who use a REALTOR® get up to 26 percent more for their home. REALTORS® handle hundreds of real estate transactions over the course of their careers and can counsel and guide buyers and sellers through the process. They have the expertise and experience to help sellers protect their investments and help buyers build theirs.

Types of Agency Relationships

Having decided to buy or sell a home, you are now faced with deciding what type of agent you will engage. There are several contractual agreements from which to choose, and understanding each of them is important before making that commitment. It is important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her, and with the brokerage company.

  • Seller’s agent. Also known as a listing agent, a seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is evidenced by a listing contract. Once a property is listed, the seller’s agent either can attempt to sell it or, in addition, may be permitted by the seller to cooperate with another licensee who will attempt to find a suitable buyer for the property. A seller’s agent negotiates the best possible price and terms for the seller. The agent represents the seller’s best interests throughout the transaction.

  • Buyer’s agent. A real estate licensee is hired by a prospective buyer as an agent to find an acceptable property for purchase and to negotiate the best possible price and terms for the buyer. The agent represents the buyer’s best interests throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s agent may be paid by the seller or receive a commission split with the listing agent.

  • Disclosed dual agent. Dual agency is a relationship in which the brokerage represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients; instead, dual agents owe limited fiduciary duties. The fiduciary duty of loyalty to the client is limited. This focuses on confidentiality and the negotiation process. Because of the potential for conflicts of interest in a dual agency relationship, it is vital that all parties to the dual agency relationship give their informed consent in writing.

It is important that you discuss the type relationship you and your agent will enter, and that you fully understand the responsibilities and working relationship that will result. Your REALTOR® will explain all options to your full satisfaction.

Real estate commissions

Commissions are negotiable between the seller and the listing broker. When completing the listing agreement, the seller and the listing REALTOR® will agree on the amount of the real estate commission. The listing contract also specifies when the commission is earned; it is important that you understand this.

Portions of this article reprinted from REALTOR® Magazine Online by permission of the National Association of REALTORS®. Copyright 2008. All rights reserved.

It Pays to Work With a Realtor

Congratulations on taking your first step to learn more about the value of homeownership in Mississippi. This guide, provided free by the Mississippi Association of REALTORS®, contains information to help you understand the process of buying and selling real estate.

Buying or selling a home can be an exciting endeavor, but without the right knowledge and experience, consumers often feel overwhelmed, confused or stressed by the process.

Work with a REALTOR® and make the process easier. When a REALTOR® represents your interests, you can rely on the knowledge, experience and commitment to fair and honest business practices a REALTOR® brings to the process.

Not all real estate professionals are the same. The term REALTOR® refers only to those real estate professionals who are members of the National Association of REALTORS® and agree to conduct their business by a strict Code of Ethics.

Learn more about why it pays to use a REALTOR®.

Buyers, a REALTOR® can:

  1. Help you determine how much house you can afford. REALTORS® can help you understand the variety of products and services offered by various lenders and direct you to the lender that best meets your needs.

  2. Use their network of resources to find your perfect home. From their contacts with other REALTORS® and sellers, REALTORS® often know about properties before they are listed for sale on the market. Having such advanced information about a desirable property could give you the first option to view and possibly make an offer on your dream house.

  3. Provide objective information to help you evaluate your options. REALTORS® can provide local community information on utilities, taxes, zoning, schools, etc. This information can help you decide if the property offers an environment in which you would like to live or invest and helps you estimate potential resale value.

  4. Negotiate your best deal like a pro. Negotiations for a home purchase can involve price, financing, terms, date of possession, repairs and furnishings. A REALTOR®’s experience negotiating these options will help you arrive at your best deal.

  5. Recommend inspections to ensure no surprises in the condition of your new home. Depending on the area and property, this could include inspections for termites, mold, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few.Your REALTOR® will know what inspections are required for your area and can recommend qualified, responsible professionals to perform inspections.

  6. Help with the titling process. Title indicates ownership of property.You should review a preliminary report on the title of the property prior to purchase. The title to most properties will have some limitations; for example, access rights for utilities. Your REALTOR® can help you resolve issues that might cause problems later.

  7. Guide you through the closing process. Your REALTOR® will help ensure that all steps have been completed in preparation for closing on the purchase. Using a REALTOR® will lessen the likelihood of surprises at the closing table.

Sellers, a REALTOR® can:

  1. Provide up-to-date marketplace information. Price, financing, terms and condition of competing properties are key factors in getting your property sold quickly, at the best price and with minimum hassle. Your REALTOR® knows the market and the other homes you are competing with. Rely on your REALTOR® for suggestions on repairs, updates and staging tips that will significantly enhance the salability of your property.

  2. Market your property for maximum exposure. Your REALTOR® will share information about your property with other real estate agents through a Multiple Listing Service (MLS) or other cooperative marketing networks. This combined with a REALTOR®’s contacts with previous clients, referrals, friends and family will give your property maximum exposure to potential buyers.

  3. Coordinate property showings. When a REALTOR® markets your property, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

  4. Help evaluate buyers’ proposals without compromising your marketing position. A buyer’s proposal is only the beginning of a process of appraisals, inspections and financing. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the system.

  5. Assist you in closing the sale of your home. Between the initial sales agreement and closing or settlement, questions may arise. Your REALTOR® is the best person to help you resolve these issues and move the transaction to closing or settlement.