Archive for the 'Home Selling' Category

Which Came First?

Published
by
kmunsell
on May 13, 2009
in Home Buying, Home Selling and Market Conditions
. 242 Comments

The age old debate of which came first, the chicken or the egg, has never been actually decided. And in the real estate market, I’ve always wondered, what comes first, the purchases or the press? (Today, I guess it really doesn’t matter — I just hope they continue to feed off each other until we’re out of this festering economic mess. )

Case in point. The most recent headlines tell us that things are on the mend, and it’s occurring across the nation. In Orlando, there is a surge in sales of lower priced homes, in Santa Clara, April stats showed an increase in activity, and in Fort Worth, signs of healing are starting to show.  Of course, some areas are still slow to pick up, but there is hope that they simply lag behind. For example, in Oneida County, New York, sales are still down, but spirits are high.

Keep it coming. Keep it coming, press people. Focus on the positives and let’s hope that we can create a bandwagon that potential homebuyers will be eager to jump on to. It seems that new buyers are finally taking the plunge. Momentum provided by a perfect storm of big tax credits, ultra low interest rates, motivated sellers and inventory extraordinaire are causing lower priced condos and houses to actually sell again. 

Is this enough to call it over? Probably not, but it is certainly a good first step, and an upturn in the real estate market is likely to generate some momentum that can potentially affect other key economic indicators, including the job market, the stock market, retail sales and travel and tourism.  I for one, am quite happy to see that this new media attitude and regardless of whether the purchases or the press came first — keep it moving, people!

Negotiating With A Pre-Approval Letter

Published
by
preynolds
on May 5, 2009
in Home Buying and Home Selling
. 28 Comments

Start searching for a home, and the first thing you’ll hear from your realtor is how you should get a pre-approval letter from a bank.

The pre-approval letter is supposed to tell you and the seller of a home that a bank would be willing to lend up to a certain amount on the purchase of a home. More than just a pre-qualifying letter (which can usually be handled in about a five-minute phone conversation with your lender), a pre-approval letter goes an extra step.  The bank will actually ask for documentation confirming your employment and the source of your down payment, along with other aspects of your financial circumstances. In a pre-qualification letter, the bank mostly just accepts whatever you tell them.

Now lets be honest. Pre-approval letters are mostly for the benefit of realtors. Realtors feel better showing homes to clients with pre-approval letters because they feel less like they’re wasting their time. Banks, however, make no guarantees, and by now, both buyers and sellers know that. Just because a buyer may have a piece of paper stating they are “pre-approved” does not mean he or she will necessarily get  financing once an offer has been made and accepted. In fact, after a diligent search, one couple I know was denied financing for a home — even though they had received a pre-approval letter from the bank just a few weeks earlier. Nothing in their circumstances had changed.

How can you make a pre-approval letter actually mean something? You can’t really. But you can try to have your letter written in such a way that you’ll obtain the best price for any home you’re making an offer on.  Here’s what the strategists say:

1) Have the pre-approval letter match your offering price and not more. If a seller sees you are approved to offer more, they may reject your offer and hold out for a higher bid.

2) Try submitting a “low” low-ball offer along with a preapproval letter for a slightly higher amount. The amount in your preapproval is your “real” low-ball price. The seller will likely counter with your maximum price, which is really what you were aiming for in the first place. If you’re lucky, the seller may even accept your originial lowball offer.

3) Get your preapproval letter from a recognized local lender. Both listing agents and sellers will feel more comfortable with a trusted lender, rather than a fly-by-night online or long-distance operation that may change the terms of the loan, threatening the deal altogether.

4) Try having your preapproval letter state that you are preapproved to buy a certain house, rather than a certain amount. In other words, you are preapproved to buy 1 Oak Lane, MSL # xxxxx. According to some realtors, this implies that you have been approved to pay full asking price, but still provides for more flexibility during negotiations.

This Caterer Knows that Atmosphere Sells…Brownstones

Published
by
Editor
on April 29, 2009
in Home Selling
. 14 Comments

According to Brownstoner, a savvy caterer has added a twist to their regular secret dinner parties (you drop $60, they tell you where to go and feed you piles of delicious glory).

“The dinner parties will be “housed in (among other places) various apartments on the market… Whether you’ll dine in a Madison penthouse or on an Orchard Street rooftop is anyone’s guess,” says Daily Candy.”

Can you think of a better way to sell your apartment, other than to invite a bunch of affluent strangers over for an amazing dinner? I can’t. That’s why Brooklyn Laundry wins the cross-promotion award this month.

Open Houses Get Austere

Published
by
preynolds
on April 28, 2009
in Home Selling and Market Conditions
. 4 Comments

Is it just our imagination, or are open houses becoming more serious affairs than in years past?

We’ve been out and about this spring and we’ve noticed something about open houses: they’re more somber, business-like, efficient. Gone are the chocolate chip cookies. Gone are the scented candles. Brokers don’t even seem to be in the mood to chat us up anymore.

What’s going on? Has a moribund housing market brought brokers back down to earth? Is it that brokers can no longer afford to spring for cookies? Or have brokers just given up? Oddly enough, the open houses that we’ve been to this year have been well attended. But brokers no longer seem so intent on finding out which broker we’re working with and getting us to sign the sign-in sheet. We think they’re a little depressed.

But there’s an up side to all this. The new open house austerity feels relaxing to buyers. During the boom years, open houses seemed like high-stake affairs where a house could get sold in a day (if not an hour). Bidding wars were common. Buyers and brokers both were tied up in knots. These days, no one has big expectations of a quick sale. So forget the scented candles and cookies. These days, it’s the essentials that count — the right price, the right location, a well-maintained home. And that’s just the way it should be.

Realtor-Buyer Disconnect and How to Avoid It

Published
by
preynolds
on March 31, 2009
in Home Buying and Home Selling
. 131 Comments

Have you ever worked with a realtor, who just doesn’t “get” you?

If you don’t know what I mean, picture dating someone who doesn’t fit into the kind of life you envision for yourself.  Perhaps you’re a homebody who likes to cook and snuggle on the couch. But the guy you’re dating isn’t the nesting type and gets restless at home. Or perhaps you consider yourself an urban sophisticate in love with sidewalk cafes, independent boutiques and neighborhood ethnic restaurants. Well, the woman you’re dating likes suburbia, big box stores and Applebee’s.

In my case, I’m an urban soul, content to walk everywhere. I gave up owning a car a few years back in favor of Zipcar. But my realtor kept pushing me to condos that came with parking spaces, even though they were often $40-$50,000 more than condos without parking. Why? Resale value, he said. Even if I don’t own a car and intend to stay in my condo for years if not decades, he thought I should find a nice condo with parking. Kind of like mom who wants you to find a nice guy with a stable job, even though the unstable artist makes you feel more alive.

Sometimes, mismatched realtors don’t understand your lifestyle because they have a predictable life pattern stuck in their head: Buy a starter home. Move to a larger home. Start a family. Raise a family in a home with good school districts, etc. Or maybe they have lived this kind of life, and so it’s hard to relate to anyone who hasn’t.

So what’s the best way to fix the realtor-buyer disconnect?

For realtors, my advice is to focus less on resale and more on what your clients want, no matter how insane it may seem. If you can’t fathom why a client would want a huge McMansion stuck in the middle of nowhere, perhaps it’s better to be honest and point your clients to some realtor who can.

For buyers, my advice is to go with a realtor who reflects your demographic. Someone who’s about your age with a lifestyle similar to your own will inherently understand why you want to live on a ground floor when most people want an upper floor, or why you want an older building with character rather than a modern complex. If you’re an artist, find a realtor who specializes in finding homes for artists. If you’re an urban pioneer, find a realtor who is an urban pioneer himself. You won’t have to convince your realtor that your lifestyle needs trump resale value. And just like your best chance of meeting a nice companion often lie with friends who have similar interests and lifestyles, so does your best chance of finding the right realtor. Get recommendations from like-minded friends.

Finding the right realtor isn’t easy, but you shouldn’t have to live through months of frustration and disappointment hoping that one day, your realtor will finally understand you.

Spring Offers Hope But Will it Last?

Published
by
kmunsell
on March 26, 2009
in Home Buying, Home Selling and Market Conditions
. 104 Comments

The official start of spring pounced on the scene just days ago. From the winter trodden areas of the country, bulbs peer out from under ground, cherry trees poise to burst, and tiny, new leaves prepare to invade winter beaten branches.

Spring, the traditional start of prime real estate season, is here. This year, however, is an extraordinary year.  Will the traditional spring real estate jolt happen this year? If you sell, will they come?

Have faith. The lookers are already beginning to emerge from their quiet, hiding places, waiting to blossom into healthy, thriving buyers. So far:

  • New home starts jumped 22% in February, compared to one month prior. Though this number is still significantly below where it was one year ago, it does offer some hope.
  • Sales of existing homes rose 5.1% from January figures, again still lower than same time last year, but a move in the right direction, nonetheless. 
  • New home buyers can obtain up to $8,000 in tax credit from a qualified purchase.
  • Fixed rate mortgages are as low as 4 3/4% for qualified buyers.

This year, spring is needed more than any year before, but we don’t know how long this new burst of life will last. Is the market now poised for a turnaround or is it just a spot of sunshine that will shrink in the dark clouds ahead. Nobody knows what lies ahead, but if a move in on your mind, there may be no better time. 

Sellers clean up, price well, and play nice to make a sale, and lookers, buy now or prepare to stick it out for the long haul. Right now, the time is right for both sides of the deal. Let’s just hope this lasts.

Readers, share your thoughts below. Do you believe we’ve reached the bottom and clearer skies lie ahead, or do you believe this is a short term, transient burst of energy?

Do You Need a Realtor?

Published
by
preynolds
on March 10, 2009
in Home Buying and Home Selling
. 108 Comments

I have friends who are in the market for a home. After years of incessant talk about buying, they can finally take the plunge, thanks to an inheritance just large enough to allow them to buy a dilapidated fixer upper on the outskirts of Boston. So they’ve been looking in the suburbs north of that city, visiting open houses and combing the internet listings. Recently they’ve stumbled onto a worn 100-year-old Victorian with lots of potential, but in need of tremendous amounts of work. They plan to offer what they have — the amount of their cash inheritance — but not a penny more as they don’t have a penny more. The seller can either take it or leave it.

But now the big debate: do they need a realtor?

One half of the couple says yes: “It won’t cost us a dime. A realtor could help walk us through the process. A realtor could tell us if we’re offering too much, and what to look out for since we’re buying a house that needs work.”

The other half of the couple says no: “Look, we have what we have to spend. We’re not going to be negotiating. We’re taking the house “as is.” Realtors, whether they are buyer or seller agents, have one common goal — making a sell. Buyers agents are in business for themselves, and thus they push prices higher. We are absolutely NOT going to use a buyer’s agent.”

I listened to my friends argue and realized I could see both their points. In fact, when I’ve been a seller, I’ve always come away feeling a bit cheated. Last time I sold, my agent advised me to take a low offer when it turned out I was able to get better just by holding out a bit. On the other hand, when I’ve been a buyer, I’ve often come away feeling as if I’ve been a bit of a sucker, paying more than I really should have.

Now here’s my question for you: Is this doubt about realtors just human nature, or does it have something real to say about the profession?

I’d love to hear your opinions.

Times are Tough All Over

Published
by
kmunsell
on March 4, 2009
in Home Selling and Market Conditions
. 145 Comments

Photo Source: KARE11.com

Sometimes it’s just no fun to read the headlines. Sometimes statistics, analyses and doom and gloom are all you see, and sometimes it is quite obvious that the problems are all over.

The last few weeks showed us that celebrities have their problems too. There are no easy sales for Britney, Ed, Shaquille or Christina, who have all had to drop the prices on their homes, while another, Debbie needs a lesson on preparing her home for sale.

However, in other news, sometimes celebs play it safe. Basketball legend Michael Jordan purchased a more humble abode, probably to avoid the infamous foreclosure calamities that other well-knowns have been unable to avoid.  

Then again, the crazy antics of common folk that can make us laugh or cry as well.  Average Joe resorts to a circus to sell his home–er, at least to get ”several people” to walk through, while another man takes his case to the streets, “Stimulate the economy! Buy my house!” And in others cities, tiny homes are filling up with too many people.  Maybe a cave would hold more people. I hear there is one for sale, that is, if it doesn’t go into foreclosure first.

Of course, these down times are causing couples on the rocks to stay together just a little bit longer.  Is this good or is this bad…in the end we really don’t know. All we can do is hope because it some point it just has to get better.

The Value of an Emotional Remodel

Published
by
kmunsell
on February 25, 2009
in Home Buying, Home Selling and Market Conditions
. 114 Comments

I’ve been hanging around house sellers (too much) lately and I find myself wondering why the most fun loving, rational of people become raving mad lunatics as soon as their house goes up for sale.  It just shouldn’t come as a surprise that it takes longer to sell a home these days. The economy is in the toilet. On top of that, low ball offers shouldn’t be particularly startling either, so why is it that sellers fly off the handle and end up on a rampage when on the receiving end of one? 

This is very likely due to the ugly baby syndrome. Sellers wonder why their house is taking so long to sell or they become downright insulted when somebody asks for a deal. Sellers fail to see the strict business side of the deal –they only hear that they have an ugly baby. Consequently, if you’re a seller, the most productive thing you can do in today’s market is to give yourself an emotional remodel.

Consider:

You are selling your house, not your home. Make the mental transition for this transaction and realize that while you consider the sale of your home near and dear to your heart, the buyer sees this transaction as the purchase of a house or real property. There are no personal insults or attacks in a business transaction. There is no ugly baby.

A low ball offer is not an insult, it is an invitation to deal. No matter how far below asking price an offer is on your property, you need to keep in mind that it is not a personal statement. In today’s dismal economy, buyers are doing what buyers are expected to do. They are looking for a good deal and there should be no harm and no foul for asking for one. After all, some sellers are willing to make better deals than others, and it’s your prerogative as a seller to simply say no, or more wisely, to make a counter offer.

A lower offer might not be your ideal offer, but it might just make financial sense. Emotions get in the way and cloud solid financial sense. The holding costs of property might make a lower offer more reasonable that it seems at first blush, so do not discount what you have in front of you because it just might take longer than you think to find a buyer that values your house the same way you value your home.

Don’t Shoot the Property Tax Messenger

Published
by
Editor
on February 22, 2009
in Home Selling and Market Conditions
. 12 Comments

The property tax issue of 2009 is undoubtedly local. Not only are we seeing assessments that reflect the moderately disappointing and/or apocalyptic decreases in home value, but each state and city is dealing with the decrease in revenue differently.

Arizona deals with a two-year lag in assessments to tax rates, meaning homeowners will be forking over a check for their sweet, sweet imaginary home values from 2007.

Florida is dealing with their deal with the devil a few years back, where the “Save Our Homes” act limited the hyperactive growth of property assessments to no more than 3 percent, but also ensured that if property values were to fall, their taxes would still rise. That little caveat might change in the state legislature very quickly if senators value their reelection status.

In Brooklyn, assessments have shot up for condos in particular, pissing a lot of people off, but showing that there is still money in the borough (while the island to the West is dealing with their own troubles). Collecting taxes is, as one might imagine, a logical way to decrease a city budget deficit. The gut renovations haven’t come to a complete halt, either.

And I can assure you, those gut renos are still happening across the street from me. The telltale sign:

The UFO landing of a garbage dump.