Daily News and Events
by Kathryn Godby Oram
It’s 7:30 am, the kids are off to school and I have the house to myself. Before I leave for work, I snap the leash on the dog and walk the few blocks to La Famiglia for a Latte. I love the walk, the greetings and the banter in the shop.
Why am I telling you this? No one really cares where I get my coffee. I relate this story merely because it’s illustrative of what’s happening around the country as well as in New Jersey. People are choosing to be a part of their communities not just to live in them. They are finding that the simple things and the simple connections that they have with merchants and neighbors are important and comforting. No one wants to see their favorite coffee shop or deli go out of business; and while we are all worried about money we still want the comforts that hometown stores can offer.
The bloom is off the rose, the economy is not what it once was. People are no longer moving from town to town for a better job or to get a bigger house. Families are staying put, laying down roots and choosing to stay where they are. Once roots are established, many families find that they enjoy being a part of a community and having all the benefits that membership entails.
What this means for the home buyer is this; as a country become less nomadic and more town centric, we are going to look for amenities that keep us close to home. As the workforce is able to spend more and more hours working from their houses the towns in which they live will benefit from those workers doing all of their errands in those towns. In that vein, New Jersey has begun an incentive program aimed at home buyers who would like to live where they work. This program Live Where You Work, offers mortgage incentives for home buyers of a certain income range.
Community living and working benefits both homeowners and business owners. A thriving town has more stable home values and is better able to weather bad markets. A stable and consistent population can keep small business alive and well in a bad economy. The 3/50 project was created to make the shopping public see what they can do to keep their local businesses afloat in these uncertain times. Join us in Supporting the 350 Project!
When looking into different towns, evaluate what kinds of things you will take advantage of. If you’re a runner; where is the safest path? Are there streetlights for running at night or early in the morning? If you are primarily interested in activities for the kids: How close are you to a park? Can your kids walk to school, tennis courts, or a community pool?
As value is always on the mind of today’s buyer, remember that if the town you live in is appealing to you than it will be appealing to a future buyer as well. That great street with the wide, bike accessible sidewalks will attract the same type of buyer that you once were.
Finally, I love my neighborhood restaurant. I can’t say that the food is the best. I can’t say much about the food actually, but I eat it. I always enjoy going there. I am greeted by a warm smile, familiar faces and while it’s not “Cheers”, it’s home. My husband buys a local police detective a beer, says hi to a neighbor and we sit. The kids are home, three blocks away, and we have a night out on the town, our town.
Wednesday, October 28, 2009
Wednesday, October 21, 2009
The Two-family revisited
by Kathryn Godby Oram
Two heads are often better than one; the same holds true for houses. In tough economic times we can use all the help we can get and for some, that help can come in the form of a two-family. Garage apartment, side-by-side, duplex or carriage house, all of these options offer income that can offset your living expenses.
The multi-family market, once dominated by owner/landlords, took a very different turn during the recent housing boom. Rising rental rates made multi-family homes very appealing for the investor. As market values and demand continued to rise the multi-family market went through the roof.
Today, overbuilt rental markets, plummeting rental rates and multi-family loan default have created the perfect storm for the multi-unit buyer. Prices on these homes have dropped dramatically yet investors are not rushing in to snatch them up. Consider this; you may be able to have a great house plus a little income to offset your mortgage and taxes. By changing your idea of what your dream home is you may be able to get your home to work for you instead of you working for it. Most recent buyers (pre-crash) got into the residential multi-family market (four units or less) to become landlords. They banked on high rental rates to pay their mortgages and taxes. When the market began to shift the income was just not there and many over-levered two-four families had to be sold at a loss. Those deals are still out in the market. They are good investments and even better homes.
Invest in your new home; Live in one unit, rent out the other. The best part of the current market belongs to the seller that can accommodate the growing number of ‘downsizers’; many of whom may become renters. Historically, in a depressed Real Estate market, the rental market is generally better. That is not currently the case but with interest rates having nowhere to go but up, many buyers will have no choice but become renters. Morris County presently has an overabundance of apartments; which is a worry for fledgling and seasoned landlords. Keep in mind, that renting out half or a third of a home has benefits that renting an apartment may not and most often the perspective tenants are not coming from the same pool. That said, time is needed to absorb the newly built product that is coming to market. So, take your time; start looking into the idea of a multi-unit dwelling. Research rental rates in good areas with low vacancy rates. Make a list of the amenities that your unit(s) can offer that will differentiate you from the competition. Think of this purchase as a step towards your dream house. Use this Real Estate down-cycle to make a smart and inexpensive purchase that will offer a home and an income.
In an age where we are encouraged to re-use and re-cycle, re-think the idea of the multi-family.
Two heads are often better than one; the same holds true for houses. In tough economic times we can use all the help we can get and for some, that help can come in the form of a two-family. Garage apartment, side-by-side, duplex or carriage house, all of these options offer income that can offset your living expenses.
The multi-family market, once dominated by owner/landlords, took a very different turn during the recent housing boom. Rising rental rates made multi-family homes very appealing for the investor. As market values and demand continued to rise the multi-family market went through the roof.
Today, overbuilt rental markets, plummeting rental rates and multi-family loan default have created the perfect storm for the multi-unit buyer. Prices on these homes have dropped dramatically yet investors are not rushing in to snatch them up. Consider this; you may be able to have a great house plus a little income to offset your mortgage and taxes. By changing your idea of what your dream home is you may be able to get your home to work for you instead of you working for it. Most recent buyers (pre-crash) got into the residential multi-family market (four units or less) to become landlords. They banked on high rental rates to pay their mortgages and taxes. When the market began to shift the income was just not there and many over-levered two-four families had to be sold at a loss. Those deals are still out in the market. They are good investments and even better homes.
Invest in your new home; Live in one unit, rent out the other. The best part of the current market belongs to the seller that can accommodate the growing number of ‘downsizers’; many of whom may become renters. Historically, in a depressed Real Estate market, the rental market is generally better. That is not currently the case but with interest rates having nowhere to go but up, many buyers will have no choice but become renters. Morris County presently has an overabundance of apartments; which is a worry for fledgling and seasoned landlords. Keep in mind, that renting out half or a third of a home has benefits that renting an apartment may not and most often the perspective tenants are not coming from the same pool. That said, time is needed to absorb the newly built product that is coming to market. So, take your time; start looking into the idea of a multi-unit dwelling. Research rental rates in good areas with low vacancy rates. Make a list of the amenities that your unit(s) can offer that will differentiate you from the competition. Think of this purchase as a step towards your dream house. Use this Real Estate down-cycle to make a smart and inexpensive purchase that will offer a home and an income.
In an age where we are encouraged to re-use and re-cycle, re-think the idea of the multi-family.
Tuesday, October 20, 2009
When Selling Your Home, Disclose All
by Laura Jacobus
If you're putting your home on the market, better be sure you're ready to tell all - good and bad.
"The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of escrow and coming to the belief that the seller knew but didn't tell them," says real estate attorney Peter Solecki of Winton & Larson, LLP.
Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home's heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their 4-year-old child survived. The seller was convicted of involuntary manslaughter.
This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.
While certainly this isn't a typical scenario, it gives good reason to pay attention to the details that you're disclosing when selling your home. It's not worth it to leave off some important details just because you think the home won't sell or will sell for less money if you disclose any problems.
Reporting problems about your property prior to the sale of it can be done through various reporting mechanisms such as the Seller Disclosure Statement . But Solecki says some disclosure reporting statements are written in the present tense, which creates a reporting dilemma for some sellers.
Buyer Can Decide
"The seller will look at the Seller Disclosure Statement and say, 'Well, there was something wrong but it's not any more; therefore, I don't have to disclose it," Solecki says. He adds, "If [sellers] haven't disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it's been disclosed, then the buyer can elect what to do with it."
If you're putting your home on the market, better be sure you're ready to tell all - good and bad.
"The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of escrow and coming to the belief that the seller knew but didn't tell them," says real estate attorney Peter Solecki of Winton & Larson, LLP.
Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home's heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their 4-year-old child survived. The seller was convicted of involuntary manslaughter.
This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.
While certainly this isn't a typical scenario, it gives good reason to pay attention to the details that you're disclosing when selling your home. It's not worth it to leave off some important details just because you think the home won't sell or will sell for less money if you disclose any problems.
Reporting problems about your property prior to the sale of it can be done through various reporting mechanisms such as the Seller Disclosure Statement . But Solecki says some disclosure reporting statements are written in the present tense, which creates a reporting dilemma for some sellers.
Buyer Can Decide
"The seller will look at the Seller Disclosure Statement and say, 'Well, there was something wrong but it's not any more; therefore, I don't have to disclose it," Solecki says. He adds, "If [sellers] haven't disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it's been disclosed, then the buyer can elect what to do with it."
Wednesday, October 14, 2009
For the Love of Investing
by Kathryn Godby Oram
“Don’t fall in love with the Real Estate!” Experienced real estate investors will tell you that. You fall in love, then you over pay, over improve and so on. Growing up in a Real estate family I heard that line over and over. That voice was my mothers’, ever the pragmatist, ever the sensible businesswoman. My father, on the other hand, was a self described visionary. He walked into an old house or building and waxed poetic about mortar and lathe. He had a romance with the form and the function.
My folks were married from 9 to 5 and after. They were in business together. That marriage worked because they both had very different ideas on business and on life but together they made a great pair. That vision of my fathers’; that love for the grain of wood and the curve or an arched doorway, gave him an eye for what lay beneath. My mother made sure the investment would work then gladly fell in beside him, breathing new life into old spaces, her artistic eye tempering his wild renovation fantasies.
The most successful people I know love what they do. You have to have passion to engender passion in others. My parents had a symbiotic relationship, vision paired with practicality. They always loved each project and the buyers or the renters loved them too. They bought and renovated and sold. They bought and renovated and rented. They had few and short vacancies because their units had charm and beauty. They put themselves into every project.
What I’m getting at is this; Real Estate is about more that the dollar. Sure, the dollar is paramount but I’ve seen what happens when a house or an investment project has been created from a passionate desire to build something wonderful. Those are the places and spaces that give you a feeling that you want to be there. I supposed what you’d call the “It factor”. That is the crux of this sentimental Real Estate monologue; you put passion in, you get money out. Emotional marketing is playing to those emotions that make people buy jewelry they don’t need and flowers from a street vendor. Impulse is important in today’s market. If you can make someone fall in love with your property you are a Real Estate God. In turn, if you feel a tingle in your gut when you see a house you want or an old apartment building, go with it. Run your numbers, check comps, let common sense and a great Real Estate Broker guide you in your purchase; But remember, that crush you have will keep you going when problems arise. When old pipes burst and when tenants complain or when your kids flood the bathroom you’ll still believe you made the right choice. In life and in business the right combination of whimsy and work makes a marriage stand the test of time and a mortgage.
That feeling in the pit of your stomach can sometimes be described as love. It can happen. As an agent I often discourage falling in love too soon. I caution my charges and explain that rushing in can make us fools at the negotiating table. On the other hand, I want my clients to love their homes, investments. I want them to see potential. With the market so flat and values still declining, we need a little love back in this business.
“Don’t fall in love with the Real Estate!” Experienced real estate investors will tell you that. You fall in love, then you over pay, over improve and so on. Growing up in a Real estate family I heard that line over and over. That voice was my mothers’, ever the pragmatist, ever the sensible businesswoman. My father, on the other hand, was a self described visionary. He walked into an old house or building and waxed poetic about mortar and lathe. He had a romance with the form and the function.
My folks were married from 9 to 5 and after. They were in business together. That marriage worked because they both had very different ideas on business and on life but together they made a great pair. That vision of my fathers’; that love for the grain of wood and the curve or an arched doorway, gave him an eye for what lay beneath. My mother made sure the investment would work then gladly fell in beside him, breathing new life into old spaces, her artistic eye tempering his wild renovation fantasies.
The most successful people I know love what they do. You have to have passion to engender passion in others. My parents had a symbiotic relationship, vision paired with practicality. They always loved each project and the buyers or the renters loved them too. They bought and renovated and sold. They bought and renovated and rented. They had few and short vacancies because their units had charm and beauty. They put themselves into every project.
What I’m getting at is this; Real Estate is about more that the dollar. Sure, the dollar is paramount but I’ve seen what happens when a house or an investment project has been created from a passionate desire to build something wonderful. Those are the places and spaces that give you a feeling that you want to be there. I supposed what you’d call the “It factor”. That is the crux of this sentimental Real Estate monologue; you put passion in, you get money out. Emotional marketing is playing to those emotions that make people buy jewelry they don’t need and flowers from a street vendor. Impulse is important in today’s market. If you can make someone fall in love with your property you are a Real Estate God. In turn, if you feel a tingle in your gut when you see a house you want or an old apartment building, go with it. Run your numbers, check comps, let common sense and a great Real Estate Broker guide you in your purchase; But remember, that crush you have will keep you going when problems arise. When old pipes burst and when tenants complain or when your kids flood the bathroom you’ll still believe you made the right choice. In life and in business the right combination of whimsy and work makes a marriage stand the test of time and a mortgage.
That feeling in the pit of your stomach can sometimes be described as love. It can happen. As an agent I often discourage falling in love too soon. I caution my charges and explain that rushing in can make us fools at the negotiating table. On the other hand, I want my clients to love their homes, investments. I want them to see potential. With the market so flat and values still declining, we need a little love back in this business.
Tuesday, October 13, 2009
Selling Your Beloved Home
by Laura Jacobus
We've heard that old saying," There's a bottom for every seat." Why is nobody interested in my house?
Many will blame it on the market, the realtor or the neighbor who keeps everything on his lawn. The fact is, yes, every house has a buyer. But whether every house has a motivated seller is another question.
Self examination in selling your house is as difficult as a self therapy session. Sometimes we need to step back from being the "owner" and look at the situation as if we are not holding possession. The act of 'possession' will actually prevent the sale. Are you really WILLING to let go of ownership? What is your motivation? Most times it is taking a "loss" on the sale that prevents the owner from seeing the reality of the market situation. Yes, we all hate to admit truth of a poor investment and are embarrassed to feel defeat. But, lets see if we can use our observation and math skills to become the victor instead of the loser.
Some factors to consider are obvious, but lets look at all of the possible reasons that your home has had no interest to buyers.
Condition of property and nearby properties.
Has your neighbor taken a down turn or has a proposed change in the neighborhood given it a reputation? Is there power lines or RR tracks nearby? Be sure to look at your property map on theses sites:
Google Maps » ( use Terrain view)
www.stopthelines.com
Check out your agents online photos and write up as well!
History of Bad Press
Has there been a flood in your area, high crime, low school score report? Have you checked the state sex offender registry lately? Have you taken any negative insurance claims on your property? Any good buyers agent knows to look for these red flags before showing a property.
Check out these sites:
www.greatschools.net
New Jersey Sex Offender Internet Registry
www.isopropertyresources.com
Overpriced
This is most likely the number one reason your property is not selling. Every above negative brings down the value of your home a few thousand dollars. You obviously saw value in your home when you bought it. That value is still there. It may need to be priced adjusted to compensate for other factors that are negatively affecting your sale. Did you buy at a high time in the market? Or maybe you have overextended your credit and need the money to get out of debt? Is this really the new buyers responsibility? Would you overpay for a home to cover the past owners debt? Buyers are quite savvy on market value. They get keyed in quickly to the trend and the value. Some preview online for up to a year before they actually go into a home with an agent. You are not fooling anyone but yourself by expecting that the right buyer will come along and pick up your tab.
Lets consider the following scenario. You bought for your home in a high market and paid $400,000 with taxes of $7000 at an interest rate of 6.5 with 5% down. So your payment is now roughly $3000 per month. If it takes you 1 year to sell your home, you will carry this payment, or $36,000. Do the math and follow that number for 2 or 3 more years. It becomes staggering.
Your listing agent is telling you to drop the asking price on your home down to market value of $359,000 , by accepting an offer of $345,000. Your closing costs and inspection repairs will be about 7% of profits or $24,000.
Bottom line $400,000-$345,000=$55,000 loss add your fees of $24,000 and you are down $79,000. Let's look at the flip side, if you held onto your home at the high asking price for 2 years you are down $72,000. If no repairs are needed, you may be only slightly ahead. If you wait 3 years you'll be out $108,000.
But you have lost sight of the reason you want to move. What is more important to you. Moving on and accepting the loss of a few thousand dollars, or fighting the losing tide of recouping your bad investment. If you are unable to let go of this ownership, then do yourself a favor and take your home off the market until you are ready to compete and win freedom from your past mistake. Owing a bank a difference of $79,000 is a lot easier to live with, than the full hand.
Remember that the home you buy will also be at today's market. So you may get a good deal yourself!
Self examination is hard. But, letting go of old habits is freedom!
We've heard that old saying," There's a bottom for every seat." Why is nobody interested in my house?
Many will blame it on the market, the realtor or the neighbor who keeps everything on his lawn. The fact is, yes, every house has a buyer. But whether every house has a motivated seller is another question.
Self examination in selling your house is as difficult as a self therapy session. Sometimes we need to step back from being the "owner" and look at the situation as if we are not holding possession. The act of 'possession' will actually prevent the sale. Are you really WILLING to let go of ownership? What is your motivation? Most times it is taking a "loss" on the sale that prevents the owner from seeing the reality of the market situation. Yes, we all hate to admit truth of a poor investment and are embarrassed to feel defeat. But, lets see if we can use our observation and math skills to become the victor instead of the loser.
Some factors to consider are obvious, but lets look at all of the possible reasons that your home has had no interest to buyers.
Condition of property and nearby properties.
Has your neighbor taken a down turn or has a proposed change in the neighborhood given it a reputation? Is there power lines or RR tracks nearby? Be sure to look at your property map on theses sites:
Google Maps » ( use Terrain view)
www.stopthelines.com
Check out your agents online photos and write up as well!
History of Bad Press
Has there been a flood in your area, high crime, low school score report? Have you checked the state sex offender registry lately? Have you taken any negative insurance claims on your property? Any good buyers agent knows to look for these red flags before showing a property.
Check out these sites:
www.greatschools.net
New Jersey Sex Offender Internet Registry
www.isopropertyresources.com
Overpriced
This is most likely the number one reason your property is not selling. Every above negative brings down the value of your home a few thousand dollars. You obviously saw value in your home when you bought it. That value is still there. It may need to be priced adjusted to compensate for other factors that are negatively affecting your sale. Did you buy at a high time in the market? Or maybe you have overextended your credit and need the money to get out of debt? Is this really the new buyers responsibility? Would you overpay for a home to cover the past owners debt? Buyers are quite savvy on market value. They get keyed in quickly to the trend and the value. Some preview online for up to a year before they actually go into a home with an agent. You are not fooling anyone but yourself by expecting that the right buyer will come along and pick up your tab.
Lets consider the following scenario. You bought for your home in a high market and paid $400,000 with taxes of $7000 at an interest rate of 6.5 with 5% down. So your payment is now roughly $3000 per month. If it takes you 1 year to sell your home, you will carry this payment, or $36,000. Do the math and follow that number for 2 or 3 more years. It becomes staggering.
Your listing agent is telling you to drop the asking price on your home down to market value of $359,000 , by accepting an offer of $345,000. Your closing costs and inspection repairs will be about 7% of profits or $24,000.
Bottom line $400,000-$345,000=$55,000 loss add your fees of $24,000 and you are down $79,000. Let's look at the flip side, if you held onto your home at the high asking price for 2 years you are down $72,000. If no repairs are needed, you may be only slightly ahead. If you wait 3 years you'll be out $108,000.
But you have lost sight of the reason you want to move. What is more important to you. Moving on and accepting the loss of a few thousand dollars, or fighting the losing tide of recouping your bad investment. If you are unable to let go of this ownership, then do yourself a favor and take your home off the market until you are ready to compete and win freedom from your past mistake. Owing a bank a difference of $79,000 is a lot easier to live with, than the full hand.
Remember that the home you buy will also be at today's market. So you may get a good deal yourself!
Self examination is hard. But, letting go of old habits is freedom!
Wednesday, October 7, 2009
Small and Perfect: When too big is too much
by Kathryn Godby Oram
In the US housing market, having the best has always meant having the biggest. The recent market correction has lead many to doubt that adage.
Perhaps the best is; what you can afford, fits your stuff, and keeps out the rain, snow and wind. Luxury does not have to mean large. A well designed smaller home can be more enjoyable and more cost effective at the same time. Think about how you live your life in and out of your home. Take stocks of your needs and list them against your desires. Decide what you can do without. Why is the smaller house trend growing in popularity and what does it mean for you as a buyer?
According to the AHBA 59 % of Baby Boomers say that they want to move to a smaller, one level, more convenient home. With boomers driving the market and young families taking a back seat, the demand for smaller, reasonably priced homes is climbing. Many boomers would like to remain in their current homes but cannot due to finances, inefficient layout or maintenance worries. This trend, pushed by the market’s biggest buyers, is affecting how and where builders build. If small, perfect and efficient is the new “must have” then perhaps the era of the McMansion with a too big kitchen and no money left for furniture is over.
The recent downturn in the economy has every American, young and old, re-thinking their finances. For most of us, our home is our biggest expense. Disposing of old norms and re-envisioning homes that are better suited to efficient living can allow all consumers to enjoy beautiful surroundings at a fraction of the cost.
Young families have not left the market entirely. With prices down and interest rates still very low, many younger buyers do not want to miss the opportunity to get into a new home. In the past, the majority of buyers bought as big and as expensive a house as they could afford; that is no longer the case. Savvy buyers are taking stock of their finances and looking more closely at the way they want to spend as well as save their money.
Buyers from all age groups are buying smaller homes. What this means for the consumer is that buying a smaller home will not only save you money it may actually make you some. The “it” factor is what sells a house. Intimate family spaces, gorgeous kitchens, organized storage and great baths are the ingredients for a successful sale. Keep in mind that those renovations are more easily paid for in a smaller home. If those improvements are appealing to you when you look at a home for sale then they will be equally appealing to a potential buyer if and when you decide to sell your own home. By creating a home that is easy and affordable to manage you’ll be creating a home that is easy to sell. In this market, that’s piece of mind.
Should you decide to downsize follow a few simple rules: Buy a home with a layout that works well for your life. Focus your time and money on the parts of the home where you spend the most time. Do not neglect outdoor spaces. A smaller home can feel expansive with a three-season patio that hosts warm fires and pleasant conversation year round. When doing improvements consider energy efficient alternatives to old favorites and see if the costs are in line with energy savings. Use quality materials that make a statement and that will last. Just because your home is not a mansion does not mean that it cannot be a showplace. Hopefully, when you’re finished you’ll have the home you’ve always longed for and you may even have money left over to decorate it.
In the US housing market, having the best has always meant having the biggest. The recent market correction has lead many to doubt that adage.
Perhaps the best is; what you can afford, fits your stuff, and keeps out the rain, snow and wind. Luxury does not have to mean large. A well designed smaller home can be more enjoyable and more cost effective at the same time. Think about how you live your life in and out of your home. Take stocks of your needs and list them against your desires. Decide what you can do without. Why is the smaller house trend growing in popularity and what does it mean for you as a buyer?
According to the AHBA 59 % of Baby Boomers say that they want to move to a smaller, one level, more convenient home. With boomers driving the market and young families taking a back seat, the demand for smaller, reasonably priced homes is climbing. Many boomers would like to remain in their current homes but cannot due to finances, inefficient layout or maintenance worries. This trend, pushed by the market’s biggest buyers, is affecting how and where builders build. If small, perfect and efficient is the new “must have” then perhaps the era of the McMansion with a too big kitchen and no money left for furniture is over.
The recent downturn in the economy has every American, young and old, re-thinking their finances. For most of us, our home is our biggest expense. Disposing of old norms and re-envisioning homes that are better suited to efficient living can allow all consumers to enjoy beautiful surroundings at a fraction of the cost.
Young families have not left the market entirely. With prices down and interest rates still very low, many younger buyers do not want to miss the opportunity to get into a new home. In the past, the majority of buyers bought as big and as expensive a house as they could afford; that is no longer the case. Savvy buyers are taking stock of their finances and looking more closely at the way they want to spend as well as save their money.
Buyers from all age groups are buying smaller homes. What this means for the consumer is that buying a smaller home will not only save you money it may actually make you some. The “it” factor is what sells a house. Intimate family spaces, gorgeous kitchens, organized storage and great baths are the ingredients for a successful sale. Keep in mind that those renovations are more easily paid for in a smaller home. If those improvements are appealing to you when you look at a home for sale then they will be equally appealing to a potential buyer if and when you decide to sell your own home. By creating a home that is easy and affordable to manage you’ll be creating a home that is easy to sell. In this market, that’s piece of mind.
Should you decide to downsize follow a few simple rules: Buy a home with a layout that works well for your life. Focus your time and money on the parts of the home where you spend the most time. Do not neglect outdoor spaces. A smaller home can feel expansive with a three-season patio that hosts warm fires and pleasant conversation year round. When doing improvements consider energy efficient alternatives to old favorites and see if the costs are in line with energy savings. Use quality materials that make a statement and that will last. Just because your home is not a mansion does not mean that it cannot be a showplace. Hopefully, when you’re finished you’ll have the home you’ve always longed for and you may even have money left over to decorate it.
Tuesday, October 6, 2009
NJ Real Estate: The Offer
by Laura Jacobus
Oh, so, congratulations, you got an offer!! You must have been a smart seller and understood the basic mentality of a home buyer. You did your homework and went to see the competition. You staged your home to be clean, clear of cluster, and welcoming. And of course, you were priced right!
Few sellers understand the value in pricing their home to sell, not to list, TO SELL! It is the homes that start high and sit and sit and sit, like stale bread on the shelf, that are the least successful in attracting a buyer. The pricing has more appeal than most can imagine.
So, why is the offer so low? What is this buyer thinking, that he can steal my home and all the money that I have put into it? That he believes that I am so desperate that I will jump at his dangling green carrot? Tell him to come back when he wants to play with my toys nicely.
Ouch. That low offer is hard on the old ego. The house becomes, in many cases like the appendage to the body. The personal insult is difficult to shrug off. This is the point where we need to move mentally into the position of the buyer. He has, by now seen at least 6-10 homes in your area and price range. Carefully look at the current list of available, sold and under contract homes in your area. Some may have sold since you listed, but many may still be out there. Evaluate with your agent, the current market and determine the mid point of this offer compared to your list price. If the midpoint is still way below your acceptable asking price, ask why. Invite the buyers agent to make a presentation and explain the buyers position. This is a very acceptable way to understand the personal side of the buyers story, and a good way to get your point across to the buyers agent as well. That agent knows if this buyer can really afford your home, as the prequalify call from their loan department told them where to shop.
This buyer obviously knew the price range he was shopping in. The average buyer "today" will put in an offer of 10-12% less than asking price. This may not sound like much on a pair of shoes, but on a price tag of $350,000, that 10% can be shocking. $35000 is a deep discount and you still need to make up for your broker fee, legal, and transfer tax, which all adds up to about 6%-7%.
The bottom line is, everyone wants to walk away feeling that he got a good deal. The seller needs to move on, with little or no remorse, and the buyer needs to feel that he did not pay full price. Finding that middle can get sticky and uncomfortable. It is important to remember that you will most likely meet this buyer at some point in the transaction. Establishing a mutual relationship is best for all parties involved.
In the end, you have the power to choose to refuse, or let go of the loss and know that you too will also be able to negotiate a good deal for yourself in your next home! The point to your sale is to move on and enjoy the next phase of your life...LET IT GO and don't take it personal!
Oh, so, congratulations, you got an offer!! You must have been a smart seller and understood the basic mentality of a home buyer. You did your homework and went to see the competition. You staged your home to be clean, clear of cluster, and welcoming. And of course, you were priced right!
Few sellers understand the value in pricing their home to sell, not to list, TO SELL! It is the homes that start high and sit and sit and sit, like stale bread on the shelf, that are the least successful in attracting a buyer. The pricing has more appeal than most can imagine.
So, why is the offer so low? What is this buyer thinking, that he can steal my home and all the money that I have put into it? That he believes that I am so desperate that I will jump at his dangling green carrot? Tell him to come back when he wants to play with my toys nicely.
Ouch. That low offer is hard on the old ego. The house becomes, in many cases like the appendage to the body. The personal insult is difficult to shrug off. This is the point where we need to move mentally into the position of the buyer. He has, by now seen at least 6-10 homes in your area and price range. Carefully look at the current list of available, sold and under contract homes in your area. Some may have sold since you listed, but many may still be out there. Evaluate with your agent, the current market and determine the mid point of this offer compared to your list price. If the midpoint is still way below your acceptable asking price, ask why. Invite the buyers agent to make a presentation and explain the buyers position. This is a very acceptable way to understand the personal side of the buyers story, and a good way to get your point across to the buyers agent as well. That agent knows if this buyer can really afford your home, as the prequalify call from their loan department told them where to shop.
This buyer obviously knew the price range he was shopping in. The average buyer "today" will put in an offer of 10-12% less than asking price. This may not sound like much on a pair of shoes, but on a price tag of $350,000, that 10% can be shocking. $35000 is a deep discount and you still need to make up for your broker fee, legal, and transfer tax, which all adds up to about 6%-7%.
The bottom line is, everyone wants to walk away feeling that he got a good deal. The seller needs to move on, with little or no remorse, and the buyer needs to feel that he did not pay full price. Finding that middle can get sticky and uncomfortable. It is important to remember that you will most likely meet this buyer at some point in the transaction. Establishing a mutual relationship is best for all parties involved.
In the end, you have the power to choose to refuse, or let go of the loss and know that you too will also be able to negotiate a good deal for yourself in your next home! The point to your sale is to move on and enjoy the next phase of your life...LET IT GO and don't take it personal!
Wednesday, September 30, 2009
Real Estate - Is it time to buy?
by Kathryn Godby Oram
When the Real Estate Industry was hot everyone was an expert on the “market”. Home values were on everyone’s mind and we all watched in wonder as our homes gained thousands in value. Now, the “market” has suffered drastic losses and the world is again buzzing about Real Estate, but mainly to ponder where we go from here.
Over the past 18 months the Fed has actively supported the housing market by keeping rates low. Even more proactively, the Central Bank, has purchased the majority of Mortgage Backed Securities in 2009 effectively owning all of the mortgages written this year. So what happens when the Fed stops its unprecedented buying and the private sector comes back into the mortgage market? What happens when the Fed starts to raise interest rates back to historically normal levels? Mortgage rates will rise. If, therefore, you want to take advantage of some of the lowest rates on record, now is to the time to buy.
In general, when rates go up prices go down and conversely, when rates go down prices go up. Over the past 18 months prices and rates have gone down simultaneously. This is a phenomenon not to be dismissed. If you are waiting for the bottom of the market you may find yourself facing an affordability dilemma. Consider the following example. A $500,000.00 purchase with 20% down or $400,000 mortgage at current rates, 5.5% on a 30 year fixed would require a $2,271 monthly payment ($27,254 annually), Fast forward to the same home in the near future. Even if the value dropped an additional 20%, so the purchase price is now $400,000.00, an 80% mortgage of $320,000.00 with a rate of 8.5% on a 30 year fixed would require a $2,461 monthly payment ($29,526 annually). If prices hold or rise from here, the difference is even more profound. Record low rates, putting affordability at an all time high is the reason to buy now even if values have further to fall
Now
Value $500,000
Rate 5.50%
LTV 80%
Mortgage $400,000
Amo 30 yr
Payment $27,254
2,271
Ratio 0.068135
Drop/ Increase 20%
Later
Value $400,000
Rate 8.50%
LTV 80%
Mortgage $320,000
Amo 30 yr
Payment $29,526
$2,461
Ratio 0.09227
When the Real Estate Industry was hot everyone was an expert on the “market”. Home values were on everyone’s mind and we all watched in wonder as our homes gained thousands in value. Now, the “market” has suffered drastic losses and the world is again buzzing about Real Estate, but mainly to ponder where we go from here.
Over the past 18 months the Fed has actively supported the housing market by keeping rates low. Even more proactively, the Central Bank, has purchased the majority of Mortgage Backed Securities in 2009 effectively owning all of the mortgages written this year. So what happens when the Fed stops its unprecedented buying and the private sector comes back into the mortgage market? What happens when the Fed starts to raise interest rates back to historically normal levels? Mortgage rates will rise. If, therefore, you want to take advantage of some of the lowest rates on record, now is to the time to buy.
In general, when rates go up prices go down and conversely, when rates go down prices go up. Over the past 18 months prices and rates have gone down simultaneously. This is a phenomenon not to be dismissed. If you are waiting for the bottom of the market you may find yourself facing an affordability dilemma. Consider the following example. A $500,000.00 purchase with 20% down or $400,000 mortgage at current rates, 5.5% on a 30 year fixed would require a $2,271 monthly payment ($27,254 annually), Fast forward to the same home in the near future. Even if the value dropped an additional 20%, so the purchase price is now $400,000.00, an 80% mortgage of $320,000.00 with a rate of 8.5% on a 30 year fixed would require a $2,461 monthly payment ($29,526 annually). If prices hold or rise from here, the difference is even more profound. Record low rates, putting affordability at an all time high is the reason to buy now even if values have further to fall
Now
Value $500,000
Rate 5.50%
LTV 80%
Mortgage $400,000
Amo 30 yr
Payment $27,254
2,271
Ratio 0.068135
Drop/ Increase 20%
Later
Value $400,000
Rate 8.50%
LTV 80%
Mortgage $320,000
Amo 30 yr
Payment $29,526
$2,461
Ratio 0.09227
Tuesday, September 29, 2009
Showing Your Home
by Laura Jacobus
The time it takes to prepare for sale is all worth the effort when your agent calls you with a "showing"!
If your home is properly marketed, and fairly priced, you should start to get multiple agents calling you or your agent for showings. It is important to realize at the time of the listing, who will be handling the calls? Do you want to handle the calls or can you leave it up to your agent? That depends on your situation at home. Many factors can influence your showings.
BUYER TURN OFFS:
PETS
Is there pets to be concerned with? Pets are the major reason that homes cannot be shown. Dogs are natural property protectors and your liability may be at risk if you are leaving your dog loose in the house. Even the friendliest dog, can be upset by surprise visitors or small children. Be sure to have your dog secured in a locked area or staying with a friend during your showing. If you need to make arrangements the day of the showing, you may loose the chance to show to that buyer for good. Agents try to schedule appointments, but sometime a buyer will throw a curve ball from the agents car and ask to see your home immediately. Try to be ready for those surprise visits. Any one can be your potential offer!
TENANTS
Although tenants can be income producers for you, they can be a hindrance in your sale. Most tenants are quite happy with their situation, and not really as eager to see the house sell as you are. Even the best tenants can be quite snooty about people coming through their belongings. If there is anyway to have the tenants prepare to leave the premises before you list, make those arrangements now. Most states require landlords give tenants 60 days to vacate. If your buyer wants a fast closing, your tenant can hold up your sale. Give your tenants fair warning and ask them to start the process of looking for a new home before your listing. Buyers have of fear of tenants refusal to vacate and no new buyer wants to be stuck with a hold over tenant.
ODORS
Pets, cigarettes, mold and old food in the trash can. Nothing says, "Lets get out of here!" more than odors. Keep windows open if possible. Dehumidify any basements or dark houses to keep the moldy smell out. Clean out fireplaces, ashtrays and litter boxes. Have carpets and drapes cleaned and wash down walls if possible. Remember that buyers are imagining their stuff in your house!
PERSONAL ITEMS
Put away photos of your kids, your family and your personal icons and idols. A home that has no information about the owner is always a better seller. The mass appeal of a home with no attachments, presents a home that could be right for anyone. Buyers cannot help but notice your kids dance photos or your diploma from culinary school. And if you have an appointment with the un-employment office on Tuesday, for heavens sake, put the calendar away! What you put away, whether in storage or in a drawer can really help your buyer to see "the space" not the sellers situation. Obviously, important documents, jewelry and valuables should be out sight.
BE READY AT ALL TIMES!
Have beds made, clothes picked up and bathrooms clean every day. Try as we may to prepare you, the buyers sometimes call the same day and ask to see your home. Consider calling a neighbor to pick up if you had a bad morning!
SHOW AND SELL!
The time it takes to prepare for sale is all worth the effort when your agent calls you with a "showing"!
If your home is properly marketed, and fairly priced, you should start to get multiple agents calling you or your agent for showings. It is important to realize at the time of the listing, who will be handling the calls? Do you want to handle the calls or can you leave it up to your agent? That depends on your situation at home. Many factors can influence your showings.
BUYER TURN OFFS:
PETS
Is there pets to be concerned with? Pets are the major reason that homes cannot be shown. Dogs are natural property protectors and your liability may be at risk if you are leaving your dog loose in the house. Even the friendliest dog, can be upset by surprise visitors or small children. Be sure to have your dog secured in a locked area or staying with a friend during your showing. If you need to make arrangements the day of the showing, you may loose the chance to show to that buyer for good. Agents try to schedule appointments, but sometime a buyer will throw a curve ball from the agents car and ask to see your home immediately. Try to be ready for those surprise visits. Any one can be your potential offer!
TENANTS
Although tenants can be income producers for you, they can be a hindrance in your sale. Most tenants are quite happy with their situation, and not really as eager to see the house sell as you are. Even the best tenants can be quite snooty about people coming through their belongings. If there is anyway to have the tenants prepare to leave the premises before you list, make those arrangements now. Most states require landlords give tenants 60 days to vacate. If your buyer wants a fast closing, your tenant can hold up your sale. Give your tenants fair warning and ask them to start the process of looking for a new home before your listing. Buyers have of fear of tenants refusal to vacate and no new buyer wants to be stuck with a hold over tenant.
ODORS
Pets, cigarettes, mold and old food in the trash can. Nothing says, "Lets get out of here!" more than odors. Keep windows open if possible. Dehumidify any basements or dark houses to keep the moldy smell out. Clean out fireplaces, ashtrays and litter boxes. Have carpets and drapes cleaned and wash down walls if possible. Remember that buyers are imagining their stuff in your house!
PERSONAL ITEMS
Put away photos of your kids, your family and your personal icons and idols. A home that has no information about the owner is always a better seller. The mass appeal of a home with no attachments, presents a home that could be right for anyone. Buyers cannot help but notice your kids dance photos or your diploma from culinary school. And if you have an appointment with the un-employment office on Tuesday, for heavens sake, put the calendar away! What you put away, whether in storage or in a drawer can really help your buyer to see "the space" not the sellers situation. Obviously, important documents, jewelry and valuables should be out sight.
BE READY AT ALL TIMES!
Have beds made, clothes picked up and bathrooms clean every day. Try as we may to prepare you, the buyers sometimes call the same day and ask to see your home. Consider calling a neighbor to pick up if you had a bad morning!
SHOW AND SELL!
Tuesday, September 22, 2009
Should You Buy That Fixer-Upper?
by Kathryn Godby Oram
In commercial real estate lingo, a fixer-upper is called a “Value-Add” deal. Either term refers to a real-estate property that will require maintenance work (redecoration, reconstruction or redesign) and can usually be lived in as it stands.
The idea that you can add value to a property is why buying a 'fixer-upper' has so much appeal. Market data shows that while housing sales have increased, prices have not.
In fact, prices are not predicted to hit bottom until the first quarter of 2010. For buyers, rates are still historically low, prices are down, government tax incentives are due to expire, and there is an abundance of homes to choose from in every market. Yet despite the appeal of buying, many new buyers are afraid to pull the trigger and loose value immediately upon closing.
Read more Research & Statistics by the New Jersey Association of REALTORS »
Buying a “Value-Add” house, if done right, can be a hedge against falling prices. The potential exists to buy the cheapest house in a desirable area way below market price, invest some time and money for renovations, and raise the property's potential value to get a return on your investment.
Make sure you have a realistic idea of what you're getting into. Here's a few things to look for:
Chances are if you’re reading this, you’ve not gone the fixer-upper route before. Finding your subject property is not an easy task. Even the best house with the best renovations will not pay you dividends if it is not in a good locale. Keep playing that old Realtor tune “location, location, location”; A great yard, a well sited home and nicer more expensive homes in close proximity are guidelines. In this market look for a house that has been overlooked because buyers cannot see past the orange shag carpet, the scary kitchen and the overgrown garden. Put on a pair of rose-colored glasses and squint. You can see it. I know you can! The best fixer-upper is a home that is out-dated but has been maintained. If the house is not sold because it needs paint and a new kitchen then there is your winner!
Once you’ve decided on a specific property find a good inspector. Cull recommendations from friends or co-workers. You might also use a screening agency such as service magic, or go to the American Society of Inspectors for help in finding a competent inspector. Your inspection report is your Golden Ticket; it tells you whether to halt or go forward. It can be your guide to assess what the house needs and if the process is manageable or will be too taxing on you and your checkbook.
Your inspection will cover everything from the roof to foundation. Pay close attention to water, mold, septic, oil tank and structural issues. Lead tests, Termite and radon may or may not be included. Pest and Radon inspections are a necessity but check with your Realtor to assess weather or not you need a lead test.
With your report in hand walk through your prospective purchase with a contractor get estimates on all proposed work. Remember that budgets expand not just because of unforeseen problems but because you may want to add more projects along the way. Add 20% to the estimate if your plan is simple. The more complex your job, the more overages you may encounter.
Keep in mind that the house was standing when you bought it and the nasty bathroom won’t kill you. If some projects can be done over time than let them. Waiting is it’s own reward. Many homeowners, myself included, have had to scale back projects because of budget and then come to realize that their original ideas were not optimal. Sometimes living in a space for a while gives you a vision that you may not have had before. Think about doing projects in phases to give yourself time to save more money and space out your expenses.
Doing a Value-Add project is not for everyone. Take stock of your time, your desire, your talents and decide if this is the right move for you. Can you do dishes in the bathroom? Do you like to paint? Can you use a hammer? These are only a few of the questions you should ask yourself. In the end, you need to decide if you are the type that likes to do things yourself. If so, this will be a trying but rewarding and profitable experience. At the end of your project, though these things never truly end, you will have a home that is absolutely yours.
I walked into the closing of my first home and signed the papers and cried. I was young, newly married, pregnant with my third child and wondering that the heck I’d just gotten myself into. Years later, I have a wonderful house, it’s nothing like the one I bought. I didn’t move, I renovated and I kept going. I bought a dump on a great street. It had good bones but a sad face. I stood in front of that house and squinted and saw what that house could be. It’s almost there. People always tell me that I have a great house and I say, “It will be” Once you get the bug you keep improving, take pride in your work, and enjoy the journey.
I have six kids now and my old farmhouse works well for us, thank goodness. The reason is works is because I followed my own advice. I bought in a good neighborhood, I knew the floor plan would work for me and I was totally aware of the scope of the work that was needed. I never thought it would be simple or cheap and I never needed to have everything done immediately. That said, it was hard but it was worth it. While others in my neighborhood have loan to value ratios that are less than desirable, I am safe. Safe at Home.
In commercial real estate lingo, a fixer-upper is called a “Value-Add” deal. Either term refers to a real-estate property that will require maintenance work (redecoration, reconstruction or redesign) and can usually be lived in as it stands.
The idea that you can add value to a property is why buying a 'fixer-upper' has so much appeal. Market data shows that while housing sales have increased, prices have not.
In fact, prices are not predicted to hit bottom until the first quarter of 2010. For buyers, rates are still historically low, prices are down, government tax incentives are due to expire, and there is an abundance of homes to choose from in every market. Yet despite the appeal of buying, many new buyers are afraid to pull the trigger and loose value immediately upon closing.
Read more Research & Statistics by the New Jersey Association of REALTORS »
Buying a “Value-Add” house, if done right, can be a hedge against falling prices. The potential exists to buy the cheapest house in a desirable area way below market price, invest some time and money for renovations, and raise the property's potential value to get a return on your investment.
Make sure you have a realistic idea of what you're getting into. Here's a few things to look for:
Chances are if you’re reading this, you’ve not gone the fixer-upper route before. Finding your subject property is not an easy task. Even the best house with the best renovations will not pay you dividends if it is not in a good locale. Keep playing that old Realtor tune “location, location, location”; A great yard, a well sited home and nicer more expensive homes in close proximity are guidelines. In this market look for a house that has been overlooked because buyers cannot see past the orange shag carpet, the scary kitchen and the overgrown garden. Put on a pair of rose-colored glasses and squint. You can see it. I know you can! The best fixer-upper is a home that is out-dated but has been maintained. If the house is not sold because it needs paint and a new kitchen then there is your winner!
Once you’ve decided on a specific property find a good inspector. Cull recommendations from friends or co-workers. You might also use a screening agency such as service magic, or go to the American Society of Inspectors for help in finding a competent inspector. Your inspection report is your Golden Ticket; it tells you whether to halt or go forward. It can be your guide to assess what the house needs and if the process is manageable or will be too taxing on you and your checkbook.
Your inspection will cover everything from the roof to foundation. Pay close attention to water, mold, septic, oil tank and structural issues. Lead tests, Termite and radon may or may not be included. Pest and Radon inspections are a necessity but check with your Realtor to assess weather or not you need a lead test.
With your report in hand walk through your prospective purchase with a contractor get estimates on all proposed work. Remember that budgets expand not just because of unforeseen problems but because you may want to add more projects along the way. Add 20% to the estimate if your plan is simple. The more complex your job, the more overages you may encounter.
Keep in mind that the house was standing when you bought it and the nasty bathroom won’t kill you. If some projects can be done over time than let them. Waiting is it’s own reward. Many homeowners, myself included, have had to scale back projects because of budget and then come to realize that their original ideas were not optimal. Sometimes living in a space for a while gives you a vision that you may not have had before. Think about doing projects in phases to give yourself time to save more money and space out your expenses.
Doing a Value-Add project is not for everyone. Take stock of your time, your desire, your talents and decide if this is the right move for you. Can you do dishes in the bathroom? Do you like to paint? Can you use a hammer? These are only a few of the questions you should ask yourself. In the end, you need to decide if you are the type that likes to do things yourself. If so, this will be a trying but rewarding and profitable experience. At the end of your project, though these things never truly end, you will have a home that is absolutely yours.
I walked into the closing of my first home and signed the papers and cried. I was young, newly married, pregnant with my third child and wondering that the heck I’d just gotten myself into. Years later, I have a wonderful house, it’s nothing like the one I bought. I didn’t move, I renovated and I kept going. I bought a dump on a great street. It had good bones but a sad face. I stood in front of that house and squinted and saw what that house could be. It’s almost there. People always tell me that I have a great house and I say, “It will be” Once you get the bug you keep improving, take pride in your work, and enjoy the journey.
I have six kids now and my old farmhouse works well for us, thank goodness. The reason is works is because I followed my own advice. I bought in a good neighborhood, I knew the floor plan would work for me and I was totally aware of the scope of the work that was needed. I never thought it would be simple or cheap and I never needed to have everything done immediately. That said, it was hard but it was worth it. While others in my neighborhood have loan to value ratios that are less than desirable, I am safe. Safe at Home.
Real Estate Market Value - What's my Home Worth?
by Laura Jacobus
With so many homes on the market, how do you get yours to stand out and get sold?
The reality of today's real estate market is tough for most homeowners to accept. Living in the present means understanding the price is not what the seller wants to believe his home is worth, but what the buyer will actually pay. We call it "Market Value".
In the spike of the 2005 real estate market, many homeowners had their properties refinanced or had a realtor do a comparative market study (CMA). The lenders were eager to give out loans and the property prices were climbing. The crash of reality is difficult for many homeowners to face. They had now overextend credit and the value of their home declined.
Pricing your home accordingly means being in step with the current market value, not expecting your overinflated CMA to be in line with current conditions. The fact is the higher you price your property, the fewer people who will come see it. Buyers actually run searches based on their comfort range of monthly payments. The range is usually within $25,000 increments. If you overprice your home, you miss a potential showing simply due to being outside of the buyers range of sight.
Have your listing agent review sale prices in your area, and pay attention to homes that did not sell. Take notice of the reason. Most homeowners will overprice their home, hoping the buyer will come along who will pay top dollar, only to drop their asking price a few months later, and miss hundreds of virtual showings.
Understanding the fair price of your home, means understanding the appraisal. The money spent on certain upgrades do not necessarily equal higher asking price. Outdoor upgrade have virtually no impact on appraisal. Although your home has better "curb appeal" a bank appraiser doesn't really care about your zen garden or waterfall spa. Emotional attachment on the sellers side to these items are not important to a buyer or appraiser.
Internet savvy buyers are looking for best value for their dollar, not
making up for your idea of of custom upgrades and fancy wallpaper. More showings equal higher percentage of possible offers on your home.
The bottom line is, set a higher price and play the waiting game, or
set a realistic price and prepare to move!
With so many homes on the market, how do you get yours to stand out and get sold?
The reality of today's real estate market is tough for most homeowners to accept. Living in the present means understanding the price is not what the seller wants to believe his home is worth, but what the buyer will actually pay. We call it "Market Value".
In the spike of the 2005 real estate market, many homeowners had their properties refinanced or had a realtor do a comparative market study (CMA). The lenders were eager to give out loans and the property prices were climbing. The crash of reality is difficult for many homeowners to face. They had now overextend credit and the value of their home declined.
Pricing your home accordingly means being in step with the current market value, not expecting your overinflated CMA to be in line with current conditions. The fact is the higher you price your property, the fewer people who will come see it. Buyers actually run searches based on their comfort range of monthly payments. The range is usually within $25,000 increments. If you overprice your home, you miss a potential showing simply due to being outside of the buyers range of sight.
Have your listing agent review sale prices in your area, and pay attention to homes that did not sell. Take notice of the reason. Most homeowners will overprice their home, hoping the buyer will come along who will pay top dollar, only to drop their asking price a few months later, and miss hundreds of virtual showings.
Understanding the fair price of your home, means understanding the appraisal. The money spent on certain upgrades do not necessarily equal higher asking price. Outdoor upgrade have virtually no impact on appraisal. Although your home has better "curb appeal" a bank appraiser doesn't really care about your zen garden or waterfall spa. Emotional attachment on the sellers side to these items are not important to a buyer or appraiser.
Internet savvy buyers are looking for best value for their dollar, not
making up for your idea of of custom upgrades and fancy wallpaper. More showings equal higher percentage of possible offers on your home.
The bottom line is, set a higher price and play the waiting game, or
set a realistic price and prepare to move!
Wednesday, September 16, 2009
Congratulations, you’re buying a home!
by Kathryn Godby Oram
Exciting and daunting at the same time, this experience can be very stressful. To reduce the amount of stress involved in purchasing your home the first thing you need to do, before you even peruse the Internet, is get pre-qualified.
Finding a Mortgage Broker is not difficult. Ask for referrals, talk to your friends, neighbors, or your Real Estate Agent. Get a few recommendations, talk over the phone to narrow down the choices. Choose someone who has experience and offers a range of products from which to choose.
Meet your new broker with the following information:
Be ready to give permission to your Broker to run your credit. Your credit score will determine your rate of interest. The best rates are available to people with a credit score of 740 and above. Your Mortgage Broker will further assist you in understanding how much you can afford to pay per month. He or she will also be able to advise you on the most expedient actions you can take to best optimize obtaining a mortgage. Should your credit score not be optimal, your Mortgage Broker will also be able to suggest ways to strengthen your numbers.
With a Mortgage Broker in place, you’ll have taken your first step towards becoming a homeowner. Having your pre-qualification gives you the knowledge you need to be an educated and confident buyer.
When you know what you can afford, get on that computer and start looking!
Exciting and daunting at the same time, this experience can be very stressful. To reduce the amount of stress involved in purchasing your home the first thing you need to do, before you even peruse the Internet, is get pre-qualified.
Finding a Mortgage Broker is not difficult. Ask for referrals, talk to your friends, neighbors, or your Real Estate Agent. Get a few recommendations, talk over the phone to narrow down the choices. Choose someone who has experience and offers a range of products from which to choose.
Meet your new broker with the following information:
- Two years W2’s
- Three months current bank statements including investment accounts
- List of all your monthly expenses
- Know how much money you have for your down payment
Be ready to give permission to your Broker to run your credit. Your credit score will determine your rate of interest. The best rates are available to people with a credit score of 740 and above. Your Mortgage Broker will further assist you in understanding how much you can afford to pay per month. He or she will also be able to advise you on the most expedient actions you can take to best optimize obtaining a mortgage. Should your credit score not be optimal, your Mortgage Broker will also be able to suggest ways to strengthen your numbers.
With a Mortgage Broker in place, you’ll have taken your first step towards becoming a homeowner. Having your pre-qualification gives you the knowledge you need to be an educated and confident buyer.
When you know what you can afford, get on that computer and start looking!
Tuesday, September 15, 2009
Low Cost Improvements for a Quick Sale
by Laura Jacobus
Maybe you're not even thinking about selling your home right now. When the time comes, however, these lost cost improvements could make a difference.
First impressions are always important so you want to make sure the entry to your home shines. As the buyer approaches the front door, the last thing they want to see is an old, worn door with cobwebs hanging from above.
Right off the bat, most buyers are going to assume that if the home is not well maintained on the exterior, the interior won't be much better.
THE ENTRYWAY
Painting the front door or even replacing it if it's beyond help can make a real difference. A nice shiny door set always stands out. If you have vinyl siding and haven't cleaned it in a while, mildew, dirt and grime can accumulate. Giving it a quick spray can surprisingly make a big difference in your home's appearance.
PLANT SOME COLOR
Planting some flowers around the entryway can really make your property come alive. Choose a variety of colors that really stand out. Adding a few potted plants in a covered entry or a large enough stoop is always a nice touch, too.
PAINT THOSE WALLS
Painting is one of the cheapest, most effective improvements you can make in your home - especially if the colors aren't neutral to begin with. I know you love the pink entryway and purple bathroom, but most buyers may not appreciate it as much.
You may be thinking painting is cheap and the buyer can just do it later, but there are many people who just don't have the vision. They need to see it done. Painting your home with off white or earth tones is the best way to go. Remember: you're selling your home to appeal to the masses.
ADDRESS THE FLOORING
Flooring is a little more expensive, but will bring a better return on your investment - especially if you're still hanging on to the orange shag. Even if you have more modern carpet but don't have enough in the budget for new carpeting, a good cleaning by a professional can help dramatically. The same can be said for wood floors, too. A good scrubbing can go a long way.
CLEAN WINDOWS & TREATMENTS
Cleaning your windows can really spruce up your home. A bright home always shows far better than a dungeon. Removing heavy drapes and curtains can help brighten it up and breathe new life into your home. It's far better to have nothing than to have a pattern or fabric that was popular 20 years ago.
CHANGE OLD LIGHTING
Lighting is a subtle enhancement to make, but a buyer will notice if a home's lighting is outdated. There are some great lights that can be purchased rather cheaply in many lighting stores. Even little things like upgrading to brighter bulbs can make the difference that matters.
Dark or poorly lit rooms turn off most homebuyers. Although it's a little more expensive to add, recessed lighting can really change the look in a room. Recessed lights work especially well in kitchens and baths.
DECLUTTER YOUR HOME
This one can really go a long way. Buyers like spacious rooms they can envision their own belongings in. Getting rid of things you don't need or can put into storage while your home is on the market can transform the appearance of your home.
Hold a yard sale for those items that still hold value. For things you want to keep but will spoil how well your home shows, get a POD (portable on-site storage) or consider putting your stuff in a short-term storage facility.
Remember: not every improvement has to be expensive. Sometimes it's the small things that make the biggest difference in a buyer's mind.
Maybe you're not even thinking about selling your home right now. When the time comes, however, these lost cost improvements could make a difference.
First impressions are always important so you want to make sure the entry to your home shines. As the buyer approaches the front door, the last thing they want to see is an old, worn door with cobwebs hanging from above.
Right off the bat, most buyers are going to assume that if the home is not well maintained on the exterior, the interior won't be much better.
THE ENTRYWAY
Painting the front door or even replacing it if it's beyond help can make a real difference. A nice shiny door set always stands out. If you have vinyl siding and haven't cleaned it in a while, mildew, dirt and grime can accumulate. Giving it a quick spray can surprisingly make a big difference in your home's appearance.
PLANT SOME COLOR
Planting some flowers around the entryway can really make your property come alive. Choose a variety of colors that really stand out. Adding a few potted plants in a covered entry or a large enough stoop is always a nice touch, too.
PAINT THOSE WALLS
Painting is one of the cheapest, most effective improvements you can make in your home - especially if the colors aren't neutral to begin with. I know you love the pink entryway and purple bathroom, but most buyers may not appreciate it as much.
You may be thinking painting is cheap and the buyer can just do it later, but there are many people who just don't have the vision. They need to see it done. Painting your home with off white or earth tones is the best way to go. Remember: you're selling your home to appeal to the masses.
ADDRESS THE FLOORING
Flooring is a little more expensive, but will bring a better return on your investment - especially if you're still hanging on to the orange shag. Even if you have more modern carpet but don't have enough in the budget for new carpeting, a good cleaning by a professional can help dramatically. The same can be said for wood floors, too. A good scrubbing can go a long way.
CLEAN WINDOWS & TREATMENTS
Cleaning your windows can really spruce up your home. A bright home always shows far better than a dungeon. Removing heavy drapes and curtains can help brighten it up and breathe new life into your home. It's far better to have nothing than to have a pattern or fabric that was popular 20 years ago.
CHANGE OLD LIGHTING
Lighting is a subtle enhancement to make, but a buyer will notice if a home's lighting is outdated. There are some great lights that can be purchased rather cheaply in many lighting stores. Even little things like upgrading to brighter bulbs can make the difference that matters.
Dark or poorly lit rooms turn off most homebuyers. Although it's a little more expensive to add, recessed lighting can really change the look in a room. Recessed lights work especially well in kitchens and baths.
DECLUTTER YOUR HOME
This one can really go a long way. Buyers like spacious rooms they can envision their own belongings in. Getting rid of things you don't need or can put into storage while your home is on the market can transform the appearance of your home.
Hold a yard sale for those items that still hold value. For things you want to keep but will spoil how well your home shows, get a POD (portable on-site storage) or consider putting your stuff in a short-term storage facility.
Remember: not every improvement has to be expensive. Sometimes it's the small things that make the biggest difference in a buyer's mind.
Saturday, September 12, 2009
Welcome to Morris County New Jersey Real Estate
MORRIS COUNTY, NEW JERSEY - Flanders NJ News is happy to announce our new section 'Morris County New Jersey Real Estate'.
Here you will find Weekly home buying and selling tips, articles and professional advice from Real Estate agents Kathryn Godby Oram, of Godby Real Estate and Laura Jacobus, of Remax Realty.
Look for great articles about Staging, Home Improvement Mistakes, Divorce Sales, Home Inspection, Mortage Loans, First Time Buyers, Best Time to Buy, Disclosures, Home Styles, and more.
Can't find what you are looking for? Drop us a line info@flanders-nj.com
Here you will find Weekly home buying and selling tips, articles and professional advice from Real Estate agents Kathryn Godby Oram, of Godby Real Estate and Laura Jacobus, of Remax Realty.
Look for great articles about Staging, Home Improvement Mistakes, Divorce Sales, Home Inspection, Mortage Loans, First Time Buyers, Best Time to Buy, Disclosures, Home Styles, and more.
Can't find what you are looking for? Drop us a line info@flanders-nj.com
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