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!
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