Deciding Whether To Buy Or Rent, What You Need To Know !

It's that time of year again where we see renters deciding whether or not they will continue renting, or will consider being a new homeowner ! This blog is to help all those considering purchasing answer that most common question "Should I Buy Or Should I Rent?" 

Why Should I Buy A Home Instead Of Rent ? 

It's a fact that in most markets, buying a home is significantly cheaper than renting.  Renting is money you will never get back, but buying a home is an investment in your future.  In most areas, if you can afford to rent, you can afford to buy! For more information on this topic you can refer to my blog, here it will give you both the pros and cons for both buying and renting, as well as offer you alternative options.  

How Do I Know I'm Ready To Buy A Home? 
The best way to know if you're ready to purchase a home is to look at your current situation.  You don't need to be employed with the same place for 2 years, you just need to have had a steady income in one field for the past 2-3 years.  You will want to run your credit and take a good look and make sure everything that is on the report is correct, if not you will want to have it corrected! You will also want to make sure you have money saved up for a down payment, in some cases you can withdraw from an IRA penalty free for a first time home purchase.  For more information on this topic you can refer to my article, here.

How Much Money Will I Have To Pay Upfront To Buy A Home? 
This is not an easy answer, because there are two factors depending on what kind of loan you take and the amount of the loan is what will decide your down payment.  For an FHA Loan you will need to put down 3.5% where a Conventional Loan you will need to put down atleast 20%.  The average cost of a home in Suffolk County is about $325,000 which would require a FHA down payment of $11,375.  

You will also need to factor in closing costs, but you can also ask for a sellers concession or have the money "gifted" to you from a friend or family member.  This ranges again by the loan amount, and any mortgage broker is required by law to give you a good faith estimate of closing costs, this is why you should always choose a reputable bank Of course, Coldwell Banker Mortgage is more than happy to help and you will always be given all of your loan options.

Once you have decided that you are in a financial position that you would like to go ahead and begin searching for your new home there are a few things you should look into.  You will want to learn the difference between what kind of homes are on the market, who you should have working for you, and what happens once you have found that "perfect home".  Because each of these topics are best explained in detail I will list each topic below with a direct link to blogs to help you get informed ! 

• Why You Should Work With A Buyer Broker
• What Kinds Of Home Are On The Market
• Benefits Of New Construction
• Short Sale VS Foreclosure
• What To Offer For That House 
• What Happens After Your Offer Is Accepted 
• What It REALLY Means To Be In A Buyers Market 
• Tips To Finding The Perfect Home

The Truth About What Your Home Is Worth !

Now almost every homeowner that has seen one the "Online Home Values" that are now being offered by Trulia, or Zillow call and express to me that their home is not only worth more than what it is/was listed for but it is even higher than that! 

Let me just say this in the most simplest terms, they are WRONG! Yes I said it, and I am sure in some parts of the country perhaps their pricing is correct, but not here on the South Shore of Long Island.  Experts have done research and their values are actually off by around 20% and in some cases up to 50%! Now most people will than ask how can they do that, it is simple they put a disclaimer on their page and that's it.  

If you really want to know what your home is worth you need to make sure the information that the value it is being based on is accurate, and up to date! On many of these sites the value of your home is based upon the closed sales, under contract sales but they don't often reflect current sales.  Now here are the biggest problem with these sites.   Problem #1 if your neighbor or someone across town from you decides to over price their home that doesn't raise your value obviously, but according to these sites it does.  Problem #2, just because a house has the same number of bedrooms or baths it does not mean they are worth the same. This is where style of home does come into play, a Colonial style home is going to have much more square footage, than a Cape style home even if it does have the same amount of bedrooms.  Problem #3, we have no idea which of these formulas they are using when they calculated the value of YOUR home! Problem #4, they could never receive information as quickly as a Realtor can, computers are a wonderful tool in today's market but that will never replace hard work, and research by an actual person! 

So how do you figure out what the value of your home actually is, well that is simple.  Call a Realtor! 

They should be able to provide you with at least 3 comps for homes that sold within the last 180 days - with similar characteristics to your home (ex-square footage, rooms, bedrooms, baths, taxes).   This will be crucial information, prior sales are what the bank will be looking for.  When you are looking at these comps your should be sure to see how many days this home was on the market as well.  

They will also show your homes that went under contract with all the same characteristics that I previously mentioned.  This will show you about what price bracket you should be in when you price your home to get an offer.  This will be a great way to see how long homes in your area are for sale before they get an accepted offer!I personally believeit it is better to be at the top of a buyers price range, than at the lower end.  

Lastly they will show you homes that are on the market, again all the same characteristics and this is where you have the chance to judge your home from a buyers prospective.  From their prospective you want to make sure that your home shows value for that price range.  I do not mean price it below market value, just simply look from a buyers prospective and if your home is all original, and other homes on the market are updated you should make sure you adjust your price accordingly.  

This is the ONLY information that will give you the real value of your home, so take the time and speak with your Realtor regularly about your neighborhoods current market!

Rent Vs Buying ? Are you ready ?

If your thinking about buying a home rather than renting there are some very obvious reasons that now is the time to buy but lets take a look at 3 of the best reasons you should buy now! 

• Low Interest Rates 
• Homes Priced To Sell 
• Inventory Of Homes To Choose From 

Now of course there are always pros and cons to both renting and buying, so lets take a quick look at those.  

                                                                                          

Renting Pro      Ability to move easily, this is important for those who often travel for work. 

Renting Pro      Renting you are not responsible for many things such as roofs, leaks ect.

Renting Con     Your money rent will never earn you any return.  

Renting Con     Increase in rent according to the market and become more costly than owning.

Buying Pro       Tax deductions on property taxes, interest. 

Buying Pro       Ability to take from your IRA penantly free for down payment.

Buying Pro       Work done to your own home raises its equity 

Buying Con      Upkeep goes into owning a home choose a home that fits your needs 

Their are many experts saying that one year from now everyone will be saying that they should have bought a home in 2012.  I have to say I would have to agree with that statement, buyers that are thinking they may want to try and buy a home should call a mortgage broker and see if they qualify immediately ! Now if your not quite ready to make that call and your just curious whether or not you could qualify lets take a look at some of the things you will need to have in order.  

1. Credit Score - Obviously you need to have decent credit but most banks will work with you if you have a credit score of 625 or higher.  
2. Work History - You need to have been consistently working in a field for 2 years to show consistency in your income.  
3. Debt To Income - This is just as important as your credit score, take a look at this simple calculator here for your debt to income ratio.  
4. Available Funds - Most down payments now are minimal at 3.5% on a FHA Loan which on a $250,000 home is only abut $8500, plus your closing costs.  Taking penantly free from your IRA is a great option also, allowing you to only need to budget for closing costs which on average can be $8,000 - $12,000.  

Lets take a look at some of the statistics for our current market to give you an idea of what kind of money you may want to expect to spend on a home.  

Now you can see that we are staying generally around the $300,000 mark, but for someone looking for the average home can comfortable purchase between $250,000 - $300,000.  

The average whole house rental for a 3 bedroom, 1 bath home here on the island will cost you about $1800 or higher, and normally you will still be responsible for all of the utilities on top of that.  Your costs on a renting a home would be much better spent on a home that you own! 

Other Available Options 

There are plenty of homes out their for first time buyers, and not only is New York now offering grants to help you but many towns and villages are building housing developments specifically for first time buyers.  A great example of this is the Courtland Square Condos, that are new construction condos that were recently built here in Bayshore.  

These condos offer a unique opportunity because the price of the condo is not decided by the builder or the buyer, it is decided buy the buyers income.  If your salary is under a certain amount than in turn the price of the condo will be one particular price.  There are certain rules and regulations that must be followed when you are purchasing one of these such as, it is required you take a class to learn about the responsibility of home ownership and you also must fill out a detailed application form.  To better educate you on this type of application it is available for PDF Download here.  When you purchase one of these condos the state and town are paying almost $100,000 in grants to help you get your first home! 

Another option is Rent To Own, now this is something you need to be very careful with.  You must meet with an attorney before you sign into something like this, but for some that are just looking to either fix a credit issue or save up a bit more for down payment it can be a great option.  There is a difference between Rent With Option To Buy, and Rent To Own: The difference between the 2 is pretty simple one gives you the option to buy, and the other locks you into buying the home within a particular time period.  

If you are thinking about purchasing a home but are still undecided about whether or not now is the right time to buy and would like additional information please feel free to contact me directly! 

What To Look For When Buying A Renovated Home

So I am sure those buyers who are out there looking have noticed the abundance of renovated homes that are currently on the market.  I am finding there are two very extreme opinions about these renovations, either the buyers absolutely refuse to even look at them, or they will look at nothing other than a renovated home. 

I would never tell anyone to not consider a renovated home, because there are some definite advantages to buying a home that has been renovated.  At the same time there are some very specific things you will want to take a look at when it comes to buying one of these homes. 

•  How long did the renovation take? Your buyers broker will be able to tell you when the home sold to the investor, from the day it closed to the day it came back onto the market is what you want to focus on.  If it was flipped within a short period of time (30-45 days) you will want to have a very thorough home inspection.  The reason for this is because in that short of a time period it was more than likely a cosmetic renovation.  
• What was done during the renovation? Certain things are quite obvious, but just because the home has new baseboards it does not mean that the heating was upgraded, you want to check the boiler/hot water heater/oil tank.  It could be that they did not require being replaced but the only way to know for sure is to let a home inspector look at it.  Don't ever assume that just because a light switch was replaced, that the electrical system was upgraded, most investors will upgrade the electric to 200-amp service, which is ideal for a remodeled home.  
• How many homes has the investor renovated? More and more people are choosing to take advantage of all of those short sales by buying them and re-selling them.  Many investors are well known in the Real Estate community, you may not know them but your buyers broker will be able to find that information out for you just by talking to the listing agent.  Do not attempt to find this information out on your own, call your broker! I personally have a investor who has been doing this for 15+ years, and I have investors who have been doing this for 2-3 years but I only work for those who do quality work.  
• What kind of warranty is provided? It is very common that new construction builds that they provide some sort of home warranty, but you always should ask if this exists on a remodeled home.  Some investors will simply give you the warranty paperwork that is provided by the manufacturer of the items the put in the home; others will offer you added warranties about the work that was done by their contractors.  It is not very common but you should still ask the question because it is a definite plus if they do! 

Those 4 questions on the most important questions you will want to know the answers to before you put in an offer on a renovated home.  Not every investor throws together remodels, but these homes are not for everyone.  If you are an avid to it yourself, or even have friends that are contractors many times you can do the same cosmetic work over the course of a season as the investor did.  I would like to think of myself as pretty handy, but I could never come close to what any of my investors do as far as quality of work.  So let's look at a few of the perks of buying a renovated home.  

The obvious perk is you are getting a turn-key home, that you will be the first to live in and will include some 

sort of warranties that you ordinarily would not have.  

 Investors now are smart and in order to move their investments instead of rushing through the renovation they

price the home a few thousand dollars UNDER market value that means your paying less for a better home.  

The reality is the renovated home came about because of an estate/short/foreclosure sale, which means the investor

has done all of the dirty work for you this is a very big perk for those areas that were really hit when the economy

went because the majority of the homes your looking at will be these renovations. 

Here is an example of a renovation, mainly cosmetic but the electrical was upgraded, plumbing as well and an extensive rehab done to the property itself including the retaining wall in front.  

BEFORE 

AFTER 

A renovated home is not for everyone, take the time to talk with your Realtor about your wants/needs as well as your price range.  If your working with a buyers broker they will be able to guide you on what kind of home is best for you.  I always try to reinforce the importance of having a buyers broker working for you but it is a absolute must if you are planning on buying one of these homes.  Only a buyer broker will be able to do the kind of research this home will require, the listing agents are legally obligated to get the best possible deal for the investor, not for the buyer.  If you are planning on looking specifically at renovated homes I would suggest going one step farther and working with an agent who is knowledgeable on these kinds of homes, not only selling them but listing them and working with investors they will know right away what questions to ask, and what answers you want to hear !! 

Why Should I Use A Real Estate Attorney ?

It is time for another blog directed for both the buyers and sellers at there whose home is either on the market, or are thinking about doing so.  The one thing everyone must be prepared to do is find an attorney that they like, and trust.  Don't just pull someone out of the phonebook, either ask your real estate agent for a referral to one that they have worked with before.  If you are a buyer, than you should be working with a buyers broker so your agent will be able to refer you to one as well.

Not all states require the use of attorneys during the purchase of a home, but even if you are buying a home out of state I always  recommend you use a attorney to protect yourself from entering into a contract that is not in your best interest.  That being said, it is time to get to the point of this blog which is why you should be using a REAL ESTATE ATTORNEY, notice those 2 words in the beginning says real estate.  There is a saying, you can only do one job well.  Attorneys can do many different things divorce, elder law, criminal law, family, ect.  and each one of these areas have its own set of rules and quirks.  Do not use an attorney who does not specifically work on real estate transactions, and I don't mean someone who does them whenever they are requested to.  You should be using someone who does it every single day, because you want this attorney to know absolutely everything they may need to to help you during this transaction.

I happen to be very lucky and we have quite a few attorneys who are on our preferred attorney list, and they have only earned a place there because 1.  They are real estate attorneys and 2. Our clients have told us what a wonderful experience they had working with them.  We do not add attorneys to our list and let them stay there just because, if we get complaints they are removed.  A common mistake is that people choose their attorney based on price, and I understand the concern over the money when your making such a large purchase but take into consideration that a good real estate attorney can cost anywhere from $800 - $1200 for the entire transaction, it is well worth it.  Plus many general practice attorneys will charge a higher rate, or even an hourly rate for your file so you will end up spending quite a bit more if there is even the smallest hiccup.

I have worked on some very hard deals, and the only reason they closed was because of the  options that the Real Estate Attorney offered to them, at the same time I have had attorneys almost kill a transaction over something completely avoidable just because they weren't aware of a simple resolution.  Sometimes after the bidding is done, and the attorneys are involved your agent will need to step back in and play the middle man, you should never feel pressured by your agent but understand they are trying to be the glue that keeps you on track to either buying or selling your home and that is what you hired us to do!

Let me give you an example of the difference in what COULD happen during a transaction where a Real Estate Attorney was not involved.

A deal is made and signed by both buyers and sellers. 
Seller agrees to close within 30 days on a cash deal, but the house will be sold as is.
Buyer agrees to close within that time frame, and agrees to the contingencies which go along with a cash transaction.

Attorneys are contacted and asked to send out the contracts to both parties.

Contracts come back and buyer is "requesting" home inspection with repairs to be made, and/or credits and adjustments.
 
You are always entitled to a home inspection but homes that are being sold as is, mean exactly that AS IS.  Non real estate attorneys will often overlook this and send out a standard contract, and it will start a un-needed disagreement.  This is something we commonly see with estate sales, short sales, and foreclosures.

The sellers opt to not sign into this contract because it does not meet the terms of the original agreement that was made, and the agent is not due to check in with the attorneys for another day or 2 and is not contacted regarding this hiccup.

Now if a real estate attorney a few things more than likely would have gone differently because

• The attorney would have taken specific notice to the terms/closing time and checked with his/her clients regarding what was being represented in the home and what was not. 
• The attorney would have been in direct communication with the agent which would have allowed the 3rd party mediator AKA The Realtor to review original terms of the transaction with his/her buyer eliminating the problem in a timely manner before it escalated.
• If the issue was something simply fixed this can sometimes be done via a verbal agreement that does not require money held in escrow.  

Please keep in mind this is just an example, sometimes transactions where non-real estate attorneys were used have gone thru with no issues at all BUT this is a big decision you are making.  Would you go to your general practitioner if you were having a heart attack ? No you would go to a emergency room, sure the GP might be able to help but what if it doesn't ? This may seem extreme, but you have no idea what it is like to see someone lose their dream home! 


There are 3 circumstances that you absolutely, positively must use a real estate attorney.

• Cash Deals: These deals can be tricky because they have very specific terms as far as what is being represented and your closing date.  

• Short Sale/Foreclosure: Banks are hard to deal with, and in this case it is who you are not only buying your house from, but it is also whose financing your loan.  There must be a direct line of communication to the banks, your lawyer needs to be educated on what these processes are.  

• Estate Sales:  This is where it gets tricky because there is usually more than one seller, it usually involves family members who are not familiar with the what is legal on the home and what is not, plus the condition is not always all that great.  It also comes down to how the home is titled and who needs to be present for the closing, and what paperwork is required.  

Now for those of you non-believers lets also look at another reason why you need to use a Real Estate Attorney, and it has nothing to do with the Attorney or his knowledge.  An attorneys staff is also important, they are usually the ones drawing up the contracts and who is contacting all the parties involved.  Keeping with the Dr analogy if you were having a heart attack, and the nurses assistant told you to just go home you would end up in quite the pickle but she may assume it was just a bit of heart-burn, even though she meant no harm it can cause a big problem for you! 

Cash Deals In Today's Market

I thought it was about time I took some time and wrote a blog about cash deals in today's market.  Interest rates are at a all time low still, but some buyers are still opting to buy their homes in cash figuring it will earn them interest quicker invested in a property than sitting in the bank.  If you are the buyer who has the ability to buy in cash you do have the upper hand on some other buyers, but not all.  This blog is for both the buyers, and for sellers to help both understand how a cash deal works, benefits of accepting a cash offer, but also how/why a seller may not be able to accept a cash offer.  

Presenting A Cash Offer

There are certain steps to presenting a cash offer that you may not ordinarily have to do, normally when you present an offer with a mortgage you would be presenting the offer with you mortgage pre-approval.  When you are doing a cash deal you will need to provide "Proof of Funds", this must be  recent, if your proof is 3 months or older you must get a new one.  Generally you can contact an agent at your bank and ask them to provide you with a letter, or even simply a copy of a recent bank statement with your bank account information hidden with only your name and available balance displayed.  

If you are purchasing your new home, with the cash from the sale of your current home than you must let this be known in the very beginning of negotiating.  Before you can place an offer, just like any other buyer you should be under contract on your current home.  

Benefits Of Cash Offers 

A seller may or may not prefer a cash offer because of the benefits it presents to them.  Not all homeowners are in a position to accept a lower cash offer because they may have a certain amount they need to "clear" on their home.  There are benefits that can make taking a lower cash offer vs a higher offer with a mortgage appealing to a homeowner.  

• No Bank Appraisals - This is pretty simple to understand, you do not need to worry at all about whether or not your home appraises because there is no bank involved which can sometimes be an obstacle.  

• No Loan Funding Contingencies - Whenever someone obtains a mortgage there are certain paperwork the bank will require from them, if they can't meet those requirements they will not be able to obtain the mortgage.  This can sometimes be avoided by using a good mortgage company but their are no guarantees, financial circumstances can change quickly and unexpectedly. 

• Home Inspections - Every buyer is entitled to a home inspection, but generally with cash deals the home is sold "as is", which means there will be no repairs or credits done to the home.   This is because generally homeowners are already accepting a lesser offer because of it being cash.  

• Faster Closing - It generally takes 60-90 days to go to closing on a home, the time frame is usually decided by how quickly a buyer can get the mortgage commitment, and close.  With no bank comes the benefit of being able to close at a time that is good for both the seller and the buyer.  

I have many homeowners ask me when is the best time to accept a cash offer vs waiting for a buyer with a mortgage pre-approval, unfortunately there is no set criteria but I can give you some pointers on when or why you should consider it.  

• If you need to move or relocate quickly, no one likes the idea of leaving there home vacant because of the risks and costs associated with it.  
• If you have your eye on another home that is on the market the benefit of having your home go to contract quickly will in turn mean you can put in a stronger offer for your new home.
• If the home is an estate sale it may need work, or you may not know the full history like the actually homeowner would.  Homes that need work will generally take longer to sell, which is why a cash offer allows you to move the home quickly reducing costs, as well as risks while giving you less responsibility after your home inspection report comes back.  

Always remember your Realtor should be advising you whether or not a cash deal is a good option for you, this goes for both buyers and sellers.  If you are the buyer placing a cash offer, my best advice is to make sure your Buyer Broker has helped you come up with a fair offer, remember there is a difference between a cash offer and a low offer ! For homeowners that have received a cash offer the process of deciding whether to accept it, or perhaps counter all depends on your home, situation, and the market for your immediate area. Your Realtor will be able to pull what cash sales have closed to help you make an educated decision about what is a fair offer for your home! 

Listing Your Home, What You Should Know !

This week I am going to write about something I don't talk about very often which is sellers who are new to the process of selling their home.  Now some of you might be thinking this doesn't apply to you but it just might so I have compiled a quick list of sellers that is a sign you should take the time to read this blog:

• You purchased your first home from a For Sale By Owner 
• You have not sold a home in the last 5 + years 
• You inherited a property or are an Executor of an estate 

One of the most important steps to selling your home is the paperwork, not only signing it but reading it and understanding it! I can't tell you how many homeowners who have not sold a home recently are very surprised by the amount of paperwork that now goes along with listing your home. 

NYS Agency Disclosure 

New York State requires that anyone who is buying/selling a home fills out the agency disclosure paper, it clearly defines who it is that the Realtor is working for.  Obviously you will sign that the agent will be working for you, but NYS has changed with the times and they now address Dual Agency before it exists.  

Dual Agency is when your agent works for both you as the seller, but also works for the buyer.  This can sometimes cause a conflict of interest, if the deal requires negotiating it can blur the lines of who your Realtor must disclose what to.  It is my recommendation that when it comes time for you to sign this piece of paper that you require if Dual Agency exists that it is Dual Agency with a designated sales person.  What this means is if a buyer walks into your home and wants to negotiate a deal that your Realtor will have an agent from their office work for this buyer rather than representing both sides of the deal.  

Multiple Listing Service Contract

This is a very important contract for you to read most Realtors will tell you it is standard and direct you straight to the bottom to sign.  They are correct when they tell you it is a standard form, but you should be reading it because this is the detailed description that will be on not only on MLS but all of the additional websites that your home will be listed on.   

You want to check certain things in particular: 

1. Taxes are correct (Ex: If your taxes are not correct you may end up with a buyer who is unable to purchase because they were mis-informed, remember pre-approvals do include the yearly taxes)
2. Make sure the number and descriptions of rooms are correct (Ex: If your kitchen is an eat in kitchen, you must make sure it is accurately inputted. These are things buyers will be placing in their search criteria and you wouldn't want a oversight to cause potential buyers to not see your home.  
3. Be sure your floor plan is accurately described (Ex: If you have an entry hall, or a laundry room you want buyers to know that because these might be important to them)
4. Utilities are described completely (Ex: Some people will have a preference when it comes to these things, again you never want to misrepresent your home, even a simple mistake can turn off a buyer) 
5. This last one may upset some Realtors, but the 2nd page of your MLS Listing agreement is where it shows what the commission will be, and where it will be going.  Remember there are 2 sides to every deal if your agent has told you that they will be taking a 6% listing because they split it equally with the buyers broker make sure that it is written that way in your contract.  

Exclusive Listing 

This is something that you may or may not see, if you are listing your home on Multiple Listing Service you should not be signing this paper unless there is a beginning and an end date filled out.  I will sometimes hold a listing as an exclusive until I have the pictures uploaded, & the virtual tour online but when I do I always write that the end date is at the homeowners request.  You might wonder why I do this, and it is just the way I run my business I want to make sure that my listing is up to not only my standard but to my sellers as well.  Once the homeowner sees the listing and approves it we than release the listing onto MLS for it's big debut !! 

Property Condition Disclosure 

The property condition disclosure is pretty much self-explanatory, it is a semi-large packet that details the history of the property.   Most Realtors, and your Real Estate Attorney will recommend that you do not fill this out. Instead you at closing you provide the buyer with the  $500 opt out credit.  The reason we recommend you do this is to simply protect yourself from future liability, even the most knowledgeable homeowner can be unaware of hidden issues in their home.  

Lead Based Paint 

If your home was built prior to 1978 than you are required to fill this out, and your Realtor is required to give the buyers a informative booklet about Lead Based Paint.  This is a common form that you, the buyers, and all Realtors involved will need to sign and is required.  If you are not sure what year your home was built it is always better to fill one out to be on the safe side.  

Seller Services Guarantee 

Unfortunately not all companies offer this, but if you are going to list your home I would recommend not signing with a company that does not provide you with one.  This is your guarantee that the Realtor will provide you with all the services he/she agreed to do in order to get your home sold.  It also gives you the ability to walk away from the contract with them if they are not providing all the services, I can't tell you how many unhappy expired clients I come across because the Realtor did not do what they had assured the client they would do, always remember that you have your guarantee and if your Realtor isn't doing the job perhaps they need to be reminded of that guarantee.  

Now, I have to take a moment to remind you that in order for you to be able to hold your Realtor accountable for the work that they are supposed to be doing, you must also do your part.  Mis-communication about the marketing plan for your home, can often cause a strained business relationship between Realtor and homeowner so you want to go over the details prior to signing anything.   

Coldwell Banker Residential Brokerage does have some additional paperwork that your average Brokerage does not have.  The reason is very simple, we are not your average company we offer additional services to our sellers that not only get their home sold but to make it a easy and enjoyable experience.

Affiliated Business Agreement

If you are one of my frequent readers than you have heard me talk about all of the additional services we are affiliated with.  For today I will not be going into the description of them, but I will link the appropriate information so you can look at the ones you may not be aware of.  Our affiliated business agreement, is to let you know the different companies and services we offer but we as agents do not profit from our buyers or sellers using them.  The reason each of these are so important to our company as a whole is the difference it makes for our clients.  

Coldwell Banker Mortgage Company

Coldwell Banker Home Warranty

Coldwell Banker Title Services & Insurance

Coldwell Banker Concierge Services

You will also receive a copy of your Comparative Market Analysis, be sure you keep this in your file for future reference.  Also make sure you keep full copies of everything that you signed, as well as additional paperwork you may sign during the time your home is listed.  Coldwell Banker Residential Brokerage, does have a system set up on a secured server that will store copies of all the paperwork you will accumulate during the transaction.  This is a great tool for someone who is on the road for work,  lives out of state, or just prefers keeping documents stored online rather than filed away.  


I hope everyone finds this blog helpful, if you have any additional questions please always feel free to comment and I will respond to your question as quickly as possible ! 

Tips For Sellers During The Home Inspection Process

I have written a blog previously for buyers about home inspections, but over the passed few months I have found that the sellers are the ones needing more guidance when it comes to their homes inspection.  So this blog is going to be specifically only for those potential sellers out there !!

First lets talk about what you should do to help the process along !

Tips For Sellers Preparing For A Home Inspection 

• Move any smaller furniture that is blocking areas that the home inspector will need to get to (ex: outlets, electrical panels) 
• Clean out utility areas (ex: remove clothes from the washer/dryer) 
• Make sure all your bulbs are working, sounds silly but important (ex: attic, garage)
• Remove your pets to allow the inspectors to work thru the house without any distractions or potential issue
• THE MOST IMPORTANT TIP: LEAVE and let your real estate agent stay ! 

Tips For Sellers During The Home Inspection

• If you decide to stay during the home inspection try your best not to try and "explain" things in the house, something you may think is a big deal might not be and visa versa
• Do not try and cover up anything, the home inspectors are thorough and they will find whatever you may have tried to hide and than they will search more to make sure they didn't miss anything
• Do not negotiate on anything during the home inspection, again something that may be a red flag for you may not be for your buyers
• Keep your distance, do not hover over the home inspector stay available IF he has a question otherwise he is a professional allow him to do his job 
• Don't expect to have the report immediately the first person to get a copy of your homes inspection will be the potential buyer who than can share it with you 

Once the home inspection has occurred is where things may get tricky for a homeowner, this is your second round of negotiations which means the price of what your home sells for just might be changing again! 

The agreed upon price of your home before a home inspection 90% of the time is not the actual final price.  

If there are safety, structural, electric, plumbing issues in your home that is uncovered you will usually be given the option to either 

A: Fix It              or B:                  Give the buyers a credit so they can have it fixed once they take ownership.  

Common Items Needing Negotiations

• Underground Oil Tanks - These will require soil testing, filling or removing old tank, installation of new tank
• Asbestos - Not all asbestos is a hazard but a certified professional is the only one who can safely make that determination
• Wiring - Broken electric outlets, outdated service
• Safety Concerns - Raised pavement on walkways, decking
• Roofs - Older or damaged roofs 

Where Do The Home Inspectors Inspect ? 

There of course are times where if a house is priced well below market value that it will be referred to as "Sold As Is" this is what happens commonly frequently with Short Sales & Foreclosures which means the buyer should have the inspection to make sure they are not getting in over their heads, but should not expect any changes to be made to the contracts or the home.

If you are a homeowner there are some very important things you should remember BEFORE you begin negotiating those items that require repair or credits !

• If there is a significant issue you should try your best to negotiate thru it, because if one home inspector finds it chances are this will be an issue with any buyer 
• There are more homes than buyers, if you have a buyer do your best to keep your deal afloat by being fair and realistic 
• Just because something does not bother you, it does not mean that the buyer should feel the same as you do about an issue, just like you do not want to give your house away, a buyer does not want to over-pay for a home that requires work 
• If you can fix it cheaper than their estimate either A: Suggest getting more estimates B: Offer to fix it
• Trust your Realtor, they should have attended the home inspection, reviewed it and be able to help advise you on what is important

The first thing you should do before you start to negotiate is meet with your Realtor, discuss what showings your home has had since other brokers have become aware of your accepted offer - if you have not had anyone show the home because of that it means that their are no aggressive buyers looking to buy your home.  You should also review the inspection report with your Realtor, we are by no means professionals in the home inspection process, but we do know what we would look at if we were working as a buyers broker and what items could possibly be an issue.  

Most importantly always remember that you may not like to hear what we are telling you, but our jobs are not to tell you what you want to hear, it is to make sure you are informed and help you make good decisions during the process of selling your home !! 

Blog Recap For First Time Buyers

I have written quite a few blogs in the passed few weeks for my readers about the buying process.  I am a big believer in keeping things as simple as possible, so I wanted to write a quick overview of all of these blogs so that you can easily see which blog has the information that you are looking for.  

The blogs  Tips On Finding Your Dream Home or The First Steps To Finding Your New Home  are helpful for those buyers who are just starting out, they have not been looking for very long and may still be unsure of what kind of home they are looking for and what steps they need to take to get things rolling.

The key points of this blog are:

• Buyer Brokerage 
• Mortgage Pre-Approvals 
• Your Wants VS Your Need 
• Organization Tips 

All of these blogs are very important, but this blog on Relocating & Choosing The Neighborhood That Is Right For You is not necessarily important for every buyer.  For someone who has lived in 1 specific community their entire life sometimes moving only 1 town over can lead to some uncertainty. 

The key points of this blog are: 

• South Shore Community Overview 
• Helping You Decide On Where & When To Limit Your Options
• How To Use Technology To Ease Relocation 
• Coldwell Banker Concierge Services 

Steps To Getting An Accepted Offer  is actually separated into 2 blogs, because of today's market their are many terms and processes that you need to be familiar with before you place an offer at all.   

Blog 1 of 2  outlines the many different kind of homes are for sale, and what you should be considering when placing an offer on a home.  

The kind of homes this reviews are:

• Short Sales 
• Foreclosure Sales 
• Estate Sales 
• Investment Sales 

Blog 2 outlines the 3 different categories a home falls into as far as pricing category, and what way of bidding will help get you an accepted offer quickly.  Knowing and understanding how the home is positioned in the market can be the difference between getting an offer accepted or losing your dream home.

• Overpriced 
• Market Value 
• Under Valued 

My most recent blog is about What Do You Offer For All That House, and this is a blog everyone whether you are a first time home-buyer or it is your 5th home you should take the time to read !! We were in such an inflated market that many homeowners are finding it very hard to take the loss on their homes, but nothing is more insulting to a home seller than a buyer not recognizing a value, or comparing them to homes that are not the same ! 

The key points here explain: 

• New Homes VS Updated Homes
• Features & Values 
• Main Roads VS Busy Residential Area 
• Pricing For Additional Rooms & Values 
• Legal Addition VS Illegal Additions 

I will begin writing additional blogs about what happens after your offer is accepted, and what you need to do to prepare for closing on your new home.  If you have any questions and they were not covered in one of my blog please feel free to email me directly or comment and I will be sure to answer your within 24 hours !! 

Steps To Getting An Accepted Offer Blog 1 Of 2

The BIG question after you find that perfect home is "What Do You Offer For The House" well that all depends on what house it is, and how that home is priced.  I have written another blog in depth about deciding what to offer, but I want to take the time to review something that I did not mention and that is the different kind of homes that are currently on the market, and what process it takes for you to get an accepted offer.  


In today's market the circumstance of why a homeowner is selling is usually pretty clear by how the listing is written up, and with so many homes on the market you really do have plenty to pick from.  The moment you find YOUR perfect home, is when you have to decide what to offer for the house but in today's market what you offer on a home will depend on what kind of sale it is! Are you dealing with a homeowner directly, will you need to have their bank involved, or is their numerous family members who will need to accept your offer.  What kind of sale the home is will decide on how aggressive your offer should actually be.

Short Sales 
With today's market filled with short sales I still find it odd than many buyers are unaware of what a short sale actually is.  So first let me explain,  a short sale is when a homeowner is under water in their home, and the bank is giving them the chance to get out from underneath it by allowing them to sell the home for less than what it owed to them.  Many people seem to think that because a home listed as a short sale it means the homeowners have stopped paying their mortgage but that is not usually the case.  Homeowners who continue to pay their mortgage can short sale their home, and could qualify for a new mortgage within a year of the process being complete!

Now when your putting in an offer on a short sale it is important to remember it will actually need to be accepted twice.  The homeowner is up first, they can  reject/accept/counter your offer but they are not able to make the FINAL decision.   Once your offer is accepted by the homeowner, it will than be submitted to the bank who will either accept/reject your offer, and that is the final decision.  Notice I didn't say counter, it was not by mistake the banks do not counter-offer.

Many people assume that because a home is listed as a short sale they will be able to "steal" the house, that happening is actually the exception not the rule.  All banks will want to get fair market value for the home,  so if the home is in move-in condition and has passed the home inspection you will want to make sure your offer is fair.  The bank may respond quickly, or it may take a few weeks for them to get back to you.  Before you put an offer in on a Short Sale your buyer broker will go thru the process of finding out if it had been pre-approved, if there are any other offers waiting for bank approval, and how many banks are involved.

My advice to those who have chosen that they want a short sale is to make sure that you submit your highest and best offer to the bank. You will spend time waiting to hear back from them, but it will save the time of resubmitting your offer if they deny your low-end offer.


Foreclosure
Now if you are looking at homes that have been foreclosed on they are usually vacated already, and unfortunately are not always in the best condition.  These are the homes where you can steal the house from the bank, but many times you will find the vandals have already stolen some important pieces of the home from the bank already!  

Do not despair there are ways of buying a foreclosure, and getting a loan to rehab the home all at once.  This is called 203K Rehab loan, it allows you to obtain a mortgage on a home that needs substantial work done before you are able to move in.  You could also use this loan, on a short sale but it is commonly used with foreclosures.

Here again, the bank will either accept/reject your offer.  You do have the ability to give them a time frame in which your offer is valid, but always be realistic many banks will take 2-3 weeks to get back to the listing agent, who will than inform your broker.

Estate Sales 
Estate sales are a wonderful way to get your new home for a great value.  Estate sales occur when either the family member has passed away, or is no longer able to take care of themselves or home.  Usually a family member will have been named the Executor/Executrix,  and will be making all the final decisions.

The upside of this is you are not dealing with the bank, and you will have a response or counter offer in a timely manner.  Most of these homes were maintained to the best of the homeowners ability.  I have seen each end of that spectrum some homes that were completely updated to homes that made you think you had taken a trip back to the 70's.

The hardest part of an estate sale is being reasonable for you the buyer, and for the seller.  Although the sellers may not have a mortgage on the home,  many times the emotional attachment to the house is a driving force during negotiations.  I have been on both sides of it, selling my own family members home I was utterly shocked when they began discussing what they would want credited off the price, because of the extensive remodel they would need to do to our original 1950's farmhouse.   On the other hand I have come across other estate sales where because of the extensive remodel I have advised my own clients to offer less for a home.

When it comes to an estate sale you should move quickly, and use your Realtors knowledge of the market to your advantage.  You will get a much quicker response with an estate sale so you have the ability to start at the lower end of what the home is worth and go up from there.  If the home is already priced at the lower end you should move quickly, because even as a buyer you have your own competition - they are called investors and they love short sales, foreclosures, and estate sales.

Investment Sale 
Your probably wondering what kind of a sale an investment sale is and not many Realtors take the time to write about them.  I happen to work very closely with my investors, and they have always been gracious enough to let me stay involved from their initial purchase thru renovations, and than allow me to re-list the finished product.  The first rule of a good investor is too not have to hold the house for very long once the work is complete, which means they are not getting above market value.

In real estate there are many myths, the most common is that investors were able to purchase the home for pennies on the dollar, unfortunately that is not always the case.  Your broker will be able to pull the record of what they bought it for since it is public record, and than you must figure in the time and labor they spent doing the renovations just because they bought the house for $150,000 and now have it listed at $250,000 does NOT mean they are making $100,000 profit.  

There are some great reasons to purchase a home from an investor, one of which being that they have no emotional attachment to the home it is all a matter of business and numbers.  Secondly, they got the house while it was a short sale/foreclosure which means you do not need to haggle with the bank or wait for a homeowner to move out in order to close sometimes saving yourself that time really is priceless.  Of course, the most common reason to buy this type of home is the fact that it is completely updated from top to bottom.  Most investors will put in hardwood floors, stainless steel appliances, tile backslashes, granite countertops in the kitchen & the bath, up-to-date cabinetry, and of course take care of any electrical & plumbing upgrades that were necessary.  If you are looking for a updated home but do not want to pay for the price tag that comes along with new construction, a investment sale is the way to go.

When placing an offer on this kind of home you want your Realtor to go the extra mile BEFORE you put in an offer.  You should know what they originally purchased the home for, and if they providing any sort of warranty on the work they did to the home.  In this kind of sale again you have the ability to get a quick response so starting at the lower price point where you are comfortable is expected, but investors will be aggressive when countering so be prepared to get their final and best offer pretty quickly.

There is another aspect when it comes to deciding what you will offer for any home,  based on which of the 3 categories its price falls into for that neighborhood: Overpriced, Fairly Priced, Action Priced.  I will be taking the time to cover this in my next blog! 


When you are placing an offer on any home you want to be sure that you educated on the market value of that particular home and decide what you are comfortable paying for the home.  This blog was to explain the process of who will need to accept your offer, and typically what kind of "Offering Style" will help you get an accepted offer quickly ! 

Average Foreclusure Time Sets New Record

Foreclosures are setting new records again, this time not in their overall numbers, but in the time it is taking for all of these properties to be processed through the legal system. The average loan in foreclosure has now been delinquent a record 631 days, according to a new report from Florida-based Lender Processing Services.

The after effects of the so-called "robo-signing" foreclosure paperwork scandal, now more than a year old, continue to plague states which require these cases to go before a judge.

The differences in processing times are blatant when you compare judicial versus non-judicial states. Non judicial state foreclosures inventories are less than half those of judicial states, and foreclosure sale rates in non-judicial states are four to five times that of judicial states. Judges are starting to ramp up the process.

Bank repossessions actually surged in October in many judicial states, up 48 percent in New Jersey and up 73 percent in Indiana month-to-month, according to RealtyTrac. Still the backlog is still enormous. Overall foreclosure inventory is at an all-time high, 4.29 percent of all active loans, according to LPS.

"The discrepancy will go on in perpetuity, as there always has been a difference between judicial and non-judicial timelines," said Kyle Lundstedt, managing director of LPS Applied Analytics. "Even prior to the worst of the crisis, loans were 4-5 months more delinquent in judicial states at time of foreclosure sale. The number today is more like 8 months, but will return to the 4-5 month difference depending on when and how fast foreclosure sales occur.

A record-high inventory of foreclosures in process does not bode well for the near future of the housing recovery. All those distressed properties will sell at a deep discount, likely bringing down the prices of surrounding homes.

They will also add to already historically high existing home inventories, while demand is still weak. While there is considerable investor demand for distressed properties, new foreclosures are still outnumbering foreclosure sales by over 3:1.

In addition to the "robo-signing" delays, we are now beginning to see the effects of ineffective loan modifications. Repeat foreclosures made up nearly 45 percent of new foreclosures in October. Of the 2.1 million modifications since the start of 2008 more than 10 percent were in foreclosure with another 27.4 percent delinquent 30 or more days, as of the end of the third quarter of this year, according to the Office of the Comptroller of the Currency.

Lundstedt said foreclosure moratoria, process/documentation reviews, evaluation for loss mitigation and bankruptcies make up the rest of the repeat foreclosures.

As the mortgage market continues to work through the backlog of troubled loans, looking forward, loans originated in 2010 and 2011 are now the best performers on record, thanks to tighter credit requirements.

Of course that begs the question:

Did the pendulum swing farther than necessary to the conservative side? Is underwriting now unnecessarily restrictive?

 

Published: Thursday, 1 Dec 2011 | 9:30 AM ET

By: Diana Olick
CNBC Real Estate Reporter