Monday, September 19, 2011

The Kiss of 'Real Estate' Death

The house has been just sitting on the market.  No one has come to see it in weeks.  It's time to make a price adjustment and so I begin that dreadful conversation with the sellers.

"Well, we are not in a big hurry to sell.  We are willing to wait for our price," they tell me.

 UGH!!!!  GROAN!   And a few other words that I don't dare publish.

More than ever before, buyers are very educated to the real estate market.  Often they will start poking around the Internet six month to a year before they are ready to make a purchase.  Sometimes they know the inventory better than a realtor, going through each house, picture by picture, room by room.     And if they are not walking around with all the latest real estate stats on the tip of their tongue, one of the first questions they will ask about a house that they like is 'how long has it been on the market?'

When a house is brand new on the market, buyers will ask "What will it take to purchase this house?"  Once a house has been sitting on the market a month or more, buyers will ask "How low will the seller be willing to go?" and if the house goes stale after 6 months or so, buyers always ask 'What's wrong with it?'  That is why I say nothing depreciates a house faster than a 'For Sale' sign.

Dropping the price is not an easy out for real estate agents.  It usually sets off a list of tasks that include new ads, new flyers, e-mailing past showings, etc all to earn less commission.  The only reason a real estate agents recommends a new price is that is what it is going to take to put up a 'SOLD' sign.

Saturday, August 13, 2011

Saving $20,000 on the Cost of a Home!

Whew! That feels good. Talk about the deal of a lifetime! We just cut more than $20,000 off the price of our home! Great negotiation skills? Nope! Foreclosure? Nada! Fire sale? No way.

We just refinanced. And no, it wasn’t a 10 point drop in interest rates, either. The secret to our savings is reducing the term of the mortgage. We went from a 15 year mortgage to a ten year mortgage. Our original mortgage would have cost us more than $46,000 is interest over the 15 year term. Our new mortgage will cost us less than $17,000. And the most amazing part of it is our payment will only go up about $150.

When I work with buyers, I am always amazed that they will fight till the bitter end and sometimes walk away from a purchase in which we are maybe two or three thousand dollars apart in price. But then they will get a 30 year mortgage with minimum down payment and end up paying the bank almost as much in interest as they pay the seller for the house.

I don’t dislike banks. If the only house I could buy was one I could afford to pay cash for, well, I would not be a happy camper. And if I could only sell real estate to individuals that can afford to pay cash, I doubt I would sell very many houses. Banks are good and mortgages are great but we should only finance what is necessary. After all, I’d much rather see that $20,000 go towards my vacation than the vacation of some banker!

By the way, interest rates are extremely low, making it a very attractive time to either buy real estate or refinance. Don’t hesitate to give me a call for more information. My office number is 756-7457.

Friday, April 29, 2011

Selling a Home With Pets

I showed a very nice, very expensive home earlier this week in which the dog had peed all over the welcome mat! My buyers love the house and had me write up an offer but then had me tear it up. What if they couldn’t get rid of the smell? Pets are unpredictable and I’m betting that this pooch was just stressed by all the sudden interest in the place he calls home. And then I was at a meeting with other Realtors yesterday when one agent announced that she is allergic to cats and she flat out will not show a home if the owners have a cat. It’s a challenging market and pets make it even more challenging. So I decided to put together a few pointers about selling a home with pets.

First and foremost, please spend special attention cleaning up after your pets. Nothing spoils the mood of finding a really nice house than having to clean off the bottom of your shoe. Believe me. I’ve seen it happen. Also, pay attention to your landscaping. If your dog’s urine is killing the grass, consider taking it for walks or moving the tie-up spot. And if you have an inside litter box, keep it clean and fresh.

Be aware of pet odors. Cat urine is the worst. Bring in a neighbor to do a whiff test. Do not use air fresheners or scented candles. People with allergies will react and others will be suspicious. Try enzyme cleaners such as Simple Solution, Nature's Miracle or call a professional ozone company. Arm & Hammer has information on a dry bath on their web site.

If your house is being shown, put food and water bowls away.   Stash the play toys. If possible, remove cages, carriers and other tell-tale signs. If you have enough warming time, treat rugs and furniture with a carpet deodorizer.Vacuum and vacuum again.

Wednesday, April 06, 2011

Coffee Table Decorations: Organizing Coffee Table Books and Trays | Pott...

With a difficult real estate market, almost nothing is more important than stagging when you are getting ready to sell a house. I was quite excited to find this clip from Pottery Barn (after all, what's more exciting than a house described as a Pottery Barn decor !) but was left a little unimpressed. Is it just me? What do you think of these coffee table decorations???

Tuesday, March 29, 2011

Starter Home Extraordinaire

I remember buying my first home like it was yesterday. It was a fixer upper, which is all I could afford at the time. The only reason the roof didn’t leak was it was the bottom floor of a condo building. The windows did leak, and not just air. One morning I woke up to find a small pile of snow in my kitchen. But this was a great investment for me. Located on the outskirts of Washington, D.C., I sold it four years later at twice what I paid for it and moved to western New York.

Starter homes have come a long way. Today I have a perfect little starter home in the town of Greece which has a newer roof, windows, furnace and even central air. It sits on a beautiful park-like lot that is nearly a third of an acre and has a 2 car garage. The kitchen and bath have been upgraded with tile and granite. The living room is large and has a stunning stone fireplace (wood burning). The home is located at 126 Alpine and you can check out more details and photos at: or give me a call at 756-7457.

Sunday, March 27, 2011

FHA Mortgage Insurance Premiums Going Up

Monthly Mortgage Insurance Premiums (MIP) will increase effective April 18, 2011 and so if you are on the verge of buying a house with a FHA mortgage, consider pulling the trigger and applying for a mortgage by April 17th!  The upfront premium remains unchanged at 1.0% of the base mortgage.  In addition, down payment minimum remains at 3.5% and maximum seller concessions is still allowed at 6% of the purchase price.

For personal advice about buying and selling real estate in the Rochester area, don't hesitate to give me a call at 756-7457.

Wednesday, March 23, 2011

$5,000 Over Asking Is Not Enough!!!

I like it where I live and apparently so do some other people. Last weekend I wrote an offer for $5000 over asking and I’m sorry to say the house went to another bidder! Why did we offer so much? Well, we lost a house the week before by writing only a thousand over asking. That’s pretty amazing considering there are parts of the Rochester area where houses sit on the market for weeks and months, sometime without even a showing.

The Ellwanger Barry neighborhood, also known as the Highland neighborhood, provides a nice stock of classic American Foursquare homes along tree-lined city streets. It is convenient to the U of R as well as Strong and Highland Hospitals and since last week was Match Day (the day when medical students find out where they will train as residents) the competition for housing is fierce.

Fortunately, my clients are not young doctors. Instead, they are a professional family that wants to leave the suburbs for the convenience of city living. They are not on the rigid timeframe although they are anxious to start their new life. Hopefully, the next house we write on will be the one. But if not, it may be the next.

Thursday, March 17, 2011

Rural Real Estate

I've spent the last few weeks running from Kendal to Canandaigua to Byron.  Tomorrow I will be near Lyndonville.  I love everything about the jaunts into the country side except filling my gas tank.

Here are a few shots from the last two weeks. Kind of nice to see the ground again, isn't it?

Tuesday, March 15, 2011

How Disappointed Will You Be If You Lose This House?

No one will sell you a house for less than what you offer, right? So why not start very, very low with the first offer?

Sometimes it works. I’ve had very low offers accepted without a single counter. Almost always it’s because the house has been on the market for a while and the seller is simply sick and tired of the process.

More often, it doesn’t work. My most notable transaction was when the seller was so insulted that she refused to sell to the buyer even after he came back with a full price offer. She still owns that property.

More than once, I’ve seen a second and better offer come in and so the low bidder never gets an opportunity improve their offering.

Most often the low ball offer will be met with a counter. And depending on how reasonable the counter is, I can often predict the outcome. Most people get a bit of a thrill with the start of the negotiation process but they quickly tire of the drama. If counter offers bounce back and forth 3 or more times (unless it’s very minor tweaking of the terms) most often the offer is going nowhere.

So, before you sit down to right a very low offer, ask yourself how disappointed will you be if you lose the property. Only your gut will tell you how to proceed.

Monday, March 14, 2011

Low Ball Offer

My clients cleaned and painted and staged. Finally, we put a ‘for sale’ sign in the front yard. For weeks, they walked on egg-shells trying to keep the house ready to show at a moment’s notice. And finally we got the call! An offer was coming in.

As soon as I picked up the offer, I knew my clients would not be happy. It was $30,000 off asking and this was not an expensive house. What I didn’t expect was their anger.

“That offer does not deserve a response,” he stormed. “Tell them to go find another house!”

The most important advice in this situation is not to take it personal. In fact, try thinking like a buyer when trying to sell your home. If there was the slightest chance that you could buy a house for $30,000 less than the asking price, wouldn’t you try it? Of course you would. It is only human nature and so don’t hold the low ball offer against the buyer.

It took some time and effort for my sellers to regain their composure. They finally agreed to write a reasonable counter offer that the buyer ended up taking. Today they are living in a new house.

Not all transactions work out this way. Sometimes the buyer walks. Sometime they counter back with another very low offer. But whatever the situation, it is most important to stay calm, focused and not take it personally.

Tomorrow I'll talk a little about low ball offers for buyers.

Saturday, February 19, 2011

A Touch of Spring at the GEH

Has this frightful weather got you down? A visit this week to the George Eastman House may just be what the doctor orders. There are just seven days left to the museum's Dutch Connection 2011 exhibit.(closes February 26, 2011. Daffodils, tulips and hyacinths Oh My! Not only is this a visual treat, but the fragrance is heavenly! Here are a few photos I took there yesterday.

Sunday, January 02, 2011

Resolve to be Money Smart in 2011!

I like New Years and fresh starts and resolutions. I make lots of New Year’s resolutions. It’s not that I don’t like the way that I am, it is just that I thrive when I’m challenged. So I set lots of goals. I do lots of the typical “eat less, exercise more and get organized resolutions.” I also resolve to visit new places, learn new skills and have fun. But one of my best resolutions was to get money smart, especially when it comes to debt.

I would often buy things simply because they were on sale and because I really couldn’t afford the item, I would put it on a credit card. I regularly carried a balance of several thousand dollars on the credit card, and with interest rates in excess of 12% I guarantee you I paid the banks much more money than I ever saved by shopping sales. One year I started tracking how much of my money was going towards interest and how much was going towards purchases. That’s when I resolved to get out of credit card debt and I’ve not carried a credit card balance in ten years!

As I work with families that want to move up into a larger home or even downsize I’m often surprised at how unaware they are of their equity in their current home. Usually when they pull out a statement to see their mortgage balance, they are surprised and even shocked at how much money they still owe on their home. Lots of first time mortgage holders have never stopped to realize that the bank front loads the interest and very little of their payment goes towards paying down the principle. For example, on a $100,000 loan with an annual interest rate of 5.5% amortized for 30 years, the mortgage holder will pay $6,813.48 a year but only $1,347.12 will come off the balance due during the first year.

Mortgages are not a bad thing as very few people are in a position to pay cash for a home. Today’s current low interest rates make borrowing money much more economical than in years past. But it’s not free!

My challenge to you is while the year is still new to pull out a current mortgage statement and make note of your current balance. Examine your payment. If you have an escrow account, your payment should have three parts: principle, interest and escrow (for taxes and insurance). Understand how much of your payment is going towards the debt. If you are not satisfied with the rate in which you are paying off your mortgage, you can always pay extra principle.

This is also a good exercise if you have credit card debt or auto debt. I do not like sending off money and not getting anything back for it. The knowledge of how much of my hard earned income was going towards interest payments gave me the power and resolve to make better financial decisions. I hope it will help you too.

Happy New Year! If I can help you with any of your real estate needs during 2011, please don’t hesitate to give me a call.