Long Island Home Search

REO's or Short Sales?

2008-06-16T12:01:00.000-07:00

Do you know that most people including real estate agents have no idea what's the difference between REO properties and short Sales? You are probably asking yourself why this matters. The reason this matters is if you are a buyer and are looking for a really good deal you will undoubtedly come across both of these types of listings. You will also probably think they are the same thing. This will be a big mistake since they are not the same thing.

REO properties are properties that are currently owned by a corporation which may or may not be a bank. Short sales are properties that are still owned by the current seller who owes more money to their current mortgage holder than the property is worth. For example, say a seller bought their home in 2005 and paid $525,000 for it and took out an interest only loan for 100% of the value. They now owe more than $525,000 on their mortgage yet the current market value of the home is only $375,000 and they need to sell immediately. This property becomes a "Short sale" since the money they will get from the sale will not be enough to pay off the current mortgage holder who must then approve this sale at such a reduced price. This process can take months to accomplish and then sometimes at the last moment the deal can still fall apart. Buyers must be aware of the substantial risks they are taking by entering into a short sale contract with a seller who ultimately can not make the final decision on whether to accept a reduced price on their property.

On the other hand, an REO property is typically a property that a bank or corporation owns after they have foreclosed on the prior owner who has typically failed to make their mortgage payments. The buyer who chooses to purchase one of these properties are typically buying them in "as is" condition and are negotiating through a real estate agent who makes the offer directly to the bank or corporation which is typically a very motivated seller who can make a final decision quickly.

Good and sometimes great deals can be had in either above situation but it is prudent for a buyer to be very aware of the differences and challenges that each situation can present.

Have we hit bottom yet?

2008-04-29T12:53:00.000-07:00

The question on many peoples' minds is "Have we hit bottom yet?" This is not an easy question to answer. My belief is that there are some areas in the country that have not hit bottom yet and there are others that are darn near close. On Long Island we have seen some drastic reductions in price compared to just one short year ago. Homes that had sold for $400,000 in early 2007 are now selling for $300,000. For buyers this should seem to be good news however there still is a segment of buyers sitting on the sidelines waiting to see if the market will fall even further. My belief is that there still is some room for further price reductions in certain market areas however in other areas the price is probably close to bottom. Smart and motivated buyers are now in the position to scoop up homes that should far exceed their previous expectations. I have seen w/my own two eyes some pretty amazing deals. I would also like to point out that these incredible deals have been noticed by buyers since they have generated bidding wars with full and over full priced offers. I know that many people will find this hard to believe considering our current market environment but it is true.

Yet the news continues to sound ugly. Today's news pointed out that 1 in 194 homes had foreclosure notices filed. Home prices are down 12.7% through February 2008 and consumer confidence sank to a 5 year low.

Most people tend to become frightened when they hear this news and fright and fear breed inaction which causes the market to further stagnate. When I hear this news I tend to have 2 reactions. My first reaction is sadness for all of the homeowners out there who are losing their homes and all of their neighbors who will be stuck living next to a foreclosed property which can attract vandalism and blight. My second reaction is excitement over the many possibilities for well qualified buyers to get into their first home or the trade up home of their dreams. Home prices have finally fallen to realistic levels where the average person has a shot at home ownership without having to work 80 hours per week just to pay the mortgage. We have now entered into a time of wonderful opportunities for the next generation of home owners. I'm happy to say 'it's about time'!

How to fix what's broken

2008-03-29T07:05:00.000-07:00

It seems as if Long Island is losing more buyers than it is gaining. Why is this happening when we all know what a beautiful place Long Island is? The short answer can be found in our ridiculous property taxes. It seems that even if you are one of the lucky few seniors who have paid off your mortgage, so what? You still will most probably have to pay real estate taxes that may be in excess of $1000 per month and you can still count on outrageous homeowner's insurance policy costs associated w/our living on an island. Heck, those wonderful companies like Liberty Mutual and State Farm decided to arbitrarily cancel people's policies even if no claim for damage was ever filed. The insurance companies cited too great a risk to insure in a coastal area. I guess Hurricane Katrina really woke them up.

Now back to our criminally outrageous real estate taxes.......... Do you know that real estate taxes on Long Island bear no resemblance to real property value? I'll give you some actual examples. How about a 3 bedroom, 1 bath ranch home w/no basement and no garage in Mastic selling for $151,000 that has real estate taxes of $7300? How absurd is that? If you were to purchase that home and put 20% down on it your actual principal and interest payment would be less than the combined cost of your real estate taxes and homeowner's insurance. Ooh wait, I have another example for you, how about a foreclosed 4 bedroom cape in Central Islip with an asking price of $199,000 that sports real estate taxes of $12,000? Now I ask our wonderful politicians out there, who the heck is going to buy a resale home (not new construction) in Central Islip that has taxes of $12,000????? Guess what? The NYC millionaire who wishes to buy a summer home in Southampton that is three times the size of the Central Islip home will only have to pay $9000 in real estate taxes. Where is the equity in that?

The lower middle class and the middle class are gettting squeezed out of home ownership by our elected politicians who refuse to make any meaningful changes to our outmoded system of real estate taxation. There tends to be neither rhyme nor reason when it comes to assessed valuation. It's high time that changes.

People want to buy on Long Island but not at a price they can't afford. Now that our home prices have fallen to more realistic levels isn't about time our real estate taxes also decrease to realistic levels?

Can you trust the news?

2008-03-25T11:53:00.000-07:00

It seems that everyday there is some more news concerning the housing market. Yesterday the news appeared to be good, more buyers were getting back into the game. This news caused the stock market to rally. Today's news wasn't so good. Home prices fell to historically low levels with the average market dropping more than 10% from last year with Florida and Nevada suffering losses of close to 20%. Yesterday's good news had the National Association of Realtors saying that prices may begin to increase in the second half of 2008. Today's bad news had other industry experts saying that we haven't hit bottom yet.

Who are you going to believe? Watch out for the National Association of Realtors since they have a vested interest in promoting a healthy real estate market even if the facts do not support such a rosy picture. Beware of the Harvard and Stamford educated economists since they are way too busy sitting in their ivory towers pontificating on the world at large. They are not on the front lines and the data they base their decisions on is usually at least 6 months old so therefore they can not see trends happening.

In America, our idea of news is more closely related to gossip and innuendo than it is to real facts and real trends. Before you decide who to listen to, regarding real estate news, try listening to your own needs first and base your decisions on those needs not the news of others.

Foreclosures, Short Sales and Desperate Sellers

2008-02-26T12:20:00.000-08:00

As an active Real Estate Investor and Buyer's Agent I have the opportunity to view a whole lot of homes (via MLS) on a daily basis. What is very interesting is that there are many homes that have been on the market for a very long time and they are dropping in price in gigantic increments. It is no longer unusual to see $50,000 to $100,000 price drops. Many of these properties are either in foreclosure or going into foreclosure. The banks holding these non-performing loans in their portfolios are getting pretty antsy about being long term property managers. At first they were not very amenable to deal with when trying to put together a short sale but slowly they have been coming around. I still find it easier to deal directly with very motivated sellers who are not in foreclosure but really do need to sell. Many good deals can be found this way if you know what to look for. I often employ my own buyer's agent when I am interested in a property since this saves me time and money. They will go out and preview up to 6 houses per day for me and submit offers on whatever ones sound good. They get paid a commission from the sale and they are extremely helpful when it comes to negotiating in my best interest. It is also very helpful to be removed from the negotiation if you are the buyer. This practice puts a third party negotiator in the middle of the deal so nothing becomes too personal when going back and forth on terms and price.

I know a lot of buyers are still sitting on the sidelines waiting for home prices to drop even further. I, too, agree that this will happen however there are always good and even great deals out there. Waiting is not always the best strategy unless you are sure that you are the best market timer in history. Even for us professionals, it is difficult to gauge the top of the market when one should sell and the bottom of the market when one should definitely buy.

Enjoy what's left of Winter and get your garden trowels ready for Spring.

Happy New Year!

2008-01-04T13:32:00.000-08:00

Greetings everyone. I am thrilled to be alive and well and still practicing real estate. It's been a difficult past year in the market place. Lots of changes have taken place and are still taking place as we speak. It's much more difficult to get a mortgage today however the interest rates are very low which should be very attractive to anyone who plans on buying or refinancing in the next few months. I do not see rates trending higher since the economy is in the dumps and there is a political election coming up this year. If anything, rates will trend slightly lower. That's very good news and then home prices have dropped quite a bit so this is a perfect opportunity for buyers who have sat on the sidelines, saved up some money and have decent credit. Buyers who are able to easily get a mortgage or who have lots of cash will truly be in the catbird seat as this year hums along.

There are so many choices in housing today available to well qualified buyers that shopping for a house is a little like being a kid in a candy store. This is also an awesome time to be an exclusive buyer's agent. I just love being able to negotiate from a position of strength not weakness. Listing agents are literally falling over themselves trying to be nice and cooperative when we show our buyer clients homes. One of my agents just put together a great deal today and the listing agent profusely thanked her for bringing such a good buyer. This is all good news for the intelligent and well qualified buyer since they will be able to obtain excellent representation and in most cases it will not cost them a dime since all commissions are included in the purchase price. This really is a great time to be a buyer since it is as if all the planets are in alignment.

Well I wish everyone a happy, healthy New Year and a home of one's own.

Home for the Holidays

2007-12-17T10:59:00.000-08:00

Well, Tis the Season. So what will be under your Christmas tree or your Chanuka bush? It is that time of year when everyone is in such an utter state of panic to make sure that holiday cards are sent out, presents are bought, travel plans are made and menus are planned that most of us forget the true purpose of the holiday season. It is a time to reflect back on the past year and to also look ahead to the New Year. It is a time for gratitude and appreciation for all that is in your life and all that can be part of your life.

This time of year can be difficult for many of us because of the losses that may have occurred during the past 12 months. Still, if you truly look around, you can find enough blessings to be grateful for. If you have a roof over your head you are luckier than many people. If you have enough food to eat and clothes to wear you have more than others in third world countries. If you have someone in your life that loves and cares about you than you are truly blessed.

Money may be the currency of countries but love is the currency of our souls. Take some time out from all the running and mad dashing from store to store this season and reach out to someone you haven't spoken to in awhile. Send a check to a charity you believe in. Volunteer your time if you don't have enough money left over to write that check. Give your family the gift of time which will always be treasured more than another toy or video component.

Turn you house into a home by making sure that there is always love and laughter within your four walls. These are the things that are remembered way after the season has come and gone.

Wishing you and yours a most memorable holiday season,

Bethany

A Tidal Wave of Doom and Hope

2007-11-14T10:18:00.000-08:00

Every day the news get a little worse. The War in Iraq is still claiming lives on a daily basis. Suicide rates are jumping for returning veterans as well as their homeless rate. Foreclosures are at their highest level in years. The National Association of Realtors have forecast that we will be in for another tough year. Every day I get a call or two from desperate people who need to refinance or sell their homes. Every week I get a new notice from another bank I've done business with that says they are no longer in the business of loaning out money and writing mortgages. Consumer confidence is hitting some serious lows and the retail businesses are bracing for the worst holiday season ever.

Will this snowball of doom and gloom ever end? Of course it will. It always does. The War will eventually end. A new President will be chosen. New business technologies will emerge. Banks will begin loosening their credit requirements again. People will begin selling their homes easier and faster. Buyers will start to buy again with confidence. The cycle will start all over again. This is the way it has been for ages and the way it will be again. There is just so much doom and gloom we can take as a species before we create lasting paradigm shifts in our reality. The time is coming and it will be here before you are even aware of it. Concentrate on one good thing you can do for yourself or others and the good times will be here sooner than later.

How Our Government Wastes Our Money

2007-10-09T14:59:00.000-07:00

I normally don't get into discussions on social service programs but I find the following information to be totally disgusting. Did you know that there are countless families living in homeless shelters on Long Island right now? Did you also know that there is no need for many of these families to live in such overcrowded and awful situations? Here is the problem in a nutshell. A family gets into financial difficulty because they don't make a lot of money. They get paid minimum wage and this is not enough money to cover the costs of an average 3 bedroom rental which typically rents for $1700 to $2000 per month plus utilities. Remember these are hard working people who just don't have the skills, education or temperament to make a decent wage. Their options are to get government subsidies so they can afford to pay the rent on a home or an apartment or to end up in a homeless shelter.

The paperwork required to get into one of these subsidized programs is daunting and the waiting list can be months or years. If you fill out a form and miss one question the paperwork is returned to you and the process starts all over again. The government pays somewhere in the vicinity of $4000 per month for a homeless family to live in one bedroom in part of a home that has been converted into a homeless shelter. So, let's see........... do the math, an average 3 bedroom home converted into a homeless shelter receives $12,000 per month from the government while landlords that have perfectly decent 3 bedroom homes available for rent may end up having their homes sit vacant for months until a tenant is found. What kind of sense does that make????

I have an idea to change this system but no one wants to hear it much less implement it. We could have a centralized list of landlords that have available housing and tenants that need available housing. DSS (Department of Social Services) and SSP (Shelter Supplement programs) and Section 8 could be more consistently and adequately funded and paperwork could be streamlined. The rent guidelines for payments could be increased to represent fair market value to landlords willing to rent to those on such government programs. Townships could stop making it so darn difficult for landlords to pass inspections. It has become normal in the town of Brookhaven for 3 separate inspections by 3 different agencies to happen on one home before it may be considered to have passed inspection. For G-d's sake, my own primary residence would fail their insane inspections. Meanwhile all this red tape is happening while poor families languish in unsafe and unsanitary conditions. I frankly find it deplorable. It's time for a change.

Deal or No Deal?

2007-10-01T10:23:00.000-07:00

It's getting awfully tough to find ready, willing and able buyers these days. It's getting very easy to find desperate sellers. Yet so many buyers are still sitting on the sidelines waiting. I wonder what they are waiting for. I went out to look at several properties this past week and I saw some pretty good deals. I just put in an offer of one of those homes. I looked at another home this morning w/a good friend of mine who wants to get into the real estate game of investing. We both liked what we saw and will most probably be putting in an offer on this home after we run the numbers to make sure that there is still plenty of profit left in the deal after we rehab the home. This is a very good time to hook up with a very knowledgeable professional team that can make your dreams of home ownership or real estate investing come true. I predict that in 10 years from now most of the properties that will be bought from 2007 to 2009 will experience a tremendous rate of return and those of you who are smart enough to be one of those buyers will look like geniuses. The beauty is that not only will you seem brilliant but you will also be wealthy, now that's a great combination that really works for me :)

Crash and Burn

2007-08-17T10:17:00.000-07:00

Well Folks, this is some market we are in isn't it? I predicted this kind of scenario would happen years ago while other industry professionals just kept spouting the party line which was 'Long Island will be insulated from a downturn in the market'. I know that real estate and mortgage markets are cyclical in nature and whatever goes up must invariably come down. How about all those other professionals talking about a very soft landing? Take a look at the mortgage market and anyone can see that this is not a very soft landing instead it is a crash and burn. Of course, there are a multitude of reasons why this is happening and the most obvious one is that greed breeds stupidity. Wow, that kind of sounds ugly, doesn't it? So many prospective home buyers thought that the market would keep going up and up and were willing to overpay. So many banks believed the same exact thing and were willing to lend and lend even when they knew that some borrowers were more than questionable. So many real estate agents just didn't care about putting people into homes that they knew they couldn't afford. So many loan officers also didn't care about the people they were getting loans for and didn't seem to mind that these same people would not be able to make the payments. All these greedy people cared about was getting their commissions quickly and moving on to the next deal. Many buyers were also stupid. They didn't do any due diligence when it came to the real estate agent or loan officer they were using. They never bothered to even use a simple calculator to see if they could truly afford the homes they were looking at. As they say in a court of law, "Ignorance is no excuse". I had several real estate agents refer me mortgage loans, after they had found buyers a home, which I had to turn down. The reason I turned down such lucrative opportunities was that I couldn't, in good conscience, put someone into a home that I knew they couldn't afford, even though they thought they could afford it. I'll bet anyone 'dollars to donuts' that some other loan officer was more than willing to write the deal and capitalize on buyer stupidity. I'll also bet money that this buyer is now facing foreclosure. It's all a shame since everyone seems to be losing out in this market place. Sellers can't sell their homes for what their neighbor's sold for in 2005, not even close. Buyers who bought in 2004 to 2006 will see declining equity. Borrowers who are in dangerous 2/28 adjustable rate mortgages will see their payments increase dramatically and not be able to refinance due to either credit issues or the decline of equity. Bank after bank are shuttering their doors. Mortgage money is getting hard to come by and rates have been trickling up. While this may sound like quite a dismal picture it actually does have a silver lining for some intelligent, educated and motivated people. For sellers, at the right price anything will sell. For buyers, there are plenty of good homes w/desperate sellers out there. Interest rates are still near 40 year lows and if you have good credit and a little bit of money you can still get a good deal on a mortgage. As always, I'm sure most people will sit on the sidelines and wait for something or someone to tell them that it's ok to buy again. Most people are followers not leaders. For those of you who are not swayed by popular opinion, the time to get some serious values in the real estate market is already here and will continue to be here for quite awhile. Ready, set, go!

So what are you waiting for?

2007-06-29T11:20:00.000-07:00

Well, I don't know about you folks but I sure do like the direction home prices are heading in. On Long Island the average home in Suffolk County has drastically dropped in value. Nassau County is just lagging behind but still dropping and Queens County has just begun to drop in price. I just love a good deal and there are quite a few to be had right now. Homes with basement apartments in Central Islip are now selling for below $300,000 when they had sold a year ago for $350,000. High ranch homes in Lindenhurst which had sold for $450,000 a year ago are now selling for $390,000. An attached brick townhome in Queens Village which had sold for $435,000 a year ago are now selling for $400,000. A large split level in south Baldwin which sold for $585,000 in 2005 is now selling for $490,000.

Yet there are not a lot of active buyers in this marketplace. Many buyers seem to be waiting on the sidelines for something else to happen. My advice is that if you can afford to wait a litttle longer and save up more money so that you can get a better mortgage then keep saving. If waiting won't help you save up any more money and you are tired of renting or living in your in law's basement apartment, then just do it! Take the plunge and start to investigate the housing market. You will never know what you've missed out on unless you begin educating yourself.
So I ask you, what are you waiting for? Jump in, cool off, the water's just fine.

A Sad and Cautionary Home Buying Tale

2007-05-11T13:27:00.000-07:00

Yesterday I met w/a lovely man who is facing foreclosure. He had bought a home for him and his family less than 2 years ago. He wanted to be in a good school district so his children could get a better education than they were receiving. He wanted a nice backyard where they could play and he could bar-b-q. He dared to dream the American dream of home ownership. He felt that somehow he would be able to manage the mortgage payments but he never did the math. The real estate agent that he had used was all too happy to make sure he could buy the home so he could make a sizable commission. The mortgage company that he had used was also happy to be making nice big juicy fees on the loans. It looked like the proverbial "win/win" situation but unfortunately for this nice man, now facing foreclosure, it was not. What went wrong? Well the answer is really quite elementary. The nice man was overly optimistic about his earning potential and the real estate and mortgage professionals didn't care enough to be honest and say to this man that he should have been looking to buy a less expensive home w/lower taxes. Does this scenario ring true for any of you reading this? It's really a pity and it need not happen.

Home Buyers, do your home work! Do the math. Work with honest and reputable professionals who will be looking out for your best interests and not their own. Try an exclusive buyer's agent who will build a solid team of experts for you.

Wishing all of you a very Happy Mother's Day Weekend.

Build Your Team

2007-04-10T10:00:00.000-07:00

I am often asked by journalists what the most important thing a home buyer can do to get ready to buy. My answer is "Build a solid team of professionals that work for you not the seller". When you as a home buyer start looking for homes, too often, you contact the listing agent for information. The next thing you know, the listing agent is showing you their own listings and inducing you to make an offer. Once that happens you are already on a speeding train about to jump the tracks. Assuming you get your offer accepted, it's now time to put your money where your mouth is. Do you have an attorney? Are you going to get an engineer's report or a home inspection? Will there be a termite report? When will it be ordered? Who will be your mortgage broker or banker? How much financing are you qualified for? Will it be enough? What will your payments be? Will the house appraise for what you are paying? Can you afford your monthly mortgage payment? Are the real estate taxes verified? Will there be C/O (certificate of occupancy) issues? Are there title issues?

Is it any wonder that buying a home is considered one of the three most stressful events in one's life? Take your pick; death, divorce or buying a home?

Wouldn't it be wonderful if most of the stress in the home buying process could be eliminated?
Well it can be!

The choice is yours. You can either do things the old and stressful way as discussed above or do things the intelligent way which will remove most of the stress. It's time to build "Your Team of Professionals" who will be looking out for your needs and interests not the sellers or their own.

Your team should consist of an experienced: Exclusive Buyer's Agent; Real Estate Attorney; Home Inspection Engineer; Termite Inspector; Insurance Agent and Mortgage Broker. These are the professionals who will make a huge difference in your life. The Exclusive Buyer's Agent will make sure you are getting the best home posssible in the best location for the least amount of money. The Real Estate Attorney will make sure you are protected by the terms of the contract. The Home Inspection Engineer will make sure that all problems that may not be obvious to the naked eye will be uncovered so that you do not buy a home that has more problems than you bargained for. The Termite Inspector will make sure that you are not buying a home that is infested w/insects. The Insurance Agent will make sure that you paying for just the amount of coverage that you truly need. The Mortgage Broker will make sure that you can afford the payments on your home and search for the best rate and the lowest payment available. All these professionals will be members of your team and as members of your team they will be actively looking out for your best interests not the sellers or their own.

Do yourself a favor, become a "Smart Buyer" today. Call your nearest Exclusive Buyer's Agent today and get the ball rolling! They will be happy to help you "Build your Team" so you can get on the road to a stress-free home buying experience.

Scary News from the Trenches

2007-03-14T11:59:00.001-07:00

Well Folks, the times they are a changing and so must we. It's hard to turn on a television or radio these days and not hear tons of doom and gloom about the housing market. The big news has been that Subprime banking giants like Fremont Investment and Loan and New Century have ceased to do business. How does this news impact you? How does this news impact me? Well for starters this means that there are less players in the market competing for business and that usually spells higher rates for consumers since there is less competition. Within the last 5 years one of the largest segments of lending involved 100% financing and now this financing will be very difficult to obtain and therefore more costly to the consumer. The trickle down effect is that there will be less buyers that can purchase homes and more sellers trying to unload their homes. Many sellers who had bought within the last 5 years had done so with the assistance of 100% financing and now that the real estate market has taken a downward turn these sellers may not be able to sell their homes for what they had paid. If sellers can't sell and many buyers can't buy then we will all have a very real and frightening problem. My prediction is that we will start to see many more foreclosed properties even in solidly middle and upper middle class neighborhoods. Still all is not bleak for there are always silver linings amongst the clouds for some. As I said in my Newday interview( Business Section page A49 and A50) yesterday with Jim Bernstein "It just depends on how you position yourself". Money is made in all kinds of markets if you educate yourself and position yourself to work with knowledgeable people who will have your best interests at heart. As a Realtor who represents buyers exclusively, I am really looking forward to this brave, new marketplace. Buyers who are smart enough to hire us will be able to get some really good deals on homes and not have to worry that they will be overpaying. Welcome to the new Buyer's market!

Short Sales on Long Island

2007-01-30T12:16:00.000-08:00

There has been a recent development in the Long Island marketplace that hasn't been seen here in a very long time. That development is called a "Short Sale" and that is the technical term that real estate and banking professionals use when describing what happens when a homeowner is in foreclosure and they can not sell their home for what they owe the bank. The reason this phenomenon is relatively new is that instead of home prices rapidly appreciating as they have done consistantly for the past 10 years they have now begun to depreciate. Let's say you bought your home at the height of the market last spring and paid $500,000 for it. In order to keep your payments affordable you took out an interest only mortgage and have been making the minimum payments ever since. Let's also say you availed yourself of 100% financing. Here you are 10 months later and you now owe $506,000 on your home. For some reason your financial situation has worsened and you can no longer afford to make even the minimum payments on your mortgage so you decide to sell your home so your credit does not spiral further downward. Guess what? Your home is no longer worth $500,000 it's now worth $475,000 and you still owe at least $506,000. You are now faced with some very ugly choices. You can pack up all your bags and leave while the bank forecloses or you can hire a professional real estate agent who has experience in "short sales" and will negotiate directly with the bank on your behalf. The "short Sale" will at least preserve your credit and may even allow you to walk away with a drop of money and your dignity more or less intact. The lesson to be learned from all of this is that you really should try not to get in over your head when you are looking to buy a home. Stick to your budget. Be realistic about your income. Keep some money tucked away for an emergency. Hire an exclusive buyers agent to negotiate the lowest possible price and best terms on your purchase so that at least you are not overpaying from the get go. Use an honest mortgage consultant who comes recommended and advises you properly. Make sure you get a home inspection report so that you can budget for expenses like a new roof or new windows. Know what you are getting yourself into before you do something foolish like buy the house next door to where you live just because you think you are getting a good deal. I have seen this kind of good deal completely backfire on the buyer because more often than not, the house next door is not a good deal. Know what you are buying and know what it is really worth. The last thing you want to become is a foreclosure statistic.

How Will the 2007 Real Estate Market behave?

2007-01-04T13:38:00.000-08:00

Happy New Year to you and yours. May 2007 bring us a better year. I, personally would like to see more peace and less war, more prosperity and less poverty. However you are probably reading my blog for real estate advice not Beth's personal vision for the world. In 2007 I expect to see continued price drops which means that home prices will continue to fall. I also believe they will fall gradually not drastically. The average home on Long Island has already depreciated 20 to 25% with the higher depreciation rate in the $500,000 and over segment of the market. Sellers are getting very nervous and buyers are sitting on the sidelines feeling very unsure of themselves. What to do, what to do? Let's take a first time buyer with little money for a down payment and a job that pays a decent salary but nothing to write home about. Should you buy now or wait? Let's see.......... A decent 3 bedroom starter home in the Mastic/Shirley area will cost you between $225,000 and $250,000 today. If you were to say hire a really good buyer agent and they could negotiate a $199,000 price for you then your total mortgage payment ( assuming a 6% interest rate) would be approximately $1650 per month. If perhaps you waited a year to buy a similar home and your good buyer's agent negotiated the price down to $189,000 your monthly mortgage payment ( assuming a 7% interest rate) might actually be $1700 per month due to the difference a year would make on the prevailing interest rates. So my best advice to you is to buy a home when you are ready, willing and able. Good deals on desireable homes can come along at any moment but remember "Ya gotta be in it to win it"

The Gift of Good Credit

2006-11-28T15:07:00.000-08:00

Well the holiday season is upon us and that means shopping for gifts! If you are like most people you will probably spend more money than you really have. At this time of year people often max out their credit cards paying for presents, food, vacations and all sorts of other good cheer. The rush you probably get from shopping will soon turn to depression and dismay when the bills start rolling in come January. That big screen tv that only cost $1995 on sale will end up costing you twice that amount if you just pay the minimum payment on your credit card. To make matters worse your credit scores will start plummeting if you make one late payment or have used up your credit limit. Instead of spending money and using your credit like there is no tomorrow remember there is a tomorrow and go easy on the credit. The best gift you can give yourself and your family is the gift of good credit. Over the average person's lifetime bad credit can end up costing hundreds of thousand of dollars in higher interest rates and payments. Bad credit can end up costing you the opportunity to become a homeowner or if you are a current homeowner bad credit may end up costing you your home. In the past 12 months more homes have been foreclosed on then in the previous 12 months. I do not expect this trend to reverse anytime soon. Bad credit is a killer. Remember overindulgence is bad for the waistline and bad for the budget. The key to a really great holiday season is moderation, know your limits and stick by them. I wish you and yours a magical season full of love and peace.

How Scary is that House?

2006-10-25T13:43:00.000-07:00

In late October my thoughts always turn to Halloween and pumpkin picking. It occurs to me that today's average home buyer is also thinking the same thing instead of thinking of what treats may lurk behind the door of the home they are putting off seeing until they feel comfortable wading into this newly evolving "Buyer's Market". If you see yourself in this statement, listen up! There are roughly 4,000,000 homes on the market throughout the country right now. This should present multiple opportunities for you. This could be your best time to get into the market place and buy that home you've always wanted. The current rates on a mortgage are still at all time lows and sellers are feeling the pressure to reduce their prices. With so much inventory on the market it is an excellent time to do your bargain hunting. So this fall as you set out to pick a pumpkin or bake a pie, think about the potential great homes that would be just perfect for you and give your "Exclusive Buyer's Agent" a call and they will be able to do the rest. You're in good hands with a Realtor that works for buyers only!

To Flip or to Hold?

2006-09-20T11:46:00.000-07:00

To flip or to hold, that is the question my dear Watson. A house came on the market in early June for a very good price. The house was in Mastic, NY and the listed price was $189,900 for a 3 bedroom ranch on a nicely landscaped piece of property. Based on the price I figured the house would need extensive renovations or that the bedrooms would all be miniscule. I called the listing agent and found out that the house was in relatively good condition and the bedrooms were nice sized. Normally I have a hard time believing listing agents however this agent was also the owner/contract vendee of the house. Being that I would be driving from my office in Baldwin, I didn't relish the thought of a wasted trip out to Mastic in the hard, driving rain. It pays to ask the right questions upfront, afterall gas is not cheap anymore, is it? I made it to Mastic in under an hour and proceeded to look the house over very quickly and take a quick tour of the outside while swatting pesky mosquitos that had decided that I appeared to be a tasty treat. Other investor types also were there looking at the house so I knew if I liked it I would need to move very fast. I went back to my home office and plugged in the numbers. $3500 for new siding; $1500 for an interior paint job; $500 to spackle and patch up some holes; $500 for new moulding around the doors where it was missing; $1000 for a new front porch deck; $1000 for new carpet; $5000 real estate commission to the selling agent; $1500 for short term homeowners insurance; $2000 for real estate taxes, water and electric; closing costs to buy and resell $5000. By the time I was done with all of my calculations I had figured out that the total cost of my proposed project would be $211,500 if I had given the seller his asking price. I also figured out that the selling price of the newly renovated house should be $229,000 and depending on how many buyers actually made offers, I might have to settle for $225,000. My overall profit on this project would have been $13,500 which certainly is nothing to sneeze at. I also thought about a PLAN B which is something I always have. Plan B involved finding a government subsidized (Section 8) tenant and rent the house out to cover the mortgage payment. After carefully thinking it all over I decided to make an offer of $185,000 with the provision that I could close very quickly (let's face it, I am a mortgage broker also). The seller accepted and we closed within 3 weeks. It took me just 2 weeks to get the house completely renovated and ultimately I decided to test the waters to see if I could get a very fast rental which I was successful at. My thought was that whatever happened first, the flip or the rental would be what was supposed to happen. My tenant has been in the home now for 2 months and I have no regrets. Flipping seems sexy but holding can be far more profitable in the long term.

Looking to Invest in Real Estate?

2006-08-15T13:39:00.000-07:00

Everybody wants to be real estate investor or so it seems. Just the other day a prospective client came in to interview one of our buyer agents to see if they would be a good fit for one another. The prospective client proceeded to tell a very sad tale of how he owned 3 investment properties that he had bought at the same time. All 3 properties needed renovation work and supposedly the contractor he hired failed to show up on time and do the right job. Now many months later he is stuck w/3 vacant peoperties that still aren't ready for occupancy. I've seen too many people get into the investment property business only to fall flat on their faces. Of course, there is plenty of good money to be made in real estate investing, I should know since I've helped quite a few people make quite a lot of money. I learned how to be a real estate investor by doing it myself and making a whole lot of mistakes early on. I no longer make those mistakes and I make sure that my clients don't make them either. The biggest secret to smart investing is to always buy right no matter what type of market you are in. I always say that you should make your money buying not selling. When you sell you will realize your profit but a smart investor knows their numbers going into the deal not the other way around.

Are you paying too much for that house?

2006-07-20T11:23:00.000-07:00

As an exclusive buyer's agent it pains me to see buyers paying too much money for houses that just aren't worth it, knowing full well that if they had taken the time to hire me they would have paid less money. Several months ago I did a home buying seminar for a credit union and it was well attended by doctors, nurses, physician attendants and other hospital employees. One of the attendees contacted me several weeks ago asking for my help. She had found a home that she wanted to buy and had agreed to pay the seller's full price of $539,000. Now she wanted me to come see the house and let her know if it was a good house. I ran a comparable market analysis and determined that the house was slightly overpriced based on its exterior condition and location however I told her I would know more after we hired a professional home inspector to check out the sytems and foundation of the house. I met the inspector at the house and was able to see the interior for the first time. The rooms were very small and the house had never been updated so it needed a complete renovation which would include a new kitchen; bath; paneling removal; sheetrock; new carpet; new paint and a whole host of other smaller items. I told my client that I thought the house was worth much less money than she had agreed to pay for it. Meanwhile the home inspector had found some serious water intrusion problems in the basement with actual furry mold growing on the concrete walls. Basically I had to tell the client that the house was a disaster and she should walk away from it. Thankfully she listened but not all buyers do. Many never even contact me because they are unaware that I will actually save them money and that my services are typically fully paid for by the real estate commission that is already included in the asking price of the house. Remember, a good buyer's agent won't cost you money they will save you money and just may prevent you from making the biggest financial mistake of your life.

Long Island Market is Changing Rapidly

2006-06-13T13:02:00.000-07:00

Having been in the real estate market place since the mid 80's I have always tried to keep a trained eye on market conditions and changes that may be occurring. Right now this Spring market has been off to a rather slow start. Inventory has been substantially increasing and buyers have been sitting on the sidelines waiting to see how this market is going to shake out. Recently we were able to negotiate a $395,000 price on a lovely newly sided high ranch in a very desireable part of Lindenhurst which had originally been priced at $445,000. Every day we get notices of price changes which means sellers are willing to take less money than they previously thought they would get. For all of the buyers sitting on the sidelines now is the time to start testing the waters. You never know what kind of good deal you can get until you try.

A Little Bit of Knowledge Goes a Long Way!

2006-05-23T11:20:00.000-07:00

Today I received a phone call from a prospective client who is interested in obtaining my mortgage services. We have been in touch over the last several years ever since she came to one of my "Home Buying Seminars". She called to tell me that she had found a home that she was interested in buying and wanted me to calculate what her mortgage payment would be. I asked her what the purchase price would be and she told me that she had made an offer of $475,000 on the home. I also inquired as to the amount of real estate taxes and was told approximately $7300. She wanted to put down a substantial down payment of $95,000 which represented 20% of the purchase price. After crunching the numbers I quoted her a total payment of $3175 based on a fixed 30 year mortgage which included the real estate taxes and home owners insurance. I asked if that sounded about right and she said that 'there was no way that she could afford that high a payment'. I asked her what number would she be comfortable paying and she replied "$2500". I was surprised by her answer and proceeded to let her know that the only way her payment could possibly be that low would be if she took out a 50 year interest only mortgage. She thought a moment and wondered out loud if that would be a good option for her. I mentioned that I thought it might be a good idea to look at homes that would cost less money but she felt that there weren't any good homes that would be less costly. She got off the phone after thanking me for spending so much time with her. I got off the phone thinking that I wished people would take the time to crunch their own numbers before they spent so much time and energy looking and bidding on properties. A little knowledge goes a long way in understanding how much home you can afford to buy if you wish to stay in your financial comfort zone.

Fear of Buying?

2006-04-25T10:59:00.000-07:00

I remember reading Erica Jong's book "Fear of Flying" many moons ago which had to do with people's fear of sexual intimacy. Many people are just afraid of commitments and the intimacy they entail. When it comes to big commitments, home buying nears the top of the list. No matter how much certain people say they want to buy a home, when it gets right down to it they back off and create reasons not to buy. I'll give you an example, a little while ago I was working w/a couple who seemed to really want to buy a home soon. In the process of showing them homes they suddenly decided that every town that had homes in it that they could afford were suddenly not good enough. I would probe them for reasons that made these towns unsuitable and they would just say that they didn't like them. I asked them if they would like to see other towns that were a little more expensive but were still affordable enough and they said 'No, we want to stay in the previous price range'. This couple had been looking for homes off and on for the past 3 years and still couldn't commit to buying. They used excuses as to why certain homes and areas were unsuitable. They refused to look in other areas that may have been more suitable using finances as an excuse. They could afford more home than they were looking for but kept putting artificial obstacles in their path. I really believe that potential home buyers could use the benefit of an impartial real estate consultant to help them through their fears, real and/or imagined. I know I have been able to provide low cost real estate consulting services for those buyers who realized they needed some outside assistance. It's like buying an insurance policy you hope you'll never need. It gives you peace of mind and helps you sleep at night. Sooner or later we all have to commit to one thing or another :)