NEW AREA CODES WILL CHANGE OUR DIALING HABITS

It's been coming for some time - and it's finally here.   Both Area Codes in Connecticut are having babies in a few days.

• Area Code 203 will give birth to Area Code 475
  
• Area Code 860 will give birth to Area Code 959

The upshot of this for all of us is that we will have to dial 10 digits (area code plus the number) for every call that we make even if you are calling your next door neighbor.  

We should be used to this kind of thing by now.  Some of us may remember when you could call people in your own exchange with just the last 4 digits. (Did I just admit that I remember that???)

Even if 4-digit dialing goes back to your ancestors, the new Area Code syndrome has been going on since the 1970s.   At first we'll be confused and annoyed, then it will just become habit.

Also remember that, just as now, you'll  have to dial a "1" BEFORE the Area Code if you're calling someone outside your local calling area.

Things always seem to come down to the last minute. 

The $8000 First-Time Home Buyer's Tax Credit, set to expire on November 30, 2009 has been extended.   1st Time buyers now have until April 30, 2010 to sign contracts on their new home and have 60 days beyond that to close the transaction.

BUT WAIT, THERE'S MORE

In addition to the extension, the program has now been expanded to include "move-up" buyers.  As long as you have occupied your current home for 5 of the last 8 years, you are also eligbile to apply for a tax credit. It's a little less, capped at $6,500 instead of $8,000 but hey - it's nothing to sneeze at.  The following is a summary put out today by the National Association of Realtors.   If you want to explore this further, speak with your lender.

BUT WAIT, THERE'S EVEN MORE!

Yup - one more thing.   In a separate measure Congress has also passed an extension  - through 12/2010 of the new higher limits on conforming loans. 

You can read the definition of Conforming Loans and Jumbo Loans for more detail, but the bottom line of it is that better interest rates are typically available on conforming loans than on jumbo.  By raising the limit for conforming loans, it enable more folks to get better interest rates on larger loans.  This is good!

THE DEBATE!

There's been a lot of discussion in the Real Estate community as to whether extending and expanding these programs is good for the economy in the long term.

There are those who feel that it will provide a "false" feeling of improvement if people buy up houses over the next several months for the tax break. The feeling is that when it ends, we could move back to a very slow market.

Those in favor of it feel that getting people moving into new homes could very well be the impetus needed to jump start the economy. When people move, there is a lot of cash pushed into the economy in the form of moving costs, renovations, furniturepurchases , hiring of contractors - etc. So it may be that things will be better BECAUSE of the temporary burst in home sales that is expected.

Whichever side you fall intellectually on is moot at this point. The extension is here and if you've been thinkikng about buying a house - buy one, while the program is on. This is one more low-pressure system in the Perfect Storm for Home Buyers.

I know that headline sounds like a line of insincere marketing hype.   Unfortunately, in our business, someone is always saying "It's a great time to buy a house". 

LET'S FACE - IT'S NOT ALWAYS A GREAT TIME TO BUY A HOUSE! 

In an "UP" market when inventory is low and prices are high, you will likely find yourself in a bidding war if you are interested in a desirable house. Bidding wars are great for sellers - not so much for buyers.   That's why they call it a seller's market.

A buyer's market exists when prices are down and inventory is up.  If you add in the third piece which is Interest Rates, you get the perfect storm. 

 Right now:

• Inventory is at an all time high and all indications are that it will continue to rise because, sadly, the unemployment situation is expected to add to the already high level of foreclosures that are out there. 
• Prices are at a level where they were prior to the boom of the early part this decade.
• Interests rates are - well, they're just ridiculous!
  

Any two of those three things would make things ripe for buyers - having all three in place creates a situation that simply makes it darn near a sin for qualified buyers to sit it out any longer.

The other thing that makes it EVEN better, is that most home sellers are beginning to understand the market. In the last few months as I show houses to buyers, I find that more and more of the listing prices are very close to market value.  This makes the whole buying process simpler.   The truth that the sellers are realizing is that although they may have to sell their homes for, perhaps 20 - 30% less than they may have paid a few years ago, they will get that savings back as they buy something else with the same kind of depreciated value.

As Realtors we often have buyers tell us that they are "Waiting the market out".   The question I usually ask is this

Which are you waiting for,

INCREASE IN PRICES or INCREASE IN INTEREST RATES?

Excellent interview  from Fox Business Network with Richard Smith, CEO of Realogy regarding where the housing market is headed in the short term. 

He points out, correctly, that the market for home buyers is about as good as it gets.  Low interest rates and high inventory make a perfect storm for buyers. 

The primary focus of the inventory is regarding Smith's opinion on whether or not the $8000 1st Time Homebuyer's Tax Credit should be extended and his opinion of whether or not it WILL be extended.

The interviewers went on to ask him about the prediction of how continued increase in the number of foreclosed properties will impact the market.

Interesting and informative video.

WATCH IT HERE.

Excellent video courtesy of Plymouth and South Shore Associationof Realtors via Chris Head from William Raveis Real Estate.    Time is short but it's still not too late if you get going right away.

So you want to sell your house but do not see the value Realtor representation. Not an unusual thought - after all, lots of people do lots of things themselves like fix their cars, do handyman jobs in their house, do their own taxes, etc.   If you can do something as well as a professional does I say "Go for it!"

As a Realtor I believe strongly in my own abilities and I do think I'll do a better job than you will - but that's not what this article is about.  I've already written about the things that you should expect from a Super-Realtor like me to help you sell your home for the highest possible net value in the shortest amount of time with the least amount of inconvenience to you.

If unrepresented selling feels like the right choice for you, here are some tips to help you through.

RESEARCH

While you may not have access to your local Multiple Listing Service which provides Realtors with up to the minute market data on sold, active and withdrawn properties that are comparable to yours, there is a wealth of data out there for you pore over to help determine what your house can sell for.

If you know of a house that sold recently, your town land records should be able to find details on the sale. Some towns are putting their records on line so you won't have to weave your way through the town hall to  look things up.

Websites like Zillow can help you also to determine the value of your house based on their algorithms which primarily use square footage and proximity of recent sales as their basis.  You will have to temper these based on the unique attributes of the sold homes balanced against your own.   Things like age, condition, type of heating/cooling, parking, water and waste specifics, flooring and many other specifics will be pluses and minuses that impact the right price for your home.

As for currently listed homes, you can get the basics of these from various websites to use as comparison.  I would also recommend going to any open houses you might see advertised in order to check out the competition.

The key in this is to be honest with yourself -- check your ego and emotional attachment to your house at the door, so to speak.   Things that have personal value to you might not mean much to prospective buyers.  A wine cellar, for example might add a lot of value to you, but to someone who doesn't collect wine, it might just be considered storage.

EXPOSURE

One of the most important things about selling anything, whether it's a toy collection, a house or a football stadium, is that you have to somehow get your product into to the consciousness of your target audience.

First you have to determine who and where your target audience is.  Remember that, as an unrepresented seller, your buyer pool is most likely limited to the people who have decided that they want to purchase from someone who is selling on their own.  If someone has decided to engage a Realtor to help them find homes, they are most likely going to rely on that Realtor to help them find a home.  Most Realtors have user friendly interfaces for their buyer clients to peruse the houses that are available and choose which ones they would like to see.  

There are, for sure, buyers who are specifically looking for For Sale By Owner houses. Here's why.  They know that the seller isn't paying a commission to a broker and they would like to save some money. Their logic is that they are entitled to some of the money you'll be saving in the form of a lower purchase price.

You can find those buyers, usually via two methods. 

• Online. There are a ton of individual websites where FSBO buyers and sellers can connect.  Check them all out and post the details of your house on each of them that you like.
• Signs.    The second method of attraction is the FSBO sign in your front yard. Obviously this will only attract people who actually see it, so the exposure will be limited to people who drive down your street.  If you live on a really busy road, many people will drive by and a certain percentage of them will be prospects for you. If you live on a cul-de-sac or dead end street your exposure will be mostly limited to people who visit your neighbors.

If you go with a sign, don't make the mistake of trying to advertise too much on your sign. Business 101 says that marketing should not be an attempt to sell your product - just a means of getting the prospects to contact you.  Someone I know recently sent me this photo of a FSBO sign.  I don't know if this sign was real or a joke (probably a joke) but it shows what not to put on the sign.  

What you do want to put on the sign will basically be how to contact you.  In good weather you may also want to put some brochures with some of the POSITIVE highlights of the house.

Third possible avenue (this will cost you some money) is to contact Real Estate brokers and offer them a commission if they bring a buyer.  You can set any amount you like.  Simply tell them, that you are not listing your house with a broker but you would be willing to pay a certain amount to a broker who has a buyer. 

If you decide to do this, you will be paying less than you would to a listing Realtor who has to account for paying a portion to the buyer broker.  Remember, as I said above, if you are saving money, your FSBO buyer will want to share the wealth with you.

You can reach out to the Realtors by finding out individual email addresses, calling them, printing fliers and bringing them to all the offices, mass faxing - or any other method you choose.

SHOWING POLICY

Decide ahead of time how you will handle requests for showings.  If there is more than one adult living in your house, make a schedule as to who will be responsible to host visitors to your house.  Decide what times you are willing to be available.  Most buyers want to see homes in the evenings or weekends, so be sure someone is available. 

One urgent safety issue.   If you do have a sign in the yard and there are times when minor children will be home alone, have a family discussion and make a plan how to handle unexpected visitors knocking on the door when there is no adult at home.

QUALIFYING

OK - so people start to call you - or they just knock on your door because of the sign - what is your plan? 

Is everyone welcome to tour your home or do you feel that you should find a little bit more about them before letting them into your home.

My recommendation is to prepare a little script for people who call.  Something to the effect of:

“We’d love to show you our home but I’m sure you understand that we need a little information about you first. We've prepared a little questionnaire which I can fax or email to you." If they are already standing on your doorstep because they saw your sign, you'll probably have to address this a little differently.

Some of the things you want to know include the following items:

• Name, 
• Address 
• Telephone #
• e-mail 
• Do they own or rent now?
• Do they have to sell something before moving 
• How many people in the family
  
• Where they commute to
• When are they looking to move

These last couple are critical unless you want to waste your time with people who love to look at houses but cannot afford one.

• Are they financially qualified to buy your home?
• Have they seen a lender yet and do they have a letter of pre-qualification or are they buying  cash.

You may want to personally connect with a local bank loan officer that you can refer people to in case they don't know anyone.

OFFER PROCESS

So if someone does make an offer, what do you do next? 

Will you require them to give you a deposit WITH the offer?

If they don't want to give you any money until after you settle on a price, you can suggest that they give a check to their attorney for, let's say, 1% of the offered price.  Their attorney can provide you a letter certifying that he is holding the money.  If your buyer is serious he'll be willing to "put something in the game" before you waste your time negotiating.  An offer with nothing attached to it, is not likely to be serious.

Prepare a sheet in advance stating your terms. 

• How long after the price is set do you want to allow them to perform an inspection?
• How many days after the inspection will they have to bring up any requested repairs?
• Do you want to require that the inspection be done only by a licensed home inspector - or can they just bring their cousin who has a tall ladder?
• Will you accept an offer from someone who has not sold their house yet?
• How much time will you allow them to obtain a mortgage approval?

To protect yourself on these and similar issues, you probably want to have your attorney prepped for these kinds of issues so he can prepare a contract template for you to use.

NEGOTIATING

Once you and the prospective buyer are on the same page as to the process you can begin negotiating the price. 

Expect a low initial offer.   That's what buyers do today.  They will test the waters to see what your sense of urgency or desperation is.   So decide ahead of time how you will respond.

The second reason for an expected low offer is something I mentioned above.  The buyer wants to share in the savings you will realize from not listing your house with a broker.  He's shopping in the FSBO market for the same reason you are selling there.  

Real estate fees are always completely negotiable - there is no such thing as a standard commission.  If, however your buyer has the perception, for example, that the fee you WOULD HAVE paid is 5% and your house is selling for $400,000, he has it in his head that you are saving $20,000.  That might not be accurate since there is no standard commission, but as we all know, perception becomes reality for many people.

In that scenario he is likely going to expect to pay $10,000 less for your house because you are selling it on your own.  You will have a hard time convincing him otherwise.

Remember, you have three options each time an offer is presented:

• Accept the offer
• Decline the offer
• Make a counter offer

Repeat the offer/counter-offer cycle as many times as necessary to come to an agreement with the buyer on price and other terms.  If you do not agree, just hang on for the next prospective buyer and begin the process again.

END GAME

So, you've received and accepted an offer. Final steps: 

• The buyer did an inspection and was satisified with the condition of the house. 
• Your attorney and their attorney have created contracts which you both have signed.
• The buyer has applied for a mortgage. 
• The lender sends an appraiser out to confirm that the sale price does not exceed the current market value. 
• The buyer gets his mortgage approval.
• The sale of his house get completed.

Somewhere in this process you will look for and be negotiating the purchase of your next home.  It's always a difficult call to know when to begin because in most cases you won't be able to complete the purchase of your next home until your current home is sold.  It's a bit of a juggling act - but this is not exclusive to unrepresented sellers - it's just a part of the real estate process.

Once all of those things have been accomplished a date is set for closing and you are on the way to your next home.

GOTHAM AUTO WORKS - Auto Detailing Center

Making the world shine - one car at a time!

Got $20?  Got $1,000?      Gotham Auto Works has something to offer.  From a simple but thorough Hand Car Wash to full Auto Detailing, pin-striping, headlight restoration or just about anything to make your car look and feel better,  Gotham does it.  "Anything your car needs to look better - right up to the point of needing a body shop"

Owner Kevin Awalt had been doing mobile Auto Detailing for several years when, about a year ago, he decided to open a permanent location in order to be able to serve his growing client list year round - regardless of the weather.  He opened his doors in 2008 at 9 South Street in Danbury, on the Bethel Line, just by the Railroad Crossing on Great Pasture Road.

A long time Danbury resident, Kevin's love of cars is matched by his business sense.  Instead of just opening his doors and waiting for business, Kevin knows that to be successful, a business must become a contributing member of the community. 

As part of this effort , he has provided needed car washing supplies to a number of local fund-raisers in an effort to help make the community a little better.

One of the cool things about the shop is that because the location is a former auto dealership, instead of garage doors, the work floor is accessed through a set of glass doors, so good weather or bad weather, you can stop by and see the Gotham team in action.  It's one of the cleanest shops I've ever been in.  

Always looking to bring his clients the latest and greatest, Kevin recently added high-end Hüper Optik® nano-ceramic window tinting into his product line.  "Expensive," Kevin adds, "but worth the money".   Stop by the shop for more details.

CAMARO DAY, 2009

Special events and promotions are another way that Gotham Auto Works differentiates itself.  Here is a photo from last month's Camaro Day.

For an appointment or questions reach out to Gotham Auto Works:

Telephone: 203.885.1070

E-Mail:  GothamAuto@gmail.com

Follow on Twitter  and  Facebook

If you're out and about today, stop by and say hello.  I'll be at 10 Flintrock Drive in Danbury from 1-4.

4 BR 2.5 Bath with updated everything.   Priced to sell at $479,900.

DIRECTIONS:  Clapboard Ridge (Rte 39) To Flintrock.  House on left.

Can't make it, give me a holler to set up a showing.

Well it's very clear that the $8000 First-Time Home Buyer's Credit is a success.

OK - you're not eligible for the credit because you're not a first time home buyer so why does this matter to you?

Simple answer - as the housing market gets better it helps the economy get better. 

The inventory of unsold houses decreases, so the people who own them begin to move on and, in many cases, buy new houses. 

The sellers are freed up to invest profits back into the economy. In addition to buying new houses, they hire moving companies, buy new furniture and new electronics. They hire decorators. They hire contractors to remodel. They spend money at home improvement stores.

The home improvement stores, the furniture stores, the electronics stores, the re-modelers and the moving companies stop laying off people and actually hire new workers.

The government spends less paying out unemployment checks.

The newly hired people put money back into the economy.

The retailers who have improved business, make more money, which they invest back into the economy by opening new stores and buying more inventory, which helps the manufacturers who sell them the inventory.

Then the manufacturers start making more money and hire more people who start earning money and - you guessed it - put it back into the economy.

So, when you hear the news about the success of the 1st Time Home Buyer's Credit - remember - it helps all of us.

Depending who you are talking to about the price of a house you have to be clear what numbers you are using. If you’re not both referring to the same lingo, you could each walk away from the conversation thinking different things and not knowing it. Here are some definitions that may be helpful.

Appraised Value

The Appraised Value of a property is an opinion of the value of a home prepared by an Appraiser. His opinion is based on a number of factors or methods of determining the value. He will look at things such as recent sales of similar properties, replacement cost and his own knowledge of the local marketplace. Lending institutions will typically use the appraised value in determining the total amount of money they are willing to lend when the property buyer is applying for a mortgage.

Assessed Value

The Assessed Value of a home is the value determined by the tax assessor for the local city or town. This value is used by the municipality to determine the amount of tax that the property owner must pay. The Assessed value will often be multiplied by a mil (Millage) rate to determine the actual tax. In other words if the property has an assessed value of $100,000.00 and the mil rate is 5, the tax on the property would be 5 X 100 or $500.

Market Value

The Market Value of a home is the probable price that a house will sell for if it is put on the market. It is determined by an analysis of the market (usually by a Realtor). The analysis should include looking at similar properties that have sold within recent times as well as looking at similar prices for homes currently on the market. In addition, if done properly, the analysis should also include those homes that were put on the market but did NOT sell, and were withdrawn.

List Price

The List Price of a home is a number assigned by the seller when he puts his home on the market. It is essentially what he hopes to sell his property before. It has no formal mathematical relationship to the actual market value of the home. In determining the list price, any reputable Realtor will recommend that it be very close to the Market Value if the seller wishes to sell in a timely fashion.

Sale Price

The sale price of a home is the actual price that the home most recently sold for.