Bethel – an alternative to the coast!

People who are considering a move into Fairfield County from NY State often have have one distinct impression or the other.

If you are from NY City or Southern Westchester County, you typically think of Fairfield County as being, Greenwich, Stamford, Norwalk, Darien, New Canaan, Westport and the other communities on or close to the Long island Sound.

Folks who live in Northern Westchester or Putnam County think about Fairfield County as being the Danbury Metro area:  Danbury, Bethel, Brookfield, Ridgefield, Newtown, New Fairfield and other neighboring towns.

Those in the first group are beginning to realize that the Northern area is a fabulous alternative to the southern section.

Greenwich and Stamford, for example are lovely towns, but in reality they are part of the NY Metro and will be priced accordingly.  The style of living is very urban or very upscale (can you say Wysteria Lane?) suburban. Now – there’s nothing wrong with any of that – but there is another option.  You can move from NY into Fairfield County and really save some money and move into a life style that is less Metro and more quintessentially “New England-ish”.

Bethel CT is one of the areas that has great home values, a reasonable commute time to parts south and a real old-fashioned style of life that many people are longing for in the 21st century.

The downtown area has sidewalks, no parking meters and an eclectic collection of retailers – not the “touristy” shops that you’ll find in vacation spots like Cape Cod or Mystic, but nice mom-and-pop shops that actually sell things to the folks who live here.

There’s a Pharmacy that is NOT a national chain, a coffee shop where the owner rings the cash register and keeps a personal eye on the kitchen, an ice cream shop where they make their own, premium product daily.  There’s a drive-in hamburger, hot dog, restaurant that has been in continuous operation for 60 years – you can flash your lights and they car-hop will come out and take your order at the car.

There’s a great local public library, next to the teen center which is next to the town hall which sports the great lawn where concerts and events are held throughout the warmer months.

This article from the NY TIMES talks in more detail about the town. It’s a good read.

If you’d like to know more about living in Bethel (I do live there – in case you couldn’t figure that out), just give me a shout.

Can I add the cost of renovations to my mortgage?

So you’ve been looking and looking for a home and you finally found one that you think will work for you and your family.  It has the right number of bedrooms and  bathrooms. The kitchen is a decent size. It’s in a good location. It has that fireplace you’ve always talked about and the yard is really nice. So what’s the problem?

The driveway is, well – non-existent really. It is rutted dirt and rocks and since you don’t drive a hummer, you will likely scrape the bottom of your car every time you come in or out. The kitchen, while spacious, has appliances, a floor and counter tops that look like they were picked out when June and Ward Cleaver were buying their first home. (For you younger folks, that’s a reference to a 1950s sitcom). The carpeting in the living room is a 1970s Rya Shag which you think is probably hosting an entire population of very small vermin. To top it off the central air, while functioning, appears to be on borrowed time.

All of these things, you decide, are fixable and do not really detract from the long-term desirability and functionality of the house. It’s just that once you move in, you won’t likely have the money to update and replace any of those things for years.

Good news! In many cases, based on your specific situation, you may able to borrow money right in your primary mortgage above and beyond the purchase price of the home so that you can fix things up.  There is a program from the U.S. Dept of HUD called 203(K) that lenders may allow you to take advantage of. It helps home buyers finance money above their purchase price in order to improve or upgrade their new home.

There are some limitations (of course) but typically it’s pretty liberal. The maximum amount you can borrow above the purchase price is $35,000. Basically it’s about improvements that will become a permanent part of the property – with the major exception of structural changes – for example you can gut and update a bathroom or kitchen but you probably cannot put an addition on the house to add an additional bathroom or expand the kitchen.

Here is a link which will give you  details – but if you think this is something you want to do, you must discuss it with your lender as to how it applies to your individual situation.

Good Luck and PLEASE BE CAREFUL with tools!!!!

Should you pay for a home inspection prior to putting your house on the market?

Yes!

I could end this article there but since I love to hear myself type, I’ll elaborate a little more.

Remember  – when you try to sell your house, you have only one goal — To sell your house.

Anything that you can do to differentiate yours from the others is a good thing.

Think about it – pretend you are looking for houses.

Your Realtor takes you to 2 similar houses in approximately the same neighborhood.  When you walk in to each house, the kitchen counter has a little rack with marketing materials.  There are glossy brochures with pictures, a “listing” sheet showing all the specs of the house, a sheet from a lender showing the monthly payments on the house if you were to pay the list price and put 10% down and a few other informative pieces.

In one of the houses, you see a report from a certified building inspector that is dated within the last month. The other house does not have this.

You take a copy and decide to read it later on.

When you get home that evening you and your significant other are reviewing all the houses you looked at that day.  You comment on how that one house had the inspection report.  You scan through it.  It says that the house is in good condition. Heating system checks out, cooling system is OK, etc.  There was one problem noted. The dishwasher did not start easily, unless the inspector lifted the door up and pushed hard on one corner to lock it in place.  Hmmmm,  that doesn’t sound too good, does it?

Wait – stapled to the last page of the inspection sticker is a bill from an appliance repair shop for $125.00 to replace one of the hinges on the dishwasher door.  WOW!  This homeowner is making sure that the house is in good shape to sell.

OK  – which house is likely to get more serious consideration from you?

No guarantee that it will sell, of course, but surely you can see how this house has a “leg up” on the other one.

So should you spend the money to do this – absolutely! It will differentiate your house from the others.

Don’t forget, of course, to fix the things that need fixing.

Why Selling Your House is Like Being on American Idol!

OK – I admit it.  I’m an American Idol addict. From late January until mid May don’t bother calling my house on Tuesday or Wednesday nights.

My wife and I, (along with our two dogs) are deeply entranced with Simon, Paula, Randy, Ryan and a plethora of (mostly) bad —>mediocre singers all wanting to have a chance to record the next over-produced, synthesized, homogenized pop hit.

Even the really good singers who win (or come in close) typically are given silly, formulaic songs to record – have you heard Bo Bice’s THE REAL THING?

Anyway – I digress.

Recently I was having a conversation with a client about pricing his house which we were about to put on the market.  I was going through my rhetoric (which you’ve heard if you’ve ever read this blog before) about how you have to let the buyers decide what your house is worth – and it hit me that I had heard this dialogue before – from Simon Cowell – albeit in a different context.

If you’ve ever seen the show, you’ll know that one of the best parts is watching Simon interact with the bad singers in the early auditions.  Yes – I do know that they exaggerate the whole William Hung thing a bit, picking the worst auditions to put on the show, strictly in the name of ratings – but I really do find it entertaining  – but more importantly it provides some real insight into how people’s perceptions of themselves are different than reality. People tend to believe what they want – they come to a conclusion first and then try to justify it based purely on emotion.

Here’s how the dialogue usually unfolds.

A really awful singer will belt out a tune – something very loud and dramatic – like a guy singing “GIRLS JUST WANNA HAVE FUN” in a bass voice while gyrating around the mini-stage in what appears, sometimes, to be a seizure of some sort.

Simon or Randy will try, sometimes in vain, to stop them mid-gyration, but they carry on as long as they can, even in the face of the judges sometimes laughing or holding their ears.

Then Simon will say “How do you think you did?”  Invariably the contestant will say they thought they did well.  Simon will assure them they didn’t.

OK  – we’re finally up to the relevant part.

The singer, will then try and explain that even though all three judges hated their performance, he or she, was actually very good. Their mother, father, sister, brother, uncle or VOICE TEACHER has told them for years how good they were. They may sound terrible here in the audition room, but if they “could have a chance to go to Hollywood” they will show the judges exactly how good they really are.

Think about that for a minute. They are trying to override how bad they sound – not by singing well, but by explaining that in spite of the judge’s perception – they really are good.

The simple fact is, that they are, (for the most part) truly convinced that they are good. They are often in shock that the judges don’t like the performance.

They don’t seem to get that it doesn’t matter a bit what THEY think. At this stage of the competition, it only matters what the judges think.  They (the contestant) are there, simply to present what they have to offer. Their success or lack thereof is 100% in the hands of the judges  – and as the weeks go by – in the hands of the voting public.

Same thing with the value of your house.  You might truly believe that your house is worth $100. The market, however, says that it’s worth $90.  The “comps” support $90. The offers that you are getting are in the high $80s.

No one wants to buy your house for $100. Therefore, in spite of your own perception – your house is not worth $100.

In a free market something is worth exactly what someone is willing to pay for it – not a penny more.

So work closely with your Realtor and come up with a reasonable number to put on as a listing price. if you overprice it, you might not even get showings.  Or you will get showings but no offers that even come close to the price you’ve asked. If it happens once – it might be someone looking to lowball with the hopes of stealing the house. If it happens twice or more, then the price they are offering is very much like Simon’s opinion – it’s the only thing that matters.

What is the difference between Appraised Value, Assessed Value, Market Value, List Price and Sale Price?

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.

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

How Long Should I Leave My House on the Market?

This is another one of those tough, subjective questions that, if you ask 5 people, you may get 5 different answers. At the end of the day, it is also a misleading question because it’s not the “root” question. The root question is “Do you want to sell your house?”

If the answer to that question is “YES” then the answer to how long is simple – “AS LONG AS IT TAKES!”

If selling a home were a medical procedure it would be categorized as very invasive. It doesn’t matter how clean and neat you are in your normal life, there is an entirely new level of neat that one must aspire to when putting the house up for showings.

This article is not about home staging, so I’m not going to spend a lot of time on it, other than in the context of how much effort needs to go into presentation. To do it right, your home must always be ready to show at a moment’s notice. This means that if you have kids, you have to pretend that they always put all their toys away in neat cubbyholes or toy chests when not playing with them. If you have dogs, you have to be prepared to cage them, put them outside or take them for a long walk. Let’s not even discuss cats – I am an animal lover and have had many cats in my life, but let’s face it, when trying to sell a house, they can be a detraction.

If you’ve staged properly, your house has less clutter. The problem is that piles of clutter often have some things mixed in that you use in everyday life so if you remove the clutter, your day to day life gets a little more complicated.

The point of all this, is that selling a house can be very emotionally wearing and stressful. Aside from the physical inconvenience there is the psychological stress that can come when no one makes an offer. Each time you hear about a showing, you and your spouse will talk about the couple for hours, wondering if they are “the ones”. When someone comes back to look a second time, your emotions soar to new heights as if you pulled 4 of the six number in the lottery and you’re waiting for the final two numbers to see if you won.

Then, when they don’t make an offer, your hopes are dashed. You call your Realtor in frustration and ask them why the buyers didn’t buy. The Realtor will try and get you feedback from the buyer’s Realtor. You’ll often hear things like “There’s not enough counter space” or “They wanted a yard they could have an inground pool.” No matter what the reason, you say to your Realtor “Well did you tell them that the ones with more counter space are 50K more? Do they really want to pay that much more just for more counters?”

Your Realtor really does understand the frustration. Eventually you’ll have the discussion with them that you need to lower the price in order to sell. You are so emotionally overwhelmed from months of dealing with the stress of showing the house with no results. Your listing agreement with your Realtor is up in a few days so, you pull your house off the market.

For a day or two you actually feel relieved. You don’t have to worry about rushing home to cage the dog when you get a call from a Realtor at 9:30 AM on your cell phone while you’re in your car, telling you that they want to show the house in an hour. You can actually breathe.

Then it surfaces – the reason you wanted to move in the first place – whatever that might be. You and your spouse have a serious discussion and decide that you do really need to sell. You admit that the price might be an issue so you say that you’ll put it on the market for a little less – but this time with a different Realtor. A fresh set of eyes might be just the ticket you think.

This scenario is becoming more and more common in today’s depreciating market. Prices are still falling a bit in most areas because there are so many, many homes on the market. If you want to sell, you have to price it competitively. The buyers who are looking know what your house is worth. So if you want to sell it, you have to provide those buyers something that THEY believe is a good value. Your own opinion of the value really doesn’t meaan a thing.

So it’s not a question of how long to keep the house on the market. It’s a question of doing what you can to shorten the time from listing to sale. You do have control.