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It is NOT a Good Time To Buy A House!

IT’S A GREAT TIME TO BUY —  OHHHHMMMMM

IT’S A GREAT TIME TO BUY— OHHHHMMMMM

To quote one my heroes, Simon Cowell,  “I don’t mean to be rude but….” SHUT UP ALREADY!

Yes prices are low!  Yes Interesting Rates are historically low!  Yes there’s a ton of housing inventory!

So let me qualify my opening about why everyone should not be jumping on the bandwagon and grabbing up some of the low-priced inventory with the low-interest rates.

It goes back to something that has been mercilessly pounded into our collective consciousness over the last 50 years.

REAL ESTATE IS A GREAT INVESTMENT!!!!

For many years, this was true.  In fact if you search through my blog archives you’ll find that I have taken my turn at chanting the mantra. If I were a politician, I might be called a flip flopper.

Right now – it’s NOT a great investment.  Sure we’d all love to silently hope that the RE Market is going to “cycle back to normalcy” tomorrow – or next month, or next year.  Another Cowelism – “If I’m being honest..”  there really aren’t any indicators that home prices are going to “bounce back” anytime soon.

Of course no one really knows exactly what the future brings and I’m by no means an economist but I continually read just about everything that’s out there on this subject and nothing has convinced me that you can buy a house now and watch your investment grow.

One of the things that makes me believe this has to do with the next “wave of foreclosures” that is coming in the next 9 – 18 months.

So, if that’s the case, you might ask, why did I just spend several hundred dollars and renew my Realtor’s License?

Fact is, there are people who should and will be buying homes and with the market as complex and dynamic as it is right now, those people need a guide like me who knows the ins and the outs so they can make it all the way from their current home to the next as gracefully and smoothly as possible.

So who is it that should be buying?

Glad you asked.

There is only one valid reason to be buying a home right now – if you are looking for a new place to live and plan on staying there for some time. For those people it’s a great time to buy for all the reasons above (low price, low interest tons of inventory).

So what I’m suggesting is this: Be honest with yourself. If you need a new place to live in Connecticut – give me shout and I WILL  help you find it.   If you are thinking that you should buy a house because conventional wisdom has been drilled and drilled that it’s a good investment, you may want consider buying gold.

It IS a Buyer’s Market.  That merely means that there are more sellers than there are buyer’s – it’s just supply and demand. It doesn’t mean that everyone should be buying just to buy.  If you need a house, you can get a great value – a REALLY great value – but think about the house as place to live, not as a way to make money.

Right now in Northern Fairfield County, CT there are more than 2000 Single Family Homes and Condominiums listed for sale.  They range in price from the low $100,000’s to more than $8,000,000.   So there are a lot of options.  If you have a valid reason to purchase one, I’d be excited and delighted to help you sort it all out.

———-

Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

Where Will The Jobs Come From?

I know, I know, I’m not an economist, I’m a Realtor. My expertise is in helping people buy and sell houses in CT, so why am I writing about job creation?

Well, the sooner employment turns around, the sooner the housing market will get back to normal – whatever normal is. As my clients who want to buy and sell houses in the Danbury CT area are able to  take part of this new job growth it should provide them more opportunity to find the right homes.

I came across this report from The Kauffman Foundation regarding their opinions on what areas are going to provide jobs for America over the next couple of years.

—————-

Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

Slower and Harder – Be Prepared!

I know I’m dating myself with the reference but if I’m getting old it’s fine. Better than the alternative.

Roger Miller had a hit song int he 1960s called England Swings Like a Pendulum Do.

Well most things swing like pendulums, don’t they?  Right now the ability to get a mortgage has swung as far away from a few years ago as it can.

Allegedly, not too long ago, the primary qualification for a consumer being approved for a loan, it seems, was a mirror test.  If you help a mirror up to the face of the borrow and steam formed, they got the loan.

OK – that’s a little extreme but let’s face it, getting credit was a breeze.  There was in fact, a loan known as NINA which stood for No Income No Asset.

As far as the house they were buying, there are folks claiming today, whether it’s true or not it is being said, that appraisals were, for the most part matching the negotiated selling price.

Neither of those points is meant to be a knock to lenders or appraisers.   My point is not so much whether loans should have been granted or not, but the perception.

So, given the media coverage of sub-prime loans and “over zealous” appraisals, the lending industry has swung completely in the opposite direction.

There are some folks today who will have a more difficult time getting a mortgage.  For example, in some areas, the new “rule of thumb” for minimum FICO scores on a loan up to $417,000 is 660.  It goes even higher on bigger loans.

Every possible precaution that can be taken to insure credit-worthiness is being taken.  This will, without a doubt eliminate some borrowers who might have been included a few years ago.

Same with appraisals.  Tighter requirements for “comps” are in place. Remember, an appraised value is not the same as the assessed value. Sometimes the appraisers are not finding any valid comps and have to rely on other formulations to come up with the right price.  Some houses are not appraising for the sale price.

Even if the house appraises as you hope and even if the borrower gets approved, the fact is that the typical time for completing this process is likely to be longer than we may be used to.  What once took 4 – 6 weeks might, in some cases take 8 – 10 weeks or more.  Maybe not  – sometimes the stars align and things go quickly and smoothly – but be prepared.

One of the things that causes agita in Real Estate transactions is an unexpected delay. Trust me, there’s nothing quite as aggravating for a seller or a buyer, than getting a phone call 5 weeks into the process that this or that hasn’t been done, or more information is needed or that there’s a backlog in processing.  There’s a dozen different reasons but the end result is the same –  you can’t move when you thought you could.

These factors will vary from region to region and from specific transaction to specific transaction – talk to your Realtor and your Mortgage Professional to find out how things are going in your area.

My advice is to go into a home transaction – as a buyer or a seller – with the idea that it is NOT going to be as quick or as smooth as you want it to be – or what you might have experienced the last time around.

As a Realtor, my responsibility is to to stay in close touch with all the various players on an ongoing basis until the moment that we all walk out of the closing room smiling.  The most important thing I can do for you, is to help you set accurate expectations.   Disappointment, is always caused by inaccurate expectations.

Negotiation Doesn’t Have to be Adversarial

February 25, 2009 1 comment

Quite often, price negotiations turn into very adversarial situations where one party tries to get “the upper hand”.  There seems to sometimes be a feeling that you can “win” a negotiation by getting your opponent into a situation where he will be somehow harmed if you were to pull out.

This comes about because buying and selling homes not only have a financial component but an emotional one as well.  The buyer is buying because he needs or wants a new home, and the seller is selling for the same reason.

Perhaps your existing residence is too small for you growing family, or perhaps it’s too big now that the kids are grown. Perhaps the economy has put you in a situation where it’s tough to keep up and you are moving to get more control of your finances.  Or perhaps you have a new job which comes along with a new commute.

There are lots of reason why you might need or want to move.   Here’s the thing, though. None of those issues has anything to do with the value of the house you are trying to buy or sell.  The value is the value.  So when you begin negotiating you need to do so strictly from a point of view of what the house is worth.   If you can’t afford to buy a certain house, or you can’t afford to sell your house for less than a certain amount – then you should not be doing it.

Your emotional and family needs are important when deciding where and when to move, but once you start negotiating, all that stuff needs to go on the back burner.

A successful house negotiation will not have a winner and an loser.  It will be a mutually beneficial business arrangement where both sides have a fair result.

Whether you are  the buyer or the seller, your Realtor, should begin the preparation for negotiation, exactly the same way – by using market data to determine the fair value of the house.   If both Realtors are doing their jobs correctly, there should be very little difference in the perception of the home’s value – whichever side you are on.

In a perfect world, everyone would get together in a room and look at all the available data, come up with the right price and that would be that – but we all know that it doesn’t work that way.

The buyer and the Realtor will, together, come up with two numbers.  The highest price you are willing to pay and where you will start the bidding.

The seller, who has already, in a sense, put in the opening bid by setting a list price, needs to prepare with his Realtor by doing essentially the same as the buyer.  Decide exactly what your lowest price will be and what your first counter-offer will be when you receive the opening offer from the buyer.  The list price, unfortunately kinds of goes out the window at this point.  The list price is designed to attract shoppers. Now you need to get down to business and decide how much you are willing to take for your house.

Since conversations between Realtor and Client are confidential, these numbers will not be shared between the two sides.  If done properly, however, “what I’m willing to pay” and “what I’m willing to sell for” shouldn’t really be too far off.

Then an opening offer is tendered, there is a series of counter and counter-counter offers and a price is settled on.  At the end of it, there shouldn’t be any negative feelings about the number from either side since the ranges were decided ahead of time.

Home prices will stabilize in 2009 and then rise – or they won’t!

December 27, 2008 Leave a comment

Recently the number of times people ask me what the housing market is going to do in 2009 has increased.  It seems that is the number one thing to ask when speaking with a Realtor these days.

It’s no secret that if more people get mortgages they can afford and purchase houses, it could be the beginning of the fix for all things economic.

It’s also no secret that a lot of potential home buyers are waiting – for that single moment when prices have fallen to the lowest possible level so that they won’t buy a home only to have the value go down.

It’s also no secret that prices will stabilize when the home buyers start buying homes because inventory will go down, reversing the supply and demand direction.

So what’s going to happen?

From what I can see, the dam of people who need to buy homes has to start flowing soon.  After all, people who started shopping for homes did so for a reason.  At some point that reason becomes more urgent.  Maybe it’s a growing family – or a longer commute, or the waste of renting for those who qualify for mortgages.

At some point, folks who have been waiting – will make the decision that they’ve waited long enough and they will then make the decision to move ahead.  That will start the flow, and the cycle will be back in the direction we all love – up!

Prices are low, mortgage rates are low, selection is large, this is the time to buy.

New Way to Search for Connecticut Home Listings

The process of looking for home listings has changed many times over the last 20 years or so – from the old hard-copy MLS book that the Realtors kept under lock and key to today’s ability to simply go online, put in your parameters and see listings.  With most of the online services you can see all the details of the listing and then, if you choose, contact your Realtor to find out more info or to schedule a showing.

Well  – technology has jumped again and theres’ a new wrinkle to the online search. It is available here in Connecticut – it’s called LISTINGBOOK.  What Listingbook does is give you direct access into our Greater Fairfield County Multiple Listing Service database so you can see everything that’s out there that meets y our criteria.  You will see things the minute they become live- including the most recent updates such as price changes.

There’s more to it than that. What you get is your own Listingbook Account that will enable you to put in your search parameters and receive a daily report right in your email inbox that shows you new or changed listings that fit.

When you look at the listings you can do a number of things – you can save them as favorites, reject them, write youself notes that will stay attached to the listing so when you share the info with your partner you won’t forget anything obvservations you wanted to make.  Your partner can also write notes, commenting on your notes.  If you see a listing that you want to share with someone else – someone who is NOT on Listingbook, you can email them the listing sheet with just a couple of clicks.

Here are some other features:

Payment Calculator –  this is not just  a generic mortgage rate calculator.  Each listing has a separate screen which has the pertinent tax data associated with it.  You can put in several “what-ifs” such as “If I can buy this house for XX and I get a conventional mortgage for XX years at XX percent”.  You’ll then be able to see your total costs for that property.  Compare this to other properties in different communities and you’ll be able to get a bigger picture.

Dialogue with your Realtor –  If you see a property that sound like it might be good but you need a little mor info – you don’t have call your Realtor or even leave the system and send an email. Just use the handy Messaging System to write a question – directly on the specific listing.  Your Realtor will receive notification that he has a new note.  He can then answer your question- directly on the note screen for that listing – where his answer will stay.  You can get all your questions answered quickly and efficiently and never worry about where you wrote down the answer.

Property Watch – If you’re in the early stages of shopping and y ou see something that you like, you can set up a property watch on a specific listing. This will send you an alert if something happens such as the price being changed or other new information being put into the MLS, such as perhaps the seller is now offering a home warranty or they’ve redone the driveway or put in new counters. So you can keep abreast of what’s going on – in real time – with the listings that interest you.

Live Chat with your Realtor.  If you and your Realtor are both on line at the same time, you can use the message function as an IM system to chat about specific properties. You can also have a conference call – you can be on the phone with your Realtor and maybe your partner. You can all be on the Listingbook system simultaneously planning your strategy for properties – together.

There’s much more – in fact there is a whole separate application to help home sellers – not just buyers – keeping track of competitive properties and values in your neighborhoods – a Cyber CMA to help set the right asking price for your house.  It will also let you know if any other consumers or Realtors have viewed your home in the Listingbook system – to keep track of the activity.

This service doesn’t cost you anything at all, BTW.  If you’re interested, you just have to CLICK HERE to set up your free account or just to find out more about it.  If you need any additional info, just give me a shout and I’ll be happy to help.

Once you sign up – you won’t need any other vehicle to search for homes. Listingbook will do it all for you.  This truly is one of those things that after you begin using it, you’ll look back at some point and wonder how anyone can look for a home without it.

WHY BUY NOW? THE MARKET IS RIPE WITH OPPORTUNITY – Kate Rossi, Coldwell Banker, President and COO

December 19, 2007 Leave a comment

Plan all you want, but life rarely exhibits perfect timing, especially when it comes to buying or selling a home. Whether you are relocating, simply looking to upgrade, searching for a second home, or are a first-time home buyer, there is a tremendous opportunity for many buyers in today’s market.

Here are the facts:

  • Interest rates are near historic lows
  • Financing is available for qualified buyers
  • There are more homes on the market to choose from than in recent years
  • Home ownership provides you with a tax advantage
  • Buying a home is a sound long-term investment
  • The cost of renting is on the rise

It is true that different housing markets bring different opportunities. For many people, today’s market may be the right time to buy. With a variety of home choices and low interest rates, home shoppers can take their time and find the dream house they’ve always wanted.

Despite the reports, the housing market in Fairfield County is still a strong investment. In fact, data from the Consolidated MLS shows that the average single family home price in Fairfield County is up and the days on market are slightly less, compared to last year during the same time period.* As one of the largest investments you’ll make, the decision to buy a home should be researched thoroughly. Today’s consumer is best-served by being an educated consumer. To successfully navigate the current real estate market and meet your personal home buying needs, a local real estate professional is key to making your dream a reality.

As experts in the local economy, real estate agents can help you evaluate whether or not today’s market is a good time to buy for you. Each person’s situation is different and poses different opportunities. Evaluating your position in today’s market could lead to a home purchase with a record low interest rate at a reasonable price, before the market shifts again. It is imperative that consumers find a reliable source for financing as well. Often times a real estate agent can provide you with invaluable information about the types of loan programs that exist, suggest lenders with proven track records and liaise with a mortgage counselor to monitor the progress of your transaction. This includes the pre-qualification process. A proactive sales associate will help guide you through a positive funding experience, sharing information and educating you along the way.

Remember, markets are always changing. Don’t let the negative hype distract you from the opportunity of home ownership. Ask yourself, does this market present me with an opportunity to make my dream home a reality?

*Consolidated MLS for January 1, through December 7 in 2006 and 2007.

Kate Rossi, President and COO, Coldwell Banker Residential Brokerage