Posts Tagged ‘Pricing your home’

Are Foreclosures Really Decreasing?

RealtyTrac – a leading provider of tracking data on Foreclosure Activity, used by many private and public sector organizations to help evaluate foreclosure trends, reported late last week on a national level foreclosure activity dropped 9% in April.

Sounds like good news right?

Well – hold 0n just one minute there, Bucko.   There may, indeed, be more to the story.

What if there were lots and lots of  homeowners, who can’t afford their payments have realized that the banks are taking a long time to take action against them?

What if some of those homeowners just stopped making their payments and are staying in their homes, making no payments for up to a year or more?

Diana Olick of CNBC says these are questions that have to be considered.   Here is her article from May 13, 2010 on this very subject called  “Banks Ignore Delinquent Borrowers”

I’ll hang on here while you go read that.

OK  – Done?

So how does that affect owners that are operating outside of this part of the market.  You know, people who have equity in their house and would like to sell.

While no one knows for sure when those foreclosures are going to hit the market – or if they are in your town, your neighborhood, one thing is for sure.  If they do, it will affect the value of your home in a negative way.

Again – every situation is different and you have to work with your Realtor to determine the best course of action for you.  Having said that, if you are interested in selling, come up with marketing plan and a price point that will move your house quickly.  The idea of  “Trying a high price” for a while – may have passed.

If you have a need to move for one reason of another, such as wanting more space, less traffic, nearer to work or school – just get it done.   Even though the economy shows signs of getting better, the decline in housing prices may not be over – not for quite a while.


Rick Schwartz,   REALTOR

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


FAST FACTS #2: Real Estate Terminology – Easements

February 23, 2010 Leave a comment

An Easement is a right granted (typically in the deed)  for use of a portion of property by someone other than the owner.

Generally speaking there are two types:  An Easement allowing one party to cross over a piece of property in order to gain access to another piece of property that is landlocked.  Sometimes this will manifest itself as a “Shared Driveway” which is actually owned by one party or the other but both have access.

The second type is a public easement or right-of-way which comes to be when a municipality/public utility has the right to cross a piece of property to provide continuous service.

There are other types of easements but these are the most common occurrences.


Rick Schwartz,   REALTOR

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

A Real Estate Carol: Ghosts of Prices Past, Present and Yet May Be!

January 1, 2010 1 comment





John and Mary decided in the fall of 2006 to move.  The house they were in was old, and had too many steps for John’s aging knees.  They did some fixin’ up and put the place on the market in early 2007.

One of their neighbors who had a similar house two doors down had sold in the summer of 2006 and received $430K.

Their Realtor told them that prices had dropped a little in their market and they should list it at $425 and be prepared to come down a bit.  Mary and John were concerned by this.  They felt that their house was at least as nice as the neighbor’s and that they did not think they should take “a loss”.

The Realtor, who knew that they had bought the house about 10 years earlier for $325, didn’t seem to agree that if they sold for $420 it should be counted as a loss.  In fact, she said, if you sold for $420, you’d be making a considerable profit.

Mary said “But if we had sold last summer we would have gotten more!”

The Realtor said “But you didn’t sell last summer?”

Mary: “Well, should we wait until prices come back up?”

Realtor: “I can only answer that if you can tell me when they will go up?”

Mary and John:  “HMMMmmmmmm

So Mary and John listed the house for $425 and in about 45 days sold it for $415.

They bought a new house in a different town about 20 miles away.  It was actually a bigger place but because it was a little farther out from the big city, the market was priced lower.  They bought it for $375.

With only a very small mortgage left on their original house, they were able to put $300 down on the new house and mortgage $75

As we move into 2010, home prices have NOT rebounded, in fact, they’ve continued to drop.  The home they bought in 2007 is now valued at $300 based on recent sales in their new neighborhood.



Mary said “But if we had sold last summer we would have gotten more!”

The Realtor said “But you didn’t sell last summer?”

Mary: “Well, should we wait until prices come back up?”

Realtor: “I can only answer that if you can tell me when they will go up?”

Mary and John: “HMMMmmmmmm”

So Mary and John held on to their house, waiting until the market came back.  As of the beginning of 2010 it had not, in fact, prices continued to drop.

In January of 2010 John had had it with the stairs.  He told Mary they needed to sell now – even if they had to give the place away.

So they called their Realtor who, after doing a Market Analysis, told them that their home should bring between $330 and $340.

They listed it at $349 and after 45 days sold it for $340

After looking around they found a new home in another town (the same home in the first part of the story).  They purchased it for $305.

Since they had a very small mortgage on the house they sold, they were able to put $235 down and had a mortgage of $70.


So – if you put aside unimportant things like sale price and market value – at the end of the day,  in both scenarios John and Mary leveraged the equity in their home to buy another home that they liked better – and they ended up with virtually the same situation – with one exception. In the second scenario, they stayed in the house they didn’t like for three additional years.


The whole thing was just starting now.

  • What if you have a home that no longer fits your needs?
  • What if you decide not to sell it because you are waiting for prices to come back up?
  • What if prices don’t rise, and you stay where you are for years?
  • What if, after that time, you make a move and end up with essentially the same financial situation?

Of course, as in any good space-time continuum story, the future is unwritten. Just ask good old Ebeneezer and he’ll tell you  The Ghost of What Will Be, is actually The Ghost of What MAY Be. Prices could go up or down dramatically in the next three years.

The point, I guess, of my little fable is that if prices go up or down on the house you want to sell, they will likely go up or down proportionately on the house you want to buy – so if you want to make a move, what is it you gain by waiting?

Just some food for thought.

God Bless Us Everyone!

How To Sell Your House Without a Realtor

October 24, 2009 Leave a comment

So you want to sell your house but do not see the value of 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.


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.


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.


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.

Also, never let people wander through your house unescorted.  If there is a large group including relatives, children, friends, etc.  ask them to all stay together as you take them through the house.  Since you don’t know the people, you have no way of really judging if they are honest or not.  Item such as jewelry, small electronics and prescription drugs can be slipped into a pocket very quickly and easily by someone who is skilled.

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.


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.


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.


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.


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.

Realtor Expectations – Part One: THE LISTING AGENT

NOTE:  This is a pretty long post but worth reading – print it out.

With so many Realtors to choose from, this is intended to help you look at some of the things you might want to clarify with an agent when selecting the one to sell your house.  Realtors, like any group of people, have many different styles, work ethics, and philosophies.

There are a lot of homes on the market today – some sell, some don’t.   Working with the right Realtor can definitely have an impact on which group your home falls in to.

Every Realtor should have the same objective when listing your home.   The objective, put simply, is this: To help you sell for the highest possible price, in the shortest amount of time, with the least amount of inconvenience for you.

This  objective should be the basis for everything else in the Realtor’s Strategy:  Highest – Shortest – Least  or HSL.

Every plan and every action should be geared towards one of those three components.

PRICING: A Realtor’s first responsibility to you is to help you decide the right asking price.

You agent should perform a detailed analysis for you of your local market, including sold properties, active listings, properties that did not sell, as well as information on how many homes have sold in your areas recently and the pricing trends.

Once you know the right price, it is the responsibility of the Realtor to advise you not to overprice your house.   Why  you should not overprice your home is covered in THIS POST.  The subject at hand today is that your Realtor should not be telling you what you want to hear. Brutal honesty should gets high marks.

The tendency for many sellers is to ask about listing above market value for  “a while” and then lower it if doesn’t sell.  Doing this is rarely in the best interest of the seller and usually ends up with months of anxiety and ultimately nets the seller less money for their home.  Look for a Realtor who will stand by his analysis and work with you towards HSL.  It may be the path of least resistance for a Realtor to simply go along with the client on this issue – but it may not be the best thing for the client.

MARKETING: I’ve heard it said that no one “sells” a house, people look at at and choose to buy it.  If that’s true then the key to finding that buyer is to get as many people to look at the house as possible.  Not everyone that views your home is going to want to buy it – that’s OK.  You only need one buyer.  The odds of finding that buyer are greatly increased by the Realtor’s ability to generate interest.    Ask your Realtor for his Marketing Plan.  What are the specifics thing he’ll be doing.  What will be done in the first few days, the first week, the second week.  What will be done on an ongoing basis.

How will he be promoting the home to the other Realtors in the area?   Remember, it’s the other Realtors who have the buyers.  So  while advertising your home to consumers is important, it is equally important to know the specifics of how your Realtor will be communicating with the other area Realtors – or even Realtors not in your area.  Your buyer may live  down the street or thousands of miles away.  In our area of Northern Fairfield county, there are multitudes of folks who move across the state line from NY.  How will your Realtor approach the NY Realtors with information about your listing?

Part of  the marketing plan includes preparing your home for showings.  This may include staging advice, which again calls for brutal honesty.  For certain homes, it might be appropriate to bring in a professional home stager, but  even without that there will be things that your Realtor will likely notice that will make your house more appealing to buyers.  Again, what you want here is for the Realtor to look beyond saying what’s comfortable – he needs to point out anything he notices to you that will help reach the prime objective.

In addition your Realtor should make a point of preparing marketing materials for your home that will point out “the high points” to visitors.  Remember – neither you nor your Realtor will likely be present during showings and the buyer’s Realtor does not know as much about your home as you or your own Realtor.  “Call outs” which are small signs can be placed throughout the house to draw attention to certain features.  If there’s a cedar closet for example, buyers will only see it if they open and look inside – so a small sign on the outside of the closet can help.

There are a variety of other materials that can be placed in the house, co-located with the agent sign-in sheets.  Property and subdivision maps, neighborhood information and transportation options are just a few.

FEEDBACK: Ask yourself how often you want updates from your Realtor about  “what’s going on”.   Will your Realtor provide weekly written summaries of all showings and re-showings of your house?   What is the Realtor’s plan for following up with the agents who bring buyers for showings?   With today’s electronic key boxes, your Realtor can have the capability of knowing very quickly what other Realtors showed your home.  Does he have a systematic plan to get feedback and follow up with them?

NEGOTIATION: Your Realtor should have a negotiation strategy which he goes over with you before the house is ever shown.  While he will bring you all offers and you will ultimately decide,  he should be discussing likely contingencies and options with you.  When an offer comes in, it begins a series of fast paced back and forth telephone conversations that should lead you to a successful sale. If you’ve discussed the strategy in advance, you’ll be prepared for and can come up with well thought out positions on things such as:

  • What will you do if you get a full priced offer on the first day of the listing – before you’ve had an open house?
  • What are your options if you get multiple offers?
  • How should you respond to “lowball” offers?
  • What if you get an offer form someone who has a healthy down-payment but needs an extended closing date?

None of these things should be surprises if and when they come up.

POST SALE: Once an offer is accepted, the primary point of contact will likely be your attorney but that, by no means, says that your Realtor’s responsibility is over.  Your agent should be prepared to follow up with all the various parties to make sure that everyone else is doing everything they are supposed to.  There is an old adage among sales people  that applies here:   “A salesperson’s job begins when the buyer says yes”.   Everything that happened prior to your finding a buyer will mean nothing if the deal falls through.  There are many things over which you or your Realtor have no control, but he can stay informed and at least try to avert any one of the many things that can go wrong.

SUMMARY: Generally speaking, you should choose someone you feel comfortable with but that comfort should come from you knowing that your Realtor has a plan which involved more than taking the listing and waiting for the buyers to come.

New Guidelines for Home Appraisals

Even with better interest rates and(hopefully) credit freeing up a bit, there is a new, tougher look being taken by banks when ordering appraisals on homes that have been sold.  The secondary mortgage market wants a firmer assurance of the value of a home prior to purchasing the loan.

So appraisers are being told to look more carefully at comparable sales – which is a tall order, because in a depreciating market comparable sales are further back in time and further away geographically from the subject property.

It’s kind of paradox, since there are fewer comps to look at and yet the banks want more comps.   I really am glad I am not an appraiser.

The thing to stay aware of here for both buyers and sellers is that the sale price of a home is not rock-solid just because both parties agree to it.   Things may change when the appraisal comes in.

So – for sellers, as I’ve recommended before – get an appraisal before listing your home and for buyers, have your Realtor do a thorough analysis of the market before making a bid.

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.