Home Ownership is a very important part of the American Dream.

According to a national survey, confidence increased marginally among respondents with 73% at least somewhat confident in the recovering real estate market and property values.
The survey also shows that Millennials and Generation X place a higher importance on and hold more favorable views toward home ownership than older generations.

1- Home ownership remains important to 96% of Americans with 77% of respondents age 25-34 and 78% ages 35-44 indicating home ownership is "very important". More so, 74% of respondents agree that with interest rates at historically low levels now is a great time to buy a home.
There are some programs like FHA or CHFA that help buyers who qualify to purchase a home for as little as 3.5% down payment and with up to 6% of sellers concessions. A purchaser can also get a DAP (down payment assistant program), which they have to qualify for. With such a low interest rates a buyer can borrow money through some programs and pay $4.00 for every $1,000 they borrow, yes, FOUR dollars for every THOUSAND!

2- Space, safety and investment drive the reasons to own a home, with 97% respondents stating that home ownership allows for more control over living space.

I know it sounds repetitive, and everyone in our business is saying the same thing, but there is no better time to buy a home than now, for sure!

Let's talk about the perfect neighborhood!

                      

There is an episode of the hit TV series "How I Met Your Mother" where the characters of Marshall and Lily decide to buy a home in a neighborhood they are unfamiliar with, only to learn later on that sits downwind from a sewer plant!
The message here is obvious: - A buyer must do his or her due diligence on prospective neighborhoods to make the best real estate decisions-

• Investigate the local school district as good schools boost your property value.
• Research the closest parks and community centers and consider how busy streets impact the neighborhood.
• Profiling the perfect neighborhood also involves meeting prospective neighbors. Walk through the area and say hello to people, and ask them for their impressions of the neighborhood. While you are at it, look around. Are there lots of kids on the block? Do people walk or jog through the neighborhood at night? A neighborhood can speak volumes by itself.
• Do not forget to map out stores and restaurants in the area. You may be used to a five minute drive to the local grocery store, only to find out that  your new home is 25 minutes away from the nearest place to buy milk.
• Of course find out if your potential new home is part of a neighborhood association bearing regular fees, and if your community has lawn or construction restrictions.

With a little ground work you can help ensure that your dream house is surrounded by a dream neighborhood!

Happy house hunting!

Home is not selling? It's not personal, It is probably price!

Home sellers face a new reality as they look to move up, down, in or out of their American dream in today's market. Consumers, particularly those who purchased their homes within the last 5 years, often find their options limited by the lack of equity. Those who can sell are sometimes numbed by deflated home prices and find it difficult to justify yesterday's valuations with today's reality. Many home sellers have dug in on price hoping not to lose additional ground. Others seem to have taken this market personally, letting emotions override analysis when setting price.

Buyer sentiment has also shifted, centered on maximum value with abundant amenities, resulting in stalemates and homes languishing on the market.  

There are compelling reasons to be realistic and make a move now.

             1- Sellers -assuming their objective is to buy another home- can capitalize on some of the lowest mortgage interest rates on record.
             2- Inventory of homes at a attractive price.
             3- While a seller may sell their home for less, they will also buy for less and with significantly cheaper borrowing costs.

Today, a home priced at or slightly below market value will attract the interest of the majority of buyers. Overpricing a home will chase buyers away even if the seller adjust their price later, it will be more difficult to recapture buyer's interest.

A seller must also have in consideration:

a) Condition an appearance of the home. Sellers should not rely on buyers to use their imagination; they need to capture it. Remember that buyers may see seven or eight homes in a single day. The most memorable home will be the one that seemed the brightest, the most spacious, and the most cheerful.
b) Terms and conditions. Even if the homes is accurately priced, and the buyer is delighted with what she or he sees, if the buyer can not live with the terms of the sale, he or she may walk away. Keep an open mind on terms and conditions and evaluate how they may affect a potential sale.
c) Incentives. Offering incentives can be just the impetus a potential buyer needs to choose your property over others. Consider offering a carpet or paint allowance. If a buyer knows up front there is an allowance for the worn carpet or paint, then may overlook those cosmetic flaws. You could pay for a professional home inspection or a home warranty or help to pay closing costs, a very popular incentive in today's market.

Indeed, real estate opportunities abound for sellers and buyers who can come to terms with today's market conditions.

Fireplaces Provide a Warm Glow to a Home on the Market

With winter weather gripping most of the country the fireplace takes on greater importance in  the sale of a home. The National Association of Realtors recently conducted a survey that found nearly two-thirds of homebuyers had a fireplace on their wish list. The fireplace has become a coveted amenity and homes boasting this feature see its benefit during resale. That's why so important to make sure the look of your fireplace has been updated and is working properly. There is a lot you can do to enhance it before a sale. A lots of time, if it has older brick you can paint over it, other times changing mantels, adding a fancier screen or placing a beautiful piece of art work above it can make a world of difference.
If your fireplace happens to have a mantel, make sure is kept clean and uncluttered. You want a fireplace that is inviting. Knickknacks and pictures can be a distraction for buyers.
Gas fireplaces are more common today and easy to use, plus they can installed just about anywhere. There is no need for a chimney, wood or matches and there is no mess to clean up either. An electric fireplace is also an option that is reasonably easy to install.
Finally, and this is very important, a fireplace should be kept clean and in working order. According to the experts,  fireplaces should be inspected and cleaned annually, wood burning or not.

The bottom line is, you want a buyer going into your home feeling really great about that room and knowing they can move in and sit in front of that wonderful fireplace.
There are few things as warm and inviting as a burning fire on a wintry day, and a cup of cocoa of course!

What is easier to predict, the weather or the housing market?

Tough one! Hmmmm, let me think. We were supposed to have a noreaster' today but there is just a dusting of snow, so that was not an accurate prediction, at least not were I live. All the economic indicators show that we are recovering from the devastating "housing tsunami" and I am optimistic;  but what does it mean for those who are on the sides waiting to either buy or sell? Well, it is not that simple and many factors influence the recovery as everyone knows. So what is the good, the bad and the ugly?

1- The good news is that there is no such a thing as a National Real Estate Market, so if you are in CT, you may not be in as bad of a shape as in many other places of the country.
2-On average the value of a home doubles every 10 years. During the past 30 years, home values have increased an average of 6%. But during the incredible house boom from 2000 to 2007, many properties increased a whooping 19% annually!! I know this for a fact because it happened to me! There is no market that can sustain that growth without crashing for sure! So what is the "predicted" appreciation rate for the "New Real Estate Market"? What about 2 or 2.5%?
3- The not so good news are that if you are thinking about waiting for the market to return to the pre-crush era, well...you may have to wait a while.
4- On the other hand if you are trading, you will benefit from the same low price when buying.
5- Interest rates are at one of the lowest points ever, so instead of putting your money in the bank,  may as well invest it.
6- The average homeowner has 46 times the wealth than the average renter. Why? Because homeowners are paying themselves when they pay their monthly mortgage by acquiring equity. It is like a savings account if you hold on to it.
7- It is estimated that 60% of the average homeowner's wealth is their home equity.
7- Corrections in markets that have experienced exhorbitants home price appreciation are expected.

I am not making light of the millions of homewoners around the country who are in a really bad shape, but we have to look to the future with optimism and hope,  and really consider the true facts about homeownership. Just keep in mind that if you are ready, and can afford to make a long term ownership commitment; the bottom line doesn't change, there is no better feeling than having your own home!

Would you pay $10 for a gallon of milk?

What if you were told it was the best milk in town? Tasted like no other! In my home we consume about a gallon of milk a day, so my answer would be a resounding no. I would not pay that price, in fact I go out of my way to buy milk so I pay a price that fits my budget and that I think is reasonable. Now, I understand that pricing a home is not the same as a gallon of milk but bear with me.

Lets establish the meaning of simple terms for the purpose of understanding how the pricing of a home is determined.

1. Price: The amount of money asked for a home. Price may or may not reflect the market value.
2. Value: is an estimate of the price of ownership. The question is who estimates the benefits or the value of a home? This is done by potential buyers and not by the Realtor or seller. As a homeowner I can understand that a home has more value to an owner than what anyone else may want to pay for it.  Many times we may confuse the affection or emotion attached to it with value. I know I have been there. But when we try to sell it, your home becomes a product and as such it should be appealing to the most number of buyers.
3. Market value: Market pricing is the most probable selling price at a specific time based upon the current market conditions. Homes can and do sell for less or more than market price depending on individual situations. However, homes priced significantly above true market price usually stay on the market for an extended period of time.
4. Regression and progression: The principle of regression determines that over improving a home beyond the general price range of the neighborhood will typically not be financially justified. In other words, as a seller you will not be able to sell your home for much more beyond the top of the neighborhood value range, regardless of the cost of your expenditures. Conversely, the lowest priced home on the block or in the neighborhood is often the quickest to appreciate, as the presence of more expensive homes nearby tends to increase its value. This is the principle of progression.
5. Conformity: This principle states that homes in a neighborhood should reasonably conform in terms of style, price, range, size, features, etc. Although there are few exceptions to the rule, homes that do not match the neighborhood usually are more difficult to sell and sometimes sell for less than their square footage may indicate.
6. Contribution: The value of an item in a home may decrease as the number increases. A large home with just one bathroom may be hard to sell. Two baths may contribute more value, but four or five would not improve the value than two or three. Components in a home cannot be judged individually but on their contribution to the whole.

Now that we have all the terms out of the way, lets explore a little more about how we get to a market value price. It is very important to understand current market conditions in order to arrive at a fair price. There is no such thing as one value for a home. Each home might reasonable sell within a small range and this is depending on many factors such as:

• Availability of credit
• Employment conditions
• Inventory
• Sold properties in the neighborhood (usually appraisers consider homes sold within a mile and within the last 3 to 6 months).
• Appraisers

Other conditions that affect the market value of a home are:

·      Location

·      Condition of the home

·      Homes for sale in the neighborhood (homes that are going to be competing with yours for buyers).

·      Supply and demand

·      Sellers and buyers motivation                              

The fact is that homes that are priced at a Fair Market Value tend to sell faster and sometimes with multiple offers than those priced at above market value. Pricing your home higher than comparable listings may help other homes sell faster than yours!

How many buyers will see your home according to how it is position on the market?

Fair market value: 60% of buyers

At +5% above market value: 30%

At +10% above market value: 10%

Below –5% market value: 80%

Below –10% market value: 92%

Case study: A home is placed on the market for $310,000 when it should have been $289,000 to $280,000 (asking price), for a market value of $265,000 to $275.000 (selling price). After being on the market for an extended period of time and lowering the price multiple times to keep up with the market, the home went under deposit for $250,000. I am very curious to see what the selling price will be.

Conclusion: The seller could have potentially sold the home for $10,000 or $15,000 more had it been priced competitively from the beginning

How many buyers saw the home when first put on the market? May be 10 to 20% of them? Probably even more but then they compared it with others on the market and went on to buy someone else’s.

And because the way buyers search for homes online (to narrow the searches a window prompts you to fill up the maximum price, square footage, etc) if a home is above market value, it may just not come up on a buyers search at all!

What are the benefits of pricing your home at a fair Market Value?

• A potential faster sale
• Less inconvenience
• Exposure to more prospects
• Cleaner and/or higher offers

 Corrections in markets that experienced exorbitant home prices appreciations are expected, although in my opinion are needed. Otherwise, very few people could afford to buy home.

The good news!

1.      If you want to trade for a bigger or smaller home, you may sell yours for less but you will also buy the next one for less.

2.      Interest rates are still low so the cost of borrowing money is more attractive.

3.      If you can afford to make a long term home ownership commitment, then it is always a good time to buy or sell.

Now going back to the gallon of milk analogy. Given the same/similar product, would you pay the higher price? Wouldn’t you shop around for other options that suit your budget?

Conclusion: A value of a product (and a home becomes a product) is determined by how much someone is willing to pay for it.

If the price of milk reaches $10 a gallon, I would seriously consider buying a cow!

   

To buy or not to buy, that is the question.....

Wouldn’t it be great to be born with a life’s instruction manual and have all our steps mapped out for us? Something like - Life for Dummies- (or is it already written?) Volume one from newborn to 4 years (mostly pictures), then 4 to 10 years and so on. You get the idea. But then again, would you want to know the future? I am not sure. So life is uncertain, it is what it is. Buying a home also carries a risk, an uncertainty.  It is a big decision, but you can take some steps to make it a little easier. Lets remind ourselves how lucky we are to be living in a country where it is still possible to own a home!  Regardless of the current economic circumstances, owning a home is still one of the best investment decisions you can make. Here are some of the questions I pose to my clients, especially first time homebuyers. The more you know, the better decisions you’ll make.

·        Is this the right time to buy a home? My question is: Is it the right time for you?

·        Get hold of your finances. If you do not have a budget, this is the time to make one. The important thing is to know where your money is going. If your monthly mortgage payment is going to keep you awake at night, you should reconsider.

·        How long do you plan to live in the home?

·        How many rooms do you really need, as oppose to how many you want?

·        Walk the neighborhood you are interested in, talk to the neighbors, visit during the day and at night, it is the only way to know if a neighborhood is the right one for you.

·        Do you have cash reserves to make mortgage payments in case of unforeseen circumstances?

·        Have you considered the cost of maintaining a home?

·        Get pre-qualified or better pre-approved for a loan. Very important. It is a waste of time and energy to look at homes that you may not be able to afford.

·        If you are buying a fixer upper count on having some extra money available. Renovations most of the time go over budget.

·        Once you have been pre-approved for a loan, and this some is extremely important, DO NOT go on a shopping spree for new furniture, household goods etc. Banks are known to pull out credit scores 2 or 3 days before closing and if the ratios between income and expenses have changed, they could pull the plug on the loan.

·        If your credit is not the best, wait, improve it and then apply for a loan. In the past consumers with lower credit scores could get a loan but would be hammered with very high interest rates. Buyers beware!

·        I think of my home’s equity as my savings account and use it when or if it is absolutely necessary. I hope you can do the same.

·        Once you own your home, walk straighter and stand proud, you have done it!

Every accomplishment starts with a single step and these are my baby steps at blogging…. well…I am more like at the crawling stage. I would love some feedback. Thanks