Brooklyn Real Estate Q&A and Info

Despite the best efforts of your Realtor, you’re not getting any offers on your property or the offers you are getting are much lower than you’re willing to accept. Well, it actually might be your fault your property, whether its a house, co-op or condo, has been languishing on the market.

“It just ain’t so”, you immediately reply.  Now, I do admit there are a lot of reasons a house might not sell, and it might well have nothing at all to do with you, but just to make sure, let’s examine one of the main reasons it might just be your fault your house won’t sell:

Your Asking Price is Way Too High

Nobody wants to loose money and that’s a fact.  But the reality of today’s real estate market is that most properties have lost value in the past few years, in some parts of the country as much as 45%.

Real Estate is actually only worth what someone is willing to pay for it, and you have to understand that buyers will not factor any of the following into their offer price:

1. You raised your family in the house and enjoyed countless Christmases, Thanksgivings and Birthdays in it.
2. You spent a fortune putting in that hot tub and installing the Cherub fountain in the back yard.
3. You could have gotten $50,000 more for it in 2004.
4. Two years ago your neighbor got a lot of money for his dump and your house is much better, the best one on the block as a matter of fact. (Truthfully your neighbor probably exaggerated the price he got.)
5. You want some profit to pay off some credit card debt and buy a new car.
6. You need more money than that to cover your mortgage.

No doubt your Realtor provided you with comparables when she came to the listing appointment.  The comparables showed you what houses like yours in your area sold for in recent months.  Based on that info, she arrived at an asking price.

Did the asking price she suggested make you gag? Did you want to throw her out of your house just for even suggesting such a thing? Did you insist on listing it for a significant amount more?

Then its probably your fault that your house hasn’t sold.

Its OK If Its Your Fault

If it is your fault, that’s OK. Wanting more for your property then the market will currently pay does not make you a bad person.  It doesn’t mean your greedy.  It only means that nobody is going to buy it.

But now, you have to make a choice. To sell or not to sell. If you are not even getting anyone interested in seeing your property at all because of your price (believe me your Realtor will tell you if that’s the case), then perhaps it would be better to take it off the market and sell in a few years when prices begin to appreciate again. That’s OK, and really your Realtor won’t mind. Time is money and she really doesn’t want to waste time trying to sell the unsellable.

However, if economic circumstances, a job offer out of town, retirement to sunny Florida or any other reason makes it impossible for you to wait to sell your house, then there really is no other choice than to lower your asking price.  Its painful, but it must be done.  However, taking less for your house might not be that bad.  Here’s why:

It May Not Be So Bad

If you’re selling your property so you can move to a new town, its very likely that housing prices have decreased there as well, and depending on which state, prices might have decrease significantly.   That means that you can get more house for less money then you would have been able to during the market boom.

If creditors are harassing you and you’re selling your property for economic reasons, imagine the  peace you’ll get when everyone is paid off (or at least satisfied) and your living comfortable in a new place with out any more final notices and unsympathetic phone calls.

So, if your condo, co-op or house is not selling, take a moment and ask yourself truthfully, “Is it my fault?  Do I want more money for my house than someone is currently willing to pay for it?”  If the answer is “yes”, don’t feel bad about it, but you do have some decisions to make.

Conventional wisdom tells you that the winter months are the worse time to list your property for sale, especially if you live in Brooklyn or any place located in an area where snow and bitter cold temperatures are the norm.

However, there are some advantages to listing your property when the weather outside is frightful, and here are 6 of them:

1. Any buyer who comes to see your property when there’s a foot of snow on the ground, and the windchill is in the single digits is a real buyer, not just a shopper or a time waster who just likes looking at houses.



2. Many times, sellers will take their property off the market for the holidays, decreasing the competition.
3. Less competition means that you might be able to get more for your property.
4. More homes are sold then listed in the winter months (again that limited competition thing).
5. The Home Buyer Tax Credit, for First-Time Home Buyers and new Existing Home Buyer has increased the pool of buyers who have to buy, or enter into a binding contract to buy by April 30th and close by June 30th 2010.
6. If you’re planning on buying a new home once the one you currently own is sold, you have an opportunity to buy during the spring, when many homes are on the market.

As you can see, there are six really good reasons to put your house up for sale during the winter months.  However, keep in mind that pricing it correctly so it won’t just languish there is part of making sure that your property is not only listed when its cold outside, but also sold.

Thanks to the recession, these terms have become common place. Newspapers, news reports, and blogs are all taking about how to buy foreclosures, REOs and especially short sales (which seems to be the buzz word of the day).

That brings up a good question. What is the difference between a Short Sale, a REO and a foreclosure, especially when it comes to Brooklyn, New York? Well here it is in a nut shell:

Short Sale – In order to completely understand the meaning of a short sale, you need to know a couple of other popular real estate terms. To be “upside down” or “underwater” means that a property owner, whether the property is a coop, condo or house, owes more on the property then the property can be sold for at the time.

When a property is being sold as a short sale, it means that the property owner is under water and the lender has either agreed to, or will be asked to agree to, forgive the difference between what a property can be sold for and what the home owner owes.

REO and Foreclosure - I’ve lumped these two terms together because they are the same.  REO is an acronym that stands for Real Estate Owned and it refers to real estate owned by a bank after it has been foreclosed on.  That brings us to the definition of foreclosure.

A foreclosure is when a borrower fails to live up to the terms of a mortgage and the bank decides to exercise its right to sell the property at auction to recover the money that was lent for the purchase.  If no one purchases the property at auction, the property becomes an REO.

Buying a short sale property or a foreclosure is a good way to purchase property at rock bottom prices, but its not for everyone.  If you’d like more information about buying a bank REO or a short sale anywhere in Brooklyn, NY, feel free to give me a call at the number below or Click Here to email me.

With the difficulty some buyers are having getting financing, and Condos and other new constructions in Brooklyn sitting empty, rent-to-own has become an option available for some buyers. But what is rent-to-own?

The rent-to-own scenario, which is also called a “lease-option” requires a potential buyer to pay a down payment of as much as 5% of the purchase price up front and pay rent monthly while they live in the property he or she intends to buy at the end of the lease.

Part of the rent goes to the owner, and a portion of the rent, called a “rent credit”, goes into an escrow account and is later applied toward the purchaser’s down payment when he or she is ready to buy.   The price the buyer will pay for the house or condo at the end of the lease is determined at the time the “rent-to-own” or “lease option” contract is signed.

The PROS

1. Its a great way to get into a house or condo that you like now without having a large down payment.
2. It gives you an opportunity to “try” before you “buy”.
3. It gives you time to make repairs to your credit rating if its necessary.
4. The owner is obligated to sell the property to you at the price agreed upon, even if the property increases in value.

The CONS

1. If you decide not to purchase the property at the end of the lease, you loose the down payment you put into the transaction at the start of the lease, however the rent credit monies that has accumulated in the escrow account is refunded.
2. If the property decreases in value, you are required to pay the price agreed upon at the signing of the lease, even if the property is worth less.  If the property does not appraise for the amount agreed upon, you may not be able to get a loan and fail to be able to close on the deal, again loosing you down payment money.
3. If the owner of the property fails to pay the mortgage and the property is foreclosed on, you may loose all the money put into the transaction.

As you can see, there are advantages and disadvantages to purchasing property rent-to-own.  Weigh the pros and cons carefully, and if you decide that rent-to-own is right for you, find out as much as you can about the owner’s financial situation, vigorously negotiate the price to be paid, and have a Real Estate Attorney thoroughly review the lease option contract before you sign it.

For more information about rent-to-own (lease-option) properties available in Brooklyn.  Please feel free to contact me using the phone number below, or via email.

Here is an interesting article I came across on the WSJ online about seller financing.

Seller financing is when the seller of the property holds the mortgage for the buyer instead of a bank or some other lending institution. If you own your Brooklyn, New York home outright and you currently don’t need the equity from the house, seller financing might be an option for you.

Selling your home can be a very difficult task, especially when it comes to deciding how much to sell it for. No doubt you have fond memories of events that took place there as well as the fact that you may have spent a lot money or put in a lot of hours of “sweat equity” to transform the house you bought into a home.

Well, there are a certain facts about your home that come into play when you’re pricing it for sale that are within your control, and some that aren’t, and these must be taken into consideration in order to price your home so that it will sell quickly.

Factors That Are Within Your Control

1. How Well Your Home Is Maintained - Despite all the do-it-yourself programs on television, most buyers do not want to buy a home that needs extensive repairs.  Is your plumbing old?  Does your house need painting?  Is your yard overgrown with weeds?  The answer to these questions affects how much your home will sell for.
2. Is Your Home Clean - Most buyers cannot see past dirt and odors.  They both mean more work for the buyer and affects how much they are willing to pay for your property (if anything at all).

Factors That Are Not Within Your Control

1. The Location of Your Home - If your home is in a less then desirable location, like across the street from a cemetery or on a very busy main thoroughfare, that has to be taken into consideration when pricing your home.
2. The Size Of Your Property Matters – If you have a small house you’ll have to take that into consideration when your price it for sale no matter how charming you think it is. 
3. Amenities Make A Difference – If your house is the only one on the block that doesn’t have a garage and its impossible to add one, that will affect the price.

When it comes to pricing a home for sale you have to accept those factors that are beyond your control, and focus on the ones you can control.   A properly prices home attracts more buyers and increases your opportunity for a quick sale.

To get the help you need in pricing your home for sale, let me provide you with a Free Home Value Report.  I will do a detailed comparison between your home, recently sold homes, and other properties currently on the  market taking into consideration your properties positive aspects and the negatives, and together we will determine what your home is really worth in today’s market.  Click here to get started.  There’s no obligation.

If you want to sell your Brooklyn house as quickly as possible and for the best possible price, your home must make a good first impression.  One of the things that can make or break that first impression (or curb appeal), is your lawn. 

Nothing says “neglected house” like an ugly lawn that’s full of weeds and bare patches.  Here are few tips that you can use to get your lawn in tip top shape and greatly improve your Brooklyn home’s curb appeal.

1. Clean Up Your Lawn - Take some time to rake up any leaves, dead branches and other debris.
2. Check for Compacted Soil – Look for areas in your lawn where there is standing water that doesn’t drain or areas where the soil looks hard.   Use the screwdriver test.  If you can’t easily push a screwdriver into the soil, its compacted.
3. Aerate Your Lawn – Lawn aeration is the process of reducing soil compaction by punching holes in the soil either with a hand tool, a pair of spiked aerator shoes, or a mechanical aerator.    Aeration helps your lawn by increasing oxygen in the soil, which stimulates root growth and helps fertilizer get down to grass roots.
4. Repair – Fill holes with quality topsoil and add grass seeds. Cover the area where you’ve newly added grass seeds with a thin layer of straw.  The straw will protect the grass seeds from birds, and help keep the soil from drying out which creates a hostile place for seeds to try and grow, and it prevent the seeds from being washed away with the rain.
5. Hydrate - It’s been recommended that you water your lawn irregularly, rather than on a strict schedule.  Irregular, when necessary, watering replicates natural weather patterns and makes your lawn more drought-tolerant.  
6. Mow – Always mow when the grass is dry and the blades are upright. Never cut more than 1/3 of the grass blade length at any one time. Grass needs the surface area of the blade to stay healthy. Try to change the mowing pattern periodically. Grass develops a grain based on the direction it is cut. Alternating the pattern will result in an upright growth pattern. Leave grass clippings on the lawn so nutrients and nitrogen are redeposited into the soil.

These methods for improving your lawn takes time.  If you need to get your lawn looking its best in a hurry, consider have new sod laid down.

Question:  I have signed, accepted offer on a property, the Real Estate Agent is holding an Open House this weekend.  Can the seller sell to someone else, like someone from the Open House?

Answer:  The short answer to this question is yes.  Until there is a Contract Of Sale drawn up and signed by both the seller and the buyer, the seller can sell his property to whomever he or she chooses.

Oftentimes, even though there is an accepted offer, the Real Estate Agent will continue to show the property.  There are times when a contract is never signed (executed), such as when the terms of a contract are not acceptable to the buyer.  

For buyers - If you find out that a house you really want has an accepted offer on it, don’t hesitate to put in an offer of your own.  Hey, you never know.

For Sellers - let your Realtor(r) continue to show your property to interested buyers even though you have an accepted offer.  It can be a week or more before a deal is ”pronounced dead”, so its in your best interest to continue to have your property shown, just in case.  Once again, you never know, the person who will end up buying your property may not be the first person whose offer you accept.