Monday, March 23, 2009

Decisions, decisions!

So you're thinking about getting a couple of real estate agents in to help you sell your home. One guy is a friend of yours. One guy's name was given to you by a co-worker. The people two doors down gave you their agent's name.

So you call them. Tell them you want to sell could they come over and take a look?

What's going to help you make your decision? The price they give you? The way they look? The commission they want to charge? The "stuff" they say they'll do?

There are so many factors that will come in to play here, that it's almost impossible to point to one as the most important!

But beware. Beware of the agent that gives you the highest figure for asking price. They are often trying to tell you what they think they want you to hear. Almost like you're going to list with the "highest bidder"!

Beware of the agent that seems to think you should list with them because their company is the biggest, or the best!

Beware of the agent that is going to offer the lowest commission rate. Often this is the person who will give the least amount of attention and effort.

But instead of what to beware of let's go this way....

Interview your agent.

Observe their manner when they set up their appointment. Are they succinct? Do they do a good job listening and confirming the appointment? How are their communications skills?

Next, when they are scheduled to arrive... are they on time? Early, but not too early? Or are they late? And if they are late, did they call you to explain why they got held up? Given they were late, are they flustered? Did they seem pre-occupied with making excuses for their tardiness? Were they able to get their feet under them and get down to business?

Do they talk too much? Are they trying too hard to impress you? Do they seem to be genuinely interested and willing to listen more than speak?

Are they credible? If you ask a question that they do not know the answer to, are they willing to admit to not knowing, but ready to do the work to find out and get back to you?

Are they organized? Do they seem to have a "plan of action"? Are they able to lay out a plan and show you how it will work?

Overall do you get a good feeling about them? I mean, they are going to represent you. Are you getting the feeling you can depend on them to negotiate and communicate in a professional and efficient manner?

How did they react when you asked them how long they've been in the business? Remember, it may be OK if they are brand new... as their training and their approach is fresh! But, if that question made them stammer, how will they hold up when they are negotiating on your behalf?

I'm still pretty convinced that you should do business with people you know. But, I am also acutely aware that you need to feel comfortable with their skills and style.

In the long run, you have to feel comfortable with your agent... don't have to become their best friend, but you need to trust them.

Do you trust them?

Tuesday, March 17, 2009

Spring Time = Selling Time?

If I've been asked once, I've been asked a few dozen times... "When is the best time to put your home on the market?"

Well, if you have that luxury of a choice... In other words you aren't being transferred or forced to sell.... you'll need to do some thinking.

Many people... in the real estate business and out of the real estate business point to spring. This hypothesis has many supporting factors.
The snow is gone.
It's easier for buyers to get around.
The properties show better.
People's attitudes improve.
Pools look better when they are open.
The sale would conclude in sync with the end of school...

Any other ideas? There are tons of "reasons" we can collectively come up with.

Now, it is true, around the Capital District, we see more houses come on the market in the spring. So, often we will meet with sellers who are anxious to embrace the method of getting their house on the market, before the spring rush. So as to avoid a higher number of competing properties.

Ideally, I guess you would like to be the only house for sale, right ? That way the buyers would only have one choice! And if there were many buyers, like we would hope there would be, they would fight over it! Drive the price up.

Of course, this is rarely the case! More accurately, never the case! So sellers, or potential sellers, if you will, need to be savvy and figure out when to put their house on the market. But, more importantly they need to research the current conditions. They need to be informed as to how many houses, reasonably similar to theirs, are out there right now. They need to be brutally honest and consider how their house measures up to those houses. They have to think like a buyer. "Hmmm... if I had xxxxxxxx number of dollars to spend, I wanted to buy a house like this one... why should I buy this one, instead of that one?

So really, the answer is, you need to put your home on the market when it suits your situation and timing. Whether it is spring, summer, fall, or winter. But more important is that you need to have your real estate rep research the market. Place your property into the existing inventory in such a way that it will look like, if not THE BEST, one of the best deals available right now! See, you need to realize, that how your price your home and place it in the buyer's sites is going to do one of two things. It will help other homes to get sold. Or it will sell itself, because it appears to be the best deal out there! I have often re-assured sellers who might call me and point out that, "such and such a house just went on the market... very similar to ours.... and they are asking xxxxx dollars more than we are!" Well, we should call them up and thank them shouldn't we? They are going to help the buyers to make a decision.... our house is a better deal!

Crazy business this real estate, isn't it?

Stay in touch. Keep looking at market conditions. Make smart, not emotional, decisions.

Questions? Call me 518-438-4511 or email me at

Monday, March 9, 2009

So, should I buy now or NOT???!!!!

Yes. I mean, "No!". Uh.. yes! Well it depends.

Geesh! Don't you wish that these kind of questions could be answered, for sure, with a simple yes or no? Sorry. They just can't. But here's what I would say to you today...

Do you need a place to live? Probably. So if you have saved enough for a down payment and closing costs... and if you've done your homework (read: analyze your income and expenses) and determined it's financially possible to do... do it! Buy a house. How much are you going to pay in rent? How much would that figure support as far as a mortgage goes? Then look at the tax benefits. Probably makes more sense to buy than to rent.

Don't try to figure out what the market's going to do. Don't try to figure out if interest rates are going to go down. Tell you what. They will. And they'll go up. And they'll go back down again. But you and I really can't be sure as to when and how much.

So... buy your own home. But just make every effort to avoid overextending.

Be smart... don't fall victim to a lender who tries to tell you that you can buy way more house than that!

Also, realize this. You know those companies that advertise on line and TV that you can submit your info and they can have you an approval in minutes, blah blah blah? Be careful with them. We've seen them! Here's what happens. You get a real quick approval and you're very excited. Then they put you in touch with their local rep, and the real work starts. "Oh, we're sorry, but after looking further into you financials, we're going to need this and that, and by the way the rate has changed and also we're going to require some more money up front...." This is a recurrent theme and has made many a buyer very sad and many sellers upset that the deal fell apart weeks after they were sure they had their house sold! So what should you do? Work with a local banker or mortgage originator! Ask your Realtor who THEY recommend. I'm pretty sure you will be on much more solid ground if you use them.

Last, but not least: Save. Even if saving means waiting a little bit. Saving money shows the bank that you are a responsible person who will be a good risk to loan money to!

Go ahead... plan... save... and buy!

Tuesday, March 3, 2009

My home... my investment

Well, after all it was us that started it! Us real estate people!

We told Americans to buy instead of rent... "It's a sound investment!" And at the time... 50 years ago... it turns out it WAS a good investment.

But today I propose that we change our view. Don't buy your home because you perceive it to be a "good investment". Buy it because you need a place to live. Buy it so that you have a place to raise a family. Buy it because you want a place to call your own.

You know what? Real estate, historically speaking, has appreciated in value, at a rate of 4-6% per year. So think about recent years.... we've seen, in different parts of the country, and specifically in the Albany, New York area appreciation years of 7... 12... even 24% . Pretty good, eh? But more recently we've seen the rate of appreciation flatten out. Like NO appreciation on some homes. But still, guess what? We had a place to live. We owned our own pad. Otherwise, we might have been paying close the same number of dollars to a landlord and STILL not owned anything. And had no right to sell it. And certainly not had any tax deductions in the real estate department. (Didja ever wonder why our government decreed that there should be deductions and tax benefits to owning as opposed to renting?... more on that later)

While I strongly urge you to enlist the services of a Realtor when purchasing a home, I would also strongly urge you not to OVER analyze the process with speculation of what kind of return you can get and when. First, NO one can predict the future. Secondly you know as well as I do that if you are going to pay to live somewhere, it would be better if you could actually call it your own and even actually own it free and clear someday! I would be amused to find out how many of you ever heard of a "mortgage burning party"? You probably need to be older than me. The Mortgage Burning Party would be on the occasion of you making the last payment on your house and you becoming the free and clear owner! People would invite their friends to come to their house... have a party and actually light to mortgage documents on fire... they might even raise a glass in honor of the event. These days financial smarty pants will probably tell you that having no mortgage is a "dumb idea", because now you have no tax deduction! Oh for the simple days!

Anyway... please.... if you are buying your personal residence... make sure you are not paying too much. Have your Realtor research the recent sales activity to help you understand the real value of the property. Buy it for less if you can. Hope that the market works in your favor. But if it doesn't grow at 25... 17... 25% a year... that's OK... you have had a real nice place to live.

In all likelihood it will appreciate. But don't bank on it!

Monday, March 2, 2009

Who says we can't predict the future?

I am not one to spend a lot of time on laying blame on anyone. But at some point you have to figure out "whodunnit"... so that we don't allow them to do it again!

When our government starts to impose quotas and minimums and maximums should that raise a red flag? A flag that flies in the face of making good business decisions?

This was sent to me by an alert reader.... NY Times excerpts NOTE the DATE 1999!

I made my notes and thoughts in white.... kind of like when you sat in class and wisecracked during a lecture...

September 30, 1999
Fannie Mae Eases Credit To Aid Mortgage Lending


ln a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people ...

...These borrowers whose incomes, credit ratings and savings are not good enough
to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates --anywhere from three to four percentage points higher than conventional loans.

"Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements," said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. Here is an example of how our society has turned into an "I want it now" beast that has abandoned the age old concept of save up your money if you want something. I refer to our parents when we told them we wanted a bike, they told us to save up our allowance, and after we've saved enough come back and see them. "Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called sub-prime market." Demographic information on these borrowers is sketchy. But at least one study indicates that l8 percent of the loans in the sub-prime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

"From the perspective of many people, including me, this is another thrift industry growing up around us," said Peter Wallison a resident fellow at the American Enterprise Institute. "If they fail, the government will have to step up and , bail them out the way it stepped up and bailed out the thrift industry."


Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy,Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings. (makes sense... right? If you have bad credit you should still be able to get a loan!)

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify, for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites. Unfortunately that approach is almost impossible to challenge these days, as one certainly stands to be labeled a racists or elitist.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 57.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings. But! That shouldn't make a difference!

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

There was a time when loaning money was business procedure. The lender would analyze the process and try to determine if there would be enough of a return to make it worthwhile, and further, and maybe even more importantly, could the applicant satisfy the terms of the agreement. The banks would send the loan application to "the committee". The committee would review the application and either deny or accept. Their collective decision was based on many factors, but mostly on what the chances of getting their money back and making a profit would be. See, the banks used to make loans based on money they held on deposit. Then the government got into the act. Pretty soon the government was the best source of money. And banks were finding that they had more applications for money than their deposits could prudently support. So they became inclined to go to the Feds and ask for support. The Feds obliged, but, long story short, they determined that if they were going to back or supply loans, they had the right to impose conditions. In other words, tell you how to run your business and tell you who you would do business with. Does this sound like some of the movies you've seen where a struggling business owner gets a note from a caring and friendly source, who later comes in and tells them who they will buy from, and who they will sell to ?