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By Helena Gentile | Agent in Massapequa, NY
  • Helping the Appraiser do the best Job.

    Posted Under: Home Buying in New York, Agent2Agent in New York, Property Q&A in New York  |  March 17, 2014 8:45 AM  |  235 views  |  No comments

    Your home is on the market. You found buyers, a nice young couple just starting out, and they're sold on the home. But wait — there's one more person you have to sell: the appraiser.

    You can no longer try to influence the professional who's responsible for placing a value on the house — a value that the lender must feel comfortable with if, for some reason, your buyers don't pay back their loan and the bank has to foreclose.

    No, the days of MAI — which stands for Member of the Appraisal Institute but was euphemistically known in the trade as "Made as Instructed" — are long gone. But there is still plenty you can do to improve the chance that you will obtain the value you are looking for.

    According to builders and realty agents, many a deal has been scuttled when lenders assigned appraisers who lived hundreds of miles away or were not familiar with the area. So after the appraiser calls to set up an appointment, check his or her bona fides.

    "The best way for owners to combat potential problems is to ensure the appraiser is qualified and competent," says Ken Wilson, president of the Appraisal Institute, a trade association based in Chicago. The organization was created by Congress to set appraisal standards and appraiser qualifications. "Consumers have every right to demand the use of someone with field experience in their market and knowledge to handle the assignment properly."

    Ask your lender about the appraiser's professional designations. How long has he practiced? What level of experience does she have with your market and your type of property? Is he familiar with the neighborhood?

    Of course, you spruced up the house when you put it on the market. You painted, perhaps, and you certainly fixed that broken window in the master bath. And you put away all that clutter in the kitchen.

    Now make sure the house is just as dandy when the appraiser finally arrives. Tidy up. Get the dishes out of the sink and into the dishwasher. Clean off the counters. Pick up the dirty clothes from the bathroom floor. Change the furnace filters.

    Also, send the kids off to the neighbors' or out to the movies, and lock up your animals.

    None of this will add or subtract from the valuation. But human nature being what it is, it will convey the notion that the house is well-maintained, says John Brenan, director of appraisal issues at the Appraisal Institute.

    Although you cannot try to directly influence the appraiser — offering a free dinner at his favorite restaurant, maybe, or a little cash under the table — you can speak with him. It's a myth that you can't.

    "Conversation is not only allowed, but it is vital," Brenan says. "The appraiser needs to be able to discuss pertinent items about the house or contract."

    When the appraiser arrives, present him with a list of everything in and about the house that you believe adds value — new windows, perhaps, or an addition above the garage. You are not trying to influence the deal, per se. Rather, you are "simply documenting," Brenan says. "You are not saying you need an extra $5,000 because you put on a new roof last year. You're just saying that you put on a new roof."

    Your list should include a detailed description of any improvements or replacements, the dates they were made, who did the work (backed up by invoices to show they were done by a professional as opposed to a weekend do-it-yourselfer), a brochure to show the quality of the materials and building permits.

    Also list any ways your house differs from others on your block: different finishes used, your better view, your larger lot size. "The list goes on and on," Brenan says. "You can't provide enough information about the house, the neighborhood, the schools. It will help give the appraiser a better understanding about the market."

    Also give the appraiser a list of comparables, or "comps," which are similar properties in your neighborhood that sold recently. The appraiser may well already have the exact same houses, so at the worst, your list may be redundant. But then again, he may have only one or two.

    Either way, Brenan says, "as long as you don't make any demands, a good, competent appraiser should appreciate" the help.

    Some appraisers still balk at accepting such information. One recently told Jill Sackler, an agent with Charles Rutenberg Realty in Merrick, N.Y., that he was no longer allowed to do so. But Barbara-Jo Roberts Berberi, a Rutenberg agent in Crystal Beach, Fla., had the opposite experience recently.

    The appraiser "was thrilled" with the list of comps Berberi provided, she said on the ActiveRain real estate chat room.

    Berberi's list included an explanation of how it was created, a map and drive-by photos of the other houses. Her list was of houses built after 1990 (the subject house was built in 2002) that had between 1,800 and 2,890 square feet (subject was 2,360).

    She also highlighted the per-square-foot sales price for each comp so the appraiser could see at a glance that the contract price for the subject house was just under the lowest price of houses that sold in the previous six months.

    It took some effort on her part, Berberi said, but "it saved him some work and made both our lives easier."

  • How to Price Real Estate...

    Posted Under: Home Selling in New York, Property Q&A in New York, Moving in New York  |  March 11, 2014 4:45 PM  |  259 views  |  No comments

    Location may have the most effect on value but Price is without question the most important factor controlling the sale of real estate.  Anything will sell anytime, how long will it take depends on the price.

    Think about it this way – you may really want to buy a car for your collection and your favorite happens to be a 1963 Corvette.  So you hear about one for sale, in mint condition, across town but the only problem is the price, the owner is asking $150,000!  Well, although you really, really want a mint condition 1963 Corvette, there is no way you will pay anywhere close to $150,000, in fact you know that the most a 1963 Corvette has ever sold for is about $200,000 and that was for a very rare model, which this one is not.

    Because you are a bit obsessed with owning one of these cars you spend almost all of your free time, and some of the time you should be working, searching the internet for available cars.  Through this exhaustive search you have become somewhat of an expert on the values of 1963 Corvettes, especially in your town.  You happen to know that the particular model for sale across town is worth about $95,000…maybe $100,000.  In fact, if the asking price was $100,000 or even $110,000 you would’ve driven over there today with your checkbook and driven home in a 1963 Corvette!

    So why don’t you go make an offer?  Well, let’s face it when you see a price that is so high compared to the actual value it makes you think that the seller is either difficult to deal with and is out of touch with reality or that he must not really want to sell the car, instead he is just fishing for the one fool in the world that will pay $150,000 for a car that is worth $95,000.  So you don’t even go look at it or call for more information…you just keep searching the various websites to find the car of your dreams.

    Yes, you guessed it the Corvette in this example actually represents your home or other real estate you might be trying to sell.  (in fact it represents any item that can be bought and sold).

    Wiggle room = Bad idea

    Most sellers think that it is necessary to “leave a little wiggle room” in the price.  They think this because they think that all buyers will make aggressively low offers…no matter what the asking price.  WRONG!!

    Buyers pay the fair market value …in other words they will pay you what it is worth!  Your job is to find out what it is worth and price it at or near that value.

    This is where brokers and/or appraisers come into the picture.  The right way to price your property is to have a professional REALTOR/broker or appraiser prepare a CMA (Comparative Market Analysis) on your property.  A CMA involves finding recent sales of similar properties, adjusting for any differences, to arrive at a current market value of your property.  Once you have this value you should have your broker set the asking price no more than 3% to 5% higher than that current market value.

    If you do this, your property will sell quickly for a price equal to exactly what it is worth, or higher!   Buyers as a general rule DO NOT make “low-ball” offers, there are some rare occasions when that happens but the vast majority of initial offers are 5% or less below asking price.

    If sellers price their property correctly the buyers will know it immediately because, just like in the Corvette example, buyers spend every spare moment searching the internet for a home, they have made themselves experts on the market value of the particular type of home in the particular area they desire.  For this reason the buyer also knows when a property is overpriced.  Most buyers will not even go look at a property that is overpriced, they say to themselves “why bother?” they assume that the seller is unreasonable and/or is not truly interested in selling the property.

    Yesterday, the Buyer’s Specialist that works for my team and I were showing a house to some buyers who were very motivated had already decided on the neighborhood.  The house was well within their price range and met every one of their criteria.  As we stood in the kitchen discussing what price we should offer we found ourselves drawn to the fact that the house had been on and off of the market for the last four years!

    The conversation immediately turned to “what is wrong with this house?”   It turns out that the house hasn’t sold because it was severely overpriced most of that 4 years, it happens to be well priced now but the stigma it carries because of the lengthy time on the market will likely result in it selling for less than it is really worth.

    Moral of this whole story is - buyers will pay what it is worth - Seller’s job is to find out what it is worth and set the asking price 3%-5% higher than that number…then sit and wait for the offers to roll in.

  • 5 Reasons to Buy Now instead of Spring.

    Posted Under: Home Buying in New York, Property Q&A in New York, Home Ownership in New York  |  December 4, 2013 6:46 AM  |  193 views  |  2 comments

    Based on prices, mortgage rates and soaring rents, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:

    Supply Is Shrinking

    With inventory declining in many regions, finding a home of your dreams may become more difficult going forward. There are buyers in more and more markets surprised that there is no longer a large assortment of houses to choose from. The best homes in the best locations sell first. Don’t miss the opportunity to get that ‘once-in-a-lifetime’ buy.

    Price Increases Are on the Horizon

    Prices are projected to appreciate by over 25% from now to 2018. First home buyers will probably pay more both in price and interest rate if they wait until the spring. Even if you are a move-up buyer, it will wind-up costing you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are in now.

    Owning a Home Helps Create Family Wealth

    Whether you are rent or you own the home you are leaving in, you are paying a mortgage. Either you are paying your mortgage or your landlord’s. The Fed, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.

    Interest Rates Are Projected to Rise

    The Mortgage Bankers Association, the National Association of Realtors, Freddie Macand Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5% by the end of 2014. That is an increase of almost one full point over current rates.

    Buy Low, Sell High

    We would all agree that, when investing, we want to buy at the lowest price possible and hope to sell at the highest price. Housing can create family wealth as long as we follow this simple principle. Today, real estate is selling ‘low’ compared to where it will be next year. It’s time to buy.

    **This article originated from KCM Crew.

  • New Information Regarding Reverse Mortgages

    Posted Under: Quality of Life in New York, Financing in New York, Property Q&A in New York  |  October 8, 2013 8:43 AM  |  1,384 views  |  No comments

    The spigot on reverse mortgages has been slowly tightened over the last several years. Borrowers can no longer tap as much of their home equity as they could before the housing crisis.

    Enlarge This ImageNow the rules are about to change again.

    As a result, some people with heavy debt who were hoping a reverse mortgage would solve their financial problems may find that it is no longer a viable option. Under the new rules, which go into effect on Sept. 30, many borrowers will be able to get access to even less of the value locked in their home — about 15 percent less — compared to the maximum available now. The rules also put new limits on the amount of money that can be taken out in the first year, which may further deter the most distressed prospective borrowers.

    “The changes really put the product on track as a long-term financial planning tool as opposed to a crisis management tool,” said Ramsey Alwin, senior director of economic security at the National Council on Aging.

    The Federal Housing Administration, which insures most reverse mortgages, is making the changes in an effort to strengthen the program, which allows people 62 and older to tap their home equity without making payments. Lenders get their money back once the house is sold.

    Since the economic crisis, more homeowners withdrew the entire pile of cash they were eligible for all at once, which strained the program’s reserve funds (lenders were also paid more when borrowers took large sums, and reverse mortgage experts say lenders prodded borrowers in this direction). Declining home values also hurt the program’s overall finances, since lenders often could not recoup the full loan amounts when the houses were ultimately sold.

    The F.H.A. hopes that the changes, particularly the limits on how much can be withdrawn in the first year, will encourage people to tap their home equity slowly and steadily, in a way that will enable property owners to stay in their homes as they age. That’s a change that several consumer advocates, along with members of the industry, agree was necessary.

    Up until now, just about anyone could qualify for a reverse mortgage. But perhaps the biggest change to the program will go into effect early next year, when borrowers will also need to prove that they have the wherewithal to pay property taxes and insurance over the life of the loan. If they cannot, they will have to set that money aside — and that could consume much of the loan’s proceeds.

    There is still a little time to get a mortgage using the current program. As long as prospective borrowers go through the required financial counseling and receive a case number before Sept. 28, they will be able to qualify under the current rules.

    Here’s a closer look at how the changes will affect prospective borrowers:

    FIRST-YEAR LIMIT There will now be a limit on the amount of money that can be withdrawn in the first year. A homeowner eligible to withdraw a total of $200,000 in cash, for example, would be allowed to get only $120,000, or 60 percent of that sum, in the first year.

    There are exceptions. Some homeowners will be able to draw a bit more if their existing mortgage, along with other items like delinquent federal debts, exceed the 60 percent limit. Homeowners are required to pay off those items — which regulators call “mandatory obligations” — before qualifying for the loan. So borrowers can withdraw enough to pay off these types of obligations, plus another 10 percent of the maximum allowable amount (in this case that’s an extra $20,000, or 10 percent, of $200,000).

    Credit cards are not considered a mandatory obligation, so people with significant credit card debt may find they can’t withdraw enough money to pay those loans off, said Christopher J. Mayer, professor of real estate, finance and economics at Columbia Business School, who is also a partner in a start-up company, Longbridge Financial, that provides reverse mortgages. “There will be fewer financially distressed borrowers for whom a reverse mortgage will provide a satisfactory solution,” he added. “The product will be more attractive for people using it as part of a retirement plan.”

    Borrowers generally choose to receive the money in one of two ways: as a lump sum (using a fixed-rate loan) or through a line of credit (which carries a variable rate). But lenders typically require people who use a fixed-rate loan to withdraw all the money at once — so they’ll be limited to 60 percent (or the amount of their mandatory obligations plus 10 percent). Only borrowers who opt for the line of credit may be able to access more money over time.

    LOAN AMOUNTS The two types of reverse mortgages available now — the “standard” and the “saver” — are essentially being eliminated and consolidated into one.

    The maximum amount of cash you can withdraw still largely depends on the age of the youngest borrower, your home value and the prevailing interest rate. (The older you are, the higher your home’s value and the lower the interest rate, the more money you can withdraw.)

    Starting on Sept. 30, however, many prospective borrowers will have access to about 15 percent less home equity, on average, than the maximum amount available now.

    With a mortgage rate of 5 percent, that means a 62-year-old will be able to withdraw up to 52.6 percent of the home’s appraised value, minus fees, under the new rules, according to the F.H.A. Under the existing program, the same person can tap up to 61.9 percent of the home’s value using a standard reverse mortgage, and 52.3 percent using a saver mortgage (which is cheaper than the standard, but gives you access to less home equity).

    PRICING Part of the mortgage’s cost will now be based on the amount withdrawn. If borrowers take out more than 60 percent of the total amount available in the first year, they will have to pay a higher upfront fee: the upfront mortgage insurance premium, which can be wrapped into the loan, will be 2.5 percent of the appraised value of the property. Everyone else — that is, people withdrawing less than 60 percent — will pay 0.5 percent of the value of the property. (Previously, the upfront fees were 2 percent for standard mortgages and 0.01 percent for savers.)

    The second fee, known as the annual mortgage insurance premium, will remain at 1.25 percent of outstanding loan balance.

    FINANCIAL ASSESSMENT Lenders will also be required to ensure that homeowners can afford to make all the necessary tax and insurance payments over the projected life of the loan. Starting Jan. 13, lenders will analyze all income sources, which includes any earnings as well as pension income, Social Security, individual retirement accounts and 401(k)’s, among other things. A borrower’s credit history will also be factored in.

    Lenders will also look closely at how much money is left over after paying typical living expenses, which include all property-related costs, federal and state income taxes, utilities and other debts and obligations, like a car payment or alimony.

    If a single homeowner has from $529 to $589 left over after paying those expenses (thresholds are higher for couples and families), they will probably be able to qualify for a reverse mortgage free and clear — that is, without having to set aside a big sum of money for property tax and insurance.

    If a prospective borrower falls short, the lender is supposed to look at other factors. The guidelines say they can consider “extenuating circumstances,” but it is unclear how lenders will interpret them. F.H.A. officials said they would also factor in how the loan proceeds would help improve a consumer’s financial situation.

    SET ASIDE If a lender determines that you may not be able to keep up with property taxes and the required flood and hazard insurance payments, you will be required to set aside money (depending on your situation, it may be charged to your credit line or deducted from your payments), which means less cash in your pocket.

    This requirement could disqualify many borrowers. “In many cases, the reserve consumes the entire credit line and then some,” said Mark Browning, president of Community Home Equity Conversion Corporation, a reverse mortgage lender in Rochester. “This provision hits especially hard in geographies where home values are more modest and property taxes and/or insurance charges are higher as a proportion of the home value.”

    The upside: Property taxes and insurance would be taken care of, leaving other income to pay for living and other expenses. How all of this will work in practice, of course, remains to be seen.

    “What regulators are trying to do is shift behavior so that people are more thoughtful and methodical about how they draw the money,” said Peter H. Bell, president of the National Reverse Mortgage Lenders Association, the industry trade group. “The changes are intended to put the program back on track and encourage people to take what they need and no more.”

  • Great Article! .

    Posted Under: Home Buying in New York, Property Q&A in New York, Home Ownership in New York  |  September 23, 2013 9:24 AM  |  218 views  |  No comments

    The Real Truth Behind “Reality” Real Estate Shows

    As reality programming continues to dominate the television world, real estate shows have proven to be a real hit among viewers. Shows such as Million Dollar Listing, Love It or List It, House Hunters and Property Virgins all depict the experiences of real people looking for real homes.

    As it turns out, however, those experiences aren’t always so real. The process of buying a home – in real life – isn’t quite as simple, and the houses aren’t as well designed, so television must find a way to exaggerate, sugarcoat and package the story so viewers will want to watch.

    Take the example of House Hunters. In 2012, a Texas family who appeared on the show revealed its inner workings. It is said that two of the houses the family apparently considered actually belonged to friends, and were not even on the market. The homes were chosen because they were attractive and clean. HGTV released a statement that cleverly avoided confirming or denying the family’s claims.

    Most shows glaze over the details of buying a home beyond tours and making an offer. You’ll never see buyers applying for a mortgage, or real estate lawyers going over paperwork. And TV buyers never seem to walk away from a home – something that often happens in reality when a home inspection reveals deal-breaking problems.

    But the goal of these shows isn’t to depict real life, despite their claim to be reality television. Instead, they serve as a pleasant distraction from everyday life. At their best, perhaps they inspire viewers to take better care of their own homes.

    Picture Credit: Flickr

  • A Study on Listing Price...

    Posted Under: Home Selling in Nassau County, Property Q&A in Nassau County, Moving in Nassau County  |  December 3, 2012 12:50 PM  |  340 views  |  No comments

    The Research

    Are there any negative effects from changing the listing price of a property?  This question haunts Brokers/Agents as well as sellers of property every day.  At present, there does not seem to be a consensus answer to this question within the professional real estate community.  Fortunately, this question was scientifically investigated by John R. Knight. Unfortunately, few know the results of Professor Knight’s research.In Knight, the impact of changing a property’s listing price is investigated.  Additionally, the types of property that are most likely to experience a price change are also estimated.  The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties.  Furthermore, bigger price changes are found to experience even longer marketing times and greater price discounts.  Finally, as for which properties are most likely to experience a price change, Knight finds that the greater the initial markup; the higher the likelihood that any given property will experience a listing price change.Implications for PracticeSellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start.  Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight.  Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors.  Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.Interestingly, I have found in my own research that the direction (up or down) of the listing price change does not matter.  A listing price increase and decrease both lead to similar results found in Knight’s work – longer marketing times and lower prices.  Therefore, get the price right from the beginning.  It is best for all.Endnotes[1] Knight, John, R.  (2002).  Listing Price, Time on Market, and Ultimate Selling Price: Causes and Effects of Listing Price Changes.  Real Estate Economics.  30:2, 213-237.
  • Great Advice!

    Posted Under: Home Selling in New York, Property Q&A in New York, Moving in New York  |  July 3, 2012 9:51 AM  |  136 views  |  No comments

    Courtesy Of:

    Walter Villalta
    July 2012

    Copyright © 2012 Realty Times
    All Rights Reserved.

    Getting an Offer

    Have you ever wondered what it takes to get more showings and to finally seal the deal? If your home has been lingering on the market for months, you might be asking yourself just that question.

    This question is more than just idle curiosity. When and how quickly you sell your home can mean the difference between buying the dream home before it's scooped up and avoiding carrying two mortgages.

    There is an old adage used in real estate that says, "location, location, location." While location is important for certain reasons (close to schools, crime levels, neighborhood appearance), there is something far more important when it comes to making a deal. The new adage should be "price, price, price."

    You can sell any home if it's priced to sell. Pricing right is about more than just pricing along with the competition. Sometimes it means listing at a lower price to make your home more attractive. Of course no one is willing to let someone just walk away with their home, but in a strong buyers market like we have today, you must be realistic about what price will truly entice a buyer.

    Experts say that if you overprice a home at the start, you're making a big mistake. Buyers look for new listings. They'll pass right over your home if it doesn't compare to the competition. They could also see your price reduction later on as a sign that you are willing to go even lower on your price.

    This is not to say you shouldn't do a price reduction. If you already have your home on the market then you should consider if a price reduction will bring in buyers. An overpriced home will never sell in today's market. There are simply too many other good deals out there.

    This means you need to price your home at the bottom end of what is a realistic price for your market and for you.

    Aside from price, there are also a few other issues that you, the seller, need to consider.

    First, you should be willing to accommodate buyers with showings. This means if they want to come during an evening or weekend you should be flexible! Your prospective buyers may have difficult schedules, but today's market means you have to work with a buyer, making showings easy and convenient for them.

    Next, stage your home. Before you have a single showing you must be sure to take the proper steps in staging. A messy, dirty, or cluttered home will turn off many buyers. They will see your home for its problems instead of its potential.

    Finally, have a financial game plan ahead of time. This means knowing what sort of offers you are willing to accept and not. Buyers don't like to sit around for days awaiting your response. What is your true bottom line?

    Selling your home in a strong buyers market is full of its challenges to be sure, but getting an offer and closing the deal in today's market is possible. Just be sure to price your home correctly!

    Written by Carla Hill

    Wondering What Your Home Is Worth? -- Let me show you.

    - Back -

    Walter Villalta
    E-mail: wvillalta@mortgagecorp.com
    Web: http://www.mortgagecorp.com
    (516) 721-1550

    Mid-Island Mortgage Corp.
    (516) 348-0648
    900 Merchants Concourse
    Westbury, N.Y. 11590

    Equal Housing Opportunity

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