Liz Hoffman

Hi, Susan's answer below is correct, with some exceptions. In Alabama, which is my area of specialty, we have a couple of cities that have special tax situations, and when a buyer purchases property in these areas they are actually purchasing only the home and improvements, and getting a lease on the land. This is an unusual set of circumstances here in Alabama. If you would like to know more, you can contact me at 251-367-3602. If you would like more information about me, please click on my name here to the right by my photo, and I will be happy to assist you in any way that will help you in your move. I know that you will love living here in our beautiful state of Alabama! - Sun Jul 20 2008, 11:15

Cindy's answer was correct, however if you find that you have no title insurance, please call me at 251-367-3602. I have some contacts locally (title companies and attorneys) that may be able to you determine what to do next, without paying any fees to anyone, or at least we can point you to the best sources. - Sat May 3 2008, 13:34

Well, Ryan, that explains it, and I do think you are very wise to be doing your homework this way. Good luck on your finals. - Tue Apr 22 2008, 10:48

Seems like, for a potential first-time buyer, you are extremely well-informed and have spent an unusually large amount of time tracking all the data, NAR reports, etc. . . Not saying that you shouldn't be keeping track-it just seems that perhaps you are in a related business, and have been, or stand to be, affected directly by what is going on currently in the market, not just trying to decide to rent or buy for the first time. - Tue Apr 22 2008, 09:56

I've been following this thread since it's inception, and I am really getting it. Great thread, and Ryan, I do understand where you are coming from concerning long-term vs. short-term. I think that perhaps, for you-in your short-term situation, you might do better to rent. Before all the other Realtors start throwing rotten tomatoes at me, please look at Ryan's previous post concerning his views re: long-term location and his objectives time-wise. I have not looked in-depth at the Chicago situation, and, as we have repeated "ad infinitum," real estate should be based on the local market. My market is stabilizing, and we have never experienced the Las Vegas, California drastic price increases and decreases) Having said that, it then follows that-if you are looking for a long-term investment, real estate is a great way to go, compared with stocks. Yes, there are other investments out there that are low-risk, but the gains in housing historically have outpaced the low-risk investments. The stock market has historically gained at approximately the same pace since the late 50's, overall, but the stock market is a bumpy ride, and much more volatile over short periods. So, if you're in it for the short-term in a market where prices continue to drop monthly, rent, but watch the market carefully and buy when you start to see an uptrend in pricing for 2-3 months. (Ryan, I already know how capable you are of tracking trends.) And, please try to find an agent who can get that data for you on a regular basis, for your price range. And when you find a Realtor willing to help you-really help you-please return that by showing loyalty when and if you do purchase. I don't just look at the NAR projections, but all the forecasts I am looking at show a cautiously optimistic view for 2009/2010 nationally, but again-look locally and be aware. Now, if you can find a great deal-and they are out there, but you have to know how and where to look-and the rental market in your area is healthy-and you are a person who can do some of the maintenance work yourself-and you are willing to do the homework(reference checking, solid contracts, etc.), you may still be able to make a modest profit until the time comes to sell. If you can buy a super foreclosure or depressed property, have the vision to see what a property can become, and have handy-person skills and can afford to fix up, you'll do better yet. You better know your market, and look aggressively for the property that will be right for you. In other words, right now, know what you're doing, if you are buying real estate for investment. And, yes, a Realtor can HELP you. Most are ethical, decent people who will do right by you. - Sun Apr 20 2008, 10:20

Jared-You posted a question for a Realtor to answer, and I hope you are still checking this thread, because here I am with a response. This is why comps are valid in a stagnant market, or any market. They should be based on accurate current market data. Sold data should be from, ideally, the last 2-3 months. If nothing has sold in an area in that time frame, then to get some data, an agent may go back as far as 6 months, but most sales comps I have ever seen have the sold date on them. You have to take into consideration how old the comp is. Then, you look at what is pending. The pending comps are a reflection of what people are willing to pay for a given home. Then, you look at active listings. Then you look-yes-at the expireds and the withdrawn listings over the last month or two, along with days on the market. With that information, you can then determine what price homes are actually selling for vs. the list price. If comp houses are selling at a certain price point, you determine that price point, and allow enough for negotiation (remember, you have the list price vs. sold price data) and you have a good list price. Now, I don't understand why you don't think the houses that didn't sell aren't taken into account. That's how it's done, and if you have an agent who isn't doing that, then ask them about it or get another agent. Many homes in my market are overpriced. Yes, I am saying that as a Realtor, and we have been doing everything we can except shouting this at sellers for the past year and a half or longer. OK-I'll shout-MANY HOUSES IN MY MARKET ARE OVER-PRICED. Sellers who want and need to sell their homes are the ones who are finally paying attention to us. We don't want overpriced houses in our inventory. In fact, I have turned down overpriced listings before. I put a lot of money into marketing my listings, and an overpriced listing won't sell, unless there is something unique about the property that appeals to a certain buyer. Nor do I want underpriced listings, which may sell quickly, but hurt us all in the long-run. It hurts us, it hurts the sellers, and in the long run it hurts our economy. Part of the skill and experience a Realtor brings to the table is his/her ability to properly and accurately price a home for sale. Many sellers won't listen to their agents, because they think their home is worth more, just because they want more. - Fri Apr 18 2008, 11:18

Got it, Zack. I do understand wanting to have the data and just filter it yourself, as you appear to be very good at that! However, if you are actively looking or are thinking of purchasing in the future in Westchester County, I am glad that you are working with someone you have found to be helpful. In most cases, even though it might not lead to a transaction anytime in the near future, agents are happy to help-hoping that you would remember them when you are ready to purchase, or might refer someone to them. Our business is about meeting people and helping them, and the more we do that, the more successful we are. The most successful agents I know are the ones who put the client's needs ahead of thoughts of commission. There isn't much of a downside for a buyer to work with an agent. Even though buyer's agents work strictly to represent the buyer, much of the time their compensation comes from the seller's commission. I do, however, appreciate your thoughtfulness about not wanting to waste anyone's time. - Thu Apr 17 2008, 19:34

Zack-Thanks for your gracious response, and I want to ask just a simple question. Why would you not go to a Realtor and ask for the baseline info? We have the information, based on years of data about almost every neighborhood in the country, including the ones you're most likely interested in. We know what the "averages" are in comparison with what's on the market. We have the historic sales data, we have the pending data, we have the active data. We know what's an expired listing, how long it was on the market, whether it was listed previously with another real estate company. We have listed vs. sales price ratios. In many areas we can give you price per square foot averages. You look at the averages, then you add a certain amount for positive features of the subject property, compared with the average. Or you subtract for the negatives. We can do that-and that's why it is hard to understand why you wouldn't avail yourself of that information. It isn't biased-we have the info you can look at and confirm, through tax records and public data. We Can Help! - Thu Apr 17 2008, 18:37

AJ-First, I cited Goodyear stock as an example. I absolutely agree that any investors should diversify, and I cited reasons why. To answer you question about my investing in condos on the Gulf, I have narrowed my search now to 4 beach properties, as well as two in other areas with all the characteristics I look for in good investments. As I stated, one must always be careful to do their homework, and I am finishing mine before making a final decision within the next month. . I would be happy to talk with you about these markets specifically, and my choices, should you care to take this further. I do still have money in some low to medium risk funds, so I am not totally against any other kind of investments. I do, however, stand by my statement that real estate is one of the least risky long-term investments you can make. Furthermore, there is statistical data to support my claim. If you aren't totally close-minded to information on the National Association of Realtors website, www.realtor.org, go to the research button, then click national center for real estate research, then click on the NCRER report "Real Estate Wealth Effects". To make this easy, rather than reading the whole report, scroll down to the graphs, particularly Chart 3, showing the steady climb in home prices since 1959, compared to the stock market. Overall, at this time the gains in the stock market are close to the gains in home pricing over the last 5 decades, but the stock investors have had a much bumpier ride, with more drastic gains and losses, occurring more frequently. So, in a nutshell, I am putting my money where my typing fingers are. And I will buy as much real estate in this market as I can afford, with an eye to the rental markets in the areas where I will purchase, with at least a 5 - year plan to hold. - Thu Apr 17 2008, 14:21

Justin-THANK YOU for cutting through all the blah, blah, blah and getting to the heart of the matter. Real estate will always, always be a great investment. What else would you want to invest in? Stocks? Advice in the stock market is as follows: "Buy low, sell high". "Buy and hold" The problem with that is that it sometimes takes 18 to 20 years to recover from a fall in stock prices. Here's a typical example of how you can lose your shirt: In 1998 Goodyear Tire and Rubber Co. stock on NYSE sold at 76.12 dollars a share in April. After the Firestone debacle, and after Goodyear was moved from the Dow top ten, the stock tumbled drastically to a low of $3.35 a share in February, 2003. It has only now recovered to $26 per share this month. This is an 11 year history. How long do you think it will take this stock to see $76 again? Admittedly, had you bought in Feb., 2003, you could be looking at significant gains. Buy low, sell high. But, this stock has wavered over the last year in the mid-20's. Markets in real estate don't stay down for 10-20 years! Let's look at real estate over the same period. In 1997 I bought a home in Alpharetta, Georgia-north of Atlanta-for $185,000. The same home recently sold for $435,000. If I had taken a mortgage for that amount, at 6.5% interest for 30 years fixed, I would have paid approximately $1170 a month principle and interest, a total of $154,440. Selling today, I would realize a gain of $280,000 minus any closing costs, which would have been anywhere from $4,000 to $8,000 conservatively! Now, if I had paid cash for the full amount, $185,000, I would see a return of $250,000. Much better to have taken a mortgage, it appears, but either way-a healthy return. Those Goodyear folks sure wish they had invested in real estate. They had no way to predict, in 1197, that they were going to be facing unforeseen issues affecting the stock. These risks exist in real estate, too. Hurricanes, floods. However, you can at least have some insurance coverage! Also, you have to be careful in buying anything! Those who purchased beachfront property along the Gulf Coast prior to Hurricane Katrina, at the height of the market are now seeing sales prices of beachfront condominiums down to 1/3 of what they paid in 2004/2005. However, the beach is still the beach, and those who are buying beach condos, some as low as $135,000, ((that sold for $400,000 - $500,000 in 2005) can expect incredible profits over the next 5 years.
O.K. - is now the time to buy? Prices have fallen, and we may not be at the exact bottom, my friends, but we are near. In my area we are experiencing an upswing-an we are at a balance in new listings and new sales over the last 4 weeks. Here's the key thing: you have to be careful. If you are wise, you will look only to local data, not national. You will be talking with everyone you can about the market-keeping in mind that the people with the most up-to-date statistical data are the real estate agents Like it or not, it pays to talk with us. In fact, the first place a turnaround will be seen in your market is on the listing/sales board at the top selling company in your area-why would you not want that information? Find a real estate agent you can trust-someone with experience and integrity, preferably a Realtor-as all Realtors have to adhere to a strict code of ethics that you can find on the NAR site, www.realtor.org. Believe me, I have worked with clients for years, just waiting for the right property. Now, if you are only looking to hold a property for a year, then perhaps real estate investment isn't right for you, though you can improve the odds by looking at sales data-active, pending and closed over the last few months. You quickest source of this data is an agent. Make sure you read covenents and restrictions, get inspections by professional inspectors, study, study, study your market. You may have to look at 100 properties to find the right one. Be wise, and if you are faint of heart, and will sell if you get skittish about the market in a year or so, then good luck with your investment dollars, because you'll probably do the same thing in the stock market-only you'll be looking at more risk. - Thu Apr 17 2008, 12:30

Wow, this really sparked a lively debate, but the truth is-all real estate IS local. Yes, we do have high inventory in most areas around the country-but sellers are figuring out that the way to sell in this market is to price aggressively. And, yes, this is a great time to buy. In fact, if you're selling a home just to turn around and buy another, the whole thing will probably be a wash-with what you might "lose" when you sell being returned to you in the form of a great purchase price when you buy. The National Association of Realtors' economists do realistic forecasts based on many factors including financial market stats, political influences, etc., in addition to property sales data. www.realtor.org In the years that I have been a Realtor, I have never known these forecasts to be far off, and the indications are that most markets will recover slightly by the end of the year, and that almost all markets will be on an upward price swing by mid 2009. Despite Zack's remark to the contrary, facts and data are two of an agent's most important tools, and allow us to assist our customers in making informed decisions. Ryan, watch closely. There are ethical, capable agents out there who would be happy to keep you regularly informed concerning changes in market stats and direction, and will gladly wait to help you determine the optimum time to buy. And, Zack, have you ever heard of a consumer confidence index? The media does indeed have the power to influence buying decisions. Housing is a leading economic indicator, and when we lose confidence in the housing markets, other markets are soon affected. Tales of woe in the housing industry, repeated on a daily basis by journalists, hurt all of us in the long run. Right now, like it or not, we are in an election year, and the media (both national and local) is, in fact, contacting top agents in my market area to solicit stories of negativity about the state of real estate today. They won't get that story from me. Yes, I believe that the mainstream media has an agenda in this election year. Just as Ryan wants to be informed, the public often looks to their daily news source to get information. Maybe one day, more consumers will look to sites such as Trulia for solid facts and informed opinions. - Wed Apr 16 2008, 19:38

I wanted to check my facts before answering. Here are the current stats: Mobile County-ALL pending resales were listed at an average of $82.61 per sq. ft., average asking price-$186,692. For pending sales 1 to 15 years old-$101.67 per square ft. at an average list price of $224,283, and for new and under construction-$134 per sq. ft. at $330,000 average list price. Now, if you are interested in the Eastern Shore as well, here are the current pending stats: ALL resales-$106 per sq. ft., avg. list price-$241,000 average sales price. Resales 1-15 years old-$114 sq. ft. at an average list price of $272,000. New -$121.52 sq. ft. at an average list price of 270,766. If you need any further information, you can contact me at 251-367-3602 or e-mail me at elihoff@bellsouth.net. I'd be happy to help you find exactly what you're looking for, and work in both areas. Also, I can provide more statistics for you, if you need them. Happy hunting! - Sat Apr 19 2008, 09:09

To clarify, did you write an offer contingent on the sale of your current home? Also, was the offer contingent on you being able to obtain financing? Most offers in our area are contingent on financing, but the contingency is another situation. Advise on the specifics and I can help further. You can e-mail me at elihoff@bellsouth.net, if you prefer not to post the details here. Also, did you have an agent representing you? Was the offer written by an agent? - Thu Apr 17 2008, 19:42