Robert J. Gaffney-Leisure Land and-Properties Realty

Homeowner Price Reductions?

While reading an article in the Star Ledger this morning I came across a segment that talked about "Homeowners lower prices in bad market". I'm finding that the Real Estate market and industry is still a mystery to the average person. It never ceases to amaze me that homeowners put their homes on the market in a bad economy and still expect to get the price they thought up, with no market analysis, no professional direction or guidance and hope to sell the house quickly.

The article states, A quarter of the homes on the market in New Jersey have seen atleast one price reduction". When a home is placed on the market it all depends on several factors to when the property enters into a contract and closes the sale. The most important factor is price. The home can be updated, newly remodeled or have many modern upgrades just installed, but if the price is not set according to the current market and existing home sales in that particular neighborhood any realtor can tell you that atleast one or more price reductions are in the cards.

I have been on many listing appointments in my career and I've turned down many listings due to overpricing. It does not benefit me or the homeowner if the price is to high compared to all the other homes that fit the same criteria currently on the market and nearby the subject property. Sure many realtors out there will take the listing and have the home sit on the market selling all the other homes currently for sale, usually part time realtors with regular jobs and excited with the notion of just getting a listing, but what does that do for your listing. All it does, is show other realtors listing properties in that neighborhood that it's much easier to sell their listings by pointing out to thier clients the value they can achieve on his or her home compared to the over priced homes on the market, but they can get  it for much less.

With the economy the way it is, with no end in site, the bargain hunters are out in droves. People on the verge of losing jobs, losing 401K plans that was meant for down payments on a first home or losing the home due to falling behind in mortgage payments the average first time homebuyer or the investor is looking to capitalize on the misfortunes of others. The problem, with all of the sub-prime mortgages that were handed out to the majority of the homes on the market today a good portion of them are trying to sell just after a pre-foreclosure, foreclosure or have no choice because they have to sell as a Short Sale. For those of you who are not familiar with "Short Sales", it is when you have passed through all of the above mentioned and now you have to sell quickly before the bank repossess the home and you end up owing what ever the amount is above what the bank sells the property for plus attorney fees, taxes and penalties.

For example, if you owe $250,000 on a mortgage, you've only owned the home for two years and through the sub-prime loan you purchased the home with a 95, 97 or even a 100% (no down payment 30 year home loan) what do you think the price is going to be? Now, lets say that home is in Woodbridge, the Star Ledger says the average of listings with price reductions are 28% and the average price reduction is 6%, you now put your house on the market at $250,000 because that is what you owe and you don't want to go into debt on a home you don't own. Now, 28% of other homes on the market in your neighborhood have had price reductions already at a rate of 6%, your price should be to start around $235,000. The problem is, you're starting off $15,000 in the hole, you don't even have an offer on your home yet and you can guarantee the prospective buyer will try discounting the price even further.

The Star Ledger also comments on "Home Sales are often driven by the price which nearby homes have sold", I've understood it to be always driven by the price at which nearby homes have sold, comparatively speaking.

This is nothing new folks, price reductions have been around since the first piece of real estate was sold. It's called negotiating the price. If the price is to high, the property will sit on the market and sell all the other homes around it.  First you'll see a Century 21 sign on it, then a Coldwell Banker, then a Weichert sign and finally a "For Sale By Owner" because the property has gotten stale and all the realtors, "who are the people who generate the prospective buyers" know about it.

Well, the good news is price reductions will benefift the first time buyer, as well as the move up buyer and the investor and the economy. Price the house right the first time and you should be able to save yourself thousands of dollars in taxes, recurring fees from the bank and the always dreaded Attorney fees which could mount up to a large portion of what you may end up owing in the long run.

Robert J. Gaffney - Sales Executive

Leisure Land & Properties Realty

Off: 973-293-3267

Cell: 570-228-9126

"Rentals, Home Sales, Commercial or Business, NO JOB TOO SMALL"

Give me a comment, what are your thoughts on the current real estate market or my article, I welcome any opinions, good or bad.

No one has a crystal ball to determine when is the best time to purchase a home. Many in the media and financial institutions would have you believe they know when the time is right. I'm sure clients of Bernie Mahoff thought they were getting the best, up to the minute stock and mutual fund information that money could buy. Unfortunately, the only thing the money they were investing with Mahoff was buying was expensive cars, jewelry and multiple properties for Mahoff. How did that work out for you? 

The only thing you can do as a potential home buyer is trust yourself.  Only you can determine the best time to buy a home according to your own financial and personal situation. As long as your head is not next on the chopping block at work, you have enough money to cover closing costs and down payment and your happy with the choice of home you picked out of the many homes that are on the market is when you should take the plunge to purchase a property.

Take it from someone that has been working in this real estate market for the past fifteen years, I've been through the ups and downs, the mid 90's were good, the late 90's were great, but the market we have today started roughly in 2005 when the banks were forced, by the government, to provide housing for low income buyers. The government told the banks and mortgage company's give loans to low income buyer's. Now, I'm sure the banks and mortgage company's either heard, "or else" or interpreted some other meaning to what was said, but nevertheless, the flood gates were opened, the water's were parted and the sky opened up to the real estate and mortgage market we see today. 

The government already has Fannie Mae and Freddie Mac, putting those in the government  in the mortgage business. I just can't wait to see the day that Obama is carting client's around in the White House limosine, attending Open House's and writing contract's posing as a Realtor. Well, wouldn't that be the next step? Well he was a community organizer. Yeah, community organizer, Senator, President of the United States then Realtor, makes sense, doesn't it? I wonder, was Obama ever an Amway salesman? Anyway, you get the idea.

If you need any further assistance in any real estate transaction or information I would be glad to help you, just give me a call. By the way, I hope you enjoyed the article, let us know if you have any input that could be helpful.

Robert J Gaffney - Sales Executive

Leisure Land & Properties Realty

Off: 973-293-3267

Fax: 973-293-3567

Cell: 570-228-9126

FORECLOSURE / BANK SHORT SALES AND AUCTIONS

The new thing for banks these days is to try to be in the Real Estate business. Too many times lately  banks and mortgage company's are stuck in the middle of collecting the mortgage and foreclosing on your home. But, these day's, as it has occurred many times in the past, financial institutions are faced with a new fad called Short Sales. Now, to understand how Short Sales work, once you get behind in your mortgage you start to receive the letters in the mail from your bank/mortgage company.  READ MORE ON www.robertjgaffney.com

Depending on the bank/mortgage company, you may have up to a full year before any foreclosure proceedings begin. Once your property is in pre-foreclosure you may have time to put the property on the market, as long as you haven't ignored the letters in the mail and you've come to grips with the fact that you are in danger of losing your home and any credit rating you may still be hanging on to. The pre-foreclosure or foreclose process has started and you have had the chance to list your property with a realtor or on your own.

By the way, it is my duty to let people know that may be currently facing this tragic situation, it would benefit anyone to use a realtor, especially for this. I say this because whoever is going to handle the sale of the property will have to in constant contact with banks, mortgage company's, appraiser's, home inspector's, buyers, attorney's as well as many other individuals involved in the sale of the property.

Now, you have your property on the market, you just found a buyer that is interested in your property. The buyer comes back with a contract and it gets excepted. Now what? You have a property that was just agreed upon for sale, but it is also in the middle of a pre-foreclosure or foreclosure process. Now the task at hand is to convince the bank/mortgage company to agree to accept the terms and conditions of the buyer and, more importantly, the price the buyer is offerring. Unfortunately, unless the buyer is purchasing the property for more than your property owes on the mortgage you will have to deal with the bank/mortgage company to see if they will accept the price.

Through personal experience, banks/mortgage company's will try to hold off, be very difficult or just try to ignore the request's made to close the transaction quickly. Banks/mortgage company's do not want to agree on a sale of a property, especially if the property is being offerred at below market value or less than the amount owed on the note.

At this point, if the purchase amount is less than what is owed on the property it will feel as if you no longer are the owner and you have to ask permission to sell your own property.

The newest craze is putting properties on the auction block instead of conventional sale. In my opinion, this is the reason why the banks/mortgage company's are "holding off" on approving Short Sales. The media likes to tell the public that Short Sale's are moving properties for the banks and the banks/mortgage company's are cooperating fully with the public. NOT TRUE.

The moral of the story, the earlier you can put the property on the market for sale, before it goes into pre-foreclosure or foreclosure, the better. I realize how difficult, frustrating and embarrassing it can be to lose your home, but it can be quite invigorating to help yourself out of your problem and not let it get to the control of others.

If you need any further assistance in any real estate transaction or information I would be glad to help you, just give me a call. By the way, I hope you enjoyed the article, let us know if you have any input that could be helpful.

Robert J Gaffney - Sales Executive

Leisure Land & Properties Realty

Off: 973-293-3267

Fax: 973-293-3567

Cell: 570-228-9126

I recently saw an article in my local newspaper which let's potential renters know landlords are dropping rental prices dramatically. Obviously, due to the fact potential renters are not renting at the moment. On the same turn of the coin it mentions in good towns like Montclair, Cedar Grove and Caldwell there going fast. Which tells me potential renters are renting units quickly. Now come on folks, this is the real estate market, just like the stock market it has it's up's and down's. I've been selling and renting real estate for almost fifteen years and the towns mentioned that are doing well have always done well. In this economy people are looking for the best bang for there buck, "nothing new". Renters are looking for as many free services as they can get, such as free garbage pick up, all utilities included, use of yard space, etc.....  Now, the reason these towns are still doing well in this economy is school systems, good public services and easy access to transportation, especially transportation with the never ending threat of higher gas prices.

People are still looking for the same ammenities they have always been looking for. The dark cloud that has fallen over everyone these days is the rising fear of losing your job from one day to another. This has become the main pitfall that landlords and potential renters have been hit with lately, not the location. Remember the the three L's in real estate, location, location, location. It still carries the same meaning today.

Real Estate:

The $8,000 tax credit in the stimulus package is for first time homebuyers to make it easier to purchase a property. The $8,000 credit is a good thing, but buyers have to be aware  if you purchase a home and you use the credit you need to own the home for three years or more before reselling.

The tax credit can make the Amercian dream of homeownership a reality for potential buyers who previously could not afford the investment.

Although, If you need to resell before the three years you will have to pay the money back at a very high interest rate.

If you are considering using the $8,000 tax credit you need to use it before Dec 1, 2009.

The $8,000 tax credit was only one of the provisions of the American Recovery and Reinvestment Act signed into law on Feb 17, 2009.

Americans need to know what are the advantages and pitfalls of using the $8,000 tax credit.

Give us your thoughts on the $8,000 tax credit that was provided through the Obama administration.