Apr

26

Taxes: The Real Issue

Filed Under Buyers, Sellers, Sellers & Buyers, Taxing Matters | 1 Comment

I’m not going to quote any articles. I’m not going to quote any politicians. It’s plain and simple. We, as Long Islanders, citizens of New York and as Americans are taxed too much. When I hear a politician talk about “affordable housing” or some government program to “help people”, I cringe. I’m all for people being able to afford to live the American Dream, but what about a more simple approach to “solving” our problems?
Taxes. One word. It’s simple enough. And let’s put another word in front of that. Lower. Okay, so now let’s put them together - Lower Taxes. It’s amazing how no politician can seem to put these two words together to “solve” problems.
Compare these two words with another two words - Affordable Housing.
Lower Taxes. Affordable Housing.
One implies that people will work hard, earn money and pay less in taxes - but still do their share to pay taxes such as property taxes, income taxes (state and federal), sales taxes and every other kind of tax. Lower Taxes - implies that the government will actually MAKE DO with what they “earn” and not create another program such as “Affordable Housing”. Lower Taxes - implies, no actually puts more money in the pockets of hard-working people who then can take that money - save it, invest it, spend it - thus helping the economy - but more importantly - themselves, their families and ultimately - their community!
I don’t know about you - but for me - I don’t want “affordable housing”. To me, “affordable” anything, from the government - is simply another two-word combination - Government Handout.
Young people don’t want another Government Handout. Older people don’t want it. Really - no self-respecting, able-bodied person wants any kind of handout and for those that do - I hope you have a good reason for one - such as illness or another type of condition or serious and real circumstance that prohibits you from being able to care for yourself or family.
I am all for taxes being used to help those in need. That’s a must - but it’s got to be done with some kind of temperance. The word “temperance” is not in the vocabulary of a politician. The word means control. Clearly, these politicians, both locally and nationally, do not have any understanding of the word. Spend. Spend more. Spend even more. Oh and just raise taxes to pay for all government “solutions” (code word for spending).
Like any family - you’ve got a budget. You use some credit to pay for some things. You get a mortgage most likely to buy a home. You take out a loan to get a car so you can drive around. And you balance household expenses and related bills. You work and pay what you can and save or invest what you’ve got left over. Government - no. Government operates as if there is a complete unlimited amount of money to continue with spending, spending, spending.
Well it’s time we, the citizens, said “No!”
We don’t want more programs. We don’t need “Affordable Housing”. We need government to get off our backs, restrict their spending and “programs” and operate on a budget - come hell or highwater! Period!
At least that’s my opinion. What do you think?

(c) Copyright 2008, www.tommcgiveron.com

By Tom McGiveron

Apr

18

Real Estate Market: Think Positive!

Filed Under Sellers | 1 Comment

Let’s face it. Real estate is a long term investment. When you buy your own home, you’re buying for the long haul. Families aren’t speculators and most people don’t buy a home strictly as an investment. So while you may be sweating over the fact that your home is “losing equity” as the market depreciates, remember that everyone elses home is doing the same.

How is this a good thing? Well, if you’re selling now, it’s good mainly because while you may be losing value in your home, you’re also going to be a buyer as well. Afterall, you’ve got to live somewhere. Now unless you’re thinking you are going to rent for some reason, you’ll be selling at a lower price, but on the bright side, you’ll be buying low as well.

Many homeowners I speak with seem very stressed out. They hear what I say about the value of homes in the area and how certain statistics I review with them indicate the value of their home is not what they want it to be. Homeowners immediately think the worst and some even go into “panic mode”.

But I have to point out a few bright points. One, over 50 homes a day are sold on Long Island, every day. Yes, that’s everyday. Second, while home values may be lagging, over the past 4 years, home values increased over 115%. This has to be taken into consideration. The fact that home values on Long Island are double the national average is one great indicator that this is a prime area to own real estate. We live right next to the greatest city in the world and financial mecca of the United States.

Most homeowners are bent out of shape because they’ve lost 10% of equity in the value of their home. However, most, if not all, forget about the over 80% of accumulated appreciation they’ve had from 2002 to 2005! It’s crazy when you actually sit back and think about it. Now of course the people who bought in 2005 and are now trying to sell (either as a speculator or tragically, a family who has found they can’t afford it) have made poor decisions, so that’s a little different. The other group of homeowners that aren’t happy at all are the ones who took out all their money and used their home like a personal ATM via refinancing and home equity loans.

Ultimately, many homeowners find themselves in great positions. Even though the market is slowed and prices have dropped, the 115% appreciative value in the past few years must not go unrecognized. I mean, seriously people, let’s wake up! That’s a good thing!

I just sat with a homeowner who kept telling me “I have to walk away with $200,000 in my pocket…after I sell”. Despite my best efforts to educate them on the market, highlighting high taxes, food prices, energy prices, and a weakening economy overall - they insisted their home is worth $550,000, when I was trying to inform them that it’s more like $499,000. Clearly, this homeowner doesn’t see the positive. He doesn’t want to understand that hey bought in 1999 for $190,000 and stand to make over 100% on the investment overall (not to mention the $100,000 he took out of the property in a home equity loan)!

So in this market, when you go to call me and ask for an appointment, don’t close your mind to reason. Think positive by all means! Realize that every day 50 houses get sold! Remember your appreciation values over the past few years and of course, recognize that you happened to have contacted the best in the business!

Positive thoughts!

(c) Copyright 2008 www.tommcgiveron.com

by Tom McGiveron

Apr

8

Real Estate Market: Buyers On The Fence

Filed Under Buyers | 3 Comments

So you’re waiting out the market? You’re watching closely to home prices and you’re waiting to strike when the market is at rock bottom hey? As a professional in the field, I may have a few things to share with you, at the very least, a few ideas about the market that may help you put things in more of a realistic perspective.

I know I know - I’m a real estate agent so how could my opinion possibly be objective. I’m just writing these articles to get people to buy. Well, if I could possibly hypnotize people through my articles by saying some strange words repeatedly that would become meshed with your subconscious so that you pick up the phone and call me to buy a home…I would definitely do that. However, this article won’t have those hypnotic words. No tricks. In fact, some of the main comments in this article will be from people who are much smarter than I am, that’s for certain.

Let’s start with Susanne Cannon, Director of the Real Estate Center, DePaul University, as quoted in the New York Times.

buyers-on-the-fence.jpgCLICK HERE TO ENLARGE

This is an interesting point Susanne brings up mainly because it fits the description to a lot of buyers out there who are simply waiting it out. However, what’s not being considered is the impact interest rates will have in the decision. Great, nine months from now, a buyer might pay $300,000 for a home that was worth $425,000 two years ago, but at an interest rate of 8.5%.

Take a look at the following graph.
interest-rates-buyers-208.jpgCLICK HERE TO ENLARGE

This graph compiled by Bankrate.com, shows the clear trend in the mortgage market toward a continuing increase in long-term rates. If you asked me if I believe that by the end of the year, interest rates will be over 8%, I would definitely have to say, no way. However, given this “crazy market” we’re in, who the heck knows.

If you buy a house for say $440,000 now and put 20% down, with a $350,000 mortgage now, at a fixed percentage rate of 6%, 30 year mortgage, the total amount of payments over the 30 years would be $755,431.84 with the total amount of interest paid being $405,431.84.

If you buy this same house say, 10 months from now (when the market prices “hit bottom”) for $410,000 and put 20% down, with a $328,000, at a fixed percentage rate of 8%, 30 year mortgage, the total amount of payments over the 30 years would be….$866,426.55 with the total amount of interest paid being $538,426.55.

We’re talking over $100,000 more in costs just to “save” 8 to 10 percent now on a purchase price. It clearly doesn’t add up. Even if you say you’re not going to live their for 30 years and will most likely sell the home 5 to 7 years from now, the cost to you will be more if you wait and take the chance of interest rates being higher.

As a professional real estate agent, based on what I read everyday, see in the market, and hear from other professionals, both locally and nationally, buying real estate anytime between now and the end of the year, price-wise, is a good time. With regard to the interest rates, without a doubt, now is the best time to strike!

As a real estate agent, I will admit, I’m a little biased. Afterall I want people to be out buying, namely my listings or working with me as their buyers agent! However, if you think about the current market rationally, it would be hard to argue with me. And let me remind you that you’re not arguing with just me, you’re arguing with the facts. Interest rates are, and have been rising since the beginning of the year. The trend is upward. While prices will continue in a downward trend, we have really no idea what will happen to interest rates.

If you are currently looking to buy real estate now or in the future, please feel free to contact me at 631.587.1700. You can also read my article Buyers Agency to learn more about how and why you should consider having me work for you! You can also sign up for a FREE listingbook account, with me as your Personal MLS guide!

(c) Copyright 2008 www.tommcgiveron.com

By Tom McGiveron
Licensed Sales Associate
Coldwell Banker Matherson

Apr

5

Mortgage Matters: New Article

Filed Under Mortgage Matters | Leave a Comment

Home Equity Has A Rate Of Return?
Let’s start with a common scenario. A prospective home buyer decides to buy a home for $500,000. They intend to put 20% down ($100,000 cash) and take out a $400,000 mortgage. Now, a question……“What interest rate is being paid to the home buyer on their cash down payment?” After a pause, most people come up with the correct answer…

CLICK HERE TO READ THE REST OF TONY AUFFANT’S COLUMN

Apr

1

The Real Estate Market: Cutting Prices

Filed Under Deer Park Real Estate, Sellers | 1 Comment

So as a real estate agent, when I go to peoples homes and discuss the market, I get the feeling that the homeowner(s) either doesn’t understand what I’m saying or they just don’t believe me because I’m a lying salesman. The funny thing is, I’m not a car salesman. These aren’t cars I’m selling off of a lot. I’m a real estate professional who has all the numbers, both locally and nationally and my lot is the neighbhorhood.

I have to price homes according to what the market is calling for. The market is made up of buyers. I’m not buying your home and it’s not 2004. The message to most of my homeowners who are hiring me to sell their home is the following:

“If you have to sell, cut your prices aggressively now.”

And that’s a quote from Business Week, February, 2008!

There’s a big problem in the market right now and I see it constantly. Many real estate agents are taking listings that are just blatantly over priced. And some more than $60,000. This is bad for business. Let me explain.

As a real estate agent, I am not going to show a home that is over priced. Why? Think about this. I’m the real estate agent and I would show any prospective buyer anything they want to see. Let me repeat that - I’ll show any prospective buyer anything they want to see. And there you have it. I don’t set the market value, buyers do and they know what they want to pay, period.

When other agents over price a home that bad, it does the neighbhorhood no good, because it indicates to their neighbors the wrong information (i.e. “Well if their house is priced at X, then my house has got to be worth XXXXX.”) Homeowners price their home as high as they can, as they should. However, seeing a neighbor hit the market at a certain price, may give them a totally warped sense of the value of their home.

Owners who attempt to sell their own home, usually get their information from 2 or 3 houses in the area. Their data is 6 months old and they just slap a price on it. Now as a homeowner, that’s fine. Most likely, they’ll get hundreds of calls from real estate agents and after a month or two, will list with an agent, hopefully with me (and thus at a good price).

The bottom line is, we as real estate agents and brokers, need to price our inventory correctly. We need to stop taking listings that are over priced. Currently, I have a listing that is over priced - oddly enough. However, the situation is a little different. The owner is of an ethnicity that is very proud and stubborn and they do not speak english so their daughter translates. The owner is in a position where if he sells, “It’s okay.” If he doesn’t sell, “I rental.”

So we priced it about $35,000 over what the data told me was market value. Now, 2 months later, we’re dropping the price to where we should have been 2 months ago. So we’re “chasing the market.” You do not want to be in this position as a homeowner. It’s no good.

How do we not “chase the market”? Simple, we cut prices now. Right now. Real estate agents stop taking listings too high and then say to other agents, “Hey, we’ve got to do what we’ve got to do.” Honestly, that’s what an agent just recently said to me when I went to an open house. It was a house in West Babylon that I had an appointment with in February and I priced the home at $379,000. I sat with the owner, followed up with them and gave them all the information they could possibly want. I told her how Coldwell Banker far surpasses all the competition and how I, as an agent, am full-time and provide the best services possible.

Well another agent came in and priced the house at…whatever the homeowner wanted which ended up being $425,000. That’s $46,000 more than my highest price. You see, I gave the owner two options and told her that the highest price she could go was $379,000 and that most likely, a better price would be $365,000 for a quick sale (30 to 60 days).

Unfortunately for the owner in this situation, they chose very poorly and will not sell their home. They will expire six months from now and the day they do, I’ll be knocking on their door. I will not show this house because - no buyers will want to see it because buyers know the prices and the buyers will not want to see it because…it’s over priced. Buyers already know this - I don’t need to tell them.

So cutting prices now is the answer. If you are a homeowner who wants to sell because they need to sell, you must cut your prices now. Call your agent and tell them you want to reduce your price now. With competition high (lots of houses on the market), supply is high and when that’s mixed with a low demand (not as many buyers out there willing to pull the trigger), you must adjust prices downward. It’s simple (and very tough) economics.

I’m not into being the bearer of bad news for people. I don’t like it. And I will fight for every penny I put into a homeowners pocket. Don’t forget, the more they make, the more I make. Everytime I have to lower a price, I make less money…on all my listings. Because when I lower one homes price, I have to go and lower all the rest, or at least try.

If you want a free comprehensive value assessment of your home, please call me at 631.587.1700, ext. 51.

(c) Copyright www.tommcgiveron.com

By Tom McGiveron