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After the past 4 years, if you’re a homeowner who’s put your home on the market for sale a few times, you may be feeling like you’ve been “ridin’ dirty” in the back of a beat up old 1990 Jeep Cherokee on some tropical rain forest terrain with the windows all muddied with dirt and grime and zero visibility and a crazy real estate agent riding “shotgun” yelling, “Don’t be worried, just a few more price reductions and we’ll get there!” And who’s in the driver seat? The buyer!

I can remember riding in the back of my uncles Jeep along the beaches in Montauk when I was little. I’d be bouncing around in the backseat while he drove crazy. I loved it. But that was then. And I’m sure if you’re feeling this way as a home seller, you’re not feeling too good right about now.

Enter: A great piece of advice. Get out of the backseat and get into the drivers seat!

You’ve got your home for sale or you’re thinking of putting it on the market…perhaps again. Here’s a newsflash, if you’re waiting for an offer…and waiting…and waiting and perhaps you’re even waiting for people to come look at the house (no one’s showing up at open houses or there’s no buyer appointments being made – this is very bad), then you’re most certainly riding it out in the backseat.

Being “in the drivers seat” simply means, you and your agent, are calling the shots. It means that you’re in command of the product (the home). People are coming to your agent to see it. Your agent and his/her office is working with multiple interested parties to show and sell the property. The marketing is on point and ultimately, once offers begin to come in, negotiations starts and your agent can advise you on the highlights of each offer.

Notice I said, offers – plural. This is what it means to be in the drivers seat. Waiting for that one special person who’s going to “get your house” (meaning understand it and appreciate it) is not the place you want to be in, in this market – if you want to sell your home. If you’re one of those homeowners who “doesn’t need to sell”, then this article isn’t for you, but perhaps this one is – click here.

If you want to sell your home, then price is where you begin to take control of your homes saleability and it’s what puts you in the driver seat.

Determining Price

In this ultimate buyers market, if you’re calling the shots on the price without listening to your real estate agent, you’re putting yourself in the backseat and in for a long bumpy ride. And if the real estate agent can’t eloquently discuss with you, in a convincing manner, where your home should be priced, then you’re listening to the wrong agent for the job.

Using the latest tools to really break down the price point is vital to achieving the ultimate offering price on your home. Simply looking at “comps” without analyzing the price points in your area and surrounding neighborhoods is going to yield a mediocre pricing strategy that once again, will put you in the backseat!

Tools that measure selling prices and asking prices, ratios and percentages, and visuals that talk to you and break down the information, will get you closer to the driver seat. Price must be accurate for the market.

Click the Image To Get A Home Value Report

And I’m not talking about just any old offering price. I’m talking about a thorough look at your market. Just because your neighbor sold his home 6 months ago for $420,000, and you have an extra bathroom and hardwood floors, doesn’t mean you can sell your home for $430,000 now. And any real estate agent that can’t give you compelling evidence to at least give you the opportunity to understand why your home is worth $399,500 now, isn’t worth listing with.

A full analysis of price is just a starting point of course. The real estate agent must be competent at negotiating, marketing and his/her office should be active and capable of servicing the listing.

“Active” means that the office you list your home with should be an office with many active agents. The only way to determine this, is to have them provide you with “market share” information. If the company has a large amount of homes for available and sold, then that’s a good indication. And don’t be fooled by affiliates. Some companies are “owned and operated” individually, so a big name may not be so big if the office is part of a franchise name.

“Capable of servicing the listing” is all about the front office and administrative staff. A “mom and pop” operation may have only one assistant or worse, no assistant. The phones are manned (or not) by the owner or spouse. If you call the office on a Sunday at 9:30am, and you get a voice mail, that means others are calling, perhaps about your home, and they’re getting the same voice mail.

It’s important for cooperating agents to be able to call the office and speak with an executive assistant or even a call center, which handles, solely, making appointments for property showings. If there’s a breakdown of this process, agents won’t call back and you’ll lose the power to show and sell your home, because the real estate company you listed with is unable to service the listing.

Now of course, things like marketing and negotiating are the next two, very important, parts of the “vehicle” (staying with the analogy here), that will keep you firmly pointed in the most straight path to your destination (a big sale). I would consider marketing and negotiating as part of the chassis and engine. Sure it’s great to put your home on MLS and put a great price tag on your home, but in order to really push the envelope and create that frenzy that gets you multiple offers is what gets you the biggest sale price.

The marketing must be methodical. If you meet with an agent and they want to put your home on MLS, the very next day, without a sign in the front yard and no ads or open houses scheduled, then stop your appointment, don’t sign the papers. Call another Realtor.

To me, it’s so important to list your home with a professional who’s going to service your listing the right way and that is, first and foremost, do what you want, but secondly and just as important, as a professional, they’re going to advise you as to how best to market and sell your home.

Again, you’re in the driver seat. You’ve got a Real Estate Agent who’s in command of the housing information. They are a member of an active and capable office. And they have a marketing plan that’s bold, organized and effective. Now, can they negotiate?

The easiest way to determine their negotiating skill, is to test them on the commission. See if they sell themselves short – right off the bat. If they do, then there’s a very good chance, they’re going to sell your home short. Next, ask them about their Listing Price To Sales Price Ratio and their average Days On Market average.

If you see a low days on market, this means they sell their listings faster than the average agent (below 80 days average is exceptional). And to me, if they sell their homes within 5% of asking price, again, on average, they’re doing a good job.

Taking this one step further, if they can show you multiple homes that they’ve sold for higher than asking price or within 2% of asking price, then there is an excellent chance, they’ve got what I call, “the goods” to get the job done quickly, effectively and for more money than the agent who quotes you a ridiculously high asking price.

So consider your goals. Take a moment to really think things through and when you call agents, keep interviewing them until you find that one agent who can decipher market data and give you an understanding of home values in your area, has a marketing plan, can negotiate on your behalf, and is part of an active company that’s capable of servicing your listing!

If you want to schedule an appointment with me, I can be reached at (631)881-5959.

By Thomas McGiveron, Licensed Associate Broker
Realty Connect USA

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Having fielded many inquiries from buyers searching for a pre-approval and a mortgage, I feel it is necessary to share with you some insights about what to look for in a professional Mortgage Loan Officer.

Being a professional Loan Originator in today’s market requires more than just a fancy title on a business card or the affiliation with a recognizable name in lending. As regulators try to continue to minimize the importance of the counsel of talented lenders through tightening guidelines and the guise of transparency, the public needs to have a better handle on how to identify a good loan officer and what value they can bring to the transaction. Being a good loan officer is being a good Leader, and Leaders have three core components:

1. They are experts. Solid loan officers know the requirements of their loan products; they know how to qualify borrowers for those products; and they have an understanding of the process work flow. Moreover, they can effectively communicate these items to consumers who “don’t do this every day”, and in so doing, they garner the trust and confidence of those consumers. But, exceptional Loan Officers offer more. They can offer insight to likely interest rate movements before it occurs because they are students of the financial markets (of course, with no guarantees, but with some reasonable probabilities). They can discuss income tax strategies (which, of course, should be reviewed with an accountant) that can help optimize the benefits of homeownership. In addition, the best loan officers are surrounded by a team of experts in other areas- real estate, financial planning, life insurance, wills & estates, construction/renovation, credit score optimization, and more.

2. They are empathetic. The loan officer of today needs to know more that facts and figures. They need to read into the nuances of a file and be able to bring out the character of the borrower. That only comes from a loan application consultation that includes hopes, dreams, and compassion about the past. Most files today have some issues (be it in the credit score or documentation of income and assets). The great loan officer knows how to highlight the strengths of a file and document the challenges in a way to lessen their impact for the underwriter. If expertise is a science, empathy is the art form. And it requires exceptional listening skills which is crucial for today’s originator.

3. They think outside the box. Most lending today is done inside the “boxes” of the FICO Credit Scoring System and the Automated Underwriting Systems. Superior loan officers understand how the “boxes” think. They know the old adage “garbage in/garbage out”. The loan officer who can properly structure a loan can get loans closed that others cannot. Loan officers who can counsel clients on asset positioning, credit score optimization, and such can be invaluable.

It is my experience in life that people want to follow in areas where they are not the expert. Getting a mortgage today, it demands that you find someone worth following. You need a loan officer who is a leader. We define that Leader as an EXPERT who is both EMPATHETIC and CREATIVE. My advice is you search for the best person, even more than you search for the lowest rate and fees.

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The Long Island real estate market has been tough on many homeowners during the last few years. Many homeowners have given up on trying to sell their homes. They’ve convinced themselves that they can hang on for a few more years.

If you’re reading this article and you fall into this category of homeowner who’s going to wait out the “bad market”, then this article is for you!

I’m not going to “sell” you on the idea that now is a “great time to sell”. This article isn’t about that. Rather, I want to focus on a few bits of information that may help you figure out things realistically now and gauge whether or not waiting is in your best interest.

Let’s start with whether or not you plan to sell and buy another home. Obviously this depends on one important element; Equity. Most owners who want to sell now and buy another home need the equity in their current home to buy another. And everyone has their own level of comfort when it comes to how much money they want to put down on the new home, how much of their equity represents lifetime “nest egg” savings, etc. All of this must be thoroughly considered before selling your home or deciding to give up on selling and “ride out the down market”.

One thing that must be pointed out is the historically low mortgage interest rates and how that can impact your purchase. One bit of information that’s helpful is knowing how much you can save on a mortgage payment.

In 2003 (where home prices are today), a mortgage savings in the current market is much more advantageous than it was back then. So if you’re looking to sell your home and purchase another home, using a portion of your equity as your down payment on a new home, the mortgage interest rate of today is simply tremendous.

Now many homeowners who are elderly or nearing retirement, want to pay cash for their home and have no mortgage. These types of homeowners don’t have a mortgage on their current home or if they do, the amount owed is minimal.

Of course, you have to take into account where you’re moving to. For instance, if you’re selling and buying in Florida, you should pay close attention to the fact that prices in Florida are down over 50% in many areas. You can still sell your home now, in 2010, and still very easily buy the home you want in another state like Florida, pay cash for it, get a great deal, and bank the rest of your proceeds from the sale of your Long Island home.

I think it’s important for homeowners to realize that during the time of between 1987 and 2006, you gained a lot of equity (see the graph below).

Notice that in 2010, despite all the bad press, from 1987, if you measured your equity appreciation from then, you’re home has increased in value over 50%. On Long Island, the value of homes almost double the national average. Clearly, Long Island real estate is still valuable, indeed, your home is still very valuable!

Of course talking about the long-term appreciative value doesn’t help many homeowners who are looking at the last four years, where they’ve seen nearly 40% of their equitable value disappear. But real estate cycles throughout history tell us that there is an ebb and flow to the housing market, just like any other market. In the video below, I can’t help but continue to go back to this and wonder how different life would be if, in 2007 or 2008, if homeowners listened to me (when I pleaded with them to sell their home for a little bit less than what they wanted).

The History of the Real Estate Market (Roller Coaster)

Now that roller coaster went down…and it went down a lot. Now in the late fall months of 2010, the coaster is still going to be going down well into 2011.

But, there are bright spots for homeowners who really want to sell. No, let’s scratch that and say it like it is, some of you reading this really need to sell. Your life is on hold. Your life is on hold because you don’t want to “give your house away.”

If you have equity in your home and it’s enough to get you into another home or at least get you moving on to the next chapter of your life, the good news is, over 70% of people surveyed believe that now is a good time to buy. So, they’ll be buyers out there now, during the late fall and winter months and they’re serious about buying!

I want to really stress that I know many different homeowners who are struggling with the idea of having to stay in Long Island when they’re kids are in other states or they have a second home waiting for them in Florida or Utah or where ever. And because they can’t sell their home for what they think it’s worth, they’re not selling and in exchange for that sacrifice and reduction in quality of life, they’re guessing that they’ll be able to sell it next Spring for more money (which is completely not rational) or maybe “in a year or two”.

Here’s a helpful tip, read my previous articles about holding off on selling and start by reading this one – 4 More Years.

For other homeowners, the “choice” of not selling isn’t a luxury. Many homeowners bought at the height of the market and cannot sell their homes for more than what they owe. They have no equity. Others are in the same position, but purchased their homes many years ago, but refinanced their homes above and beyond what it is worth today.

Each time I meet homeowners who are “upside down” on their home value, I really do get a sickness in my stomach. It’s tough. But you still have choices. Strategic defaults are viable choices if you have not suffered any financial hardship and just want to sell your home to get out of it.

Other homeowners who have lost a job or suffered other life circumstances that have negatively impacted their ability to pay their mortgage certainly have choices to avoid foreclosure.

All in all, as a homeowner, you have choices and that’s the most helpful tip I can provide. Don’t give up just because your last real estate agent couldn’t sell your home. Don’t think that you can sell your home next year for more money than you can today. The time to “guess” or use your “gut instinct” and gauge the market is long gone.

Information is the key and going through the numbers and honestly asking yourself whether or not sacrificing the next 2 to 5 years of your life is worth the 8% or so you’re home might increase in value through that time (and to get back to 2006 levels, it would need to increase 35% on average – see 2019).

There are bright spots and right now is one of them. Buyers know that now is the time. The only difference between now and this time next year is that your home is worth more!

Should you have any questions or want to schedule an appointment to see me, please call (631)831-9048. Please feel free to share this article on social networks and with your friends or family!

By Thomas McGiveron, Licensed Associate Broker
Realty Connect USA

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The Long Island real estate market has taken a beating. No one can question that. But the real question that I continue to answer on a monthly basis is, what’s next for the LI market?

The Media Coverage

On the very same day, two different sources share two entirely different messages. The issue with the media is one of competence. When one source looks at a Month Over Month comparison, the “data” looks promising and suggests to homeowners, that the market is getting better. Then the exact opposite is expressed in another news source because the comparison of data is Year Over Year (comparing the month of September 2009 to Sept 2010). There’s a big difference.

So my advice is, when you hear something in the media, call a trusted local source! You may even visit my website on a consistent basis or sign up for my e-newsletter to keep current. But just don’t listen to CNN or read an outdated newspaper and leave it at that.

The Real Deal

If you’ve ever watched CNBC, you’ll now the name Moody’s. They’re economic and housing guru’s who actually work hard to get the best information out there for people to see and when you talk about the real estate market, Moody’s hits the hammer on the head when they talk foreclosures (distressed sales).

“Prices will descend until distressed sales represent a smaller share of total homes sales”, as stated in Moody’s. You cannot have a high number of short sales and foreclosures and see prices improve. That’s not going to happen. Why? Because buyers aren’t going to pay more for homes when it’s a “buyers market”.

The Future Of Home Prices

I am covering this every month and every month this gets a little “tweaked”. This month is no different. From the CME Group, a Risk Management and options firm that analyzes risk and price futures, sees future prices staying very stagnant over the next several years (through 2014).

Does that mean the market’s not going to improve? No, but it’s a very good indicator of what’s ahead.

And Bank Of America, in it’s analysis of the real estate market’s future, sees a bottom in the second quarter of 2011 followed but a modest increase toward the end of 2011, which falls short of current values. So at the end of 2011, Bank Of America and CME Group and other industry experts, see the real estate market poised for continued decline.

So what’s the strategy?

If you’re a homeowner looking to sell, let’s take a look at the local Long Island real estate market.

Long Island Real Estate Market: Year Over Year Comparison

When I took a look at September 2010 and compared it to the same month in 2009, the numbers were exactly opposite from what any homeowner would want.

From 2009 to 2010, inventory increased and sales decreased.

So where does that leave us?

The “hangover” from the Spring Home Buyer Tax Credit obviously impacted July and August buyer activity (remember closings in September are normally from July and August contracts). Additionally, the extremely low mortgage interest rates (what you would think is a good thing), are working against the real estate market at this point. Buyers have become complacent.

With mortgage interest rates as low as 4%, buyer activity should be double what it is. It’s a “no brainer” at this point that buying a home now is optimal.

But due to the rates being so low, for so long, many well qualified home buyers are sitting on the sideline…still. How do I know this? Because I know these buyers. I’m waiting for them to start buying. I know them personally and I know other brokers and agents who are doing the same thing. We are waiting for buyers to buy.

And so are you, if you’re a homeowner.

The Most Important Statement In This Article

For any homeowner reading this, and I’m sure you may have heard this before, but when a home is priced “correctly”, meaning it has a price tag that attracts multiple offers, home buyers come out in large numbers. This is a phenomenon known as buyers market.

You must sit with the right Real Estate Agent who can price your home so that you can earn maximum dollar in this tough market. Look at who’s selling real estate in your area and give them a call. Any agent worth his/her salt, should be able to tell you how many homes they’ve sold this year and what their Listing to Sales Price Ratio is, which will tell you if they sell their homes for more or less money.

Should you have any questions about the Long Island real estate market or would like to schedule an appointment, please call me at 631-831-9048.
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