HERE’S THE INSIDE SCOOP ON HOW TO DO IT RIGHT!

First, make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS…RUN…DON’T WALK…RUN…TO A LENDER THAT DOES!

1. What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, Not the 10-year Treasury note. While the 10-year Treasury note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)
2. What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this at their fingertips. For an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate, ask to be added to my e-mail distribution for my weekly newsletter.)
3. When Bernanke and the Fed “change rates”, what does this mean…and what impact does this have on mortgage interest rates? (The answer may surprise you. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short-term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed Change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).
4. Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

Be smart… Ask questions… Get answers!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do these only four or five times in your entire life… but we do this every single day. It’s your home and your future. It’s our profession and our passion. We’re ready to work for your best interest.

Tony Auffant
Senior Mortgage Planner
Continental Home Loans, Inc.

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.

Now you can adjust those numbers but they remain the same. The difference between 5% and 6.5% means you’re paying approximately 23% more in interest (the difference between 5% and 6.5% is not just 1.5% - it’s a 23.077% difference).
So now I basically am saying to you, as a buyer, you’re just simply nuts not to seriously consider buying real estate now. I have written in the past that interest rates would be higher now. And I can admit, I was wrong, but no one saw what happened in October to the entire financial market. Not even Warren Buffet himself saw that coming.
So I’m not going to say that interest rates will be higher 3 months from now. What I will say is that I know the following facts:
1. Interest rates for qualified buyers are incredible…right now.
2. Prices have dropped over 20%.

This may not be enough for you, as a buyer. To you I say - continue paying rent and see how much you increase your net worth over the next year and call me when you’re ready to buy or sign up for a listingbook account now and browse the market like a champ. To the buyer who’s shaking his head in curiousity and is saying, “I think it’s time to buy”…Call me 631-831-9048.

(c) Copyright 2008, www.tommcgiveron.com

By Thomas McGiveron, Licensed Salesperson

LISPENDENSLISTS.COM

Suffolk County

West Islip = 70 Homes Pending Foreclosure - this represents over a 50% increase since the last report on Oct. 7, 2008.
Deer Park = 176 Homes Pending Foreclosure - a 165% increase since October, 2008.
Babylon = 34 Homes Pending Foreclosure (nearly 200% increase)
West Babylon = 188 Homes Pending Foreclosure (117% increase)
Lindenhurst = 193 Homes Pending Foreclosure (exactly 100 more foreclosures…in two months)
Patchogue = 17 Homes Pending Foreclosure
Miller Place = 47 Homes Pending Foreclosure
Riverhead = 3 Homes Pending Foreclosure
Huntington = 95 Homes Pending Foreclosure (nearly 100% increase since Oct. 2008)
Port Jeff = 21 Homes Pending Foreclosure (100% increase)
Sayville = 32 Homes Pending Foreclosure
East Hampton = 4 Homes Pending Foreclosure (300% increase)
Smithtown = 11 Homes Pending Foreclosure
Hauppauge = 26 Homes Pending Foreclosure
Manorville = 43 Homes Pending Foreclosure (over 144% increase)

Total = 960 Homes Pending Foreclosure (51% increase since last report in October, 2008)

Nassau County

Farmingdale = 34 Homes Pending Foreclosure
Seaford = 9 Homes Pending Foreclosure (125% increase)
Massapequa = 37 Homes Pending Foreclosure (8% decline)
Freeport = 56 Homes Pending Foreclosure
Wantagh = 10 Homes Pending Foreclosure
Lynbrook = 3 Homes Pending Foreclosure
Elmont = 47 Homes Pending Foreclosure
Oceanside = 6 Homes Pending Foreclosure

Total = 202 Homes Pending Foreclosure

If you want information on a specific town, leave me a comment or call me at 631.831.9048.

It’s clear that Suffolk county had a tremendous surge in foreclosure filings. All this information was gathered from RealtyTrac. The information is a combination of lis pendens filings with local county offices, public notices of foreclosure sales, and real estate owned properties (properties currently owned by banking institutions).

The average loss of equity from a foreclosure on Long Island is about $8000. So the fewer foreclosures in your area, the better! Overall, the foreclosure numbers, gathered from RealtyTrac, appear to be increasing. A 50% increase in the number of foreclosures in less than 3 months.

Click the slide to enlarge it. These are some national numbers which seem to correlate with the Long Island real estate market.

I will continue to report on the Long Island foreclosure situation and see how things change from month to month. Please continue to come back. If you have any questions on a specific town, please feel free to contact me.

For the previous foreclosure updates, www.tommcgiveron.com/category/foreclosures/.

Resource For Homeowners

Since 2006, over 220 offices throughout Long Island have closed. They’re either large companies “restructuring” to become more centralized, or they’re small offices that are just no longer in business any longer.

Many offices and their agents have dropped commissions to “compete” with low-cost real estate companies. This has been a trend for the past 30 months or so. But oddly enough, what has happened is these offices have closed down. The “flat-fee” brokerages charging $3500 (plus a commission pay out for cooperating brokerages) are mostly shut down.

Without boring anyone, I’ll talk briefly about how business works. It’s simple really. The equation is:

Revenues - Expenses = PROFIT

Now let’s look at the retail world of clothing. If a clothing company like The Gap decreases their prices, they are inadvertantly decreasing their revenues. They need to sell more in order to make a profit or, they need to eliminate expenses. Now fortune 500 companies usually will cut costs by firing people. It’s that simple.

In the real estate business, in order for a brokerage charging a flat-fee or charging a 4% commission (split 50/50 with another brokerage - the other brokerage brings the buyer and each office splits the commission), to make a profit, the must either sell more houses - faster and not hold onto them or they must decrease expenses.

In the real estate business, decreasing expenses includes less advertising, less auxilary staff to run the office, less open houses, less signs - basically less marketing all around. This is a fact, or the office will close like the over 220 offices that have gone that route since 2006.

Now think about prices of homes and add this into the mix. If a brokerage is letting their agents take 4% listings and the homes selling in their market have come down in price over 20%, assuming a standard and healthy commission is 6%, and their charging 4%, that’s a 49% drop in revenue.

Now prices across the board have come down. We all know this as you astutely thought to yourself at the beginning of this article about my insight. So ask yourself this question next time you’re sitting with a real estate agent who will accept a 4% or flat-fee commission:

“How can this agent and their office market my property when their revenues are down 50%?”

Ask yourself this question next:

“If this agent and their office is taking a 4% commission now, how well are they going to negotiate a price for me in the future?” (because they’re bottom-feeding right from the get-go).

If you could buy something now, that will definitely do what you bought it to do, or spend a little less and buy something that could very likely turn out to not be able to do what you’re buying it to do - which do you think you should buy?

The reason for this article is push back a little against the trend that is putting real estate businesses out of business and putting homeowners in situations where their equity is flying out the window each and every month their home doesn’t sell.

Price is king in this market, but effective marketing helps make any listing pop off the long list of homes for sale (over 30,000) on Long Island.

Call me now to talk about actually selling your home and how I use my fee for service to help sell your property faster and for more money than my competition.

1-877-765-3123, Ext. 51

(c) Copyright, 2008 www.tommcgiveron.com

The number of Long Island short sales is increasing much like the rest of the country. Homeowners are finding themselves stuck behind a mortgage payment they cannot afford and we are seeing these homes coming to the market for sale - when the home is worth less than what is owed on the mortgage.
In my travels all across Long Island, I continue to meet with homeowners who have either just bought at the height of the market or many who have refinanced their home or taken out multiple home equity loans and now find themselves with a home that isn’t worth what they “pulled out” in equity. This isn’t a problem in and of itself.
The problem is now these homeowners are getting a divorce, in poor health, currently unemployed, lost a business, and on and on. Some who bought homes just a few years ago in 2004-05-06, are deciding they don’t want a home anymore for whatever reasons, but most are people who should never have purchased a home to begin with. Enter subprime lending.
Those that purchased in say, 2001 - 2005 are now facing resets on their adjustable rate mortgages (ARM). An ARM is a mortgage that offers a low-interest mortgage up front, but follows the market and adjusts after a certain period to whatever interest rates are at the current time. Luckily, the interest rates are still low. However, even a homeowner who purchased with a 4% ARM in 2004, is now paying for sake of argument, 5.5%; that’s a whopping 1.5% increase on a mortgage, not a car loan!
With all this, I am introducing www.longislandshortsales.org. It is a website dedicated to the cause of helping homeowners who need professional real estate agents, attorneys, and reputable mortgage consultants to assist them with their options.
For every home that I help avoid foreclosure, the stability of the real estate market remains intact. If all the homeowners who are in trouble on this very day, November 29, 2008, with paying their mortgage were to be foreclosed on, homeowners all across the island, would see the bottom drop out from under their home values. We’re talking 50% loss of equity from today (we’ve already lost over 20% during the past 30 months or so).
A boarded-up home next door to you is bad for everyone - the family that was there, the investor who tried to make something out of his/her life, the neighbors, the bank holding the note. In these situations, everyone loses.
My point in announcing this website on tommcgiveron.com, is to create awareness for my visitors and subscribers, that if you know of anyone who is in trouble, call me. Visit longislandshortsales.org and just read the home page.
One of the main reasons I am creating this website and forging ahead into the direction of short sales is because time and time again, I, and many of my colleagues, are running into real estate agents who are not managing these types of sales correctly. They are time consuming and delicate listings that must have a solid real estate professional with the experience and tools to analyze all of the homeowner options.
Many homeowners are listing their homes with agents and not disclosing that they’re a month or two behind on the mortgage payment. They list the home too high because they’re listing with real estate agents who are not fully vested in this business. The home is sitting on the market. The homeowners are not making their mortgage payments. And worst of all, after 6 months of falling behind, the homeowners find themselves in a haze of misinformation coming from a real estate agent who doesn’t know what they’re talking about.
These times call for professionals in the legal field and real estate industry to pull together to make sure homeowners are not taken advantage of by businesses proclaiming to perfrom miracle “loan modifications” for $1000’s of dollars. Their are reputable companies and attornies that handle this, but homeowners have to be careful.
Longislandshortsales.org is a place where homeowners can come and get a trustworthy company, Coldwell Banker and a real estate agent, me, who is experienced with helping homeowners fully evaluate their circumstances. I am not a lawyer, but I have teamed with the best. I am not a loan modification specialist, but I know the best. I am a real estate professional who knows the market, has extensive experience with short sales and can help homeowners actually avoid foreclosure. Whether it’s through short selling their home fast so as to maximize the lenders return so that they accept the short sale or it’s a referral to a qualified attorney to help them get out of a bad situation, I am available at 1-877-765-3123, ext. 51.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Salesperson

The State of New York Mortgage Agency (SONYMA) provides safe, low interest fixed rate mortgages, closing cost assistance and other programs specifically designed to help low and moderate income families become homeowners. One of the biggest obstacles to owning a home is the amount of funds an applicant must have for down payment and closing costs.

To help applicants overcome this obstacle, SONYMA offers closing cost assistance, in combination with any currently available SONYMA program. One of the brightest features of the SONYMA product is a maximum assistance of closing costs equal to $5,000 or 3% of the SONYMA mortgage loan amount, whichever is higher. In addition…

Read The Rest Of The Article

Share

According to the Multiple Listing Service of Long Island, in October 2007, there were 2,871 real estate offices throughout Long Island (Queens, Nassau, Suffolk). As of October 2008, there are 2660 real estate offices still in business. That’s a whopping 211 office closings in one year.

According to the Multiple Listing Service of Long Island, $12,787,251,000 worth of real estate was sold during the months of January through October of 2007. Compare this to the $8,755,692,338 of real estate sold during January through October of 2008. That is a tremendous decline of over 4 Billion (with a “B”) dollars.

The average home sold for $456,500 this year in October. October of last year, the average home sold for $521,200. That’s a 12.5% decline in prices from October 2007 to October 2008. And in September of 2008, homes sold throughout Long Island for an average $478,100. Comparing that to October of this year, that’s over 4% decline in prices on one month!

So if an owner asks me where I think the market is going, the answer is simple - down. Period. No one has a crystal ball, but I can safely say that and not think twice about it. Sure there are some bright spots which have been discussed in previous articles, but ultimately, if you have plans to move on in life, holding on until next Spring or even Spring, 2010, you’ll be faced with a significant loss of equity.

Click the image to enlarge.

If your current real estate agent is not keeping you up to date with these facts, tell them you want the information you need to make the best decision for you and your family. If you’re in the midst of deciding whether or not you want to sell, it is imperative that you call a qualified real estate agent in your area. Since I already have the information at my fingertips, why not call me right now at 631.831.9048 and let’s discuss how I will sell your property fast, with no hassles while your neighbors sit on the market, watching their equity fly out the window.

(c) Copyright 2008, www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson

In September of 2007, median price of a home sold was $380,000, a 12% decline. Nassau saw less severe declines of $417,300 in August to $415,000 in September of this year, with a decline from $445,000 this time last year (a 6.5% deline).

Throughout the island, there are less properties on the market than there was a year ago. There were 14,413 homes on the market in Suffolk County in September of this year, compared to 14,761 this time last year. What this shows is a decline in inventory, albeit a marginal decline. This means less homes are coming to market for sale.

The months of supply throughout the Long Island real estate market has declined as well from 19 months last year to 14.8 months as of September this year. The months of supply helps us determine how long it would take to sell every house that’s currently for sale. While this is over a 20% decline in months supply, 14.8% is still very high.


To summarize and make sense of all of this data, it’s important to note that these are all indicators that the market will continue to slide downward as we head into 2009 and probably well into 2010. Many experts were predicting Spring, 2009 as the overall bottom, but these numbers don’t indicate a bottom in 2009. It is a game of “catch up” and the numbers homeowners need to improve are getting better, but that’s just to get us to break even or to the bottom. From there, the numbers need to improve in the opposite direction for prices to actually go up, which does not seem to be anywhere in the near future.

If you don’t want to wait around indefinitely trying to recoupe the loss of equity during the past 32 months or so, the first step would be to determine your home’s value - now. See where you stand. I like to look at this situation this way: If it takes 40 months of decline to lose 25%, it will probably take at least that much to gain it back. Historically, over the past 100 years, real estate realizes a respectable 5% appreciative value annually. Forty months is equal to just over 3 years. Once we reach bottom, the best case scenario is the market will again begin realizing 5% appreciation which is actually on 15% compounded value.

All the jibberish aside, if you can follow it - it’s going to be a long time before the Long Island real estate market is back to normal. Keep in mind that this article did not even take into account a “global recession”, local foreclosures and the increasing number of short sales, as well as the credit crunch and decreased qualified buyer pool. And of course, our ever-increasing property tax burden, which in Nassua County especially, doesn’t seem to have any hope for, at the very least, a holding pattern, as county officials are looking to increase property taxes there once again.

The purpose of this article is to help those homeowners who are on the fence or mistakenly thinking that they can wait until Spring, 2009 to miraculously sell their home “for more”, to consider the hard reality that now is the best time to sell their home. For those homeowners who are “in it for the long haul”, obviously that’s a better position to be in, but that “long haul” must be carefully weighed against reality.

For questions about the Long Island real estate market, please feel free to call me at anytime at 631.587.1700, ext. 51.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson

Share

So how do you buy a home?

I’m going to share with you in this article, the very basic plan on how you buy a home. It is up to the reader to do their own due-diligence and learn more about the topic on their own - or by calling me.

As a first-time buyer, in one of the best buyers markets in decades, first and foremost, it is in your best interest, to find a good agent. Before I got my real estate license, I was an actual human being just like you, the reader (attempt at humor there). I believed that I, and I alone, would be best suited to “find a deal“.

After obtaining my license and working with many buyers, I have come to find that working with a qualified professional is definitely better than going it alone, thinking you’re “all that and a bag of chips”. Of course you have to find the right agent. That’s a personal preference, but they have to use cutting-edge tools and be available 24/7.

Now a good real estate agent will have the partners in the business and encourage you to either use their services or your own professional contacts in the mortgage/banking industry to determine your mortgage approval status. Determining how much you can afford and understanding the mortgage process is a great place to start.

Once you have established a basic knowledge for how much you can afford, it’s important to understand what you like, as a buyer. This may take a few visits to some open houses as you do some preliminary work to lay the foundation for your search. Knowing what you like and do not like is definitely advantageous to square away in the beginning. A worksheet that you take with you to view homes can help remind you of what you like and do not like. Second to this, allow the real estate agent you begin working with to guide your search a little. See what they come up with. If they can’t demonstrate an understanding of what it is you’re looking for, or they can’t (or don’t) talk to you about the realities of the market conditions and advise you about your price range, then it may be time to move on.

When you come to the point of making an offer, the basics of what to expect are simple. Once a price is agreed to, you will more than likely, have a home inspection completed. The home inspection is used specifically to determine if there are any major problems with the home. It is not a tool to renegotiate the tentative agreed upon price and terms.

From this point, the seller’s attorney will generate contracts and send them to your attorney. From this point, legalities will be discussed and as soon as both parties have agreed to contract stipulations and terms, the contracts will be signed. As the buyer, you will provide your attorney with the down payment, in the form of a check (make sure you have the money in the bank)!

Items such as an appraisal of the homes value, which will be used to establish an approval for the loan amount for your lender and verify to you and to all parties, that the home is valued accordingly.

Your attorney will order a title search, which will verify all information pertaining to liens on the property. You don’t want to buy a home with outstanding liens on it for obvious reasons.

You will then choose a home insurance carrier and have a policy in place to protect the home upon taking possession of the property. Your lender will require all of these items to be in place prior to closing.

The real estate closing will be scheduled according to each parties availability, most importantly, the buyers, sellers and their respective attorneys as well as the bank and title company. The real estate agent(s) will rearrange their schedule to match the closing date and their availability has no bearing on the closing whatsoever.

These are the basic to buying a home. If you have any questions on this topic, please feel free to call me at 631.831.9048 or leave a comment.

(c) Copyright, 2008 www.tommcgiveron.com

By Thomas McGiveron, Licensed Real Estate Salesperson

Share

Thank you Kevin for those kind words. My partner, Paul Musso, and I helped sell Kevin’s home in West Babylon. It was a great house to market, as it was always ready to show. When we first began the listing, I thought it would be a fast sale, quick and easy. This market proved otherwise. We managed to still sell it in 78 days, but I first thought we would sell it within the first 30 days because it was a great house, a cut above the rest in the area. Through our efforts of aggressively following up with other agents and buyers, we managed to sell it and help Kevin and his family move on. Congratulations and good luck!