Where do we go from here!

The last day of the Housing Tax Credits is upon us. The Real Estate market has started to rebound. Prices seem to be stabilizing in areas, inventory is high but managable. Offers are being negotiated but they are still a fight to get to closing. Banks are very slow and plodding through the mortgage process! A major factor is house condition. Many are in need of repairs that slow the process, some times grinding the whole mechanism to a stop. Sellers need to be better counseled on what to expect and what issues will help sell their house.
An example; Should you do a new kitchen, or replace a roof? Most would say the kitchen will make my home a showplace, when rthe smart money says check the roof, if it is need of replacement... do it! Because the bank or the home inspector may require it. How about his one; I recommend to my sellers to have the big ticket items checked before they begin marketing. Heating systems, water tests, radon for air and water. Lets look at these cuz if they are defective they will need to be addressed. And these are expensive repairs. (Why wait for the inspector to tell you and you have to renegotiate in the middle of the transaction.)Pennywise and pound foolish can be very costly. Anything that you, as a home owner, can do to ensure the completeness (is that a word?) of your house prior to marketing will result in an easier and more profitable venture.
It will be very interesting to see how the economy flows now that the Tax Credits are ended. What type of stimulus is next on the horizon. Hopefully something that will be beneficial to a larger group of buyers and sellers. My next Blog will discuss my ideas to truely stimulate the economy, promote housing, and help businesses and communities on aa a whole; and the cost is able to be recouped!

Opportunity is Knocking! Don't miss it!

Everywhere you go all people want to do is talk about all the bad stuff in the world! Ugly politics, Inflation, Money lost, Jobs disappearing, it really can go on and on. The Real Estate market alone can consume hours of useless chatter around the water cooler. Let's try a different approach.... How About Only Talking About What IS Good! The conversations may be shorter, but will definately be uplifting. An early spring, baseball starts soon, a great Final Four, proms, weddings and all the rites of Spring. Here is another topic! Real Estate! YES REAL ESTATE! it is a double edged sword! There is all the bad stuff...(which we will not talk about), but what about the good side! Yes, there is a good side! There are so many investment possibilities for young home buyers, investors, and even possibilities for those that got rocked (maybe they can start to rebuild a portfolio, heck they did it once before, why not again.) There really are some very good buys out in the market. HUD, FANNIE MAE, FREDDIE MAC foreclosures can be quite lucrative over time. Add in the Tax Credits for the qualified buyers (which only last until April 30, 2010) and the deals even look better. I do not understand why more people are not taking advantage of the market. Money is cheap to borrow (current rate BELOW 5%, CHFA BELOW 4.25%...100% FINANCING, FHA 5% 3.5% down payment) For you first time buyers there is still the $8000 Tax Credit and for the current owners that qualify there is a $6500 Tax Credit for accepted Contracts prior to April 30, 2010. All homes must close by June 30, 2010. Don't let all the negativism out there pull you down. If you are in a secure position in life and thinking of improving your housing situation, Now Is The Time To Act!

It's Crunch Time!

It is getting down to crunch time! Today is March 12th 2010, there are only 49 days left to decide to purchase a home and take advantage of the Tax Credits before they expire! I know this sounds like a furniture store going out of business and the announcer is trying to inspire all the buyers to action before the big SALE ENDS! But this time, it is quite possible that the Tax Credits will end and you, the buyers, that decide to act later in the year will lose money, Hard Cash. Money that could have been used for bills, household needs, college funds, wedding arrangements and so much more. Prices may fall after the Tax Credits end, but that does not necessarily put cash in hand. Rates are great, money is cheap to borrow. You could almost think of this Credit as a home equity loan to yourself that you don't have to pay back. All that is required is for you buyers to act now or within the next 49 days to get an accepted offer. You then need to close by June 30th 2010. Remember the guidelines are spelled out for you at; www.federalhousingtaxcredit.com. Take the time to review this program, it is no longer just for the first time buyer, repeat buyers that meet the qualifications can also take advantage. After your review of the information; please give me a call and let me go to work on your behalf.

The American Way?

Believe me when I say how sorry I am for all the people that are having financial difficulties at this time. Those folks that lost jobs, hours, reduced pay, etc. There is a story for all occasions. House values are upside down. Meaning the house is not currently worth what is owed on the mortgage. However in many cases that does not mean the house is not worth what the owner originally paid for the house. How many people have remortgaged and added debt to their house in the form of college loans, cars, credit card balances, trips and other short term debts. This is what the public was told to do. Borrow against your main long term investment because it had a lower rate and you could then afford the payments. Heck the value of your house was increasing at such a fast pace, many people refinanced numerous times adding mega debt. Then the marketplace has a ‘correction’ and lo and behold there is not enough equity to support the value. (This is not the case in most problem loans), but I would be interested to know what is that ratio? How many people have over financed their original debt and walked away with all the toys? The cars were ‘paid for’ in the house loan, so were the credit cards and all those purchases, except the final loan was never paid off. So not only, did the banks have to absorb the financial down turn but had to absorb the extras.
Now let’s look at this, the American government operates in a terrible deficit based upon unsound borrowing practices. They encouraged the banks to lend money in such a way as to promote indebtedness. We are short of jobs in the U.S., so let’s send more jobs over seas. We use energy at an alarming rate, but we buy the oil from overseas. We needed to bail out Wall Street so we borrowed the funds from our future; based upon future growth and the ability to repay at a later date. As the song goes; ‘When Will We Ever Learn?’
There needs to be a real shake up in our society. One that not only means we have to live within our means, but one that goes farther and says ‘we must live as if the future depends on the actions of the present.’ Our debts must be controlled; we must keep our jobs in the U.S. With out employment we can not get out of the fix we created. Health care needs to be corrected to allow growth. Taxes cuts need to be implemented to keep and grow the job market. Incentives packages need to be extended to employers to keep jobs from going abroad in exchange for guarantees of goods and services and future employment to those in the communities.
We need to change the American way back to the days of our parents, and their parents. Learn from the past, Pride in American goods and services. Growth of the economy through manufacturing, and industrial growth is essential. New business strategies, and techniques need to be established, growth of sound energy practices, expansion of natural gas, solar, nuclear power and finally business loyalty are imperative to sustaining growth and eliminating the debt. Lastly, I call on the government to stop the political wrangling and holding the American public at bay with all the earmarks and sloppy backroom government deals. They need to work together to pull us out of this hole that we are in. How we got there is not the point, the fact we are in this mess is the important issue. Let’s work as we did after the last crisis in 9/11, face this crisis head on and getter done!

Don’t Throw the Money Out With The Wash!

If you are a prospective home purchaser remember that the current drop dead date for an accepted contract is April 30, 2010 and that you must close by June 30, 2010. If there is no extension to this date, a delayal potentially could cost you between $6500 - $8000. (Depending on which program and how much money you spend.) Regardless, this delay could be very expensive indeed.
Now if you are waiting for the “Spring Market”; Stop waiting! With the buyer incentives soon coming to an end, NOW is the time to get your house on the market. Price it correctly and get an offer, then you may have still have time (if you qualify) to take advantage of the current owner buyer credit of $6500. (Call me to find out if you qualify, there are a few rules and regulations) I am sure that every one could use this tax credit. Don’t throw this opportunity away. Even if the Fed extends the program (which I doubt), you will have made a quality transaction based on current inventory, great mortgage rates and a known immediate return.

Let Them Eat Cake!

‘Let Them Eat Cake !!’

Well, I still am on a campaign for the banking industry, PMI companies, AIG, the Federal Government, Fannie Mae, Freddie Mac, FHA, and any other lien holders to finally “get it”!! These incredible bonuses for AIG employees that are coming out of the government bailout funds because of some contractual obligations is ridiculous! How could that not have been negotiated out of existence as part of the bail out? Those folks should be happy to have a good paying job, let alone having the thought of suing because the bonus was not big enough! How absurd! How egotistical! How vulgar to think they deserve, or entitled to such grotesque ‘bonuses’ for work that was not over and above the bar.
These funds would be better spent on repaying, or investing in the future economy. The TARP funds had very specific uses… BONUSES are not included! Take that money and the $30 Billion that seems to be floating around that no one knows what to do with and put it into circulation. Hire contractors to repair the houses that are currently in need of repair. Stop the downward cycle that is affecting many neighborhoods. Sell these rehabbed houses to the general public. Through the sale repay the Tarp funds so it can continue to be utilized to address similar needs in other neighborhoods. With the profits the institutions can become more fiscally sound, community minded and create a repayment program, as well as invest in housing that has greater and more stable values.
(This is not brain surgery! If the Fed thinks it can handle health care, this should not be that tough)
There would be many benefits to the communities from this type of program. Local contractors would be put to work. Supply houses would be active selling products. Buyers would be able to easily finance these homes. Many businesses rely on a strong housing market, the economy would start to trend upward. Attitudes would change because people would be working again.
Instead of looking for these sensible solutions, our Government has decided to allow the shoddy leadership of companies like AIG and others with outlandish Bonuses. They seem to take that same stance as Marie Antoinette when she stated… ‘Let them eat cake !’ as the nation continued to suffer. Just remember the fate of Marie Antoinette !

How to Attract Buyer in Todays Real Estate Market!

The Real Estate market is incredible at this time! Prices are flattening out, inventory is beginning to shrink for a number of reasons (sold, removed for the holidays, winter doldrums and some people have realized they are not competitively priced). These factors plus the buyer incentives (Tax Credits), make this a great time to market your home. But be careful! There are a number of factors that you need to be aware of as a seller.

First and foremost is the price. In the past, the sellers were able to over price a house and eventually the market would catch up to the price and a transaction would fall into place. That has changed and when sellers don’t realize this it will cost them money! So the first rule is to 'Price the Home on the Cutting Edge of the Market’. Your home must be the standard bearer of the price range. Every house must compare unfavorably to yours, so when a buyer looks at other houses they feel that yours is the best deal for them. Pricing your house in this manner will bring you the highest possible price in the shortest time, with the least hassle. Accurate Pricing is first the step in attracting qualified buyers.

Here are some other key ingredients to make a successful transaction!
1. Clean up the joint. No one wants to walk into a cluttered mess. Yes you have to live in your house while you are marketing it, but don’t let the house get away from you. (You know that is when the buyers will want to come) and you are forced to say no or worse to go crazy trying to do a quick clean to impress only to have the buyer spent 10 minutes in the house and leave. So stay on top of things, think dress for success!
2. Make the outside look great! You only one chance to make a first impression! Doors should latch and unlock easily. If there is paint needed, do it! Kid’s toys put away. Garden hoses rolled up! A nice WELCOME MAT in place. A place for the buyers to wipe their shoes, in case of inclement weather a place to easily remove shoes or booties to protect your carpets. (if floors are slippery avoid booties)
3. Make the kitchens and baths shine! These are the most expensive areas of your house. Make them look that way. Even an older bath can sparkle.
4. Basements should be organized so the buyer and eventually the home inspector can get a good look. This also make the home seem bigger and user friendly.
5. Have all the mechanicals serviced. Boilers should run quietly and clean. This helps in the inspection and can save lots of money and aggravation at the point of sale.
6. Do some inspections prior to the sale! This tip will save you money! Have an inspector come in and do a radon test in air and water, have heating contractor check out the system, have septic pumped and inspected and if the roof is questionable have a contractor available to give a quote. All these actions will help you to negotiate a selling price from the side of strength. Knowing that these big ticket items are addressed and would come to bite you after the inspections. Buyers will demand these items to be repaired, and you can comfortably provide the results to them, thus removing them from the table. If the house needs any repairs you can build them into the original price and not have to deal with the unknown in the middle of a transaction.
7. Hire a professional that will work for you and protect your interests in the transaction. This agent should be well versed in today’s financing, work closely with attorneys, inspectors and appraisers. They should be full time and have a strong office staff. The agent should also be well versed with the property so they are able to provide information to prospective buyers and buyer agents.

I hope these tips will assist you in the marketing of your homes. Please give me a call and we can discuss these items further, plus prepare marketing plans that will fit your needs. I can be reached at 203 586-9167, or at my office Century 21 Home Services Scalzo 203 -264-1400 xt 2003. For more information about me please go to; www.jeffcoltsellsconnecticut.com .

Happy New Year! Lets Start Thinking Outside the Box

We all have hopes and dreams for this New Year. Sadly, there will be a huge number of home owners that will have lost their homes to foreclosure. This is an unfortunate circumstance. Over the next year there is reportedly going to be approximately 1.4 to 1.5 million more foreclosures that will hit the market. This is a staggering number. The banks do not have the ability to adequately handle this overflow of properties. The adjustable rates are ready to tick up and that will force many into despair.

I have a suggestion to throw out to the powers that be; many banks are talking of repaying the TARP funds and that they have reached financial security. That is BS! The only way they have become whole is by smoke and mirrors, selling off bad loans and forsaking the general public in their time of need. I do not want the lenders to suffer a loss; they deserve and need to get paid as prescribed in the original notes. (Here is my suggestion) If the lenders used the Tarp money to pay for the adjustment of the mortgage up tick (in other words Buy down the rate utilizing the government funds) we could avoid many of the next round of foreclosures. The recipients of the funds would need to be current in their mortgage and would be required to pay back the money with interest upon the sale of their homes or upon a reammortization of the debt in a prescribed time period (5yrs). It sounds complicated, but actually it is a mortgage principle that was used years ago. It is a buy down with an equity adjustment to avoid a negative value.

Here is the outcome that I would hope to achieve.

1. Home owners get to keep or sell their homes; thus avoiding foreclosure, short sale nightmares and the ruining of the American Dream

2. The lenders would not loose the money that they so desperately need to make the country function as intended. We have already allocated the TARP funds and much of it currently are not utilizing.

3. The lenders would not have to try to maintain a slew of houses that inevitably fall into disrepair and yield pennies on the dollar for the amount owed.

4. Neighborhoods, cities etc would not devaluate to a point where they suffer from tax delinquencies, increase crime rates and the general malaise that flows along with high foreclosure communities.

5. Pride of ownership returns to many communities that so desperately need rebuilding.This fix may seem like a band aid for a short period of time (5 years) but a lot can change in that much time, especially if the downward cycle can be lifted.

My guess is the cost of funding this buy down plan would be less than the losses incurred by the mismanaged, broken down, frozen and neglected properties that the lenders are trying to sell. The general public can not purchase these albatross’ due to the inability to finance these elephants. We need to start thinking outside the box!