Common Questions About Closing

Often times as agents we come across certain questions or situations that are quite common to us, the job of a real estate agent is not only to help you but to educate the public on all things real estate.    These next few blogs I want to address each situation and the common questions or fears that a buyer or seller may encounter.  Each week will be a different topic - if you have a specific question please feel free to comment and I will make sure to either answer you directly or write a blog specifically to answer your question !

How Is The Closing Date Determined ?
Your closing date is determined usually between 4 - 6 weeks from the time you go into contract.  Often times sellers will ask why the date on the sales agreement is different from the date in the contract.  This normally will take place because the date on the sales agreement is 4 - 6 weeks from the day the offer is presented.  If negotiations take a week, or there is a delay in order to perform a home inspection the attorneys will extend the closing date to give the buyer adequate time because of the delay.

What Is The Closing Date VS Commitment Date ?
In all real estate deals that involve a bank there will be a smaller window of time for the buyer to obtain their mortgage commitment - this is generally 30 - 45 days it is the most important part of the transaction.  After the commitment is received there are still additional steps left to be able to get to the closing table including the title report and information they may request.  These are the items that generally take a bit longer to pull together which is why they have 2 dates for these items to be completed.

Why Does The Kind Of Deal Effect Closing Date ? 
All Cash deals tend to move a bit quicker because their is no bank involved so you move straight to simply waiting for a clear title without having to wait for the bank.  Cash deals are still entitled to home inspections but typically the home will be sold as is so their will be no repair requests to be fulfilled.

Deals that involve the buyer obtaining a mortgage are at the mercy of the bank, unfortunately not even the buyer has any control on how quickly or slowly the wheels will go into motion.  The bank appraiser will also play a role, they are a hired 3rd party and also do not answer to the buyer.  The amount of time it takes for them to complete the appraisal and the bank to receive and approve it can take time.   The larger the bank does not always mean they will move quicker than a smaller bank because they will have many loans that need to be serviced.

How Much Time After The On Or About Date Do You Have ? 
There is a "grace period" from the on or about closing date, the reason why is because sometimes the timing of a move can be tricky.  If the seller is moving into another home it may or may not be available, or buyers could be moving from another state or area.  Because the timing is something that might need to be finessed a bit you are given 30 days from your on or about date to get to the closing table.

Can Either Party Require Closing Before The Closing Date ?
Typically no one can "force" a buyer or seller to close before the on or about date.  Even if buyer and seller agree they want to move quickly getting it on paper involves a few other important parties.  The attorneys of course will need to be available, but the schedule of the bank attorney as well as the title closer need to be available as well.  This can sometime push a closing to a later than one may want - if you need to close quickly giving your agent a realistic date for them to help you navigate if the buyer or the home is right for you is very important.

Can A Seller Simply "Change Their Mind" About Selling ? 
The seller can always change their mind, but often financially it is not recommend.  If the seller defaults you can sue for specific performance forcing them to sell the home.  They will also become responsible for the costs that you had from appraisal/mortgage fees, inspections, and even agents commission.  Once you have hit the "On Or About Closing Date" if they seem to be a bit hesitant on the sale you can & should request a time of the essence letter to be sent out regarding your closing.

Can A Buyer Simply "Change Their Mind" About Buying ? 
Just as a seller can back out with repercussions that same goes for the buyer.  There are a few circumstances though for a buyer where they will not be in breach of the contract.  If they are unable to obtain a mortgage, this is not something that they can just say.  Their must be a letter from the bank which proves that they applied for the mortgage and it was denied.  The buyer also has the right to re-negotiate if the home does not appraise for the sales price - if a new price is not agreed upon they have the right to not purchase.

What Sellers Should Know About Pricing

Pricing is always a very important factor when it comes to selling your home, it will usually be what makes or breaks the decision for many homeowners.  Whether you bought your home in the height of the market for top dollar or for those who have owned it for many years the realization of what your home is worth will often come as a shock to your system.  This blog explains how and why the pricing of your home is so important, and hopefully some tips to help those sellers to sell fast and for top dollar !

The Power Of Pricing 

• Many homeowners believe pricing it a bit higher will leave room for negotiations but with today's technology it will often keep the home from being shown or even seen.  There is no way for your Realtor to tell those who are browsing online that the homeowner has a large amount of negotiating they are willing to do, and with inventory still high buyers can/will bypass to the next home.  
• Market pricing, allows the home to have the average amount of showings, and than value will than be determined by the buyers.  We will always suggest paying careful attention to the feedback after ALL showings to get the buyers perception of value.  In some cases it will be helpful, and in other cases buyers will simply want to go with the lowest number possible - your agent will be the one who can make that call since he/she will have the comparable homes to show an educate both you and a potential buyer.  
• "Power Pricing" is something that Coldwell Banker Residential Brokerage has actually adapted a completely new system of advertising for.  These listings are not just priced and set up the same as the others because they are priced to sell within 30 days for ideally above the list price.  This is done simply by creating a perception of value immediately with a slight price adjustment and additional advertising - todays buyers are educated they will know a great value when they see it ! 

Broker Open Houses

• There are 2 reasons why Realtors will hold Broker Open Houses, the first of which is of course to show off the listing by letting the other Realtors preview the home in order to determine if they have a buyer for it.   Brokers in the area will want to be up to date on all listings not just those in which they have listed. 
• The 2nd reason is because after we have the home listed we want an educated perception of value from the agents in the area.  The feedback of the realtor vs a buyer is priceless because their is no emotional attachment or low-balling to get a good price it is simply other professionals giving an opinion.  This would be similar to you interviewing 6 or 7 realtors to get the opinion on price without the never ending interview process.  

Showings & Offers 

• If your not having any showings, and your listing information is accurate and descriptive than chances are your home is overpriced.  Your listing should be giving buyers a virtual tour of everything your home has to offer, now if you are not giving much information in your listing that can also be the cause of your home not getting showings or inquiries.  The best way to avoid this situation is to look over your listing prior to it being posted on MLS and look at it from a buyers point of view.  
• If your having a lot of showings but no offers coming in than again you can attribute this many times to it being the price, BUT their are some listings that just need a particular buyer.  If your home is something "out of the ordinary" that will usually be the case.  Being in Babylon Village this can often times happen because their are a larger amount of small cottages and vacation homes that are on the market.  These homes will often spend time on the market not because they are overpriced but because it is meant for a very particular buyer.  You should always make sure that you work with a company from your area for this reason, you want a Realtor who knows your market specifically  not one whose area is towns away.  
• Low-Ball offers on a home that is obviously worth more than the buyers opinion are often a sellers nightmare.  Although most buyers are highly informed and use a Buyer Broker, it will not stop these low ball offers from coming in.  This again is why having feedback from the brokers open is so important, you will be able to be confident in not entertaining those offers because you now have multiple sources of the value of your home.  

Features VS A Value 

• Many sellers attribute their homes features and values to large increases in their homes price.  Unfortunately the bank might not see those in the same monetary amount as you may think.  There is an entire blog outlining what you can expect for the bank to allow you to use to up the price of your home HERE.  
• Always keep in mind when it comes to features and values that it is really buyer dependent.  The homeowner might see their pool as a feature, but buyers might not see it that way - luckily things like pools are something that the bank will allow an increase in price but what about when it is something that they might not ? There are times when a homeowner will do things to their home not because it raises the value but because it is their personal taste - the best way to tell if you are adding value or just over-investing is by scoping out your neighborhood.  If you see that all of your neighbors have done updated siding rather than leaving the original shingles than it is safe to say it will be a good value to add to your home as well.  

Power Pricing - Why Your Home Should Be Power Priced !

The market has heated up, and with more homes coming onto the market you want to make sure your home stands out.  Sometimes even the home with the best photos, description and the easiest to show can get lost in the vast inventory that we are still carrying so what can you do so that your not lost in that shuffle.  You can power price your home, most assume that it means put your home priced lower than the rest but that isn't quite it.

Power pricing is a technique that investors have always taken advantage of, and homeowners are now catching on and with buyers as educated as they are it is the perfect time to take advantage of it ! So lets take the time and explain what it actually is !

When you list your home you will of course look at the comparable homes on the market, specifically the ones that are on the market.  You will want to look at these carefully because they are your competition and buyers will be seeing all of the available listings.  Look at their pricing and than figure 3% - 5% lower will be considered action priced.  Below is an example of three similar listings in the Deer Park area, buyers will be drawn to the home on Crossway Drive.

                          39 Crossway Drive, Deer Park                    19 Lisa Drive, Deer Park

Colonial, 3 Bed 1.5 Bath                           Colonial, 3 Bed 1.5 Bath             

Action Priced: $369,990                           Market Priced: $389,000

                     

17 Goshen St, Deer Park 

Colonial, 3 Bed 2.5 Bath 

Over Priced - $429,000

Now most homeowners say well I don't want to take that much less for my home, I would rather have it higher and leave more room for negotiation.  Well the buyer does not know that they are looking at the numbers and they are going to go where they see value ! Buyers are educated, they know a good deal when they see one and don't want to lose out on a home.  All of the homes where I have used power priced have gotten over significantly faster than other homes, normally under 30 days and have received multiple offers resulting in a bidding war or a full price offer ! 

Coldwell Banker Residential, and myself go one step farther in helping your listing stand out.  We also offer a home warranty on your home, which is a great addition when it comes to adding value because many buyers will have concerns and the home warranty gives them a built in safety net.  It has also been proved that these warranties help your home sell for more and are recommended to buyers by their own agents when comparing one home to another.  You can find out more about this warranty here The American Home Shield Warranty.

If your thinking about putting your home on the market its not too late to take part in our power pricing event .  The event is going to be held on August 16th and 17th, and all of our listings will be taking part in this event and getting maximum exposure.  If your interested in finding out about the event or what the Coldwell Banker difference is than call me or request a brochure on my site! 

The Benefits Of Buying New Construction

With so many homes on the market, many buyers are taking advantage of the many kinds of homes they can purchase, there are a few different categories fixer-uppper (requiring a 203-K Loan), Renovated Home, or New Construction.

New construction was typically the most expensive but in today's market new construction homes are still not being sold above market value.  There are some definite perks of buying a new construction home, and I wanted to take the time to compare some of the things that set these homes apart from renovations, as well as those fixer uppers.  Remember even when you purchase a renovation most investors will not necessarily rip out all the original boards, or insulation most investors are willing to share what they did/did not replace but with brand new construction you will be able to see it throughout its process !

Benefits Of New Construction 

• Choice & Customization: When you purchase a new construction if it is prior to the home being completed most builders will give you different options on everything from the lay-out, materials used, or landscaping.  You are able to pick out things to your liking, they will also normally have add-ons that you can pick and choose which will suite you and your families needs. If your buying in a development you can even choose the exact location of which lot you want your new home to be built on ! 

• Less Maintenance: Newly constructed homes are able to use materials during the building process that are not only better for efficiency but help maintain the home long term.  An example of this is the kind of wood that is used on joists & frames 20 years ago were not able to prevent termites, but CCA lumber is used in new construction/additions and has been treated to prevent termites. Additionally things liking decking is now built with the PVC Composite decking requiring only power washing for maintenance, rather than sanding/staining routinely.  

• Going Green & Efficiency: Everyone knows that buying energy efficient appliances is a helpful way to save money but there is more to it than just that with new homes.  Rather than using FiberGlass Rolls of insulation most builders will now opt to have the spray foam insulation put into new builds, this is a great benefit because it eliminates any drafts that may occur over time in the home.  Another change is the single-pane windows are no longer used in these builds and double, and triple pane windows are being used keeping heating/cooling costs under control.  

• Safety: Not often do you think about what items in your home will help protect you, and although some things like an alarm may only seem like a small costs technology has made the options for what alarm works for your family a great 

What Is All That Paperwork To List Your Home !

This week I am going to write about something I don't talk about very often which is sellers who are new to the process of selling their home.  Now some of you might be thinking this doesn't apply to you but it just might so I have compiled a quick list of sellers that is a sign you should take the time to read this blog:

• You purchased your first home from a For Sale By Owner 
• You have not sold a home in the last 5 + years 
• You inherited a property or are an Executor of an estate 

One of the most important steps to selling your home is the paperwork, not only signing it but reading it and understanding it! I can't tell you how many homeowners who have not sold a home recently are very surprised by the amount of paperwork that now goes along with listing your home. 

NYS Agency Disclosure 

New York State requires that anyone who is buying/selling a home fills out the agency disclosure paper, it clearly defines who it is that the Realtor is working for.  Obviously you will sign that the agent will be working for you, but NYS has changed with the times and they now address Dual Agency before it exists.  

Dual Agency is when your agent works for both you as the seller, but also works for the buyer.  This can sometimes cause a conflict of interest, if the deal requires negotiating it can blur the lines of who your Realtor must disclose what to.  It is my recommendation that when it comes time for you to sign this piece of paper that you require if Dual Agency exists that it is Dual Agency with a designated sales person.  What this means is if a buyer walks into your home and wants to negotiate a deal that your Realtor will have an agent from their office work for this buyer rather than representing both sides of the deal.  

Multiple Listing Service Contract

This is a very important contract for you to read most Realtors will tell you it is standard and direct you straight to the bottom to sign.  They are correct when they tell you it is a standard form, but you should be reading it because this is the detailed description that will be on not only on MLS but all of the additional websites that your home will be listed on.   

You want to check certain things in particular: 

1. Taxes are correct (Ex: If your taxes are not correct you may end up with a buyer who is unable to purchase because they were mis-informed, remember pre-approvals do include the yearly taxes)
2. Make sure the number and descriptions of rooms are correct (Ex: If your kitchen is an eat in kitchen, you must make sure it is accurately inputted. These are things buyers will be placing in their search criteria and you wouldn't want a oversight to cause potential buyers to not see your home.  
3. Be sure your floor plan is accurately described (Ex: If you have an entry hall, or a laundry room you want buyers to know that because these might be important to them)
4. Utilities are described completely (Ex: Some people will have a preference when it comes to these things, again you never want to misrepresent your home, even a simple mistake can turn off a buyer) 
5. This last one may upset some Realtors, but the 2nd page of your MLS Listing agreement is where it shows what the commission will be, and where it will be going.  Remember there are 2 sides to every deal if your agent has told you that they will be taking a 6% listing because they split it equally with the buyers broker make sure that it is written that way in your contract.  

Exclusive Listing 

This is something that you may or may not see, if you are listing your home on Multiple Listing Service you should not be signing this paper unless there is a beginning and an end date filled out.  I will sometimes hold a listing as an exclusive until I have the pictures uploaded, & the virtual tour online but when I do I always write that the end date is at the homeowners request.  You might wonder why I do this, and it is just the way I run my business I want to make sure that my listing is up to not only my standard but to my sellers as well.  Once the homeowner sees the listing and approves it we than release the listing onto MLS for it's big debut !! 

Property Condition Disclosure 

The property condition disclosure is pretty much self-explanatory, it is a semi-large packet that details the history of the property.   Most Realtors, and your Real Estate Attorney will recommend that you do not fill this out. Instead you at closing you provide the buyer with the  $500 opt out credit.  The reason we recommend you do this is to simply protect yourself from future liability, even the most knowledgeable homeowner can be unaware of hidden issues in their home.  

Lead Based Paint 

If your home was built prior to 1978 than you are required to fill this out, and your Realtor is required to give the buyers a informative booklet about Lead Based Paint.  This is a common form that you, the buyers, and all Realtors involved will need to sign and is required.  If you are not sure what year your home was built it is always better to fill one out to be on the safe side.  

Seller Services Guarantee 

Unfortunately not all companies offer this, but if you are going to list your home I would recommend not signing with a company that does not provide you with one.  This is your guarantee that the Realtor will provide you with all the services he/she agreed to do in order to get your home sold.  It also gives you the ability to walk away from the contract with them if they are not providing all the services, I can't tell you how many unhappy expired clients I come across because the Realtor did not do what they had assured the client they would do, always remember that you have your guarantee and if your Realtor isn't doing the job perhaps they need to be reminded of that guarantee.  

Now, I have to take a moment to remind you that in order for you to be able to hold your Realtor accountable for the work that they are supposed to be doing, you must also do your part.  Mis-communication about the marketing plan for your home, can often cause a strained business relationship between Realtor and homeowner so you want to go over the details prior to signing anything.   

Coldwell Banker Residential Brokerage does have some additional paperwork that your average Brokerage does not have.  The reason is very simple, we are not your average company we offer additional services to our sellers that not only get their home sold but to make it a easy and enjoyable experience.

Affiliated Business Agreement

If you are one of my frequent readers than you have heard me talk about all of the additional services we are affiliated with.  For today I will not be going into the description of them, but I will link the appropriate information so you can look at the ones you may not be aware of.  Our affiliated business agreement, is to let you know the different companies and services we offer but we as agents do not profit from our buyers or sellers using them.  The reason each of these are so important to our company as a whole is the difference it makes for our clients.  

Coldwell Banker Mortgage Company

Coldwell Banker Home Warranty

Coldwell Banker Title Services & Insurance

Coldwell Banker Concierge Services

You will also receive a copy of your Comparative Market Analysis, be sure you keep this in your file for future reference.  Also make sure you keep full copies of everything that you signed, as well as additional paperwork you may sign during the time your home is listed.  Coldwell Banker Residential Brokerage, does have a system set up on a secured server that will store copies of all the paperwork you will accumulate during the transaction.  This is a great tool for someone who is on the road for work,  lives out of state, or just prefers keeping documents stored online rather than filed away.  

I hope everyone finds this blog helpful, if you have any additional questions please always feel free to comment and I will respond to your question as quickly as possible ! 

Deciding To Buy Or Rent What You Need To Know

It's that time of year again where we see renters deciding whether or not they will continue renting, or will consider being a new homeowner ! This blog is to help all those considering purchasing answer that most common question "Should I Buy Or Should I Rent?" 

Why Should I Buy A Home Instead Of Rent ? 

It's a fact that in most markets, buying a home is significantly cheaper than renting.  Renting is money you will never get back, but buying a home is an investment in your future.  In most areas, if you can afford to rent, you can afford to buy! For more information on this topic you can refer to my blog, here it will give you both the pros and cons for both buying and renting, as well as offer you alternative options.  

How Do I Know I'm Ready To Buy A Home? 
The best way to know if you're ready to purchase a home is to look at your current situation.  You don't need to be employed with the same place for 2 years, you just need to have had a steady income in one field for the past 2-3 years.  You will want to run your credit and take a good look and make sure everything that is on the report is correct, if not you will want to have it corrected! You will also want to make sure you have money saved up for a down payment, in some cases you can withdraw from an IRA penalty free for a first time home purchase.  For more information on this topic you can refer to my article, here.

How Much Money Will I Have To Pay Upfront To Buy A Home? 
This is not an easy answer, because there are two factors depending on what kind of loan you take and the amount of the loan is what will decide your down payment.  For an FHA Loan you will need to put down 3.5% where a Conventional Loan you will need to put down atleast 20%.  The average cost of a home in Suffolk County is about $325,000 which would require a FHA down payment of $11,375.  

You will also need to factor in closing costs, but you can also ask for a sellers concession or have the money "gifted" to you from a friend or family member.  This ranges again by the loan amount, and any mortgage broker is required by law to give you a good faith estimate of closing costs, this is why you should always choose a reputable bank Of course, Coldwell Banker Mortgage is more than happy to help and you will always be given all of your loan options.

Once you have decided that you are in a financial position that you would like to go ahead and begin searching for your new home there are a few things you should look into.  You will want to learn the difference between what kind of homes are on the market, who you should have working for you, and what happens once you have found that "perfect home".  Because each of these topics are best explained in detail I will list each topic below with a direct link to blogs to help you get informed ! 

• Why You Should Work With A Buyer Broker
• What Kinds Of Home Are On The Market
• Benefits Of New Construction
• Short Sale VS Foreclosure
• What To Offer For That House 
• What Happens After Your Offer Is Accepted 
• What It REALLY Means To Be In A Buyers Market 
• Tips To Finding The Perfect Home