Author Archives: vlm

Spring Market Buyer Beware

Spring Market Buyer Beware!

If you are a housing market buyer contemplating the purchase of your next home, there are a few things to remember to put things into perspective when beginning your search. First is to have a lot of patience.

The spring market usually begins the week after the Super Bowl. The weather begins to turn nice and people who are looking for their special home are raring to go. The issue is that more buyers come out at the beginning of the spring market before homes become available. This means that the inventory is low, so the buying process favors the seller. It is very common to get into a bidding war for a property. Therefore, it is important to carefully develop a strategy for making a final and best offer.

If you are not the winning bid do not get discouraged. It happens a 100% of the time that people who feel they have lost the home of their dreams find their dream home in a few months.

The second issue, weather it is the spring market or any other time of the year is DO NOT CALL THE LISTING AGENT OFF THE SIGN.

Every listing agent including myself becomes ecstatic at the thought that we might be dual agents on the purchase of one of our properties for sale. This means that we receive the commission from the seller for both the seller and buyer’s side of the transaction.

Buyers think that they will get a better deal if they call the listing agent off the sign. This is a myth. The listing agent’s primary fiduciary responsibility is to the seller. The goal is to get the highest price for the purchase of the property. This also results in a higher commission to the listing agent. The listing agent only has to act fairly with the buyer in a dual agent transaction. If the seller does not want to disclose certain information to the buyer than the listing agent does not have to disclose. In order to maximize your negotiation position, it is always best to find a buyer’s agent who you trust and feel comfortable working with.

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You Don’t Have To Burn Through Your Wallet To Buy A Great Bottle of Wine!

You Don't Have To Burn Through Your Wallet To Buy A Great Bottle of Wine!

The other day I was invited to a culinary holiday party, the only requirement is to bring a bottle of wine that cost no less than $75. To quote John McEnroe talking to the umpire in a tennis match, “You can’t be serious”.

Recently, the amount that people have told me their home improvement projects are costing them, from changing a faucet, to replacing a sewer pipe to renovating a kitchen or bathroom or even constructing an addition evoked the same reaction. You can’t be serious.

Here is a simple way to do your own approximate estimate for most construction projects. This will show the contractor that you have some knowledge of how the game is played and reduce your chances of being taken advantage of.

Ask the contractor how many days and how many people it will take to complete the work. Based on a current daily rate of $300 per worker, multiply $300 times the number of workers and the number of days needed to complete the work.

For example, if it will take two people three days to complete your project, multiply two people times three days which accounts for six-man days, multiplied times $300. This number approximates the labor costs. Now double the number of your labor cost. This number will be your combined costs for labor and material. The cost of labor and material is approximately the same although material costs have been running higher because of inflation.

Multiply the total number by 10%-20% to account for the contractors overhead and profit. Small companies will have a smaller overhead and profit and larger companies have higher numbers. The result will be approximately the cost of your project. Special equipment that is needed for your specific project could increase the costs.

One other secret to keep in mind. Contractors charge according to your zip code. Medford, Voorhees, Cherry Hill, Haddonfield, Moorestown, Princeton and townships like West Windsor will see higher construction prices than areas like Berlin, Stratford, Glassboro, Ewing, and East Windsor.

Material and labor costs throughout the area are generally constant. The only variable cost is the number assigned for profit. As a contractor once said to me when asked why he charges different numbers for different townships, the reply was “If people in more affluent communities think it costs more money to do a better job than I am more than happy to accommodate them.”

So, the next time you think about buying that $75 bottle of wine remember the same grape that produces the $30 bottle of wine could come from the vineyard down the road.

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

The Ball of Confusion that is the Real Estate Market

The Ball of Confusion that is the Real Estate Market

The Temptations wrote a song titled The Ball of Confusion. “That’s what the world is today. Round and around and around we go where the worlds headed nobody knows.” The song was written 52 years ago in 1970 and the only difference between then and now is that the world seems to be spinning faster and faster. To where, nobody still knows.

Real Estate is the last asset class to be negatively affected by what is happening in the economy. It is also the most important asset to most Americans and is the foundation of their wealth. At what level will property values fall to? Nobody knows.

Over the last year, because of the doubling of interest rates, buyers have lost $30,000 of buying power for every $100,000 they borrow. The listing price for seller’s properties are also starting to fall and properties are staying on the market much longer. Bidding wars are a thing of the past.

What should buyers and sellers do?

If you absolutely do not have to sell or buy, then you might want to have patience and do nothing. Wait until things stabilize, when the number of buyers and sellers in the marketplace is about the same.

However, even with all the uncertainty in the world and real estate market, this is a great opportunity to purchase rental properties. Wether it is a one, two or multifamily property, raising rental rates and falling property values creates excellent rates of yearly returns for one’s investment. Most savvy investors are looking for an 8-10% annual rate of return.

Considering the inflation rate is at 8%, wages not keeping up with inflation, the value of equities and crypto currencies are evaporating, rental properties are the best way to hedge against inflation while continuing to create wealth.

Nobody knows where The Ball of Confusion is headed but the right real estate investment property can make the journey much easier.

Consider this. Inflation affects everyone’s life in a negative way. Some economists are saying that the only way to stop inflation is to raise the interest rate higher than the inflation rate. The inflation rate now is approximately 8%.

Stay healthy and safe and look for those great opportunities. Contact me to assist your search…

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

The Wizard of Oz and the Perfect Storm

Real estate values are about to free fall

Close your eyes for a moment. Picture the scene from the beginning of The Wizard of Oz when Dorothy and Todo get locked out of the storm shelter. They run back to the house to Dorothy’s bedroom. The next thing you know the house is free falling in a tornado.

Real estate values are about to free fall as if they are affected by a tornado and no one knows where the landing will be or how hard they will hit the ground. For real estate values the tornado is coming, and the storm shelter door has been locked months.

Until recently the only asset class not affected by inflation has been the value of real estate. The wealth you have built in your home since 2008 but especially over the last two years has now caught the inflation bug.

Raising oil prices and interest rates, which by themselves would increase inflation, have an inverse relationship to the value of your home. Higher oil prices, interest rates and more inflation will drive down the value of your home.

There are two ways to reduce inflation and preserve the value of your real estate investments as well as other assets. Government can reduce the restrictions on the production and exploration of United States oil and flood the domestic and European markets with an abundance of oil. This will drive down oil prices, interest rates, the cost of all goods and services and inflation within a few months. Or we can sit back and witness what the government seems hell bent on doing. Curb inflation by limiting oil production, driving prices on everything up, increasing the interest rate and destroying your wealth by crashing real estate values. If your wealth is reduced, you have less money to buy things with.

Anyone who is close to or is retired, especially if your mortgage is paid off, still has an opportunity to preserve their wealth. Sell your home now and ride out the perfect storm to survive the crash landing. You will have great opportunities. There is always a rainbow at the end of the storm.

There is always a rainbow at the end of the storm


Baby Boomers: Time to Cash Out Your Home

Baby Boomers Time to Cash Out Your Home

It has never been a better time to cash out your home’s equity and Baby Boomers are the age group poised to benefit the most from today’s housing market. 

Preserving one’s wealth is the most important action you can take.  Baby Boomers who have been fortunate to experience property appreciation and have not taken the equity out of their homes, should be thinking about ways to reap the benefits and create other opportunities for wealth building without incurring more debt.

Up until October of 2021 the pattern of contracts for the resale of homes priced over $500,000 was approximately $20,000 to $30,000 over listing price. From then until the present homes priced over $500,000 are commanding resale prices of $75,000-$125,000 over listing price.

If you want to take advantage of your one asset that has appreciated the most in your lifetime you might want to consider selling your home now because the train is about ready to leave the station.

Since February of this year interest rates have increased 2 ½ %. For every 1% increase in the home interest rate a buyer loses $10,000 of buying power for every $100,000 borrowed. If a buyer is comfortable making monthly mortgage payments on a $500,000 mortgage and interest rates go up by 1% point that same mortgage payment will translate to a $450,000 mortgage.

A 2 1/2 % rate increase will decrease the equivalent mortgage to $375,000. This is great news for buyers and terrible news for sellers.

Consider this. Inflation affects everyone’s life in a negative way. Some economists are saying that the only way to stop inflation is to raise the interest rate higher than the inflation rate. The inflation rate now is approximately 8%.

Three or four months from now you probably don’t want to say to yourself, “If only I sold my house.”

Stay healthy and safe and look for those great opportunities. Contact me to assist your search…

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

Listing Price vs. Selling Price – What to Expect

Listing Price vs. Selling Price - What to Expect

What is a fair listing price? What is a fair selling price? The listing price vs. selling price difference is determined by a number of factors. Whether a REALTOR sells four homes a year or four hundred homes, the rule of thumb for establishing a listing price for a homeowner or making an initial offer for a buyer is always the same. Statistics show that in a market where there are approximately an equal number of buyers and sellers, homes will sell from 88-92% of the listing price.

If I am working with a seller, I advise them to list their home at 10% but no more than 15% above recently sold similar homes in the past six months. If I am working with a buyer, I suggest making an initial offer of 10% but no less than 15% below recently sold similar homes in the past six months. More often than not unless there is a bidding war, the contract amount for the home will end up being in that 88-92% range of the original listing price.

Homes that are priced this way will attract 60% of the buyers that are looking for homes in the particular price range.

Some sellers don’t understand this and demand that their home be priced at a number that the homeowner wants. An unrealistic seller could say that they want to get back the full value for recent improvements. In all reality no one cares how much money a seller has put into their home. However, improvements will increase the chances of selling a home in relation to other homes that have not been improved. Ultimately price is determined by the supply and demand of the market.

Some buyers have the mindset that they are going to negotiate a ridiculously low price and get their dream home at a steal.

The goal with listing price vs. selling price is finding a balance. The bottom line is no one is going to pay more for personal improvements that a homeowner falls in love with and a buyer is not going to steal a home. A good deal is one when both the seller and buyer feel that they have made a fair deal for everyone. Your home is worth whatever price someone is willing to pay for it.

Get More Listing and Selling Price Advice!

Stay healthy and safe and look for those great opportunities. Contact me to assist your search…

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

How Sellers Price Their Homes

how sellers price their homes

Clients often ask, “How much under the listing price should we offer?” The best way to understand market value is through comparative research to see how sellers price their homes in the area. Professional real estate consultants review and study at least 40 to 60 listings, visit 10 to 20, and inspect 5 to10 properties to develop a sense of relative worth for properties in a given area.

Additionally, a professional appraisal factors into determining the fair market value of the home. An appraisal protects you because Lenders want to make sure that you don’t overpay for a home. If the home value does not meet the sale price in the eyes of the appraiser, they’ll let you know. At that time, the Realtor can renegotiate the sale price or void the agreement and refund your earnest money deposit.

Four basic factors influence how sellers price their homes:

1. Sellers Get Poor Advice

Some real estate agents inflate the value of the seller’s home in an effort to obtain the listing. There’s a natural tendency on the part of sellers to list with the real estate agent who gives them the promise of the highest selling price. When homes are overpriced, they

• Stay on the market longer

• May not sell

2. Sellers Set an Unrealistic Price for Emotional Reasons

These sellers believe their home is worth every penny of their asking price for personal reasons. Sometimes they lose their objectivity and focus on features that seem more valuable to them (rather than to the buyer). For example, the suede wall-covering in the master bedroom may not appeal to potential buyers.

Additionally, some sellers, anticipating reticence to buy, feel it’s a good idea to leave a little “negotiating” room in the asking price.

3. Sellers Price their Home at Fair Market Value

These sellers carefully and realistically study other homes for sale, and may consul.t with a real estate professional. They price their home competitively, and it usually sells quickly at (or very near) the asking price.

4. Sellers are Motivated to Sell

When sellers want a fast sale, they price their home below fair market value. These homes usually sell right away, at or above the listed price. There are usually competing offers.

Eric Schlamowitz is your established Realtor in the South Jersey region – whether you’re buying or selling a home in the area, he can help you! Reach out to Eric to set up an appointment today and get started on your new home adventure.

Eric and his team have a wealth of experience in helping residents buy homes, and can help you understand how sellers price their homes and what to be aware of. We’ll help you determine the fair market price for any home. Our job is to ensure that you have the tools and information you need to make an informed decision. We’ll help you every step of the way.

Interested in more real estate advice and in buying a home in South Jersey? Visit our Facebook page for up to the minute updates and advice!

Coming Out of the Funk of the Pandemic Fog

Coming Out of the Funk of the Fog

It has been two years since the virtual reality of living in a daily fog overtook our lives. Expectations, goals and dreams were either put on hold or vaporized in front of our eyes. A sense of hopelessness created a funk for everyone, young and old. We celebrated the spring of 2020 with a national lockdown. Today, we have the opportunity to celebrate the spring of 2022 with reconnection and a new beginning of hope.

If we have learned anything from the past two years, it is that there are very few things that we can control. Something we can control is how we create wealth through real estate or protect the wealth that we have already created with the home and properties we own.

Over the past two years the real estate market has been great for sellers and stressful for buyers. Despite the insanity, there are good options and strategies for both buyers and sellers to make deals that benefit both sides.

Browse through my new updated website and let me know if you would like to discuss your options in creating your real estate wealth or protecting what you have in these crazy times. Or just drop me a line and say hello and let me know how you are doing.

The Real Estate Shift Is Here – Expect Prices to Drop

The Real Estate Shift Is Here - Expect Prices to Drop

Over the past two years sellers have reaped the benefits of increased property values. A low inventory of homes on the market over this time was only an extension of a pre-pandemic trend. Based on supply and demand, a low inventory of homes combined with an overabundance of buyers means property values will go up. Buyers have also helped to increase property values. Most buyers got caught up in the emotional side of the buying process and couldn’t help but overpay for a property.

The proposals to purchase one of my listings had offers that varied by $200,000. A buyer on another listing of mine paid $50,000 over other comparable properties, waived the home inspection and was willing to pay another premium if the property didn’t appraise for the contract amount.

Upcoming moves by the Federal Reserve will likely prevent buyers from overpaying for properties and force property values down.

The Federal Reserve has indicated that there will be three to four interest rate hikes this year. Some experts think there could be seven to eight rate hikes to slow down and decrease inflation.

Increased interest rates, reduces the buying power for individuals. This results in lower property values for sellers. For every point that the cost to borrow money increases a buyer loses $10,000 of buying power for every $100,000 borrowed.

For example, if you are comfortable making monthly payments on a $200,000 mortgage and the interest rate goes up one point you will now only be comfortable buying a home with a $180,000 mortgage in order to maintain the same monthly payment.

If each interest rate increase varies from ¼ to ½ percent a buyer could be looking at an interest rate increase of 1 to 2 percent by the end of the year. In the example above a 2 percent interest rate increase would reduce buying power by $40,000, resulting in a mortgage loan of $160,000.

If you are a frustrated buyer because you keep losing your dream home in a bidding war just have patience. The prices are coming back to you. Sellers who feel they don’t want to miss out on the recent prices for homes will help to increase inventory by listing their homes. This in turn will also help to reduce home prices.

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Taunton Lakes Neighborhood in Medford, NJ

Taunton Lakes Neighborhood

One of the hidden gem communities of Burlington County in South Jersey is Taunton Lakes in Medford. The community of a little more than 100 homes is also known as the Old Taunton Colony Club. Most of the homes are located on a pristine lake, where, if you look close enough, you will find homes situated within the natural Pinelands habitat. No two homes look alike and vary in style and size, but all the homes compliment the neighborhood scheme.

There is a rich history of this area that goes back to Revolutionary War times. Taunton Lakes evolved from an area that focused around iron works, making furnaces, forges, and cannon shot to an area of cranberry bogs that became the favorite place for local outings during the mid-1800s.

In 1920, a Philadelphia businessman bought the properties around the lake prior to the completion of the bridges over the Delaware River between Pennsylvania and New Jersey hoping to develop Taunton Lake into a satellite community of Philadelphia. World War II slowed the development of the community. Eventually remaining lots were sold to the Taunton Lakes Company formed by the local residents that also purchased the lake.

The homes on the lake can vary in price from the low $300,000 to the high $900,000 range. Being situated on the lake will also add to the value of your home. It is common to see ducks and turtles swimming past your dock while watching the sun rise or set depending on which direction your home faces. Families enjoy water activities at the beach or off their respective docks. It is a great lake if you enjoy open water swimming, especially if you are a triathlete that would like to swim at least a mile.

Taunton Lakes in Medford is located in the Lenape Regional School District where public school students will attend Shawnee High School. It is nicely tucked away from typical Philadelphia suburb congestion, yet it’s easy enough to access great shopping and dining on NJ Routes 70 and 73 in the direction of Cherry Hill and Marlton. It’s ideal quiet and convenient living, and we believe you’ll love it here!

Find Out More About The Taunton Lakes Neighborhood!

Are you looking into buying a beautiful home in Taunton Lakes? Reach out to Eric Schlamowitz today or use the form below to contact us…we can help you find the ideal home for you in the area!