Author Archives: vlm


Why You Should Sell Your House Now

Why You Should Sell Your House Now

There are two very good reasons why your should sell your house now.

(1) Inventory of homes to purchase is ridiculously low. Therefore the market favors the seller. If a sellers’ home has been updated in the past three to five years and is priced where similar homes have sold in the past six months, there is a good probability that the seller will be able to get at least the listing price from a buyer in a short period of time. Since there seems to be more than three buyers for every desired property the seller could command in excess of ten to twenty percent above the listing price depending on the location.

Based on selling statistics, if an older home that has not been updated is listed based on the sale of similar properties over the last six months than the seller should be able to command a purchase price within ten percent of the asking price. A purchase price could be higher based on the number of interested buyers depending on the area.

(2) The second reason to sell your house now, especially if you are over 50 years of age, is because this might be the last opportunity in your lifetime to cash in on the appreciated value of your most important asset. The circumstances of the past year have created a bubble in the real estate market that most people don’t like to talk about. Many homeowners who have lost their jobs have been able to get moratoriums on paying their monthly mortgages. When the mortgage moratoriums end, and employment opportunities remain nonexistent than distressed homeowners will face short sales or foreclosures. A flood of properties on the market will now favor the buyers because property values will go down. It could be years before property values recover.

Free Home Valuation

So, if you are thinking of downsizing or moving out of the area get on the sell train and sell your house now! Don’t rush into buying your next home for about a year because if your timing is right you will be in a market that favors the buyer.

Is it Still Time to Purchase Your Next Home

Is it Still Time to Purchase Your Next Home

If you are looking to purchase your next home, now is the time. To quote Jim Cramer from Mad Money, “BUY BUY BUY”. Although inventory of homes to purchase is low, this is not the time to give up on finding your dream home. This might be the one opportunity to purchase a home in your lifetime where interest rates are going to be this low. Low interest rates means low monthly manageable payments. It also means that a 15 year mortgage becomes an affordable option. Having a 15 year mortgage will save tens of thousands of dollars compared to paying a mortgage for 30 or 40 years. You pay less interest back to the lending institution and the equity in your home builds up quicker with a 15 year mortgage.

Low interest rates means that you also have more buying power. For every point that the interest rate goes up or down your buying power also goes up or down. Buying power varies by $10,000 for every $100,000 you borrow. Increased interest rates means less buying power and lower interest rates means more buying power.

The dark cloud on the horizon that could burst the bubble is INFLATION. The result of inflation is higher interest rates, less buying power, higher mortgage payments and lower property values. If inflation gets high enough many people will not be able to buy into the American Dream of owning your own home.

If you are ready to purchase your next home and avoiding bidding wars during the upcoming Spring Market contact me through my website or instant message me.

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The Super Bowl and the Spring Real Estate Market

The Super Bowl and the Spring Real Estate Market

In addition to being the best day for eating wings and drinking beer the Super Bowl is a great day because it is the unofficial beginning of the spring real estate market. I have seen a pattern over the years where sellers take their homes off the market around the holidays and buyers don’t like to look at homes in the cold weather of January. This year, for many reasons is no exception. Right after the Super Bowl people will be ready to release that cabin fever.

The buyers come out first. Inventory is usually low until late February or mid March. The beginning of the spring market favors the sellers because the demand for homes is greater than the supply. Impatient buyers who become emotionally attached to a possible home can end up bidding from 10-20% over list price. One positive for buyers is that they have more buying power than 18 months ago. The lower interest rates have increased buying power by approximately $15,000 for every $100,000 borrowed.

If you would like to know how you can find that special home and avoid the possibility of getting into a bidding war visit my web site and send me a message.

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The Mistakes First Time Home Buyers Make

The Mistakes First Time Home Buyers Make

Every buyer, especially first time home buyers, want to make a great deal and get as much value for their purchase as possible. If that is you, the best thing you can do when you begin your home search is NEVER CALL THE REALTOR ON THE SIGN.

Your driving down a beautiful neighborhood and you see a house where it is love at first site. You pick up your phone and dial or text that realtor who has the listing. STOP. Every realtor who has a listing, including myself, loves when a potential first time home buyer calls from the sign in front of a listing. It means that there is a potential for the listing agent to get both sides of the transaction. Both sides of the transaction are twice as good as one side of the transaction.

The listing agents’ primary responsibility is to the seller not the buyer. The reason most first time home buyers give for calling an agent off the sign is that they will get a better price and the agent will reduce their commission to make a deal. That is not going to happen. The listing agent’s goal is to get the highest price for their seller. Most brokerages will not allow their agents to reduce their commission once a listing agreement is signed. The listing agent only has to act fairly with the buyer. Acting fairly can be a tenuous interpretation. If a seller does not want to disclose certain information than a selling agent will not disclose it to the potential buyer.

The best way for a first time home buyer to get a great deal is to find that agent that will be their advocate during all phases of the buying process and fight for you like a pit bull. So, when you see that house that is love at first site your next call should go to your buying agent to set up a showing.

Recent Unemployment Spike vs Real Estate Markets

The Effect of COVID-19 On Real Estate Markets

In a recent post I indicated that because of the excessive number of unemployed people there could be an increase in short sales and foreclosures in greater numbers than we saw in 2008. This would also result in a decrease in property values. Recent economic activity seems to indicate that this hit to real estate could be short lived compared to other economic down turns but that is no comfort to the millions of people who have lost their jobs and are uncertain about the prospects of those jobs returning.

If you find yourself in the situation of facing a short sale of your home, foreclosure or worse DO NOT PANIC. Hysteria spreads worse than the coronavirus. Don’t become paralyzed with the inability to make a decision and move forward. Accept the fact that your world is collapsing and there is no way out for only a day or two. It is then time to formulate a plan to either sell your home with as few consequences to your future well being or keep your home. Just ignore the effect of COVID-19 on real estate markets, at least for the short term.

Knowledge is king and is a great remedy for stress and anxiety. You need to gather as much information as you can about the short sale and foreclosure process. Your mindset at this point will be a great factor in a successful outcome. Turn this into a game where your goal is to win.

Find a realtor who has been through all aspects of the process before. The process could take anywhere from three months to five years. The longer the process goes the better your chances are of keeping your home especially if the economy improves quickly, as is anticipated.

The biggest trick is to select the right realtor. Unfortunately, most realtors have no idea how the process works. They might have been involved in a short sale transaction before but the attorney for the seller is probably the one who coordinated the process with the bank and lien holders. Sad to say, realtors do not like getting involved in short sales because the time involved in completing the transaction is not equal to the compensation of the respective commission. Your realtor needs to be you advocate, have patience and be able to negotiate with the bank and any other entities that might have a financial interest in your property. The realtor needs to explain all the aspects of the short sale and foreclosure process to you until you are an expert and are confident enough to work with the realtor to develop a successful strategy.

Are you curious about the effect of COVID-19 on real estate in your neighborhood? I specialize in Medford, Medford Lakes and Shamong real estate. 

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Market Alert: Beware House Flippers

Beware House Flippers

A quick word of caution to all house flippers. Having experienced the Savings and Loan housing crisis back in the 80’s, without my asbestos underwear, when I thought I knew everything, was a painful experience. I would like to share some insights about flipping homes now because the similarities to the 80’s exist today but are more severe. Most successful flippers are looking to purchase a distressed property and make a quick turn- around for an average of $20,000 – $30,000 profit. There are those few occasions where a flipper can make a lot more, but the successful ones go for multiple singles than hitting that grand slam.

Although I hope I am wrong but unfortunately, based on my experiences and knowing that history (especially in real estate) tends to repeat itself, this is how the market looks. Inventory has been low for property purchases even before the Coronavirus hit. Now inventory is even lower which means that the sellers have an upper hand and property values have actually drifted up.

That is probably going to change. I believe in the next 3-6 months property values could go down 20-25%. There are too many people that are unemployed and not going to be able to pay their mortgages. The banks may or may not help those people who get behind in their mortgages but homeowners in that situation cannot count on that lifeline. Therefore, as what happened in 2008, but on a larger scale, there could be an abundance of short sales and foreclosures. This will change the balance between supply and demand. The supply will greatly increase causing property values to go down. This might be good for buyers looking for a bargain, but it is not a good environment for flippers to make a quick return on their investment. Even the nicest fixed up flips will only be able to sell their investments quicker but at the reduced property values.

The is a silver lining to this situation Flipping and holding for rental income and depreciation has financial benefits that should be discussed with your accountant. Many people who have lost their homes that are part of the collateral damage of the pandemic, but are in a financial position to pay rent, are good candidates for tenants.

In the meantime, stay healthy and safe and look for those great opportunities. Contact me to assist your search! 

Medford and Shamong Residents Should Stop and Smell the Fresh Air

Medford and Shamong Residents Should Stop and Smell the Fresh Air

Usually when I go on my weekend long bike ride through Medford, Shamong and Tabernacle I always try to go faster than the previous week. Now that time seems to have stood still and there doesn’t seem to be a rush to go anywhere I slowed down and realized how beautiful and peaceful some of the sites are in Burlington and Camden Counties. I realized how grateful I am to pass the horse farms, the lakes and enjoy the solitude of a quiet country road in a time of total insanity.

 

Why Your Zip Code Matters to Contractors

Why Your Zip Code Matters to Contractors

Let’s explore how your zip code could be impacting the price you pay for home remodeling services. First time home buyers, who are purchasing an older home, get overwhelmed when they realize that in order to maintain their dream they might have to replace or update things like the roof, mechanical equipment, hot water tank, washer, dryer, kitchens and bathrooms.

In order to have been in a position to buy that first home you have had to achieve a certain amount of financial success. You want to be able to use those same skills that helped you achieve financial success when it comes time to selecting a contractor to perform work in your home.

One number that could be as equally important as your social security number is the zip code where your home is located. The dirty little secret that contractors won’t tell you is that the prices you are quoted to perform work is a lot of times based on your zip code. If you live in Central or South Jersey and live in Princeton, West Windsor, Hopewell, Pennington, Medford, Moorestown, Voorhees, Cherry Hill, Haddonfield and Marlton your quotes will generally be a minimum 25-30% higher than adjacent communities.

The one thing that all buyers and even existing homeowners share is the idea that if the price to complete work is not high, than the final product can’t possibly be good. The second little secret that contractors don’t tell you is that since the majority of worked performed in your home is done by nonunion labor, the labor and material costs, no matter what town you live in is the same. Therefore, the only difference in price based on zip code is how much profit the contractor wants to make.

Here is a simple way to estimate the accuracy of any estimate. Ask for a complete breakdown or the costs for the work to be performed. This should include material, labor overhead and profit. The larger the company you employ the great the overhead will be. Overhead and profit should represent about 25% of the total labor and material costs. Based on recent prices the material costs represent approximately 55% of the total material and labor costs and the labor represents approximately 45% of those total cost.

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

A Silver Lining for Home Buyers and Sellers

A Silver Lining for Home Buyers and Sellers

There is a silver lining for home buyers and sellers during the COVID-19 crisis. Not with standing the seriousness of the coronavirus and everyone’s effort to mitigate the consequences, if you are able to slow down, step back and look at the big picture you might realize a great opportunity awaits you for buying or selling a home.

Silver Lining for Home Sellers

The only market that has not gone down in recent weeks is the real estate market. Home inventory was low prior to the beginning of the spring market and the inventory now is even lower. This mean if you are a seller and your home has recently been updated you have a good chance to get your listing price. Better yet, since there are more buyers than available homes to purchase there is a good likelihood that buyers will get into a bidding war for a property. So, if you are a motivated seller with an updated home and are good with people putting on booties and using wipy dipes for their hands at your front door this is a great opportunity to sell your home in a short period of time.

Silver Lining for Home Buyers

There is also a silver lining for buyers. With the interest rates going down it is important for buyers to think about this rule of thumb. For every point that the interest rate goes down your buying power increases by $10,000 for every $100,000 you borrow. So if you are comfortable making a monthly mortgage payment based on $200,000 and the interest rate goes down by one point you are now able to purchase a home for $220,000 and still maintain the mortgage payment of $200.000.

If you are a buyer and your equities have taken a major hit and the amount of money you have for a down payment has shrunk, you might want to consider getting an FHA mortgage with a 3.5% down payment. Once the equity markets reach the pre-virus high levels you can refinance with a conventional mortgage with a larger down payment.

In the meantime, stay healthy and safe and look for those great opportunities. Contact me to assist your search! 

Spring Market Buyer Beware

Spring Market Buyers Beware

If you are a 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 buyers agent who you trust and feel comfortable working with.