Real Estate Information

The Seven Dangers of Overpricing!!!!

Most experts would advise that the best way to increase your
odds of a successful sale is to price your home at fair market
value. But, as logical as this advice sounds, for many sellers it is
still tempting to tack a few percentage points onto the price to
"leave room to negotiate". To avoid this temptation, let's take a
look at the seven deadly sins of overpricing:
1. Appraisal Problems
Even if you do find a buyer willing to pay an inflated price, the fact
is over 90% of buyers use some kind of financing to pay for their
home purchase. If your home won't appraise for the purchase
price the sale will likely fail.
7 Deadly Sins of Overpricing
2. No Showings
Today's sophisticated home buyers are well educated about the real estate market. If your home is overpriced they
won't bother looking at it, let alone make you an offer.
3. Branding Problems
When a new listing hits the market, every agent quickly checks the property out to see if it's a good fit for their
clients. If your home is branded as "overpriced", reigniting interest may take drastic measures.
4. Selling the Competition
Overpricing helps your competition. How? You make their lower prices seem like bargains. Nothing is worse than
watching your neighbors put up a sold sign.
5. Stagnation
The longer your home sits on the market, the more likely it is to become stigmatized or stale. Have you ever seen a
property that seems to be perpetually for sale? Do you ever wonder - What's wrong with that house?
6. Tougher Negotiations
Buyers who do view your home may negotiate harder because the home has been on the market for a longer
period of time and because it is overpriced compared to the competition.
7. Lost Opportunities
You will lose a percentage of buyers who are outside of your price point. These are buyers who are looking in the
price range that the home will eventually sell for but don't see the home because the price is above their pre-set
budget.
Most buyers look at 10-15 homes before making a buying decision. Because of this, setting a competitive price
relative to the competition is an essential component to a successful marketing strategy.

Take Charge When Buying a Home

Take Charge When Buying a Home

If you approach the home buying process intelligently and with confidence, you are much more likely to buy a house you'll be proud to call home.

Approaching the task of buying a home can be overwhelming; there's so much to consider:

• How much house can I afford?
• How can I find the best loan?
• Where will I come up with a down payment, and how much will I need?
• Should I buy a new or resale home, and which will go up in value?
• Should I work with an agent or look at homes on my own?

And these questions are just the beginning. Buying a home is one of the largest financial transactions in your lifetime - do your research so you know what you’re doing.

Here are the two most important things to remember no matter where you are on the road to home ownership:

1. You can and should understand everything that is happening in the home buying process.

There is nothing that is so complex that it can't be easily explained to anyone with average intelligence. Just because you don't apply for a thirty year mortgage once a week doesn't mean you have to take the first one that comes along. You'll need to learn some new terms, apply some new concepts and take the time to understand what you're getting into.

If, at any point, something happens that doesn't make sense to you, simply demand a full and complete explanation. If it still doesn't make sense, seek help from someone you trust like your CPA, your banker or maybe an online real estate columnist.

2. In the world of real estate sales, YOU are the most important person in the entire process.

It's easy to think that everyone else carries more weight than you. The agent talks fast and has an answer for everything. The lender may decline your loan application, and on and on.

But the truth is that you, the buyer, are the one person in the transaction that makes it all happen. If you decide to not buy, the entire process comes to a grinding halt.

So flex your consumer muscle and take command of this process. Surround yourself with a team of professionals that you have confidence in and make them work for you.

Approach home buying with intelligence and confidence, and by doing your homework, and you are more likely to buy a house you’re happy with and to know that you made the right decision.

This is a true story from a recent inspection with a buyer last week. When I am asked if we "need" to do inspections, I always say that my advice would be to most certainly do inspections. I realize that money is tight for everyone and it's not a small cost to have the "standard" inspections done. Those being structural, which looks at the basic construction of the house from framing to foundation, including attic space, age of windows, insulation and mechanicals. Now, a structural inspection is not a detailed look at every last tiny component in a house. It's basically a "checkup" done by a certified inspector to look for items that may not be as easily seen by an inexperienced buyer.

The pest inspection must also be done by a "certified" pest inspector. You can have it done by the company that does the structural or anybody really, but if they are not certified, you have no legal recourse based on the contract terms.

Septic inspection is probably only done 50% of the time based on my experience because people just assume that if the waste and water "go away" when you flush that everything is fine.

So, back to our story from last week. My buyer took my advice and had all three plus a radon test done.

After the structural, it was clear that the roof had some major issues that were hinted at by our initial walk around. Turns out that there were rafters that were fractured as well as mildew and rotten roof sheeting on 6-8 sheets of plywood. These were areas that may not have been known without the inspector crawling in the hot, fiberglass ridden attic. So that was money well spent.

The following day, the septic inspection was due to be done. The seller had told us that it was pointless and a waste of money because it had been pumped 3 years prior and was fine. The buyer actually considered cancelling the inspection. I strongly advised against it. The septic inspector came and dug up the caps, pumped the tank and ran some water into the leach field. Guess what? The tank was fine, but the leach field was totally plugged and collapsed and was showing water coming up out of the soil.

The lesson is simple, all in all, these inspections cost the buyer close to $900, but saved, as we're finding out, close to $10,000 in repairs that if they were not found prior to closing, you'd have a slim to none chance of recouping any cost unless you could prove that they didn't disclose those items. Bottom line is that it "pays" to have inspections done, they don't "cost" anything. All found items over $1,500 can hopefully be negotiated successfully and it's in the seller's best interest to do so because they then have to disclose those problems, by law. Learn from my experience...use an experienced agent that has your best interest in mind.

As a real estate broker, I'm often asked if we've hit the "bottom" of the market yet. Although a very locally diverse issue, I would say that we are very close. In this market, as in many, it all depends on what you're selling. The inventory of homes in Queensbury, Lake George, Glens Falls and surrounding areas is at very high numbers right now. That being said, it means that buyers have a lot to look at. In the past, buyers would look at about 11 homes on average before purchasing. In my experience, that process of searching spanned about 2-3 months. Now, buyers are taking up to 6 months and more to find that "perfect" house and looking at 20-30 homes, at least, before doing so. It makes sense, but often times what they are searching for in the beginning, is nothing like what they purchase in the end. My advice on the buying end is to have realistic requirements when searching and always keep location as the top priority for future resale.

When pricing a home to sell, accurate comparables are always the best way. As agents and brokers, we do our best to "adjust" those numbers based on current sale trends. It is not a science, but the best way to predict sales price. As a seller, also have realistic goals when pricing and understand that today's market time is about 6 months, so pricing aggressively, don't read "give it away", will ensure lots of interest and hopefully a quicker than normal sale.

Oh no, interest rates are rising! The world is coming to an end, buy up all the canned food you can!

OK, ok.....it's not that bad! Interest rates are still at historic lows but the trend is that they will continue to rise. This has to happen to help get us back to a stable market, (no, we're not there yet!) It's also imperative, if you're a buyer, that you get pretty aggressive looking at homes. Some first time buyers will be "out of the market" if the rates rise even 1/4 %.

Now is the time to get out there and find the houses you DON'T like. Sounds backwards, but that's really what it's about, figuring out what you don't like to help narrow your search to the "perfect" home. There is a lot of inventory out there right now, so start looking! If you need any help at all, I'm here when you need me. Happy hunting!

All Your Ducks In A Row

I've worked with many buyers and sellers throughout my career. One of the most important aspect to professionally working with both revolves around the issue of financing. When it comes to buyers, it is our job to make sure that they have spoken to lenders to find out how much money they are qualified to borrow. This doesn't mean that we try to find them a house that "maxes" out their finances. To me, this means finding them a home they can comfortably afford. Although it's a slow market, the attraction of well priced homes has many homes disappearing quickly to the buyers that are ready. It is crucial that buyers contact a lender and find out what priced home they can comfortably afford BEFORE they look at homes.

Concerning sellers, it is my job to make sure that the interested buyers have also been to a lender and have been pre-qualified for the sellers home at the price they are asking for. Lazy agents don't go the extra mile to find these things out and it's a disservice to their clients, whether it's the buyer or the seller. Banks are being very conservative with who they lend money to, so make sure no matter what side you're on that you do your homework and choose a real estate agent that works for their clients effectively.

If you're a buyer and you'd like a list of lenders to speak with, please feel free to contact me at realtormcgrath@gmail.com

There is a program through USDA that still alows 100% financing for certain rural areas. The following bullets are compiled from the USDA New York State Handbook.  The purpose of this hand-out is to provide you with the most important items listed in the 35 page handbook published 1^st quarter 2009.  There are some exceptions based on the individual’s compensating factors.

• Owner occupied
• Single family residence
• 30 year fixed only
• Escrow required
• Debt ratio at or below 29/41%(some exceptions)
• Minimum 620 credit score
• 2% one time guarantee fee paid to the USDA
• No monthly private mortgage insurance
• Rural properties only, see website.
• No cap on seller’s concession
• No down payment
• FHA appraiser required, inspections can be waived
• Full documented income within adjusted income limits
• No documentation needed for past credit issues except defaults on federal debt

Land cannot be valued at over 30% of total value