Negotiating a Low-Ball Offer

July 8, 2012 By Leave a Comment
 

Central Jersey Home

In Real Estate, a low-ball offer is an offer that is far below the price of a home should be in that particular area.

I have received low-ball offers on my listings, and I represent buyers who make lowball offers on other agent’s listings. Therefore, I have sat in both sides of the seats and have had some successful transactions.

My Bridgewater homebuyers are looking for a bargain, home sellers are looking for a quick sale and should consider every offer no matter how low, and homebuilders and banks are selling homes at reduced prices.

I have notice here in Bridgewater, Bedminster, and Branchburg; the conditions have sparked a wave of low-ball offers to buy homes. This is not only in Central New Jersey but also in the U.S. housing markets.

Now, the key to making a hardline low-ball offer on a home is to start by finding properties that have lingered on the market for a long time. The softer the market, the more likely the strategy will work.

To some, a low-ball offer may be undesirable; however, it could be an opportunity to open a discussion with a buyer who may give the sellers what they want. A seller, who has a bad reaction to a low offer, may lose a good buyer. Some sellers respond to a lowball offer with a counteroffer which I always recommend.

Some REALTORS caution buyers against making an offer that is so low it could offend the seller and stop the negotiation process. That is ridiculous!  If the seller does not have multiple offers, it often does not hurt to go in low.

It helps to have a REALTOR that has comprehensive knowledge of the local market, like Central New Jersey so that they can provide the best comparative market analysis that will identify the key trends for that particular neighborhood.

The bottom line on low-ball offers is that each real estate transaction, like each house, is unique. That means buyers and sellers needs representation by a skilled Real Estate Agent who can distinguish the strengths and weaknesses of both negotiating positions.

If you are looking for a skilled agent, you need not look any further. I am right here! Email me @ dawn@dawnruete.com or call me (908)930-2408

 
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Absorption Rates for the Bridgewater Housing Market

June 22, 2012 By Leave a Comment
 

As a REALTOR serving the Bridgewater housing market, I am often asked how we determine the salability of a home.  One of the tools we use is called the absorption rate.

To calculate the absorption rate we divide the total number of properties available by the number of sales by month.  The resulting number is the time it would take to sell every home on the market assuming no other homes come on the market.  If you look at the chart below you will see that as of today in the Bridgewater Housing Market if you were to try and sell a home in the $400,000-$650,000 range, the current absorption rate is 8.5 months.

If you were to list your home right now and you were the last home sold you should expect to move in just over 8 months.  That assumes no other homes come on the market and that other factors such as higher interest rates do not come into play.

When we are trying to determine when you want to move, the question becomes do you want to be the next home sold or the last one sold.  To a large extent you should consider pricing as one of the factors in your sale.  Buyers recognize value and will take the best home available at the best value.

If you have any questions about how we help you determine the price for your home please send us an email at mike@mikedowner.com or give us a call at 732-302-1771.  We would be happy to run an absorption report for your area.

Bridgewater Homes $400,000-$650,000

Current Active Listings In Bridgewater 104

Number Sold Last 12 Months 147 (12.2 per month)

Number Sold Last 6 Months 48 (8 per month)

Number Sold Last 3 Months 38 (12.7 per month)

Current # of Months Inventory 8.5

 

 

 

 
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Are Free Credit Scores Really Free?

May 21, 2012 By Leave a Comment
 

As REALTOR in Central New Jersey I get a lot of people asking me if they should get a copy of their credit report before they start a home search.  These days you can’t go very far in the internet, watching TV or even to your mailbox without seeing an ad for a “free” credit report.  While they all sound like a good deal, very seldom are the reports actually free.  There is no such thing as a free lunch.  One way or another you are going to have to pay something or buy something from them to get your rating.  In most cases you have to sign up for one of their services such as credit monitoring.  While this is not always a bad idea since it can protect you from identity theft or alert you to credit checks from companies offering you preapproved loans or credit, it does mean that you have to purchase something.

If these programs are not for you, you can pay for your score on the FICO website. When a lender denies you credit, new law that went into effect in 2011 requires lenders to send the applicant their credit score when they deny their credit due to a low credit score. While this may be unfortunate for a potential borrower at least it does take some of the mystery out of why you may have been rejected.

Free credit scores and free credit reports are two different things. Everyone is entitled to a free credit report once per year from all three reporting agencies (Experian, TransUnion, and Equifax). You can also get a free credit report anytime someone denies you credit. Simply contact the reporting agency in writing and they will mail you a report. While the report will not provide an actual score it will provide many details of your credit history.

The best plan is of course to keep your credit clean. A great rating means you will be approved for most loans and the best part of that is you will not be getting free credit scores. If you are thinking of buying a home you should contact a professional mortgage loan officer to have a complete credit approval ready to purchase the home of your dreams.  If you would like more information about credit scores, reports or how to use them in considering the purchase of a new home just drop me a line at mike@mikedowner.com and put the word CREDIT in the subject line.

 

 
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Tips to Get Your Bridgewater Home Sold Faster

May 15, 2012 By Leave a Comment
 

Whether you’re trying to sell your Bridgewater home because you’re moving or if you’re just trying to flip a property for profit, you need to know about how the real estate market works and what you can do to sell your Bridgewater home quickly and for the most amount of money.

  1. A Fresh Coat of Paint – Paint your home with neutral colors; this allows potential buyers to more easily picture their lifestyle in the new home. Light candles or bake cookies, so potential home buyers are greeted with an aroma they can relate to. An atmosphere they feel welcome in may determine whether they choose to buy your Bridgewater home.
  2. Get a Mechanical Checkup – Have someone check your air conditioner and heating before listing your house. Buyers generally don’t want a home that needs large investments, like a new furnace, so if the AC and heating are fine, it will appeal to more buyers.
  3. Get a Bridgewater Real Estate Agent – You may not always want to listen to what we have to say but using the services of a trained real estate agent will save you money in the long run. We do know what they’re talking about. While you may not like some of the things your real estate agent tells you, following his or her advice will help you sell your Bridgewater home faster and for more money. While you may think that selling your home yourself will save you a commission, statistics show that using the services of a real estate professional will get your Bridgewater home sold quicker and with much less hassle than selling it yourself.
  4. Check Your Curb Appeal – Curb appeal is a major factor in whether or not buyers will stop to look at your home. Your house and yard will look better maintained if you mow the lawn and trim the shrubbery. Keep in mind that the first impression is a lasting one, so present the exterior of your house in its best light. A home that looks inviting is far more appealing to buyers than one that looks neglected. It will definitely impact how many people coming to view your home.
  5. Get Rid of Pet Smells – If you have a pet, your home will have an odor to potential buyers who enter. You get used to your home’s scent from your pet and may not think this is an issue, but be aware that others can sniff out your pet’s smell as soon as they walk in the door. Take measures to eliminate the odors, so buyers won’t be put off.  At the same time, don’t overwhelm potential buyers with air fresheners, candles or other fragrances. You may offend the buyer, set off their allergies and even drive them to leave your home without seeing it in full! Why compromise a sale by making the potential buyer feel like they have to rush through the viewing? Put potpourri inside of a bowl if you want a nice-smelling home.

There is a lot to consider when selling a Bridgewater home, but the time you spend learning what is important and sprucing up before your home goes on the market will certainly pay off!

 
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When will we know we have we hit bottom in the Bridgewater Housing Market?

May 12, 2012 By Leave a Comment
 

You will not know by looking at your calendar.  For the Bridgewater housing market to begin a climb in prices a few things have to happen first.

According to Stan Humpries, chief economist at real estate website Zillow, “The market bottom is a multi-step affair. First, home sales have to bottom out, which they did in early 2009. Then, long-horizon buyers such as investors, 2nd home buyers, and retirees move into the market.”

The Bridgewater housing market has seen a lot of decent activity during the spring market so far but most economists still predict home prices to decline a bit more on average.  The economists see the shadow inventory (homeowners underwater on their mortgage but hanging on due to depressed prices) being a major force in the market very soon.

These distressed properties will be sold at bargain rates which will further depress prices short term until the inventory is used up.

Humphries points out that “A big part of it goes back to figuring out the ‘bottom of the housing market’ and the annoying little fact that no one can really predict when it will occur. For obvious reasons, consumers tend to not want to fork over thousands of dollars for something they know will decline in value, even if it’s only in the near term.”

Humphries goes on to say, “…for those who continue to wait out ‘the bottom of the housing market,’ lower prices aren’t their biggest enemy, the specter of rising interest rates are.”

Interest rates almost have to go higher if only to keep pace with inflation.  Currently rates are artificially low due to government programs.  A rule of thumb for those considering waiting for prices to fall a little more is if interest rates go up 2% the price of a home has to fall 20% just to have the buyer break even.  Or in other words, a $500,000 home must fall to $400,000 if rates move from the current 4% to 6%.

Don’t Try to Time the bottom of the Bridgewater Housing Market

With each Bridgewater housing price decline there are always buyers trying to wait for the bottom.  While they are standing on the sidelines trying to figure out where the bottom is, a combination of rising home prices and higher interest rates cost them a lot more financially than if they had
taken advantage of the great combination of rates and prices we currently are experiencing.

More than anything as a REALTOR in the Central New Jersey market, I see people lose great homes that they really love over a few dollars a month.

 
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What are the Different Types of Home Inspections?

April 27, 2012 By 1 Comment
 

Many first time home buyers are confused when their real estate agent tells them they need to have a home inspection when they buy a new home.  Here is a quick list of the types of inspections you may choose to have when buying your next home.

Primary Home Inspection

This is the most basic of inspections and yet the one many people decide they should save some money on by not have it done. This type of inspection allows you to find out what repairs if any should be done to protect your interests as well as any repairs that may be too expensive to have done so you should walk away from the deal.  In order to avoid buyer’s remorse get this one done at all times.

Engineer’s Reports

Some buyers retain an engineer to do a detailed inspection of a property.  This would be a thorough inspection of the electrical, plumbing, air conditioning, and or heating systems.  Many primary inspections include this as part of their service.  It is especially important where the home is older or the systems are older.

Termite Inspection

As the name implies, the purpose of the inspection is to check for termites or other wood-destroying insects in a house. Many banks require this as part of the mortgage process.

Well Water Inspections

If you do not have public water to the property you most likely will have a well.  Potable water as well as the availability is key to your being able to live in the home.

Appraisal / Appraiser’s Inspection

If you are going to get a mortgage on your property, the bank will require an appraisal.  The bank wants to be sure there are no problems with the property in case you stop making payments.  They want to make certain they have a marketable asset if something goes wrong later.

Walk-Through Inspection

The final walk-through normally takes place a day or two before closing or on the morning of the closing depending on when the previous owner moves out.  Your real estate agent should accompany you on this inspection to look at any possible issues.  It is the final inspection and your chance to make sure that any previously agreed upon issues have been resolved.

 For a list of inspectors licensed by the State of New Jersey who serve the Somerset and Middlesex County areas just drop us an email with the subject line INSPECTORS to mike@mikedowner.com and we will get that right out to you.

 
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The Seller’s Secret?

April 27, 2012 By 1 Comment
 

Recent surveys indicate that over 80% of all new potential home buyers in Bridgewater check out the internet first for their home search and then actually do a drive by of the home even before they contact a REALTOR or the owner for a showing. If you are thinking of selling will anyone even want to see your property? Take a quick look at these tips and then ask yourself if your home would pass the curb appeal test.

Think PICKY!  Buyers will not want to see junk lying around the yard, recyclables overflowing the bin, and weeds all over the yard.

Selling a home means a lot of nagging in some cases.  You need to stay on top of kids who wash the car and leave the hose and bucket on the driveway; little ones in and drop sports equipment and bikes by your front door instead of putting them away properly.

While these things are temporary, you have to also consider any permanent items that should be addressed.

Where do you keep your trash cans? They should be kept out of sight from the street while you are selling your home.  Inconvenient?  Yes but it will get you more money for your home in the end.

Take a look at the front yard.  How does it look? Is it green, well mowed and nicely edged along the curb and sidewalk?  If the grass looks a little bare you need to put a few bucks into some grass seed and maybe a couple shrubs.

Make sure you park your cars in the garage and keep the garage door closed. People can see the whole house when they drive by.  It will always look bigger without the cars blocking the view.  It also tells people you have enough storage room for their things without having to use the garage.

Install a warm glowing light bulb at your front door; this way your home will look welcoming and inviting to a prospective buyer.  Remember you never know when the potential buyer is coming to see your home.

These are just a FEW of the things you need to consider when selling your home. A quick trip to Lowes or Home Depot can help you get any of the items mentioned.  If you would like a more complete list of things you should consider, just send us an email with CURB APPEAL in the subject line to mike@mikedowner.com and we will send you the list of curb appeal suggestions.

 
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Is Buying a Short Sale in Your Future?

April 25, 2012 By 2 Comments
 

Even in Bridgewater the expression “short sale” seems to be popping up more and more. You see it in economic reports, the local newspaper, on real estate web sites, and you may even have friends or relatives who have looked at or purchased a home that was a short sale. But what exactly is a short sale? Is a short sale always a good deal? What are the potential problems with buying a short sale?

If you are thinking about buying a short sale in Bridgewater or some other area of Central New Jersey here are some questions you should ask your REALTOR.

What exactly is a short sale?
A short sale happens when a homeowner is “underwater” on his or her mortgage.  (The house is worth less than they owe on the mortgage.)  They have usually missed at least three months of payments to the bank or lender and they are trying to make a deal with a bank in hopes of avoiding a foreclosure. The bank that holds the mortgage allows the owner sell the home for less than he or she owes on the mortgage.  A short sale agreement allows the bank to avoid a foreclosure process that in New Jersey can take up to two years in many cases. The short sale allows the homeowner to escape the effects that a foreclosure has on their credit score.

How is a short sale different than a foreclosure?
In a short sale, the owner is probably living in the home while it is for sale. The owner is usually significantly underwater in the home so the hope of selling for what they owe is out the window. When a home is marketed as a foreclosure, the bank has already evicted the homeowner and taken possession of the house.

When a potential buyer places a bid on a short sale property, the offer must be accepted by both the homeowner and the bank. If there are two mortgages on the home (commonly called a second mortgage or home equity loan) all banks must sign off on the offer. In a foreclosure the offer must only be accepted by one bank since they have taken possession.

What should you consider if you put an offer on a home that’s a short sale?
Patience is the key to short sales. Since there are multiple parties involved (banks, homeowners, lien holders, etc.), the negotiation process can take a lot longer than in a traditional purchase. Also, many lenders only accept “as-is” contract offers on short sale properties. Basically they will not do any repairs to the home.  (Make certain your contract offer allows for a home inspection period so you have a clear idea of what you are getting into with your new home.)

Will you save money buying a short sale property?
Especially for first time buyers, a short sale can be a great way to get into a home.  It is also a great way for move up buyers to find a place in a more desirable neighborhood at a good price.  Keep in mind that your real estate agent should be able to help you find comps in the area so you can submit a winning offer.

Is a short sale right for you?
A short sale is best suited for buyers with patience. Short sales can span many months.  The hurry up and wait aspect drives many potential buyers crazy. Often short sales attract multiple offers, including all-cash offers from investment speculators. If your timeline is flexible for moving and have found a home you love, buying a short sale can get you the home of your dreams for less money than you might think.

For a list of short sale properties in Bridgewater or Central New Jersey in general just drop us a line at mike@mikedowner.com.

 
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Beginner Tips On Buying Bridgewater Homes For Sale

April 24, 2012 By 1 Comment
 

When it comes to looking at Bridgewater homes for sale; many first-time buyers often are overwhelmed by the thought of the process.  With the assistance of a professional REALTOR, the way toward a new home can be not only fun but quite successful.  Here are some tips on how to start your search and things you can do before you even look at the first picture on www.REALTOR.com, www.CBMoves.com or www.DoorPath.com.

Ask your real estate agent to get you preapproved for a mortgage through a reputable mortgage lender.  They will help you determine how much you can afford and more importantly how much you are comfortable affording.  Many people tend to go for the as much money as they can qualify for, even if they can’t really afford it and enjoy their lifestyle.  Remember you have other expenses that you already incur such as car payments, food, insurance, etc., not to mention new ones such as taxes, HOA fees and so on for the new Bridgewater home.

Determine what is reasonable for you long term, particularly when it comes to your mortgage and key elements such as what is important to you in a new home. Setting a budget for you and then sticking to Bridgewater houses that meet this price range can often help to avoid the hassle of being tempted by unrealistic houses or homes out of your price range.

To help you with your search you should ask your real estate agent for a bracket search form.  It is the easiest fastest way to determine needs versus wants in your next home.  (For a copy of the form just send me an email with the word bracket in the subject line – mike@mikedowner.com)  Space is also a big consideration, as well as whether or not you want a single family home or a townhouse/condo format.

In general start with the basics. For example, think about how many bedrooms you need, are you OK with living right next to neighbors or do you need a fenced backyard. Do you need a garage for your car or for storage or can a basement work for storage?

Most importantly you need to be realistic with your expectations and budget.  In Bridgewater you usually do not get a moat and a drawbridge for $100,000. Fortunately Bridgewater has many different neighborhoods and price ranges.  You may choose to go with a smaller residence or choose to move to a different place in order to get a larger-sized home.

Working with a professional real estate agent about Bridgewater homes for sale can often be a great way to gain further help and insight. We are familiar with the area and pricing since we work the market every day.  We often have access to hard-to-find deals that could potentially be in your favor. Prior planning can be a great way to find what you’re looking for.

If you have questions or comments about these tips for buying a home, please call us at 732-302-1771. We’d love to hear from you.

 
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Reality Check for Real Estate Investing

April 21, 2012 By 3 Comments
 

Reality Check for Rental Real Estate Investing

You can’t judge a book by its cover.  When considering whether or not to become a real estate investor, you always need to look deeper than the surface and you always need to look at dollars as the motivating factor.  Don’t let the media or your emotions lead you down a path of mistakes.

To help you avoid these mistakes here are four rules to follow:

1. Rule one is always know who your target market is.  You may not want to live in the property you are considering but renters may think it is a great home for them.  Ask a real estate agent what types of properties are in demand for the areas you are considering.  In the Bridgewater area we are seeing places that offer two bedrooms and two baths being snapped up almost immediately.  Studios and one bedroom places tend to stay on the market a little longer.

2. Rule number two is never get emotionally involved with a property.  When it comes time to negotiate a contract on a new purchase you should always feel like you can walk away from the deal emotionally.  If you feel as though you cannot walk away from the deal, you need to take a step back and review all the terms! When your emotions take over you cannot make rational decisions and will almost never make a good business decision.

3. Rule number three is a little tricky.  Are the numbers actually true?  No matter how good the numbers look a simple reality check can save you time and money.  Will the rent cover expenses such as a mortgage, taxes, association fees, utilities, etc.? Check the numbers on leases and get copies so you can verify what current tenants are paying.  Call around to check on market rates for rents.  If the rents are high on the places you are considering your tenants may not renew with you and your potential income will drop.

4. Rule number four is ugly can be pretty in the pocketbook.  Many places are overlooked due to a negative first impression.  Often the ugliest place can be rehabbed easily and turn a profit quickly.

When investing in real estate always consult with a REALTOR.  Their job is to know the market, recognize value and assist in closing the deal you are seeking.  A professional real estate agent will know of short sales, foreclosures and in some case special circumstances which may allow you to get a bargain on your next investment property.

 
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