Avoid These 8 Staging Mistakes

By Fred Golden

Associate Broker

The Field-Golden Team

Prudential Douglas Elliman

             You may love your home, but that doesn’t mean that everyone coming through the door will feel the same way. What may be “charming” to the seller may seem off-putting to a prospective buyer. Many sellers attempt to stage their home themselves and, in doing so, create mistakes that can actually sidetrack the sale of their homes.

            Here are some of the biggest staging mistakes, according to professional home stagers, and a few personal opinions to take with that proverbial “grain of salt”.

            1. Getting too personal: Home staging is meant to create a neutral canvas that will appeal to the majority of buyers. Staging is all about de-personalizing the space, and creating more of a luxury hotel or a model home look that will appeal to most everyone. This is not the time to bring in your unique style and create a look that appeals to just you. However, keep in mind that if it comes off too “cold”, it may be difficult for a possible buyer to feel any attachment.

            2. Using dark colors: If painting, you should choose a nice, neutral and warm color, such as beige tones, grey tones, or light blue or pale greens. You’ll be amazed at the transformation a few coats of fresh paint will make on your home.

            3. Not taking advantage of natural light: People love natural light, so blocking off any light with heavy curtains or furniture can hurt your sale, especially if the home has attractive views. Anything dated in a home is a turn-off to a potential buyer and window treatments or old blinds are one of them.

            4. Thinking more is better: Scale down your furniture. The size of the furniture needs to be in balance with the scale of the room and the other furniture in it. Remember that the purpose of furniture when selling a home is to define the purpose of the room and to show what will fit where. It is not meant to show that you can provide seating for 15 in your living room and every seat has a side table to rest drinks on. Less is more, in this case.

            5. Leaving pets at home: You need to remove all traces of animals from the house and make sure “Fido” or “Sunshine” is away during showings. Having a pet could kill a sale before someone even steps into a house. No cat of doggie fur on the sofa, no smelly pet food out, no litter box on display.

            6. Neglecting the outside: People care about the outside space just as much as the inside, so add flowers, make sure the lawn is mowed, the yard is tidy and add a few backyard accessories for the kids.

            7. Only dealing with “main” rooms: People are quick to stage living rooms, kitchens and bedrooms, but don’t forget to spruce up the garage, basement and closets as well.

            8. Forgetting fixtures: When staging a home, it’s important to ensure all lights are burning with fresh bulbs, and that all fixtures are working properly.

Remember, staging a home means showcasing the property’s many features, not concealing its flaws. Make sure your house is in good condition and use staging to cast the home in the best light.

 Fred Golden can be reached at (917) 620.4907.  Prudential Douglas Elliman is an independently owned and operated broker member of BRER Affiliates, Inc. Prudential, the Prudential logo and the Rock symbol are registered service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Used under license with no other affiliation with Prudential. Equal Housing Opportunity.

An Alternative Means for Buyers Over 62 to Finance a Home Purchase

Fred Golden

Associate Broker

The Field-Golden Team

Prudential Douglas Elliman 

A know that this week’s blog is a little late, and I hope that you will forgive me.  This week’s topic is especially worthwhile and worth a little forgiveness. Over the past several weeks, We have been working hard with a young lady of 77.  Because of our work with her, we learned about a way for those over 62 to finance the purchase of a new home.  Despite my 10 years in the business and the 18 years’ experience my partner has, we have never seen or heard of this exciting means of financing. Today, I want to share this with all of you.  Most of us have heard of a Reverse Mortgage, and have assumed that it meant that an owner of a home with no current mortgage would arrange a reverse mortgage that would provide them funds every month for their retirement and would be paid off when the property is sold, either upon their death or when moving out of the property.  Basically they are using the home as an annuity. 

I found out last week, with the help of a customer, that a Home Equity Conversion Mortgage (HECM) can be used to finance the purchase of new home!  The HECM is an FHA insured, low-rate, reverse mortgage. There are several requirements and restrictions, but basically you can borrow between 55 and 70% of the purchase price (depending on the age of the youngest borrower), regardless of income or credit standing. No future payments are required until the home is sold or the borrowers are no longer living there. This program was designed to allow seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage and obtain a reverse mortgage within a single transaction. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs, i.e., handrails, one level properties, ramps, wider doorways, etc. Now, for some of the more significant requirements and restrictions: 

   The youngest borrower must be age 62 or greater.

   The property must be HUD/FHA approved.

   Mostly for single-family homes and condominiums.  No Co-Ops.

   FHA requirements apply (source of funds, documentation, etc.) 

I do not want to make this appear too simple, and not every lender will offer it, but it is possible to get and may work for you or someone that you know.  There are many variations, and I have only described the simplest. If retirement is in your future and you are looking at a move, this is clearly worth investigating. 

I will be happy to answer your questions, or to get you answers. And, of course, we have many approved properties that we can show to buyers in NY, from Montauk to Putnam County and every place in between, as well as the South Florida area.  Just let us know how we may help. 

Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity. Listings available at http://www.elliman.com/FSG.

 

Often Overlooked… The Sec. 203(k) Mortgage

By Fred Golden

 

The Field-Golden Team

 

Prudential Douglas Elliman

 

              We have all heard about the “deals” to be had in foreclosed properties and the horror stories of many of those that purchased them.  Real estate consumers today can find ample value in distressed homes – properties that are under a foreclosure order or up for short sale. In many cases, however, “distressed” speaks more for the condition of the homes than their recent financial histories, as they’ve sat empty for extended periods and have been subject to vandalism and theft.

            Buyers often believe that will need to purchase the “deal” and then spend a fortune out of their own pocket to rehabilitate the property. Those considering homes in need of repair and renovation should consider a 203k mortgage, which enables homebuyers to finance both the acquisition and rehabilitation of the property with just one loan.

            “FHA 203k purchase loans are the perfect financing vehicle for homeowners seeking the value proposition offered by REO homes,” said David Wind, president and board chairman of White Plains, N.Y.-based Guaranteed Home Mortgage Company, in a company statement this June. “Home buyers’ ‘perfect’ home can be purchased in less than perfect condition with a single-close loan product that allows repairs and remodeling.”

            There are two types of 203k loans: the 203k streamline and the full 203k. The 203k streamline is the most popular among homebuyers and lenders.

            “The maximum allowable in repairs is $35,000 under the 203k streamline and it does not allow any structural repairs to be done to the home, unless [the repairs are] a result of an unforeseen circumstance,” explained David Krushinsky, a certified mortgage planning specialist for Mesa, Ariz.-based AmeriFirst Financial Inc. “The full 203k allows structural repairs and will allow the buyer to exceed the $35,000 in home repairs. Both loans allow up to $1,500 in swimming pool repairs.”

            Contractors chosen to perform repairs must be licensed, bonded and insured, and they usually must provide the lender with a resume and two client-reference letters.

            “After the close of escrow is when all the rehabilitation work begins,” said Krushinsky. “Funds usually aren’t released immediately so it’s important for your contractor to start work in a timely manner. Typically, if they’ve been in business, they have existing relationships with vendors so they can order materials and begin work. If not, the project may take longer than anticipated.”

            Since the 203k mortgage is based on the home’s potential value after repairs — not its existing value — you can be approved for a higher loan amount. The mortgages also carry long-term-fixed rates, are insured as soon as they fund, and include escrow accounts for the scheduled repairs.

            Loan amounts are capped according to local FHA limits. Only owner-occupied properties of one to four units qualify for 203k mortgage financing; homes also must be at least one year old.  

  Fred Golden can be reached at (917)620.4907.  Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

What Does a “Good” Agent do for a Seller to earn their Commission?

by Fred Golden

Associate Broker

Prudential Douglas Elliman

My partner and I have over 25 years of experience selling residential real estate in New York City.  We work hard for the commissions that we earn.  In our neck of the woods, lockboxes are few and far between. I will try to go thru this from the beginning…

To get a listing, we need to evaluate a property, including it’s market potential and then explain this to the seller.  The market must be reviewed for comparable sales and changing conditions.  We must explain what we have found to the seller and be prepared to answer their questions. We also explain, under changing market conditions, the relationship between the Asking Price and the Selling Price.

We review with a seller what their property may need to attract potential buyers, whether a paint job, refinishing a floor, or possibly professional or virtual staging.  Maybe it is as simple as cleaning the carpets and de-cluttering the space or as complex as a new kitchen.  We need to be prepared with answers when the seller wants an expectation of the cost to do what we recommend. We may even need to have names and numbers available for cleaners, contractors, trash removal services and charities that accept furniture.

We develop a marketing strategy and carry it out.  We make changes to the strategy when conditions require it or if circumstances change.  We may even need to provide advice for a potential short sale.  We see that the property is presented in the best possible light (another reason we do not use lockboxes), including expert pictures and well written descriptions.

We have learned to negotiate a price thru years of experience. We listen when a client or customer tells us something. We communicate what is happening with their listing on a periodic basis.  We answer their questions and, where possible, relieve their concerns.

We communicate with the seller’s attorney and follow up to insure the buyer is following up on their obligations.  We review condo and co-op board packages to insure that they are being presented in the best light and that they are complete when submitted.

We are present for engineer inspections and mortgage appraisals.  We make sure that the appraiser has the necessary comparables to support the price.  If we believe that an appraisal is incorrect, we will push for an appeal.

It is not just our job to find a buyer, but to see that the transaction moves to completion in the shortest possible time and with the least possible stress to the seller. Our “job” is not done until we leave the closing table, and sometimes, not even then.

Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

Picking an Agent

By Fred Golden
The Field-Golden Team
Prudential Douglas Elliman

If you needed heart surgery, would you pick a name from the phone book? Of course not, you would most likely ask friends or relatives and your family doctor for their recommendations. Buying or selling a home may one of the most significant financial decisions of your life and you should not rely on just anyone to help. Whether you are buying or selling, the agent that you work with will be critical to your success. Often people feel that the process is simple and that they can do it themselves. Statistics have shown that nearly 90% sellers and 80% of buyers use an agent to help accomplish their goal. If you are going to have help, shouldn’t it be an expert?
How to find the right agent? Recommendations from friends and family are a good source, but only if they have actually worked with the agent in question. Friends of friends and relatives do not necessarily make good agents. Recommendations from real estate attorneys and mortgage brokers are often helpful. Agents that work for firms with a “good reputation” in your neighborhood can also be a starting point.
If you are a buyer, you want an agent that knows the neighborhood and the homes and residential buildings in the area. If you are planning to purchase a co-op or condo, you need someone well versed in the process, someone that will work to get you approved. You should also be certain that they are familiar with the financing process and can help you find financing, if necessary, and understand the current mortgage possibilities in your area. If you are planning to purchase a fixer-upper, do they understand 203(k) financing? If your credit is an issue, can they direct you to the proper lender? If you have great credit, can they help you get the lowest rate? From a seller’s perspective, will they be able to help a potential buyer complete the purchase of the seller’s property?
It is usually best to work with an agent that is a full-time agent. Someone that is willing and able to devote the necessary time to getting the job done. What is their experience, both in and out of real estate and how can that experience be applied to help you? Financial experience, construction experience, decorating experience, etc., these and others can all be useful. Do they have the contacts that you might need, attorneys, mortgage lenders, appraisers, inspectors, et al?
Do they have the contacts with other local agents that will generate potential buyers, or access to listings that may not be advertised or are not on the MLS? Will they communicate frequently and effectively? Will they give you the bad news as well as the good? If you are a seller, can they provide a real marketing plan? Will they actually show your home, or just put a lock-box on the property and wait for others to show it?
If you are a buyer, will they actually put in the time to work with you, or will they send you to open houses alone or wait for you to ask about seeing an advertised property? Being an effective agent in today’s market is hard work. Be convinced that the agent you select is willing to make it work for you.

Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

What Constitutes an Effective Search Plan for a Buyer?

Fred Golden

Associate Broker

The Field-Golden Team

Prudential Douglas Elliman 

 This may differ somewhat from buyer to buyer, but there are a few items that should be on everybody’s list.

If you know the area in which you plan to search, that will make your search quicker and less likely to have a poor result (I am defining this as renting or purchasing a home where you ultimately realize you do not want to live).   If you are not knowledgeable about the area, you will need to have contact with people that have the knowledge.  Often times this may be a local real estate agent or broker.  Options here are getting recommendations from their prior customers, friends that might live in the area, or co-workers living in the area. 

Failing such a recommendation, you may want to go online and search for listings that “look” appropriate to see if there is an agent that seems to be working with the type of listings that might interest you.  This will however require conversations with the likely agents to determine if there is a fit between you and the agent.  It is always better to work with one agent once you feel that there is a good fit.  That way the agent will have a chance to get to know you, your needs, and your desires.  Have the agent send you suggested listings to see if they are on the right track.

You should speak to a local mortgage broker or banker and get a prequalification.  This will help you determine what you can afford and how much you can mortgage.  You don’t want to waste your time, or your agent’s time, looking at homes that you cannot afford.

You need to analyze what you need and want in a home and be able to communicate those needs to whoever is doing the search.  This is your search, so you should determine the criteria.  Important factors, depending on where you are searching may consist of:

Price, Size (sf and number of bedrooms), home features (fireplace, garage, driveway, pool, etc.), vicinity to transportation, shopping, schools, etc.   These are the basics you should try to determine in advance of starting your search.  In each category, think about the minimum that you can accept and the maximum that you want.  Once you have done a search using these criteria, you will begin to get a feel for the possibilities and can further refine your search.  A preliminary conversation with a skilled agent in the area may help you refine some of the search up front.

Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity. Listings available athttp://www.elliman.com/FSG

What Determines the Success of a Residential Real Estate Transaction?

Fred Golden

Associate Broker

The Field-Golden Team

Prudential Douglas Elliman 

Motivation –     For the seller, this means that selling their property comes right behind their family and their job. If getting to the closing table is not very near the top of their priority list, it may not happen, or it will take longer than necessary, or it will happen at a lower price.  It can be a lot of work to get your home ready for sale (repairs, painting, landscaping cleanup, etc.), the need to keep your home ‘neat’ and ready for showing, and picking the right agent to represent you.  I will detail each of these items in separate postings in the future, but I am happy to answer individual questions.

                                For the Buyer, this means doing your homework on neighborhoods, schools, transportation options, and what you can really afford.  It also means getting your credit in order, speaking with a mortgage person, and finding a compatible agent to help you in your search.  You must also realize that this is an important decision that will require time and thought so there will be no ‘buyer’s remorse’.  If you are moving from an apartment, you must be aware of when your lease ends, will the owner extend you time on a month-to-month basis if necessary, what if you find the right home quickly and want to terminate your lease?

An Effective Marketing/Search Plan – To be detailed in a subsequent post.

Having the right help –  For the seller, this means the agent/brokerage you choose to work with; an experienced real estate attorney; mortgage lender, and if you are doing any refurbishing, reliable contractor(s).   Your attorney needs to protect you, but at the same time you do not want them trying to find issues so they can justify their fee, or taking an attitude with the buyer’s attorney.  Put differently, they must be professional. 

                                                For the Buyer, again this means the right agent/brokerage to guide you and help you find the ‘right’ home for you and your family, a competent real estate attorney, a pre-approval from a lender that actually reviews all of your finances and needs and will help you determine what you can afford.  The issues on attorneys, presented above, apply on the buyer side as well. With your selected mortgage lender, the most significant issue is follow thru and attention to detail.  They may need to come to your defense with their own or a bank’s underwriter.  They made need to push for the appraisal to get done, or be sure everyone is following up on the necessary paperwork.  Your lender must be aware of all of the Fannie Mae guidelines and how they can affect your application, as well as all of the possible programs for which you may be eligible.

This is not intended to be an exhaustive list, but if all of the above are in place, you should get to the closing table in a reasonable time and with a limited amount of stress.

  Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity. Listings available at http://www.elliman.com/FSG

 

Costs for 1st Time Home Buyers

By Fred Golden

Prudential Douglas Elliman 

             Buying a new home can be a huge, complex undertaking, especially when it’s your first time. That’s why it’s important to have an experienced real estate agent guiding you along the way.

            In a survey conducted earlier this year by Prudential Real Estate and Relocation Services (PRERS),  a Prudential Financial, Inc. [NYSE:PRU] company, 75% of respondents highlighted the importance of real estate agents in the process of buying or selling their home, with only 24% saying agents are helpful but not imperative.

            “Americans continue to see real estate agents as having a very important role in helping them price, buy and sell their homes,” said James Mallozzi, PRERS’ chairman and chief executive officer. “Although the data underscores the value real estate agents provide, it also shows that the industry needs to continue to work hard to meet clients’ unique needs.”

            First-time buyers need to look at their financial situation and crunch the numbers to see if this is the right time to buy. Chances are the numbers they see today will be the best they will see for some time, which is why so many are considering homeownership.  

            Still, understanding the money that goes into a home purchase is important. The biggest mistake new buyers make is underestimating the costs of buying a house and maintaining it over time.

            Homebuying requires more than a down payment as closing costs and future expenses will figure prominently. Many experts agree that homeowners should have 1%-3% of their homes’ purchase price in savings for improvements and surprise expenses. Mortgage experts also say it’s wise to have at least six mortgage payments in the bank after a closing. Closing cost may be a big item and will be handled in a seperate post.  For now, be sure to get an estime of closing costs from your lender or an estimate from your broker.  And remember, many co-ops expect your to have 1 – 2 years of mortgage and maintenance payments in accessible funds after your down payment has been made.

            While those numbers may not be feasible for everyone, if you are spending above your means on a new home, you may find yourself in financial trouble fast.

            Inspections are important for the first-time buyer, as they list repairs that will be needed for the home. A buyer should put together a short-term and long-term plan based on the inspection so they know how much money they will need in the months and years ahead.

            As renters, people are accustomed to paying rent and basic utilities. As homeowners, you’ll also pay for water, sewer and trash collection. Then there are property taxes, homeowner’s insurance and homeowner’s association dues, plus yard care, snow removal and other expenses unique to your location.

            To be sure, buying a home is one of the largest investments you’ll make and when done wisely, it can be one of the best decisions of your life. Your real estate agent will help each step of the way, first helping you establish a realistic price point for your home purchase and a clear understanding of your monthly expenses.

  Fred Golden can be reached at (917) 620.4907. Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

Looking at “Distressed” Property or a Handyman Special? The 203k Mortgage

Fred Golden

Prudential Douglas Elliman 

            Real estate consumers today can find ample value in distressed homes – properties that are under a foreclosure order or up for short sale. In many cases, however, “distressed” speaks more for the condition of the homes than their recent financial histories, as they may have sat empty for extended periods and subject to possible vandalism and theft.

            Those considering homes in need of repair and renovation should consider a 203k mortgage, which enables homebuyers to finance both the acquisition and rehabilitation of the property with just one loan.

            “FHA 203k purchase loans are the perfect financing vehicle for homeowners seeking the value proposition offered by REO homes,” said David Wind, president and board chairman of White Plains, N.Y.-based Guaranteed Home Mortgage Company, in a company statement this June. “Home buyers’ ‘perfect’ home can be purchased in less than perfect condition with a single-close loan product that allows repairs and remodeling.”

            There are two types of 203k loans: the 203k streamline and the full 203k. The 203k streamline is the most popular among homebuyers and lenders.

            “The maximum allowable in repairs is $35,000 under the 203k streamline and it does not allow any structural repairs to be done to the home, unless [the repairs are] a result of an unforeseen circumstance,” explained David Krushinsky, a certified mortgage planning specialist for Mesa, Ariz.-based AmeriFirst Financial Inc. “The full 203k allows structural repairs and will allow the buyer to exceed the $35,000 in home repairs. Both loans allow up to $1,500 in swimming pool repairs.”

            Contractors chosen to perform repairs must be licensed, bonded and insured, and they usually must provide the lender with a resume and two client-reference letters.

            “After the close of escrow is when all the rehabilitation work begins,” said Krushinsky. “Funds usually aren’t released immediately so it’s important for your contractor to start work in a timely manner. Typically, if they’ve been in business, they have existing relationships with vendors so they can order materials and begin work. If not, the project may take longer than anticipated.”

            Since the 203k mortgage is based on the home’s potential value after repairs — not its existing value — you can be approved for a higher loan amount. The mortgages also carry long-term-fixed rates, are insured as soon as they fund, and include escrow accounts for the scheduled repairs.

            Loan amounts are capped according to local FHA limits. Only owner-occupied properties of one to four units qualify for 203k mortage financing; homes also must be at least one year old.            

 

  Fred Golden can be reached at (917) 620.4907.  Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.

Sell it with Pictures

By Fred Golden

The Field-Golden Team

Prudential Douglas Elliman

             We have all heard it said that a picture is worth a thousand words.  When it comes to selling your home, you want those words to end with “sold”.  It’s no secret that better-presented homes get more traffic and more buyer interest.  Even though it only takes one buyer for you to sell your home, the more buyers that actually come see it, the more likely it will sell.

            According to the National Association of REALTORS^®, nearly 90% of all homebuyers begin shopping for homes online. Many flip through photos of the homes and send a list of those they want to see to their agent. In fact, homes with few or no photos are often ignored by potential buyers, even if the home’s description matches a buyer’s ideal listing.

            Many agents believe that no other marketing investment is as important as professional photography in marketing a property effectively. So, to generate more buyer interest, there has been a dramatic increase in the use of professional real estate photographers in the past few years.

            The best photographs are most likely to come from someone who has an eye for the underlying beauty of the home’s structure and spaces; has specialized equipment and techniques for lighting and perspective control; and uses workflow processes for post-processing of the images for use on the Web and in publications.

            Let’s face it, as much as we all like to think we take great photos, a professional has an eye for seeing the best vantage points and lighting options and also has better equipment to make the photos bright, clear and sharp. A professional photographer will most likely use a 10mm lens that can capture up to 85% of a room and lighting that can illuminate the entire room.

            It is the same story when taking a video of your home to add to a website listing. An amateur can show what each room and yard looks like, but a video professional will make the strongest elements stand out and provide a much better video narrative of the home. Plus, you don’t have to worry about any shakiness or dullness that someone not that experienced with a video camera may give you.

            Before bringing in someone to photograph or video your home, it’s essential that it is clean and de-cluttered so the pictures entice a buyer to want to see the home in person. You don’t want clothes, pets or anything else distracting people from the photo at hand.

            Indeed, homes showcased with the best images will attract more potential buyers and help speed the home-sale process to a successful conclusion.

Fred Golden can be reached at (917) 620.4907.   Prudential Douglas Elliman is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company.  Equal Housing Opportunity.