Archive for February, 2007
Websites Every Home Buyer and Seller in Connecticut Should Use
February 24th, 2007 categories: Central Connecticut News & Information, Home Buyers, Home Sellers
This list is not comprehensive but these sites are staples in my real estate agent repertoire. Maybe you know some of them, maybe you don’t - but you should…
Agentsonline.net - Want to know what real estate agents really think? This site is a lively forum where agents ask each other questions and get advice. Another great feature is that consumers can also ask real estate agents questions and get feedback, without any obligation whatsoever.
Visionappraisal.com - This is the largest single source of real property and sales information in the state. If the town you’re looking for isn’t covered by Vision Appraisal, here are some other sites I know of. If it’s not on this list, try searching on-line for the name of the town and “assessor”. If they have information on-line, there will be a link on their page. Note: not every town has this information on-line.
- Totalvaluation.com
- Town of Windsor CT
- Town of West Hartford CT
- City of Hartford CT
- City of Waterbury CT
CT Data Engine- This is a hodgepodge of real estate and demographics information. Want to know the average rental rates in New Haven? How about the average sales price for homes in Wethersfield? Or the median income for Fairfield County?
HSH - Get accurate mortgage rate info and do research on things like the LIBOR, the index many home equity lines of credits are based on.
CT Mill Rates By Town - This was last updated in September 2006. Check directly with the town to confirm the mill rate as it’s budget time in Connecticut and the number may not be accurate.
Rate the Towns - Every year, Connecticut Magazine rates each town/city in CT and compares it to towns/cities of a comparable size in categories like education, cost of living and leisure.
CT Clic - Please, folks, make sure every contractor or real estate agent you hire is licensed and bonded. This site will at least answer the license question.
City Rating -Their crime statistics are interesting for general purposes. If you really want to know the statistics or what type of crime there is in a particular area, call the local police department - they will be more than happy to tell you what crime is like in a neighborhood and what’s causing it. Another great source is SecurityOnCampus - Crime statistics on college campuses - which affect students and faculty.
| Discussion: 8 Comments »
Local Lenders are the Best
February 22nd, 2007 categories: Mortgages & Finance
I constantly tell clients and prospects to use a local lender. Here’s why:
I received a call from a prospect who has been pre-approved for a VA loan in a neighboring state. When I spoke with the gentleman, I told him that I’d like to refer him to a local lender as I thought he might be a good candidate for CHFA (a program I rave about that is for Connecticut buyers only). His out-of-state lender had not mentioned this program to him. Either he didn’t know about it, didn’t want to know about it or wasn’t doing what is best for the client. Thumbs down on all counts.
I just got a call from the lender who told me the prospect is a perfect fit for a VA/CHFA loan - where he gets the CHFA interest rate which is about 1% below the rate he was quoted from the lender in another state!
This is the stuff I live for - being able to save someone a significant amount of money just with a little effort. Some days, I love my job.
| Discussion: 2 Comments »
Just Say No to Homeownership
February 20th, 2007 categories: Home Buyers
Someone I know in the real estate business, although not an agent, says “not everyone deserves to own a home.” He makes this statement after dealing with one more homebuyer with a credit score around 500, who had a repossession and has $0 for a downpayment. I’m not sure I would go as far as my associate but I do believe that not everyone should own a home. A subtle distinction but my version sounds a little nicer.
There are times in all of our lives when we’re either not prepared, not able or too distracted to look for a home and make a good decision about it. Here are some times that I think are not the best to be looking for a home.
When to say no to homeownership?
You are changing jobs and/or careers. With job change comes income change as well as uncertainty. What if you take a new job, buy a house based on that job and find out two months into your new job that you hate it. And if you;re changing careers, your lender may not look upon your career hopping favorably.
You are going to have a baby. Having a baby is very stressful and exciting. If you can wait to look for and buy a house until after the baby is born, then wait. Babies don’t take up that much room in the first few months so sit tight and look when you’ve (or your wife has) physically and emotionally healed.
Your credit is bad. Although you may be able to qualify for a mortgage, you won’t get the best rate and you may have to get an exotic mortgage. It will end up costing you more in the end so if you can wait a year or so, then wait and spend your time and money building your credit up. Pay more of your debt down, make your payments on time, correct errors on your credit report and don’t open any new accounts.
You won’t be able to afford the house and a catastrophe. I listen to Dave Ramsey ’s show sometimes (the freedom from debt guy) and his show always reminds that Uncle Murphy (of Murphy’s Law) can move in at the worst times and get really comfortable on your living room sofa. You should have at least 6 months of emergency funds set aside (6 months of your current income). If you can’t save this money when you buy a house, then what happens if your furnace blows up, your basement floods, your spouse loses their job, your neighbor slips on your sidewalk, your taxes go up (not if, when)…
You can’t afford anything decent. Decent is relative of course but if there are bullets, cars or planes flying by, try to save your money in order to buy something in a better area. Not only will you probably like living there better, you will have an easier time selling it, too, when you have to.
| Discussion: 3 Comments »
Tracking Zillow’s Zestimates One Property at a Time
February 16th, 2007 categories: Real Estate Market
I’ve written a few times about Zillow.com and the (in)accuracy of their zestimates. I’ve been tracking one property in particular on a monthly basis and I thought I would share with you my findings. Out of respect for my clients who purchased this house, I will not give you the address but it is a real place and these are real figures.
House Description: 4 bedroom, 2.5 bath, 2200 sf, 2 car garage, colonial on 1 acre, built in 1979, full walk-out basement in Shelton, CT. House was only one of a few available in this highly desirable section of Shelton under $500,000.
List Price: $489,900
Comps: $499,000 and $477,000 - comparable in size, age, location, style and both sold within 3 months of this home
Offer Price: $465,000
Final Sales Price: $470,000
Appraisal Value: $470,000
Sold Date: 1/26/07
According to Zillow’s Zestimate, house was valued as follows (figures are rounded):
November 06: $460,000
December 06: $455,000
January 07: $450,000
February 07: $430,000
So, despite all other indications that the market has not crashed, this particular property dropped $30,000 in value in four months? Puhlease!
Some interesting facts:
- Zillow does not yet have the sales data from this property (sold date 1/26/07) and it’s now 2/16/07 - data is out of date
- Zillow is using comps for condominiums - like comparing apples and oranges, to be cliche
- Zillow is using comps that are miles away from this property even though there are excellent comps within one mile
I’ll let you know what Zillow says the value is when the most recent sales data is figured into this equation.
| Discussion: 8 Comments »
Buyer Agent Commissions - Nothing Worth Getting is Free
February 15th, 2007 categories: Home Buyers, Home Sellers, Real Estate Market
Here’s a little lie home buyers believe. Real estate agents know it isn’t true but don’t always correct.
The seller pays the commission and therefore using a buyer’s agent is free!
I love free stuff as much as the next person but haven’t you noticed that free stuff is usually worthless, with the obvious exceptions of love and having your dog greet you at the door wagging his tail.
If something is free, it usually means that no one else wanted it, someone couldn’t sell it for enough money to make it worthwhile, or it’s just a gimmick to get you pay double for something else.
As a home buyer, you can choose to bury your head in the sand and believe that the services of a buyer’s agent are free. You may not have to take out your checkbook to pay for the service but you do pay for it.
Or, Know the Truth
“Before you, as a buyer, go to see homes, there is already a mechanism in place for the agent who opens the door for you to get paid. This is why agents may want you to sign a contract to work with them, but they do NOT rely on you to agree to pay them.”
The listing agreement is the mechanism Ardell mentions.
When a home owner signs an agreement with a listing agent to sell their home, included in that agreement is a commission - say 6%. The seller agrees to pay the listing agent 6% of the sales price at closing. Unless otherwise directed by the seller, the listing agent will advertise the listing in the Multiple Listing Service with an offer of commission to the buyer’s agent, usually half of the 6% but not always. The listing agent may choose to only offer 2% and keep 4% or offer 4% and keep 2%. This is an agreement the listing agent makes with prospective buyer’s agents. Every listing in the MLS has such an offer, called the co-broke.
In either case, the commission is built into the price you pay as a homebuyer. That’s why buyer agents don’t rely on buyers to pay the commission - payment is guaranteed in the listing.
With almost 80% of the homes in the United States sold through real estate brokerages who are paid through this commission structure, sellers price their homes expecting to pay a commission. Even if the house is being sold as a For Sale By Owner without the use of an agent, a FSBO seller when setting a sales price is still looking at sales statistics of homes that sold paying the commission. People sell their house FSBO so that they get to keep the commission - not give it to some buyer!
But the HUD-1 says…
When you actually buy a house, you’re given a HUD-1 statement either before the closing or at closing. In Connecticut, the agent commissions are listed at the top of page two and are an item on the seller’s side (not every state discloses this). So, technically, the seller pays for the commission of both agents OUT OF THE PROCEEDS OF THE SALE.
No buyer=no sale=no commission. The commission is weaved into your purchase price but appears to be paid by the seller. Very sneaky…
How Do You Know What Your Buyer Agent is Making?
Ask, as Greg Swann writes in his article, Repeat After Me, Mr. Realtor, What do you charge? I write my agreements up front with clients so they know what my commission is and don’t have to ask later on. If you’ve signed a buyer agency agreement with an agent, then ask when you’re putting in an offer. The commission is listed in the MLS so it’s a really easy question to answer.
And don’t be afraid or intimidated. Your agent may choke on her latte when you ask but she’ll live. (No offense meant toward lattes, real estate agents or latte drinking agents).
Can You Negotiate the Buyer Agent Commission?
Yes. You can do so up front when you sign a contract with a buyer’s agent or when you’ve written up a contract for an offer. For example, if you’ve looked at only one house with an agent, the co-broke is 3% and your offer is accepted, then I think it’s fair to ask buyer agent to rebate the buyer for 1% of the commission or so.
| Discussion: 6 Comments »
