Archive for the 'Home Buyers' Category
Beganski’s Law of Buying Real Estate
November 10th, 2008 categories: Central Connecticut News & Information, Home Buyers, Real Estate Market
Beganski’s Law of Buying Real Estate in any market is:
“If you are about to write up an offer to buy a house, another buyer has just submitted an offer or is currently writing one.”
Although more common in a seller’s market, Beganski’s Law of Buying Real Estate also occurs in a buyer’s market. In a buyer’s market, the effect is more significant, causing buyers to wonder if the other offer even exists. In a seller’s market, buyers must assume there are other buyers about to put in offers.
Not only have I witnessed this happening to my clients, it happened to me this weekend which is why I finally named it.
I went to see a house I’ve noticed in the MLS for 3-4 months but never had a chance to go see it in person. I liked it enough to talk to the listing agent who told me an offer was just negotiated and accepted.
Of course there was. Moving on…
Beganski’s Law of Buying Real Estate strikes again.Don’t lull yourself into thinking that in this market, you will be the only buyer interested in a particular property. In other words, DON’T be like me.
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Why Title Insurance Is Still Necessary In Connecticut
November 6th, 2008 categories: Home Buyers
Title insurance protects both a home owner and a lender against loss that occurs from a defect in title, regardless of when the defects are found. Home buyers are required by their lenders to purchase title insurance that protects the home owner and the lender from any one of the following problems:
Basic Owner’s Title Policy Coverage:
- Clear title to the property
- Incorrect signatures on documents
- Forgery, fraud
- Defective recording
- Restrictive covenants
- Encumbrances or judgments
Basic Lender’s Title Policy Coverage:
- Mechanic’s liens and unrecorded liens
- Unrecorded easements and access rights
- Defects and other unrecorded documents
- Extended Owner’s Coverage
- Building permit violations from previous owners
- Subdivision maps
- Covenant violations from previous owners
- Living trusts
- Structure damage from mineral extractions
- Variety of encroachments and forgeries after title insurance is issued
If you are taking out a mortgage, your lender will require you to purchase title insurance. But if you are paying cash, you do not have to purchase title insurance.
The question that comes up is if a home has been around for 100 years (pretty typical in CT) and has been purchased many times over, with an attorney doing a title search each time, what are the chances that there could be a problem with the title today?
Recently, I had a closing where title was an issue. The sellers purchased a property about 4 years ago and did a title search, with nothing out of the ordinary - a clear title.
When they sold the property, another attorney did a title search and found an old private mortgage lien against the property. Had the sellers not had title insurance, they would have been personally responsible for clearing the title, i.e., paying off the balance of that mortgage that they never even knew about. Luckily for them, the title insurance covers this.
For more on title insurance, visit CTRealEstateLaw.com.
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Home Buyers to Sellers in Connecticut- That Ship Has Sailed
October 27th, 2008 categories: Central Connecticut News & Information, Home Buyers, Home Sellers
Home buyers are communicating to home sellers loudly and clearly - don’t accept my offer and I will move on. And when you finally adjust your price to where it should be or should have been, I will have found another home I like just as much and a seller who is willing to work with me.
Case in point: A client put in an offer earlier this year on a home in the Farmington Valley. The offer was 13% below the asking price but we had solid comparables to back up our offer. The house was overpriced by more than 10%.
After some negotiation, the buyer was actually willing to overpay for the property slightly but the seller was unwilling to come down on the price by more than $10,000. Another $3,000 off the price and they would have sealed the deal.
My buyer client walked. Or, in keeping with my theme, sailed their boat to a different port.
Flash forward 4 weeks. I get a call from the listing agent who tells me that the sellers have reduced their price by $10,000. They will likely end up selling it for less than what my buyer was willing to pay for it, if they sell at all.
Unfortunately, her clients missed the boat (sorry, I can’t help myself). My client already put in an offer on another property and is closing soon.
The seller made two classic mistakes: they overpriced the house and were unwilling to negotiate with a real buyer.
Overpricing
A home seller’s best opportunity to sell is within the first three weeks a home is listed. The best offers by the most qualified buyers typically come at this point.
After that, you most likely have to play catch up with the market. In this case, we are in a slightly declining market (we are not Florida or California) and sellers, with their agent’s advice, should anticipate the market.
Furthermore, you risk other homes selling for less, driving down the value of your home, or worsening economic or credit problems.
The example I used above is still overpriced by at least $7,000. The sellers haven’t learned their lesson yet.
Unwilling to Negotiate With Real Buyers
A real buyer comes to a seller with a decent deposit, some money down (preferably) and a mortgage pre-approval (even better, a Buyer’s Edge Approval from McCue Mortgage which is only subject to appraisal and a sales contract). They are actually qualified and want to buy your house! What a combination.
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Connecticut Cities Avoid List of Forbes Next Foreclosure Capitals
October 20th, 2008 categories: Home Buyers, Home Sellers, Investors/Landlords, Real Estate Market
Forbes.com just released their predictions for the next round of cities to be hardest hit by foreclosures. Move over Stockton - hello, Jacksonville.
The good news is that no city in Connecticut is on the list - the bad news is that such a list exists.
The cities named are:
1. Jacksonville, FL
2. Fresno, CA
3. Naples, FL
4. Miami, FL
5. Orlando, FL
6. Santa Cruz, CA
7. Merced, CA
8. Oxnard, CA
9. Deltona, FL
10. Santa Barbara, CA
RealtyTrac.com ranks the Top 100 metro areas for foreclosures in the 2nd quarter of 2008 as New Haven/Milford rank #57, Stamford/Norwalk/Bridgeport is #64 and Hartford is #74.
For August of 2008, CT ranks as the 17th top (worst) state for foreclosures.
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Getting the Most Out of Your Free Comparative Market Analysis
October 7th, 2008 categories: Home Buyers, Home Sellers
I have an online form for buyers and sellers to fill out to request a free Comparative Market Analysis for any property they’re buying or selling in Central Connecticut (Hartford, New Haven, Middlesex, New London and Tolland counties).
Having received a number of requests, I realized that I needed to add a field to identify whether the person is a buyer a seller. While the final price I come up with may not differ that much, the report will differ - for a seller I’ll include active properties but only include recently sold homes for buyers.
In addition to the new required field, here are some other tips to getting the most out of your CMA.
List as many additional features as possible, such as updated kitchen, fence, deck, fireplaces, wood floors, or any other new or updated features. Or list any repairs that are needed.
In the comments box, put any information about your plans to buy or sell. Are you planning on selling in one month or six months?
Do you have reasons for selling (financial, relocating, etc) that would warrant a need for a faster sale?
Do you have any other information on the buyer’s or seller’s motivation?
Please note that I compile all the data by hand, pulling information directly from the multiple listing service and local property tax databases, so it can take up to 24 hours.
To get your free Comparative Market Analysis, click here.
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