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Archive for the ‘Buying’ Category

Verbal Offers Aren’t Smart

Unlike most of the US, in Westchester and the surrounding areas of New York real estate contracts are prepared by attorneys only after a process of offers, inspections and due diligence. Other than mortgage, contracts are non contingent. There is not even a deposit of any kind until contracts are signed. It is not at all unusual for an accepted offer to wait 2 weeks for fully executed contracts.

Most of the time, therefore, offers are submitted on company letter head with terms specified and accompanied by a pre approval. The more specificity, the better. Sellers are rightly very reticent to accept any offer without assurance of the buyer’s ability to perform, especially since we are required to disclose an accepted offer per the code of ethics even with nothing signed.

Every so often, I get an offer from an agent over the phone. They say they are buyer agents, but I really don’t see how a verbal offer, without clear terms and a pre approval, sheds the best light on the buyer’s ability to perform. If anything, it makes the agent seem indifferent and the buyer either unforthcoming or uncooperative.

The old rationale that “I don’t want to waste my time writing up an offer if it isn’t going anywhere” is ironic- the best way to make sure an offer goes nowhere is to make a halfhearted, verbal offer with a mystery buyer. If you want to make that sale, you have to do work- it isn’t a waste of time, it is your job.

I wish I had a nickel for every time this has been said in our industry, but it has never been more relevant than now: put it in writing.

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Generally, not up. There may be pockets of improvement, as all markets are local, but we aren’t on solid ground. We haven’t grown out of the recession yet, and there are questions as to whether the gigantic spending the administration is doing will sabotage or foster prosperity. Les Christie of CNN/Money rightly observes that rising rates, foreclosures and the eventual end of the tax credit will continue to suppress prices. I agree.

There are no arguments to the contrary. Money markets are still a shambles, the public is either unemployed or freaked out, and inventory is being pelted daily with cheap REOs. While New York is not as bad as Las Vegas or South Florida, we aren’t immune either- I see more short sales and distress now than 18 months ago. It has to cycle out before we’ll see sustainable, general improvement.

Buyers are in the driver’s seat.

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I closed 2 deals this week. Both were first time home buyers. One bought a home in Patterson, NY and the other closed on a short sale in Monroe, NY.

Eve and Ryan bought in Patterson and were one of the fastest FHA deals I have ever witnessed. They have great plans for this home, as it sits on a beautiful private piece of property. I will remain in touch with them for sure. They were very motivated buyers from the first day we met. They were all about finding the right place, and once we found the place, they took my coaching on negotiation and we ended up getting a $399,000 listing (which had just been reduced from $450,000) for $350,000.

Michael and Stephanie were referrals from an old high school classmate who is Michael’s older brother. They had been out looking for a while, and a prior agent had written an offer for them which didn’t work out. They didn’t have a good experience with this agent, and it did help that Mike’s brother vouched for me. We found a short sale which took almost 4 months to get closed, as short sales do take a long while, and it almost looked for a while that the deal might die. Luckily, when the approval came through they had their act together, and were able to close a day ahead of the lender’s deadline. The closing itself was not without drama, as the seller’s attorney was never on point and our lawyer had to do some fast work that morning to make everything come together. The closing lasted 3 1/2 hours. But close it did.

I have at least 2 more pending transactions which should close this month.

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Own or rent the most affordable Briarcliff Condo on the market! 1st level unit in sought after Kemeys Cove with stunning view of Hudson River from either the living room or master bedroom patio. Both master bedroom and living room have sliders to outdoor covered patio with river view and close proximity to pool. Extremely large living room. Low maintenance includes heat & water. Walk/jitney to Scarborough train – minutes to NYC! Pool, clubhouse, assigned parking spot. Bring your imagination! Original family still owns this unit and price reflects updating you may desire. Also available for rent, call for details.

110 Kemeys Cove

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The Listingbook Program allows consumers to search for a home online for free on a platform that is far more in depth and comprehensive than Realtor.com or a broker’s typical website. Registration is free, your information is confidential, and the results are fantastic.

Listing Book

Listing Book

Some features of the program include:

  • Customizable search, including bookmarking and rejecting specific properties
  • Morning updates delivered via email daily as new listings become available, putting you on top of the market
  • Personal notes on properties and the ability to send messages to your agent on each home
  • Change criteria quickly and easily
  • Database is updated twice an hour, not once daily!
  • Price change alert on bookmarked properties
  • Much more

Nothing can replace a good agent, but having this kind of technology at your fingertips will make the process far more efficient. Fewer homes will be “missed out on,” more homes will fit your search, and you’ll be able to be far more specific in your criteria. Not only that, you can instant message and email your agent from the site in real time.

All your information is confidential and safe. You’ll never be spammed or solicited from 3rd parties for registering your search on the site. This is truly real estate 2.0.

Right now the database is for the Westchester-Putnam MLS system only, which includes Westchester and Putnam Counties, as well as the Bronx and Dutchess County.

If you want to search Long Island (Queens, Nassau & Suffolk Counties), click here.

If you want to search Connecticut, email me and I can get you the link.

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Many who grew up in Ossining, NY like I did will remember an old, overgrown algae-covered man-made pond near the Chilmark Shopping Center known simply as The Reservoir. It was the Village’s water supply for much of the pre-World War II era, and then was replaced by water towers. When I was growing up in the 70’s and 80’s the Reservoir was used for skating (AT OWN RISK, as the sign said) and hanging out.

The water towers had their share of graffiti, and nobody really knew what good the Reservoir was. I learned to skip rocks there,and I spent many hours of my youth sitting quietly, watching the water, either alone or with some friends after buying baseball cards and candy at Chilmark Pharmacy. In the Spring and Autumn we’d ride our bikes around it. I had a 5-speed with high handle bars and a banana seat.

In the earlier part of this decade, the Village cleaned the place up,  added an asphalt ring around it for walking, installed some park benches and tables, and dedicated it as Reservoir Park. An aerator was installed for the algae, and the towers were repainted. Mayor Perillo was vilified by some for the improvement expense, but most, like myself, applauded the move. It is an extremely popular place to sit, walk the dog, stroll the kids, and spend quiet time. The SKATE AT OWN RISK sign is long gone, replaced by 3 LAPS = 1 MILE.

Ossining Reservoir Park

Ossining Reservoir Park

You can barely make out the water towers at the other end of the Reservoir. They use to be an awful sky blue accented with graffiti. Now they are a dark green-far better aesthetics. A few years ago the park was renamed after Richard Wishnie, a retired county legislator for his 40 years of distinguished public service.
Pump House

Pump House

That brick structure behind the sign is from 1869 and is an old pump house. I climbed inside a few times when I was around 12. There is nothing inside except an old wood floor and brick walls. It was a great hiding place and we  flipped baseball cards inside.

Pump House Dedication from 1869

Pump House Dedication from 1869

As the stone says, Ossining used to be known as Sing Sing, an Anglicization of Sint Sinck, the aboriginal natives of the area. To differentiate the village from Sing Sing Prison, the name evolved to Ossingsing and then Ossining. Ossining High’s mascot was the Indian for many years to honor the Sint Sinck, but political correctness ended the Indian mascot. The neighborhood across Pleasantville Road from the Reservoir is known informally as the Indian Village, as the streets are all Native American names, such as Mohawk, Pocantico and Iroquois. I grew up on Osage Drive West.

There is alot to like about Ossining-the diversity of the residents, the managable commute to New York City, and that magnificent Hudson View. Of course, since they finally turned around that derelict, overgrown hole in the ground, the Richard Wishnie Reservoir Park is another great thing about the place.

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I sold my first short sale in the 90’s. I have over 10 in my pipeline. I am known in my marketplace for the specialty. Buyers are justifiably interested in the savings a short sale can offer. However, few buyers are prepared for the process, often because it is new terrain for their agent as well. Forewarned is forearmed. Here are some things that you should be prepared for if you have a short sale in your sights:

  • You must be prepared to wait…and wait. Occasionally, we get some short sales where everything just clicks and the thing is done almost as quickly as a regular sale. Those are the exception and not the rule. Typically, and it all depends on the lender, short sales can take months. Here is part of what is going on behind the scenes: the lender’s loss mitigation department is inundated with short sale applications. Often, the negotiators are rotated every 30 days. Faxes get lost. Responses take a long while, and the seller’s negotiator (typically the agent or in New York, the lawyer’s office) can be on hold for an hour waiting to speak with a human, only to hear that they were given the wrong fax number last week. It is a maddening, daily battle. Be glad you aren’t in the front lines. Eventually, it gets sorted out.
  • You are buying the house AS IS. Just like with a bank-owned foreclosure, it is “an as” is transaction, because no principal has the funds to remedy any physical issue with the house. Get an inspection for sure, but understand that unless it is an environmental problem, the lender won’t address anything and the seller cannot financially.
  • You WILL get clear title. In an approved short sale, none of the seller’s back taxes, arrearage or other issues convey to you. The lender is hitting the reset button and releasing all liens. That may not mean that a non-conforming bathroom shed or finished basement is compliant, but financially the title is whole.
  • No, you may not speak with the bank. Some buyers get frustrated with the process and figure that all they need to do is speak to someone and fix the short sale. They cannot. The lender will speak ONLY with the borrower or an authorized party about the mortgage being worked out for the same rules of confidentiality that prevent your bank from talking with anyone about your finances. Even if you were to get hold of a loss mitigator, your input will be as welcome as if you walk into a stranger’s operating room or onto a construction site.
  • You probably can’t “steal” the house. As a matter of fact, your offer may not even be submitted unless it is your best offer. Once the seller’s hardship package is approved, the bank will order a BPO (broker price opinion) or appraisal to ensure that the sale price is in line with market conditions. You might get a $400,000 house for $365,000, but you won’t get it for $250,000. Short sales are good deals, but they are seldom steals. Which brings us to this point:
  • The lender may counter your offer. The house may appraise considerably higher than your offer, or your offer may indeed be too unrealistic. If the bank counters you, look on the bright side: the finish line is in sight! If the counter isn’t to your liking, the smart move is to counter back. If you simply walk away, you may have nailed the seller’s coffin, who has, in good faith, been working and waiting just like you have been. Negotiate. If the seller chose your offer to submit to the lender over the others, you should operate in the same good faith and negotiate. The lender may still come down some.
  • Once approved, you have a deadline to close. The biggest irony in real estate is how glacially slow lenders are in approving short sales and how impatient they are to close once they rubber stamp one. Typically, it is only 15-30 days to close or the offer is rescinded. Therefore, you should have your act together with regard to your appraisal, rate lock, inspections, and so forth. When that approval come down the pike, you need to be prepared to pull the trigger.
  • You can’t get a seller’s concession. If you were able to borrow more against the house, the lender, who is losing money, will want it.

My view is that if the short sale process were easier and more streamlined, the market would stabilize far faster, doing the economy a world of good (are you reading this, Mr. Obama?). Unfortunately, the process we work with now is often bloody difficult more often than not, with lots of moving parts and a shifting landscape. Understanding that going in can lessen your frustration and minimize the confusion of a process that is anything but simple. Few worthwhile things are.

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