Busy Holiday Season for Sales

While I’ve never much agreed that the real estate market completely “dies” during the holidays, this season has been surprising.  Not only was the period between Thanksgiving and Christmas Day busier than usual, it was busy for any time of year.

Our real estate office saw numerous inquiries, sales contracts, buyer visits and listing appointments during the entire period.  We even had a call on Christmas Eve asking us to come list a house that day.

This may become the new normal.  Just as stores are beginning to open on Thanksgiving  and more & more restaurants are open on Christmas Eve and even Christmas day, the public is demanding convenience from all services.  Let’s see how 2016 goes.

History Repeats Itself, Even in Real Estate Sales

Most cities grew by having the jobs people needed and then housing stock grew near those jobs.  Large apartment buildings are common in many cities and downtown areas.  Along with housing came the shops and restaurants to support the locals who lived nearby.

While it may not be completely obvious yet, one trend is to build new developments with retail on the first floor and residential (apartments or condominiums) above.  Real Estate buyers are finding this kind of community very attractive.  Look at Pier Village in Long Branch NJ.  Plenty of restaurants, shops, health club etc.  It is so successful that the developers are expanding.  Sure, having the ocean there is no small asset, but this trend is getting popular everywhere.

Keep an eye open for

Do You Really Need the Multiple Listing Service to Sell Your Home?

This one will get lots of agents upset with me.  The simple answer is not so simple.  There is no one size fits all response.

Obviously you don’t “need” the multiple listing service or even a real estate agent for that matter.  But let’s leave “for sale by owners” off the table ( a new post addressing FSBO’s will be coming ) since the number of those sales has actually been declining and represent such a small sector of the homes that have closed title.

Our New Jersey office has always offered a 2% commission non-Multiple Listing Service (MLS) program for sellers who wanted to potentially save the most dollars while still being professionally represented by a licensed agent.  This means that agents from other real estate offices would not be able to show and sell that listing unless they were being compensated by their own buyer.  It’s what’s called an “office exclusive” listing.

In the raging real estate market of 2005, a significant number of our listings sold this way with no MLS service.  Long time agents will tell sellers this can’t happen, but it certainly can.  Today the program still works for the right property.  We just sold a home in northern NJ with partial views of New York City with no MLS.  In today’s world it’s difficult to hide a home from potential buyers.  Even though the homes listed this way are not on the local MLS, they are still advertised on all major real estate web sites including those designed to be used by agents. If a buyer locates a property that is perfect for them but their own agent cannot show it, I do not see that buyer walking away from the home.  They will call us for a showing.

That being said, a home that is either priced poorly or located in an area where there is no scarcity may benefit from the MLS and being accessible to the thousands of agents out there.  Most buyers prefer to deal with their own agent (which is the one thing For Sale By Owners miss) and if your home is just one of many that are similar they may not go out of their way to see it.

As mentioned earlier, the decision for a seller as to whether to choose a very low commission non MLS program or spend a bit more for the MLS, needs to be based on the individual situation and property.  Some of our sellers choose the 2% plan knowing they can always switch to the full MLS program later (usually no more than 3.9% total).  In any event there is no need to pay a higher fee.  You can visit our web site at 2percentUSA.com or call with more questions.  This is a topic that lends itself to discussion.

Required Disclosures:  In New Jersey all commissions are negotiable.  Savings are used for comparison purposes only and are not guaranteed.

Buying or Selling A Home, The New Closing Rules part 1

As many buyers in the real estate market may know, beginning this October there are changes in effect for closing transactions with a mortgage.  Sellers should also become familiar with these changes as their side of the transaction will also be affected.

Today I attended a closing on a transaction that was signed up “PRIOR” to the new rules and therefore was not subject to the new requirements.  But all of us there were discussing how the sale would never have happened that day under the new rules.

Under the new rules, the closing statement must be prepared and provided at least 3 days prior to the closing.  For the most part, that statement cannot change without having to wait another 3 days to close.   Today, the closing statement changed (3) times.  I’m not going to lay the blame on any party for missing items or making mistakes, but the reality is that today: the corrections were made, sent to the lender for approval and we closed with the modifications.

What would have happened if there was a moving company hired?  If the seller needed the funds that day to purchase another home?  Like other changes, the professionals involved in real estate transactions will figure out how to get it done effectively.  But during that learning curve I foresee plenty of problems.

And remember, the final closing statement 3 days prior to closing is just one of the new changes.

Why Good Comparable Sales Matter When Choosing an Asking Price

I’ve been a real estate agent and broker in New Jersey for most of my adult life.  One statement I’ve heard again and again when getting ready to list someone’s home is “my neighbor is asking “x” dollars for his home and mine is better so I want more than that”.  While I understand what the seller may be thinking, the reality is that if a buyer is getting a mortgage, the home must appraise for the sales price.

An appraiser does not use the “asking” price of another home to arrive at the value of the appraisal..   Generally speaking, appraisers use similar homes, in close proximity to the subject property that have actually closed title in the prior 3-4 months.  In certain instances, with a lack of good quality comparable sales, an appraiser may look back 6 months or look at a home that is under contract but has not yet closed title.  However this is not their preferred method.

As a seller, you should carefully look at the comparable sales (or your agent should show you) when determining asking price.  It will save you time and emotional stress being confident that your sale will appraise and actually close title.  No one wants to sign contracts, start making plans to move, hire attorneys/title companies etc, only to find out halfway through the transaction that there is an appraisal issue.

Remember, the appraised value must come in at the “sales price”, not the mortgage amount.  So be realistic and hopefully have smooth sailing in your transaction.