The Four Fundamental Principles of the Real Estate Buying Process

No matter how much or how little you decide to learn about the details of your purchase transaction, there are four principles that apply to nearly any aspect of the process. If you apply these proven principles it will help you avoid and identify the common mistakes that buyers make, and even help you navigate through them if you are reading this blog too late.

1. The rules of real estate are always local
2. The best deals are usually a win-win for both sides
3. Price and value are not the same
4. Choose with your heart and your head

Principle 1: The Rules of Real Estate are Always Local

Markets change from year to year and from neighborhood to neighborhood. If you are shopping for a $380,000 home in East Meadow, NY you don't need any advice based on what the market was like when your parents bought, or what the market is like in Bayside, NY, or in fact in the $800,000 neighborhood of Garden City, NY just a few miles down the road. As for your Brother-in-Law's hot advice for scoring a sweet deal on a Short Sale in Uniondale - let it go. Your cousin's rules of real estate - plug your ears! Or, if you must, take all this "advice" with a great big grain of salt. You only need to understand what is available for $380,000 in East Meadow - RIGHT NOW (not 3 years ago, or 30 years ago), nothing more, nothing less.  You will have a hard enough time, learning all about the inventory in your area of choice to waste your time learning all about how things are done where you aren't interested in purchasing.

Similarly, I also encourage you to have skepticism towards the simplistic advice you may have heard, i.e., "Always offer way below list price...Fixer-uppers are the best deals...There must be something wrong with that house because it is listed for a long time..." You get the idea. Adages and absolutes like these can blind you to the realities of your unique market, a specific property, or your personal needs and can keep you from seizing the opportunities before you.

Also, real estate laws, procedures and practices are local. They vary significantly from County to County, state to state and city to city. The way a real estate transaction closing was handled for your cousin in Virginia, or your Aunt that lives in White Plains may not be the way it is handled where you're buying your home. One of the key things your Real Estate Agent will do for you is educate you on how the real estate process is handled in the area that you are buying in, and he or she should be guiding you every step of the way.

Principle 2: The Best Deals are Usually a Win-Win for both sides

Everything in real estate is negotiable, so do not be afraid to ask for what you really want. Still, negotiations end when the parties involved become inflexible. The solution? Find a win-win outcome that accomplishes what both parties really need. That is why it is important to prepare for any real estate negotiation by deciding where you will and will not be willing to compromise. In the end, there is always a certain amount of give and take. You hold on to those things you really want, and you offer up those things that the other person wants and are not as important to you. For example, you really want the seller to have the home treated for termites and provide you with a termite certification for your lender. The seller really wants to have an extra 3 weeks in the home because the house they are building won't be ready until then and they don't want to move twice. You trade the termite certification for the extra time in the home (if the timing isn't really critical for you). The seller feels like they won because they don't have to deal with the stress of moving twice and you feel like you won because now you don't have to pay for a termite treatment when you move in. That is a win-win!

Principle 3: Price and Value are NOT the Same

A common mistake occurs when people focus on price, not value. This applies to the home you buy as well as the professionals you use. Being cost conscious is always wise, but being value conscious is even wiser. Price and value normally correlate: you usually get what you pay for, but when looking beyond the surface, always be clear about what you want and what matters, and then expect to pay a fair price for these things. Just because it is cheap does not make it a bargain. Think of buying a home as a search for value.

Also, you want to think of value as quality at a reasonable price. Just as you seek out value in the home that you buy, also look for value from the professionals you hire. After all, you are more than likely making one of the biggest purchases of your life. This is not the time to cut corners - that half-price inspector may save you $250 today but could miss a structural problem that you thousands of dollars tomorrow. You should be able to count on your lender to lock in the best rate and deliver all necessary paperwork by closing. If a discount lender drops the ball, your closing could be delayed, it could cost you considerably more money, or it might possibly even cause you to lose the home.

Don't set yourself up for hassles, headaches, or dead deals. Look for VALUE - that is integrity, reliability, and impeccable service - from ALL the professionals you hire. This principle has always been true and will always be true: you get what you pay for.

 

Principle 4:  Choose With your Heart and Your HEAD

Whatever property you buy will be both your home and a major financial investment. You want to find a home you absolutely love. A home that seems to fit your life located in a neighborhood that feels just right. At the same time, you want the property to be a solid financial asset - one that is structurally sound and appears to be well positioned to appreciate in the future. In the end, finding that perfect place for you means balancing emotion and rationality. When you are out looking for your future home, go ahead, let your heart guide you. But when it is time to buy, step back and think with a cool head. In a few years, when you may want to sell the house, you will be very glad that you did.

This Month in Real Estate - September 2013

September 2013 Market Update

The annual rate of home sales rose to the highest level since 2009 in July, the jump likely boosted by formerly reluctant buyers being pushed off the sidelines by the anticipation of rising mortgage rates. As speculation continues on the date and extent of the Federal Reserve's reduction in its purchases of unconventional assets, mortgage rates have already begun to rise and are unlikely to return to the historic lows witnessed early in the year. With rates on the move, prospective buyers would do well to take advantage of low rates while home affordability remains at historically high levels. Prices moderated slightly in July from their peak in June, likely due to seasonal variation, but maintained high year-over-year growth rates. Sellers are still well-positioned in the national market with inventory still relatively tight in many areas.

Interest Rates 

Interest rates have moved up this month: 30-year fixed-rate mortgages are currently 4.58% with 15-year rates at 3.60% and 5-year adjustable rates at 3.21%. These are the highest rates we have seen in the last two years.

Home Sales

Total existing home sales in July were up 6.5% from June to a seasonally adjusted annual rate of 5.39 million homes. Year-over-year home sales were up 17.2% from the July 2012 rate of 4.6 million homes. The housing market recovery is still well under way with 25 consecutive months of year-over-year growth in home sales heading into this fall.

Home Price

The median existing home price in the United States in July was $213,500, down slightly from the previous month but up 13.7% from the same month last year. The median price level released by the National Association of Realtors is not seasonally adjusted and the small dip we experienced from June to July is consistent with those we have seen in the past. This is the seventeenth consecutive month of year-over-year price increases, which last occurred from January 2005 to May 2006.

Inventory 

A slight rise in inventory levels was evenly offset by the increase in the pace of home sales, causing the months of supply for existing homes to hold steady at 5.1 months. Total housing inventory rose by 5.6% in July to a level of 2.28 million homes. Inventory is 5% below levels reported for July of last year, which represented 6.3 months of supply at the time.

Brought to you by KW Research. For additional graphs and details, please see the This Month in Real Estate PowerPoint Report.
The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.

Important Information Regarding 2014 STAR Exemption for Home-owners

Important Information Regarding 2014 STAR Exemption for Home-owners

By: Christina DeFalco

Date: 8/22/2013

To keep STAR tax break, you'll need to reapply by Dec. 31

In coming weeks, homeowners will receive a letter instructing them to reapply for the STAR program online or by phone by Dec. 31. People will need to verify their salaries, Social Security numbers and primary residence.

The initiative, approved as part of the state budget in March, will seek to stop some property owners from claiming the tax breaks on multiple homes.

 

The new legislation requires all homeowners receiving a Basic STAR exemption to register with the New York State Tax Department in order to receive the exemption in 2014 and subsequent years.

• Homeowners will not have to register in order to receive their 2013 STAR exemptions.
• Homeowners will not have to re-register every year. Based on the information provided in the  registration process, the Tax Department will monitor homeowners' eligibility in future years.

 

How to register

You can register for the STAR exemption online. You'll need to:

• provide a STAR code (we're mailing codes to all Basic STAR recipients; or you can use the STAR code lookup)
• provide the names and social security numbers for all owners of the property and spouses
• confirm that the property is the primary residence of one of its owners (married couples with multiple residences may only claim one STAR exemption)
• confirm that the combined income of the owners and their spouses who reside at the property does not exceed $500,000
• confirm that no resident owner received a residency-based tax benefit from another state

 

You can also register by calling (518) 457-2036

• Monday - Friday:  8:30 am - 8:00 pm
• Saturday:  9:00 am - 1:00 pm

 

Registration period

Registration started on August 19, 2013 and will continue through December 31, 2013.

 

Senior citizens

Senior citizens receiving the Enhanced STAR exemption are not affected by the new registration requirement. Seniors must, however, continue to:

• apply annually, or
• participate in the Income Verification Program

 

For more information contact (518) 457-2036 or visit New York State Department of Taxation and Finance.

TIPS FOR LIVING GREEN

TIPS FOR LIVING GREEN

Well, it's official: the new black is green - living green, that is. New companies devoted to helping reduce folks' carbon footprint are springing up all over. Hybrid cars, renewed interest in recycling, eco-friendly business practices - all are devoted to cleaning up the nation's collective teenage bedroom. How can you jump on the eco-bandwagon? Read on to find out.
Fix any plumbing leaks - sinks, tubs, showers and toilets all should be inspected for drips and leaks. The tiniest drip can add up to a lot of wasted water.

• Better yet, install water-saving faucets, toilets - you can even buy conservational water pipes to replace your old plumbing.

• While you're at it, install a programmable thermostat to save energy.

• At least turn down the heat at night, during the day if no one is home and any time you leave the house.

• Use compact, long-life fluorescent light bulbs. They're more expensive, but they last several times longer than the old-fashioned kind.

• Many utility companies perform home energy audits for their customers. This will let you know where you're being wasteful, and where you can save energy and money.

• Your audit may point out that you need new or additional insulation. You may find that your windows and doors aren't as tight as you thought. Seal it all up with weather stripping and caulking. By preventing heat from escaping, you automatically reduce your energy consumption.

• Another place for insulation: your electric (NOT NATURAL GAS!) hot water heater as well as the pipes. Just make sure the insulation is no closer than six inches from the heater.

• During the winter, change the filter in your furnace every month. If the filter is allowed to collect dust, it will make your furnace work harder, use more energy and potentially shorten the life of this expensive appliance.

• Use non-toxic cleaning alternatives in your home, such as baking soda, vinegar, etc.

• No more plastic furniture - make sure your furnishings are constructed out of natural materials like wood, metal and glass.

• Read the labels of the items you're buying and avoid the use of polyvinyl chloride (also known as PVC or vinyl). It can creep up in toys, flooring, shower curtains, etc.

• Compost your food waste and use as nutrient-rich soil for your lawn.

• Cut down on paper products. Paper towels and napkins can be replaced with cloth rags and napkins.

• Bite the bullet and start depending on reusable items, such as water bottles, food containers, batteries, pens, razors, etc.

• Instead of going to a carwash or letting your garden hose run, wash your car when it rains - get out there with your chamois and your eco-friendly soap and have at it.

• Leave your car parked as often as possible. Ride your bike, walk or take public transportation. Even carpooling is better than riding alone when it comes to energy consumption.

• Whenever possible, think globally but buy locally. Transporting food across country uses up an obscene amount of fuel. An added bonus is that it's good for the local economy.

• Cut down on your battery usage. The hazardous waste created by the lead in batteries is a danger to the environment. Instead, use rechargeable or solar-charged batteries.

• Avoid products with excess packaging. Reward companies who use packaging sparingly.

• Stop using plastic bags! Plastic grocery bags are a quadruple whammy: they never decompose, they're hazardous to wildlife when they inevitably end up in their habitats, they're made from petroleum products and they can be a danger to the folks in your own household.

• Avoid the use of aerosols.

• Instead of lubricants containing solvents, use castor or mineral oils to lubricate switches and hinges.

• Use water-based latex house paints instead of oil or solvent-based paints.

• Be very mindful of what you throw away. Never dispose of paint, solvents, motor oil in your garbage can. Talk to your garbage collection company for proper disposal procedures of hazardous wastes.

• Never throw away a computer. The lead is a hazard to the environment. Most cities now have specialty companies that recycle computers. Look in your yellow pages under computer disposal.

• Instead of throwing away old books, donate them.

• Give last season's wardrobe to Goodwill or Salvation Army.

• Don't want your old photos and/or letters? Don't heap them on the landfill - donate them to your local historical society.

• Don't take that old dishwasher or refrigerator to the dump, donate it.

This Month in Real Estate - August 2013 Market Update

Keller Williams Realty Landmark | 32-55 Francis Lewis Blvd. | Bayside | NY | 11358

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Back-to-School With No Stress?

Back-to-School With No Stress?

It Could Happen!

When the warm summer months begin to wind down and the days become a little shorter, you can almost smell it in the air - back-to-school time is here! And, just as fall and cooler weather approach, so does back-to-school anxiety. Between kids fearing they'll miss the bus and won't make new friends, and parents feeling stressed about hectic mornings and carpooling chaos, how can anyone get excited about the first day back to school? Parents, however, can set the tone for a smooth transition from summer to the new classroom by proactively addressing their children's concerns. Here are a few tips to help ease your family's back-to-school anxiety.

 

• Be enthusiastic. If you are excited and confident, your child will be, too.
• Prepare yourself. Note your child's reaction to separation. If possible, visit the new setting together and introduce your child to the new teacher in advance.
• Start daily routines. Let your child become involved with packing her lunch and laying out her clothes the night before. Also, begin an earlier bedtime at least one week before.
• Pack the night before. Make sure your child packs her book bag every night before bed. This eliminates the morning rush and trying to locate stray items.
• Always say good-bye to your child. Be firm, but friendly about separating. Never ridicule a child for crying. Instead, make supportive statements like, "I know it's hard to say good-bye."
• Send a photo of your family or write a reassuring note and put it in his backpack or lunch box.
• At the end of the workday, put aside your work concerns and focus on being a parent.

Helpful Homework Hints

(that really work!)

Here are some ways to make homework time easier for you and your child: 

 

• Have a regular place for your child to do homework - a desk or table in a quiet room.
• Set a regular time for homework. You may want to make a rule, "No television until homework is finished."
• Set aside ample time for homework and help your child plan how she'll use her time.
• Be available to answer questions and offer assistance, but never do the homework for her.
• To help alleviate fatigue, have your child close the books for 10 minutes every hour and go do something else.
• If your child is struggling with a particular subject, and you aren't able to help, a tutor can be a good solution. Discuss it with the teacher first.
• Have your child do the most difficult homework first. Save "easy" subjects for last.
• Praise your child's good work. Your interest will encourage good work.

Backpack Safety

When choosing a backpack, look for the following: 

 

• Wide, padded shoulder straps. Narrow straps can dig into shoulders, causing pain and restricting circulation.
• Padded back. A padded back protects against sharp edges on objects inside the pack.

To prevent injury when using a backpack, do the following: 

 

• Pack light. The backpack should never weigh more than 10 to 20 percent of the student's body weight.
• Always use both shoulder straps. Slinging a backpack over one shoulder can strain muscles and may increase curvature of the spine.
• Organize the backpack to use all of its compartments. Pack heavier items closest to the center of the back.
• Use a rolling backpack. This type of backpack may be a good choice for students who must tote a heavy load. Remember that rolling backpacks still must be carried upstairs, and they may be difficult to roll in snow.

Courtesy of the American Academy of Pediatrics (AAP).

Children and Moving

When a family move becomes inevitable, it is important to involve your children in the process. Since moving can cause some concerns for children, like going to a new school, leaving friends, and unfamiliarity about the new neighborhood, things will go a lot easier if your children support your efforts to get your current home sold. It is important that children keep their toys and clothes put away, and teenagers understand about keeping their room in "showing" condition. Also, showing a family home is much more successful for the realtor if the family is away. Make an effort to include everyone in the discussions about the move and your children on house hunting trips. Contact a realtor who is comfortable with children and will be sensitive to their needs and concerns.

 

New House, New School?

Try This...

• If possible, give your child three months' notice before an upcoming move, so that he has time to get used to the idea.
• Explain the reason for relocating.
• Familiarize your child with her new neighborhood ahead of time.
• Emphasize the positive aspects of the move.
• Contact the school your child will be attending and arrange a time to visit.
   

Protecting Your Home: Locks, Lights and Good Neighbors

One of the crimes most frequently reported to the police is residential burglary. It's also the most
preventable. It doesn't take much or cost much to outsmart most burglars. They're usually not professionals, but rather people taking advantage of an easy target. Burglars may do more than steal things. If they're surprised by someone coming home or if they choose a home that's occupied, someone may get hurt.

Tips on Safeguarding Your Home

• Make sure all exterior doors have good locks at least deadbolt locks with a 1" throw.
• Always lock up when you go out, even if only for a minute
• Secure sliding glass doors with bars or locks, or put a broom handle in the door track.
• Make sure your windows have good locks, especially those at ground level.
• Make sure all porches, entrances, and outside areas are well lit.
• Trim any bushes or trees that hide doors or windows.
• Maintain your yard and keep ladders and tools inside when you're not using them.
• Don't hide your keys under the doormat or in a flowerpot. That's the first place burglars look! It's much better to give an extra key to a trusted neighbor.
• Mark your valuable property like TVs, DVD players, computers, cameras and stereos with your driver's license number.
• Keep a record of your property in a safe place.
• Install an alarm system for summoning emergency help.
• If you park your car outside, never leave a garage door opener in the car.

When you go away:

• When you go away Ask a neighbor to collect your mail and newspapers, and offer to return the favor.
• Put an automatic timer on at least two lights and a radio. Consider photoelectric sensors to turn outside lights on and off automatically.
• Tell a trusted neighbor when you're leaving and when you'll return. Include an itinerary and phone numbers where you can be reached in an emergency.

Neighbors Helping Neighbors

There's more to crime prevention than locks and lighting. The fact is, concerned neighbors who

watch out for each other are the front line defenses against crime.

• Get to know your neighbors and discuss your concerns about the neighborhood.
• Be alert to things that invite crime like poor street lighting, boarded up buildings, a lack of recreational activities or jobs for teens, vacant lots littered with debris and inadequate daycare and after school programs. Work with law enforcement, civic groups, schools, churches and service clubs to solve the problems.
• Alert law enforcement to suspicious activities and any crimes.
• Report nonworking street lights, abandoned houses and other problems.
• Join a Neighborhood Watch group. If there's no Watch organization in your neighborhood, start one with help from local law enforcement and community groups. Joining a

 

Neighborhood Watch, Block Watch, Town Watch, Crime Watch - whatever the name, it's one of the most effective and least costly ways to prevent crime and reduce fear. Neighborhood Watch fights the isolation that crime both creates and feeds upon. It forges bonds among area residents, helps reduce burglaries and robberies, and improves relations between police and the communities that
they serve.

A few concerned residents, a community organization or a law enforcement agency can spearhead the effort to organize a Watch. Members learn how to make their homes more secure, watch out for each other and the neighborhood, and report activities that raise their suspicions to the police or sheriff's office.

 

Watch groups are not vigilantes. They are extra eyes and ears for reporting crime and  helping neighbors. Neighborhood Watch helps build pride and serves as a springboard for efforts that address community concerns such as recreation for youth, child care, and affordable housing.

 

Cristina Callegari

Keller Williams Realty Landmark

32 -55 Francis Lewis Blvd.

Bayside, NY 11358

718-475-2700

9179-21-5397

ccallegari@kw.com

www.nyhomeshowcase.com