Is Inflation A Good or Bad Thing, And Other Lies and/ or Distortions?

Economics, economic theories, and political realities often cross paths, and make many people wonder what's going on. We have offered heard about the dangers of inflation, the dangers of recession, and other similar terminology, yet most of us will hear the media, and especially the business media, one day warn of the risk of inflation, and another day cite the lower than anticipated inflation rate as something to be concerned about. There are even different sets of indexes, one that includes core items (whatever that really means) and another that measures the inflation rate including energy costs.
The only thing that most American consumers concern themselves about from day to day, is how these costs impact them. Is their cost of living going up, staying the same, or going down. I have not met anyone recently that has told me that he feels that things are costing him less. At the supermarket, manufacturers continuing their clever "game" of effectively raising prices by keeping prices the same but reducing the package size. Shouldn't pricing be considered for these cost of living indexes the way the unit pricing is required by a lot of states, that is, by showing the cost per ounce, or per serving? Most of us have observed increased costs in milk, most meats, fowl, fish, cans of soda, bottles of soda, etc. Yet, we are being told that there is no or little inflation.
Gas prices are constantly fluctuating, yet the pattern is that prices go up. About the only thing that has not kept pace with these increases is average wages. Many workers are being paid for fewer hours, while others have been laid off. The unemployment rate statistically is about 9.5%, but realistically is more than 15%. Many Americans are either under-employed or unemployed, and this has been going on for so long, that, for many, unemployment benefits are expiring. If these people's benefits run out, the statistics will show a lower unemployment rate, because the official statistics does not count people not collecting benefits. It also does not count individuals who owned small businesses, that had to go out of business, because owners of these types of businesses are generally not eligible for unemployment.

The bottom line is that statistics are misleading. There is an old saying that the difference between a recession and a depression is, that it's a recession when it happens to someone else, and a depression when it happens to you. It is time for the American public to demand that our government officials stop partisan politics, and realistically address the economy and the joblessness issues, making those the overwhelming top priorities.

Understanding Mortgages

When someone purchases a home, one of the most confusing and frightening aspects of the experience is getting a mortgage. There are so many different types, and so much confusing terminology.

There are 2 types of mortgages that most home buyers acquire: fixed rate; and variable rate. Historically, variable rate mortgages begin with a lower rate, and that rate is adjusted periodically, pegged to some economic index, such as Treasury bonds, etc., while fixed rate mortgages maintain the same rate throughout the term of the mortgage. However, in periods of very low interest rates, such as have existed for the last several years, there is very little rate difference between fixed and variable mortgages.
You may have read about the rate of a mortgage with points, or without. A point is an amount that one pays to lower the rate during the rest of the term of the mortgage. It is a "trade off" of paying more upfront to pay less on a monthly basis. One point equals 1% of the amount of the mortgage, so paying 1 point on a $300,000 mortgage would mean paying $3,000 up front to receive a lower monthly rate. In order to see if paying the "points" is beneficial, one must calculate the amount of savings per month, how much it would save over the term of the mortgage, and the opportunity value of the dollar amounts of the points. It is also important to understand that it might be necessary to pay "points" in order to bring the monthly carrying charge down, in order to qualify for the percentage qualifications that lending institutions use as a factor in determining qualification for the mortgage.
Mortgages also come in a variety of lengths. Most common fixed rate mortgages are: 15 year; 20 year; 25 year; 30 year; and 40 year. The shorter the term, usually the lower the rate paid, but since there is also a shorter repayment period, the monthly carrying charge may be significantly higher. Obviously, the shorter the term, the lower the total amount of payments. Not all individuals will be eligible for some of the shorter terms, because the higher monthly carrying charge would require a higher income for approval. If someone wants to pay off a mortgage in a shorter period of time, most mortgages today have no pre-payment penalty (Years ago, many more did). Adding a small amount to one's monthly payment voluntarily will reduce the term (number of years needed to repay) of the mortgage significantly. Following this approach, also has the advantage that the "required" monthly payment is lower than in the shorter term mortgages.

If one wishes to qualify for a mortgage, it is very important to make sure that one has a fairly pristine credit report, and a relatively high credit scores. In today's economic climate, most lending institutions will normally exclude anyone whose credit score (e.g. FICO) is not around 700, or higher. Before applying for a mortgage, one should request a free copy of their credit report, and if there are any inaccuracies, fix them. If there are any potential problems, it is essential to "fix" your credit before going for a mortgage. Lending institutions today are far more careful and cautious than they have been in the past.

5 Common Mistakes Made By Home Sellers

One of the most difficult things for many people is coming to terms with selling their home. Many have gotten emotionally attached over the years, and rather than looking at the home from a standpoint of how a potential buyer might view their home, they look at many aspects unrealistically. This often causes them to begin the entire process from a perspective that hurts themselves, and between this emotional attachment, greed and unrealistic desires, many homeowners put their homes on the market for more than they should, and thus inhibit the number of individuals who might offer to actually buy the house. That being said, the next five items often adversely impact the ability to optimally sell ones home, and are usually things that can, and should be easily addressed. As a Licensed Salesperson in New York State, I always advise my clients to pay attention to these easily addressed areas.

1. Avoid large displays of personal items and possessions. These include, but are not limited to: overwhelming amounts of family pictures, trophies, etc; excessive religious decor; lots of lawn decorations/ ornaments; or children's toys strewn about. Homeowners should either store these out of sight, or even temporarily take out a storage unit. They should also place excessive furniture and furnishings in this unit, so the house does not look cluttered, and excessive furniture also often makes rooms look far smaller than they actually are.
2. If your house is an unusual color or shade, many potential home buyers might be turned off. It is far better to have a neutral, but attractive color to put your house in the best perspective.
3. Clear out your garage, at least sufficiently to put your car in their during home showings, as well as when pictures are taken. Remember that a seller wants to make the buyer feel as comfortable as possible, and first impressions are most important. At the same time, unclutter the driveway and front lawn area, for precisely the same reason.
4. The first impression a potential buyer gets when he sees the house is most important. Address any potential distractions, or eyesores. These include peeling paint, broken shutters, dirty appearance, awnings or shingles that need repair,broken sidewalks or driveways, unpainted railings, rusty areas, etc. Take a look from the front of your house from every angle, and address any areas that may be turn- offs.
5. Don't neglect lawns, gardens, etc. Make sure the lawn is trimmed, mowed and seeded for maximum positive impact. If the weather permits, make sure there are some colorful and attractive plants, and make sure all areas are weeded, clean, and welcoming.

These are all relatively easy areas to address. Homeowners often cost themselves time, opportunities, and substantial dollars because they overlook these items. I recommend that a home seller discuss these types of things with his real estate professional, and heed the advice given.

Is This A Good Time To Buy A Home?

As a New York State Licensed Salesperson in real estate, I am often asked by individuals considering purchasing a home, whether or not this is the right time (or at least a good time) to buy a home. While there is no simple answer to that question, the answer is to a large degree dependent upon individual circumstances, including needs, employment, credit rating, etc.

1. As we all know, the United States (as well as almost all the rest of the world) has been undergoing a prolonged period of economic distress that has not been this widely witnessed for eighty years. In many parts of the country, house values have plummeted, while in others there has merely been a large reduction in market value. While most areas have seen a resurgence in value, some of the country is still in a period of stagnant, inconsistent pricing. With these lower (or stable) prices for houses, combined with record low mortgage interest rates, a home buyer will have a significantly lower month carrying charge than in the recent past. In fact, some areas are seeing the lowest home prices in a decade! However, today's real estate market is also different for buyers in the sense that most lending institutions are being far more strict about down payments (most requiring 20%), and are requiring significantly higher credit scores to qualify for a mortgage. In addition, house appraisers are far more conservative in stating values, which means that the 80% that the bank is willing to loan is based on a lower home price, and thus, could, under certain circumstances, require an even larger down payment by the buyer. However, if all these conditions are met, the buyer is operating in a Buyers Market (more sellers than qualified buyers), and thus is in a fairly good negotiating situation.
2. Does the buyer have a home he is selling at the same time? If he does, it might take longer for his house to sell, and he will receive a lower amount for his house than he would have a few years ago, in some scenarios. However, in most cases, the trade- off of also buying another home for less money combined with the low mortgage interest rates will generally be advantageous to the individual.
3. Many potential buyers today are wary because of the market, and their fear of their own job security, or income consistency. Most potential buyers are acting more cautiously, and some are only making offers that even determined sellers are finding insulting because there is a "want to get it at a steal" mentality. When determined sellers and qualified buyers both look realistically at the market place, and don't take a what was type of attitude, buyers are often doing quite well.
4. Is the potential buyer looking at this purchase from a long- term or near- term basis? While nobody can know for sure how long any downturn will continue, it is always best to look at home ownership from a longer - term, need - oriented perspective, rather than merely instant gratification. Some individuals who purchased homes three to five years ago have seen their houses values drop, but others who have lived in their homes for much longer still have tremendous equity in their homes. Most experts still believe that houses are good long- term assets, because they historically have out- performed the inflation rate. For those looking short term, there is always more risk!
5. When the real estate sales market has slowed, in most areas, the rental market has seen higher occupancy rates. With the lower home prices and mortgage rates, combined with the fact that personal real estate is still one of our few substantial tax deductions (the interest and real estate taxes are deductible), in many circumstances, it is actually more economical to buy than to rent. However, like everything else in real estate and in this economy, this varies dependent on area of country and the individual's circumstances.

Is it time to buy a home? It all depends on your qualifications, credit, personal circumstances, needs, and your objective, but for many qualified people, this is a great buying opportunity!

Negotiations- An Art and a Science - How Cooperation Gets It Done?

Although nearly everything in life is negotiable, few people either understand the nuances of the art and science of negotiating, or adequately prepare themselves for negotiations. However, in one of life's ironies, it appears that negotiating is often considered easy and many people believe that anyone can negotiate. There are many simple and basic examples from everyday life that clearly demonstrate the need to be a better negotiator, from the car buying and home buying processes, to wage negotiations, etc. While these circumstances certainly put some individuals at a competitive disadvantage, the results are generally personal, and thus not that impacting on larger groups or society. When organizations are in negotiating situations, how well they handle these circumstances often dictates their eventual success or failure. Whether the negotiations relate to a group's needs, or how a real estate professional will perform the process, there is perhaps no single skill that is more relevant to our final results, and the relevance of our efforts.

In my more than thirty years as a professional negotiator, I have learned how essential negotiations are. Many inexperienced negotiators falsely believe that negotiations is a contest, where one party needs to best the other. In fact, the best possible scenario is invariably when the negotiations end up being win- win (meaning both sides are content with the result). In many cases, the victories are far more subtle, and while one side gets what it wants and feels it needs, the other side is also satisfied.

1. One of the best examples comes from the event planning world, where an event/ conference organizer is dealing with a hotel. In order to get the best result, the organizer must first do his homework, and understand the needs of the hotel, and what it seeks and needs. Some inexperienced negotiators push too hard for certain concessions that may be harmful to the hotel. What invariably occurs is either the hotel terminates the discussions, resolutely refuses, or in a weakened state, agrees because they desperately need the business. When the last scenario occurs, the hotel will often adopt an inflexible attitude after the contract is signed, and thus the group generally loses in other areas. When there are open and honest discussions, and the group explains its budget, what it needs, etc., and permits the hotel to suggest alternatives (for example, serving in specific rooms, tweaking menus, piggybacking other groups menus to create economies of scale for the hotel, etc.), the optimum resolution to the negotiations often results. For this to occur, however, the group's negotiator must be totally prepared and know the group's needs in advance, such as audio- visual requirements, special dietary needs, guest room needs, etc. When the two negotiators build their relationship based on mutual trust and respect, negotiations have the best chance of being resolved to both sides satisfaction.

2. Many groups falsely believe that they save monies by doing their own negotiating rather than hiring a professional negotiator. While occasionally that is the case (for example, if the group happens to have in- house a qualified and experienced negotiator), in most cases, a professional negotiator will attain results which will end up best serving the group's needs. One caveat, however, is that the group or organization must carefully interview the professional negotiator, and clearly make sure he understands the needs and the group's philosophy. Like in most consulting situations, many claim to be experts, but few can and do actually deliver. For example, in my years of negotiating professionally, I have found that I will generally save a group at least 30%, which is often the difference between the event being a rousing success or a dismal failure.
Negotiations are essential, and the most groups that utilize proficient, skilled and expert negotiators generally save time, money, aggravation, as well as ending up with a far better overall situation.

3. In real estate, there is always some degree of negotiation. Those real estate professionals that learn what both sides needs (his client and the other side/ party) propel the process forward in a win - win manner.

The Basics of Giving A Quality Presentation

Although many of us are called up frequently to give some sort of public presentation, a large percentage of individuals become nervous, queezy and uneasy when this occurs, often feeling considerably out of their comfort zone. Unfortunately, this form of oral communications has often been largely either ignored or paid little attention to, and because of that, many presentations and presenters present an atmosphere of discomfort, boredom, and somewhat of a feeling of "why did I bother attending this," amongst attendees. Like most acquired skills, learning to, and actually giving a quality presentation requires dedication, commitment and an understanding of the process and the requirements/ needs.

1. You'll rarely give a consistently quality presentation until, and unless, you thoroughly are prepared. This presentation means determining the goal of the presentation (i.e. what you want the attendees to walk away with), whether or not there is a need for accompanying visuals, doing your research and homework, understanding the group and its dynamics, etc.
2. Once you've formulated your information and materials, practice your presentation, and rehearse. This rehearsal should enhance your comfort zone, and anticipate questions and concerns that might be asked by the attendees.
3. Just like actors rehearsing for a new show, an effective rehearsal is never a one - shot event. The procedure must be repeated until your level of comfort with, and knowledge of, the materials, is nearly second - nature, and automatic.
4. Review your content in detail. Are you providing too little, too much, or just the right amount of information? Is the group that is attending prepared for the information you are giving? Will they welcome, or close their minds to new information, ideas and alternatives?
5. Are you comfortable going in front of a group? Are you so uncomfortable that your nervousness will create an impediment to a quality presentation? Rehearse in front of a mirror, look at your body language, continuously change the inflection and tone quality of your voice, and remember to speak more slowly than you feel you need to (because invariably nervous speakers rush). One's confidence is an essential of a quality performance!
6. Finally, consider your delivery, your performance, and whether or not you are engaging the group in an interactive manner. When one gets the audience more involved, it enhances the bond and thus the attention that the crowd will give you.

There is no one - step, easy procedure for enhancing your presentation skills. However, paying attention and being consistent, and thus using these basic six steps, helps to put you in the best scenario.

Basics of Meaningful Budgeting

Nearly every organization, whether it be public, non - profit, or related to a for - profit group or scenario, has some sort of budget process. Unfortunately, far too often, the attitude towards the significance and relevance of the budget process is often a diminishment of the need for this process. Meaningful budgeting must always begin with an attitude of understanding and appreciating the reasons and needs for the process. When done correctly, it enhances one's ability to do a thorough and relevant analysis of needs and priorities, as well as direct a process in the right direction. This should assist in the prioritization process, and make this a step towards functionality, rather than merely an exercise. Once this is understood, many believe that only by using a zero - based budget process, does the document serve the maximum purpose.

1. The vast majority of individuals tend to feel that creating a budget is merely a guide, rather than a directive. Because of this, once they get the budget approved, they often ignore the document, and merely resort to shorter term or crisis management form of leadership. On the other hand, when budgets are used properly, they set the tone, create priorities and direction, and do so in a responsible and effective manner.
2. Effective budgets begin with a commitment to thorough analysis. This permits groups to set goals, create meaningful prioritizes (based both on needs as well as goals and visions), and to effectively plan for the upcoming period. When use properly, budgets are an essential first step in realistic strategic planning.
3. Does your group have needs and priorities, and do they plan to address these in a manner that includes budgeting for them, or do they simply take haphazard steps in a less than meaningful manner?
4. Budgets must be used as a guide to which actions to take, and how to get the maximum bang for the buck. When this is done, organizations have the ability to prioritize providing value to their constituents and other stakeholders.
5. For more than three decades, I have prepared and assisted in preparing numerous budgets, and have become an advocate for the need for using zero - based process. Zero - based means avoiding the tendency of merely extending meaningless budgets year after year. When groups merely look at what they are doing, and just either maintain a line item expenditure or increase things by a specific percentage, groups lose an opportunity to improve and become more efficient and effective. Zero - based means one must justify each non contractural item on a needs, priorities, best ways, and relevant manner. Only when this is done can most organizations plan effectively in a non - crisis manner, and evolve before they must.

Don't consider budgeting to be merely a process or exercise! When that is the approach and attitude, opportunities are squandered, monies and time wasted, and true leadership diminished. Commit to use your budget as your ally.

Do You Really Want To Sell Your Home? - Then Price It Realistically From The Start!

People come up to me all the time and ask, "How's the real estate market doing?" Although I would really enjoy giving a simple answer to this question, the real answer is far more complex. In certain parts of the country, the housing market has been stronger than in many other areas, although, prices are lower than they were at the peak of the market. However, many homeowners who list their homes have listed them at unrealistically high prices, and then been inflexible in terms of reducing their price. I have observed homeowners list their houses at prices higher than homes sold for at the peak of the market, and then becoming disappointed when their homes don't sell. Some homeowners explain their asking price by explaining how much money they have put into their homes, or how beautiful and exceptional their house is. Often, these same homeowners have owned their houses for many years, and they seem to conveniently forget how little they originally paid for their houses. Yet, the reality is that the price one receives for one's house is not related directly to how much one may have paid, or how much one may have put into the property. In the end, houses generally sell based on what buyers are willing to spend for the house, and that is generally related to the real estate market at that time.

These homeowners are generally hurting their own chances of selling their homes by listing their homes at unrealistically high prices. Houses that are "priced right to sell" from the start have a far better chance of selling than those priced too high. Today's buyers study the internet, and many realize what comparable houses are realistically selling for. A basic reality of real estate is that in most cases, the best offer a homeowner will receive for his house is received in the first few weeks after it goes on the market. New listings are "hot" to potential buyers, while houses that remain unsold often elicit questions from buyers as to what was wrong with the property - why it hasn't sold?
Many owners interested in selling their homes interview several real estate agents and brokers, and ask for recommendations as to pricing, as well as many other questions. Many owners want to believe the agent that tells them their house is worth the highest amount, as if saying it will automatically bring forth a higher price. Instead, owners should demand a professionally prepared Comparative Market Analysis, including pricing and a marketing plan from their realtor. In most cases, a homeowner will do best going with an agent that acts professionally, markets professionally, and justifies both the pricing, and how the marketing plan will work.
In addition, even if a "stranger from another planet" decided to pay an unrealistically high price for a house, most buyers need to get a mortgage to finalize the funding for the purchase. Lending institutions, for a number of reasons including some unwise lending decisions during the height of the real estate "bubble," are doing far more complete and conservative comparative market analysis of their own, and if this comparison (known as "Comps") do not justify the price being offered, the lending institution will deny that amount of funding because it does not "comp out."
Since for most individuals, their home is their most valuable asset, doesn't it make sense to objectively ask the same questions as an owner that potential buyers will ask? The main question should be, "How does this house compare with comparable homes in comparable areas in comparable condition? Owners should also ask, "If I were buying a home, would I pay that much for this house?"

New Year - But It's Still Real Estate!

2015 is now over 1/24 completed, and statistics show that over half of us have already broken our resolutions, and are now proceeding as usual. While real estate is one component of what goes on in the real world, every period has certain specifics and nuances that should be addressed proactively, if one is to achieve the best results. Here are some factors that impact real estate as we face 2015:

1. Oil Prices: The significant cut in pricing significantly reduces homeowners (especially in areas that have winter seasons) heating and energy costs. For many, this will mean at least a $500 savings (or more) during the cold - weather months  Another impact is that there is no longer a savings heating using gas heat, and that might impact potential buyers' decisions.

2. Mortgage Rates: As we begin the year, these rates are at or near historic lows. It is important to remember that for every $100,000 of mortgage, a change of 1% in the rate translates to approximately $65 per $100,000 of mortgage, per month. In areas such as the New York metro area, where the typical mortgage is for a far larger amount, consider the differential. In addition, when mortgage rates are lower, more people qualify because of the lower monthly payments.

3. Consumer Confidence: Most polls show that it is improving, and more people buy homes when consumers feel more secure and confident. However, these same polls continue to fluctuate, and thus must be reviewed regularly.

4. Supply & Demand: Is it a buyers or sellers market? What is the trend? Why?

5. Other Factors: These include: economic, political and perceptions.

New year, but the same rules apply. The better you understand external conditions, the more capable you'll be of adjusting, adapting and enjoying the real estate market

Today's Real Estate Mortgage Environment

Mortgages have existed for as long as most of us remember. Few individuals would be able to achieve their goal/ dream of home ownership without one, and therefore, it would probably be helpful, to review what the present mortgage situation, scenario and environment is.

1. Mortgage rates continue to be at (or near) historic lows. When the interest rates are low, it means that more people might qualify for one, and that others might be able to afford more home. Although no one possesses a crystal ball and can guarantee or see the future, most economic indicators point to these rates gradually moving higher. Therefore, those wanting to buy a home, presently have a great opportunity.

2. Mortgage downpayment: While most conventional mortgages still require 20% down, there are new programs that some people will qualify for, that will now permit downpayments as low as 3%. Understand that while that might create a better situation for some, it will also mean a higher monthly carrying charge (payment)

3. Conventional vs Jumbo mortgages: Periodically, lending institutions change the amounts that necessitate taking out a jumbo mortgage. In the past, this generally brought forth a higher rate, but recently the jumbo rate has actually been lower than the conventional one.

4. Credit Rating: Ever since the economic credit crunch that occurred at the end of the last decade, most lending institutions have significantly tightened their qualifications required to obtain a mortgage. Today, in order to obtain the best rate, one must possess a credit rating equal to no lower than 720. 

5. Best advice - Get pre-approved in advance. Discuss the process informally with a qualified, recommended, mortgage professional. Have someone knowledgeable look at, review and assist you in transforming your personal credit report to the best possible, and do so before you begin the process.

These are only a few of the things one should know about today's mortgage world/ environment. Potential home buyers should thoroughly discuss the entire buying process with both their selected real estate professional and with a trusted, quality mortgage professional.

Real Estate's Compromise Between Hype/ Motivating, & Absolute Integrity

While conceptually most people might indicate that they would prefer doing business with someone who adheres to absolute integrity, the reality is that unless a real estate professional is capable of combining enthusiasm, hype and motivating prospective buyers, he won't get the needed results. When an agent discusses listing one's home with a homeowner considering selling his home, he must realize that he is also in competition with others seeking that same listing.

My personal trademarked slogan is, "I'll always tell you what you need to know, NOT just what you want to hear," TM but that does not mean that anyone works in a vacuum, and therefore the facts must be presented in the most palatable manner, using the finest in sales techniques and people skills. This fine line should not mean compromising integrity, but rather understanding and using one's words in the most effective and motivating manner.

One can be enthusiastic and motivating without abandoning one's ideals and commitment to integrity! Doing so may mean taking a little more time and effort, but isn't it worth it, to get the best results, while being true to oneself and ideals.

Know what you can compromise without selling out! When a real estate professional understands how to merge both necessary components, he best serves his clients. 

Selecting The Real Estate Professional FOR YOU!

The vast majority of individuals who either seek to sell their homes or buy one, utilize the services of a real estate agent. This is for a variety of reasons, including such factors as: professionalism and understanding the process and its nuances; hand holding; getting the best price under the best circumstances; reducing the stress of a generally tense period/ situation, etc. I have written extensively about why someone should use a real estate agent, but this article is hopefully stressing not only selecting an agent, but rather selecting the right real estate agent FOR YOU!

1. Whether you are buying or selling, take the time to carefully examine and interview several agents, and select the one who is best suited for you!  There are a number of factors to consider, but it must begin with your personal comfort level with that individual. Does the professional make you feel comfortable and ease with him, and do you believe him (and in him)?

2. Many people choose their agent based on numbers only, or promises (perhaps empty ones) that might be made. Be organized and ask how that individual will achieve what he states he will. Does the explanation ring true to you?

3. Don't simply go with the agent that gives you the highest listing price! Remember that listing and selling price are often far different, and the best way usually to list a home for sale, is to base that price on comparables, and the existing local market (and other economic conditions).

4. Ask about marketing plan, and negotiating skills. How will your home be marketed if you are selling (and how will you be marketed if buying)? FYI - one way to determine the quality of one's negotiating ability is how he defends the commission he asks for (and his personal value). If one can't negotiate impactfully in his own defense, how can he possibly do so best for you?


"I'll always tell you what you need to know, NOT just what you want to hear." TM

What You Need To Know Is Different From What You Want To Hear!

Because I feel so strongly about how important it is for a real estate professional to focus on communication with absolute integrity and what the client needs to know, I have trademarked this statement: "I'll tell you what you need to know, NOT just what you want to hear." TM 

The focus of meaningful communication between real estate agent and client must be based on letting one's client fully understand the plan (to either buy or sell a home), and avoid the temptation to either sugar coat the issues, or merely say what the professional believes the client wants to hear. While that may be the easier approach, and might enhance the ability to obtain clients, it is NOT in the best interest of any potential client to not understand factors, approaches, marketing plan, and ramifications in a clear - cut way.

For example,  a homeowner might be attracted to the agent that compliments him and his home by telling him to list his home at an inflated price. However, the reality is that homes that are priced right from the start provide the best results to that homeowner. Similar discussions where there might be big differences between needing to know and wanting to hear, often occurs in the commission discussion (e.g. homeowners might want to hear a low commission, while there are often numerous reasons why a higher commission is warranted and necessary), the curb appeal scenario (the professional must act as the objective eye), and whether a house needs staging (the often fine line between being kind/ complimentary, and being truthful and objective).

Both buyers and sellers should interview their potential real estate professional, and be influenced, not by whether the agent merely tells you what you want to be told, but whether he behaves truly strong and professional, by telling you what you NEED to hear! (even if it may not be what you want to hear) 

Home Buyers and Sellers Should BE PREPARED!

What might it mean when I state that both potential home buyers, as well as homeowners wanting to sell their homes, must BE PREPARED? Nearly everyone who has ever either bought or sold a home realizes that there are often challenges, tensions, obstacles, and other scenarios that often complicate (and sometimes ruin) a deal! Here are a few ways that, with the assistance of a quality, experienced real estate professional who is best suited for the individual, buyers and sellers could improve the experience by being prepared:

1. BUYERS: Begin by realistically knowing what you want, as well as what you need. Have an earnest discussion, at the onset, with your Buyer Representative, so that you have realistic expectations of what is available, and a realistic view of what that may cost. Make sure your credit is paid attention to, and speak to a Mortgage Professional before you begin the process, so that you know how much mortgage you qualify for, and get either a Pre - approval or Priority Buyer Letter, at the onset. Interview real estate professionals, so that the agent you select is the right one for you and your needs. 

2. SELLERS/ HOMEOWNERS: Price your home (listing price) right from the start. In the vast majority of circumstances, selling a home is an easier process when the highest number of qualified buyers get to see it. De- clutter and enhance curb appeal, as well as doing necessary touch - ups that create the best possible 1st impression! Seriously consider staging services provided by recommended professional stagers.

Both sides should take a bigger picture approach, rather than being myopic or argue petty or minor issues. Keep your ego out of it. Let the real estate professional you have selected negotiate in a quality, effective manner.

Is The Housing Market Always Seasonal?

While there is little doubt, at least from a statistical, historic basis, that more houses sell during certain times of year, one of the realities of real estate is that there are few iron - clad guarantees! Real estate professionals often discuss the Spring Market, often nearly as if it is somewhat of a magic elixir to all that might be ailing during the rest of the year. However, there are many factors to examine:

1. Spring Market - Depending on the area of the country, generally considered to be from about March through June (or early July). While there are more houses listed on the market during this time than other times, and there are also far more buyers looking, we must differentiate between actual/ real buyers and lookers. Those with children of school age often prefer to look during this period because if they find a home, they can settle in before the new school year. In addition, it is more seasonably comfortable (especially here in the Northeast) to look during this season. Also, homes generally are more attractive during Spring, with lawns green and flowers blooming. However, remember that the key is generally creating a Meeting of the Minds, and there is far more competition during this Season (depending on whether it is a Sellers Market, Buyers Market, or a neutral one) than other times of year.


2. Summer Market - We have all heard of the Dog Days of Summer, and because of a combination of hot weather, summer vacations, etc., this season often sees somewhat of a slowdown. However, remember that there are many serious buyers out during this season, who either did not get a chance to go out during Spring, or didn't find what they wanted and could afford. Both supply and demand is generally reduced from Spring, but many sales are still made during the July through September season.

3. Fall/ Pre- Winter Market - October to early - December - Generally smaller supply and smaller demand, but generally buyers are somewhat more committed and real. Many buyers want to procure a home before the New Year, and before the Winter.

4. Winter Market - December through early March. More challenging to have Open Houses, and to get buyers to come out to view homes. However, buyers looking during these months are generally the most committed and ready to buy. While there is less demand, there is also less supply, and thus there is generally a committed market that should be addressed and paid attention to. (Remember that there are 2 Holiday times during this season - Xmas/ New Years, and President's Week).

While there is generally a certain amount of seasonality to the housing market, it is important to realize that houses sell year - around. When sellers, buyers and real estate professionals approach each season in a serious, intelligent manner, houses will address the buyers that are suited for them!

Economic & Political Indicators and Factors That Might Impact 2015 Home Market

Beware of anyone who states that they can state with absolute certainty or guarantee what is going to happen in the future! It is, therefore, precisely for that reason that potential home buyers and sellers, as well as real estate professionals must keep a careful eye on certain things that might have an impact on the housing market. Some of these include:

Federal Reserve actions (or inactions): DO NOT merely listen to the hype, or overly depend on the intuitions, suppositions, etc. of the so - many, so - called experts! Rather, look at the copy of the actual minutes of the Fed meetings when they are released, and learn what actions might be taken, and when. This includes items such as interest rates, monetary policies, bond buybacks, etc. The more, and better, you know and understand, the better off you'll be!

Credit company policies: Companies such as Experian, TransUnion, etc., have individual policies that might impact credit ratings (and specifically, yours). Get your free copy of your report annually, and take advantage of looking at your credit score when your credit cards might provide this information (e.g. Discover, Juniper/ Barclays, etc. provide your Credit Rating monthly). You can also use websites like CreditKarma and see for free your relative scores. Do all you can to maintain the highest possible personal score.

International events: Events elsewhere in the world often impact our economy at home. Read, study, take courses, and learn as much as you can, to best position yourself. Some of these factors may include: Economic upticks or slowdowns; wars/ unrest/ fears/ battles; oil disruption (or fear of such); terrorism; widespread computer hacking, etc.

Your local real estate market: Housing demands, pricing, etc. vary dramatically from region to region. Keep an eye on your local market, using websites such as Multiple Listing Service, Trulia, Zillow, and many others, to examine such relevant components, such as: homes on market; average length on market; comparison to your house; features; etc. Sellers should price their homes right from the start, and buyers should be realistic and pragmatic, in order to get the optimum results.

Politics: Are there any laws, codes, etc., that might have an impact, either positive or negative? Don't only look at what's on the books now, but take into consideration proposed changes, etc. For example, building lot size; property taxes; mortgage tax and interest deductions; proposed projects, etc. that might change things, etc.

DON'T FORGET YOUR GUT! But be lead by your head, NOT your heart alone! 
 

Rich Brody's Take: My 2015 Real Estate Predictions/ Crystal Ball

Rich Brody's Take: My 2015 Real Estate Predictions/ Crystal Ball: It's always both somewhat dangerous, while also being fun, to make predictions or prognostications for the upcoming year, so, of course,...

My 2015 Real Estate Predictions/ Crystal Ball

It's always both somewhat dangerous, while also being fun, to make predictions or prognostications for the upcoming year, so, of course, I just couldn't resist the urge. Disclaimer: These are merely my thoughts and/ or projections, and certainly no guarantee, of any sort. However, although we are in an ever - unpredictable world, with an often, even more unpredictable (or often, even explainable) economy, the predictions for 2015, are even more intriguing (as well as being speculative). So, here are the Richard Brody 2015 Real Estate Predictions (Using my Crystal Ball):

1. The most likely: Most sellers will continue to over - value their homes, while most prospective buyers will also continue the low ball approach. This approach occurs every year, and nearly never gets the best results. As always: Pricing your home right from the start will get the best results for the homeowner, and realistic offers (and knowing what you can afford) is the best buyer approach.

2. Mortgage Rates: Since they are now, and have been for some time, at historic low rates, eventually they will probably go up. No one knows for sure, but the Federal Reserve has indicated that it will, sometime in 2015 (probably sooner than later, but dependent on economic conditions) probably alter its policies somewhat, which will create an increase in interest rates (therefore, mortgage rates would probably follow). My prediction is that rates will remain someone steady, at lead until the latter part of the 2nd Quarter, or 3rd or 4th Quarter, and then will gradually rise. (Remember that when mortgage rates rise, monthly carry charges for homeowners rise, as well.

3. Real estate taxes always seem to go up, no matter what appraisals, political posturing, etc., is. 2015 should be no exception.

4. Housing Market: 2014 was better than 2013, and a big improvement from the 2008-12 period, in most regions of the country. I would expect markets to be steady to slightly better, because it is becoming increasingly difficult for young families to afford home ownership, but since rents have similarly risen in many locations, I believe more young families (1st time homebuyers) might decide to jump in (before interest rates go up).

5. Tax deductions for mortgage interest and real estate taxes: No one ever knows for certain what politicians will do, but I believe even politicians are NOT crazy enough (especially in a continuously fragile economy) to eliminate these. If anything is done, there may be a movement to cap the amount of these that are tax deductible, but I do NOT believe that will happen in 2015!


We'll have to wait about a year to see how well my predictions work! I believe in them, but there are NO guarantees. 

Owning a home is an important component of our nation's economy. Hopefully, issues facing affordability for 1st time Buyers, etc., can be addressed to make it remain an essential part of most people's American Dream. But I don't expect any miracles during 2015, with the current economic policy.


I present this to you because of my trademarked pledge: "I will always tell you what you need to know, not just what you want to hear." TM 

   

Richard Brody's Real Estate Cybertips - January Edition

Here is the Link to the latest edition of my monthly : Richard Brody's Cybertips

Hope you enjoy!

http://www.recyber.com/cyber-tips/cyber-tip/r14559

Rich Brody's Take: How You Price Your Home Is A Combination of Art an...

Rich Brody's Take: How You Price Your Home Is A Combination of Art an...: People come up to me all the time and ask, "How's the real estate market doing?" Although I would really enjoy giving a simp...

How You Price Your Home Is A Combination of Art and Science!

People come up to me all the time and ask, "How's the real estate market doing?" Although I would really enjoy giving a simple answer to this question, the real answer is far more complex. In certain parts of the country, the housing market has been stronger than in many other areas, although, prices are lower than they were at the peak of the market. However, many homeowners who list their homes have listed them at unrealistically high prices, and then been inflexible in terms of reducing their price. I have observed homeowners list their houses at prices higher than homes sold for at the peak of the market, and then becoming disappointed when their homes don't sell. Some homeowners explain their asking price by explaining how much money they have put into their homes, or how beautiful and exceptional their house is. Often, these same homeowners have owned their houses for many years, and they seem to conveniently forget how little they originally paid for their houses. Yet, the reality is that the price one receives for one's house is not related directly to how much one may have paid, or how much one may have put into the property. In the end, houses generally sell based on what buyers are willing to spend for the house, and that is generally related to the real estate market at that time. These homeowners are generally hurting their own chances of selling their homes by listing their homes at unrealistically high prices. Houses that are "priced right to sell" from the start have a far better chance of selling than those priced too high. Today's buyers study the internet, and many realize what comparable houses are realistically selling for. A basic reality of real estate is that in most cases, the best offer a homeowner will receive for his house is received in the first few weeks after it goes on the market. New listings are "hot" to potential buyers, while houses that remain unsold often elicit questions from buyers as to what was wrong with the property - why it hasn't sold? Many owners interested in selling their homes interview several real estate agents and brokers, and ask for recommendations as to pricing, as well as many other questions. Many owners want to believe the agent that tells them their house is worth the highest amount, as if saying it will automatically bring forth a higher price. Instead, owners should demand a professionally prepared Comparative Market Analysis, including pricing and a marketing plan from their realtor. In most cases, a homeowner will do best going with an agent that acts professionally, markets professionally, and justifies both the pricing, and how the marketing plan will work. In addition, even if a "stranger from another planet" decided to pay an unrealistically high price for a house, most buyers need to get a mortgage to finalize the funding for the purchase. Lending institutions, for a number of reasons including some unwise lending decisions during the height of the real estate "bubble," are doing far more complete and conservative comparative market analysis of their own, and if this comparison (known as "Comps") do not justify the price being offered, the lending institution will deny that amount of funding because it does not "comp out." Since for most individuals, their home is their most valuable asset, doesn't it make sense to objectively ask the same questions as an owner that potential buyers will ask? The main question should be, "How does this house compare with comparable homes in comparable areas in comparable condition? Owners should also ask, "If I were buying a home, would I pay that much for this house?"