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Category Archive: ‘Thinking of Buying?’

Buying with Friends

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I have bought with friends before, and I’ll never do it again – you have to reach full agreement on everything! 

And don’t do anything quickly! (bottom paragraph)

For some New Yorkers who have been priced out of New York City’s real estate game, pooling resources with friends and siblings has become the quickest path to homeownership. And while sharing a front door can put even the best relationships to the test, some are finding it’s worth the risk.

For Laurie Savage, a writer and restaurant server, and her husband, Garette Henson, a filmmaker, both 36, the arrival of their son, Fox Henson, almost 2, sparked the idea of buying real estate with a friend. That friend was Alix Frey, 37, whom they had met when they were all students at Sarah Lawrence College.

The group recently moved into a three-story two-family townhouse in Bedford-Stuyvesant, Brooklyn. Ms. Frey, the director of the Blum & Poe gallery in Manhattan, occupies the top level while the couple have the lower level, including the basement and the backyard. The parlor level is divided between the Savage/Hensons and Ms. Frey.

For assistance in their search for a place to buy, the three, who had rented apartments in the same brownstone in Fort Greene, Brooklyn, for eight years, turned to Marina T. Schindler, a saleswoman at Compass real estate and one of Ms. Frey’s close friends.

“It’s a really good way for people to work the system,” Ms. Schindler said. “Not everybody has that money for a down payment. They realize if they team up, they get more bang for the buck.”

It’s a complicated process, she added, “because they’ve got to have an agreement between each other, they have to trust each other, but it’s a great way for young families to make a bigger, better investment.”

The friends had originally looked at properties separately, almost immediately concluding that they were priced out of Fort Greene. As they expanded their searches to Crown Heights and Bedford-Stuyvesant, the numbers still seemed shocking. “Alix was looking at a one-bedroom for $750,000. She wanted a two-bedroom for less than that,” Ms. Savage said.

“We realized we can get a better space if we buy together,” she said. “The apartments priced at what we’re each getting our units for were like tiny boxes. It was startling, the difference in the quality of what we could get. So very quickly we said we’re open to it.”

Read full article here:

http://www.nytimes.com/2016/07/31/realestate/when-friends-buy-a-home-together.html?_r=0

Posted by on Jul 29, 2016 in Jim's Take on the Market, Market Buzz, Thinking of Buying? | 3 comments

More on Millennials and Home Buying

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The lightweight reporters who nibble around the edges don’t ever get to the point.  It doesn’t matter who wins the election, rich people are taking over.  Millennials and others will have to find a way to buy a home, or be at the mercy of rich people for the rest of their lives.

http://www.npr.org/2016/07/26/487470787/fewer-young-people-buying-houses-but-why

Trevor Burbank is single, 27 years old, and has been house hunting in Nashville for the last year.

“My rent’s going up in August, so I have to figure out what I’m doing,” he says.

The last time Burbank looked for a place was five years ago. He decided to use his down payment to start a business instead.

“There was a house that I really liked that was going for $60,000, and I saw the house being sold in the past few months for just shy of $300,000,” Burbank says.

There’s a big debate in real estate over where home ownership rates are headed, and whether Millennials — people who came of age around 2000 — will get into the housing market the way generations before them did.

Read More

Posted by on Jul 27, 2016 in Jim's Take on the Market, The Future, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 7 comments

Lowball Strategy

typical agent

Have you seen a home sale close at a surprisingly-low price, and you said,

“Geez, I would have paid that!”

Usually the house has been on the market for months, and everyone else has forgotten about it. The seller doesn’t want to lower the price, but tells his agent, “Just bring me an offer”.

The agent revises the MLS remarks, adding gems like ‘Extremely Motivated’, and ‘All Offers Considered”.  A buyer who saw it earlier with another agent decided to approach the listing agent directly with an offer 20% below list – take it or leave it.

With visions of two commissions twirling around in their head, the agent tells the seller this is the best they could do. The seller really is motivated, so after months of failure at a too-high price, frustration sets in and he signs it.

If any seller is tempted to take a lowball offer – more than 10% below list – they should instruct the listing agent to immediately lower their list price to the midpoint between the offered price and current list price.

Let’s see who else is out there!

Watch how many you see that close at 15% to 20% below list and the listing agent represents both parties.  It isn’t enough to change the market, but a notable strategy.

You shouldn’t burn your old agent though – there are enough listing agents who are wimpy about dual agency and prefer that you have your own agent anyway. It is the same net to the seller, so he won’t care either.

Posted by on Jul 20, 2016 in Ideas/Solutions, Jim's Take on the Market, Thinking of Buying?, Tips, Advice & Links, Why You Should Hire Jim as your Buyer's Agent | 0 comments

Multi-Gen Paradise

Lakeside isn’t far – it is centrally-located in San Diego County, and is a straight shot down the 52 and 67 from La Jolla.  It might be a reasonable compromise for those multi-gen buyers who would treasure two houses on a quarter-acre lot with citrus and avocado trees.  This property has been lovingly-maintained and owner-occupied for the last 30 years!

lakeside

Here is a feature-length YouTube video tour:

Pueblo Road satellite photo

Posted by on Jul 17, 2016 in Boomers, Bubbleinfo TV, Jim's Take on the Market, Real Estate Investing, Thinking of Buying? | 0 comments

2016 Renter Survey

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Worried we might run out of buyers? Plenty are waiting in the wings – and working with their parents to achieve!

Current renters value homeownership and want to buy a home but many are encountering affordability and financial obstacles that prevent them from buying, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 Renter Survey.”

Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a downpayment would motivate them to buy now.

Of the 28 percent of renters who don’t plan to buy in the future, 50 percent said they can’t afford to buy, 20 percent will not buy because they prefer to rent, 19 percent said they can’t qualify for a mortgage, and 15 percent lack a downpayment. Job uncertainty (9 percent), economic uncertainty (12 percent), and housing market uncertainty (6 percent) were among other reasons renters cited for not buying a home.

Homeownership remains important to renters, with nearly half (45 percent) rating it 8 or higher in importance on a scale of 1-10, with 10 being extremely important. The average was 6.8. Nearly all renters (95 percent) see advantages to homeownership; freedom to do what you want with your home, building equity, and having permanence and stability were the top benefits mentioned by renters.

One of the surprising findings of this survey is that more than one in four millennial renters said they plan to purchase a home that will accommodate their parents, and about one in five millennials indicated they plan to pool funds with family members to buy a home.

Other key findings from C.A.R.’s “2016 Renter Survey” include:

  • Forty-six percent of renters claimed they currently rent because they can’t afford to buy, and 13 percent said they have poor credit and can’t qualify for a loan. The remaining renters choose to rent because they like the flexibility, freedom and ease of renting, are concerned about the maintenance costs of owning a home, or are not interested or aren’t ready to buy.
  • Nearly four in 10 renters (39 percent) indicated they plan to purchase a home in the same county where they currently reside, and 23 percent plan to buy in the same neighborhood.
  • Fifteen percent of renters plan to buy a home out of their current area, with 7 percent planning to move to another state, 7 percent to another county in California, and 1 percent to another country.
  • Of the renters who are planning to leave the area where they currently reside, 27 percent are moving to find lower housing prices, 24 percent are moving for a better neighborhood, 14 percent want to be closer to family, 9 percent want a shorter commute, and 7 percent are moving for a better school district.
  • Two in three renters have made some kind of preparation to buy a home: 25 percent have searched for homes, 16 percent have searched online for information about the homebuying process, and 12 percent have spoken to a REALTOR®.
  • Thirty-one percent of renters previously owned a primary residence, and 9 percent currently own real estate. Of those who previously owned a home, the reasons for selling included family reasons (37 percent), financial difficulties (28 percent), and work (13 percent).

survey
http://www.car.org/newsstand/newsreleases/2016releases/2016rentersurvey/?view=Standard#

Posted by on Jul 17, 2016 in Boomers, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 0 comments

Farm at Home

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Being self-sufficient today can include growing your own food.  Here is a new-home tract that includes farmland within the community:

http://www.marketwatch.com/story/why-farmland-may-become-a-more-popular-neighborhood-amenity-than-a-golf-course-2016-07-11

Amy Fahey tends to a backyard garden at her suburban Chicago home, growing tomatoes, cucumbers, kale, peppers, Brussels sprouts, beans and herbs. But never squash.

“Three years in a row I’ve been struggling to grow squash,” she said. The reason it won’t take, she thinks: There aren’t enough bees to pollinate the plants. “We’ve killed off parts of the environment that could naturally make this happen,” said the retired J.P. Morgan executive who lives in Elmhurst, Ill., with her husband and teenage daughter.

But the neighborhood in which the Faheys are building a home offers new hope.

Set in Hampshire, Ill., about 50 miles from downtown Chicago, Serosun Farms is a new home-conservation development, restoring wetlands, woodlands and prairie, and preserving farmland throughout. Already, the frog population has grown exponentially from the conservation work done onsite, and monarch butterflies are also on the rebound, said Jane Stickland, who is working on the project with her brother, developer John DeWald. Their efforts also are boosting the bee population.

It’s very early in its development, but Serosun plans to incorporate about 160 acres of working farmland, making farm-to-table a way of life for residents through regular farmer’s markets. The community also offers eight miles of trails, an equestrian center and fishing ponds: 75% of the development will be reserved for farming and open space.

The 114 single-family homes range from $700,000 to $2 million; the median listing price for homes in Hampshire, Ill., is about $238,000, according to Realtor.com.

Read full article here:

http://www.marketwatch.com/story/why-farmland-may-become-a-more-popular-neighborhood-amenity-than-a-golf-course-2016-07-11

Posted by on Jul 11, 2016 in Jim's Take on the Market, Thinking of Building?, Thinking of Buying? | 0 comments

One-Story Hope

2016-07-05 12.28.07

It’s not easy to downsize, especially into a decent one-story house – there aren’t enough one-story owners who want to sell!

But there are some good opportunities if you are willing to leave the coast.  Sell your coastal big bombers and go inland just far enough that you can get a one-story for less, and still be close to the grandkids!

Posted by on Jul 5, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, One-Story, Thinking of Buying? | 4 comments

MID and Home Prices

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This has my vote for the worst real estate article of the year:

http://www.realestateeconomywatch.com/2016/06/new-study-abolishing-the-mortgage-interest-deduction-would-lower-house-prices-by-nearly-20-percent/

Three Belgian economists have shown the world that they know how to work a calculator.  They concluded that if the mortgage-interest deduction went away, homes would be selling for 20% less.

They didn’t talk to any buyers…..they didn’t talk to any realtors…..and they sure didn’t talk to any home sellers.

There is more to it than that!

  1.  The benefit of the mortgage-interest deduction has been minimized by record low rates.
  2.  There are many other reasons to buy a home besides the MID.
  3.  Sellers will wait to get their price.

The MID is icing on the cake for home buyers.  It doesn’t impact their ability to get a mortgage, and if the if the government takes back a tax deduction, it’s not going to stop families from wanting to have a place of their own.

Don’t be surprised if you see this article flashed around by NAR types who want to keep their lobbyists employed.

Posted by on Jul 5, 2016 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 1 comment

Wait to Buy?

sd2016

A potential buyer mentioned that the market was feeling bubbly, and they were wondering if they should wait to buy until things settle down later this year.

First, let’s describe what we need.

We need to find the right house at the right price with the right sellers and the right listing agent.

Any of the four can screw up your chances of securing the right buy.  If the price is right, but it’s not the right house, would you buy it?  Probably not.  If the rest is good is good but the sellers need a 90-day rentback and prefer that their 8 dogs and cats never leave the house, you may not buy it either.

Getting all four to line up is a formidable challenge.  As a buyer, you need to keep looking 12 months out of the year just to have a shot.

Other notes:

  1.  In the off-season, the selection isn’t as good.  But you only need one, so keep looking!
  2.  Stay in the game just to keep your chops up.  If you stop looking, but then come across a house that might be a fit, you may not recognize it because you haven’t been watching lately.
  3.  Being active in the marketplace keeps you analyzing where and what you are willing to compromise.  You don’t want to make a mistake here.
  4.  Generally, the pricing isn’t going to change.  We will see more than 90% of the sellers using today’s comps and tacking on the usual 5% or so to determine their list price.  If there was a downturn, it wouldn’t be obvious until sales decline for an extended time.

Keep plugging – it’s only takes one!

Save

Save

Posted by on Jul 2, 2016 in Jim's Take on the Market, Market Conditions, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 4 comments