Christopher Pagli - Westchester, NY - Real Estate

#1: Just because it's a buyer's market doesn't mean you should buy right now. Don't let the lucrative market dictate a buying decision if the time isn't absolutely right. Potential homebuyers need to ask themselves if they have a good credit score, if their job is secure and if they can stay in the home for a few years. If the answer to these questions is "no," it might make more sense to wait until life and finances are more stable.

 #2: The cost of owning a home is more than just the purchase price. On top of a mortgage payment, there are several monthly fees and expenses any first-time buyer should consider when becoming a homeowner: insurance, property taxes, utilities and maintenance. Think about scaling back the home price in order to better budget for the entire package.

#3: Programs are out there to help first-time buyers. A sizeable down payment is great to have for a home purchase, but not everyone can afford to fork over 20 percent upfront. Fortunately, there are many federal, state and local programs geared toward helping first-time homebuyers with down payments, interest rates and loan terms sure to make the whole process and affordability a bit easier.

#4: Foreclosures and short sales present great deals, but proceed with caution. Buying a foreclosed or short sale home can be a risky proposition for a first-time buyer. Foreclosures are often sold "as-is," while a short sale transaction can be lengthier and more complicated than a typical home purchase. First-timers should consult an agent or attorney with specialization in these areas.

#5: Getting pre-approved for a loan gives you more buying power. Obtaining lender pre-approvals are important because it establishes a homebuyer's maximum purchase price, shows sellers that the buyer is serious about buying a home and lets the homebuyer compare interest rates and terms to find the best deal.

#6: Good school districts boost property value. One of the most important aspects of a home's value is the neighborhood where it's located. Even if the homebuyer does not have kids, buying a home near sought-after schools can help the resale value.

#7: You may be able to access your tax credit upfront. Buyers using FHA-insured mortgages can apply their tax credit toward their home purchase immediately, rather than waiting until they file their income taxes to receive a refund. Prospective buyers who believe they qualify for the credit are also allowed to reduce their income tax withholding, therefore increasing their take-home pay.

#8: Not all real estate agents represent buyers. There are three types of agents: listing agents, who represent sellers and help them get the best price; buyers' agents, who represent buyers and protect their interests; and agents who represent either (or both). Often, first-time buyers prefer to work exclusively with a Westchester County buyer's agent so there are no possible conflicts of interest.

#9: Doing your homework can help you make a competitive offer. Before buying the home, determine the property's market value by having the realtor conduct a comparative market analysis. This report will show what buyers were willing to pay for similar homes in the area, giving a good idea of what will make a fair offer.

#10: It's important to have a back-out plan. Before signing on the dotted line, make sure to have a contingency plan in case things don't go as planned in the home inspection or appraisal. If the home has a major flaw or doesn't appraise for the purchase price, an escape plan allows the contract to be voided.

The short-sales process In Westchester County, often agonizingly long, may not speed up overnight, but there’s reason to believe that better days are ahead. The federal government’s long-awaited guidelines for standardizing short sales were released at the end of 2009, and although they don’t take effect until April, mortgage servicers have the option of implementing them early.

 

The short sales guidelines are part of the government’s new Home Affordable Foreclosure Alternative Program, known as HAFA, which is an add-on to the Obama Administration’s more wide-reaching Home Affordable Modification Program launched in early 2009. The idea is that if borrowers are eligible for the modification program but are unable to work out a plan to stay in their home, they—and their lenders—have a well-mapped route for executing a short sale or a deed in lieu of foreclosure.

 

The new HAFA program applies to the large volume of so-called "risky" loans that were issued outside of Fannie Mae and Freddie Mac guidelines during the housing boom, such as zero-down loans, option ARMs, and Alt-A mortgages that didn’t require extensive income documentation (see sidebar, "Which Loans Are Eligible?"). As of this writing, Fannie and Freddie were developing their own, similar guidance for loans they’ve backed.

 

The HAFA guidelines are voluntary, but major banks and servicers—including Bank of America, Chase, Wells Fargo, and Citimortgage—as well as dozens of smaller lenders, are expected to participate, clearing up the logjam of potential short sales on their books.

 

To participate, a mortgage servicer must have opted in to the government’s Home Affordable Modification Program by the close of last year. Through the end of November 2009, there were 78 such mortgage servicers, which together cover approximately 85 percent of eligible mortgage debt, according to the program’s servicer performance report. 

 

 

How the Rules Will Help

Observers say the HAFA guidelines speak to many of the real estate industry’s ongoing frustrations over short sales. For starters, lenders will have a financial incentive to get these deals moving. Servicers get $1,000 to cover their costs, and subordinate lien holders get up to $3,000 through a matching arrangement in exchange for relinquishing their lien. In addition, borrowers receive $1,500 to defray their moving costs.

 

The guidelines also include standardized forms, procedures, and timelines—and allow the borrower to receive preapproved short sale terms prior to the property listing. These measures should address the resistance of serious buyers to invest time, money, and effort into a purchase offer without having any assurance that the lender will accept their offer or even look at it in a reasonable time frame (or, just as bad, accept a last-minute rival offer).

 

 Also, the HAFA rules require that borrowers be fully released from future liability for the debt. That will be a relief to home owners in recourse states who would otherwise remain liable for debt collection. Slightly fewer than half of the states are recourse states.

 

 

Getting New Systems In Place

Bank of America in late 2009 rolled out an initiative to dovetail with the guidelines, and other lenders may follow with their own programs that anticipate the new rules. Through its "cooperative program," the bank’s mortgage servicers reach out to owners who are unable to modify their mortgage. "We developed our program in anticipation of the federal guidelines," says David Sunlin, Bank of America Home Loans senior vice president who oversees the company’s foreclosure and REO activities. Sunlin participated in a webinar hosted by REALTOR® Magazine in mid-December to talk about the bank’s new procedures.

 

Sunlin says the bank’s program gives troubled owners "a preapproved solicitation for a short sale" along with proactive processing of all the required steps: "appraisals, review of financials, investor approvals, mortgage insurer approvals, second-lien approvals—all of these can be done while the property is being marketed," he says, "so when an offer is brought to the table we can do a much quicker turnaround."

 

It will take months for lenders to modify their procedures in accordance with the guidelines (and, for agency loans, in accordance with the Fannie Mae and Freddie Mac guidelines), and even then, the new rules surely won’t be a cure-all. But there does seem to be a light at the end of the tunnel. 

 

Sunlin says the fall-out rate for short sales at Bank of America has been as high as 70 percent. His hope is that with the new guidelines, that rate will drop to something similar to that for REO transactions, which have a 10 percent to 15 percent fall-out rate.

 

"Short sales have always been a reactive process," he says. "We need a proactive process, and the guidelines are a good start." REALTORS® no doubt would like to see that hold true.

 

 

Which Loans Are Eligible?

The Home Affordable Foreclosure Alternative Program provides short sales guidelines for loans not owned or guaranteed by Fannie Mae or Freddie Mac (those agencies are expected to release their own, similar guidance). The following conditions also must be met:

 

• The property is the borrower’s principal residence.
• The mortgage loan is a first lien mortgage originated on or before Jan. 1, 2009.
• The mortgage is delinquent or default is reasonably foreseeable.
• The current unpaid principal balance is equal to or less than $729,750.
• The borrower’s total monthly mortgage payment exceeds 31 percent of the borrower’s gross income.

 

Many may not realize this but child identity theft is one of the fastest growing forms of fraud in the US.  According to the Federal Trade Commission almost 5% of all identity theft cases in the US target children.   Believe it or not approximately 54% of these cases target children under six.  Shocked?  So am I, here’s why it happens....

The main reason children are targeted is their credit is a clean slate.  Once a thief gets access to the Childs name and social security number they can then apply for credit.  They add a phony address and other needed information and it's as easy as that.  Once the thief is granted credit the accounts are cultivated long enough to establish higher limits.  They make purchases and then disappear leaving a mucky future for the child.  Unfortunately this usually goes unnoticed until the child is old enough to apply for credit and come to find out they have a long history of bad credit. 

Here are the red flags to watch out for:

1) Medical, dental, and hospital records
2) Youth organizations, such as boy scouts and girl scouts
3) Info accessible To volunteers
4) Registering for daycare, sports teams, and schools
5) Internet thief posing on internet conning people for their sensitive information
6) Receiving solicitations for credit cards and other financial offers for your child

Keep in mind, any information that is not stored by secure entity is at risk.

If you feel your child is at risk you can setup a monitoring system for them.  You will get an alert any time their info comes up.  You can also purchase a credit report two to three times a year until the child turns eighteen, then they entitled to a free report each year.  Unfortunately we need to think about these things in today’s world.  It's better to be safe then sorry and always expect the unexpected!

When the time for a final walkthrough inspection of the home you're purchasing arrives, most will welcome assistance!  This inspection should not be confused with an engineer home inspection which is conducted right after offer acceptance.  Below is a checklist of items to be checked by you and your Westchester County Buyers Agent.

General

1) Have all agreed upon repairs been completed?
2) Have the sellers removed any items that are supposed to stay in the home?
3) Is the home clean and/or broom swept?
4) Are there any signs of new damage to walls, floors, etc?
5) Do all light fixtures work?
6) If an agreed upon fixture was removed is there at least a "contractor grade" replacement?
7) Does every outlet have power?
8) Are there any leaking pipes, faucets, or toilets?
9) Do all The toilets flush?
10) Does the garage door opener work?
11) Do the locks work?
12) Do all the appliances work?
13) If new construction, are all the agreed upon finishing touches in?

HVAC

1) Test the furnace and air conditioning system...please note that a central air compressor cannot be tested in the freezing cold weather. Please consult an HVAC expert for more info.
2) Check to make sure vents aren't blocked?

The final walkthrough process is a fairly casual one and should be conducted the night before or hours before the closing.  If there are any issues that need to be addressed your Buyers Agent can approach the Listing Agent and arrange to have the items either credited or negotiated.  In my experience everything can be worked out as long as both parties are open minded.  Now enjoy the Real Estate you have purchased and will now call home!

New Jersey, New York Tops in Tax Bills
The highest property tax bills in the country are in New York and New Jersey, according to the Tax Foundation’s analysis of data from the U.S. Census Bureau.

The Tax Foundation analyzes counties and includes taxes levied by school districts and other taxing authorities. The national median property tax is $1,854.

The counties with the highest median property tax for owner-occupied properties are:

1. Westchester County, N.Y., $8,404
2. Hunterdon County, N.J., $8,347
3. Nassau County, N.Y., $8,306
4. Bergen County, N.J., $7,997
5. Rockland County, N.Y., $7,798
6. Essex County, N.J., $7,676 (tie)
6. Somerset County, N.J., $7,676 (tie)
8. Morris County, N.J., $7,310
9. Passaic County, N.J., $7,095
10. Union County, N.J., $7,058

While the area’s residential real estate market has struggled in recessionary mode all year long, there has nevertheless been a steady improvement in the sales rate over the past nine months. Realtor participants of the Westchester-Putnam Multiple Listing Service, Inc. reported a total of 1,898 closings of Westchester residential real estate transactions in July through September, a level that was 9.7% less than last year’s third quarter closings, but that was considerably improved over the second and first quarter sales volumes which were off by 30.7% and 36.6%, respectively, from the prior year.

On a seasonally adjusted basis1, the third quarter Westchester closings were equivalent to an annual sales rate of 6,170 units, an increase of 30.7% over the prior quarter, constituting a very large bounce-back from the barely 4,000-unit level posted in the first three months of the year.

Putnam County’s performance, though not as vigorous as Westchester’s, also showed improvement in the third quarter. The 186 posted closings were 18.1% fewer than last year’s, whereas the first quarter closings were down by 30.5%.

Third quarter single family median2 sales prices, $630,000 in Westchester and $330,000 in Putnam, were below last year’s levels by 11% and 12% respectively, constituting a modest recovery from the second quarter when median prices were running 16% and 19% below last year’s levels. Most of the price decrease since the start of the recession has been attributable to across-the-board market depreciation from lack of demand but part of it also results from a pronounced fall-off in high-end sales.

In 2008 and earlier, million-dollar-plus sales accounted for as much as 25% or more of all transactions. That percentage abruptly fell to 13% in the first quarter of 2009; it increased to 17% in the second quarter and to 20% in the third quarter but still falls short of its former high levels.

The condominium and cooperative sectors fared better as to prices. The $362,000 median sale price of a Westchester condominium was 8.6% less than last year’s. The co-op median of $170,500 was 9.2% lower than last year’s. The median sale price of Multi-family (2-4 unit) houses was $399,500, retaking its place from condominiums in the second quarter as the second most expensive housing type in Westchester.

Notwithstanding the continuing sluggish pace of sales in the region, there has been no buildup of actively marketed inventory. The end-of-quarter supply of single family houses in Westchester barely changed at all from the third quarter of 2008 to 2009. Total inventory of all property types actually decreased by 5.4%.

In Putnam County the total inventory decreased by 7.6%. The number of units now on the market is not much different than in 2007 before the looming recession became truly apparent.

The third quarter closings in Westchester and Putnam Counties largely followed upon marketing activity that occurred in the late spring and summer months, a period that produced mostly positive economic indicators favorable to real estate. Mortgage interest rates, which had reached a short-term peak of about 6% on 30-year conventional loans in mid-June, subsided thereafter to a range of 5.6-5.8%.

Except for a brief dip in early July, the equity markets exhibited sustained growth from May through August; the Dow Jones Industrial Average crossed the 9,000 mark in late July. The most serious negative indicator during this period was, and remains, a Westchester and regional unemployment rate around 7.5%. Conservative lending practices also continue to put a brake on the market.

On a nine-month basis, Westchester County’s sales volume of 3,975 units was 24.1% less than in 2008, and a hurtful 43.3% less than in 2007. The second and especially the third quarter results, however, are trending to a steady improvement in sales volumes. Further, there is a slight suggestion in the data that overall prices are at or close to bottom, and that the high-end segment of the market is inching its way back to a larger market share though probably not its former prominence.

These factors, together with the restrained local inventory, suggest that there exists pent-up demand to complement pent up desire to sell – a real estate market in the remaking if only the larger economic environment would cooperate.

Fall is upon us and the foliage is one of the things I enjoy most about the season.  Below are five trailways worth traveling if you enjoy it as much as I do!

1) Rockwood Hall, Sleepy Hollow NY  - This spot is absolutely beautiful, peaceful, and scenic.  It is accessible by public transportation (off Route 9).  One of the highlights is the amazing views of the Palisades.

2) North County Trailway, Croton NY - This site offers the only view over the Croton Reservoir and is accessible by bike.  Go south on route 118 out to the railroad brodge over the Croton Reservoir ( which is handicapped accessible).  You can also pick up the trail from Route 134.

3) Lakeside Trail At Teatown Reservation, Ossining NY - This site offers many scenic views on the trail over the lake.

4) Camp Smith Trail, Peekskill NY - These views are billed as the best in Westchester County.  It is also very romantic, many couples have gotten engaged here!  It is accessible from the Toll House Visitors Center on Route 6/202.  Or you can reach it by the Appalachian Trail just north of the Bear Mountain Bridge.

5) Silver Lake Preserves White Trail, Harrison NY - This is a little park that was once the site of American Revolutionary War activity.

What is Twitter you ask?  Twitter is a social networking site that allows people to follow your updates.  It is very important for you to determine your ultimate goal with the site before beginning.  I choose to use it for work purposes.  I post useful articles and stories pertaining to Real Estate along with the occasional recipes, cool gadgets, etc.  Below are the 5 steps to begin Twittering:

1) Go to Twitter.com and setup your account. It's pretty basic, just setup a username/email and password.

2) Read the basic guidelines at http://Help.Twitter.Com, this will save you alot of time and headaches in the long run.  Many people avoid because they don't understand.  This may become a valuable tool for you, give it a shot!

3) Once your account is created you will then get a home page and profile.  Fill it out your profile and then you can start searching for friends and topics of interest.  If you choose to follow someone you will be able to see their updates, if they follow you they will see yours.

4) Decide who you want to follow.  Start with people you already know by using Twitters directory.  You can also browse http://www.Twellow.com.  This site sorts people by industry.  You can also register yourself here as well.

5) Decide what content you want to post.  You can observe others before posting.  It's kind of like watching from the sidelines until you are comfirtable jumping in the pool.  This can also be used as the first step.

These are just the very basic beginning steps.  As you become comfortable with the site you can get creative and take advantage of the many tools that come with it.