For the past several years, I have been passing on two documents, my Buyer's Plan of Action, and my Seller's Plan of Action. These documents had multiple purposes:
Today, I think it would be useful to take those process steps and put them into a post, so both buyers and sellers have a place to see the process explained, before getting into it. Today, we will focus on the selling process, as if I were your listing agent for the sale of your property.
Let's jump right into it:
In the wake of the 'Great Recession', many homeowners were left with homes that were no longer worth the mortgage they paid for the home. For example, if you paid $500,000 for your home (Home 1) with a $400,000 mortgage, and Home 1 is now worth only $300,000, you are 'underwater'. With so many underwater homes, the number of short sales increased dramatically in the past 5-8 years, to the chagrin of many homeowners in neighborhoods where property values were effected. No neighborhood was safe from this, and consequently, short sale and foreclosure prices met market value (so many of these sales caused regular prices to factor in these distressed prices) and there were no longer 'good deals'. These sales became a burden, instead of an opportunity.
Here in 2016/2017, now that less foreclosure inventory is coming on the market, and short sales are no longer 50% of all sales, the market has improved greatly. However, there are still many homeowners waiting on the sidelines to sell, but don't want to risk their credit to unload their property (by using a short sale option).
Disclaimer: I am not an attorney nor a mortgage broker. Please seek professional advice before taking action on what I write. Or call me, I'll hook you up with the right professionals.
I want to tell you about an experience I have had that really must be shared and passed on to anyone who owns a home. It should save you money in the long run, so I think it’s a worthwhile read.
In many states, there are companies that do what is called a Home Energy Audit, where they spend the better part of the day making your home more energy efficient. This service includes replacing all your light bulbs with 90% efficient LED bulbs, caulking around windows, doors and trim, replacing shower heads, and weather-stripping the doors that require it (and more).
The crew begins by looking around, and making sure the home is safe – in other words, if you have mold, asbestos, etc, they will require those things taken care of before doing anything. Otherwise, Javier and Chris, Team 1, began by giving me advice, and a whole boatload of advice (I will share after I finish my story). Then they began to complete the tasks I mentioned, while taking size measurements of the home for insulation, looking at appliances and checking if they are eligible for upgrades, and so much more. They insulated around pipes from hot water heater/boiler, they replaced the shower heads with brand new, more efficient heads, and just kept going. It was amazing.
After they finished, they ran a blower-door test (that is what I called it). Basically, they took a big fan, sealed the main, front door with plastic, and assuming all doors and windows were shut, took a reading to determine how much air was being pulled in through spaces you might not otherwise see (e.g. holes in the walls, in between trim, and around doors/windows). After the control test, they caulked in as many places as possible, finished with the weather-stripping of other doors, and then ran the test a second time, getting a differential reading after the fact. This information allows them to determine how much energy you should theoretically save, and that would then translate to a dollar value in savings. This information has not yet been sent to me, but after their calculations are run, based on your utility bills (which you provide), the information is given by email.
For about 6 hours of time, and $125, my home is more efficient and warmer. Now, this sounds like the story of a cheap salesman, but I really like when something gets me excited, and this did. The reason it’s so inexpensive, is because it is a government subsidized program, intended to help homeowners reduce the amount of energy they waste – I would consider it an educational experience, better than taking a class on the subject (possibly dependent on the technician).
There is so much more to this program, and it might seem too good to be true, but the purpose is to make our homes more efficient, and to save money for years. If you are income eligible (see picture on left), you can get this test for free. At the end of the day, they gave me some rebates for appliances, geothermal, insulating the whole house, and more. Instead of spending top dollar, you can get some money back. If income eligible, you might be able to get some of these upgrades for free (again, subsidized by the government). I love green initiatives, and this was the tip of the iceberg. The tips and bonus tricks below were all extra value provided by my team to me, so I will share. End of salesman-ey rant.
What I Learned
The first tidbit of information requires me to generalize: most homeowners looking to save on utility bills, immediately jump to needing new windows, a furnace, insulation, etc. However, save yourself the money, and prioritize what you could do in the following order to help your energy efficiency:
If you spend the time caulking and spray foam insulating where appropriate, both costing under $10, you can go a long way towards reducing the air that comes in. This in and of itself will dramatically help (hence why it's mentioned in the tips below as well).
To that end, here are some tips:
I am a big proponent for eliminating your carbon footprint, so every effort you make not only saves you huge amounts of money, but also is part of what you should do as a human on earth to help in small ways.
As I mentioned, the point of this is not to sell you something, the point is to save you money, and make you more comfortable in the cold months. I did this Home Energy Audit on my home, and on a few properties that I manage a year or so ago, and decided it was time to make sure anyone and everyone knew about it.
Send me an email, or give me a call and I am happy to tell you about the company that I used to do this, and make sure you get connected to the guys that came here. I don’t offer this information freely only because I want to explain a few more things about income eligibility that I would prefer not to write here. Javier and Chris gave me a slew of little suggestions to help get into income eligibility status, and other tips to help you get more out of this program.
Even if you do not qualify for income eligibility, the program is well worth the $125.
Good luck, and have a great winter!
You are a seller, and you might not know me - or you do, maybe you were referred to me from a past client, or maybe we have done business together.
In any case, my goal in this business is to leave you more educated when you leave me than at our first contact. To that end, I determined it might be valuable to have a transparent breakdown of what happens after that first contact when selling a home, so you can understand why and how I do this process.
So, after first contact, we would have decided upon a time to meet in the next few days, in order for me to meet you, and see your home. This is important because as I price the home, having seen the home allows my information to be most accurate, and thus the price more accurate. The alternative is a much wider range of sales price, with no guarantee as to whether that would work out, in the end.
This might seem like a pushy/obligatory meeting, but it is not. I come with clipboard and tax card, and we meet for the first time; You then show me the property, and tell me all about the pros and cons.
More than likely, this first meeting would include some value-based suggestions regarding cleanup, staging, and de-cluttering. These suggestions are given with intent to manage your expectations: if we work together to sell the home, I expect you to do everything to can to take these suggestions, as they result in higher prices and quicker sales (there is a method to my madness!).
As you might know, my goal is to educate everyone I interact with, so the least you get out of meeting with me, is information. After we meet, I do thorough due diligence:
Upon our second meeting, I share with you the information gathered, as well as a price range in which I think your home can sell. Depending on the location and price point, there are so many flexible options to listing a home at a given price, that not all is lost if our expected sales prices don't match. Please Note: I am not giving you a price in order to get your home as a listing, I am giving you a determination of fair market value.
I educate you about my marketing, and what is necessary to get the home sold (I would check out The Game Plan for more information on marketing).
If you have read this far, then you are considering going through these first steps with me. I promise to give you as much solid information as I can, with the expectation that one day you might think of me first when you decide to sell.
In any case, enjoy the information, and hopefully this process doesn't seem too overwhelming. I like to think knowing what is in store makes you feel more comfortable about this fact-seeking mission.
There are many resources out there that tell you about what a foreclosure really is, but as I get more experience dealing with these types of situations, it is clear that a concise breakdown of the process and some of the solutions might be welcome. Many of the solutions that follow are unknown to sellers, because banks don’t want you to know about them, and neither do real estate agents (first priority might be getting a sale, instead of actually helping you negotiate with the bank to help you out of a difficult situation). Luckily, I like full disclosure, so this is intended to help first.
A side note: some of these solutions can also be applied to other types of distress, such as estate sales among many siblings, divorce, or other issues that arise. I might also mention that I am no attorney, so nothing here should be taken as legal advice.
Are Foreclosures Common?
It seems that whenever the discussion turns to distressed property owners, the 2007/2008 financial crisis becomes the center of the discussion. When prices tanked and the faulty mortgages that caused the disaster were discovered, many homeowners simultaneously lost their jobs – further inflaming the issues of this time. So, not only do we have millions of homeowners realizing their loans were bogus, but we have large, institutional business going under, and smaller business trying to make ends meet – it was the perfect storm.
Though the amount of foreclosures is steadily declining, we are far from out of this, and this does not include the short sale inventory. According to CoreLogic, there were 2,488 foreclosures completed in the 12 months through June of 2016 in Connecticut, and about 1.6% of the inventory is in foreclosure, down 20.6% from last year. Very few states are seeing an increase in foreclosure inventory. Overall, 1% of all homes with a mortgage are in foreclosure, and 2.8% of all mortgages are in serious delinquency*.
*CoreLogic, Inc; National Foreclosure Report, June 2016
So, what does this all mean?
Seeing downward trends in foreclosure numbers is positive, as it indicates that we are getting out of the mess we were in. With 1%, as compared to 3.4% in 2013, of all mortgages with foreclosures, we have come a long way. However, there are still a huge amount in serious delinquency, which really means that the bank hasn’t had time to take these homes, or does not want to.
I am in foreclosure, what can I do?
There are many options that come before foreclosure. Forgive me for passing through these quickly, but it can get boring quickly if not applicable to you (remember, this is the abridged version); they are in order of most beneficial to the homeowner:
Pay Off the Debt: This option is straightforward, pay what you owe including all the back taxes, back payments, and fees/interest applied to those payments. If you have the money, you should do this, unless your credit is not important to you.
Loan Modification: There is a difference between a modification and a refinance. A refinance simply means that you get a lower interest rate by qualifying for the same loan you still have, with the same bank you are dealing with. A modification is different, it is the act of taking what you owe (including all bank payments and interest), and re-structuring the loan over another 30 years (or some loan term), in order to catch up without a huge payout all at once.
Forbearance Agreement: Another word for this is payment plan. The main difference between this and a loan modification is that you are still in foreclosure for the duration of the payment plan, and you pay in a shorter period of time, on top of your regular mortgage payment. For example, if you owe $10,000 in back payments/interest, and your mortgage payment is $1500 per month, then you might pay $1916.67 for 24 months to pay back interest, and get out of debt. Banks are sometimes willing to negotiate an agreement like this if you can afford the payments. If you owe hundreds of thousands, this might be infeasible.
Subject To: This option is the least useful to a homeowner, though sometimes it is better than the alternatives that follow. A ‘subject to’ [existing mortgage] deal would involve finding an investor with cash, to pay off your outstanding debt, the cost of which is the transfer of the deed in their name. The owner would still hold the mortgage, and the investor would then own the home. The bank is paid off, the seller moves out, and an agreement is made that the investor would refinance in a number of years (say 3-5) in order to get the loan into their name. It’s a great option if you don’t want to take any credit hit and if an investor is willing to do it.
Short Sale: Short sale is typically the most common option by the time the seller goes to an investor/Realtor for help. A short sale is the sale of the home to a buyer where the bank agrees to forgive all the debt, and sell the home at a steep discount. This is a much simpler description than what it actually takes to convince the bank to do it, but the alternatives for the bank justify short sales in most cases. Short sales tend to be a harm to the seller’s credit for 2-7 years, a much better out than foreclosure.
Foreclosure: The last option, and the most desperate option is the foreclosure, or forfeiture/acquisition of your home to/by the bank. In other words, the bank takes the home after a long and drawn out process. At some point, there is no shame in having your home taken by the bank, as it will enable you to move on with life (and hopefully you have been banking all the cash you are not paying into the mortgage). I say this is the last option, because it ruins your credit for 7-10 years. No bank or thorough landlord will want to touch your financial situation for a long period of time afterwards.
How Do I Know Which One to Use?
The answer to this question is not an easy one to answer, so I will not attempt to do it in this blog. Every homeowner is in a different situation, whether they have multiple mortgages, other liens on the property, a home in disrepair, and many other factors effecting your ability to use one or another of these options. Your bank might also be unwilling to work with you.
The best thing you can do is find someone who can help figure it out. An attorney, a Realtor with experience in these matters, an investor who has negotiated with the bank, are all viable options. The point is that you find someone you can trust, and that is familiar with the bank practices in your state.
Continuing the Game Plan, your home would already be prepared to go on the market. As the seller, you should have a signed contract, a fixed, cleaned, and staged home, and professional-quality photographs (if not, go back). You should also have a detailed and thorough description written, room features and dimensions already taken, and all the supplements necessary to get the home sold.
Now that your listing is promotion ready, it is time to begin an Internet marketing plan to knock out the competition. In an effort to achieve organic growth on a small scale, there are some key websites that will get the word out there more effectively than others. Most are common knowledge, but some might be new to you. Those that are not so common, set my business apart from the rest. Despite my disclosure of all my 'little secrets', there is still an innate understanding of how these websites work together that differentiates myself from the Realtors in town.
So, now that we understand how important the Internet is, where do I go as a Realtor or a seller, for the most impact?
This is by no means all-encompassing. The Internet is a vast playground, and if you seek, you shall find. I have taken this marketing plan and brought it a step further, by learning the nuances of real estate analytics on this small scale. That can be covered in another blog post in the future.
I would also suggest combining this with a physical marketing plan, including open houses, direct mail, and other ads that further promote you and your listings (or your home).
Learning how to work these websites together, takes practice, but is a small hurdle for a Realtor new to technology, or this Game Plan.
This article is the last one of several about Listing Real Estate - The Game-Plan. If you want to continue to learn more about Listing Real Estate, there will be more to come from your's truly.
Whenever a client, friend, or family member asks me about real estate, the FIRST tool that I give them as a value-added resource, is Listingbook.
How does it work?
Listingbook has been around for many years. The company made the wise decision to work directly with local MLSs (Multiple Listing Services) throughout the country, giving them direct database access. In other words, when a Realtor changes the status of their listing on the MLS (usually the first place they change anything), it is automatically updated on Listingbook. This highly contested real estate content is restricted from Zillow, Trulia, and Realtor.com (not to mention most other sites).
Listingbook is not exclusive to Norwalk and Fairfield County, CT. It is something that spans many different MLSs throughout the country.
What is Listingbook?
In addition to acting as a database, Listingbook is so much more. I call it a comprehensive search tool - and they specialize in just that, search and everything associated with it. The user (or a Realtor's client), will use this software to create an account that they can then set their ideal search criteria, which is saved. From there, they can seek new property, view past sales of property, and then save their favorites, or eliminate the 'rejects'. The user can also write notes on each property, which can then be viewed by the Realtor. This can be described as a communication tool, as much as a search tool, specifically for real estate transactions.
Probably the most underrated feature is the ability to receive daily updates in your search criteria, making you the expert on what you are looking for. This power makes the client more timely on new listings that the Realtor (unless they look at new changes to the market every hour).
On the Realtor end of the product, we can see what the client is looking at. This makes it easier to make appointments to view properties, allows the Realtor to do additional due diligence, knowing what the buyer is looking at, and has many other benefits.
Great For Sellers Too!
Additionally, though the tool is intended for buyers, it can also provide value to sellers. In this case, a seller can use this tool to follow the market as they try to sell their home, or in advance of doing so. The knowledge they gain, allows them to make more informed decisions when putting their home on the market. The more familiar a seller is with the market, the easier it is for the Realtor to do their job, and get the home SOLD.
The past five years for the spring market in Lower Fairfield County has been consistent until this year. The past few years have seen everything selling. This spring has been somewhat of an outlier, with certain price points moving, and others sitting stagnant, with few exceptions.
In this case, the New Canaan, Darien, Wilton markets have been unusually stagnant, where usually these are the markets most desired by buyers, if they are able to afford them. My opinion is that buyers are out there, but the inventory is so vast that finding the right home, priced well, is out of reach. Westport on the other hand is becoming more and more like New Canaan was, where everyone wants to get into this market.
The real bright spot in the market has been below $500,000 in the Stamford, Norwalk, and Fairfield markets (Trumbull as well). These price points don't tend to exist in other markets, so those seeking Fairfield County will move to these cities, to avoid unnecessarily expensive homes.
As a buyer under $500,000: Get ready for a tough market, and low, less desirable inventory. You might have to settle if you are in a rush, but with patience, and the right agent, you can find those gems. There are ways to find new homes that are not currently on the market, so if your agent is only using MLS, then find another agent!
As a buyer over $500,000: Get ready to have a plethora of options. You will have the leverage, so take advantage of it. Look in other towns and cities, because there might be opportunities to be the cheapest home in a great neighborhood (which is a good thing).
As a seller under $500,000: If you have your home on the market and it isn't selling, something isn't right. If you don't have your home on the market, but are considering, do it NOW. It is a seller's market for you.
As a seller above $500,000: Your patience is going to be necessary. The market will soften a bit after this huge inventory push, that is typical of the spring and early-summer time frame. If you are getting no showings, and getting no offers on your home on market, get a new agent. If you are considering listing, either wait, or expect a much slower process.
Where Hanson Realty Stands
Despite an odd market, we are still listing champions, especially in Norwalk. Here is the current Hanson Realty Group inventory, with Joe's inventory linked to a blog post. There is more to come, so let me know if you would like to follow the progression of our new listings. Here is current inventory with prices:
15 New Canaan Way, Norwalk, $699,00
2 Silwen Lane, Norwalk, $426,960
182 Silvermine Avenue, Norwalk, $499,000
279 Silvermine Road, New Canaan, $1,148,690
35 E Hills Drive, New Canaan, $450,000
10 Leslie Lane, Norwalk, $669,000
4 Blue Mountain Road, Norwalk, $567,315
2 Eclipse Avenue, Norwalk, $298,315
1 Horizon Drive, #10, Norwalk, $225,000
25 Grand Street, #234, Norwalk, $225,000
41 Valley View Road, Norwalk, $468,738
59 Barbara Drive, Norwalk, $445,150
3370 Madison Avenue, #17B, Bridgeport, $65,000
207 W Rocks Road, Norwalk, $513,213
115 Fillow Street, #4, Norwalk, $268,155
17 Grey Hollow Road, Norwalk, $648,833
160 Strawberry Hill Avenue, $499,838
43 Old Rock Lane, Norwalk, $949,419
7 Sheridan Street, #2, Norwalk, $180,763
18 Eastwood Road, Norwalk, $424,676
47 Comstock Hill Avenue, Norwalk, $647,833
18 Red Oak Lane, Norwalk, $875,379
29 Old Rock Lane, Norwalk, $864,290
5 Hillside Place, Norwalk, $235,000
4 West Lake Court, Norwalk, $1,250,000
Dear friends and family,
It is with great pleasure that I announce that Hanson Realty Group is officially the top producing team within William Raveis Real Estate in Norwalk and Rowayton! Beyond Raveis, we are also the top producers in Norwalk across all the Realtors and Companies. With $22,182,864 in closed volume, we have taken this city by storm, and continue to do so with a zeal and effectiveness not seen in our competition.
Along with these accolades, we have achieved Top Listing Team, remained in the Chairman's Elite, the top tier of William Raveis sales agents, among others.
Personally, I am proud to be awarded a 5 Years of Service and Dedication Award (as I enter my 7th year in August). My time with William Raveis as a Realtor has been tremendous, and my successes have only been possible because of the trust and faith of all my clients that have used my expertise to get their home SOLD, or help them find the home for them. So THANK YOU!
Here are all of the awards:
Also, a special thanks to Susan and Steve Hanson, who taught me how to be an honest and effective Realtor. Their guidance has been invaluable, and clearly we are doing something right. Susan and Steve were awarded several other awards including '#1 Top Insurance Support', 'Outgoing Referral', and 'Sales Vice President' awards. Congrats to you as well!
This guide is intended to give you information about the process, but remember to involve an attorney before making decisions, or call your Realtor to get put in the right direction.
Before we discuss the how, it is important to know what a short sale is, and how it differs from a traditional sale.
Short sales were an unknown term before the 2007/2008 financial bust, unless you were in this business during the last bust in the housing market. Overnight, these types of sales became prominent, because the Great Recession was one that hurt property values like nothing else seen in many years.
We (Joe and Chris Balestriere) are Realtors in Fairfield County, Connecticut. Our blog is meant to educate buyers and sellers and equip them with tools to get the most out of their Realtor, whether it is us or someone else. We focus on technology and how it enhances the work we do for our clients--we are not top CT Realtors by accident.