Sarah Sells the Main Line

Buyers Beware of Purchasing New Construction

2009-04-22T19:26:00.003-05:00

Although there are not a lot of new construction subdivisions on the Main Line, buyers need to be aware of some of the potential hazards of purchasing new construction and some of the precautions they need to take.

Homebuilders have been hit hard by this economy and many are filing for bankruptcy. If a builder goes bankrupt, buyers could lose their deposit monies, liens could be placed on homes just completed and purchased, builders would no longer be able to uphold their warranties, houses, clubhouses, pools, and/or parks could be left uncompleted and neglected.

What should a buyer do if they are thinking of purchasing new construction?

1 Make sure the builder is financially sound before purchasing any new construction or having a home built. The internet can help you with this especially if it is a publicly held company.

2. Drive through the neighborhood to see if any work is being done. If there aren’t a lot of subcontractors working on completing homes or amenities then that could be a sign the builder is having financial difficulties.

3. Knock on the doors in the neighborhood to see if the owners are pleased with their home and if the builder has been repairing items under warranty.

4. Don’t buy in a neighborhood where you are one of the first homes. If the neighborhood is well established and the builder does get into financial trouble, your neighborhood won’t look like a construction site and you won’t be sharing responsibility for common maintenance with just a few home owners

5. Eliminate some of the risk, such as losing your deposit and being unable to get out of a contract, by purchasing a house that has already been completed in the new subdivision.

If you do decide to have a new home built:

1. Make sure your deposit money is being kept in a third party escrow account; not in the builder’s escrow account so you will have a better chance of having your money returned.

2. Have a clause put in the contract that if the builder goes bankrupt , seeks debt reorganization or debt discharge, the buyer will receive all their deposit monies back and have the ability to declare the contract null and void.

3. In the contract, make sure there is a clause stating that the seller at the time of settlement will make sure a title insurance policy with an affirmative mechanic’s lien coverage clause insuring the home will be available to the buyer.

4. The buyer may also want to include language in the contract that states the property must appraise at the sales price or more in order for the settlement to occur due to decreasing home values. If a lower sales price can be agreed upon by both parties then the closing can take place.

Not all builders are in financial trouble, but all buyers need to be aware and take precautions before purchasing new construction whether on the Main Line or elsewhere.

Regards,

Sarah

Visit me at: www.sarahsellsthemainline.com

How a Foreclosure on the Main Line Can Affect the Community

2009-03-15T19:02:00.002-05:00

There are not a lot of real estate foreclosures here on the Main Line. According to the Philadelphia Inquirer, Philadelphia and the eight surrounding counties placed number 77 out of 100 metro areas nationwide in the number of people filing for foreclosures in 2008.
However, I am starting to see more foreclosures on the Main Line and it is worrisome and it affects the whole community.

There is a home four houses down from mine on the Main Line that went through foreclosure. It once was a beautiful home surrounded by a picket fence with perennials planted next to the road. The yard had two large water fountains and had been professionally designed and landscaped. It resembled a large French cottage. It was an asset to our neighborhood. Then we started noticing that the privet hedge and perennial beds were starting to look overgrown. Next the picket fence was starting to fall apart and ivy starting climbing on the outside walls. Then we realized that the owners had left town. My neighbors started calling me. They were very concerned about someone breaking in and trying to live there. We talked about getting together to clean up the yard so the house wouldn’t look vacant. One day my child came home very upset because there were policemen at the vacant house. They were putting up a Notice to Sale on the front door. She felt horrible for the family that had lost their home and she was close to tears. In the end, there were about three large pink notices left on the front door for everyone to see. It is now a REO property and is listed for sale. There is a padlock on the front door along with a lockbox . The house looks very scary and forlorn.

It takes about 10 months to foreclose on a home. A lot can happen to a home during that time. I understand that the hardwood floors are all buckled and that the basement is full of water. The yard and fence still look horrible. The REO (Real Estate Owned) company did cut back the privet hedge but that is about all. Who will buy the property? Will the house be fixed up or torn down? Will they turn it into townhouses? How will this house affect the values of the homes in the neighborhood? These are all questions that the community is asking. All we know is what was once a lovely home is now an eyesore and a reminder of what many families are going through in these difficult economic times.

Regards,

Sarah

www.sarahsellsthemainline.com

How the $8000 First Time Home Buyers Tax Credit can Help You Purchase a House Now

2009-03-05T12:03:00.003-05:00

Many people who have never been able to purchase a home on the Main Line would love to take advantage of the new 2009 $8000 tax credit, but they don’t have enough money for a down payment or to cover the closing costs. If you are a first time home buyer and you need your 2009 $8000 tax credit to help you purchase a home, there is a way to receive your tax credit early. First time home buyers who would qualify for the tax credit are allowed to lower their income tax withholdings up to the amount of the tax credit. This extra money will be brought home in the buyers take home pay. Buyers can then save and use this extra money to help them with their down payments or their closing costs. Buyers just need to adjust their withholding amounts on their W-4 through their employer or quarterly estimated tax payments if they are self-employed. However, if a buyer does decide to lower their income tax withholdings and does NOT make a tax credit qualified purchase then they would have to repay the IRS for the income tax possibly including even interest and penalties. If you would like to read the rules and guidelines concerning income tax withholdings, they can be found in the IRS Publication 919.

Also, some rules were changed as part of the stimulus package to allow first time home buyers to claim the tax credit and take part in a program financed by tax-exempt bonds. Some state financing agencies, such as the Missouri Housing Development Commission, have developed programs that provide a short-term loan in the amount of the tax credit to first time home buyers which can then be used for a down payment. Potential first time home buyers should contact their state housing finance agency to see if such a program exists. Most of these numbers are listed by state on the website www.housingfinance.com.

Best Regards,

Sarah

Visit me at: www.sarahsellsthemainline.com

First Time Home Buyers $8000 Tax Credit Explained

2009-02-22T15:15:00.002-05:00

Currently it’s a great time to be a first time homebuyer on the Main Line, or any where in the United States for that matter. The main reason being the new first time homebuyers $8000 tax credit that is retroactive to January 1, 2009 and lasts until November 30, 2009. How does the $8000 tax credit work? Basically, if you purchase your first home within the time period mentioned above, when you file your taxes next year you will receive a refund check for $8,000 if you do not owe any taxes. If you owe $3000 in taxes then you will receive a refund check of $5000. Unlike the first time homebuyers $7500 tax credit that went into effect April 8, 2008, you do not have to repay this tax credit back as long as you remain in the home for three years. This tax credit, along with 30-year interest rates being at 4.98% should remove any doubt that this is a great time to purchase your first home on the Main Line.

If you have never owned a home or if you have not owned a home or had any ownership interest in a home in the past three years, then you are considered a first time home buyer. If you are married, both parties have to be first time homebuyers. The home you are purchasing has to be where you will reside over 50% of the time and within the United States. It can be a condo, townhouse, co-op, or a single-family residence. If the home is new construction you have to be moved in by December 1, 2009. It cannot be a vacation home or rental property. The purchase price has to be over $80,000 to receive the full $8000 credit. If the purchase price is less than $80,000 then the credit is 10% of the purchase price.

There are some exclusion’s however. Even if you are a first time homebuyer, you will not qualify for the tax credit if your modified adjusted gross income is above $95,000 or if jointly it is above $170,00. You are also excluded if you have purchased your home from a close relative such as a parent, grandparent, spouse, child, or grandchild. Also, you cannot be a nonresident alien. The good news is that most first time homebuyers will qualify and will receive a huge benefit from purchasing their first home in 2009.

The new $8000 first time homebuyers credit, historically low interest rates, large inventory of homes at great prices makes this the best market in a long time for first time homebuyers on the Main Line.

What is the Most Effective but Least Used Marketing Tool of a Realtor?

2009-02-22T10:18:00.005-05:00

Even though the Main Line is an affluent area, the current economic hard times have caused home sales to decrease. Homes are taking longer to sell and home owners are facing stiff competition for buyers. So, why not use every marketing tool available to get a home sold faster? In real estate as in other industries, time equals money. The longer a home stays on the market the more money it costs the home owner and realtor. In my opinion, home staging is an underused marketing tool. According to the International Association of Home Stagers, staging a home can increase the sale price by an extra seven percent and enables the home to sell quicker than other homes in the area by 100 days. I have personally experienced how staging a home can shorten its days on the market and increase its value. Every home that I have staged as a realtor has sold within 30 days that is why I offer free home staging to all of my clients. I know times are hard but stagers are now offering more packages then ever. For as little as $125.00 a stager will come and give a verbal recommendation of what needs to be done to the house to help it sell quickly. To have those same recommendations put in writing costs around $300.00. Where else can you get such a good return on your sales and marketing dollars? Stagers inform home owners how to increase their home's curb appeal. They will tell them how to arrange the furniture so the house will look larger and have a better flow. They will have them remove the clutter and repaint. They will even go as far as recommending the actual paint colors. Some stagers even have furniture and accessories realtors and their clients are able to use. Want to get a vacant home sold fast? Home staging will do that too. It has been proven that vacant houses take longer to sell because the house appears smaller and buyers are not able to visualize how their furniture will fit into a space and the house appears stark and cold. Home staging is a great way to make a vacant house look larger and to increase the livability of a home. Builders have known about this secret for a long time that is why model homes are decorated and accessorized.

However, one of the things I like most about using a stager is that it reduces the tensions that can occur between a realtor and a client. Realtors no longer have to worry about offending clients because they were the ones that had to tell them that in order for their house to sell they needed to remove all the clutter, repaint, buy new accessories for the bathroom, clean up outside, etc. Not only do we not have to worry about stressing our relationship with our clients over home improvements but we can enjoy the praise that our clients will give us for providing them with a service that enabled their house to sell quickly and for more money.

First Time Home Buyers: Isn't it Time to Buy a House on the Main Line?

2009-02-22T10:07:00.005-05:00

For first time home buyers now is the perfect time to purchase a home on the Main Line. Currently the Main Line real estate market has a large supply of homes and few buyers; therefore the likelihood that you will be competing with another buyer for the same house is slim. In addition, you can get a lot more house for your money than you could a couple of years ago due to low interest rates. Combine these all together and you have the perfect first time home buyers' market. Besides the purchase price of the house, few things affect your payment more than the interest rate and interest rates are at historical lows. When interest rates are low you are able to purchase more home for the money. If you are concerned about getting a loan, don't worry. If you have good credit, there are plenty of banks willing to give you a loan and for those whose credit is questionable or don't have a large down payment there are FHA loans readily available. For a FHA loan, the home buyer just needs to know that he/she will have to provide more documentation than usual and that he/she needs at least 60 days to close on a house since it takes approximately 30 days to get the loan approved. The government is even helping out by offering first time home buyers a new tax credit. The first time home buyer will be credited 10 percent of the purchase price of their home or up to the maximum amount of $7,500. For those first time home buyers who want to live on the Main Line because of its proximity to Philadelphia, its great schools and its great towns such as Wayne, now is the time to buy.

The Basics of Buying at Real Estate Auctions on the Main Line

2009-02-21T19:20:00.010-05:00

I was watching the Today Show recently and their real estate expert, Barbara Corcoran, had a segment about foreclosures and auctions. While the real estate market on the Main Line has not been hit as hard as other areas, there are still foreclosure properties on the Main Line for sale. Radnor, St. Davids, Wayne, Devon, Berwyn, Bryn Mawr, Ardmore, and Haverford are all great areas to buy in on the Main Line because of their great school districts and proximity to Philadelphia.

If you are currently looking to buy foreclosures at auctions, here are three really good websites to help you find these types of properties: http://www.foreclosure.com/, http://www.foreclosures.com/ and http://www.realtytrac.com/. Remember that most foreclosures are sold “as is”, so it is wise to have an inspection beforehand and to have a contractor provide you with estimates on any repairs or updating that the house is going to need.

Before going to the auction you should know your maximum bid. You don’t want to get caught up in any bidding wars. You will also need a cashier’s check, picture identification, and a pre-qualification letter. Auctions usually require 5% of the selling price as a deposit and they won’t accept personal checks. Also, it doesn’t hurt to have a picture of the house you are bidding on with you. More buyers than you would think end up bidding on the wrong house at auctions.

Some questions that are important to ask are: is there a reserve on the property and does the buyer have a right to rescind the contract? If there is a reserve amount on the property then the seller does not have to accept the winning bid if it is less than the reserve amount. If it is an absolute auction, then the winning bidder gets the property no matter what. Most auctions will give you a 3-day review period, but if they don’t grant you the right to rescind then you will be required to purchase the property. If you back out of the deal or can’t get a loan to purchase the property, then you may be held accountable for 25% of the selling price.

To get the best price at an auction, bid on properties that come up in the beginning of the auction. Those first on the list always go for less because people are gauging prices. Don’t let your emotions get you involved in any bidding wars. Have your maximum bid written down and in front of you. Dress very professional and sit close to the front. Most people attending the auction will think you are with a bank trying to buy back a property and will probably not bid against you.

Main Line Real Estate: The Truth about the Housing Market

2008-10-29T19:00:00.003-05:00

The housing market has been constantly in the news this past year with the media reporting on decreasing property values and increasing foreclosures. Unfortunately most of the information on the housing market reflects what is occurring in Florida, California, Arizona, Nevada, and Michigan some of the hardest hit states. What the media neglects to mention is that real estate is extremely localized. The values and prices of homes for sale vary from state to state, school district to school district, and town to town. Since I live and work as a realtor on the Main Line, I decided to examine the housing market of the T/E and Radnor school districts which are comprised of the towns of Radnor, St. Davids, Wayne, Strafford, Berwyn, Devon, and some of Paoli, Malvern, and Valley Forge. While sales of homes in these areas are down approximately 33% from this time last year, I do have some encouraging news to report. The average prices of homes in these areas are actually increasing. Our homes have not lost 10% to 20% of their value as the media would have us believe. Homeowners in the T/E and Radnor School District, on the average, can expect their homes to be on the market 62 days before finding a buyer and to receive 96.4% of their asking price. We do have a seven month supply of homes on the market which indicates that this is still a buyer’s market. A six months’ supply is considered to be a balanced market. A balanced market is when the number of homes for sale is approximately the same as the number of buyers in a certain area. So currently we are not far from a balanced market, but what does the future hold? The latest housing market forecast from Trend, the multiple listing service for agents on the Main Line, predicts from now until the end of 2008 that the number of houses for sale and the average days on the market for homes will increase and the number of homes sold will decrease while home values are expected to remain about the same.

Currently, People are watching their retirement accounts, 401ks, and savings dwindle. Everyone is expressing concerns over the economy and are asking when will this crisis end? I don’t know the answer to that question. What I do know is that interest rates are down in the 5% range, gas prices are decreasing, and the sales of lower priced homes are still robust. Hopefully, sooner than later, the low interest rates and the decreased threat of inflation will entice some buyers to go ahead and make that home purchase. I am still hopeful that the turn in the market is on the horizon and thankful that the housing market on the Main Line is doing better than other housing markets in the United States. Real estate on the Main Line is still a good investment.

The FSBO Conundrum

2008-01-26T12:02:00.004-05:00

As a full service agent, I realize the value that I bring to my clients. I work HARD for my commissions and after the dealing is done and the transaction is closed, my clients can see the efforts that I have put forth and appreciate what I have done for them. In recent years, there has been an increase in Real Estate firms that specialize in FSBO’s (For Sale By Owner) by offering to list their home in the local MLS for a flat fee. Mr. and Mrs. FSBO list their home with an agency for a specified amount of time as with a traditional full service listing.

So, here’s where I’m going with this, if Mr. and Mrs. FSBO are only receiving a listing in the MLS and no other service from the Flat Fee MLSFirm, why are they treated just like a listing by a full service Realtor? In other words, if I am researching the MLS, and I see a FSBO assistance listing that has been on the market for an above average number of days, why can’t I call them? I would not hesitate to call a true FSBO! Yes, I realize that Mr. and Mrs. FSBO signed a contract with the Flat Fee MLS firm, so my question is, should it be that way? The Flat Fee MLS firm has already gotten their flat fee, all they are out is the time it took them to place the listing in the MLS. Oh, I know this is controversial! I can already envision the responses that may be made here. “That’s predatory marketing!” “Dirty sales tactic!” are a couple that come to mind. It is my opinion, that many sellers are lured by the commissions that they do not have to pay and don’t take into account all the work a full service agent does on there behalf. Work that now Mr. and Mrs. FSBO now have to do themselves.

So, to put all your minds at ease, I do not call FSBO’s listed in the MLS by the Flat Fee MLS firms. It is just puzzling to me why these agencies are provided the same level of protection as a full service realtor when they provide so little service to the their clients.

Welcomed Guest, or Uninvited Intruder?

2007-04-03T19:54:00.003-05:00

Hello! For my first blog entry, I would like to share with you an interesting new look at a universally accepted marketing technique. I recently attended a seminar for Multi-Million dollar producers, where one of the featured speakers gave a presentation on the use of agent photographs on marketing materials. Most agents, myself being one of them, have their best glamour shot on their business cards, flyer's, web site and mailings, just to name a few.

For years, this has been the accepted norm. The use of your photograph identified yourself and personalized the message you are trying to convey. Well, it seems that this speaker has quite a different take on things. It is his belief that using your photograph, especially on mailers, has a negative effect on the recipient and is more likely to be placed in the trash can without so much as a glance. He went a step further though, elaborating that the recipient of your personalized mailer would be resentful and would feel that you had intruded into their home unannounced! Now that is thought provoking. It made me think about this from my perspective as a homeowner. I regularly receive mailers from agents, announcing their latest listings and sales. Personally, I do look at these before “filing” them. One agent in particular has information about recent sales of historic properties, his area of expertise, which I find very interesting. Now, I will be the first to admit that as an agent, I may be more interested than the average homeowner and it is rather nice that the competition delivers their marketing materials to my front door! But I still wonder, what does the average homeowner think? I would love to hear your thoughts on this as I am skeptical of what I heard from this speaker. I believe that using your photograph on marketing materials is establishing brand recognition. No one else has your face, nor can they copy it!

Thanks so much for stopping by to read my blog. Come back soon for more!

Sarah

Sarah's Blog

2007-03-10T11:54:00.001-05:00

Hello and welcome to my new blog! I am very excited about having a forum in which I can post my thoughts about the Main Line real estate market. Over the coming months, I will share with you my insight and knowledge on the latest real estate trends affecting the Main Line.

I hope that you will find the information that I post here helpful. Please feel free to post any comments that you may have regarding my blog.

Sarah