New Jersey Real Estate

by Dion Smith

When you're ready to put your property on the market, you want to get the most qualified buyers to take notice. This is especially the case if you have already purchased another property or need to relocate within a short time span. Rather than spending days bickering over a fair selling price or financing terms, you may want to draw those who are ready to do business, so you can finalize the deal as soon as possible. If that's the case, here are some tips that can help to attract those who are ready to sign on the dotted line.

1. Avoid contingency offers. These buyers have a property of their own to sell, and may not even have any firm purchase offers they are negotiating. If you sign a contract with this type of buyer, the sale of your property might not be final until their property sells. In effect, you are taking responsibility for the sale of two properties, not just one. In some cases, a buyer may not be required to sell his or her property first, but then may back out from buying your property if they begin to worry about meeting two monthly mortgage payments. A contingency offer may work well in some cases, but is usually not the best way to go if you are in a hurry.

2. Be careful with first-time homebuyers. Although many first time homebuyers often are ready to put together a purchase deal for your property, some are ill equipped to carry out a speedy purchase. They may have overlooked some of the usual purchase terms simply because they are new to the process. Depending on the real estate agent who represents them, or their advance preparation to buy a property, they may have everything lined up and ready to go, including a review of their credit history and a careful budget assessment to see what type of mortgage payment they can afford.

3. Screen potential buyers. When your agent hosts an open house, see if he or she can find out those who have been pre-approved. Interested buyers can be encouraged to get pre-approved if they are not already. Sorting ready from tentative buyers will let you focus on those who are in a position to buy rather than merely being ready to start the pre-approval process. Ideally, the buyers should know how much house they can afford, what type of monthly payment will fit with their budget, and whether their credit history will support the purchase of real estate at this point.

Taking steps like these can prepare your property for a ready sale and reduce the risk of unexpected delays.

About the Author

This article was written by Dion Smith of The Westside Group, offering top-notch real estate services in California. The Westside Group also provides a wealth of free resources for any home buyer or seller. Contact us today to receive your FREE HomeBuyer or HomeSeller Handbooks. Reproductions of this article are encouraged but must include a link back to http://www.westsidegroup.com/

Many of us subscribe to the Old West credo that a deal is finished when both parties shake hands on it. If that's your way of thinking, then be prepared to get skinned alive when you buy real estate. The modern credo is "Never stop negotiating"--even after the deal is signed, even after escrow has opened, even after escrow has closed and title has passed to you. If you truly want to look out for your own interests, you won't stop negotiating!

Yes, this is a bit of an exaggeration. Nevertheless, those who do get the best deals in real estate are often those who keep right on negotiating as long as, so to speak, there's anything left on the table.

Negotiate as Part of Making an Offer

The entire process of making an offer involves negotiation. You purchase a home at a certain price for specified terms, including contingencies that allow you to back out in certain circumstances. The sellers read you offer and then either accept or, more likely, counter at a different price and with different terms, perhaps eliminating some of your contingencies and modifying others by limiting them for example, in terms of time. Thus the sellers may agree that you can have an inspection, but you must approve the report within, say, 14 days.

Back and forth it goes with counteroffers, and counters to the counteroffers and counters to the counter to the counteroffers. This is the negotiation process and, depending on how good you are at it, you'll get a better or worse deal.

If you get a deal that's acceptable to you and is the best you feel you can get, and if the same is true for the sellers, there's agreement and everyone signs. The presumption is that the deal is made.

Don't count on it.

Negotiate Over the Disclosures

A wise buyer knows that the really tough negotiations frequently don't start until after the deal is signed. Usually the next negotiation takes place over the disclosures. Within a few days of signing, you should receive a list of defects in the property as revealed by the sellers. (If you get the list before negotiation start, then this point is moot.)

If your offer was properly filled out (or if your state gives you rights here), you now can back out of the deal without penalty. If something seriously wrong is revealed, you may want to simply say no, take back your deposit, and move on.

Or you may want to negotiate some more.

You do this by letting the sellers know (through their agent, if they have one) that you disapprove of the disclosures because of the problem(s) they reveal. However, you're willing to go through with the deal if the sellers either repair the problem or reduce the price. If it's price you want, you indicate what you consider to be a fair price (sometimes a figure significantly lower than what was originally agreed upon), and negotiations begin again.

Typically the sellers will balk, but if they want to sell and there is a problem, they very likely will counter your offer. Back and forth it goes until both parties feel they can live with the same set of terms. If something significant was revealed in the disclosures (or if you said that, in you view, what was revealed was important), you may get a significant price reduction or better terms.

Negotiate Over the Home Inspection

The next negotiation frequently occurs over the results of the home inspection.

It's rare that a home inspection, even of a brand new home, will reveal nothing. Usually there's something, even if it's just leaking faucets. Depending on the severity of the problem(s) discovered, savvy buyers now open negotiations all over again.

How can you do this? Remember, a good inspection clause is actually a contingency that, in effect, makes the purchase subject to the buyer's approving the inspection report. You don't approve. There's no dealunless the seller is willing to come down in price or up in terms.

Keep in mind that problems such as these usually arise two weeks or so after the deal was originally signed. During those two weeks the sellers have begun making plans to move. They may even have put down a deposit and made a deal on another home. They are counting on your deal going through.

Now, suddenly, there's a hitch. As the buyer, you are balking at something that came up in the inspection. You can bet that the sellers are going to be eager to smooth over the problem, if they can. I've seen deals where the price was knocked down $3,500 to handle a problem with paint, $17,000 for a problem with a roof, and $35,000 to accommodate a problem with the structure.

Why would the sellers be so accommodating? It's not that they want to. It's just that once a problem is revealed, it will have to be dealt with one way or another, either with you or with other buyers. It might as well be you, since you're already involved in the deal.

Further, seller sometimes simply get desperate to sell, Although they were adamantly against lowering their price or giving you a better deal during the initial negotiations, now they simply lay down and roll over. I've seen it happen.

You may negotiate a cash settlement without actually having a disclosure problem corrected, provided the lender doesn't object. For example, the seller s may lower the price $5,000 over a leaking roof. However, instead of replacing the roof, you have it patched for $500 and pocket the difference (at least until the next rainstorm).

Negotiate During Escrow

Some buyers with a lot of what might be called gall negotiate right through escrow. As the sellers get more and more used to the idea of their home being sold, the buyers keep coming up with new concerns that can be resolved only by further concessions from the sellers.

I've heard buyers say that they drove by and became aware that the window trim was damaged. They then wanted several hundred dollars off the price to have it fixed. If not, they would simply hold off on buying the home. Yes, these buyers stand a chance of losing their deposit (and more), but the sellers won't get it either without going to court. In the meantime, the sellers' house is tied up. It simply becomes easier for the sellers to acquiesce than to fight.

In a very slow market, buyers may demand a reduction in price because of market conditions. They simply tell the sellers that prices are going down. The house is no longer worth what is was when the offer was accepted. Either the sellers accommodate with a lower price or the buyers refuse the deal.

Once again, the sellers have options, none of them particularly good in a down market. And many will acquiesce to placate an irritable buyer.

The sellers could refuse a buyer's new terms, then demand the deposit, or even demand specific performance (the buyer either goes through with the purchase or, more likely, pays damages). But few sellers really want to go to court and fewer actually do. Buyer with gall and the willingness to risk a lot have pulled off some amazing deals in this fashion.

Negotiate After You Own the Property

It is possible to get a better deal even after the escrow has closed and you take possession of the property. This frequently happens when buyers find something amiss, and demand that sellers make it good.

In one case, the buyers discovered after they moved in that the sellers had allowed their pets to run wild over much of the home. A urine smell permeated the wall-to-wall carpeting in several rooms. The smell had not been detected earlier because the windows were always open when the buyers inspected the property. Further, the sellers had failed to disclose this problem.

It's important to understand that animal urine in carpeting cannot really be removed. The smell will remain, often permeating the padding and even the flooring beneath.

The buyers demanded that the sellers replace not just the carpeting in the rooms with the problem, but also the carpeting throughout the house, since it was all of a kind. They said it wouldn't look right to have just a few rooms fixed. After conferring with their agent, the sellers agreed.

Then the buyers picked out the carpeting, which was valued at close to $15,000, installed. The sellers balked, but when confronted with the cost and possible outcome if the matter went to litigation, they sent the buyers a check for that amount.

As long as there are problems, you can negotiate with the sellers. In some cases, even if the problem is something you imagine, you can still negotiate and win concessions simply because the sellers don't want to bother with the nuisance.

Remember, to paraphrase Yogi Berra, the deal isn't over until it's over.

Don't pressure sellers too far. If you insist on unreasonable demands, they may simply refuse and buckle down, ready to fight you legally. That could mean you'd lose the house and have legal problems to boot.

About the Author

Tony Smith, Copyright Florida Dream Villas, 2006

By Julie Jalone

Most sellers understand keeping a house clean and picked-up but have difficulty understanding how to really remove clutter. It is more than keeping the house neat. Try some of the following and impress your agent and, more importantly, potential buyers.

The first task I suggest it to pretend you are not the owner or even that you have ever seen the house before. Tour your property both inside and outside and make a list of anything you see that catches your eye and takes away from the homes appeal. These will be offensive to your eye such as toys in the front yard, hoses that are not put away, busy shelves and too many items on the mantel. It could also be stacks of magazines or newspapers. Make the tour several times and keep adding to your list. The more you notice the less the potential buyers will.

Most home owners, including myself, are attached to our home, how we have decorated it and our possessions we proudly display. Sellers must accept the fact they will not be in the house much longer and be willing to repaint rooms with neutral colors, remove pictures and put away those souvenirs from last years vacation. A good idea is to start by removing most of your personal items from each room. Get boxes or storage containers to store your items. Approach the removing clutter as if you are staging or preparing a model home for viewing by buyers. Remember you want the buyers to be able to imagine their belongings in the house.

You will know if you have successfully removed clutter in your home by the number of boxes or storage containers you have when you are done. Your first thought may be to put all these boxes neatly in a closet. Resist the temptation and consider closet space can be a selling feature. They too should look as good as possible. Not overly packed closets will help create a spacious feeling in your home. If your closets are packed full or messy, the potential buyer may get the feeling the house is not big enough.

Don't overlook your garage as this is the place most of us consider as a storage area. Find a friend, neighbor or family member willing to store your boxes and containers. If this is not possible consider renting a storage facility on a short term basis. Selling your home quickly and at a higher price will more than cover the cost.

After making your tours, list and removing your personal item I suspect your real estate agent will still think you have too much in the house. Don't be timid about asking your agent to help point out these final few items. We spend a fair amount of time in homes and have a good feel for which ones show best and why. If you ask, be prepared to accept their suggestions. We are here to help you sell your house, not be critical of your possessions.

If all of this seems more than you want to cope with, consider using a professional stager. They can remove clutter and even help you bring in items that will make your house look like a model home. Again selling quickly and for the best price possible can more than pay for this service. Like above, consult your agent, they can help you make this decision.

If you like this article or have comments please let me know. You can contact me via my web site at http://www.jalone.com.

About the Author

Julie Jalone is an experienced professional Realtor serving the needs of both buyers and sellers of residential real estate in the Greater Sacramento, California area. Communities she serves include, Sacramento, Roseville, Lincoln, Rocklin, Granite Bay and cities located in Placer, Sacramento, El Dorado, Yolo and Yuba counties. To learn more about Julie and see a complete line of real estate resouces visit her site at http:/www.jalone.com

By Nicholas Yulico

TheStreet.com Staff Reporter

Since mid-2004, Ken Rosen has been saying the housing market has been bound to correct itself. The economist and hedge fund manager in turn has been shorting homebuilders and mortgage lenders and making long bets on apartment and office REITs.
It took some time, but his strategy is finally starting to pan out. In recent weeks, homebuilders have been getting hammered as several companies reported disappointing new order numbers. On the flipside, apartment REITs have been soaring as fundamentals in the sector rebound and M&A activity heats up.
Rosen's $120 million hedge fund, Rosen Real Estate Securities, is currently 30% short homebuilders, 11% short residential mortgage REITs, and 9% short other equity REITs. The fund is 50% long apartment and office REITs.
Rosen's central thesis is that the runaway residential housing boom has to reverse at some point. At the same time, he's betting on the improving economy and lack of new supply to help office and apartment owners fill space, raise rents and post solid operating fundamentals.
"Since 9/11, we've had one of the most unusual periods in American history," says Rosen, who is also a professor of real estate and urban economics at UC Berkeley's Haas School of Business.
Whereas some people say there's been a change in demographics and housing demand, Rosen believes the vast majority of the housing explosion was instead due to easy money and cheap credit, which make the boom unsustainable.
He expects housing starts to drop from 1.7 million in 2005 to between 1.3 million to 1.4 million in 2006 and 2007. He says home sales will fall to 5.5 million to 6 million in 2006 and 2007, down from 7 million in 2005.
"It's not a perpetual motion machine," he says. "We borrowed all that demand from the future."
Although Rosen says he can't mention his specific holdings or talk about individual companies, borrowing demand from the future clearly applies to Toll Brothers. The builder's recent 29% drop in new orders spooked the market and can be blamed on difficult year-over-year comparisons and a tough sales market. Some analysts now think Toll will be hard-pressed to achieve earnings growth over the next two years after the company doubled earnings in 2005.
Rosen projects sales will only get worse for builders, and he expects the 10-year note could yield 5.5% by the end of 2006. That will put "pressure on these guys to make their volumes. Volumes will be down in both the mortgage lending business and home building industries," he says.
While Rosen has taken some money of the table recently and rebalanced his homebuilder portfolio, he still thinks the sector could be in for another 30% decline as "earnings will be lowered dramatically for 2006 and especially for 2007" and housing remains weak for the next three years.
In the meantime, he admits that many REITs are getting pricey. But he likes the improving fundamentals of the office and apartment sectors.
Both property owners are benefiting from a lack of new supply and an improving economy. Apartment REITs are also being helped by the fact that owning a home has become a lot more costly.

In the office sector, Rosen particularly likes companies focused on New York, Los Angeles, and Washington, D.C. -- areas with strong job growth, increased leasing, and improving rents. While he declines to give names, companies that fall into this group could include SL Green, Boston Properties and Vornado.
Although his overall long/short strategy didn't pan out too well over the past two years, Rosen says his fund has been able to post annual gains by making money even when he was wrong. His fund has long and short positions in every sector he trades (with apartments being predominantly long). Trading at the right time allowed him to book gains.
Rosen says his fund was up 7.1% in 2005 and 14% in 2004. Year-to-date, the fund is up about 1% but has been performing well of late, as homebuilders have tumbled and apartment REITs have soared.