For most people, home buying is one of the biggest purchases of their lifetime. And it is the most rewarding of all other investments too. After all, which other investment let's you use it, improve it, enjoy it, raise your family in it, leverage it, write off taxes, and most likely realize a nice appreciation too?
Like all other investments, there are precautions you must take to make sure you don't end up making a wrong decision. Here are 7 we suggest.
1) Do NOT buy much more than you can afford: This is critical. Buying what you can't afford, just to show off to your friends or for false ego satisfaction, can cause a lot of headaches with time. You will end up working many more hours to keep up with your mortgage payments. You will be stressed out. You will not have time to enjoy the home as you are working harder. And, as seen many times, buyers who over buy, end up defaulting.
2) Do NOT buy unless you plan to stay in the home for atleast 3 years: Even in an slightly appreciating market, it takes that long to get your money back including the closing costs. So while buying is an excellent idea and everyone should, you must analyse your situation first.
3) Not working with one agent: Many buyers will call from ad to ad and sign to sign. They want to work with the listing agent but they don' realize that they are losing out on seeing many great values that didn't even have the time to get a sign or be advertised. Hiring a right agent and then trusting him/her can make a big difference between finding the right home at the right price. Ofcourse, the key here is interviewing few agents and making sure that the one you are about to choose does this for living (full time) and has your best interest in mind.
4) Not buying the right home: Many times, we see a buyer loose out on the right home just because they wanted to negotiate harder while someone else was willing to pay the price for the home. It is more important to find the right home that you will love to come back to every night instead of buying one that is a little cheaper. We are not saying you should buy more than you can afford here, what we are saying is that within your budget, buy the right one. Also, make sure that the home meets your basic needs.
5) Reading wrong books: There are books out there that guide homebuyers to make an offer 15% below asking price. Nothing can be more misleading than this. Remember the author is making his/her money by selling books and more they misguide, more they sell. While they may have an excellent point for overpriced homes and while they may be giving a great advise in a falling market with no demand, they make many miss out on right homes that are priced right to begin with. While reading such books is OK, following their advise blindly can almost guarantee no home and if you get one cheaper, it was overpriced anyhow so you got no bargain.
6) Waiving a home inspection: Such a large investment and you want to save few hundred dollars in inspection money? Not a good idea at all. Home inspection not only helps you possibly find defects, it also helps you renegotiate the price if there are major issues, thereby paying back many times the inspection price. Just make sure the inspector is licensed and insured and will stand behind his/her inspection.
7) Not hiring an attorney: Again, remember this a large investment and you want to be protected by a good professional, specially if the opposing side has an attorney to represent them. Don't consider this as your cost, it is an investment.
This advise has been brought to you by the professionals at On Track Realty in Edison, NJ. http://www.ontrackrealty.com/. For any questions, please feel to call us at 732.494.2211.
Friday, July 31, 2009
Tuesday, June 16, 2009
7 Mistakes to AVOID when Selling your Home!
Mistake 1. And the biggest mistake, is overpricing your home. While it is tempting to test the market, the results have proven again and again that the homes priced right sell fast at the best possible price. Overpriced homes take much longer to sell and often sell at much lower price. While it OK to price a little higher in a market where the prices are going up (as the market will eventually catch up), it is a huge mistake to price higher in the market that is going down.
Mistake 2. Choosing an agent who suggests higher list price just to get the listing. Sellers make this mistake often (and I did too when I was a seller and not an agent then in 1988). We interviewed 3 agents - one told us to list for $159,900, the other $164,900 and 3rd at $199,900. Ofcourse I loved the agent who gave us $199,900 and we listed with him. One year later, we sold our home for $153,500. Only if I had listened to the agent who showed me the comps and suggested the price based on those. I could have sold my home much faster at a much higher price.
Mistake 3. Not having the option to fire your agent if he/she doesn't perform as he/she says or if they don't guide you as needed to sell your home. Infact, we suggest that this be a MUST. Don't hire anyone who won't offer this guarantee. And we suggest that you go a little further - you should have the unconditional right to terminate the listing if your needs change.
Mistake 4. Not preparing the home for sale. Your home must look clean and smell good otherwise many buyers will be turned off. Not only do you risk loosing the sale, you also invite much lower price.
Mistake 5. Not disclosing any known defects in the home. This can not only terminate the sale after inspections, it can also cause lawsuits after the sale.
Mistake 6. Hiring an inexperienced agent. There is lot a good experienced agent brings to the table. It is not just about finding a buyer, it is handling the whole deal including negotiations, inspections, etc.
Mistake 7. Hiring an agent who offers the lowest commission. We have all heard, we get what we pay for. Don't miss out on a good agent to save a little on the commission. This little saving can actually hurt your bottom line when it is all said and done.
This advise has been brought to you by the professionals at On Track Realty in Edison, NJ. http://www.ontrackrealty.com/. For any questions, please feel to call us at 732.494.2211.
Mistake 2. Choosing an agent who suggests higher list price just to get the listing. Sellers make this mistake often (and I did too when I was a seller and not an agent then in 1988). We interviewed 3 agents - one told us to list for $159,900, the other $164,900 and 3rd at $199,900. Ofcourse I loved the agent who gave us $199,900 and we listed with him. One year later, we sold our home for $153,500. Only if I had listened to the agent who showed me the comps and suggested the price based on those. I could have sold my home much faster at a much higher price.
Mistake 3. Not having the option to fire your agent if he/she doesn't perform as he/she says or if they don't guide you as needed to sell your home. Infact, we suggest that this be a MUST. Don't hire anyone who won't offer this guarantee. And we suggest that you go a little further - you should have the unconditional right to terminate the listing if your needs change.
Mistake 4. Not preparing the home for sale. Your home must look clean and smell good otherwise many buyers will be turned off. Not only do you risk loosing the sale, you also invite much lower price.
Mistake 5. Not disclosing any known defects in the home. This can not only terminate the sale after inspections, it can also cause lawsuits after the sale.
Mistake 6. Hiring an inexperienced agent. There is lot a good experienced agent brings to the table. It is not just about finding a buyer, it is handling the whole deal including negotiations, inspections, etc.
Mistake 7. Hiring an agent who offers the lowest commission. We have all heard, we get what we pay for. Don't miss out on a good agent to save a little on the commission. This little saving can actually hurt your bottom line when it is all said and done.
This advise has been brought to you by the professionals at On Track Realty in Edison, NJ. http://www.ontrackrealty.com/. For any questions, please feel to call us at 732.494.2211.
Tuesday, June 2, 2009
Dangers of Overpricing Your Home!
Overpricing Can Be Costly!
While it is tempting as a seller to ask for the highest price possible (been there, done that), we suggest that you be very careful in pricing your home. The fact is, the homes priced right usually sell for the best possible price. While pricing high may be OK in an appreciating market, it can be the worst decision you can make in a declining market. Here are few reasons why you must not price your home wrong:
You will lose the excitement/momentum that a new listing generates: Real estate agents are working with buyers who have seen what is currently on the market and are waiting for something new to be listed. Therefore, the most activity will take place in the first 30 days of a listing. Your home will probably receive its highest and best offers during this time. After that initial period, the only people to look at your home will be new buyers in the marketplace.
You will lose the most qualified prospects: Buyers won’t be able to “make an offer” because they probably won’t see your property. They will view the properties that are priced within their purchase power range, knowing that they cannot afford anything above their price range.
Overpricing helps sell other, more competitively priced homes first: Your home may be used to demonstrate the good value of other properties. Your objective should be to enter the market in a position that will attract prospects, not drive them away.
Your home may become stale on the market: Prospects may wonder why it has been on the market so long or if something is wrong with the property, even after you lower the price. You may even have to settle for less than market value. A house takes on a reputation surprisingly fast, so don’t wear out your welcome on the market.
You lose a strong negotiating position when your house is on the market a long time, both financially and mentally: Prospects will not “rush” to make an offer on an overpriced property, and you may feel compelled to accept less when they finally do.
If you do get an offer, the contract may fall through because of appraisal problems: The lender must justify the price to the market. So even if the buyer pays the price, the lender may not approve the mortgage because of the appraisal.
As you can see, there are many reasons why you should price the home right. Don't choose an agent who is trying to buy your listing - by giving you an unrealistic listing price. This one mistake can cost you thousands. Always price your home logically, not emotionally.
Call the professionals at On Track Realty at 732.494.2211 to discuss your real estate needs. We promise to give you an honest evaluation, even if it means losing your business. We would rather turn down you business upfront by being honest instead of taking your listing and letting you down later. http://www.ontrackrealty.com/
Wednesday, May 20, 2009
Buy or Not to Buy? Advantages and Disadvantages!
While everyone talks about home ownership, and while there is no question that owning is better than not owning (explained below), there are some exceptions.
Some advantages of owning a home:
1) The pride of ownership - this is huge & irreplaceable
2) Tax benefits - Uncle Sam gives us most of us money back by allowing us to write off interest and property taxes
3) Appreciation in values - think of this benefit as a long term equity builder
4) The ability to live your lifestyle - home with a garden, townhouse with no outside worries
5) An advantage, atleast at this point - $8,000 credit if you qualify (many first time buyers do)
6) A large selection available due to increased inventories
7) Leveraging your money smartly is a great benefit
Some disadvantages:
1) Doesn't allow flexibility. Not easy to just pack up and move
2) The trouble of ongoing maintenance - takes away worry free lifestyle
So should you buy or not? Depends upon your situation. Apart from the advantages and disadvantages mentioned, here are few other questions you must ask:
1) Can I afford the monthly payments?
2) Do I have extra money for emergency repairs?
3) Is there an anticipated move within next 2 to 3 years?
4) Is there an expected change in my job?
5) Am I doing this to impress others or for my own needs?
Some suggestions:
1) Don't buy larger than you need or expensive than you can afford.
2) Know that buying for long term is the best thing you can do for your future savings!
3) Why waste on rent when you can own and build equity long term?
4) If possible, pay extra principal every month to payoff your loan sooner.
5) Don't use all of your equity for wrong purposes.
Good luck with the purchase of your home.
Sanjeev Aneja, CRS, Broker/Owner
On Track Realty, Edison, NJ
732.494.2211
www.ontrackrealty.com
Some advantages of owning a home:
1) The pride of ownership - this is huge & irreplaceable
2) Tax benefits - Uncle Sam gives us most of us money back by allowing us to write off interest and property taxes
3) Appreciation in values - think of this benefit as a long term equity builder
4) The ability to live your lifestyle - home with a garden, townhouse with no outside worries
5) An advantage, atleast at this point - $8,000 credit if you qualify (many first time buyers do)
6) A large selection available due to increased inventories
7) Leveraging your money smartly is a great benefit
Some disadvantages:
1) Doesn't allow flexibility. Not easy to just pack up and move
2) The trouble of ongoing maintenance - takes away worry free lifestyle
So should you buy or not? Depends upon your situation. Apart from the advantages and disadvantages mentioned, here are few other questions you must ask:
1) Can I afford the monthly payments?
2) Do I have extra money for emergency repairs?
3) Is there an anticipated move within next 2 to 3 years?
4) Is there an expected change in my job?
5) Am I doing this to impress others or for my own needs?
Some suggestions:
1) Don't buy larger than you need or expensive than you can afford.
2) Know that buying for long term is the best thing you can do for your future savings!
3) Why waste on rent when you can own and build equity long term?
4) If possible, pay extra principal every month to payoff your loan sooner.
5) Don't use all of your equity for wrong purposes.
Good luck with the purchase of your home.
Sanjeev Aneja, CRS, Broker/Owner
On Track Realty, Edison, NJ
732.494.2211
www.ontrackrealty.com
Wednesday, April 22, 2009
Showing your home at it's very best!
Want to sell your home fast for the best possible price? While here are many things to remember, here are few very important ones.
1) Price it right. Pricing it wrong and leaving too much room for negotiations will hurt you as the right buyers won't come thru the home.
2) Improve your curb appeal. If it doesn't attract from outside, many buyers won't go in. Would you go into a restaurant that appears very dirty but promises excellent food once you go in?
3) Keep it bright. Most people don't like dark homes. Let the natural light come in.
If you are working with a Realtor (not all agents are Realtors), follow the advise of your Realtor. You hired this person because you trust their opinion and expertise.
One other suggestion if working with a Realtor. Do NOT hire anyone who does not give you an UNCONDITIONAL PERFORMANCE GUARANTEE. Simply put, if you are not happy with their services, you should be able to fire them.
Good luck with the sale of your home.
Sanjeev Aneja, CRS
Broker/Owner
On Track Realty, Edison
732.494.2211
www.ontrackrealty.com
1) Price it right. Pricing it wrong and leaving too much room for negotiations will hurt you as the right buyers won't come thru the home.
2) Improve your curb appeal. If it doesn't attract from outside, many buyers won't go in. Would you go into a restaurant that appears very dirty but promises excellent food once you go in?
3) Keep it bright. Most people don't like dark homes. Let the natural light come in.
If you are working with a Realtor (not all agents are Realtors), follow the advise of your Realtor. You hired this person because you trust their opinion and expertise.
One other suggestion if working with a Realtor. Do NOT hire anyone who does not give you an UNCONDITIONAL PERFORMANCE GUARANTEE. Simply put, if you are not happy with their services, you should be able to fire them.
Good luck with the sale of your home.
Sanjeev Aneja, CRS
Broker/Owner
On Track Realty, Edison
732.494.2211
www.ontrackrealty.com
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