Archive for the 'East End LI Foreclosures' Category

Real Estate Investment Opportunities on the North Fork, Long Island

April 25th, 2008 category: East End LI Foreclosures, Real Estate NewsNo Comments »

Matt Woolsey, at Forbes.com says in his article Market looks good for landlords , that more Americans are renting as foreclosures and risky lending roil the housing market.

Whether they’re waiting out the housing storm, or smack in the middle of it, an increasing number of Americans are choosing to rent, not own. And that’s good news for landlords and investors.

Foreclosures and risky lending have dogged the housing market. As lenders have tightened their standards, attractive mortgages have grown harder to come by. Yet rental fundamentals have remained strong, especially in the 10 areas that made our list of Best Markets for Landlords.

While many potential sellers have made the decision to hold off selling their properties for now, it would appear that the blossoming opportunity to provide housing for renters may well provide some relief for a tumultuous real estate environment.

Which then compels the question: when will the investors be returning to the market?

The presence of investors snapping up distressed properties is nothing new, so with an increasing number of people unable to purchase, the financial benefit of owning a rental is becoming apparent. While many of todays renters were buyers a few years ago, they are no longer able to qualify for properties.

A new homeowner of a few years ago is a capable renter today, and with increased numbers coming from this contingent, owning a rental property is making more financial long term sense than it may have a few short years ago, at least for me.

It really is true- ride out the cycles, and locate opportunity in real estate regardless of the market- for a long term investment, real estate offers an upside even in a downswing.

Call us if you are interested in an investment property on the North Fork of Long Island, and check out this great opportunity at 7720 Soundview Ave. in Southold, New York: 7720 Soundview Ave. V-Flyer

flower photo : copyright Maria Andersson

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A Good Sign?

April 8th, 2008 category: East End LI Foreclosures, Real Estate NewsNo Comments »

For buyers and sellers of homes on the North Fork of Long Island, the current market woes nationally have created an uncertainty- sell? Buy? Wait it out?

This article in the Houston Chronicle, offers a glimmer of reality for all following the market. While certainly not a guarantee of improved conditions, the search for some kind of historical data that might offer a time-target has been conveyed here.

While the indicator is that we are likely nine months from tangible evidence of a turn-around, keeping an eye on builder stocks as a conduit for the thought process of investors is a key element when making a decision to buy, sell, or wait.

I, for one, will be watching closely- and reporting back!

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Buying Power on the North Fork

March 26th, 2008 category: Buyers, East End LI Foreclosures, Real Estate PhilosophyNo Comments »

Recently, we’ve received several inquiries from people interested in vacation/second/retirement homes on the North Fork of Long Island, New York.

While the majority of people are in the early stages, there is confusion- take the plunge, or wait?

Statistics are offering a clear indication that we are in a buyer-friendly market. As buyers, you control the market- a welcomed change from the days of frantic bidding wars, and disappointment.

Do buyers truly understand the power that they wield? I don’t think so- at least, not in New York.

And certainly, not on the North Fork. Here’s why:

The North Fork is a “last bastion” of seller-friendly real estate agents (one in which both agents operate on behalf of the seller, leaving the buyer unrepresented). While many are willing to go “out on a limb” in order to represent buyers with a broker agency capacity, few are willing to offer fiduciary (and the accompanying “liability”) to the current MVP- the BUYER.

Buyers have been forced to participate in the buying process in a two-on-one game- with both real estate agents representing the best interests of the seller. That this creates vicarious liability (not good) for sellers has gone unnoticed- or is simply misunderstood.

The resounding word used by local agents that eschew buyer agency is “liability”. Hmmm. Fear of a buyer suing an agent for violating the required fiduciary spelled out in a BUYER AGENCY AGREEMENT.

The question that I would pose is: WHAT IS TO FEAR? The notion that there is more to fear from the buyer (as opposed to the seller) is confounding to a company with buyer agency experience. Taking the same cautious steps and performing due diligence is what we are PAID FOR.

Anything contrary to what has been represented by a seller is something that a buyer is entitled to, irrespective of agency- inherent fairness is a requirement of representation for both parties. A buyer is also entitled, as the “boss”, to make an offer commensurate with their comfort level- and with the input of a Realtor that provides a comprehensive view of market conditions as a basis for that offer.

Buyers, until very recently, have been unable to secure a real estate representative that is “on their side“- and make no mistake- there are very defined lines.

Proponents of buyer agency are not the enemy of sellers. To the contrary, buyers with representation are better informed, and are working within parameters that are still set by the seller- they are simply represented. This commitment on the part of a buyers agent does, indeed, remove vicarious liability for the seller- liability falls to the buyers agent.

A real estate agent comfortable with the information provided to their buyer is as immune from legal ramifications as the agent representing the seller is- it’s all about providing ethical service, and achieving the “best possible price” for the buyer. Again: buyers control the market right now. If sellers want to sell, representation is moot. Offers are the name of the game.

PROSPECTIVE BUYERS OF HOMES ON THE NORTH FORK: You deserve- no- are ENTITLED to representation from a real estate agent that has the goal of your “best possible price” at the forefront. No games; no nonsense- just ethical, focused representation.

Call us to explore your buyer agency opportunity. Experienced with buyer agency, we view “liability” as a non-issue. I’d rather participate in a “fair” transaction than one in which a buyer is making an offer based on the input of real estate agents that have promised the seller the “best possible price.”

And that, folks, is what happens with every transaction that does not include buyer representation.

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Appraisals Change on Long Island New York?

March 8th, 2008 category: East End LI Foreclosures, Real Estate News, Real Estate Philosophy6 Comments »

The following article by Patrick Rucker-ReutersUK, found here, is a good thing for consumers in New York.

“The two largest sources of U.S. mortgage financing agreed on Monday to sponsor a new home appraisal watchdog to prevent inflated home values.”

It’s rather surprising that it’s taken this long to comprehend the obvious: that appraisers connected with banks might have an ethical dilemma to self determine. Under-appraise, and impact the loan for the buyers bank (jeopardizing the purchase agreement); over-appraise, and all is well. Until market conditions change.

While the initiation of this new law in NY appears to be largely the result of those that received over appraisals in a market that seemed limitless with the respect to increases, having this law in effect in a downswing would appear to be equally beneficial to buyers and sellers of real estate in New York.

An independent appraisal in a down market will prevent overly cautious lenders from using “their own” to make judgements that will impact the price in the lenders favor. This market is subjective, and consumers don’t need banks to establish “value”- particularly if that value has, attached to it, a huge self created “sting” due to loans provided that made little sense to the consumer and are now impacting lending institutions negatively.

Separating market value and lending companies, in hindsight, seems so, well…COMMON SENSE.

For sellers today, while “declining market status” in Suffolk County, New York, will surely impact an appraisal, there is nothing “right” about assuming that a badly burned lender (and it’s fleet of connected appraisers) will not make it worse by having their own agenda present. That agenda, by the nature of the market, is likely (opinion) err on the side of caution, irrespective of the impact on sellers and buyers.

An independent appraiser, who has no future benefits with a lender via additional business, will have the ability to appraise a property without bias (or pressure in either direction). Sellers will sell at market value; buyers will buy at market value. Now, if we can just find a consistent measure of price in an inconsistent market…

Eliminating the connection of appraisers with lending institutions eliminates a major relationship that should never have existed in the first place. Good for New York.

© 2008 OptionsRealty
Photos © iStockPhoto

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Don’t Come to ME for a Home Equity Line of Credit

February 26th, 2008 category: East End LI Foreclosures, Real Estate NewsNo Comments »

Much has been written about the depreciating value of homes, and the subsequent difficulties facing borrowers when they attempt a home purchase- tighter lending requirements, higher costs associated with the loans, and appraisal issues have created a complicated buying scenario (not to mention additional gray hairs for sellers).

On the heels of change comes another shocker for some: Home Equity Lines of Credit (HELOC).

As shared here, large banks are pulling the plug on some existing HELOCs, wreaking havoc for homeowners who have decided to utilize what remains of their equity in order to finance some of life’s events (college and home improvements are among common uses for HELOC’s).

As detailed in the link provided above, major players want “out” of the line of credit game, indicating awareness that our downward plunge has yet to hit bottom.

What is most alarming is that credit-worthy recipients are as likely to be targeted as those that have less than stellar credit- suddenly, “credit worthy” is becoming increasingly difficult to define.

Interesting that banks, on the heels of their own loose lending, are now creating a disadvantage for those homeowners that, for all intents and purposes, have demonstrated a willingness to stay above the fray by maintaining strong credit scores.

If you are a homeowner who has decided to stay put and either fix up your property, or utilize remaining equity for life changes, the suggestion in the article appears to be do it now…or not in the near future.

It would appear that banks are finished dealing with the mess that was created out of their own lending practices- perhaps draining 401k’s is better for the consumer (???).

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The Appraisal Isn’t MY Fault…Who Takes the Hit in New York?

February 13th, 2008 category: East End LI Foreclosures, Real Estate News2 Comments »

Just when things seem to be settling into an uneasy downswing, with buyers and sellers viewing the market with a studied eye, another kink in the system awaits.

You’ve received the contract on your house; you’re happy, your buyer is happy. As a seller, you priced it correctly; as a buyer, the house has mentally become your “home”. All is well, until…the appraisal comes back. It can happen to anyone.

In order to prevent lending money to home buyers that begin home-ownership in a declining market, Fannie Mae and Freddie Mac have designated Nassau and Suffolk counties as “declining markets.” In a nutshell, this designation allows for room in the appraisal to lower the value in order to protect the lender from an overinflated loan instrument.

In the event that a property value that comes in below the purchase price (the math on this is very gray, without specifics) the buyer/seller will have to negotiate for this possibility. While the sales price might fall right in line with previous comparables, appraisers now have the responsibility of determining the short term continued fall of pricing- and the commensurate house “value” that results from market conditions months from now.

SELLERS: Be prepared to re-negotiate the purchase price (which will impact your net);

BUYERS: Be prepared, in the absence of sellers reducing the price to the appraised value, to come up with additional funds to close, or be prepared to walk from the purchase.

With respect to contracts, your attorney should address this, either by providing an “out” to the buyer whose property of interest did not appraise; offering language that spells out the contributions (should the appraisal come in low) by both parties; or by making known to the buyer that the seller will not be reducing the price, and as a result, the buyer may need additional funds to close (to make up the price differential).

In order to disclose this issue, it is incumbent upon real estate agents to forewarn (and forearm) both buyers and sellers by determining in advance who will take the “hit”, should it present itself. While a function of this odd market, it’s another relatively new development. Failing to address it prior to an offer can result in disappointment for both buyers and sellers, should a low appraisal come as a shock without forethought.

For further information about the “declining market” status of Nassau and Suffolk counties in New York, contact your lender for further explanation- it’s important to both sides. We’re happy to provide lenders that are able to discuss this unusual measure, and will offer all that we know. Be prepared for a bump, and solve it before your home gets an offer by determining what, as a seller, you are willing to work with.

As a buyer, the same theory applies- don’t have your purchase fall apart due to an issue that is present, but may not present itself until after you’ve fallen in love with the house. In the absence of a seller willing to negotiate, your key to the house may cost a bit more out of pocket.

If you are considering buying or selling a home on the North Fork of Long Island, New York, we’re happy to answer any questions that you may have.

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Real Estate Agency, North Fork, Long Island

January 25th, 2008 category: Buyers, East End LI Foreclosures, Real Estate News, Real Estate Philosophy, Sellers1 Comment »

If you are thinking about selling or buying a home on the North Fork of Long Island, New York, real estate companies have a revised document for you to sign with regard to AGENCY RELATIONSHIPS.

Acknowledgement of agency laws is required by the New York Department of State in order to encourage all consumers to understand what role a Realtor will play in the way of representation to each party- the seller and the buyer. In our opinion, the bold-ed verbiage is worth note. In that way, it differs from the form that you will be signing. THIS FORM IS NOT A CONTRACT.

The following is taken directly from the New York Disclosure Form for Buyers and Sellers, and will be presented to you, with an explanation of each representation so that you are able to determine who is on your “side”, once the agency relationship has been determined. As offered by the DOS, “this disclosure will help you to make informed choices about your relationship with the real estate broker and its sales associates.”

Sellers Agent: A sellers agent is an agent who is engaged by a seller to represent the seller’s interests. The seller’s agent does this by securing a buyer for the seller’s home at a price and on terms acceptable to the seller. A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account. A seller’s agent does not represent the interests of the buyer. The obligations of a seller’s agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller’s agent should a) exercise reasonable skill and care in performance of the agent’s duties; b) deal honestly, fairly, and in good faith; and c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
Buyer’s Agent: A buyer’s agent is an agent who is engaged by the buyer to represent the buyer’s interests. The buyer’s agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer’s agent has, without limitation, the following fiduciary duties to the buyer: reasonable care,undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyers agent does not represent the interests of the seller. The obligations of a buyer’s agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer’s agent should a) exercise reasonable skill and care in performance of the agent’s duties; b) deal honestly, fairly, and in good faith;and c) disclose all facts known to the agent materially affecting the buyer’s ability and/or willingness to perform a contract to acquire seller’s property that are not inconsistent with the agent’s fiduciary duties to the buyer.

Broker’s Agent: A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyers agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyers agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer’s agent’s buyer. The broker’s agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker’s agent. The buyer and the seller therefore do not have vicarious liability for the acts of the broker’s agent. The listing agent or buyers agent do provide direction and instruction to the broker’s agent, and therefore the listing agent or buyer’s agent will have liability for the acts of the broker’s agent.

Dual Agent: A real estate agent may represent both the buyer and the seller if both the buyer and the seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, the buyer and the seller. An agent acting as a dual agent must explain carefully both the buyer and the seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.

Dual Agent with Designated Sales Agents: If the buyer and seller provide their informed consent in writing, the principals or the real estate broker who represents both parties as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of real estate. A sales agent works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales agent for the buyer will function as the buyer’s agent representing the interests of and advocating on behalf of the buyer and the designated sales agent and the designated sales agent for the seller will function as the seller’s agent representing the interests of and advocating on behalf of the seller in negotiations between the buyer and the seller. A designated sales agent range of fiduciary cannot provide the full duties to the buyer or seller. The designated sales agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales agents before agreeing to such representation.

(emphasis added)

For sellers, the other consideration when reviewing agency is to make a determination as to which agency, if any, you will offer compensation, particularly if your Realtor is promoting your property on the Multi List system of Long Island (MLSLI, with the feeder to Realtor.com). Realtors utilize this system to provide exposure for your property, and your compensation is advertised to the Realtor community with the following designations defined above:

SA, or seller’s agent

BA, or buyer’s agent

Broker’s Agent

For sellers, understanding the advantages/ramifications of each agency compensated is imperative. Establish what is best for you by discussing this with a few Realtors to gain as much comprehension as possible. Full understanding on your part of each designation is the responsibility of the Realtor who lists your home, sells your home, or facilitates the purchase of a new home- clarity on the part of the Realtor involved will facilitate an easier transition for both sellers and the buyers that purchase your home. KEYWORD: FIDUCIARY.

Call us if you’d like to have a conversation about Agency relationships. While we offer opinions on all things real estate, this is a serious consideration for consumers- too much information isn’t enough.

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If I Were Selling or Buying a Home on the North Fork of Long Island

January 21st, 2008 category: Buyers, East End LI Foreclosures, Real Estate Philosophy, Sellers1 Comment »

If I were a seller on the North Fork of Long Island, New York, I would ask the following question of the Realtor offering their services: Do you understand fiduciary?

What is fiduciary, from a seller perspective? Here are some good questions:

1. Will my property be entered into the MLSLI immediately? I want all agents with buyers to know that it’s for sale; that will potentially increase the offer that is made to me.

2. Are you seeking the best offer for ME, or are you interested in excluding Realtors that may have a good offer, but will take half of the fee that I’ve offered you to sell the property, preventing you and your company from getting it ALL? I don’t want an agent or company that’s not complying with fiduciary here; what you and your company receive is what I’ve agreed to, and I don’t care who it goes to. Nor should you, if you understand your fiduciary to me.

3. Will your sign out front be welcoming to all that might have an interest, without that antiquated “exclusive” part attached to it? I don’t want to discourage anyone from seeing my house. What’s up with the “exclusive” on my sign?

4. Will you provide me with ALL binders, so that I can make the decision? I think that I deserve that- after all, I’m paying your fee. Can I trust you with this?

If I were buying a home on the North Fork of Long Island, I would demand a buyer agent. Buyers agents operate with fiduciary- that’s what the Realtor code of ethics requires.

If I want a home, the “fee” for the buyers agent is already in the price. Hey, I’m not stupid. And no, I don’t want to be a “customer” of the listing agent or anything else- my agenda is to locate the best value, and that means my own Buyers Agent. Period. If I want to make a low-ball offer through the listing company, that’s my right, too- respect that I do NOT want to buy through the selling company, but they can facilitate a low-ball. Anything else and I’m compromising my own money.

AND, I want to see ALL of the available homes. I’ve given a price range, and I want to see them all. If my buyers agent wants to show a home that I may have to “pay” him or her for, no thanks- I’d take it off of the offer price, anyway- we all KNOW that sellers have included some kind of payment if you offer it to agents that only represent sellers- “SUB-AGENTS”. What are those types of agents still doing around, anyway? If you can pay a sub-agent, you have made financial room for a buyers agent- they often have buyers. I want their offers.

What? You’ve counseled your seller to pay less to a buyers agent, or nothing to a buyers agent? Hmm. I wonder what’s wrong with the house- is there a problem that a buyers agent will uncover?

Oh- and if you want to make it difficult, so what. The market is declining anyway. Hey, I want to buy a house. You can make it easier, or I’ll just wait.

Really, it’s all so simple, this FIDUCIARY stuff. And well worth understanding.

Make sure that your Realtor “gets it”- after all, it’s required.

At Options Realty, we “get it”, whether you are selling or buying a home. Your interests come first.

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