New Vision for Housing Policy

This week a bipartisan commission of leading housing and economic experts unveiled a new vision for housing policy. If adopted, the plan will be to further our nation’s economic recovery and improve the lives of millions of Americans—then again, right now it’s only a plan. Six years after the collapse of the housing market, the underlying problems in housing remain, and government solutions continue to be elusive.  The commission hopes their “vision” will serve as a catalyst for action.

The recommendations propose scaling back the government role in the nation’s housing finance system and reforming housing assistance programs to better meet the needs of America’s most vulnerable households.

The report proposes a new housing finance system that calls for a far greater role for the private sector, a continued but limited role for the federal government, the elimination of Fannie Mae and Freddie Mac, and reform of the Federal Housing Administration to improve efficiency and avoid crowd-out of private capital.

Through these reforms, the plan addresses the broken mortgage finance system while creating a path to a stable and strong housing market designed to provide greater taxpayer protection and support a more vibrant economy.

At the core of this plan are the perceived needs that have gone unfilled. As demonstrated in the recent presidential election, profound demographic changes are transforming the country and our housing needs. The increasing diversity of the American population and it’s intrinsic economic issues, the aging of the Baby Boomers, and the formation of new households by millions of young Echo Boomers striking out on their own, all present new challenges.

The plan presented this week calls for reforms that would establish a new performance-based system for delivering federal rental assistance with greater devolution of responsibilities to state and local providers. The commission also proposes to shift existing resources to assist the poorest households, and to expand the Low Income Housing Tax Credit program to increase the supply of affordable rental housing.

For first-time home buyers, the report emphasizes the importance of housing counseling as a means of preparing for homeownership. The commission feels that “government knows best” and so offers recommendations for the young as well as proposals to enable seniors to “age in place” safely and affordably while integrating housing with health care and other programs. For the one-third of Americans who live in rural areas, the commission recommends continued support for homeownership and rental assistance in those communities.

To read the full report of the Bipartisan Policy Center’s Housing Commission, please visit http://bipartisanpolicy.org/library/report/housing-future.

Dane Hahn is a real estate professional serving clients in Charlotte and Sarasota Counties. He can be reached at dane.hahn@gmail.com or by phone at 941-681-0312, or on the web at www.danesellsflorida.com

This House Stinks

There’s really nothing less inviting than going into a home and finding a really gross aroma.  Last week I took a youngish couple through several homes that were bank-owned, and with all due respect to the cat owners out there, they smelled of cat urine—which as you probably know is about 100% ammonia.  The smell was so strong it actually hurt your sinuses. I’d like to say Fabrize to the rescue, but I don’t know if even that would make much of a difference.

Back in the old days people didn’t keep cats in the house—for exactly that reason.  Cats lived in the barn and had a job.  They kept the population of mice and rats to a minimum.  They were fuzzy and didn’t need much food, and frankly they found a place to make their smells that was acceptable to all, so long as there weren’t any rodents around.

About the mid part of the last century, kitty litter replaced sand as the potty of choice for cats and cat lovers. And with that invention, having a “house cat” became much more acceptable, as the “litter” curtailed the aroma, and so the population of cats skyrocketed.  Thus giving the American family a second choice in the home pet department.  Fido began to lose his standing as Fluffy grew in popularity.

But in a slow real estate market, when money is scarce, kitty litter can be one more expense that just can’t be met. And after a family or tenant moves away and takes their possessions with them, sometimes the cat stays on in the old house—and that’s a real issue.  Recently a study was done on aromas, and it seems that some aromas can have a direct impact on people's tendencies to spend. Of 402 people browsing in a home-decor store in Switzerland over a nearly 20-day period, when an aroma consisting simply of orange filled the store, shoppers spent 31.8 percent more. But add scents like green tea, basil, and complex blends of orange and the shopping spree decreased.  (Obviously they didn’t try the cat stink, but the results are interesting.)

The study makes the argument that fragrances may affect cognitive functions in the same areas of the brain that are responsible for decision-making.  And that while complex scents may be pleasant, they can still be a distraction. It seems they have an effect on some people that causes them to subconsciously spend time trying to identify the aroma.

Smells that are subtle go, more or less, unnoticed. So people don't actually concentrate on what they smell. They don't ask their significant other, "Can you smell that?" Whether it's in a store or a home for sale, some aromas are distracting—just as other influences can interrupt a train of thought.

This principle applies to many things in and around a home that's listed for sale. For instance, if you have lots of personal pictures displayed, it's likely they will distract potential buyers. They'll get a little curious and start exploring your photos and commenting on them to the agent or whoever they are with while viewing your home.

Yet another no-no is to have many medications out cluttering the bathroom--or even in your prescription cabinet. Like the home's aroma and the photos on your counter, this can be a distraction. When buyers pass through a home, they open closets, cabinets, and sometimes-even drawers. It's what they're supposed to do. They're thinking of putting their own "stuff" where your stuff currently is. So they need to check out all the spaces available. Any distraction will interrupt their decision making regarding the home, so it’s a good idea not to have personal items out and around.

The best policy when preparing a home for sale, is to stage it as if you don't live in it. Give your home the “look” of a model home. Of course you can’t bring in all new furniture for the period of time the house will be for sale, but you can rid the rooms of personal items, make the whole house smell good, and clean the finger prints and smudges off the woodwork and the appliances. Tone down the scent--especially of pets. And find a way to clear the clutter, because it may mean a faster sale of your home and for more money.

Dane Hahn is a real estate professional serving Charlotte and Sarasota Counties in Florida. Call him at 941-681-0312, or email at dane.hahn@gmail.com.  See him on the web at www.danesellsflorida.com

Investing in A Home

Buying a home is usually the largest expenditure (or shall we call it an investment) any of us ever makes.  Spending that kind of money almost always comes with second thoughts, particularly if it’s your first home. And there are some hazards of home buying that are totally unavoidable. I always try to help buyers with their concerns. I would guess that the average agent holds the hand of a buyer maybe hundreds of times throughout their career.

You may have heard the term “Buyer’s Remorse”.  I like to tell both buyers and sellers that they may experience remorse once their “deal” is written and the offer is made and accepted.  And yes there is “Seller’s Remorse” too, but the truth is, both parties will probably spend that evening riddled with remorse: the buyers think the accepted offer means they could have gotten the place for less, and the sellers think it means they could have demanded more!

Even after showing the homes that I think will work best for my clients, they still sometimes are attracted by some glitter seen in a water front home or a golf course property, and later rue the day they closed on that particular home, maybe for years and years to come. I had a buyer once who saw a worn out waterfront home with a barn and paddock—after he saw it, he could not focus on anything else.  He had to have it, even though the home was not functional for his family. Apparently it represented all the things he had always wanted to show off. Unfortunately the purchase price plus the repairs caused him to over extend himself financially and he ended up in mortgage distress.

Clearly, the decision-as to what house makes the most sense for a family is the buyer’s.  But as an agent I can and do make suggestions—and sometimes even argue. Probably the most important suggestion I ever make is that the buyers hire a home inspector. House condition surprises are only avoidable if you have inspections. And while the inspector may find many things to report to the buyer, the idea is that sooner or later the homebuyer would find these things out for himself, so before he buys is a better time than after.

When I am trying to find the perfect home for a client, I have long used a visualization exercise. I like to ask them to close their eyes and tell me what the perfect house would be. And to tell me what their favorite rooms were in the homes or apartments they have lived in. Sometimes I try to get their minds’ eye on topics like how long will the family likely live in the new home.  Or what is important to them in terms of neighborhoods and schools? Do they want to walk to shopping. What sorts of things are appealing to the family, both inside and outside of the home, for work, school, play and their downtime. County water and sewer may or may not be available. How close are they to retirement? (These points seem personal, but so is a home, and more to the point, what home amenities they will need). Naturally I ask about the desired number of beds, baths, square feet desired in the next home. 

American clients don’t have a good feel for the size of a home expressed in square feet.  They are more from the school of, “I’ll know it when I see it.”  Whereas, Canadians and European buyers seem to know exactly how big a home they want and can quote you the exact number of square feet, “I want a home that is 1800 square feet,” they’ll say.

Some buyers fail or choose not to read disclosures, inspections, loan documents and such. These are the buyers who tend to end up really, really upset at a later stage of the deal. Some buyers are so unused to these sorts of transactions that the mere sight of all those papers and zeros makes their eyes glaze over. Other times, there are buyers who have done so many major transactions in their work or their lives that they’ve gotten casual, with the details.

I try to summarize the documents which I know are important and encourage them to ask questions. The prospect of trying to read and catch mistakes in a pile of docs at the closing table can be daunting.  When the closing is hanging in the balance and all the excitement and expectations of the family—and maybe the moving truck is parked just outside--is one of the most common reasons buyers cite for not reading and understanding their papers.

I’ve had buyers proudly arrive at the closing in a brand new car, and then be told (by phone) by their lender that since they bought a new car their credit no longer qualifies them for the mortgage. I always tell my buyers not to make any expenditures (no new furniture, no new cars or boats) until AFTER athe closing.

Some of my best buyers have early on disregarded my advice, only to lose a house to another buyer or a mortgage to a dumb financial move. But then, once they see that good advice and timing will help them, these are the folks who can turn out to be my best clients, especially when the market has proven me right!

Dane Hahn is a real estate professional serving Sarasota and Charlotte counties. You can reach him at 941-681-0312 or via email at dane.hahn@gmail.com. See him on the web at www.danesellsflorida.com.

It's a Seller's Market!

As I write this, I am surrounded with this week’s newspaper real estate sections. The headlines call out the fact that home sales are up, home prices are up, and home inventories are down.  Why just this morning I showed a home to some buyers who early in the week had found 5 homes they wanted to see, but by this morning, two of the five were under agreement and so not able to be seen. Property is moving again!

Buyers are discovering, to their dismay that homes they wanted to see or possibly buy have already been snatched up before they even get a chance to see or make an offer on the property.  Our area’s unprecedented low inventory levels are slowly driving up home prices and making sellers reluctant to cede little if any concessions to buyers.

There’s no better gauge of the onset of a seller’s market than the demise of concessions that were once considered essential to attract buyer interest just a few months ago.  But with inventories down and prices up, sellers are ending the costly incentives they have been forced to offer buyers during the six-year long buyers’ market. The market has steadily moved towards a seller’s market with buyers more willing to bear closing costs, in some cases paying for half or more of the closing costs. Tight inventories of homes for sale are making markets increasingly competitive.

Last year sales were so slow that 60 percent of all sellers offered an incentive of some kind to attract buyers. The most popular was a free home warranty policy, which costs about $500, according to NAR this was offered by 22 percent of sellers, but 17 percent upped the ante by paying a portion of buyers’ closing costs and 7 percent contributed to remodeling or repairs.

Concessions linger where inventories are still adequate and sales slow, but in tight markets the times when buyers can expect concessions are already over.  And where the supply is dwindling and sales are moving to a more balanced market, buyers can expect sellers to offer even fewer concessions and sales prices will be close to list price.

Not only are most concessions a thing of the past, but also some desperate buyers are even resorting to writing “love letters” to win over sellers in competitive situations. When buyers know they are in a competitive market and there will likely be multiple offers, it makes sense to write a letter introducing themselves to the seller and explaining why they liked (and wanted to buy) the home so much.  The idea here is to get the seller to choose the letter-writer’s offer from the multiple offers they have to sort through.
New regulations enacted last year by the Federal Housing Administration to limit its exposure to risk forced many sellers to cut back on the amount of assistance on buyers’ closing costs. Sellers are now limited to no more than six percent of the loan amount at 90 percent loan-to-value or lower, and then usually 3 percent for 90 to 100 percent loan-to-value.

Some sellers bump up the home sales price to pay for concessions. But when this happens, and the buyer is getting a mortgage, then he will need to borrow the increased amount, (and he will need the property to appraise for the higher amount). So it will make sense to focus on concessions that will actually increase the value of the home, because the buyer will have to meet increased debt-to-income ratio in order to close his loan.

Making concessions or simply lowering the price are both powerful incentives to attract a buyer.  As the market ebbs and flows, sometimes it’s a buyers market and sometimes a sellers market, but the recent limiting of concessions will make buying and selling a little simpler and more rational for all parties. From my standpoint it will make writing a contract a little simpler. As one observed asked, “In this market, why would anyone selling a home pay the buyer to buy it?”

Dane Hahn is a real estate professional.  You can reach him at 941-681-0312 or by email at dane.hahn@gmail.com. See him on the web at www.danesellsflorida.com

New York Real Estate Ownership Guide

This article is designed to be a roadmap for the first time homebuyer or seller. Throughout, I'll guide you through the many steps of purchasing or selling your property and explain to you in the process how to avoid the most common mistakes. You will also learn both the legal and psychological problems often encountered.

For most people, buying (or selling) a home is one of the biggest part of living the "American dream". It's also probably the biggest investments they will ever make. Not surprising then, that many find this experience to be very exciting but also worrisome at the same time. Achieving the final transaction and transfer of funds for the property (referred to as the "closing") can leave many home owners feeling exhausted, even depressed. The same can be said for buyers. However, if the process is done correctly, it can also be both interesting and exciting for everybody involved. The ultimate outcome depends on many factors: time, energy needed to devote to the transaction, thoughtfulness and patience. All these traits are included in the process, and all can have an impact on your bottom line.

That's why preparation is key in any successful transaction. The process, complicated by multiple transactions and waiting periods, can be quite confusing. Real estate transactions require expertise. Those wanting total control of the transaction with a do-it-yourself attitude can make many costly mistakes. So unless buyers and sellers have a solid background in Real Estate, they stand to lose thousands of dollars in any given transaction.

Saving on New York Real Estate Attorney Fees

Trying to save a few extra dollars on legal fees may sound like a nice idea, especially for those with large down payments. But this strategy may backfire. You may end up being penny-wise, but broke in the long run. There are many detailed procedures involved in the purchase process that the vast majority of consumers may overlook.

In one of the biggest purchases of your life, it's simply not the time to "bargain shop". Remember the key criteria: if you can't afford to see the big picture in the transaction you probably aren't ready to close the deal. The amount of legal fees charged should not be the deciding factor in hiring a particular New York Real Estate Lawyer. You retain a New York Real Estate Lawyer because you trust that they will represent your best interest in the transaction. The bottom line is that you want a New York Real Estate Lawyer you can trust, if trust becomes an issue you are well advised to seek another New York Real Estate Lawyer, no matter how low the fees are. For the most part, a New York Real Estate Lawyers aim to satisfy their clients and keep that satisfaction within the legal bounds of the law --all at the same time. The happier their clients, the busier the New York Real Estate Attorney will be with future clients. So it makes common sense as much as it makes dollars sense to retain a New York Real Estate Lawyer who aim is to achieve the client's goal in the real estate transaction.
Real Estate transactions involve use of standard legal language. It is quite understandable then, if a buyer or seller do not understand the terms used in the transaction. First-time homebuyers have the worst experience. That is the reason why it makes sense to hire a New York Real Estate Lawyer who can represent your interest and can help you avoid pitfalls and unnecessary problems.
If not detected prior to closing, once a problem occurs, it can take time and money to correct the situation. An attorney with experience in New York real estate law can help steer a buyer or seller away from costly mistakes.

What kind of home fits my needs?

When buying a home, you have to determine what property will fit your needs. Picking the right kind of property to purchase requires careful planning, organization, and sacrifice. Since most people don't have the time, real estate brokers can be extremely helpful in letting you understand the many issues you might encounter. The questions involved can be overwhelming. What matters need further inquiry? Which homes come with bad neighbors? There are many matters which you need to inquire about when you look at different properties that interests you. However, some issues are common to most real estate purchases. A simple tip is to determine what borough you like to live. If you plan on living in Queens, Brooklyn, Bronx, Staten Island, Manhattan or Long Island, you may want to deal with a broker in that borough.

Coop or Condos?

Cooperatives are the most popular property purchased in New York City. One reason for this is a trend away from expense-ridden properties where foreclosures are common. Another reason for coop popularity is convenience. Deals can be less expensive (about half the price of a condo) and may involve less paperwork in the closing. Less financial stress and fewer headaches might sound good, right? But what most buyers don't know is that when you buy a co-op, you're NOT buying the physical apartment. Actually, you're buying "shares" of a corporation that owns the building which contains the co-op on its land. Also keep in mind that, just like any other company, a co-op has officers such as a president, a vice-president and a treasurer. And just like any other company they're responsible for the well being of the coop. If the coop suffers a financial meltdown, you could lose your apartment investment altogether.

What happens if I do decide to buy a coop?

You receive a stock certificate and a proprietary lease.

The co-op requires that each coop owner pay a "maintenance fee". If you own a condo, you'll be paying a "common charge." Usually, the monthly fee paid by a shareholder is almost double the fee paid by condo owners.

Sometimes a co-op only "owns" the improvements, and some other company or organization owns the land. This form of co-op is not the normal situation, but it does exist. Your New York Real Estate Attorney should be able to assist you in determining if you are purchasing such a property.

Where does the maintenance fee go? How is the money spent?

When an "entity" (i.e. some organization or other company) holds a mortgage of the co-op, the coop corporation must pay a monthly mortgage payment to the bank. The "maintenance fee" charged to coop owners helps the corporation offset this cost. By charging each shareholder a charge per share the "maintenance fee" helps pay the city taxes on the property as a whole and pay for the expenses in maintaining the property (such as the superintendent or doorman) The "common charge" for a condo helps offset the expenses associated with the maintenance of the building. Elevators, painting, cleanliness and any landscaping all require funding not to mention the common areas of the residential unit.

It is important to note that the monthly fee is not fixed. Just like rent, it can be increased. In buying a condo, however, you are buying a portion of the physical building in which the apartment is located. You then own part of the building and will receive a deed to the property that shows that you are the legal owner. The common charges for condos usually tend to be stable. Most co-ops require that a seller receive approval by the board before attempting to sell. Likewise, the buyer must also be approved by the board to make sure that the buyer will be a "responsible" co-op owner. One exception to this situation is when the coop has a special status as being a "sponsor unit". That means that when the building was converted into a co-op, the co-op conversion plans allowed the sponsor of the building to reserve the right to sell unsold shares without board approval. If you are purchasing the co-op from the original sponsor, then most likely you will not need to get board approval. The same applies to subletting the unit. In most cases you'll need permission. In some cases, purchasing the unit from the original sponsor, may entitle you to the same rights and privileges as the sponsor.

Recently after the cost of fuel skyrocketed, many co-ops and condos monthly fees increased. So when buying a coop or condo make sure that you understand the financial future implications. Ask for the financial information before signing on the bottom line.

Should I buy a single or multi-family residence?

One of the most common dilemmas encountered when purchasing a home is whether to buy a "single-family home" or "muti-family home". Common sense dictates that a single-family home will cost you significantly less than a multi-family home, and will appreciate accordingly. What are the advantages? The peace that comes with it is enticing for some. Not having to deal with renting to strangers, and the headaches of hiring (or being) a landlord. However, on the other side of that argument, a multi-family home can be a financial plus: the rental income helps with the monthly mortgage payments and makes ownership less financially stressful.

How can a real estate agents help me?

Normally the first person you may have direct contact with in the purchase or sale of land or residence, is a real estate agent. Most people use them rather than do it themselves. The agent works for his or her supervisor, and they are called "brokers". The kind of relationship you have with the agent can have a major impact on how well you as a buyer or seller, understand the initial process, and transaction. Two important points: Agents can normally provide good advice and suggestions regarding your purchase or sale. Since they're well-educated in both the property markets and their field, they are can give you past performance for a particular property. However, although the agent may seem to work for you, unless expressly contracted for, they normally work for the seller!

What is a Binder? Why is it important?

A binder (otherwise known as an "offer to purchase") is the first document secured by a minimal money deposit. You will normally sign a binder at the moment that you decide to make the seller an offer to purchase. This tells the seller that you are serious about making the purchase. Once the Binder Agreement is executed, the real estate broker or agent will present it to the seller. If accepted, the property will no longer be shown to potential buyers. It is important to note that the binder, unlike a contract of sale, is subject to a time limit. Unless the binder details the money to be refunded, it will be forfeited under most circumstances.

What should I know about the "Contract of Sale"?

The contract of sale is the first formal stage of the buying and selling process. When you have retained a New York Real Estate Lawyer and have made an acceptable offer, at this point in time, you and the seller will sign a contract of sale. The seller's New York Real Estate Attorney will normally draft the contract and then the buyer's New York Real Estate Attorney will review the contract to make sure that you are protected from any future problems (both legal and residential issues).

It's also important to note that when the buyer signs the contract, a "Down Payment" is given to the seller for the seller's New York Real Estate Attorney to hold in a special account called an "Escrow". The seller's New York Real Estate Attorney is required by ethical rules to do so. However, not to worry: the entire amount will of course, be credited to the buyer and applied to the final outstanding balance at "closing."

The biggest mistake a buyer or seller can make is signing a contract of sale before getting adequate legal representation. A contract of sale is an agreement to purchase and sell the property. Once it's signed, it becomes a legal document. If you change your mind and want to change the terms of the agreement or if you want out of the transaction altogether, then you will find yourself in an extremely frustrating legal bind. That's why an experienced New York Real Estate Lawyer is necessary throughout the process, especially at the beginning stages. The contract of sale dictates exactly how the transaction will proceed. It says how payments will be made and collected, and contains all the important details. Tell your New York Real Estate Lawyer every detail which you think is important and essential to you intensions. For example, maybe you are selling another property while simultaneously buying a home. Since the sale of your property is a condition, that condition is a major detail that you should tell your New York Real Estate Lawyer since, the other "party" may have not accepted your offer had they known such a condition.

Another issue that sometimes comes up is the issue of occupancy. Generally a house is sold vacant. However, if you would like to keep the existing tenants, it is a good idea to tell your New York Real Estate Lawyer (assuming it's not a new construction), and that by itself can save you time and hassle in the process of renting the property later on.

As a seller, should I have my home inspected?

Home inspections can sometimes make or break the deal. A New York Real Estate Lawyer can secure a condition in the contract of sale which allows the buyer to refuse to purchase the property if the home inspector determines that the structure is not physically sound. Termite problems or signs of other wood-destroying insects are great reasons for a buyer to opt out of the contract. In such cases the seller usually return the buyer's down payment and everybody walks away from the table. Home inspections are relatively convenient, inexpensive and will save you a lot of time and money.

Finding a New York Real Estate Lawyer?

When looking for legal representation, most importantly, you want a New York Real Estate Attorney whom you feel comfortable with. If you don't feel comfortable with a particular New York Real Estate Attorney, chances are that you will not have a good working relationship.

An experienced New York Real Estate Lawyer, who you feel comfortable with, can be greatly beneficial in explaining and reducing the mystery out of buying or selling real estate in New York. Your New York Real Estate Lawyer can review and prepare the contract of sale, order title insurance, and conduct key parts of the transaction. Making sure the property you are purchasing has no undisclosed liens. If they do exist, your New York Real Estate Lawyer can take care that they will be satisfied prior to the closing.

The last thing you need is to have doubts and questions about your transaction. You want to make sure that after all the documents are signed and notarized, that you understand what just happened and that you are confident that everything was done correctly.

When should I close the deal?

The closing is the climax of the transaction. The buyer's New York Real Estate Attorney is normally the ringmaster who coordinates the time and place of the closing. The closing is where the parties meet to finalize the deal. Normally the parties you will see at the meeting are the seller and their New York Real Estate Attorney, the bank's New York Real Estate Attorney, and the title representative. What occurs at the closing table can be broken down to three major steps:

The bank makes the loan to the buyer and in return the buyer gives the bank an interest in the property (Mortgage)

The buyer turns that loan over to the seller and in turn receives a deed from the seller

The title company makes certain that the seller does indeed own the property they are transferring

Unless there are any serious outstanding issues, the closing can take about 2-3 hours. At this stage, the buyer should have obtained homeowners Insurance prior to the closing. Since not all insurance companies charge the same prices for the replacement value of a house you might want to shop around before the closing.

Lastly, a day or two prior to the closing, it's always a good idea to do a walk though of the property to make sure that it is in the same condition as when you decided to buy it.

Sellers, It's Your Front Door!

The real estate market is coming back—over the last week or so I have probably been in and out of 25 homes with several groups of buyers, and I must say, today’s sellers are neither very tidy nor all that conscious of the “first impression” that we all talk about. 

You don’t get a second chance to make a “first impression”. Some homes make a very poor first impression. These are homes with a very uninviting front door, or homes where you had to skirt the gas meter or sidle around garbage cans to get into the home. In one case a house where there was such a bewildering array of doors, you weren't sure which one to knock at.

Picture yourself as my customer, at the front door, while I am getting the door unlocked. My clients are noticing the door paint is peeling or the lockset hardware is rusty, or worse, it’s loose. The front entrance is seldom high on a seller's remodeling priority, yet, just like that old saw about first impressions, it's the home's entrance that people notice first. It's practically impossible to rectify a bad impression made at the front door.

Customers actually say, “I hope it’s nicer inside than this.”  Or, “looks like they didn’t take care of this one.”

Newer homes built by tract homebuilders usually have more money and energy spent on the front door than elsewhere in the home. Because builders who know their buyers care about first impression--even in the cheapest house--they rarely cut corners on the front door. They know that a strong impression of quality here subtly colors a visitor's perception of the whole house.

For hundreds of years colonists, architects and builders have spent time on their front entrances, which are a focal point of a home's design. In colonial New England, for example, the front door was often flanked by sidelights and topped by a pediment, setting it apart from an otherwise austere facade.

Certain design elements are hard to adjust, for example, a narrow lot does not lend itself to a garage opening to the side, so the “snorkel-house” (the one with the garage sticking out toward the street) has become popular in Florida, but really, the entrance should also be clearly apparent from the street. That doesn't mean it has to be glaringly exposed to view just that an unfamiliar passerby should easily deduce its location. Architects call this principle "demarcation."

There are lots of subtle ways to demarcate a front entrance. The most common is to surround the door with an architectural form such as a pediment or other type of trim. Another traditional strategy places the door in a recess, on a projection, or under a roofed porch. You can find a well-known example of the latter on the back of a $20 bill.

If you’re selling, here are some thoughts for your own grand entrance:

• Stand on you own entry porch area and look around with special emphasis on the door.  A quart or two of paint can correct a world of hurt from the front door. Don't be afraid to invest in a new door lockset hardware, there’s a lot to say about new shiny doorknob and key locks.

• Trim back any natural vegetation that might be overgrowing the entry. And if you must bring the path to the front door past utilities such as gas or electric meters, or past unsightly storage areas for trash or the like, consider a couple of sheets of plastic fence or lattice installed to hide the utilities. Keep these kinds of features out of the buyer's line of sight.

• If you have a covered entrance porch, be sure it’s clean and free of mud wasps, spider webs and any general mess.  A pressure wash will correct most of this, but even a garden hose and a broom will do the job.

• Lastly, if your house has several doors facing the street, make sure your front approach directs your visitors toward the main entrance. Do this with welcoming geranium flowerpots—or similar--or even a small welcome flag. Your front door may seem obvious to you, but, hey, you live there.

Dane Hahn is a real estate professional serving Charlotte and Sarasota Counties in Florida, he can be reached at dane.hahn@gmail.com or by phone at 941-681-0312. See him on the web at www.danesellsflorida.com

Buyers Determine The Selling Price

Sellers often start a conversation with the statement, “I have to get a certain amount”. Of course they then tell you what their carved-in-stone minimum price is—and sometimes they tell you why it's that (high) amount. Sometimes their imaginary “have to get” price is what they paid for the place some years back, possibly with every upgrade added in. Sometimes it's the price a neighbor sold for, and they have to “match” the windfall. Sometimes it's totally irrational, and may be a number that they made up over cocktails with the neighbors, or on the phone with the kids, and are now certain they can achieve.

House prices really are like the prices in the stock market, you pay the going rate when you buy in and sell at the going rate when you leave. But with real estate home prices, sellers always think they control the selling price, but it's the buyers who have the cash and they call the price.

The bad news for the stubborn seller is that buyers don't care about their personal “have to get” number. Buyers usually see a bunch of homes that are available within an acceptable area, and after their home search, they are pretty knowledgeable as to what is priced right and what's not. In fact I like to tell buyers that I will make them experts on homes in their price range, and they can make up their own mind as to what is priced properly, and what is not. After a couple of days out looking at homes, they rarely disappoint.

But how do we tell a stubborn seller that his “have to get” price is too high? I suppose gently is the best way, but the signs will be obvious. First of all, the price may be too high if there are only a few lookers

You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, (ask your agent) that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

Another measure of over pricing is there are lots of lookers, but no offers. If you’ve had many sets of potential buyers come through your home and not a single one has made an offer, something is off. What kind of feed-back are you getting? If the other agents who are bringing in the buyers are not encouraging them to make an offer, there are only a couple of things that could be the cause, condition and price. An overly high price may be discouraging buyers from making an offer.

If the home’s been on the market longer than similar homes, check with your real estate agent about the average number of days it takes to sell a home in your market. We call that DOM (days on market) If your home has been on the market for longer than the usual market period, your price may be affecting buyer interest. When a home sits on the market for too long, buyers begin to wonder if there’s something wrong with it, which can delay a sale even further. It's probably time to consider lowering your asking price.

To increase buyer interest and “get 'er sold” you may resort to a price cut. If you have to sell soon because of a job transfer or you’ve already purchased another home, it may be smart to abandon the “have to get” price and generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.

If you want to hold that magic asking price number, and can afford to sweeten the home a bit, consider adding new carpets or stainless kitchen appliances. If you can afford to, then address the questions that buyers have asked—for example if there is a lack of privacy, perhaps adding a hedge or planting bushes will make that complaint go away. Adding a home warranty to give buyers peace of mind can solve their concern about condition. But if you're plum out of cash and don’t have the funds to even put fresh paint on the walls, clean the carpets, and add curb appeal, then a price decrease will cure these issues.

If your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.

If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what's still on the market? What new listings have been added since you listed your home for sale? When comparable home sales or new listings show your price is too steep, the only way to a sale will be a price reduction.

Dane Hahn is a real estate professional practicing in Sarasota and Charlotte counties. You can reach him at 941-681-0312 begin_of_the_skype_highlighting            941-681-0312      end_of_the_skype_highlighting or by email at dane.hahn@gmail.com. See him on the web at www.danesellsflorida.com.

Foreign Buyers are Here

One of the first axioms we teach in real estate is that all business is local. Meaning that watching national trends and basing future decisions on national headlines—when our business is local—is like comparing apples with oranges. This week brought lots of minor national reports but nothing to change the outlook. In general, nationally things are better, but not booming. And yet, here on the Suncoast, business is booming. The 12 percent spike in December housing starts (again, nationally) got more attention than it deserved -- a dead-of-winter month is not a good indicator – but it manages to push interest rates up a hair. Locally, it feels like 12 per cent is a low number.

For now inflation in the real estate markets seems under control, up only 1.7 percent in the whole of 2012. But again, spending income (free cash) has taken a hit with the new withholding taxes. So will that influence the willingness of Mr and Mrs Jones from Anytown, USA to move here—or at least to prepurchase a retirement home for use in the near future? Time will tell. The core hazard facing us all: how to get right the timing and magnitude of fiscal austerity before the Fed has to stop buying our debt. When that happens, the musical chairs game ends and we all know, if you don't have a chair, you're out. We may be making more accidental, near-term progress than we know, time will tell.

Having said all that, I have more business today than I have had in a couple of years. Clients are a mix of American, Canadian and Russian. Honestly, I have never marketed myself to Europeans, I'm not fluent in any language but English, I have a little high school Spanish that has served me well on vacation trips, but I could never say with a straight face that “Yo hablo Espanol”. So what's up with all these buyers being (as we say in New England) “from away”?

Well for one thing, fear. Either the economy of the world sucks more than ours does, and so their investment money is finding us a safe haven and their money is better invested here, or our economy sucks more than theirs and so the values are greater here. Either way, people are knocking at my listing's doors with cash. And they are anxious.

Over the last 25 years or so I have never felt good about writing a contract on a property which the prospective buyer has only seen once and not “slept on”. It's been my history that buyers who fall in love with a property after one viewing, fall out of love just as fast after the home inspection. Once the stars in their eyes clear, and they find reality rearing it's ugly face, they can't wait to cancel a contract. Not so today's European buyers. The decision to get a piece of Florida real estate is so strong that they will ALMOST buy from a photo. If the property they saw in the Multiple Listing is as nice as it's photos, just walking into the property one time is all it takes to confirm their decision. This would make for a really dull HGTV show. The people buy the first house. No drama and no worries. You could fit the whole show into 5 minutes. Too bad they're not all like that.

Dane Hahn is a real estate professional practicing in Charlotte and Sarasota Counties. You can reach him at dane.hahn@gmail.comor by phone at 941-681-0312. See him on the web at www.danesellsflorida.com

Maybe It's Time To Sell Your House!

Homes are starting to sell again, and the asking prices are inching up. So for the folks who meant to sell last year, but couldn’t get their price—meaning they couldn’t afford to sell—or for those of you who want to move up into a larger manse, now may be the first time in the last 5 years when listing your house makes good sense. But don’t think that slapping a “For Sale By Owner” sign up on the nearest palm tree will get you the money or deal you are hoping for. There’s a good deal of marketing and preparation that needs to go into a home to get the best price in the least amount of time.

If you want to start the home-selling process, ask yourself, "What would happen if my home doesn't sell?" I’m here to say the home selling process is not easy, but before you panic, recognize that there are many things that you can do so you don't wind up in that position.

First of all, understanding the real estate market and the value of your home will help you avoid this dilemma. The first key point is to get educated about the market. Read your newspapers, check online real estate sites, look at your tax assessment and consult with the best experts in real estate for your area before you determine the sales price.  Don’t take any web site's dollar figure as gospel, but look for ranges within which homes in your neighborhood have been selling.

While all that may seem basic, you'd be surprised how many sellers rely on emotion to dream up a selling price for their home. I once had a house listed for what I considered was about 25% more than it’s value.  The price had been set by the seller’s mother—a price which “came to her in a dream”. It must have been a bad dream. When I finally lowered the price to where it needed to be, the place sold quickly.

Some sellers have done little research on their own neighborhood. Instead, their strong ties to their homes cause them to imagine that their home should sell for the price they want. Or they base the selling price on how much they owe which is, of course, of no significance to buyers. Sometimes the neighborhood busy-body will suggest prices base on what they thought a house sold for. Discount real estate data learned at a cocktail party.

Visualize a shelf at a shoe store filled with shoes. You’re going to pick the nicest ones that fit right?  Most buyers don't want to purchase a house with a long list of things they need to fix before they can live in the home. Yet, some sellers think that it's a waste to spend money on a home that they're moving out of soon. That's quite a predicament. Both sides have valid points.  BUT the buyers are in a stronger position because they have the money. The seller is in charge of the condition of the house, so if the home is a mess, many buyers will simply move on to the next best house.

Sometimes, if a buyer wants a particular home or neighborhood badly enough, he/she might agree to purchase a home that needs work, but it's almost sure that the buyer will want to discount the price for the problems that need fixing. In the end, you might have to fix the issues before the closing anyway. So, offering a house that is in relatively good order is the best way to begin.

I have sold homes on Christmas Eve and Thanksgiving Day. Buyers who need to buy a home will keep hunting through all the seasons. There may be some slow times but when people need a house, they'll keep looking even in the unlikely times. Think about companies that are on a calendar budget, they are ready to hire (and transfer people) in January, so holiday shopping can include homes.

Also you can offer incentives. You can make your home more appealing by offering a home warranty or some other incentive. The law allows the seller to offer bonuses to the buyers, but it's best to speak with your real estate agent about which incentives are best for you to offer. I am presently offering a cruise (value up to $2,000) to whoever buys a home I own in Maryland. Consider practical incentives to get buyers into your home to view it. For example, if your house is “way out of town”, consider offering a $25 gasoline certificate for each family that shows up at your open house. These incentives can help encourage the buyer to move forward, especially if other challenges arise.

Have you ever heard about staging your home? This is not the same thing as fixing up your home. Fixing up your home includes daily maintenance and repairs. Staging your home involves using a decorator or staging experts to make your home showroom-ready–like a model home. Even if you don’t want to live in a “model home” at least your agent can take photos of the home in all its staged glory, and use them in the advertising.  And speaking of photos, walk through your home before you list it for sale and take photos.  Then with a critical eye look at what your buyers will be seeing. I'll bet you will see dirty fingerprints and messy areas that are simply the result of living in a home, but you will be able to fix these things yourself--and that will help sell the house.

Take the time to research and understand today’s real estate market. See a Realtor. This will allow you to gain knowledge and information about your home and the market place. What you do with that is up to you, but it may just be the difference between a For Sale sign and a Sold sign hanging outside your home.

Dane Hahn is a real estate professional service Sarasota and Charlotte Counties. You can reach him at dane.hahn@gmail.com, or by phone at 941-681-0312.  See him on the web at www.danesellsflorida.com

Investing In Real Estate Investors

With the never-ending changes in our Real Estate Markets real estate professionals are starting to pay attention to the sound of new commission streams of income. Some realtors have either shied away or ran-away from such terms as "Cap Rate," & "Cash-on-Cash Returns." Terms that only the 'smart' and 'numbers-oriented people use to determine if a Real Estate purchase is a "Good Deal", or not. A majority of the realtor brethren attended real estate school because they are excited and passionate about the promise of selling real estate and making a fantastic living. That being said "Times are a Changing." Even if you live in a Hot Market where residential real estate sells in 2-3 days there is an old approach to real estate that is growing faster by the day.....Residential Real Estate Investors.

This deft group of real estate investors is taking real estate and the real estate investment world into a new era! No longer accepting the crazy volatility of the Dow Jones and NASDAQ families. Unwilling to accept the investment practices of their fore-fathers these Investors throw caution to the wind for returns above the traditional 5-6% in their Roth or IRA accounts. These Investors are bold and oftentimes aggressive. Today's Real Estate Investors are all about the fast fix-n-flip, high appreciation, and rock solid monthly cash-flows. Cutting their teeth on investment in their own home-towns is only the beginning as the Serious Investors turn to points outside their own back-yards to other regions that demonstrate greater promise and higher returns. You may say well how does this older adult view their investment opportunities? For starters the age of these stealth hunters ranges from 28 to 68. From "Rich Dad-Poor Dad" book series to Trumps magical presence on "The Apprentice," the young real estate entrepreneurs are making their dreams happen to the tune of 3-5 acquisitions a year! Got your attention now? The typical Investor has good to great credit scores. Excellent cash reserves or hidden resources of partners with cash, and a willingness to make the deal happen at nearly any cost. The best kept secret of all is that these investing beasts travel in packs. Where you see one another is very close behind. In other words they know the people that you need to know to grow your investor database even larger. If the real estate professional does a good job the happy clients are likely to refer many of their fellow-investors. Not just investor clients but their regular every-day real estate business. Face it, if you can demonstrate to your clients how adept you are with their largest personal purchase of real estate, then wouldn't you suppose they will be over their "trusted real estate advisors" opinion on buying a basic home, condo or beach house?

So what if you haven't been focused in the real estate investment sector. And you are thinking this all sounds pretty good, let's give it a try. First question to ask yourself is who have your clients been working with or exploring their options of real estate investing with over the past 3-4 months. Statistically 6 out of 10 clients have considered investing in real estate or have already begun doing so before their realtor even has a chance to blink an eye. Got your attention now? How about the fact that in less than one year I increased my annual commissions by 30% by just positioning myself within my primary data-base of clients. All I did was let them know that I was ready, willing and able to begin assisting them with their "Investment Realty" needs. What I learned during the first year was that if I could create an environment for my clients to learn more about real estate investing that they would thank me in a variety of ways....Most importantly they would call me before writing a contract and would make sure that I was involved in every contract that wanted to make a real estate purchase. Before long 30% went up to 45% and further. Even if you aren't interested in expanding your client database, at least consider protecting the turf you have for so long spent tireless amounts of time and financial resources to maintain their allegiance. On the other hand if you are looking at your real estate career and are wondering how to reposition yourself for market growth certainly to go well into 2025, here are a few known facts about how real estate investors can improve your business.

1. Real Estate Investors are literally everywhere. Successfully tapping into your current database could increase your annual commissions by 20-30%.

2. Real Estate Investors will be loyal to the professional that helps fill the gap of their investment education. Workshops, mentoring groups, finding the "golden deals" in your market makes a huge impact!

3. Investing in Real Estate Investors doesn't have to mean that you lose your "typical" residential realtor position. Being a real estate investment specialist means you are smarter than the average realtor in the market.

4. Mortgage professionals are struggling to provide real estate investors with property deals, so when you can place an investor into a good deal the referrals will begin to flow even more.

5. Real Estate Investors tend to be more conscientious about your personal time away. Investors also like to shop Monday-Friday for their deals before the "Weekend Warrior" investors get out into the competition. This translates into more normal hours and days of operation for you and your business.

6. Real Estate Investors buy-sell cycles are shorter than primary home purchasers resulting in more transactions in shorter time-frames.

We Made it Over the Physical CLiff

Dear Congress of the United States, all is forgiven.  My concern that the real estate market would be an orphan adrift on a raft of foreclosed homes has not come to pass. This week the House and Senate passed H.R. 8, legislation to avert the so-called “fiscal cliff.” A delightful term, which was widely misused as “the physical cliff” by Barbara Walters and others. Following are real estate-related provisions of the bill, which the President has ratified. So we’re good for another year.

The interest on your home mortgage remains deductible, so long as you itemize deductions on your tax return. Check with your CPA, but mortgage interest costs you money and is therefore income for your bank or mortgage lender and those guys will get to pay the taxes on that payment to them. There was some realistic concern that the interest deduction might not make the cut, but when push came to shove in Washington, this topic was apparently not even on the table.

The capital gains rate remains at 15 percent for individuals earning less than $400,000 per year and couples earning less than $450,000.  Any gains above these amounts will be taxed at 20 percent. The $250,000 individual/$500,000 married couple exclusion on the profits from the sale of a principle residence remains in place, but when one exceeds these parameters, one needs a CPA to sort out the Obama Care fees on that transaction.

Mortgage Forgiveness Debt Relief Act has been extended to January 1, 2014. In place since 2007, the act provided a tax break for homeowners who struggled through financial hardship such as a foreclosure, and were granted mortgage debt forgiveness. More than a quarter of all real estate transactions involve distressed properties.  In a letter to Congress, the NAR said. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.” So the short sale continues to live among us, at least through next January.

Mortgage insurance (which is an insurance company’s guarantee that you will not welsh on your mortgage, and in turn for that guarantee a lender will give you a mortgage with less than 20% down) that mortgage insurance has been deductible for only the past few years. Congress has decided that this deduction (for filers making below $110,000) should be extended through 2013 and made retroactive to cover 2012.

Another topic Congress touched on is the 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties.  In their wisdom this is extended through 2013 and made retroactive to cover 2012.

I’m not exactly sure why the 10 percent tax credit (up to $500) for homeowners for energy efficiency improvements to existing homes was extended through 2013 and made retroactive to cover 2012. But I’m sure the guys who sell air conditioners had much to say through their lobbies on this topic.

“Pease limitations” that reduce the value of itemized deductions have been permanently repealed for most taxpayers (but will be reinstituted for high-income filers). “Pease” limitations will only apply to individuals earning more than $250,000 and joint filers earning more than $300,000. The thresholds are indexed for inflation so will rise over time. Under the formula, filers gradually lose the value of their total itemized deductions up to a total of a 20% reduction. Raise your hand if this applies to you or anyone you know.

First enacted in 1990 and named for Ohio Congressman Don Pease, who proposed the idea, the limitations continued throughout the Clinton years. The limitations were gradually phased out starting in 2003 and eliminated in 2010. Reinstitution of these limits has far less impact on the mortgage interest deduction than a hard dollar deduction cap, percentage deduction cap or reduction of the amount of mortgage interest deduction that can be claimed.

Dane Hahn is a real estate professional serving Charlotte and Sarasota Counties.  He can be reached at 941-681-0312 or at dane.hahn@gmail.com.  See him on the web at www.danesellsflorida.com.