Understanding National Housing Reports from S&P Case-Shiller, NAR and others

What you see nationally for housing trends and reports is important as a general barometer of the market, but you must take into account the local townwide market performance  as well as the market specifically as it relates to your home in order to ascertain what all of these different reports mean to you and your home.

Probably the two biggest and most trusted  national home reports and trends come from Standard & Poor's Case-Shiller Index and the National Association of REALTORS (NAR). I review these reports whenever they come out, which is usually the last week of the month. For example, the Case-Shiller indices came out today, as they always do at 9 AM Eastern time on the last Tuesday of any given month. The Case Shiller reports review non-seasonally adjusted home sales data and  changes in the index are derived  from actual changes in selling prices of homes. At 169.19, our region is in the New York MSA , and  is the third highest in the nation, behind Washington D.C. and Los Angeles, respectively. The index references a starting point of January, 2000  which equals 100.

The NAR (The National Association of REALTORS) report that was issued just five days ago  says that regionally, existing-home sales in the Northeast rose 2.6 percent to an annual level of 790,000 in September and are 6.8 percent above a year ago. The median price in the Northeast was $229,400, down 3.3 percent from September 2010. You may have thought that 790,000 was an average sales price. It almost sounds like one around here. They actually mean that there are 790,000 units sold, and the average sale price is under $230,000. That's my point.

Another thought- For example, as you know,  foreclosures are affecting the housing recovery-some reports say as much as 30 percent of all sales are foreclosures. Now, I would truly hesitate to say,  and I think you would agree with me that for example, nearly one third of all Westport's sales are in distress (they're not) or that that just one third of Bridgeport's home sales are in distress. I can actually look that up, individually on each property that is on the market. It would take some time, but it's do-able. My years of experience tell me quite simply that national averages do not equal local averages, especially in Fairfield County. We typically run better than those national averages, but I also think the general population is astute  enough to know that.

When it comes down to brass tacks, real estate is VERY local.  So local, in fact that I am sure that you, or anyone not even involved in real estate on a daily basis can think of one area in town that sells better than another area, or one area of town that traditionally has lower resale values,  and maybe even one side of the street that is more desirable than other side. That happens all the time, by the way.

A Townwide  average cannot be true for every home in that town. Again, its a great indicator of what's going on in your town, but your home is unique to itself and so are the conditions regarding its value and marketability.  And yes, I perform weekly statistics on five towns. Five towns that I am keenly aware of the market and its intricacies,  because I have reported local statistics for years- as far back as in the 1990's. (ouch, I am dating myself-lol)  At any rate, I offer my reports and trends as an experienced local professional, experienced not only in sales, but in analyzing those sales as well.  When you review my weekly reports, you might notice that I generally focus on the week, and on active listings.  I give averages on sales, but I do not include the addresses of homes that sold. I give an overview at the end of the month, the end of the quarter, and/or my predictions for the upcoming months, but  giving an address and a sale price doesn't do too much of anything for you to figure out what the price of your home will be, without all the additional details that are needed in order to do so.

It is VERY IMPORTANT to know these national statistics. They help us put our market into perspective, just like a townwide analysis helps to put your area in perspective, and a neighborhood analysis helps to put your home's price into perspective. It's all relevant, just place the greater relevancy on the more local figures. Those national statistics are a great base to start on. If you want to price your home, or know what it's worth. Call me, email me, and I'll come over, preview your home, and tell you what the price is after I review the market as it pertains to your home, and your home alone. Just email or call when you need me.

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Obtaining Home and Building Products For Your Fixer-Upper at Clubs Like Direct Buy

When it comes to purchasing a "fixer-upper" home, many buyers  initially think that a home that needs work will be a great bargain,  but once they realize how much everything will cost, they tend to shy away from the house, mainly because they are calculating the costs of materials involved. Building  materials, appliances and home goods can add up and become expensive- sometimes equalling or surpassing  the amount of downpayment on the house! So although those 'Fixer-upper' homes present an excellent investment opportunity to home buyers, many don't move forward with that typr of house  because they perceive a never ending project that will end up depleting their bank accounts on materials alone.  

Home buyers who are not experienced with the basics of remodeling should consult with a licensed home inspector, and a licensed remodeling contractor before purchasing a home that needs work. Such professionals can provide you with a basic understanding of the steps needed to complete your desired projects, and most contractors  will offer to perform any tasks necessary to bring your home up to your standards. However, to receive the greatest profit on your investment, you should attempt to complete as many aspects of your project as you reasonably and comfortably can.

If you are thinking about selling your home, and it needs some updates, remember that homes with renovated kitchens, bathrooms, and master suites are invariably sold at higher prices than their outdated counterparts, and by upgrading those key areas of your house, you can increase the value of your property. No one says that it has to be a very expensive remodel. The general buyer population prefers homes that are in move-in condition, and those homes will continue to sell at a premium, because renovation projects can seem somewhat complex and more expensive than they actually are.

Unfortunately, many home owners are reluctant to undertake major renovation projects because they fear that inexperience will cause them to make costly mistakes. However, Direct Buy reviews attest that the biggest single component that you need in order to complete a successful renovation is access to low-cost supplies. A Direct Buy membership enables you to acquire furniture, appliances, lighting, and more at manufacturer prices.
 
A club like Direct Buy Membership has its privileges and can be quite advantageous. Direct Buy reviews explains how the company allows home owners to purchase the supplies that they need without paying retail markups. Home renovators can use these inexpensive goods to perform home updates that are considered desirable by most purchasers; for example, many home buyers expect to find granite countertops in the kitchen, a spa tub in the bathroom, and hardwood floors throughout. By incorporating these updates, you can  boost equity and value of your home.

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Doesn't That Bedroom in the Basement "Count" in my Connecticut Home?

Most basement bedrooms are considered non-conforming, and can be very dangerous. If you are selling your home, and intend to include a bedroom in the lower level as part of your property's features, make sure you know the implications.

Non-Conforming Bedrooms

A room must conform to specific requirements in order for it to be considered a bedroom or sleeping room. The reason for this law is that the inhabitant must be able to quickly escape in case of fire or another emergency.
 
Why would a homeowner use a non-conforming room as a bedroom?  Some of the reasons include:

    to earn money from it as a rental. While they run the risk of being discovered by the city, landlords will profit by renting out rooms that are not legally bedrooms;
    to increase the value of the home. All other considerations being equal, a four-bedroom house will usually sell for more than a three-bedroom house; and
    lack of knowledge of code requirements. To the untrained eye, there is little obvious difference between a conforming bedroom and non-conforming bedroom. When an emergency happens, however, the difference will be more apparent. If you have any questions about safety requirements, ask your InterNACHI inspector during your next scheduled inspection.

Homeowners run serious risks when they use a non-conforming room as a bedroom. An embittered tenant, for instance, may bring their landlord to court, especially if the tenant was forced out when the faux bedroom was exposed. The landlord, upon being exposed, might choose to adjust the bedroom to make it code-compliant, but this can cost thousands of dollars. Landlords can also be sued if they sell the home after having advertised it as having more bedrooms than it actually has. And the owner might pay more than they should be paying in property tax if they incorrectly list a non-conforming bedroom as a bedroom. Perhaps the greatest risk posed by rooms that unlawfully serve as bedrooms stems from the reason these laws exist in the first place:  rooms lacking egress can be deadly in case of an emergency. For instance, on January 5, 2002, four family members sleeping in the basement of a Gaithersburg, Maryland, townhome were killed by a blaze when they had no easy escape.

The following requirements are taken from the 2006 International Residential Code (IRC), and they can be used as a general guide, but bear in mind that the local municipality determines the legal definition of a bedroom. Such local regulations can vary widely among municipalities, and what qualifies as a bedroom in one city might be more properly called a den in a nearby city. In some municipalities, the room must be above grade, be equipped with an AFCI or smoke alarm to be considered a conforming bedroom, for instance. Ceiling height and natural lighting might also be factors. The issue can be extremely complex, so it’s best to learn the code requirements for your area. Nevertheless, the IRC can be useful, and it reads as follows:

    EMERGENCY ESCAPE AND RESCUE REQUIRED SECTION: R 310.1 Basements and every sleeping room shall have at least one operable emergency and rescue opening. Such opening shall open directly into a public street, public alley, yard or court. Where basements contain one or more sleeping rooms, emergency egress and rescue openings shall be required in each sleeping room, but shall not be required in adjoining areas of the basement. Where emergency escape and rescue openings are provided, they shall have a sill height of not more than 44 inches (1,118mm) above the floor. Where a door opening having a threshold below the adjacent ground elevation serves as an emergency escape and rescue opening and is provided with a bulkhead enclosure, the bulkhead enclosure shall comply with SECTION R310.3. The net clear opening dimensions required by this section shall be obtained by the normal operation of the emergency escape and rescue opening from the inside. Emergency escape and rescue openings with a finished sill height below the adjacent ground elevation shall be provided with a window well, in accordance with SECTION R310.2.  
        MINIMUM OPENING AREA: SECTION: R 310.1.1 All emergency escape and rescue openings shall have a minimum net clear opening of 5.7 square feet (0.530 m2). Exception: Grade floor openings shall have a minimum net clear opening of 5 square feet (0.465 m2).
        MINIMUM OPENING HEIGHT: R 310.1.2 The minimum net clear opening height shall be 24 inches (610mm).
        MINIMUM OPENING WIDTH: R 310.1.3 The minimum net clear opening width shall be 20 inches (508mm).
        OPERATIONAL CONSTRAINTS: R 310.1.4 Emergency escape and rescue openings shall be operational from the inside of the room without the use of keys or tools or special knowledge.

    WINDOW WELLS: SECTION: R310.2 The minimum horizontal area of the window well shall be 9 square feet (0.9 m2), with a minimum horizontal projection and width of 36 inches (914mm). The area of the window well shall allow the emergency escape and rescue opening to be fully opened. Exception: The ladder or steps required by SECTION R 310.2.1 shall be permitted to encroach a maximum of 6 inches (152mm) into the required dimensions of the window well.

    LADDER AND STEPS: SECTION: R 310.2.1 Window wells with a vertical depth greater than 44 inches (1,118mm) shall be equipped with a permanently affixed ladder or steps usable with the window in the fully open position. Ladders or steps required by this section shall not be required to comply with SECTIONS R311.5 and R311.6. Ladders or rungs shall have an inside width of at least 12 inches (305 mm), shall project at least 3 inches (76mm) from the wall, and shall be spaced not more than 18 inches (457mm) on-center vertically for the full height of the window well.

    BULKHEAD ENCLOSURES: SECTION: R 310.3 Bulkhead enclosures shall provide direct access to the basement. The bulkhead enclosure with the door panels in the fully open position shall provide the minimum net clear opening required by SECTION R 310.1.1. Bulkhead enclosures shall also comply with SECTION R 311.5.8.2.

    BARS, GRILLS, COVERS, AND SCREENS: SECTION: R 310.3 Bars, grilles, covers, screens or similar devices are permitted to be placed over emergency escape and rescue openings, bulkhead enclosures, or window wells that serve such openings, provided the minimum net clear opening size complies with SECTIONS R 310.1.1 to R 310.1.3, and such devices shall be releasable or removable from the inside without the use of a key, tool, special knowledge, or force greater than that which is required for normal operation of the escape and rescue opening.

    EMERGENCY ESCAPE WINDOWS UNDER DECKS AND PORCHES: SECTION: R 310.5 Emergency escape windows are allowed to be installed under decks and porches, provided the location of the deck allows the emergency escape window to be fully opened and provides a path not less than 36 inches (914 mm) in height to a yard or court.

In summary, non-conforming bedrooms are rooms that unlawfully serve as bedrooms, as the occupant would lack an easy escape in case of emergency.

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by Nick Gromicko and Rob London

Nick Gromicko, FOUNDER. http://www.nachi.org
International Association of Certified Home Inspectors (InterNACHI) is the world's most elite, non-profit inspection association.
President, ComInspect, www.cominspect.com
Director, Master Inspector Certification Board, www.certifiedmasterinspector.org
Author, 15 books and Co-Host of  http://www.NACHI.TV

Buyers Agency Agreement in Connecticut. Do you have to sign it?

When you are all ready to see houses, and excited about the prospect of seeing those homes, especially if one of them really caught your eye, there's almost nothing worse than having a piece of paper shoved in front of you the moment you meet an agent and being told that you MUST sign before you can see any properties.

It's simply not true. You don't have to sign anything. It's not the law.... (for you)
Now, the real estate agent is bound by law to discuss agency with you at the first substantial meeting. Whether or not you choose to sign an exclusive buyer representation agreement is entirely up to you. You should not feel pressured by any real estate agent to ever sign anything..

Buyers Agency agreements are intended to protect the buyer. Years ago, all agents represented the seller, and owed their fiduciary responsibility to the seller. So even though you were working with an agent who was showing you properties, that agent worked for the seller to get them the highest price. Seems a little quirky, doesn't it?

That's one of the reasons that Agency was changed, and there are all types of representation agreements. You can choose to be exclusively represented by one agency, you can choose (with the appropriate agreement and language) to work with a number of agencies, you can choose to be represented  for specific properties only, you can choose representation for the day, the week, the month, etc., or define your parameters for the agreement in most any way you want. You can also choose NOT to be represented. By the way, there is also an agreement (form)  for that, too.

What I am saying here is that the agreement, and type of agreement is also negotiable. If you are ever pushed into signing ANYTHING, run... don't walk to the next agent.

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Seller Tips: Proper Staging and Guidelines for Home Showings.

When you list your home for sale, a lot of emotions can come to the forefront of your thoughts. You love your house, you may  have some sentimental memories there, and it's only natural to think that everyone who comes in should like it enough too want to buy it, too. But that's not always the case.

The most important thing to remember is that it is not a personal affront to you when a buyer comes into your home and doesn't wish to pursue a purchase.

There are things that you can do before, during and after a home showing that will assist your Realtor in making the process as quick and painless as possible  There are also things that you shouldn't do that can also hinder a sale. SEE ARTICLE ON "Should a Seller Leave During Home Showings".

Before the showing:

Is you home properly staged for sale? We have a few general tips on staging  and have also provided useful links right here within this article for your reference.

OUTSIDE: Make sure your front porch is inviting. During the summer months, put a potted plant near the door. In the fall, Mums are nice, and make sure that the porch and front walk are clear of any fallen leaves. In the winter, make sure your walk is devoid of ice and/or snow. SEE ARTICLE ON Exterior Staging

INSIDE: Pick up any clothing on the floor, on the bed, draped on the couch, or in the laundry room.  Gather all of your personal papers and put them out of sight. Make sure your counters are clean, no dishes are in the sink, and that your home smells fresh.  In, short, it's time to de-clutter. DO NOT spray something like Febreze all around the house moments before a showing. It's obvious to buyers, and it looks like you are hiding something.

During the Showing: Try and leave if you can. You don't have to leave until the buyers come, but  really- try not to be there.It can get uncomfortable for the buyers and you want them to have their own "space" while they are looking.

After the Showing: Most  buyers spend about 10-15 minutes looking at an average sized  home. Any less, they are probably not interested. If they stay over 20 minutes, there may be some interest. You should expect that your agent (that would be me!)  will obtain feedback for you on the showing. Be prepared for negative feedback, and again... do not take it personally. Feedback helps you and your agent tweak the marketing of your home in order to effect a sale.

When you decide to sell your home, be prepared for the gamut of emotions to pour out. Don't shoot the messenger if the news is not exactly what you want to hear, and always be fully prepared for the last minute showing. It could very well be your last showing, too!

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