Trust Your Gut. Spot Red Flags When Negotiating the Sale of Your Home

Your gut instincts are usually right on target. Learn to trust them. Sometimes, we get that gut feeling that something can or will go wrong, and we dismiss them for whatever reason. Maybe it's because  the reason we got those gut feelings is because of something totally unrelated, and we recognize that. Or, maybe the other party did something  to diffuse the initial concern.

Nobody ever wants to tell you, "I told you so", and you should not ever have to feel like saying to yourself, "I should have listened to my gut and I didn't. That's what got me into this predicament"

So let's talk about those gut reactions, and gut feelings when it comes to negotiating. When you can chalk those up to past experiences when there are many of the same factors involved, it is time to listen.

This may seem out of context, but it really isn't, if you think about it.  A few years ago,  I went to a Realtor safety class that was given by a seasoned detective. He gave us a great presentation and went on to say that we (as Realtors) put ourselves at risk  on a daily basis. He said something that resonates with me to this very day, and that not only involves personal safety, something that is smart thinking in day to day life- and I have taken that one step further to include negotiating.

What he said is that is if you have a concern, you learned that (physical and/or) emotional response from a prior event. Listen to your gut. If it says you need to be concerned, then be concerned. Period. And take an appropriate course of action.

Now what does all of this have to do with negotiating? We are not talking about safety issues, we are talking about negotiating. And that, we are...

You probably have not been involved in a large number of home negotiations, but I am assuming your real estate agent has. There are few obvious red flags to concern yourself with.

When the party on other side of the transaction displays some behavior that just doesn't seem right and it's right there from the beginning, don't expect it to get any better throughout the transaction.

If a buyer or seller is nickel and diming you from the very beginning, expect it to last right up through and including the closing.  That doesn't mean that you shouldn't work with that buyer or seller, it just means that you should know what you are in for, and to be ready for it. That may mean holding back some negotiations that are inevitably bound to happen before the closing.

If a buyer or seller agrees to a contingency or modification of the offer, and then reneges, expect that to happen throughout the transaction, if it ever comes to fruition.

On the other hand, when the other party tends to be reasonable, they will most likely be reasonable throughout the transaction. So your gut isn't always telling you that there is something to be concerned about.

Your agent (that would be me) knows how to negotiate and counteract those  seemingly little items that tend to pop up, and that could very well amount to much more than they initially appear. So count on your professional agent to guide you in the right direction and handle the bumps along the way.

 

Do You Know Any Fairfield County or Southwestern Connecticut Trivia?

We are looking for your input! Do you know a little known fact or interesting tidbit about any of the towns that we service? We are looking for unique facts, specific lore, or interesting little known history about the following towns in Fairfield and New Haven Counties.

Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, Newtown, Norwalk, Redding, Shelton, Southport, Stratford, Trumbull, Weston and Westport

and Ansonia, Derby, Milford, Oxford, Seymour

Please check out the respective Town page first to see whether or not we have already included this information in our town bio. If it's not there, please send me us an email  or submit a comment below!

We will be giving away a free book, "The Art of Buying or Selling a Home" to the best submission.

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Woodburning Stove Safety in Your Connecticut Home

A wood-burning stove (also known as a wood stove) is a heating appliance made from iron or steel that is capable of burning wood fuel. Unlike standard fireplaces, wood stoves are typically contained entirely within the living space, rather than inset in the wall.

Wood stoves come in many different sizes, each suited for a different purpose:

• Small stoves are suitable in single rooms, seasonal cottages or small, energy efficient homes. These models can also be used for zone heating in large homes where supplemental heating is needed.
• Medium-size stoves are appropriate for heating small houses or mid-size homes that are intended to be energy-efficient and as inexpensive as possible to maintain.
• Large stoves are used in larger homes or older homes that leak air and are located in colder climate zones.

To ensure safe and efficient use of wood-burning stoves, inspectors can pass along the following tips to their clients:

Never:

• burn coal. Coal burns significantly hotter than wood, posing a fire hazard;
• burn materials that will emit toxic chemicals, such as wood that has been pressure-treated or painted, colored paper, gift wrap, plastic, plywood, particleboard, or questionable wood from furniture;
• burn wet wood. Generally speaking, it takes six months for cut, stored wood to dry out and be ready for use in wood-burning stoves;
• burn combustible liquids, such as kerosene, gasoline, alcohol or lighter fluid;
• let small children play near a lit wood-burning stove. Unlike standard fireplaces, the sides of which are mostly inaccessible, all sides of wood stoves are exposed and capable of burning flesh or clothing; or
• let the fire burn while the fire screen or door is open.

Always:

• use a grate to hold the logs so that they remain secured in the stove and the air can circulate adequately to keep the fire burning hot;
• keep the damper open while the stove is lit;
• dispose of ashes outdoors in a water-filled, metal container;
• check smoke alarms to make sure they are working properly; and
• periodically remove the stovepipe between the stove and the chimney so that it can be inspected for creosote. Homeowners may want to hire a professional to perform this service.

Efficiency and Air Pollutants

While federal and state governments crack down on vehicle and industrial emissions, they do relatively little to limit the harmful air pollution emitted from wood stoves. The problem is so bad that, in many areas, such as Chico, Caifornia (pictured at right), the smoke from wood stoves is the largest single contributor to that city's air pollution.  Smoke from wood stoves can cause a variety of health ailments, from asthma to cancer.

To mitigate these concerns, the EPA sets requirements for wood-stove emissions based on the design of the stove: 4.1 grams of smoke per hour (g/h) for catalytic stoves, and 7.5 g/h for non-catalytic stoves. Some state laws further restrict airborne particulates, and many new models emit as little as 1 g/h. These two approaches -- catalytic and non-catalytic combustion -- are described briefly as follows:

• In catalytic stoves, the smoky exhaust passes through a coated, ceramic honeycomb that ignites particulates and smoke gasses. Catalysts degrade over time and must eventually be replaced, but they can last up to six seasons if the stove is used properly. Inadequate maintenance and the use of inappropriate fuel result in an early expiration of the catalyst. These stoves are typically more expensive than non-catalytic models, and they require more maintenance, although these challenges pay off through heightened efficiency.
• Non-catalytic stoves lack a catalyst but have three characteristics that assist complete, clean combustion:  pre-heated combustion air introduced from above the fuel; firebox insulation; and a large baffle to create hotter, longer air flow in the firebox. The baffle will eventually need to be replaced as it deteriorates from combustion heat.

The following indicators hint that the fire in a wood-burning stove suffers from oxygen deprivation and incomplete combustion, which will increase the emission of particulates into the air:

• It emits dark, smelly smoke. An efficient stove will produce little smoke.
• There is a smoky odor in the house.
• There is soot on the furniture.
• The stove is burning at less than 300º F. A flue pipe-mounted thermometer should read between 300º F and 400º F.
• The flames are dull and steady, rather than bright and lively.

To ensure efficiency, practice the following techniques:

• Purchase a wood-burning stove listed by Underwriters Laboratories. Stoves tested by UL and other laboratories burn cleanly and efficiently.
• Burn only dry wood. Wood that has a moisture content (MC) of less than 20% burns hotter and cleaner than freshly cut wood, which may contain half of its weight in water.
• Burn hardwoods, such as oak, hickory and ash once the fire has started. Softwoods, such as pine, ignite quicker and are excellent fire starters. 
• Make sure the stove is properly sized for the space. Stoves that are too large for their area burn inefficiently.
• Burn smaller wood rather than larger pieces. Smaller pieces of wood have a large surface area, which allows them to burn hotter and cleaner.

In summary, wood-burning stoves, if properly designed and used appropriately for the space, are efficient, clean ways to heat a home.

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

 

 

How much should you negotiate on your home?

This may seem initially vague,  but that answer will be different for everyone. Four factors play a major part in the ultimate selling price of your home, and those four factors together will determine the negotiating guidelines that are right for you.

• what is the market value is on your home

• how much is your home listed for

• how much structural or cosmetic work is needed

• how badly you want to sell.

1. What is the market value of your home? If your home's value is estimated from your Realtor  to be at  $600,000, for example, and you have an offer on the table that is substantially less, there may not be any room to negotiate, or any need to , for that matter. If your offer comes in at $620,000 for example, you may just want to accept it right then and there, or just try for a little more. (It never hurts!)

2. How much is your home listed for? Let's say that your home that is valued at $600,000 is actually listed for $650,000, because you wanted to leave room for negotiations. If someone came in with an offer under $600,000 does it mean that they are trying to lowball you? Absolutely not. They just want to get you to accept an offer on your home that is much more in line with market value.  Optimally, you should never put in "negotiating room" on your asking price. Your home  will end up  being labeled as overpriced, and you will not be able to compete properly with the homes in your expanded price range.  Buyers buy on emotion. If they really want your home, they will pay your price, as long as its within market reason, and they have the financial wherewithal to buy it.

3. Does your home need any structural repairs or obvious cosmetic updates? If a repair costs $2,500, subconsciously most buyers will end up doubling that and reduce their offering price by the doubled amount. It might fare better that you acknowledge that the home needs some structural or cosmetic repairs, and state clearly that you have already accounted for that in the price, do you don't get hit in the wallet  twice for one repair.

4. How badly do you want to sell? If you are not getting a lot of offers, or getting very few, that saying "A bird in the hand is worth two in the bush", is much more relevant to you. Just for one quick example, think about each monthly mortgage payment you make, and how much it costs you to maintain your home while it is on the market. If you are sure that the risk of not selling is less than the perceived financial loss of selling, then hang on and wait for another buyer.  But remember to look at your actual bottom line- that is your net proceeds after your expenses.

If the bottom line in your mind is that you won't selll for a dime less than $600,000, your mortgage is $4,000 per month and you have already waited four months to get an offer of $585,000, you have actually spent $16,000 to get to that point (four months worth of mortgage) for a net of $584,000.  If you end up waiting yet another four months and settle for $595,000, you have spent $32,000 to get to that point.
That $595,000 is worth less than the $585,000 just 120 days ago. So it is important to look at your actual net, after you take into account all of your expenses.

But truly, the answer to how much you should negotiate falls squarely on your shoulders, taking into account  these four items, and it is your decision. Let no one talk you into or out of anything. What is best is that you have someone experienced (like me!) give you the best advice  possible. Contact me anytime. I am ready to assist you with all of your real estate needs.

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Connecticut Mortgage Rates and Financing Update October 14, 2011

This Week's Financial News

Paperwork, paperwork, and more paperwork. Why do well qualified borrowers have to supply so many documents that are not income and asset based?   Fannie Mae and Freddie Mac are increasingly demanding sellers ( your lenders)  repurchase mortgages that default years after they were made and buy back recent loans that aren't even delinquent, according to PHH." "They're casting the net wider," Luke Hayden, head of PHH's mortgage unit.  Which means, the banks have to buy back the mortgage debt and have less money to lend.  And with the threat of a buy back on a mortgage, the banks (sellers) want to make sure everything is documented by the borrower.  The indication is, it is only going to require more paper work from borrowers to qualify for a mortgage.

Today the Fed will announce how much money it will have to reinvest into the Mortgage Backed Securities market from mid-October through mid-November. Estimates are around $22 billion which translates to about $1.1+ billion per day. This scenario with mortgage banker supply holding in the $1.5 to $2.0 billion area equates to the Fed taking between 73% and 55% of daily supply. This is a more favorable demand dynamic versus last week when supply hit between $2.5 and $3.0 billion in a couple of sessions.
 

With Bank of America leaving correspondent, is someone like Chase going to be next? There is a big difference between hallway chatter and headlines of "MetLife May Sell Mortgage Business" in Bloomberg! "Chief Executive Officer Steven Kandarian, who took the job in May, is planning to exit a business that expanded in June when it replaced Bank of America Corp. as the preferred lender of builder KB Home...Keeping the mortgage unit could divert "resources away from MetLife's primary focus on its global insurance and employee benefits businesses," the New York-based company said in a statement.  Let's sum things up, given the investor scuttlebutt from the national Mortgage Conference this week and general rumors, possible half-truths, and outright misstatements. MetLife is/was a solid competitor for wholesale broker business in many parts of the nation - maybe someone like Fortress will buy the mortgage group. Bank of America will soon be strictly retail, and only in some states. Chase does not buy third-party originated production, i.e., broker business, from clients. GMAC, PHH, and SunTrust have varying degrees of operational hurdles, and only buy loans on a mandatory basis one at a time or not at all, and have varying degrees of tolerance for buying loans from smaller companies offering correspondent relationships. Are they ready for all this volume? Looking at the top correspondents, volume-wise, so we have Wells Fargo, which is grappling with purchase turn time days into the teens, CitiMortgage, U.S. Bank, Flagstar, Franklin American, and BB&T. Rumors of higher capital requirements for correspondent sellers are rampant.

Too much competition is one thing, but does the industry really need fewer players? Besides making things easier for pricing engines, will the borrower be better off? Let's ask the protesters about unintended consequences.

Today's Mortgage Rates

30 year fixed - 3.99% + 0 cost points for rate
20 year fixed - 4.00% + 0 points for rate
15 year fixed - 3.375% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 3.875% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.50 with 0 point for rate

Jumbo - over 635,000 to 2,000,000
30 year fixed - 4.50 % with 0 points  for rate
15 year fixed - 4.250% with 0 points for rate
5/1 ARM - 3.250% - 0 points for rate
7/1 ARM - 3.625 % - 0 points for rate

10/1 ARM - 4.375% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.