The past few years have been extremely difficult for many people in the Mystic Country region of CT as well as the rest of the country. I am often asked about the opportunities presented by foreclosures, short sales, and REO properties. Don’t get me wrong, there are opportunities, for those people who have weathered the storm, but I want to focus on those people who have fallen into hard times and are looking for solutions.
After much thought, and countless hours of research, I must point you in the direction of a “Special Report” posted by the Real Estate Radio Guys entitled “What you must know before attempting a loan workout” This 18 page report is extremely informative and will guide you down the right path in making the best decisions possible before you contact your lender, attorney, or real estate professional. Please paste the following link into your browser to receive the report: or click here
http://web27.streamhoster.com/tbray777/Loan%20Workout/Loan%20Workout.pdf
To those people who inevitability must lose their properties, I offer you this advice. Meet with a knowledgeable real estate professional and get your property priced correctly and on the market. Let me offer you the following example:
Suppose that you owe $300,000 on your property but fair market value is $200,000. You are what we call “under water” You owe more on the property than it is worth. You place the property on the market and receive an offer for $195,000. You then take this offer to your lender and ask them to approve a short sale. Yes, you will have had to do everything outlined in the Real Estate Guys Special Report including the documentation of a hardship. The bank turns you down and you lose the buyer.
You may have just mitigated your losses. Let’s say that the market continues to decline and a year from now you get another offer…only this time it is for $150,000. The bank accepts….what are you liable for? You can argue that a year ago you had a ready, willing, and able buyer for$200,000….. $45,000 more than they just accepted. You may also want to point out that all the fees paid by the bank over the past year are solely the responsibility of the bank since your clock stopped the minute you brought the $200,000 offer to the table. Food for thought.
Monday, January 25, 2010
Thursday, January 21, 2010
Psychology of the real estate transaction
As a real estate professional, I am forced to acknowledge the factors leading to the purchase of property on a daily basis. Most buyers and sellers have points of view driven by their own interest in a specific property.
Sellers typically believe that their property is worth more than other properties in the market place due to location, emotional attachment, personal improvements, or because their friends and family advised them. Selling a property below their own perceived value would be admitting that they may have made a mistake in the purchase, timing the sale, or over-improving the property.
Buyers, on the other hand, search for real estate to solve a problem currently existing in their lives. The most common utility achieved by the purchase of real estate is shelter. Affordability followed by lifestyle and ultimately leveraging funds in the form of a real estate investment lead the charge in the decision to buy property.
In today's market a buyer is quick to point out the negative attributes of a property in an attempt to justify and negotiate a lower offer. Often times the seller is offended by perceived low offers and a deal is ultimately not consummated due to emotional factors and/or financial loss.
As a listing agent my job is to keep as much money in my client's pocket as possible. I must provide care, obedience, accountability, loyalty and disclosure at all times. I am a successful real estate broker because of my integrity, work ethic and straight forward approach. My exceptional referral base is a direct result of proactive service and client appreciation.
Below, I have outlined my teams approach to selling properties at top market value and a brief analysis of your asset.
The First Step in Selling Property: Determine an accurate price range.
Trying to sell an over-priced property to an INFORMED buyer is virtually impossible in today's market. Buyers are knowledgeable and more educated today because of new technology and the internet. With a click of the button potential buyers are able to view all of the transactions in an area and quickly form an opinion about a property. Real estate agents are no longer in control of disseminating information. Their true value lies in market knowledge, interpretation and strategy.
Avoid Low-ball Offers: Third party appraisal will negate the buyer's ability to substantiate a low-ball offer.
Almost all of the offers I have received in the past few years contain specific language intended to protect both the buyers and the lending institutions. Specifically, "This offer is contingent upon the property appraising at or above the purchase price". By getting an opinion of value from a local, third party appraiser prior to marketing your property you will accomplish several things. First, your property will be priced realistically and will attract qualified buyers. Secondly, the appraisal will negate the buyer's ability to substantiate a low-ball offer. Third, an appraisal is an important component to help expedite the selling process. The goal in today's market place is to get recognized, get offers and sell. A long selling process, with multiple price reductions, hinders the ability to achieve a top market selling price.
Get Recognized and Not Passed Over: Being a real estate marketing professional means "professionally" marketing property so it looks great, creates interest and gets unparalleled market exposure. No excuses!
Hands down, my team markets property better than anyone in this region. We are the best because that is our standard. Marketing starts with having a thorough understanding of the market and being educated about the real estate industry. After compiling extensive market research, we incorporate professional photography, architectural drafted floor plans and aerial photos, along with other pertinent information to create graphically compelling marketing material.
Let's face it...if the property is overpriced then no one will ever see the marketing.
Tim Bray
B.S. Real Estate & Urban Economics - (UConn)
Sellers typically believe that their property is worth more than other properties in the market place due to location, emotional attachment, personal improvements, or because their friends and family advised them. Selling a property below their own perceived value would be admitting that they may have made a mistake in the purchase, timing the sale, or over-improving the property.
Buyers, on the other hand, search for real estate to solve a problem currently existing in their lives. The most common utility achieved by the purchase of real estate is shelter. Affordability followed by lifestyle and ultimately leveraging funds in the form of a real estate investment lead the charge in the decision to buy property.
In today's market a buyer is quick to point out the negative attributes of a property in an attempt to justify and negotiate a lower offer. Often times the seller is offended by perceived low offers and a deal is ultimately not consummated due to emotional factors and/or financial loss.
As a listing agent my job is to keep as much money in my client's pocket as possible. I must provide care, obedience, accountability, loyalty and disclosure at all times. I am a successful real estate broker because of my integrity, work ethic and straight forward approach. My exceptional referral base is a direct result of proactive service and client appreciation.
Below, I have outlined my teams approach to selling properties at top market value and a brief analysis of your asset.
The First Step in Selling Property: Determine an accurate price range.
Trying to sell an over-priced property to an INFORMED buyer is virtually impossible in today's market. Buyers are knowledgeable and more educated today because of new technology and the internet. With a click of the button potential buyers are able to view all of the transactions in an area and quickly form an opinion about a property. Real estate agents are no longer in control of disseminating information. Their true value lies in market knowledge, interpretation and strategy.
Avoid Low-ball Offers: Third party appraisal will negate the buyer's ability to substantiate a low-ball offer.
Almost all of the offers I have received in the past few years contain specific language intended to protect both the buyers and the lending institutions. Specifically, "This offer is contingent upon the property appraising at or above the purchase price". By getting an opinion of value from a local, third party appraiser prior to marketing your property you will accomplish several things. First, your property will be priced realistically and will attract qualified buyers. Secondly, the appraisal will negate the buyer's ability to substantiate a low-ball offer. Third, an appraisal is an important component to help expedite the selling process. The goal in today's market place is to get recognized, get offers and sell. A long selling process, with multiple price reductions, hinders the ability to achieve a top market selling price.
Get Recognized and Not Passed Over: Being a real estate marketing professional means "professionally" marketing property so it looks great, creates interest and gets unparalleled market exposure. No excuses!
Hands down, my team markets property better than anyone in this region. We are the best because that is our standard. Marketing starts with having a thorough understanding of the market and being educated about the real estate industry. After compiling extensive market research, we incorporate professional photography, architectural drafted floor plans and aerial photos, along with other pertinent information to create graphically compelling marketing material.
Let's face it...if the property is overpriced then no one will ever see the marketing.
Tim Bray
B.S. Real Estate & Urban Economics - (UConn)
Tuesday, January 19, 2010
Are condos a risky investment in today's market?
I am often being asked if I feel that Condo’s are particularly risky in these trying times. Let me shed some light on the condo market and try to help you make the best decision possible. I will focus in on the primary resident condo market as opposed to investment properties in Aspen or on the ocean. Condos are built with a specific client in mind. Condo owners are typically first time homeowners who have good credit, previously were renters, who wish to enter the housing market. They often times use the condo as a stepping stone into the single family housing arena but can not afford to do so at this time. Or the condo owner enjoys the relatively maintenance free lifestyle that a condo offers.
The risk in ownership and potential depreciation in value lies in the age of the condo, management, Home Owner’s Association, availability of other condos in the complex as well as the town, taxes, and the barrier to entry for developers in the market place.
There are very few condo complexes in my region that I would recommend. The first thing that I look at would be the town in which the complex is located.
1. Has the town approved similar condo complexes that have yet to be built and would be in direct competition with the one in question?
2. More importantly, do the existing complexes or the one you are looking at have approvals in place for the developer to build more when the market shows signs of turning?
These two questions are critical in determining your risk and the probability of a further decline in value. Developers can typically be much more aggressive in their pricing of individual units and you will rarely win when trying to go head to head in competing for the attention of buyers.
3. Pay close attention to the spread between the cost to rent, own a condo, and a detached single family. The greater the gap in between these three factors will reduce your risk.
There are a couple of condo complexes in the Southeastern portion of CT that I would feel extremely comfortable in recommending to potential buyers. Unfortunately they comprise only a small fraction of the condos currently on the market and are losing value at a fast pace.
P.S. I do not have any affiliation, ties, or listings currently in the complexes being recommended.
The risk in ownership and potential depreciation in value lies in the age of the condo, management, Home Owner’s Association, availability of other condos in the complex as well as the town, taxes, and the barrier to entry for developers in the market place.
There are very few condo complexes in my region that I would recommend. The first thing that I look at would be the town in which the complex is located.
1. Has the town approved similar condo complexes that have yet to be built and would be in direct competition with the one in question?
2. More importantly, do the existing complexes or the one you are looking at have approvals in place for the developer to build more when the market shows signs of turning?
These two questions are critical in determining your risk and the probability of a further decline in value. Developers can typically be much more aggressive in their pricing of individual units and you will rarely win when trying to go head to head in competing for the attention of buyers.
3. Pay close attention to the spread between the cost to rent, own a condo, and a detached single family. The greater the gap in between these three factors will reduce your risk.
There are a couple of condo complexes in the Southeastern portion of CT that I would feel extremely comfortable in recommending to potential buyers. Unfortunately they comprise only a small fraction of the condos currently on the market and are losing value at a fast pace.
P.S. I do not have any affiliation, ties, or listings currently in the complexes being recommended.
Thursday, January 7, 2010
Bright spot in the commercial sector
5 years ago most real estate markets were thriving....all except for one. The commercial multi family marketplace was taking a major hit. After all, anyone with a pulse could get a loan and purchase a single family home as opposed to renting. Vacancies were at an all time high and many commercial apartment brokers were forced out of the market.
The recent paradigm shift has created huge opportunities for those who stayed in this segment of the market. As a potential homeowner it is now very difficult to get a loan. People who previously possessed good credit and owned huge homes are now forced to rent due to the loss of an income,
Commercial lenders have closed their wallets, put their feet on their desks, and are playing the waiting game. The commercial sector, has been officially upended. If you question my claims then take a peek at the recent news articles on Inman News or CoStar Group.
Here comes the good news. Huge deals in the apartment arena are taking place every day. Loans are being made and money is flowing....but you still need to be smart. There is no more dumb-money in the market place. Study the demographics of the region in question to make sure that there is a wide spread between the cost to rent and the cost to own. The greater the gap, the lesser the risk.
Opportunities are there. Some need to be created...others are to be found. What opportunities do you see in this coming year?
Warmest wishes,
Tim Bray
B.S. Real Estate & Urban Economics (UConn)
The recent paradigm shift has created huge opportunities for those who stayed in this segment of the market. As a potential homeowner it is now very difficult to get a loan. People who previously possessed good credit and owned huge homes are now forced to rent due to the loss of an income,
Commercial lenders have closed their wallets, put their feet on their desks, and are playing the waiting game. The commercial sector, has been officially upended. If you question my claims then take a peek at the recent news articles on Inman News or CoStar Group.
Here comes the good news. Huge deals in the apartment arena are taking place every day. Loans are being made and money is flowing....but you still need to be smart. There is no more dumb-money in the market place. Study the demographics of the region in question to make sure that there is a wide spread between the cost to rent and the cost to own. The greater the gap, the lesser the risk.
Opportunities are there. Some need to be created...others are to be found. What opportunities do you see in this coming year?
Warmest wishes,
Tim Bray
B.S. Real Estate & Urban Economics (UConn)
Saturday, August 16, 2008
My team and I religiously track the real estate market in search of information that will give us a competitive advantage and help our clients. On a biweekly basis we take each of our listings and monitor the # of properties in direct competition; how many new properties have been added to the market; how many price reductions; # of properties under contract; # of properties closed; etc. Over time trends emerge...but I have never seen a trend like the one I discovered yesterday.
Keep in mind that over the past 5 years it has been our primary goal to market properties better than the competition and simply get them under contract. 95% of the time these properties would go through the motions and successfully close. Times have changed.
As an example I would like to show you the Groton residential single family market in the price range of $250,000 -$300,000. Over the past 4 months there have been a total of 52 properties that have gone under contract. Of those 52 properties 14 have closed. This is a 27% close ratio in comparison to a former ratio of 95%!! 4 properties in that range are still under contract at this time. Many of these properties have been withdrawn or are in pre foreclosure-foreclosure status. The Montville market is at a whopping 18% close ratio.
It is becoming more and more difficult to find qualified buyers that are capable of meeting the new lending standards and are willing to see a transaction through without being scared off by the National Media at some point throughout the transaction.
Thankfully unique properties such as waterfront, equestrian, or special use properties are being targeted by the wealthy, overseas investors, or bottom feeders with their eyes on an opportunity. This will keep diversified agents fed through the tough times.
More to come…
Thursday, July 3, 2008
INVESTING WISELY IN A TROUBLED MARKET
Have you ever noticed that successful real estate investors often purchase real estate when the market is not strong? Many would say they are lucky. I say they make their own luck. These people use their knowledge of real estate cycles to their benefit. They are people with vision who watch the trends and recognize opportunities when they become apparent. They use their knowledge of the fundamentals to make sound decisions and are ready to buy when the opportunity presents itself.
What you can do to assure that you will make the right decision:
1. Research the local market and the price range you are prepared to buy in.
a. Identify all current area listings that are $50,000 above and below the price point you are interested in.
b. Identify and fully study the area sales that have occurred $50,000 above and below the price you are considering.
c. Determine the current inventory (months of listings).
2. When you find a property that interests you.
a. Research to find out which nearby properties may be in financial trouble. (identify current debt/check foreclosure notices)
b. Identify the most recent sales in the neighborhood and determine how the sale price of each compares to it’s last sale price. (appreciation/depreciation)
c. Determine:
i. are there any unsold new homes/units in the neighborhood,
ii. how long have those properties been on the market,
iii. have there been any price reductions, and
iv. what percentage of units are still owned by the developer.
3. Treat the purchase like an investment - don’t buy on emotion.
4. Always have the property appraised and thoroughly inspected by licensed professionals.
5. Align with an agent that can provide you with a depth of real estate knowledge and experience.
This is a time when people with the ability to buy have a competitive advantage. With higher than average inventories and many troubled properties in the market, this is a great time to buy real estate.
Call 860-912-8167 to reserve a seat for our next seminar titled ‘Investing Wisely In A Troubled Market”
to be held at 9 AM, Saturday, July 12th, 102 Front Street, Noank, adjacent to the Noank Village Boatyard.
What you can do to assure that you will make the right decision:
1. Research the local market and the price range you are prepared to buy in.
a. Identify all current area listings that are $50,000 above and below the price point you are interested in.
b. Identify and fully study the area sales that have occurred $50,000 above and below the price you are considering.
c. Determine the current inventory (months of listings).
2. When you find a property that interests you.
a. Research to find out which nearby properties may be in financial trouble. (identify current debt/check foreclosure notices)
b. Identify the most recent sales in the neighborhood and determine how the sale price of each compares to it’s last sale price. (appreciation/depreciation)
c. Determine:
i. are there any unsold new homes/units in the neighborhood,
ii. how long have those properties been on the market,
iii. have there been any price reductions, and
iv. what percentage of units are still owned by the developer.
3. Treat the purchase like an investment - don’t buy on emotion.
4. Always have the property appraised and thoroughly inspected by licensed professionals.
5. Align with an agent that can provide you with a depth of real estate knowledge and experience.
This is a time when people with the ability to buy have a competitive advantage. With higher than average inventories and many troubled properties in the market, this is a great time to buy real estate.
Call 860-912-8167 to reserve a seat for our next seminar titled ‘Investing Wisely In A Troubled Market”
to be held at 9 AM, Saturday, July 12th, 102 Front Street, Noank, adjacent to the Noank Village Boatyard.
Monday, June 23, 2008
Raw Video -Metcalf's Law put to the test
Buyers and sellers are faced with many options when choosing a real estate professional. To differentiate ourselves ultimately means more business. But there are only so many hours in the day and our sphere of influence is not helping us grow our business as fast as we would like. Does video work...I am not sure at this point but I do know that after folks watch our video they feel as though they know us. The first meeting seems more relaxed and casual. Instead of hearing "Nice to meet you" we here "Great to see you" The end result is that we are utilizing metcalf's law in we produced something once and let the web do the rest indefinitely...even as we sleep. Our video is very basic, shows that we are down to earth, and makes us approachable. Click below or paste into your browser to watch this 1 minute video.
http://web3.streamhoster.com/tbray777/Introduction%20to%20Bray%20Consultants%20@%20Sothebys.wmv
We have differentiated ourselves in the way that we market properties and our philosophy when listing a property. To show potential sellers how our services differ, we have created a six minute listing presentation outlining our intent and plan to market their property. Although the presentation is strong, we find that our backgrounds and real estate education are the pivotal points tipping the scale in our favor. Our presentation can be viewed by pasting the following link into your browser or just clicking on the link.
http://web3.streamhoster.com/tbray777/Introduction%20to%20Bray%20Consultants%20@%20Sothebys.wmv
We have differentiated ourselves in the way that we market properties and our philosophy when listing a property. To show potential sellers how our services differ, we have created a six minute listing presentation outlining our intent and plan to market their property. Although the presentation is strong, we find that our backgrounds and real estate education are the pivotal points tipping the scale in our favor. Our presentation can be viewed by pasting the following link into your browser or just clicking on the link.
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