AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Will Wall Street Bonuses Revive NYC Housing?http://realestate.aol.com/blog/2010/01/13/will-wall-street-bonuses-revive-nyc-housing/http://realestate.aol.com/blog/2010/01/13/will-wall-street-bonuses-revive-nyc-housing/http://realestate.aol.com/blog/2010/01/13/will-wall-street-bonuses-revive-nyc-housing/#commentsFiled under: ,

As goes Wall Street, so goes the New York City real estate market.

While Americans West of the Hudson might decry the return of big investment bank bonuses others-say, local real estate agents or upper and middle class homeowners who are living next to empty, or worse, sublet houses and co-ops-are relieved to see bonuses come back.

The greater New York City housing market has not exactly been strong lately, but the Lehman Brothers collapse in the fall of 2008 basically drove it into a tailspin.

For most of that year and into 2009 top Wall Street employers were straight up going out of business or paralyzed with terror that they might be next.

They cut dividends, slashed payrolls and cut bonuses-the bread and butter for many of the rank and file bankers and secretaries who own homes in the city and outlying suburbs. Enclaves such as Connecticut's tony Greenwich, were devastated.

Even Timothy Geithner couldn't sell his house in Westchester County, joining the ranks of accidental and reluctant landlords.

Now, the "flyover states" are up in arms about Wall Street big shots and their bonuses. But all the big banks have paid their TARP money back, and the senior congressman from Arkan-missi-zona doesn't have much of a leg to stand on.

In fact, the Federal Reserve will be giving $46 billion back to the Treasury Department, the largest payment in Fed history, so you could argue that Uncle Sam is already getting his cut of Wall Street's bonuses.

As Forbes.com has noted: "The effect, if any, is likely to be limited to Manhattan and its wealthier suburbs, the primary beneficiaries of Wall Street income."

But that's Okay. In fact, it's exactly the point. According to HousingPredictor.com, prices in New York could fall another 17 percent in 2010, the worst decline in the country, without something to give them a boost. The first-time buyer credit of $8,000, which has goosed local housing markets in other parts of the country, doesn't do a whole hell of a lot in a market where the median home price approaches to $1 million.

No market -- sorry Detroit and Las Vegas -- needs an influx of capital from its core industry more than New York. Developers, Realtors and homeowners alike look forward to bankers, traders, admins and even mail-room clerks being able to spread the wealth again.

 

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]]>connecticutgreenwichhousing pricesinvestment banksnew yorkspsnotreqdcitynew yorkspsnotreqdhousingspsnotreqdmarketnew yorkspsnotreqdhousingspsnotreqdpriceswall streetwall streetspsnotreqdbonusesBrett Widness2010-01-13T10:40:00 00:00Pandora's Profitablity Means More Music for Allhttp://realestate.aol.com/blog/2010/01/12/pandoras-profitablity-means-more-music-for-all/http://realestate.aol.com/blog/2010/01/12/pandoras-profitablity-means-more-music-for-all/http://realestate.aol.com/blog/2010/01/12/pandoras-profitablity-means-more-music-for-all/#commentsFiled under:

Some people are late to the Pandora party, shucking out 99 cents or more for downloads from iTunes or Amazon (or heaven forfend, buying vinyl or CDs in an actual brick and mortar store!) Chumps!

With the music recommendation service's announcement Tuesday that it will be profitable this quarter, hopefully it will be around at least a little longer, while other services have faded.

Firstly, Pandora is great for at-work listening, since you don't download any software.

Secondly, if you don't have an iPhone, (and even if you do) Pandora is a nice alternative for music on the go.Lastly, expect to see more and more Pandora integrations into your TVs, stereos, alarm clocks, etc. My Roku device recently added Pandora as one of it's channels, so that makes it at least twice as useful as it was before (besides streaming Netflix.)

While some people may use those digital music channels that come with Comcast or Time Warner Cables, why not use a custom Pandora station for your next house party? Or, set your phone or alarm clock to wake you to one of your stations.

For example, Samsung unvelied a bunch of devices at CES that have Pandora baked in, including this sound bar.

Guess what I want for Valentine's Day?

 

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]]>iTunesmusicpandoraBrett Widness2010-01-12T17:00:00 00:00Why D.C. Condo Sales Are Boominghttp://realestate.aol.com/blog/2010/01/12/why-d-c-condo-sales-are-booming/http://realestate.aol.com/blog/2010/01/12/why-d-c-condo-sales-are-booming/http://realestate.aol.com/blog/2010/01/12/why-d-c-condo-sales-are-booming/#commentsFiled under:

Condominium sales in the Washington area jumped 34 percent last year, with a total of 2,350 units sold, according to a year-end report by Delta Associates.

At the same time, that hasn't kept prices from dropping. New condo prices dipped 3.7 percent in the District, slumped 6.2 percent in Northern Virginia and fell 6.9 in suburban Maryland, according to the Washington Business Journal.

Why are condo sales so strong in the nation's capital, while cities such as Miami and Las Vegas are burdened with years of inventory.

Firstly, with all the government spending, D.C.'s unemployment rate is only at 6.1 percent, almost four full percentage points lower than the national average.
Secondly, D.C. developers were quick to convert condo projects to rentals when the housing market started to soften, taking some of the inventory out of circulation. Other developers may have quickly gone into foreclosure or bankruptcy.

Thirdly, low interest rates and the first-time buyer credit certainly didn't hurt.

More on D.C. Housing: D.C. Housing Market | D.C. Homes for Sale | D.C. Apartments

At the same time, not all of the D.C.-area condo markets are doing very well. Maryland's suburban Prince George's County has a 22 year stockpile of unsold condos at the current rate of sales, while Virginia's Arlington and Alexandria have just a 1.4 year inventory.

But the big question for condo owners new and old is when prices will start to rise again.

Sales are great, but appreciation is better. Or will developers flood the market with new inventory in 2011?

 

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]]>condosdcBrett Widness2010-01-12T09:00:00 00:00Sinkhole Swallows Florida House; Trailer Park Evacuatedhttp://realestate.aol.com/blog/2010/01/11/sinkhole-swallows-florida-house-trailer-park-evacuated/http://realestate.aol.com/blog/2010/01/11/sinkhole-swallows-florida-house-trailer-park-evacuated/http://realestate.aol.com/blog/2010/01/11/sinkhole-swallows-florida-house-trailer-park-evacuated/#commentsA 10-foot deep sinkhole swallowed part of a home in Plant City, Florida.

According to the Tampa Bay's WTSP, Nancy Regan and her boyfriend found themselves escaping through a back bedroom window as the ground swallowed up their home. Both the Regan's home and a neighboring home have been condemned.

In nearby Polk County, another sinkhole led to the evacuation of a Frostproof mobile home park (left). This sinkhole was estimated to be 40 to 50 feet deep and 30 feet wide, and swallowed several trees but no actual homes.According to Sinkholes.net:
[S]inkholes are formed where the rock below the land surface is limestone or other carbonate rock whose minerals are naturally dissolved by water. As the rock dissolves, the ceiling of the cavern becomes thinner as it decays. When the land above the cavern becomes too heavy for the ceiling to support, the soil and sub-surface above starts to ravel downward to it. A depression or even a complete collapse of the land above can occur. Water flow also forces more sub-surface particles downward. ... Florida is the most vulnerable state for sinkhole development, especially along the northwest Gulf Coast. ... Florida Law requires insurance companies to provide coverage for damage caused by sinkholes.
Ms. Regan indicated she does not have the appropriate insurance for her home.

 

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]]>Brett Widness2010-01-11T15:00:00 00:00Real Estate Pioneer and Century 21 Co-Founder Dieshttp://realestate.aol.com/blog/2010/01/07/real-estate-pioneer-and-century-21-co-founder-dies/http://realestate.aol.com/blog/2010/01/07/real-estate-pioneer-and-century-21-co-founder-dies/http://realestate.aol.com/blog/2010/01/07/real-estate-pioneer-and-century-21-co-founder-dies/#commentsFiled under:

On the eve of an initial public offering of Century 21's Chinese operation, Art Bartlett, the co-founder of Century 21 Real Estate Corp., died at age 76.

Best known for their trademark yellow blazers, Century 21 was the first franchise-based real estate company to take off in the United States. Mr. Bartlett sold his share in 1979, but today, the company has 120,000 employees in 67 countries.

Today, the franchise model is employed by RE-Max and most other national powerhouses, and is easy to be taken for granted. But when Bartlett and his partner Marsh Fisher started in 1971, it was a novelty. The model pioneered by Bartlett and Ray Kroc of McDonald's is now a ubiquitous in the hotel, fast food and other industries.

The national franchise model eventually brought us to within spitting distance of a national MLS, where you can look up the information of any house for sale, anywhere in the country, without any kind of login or password.

Mr. Bartlett also attempted to launch a franchise-based home improvement company called Mr. Build in the 1980s, but was largely unsuccessful.

While we think of businesses such as Zillow or Redfin as the innovators now, Mr. Bartlett and Century 21 were at the front of the last wave of innovation in the real estate space, almost 40 years ago.

 

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]]>Art Bartlettcentury 21expire-images:2010-2-6franchise modelRedfinZillowBrett Widness2010-01-07T16:50:00 00:00Somali Pirates Blamed for Kenyan Housing Boomhttp://realestate.aol.com/blog/2010/01/05/somali-pirates-blamed-for-kenyan-housing-boom/http://realestate.aol.com/blog/2010/01/05/somali-pirates-blamed-for-kenyan-housing-boom/http://realestate.aol.com/blog/2010/01/05/somali-pirates-blamed-for-kenyan-housing-boom/#commentsFiled under:

Take that, hedge fund managers!

Capitalizing on what appears to be THE hot career for 2010, Somali pirates, flush with $100 million in ransom money, have apparently started to inflate home prices in Kenya's capital city of Nairobi.

In a neighborhood known as "Little Mogadishu," business and apartment buildings have sprung up to provide for the growing Somali community.

One anonymous Kenyan real estate agent told the Associated Press that Somalis are known for paying double what a property is worth so as to avoid scrutiny.
On the one hand, ill-gotten gains are always going to be laundered into businesses or property. The same thing has happened in America during the boom time when drug dealers and other criminals would buy houses or cars or boats for cash. It may happen even more now, as sellers are desperate!

On the other hand, their may be a populist political motivation here for Kenya to go after Somali ex-pats who are seen as being tax dodgers, while blaming them for making homes in Nairobi "unaffordable."

In some ways this is similar to efforts in the U.K. to put higher tax rates on ex-pats from Russia or the Middle East.

Hey, Somali pirates are welcome to come to my open house this weekend if they make a cash offer for double of what I'm asking!

 

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]]>Brett Widness2010-01-05T11:00:00 00:00NFL Star's Home Comes With Free Porschehttp://realestate.aol.com/blog/2010/01/04/nfl-stars-home-comes-with-free-porsche/http://realestate.aol.com/blog/2010/01/04/nfl-stars-home-comes-with-free-porsche/http://realestate.aol.com/blog/2010/01/04/nfl-stars-home-comes-with-free-porsche/#commentsFiled under:

Atlanta Falcons' tight end Tony Gonzalez is going long in attempts to sell his home in Manhattan Beach, California. For just $3.6 million, you get the house and a 2010 Porsche 911 convertible.

Mr. Gonzalez listed his home at 228 34th Street last year for $3.999M, but was unable to sell at that time. Now, it's back on the market for $3.6M.

The home is listed at 4 bedrooms and 3 and a half bathrooms, 3,725 square feet, and is just two blocks from the beach.

The home has been completely remodeled with a jaw dropping 1,700 square foot rooftop deck that will capture your heart with its three separate sections, lounge chairs, a built-in grill, sound system and bed.
Zillow says the house is worth closer to $2 million, so Tony might have to include more than a car or two to get us to bite on this offer.

Since the Falcons playoff run ended this past Sunday, he and the rest of the "dirty birds" can spend the off-season doing touch-up paint jobs and other staging projects.

A 2010 Porche 911 Carrera Cabriolet retails for $88,000.








 

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]]>los angelesBrett Widness2010-01-04T15:30:00 00:00Hottest and 'Not'-est Housing Markets of the '00shttp://realestate.aol.com/blog/2009/12/22/hottest-and-not-est-housing-markets-of-the-00s/http://realestate.aol.com/blog/2009/12/22/hottest-and-not-est-housing-markets-of-the-00s/http://realestate.aol.com/blog/2009/12/22/hottest-and-not-est-housing-markets-of-the-00s/#commentsFiled under:

Think back to New Years Eve, 1999.

Most of us were more worried about Y2K and the incoming Bush administration (damn you Nader!) than whether or or not it was a good time to buy a house.

If only we knew then, what we know now ... we probably would have bought in Fort Myers and have only made 0.5 percent over a 10-year period.

Using the most recent data from the National Assocation of Realtors, we were able to compile a list of the 10 strongest housing markets since 2000 and the 10 weakest. While the final numbers for the fourth quarter of 2009 won't be out until February, we think it's fairly safe to proclaim the winners and losers.

The big winner in the housing market appears to be ... drumroll ... the Northeast.
Strongest Markets of the '00s
Median Prices in Thousands of Dollars
 2000 3Q 2009 Change Change Per Year
Allentown-Bethlehem-Easton, Pa.-N.J. 115.4 230.5 99.74% 9.97%
Baltimore-Towson, Md. 131.8 261.1 98.10% 9.81%
Trenton-Ewing, N.J. 150.9 291.2 92.98% 9.30%
Atlantic City, N.J. 116.3 223.0 91.75% 9.17%
Virginia Beach-Norfolk-Newport News, Va.-N.C. 112.3 215.0 91.45% 9.15%
Philadelphia-Camden-Wilmington, Penn.-N.J.-Del.-Md. 122.4 227.5 85.87% 8.59%
Edison, N.J. 188.2 343.8 82.68% 8.27%
Shreveport-Bossier City, La. 83.8 152.3 81.74% 8.17%
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. 178.8 324.7 81.60% 8.16%
Nassau-Suffolk, N.Y. 214.0 384.9 79.86% 7.99%

Six of the top 10 strongest housing markets are in the East Coast corridor between Philadelphia and New York City.

Only one is in the Southeast, and some of Shreveport's appreciation can be attributed to the relocation falling Hurricane Katrina. None of the cities out West made the top 10, but neither did they make the bottom 10.

Weakest Markets of the '00s
Median Prices in Thousands of Dollars
 2000 3Q 2009 Change Change Per Year
Cape Coral-Fort Myers, Fla. 97.4 98.0 0.62% 0.06%
Atlanta-Sandy Springs-Marietta, Ga. 131.2 129.4 -1.37% -0.14%
Akron, Ohio 110.1 107.2 -2.63% -0.26%
Youngstown-Warren-Boardman, Ohio-Penn. 74.1 70.7 -4.59% -0.46%
Cleveland-Elyria-Mentor, Ohio 125.1 115.8 -7.43% -0.74%
Toledo, Ohio 104.0 88.3 -15.10% -1.51%
Grand Rapids, Mich. 114.9 97.1 -15.49% -1.55%
Canton-Massillon, Ohio 107.8 89.3 -17.16% -1.72%
Lansing-E. Lansing, Mich. 111.2 86.6 -22.12% -2.21%
Saginaw-Saginaw Township North, Mich. 80.2 61.4 -23.44% -2.34%

With eight of the 10 weakest markets hailing from the Midwest, it is fairly clear that the steady decline of home prices in that region is neither a new or a short-lived phenomenon.

It is somewhat surprising to see Atlanta and Cape Coral barely making the list, but this is indicative of how high prices went in places like Vegas and Phoenix before they fell 30 to 40 percent in the past two years.

Now, if you slap a 6-7 percent mortgage on these median homes, and then 2-3 percent inflation, you are looking at "a lost decade" for even the strongest markets.

How has your market fared over the past 10 years? What about the next 10?

 

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]]>Brett Widness2009-12-22T18:00:00 00:00AT&T Tops Verizon in 12-City Testhttp://realestate.aol.com/blog/2009/12/22/atandt-tops-verizon-in-12-city-test/http://realestate.aol.com/blog/2009/12/22/atandt-tops-verizon-in-12-city-test/http://realestate.aol.com/blog/2009/12/22/atandt-tops-verizon-in-12-city-test/#commentsFiled under:

If you are like me, you are getting a little sick of all these "AT&T vs Verizon" Luke Wilson commercials mucking up my weekends.

In a nutshell, Verizon says they have more 3G coverage, while AT&T says their network is better. But no one really cares what the network is like outside of where they spend 90 percent of their time.

Gizmodo did a survey of 12 cities, including Atlanta, Chicago, Denver, Vegas, L.A., New York, Portland, Phoenix, Seattle, San Francisco. As a D.C. resident, this seems a little West Coast-centric to me, but whatever.

In nine out of the 12 cities, AT&T finished either first or second.

Verizon finished first in Vegas, Phoenix and Seattle, so that may be why you hear so much complaining about AT&T from people who live or often travel to those three cities.

T-Mobile finished first in Portland and Sprint topped the charts in Tampa, file that under random.

At the same time, Sprint won Gizmodo's survey of 3G coverage in 2008, so by this time next year, things could be totally different. But for now, AT&T is at least OK.

Maybe until Verizon gets an iPhone?

Now, here is a video of random clips from horror movies where people freak out about not having a signal on their cell phones.

See more funny videos and funny pictures at CollegeHumor.

 

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]]>Brett Widness2009-12-22T09:00:00 00:00Mortgage Insurers Start Re-Digging Gravehttp://realestate.aol.com/blog/2009/12/21/mortgage-insurers-start-re-digging-grave/http://realestate.aol.com/blog/2009/12/21/mortgage-insurers-start-re-digging-grave/http://realestate.aol.com/blog/2009/12/21/mortgage-insurers-start-re-digging-grave/#commentsPrivate mortgage insurance, often referred to as PMI, can be one of the most confusing aspects of financing a home. The buyer is required to pay PMI if they have less than a 20 percent down payment, but if they default on the mortgage, it is the bank that files a claim with the insurer, and you get nothing for all those fees you paid.

PMI used to be non-deductible, so lenders created 80/20 piggyback loans to help buyers avoid paying PMI, which helped if not caused part of the foreclosure and credit crisis in which we are still in.

Most borrowers who had less than 20 percent to put down have been using FHA loans for the past two years, which allows you to put down just 3.5 percent. And if you have 20 percent to put down, then you don't need PMI. So the range of mortgages where
PMI is relevant is strictly between 3.5 percent down and 20 percent down.

Now, the private mortgage insurers are trying to re-take some of their turf, according to the Wall Street Journal, in a sign that could be viewed as a vote of confidence for the housing market, or as the reinflation of the bubble-driven mentality that got us here.

The PMI providers, including Mortgage Guaratee International Corporation or MGIC, had restricted the loan to value ratios they would support to below 90 percent in what they called "distressed" or "declining" markets. So if you were a borrower in that range between 90 percent LTV (or 10 percent down) and 95 percent LTV (or 5 percent down), you really had no option but to go FHA.

As of early December, cities such as New Orleans, Akron, Ohio, and Dover, Del., were removed from MGIC's "distressed" list. This followed cities such as Denver and St. Louis in September. So, you can now get PMI with as low as a 680 credit score and 5 percent down.

Genworth Financial has removed all but five states from its distressed list, with the five states being California, Arizona, Nevada, Michigan and Florida. So no signs of life in those states.

The good news is this means less people are going to have to use FHA financing, which is on the brink of bankruptcy as it is. FHA mortgages can also have fairly high fees, so paying PMI might be more advantageous for some buyers.

The bad news is that these aren't exactly "prime" borrowers, with credit scores below 700 and just 5 percent down payment.

But I guess that's what insurance is for, protecting from things going bad.

Only in this case, the insurance protects the banks and not the consumer.

 

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]]>Brett Widness2009-12-21T18:00:00 00:00Happiness Is a Warm Gun for Kansas Homes Buyershttp://realestate.aol.com/blog/2009/12/21/happiness-is-a-warm-gun-for-kansas-homes-buyers/http://realestate.aol.com/blog/2009/12/21/happiness-is-a-warm-gun-for-kansas-homes-buyers/http://realestate.aol.com/blog/2009/12/21/happiness-is-a-warm-gun-for-kansas-homes-buyers/#commentsFiled under:

It's not unusual for banks and other businesses to offer some kind of rebate or "inducement" to get customers to open a new checking account or make some other business transaction.

Ben Edsall, a real estate broker based in Kansas City (not pictured), has apparently taken things a step further, offering a Buy a House, Get a Gun coupon. According to Examiner.com, Mr. Edsall himself is not immune to gun-based incentives, having bought his own truck from a local car dealer that offered either a free tank of gas or a free hand gun.
A Texas-based broker offered Glock handguns to buyers in 2006, and Michael Moore documented a bank that gave away rifles to those open new accounts in the movie, Bowling for Columbine.Inducements are actually illegal in some states, including Missouri, so Mr. Edsall is only offering the coupon on the Kansas side of Kansas City at this point.

Whatever works, Mr. Edsall.

 

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]]>Brett Widness2009-12-21T17:00:00 00:00Does Your Broker Needs a Shave ...http://realestate.aol.com/blog/2009/12/21/your-broker-needs-a-haircut/http://realestate.aol.com/blog/2009/12/21/your-broker-needs-a-haircut/http://realestate.aol.com/blog/2009/12/21/your-broker-needs-a-haircut/#commentsFiled under:

You thought you got a good deal on that home... until you factored in the commission and extras. Should brokers cut their commissions? Most will tell you they're worth it, but here's why I think they need a shave.

Traditionally, a home seller pays out 6 percent in commissions, split evenly between the selling agent and the buyer's agent. If you don't have a lot of equity in your home, the commissions and closing costs alone can put you in the red on the whole deal.

It pays to be a shrewd negotiator. And the rules aren't set in stone. As a seller, you don't have much control over the buyer's agent, but you can always try offering a 2 or 2.5 percent commission and see how many agents come calling. According to National Association of Realtors, the buying agent was compensated by the seller approximate 65 percent of the time. A third of the time, either the buyer paid for their agent or the buyer and the seller split it somehow. There are a few ways to split that nut, but in a weaker market, you usually need to incent the buyer's agent with a full 2.5-3 percent commission.

On the other side of the transaction, the selling agent is your employee, and only gets paid if and when you sell, so you should be aggressive in asking them to reduce their commission if you feel it's appropriate.

Here are some of the more compelling reasons why a selling agent might be willing to cut their rate:1. You Are Truly 'Motivated'
Some sellers put their homes on the market and don't care if it takes a year for it to sell. This is a lot of effort for the agent with no promise of getting paid. If you can convince your agent that you truly intend to close the sale within 90 days or 120 days or six months, then they can evaluate if a lower commission is worth it.

2. Make It Up to Them on the Back Side
If you will be buying another house in the same area, you can promise to give the agent the full 3 percent on that transaction, or perhaps 2.5 percent on both deals. Or, ask for a lower commission or rebate when you buy. Either way, the agent should make more money than if you just give them the 3 percent on your sale and then find a new agent. If you are moving out of the area, they may be able to get some kind of referral fee for doing little or no work.

See the Other Side of This Argument: Your Broker Is Worth It

3. You'll Send Them More Business
According to the National Association of Realtors, 43 percent of buyers found their agents through referrals from friends and family. Eleven percent used the same agent they had used before. Add it up, and you represent roughly 54 percent of how this agent will get their future business.

4. You Have Other Options
Find out if discount brokers such as Redfin or ZipRealty are available in your area. They often work either for a flat fee or for a rebate on commission, so at least you have something to compare against your regular agent.

5. You Do the Dirty Work
A recent L.A. Times article mentions the idea of "pre-staging" your home. The idea is that, if your agent shows up to view your home and it's a mess, the agent is likely to assume he'll have a hard time selling your house, and therefore will insist on a higher commission. Try to make it look like the easiest sale he'll ever have.

6. It's All Relative
If your agent sells six homes per year, each of which are worth $500,000, she "grosses" $90,000 in commissions. If your home is worth slightly more than average, the agent may be willing to give you a break on the commission, as she'll make roughly the same amount even at 2.5 as at 3 percent. Or, if your house is relatively cheap for an area, she may think she can sell it quickly.

7. You Are Willing to Admit You Are Wrong
You may think your home is going to sell for full price after one open house, but you wouldn't be the first seller to overestimate their home's value. Your agent may agree to sell your house on a lower commission if you do everything that is asked and if you sell it within 45 days. If it doesn't sell after that time, your agent is going to have to do another open house, etc, so there's a justification to pay the higher commission. Unfortunately, you will probably be reducing your price at the same time.

If you are easy to work with, agents will bend over backwards to keep you happy, including cutting their commissions. But if you ask them to get paid less, you should expect them to do less, and you may have to make up the difference yourself.

One additional thing to note: Your agent doesn't pocket the whole commission: it is split with the boss, usually at 50/50. So the agent may not even have control over what they can charge.

 

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]]>brokersbuying a homebuying adviceBuyingAdviceBuyingAHomenegotiating feesNegotiatingFeesReal estate agentsRealEstateAgentsBrett Widness2009-12-21T09:00:00 00:00City Considers Licensing Landlordshttp://realestate.aol.com/blog/2009/12/18/city-considers-licensing-landlords/http://realestate.aol.com/blog/2009/12/18/city-considers-licensing-landlords/http://realestate.aol.com/blog/2009/12/18/city-considers-licensing-landlords/#commentsFiled under:

As a young Keanu Reeves once pointed out in the movie Parenthood, you usually need a license to drive a car, catch a fish or own a dog, but not, in this case, to rent out that spare bedroom over the garage or the other unit in your duplex.

The good people of Oak Ridge, Tenn., are considering changing that:
"The ordinance, which would require residential landlords to have an operating license, could make rental properties subject to inspection. The biennial license could cost property owners $25 each, regardless of the number of rental units they operate."

The bad thing here is that a landlord who rents out one room is charged the same fee as one that rents out a building of 30 units, but the implication seems to be that the smaller operators cause more of the problems.

"Under the ordinance, municipal workers would have the right to inspect rental properties for a variety of reasons -- including when a code violation is suspected, the landlord license is renewed, or an inspection is requested by the owner, agent or tenant."

Landlords may get a bad rap, but as a landlord myself, I don't think it'd be unreasonable for some kind of certification and inspection program for rental properties. Another option might be some kind of voluntary association, although that might look like collusion to some local authorities.

 

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]]>Brett Widness2009-12-18T09:00:00 00:00Would You Buy This Home for $1?http://realestate.aol.com/blog/2009/12/17/would-you-buy-this-home-for-1/http://realestate.aol.com/blog/2009/12/17/would-you-buy-this-home-for-1/http://realestate.aol.com/blog/2009/12/17/would-you-buy-this-home-for-1/#commentsFiled under:

This Old House, one of our favorite dead-tree publications, has a feature called Save This House at the back of most issues. Generally there is a building which is available if you can either take it off the land or restore it to it's former glory.

Photo Gallery: See Homes for Sale for $1

This past year, a house from Leesburg, Va., was promoted all over the Internet, and drew interest from all over the world.

While it's great to look at older homes and dream, this feature actually contextualizes what a huge expense owning a home can be. Most of these older homes are going to need tens of thousands of dollars worth of work, and the taxes and utilities could be another thousand, so it's not like you are getting a "free" home.

What Happens to Those 'Save This House' Homes: 2006 | 2007-2008It's one thing to buy an old car and fix up the engine as a hobby. It's another thing to actually try to maintain the structural integrity of a 150 year old house when you have no idea what you are doing.

So, we'll leave buying those really old houses to the experts.

 

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]]>Brett Widness2009-12-17T10:00:00 00:00More Refis Looking at 15-Yearhttp://realestate.aol.com/blog/2009/12/16/more-refis-looking-at-15-year/http://realestate.aol.com/blog/2009/12/16/more-refis-looking-at-15-year/http://realestate.aol.com/blog/2009/12/16/more-refis-looking-at-15-year/#commentsFiled under:

According to the Mortgage Bankers Association, 15-year mortgages made up nearly 20 percent of the refinancing activity in October, the most recent month available.

As reported in the Wall Street Journal: "Originations of 15-year mortgages at Wells Fargo & Co. are up 55 percent through November from a year earlier. At J.P. Morgan Chase & Co., 15-year loans now account for 20 percent of refinances, up from 10 percent a year ago."

While these are increases from a low base, what you are seeing here is that the "haves" of the homeowner world are locking in a low rate while they can, while also shortening the amount of time they will have to pay their mortgage.

The main reason why people would look at a 15-year mortgage is the lower rate. While the monthly payments are higher, this may not matter as much for owners who have dual incomes and want to just get that house paid off as quickly as possible.

For example, if you bought a house five years ago, would you rather extend your mortgage out for another 30 years or pay it off in 15, so that the total amount of financing is 20 years instead of 35? Particularly if you are in your 40s of 50s, it'd be nice to have that house paid off by the time you retire.

The downside is that you will get less of a tax deduction as you near the end of the 15 year period, but maybe people don't even plan to have the mortgage that long.

An equally viable alternative would be a 7/1 or 10/1 ARM, as long as the rate is going to be lower than a 30-year. If you know you won't be in the house for more than 10 years, why pay the extra interest? According to the Mortgage Professor, the rate on a 5/1 ARM could be a full point and a half lower than on a 30, while the 15 is a half a point (Example: 4.784 vs 4.216)

On the darker side, the implication is that Americans would rather put more money into their homes each month rather than have the cash flow to invest in the stock market or other investments, but again, we are talking about 20 percent of all refinances here, not the vast majority.

 

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]]>Brett Widness2009-12-16T13:30:00 00:00'Landlord' Rents Out Home He Doesn't Ownhttp://realestate.aol.com/blog/2009/12/15/landlord-rents-out-home-he-doesnt-own/http://realestate.aol.com/blog/2009/12/15/landlord-rents-out-home-he-doesnt-own/http://realestate.aol.com/blog/2009/12/15/landlord-rents-out-home-he-doesnt-own/#commentsFiled under:

A 45-year-old man, posing as a real estate agent, signed an unsuspecting tenant to a lease for $2,200 in rent per month for a boarded-up, Baldwin, Long Island home he didn't even own.

Eventually, the tenant stopped paying the "rent" after Ozell Neely didn't follow through on some of the repairs he had promised her. Mr. Neely initiated eviction proceedings, at which point the true owner showed up.

Neely, who allegedly pocketed more than $10,000, faces up to seven years in prison if convicted.

"His crime does not rank up there with the most sophisticated," Nassau County District Attorney Kathleen Rice told the New York Daily News. "But for a brief period in time, it worked and he profited."

Mr. Ozell allegedly got more than $10,000 from the tenant before being caught. He has been charged with burglary and grand larceny, and faces up to seven years in prison if convicted.

 

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]]>baldwinlandlord scamlong islandnew yorkrental scamBrett Widness2009-12-15T10:00:00 00:00Doesn't Hurt to Look, But to Buy ...http://realestate.aol.com/blog/2009/12/15/doesnt-hurt-to-look-but-to-buy/http://realestate.aol.com/blog/2009/12/15/doesnt-hurt-to-look-but-to-buy/http://realestate.aol.com/blog/2009/12/15/doesnt-hurt-to-look-but-to-buy/#commentsMany renters are being tempted to look at buying, whether it's because of the first-time buyer tax credit, the low interest rates or the low prices. And there's certainly no harm in looking.

Even in New York City, where it is estimated that 70 percent of the population rents, some long-time renters are considering buying. Even tenants with so called "rent control" are taking the plunge, according to a recent New York Times article.

In one scenario, a man who is renting for just $725 a month is considering moving. The first reason is he wants to move anyway, and if he rented at a new location, he'd probably double his rent anyway. Also, at 61, he wants a building with an elevator and a doorman, so he's willing to pay a little more for certain amenities.

For some one on a fixed income, buying probably makes sense, as 30-year mortgage helps to keep costs from rising.

But what people who bought at the peak are only now learning is that it can cost up to 10 percent just to sell your home, so if you don't have much equity, and prices go down, you are lucky if you can just break even and walk away.

Also, just making your normal mortgage payments isn't going to do much to help you build equity. Your mortgage is set up so that you mostly pay interest at first, which is great for your tax deductions but sucks for your equity. After a year or two, you won't have paid your mortgage down hardly at all, maybe $1,000 or so.

Lastly, you need to give yourself some flexibility. Is your boyfriend/best friend going to move in with you/move out? Do you want to get a dog or a cat?

The gentleman mentioned in the Times article is already retired, so hopefully he has a sense of where he wants to live for the next 10 to 20 years, but if you don't, then buying probably isn't the smartest move for him right now.

 

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]]>Brett Widness2009-12-15T09:00:00 00:00Why Chase Turned Me Downhttp://realestate.aol.com/blog/2009/12/14/why-chase-turned-me-down/http://realestate.aol.com/blog/2009/12/14/why-chase-turned-me-down/http://realestate.aol.com/blog/2009/12/14/why-chase-turned-me-down/#commentsFiled under:

It's understandable why a bank might not want to to refinance a home that is underwater, or where the owner can't show enough income to justify the rate. But what about a perfectly normal mortgage?

The New York Times had a recent piece about otherwise qualified homeowners who try to refinance their mortgages at today's ultra-low rates, but are turned away. The issue may be among the topics that President Obama will address with the so-called "fat cat" bankers in the coming weeks.

In the meantime, it happened to yours truly as recently as last week on my condo in suburban D.C.

Like everyone else, I'd been seeing (and writing) the headlines about how rates are very low right now, but likely to go higher next spring. So I was ready to lock in lower rates.

The mortgage on my primary residence is with Washington Mutual, so I waited until Chase finished it's consolidation of WaMu before calling to see about refinancing my adjustable-rate mortgage, which unlocks this coming summer. This finally happened in October/November.
The good news is that my home in Arlington, Va., just outside if Washington, D.C., purchased six years ago, is worth more than my mortgage. So, in theory, I shouldn't have any problems refinancing.

So much for theories. After going through the phone prompts, the Chase representative told me that they were too busy to deal with my refinance and transferred me to what turned out to be a division of LendingTree.com.

There seem to be three overall problems:
1) With all the consolidation going on in the lending industry, there is less competition and fewer people answering the phone willing to refinance your mortgage.
2) "Bad" mortgages, where the holders are either unemployed or have a lot of negative equity, are the mortgages that the banks are going to have to spend a fair amount of time on as they decide whether to do a short sale or foreclose or what.
3) The banks may actually make more money in the short term by referring me to a company like LendingTree as a lead than they would if I refinanced my mortgage at a lower rate.

Any wonder that protesters took over Chase's lobby this week?

 

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]]>ArlingtonChasemortgagerefinancingVAVa.washington dcBrett Widness2009-12-14T17:00:00 00:00Interest Rates Are Really High ... Or Low, Either Wayhttp://realestate.aol.com/blog/2009/12/02/interest-rates-are-really-high-or-low-either-way/http://realestate.aol.com/blog/2009/12/02/interest-rates-are-really-high-or-low-either-way/http://realestate.aol.com/blog/2009/12/02/interest-rates-are-really-high-or-low-either-way/#commentsFiled under:

A Reuters head this morning says that mortgage rates are at a six-month high, when in reality they are are a six-month LOW.

There was a slight bump in mortgage applications, which makes sense since rates are so low.

There's sure to be a write-thru correcting the headline some time this morning, but it's easy to see why people get confused about financial reporting when there are mistakes like this.

 

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]]>Brett Widness2009-12-02T10:30:00 00:00NBA's Worst Owner Also Pretty Bad Landlordhttp://realestate.aol.com/blog/2009/11/24/nbas-worst-owner-also-pretty-bad-landlord/http://realestate.aol.com/blog/2009/11/24/nbas-worst-owner-also-pretty-bad-landlord/http://realestate.aol.com/blog/2009/11/24/nbas-worst-owner-also-pretty-bad-landlord/#commentsFiled under: ,

The Los Angeles Clippers have been referred to as the NBA's most accursed team. Their most recent first-round draft pick, of which they have many since they are consistently terrible, Blake Griffin, hurt himself before the season even started and hasn't played a single game yet. They also have the bad luck of being in the same town and same stadium as the L.A. Lakers, and have never won a title in the franchise's history.

Most, if not all, of this bad karma can be laid at the feet of owner Donald Sterling.

According to the Los Angeles Times, Mr. Sterling will be coughing up a record $2.75 million fine for discriminating against African Americans, Hispanics and families with children, as part of his business owning apartments and commercial space in Los Angeles' Koreatown.

Considering how many fans of the NBA fall into one of these three groups, this seems like it will not help Mr. Sterling or his team's popularity.

"The settlement, which must be approved by U.S. District Judge Dale S. Fischer, is the largest ever obtained by the Justice Department in a housing discrimination case involving apartment rentals, officials said."

Sterling, a divorce and real estate lawyer by trade, has also been involved in sexual harassment allegations.

Needless to say, he might not be our first choice for either the owner of our favorite sports team or the guy we have to send rent checks to every month.

 

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]]>ClippersdiscriminationDonald SterlingNBABrett Widness2009-11-24T17:30:00 00:00