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Buying a home can be stressful. I mean, look at the picture: the largest expenditure of most lives, housing, borrowing, lawyers, mortgages, down payments, contingencies, credit, taxes, closing costs, monthly payments, inspections…does any of that sound soothing? Another decidedly NOT soothing word is “decisions,” and consumers have to make quite a few of them throughout the process, which only adds to the potential anxiety. It is human nature to defer a decision until it’s absolutely needed.
One thing that consumers understandably link to their decision process is a favorable financial picture. That also makes perfect sense. Save your money. Improve your credit. Get educated. These are things you can influence. One piece of kryptonite to home ownership is when a consumer defers action until something outside their financial picture is optimized. That is, again, understandable, but absent specific knowledge, it can be self defeating. The practice I’m referring to is known as timing the market.
In the Great Recession, when the median price of a single family home in Westchester County fell below $500,000, I saw quite a few potential buyers lose out on great opportunities because they wanted to time their purchase with the exact moment the market bottomed out. The problem for them, of course, was that no clairvoyance exists to tell you exactly when that would be.
The same behavior exists today with mortgage rates. Upon occasion, we hear from would -be buyers that they want to wait until rates fall to a certain level before they buy. Their housing needs clearly call for a purchase, but they want to hold off.
There are two reasons why timing the market in this way is an inadvisable strategy.
First, you need a crystal ball to predict when rates will hit that arbitrary magic optic. Even seasoned professionals smirk at that idea.
Second, and more importantly, this is one of those cases when would-be Westchester County homeowners make plans and God laughs. Let’s suppose that you wait until rates fall below 6.5%, and at that moment you are ready to go. That’s great! So are 100 other people with the same brilliant idea, and the competition for a home, which is already fierce in the Hudson Valley, becomes even more cutthroat.
- There aren’t enough houses for sale to accommodate the additional demand.
- The amount of time it will take to find a seller that will go to contract with you get even longer.
- Home prices get bid up even higher with the stiffer competition, nullifying any savings derived from lower rates.
- The typical buyer will end up closing more than 6 months after they entered the market, paying more than they expected, often settling for the prevailing rate at that time because most people won’t invest that much effort and then just walk away.
- Home prices get bid up even higher with the stiffer competition, nullifying any savings derived from lower rates.
- The amount of time it will take to find a seller that will go to contract with you get even longer.
“But Phil,” you might say, “When rates fall more developers will start building.”
That’s true. Builders love low rates. But unless that developer is a witch or a genie, the new homes won’t magically appear in a blink or nose wiggle. In most of Westchester and a growing chunk of Putnam and Rockland, a few spot builds might spring up within 6-9 months, but actual subdivisions could take a year or two, possibly more.
So, if the picture in your head is that of rates falling in March and by April or May you’re in contract on a house that meets your needs at the price you assume will reflect prices right now, I’ve got bad news: that is highly, highly unlikely.
Here’s how you time the market the right way: when your housing needs call for a new home, you move. The reason is simple; this isn’t simply a financial instrument you’re transacting, it is your shelter. You can’t live in your interest rate. You can only live indoors (far more creature comforts). A home is first and foremost shelter. It does behave in ways like an investment does, but it’s the only investment where you reside. Yes, lower rates and lower payments are nice, but they don’t occur in a vacuum. When rates fall and inventory is not abundant, the dynamics of supply and demand are unforgiving.
As my father, a corporate controller for decades, wisely said many times in the 80’s when rates were above 15%, the rate was secondary to the affordability of the payment. If you can afford the payment and the property matches your housing needs, your family will benefit far more than from a desirable optic on a mortgage statement. The north star for buyers should always be housing needs first. Subordinating that to reverse engineering numbers to behave a certain way on a spreadsheet is ill advised and virtually never works out. Quality of life is always better when you meet your housing needs first and are savvy about refinancing when rates come around.
Marry your shelter. Date the mortgage payment.
If I hadn’t gone through this myself with my own mother I doubt I would write about it. I do think that my (and my brothers’) experience is worth sharing for those who are considering this as an option.
One of the more frustrating things for consumers to experience when searching for real estate to is to see a desirable property online for sale, send it to their agent to schedule a showing, and then not be able to get in. Sometimes the listing agent doesn’t respond, which is a violation of the rules. But other times the buyer’s agent is told that there is a deal on the home, contracts are about to be signed, and the that the seller has concluded showing the property. Often, it’s still active a week later. Why, you might ask, is it appearing online as active and available when the showings are finished?
September is a big month in property tax circles in New York, and courts throughout the state are receiving “tax certiorari” cases filed in considerable volume.
One ironic request, however, is when the seller does not want a yard sign. Their rationale is understandable in many cases, as the perception of privacy from nosy neighbors is often mentioned. Moreover, consumers aren’t primarily driving around looking for signs, they are looking online. That’s true- to a degree. I’ve had clients opine that the signs are more for the agent than the home seller, as if it is more of a self promotional vehicle than one to sell the listing. Selling a home successfully is a win/win proposition for client and agent, so I take issue with that more than the others.
Ah, north Westchester! The land of horse country, idyllic lake communities, winding roads, and spotty cellular coverage. When you find a home with lake rights that has good mobile phone signal like this one, you know you’ve got something special. Snark about cellular data aside, this 1500 square foot colonial set on nearly a quarter acre does offer quite a package. My clients will now enjoy lake rights on the pristine Lake Kitchawan, enjoy their deck overlooking their level rear yard, and have already begun the remodeling process on their new home.
For many years, there has been an awkward moment when consumers attending an open house are asked to sign in. It is understandable to not want to become someone’s prospect or lead, and it doesn’t seem necessary to many folks. We see this pushback everywhere: a cashier asks a customer at checkout for their email or phone number, and is told they just want to buy the thing and be on their way. It seems like everywhere we go, we are asked for our information. You can’t even log onto some websites without a popup window offering you a discount if you enter your email handle, and you haven’t even decided if you want anything they sell.
This was the house that came back; I interviewed with the prior owner who sold it to my clients but we didn’t get the listing. This time we did! It just closed on July 31st for $800,000. Somers is known for its bucolic setting and this property didn’t disappoint, as the nearly 1.5 acre lot backs up to the a forever green preserve, the Somers Land Trust. The nearly 3500 square foot home has three bedrooms, 4 baths, a finished walkout basement, and a master suite to die for. The road is a no-through traffic street as well.
If you feel priced out of Westchester, fear not. Dutchess County, sometimes humorously referred to as “Nextchester,” often has what you need if you are open to living a little farther north. A great example is this renovated raised ranch on a 1.2 acre lot on a cul-de-sac street that we closed on today at 6 Briar Lane in Wappingers Falls. The MLS description paints a great picture:
Contractual deadlines and “by when” dates are baked into industry practices. Listings have expiration dates. Buyer agreements do also. Purchase and sale contracts have mortgage contingency dates, closing dates, and other structures of fulfillment that are terms for principals to abide by. Deadlines are not exclusive to contracts. There is a reasonable amount of time to expect a response to an offer. The seller might set a date and time for all parties to submit their highest and best bids.
13 years ago I wrote a post entitled “
First, some backstory: When I joined Howard Hanna Rand, I had been based in Briarcliff Manor for almost 20 years. My company had other office locations in Pelham and Carmel, but I hung my hat near my home. This past December, I was asked to move a bit north and manage the Yorktown and Carmel offices. So far it’s been a wonderful experience. The agents are committed professionals, eager to learn and up their game, and they’ve made me feel warmly welcomed.
The Latest Real Estate Scam – Be Careful Out There
I just off the phone with a guy who initially sounded like a telemarketer, but claimed that he wanted me to list some acreage he owns about 90 minutes north of me to pay for an upcoming surgery. He must have done a little bit of homework, because he got the name right of the owner of the property. The only problem is that he claims to be the same guy that bought the parcel in 1972.
Well, that’s not the only problem. The actual owner of the property, meaning the guy who bought it in 1972, died about 10 years ago. Further, he was a public figure who received the Presidential Medal of Freedom Award. I’m certain that I was not speaking to him. And I wasn’t speaking to an heir.
I’m not exactly sure, but I think the crux of the scam is to do everything remotely, get the property listed under false pretenses, and phish the buyer’s good faith deposit once a transaction is promulgated. An awful lot would have to go right (well, wrong, depending on who you’re rooting for here) for this to work out for the scammer, because he’d have to bamboozle a listing agent, a buyer agent, a buyer, a victim seller’s attorney, and a buyer’s attorney. That’s an awful lot of bamboozle.
And yet, here we are.
A few weeks ago, one of my agents had to withdraw a listing for vacant land when it became clear that her “client” was not in fact the owner of the property. In the past several months I have spoken to at least 2 other agents with the same story. What a colossal waste of time.
Here were the red flags:
Basically, nothing added up during the call, and in my search afterward it took about 10 minutes to ascertain that this was bogus.
Now, I am trying to reach the family that owns this land to be wary of any sign going up on their land.