Buyers Guide
What can you afford?
One of the most important calculations is to first consider what you can afford. The first step is to consider how much you can put down on a purchase. In our current market this is now 20% down. Therefore, if you have $50,000 put away for your home, you will be able to afford a $250,000 home. If you have $100,000 put away for your home, you will be able to afford a $500,000 home and etc.
The next calculation is using a percentage of your income, which is 28% of your gross income. To receive a bank loan, this will need to cover your mortgage, taxes and insurance for your new home/condo. If your gross income is $100,000, then your total budget is $28,000 per year or $2,333.00 per month. With these numbers in mind and the associated paperwork collected, then contact your bank or mortgage representative to evaluate what they would approve you for. This first step is very important, as it will then guide you to areas that are affordable, styles, etc. We highly suggest that you take the time to do this first step to avoid you wasting your time or a realtors time.
What areas/prices do you want to consider?
Now that you have a price point done in step one, look online using services such as realtor.com, homes.com, homeseekers.com or realtor sites looking at various areas of interest at your price points. Further consider your areas of interest and make sure they are offered in the place you would like to move. You can obtain most if not all of this information by going to the town or city web sites. These sites typically offer a wealth of information about the town, libraries, schools, parks, and other amenities offered.
After doing your homework you can now narrow down the areas you would like to live. Make sure you consider how much annual tax you will have to pay in each town as they can differ greatly. A $500,000 home in one town may mean $4,000 in taxes annually, while in another town it could be $8,000 in taxes. This is particularly important when you add the tax amount to your affordability as found in the section ìWhat can you afford?î.
Selecting a Realtor?
Either select a realtor or interview realtors. DO NOT sign commitments for more than 1 week with a realtor to represent you. You DO NOT want to get stuck with a realtor that is not looking out for your best interests. By signing for a short time they will want to work hard to keep you and find you the right home for you and your family. You should always maintain the option of working with them or changing realtors, if you choose. READ EVERYTHING THE REALTOR HAS YOU SIGN, AS THESE DOCUMENTS ARE LEGALLY BINDING!
The 5 P’s of Selling a Home
Price | Promotion | Presentation | Professionalism | Profitability
1. Price
When considering the price you will ask for your home you must remove emotion and rely on information that is quantifiable.
In order to gain this information the most convenient way is to ask up to three real estate brokers for a free home evaluation. They have access to the current market condition, prior months equivalent sold, and the current listed inventory. You are not obligated to list your home with any of these realtors, therefore do not allow yourself to be pressured into a listing.
If you choose to do independent research, it would behoove you to go to the local town hall and look up the records for sold homes. This is a difficult and time consuming process and the results are typically more emotional than factual. An additional way is to use empirical data gained by reviewing the newspapers, local houses sold, and discussions with friends. This again is more subject to emotion, and as first stated emotion should not enter into the pricing.
Although your house is very personal, you must consider it as nothing more than a commodity to others. They will compare your house (commodity) to others and make their value decision as to the worth. If priced to high, they will ignore the house, if priced to low you will have multiple offers, if priced just right, you will get a qualified buyer given time at the right price.
The last important consideration is your timeframe to sell. Since it takes about 60 days from a qualified offer to closing the typical minimum timeframe from listing to sale is three months. If this is your desire, then price your home on the lower side of the suggested price range. If your timeframe is one year, price your home in the mid range, or a little higher. Remember if you allow your emotion to say the house is worth more than studied data can prove, you will probably not sell it at all.
2. Promotion
Print Advertising: This was the most frequently used method along with your local Multiple listing service prior to the advent of the Internet. There are many agents that continue to use this method exclusively. Although it continues to be a mainstay of the industry, statistics are proving that the Internet is actually the method whereby most actual buyers come from. Considering the fact that there is always a cost to advertising and promotion of any kind, the determination should be how to balance this budget. Assume a house is worth $500,000, and the gross commission is at 6%. This would leave the listing agent a maximum of $7,500 gross profit before expenses or as little as $3,000 gross profit before expenses. How much money can they spend to earn this is the question, and where should this money be spent. Assume they will budget $1,000. Now where should this be spent?
Multiple Listing Service: Virtually all realtors belong to one or more multiple listing services. As a private citizen these services are normally not available to you. This is the added advantage of listing with a realtor, as they publish your home to all other realtors that are members of this service. If a realtor is representing a buyer, the local multiple listing services are the most used search facility for available properties. Therefore be aware that if you list your home as ìFor Sale By Ownerî, in many cases the local MLS service is not available to you. Call the MLS service in your area and ask if they will allow a private listing, and if so what is the cost.
On-Line Search Engines: There are literally multiple dozens of on-line search engines that can promote your home. In order to use these you first need published listing information, and then the knowledge on how to get on these search engines. Many realty agencies now list their properties on their local MLS, as well as on some on-line search engines. This is beyond the scope of most owners and unless you have a great deal of experience in this area, it would be recommended that you interview your realtor as to their knowledge or employ your own professional representative to perform them on your behalf. Some independent Virtual Tour companies such as Professional Virtual Tours are experienced in this area.
3. Presentation
Presentation Sheets are printed brochures and data that represent your home. Typically a realtor if engaged will create these for you. If you choose to do your own, go to postlets.com and review a number of presentation formats that are pre-done for you and can be used for free.
Virtual Tours are now one of the most effective methods of presenting a home. Some of these are simple slide shows, some moving slide shows, and the most effective 360-degree rolling property presentations. There are a great variety of different offerings from very simple to highly comprehensive. Some include local data, maps, mortgage info, property details, floor plans and much more. The more comprehensive the more expensive, but also the greater the presentation response. Tom Hanson uses Professional Virtual Tours (PROVirtualTours.com), which he believes provides the most complete service available today.
Slide Shows a single shot renditions of your home arranged and published in a slide show fashion. As a private owner you can produce your own, or request that your realtor provides one. Alternatively, you can produce your own and allow the realtor to use it in their promotion.
Social Networking is a new method to promote properties. If you are not currently familiar with this technique it would behoove you to discuss it with your realtor or use a private service to employ this method. It is becoming one of the more powerful tools on the Internet, but it is used more aggressively by the younger generation.
4. Professionalism
Professional Representation is a key to a non-emotional approach to the sale of your home. Your representative should demonstrate and commit to you their knowledge of the market, their knowledge and usage of the most current presentation and promotion approaches, as well as their ability to recommend qualified professionals such as lawyers that you may need. In addition they must negotiate and advise you as their client only. Representing both the buyer and seller is a very difficult if not impossible task for most people. The timeframe for you to list with a realtor can be short, or long (up to twelve months). It is imprudent to tie yourself with a realtor longer than the practical timeframe to sell your home. This is typically 6 months. You should expect weekly reports as to the progress of selling your home. This includes: call reports, marketing plans and completion of these and other aspects that you may agree upon. Realtors will sometimes pays for Virtual Tours of your home and if not you can find them on your own. I strongly suggest researching and using a Virtual Tour Company, which will give your home a great edge over your competition.
Choose your representation wisely, as your home is typically your largest financial asset.
5. Profitability
There are many considerations used to determine the actual Profit (net cash) you will receive when you sell your home. If you do or do not use an accountant for the preparation of your taxes you should contact Tom Hanson or another professional to review all of the various additional home selling expenses as well as the original cost value additions that can be claimed for income tax purposes. There are a number of other factors, which are normally overlooked when actually determining the profitability and although they are not quite as obvious they are equally as important.
Contact Tom Hanson and he will send you by email specific worksheets to calculate your final expected cash in pocket after sale based on specific selling prices. This form includes category additions to the original cost basis that are allowable by the IRS which will determine the taxes you will owe the Federal and State Government.
Special Programs
There are special programs for Teachers, Police, Military and First Time Home Buyers. You can put as little as 3% down. Call or email Tom Hanson for qualifications needed to receive below market interest!
Feel free to email Tom Hanson to receive a full list of potential homes and/or condos with your parameters. Please specify the following in your email:
- Towns interested In
- Houses and/or Condominiums
- Number of Bedrooms
- Low Price Range
- High Price Range
- And any other specifics you may want
Commuting Information
Commuting to New York and Hartford is very easy from Darien, Stamford, Norwalk and Westport. It takes about an hour either by train or highway. Trains leave at least every hour from all 4 towns. All 4 towns are minutes from I-95, the Merritt Parkway and Metro North Trains for a direct commute. View the train schedule or use Map Quest below to find your exact commute time from your new home.
Traveling out of the area by air is easy and convenient from Darien, Stamford, Norwalk and Westport. There are 5 airports within 2 hours from all 4 towns. There are shuttles and car services as well as long term parking at all 5 airports.
