Real Estate Watch: Why wait until spring to sell home?

I have spoken to many homeowners who have decided to wait until the spring to sell their homes.

I ask why, and the response has been, “Well there will be many more purchasers at that time of the year.”

Right now, with the lack of snow and the weather more than cooperating, buyers are out in full force, buying, pretty much everything in site, if the home is priced correctly.

So waiting until the spring, is not really the best path to take.

Plus, if you are planning to relocate south or west, prices will potentially be lower at this time of the year than in the spring.

More important, interest rates have or will have gone up by then, eliminating some buyers from the market.

Also, as of Jan. 1, mortgage recording fees have gone up (three fold for each mortgage recording document) hundreds of dollars, (better than raising our real estate taxes that much more, which I am sure was an option, but I guess some want to get re-elected) so Nassau County will have another source of income to pay their every ballooning bills and debts.

So all transactions that are now occurring will cost the buyer and seller in each and every new transaction.

I am curious about whether or not there is additional savings that would occur, if the county looked into their expenses and examined every line item to see if money could be saved.

It is always easier to tax the public, rather than seeing if savings could be determined by looking deep into budgets that in many situations, have areas of being bloated with costs over runs. Who is accountable for this? It is easy to go after homeowners, especially when there are larger numbers and who will really complain about it; less constituents will even know or maybe care where that extra money that is taken from the transaction is going or even ask where it is going.

It is the least path of resistance to collect that money, than raising our real estate taxes more than the proposed increase of 1.2 percent for 2016.

So, again, this is an excellent time to put your home on the market to sell.

Your savings of heating, assuming you sell quickly by pricing it where the market is and having a bit of a bidding war too; real estate taxes, maintenance of your home etc.

More important, once you have sold, are you going to rent or purchase? Will you be applying for a mortgage or paying cash for your next purchase?

Interest rates just might go up again in the spring, so your interest savings could be substantial over a 15-30 year period. Just do the math. If the rates are a ¼ point higher on a 700,000 purchase, with a 4 percent interest rate, 20 percent down over 30 years; your total interest payments would be $402,469.24 (assuming you make no extra payments and pay the mortgage through the 30th year).

The same situation with 4.25 percent interest would boost your total interest payments to: $431,750.82 and if the rates go to 4.50 percent then total interest payments would then go to $461,477.58.

You can see and understand that time is of the essence in purchasing in today’s market and waiting will cost you on average $29,000 in additional interest over 30 years (or an average of an extra $1,000 per year) for every ¼ point increase in mortgage interest rates, plus you will sacrifice any price appreciation which could be from 3-5 percent (or normally based on the current inflation rate, as has been in the past).

One must also calculate the lost tax deductions that you will miss out, so you would pay additional income taxes, based on your tax bracket and not having the allowed home deductions of taxes and interest. This example is geared to those who are renting. If you own, then the impact might be less. But more important, even if you might lose some money on your current home (due to purchasing in the height of the market 8-10 years ago) to move up to the next level, you will gain it back, in potential negotiations, greater appreciation due to the higher price point purchase, potentially greater tax deductions and the need of more room and satisfaction in moving to a better location, school, etc.

Look at selling your property as a stepping stone to getting out of what you really want to move away from to where you really need and want to be.

Look at the big picture and maybe renovating and/or expanding your current residence, could be another possibility.

However make sure what you are spending in your upgrade, doesn’t turn your current home into the most expensive domicile on the block or the surrounding blocks; in the event you might have to sell within the next three to five years. Stay within a planned budget. Get two to three estimates, preferably from referrals and ask for names, addresses and, if possible, phone numbers of at least three jobs that the contractor has completed.

One that was done 10 years ago, five years ago and one that was recently completed.

Make sure that those clients were satisfied with the work and that it was done in a timely manor.

Also, make sure they have complete insurance (also ask, from whomever you finally choose, to have you as an additional insured on a certificate of insurance, so in the event of God forbid, a fire, damage, or someone getting hurt, etc. that the contractors insurance will cover the liability and not your homeowner’s).

Only you can decide whether to sell and upgrade or downsize or expand your existing home.

Look at all the options and feel comfortable with the decision and then move ahead. The winter will be the best time to expand or relocate, since there will be less competition for the existing inventory and contractors will be a bit more negotiable, since work is usually slower at this time of the year.

One last tip, replace central air in the winter and heating in the summer for the best deals.

Thanks!

Enjoy a More Healthier, More Happier, & Hopefully More Prosperous 2016!

Philip A. Raices,

Pres..C.E.O.

Licensed Real Estate

Broker Consultant

Turn Key Real Estate

7 Bond St

Great Neck N. Y. 11021

Mobile: (516) 647-4289

Email: Phil@TurnKey