Archive for the 'Closing' Category
Junk in Your Basement
When you bought your home, did you allow the previous owners to leave items in the basement, garage or attic of the home?
When a buyer purchases a property in the Greater Hartford area, it’s supposed to be left in “broom clean condition” by the closing. That means the previous owners shouldn’t leave old paint cans, cleaning products or a host of other things behind.
Often you’ll see a seller ask a buyer if it’s okay to leave random “stuff” that they feel the buyer may find useful in the future. Leftover paint is the most common request because sellers believe buyers may want the paint to do touch ups once all of the wall hangings are removed. Some buyers will be okay with the old paint staying, while others will tell the sellers “no thanks” and ask that it be thrown away. Usually it depends on the color of the paint and whether or not the buyer plans on painting right away. Truthfully, most sellers want to leave the paint because it’s a pain in the butt to dispose of properly.
And what happens when you, the buyer, eventually become the seller of the house? Well, the next buyer is going to expect you to clean everything out. I’ve run out of fingers counting the number of times I’ve heard a seller client say “But the person I bought the house from left this for me, why can’t I just leave it for the new buyer…” The leftover mess from the previous seller now becomes your problem because you never dealt with it, or probably used any of it.
If you’re a buyer, think long and hard about the items if a seller asks you if they can leave some things with the home. You’re going to be responsible to remove it in the future, so if it really isn’t of any value to you and you don’t see yourself ever using it, make sure you have the seller take it away before the closing. Otherwise it will become your problem a few years down the line before the closing of your sale.
Property Taxes in the City of Hartford
One of the most difficult conversations that I have as a real estate agent is explaining the property tax system in the City of Hartford.
Most of the time the subject comes up as I’m touring around with a buyer and trying to cover various home buying subjects as we drive from one property to the next. My client will casually ask about taxes, expecting an answer along the lines of “They’re low/high compared to other towns.” In most towns I can give an answer like that, and then also talk about where that town is in the revaluation process.
When we’re touring Hartford, my answer is usually, “They’re complicated; would you like the short version or the long version?” To their credit, most buyers seem to ask for the long version. They want to know how it works, and what possibilities exist in the future. After all, they’re going to be on the hook for making the tax payments if they buy a house in the City. And as their agent, I feel it’s my responsibility to make sure my buyers have all the information they need to make an informed decision.
I’ve spent a considerable amount of time trying to understand exactly how the taxes work in Hartford.
I’ve talked to the City Assessor and various staff members to work through the details of the current system at different points of time. I’ve talked to our elected officials at both the City and State level to hear the arguments for why they have advocated for different implementations. I’ve sat in on presentations and negotiations between different constituency groups as they hash out a forward looking plan.
Despite all this effort, I still cannot neatly summarize property taxes in the City of Hartford for someone with basic municipal property tax knowledge. It’s just too complicated. I can’t even build a spreadsheet/model that will predict the coming year’s taxes based on an expected City budget. There are too many moving parts.
The best I can do is create a resource, so that those interested in learning about how property taxes work in the City of Hartford have a central place to go for information. I’ve made an effort to summarize as best I can, and I’ve also collected and sorted links to over 50 articles, presentations, and videos on the subject dating back to 2006.
The City of Hartford: Property Taxes page is a work in progress, and I definitely appreciate feedback and comments on how to make it more helpful, more accurate, and generally better.
Special Offers for New Homeowners
Every time a mortgage closes, marketers line up to pitch all sorts of fabulous offers and opportunities to new homeowners. Nearly all arrive via mail so they are, fortunately, easy to sort through and discard. On occasion a company will dispatch their best door-to-door salesman to pay the buyers a visit and congratulate them on their purchase – thankfully they are few and far between.
The special offer bounty covers a wide spectrum. Some is relevant and useful though much is opportunism, “These buyers just shelled out hundreds of thousands for a house, so maybe we can convince them that a few hundred here and there is a prudent additional expense.”
Since there is no real difference between a mortgage closing via a purchase or a refinance, we’ve been the lucky recipients of much of this marketing over the past couple months. It’s been interesting to see what is offered, how it is presented, and how persistent the different companies are. Here’s a sampling of some of the exciting opportunities that we’ve received:
- Coupons from Big Box Home Improvement Centers: Of the haul, these seem most likely to be helpful. Just about all houses need a little something here and there, whether it is a small repair or just some personalization.
- Coupons from Home Design/Accessory Stores: These can also be helpful, but the ones we received are not all that scarce. They regularly send out the same 20% off coupons, so it’s not like this is truly a special deal for home buyers – the text is just different.
- Gutter, Windows, and Roofs: We received a surprising number of offers to help out with moderately sized/priced home improvement projects. Sometimes they came from manufacturers, but more often they seemed be sent by the local contractors who would actually do the work.
- Water Treatment System: This seemed really random to me. I know that water treatment systems are critically important in some areas, but I don’t really see all that many of them in our area. The MDC water is actually quite tasty!
- Credit Card from Mortgage Servicer that Pays Down Principal: I give extra credit for being creative; this is a sales angle that I hadn’t seen before. Unfortunately the rewards points are less generous than other cards available.
- Mortgage Insurance! Mortgage insurance must be a very profitable product to sell, because we’ve received more than 20 offers so far. The companies are so aggressive that it immediately raises my guard. And the numbers don’t sit well with me. The benefit decreases over time (because I’m paying down my principal each month) even though I’ve paid more premiums and am more likely to die? I must not understand the product properly…
If you’ve been through a purchase recently, have you received anything worthwhile? What’s been the most outrageous solicitation?
October 2010 Market Statistics
Here’s a quick look at how the Hartford County real estate markets performed last month. Closings in October reflect deals negotiated during the summer and fall depending on the amount of time between the contract date and the closing date. The data comes from the Connecticut Multiple Listing Service (CTMLS), which is deemed reliable but not guaranteed.
Some Observations
There was a wide range in the percent change in number of transactions for this October versus last October. Most towns were considerably less active, though there were some positive towns. Glastonbury had 25% more sales than last year (6 deals), while Rocky Hill saw 3 more deals close for a 50% gain. At the other end of the spectrum there were 7 towns in which the number of deals fell by more than 50%. Hartford County overall saw a 38% decrease in the number of transactions for October 2010 versus October 2009.
Part of the reason for the drop in activity was the Federal Home Buyer Tax Credit. Last fall there was a version of the credit scheduled to expire at the end of November, before the program was extended for the final time. Many buyers planning to take advantage of the credit scheduled their closings for October and early November, so the activity this year should be less.
Buyers should have some very good choices in the market, as inventory levels show a buyer’s market for nearly all the towns in the County. The standard benchmark for a buyer’s market is when there is 6 months or more of inventory available. Based on recent activity, only four towns are NOT in a buyer’s market. West Hartford has the least inventory, at 5.3 months, while the other three are each much closer to the 6 month dividing line.
Sellers need to be willing to price their homes attractively if they really want to sell – this isn’t the time to stretch for that extra few thousand dollars. Buyers do have a lot to choose from and seem comfortable taking their time to make a decision. Sellers need to give them a reason to pull the trigger. Make sure the property shows as well as possible and consider touching up any problem areas before putting it on the market.
Mortgage Rates and The Fed
This afternoon the Federal Reserve announced the next phase of their strategy to stimulate the economy. Broadly referred to as Quantitative Easing 2, the plan involves printing a whole lot of money in order to buy long-term US Treasury Bonds in the markets.
The Fed’s big picture goal is to reduce unemployment, and hopes that injecting more money into the economy will encourage businesses to begin taking risks to expand their operations (hire more workers), which would hopefully also boost confidence and inspire consumers to increase their spending.
Analysts, economists, and investors have been debating the merits of the expected plan for weeks. Some feel it will be modestly helpful in supporting the business environment, while others are quite pessimistic. Ultimately this sort of indirect economic stimulus relies on a chain of events, with many types of participants, so it’s impossible to predict what will happen with any level of confidence.
Commentators do seem to agree that the Fed’s move will continue the very favorable refinance opportunity for homeowners. Because mortgage rates are generally based on the long-term US Treasury Bonds, and those are the exact securities the Fed plans to purchase, rates should be directly impacted by the program. Again, there are various opinions as to how much lower mortgage rates may go, but I have not seen any articles expecting them to rise.
The refinancing opportunity appears as though it will be extended again. Homeowners with strong credit and positive home equity may want to consider improving their interest rate and/or shorting the length of their loan. Just keep in mind that there is an up-front cash cost to refinancing, so in order for it to make sense homeowners should plan to be in their property for at least a few more years. We’re happy to share our experience with the process and suggest mortgage professionals – just call or email.