By June Fletcher
From The Wall
Street Journal Online
To buy or not to buy?
That is the question facing homeowners all across the country as overall
home prices reach yet another record, mortgage interest rates reach a six-year-high,
and construction workers and supplies are diverted to the hurricane ravaged
Gulf Coast.
As tensions mount between too much demand and too little supply, many consumers
are wondering if the decade-long housing boom is peaking. Should they buy
now, or wait for rising rates to depress prices? "House Poor," a
new book by Wall Street Journal reporter June Fletcher, published by HarperCollins
and in stores Tuesday, looks at this crucial question, and suggests strategies
to survive a housing market in turmoil. Here is a condensed excerpt:
April and Adam Nichols are suffering from sticker shock. The newlywed New
Yorkers would love to get out of their cramped one-bedroom rental in Manhattan,
which costs them $2,325 a month, and buy a starter condo. But everything
they've seen in their under-$500,000 price range is horrible, from a fifth-floor
Hoboken, N.J., walk-up with a view of an ugly brick wall to a run-down building
in the Bronx.
So what are the Nicholses planning to do? For now, nothing. "It's
hard to throw money away on rent, but we're going to be patient," says
Ms. Nichols. "Prices are bound to come down."
It's challenging to sit on the sidelines when every day, the airwaves are
crammed with home fix-up shows, and bookstores push books on how to make
millions as a real-estate investor. But the real trick to winning at real
estate is to be contrarian and recognize just where you are in the real-estate
cycle. When Doug Duncan, chief economist for the Mortgage Bankers Association,
moved to Washington in 1988, the local real-estate market was sizzling and
buyers got caught up in bidding wars at open houses. He decided to rent.
Soon, the market took a nose dive. Five years later, he decided it would
be a good time to buy. He paid about a third less than the previous owner,
who'd lost his home in a foreclosure. "You have to use caution," he
says.
Understandably, not many real-estate brokers share this opinion. An ad recently
sent to clients by agents of the New York brokerage firm Prudential Douglas
Elliman pushed ownership hard. It points out that real-estate prices, unlike
stocks, adjust slowly, and that predictions that the New York market would
crash after 9/11 didn't come to pass. It also told first-time home buyers
that they have to "get in the elevator to ride to the penthouse," and
asked: "Why do you work so hard? To live in a crummy rental for the
rest of your life waiting for a bargain to emerge?"
But the real worry today isn't that you'll be stuck in a rental for the
rest of your life, but that you'll buy at the peak, watch prices slide, and
be stuck in the property for years, waiting for them to recover. To come
out ahead as investors, consumers need to buy low and sell high, but this
gets forgotten in the emotions of buying a home.
When Showing Your Home to a Home Buyer
Here below are some of the reasons why buyers may be put
off when visiting your home.
1. Welcoming Entrance - First Impression Matters
As has often been said, the first impression is the most
lasting. It is as important, if not more, for your house to look good from
the outside as it is to look from the inside. A prospective buyer wouldn’t
be too impressed with an unkempt yard, unpainted exteriors or a chipped off
front door. Get everything in order and in a position to show before putting
your house on the market.
2. Odors
Cigarettes, pets and whatever else that may have your home
smell in an unpleasant manner should be, at best, avoided. Although, it doesn’t
mean that you spray perfume all over. A clean and fresh atmosphere is what
is required.
3. Pets
Some buyers may not appreciate seeing pets at home. Some
may be frightened or some may be irritated. You wouldn’t want your pets to
be the cause of their distraction. Get your pets away while the buyers are
there and let them see your house with nothing coming in the way.
4. Dirty Bathrooms
>The heading says it all. You should know what needs to
be done.
5. Dark Rooms
Dark homes are a turnoff to most home buyers. Install additional
light fixtures, if required. Draw open the drapes when the buyers come over.
And do whatever it takes, to make your home seem more bright and welcoming.
6. Damp Basements
Dampness or damp smells in the basement may cause your
buyer to think that the basement leaks even if it doesn't truly leak. Fix
any leaks, if at all and ensure that whatever the source of the dampness,
it be dealt with. It may be caused by rainwater or the underground drains
being blocked. Have it checked.
7. Don’t Hang Around for Showings
Leave the house during showings or stay away from the buyers
while they go through your home. They may feel awkward about opening closet
doors and taking a really good look at the house if you move around with
them all over the house.
Get Your Home Ready To Sell
Have you been considering selling your home in the near
future? If you have, then it wouldn't be a bad idea to take a good long
look at your home, using an unbiased eye.
After all, a clean, appealing, well maintained home has
much better odds of selling, selling for more, and selling faster.
When looking at your house, the thing you need to keep
repeating to yourself is that “first impressions are lasting impressions.”
This couldn't be truer when it comes to selling real estate.
However, this doesn't mean that you should take on a major
renovation project just so that you can sell your property. Remember, there
are no guarantees that you would recover the costs of an enormous overhaul.
Instead, take a more conservative approach, and have a
look at the different cosmetic improvements that can be made for an overall
improvement. These can include things such as cleaning, painting, refinishing,
and other such efforts. These are the projects that don't require all that
much capital, and yet they make an immeasurable improvement to the overall
look of your home.
Before you take on any fix-up-for-sale projects, take
on the mindset that you are sprucing up your home in order to sell it. Don't
think of it as fixing it up for someone else. You're trying to create more
of an appealing look than you are a perfect home.
If you fix up the house with a certain person in mind,
you're limiting your market. Limiting your market will usually mean a slower
sale, and a lower selling price.
So instead of tackling a whole mess of huge projects,
just focus on making the home attractive, clean, presentable, and well maintained.
Let the new owners do their own customizations.
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