In the age where information regarding real estate purchase is
plentiful some people doubt the need for a REALTOR®. It has been
suggested that the agent has been marginalized to the role of a “door
opener”.

In the state of CT the proper procedure for buying property is still
fraught with pitfalls and only an experienced agent can help you
navigate them.

Read on to see the level of detail required to transfer title in CT and
let me know if you don’t agree that the role of the REALTOR® is as vital as ever. Many people do not realize that purchase procedures vary from state to state and even from town to town. In the towns of Darien and Rowayton however the procedures are as follows.

Once you have found your dream home…

1.INSTRUCT YOUR AGENT TO MAKE A WRITTEN OFFER TO PURCHASE

This is also known as a binder. Typically this offer contains the
amount you are offering, the amount you are planning to put down as a
deposit, as well as the amount you are planning to finance. A minimum
of 10% of the purchase price is customary although a buyer may deposit
more if he wishes. At this point, however, a check for only 1% of the
proposed purchase price is suggested.

The binder of sale also contains other terms of the offer such as
contingencies (i.e., inspection or mortgage contingencies), a proposed
closing date and any specific items or terms to be included or excluded from the sale. At this time the buyer should also sign the “property disclosure” forms which are required by the state and disclose any known problems on the property such as asbestos, water issues or lead paint.

All binders should be signed and dated including the hour in the case of competing or subsequent offers.

It should be noted that although this is called a “Binder of Sale”, in some instances depending on wording it may only a handshake agreement. While you are in this stage…A SELLER HAS THE RIGHT TO ACCEPT ANOTHER OFFER.

The binder is then delivered by the buyer’s agent to the seller’s agent, if the sellers have contracted for agency representation, who in turn presents it to the homeowner. At this time negotiations formally begin. If the buyer and seller do not reach an agreement, the 1% DEPOSIT IS FULLY REFUNDABLE.

It is the law that the 1% check be placed in an escrow account within 3
days.

2. SET UP A HOME INSPECTION AND HIRE AN ATTORNEY

Assuming you and the seller agree on price and terms, the buyer should
work with the REALTOR® to set up a home inspection and hire an attorney
to draw up a binding contract, establish clear title to the property
and execute the closing. If you don’t have a good real estate attorney
your agent can recommend one.

3. BUTTON UP YOUR FINANCING

The buyer should at this point be moving aggressively to secure
financing in order to expedite the transaction and remove the
possibility of being outbid on the property.

4. GOING TO CONTRACT

The attorney will draw up a contract containing, the purchase
price, contingencies with amounts and dates, date of closing, and
inspection reports.

The buyer should sign the contract and have it sent with a check for 9%
of the purchase price (remember the buyer has already written a check
for 1% for a total of 10%) to the sellers attorney. The seller should
then sign the contract.

TITLE SEARCH, APPRAISAL AND CLOSING

In the meantime, the buyer’s attorney will be executing a title search
on the property, and work with the bank on transfer of funds for the
closing. In addition, the lending institution will send an appraiser to
the property to establish the value of the home.

Buyer and seller then proceed to closing.

Each one of the above steps can contain roadblocks and problems that
your attorney and agent will work through together until the
transaction is complete. Much of the time things proceed smoothly but
when your dream home is at stake, you will want all the professional
help possible.

Keep in mind again that every “deal” is different and procedures do
vary by state and even by town, but by now you can see agents are much
more than “door openers.

Karen Brewer
William Pitt Sotheby’s International Realty

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Have you ever noticed that successful real estate investors often purchase real estate when the market is not strong? Many would say they are lucky. I say they make their own luck. These people use their knowledge of real estate cycles to their benefit. They are people with vision who watch the trends and recognize opportunities when they become apparent. They use their knowledge of the fundamentals to make sound decisions and are ready to buy when the opportunity presents itself.

What you can do to assure that you will make the right decision:
1. Research the local market and the price range you are prepared to buy in.
a. Identify all current area listings that are $50,000 above and below the price point you are interested in.
b. Identify and fully study the area sales that have occurred $50,000 above and below the price you are considering.
c. Determine the current inventory (months of listings).
2. When you find a property that interests you.
a. Research to find out which nearby properties may be in financial trouble. (identify current debt/check foreclosure notices)
b. Identify the most recent sales in the neighborhood and determine how the sale price of each compares to it’s last sale price. (appreciation/depreciation)
c. Determine:
i. are there any unsold new homes/units in the neighborhood,
ii. how long have those properties been on the market,
iii. have there been any price reductions, and
iv. what percentage of units are still owned by the developer.
3. Treat the purchase like an investment - don’t buy on emotion.
4. Always have the property appraised and thoroughly inspected by licensed professionals.
5. Align with an agent that can provide you with a depth of real estate knowledge and experience.

This is a time when people with the ability to buy have a competitive advantage. With higher than average inventories and many troubled properties in the market, this is a great time to buy real estate.

Les Bray
Stonington Sales Office

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As you may have heard, significant improvements in the temporary First-Time Homebuyer Tax Credit were signed into law on Feb. 17 as part of the American Recovery and Reinvestment Act of 2009 to provide a housing stimulus for first-time home purchases that occur between Jan. 1 and Dec. 1, 2009.

This is even better news for first-time homebuyers than the tax credit announced in April 2008 because not only has the tax credit maximum increased from $7,500 to $8,000 – but more significantly – it does not need to be repaid unless the individual re-sells the home within three years.

We want you to be aware of some of the details in case it can be of use to you, or for you to share with others. There are several notable points about this federal income tax credit that we have bulleted for your convenience. They are:

• Credit maximum was increased from $7,500 to $8,000. The credit is calculated as 10% of the purchase price. Example: If the purchase price is $70,000, the credit is $7,000.
• Removed the repayment requirement, provided the homebuyer does not resell the home for three years.
• Eligibility remains for first-time homebuyers only. In this case, a first-time homebuyer is defined as an individual who has not owned a primary home at any time during the three years prior to purchase, but who may have done so prior to that time. Although certain income limits do apply, the amount of the credit is the same for all taxpayers, married or single.
• To be eligible for the full tax credit, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.
• The tax credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home between Jan. 1, 2009 and Dec. 1, 2009. It can be claimed on a 2008 tax return (to be filed by April 15, 2009), an amended 2008 tax return, or a 2009 tax return. Individuals should consult a professional tax advisor for exact tax calculations and timing.
To further assist you in understanding this good news, the National Association of Realtors® has featured articles and resources on their home page at www.realtor.org. Be sure to consult with your tax or legal professional and other advisors before making your home purchase decisions.

We hope you find this information useful.

Nancy L. Carlin
Vice President, Operations
William Pitt Sotheby’s International Realty

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During my 4 decades as a real estate agent and residential and commercial appraiser, I have learned that change is inevitable and that buyers and sellers should consider basic valuation factors in good and bad markets. Now that double digit annual appreciation has gone away, we must rely on valuation basics to arrive at what is a reasonable price to ask or to offer for residential and commercial property.

From 1998 until +- 2005, buyers could rely on appreciation to protect them from making a poor decision when buying a property while sellers could set a price and wait for a buyer to show up. Over the past few years market participants have discovered that it isn’t that simple and all properties are not always a good “investment”.

Here are a few observations for sellers:

A. Be brutally honest with yourself and ask:
1. If I were buying this property would the location, curb appeal, layout, condition, etc. appeal to me?
2. What properties have sold in the past 3 months similar to mine, at what price, how long were they on the market and what was the original asking price? Reminder: A property that was put under contract before September was in a different market than now.
3. If I were looking for a property similar to mine today, what properties presently on the market would I look at? How do they compare to mine? Am I prepared to set a competitive price that will appeal to a buyer?
4. If you own a non-owner occupied income property, will it support itself? In other words, will the recent history (at least the past 3 years) demonstrate that there is sufficient revenue to pay all expenses including management and reserves and still pay the mortgage and a return on investment?

B. To sell within a reasonable period of time you must:
1. Make sure that for the price range, your property compares favorably.
2. Watch the market. If a competing property comes on the market, make sure you are priced accordingly. Follow recent sales closely. Be prepared to adjust your price.
3. Consider owner-financing but be careful.

Finally, align with a company and an agent that will provide you with the best chance for success.

-Les Bray
Stonington Sales Office

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A low level of consumer confidence, rising unemployment rates and an economy in turmoil led to less sales and lower prices in the Stamford real estate market last year. Will things look up in 2009?

It would certainly seem so based on early indications.

“I actually think there’s more activity since January 1,” said one Stamford real estate agent. “I’ve been involved with four sales this month, all bindered, and one in contract that seem to be moving along.”

The number of single-family houses sold in 2008 tumbled 28.7 percent to 464, from 651 a year earlier, however an occasional bright spot was seen. In late spring, a direct waterfront home in Stamford sold for $4.7 million on nearly 1.6 acres on Shippan Point.

But overall, the average price of a house was down 8.8 percent to $768,700, from $842,800 in 2007. The median price slid 7 percent to $640,000, from $690,000.

The higher end of our market has gone fairly soft. We saw the decline towards the end of the year and it’s a trend we see continuing into 2009. It has, however, created an outstanding opportunity for buyers.

From September to December, three houses sold for $1.5 million to $2 million, with one topping $2 million. But 28 went for less than $400,000, with another 38 selling for $400,000 to $600,000.

In the last quarter of 2008, 103 sales were recorded at an average price of $642,000, of which 10 topped $1 million, however the preceding year, 115 sales had an average price of $801,000, with 20 selling for more than $1 million.

One of our agents had a brand-new listing come on the market this month, a small home in North Stamford in the middle-end price range. The house showed very well and the seller was very realistic in the pricing. It sold within the first week.

Pricing, as always, is key.

Regardless of some of the dismal news, properties that are priced well are moving quite quickly. Buyers are still out there looking for their proverbial deals.

Predicting the bottom of the market is obviously tough.

“It’s impossible to time the bottom of the market,” noted another Stamford real estate broker. “It’s like trying to speculate about the stock market. We won’t know we’ve reached the bottom until prices are starting to appreciate again.”

Mortgage requirements are more stringent, but rates still are reasonable and may go lower. It’s not unrealistic to see rates in the fours for qualified borrowers. Our partnership with William Pitt Mortgage, an affiliate of Wells Fargo Home Mortgage, allows us to offer our clients a broad spectrum of financing products … products not otherwise readily available in today’s marketplace. That’s one of the advantages of working with the country’s only AAA-rated bank!

-Rob Vannucchi, Director of Sales, Stamford – Bedford Street Sales Office
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These days, nearly every discussion about real estate boils down to what’s become the industry’s mantra: “In this market….” In late January, there was encouraging news that existing-home sales in December were up nearly 5%. Coupled with historically low mortgage rates, it’s a positive sign that, in this market, prospects are improving.

It behooves today’s sellers, therefore, to do whatever they can to attract buyers. That’s where the value of a creative, knowledgeable real estate agent becomes apparent.

Savvy agents understand that, in this market, there are a number of inexpensive ways sellers can make their homes more saleable. Pricing, as always, remains the key factor. That’s why a timeless real estate adage—“priced to sell”—works its way into listing agreements. Buyers are looking for value. They’re more informed than ever, largely thanks to websites that allow them to continuously track listings and keep an eye on what’s out there.

In this market, buyers are looking for not only a fair-priced, but also a well-maintained home—one where they can just turn the key and move right in on closing day. Whether it’s a lack of time or funds, making even modest improvements can be difficult. So smart sellers have to be resourceful in preparing their home to stand out “as is.”

In this market, homeowners’ investments to improve kitchens and bathrooms yield the greatest returns, according to estimates from the National Realtors Association. Keeping that in mind, here are some relatively easy, quick and economical projects to consider when you are getting ready to list your home:

KITCHEN
• For a fresh makeover, paint the cabinets and replace the handles and pulls on doors and drawers.
• Something as simple as a new gooseneck faucet will give the sink area an updated appearance.
• Get rid of clutter by organizing cupboards, the pantry, and countertops.
• Spruce up food-preparation and eating areas by replacing old light fixtures with stylish new ones.
• Brighten a backsplash with colorful, inexpensive tiles.
• If the budget allows, new stainless steel appliances can be deal-makers.

BATHROOMS
• A coat of paint or new wallpaper adds instant appeal.
• Reglazing a tub is affordable, and makes a big difference.
• The same goes for a new shower door or curtain.
• Prices for expensive-looking sinks and vanities are surprisingly low.
• Fluffy new towels and rugs are a nice touch.

In this market, there are always buyers ready to make an offer—if sellers are willing to make the right moves.

By Sue Woods ABR, GRI
William Pitt Sotheby’s International Realty
Madison, Conn.
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As a seller, the most difficult task is to price your home for the current market. Most homeowners have difficulty being objective about their own homes which they have lovingly cared for and decorated. It is a struggle to imagine that others may not share your taste or may have very different requirements.

Years ago, before I became a REALTOR®, my husband and I sold a Victorian home, just outside of Chicago. We had painstakingly restored the home with its original trim and “gingerbread,” and we received a historic award for having done so. The first time my husband showed the property, the potential buyers listened to him explain (for 2 hours!) what we had done. The home did not meet their needs in terms of room sizes, and his descriptions were not important to them. It was a great lesson for me, and when I became a REALTOR®, one of my goals was, and still is, to help people with my own ability to be objective and use statistics regarding recent sales to evaluate an appropriate price.

Count on your REALTOR® and allow someone else to provide the objectivity to price your home accurately for the market.

Blythe Ann Smith
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Over the past few months I have frequently been asked “Is now the time to sell my home?” History suggests you should carefully consider selling now.

With the arrival of the credit crisis and specifically since the events of September 2008, it has become obvious we are facing more months of declining sales prices with an unknown date for when we can expect to reach stabilized values. What may be more predictable is what will happen to values after prices stop declining.

We should be reminded of what history has told us. As a realtor and residential and commercial appraiser/market analyst since the early 1970s, I have witnessed many real estate cycles. This one is different. Buyers came into the marketplace in the first part of the decade due to easy credit which resulted in double-digit appreciation. This unprecedented escalation of prices took us to median sales prices never reached before. It is doubtful credit will be as readily available again and therefore traditional appreciation likely will return.

So when a stabilized market is reached (a point where prices no longer decline), what might we expect?

1. A home will no longer be an investment with enormous resale returns possible only 2-3 years later, but rather a place for living that has value due to location, curb appeal, layout, view, etc.
2. Increases in value will be linked to an understanding of valuation fundamentals and a relationship of inflation and a modest return. (Economist Robert Shiller, Yale University, notes that from 1950 through 2000 the average annual investment return from home ownership was less than one-half of 1% per year, after adjusting for inflation.)
3. Homes will be considered affordable if the value is roughly 3 times the family household income.

History therefore suggests it does not make sense to wait as values likely will be lower in the future at stabilization. If you believe prices will continue to decline for a while and future appreciation will be modest by comparison to our recent past, selling now will likely net greater returns.

-Les Bray

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