Is Greenwich, CT now a Steal, Deal and Gem?

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According to a recent article in Bloomberg News – Now is the time to buy in Greenwich, CT. Here is the link to the article:

http://www.bloomberg.com/news/2013-09-30/wall-street-on-a-budget-revives-greenwich-real-estate.html

In my opinion, Greenwich is now the “go to” town.  Our taxes are far better than Westchester County in NY,  Bergen County in NJ and any of the prime Long Island locations.  The NYC market is once again becoming too expensive.  Greenwich has great schools, the easiest commute to NYC of all of the Connecticut towns, great beaches, parks and overall amenities.  It is an ideal town for any family which still wants to maintain a connection to Manhattan.

Our homes have taken, on average, a good 20% hit from their peak pricing.  And like the interviewees in this article, buyers in the $2-3 million range are finding great opportunities in areas like Back Country.  The under $2 million market remains very competitive.  You can still find great opportunities; but, you must be ready to make good and fast offers when the right home comes on the market.

In the past 30 days we have had 74 sales:  3 sales over $10 million; 11 sales from $2-6 million; 30 sales from $1-2 million; and 30 sales under $1 million.

It’s been a while but…

OK — I know that I have not blogged in a while. Quite honestly, this market has been nuts (in a good way) and I have been trying to find a bit of time to post. Well, I had to reach out today. 

My clients just reduced their spectacularly renovated 1920’s Spanish Colonial in Greenwich (Cos Cob to be exact) from $1,495,000 to $1,195,000. This is a GEM, DEAL and STEAL.  Within 10 minutes of posting the price change, my phone was ringing for appointments.  At this price it certainly will not last.

The home was renovated top to bottom with the highest quality materials.  And the back yard is literally to die for.  It is like having your own park.  Walking distance to the train and the elementary school — this is absolutely the best value in Greenwich, CT.

Here is the link to the listing:

http://grw.mlxchange.com/DotNet/Pub/EmailView.aspx?r=145395530&s=GRW&t=GRW

Don’t forget to check out the virtual tour:  http://www.visualtour.com/show.asp?t=2969659&prt=10003

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DEAL and GEM: Owner Financing

I recently had a client ask me to find a home to purchase in the Greenwich/Stamford area. They want a traditional colonial with good space, a reasonable sales price and a good location.  No problem – that is a piece of cake.  Well, here’s the rub: The client wanted me to find a home where the seller would be willing to provide owner financing. 

Owner financing is quite simply a situation where the owner of a property agrees to act as the bank and provide the buyer a mortgage to finance the home.  Owner financing is not new; and, it has always been provided throughout history.  This form of financing really stepped up in prevalence after late 2008, when the mortgage market fell apart.  People still had homes to sell; and, those who were in a position to offer this perk sold homes in an environment where others could not due to tightened traditional credit. 

Even though the real estate market has recently sprung to life, the mortgage credit remains somewhat tight.  Even very qualified buyers find themselves battling with underwriters to meet the current stricter lending standards.  Do not make the mistake of believing that a person with poor credit can easily get owner financing.  Homeowners are very savvy about the market and current lending standards. They may be much more flexible than traditional lenders; but, it is highly unlikely that the owner lender will ignore a poor credit rating in deciding to enter such an agreement with a buyer.   

Typically, owner lenders want 20-25% as a down payment, proof of a solid credit history and proof of an ability to make the monthly payments.  Well, you may say that sounds like a regular bank.  Not really.  Here are some examples of how a traditional lender may not be feasible for an otherwise excellent borrower:

– A Wall Street executive with an excellent credit history makes $250,000 per year in base salary and has received a bonus of $750,000 consistently for the past several years.  Prior to the lending crisis, the fact that the bonus has been consistent for several years would be enough to base the executive’s borrowing power on the $1 million income.  Today, unless the lender receives written verification from the employer that the bonus income will continue at the same level for several years, the bonus income will not count.  Most employers will not make a written commitment to a set future bonus, even if there is a hand-shake understanding that it will continue.  As such, the traditional lender will take this million dollar earner and reduce them to $250,000.  That is a big hit in qualifying for a higher mortgage.  That is something an owner lender may be willing to ignore.

– A well qualified person who is divorcing may need an owner lender.  Such a buyer may find that their assets and income are tied up in providing support or while awaiting disposition of assets by the court.  Although they can afford the payment of a new home, a traditional lender may not see it that way.  The traditional lender will consider reduction of income and assets from support payments, other housing payments and disputed assets in determining the buyer’s ability to pay.  You are unlikely to have this level of scrutiny from an owner lender.

It is clear that various situations may be present in the life of a very strong buyer/borrower which would preclude them from getting a traditional mortgage. The availability of owner financing allows such buyers to enjoy this rare marketplace of low rates and reasonably priced homes.  Conversely, owners who are willing to provide financing greatly increase the marketability of their homes.  It is not unusual for owner financiers to receive their asking sales price as well as a slightly higher interest rate because of their willingness to provide the means of purchase in a less stringent environment.

Check out my next BLOG post to read about some of the great homes in the Gold Coast towns offering owner financing.

Deals: Bank Owned and Short Sale Homes and the Current Market

The most obvious place to look for a real estate deal is the “land of foreclosures”.  This includes bank owned properties (where the bank has finished the foreclosure process) and short sales (where the owner owes more than the property is worth or the owner is in financial trouble and facing foreclosure or typically a combination of the two).

Up until the past few months, the rule of thumb was that you could come in with cash or promise of a problem free, quick closing and pretty much set your price at the lower spectrum of property value.  Well, the market has changed; and as such, the rules of the game have changed accordingly.  We need to divide the market into segments to know the rules.

UNDER $1.5 MILLION:

In January 2013, the “under $1 million market” really started to explode in the Connecticut Gold Coast towns.  Properties in this price range were going very quickly and many with bidding wars.  As of the end of March, the segment has expanded into the “under $1.5 million market.”  This has occurred because the demand has raised prices and caused hungry buyers to stretch budgets into the higher price points to find desired housing.  Accordingly, those seeking bank owned properties in this range must be ready to move quickly.  You may find a nicely priced home by looking at bank owned and short sale homes, but buyers should expect to present clean offers with quick closing dates and typically taking the home in “AS IS” condition.  A home inspection should be completed; but, that is usually only for the buyer’s use in deciding whether to sign the contract.  These buyers also need to be ready to pounce on the good deals immediately.  It is common for multiple offers to come in within 48 hours on a hot property.

OVER $1.5 MILLION:

Those who have a budget over $1.5 million, particularly those in the “over $3 million market”, are really in the best position to negotiate.  The properties in this range have not gained the momentum, to date, enjoyed within lower price ranges.  There is in indication that the “under $3 million market” is heating up as the number sales and pending contracts are rising.  Nonetheless, right now, those with cash or an ability to obtain a mortgage in this price range may really find great bargaining power with bank owned and short sale properties.  If you are ready to buy in this range, I suggest that you actively seek out opportunities within this segment.

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