Real Estate News | Featured Columnists
Q & A with Barbara Corcoran
By Barbara Corcoran | February 26, 2009 4:18 PM ET
Q1 - Isn't it true that agents like to show the worst properties first because it makes the next houses they show you look better?
A - That old routine stopped years ago! It only made the agent look inept and lose their customers. The real estate agent's business is built on good will and today even a half smart agent knows better than to try to trick a customer.
Q2 - I recently read an article about new legislation that allows home buyers, after meeting certain requirements, to borrow up to $7,500.00 from the government at no interest to be paid back over 15 years. But the article I read gave no information on how one is to go about applying for this loan. Can you help me?
A - You'll find the information online at www.HUD.gov. It's a $7,500 tax credit available to first-time home buyers for homes purchased between April 2008 and July 2009. Single people with incomes of $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit, and it works like an interest-free loan that is re-paid over a 15-year period.
Q3 - Two years ago I foolishly switched to an interest only mortgage with Wachovia Bank. My payments are due every two weeks and I am slowly drowning. I have called every single day for four weeks to speak to someone to modify my bi-weekly payments to once a month and keep leaving voice messages, but no one ever calls back.
A - You may be calling the wrong department at the bank. Ask for the workout department and speak with either a vice president or supervisor because they're the only people there with the authority to make a decision. Follow up your conversation in writing by certified mail, return receipt requested, as that provides legal proof the bank received your letter.
Q4 - I have found my dream house! It has never been lived in, yet it was built in 2006, so it's been on the market for over two years. The listed price is $249,000. How low an offer should I make?
A - The price you bid should be based on what the house is actually worth, so you'll need to do some homework. Ask a broker to provide you with a list of recent sales in the neighborhood. Then check out the specifics of each house that's similar to the one you're interested in and drive by to have a quick look. You should make an offer 20% to 25% below what it's worth. Whether your bid is accepted depends on how eager the owner is to sell. And if your offer is flatly refused, ask your broker to stay in touch with the homeowner. The market will make your bid look better over time and many sales happen long after the first bid is refused.
Q5 - I've been self employed since 1979 and have always managed to qualify for the 'stated income with documentation of assets' type of loan. Are these loans still available?
A - Yes they are, but they're in the lonely loan club. And the down payment requirement is much higher today, usually 25% to 30% down, plus the credit and asset requirements have become far more rigid.
Q6 - I live in a summer vacation town where a lot of houses are second homes and I'm hoping the market will pick up. I'm determined to sell my house. I've slashed the price to what I think is below market value, I plan to repaint inside and out to freshen it up, un-clutter all the rooms, clear my closet floor and cabinet tops, replace the kitchen countertops, remove all non-essential items from the house and take my children's pictures down. Should I remove ALL the hangings from the walls and how many things should I leave on the bookshelves in the living room? Also, the exterior of my house is white with grey trim and the interior is a very, very light pink (they look white). Should I stick with that rather than trying to change the colors?
A - Other than a good power-wash, leave the outside of your house alone. You'll have more than enough to keep you busy on the inside. The pale pink on the walls is fine as long as it still looks fresh, and don't take down all of your artwork, nor the books on the bookshelf, because every house needs a little color.
Q7 - My agent, who I trust, tells me our Staten Island house is only worth $340,000 to $350,000, which was very disappointing to hear. We've lived here for 32 years and our kids are on their own. We want to put it on the market at $399,000 because we can always reduce the price later, but our agent doesn't agree. She's our cousin.
A - Every seller is tempted to price their home higher for a few weeks, just to test the market. Homeowners figure if there's any chance they could get somebody to pay more for the house, they don't want to miss it! But listen to your agent. All buyers shop by price range, and if you put your house in the wrong one, you'll help everyone else sell their house instead because your mispriced house will only make theirs look better. And don't make the mistake of reducing your price by small increments later because you'll find yourself in the bad position of chasing the price tide as it goes out.