Make an Offer

Feb. 23, 2007

We, in the real estate business, say that the so-called "spring market" starts right after the Super Bowl.  Since the Super Bowl is now over, from a realtor perspective, the spring market is underway albeit in the very early stages.  If you are new to the market, or have not bought or sold real estate in Bucks County for a long time, I thought it might be helpful to disucss the process of making an offer so that you can be better prepared, once you reach that point in the buying process.

So lets presume that you have spent an appropriate amount of time getting educated about the market and the areas that you, as a buyer, are considering.  You have found the house of your dreams and wonder, what now?

It is time to write an offer 
The offer you sign contains all the terms and conditions which, if accepted by the seller, will allow you to purchase the house.  It is critically important to understand that in Pennsylvania the offer to purchase residential real estate will become a fully binding contract once signed by the seller.  You will be bound by all of the elements of that contract once it is fully executed by all parties. 

What is involved in making the offer? 
Once you have found the right house, your realtor -- assuming you are working with a realtor -- will help you answer all the necessary questions that go into the actual offer.  The first, and most obvious, is to determine what price you are offering.  Your realtor agent should discuss comparable properties as well as things like how long the property has been on the market.  Other factors that determine the price include the state of the market in general.  Is it a buyers market or a sellers market?  (The whole concept of pricing strategy could be a subject for a separate post.)  For the purpose of explaining the offer process you need to determine your offering price as the initial step in preparing the contract.

Establish a settlement date
Your settlement date is the day you go to closing and take title to your home.  The settlement date is often a very important element of the offer and can sometimes create an insurmountable obstacle.  The seller may require a long lead time if they are building a house, for example, and they are not willing to consider a temporary move. The buyer, on the other hand, may be relocating and need a very quick closing.  As an agent for the buyer, I try to find out in advance exactly what the seller is looking for so I can see whether this is going to be an issue.  When representing the seller, I try to encourage the seller to be flexible, if possible, so they don't create obstacles for buyers making offers.

How will you finance your new home?
Once you have established the price and closing dates, you need to specifiy how you will pay for the house.  It will be necessary to submit a check with your offer as an initial good faith deposit. In my contracts, the most common initial deposit paid by the buyers is $1,000.00.  Again, in general, if the property is listed with a real estate broker the deposits are held by the office representing the seller.  The deposit or deposits paid by the buyer towards the purchase price are called "escrow" deposits.  The purpose of the escrow deposit is to provide some assurance to the seller that the buyer will not walk away from the transaction for a frivulous reason.  It is important to note that the amount held in escrow is completely negotiable.  In most contracts in Bucks County, the buyer will be expected to make a second, and more significant , deposit into the escrow account aproximately 14 days following the full execution of the contract.  This must be structured into the agreement at the time the offer is written.  The only way that the buyer would forfeit the escrow deposit is if they default.  A default would occur if all of the contingencies in the contract are met but the buyer failed to go to closing.

The next step in the process of preparing the offer is to determine the mortgage amount, if any, and the acceptable terms of the mortgage.  The mortgage contingency clause is extremely important; it basically says that if the buyer is not able to obtain a mortgage for the amount and terms specified in the contract they can cancel the contract based on this contingency.

Next is to determine whether the sale will be contingent on a home inspection, radon inspection and wood destroying insect inspection.  These are the most common, but not the only, inspection-related contingencies.  Some additional inspection type contingencies are swimming pool inspections, septic inspections and well water inspections.  There are a couple of different ways to structure the inspection contingencies and they must be spelled out at the time of preparing the offer.

The actual contract that you will sign in making your offer will define in detail how all of these contingencies work.  As a buyer, you will be asked to review and sign the actual sales agreement.  There are a couple of additional documents that are expected when making an offer on a house.  The one that is often the most confusing to buyers is the Buyers Financial Statement.  While not a legal requirement, the agent for the seller will expect the buyer to complete a statement the details the assets and liabliities of the buyer along with their employment information.  The realtor representing the seller will also expect the buyer to have at least a mortgage pre-qualification letter from a lending institution.  It is a good idea to get these things together before you start the process of looking for homes.  That way, you will be fully prepared if you find the right house.

I hope that this brief overview of the offer process is helpful.  The standard Pennsylvania Association of Realtors (PAR) contract is extremely thorough and well thought out.  There are several options in completing many of the clauses; some are biased towards the seller and some towards the buyer.  It is critically important that your realtor be able to fully explain all aspects of the agreement to you.  As I indicated previously, once you sign the agreement it is fully binding when signed by the seller.  In another post, I will review the sales agreement and will explain all aspects of the agreement in greater detail.  In the meantime, you can review a blank copy of the agreement on my website at www.MartinMillner.com.

 

 

 

 

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Bucks County Real Estate Market Update

Feb. 11, 2007

As we move through the month of February -- although it does not feel like it at the moment -- we get closer and closer to spring.  The spring market -- well, what we in the real estate industry refer to as the spring market -- begins once the Super Bowl ends.  That means we are in the early stages of what is traditionally the busiest real estate time of the year.  I thought that this would be an appropriate time to review the local real estate market situation in the areas I cover, which is essentially Bucks County in Pennsylvania and Mercer County in New Jersey.

There have been many articles over the past several months in national magazines that have painted a picture of gloom and doom in the real estate market.  Most of those articles discuss the concept of a "real estate bubble."  We experienced such a bubble in the late 80s and early 90s.  Many people who purchased homes in the late 1980s found that when they went to sell several years later their homes had depreciated signficantly in value.  In fact, for those sellers who were highly leveraged -- meaning they put down small amounts of cash -- they had to bring money to closing in order to settle because of the fall in the value of real estate.  The most common question I am asked is whether the so-called bubble in real estate has burst. 

It has been frustrating for me to read many of the local articles about the real estate market, which often use statistics from extremely depressed markets in other parts of the country. They use those statistics as evidence that the market here in Bucks County is in a free-fall decline.  It's true that in parts of the country (i.e., areas in Florida) there has been a serious decline in real estate value.  Many of those areas saw a large amount of speculative buying during the past four or five years as real estate values sky-rocketed.  But in our market here in Bucks County we do have a buyers market although it is nowhere near as dire as the press would have us believe.  Emplyoment in our area is still very strong and there has not been the sort of speculative buying that we have seen in other areas and houses continue to sell every day.  Statistics from 2006, bear this out.

In looking at the market statistics from 2006 for single family homes in the following areas: Lower Makefield Township, Newtown Township, Upper Makefield Township, Solebury Township, Buckingham Township, Northampton Township, the only township that had a declining value from the prior year was Upper Makefield.  In all other markets, the average sold price was higher in 2006 than the previous year.  As the table below shows, the increase ranged from 3.4% in Lower Makefield to 12.6% in Solebury. 

What the table clearly show is that the average price for homes on the market indicates much slower appreciation.  The statistics also show that, for the year, inventory was higher and sales were slower than for the previous year.  That indicates that we are in a buyers market.  Interestingly enough, sales pace actually improved in November and December in terms of sales dollars and units.  Clearly it is more important than ever to be sure that your house is priced correctly, if you are considering selling.  In a buyers market, there are more homes on the market, which means more competition so it generally takes longer to sell. Often homes end up selling at a price that is less than the asking price.  This so-called discount rate actually increased in the fourth quarter meaning that buyers were able to negotiate better prices.  It is critically important to remember that when selling, it is the current market that determines the price of your home.

My personal experience over the past couple of months has been that the market is improving somewhat.  I was actually surprisingly busy in November, December and January.  As we move further into the spring market, as always, the market will be influenced by supply and demand.  Will there be many more sellers than buyers?  We don't know. But if so, the buyers market will get even better for those who are buying.  If we see more buyers coming into the market than sellers, then the market will improve for sellers.  With interest rates still at very attractive levels -- close to all-time lows and with lots of inventory -- it is actually a very good time to be a buyer.  From a seller's perspective, as I mentioned before, be sure to price your home correctly and make sure that it is marketed aggressively and it will sell.  The Bucks County market is nowhere near as dire as the press would have you believe.

 

 

 

 

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The Power of Feng Shui in Real Estate

Feb. 7, 2007

I just received the February issue of the Pennsylvania Association of Realtors (PAR) magazine, and there were a couple of very interesting and informative articles on Feng Shui.  As a realtor, Feng Shui comes up in conversation, fairly often.  I though it might be worth having a brief discussion about what Feng Shui is, and how it relates to real estate.

I just received the February issue of the Pennsylvania Association of Realtors (PAR) magazine and there were a couple of very interesting and informative articles on Feng Shui.  As a realtor, Feng Shui comes up in conversation fairly often.  I thought it might be worth having a brief discussion about what Feng Shui is and how it relates to real estate.

According to Chinese traditions,  Feng Shui handles five main elements in order to achieve balance and harmony in any space.  Each of the five elements have their own characteristics and properties.  To create harmony, using the art and science of Feng Shui, each of the elements must be properly employed according to their characteristics and effects.

The five elements of Feng Shui are fire, earth, metal, water and wood.  Having all of thtem represented in various areas of a property bring the property into balance.  Often times representing the elements is done through the use of color.  For example, red represents fire.  There are metaphors for the elements; you don't necessarily have to see a fire burning. 

According to author Jakob Jelling, who is the founder of http://www.fengshuicrazy.com/, the following represents the characteristics of the various elements:

Wood Represents innovation, creativity and birth and is a sociable element. This element corresponds to the color green and the east direction.  By placing this element at a strategic spot in any space, it adds all of the concepts in represents.

Fire Symbolizes and brings activity, enthusiasm and energy to the places where it can be found.  It is a warm element that must be treated with measure since too much of it can destroy what surrounds it.  As mentioned above, fire is often represented by the color red and direction south and symbolizes the puberty years.

Earth Symbolizes stability, patience and honesty.  It is a methodic element that can also become demanding and is ideal for everything that is related with real estate and inheritances.  Earth is often symbolized by the color yellow and is representative of the early youth years.

Metal Represents success in business and harvesting.  White and gold are the colors that symbolize it and its direction is west.  This Feng Shui element symbolizes the adult years of human life.

Water Has an important role among Feng Shui elements. The word Feng Shui itself means water and wind.  Water represents communications and traveling but it also represents learning, arts and media.  Water is elemental for living, not only for humans but also for animals and plants.  It can be quiet or violent.  This element is represented by the color black and direction north and symbolizes the old human years.

I have actually had buyers request to see homes that have "good Feng Shui".  Feng Shui can do a lot of things to make a property more appealing to buyers. This, along with staging -- which I will discuss in another post -- can help make a property stand out in a tight market. 

As realtors, it is important that we realize that Feng Shui does not have anything to do with religion or superstitions.  It is all about creating an enviornment in which buyers will embrace the atmosphere and want to remain longer.  That way they may be more inclined to write offers. 

I hope that you found this little primer on Feng Shui interesting.  Please don't hesitate to contact me with any questions about this, or any other concern about real estate or life in Bucks County.

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Fabulous Philadelphia Restaurant

Feb. 4, 2007

As I mentioned in my previous post, one of the things I love about being in Bucks County is the proximity to both Philadelphia and New York.  Yardley,  which is where I live, -- actually Lower Makefield Township, which has a Yardley mailing address -- is only about 35 minutes from center city Philadelphia on a Saturday evening.  If you are not familiar with Philadelphia it is a wonderful city to explore.  World-class restaurants, fabulous orchestra and concert halls, great music and much more. However, our sports teams are not so great. Following Philadelphia sports teams is a soap opera unto itself. 

Last evening my wife and I joined friends of ours for dinner at a new restaurant in Philadelphia.  Because the restaurant was so incredible, I wanted to mention it.  It is called, Waterworks, and is located just around the corner from the art museum.  You can actually see boathouse row from the restaurant, which is really beautifull.  Again for those who are not familiar with Philadelphia, boat house row is along the Schuykill River where rowing clubs have their huts and clubhouses.  They are beautiful to see at night.

Anyway, this restaurant is absolutely fabulous and I would recommend it to anyone looking for a great dining experience in Philadelphia.  The building that houses the restuarant dates back to the 1800s and the current owner has done an amazing job of renovating it.  It looks as though they will have outdoor seating in warm weather, with views of the river, which should be very enjoyable.  The food and service is outstanding and I don't think you will regret giving it a try if you are in the Philadelphia area. 

It is hard to believe that today is Super Bowl Sunday already.  From a real estate perspective, the Super Bowl is important because we, in the industry, talk about the start of the spring market as beginning once the Super Bowl is over.  The spring market is generally the most active market for real estate.  Many people want to coordinate their moves once the school year ends and this generally begins at the end of June.  As a result, even though it is only February, people begin their search for homes now. They also begin the process of exposing their homes to the market this time of the year looking for late June, July and August closings.  If you are in that group, it is not too soon to begin the process.  I have an excellent booklet of 450 ideas to get your home sold quickly and for the highest price.  It offers a checklist of things to take care of to make the process as smooth as possible.  The booklet can be e-mailed and is free for anyone interested in obtaining a copy.  I also have a book about moving with children and moving with pets, which can also be e-mailed.  They all offer wonderful suggestions for dealing with the entire process of getting your house ready for the market and dealing with the process of moving with children and pets.

Enjoy the Super Bowl.

View more entries tagged with: Places To Eat In Philadelphia, Yardley Real Estate, Pennsylvania Real Estate, Restaurants In Philadelphia, Waterworks Restaurant In Philadelphia, Bucks County Real Estate

Blogging in Bucks County, Pa.

Feb. 1, 2007

Welcome to my Bucks County real estate -- and other related and/or non-related  -- blog spot.  My goal in creating this blog is to provide a personal perspective on Bucks County life, as well as providing an insight into real estate in Bucks County.  Although I am new to blogging, I am not new to real estate or Bucks County and I love to write.  I have lived in Bucks County for almost 30 years and have been working as a realtor for more than 13 of those years. This means that I should know Bucks County real estate.  Because Bucks County, Pennsylvania is so close to New Jersey -- and because I was born in New Jersey -- I also do real estate in New Jersey.  There are definitely advantages and disadvantages to living in either state. 

To those who do not know Bucks County, let me familiarize you about this absolutely wonderful place. It is a great place to live and features excellent schools, loads of history and charm, and absolutely gorgeous and stunning settings.  The Delaware River meanders through the county, and there are many towns and villages along the river. In fact, the river acts as a border between Pennsylvania and New Jersey.

There is a huge array of housing options in Bucks County. Most people who are new to the area find the housing expensive compared to many other parts of the country.  Central Bucks County is about 35 minutes from Center City, Philadelphia and only about an hour by train from New York City.  Our real estate pricing is slightly lower than the Philadelphia main line and lower than the commuting areas close to New York City; however, it is still expensive when compared with many other parts of the country.  Because there are many types of houses -- from condominiums to small single family homes to huge palatial estates -- there is something for every taste.

I live in Yardley with my wife Jane.  We have 3 children: Rachel, Lauren and Michael.  Rachel has a doctorate in psychology and is in private practice.  She also teaches and has a corporate consulting business, which helps companies with diversity training, conflict resolution strategies and helps executives maximize both individual and corporate potential.

Lauren currently owns and operates a Coldstone Creamery Ice Cream store in the Mercer Mall in Lawrence Township, New Jersey.  If you have never experienced Coldstone, do yourself a favor and check it out.  The ice cream is absolutely amazing!

Michael, our youngest, recently graduated from the University of Maryland and is working at a Marriott near campus.

In my life away from real estate, (I occasionally have some free time) I love basketball.  My tag line is that I am old, but slow!  I love to read both fiction and non-friction.  I play golf (if you can call what I do actually playing golf) and love all kinds of music.  I am currently taking guitar lessons, which is something that I have always wanted to do.  Jane and I love to eat so we enjoy trying new restaurants anywhere in the Bucks County area as well as in Philadelphia.

Because this is a real estate-related blog, I should mention that our local real estate market -- as with many areas in the country --went through about a 5-year cycle of rapidly appreciating values with multiple offers on homes not uncommon.  That cycle ended about 6 to 8 months ago.  The market totally shifted and has become more of a buyers market.  That means that buyers have many more choices, houses stay on the market for considerably longer, and offers are generally submitted below the asking price -- sometimes considerably lower than the asking price.  In future posts, I will share some graphs and statistics that will demonstrate exactly what is going on in our market. 

For those who know Bucks County -- although I have worked everywhere in the county -- the areas that I focus on the most are the areas that include Yardley, Lower Makefield Township, Upper Makefield Township, Newtown, Buckingham, Doylestown, Solebury and Langhorne. 

Well I guess that is enough for my first post.  I would encourage you to post comments or feedback.  If you have real estate-specific questions, I would be happy to answer them for you.  If you have any questions related to life in Bucks County, please let me know.  In the meantime, please visit my websites at www.TourBucksCounty.com, www.MartinMillner.com and  www.TeamMillner.com.

 

 

 

 

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