Are you making resolutions that include a new Brooklyn home for 2023? If that is on your list of resolutions, you may wonder where to start. 

As a homebuyer, there are several steps to take before your begin to look at homes:

Talk With A Lender

It is always important to speak with a lender first to determine the amount you will be able to borrow. Interest rates have changed and may affect the price of the new Brooklyn home you can afford. Learn what you can do to beat high-interest rates in this previous blog post.

The lender will look at your credit report to determine the amount of a mortgage you qualify to borrow. If there are any credit issues, the lender can direct you to a credit repair agency that can help you boost your credit score to buy a house within a few months.

Having a pre-approval letter before you start looking will help you in several different ways:

• You will know your most comfortable price range and target your monthly payments.
• The seller will require a pre-approval letter to be submitted with your offer so that they know you are qualified to purchase their home before they agree to accept your offer.
• You will not delay submitting your offer by having to obtain your pre-approval after you find the perfect home.

What information do you need to have when contacting a lender for pre-approval?

• Income verification. How you get paid will determine what information you need to provide the lender. 
  • W-2 employee – You will need copies of your W-2 forms and two most recent payroll stubs. 
  • Self-employed – You will need a year-to-date profit and loss statement and two years of tax records, including 1099s you used to report income. Self-employed includes sole proprietors, partnerships, and S-corporations.
• Assets. You will need to provide bank, retirement, and investment account statements.
• Debts. You will need a list of all your monthly payments for student loans, auto loans, personal loans, mortgages, and credit cards.
• Other information. It may be necessary to show any rental income you receive, a divorce decree which would address child support and alimony along with property settlements, and down payment gift letters if you will be obtaining your down payment from a parent or family member.

The lender will ask for verification of any other items needed throughout the process. First, you must have a paper trail of sources for the down payment and closing costs. If the lender finds any large deposits in your bank statements, they may request an explanation of its origins. Finally, you will need to notify your lender of any changes in your financial position.

Getting pre-approval from your lender in advance is the first and most important step in the home-buying process.

Find a Good Real Estate Agent

When you are ready to buy a new Brooklyn home, you need to find the right agent to guide you through the buying process, whether you are a first-time homebuyer, a move-up buyer, or a downsizing buyer. 

Interview several agents if you do not know one with a good track record and local reputation. Questions you may want to ask an agent during an interview include:

• How long have you been an active real estate agent?
• Do you work full-time in your real estate business?
• How many homes do you sell per year?
• How do you stay current on the local real estate market and trends?
• Do you have references available?
• Do I have to sign a contract, and can I cancel if I am unsatisfied?
• How do you communicate with your clients and set realistic expectations?

The local real estate market is changing, and you need someone in your corner who is knowledgeable and can help you negotiate the best deal possible. You also want someone realistic about the market. Hiring a Buyer’s Agent does not typically cost the buyer, as the seller pays the commission. 

A buyer’s agent is responsible for the following:

• Assessing your needs. The buyer’s agent will ask you about your requirements. You need 3 bedrooms, but you want 4 bedrooms. This information will help your agent research properties that suit your desires.
• Explaining the buying process. The buying process can be complicated. Every home sale is different. An experienced buyer’s agent can handle unique situations to help you buy your Brooklyn home. 
• Showing you properties. Your agent will find the properties, make appointments, and walk you through the homes. This is where an experienced local agent is most valuable to help point out the positive features and potential issues they may see.
• Writing up and submitting your offer. Your buyer’s agent can advise you on pricing and how to structure an appealing offer. They will then submit the offer and communicate with the seller’s agent to begin negotiations.
• Monitoring the closing process. After your offer is accepted, your agent will coordinate with all parties until the closing is final.

Your buyer’s agent is your advocate. They will answer your questions and guide you through the entire process to help you buy your new Brooklyn home.

A common misconception is that working with the seller’s agent will get you a better deal. The Seller’s agent is working on the seller’s behalf and is contractually obligated to do so. Do yourself a favor and find the right buyer’s agent.

Narrow Your Search Criteria

You most likely know where you would like to buy your new Brooklyn home. However, you may be looking for a particular school or proximity to work. Focus on your top area first, and then move out if you can not find the right home.

Make a list of the items you must have in your new home, and be sure to discuss those items with your real estate agent. Think of the things that would be a “deal-breaker” for you and discuss that with your real estate agent. The more your agent knows about your needs, the better they can zoom in on the suitable homes for you. A resourceful real estate agent can guide you to the properties that meet your criteria. 

Try to get input from others who live in the areas you are considering for the pros and cons they can offer. If you don’t know anyone living in the neighborhood, check out some online forums that can provide insight.

It is a good idea to visit the community at different times of the day to get a feel for what is happening in the neighborhood.

Conduct Inspections

Unless you have a thorough knowledge of house construction and components, I do not recommend waiving the inspections when you buy a house. Inspections are an important part of the home-buying process. 

A home inspector must have an active license in the State of New York. You can find answers to frequently asked questions about New York licensing for inspectors here.

The seller will disclose what they know about the property. However, it isn’t uncommon for the home inspector to find things that the seller didn’t know.

The home inspector will check the home’s major components, starting on the outside. First, they will look at the foundation and the roof for any defects. Then they will begin their interior inspection in the home’s basement. Finally, they will check the electrical, heating, air conditioning, and plumbing systems. In addition, they will also check windows, doors, and flooring.

Ask the inspector what they will and will not check before scheduling your inspection. If you notice something during your home tour, you should ask the inspector to look closely during his inspection.

You will also want to have a pest inspection to ensure there are no wood-boring insects, such as termites, that would be causing damage to the home. In addition, some types of financing will require a clear pest inspection report.

When you initially look at a home, you look more from an emotional point of view. You are picturing yourself and your family and friends in the spaces. You may not be looking at the home with a critical eye. Therefore, having a third party examine the property is valuable to learn if any safety or major ticket items need repairs.

Loan Application

After you accept a home offer, you will need to make a formal mortgage application. If you use the same lender who provided you with the pre-approval, they may have all your information. Notify them when you have an accepted offer on a home and find out what additional information they require.

Once the formal loan application is in process and inspections are negotiated, you can prepare for closing day!

The process of buying a new Brooklyn home can seem daunting. However, the key to a successful home search and negotiation is to have the right team in your corner. There are many people involved. Check out this blog post to learn more about each party.

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate, to help you make your resolution for a new Brooklyn home come true. As a Brooklyn real estate agent with over 35 years of experience, I have been assisting Brooklyn Homebuyers with advice and resources. Reach me by phone at (718) 253-9500 ext. 1901 or by email at [email protected].

Many Brooklyn homeowners are debating whether to sell now; you need to understand what is going on with home prices. With all the news, you may still be determining whether now is the right time to sell your home. 

Remember that news outlets design headlines to make big impressions. Are they genuinely accurate? 

Indeed, home prices are down slightly month-over-month in some markets, but nationally home values are up on a year-over-year basis. Based on national statistics, the median house sales price was up +5% year-over-year as of October 2022.

Year-over-year is a method of evaluating growth by comparing a statistic in one time period with the same time period one year earlier.

We hear on the news that home price growth has moderated recently as buyer demand has lessened due to higher mortgage rates. That is a true statement. However, prices are still doing well in the real estate market.

You need to understand that the percentage of appreciation is still well over what we saw during the years before the pandemic and market explosion. Between January 2019 through mid-2020, the appreciation rate was around 3-4%. The latest statistics show that this year’s home prices have climbed roughly 10% over last year.

Ten percent appreciation is a significant rate compared to the average of 3-4%. It is undoubtedly below the 20% appreciation we saw earlier in 2022, but it is still an impressive number.  

If you have owned your home over the last two years, you have probably recognized a substantial amount of equity in your home as the home prices climbed. And even now, as the home prices moderate, you may see an increase in your equity. 

Mark Fleming, Chief Economist at the First American Economic Center, stated in his report on November 28, 2022: 

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

The experts are not expecting a crash in housing prices. However, as prices moderate, factors such as local supply and demand will determine the level of moderation for each market. 

Consulting with a trusted real estate advisor who understands your local market is the best advice if you are interested in selling to determine your home’s current fair market value.

The market’s reaction to moderation is not within a seller’s control. But the areas you can control can become barriers when looking for a quick sale. For example, no longer can you put a sign in your yard in the morning and expect multiple offers by dinner.

However, homes are still selling at reasonable prices.

Some simple tips to get your home ready for sale are the tried and true tips that work for selling a home.

Price your home correctly. 

There are five factors to consider when pricing your home:

• Location
• Comparable home sales
• Condition
• Updates
• Market Conditions

An experienced local real estate professional understands what is happening in the local market. They study and track the current trends and can provide you with the statistics for your local area.

In this previous blog post, I explain the pricing philosophy in depth.

Prepare your home for sale.

It is essential if you want a quick sale to thoroughly prepare your home before the sign goes in the yard. You have one chance to make a first impression. 

All preparation must start with a deep clean and decluttering inside and out. Inside you should go room by room, decluttering and cleaning as you go. Outside, you may need to powerwash the exterior decks or siding, clean windows, and tidy up the landscaping.

Stage your home.

It is vital to present your home’s best features. That is the purpose of staging a home. Psychology to staging allows the buyer to see the best features of your home and to imagine themselves living there.

Brooklyn homeowners should strive to make their homes look bigger, brighter, and more inviting for the homebuyers that walk through the door. To do this, you need to think like a homebuyer:

• Buyers want a move-in ready home.
• They believe that if the seller doesn’t make an effort to prepare their home for sale, there are probably neglected, non-visible high-ticket maintenance items too.
• Buyers are more likely to offer a better sales price if the home presents well.
• Only 10% of buyers can visualize a home’s potential and can not see past the clutter and uncleanliness.

When staging your home, you must be objective and keep the buyer in mind. If you find it difficult, hire a professional home stager to help. A home stager is not emotionally attached to the home like you may be and can objectively provide you with advice.

Hire a real estate professional.

Given the skewed news reports an unprecedented real estate market, it is understandable that Brooklyn homeowners need clarification about whether they should sell their homes or not.

Selling a home can be stressful, no matter the market. Hiring an agent to guide you through the process can alleviate some stress. There is much to know about the real estate process to attain a smooth transaction when you are ready to sell your Brooklyn home. 

A real estate professional can do the research and recommend a fair asking price. They know the process and have the negotiating skills to help you obtain the best results. 

They study the market and understand the current trends in the local area that may affect you as a Brooklyn homeowner. Then, a real estate agent will guide you in presenting your home in the best possible light based on what the current buyers in your market want.

Your real estate agent will professionally market your home to obtain the proper exposure to the available buyers. Help with staging, professional photography, and internet exposure of the house are all part of a real estate marketing plan they can provide.

You may wonder if selling a home in the winter is a good idea. There are some excellent reasons to sell during the winter if you are ready.

• Competition with other sellers is low because fewer homes are listed now.
• Internet searches increase during the winter as most homebuyers start their search online.
• Many promotions and relocations happen during the first part of the year.
• Year-end bonuses give some buyers the extra cash to purchase a home.
• Buyers looking in the winter tend to be more serious about buying a home.

If we could look into a crystal ball, we would know exactly what to expect. For now, though, we will need to rely on the expert’s predictions and watch our local market. There is no guarantee, but the forecast isn’t as gloomy as the headlines make it seem.

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate, if you are considering buying or selling a home. As a Brooklyn real estate agent with over 35 years of experience, I have been helping Brooklyn Homeowners with advice and resources. Reach me by phone at (718) 253-9500 ext. 1901 or by email at [email protected].