The market is up and down at the same time? What?

Real estate is in the news a lot this week with several new reports being released and some of these reports indicate that home prices may go lower. But yet, some industry experts are touting stabilizing markets and even a slight increase in buyer activity and sales.

How is this possible all at once? Well, it’s a question I am asked all the time. In fact, I just did an interview with Pasadena Magazine discussing this very topic. As I explained, the most important consideration when reading national real estate news stories is that they are in fact just that…national. The key to unlocking real estate trends is to remember that real estate is local. As Jim Gillespie, Coldwell Banker Real Estate’s CEO, likes to say: “If you are taking a trip to Las Vegas you will want to know what the temperature is going to be in Vegas…not the average temperature of the entire country.”

So in other words…yes, there can be reports that prices may show some downward movement and reports indicating that prices are stabilizing and looking toward the upswing….both at the same time. It’s all about which local market you are analyzing.

So before you jump onto any bandwagon or make decisions about buying or selling based on a news article headline… find out if it actually applies to YOUR town! It could mean the difference of making a smart move at just the right time or missing the proverbial house boat.

For more tips and insights about how to buy Safe, Sane and Smart in Today’s Market, order my newest best seller…Before You Buy..The Homebuyer’s Handbook for Today’s Market!

Real Estate from Coast to Coast

This has been an amazing week folks.  And one where I have had to travel back and forth from coast to coast.  Last Monday in LA I prepared my real estate segment on Good Day Live.  I showcased some great Los Angeles celebrity homes for sale, including Jack Nicholson‘s and Angelica Houston’s properties. 

Then on Wednesday I flew to New York City to do my real estate segment on The View .  That was so much fun!  I selected eight properties priced from $79,000 to $22 million and made the ladies guess “What’s It Worth.” 

I was also able to showcase during my segment on The View the wonderful Home Alone House.  Yes, the actual house that was used in the movie Home Alone just came on the market in Winnetka, Ill., which is located right outside of Chicago.

This week’s tip from Before You Buy!

How Much Does it Really Cost to Buy a Home?

Your home purchasing costs don’t stop with the down payment. You have to factor in the closing costs and all the expenses incurred in buying the house; appraisal fees, buyer’s broker fees, loan application fees, loan broker fees, structural inspection fees, and so on. Those are the “upfront” costs. Then there are the “ongoing” costs, which includes property taxes, homeowner’s insurance, hazard insurance, condo, homeowner’s association fees, and moving expenses. You don’t want your new home-owning experience to start by playing catch-up. Start saving up some extra cash now.

For more tips and guidelines, check out my book “Before You Buy!” on Amazon.com.

Buying new construction? Tips you need to know

There have been so many interesting things going on this past week   I was able to shoot some fantastic homes for Extra.  One in particular was an $18 million “Bachelor Pad” high a top the Hollywood Hills.  It had amazing views of the city and even more amazing views of other celebrity homes.  Yes, directly across the way are Sandra Bullock and Leonardo DiCaprio’s hot Hollywood homes.

Also airing this weekend is one of my Mansions and Millionaires segments: Celebrity Real Estate.  I am showcasing some of the best real estate on the market right now – and a few of the top real estate agents in the country.  In fact, the segment includes the Coldwell Banker CEO,  Jim Gillespie.  And a segment that gives some great tips directly from my book Before You Buy!

Lastly I wanted to share this article that appeared on CNBC.com:

Buying New Construction – Tips You Need to Know.

LOS ANGELES – Homebuilders are eager to rack up sales this spring, and many are offering incentives and even some price reductions on homes.

So how best to find a good deal on a new home?

While homeowners looking to sell their property might balk at an offer that is too low and pull their home off the market, homebuilders have money invested in land and construction costs and can’t afford to just sit on the homes they build.

With a little research, anyone considering purchasing a new construction home can improve their chances of negotiating a better deal, says Michael Corbett, real estate expert and author of “Before You Buy! The Homebuyer’s Handbook for Today’s Market.”

When considering an already built home, Corbett suggests buyers find out how long ago the home was built and how many residents are living in the development.

“The bigger the inventory, the more leverage you’re going to have,” he says. “The longer it has been on the market, the more leverage.”

Another essential step is to check the price at which comparable homes in the development sold, but ignore transactions that are more than 60 to 90 days old.

It also is important not to put too much stock in the price of other, similar homes in the development that have yet to sell — an argument one might hear from a builder’s sales representative.

“A house is only worth what it’s going to sell for, so don’t be bamboozled by a higher price on the properties that are sitting there,” Corbett says.

To structure an initial offer on a new construction home, one must weigh the recent comparable home prices, how many homes are left to be sold in the development and how long the home has been unsold.

But definitely make an offer that is below the asking price, Corbett says.

“Some buyers are timid, they don’t want to insult anyone,” he says. “In today’s market, go in a little bit lower. Unless you do, you’re never going to hit the middle ground you want to hit.”

It’s hard to say how much lower, but Corbett offers an example:

If the house is listed at $400,000, try going in at $375,000.

However, if recent comparable sales at the development have gone for $350,000, for example, then the buyer should make an offer at that level or below.

And if the development has 30 empty houses, that’s a good indicator the bid should go even lower.

“You really negotiate three times,” Corbett says. “When you make the offer, a counter offer and after the inspection.”

Among other tips Corbett recommends:

— Even though a new home often comes with a guarantee, pay for a home inspection so you avoid any repair surprises.

— Get a real estate agent or lawyer to assist with the transaction.

— Don’t be fooled by model home staging tricks, such as smaller-scale furniture, glass tables and doors removed from their hinges in interior rooms — tactics often used to make the home look bigger.

Copyright 2011 The Associated Press. All rights reserved.

Looking to buy but think the price is too high?

I wanted to share an article that I was interviewed for by Alex Veiga with the Associated Press. The article received a lot of pick-up on many online news sites… I think because as people are looking to buy again, they are revisiting the new construction developments and buildings that have been sitting on the market. I think you will enjoy it and find that the tips from Before You Buy! really helpful.

April 03, 2011

By ALEX VEIGA

The Associated Press

LOS ANGELES — Home builders are eager to rack up sales this spring, and many are offering incentives and even some price reductions on homes.

So how best to find a good deal on a new home?

While homeowners looking to sell their property might balk at an offer that is too low and pull their home off the market, home builders have money invested in land and construction costs and can’t afford to just sit on the homes they build.

With a little research, anyone considering purchasing a new construction home can improve the chances of negotiating a better deal, says Michael Corbett, real estate expert and author of Before You Buy! The Homebuyer’s Handbook for Today’s Market.” When considering an already-built home, Corbett suggests buyers find out how long ago the home was built and how many residents are living in the development.

“The bigger the inventory, the more leverage you’re going to have,” he says. “The longer it has been on the market, the more leverage.” Another essential step is to check the price at which comparable homes in the development sold, but ignore transactions that are more than 60 to 90 days old.

It also is important not to put too much stock in the price of other, similar homes in the development that have yet to sell — an argument one might hear from a builder’s sales representative.

“A house is only worth what it’s going to sell for, so don’t be bamboozled by a higher price on the properties that are sitting there,” Corbett says.

To structure an initial offer on a new construction home, one must weigh the recent comparable home prices, how many homes are left to be sold in the development and how long the home has been unsold.

But definitely make an offer that is below the asking price, Corbett says.

“Some buyers are timid, they don’t want to insult anyone,” he says. “In today’s market, go in a little bit lower. Unless you do, you’re never going to hit the middle ground you want to hit.” It’s hard to say how much lower, but Corbett offers an example:

If the house is listed at $400,000, try going in at $375,000.

However, if recent comparable sales at the development have gone for $350,000, for example, then the buyer should make an offer at that level or below.

And if the development has 30 empty houses, that’s a good indicator the bid should go even lower.

“You really negotiate three times,” Corbett says. “When you make the offer, a counter offer and after the inspection.” Among other tips Corbett recommends:

— Even though a new home often comes with a guarantee, pay for a home inspection so you avoid any repair surprises.

— Get a real estate agent or lawyer to assist with the transaction.

— Don’t be fooled by model home staging tricks, such as smaller-scale furniture, glass tables and doors removed from their hinges in interior rooms — tactics often used to make the home look bigger.

For more great home buying tips go to Michael’s website www.MichaelCorbett.com or pick up one of his other bestselling books Find It, Fix It Flip It!.

Getting a great deal is a balance of the lowest price and the best interest rate

 There was a great discussion in an article on MoneyWatch.com that struck a chord with me. The article talked about the shadow inventory of distressed properties that are yet to be released on the market. But even though there are more great deals to come onto the market with the release of these distressed properties, it is worth noting that if interest rates rise it could cost you. Remember you need to balance both the price and interest rates.

The fact that your local market has a large shadow inventory doesn’t necessarily mean more steep price declines.   If you’re looking to buy, a high shadow inventory is seemingly an argument to take your time looking, but keep all the moving pieces of this in mind. For example, even if you don’t have to worry about rising prices, what about mortgage rates? No one can predict where mortgage rates will be in six months or a year, but we do know that current rates are at historic lows.   CBS MoneyWatch.com, Mar 31, 2011.

As I say in Before You Buy! waiting for the bottom of the market could cost you.

If interest rates rise, even if pricing heads lower, waiting another three, six or twelve months will actually cost you in the long run. For example: If you buy a house for $450,000 with 20 percent down, you will have a $360,000 mortgage. With a low five percent interest rate your monthly mortgage payment would be $1,932.56. However, if you wait six months in hopes of getting the house for $10,000 less at $440,000, but the interest rates have climbed to six percent, your monthly payment is now $2,110.41—costing you an additional $72,157.82 over the course of the loan. This is definitely something to think about as you enter into the home buying process this spring.

Now on an Extra celebrity real estate front…This week I may be heading out to Malibu, Calif. to check out the beach house that Sharon and Ozzie Osborne are renting out!   It’s a steal…at $30,000/ month.

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Host, Actor, Bestselling Author Michael Corbett is the Real Estate and Lifestyle correspondent of the #1 Rated nationally syndicated newsmagazine NBC’s EXTRA. Utilizing his expertise in Real Estate, Home and Lifestyle, Corbett also hosts and produces NBC’s EXTRA’S MANSIONS AND MILLIONAIRES! EXTRA’s top rated weekend shows, with over 2.4 million viewers a week.

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