Archive for the 'Buyers Agent' Category
Second Homes in New Orleans are Picking Up, Condos make a great choice…
January 14th, 2012 categories: Buyers Agent, Condo Knowledge, Second Homes
The New Orleans Market is doing very well for second homes as we start the new year of 2012. The main areas of interest are the French Quarter, Warehouse District, Garden District, Lower Garden District and Uptown. Most second home buyers want two bedroom places although good number of buyers are looking at one bedrooms as well. The buyers fall int0 one of two categories…
New Orleans Connections - Buyers with connections are those that may have lived here or gone to school in the past. Many have moved away and all miss what New Orleans has to offer. They tend to look in various areas of the City of New Orleans because they know it better. Some have relatives and want to get back to visit them and their families.
Buyers Just with a love to come- I am seeing more and more buyers who have no real connections to New Orleans through family but just like to come here often. They may have come to Jazz Fest, a convention, or on business and just like it here. These are the buyers that make me appreciate what we have here.
In both these categories you tend to see people looking at the purchase as a retirement condo to spend part of the year here. Many plan to live in New Orleans for several months at a time. Some can even work in New Orleans part time and then return home between visits.
One thing most second home buyer have in common is that they have the 20% down required by lenders, will put a lot down or will pay cash for the condo. Most want a place that is carefree and has been updated. Most tend to be very picky in what they are looking for. We have to remember that a second home is a desire and they want what they want. I do see the price ranges getting higher over the last 2 years. However you can find some nice places as low as 140k in the Uptown area.
I always get asked about flooding and crime in New Orleans. The majority of the City did flood during Katrina but over 95% of the condos in the areas mentioned did not flood at anytime in the past. There is crime in the city but where you have condos the crime is not a big issue. The condos tend to be in the more expensive areas of town and are in neighborhoods where people are not interested in crimes.
The other very interesting factor is second home buyers is the length of time they look. Some take a while to purchase but know what they want. They take more time to decide before pulling the trigger. In today’s market its easy to keep clients updated with the Internet if we know about what they are looking for. I can answer the questions and send listings as they become available. The most interested do their homework and have a good idea of what they want.
The other group has been looking for a while but when I get them as a client they are ready to purchase. Most of these can weigh the pluses and minuses of each condo and make that decision.
Neither group wants to see the overpriced condos and those that fit do not fit their needs. Lately it has been very ease to get don to the best 5 properties before they start searching. Lately if they know the area it may be hard to find even 5 winners. I am still amazed at some of the deals my clients have gotten so I am never surprised. I supply then with lots of sales data so they can make an informed decision and answer their questions as honestly as I can. Visit www.nolahomesearch.net to start your search.
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Buying a condo at 4% interest rates could be better than renting…
November 27th, 2011 categories: Buyers Agent, Condo Knowledge
Lets talk about the numbers. Lets chose some round numbers to make it easier to see. Lets look at borrowing $200,000.
Principal and Interest Your payment of just interest and principle would be $954.83 per month. In the beginning you are paying $288.17 towards your principal. This is your equity that builds up much quicker when rates are low. After two years you would have $7187.58 in equity.
The 24th month you would be paying down the equity at $311.08 per month. The amount you pay in principal increases monthly. The equity is yours to keep.
Tax Saving as interest rates are deductible If you are in the 25% bracket you will deduct $22,916 of interest in the first two years. The average saving over this period is $5729 or $238.71 per month. This is an out of pocket saving from Uncle Same. This saving goes down over time but paying down the principal goes up. Live in your condo for two years and you never pay it back.
So far the 954.83 minus the principal payments and tax savings gives you a much lower number of $427.95. Almost sounds too good to be true. It is as you do have condo fees, repairs, Interior insurance and PMI.
Expenses have to count. A higher than normal condo fee for this price unit is about $300 per month. Insurance is about $50 per month for your contents. You may pay this anyway if you are renting. Not everyone needs to pay PMI. Only those that do not have 20% down will have to pay this. Once you have 20% equity this can go away.
Adding the $300 plus the $50 to the 427.95 gives you $777.95 per month without the PMI. The PMI will vary depending on your down payment. Lets say the number is $150 per month. Your number comes back to $927.95. This does not include your closing costs or taxes.
Taxes and Closing costs- Your closing cost are a one time fee and will be less than 2% and cover some of your future cost. Taxes are going to run about 14.5 mills in New Orleans. So figure your taxes will be about $150 per month with your homestead exemption of 75k. Adding this to the other cost you get to about $1075 per month. It may be a little more or less but compare it to $1300-$1500 in rent that you would be renting for.
Appreciation and Sweat Equity will not be taken into account at this time. Buying right may get you some instant equity as well. Timing can save you money as well. Having an experienced agent can save you more that knows the markets.
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Cotton Mills Condos, One of the best places to buy for under 200k in the New Orleans Warehouse District.
November 13th, 2011 categories: Buyers Agent, Condo Knowledge, Warehouse District
The Cotton Mill Condos located at 920 Poeyfarre has been the choice of many of my clients looking for the condo under 200k that has a lot of amenities. Its a large complex of 288 units spread over an entire city block. It is easily one of the places to look at and purchase for under $200,000. Take a further look on my New Orleans Condos-Cotton Mill Condos for plenty of additional photos.
I will list the reasons that over 30 of my clients have bought at the Cotton Mills. I think the values have been very consistent over the past two years. Its now actually hard to see more than one or two choices that are worth purchasing.
Lots of Amenities- You have a very nice gym with all the modern equipment and free weights. You have a full size swimming pool surrounded by tropical plants. Huge 25,000 square footage of courtyard. You have a large secure lobby.
The Warehouse Feel- You have exposed brick in every unit. Tall ceiling of at least 18 feet in most of the units. The exposed beams and wood floors add to the New Orleans Warehouse District Feel. They always feel larger than the square footage says. Most of the condos have some sort of decent view with lots of natural light.
Security- You have a secure that is manned at all times. The desk person lets in only those that should be there. Packages are delivered at the front desk for pickup. During the day you have more staff available.
Location gets better - Over the last couple of years the Warehouse District has spread out. Being a block from the World War II Museum is now a big plus. You can walk to the St. Charles Streetcar line. The Museum is a great plus for this area of the Warehouse District.
Low Condo Fees- Very moderate fees of around $240-$275 for a one bedroom. That includes insurance for the unit. That includes hot water and cable as well.
Well Managed- On site management with a manager on staff daily. The present management team is one of the best. They are very helpful.
FHA Finacing is Available- The only FHA approved Condo Association in the Warehouse District. This allows for 3.5% downpayments . This means you have to come up with $7000 and ask for sellers concessions. This is an important deal for resale value.
Easy to rent- If for what reason you need to rent your unit, it is very easy to rent. People easily pay 1300-1400 for a one bedroom condo. I see this trend will continue.
Parking is available in nearby lots for monthly parking for 100-125 per month. You can park on the street as well.
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Shopping for the negatives and positives of each New Orleans Condo….
October 28th, 2011 categories: Buyers Agent, Market Trends
In ans a market where almost all clients are very picky they will view each condo they see with positives and negatives. Everyone does seem to want it all and people become less picky when the units are bargains. I tend to think that way as well as I am thinking about resale value as I go through the listings.
Some negatives can be made into positives such as paint, older appliances, light fixtures and such. Some negatives such as floor plans, no parking, odd views, high condo fees cannot be overcome. Sellers can make their unit have more positives as well. Overpricing is a huge negative and agents will just pass them buy as they do not compete as well.
I had a client call me today to see condos in the Warehouse District between 180k and 300k. I could only find four that I thought they would like to see. One they had already seen. One is not available till next week. Two that would have been a winner was sold this past week. Both were “winners” in my book and far as positives and price. That leaves two units to see. In the Warehouse District this is becoming the norm.
Business is not booming but there is not a lot of the nicer things for sale. It is a supply issue when all you can show are two or three condos. The buyers can expand their search to other areas or wait for the right one. More than one buyer will be doing this so you begin to have a buildup up in demand of the nice condos that are priced correctly and have a bunch of positives.
There have been several foreclosures this year and all three were sold in a couple of days with mutiple bids. Fannie Mae generally lists the condos 20% below market value and you take it as it is. There were several bids on each. They take the highest bid from someone who is going to live there for the first 15 days. Then investors get a shot. Very few have gotten any shots in 2011 Warehouse District.
There are other areas that are going to be like this but they are not quite there as yet. Happy Halloween ……Eric
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Real Estate Pricing, its not how much you get off the price that counts….
August 4th, 2011 categories: Buyers Agent, Condo Knowledge
It is always amazing to me that buyers base their decisions on how much they get off the asking price when buying real estate. After 15 years and over 6oo sales I still run across this with particular clients on a regular basis. Most of the time these are out of town buyers who know little about real estate in New Orleans and the surrounding areas. They love to use square footage prices as a basis for their facts.
This method of evaluation for pricing is a starting point. Real Estate is all local and location within even small areas matter a lot. Several blocks one way or the other can see real drops in value. In the condo market the pricing by foot does not take into account features that people will pay dearly for. Some of these items include garage parking, balconies, patios, premium units, great views and a great street with an area. To exclude these factors is pure folly.
As an agent we try to focus on the resale value and help our clients see this as they make their choices. The premium units that have all the pluses are doing the best even in a weak market. The units that need things are going to be priced lower. These should always have a risk factor built in as things may end up costing more.
When a agent gets a listing these days many more sellers will listen more intently when pricing their property. It is easier to get sellers in the beginning or with a specified time period to review the pricing. This should take place in the 30-45 day period. Agents know when things are priced correctly but we do not what what a seller may take in the end. The average selling price remains 3-4% off the final asking price as an average. This tends to remain constant on all prices of properties.
The key here is the final asking price. An example is if a unit is priced at 269k and is worth in the 240’s it may not get the offer needed to sell until the number drops to 249k. This will be closer to the real value at that time. Its a moving target that does change with interest rates, people expectations, seasons, strength of the rental market and the macro economic outlook. Some of these factors can change weekly.
A buyer in the end see several properties before making a decision and he ranks within price ranges and will then chose the best unit for themselves. They are able to see past sales history, review trends, looking at tax records, see what the seller paid for the property before making a decision. They look at the pluses and minsus before making that big decision. The property will end up getting appraised for a number. That number will not really tell you if you got a great deal. The resale value will tell you that and that changes with time.
Getting 40k off a condo that is worth 200k when they are asking 250k is not a great deal. It may make the buyer think like he is a great negotiatorbut that is not the best deal. Many buyers figure it out and some still do not figure it out. Not all Realtors know the answers either. That is why it pays to get the best that knows the info that you need and can help you put the numbers together. Emotion is hard to over come but its hard to change the numbers once you have all the facts about local market in real estate. It pays to listen…………It pays to look up the number……..Next time we will talk about how to get at that number……
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Out of town lenders not up to par…..Stay local and be satisfied..
May 21st, 2011 categories: Buyers Agent
Lets not paint all lenders with the same brush but over and oven out of town lenders disappoint their clients. Its not just me but most New Orleans agents will tell you this as well. The lenders just are not use to doing business in the area. They have a hard time figuring out taxes, flood zones and insurance issues. They want data that does not exist and then want things that are useless.
Stay local and keep the jobs local. When the back office is local it is much easier to get answers. The local know their reputation is on the line. They depend on getting business from the local real estate community. They actually care about the business. People like to get feedback on the process and in many cases this is lacking. You can throw the National Banks into this category as well much of the time.
I have found the rates and cost are more than competitive in vast majority of the cases of the cases. The hidden cost tend to add up.
I have had 3 clients burned this week so it fresh in my mind. One had an appraiser who got lost and could not finish the appraisal in 12 days. One that was .5% off on the rates and the client changed because of inaction by the lender. The third used an appraiser who was totally unfamiliar with the area and showed up two weeks after he was suppose to.
All in a days work, I do not think so……Its all so last minute you will begin pulling your hair out. Now that is how I feel and that is my opinion. I have had some great ones but why fight the long odds of having to fight the issues,feel negelected, end up mad and maybe poorer.
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Getting started on your New Orleans Condo search…
May 9th, 2011 categories: Buyers Agent, Condo Knowledge
Lets get you started in a search for your New Orleans Condo. Where do you start and when should you start? Getting your questions answers from your agent is just as important as him trying to give you the best possible matches for your needs. Each property is going to have pros and cons as it is not all about price.
1. Know what you can afford and what it will cost you to purchase a condo. This means you should talk to a lender about the loan process. They will tell you what you can afford and the various loan programs that are available. It may be a conventional loan with 10% down, a second home with 20% down, it may be an FHA loan with 3.5% down, it could be a doctors loan with zero down. It could even be a VA loan with nothing down. Not all complexes can be financed the same way so the agent has to know the type of loan.
2. Paying cash for a condo is great but there are still questions about other cost associated with the purchase. Ask about the property taxes, content insurance and condo fees that come with owning a condo. A cash offer to the seller is much like getting a cash discount of 2%. You can still get an appraisal if it makes you feel better.
3. Know the area that you want to start looking in. Begin to review the condos on the market in that particular area. Its always good to get a back up plan and at least get ideas from other areas. Many people will get started in one area and change their mind in the process. This is not unusual.
4. Have an idea of what “feel” you are looking for in a condo. How many Bedrooms? Baths? Have Pets? Need Parking? Common areas? Do you want a pool or gym ? What kind of feel do you want in your condo? How far a commute is one of the more important factors in the decision. Remember New Orleans is not that large….
5. Know the style of condo that you want ? Is it a true Warehouse feel with large windows, high ceilings, wood floors, exposed beams and exposed bricks that meets your needs. Is it part of an old home turned into condos that give you a neighborhood feel while retaining the historic feel of the home. Is it a condo on St. Charles Ave? Is it a French Quarter balcony that is important.
6. Your reason for buying the condo is important as this will let your agent some insight into your needs. He can then give you the properties that will best meet those needs. Your needs will more likely match a past client needs. Best to talk about these ideas as you begin your shopping trip.
7. On line shopping is where most people start l0oking to get ideas. This is a great place to start looking. However an agent familiar with the areas can quickly help you with the search with his or her knowledge of the neighborhoods. Its not that hard to narrow your initial search to single digitchoices. Some clients want to see everything but many just want to see the best of the bunch. Once we get a dialogue going it really helps in getting the right property.
8. When do you start? Start several months outto get ideas and view some properties. Sit down with your agent to go over all the choices and the process of purchasing. This is valuable meeting as I give you plenty of useful information on your search. You can give me your needs on what you are looking for and the reasons you would like this or that one. This gives you time to see properties come and go. Once you are 8 weeks out that is time to really get serious.
Getting the loan process started is crucial to the overall experience. Its never as easy as it once was. The best results that my clients have had is in working with a local lender who know the market and will stay on top of the process. The more the process is done locally then the better. There are some exceptions where it is best to go with someone who can do the loan such as a doctor’s loan as there are no local companies currently offering this.
The lender landscape is constantly changing due to new rules and regulations. It is best to give the lender 4-6 weeks to get to closing depending on the type of loan.
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Warehouse District Condos in New Orleans, One Bedroom condos are making a comeback!
March 29th, 2011 categories: Buyers Agent, Second Homes, Warehouse District
The recent real estate trends of the Warehouse District Condo Market over the last year is that the two bedroom units were the condos that were the most sought after. Now we are beginning to see the comeback for the one bedroom units. You still cannot just sell anything but those priced right that have been updated are constantly getting shown and going under contact.
We are seeing a combination of new arrivals, people now renting, investors and second home people looking and finding very few things to look at. Lenders are still requiring 10% for owners and 20% for second homes. The one exception is the Cotton Mills Condos which have been FHA approved meaning a 3.5% downpayment.
The Cotton Mill Condos has always has been a favorite of the under 200k price range. There have been 4-5 recent sales this year and only a very few one bedrooms worth looking and and a couple of two bedrooms. I have one favorite in the one bedroom category and it is a bit pricey for now.
Magazine Place at 760 Magazine Street has two one bedroom condos worth looking at. They are both priced for over 200k but both have reserved parking which is worth 25k in the New Orleans Warehouse District. Smaller units but both have been updated with v ery moderate condo fees. Below are roof top views from Magazine Place looking at the New Orleans Skyline.
Julia Place Condos at 333 Julia Street has several units without parking and have not been tootally updated. Expect to pay $210-$220 for the better condos with parking and good views. There are currently none for sale. A recent law suit against the condo association has put a damper on financed units. The recent sales have been cash. Look for the law suit to be settled soon. Buy a unit here with parking unless its a super deal.
402 Julia, The Lofts has a couple of small units that need updating but the prices are in the 140k-160k range. They need new kitchens and baths. The have great location and you can rent a spot in the Emeril’s lot. These could be good buys but you will have to update. Neither of the views are great. The Lofts on Julia are above the art galleries on the first floor.
I can cover the rest of the associations on a later update. This gives you an idea of the market and knowing it is hard to now find that unit. Get started early so you will be able to know what is good and what is not a buy. I can get you updated with condos that meet you criteria so you will have some knowledge. I can share my knowledge as well which is as good as any agent that works the New Orleans Real Estate Market.
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Inspections on your New Orleans Condos, once you have an accepted contract…
March 27th, 2011 categories: Buyers Agent
Once you have a purchase agreement signed and agreed upon you will have a period to do an inspection on the condo. This inspection normally takes place in the 10-15 days following acceptance. During this period the buyer can hire a professional inspector to check out all the systems and mechanics of a condo. The sooner it gets done the better as some followup work may be needed.
The buyer finds an inspector or two he wishes. I have several that will do the basic inspection for $175 if its in a complex. Each will issue you a report.
I suggest two types of inspections depending upon the type of condo you are buying. If you a condo in a converted home with a small number of units then you need to appraoch it more like a home. Any negatives with the house or complex could be found on the inspection. If there is something wrong found in the futute in a 4 plex then the expense for you can easily be 25% of the bill.
In larger complexes of 20 or more unit there is less of a chance of major defects and the building has generally undergone many more inspections. The cost is spread over many more people so the cost is like 2% of the expense.
In either case I recommend getting a separate a/c and heat guy to really check the system in depth. This would be a big expense if the unit were to fail. The cost is a little over a $100 and you have a written report if you need to claim against a home warranty. There is so much less that can go wrong in a condo very few deals ever fall apart on inspections. I can vnever remember one happening to me.
Once the inspection is complete you will feel much better about the purchase if all goes well. We are then set to negotiate the defects with the seller. Most of the time I have found the condo sellers to be agreeable to doing the repairs or giving an allowance.
Allowances are great if we can be sure of the exact cost to repair. If we are not sure then it is better to have the seller do the repairs and have the surprises of paying more. The seller will give us receipts for the repairs. We will check the repairs before the act of sale depending upon the extend of the repairs to when we do it. Many times we do it at the final walk through and other times we may make an extra trip for larger items. We want the more technical items to be fixed by a professional and not the brother in law.
On the final walk through we not only check out the repair items but any damage that may have happened since the inspection. Checking out the major systems is a great idea. I had one not that long ago that the a/c did not work at the final walk through. The sellers had been gone about 20 days and the compressor went out. It was a $1600 last minute repair several hours before closing. Not what you want to happen but it does happen for the buyer and seller at the last minute. Best just to double check the condo one last time to be sure……..
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Finding your New Orleans Condo ? Never as many choices as one would think?
March 3rd, 2011 categories: Buyers Agent, Condo Knowledge
Clients always think there are going to be a multitude of choices in the New Orleans Condo market. Once I know your criteria such as price range , area, style, bedrooms and bathrooms there will be a much shorter list. Once you consider the locations you will quickly get into single digits. Normally 5-6 units. After looking at prices you narrow it further as some will be misplaced and are not competitive on their pricing.
Today’s buyer has shopped the internet so knows his areas and prices much better than the buyers of the past. The buyers of today are good at narrowing down the choices when they know what they want and what to expect. If this is the case 3-4 properties are going to meet their needs.
Some will not be able to be financed by a conventional mortgage and those may be elimanated. Some of these are good buys for than reasons alone and a cash y can get a deal if it meets his or her criteria. This is an issue as the lending rules have been changing with every coming quarter. Remember the lending decisions come from Washington and they have no insite into any local market. Nor do they ever seem to care.
This is currently the market we live in. We are entering the selling season so I expect to see more of the premium listings come onto the market as we move into Spring. Many of these will be priced to sell and some will not.
The sellers that are not pricing to sell are just are wasting time and money by not pricing correctly. In the end they often get less. The values have nothing to do with what you need or what you owe on a mortgage. Buyers have choices and they will pick the best choice in their range that meets their criteria. Your condo may never get seen.
Having an agent that knows the market can really streamline the search for the condo and for the best financing available. Having an agent like this saves you time and money. You may miss a lot of the “dogs” and “Money Pits” but that will be your call. When buying always think about the resale as some things you cannot change while some you can. In the end it gets down to pricing, condition and location.
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