Navigating the Challenges of the Real Estate Market

Experts from all areas of the real estate market presented a seminar at the Sayville Library recently to help residents navigate their way through the challenges of buying and selling a home.

The program featured a mortgage consultant, two real estate attorneys, an appraiser as well as several local area realtors to help answer any questions.

Gerard Troha from Continental Home Mortgage started the talk with some information about the current environment in the mortgage market, especially in regards to interest rates. Rates have started to climb in the last four or five months, he said, about three quarters of a percent. “These are still phenomenal interest rates,” Troha said, trending just below or at 5 percent. There are factors that could impact what your interest rate will eventually be including the type of loan and your credit score.

“You need to be pre-approved before you even start the searching process,” Troha said. “Lenders are looking much more closely than they did a few years ago.” He spoke about some different types of loans, the most popular of which is an FHA loan. It’s a good option for first time homebuyers, since it requires a low down payment (3.5 percent), there’s some flexibility (if you hit a financial bump in the road) and buyers can negotiate building their closing costs into the loan.

Another popular option with first time homebuyers is the SONYMA (State of New York Mortgage Agency) loan, which also requires a low down payment (as little as 3 percent), and a low interest rate (as low as 4.25 percent) depending on income. It’s also a good option for veterans and requires no PMI.

For foreclosures or renovations, Troha talked about something called a renovation loan, or a 203K loan. It’s a good loan for a buyer who is purchasing a home in need of repairs, as the bank lends you the money to buy the house and also for the repairs. The work must be completed by a licensed contractor and approved by the bank inspector. It does run about one quarter of a percent higher than traditional loans, he added.

Leaving buyers with one piece of advice, Troha told them to think twice when negotiating on a house over a few thousand dollars. “You can be negotiating back and forth for weeks over a few thousand dollars, and in turn end up with a higher interest rate that can cost you $50,000 over the course of the loan,” he said.

Christine Sirico, licensed New York State appraiser, talked about the appraisal process and what buyers and sellers should expect. The appraiser will inspect the property, take photos, survey the interior and exterior and also use recent comps in the area to come up with an appraisal. Appraisers really need to know the area they are surveying in order to come up with a proper figure, she said.

Tom Zepf from Zepf Law Firm told attendees about the importance of having a lawyer involved in the process of buying and selling. “The attorney is your advocate; they are someone who is working for you and they are there to answer questions, ask advice or explain the process,” he said. “Information sharing is the name of the game.”

If you are selling, Zepf listed some things you would need such as a copy of the deed, survey, certificates of occupancy, closing bills and tax bills. If you are buying a house, you need an attorney to help you go over the home inspection and engineering reports and help negotiate and navigate through the contracts. “Things come up in a title search like judgments, liens and loans. It’s the attorney’s job to make sure the title is clear,” Zepf said. “You need to use a real estate lawyer. Ask your realtor, friends or neighbors for referrals.” Real estate attorney fees can run the gamut from $500 to $2,500, he said.

To put another perspective on it, Dan Boldi from Boldi Law Group spoke about short sales and foreclosures and how an attorney can help in those areas. “Short sales are becoming more popular because a lot of people bought at the height of the market,” he said. “I’ve seen a lot more short sales this year.”

However, banks are becoming stricter in their requirements, which is where an attorney can be helpful. “It’s a lengthy, time consuming and often frustrating process,” Boldi said. “It depends on the bank, it depends on the offer and sometimes it can take up to 90 days just to get an answer.” If you have staying power and aren’t in a rush, a short sale can be a great deal, he added. The experts finished the program by fielding specific questions from audience members.