Government Getting More Conservative on Lending Criteria

When a consumer takes out a mortgage loan from a bank they do so on the primary mortgage market. The primary mortgage market consists of anyone who directly loans money to consumers, for example a bank.

The primary lender packages up and sells these mortgages on the secondary market as mortgage backed securities to free up funds and be able to lend more money.

One of the largest players in the secondary market is the government and they set their criteria on what type of mortgages they will buy. Currently, consumers can qualify for mortgages with DTI (Debt to Income) ratios all the way up to 49% and the government will still buy them on the secondary market. However, the government has begun to hint that they want to take a more conservative position and bring their DTI limits to 43% 

So how does this effect both buyers and sellers? 

For buyers: You will now have less purchasing power as you will qualify for a smaller mortgage amount. For example, say you gross $10,000 a month. Currently you can have a monthly debt of $4,900 at that income level.  

Hypothetically, Let's say in that $4,900 monthly debt, $2,800 goes towards your mortgage, $1,500 goes towards your credit card expenses and the remaining $600 goes towards car loans. Now keeping your wage at $10,000 and lowering the DTI to 43% you can now only have monthly debt of $4,300. If your credit card and car loan expense stays the same, you've now gone from being able to afford a $2,800 monthly mortgage payment to a $2,200 monthly mortgage payment. 

For Sellers: Being that buyers will have less purchasing power, the market will not appreciate as much as it has for the past two years (7%-10% YTD). Simply, what this means is that if you're planning on waiting to sell for another few years to see your home appreciate, don't. Interest rates are only going up from here so it makes more sense to sell now when buyers can still afford more than usual due to lower interest rates. While you can take advantage of the low rates yourself on your next purchase. 

As always if you have any questions, give me a call 201-403-1314. 

-Kyle Kovats, New Jersey Realtor

Why is the First-Time Home Buyers Market Lacking Inventory?

With the jobs market still recovering we are seeing homeowners stay in their first homes for longer periods of time. This is due to stagnant wages and outsourcing becomes more and more prevalent. 

The biggest correlation to the housing market is the jobs market. When the jobs market is booming the housing market is on fire and many "upgrade buyers" enter the market. When the jobs market is uncertain, people hold onto their first homes rather than becoming "upgrade buyers". This leads to a low amount of inventory in the first-time homeowners market. 

So how do you find a home when there's nothing on the market? 

1) Call me. 

2) Tell me exactly what you're looking for, be as specific as possible. Once I know exactly what you're looking for I can almost always find you a home off the market that suits your needs. 

As always if you have any questions, feel free to give me a call 201-403-1314. 

-Kyle Kovats, New Jersey Realtor 

October 2013: How's the Real Estate Market Doing?

The real estate market in NJ has experienced rising home values since early 2012. Why? Interest rates reaching all-time lows lead to a huge surge in buyers and has fueled the housing market for the past 22 months. Bidding wars have become commonplace and multiple offers on properties, the norm. In fact, one of the only problems that I’ve run into is that houses are selling for too much money in these bidding wars and buyers have to put down a larger down payment to meet lending criteria due to appraisal values coming in below sales prices.

But what happens when interests rates rise, will the housing market slump? Over the summer from June to August we saw interest rates rise nearly 1% and all this did was bring more buyers to the market than we previously had. The reason for this is buyers did not want to miss out on locking in an interest rates in the 3-4.5% range (30-year rate today is 4.28%). I personally saw a ton of buyers coming out from their rentals in the Hoboken and NYC areas to find homes in the suburbs.

Economists have stated that buying in New Jersey will be cheaper than renting until interest rates hit roughly 6%. The bottom line is we may not experience the 7-10% appreciation in home values per year that we’ve seen over the last 22 months but the housing market should continue to appreciate for the foreseeable future. 

If you'd like to check out some of the current inventory we have in North Jersey, check out my website, NorthJerseySuburbs.com. If you have any questions at all please feel free to e-mail me, KyleKovats@Gmail.com 

-Kyle Kovats, New Jersey Realtor 

Why The Luxury Homes Market is Booming

Since June interest rates have risen roughly 1% causing renters who were on the fence about their buying timetable to speed up their searches. In the Essex County market we have seen a huge surge in buyers from areas such as Hoboken, New York City, and Jersey City. A lot of these young couples were renters who became active buyers.

The surge in buyers has caused record lows in inventory and made prices appreciate above normal appreciation rates. We've even seen bidding wars break out in the luxury home market which is usually not common due to the "jumbo" loan process.

However, is this boom sustainable? The answer is, it depends. If the fed continues to buy mortgage backed securities to keep interest rates low, we should continue to see buyers come out in the droves in all price ranges. Once interest rates hit roughly 6% and the cost of renting vs. buying become even, then we'll see the market slow down and appreciation scale back. Until then, we will continue to have a booming sellers market.

-Kyle Kovats, New Jersey Realtor

Why Do Some Agents Overprice Properties?

So, you're selling your home and you want to get top dollar. You interview 3 agents and decide to go with the agent that will list your home for the most money. Sounds smart. You're figuring if they're going to list it for the most money they'll surely sell it for the most money, right? Wrong.

Beware of agents who overprice listings, they intentionally do it for a couple of reasons that I will outline below.

1) They bought your listing- the term "buying a listing" refers to a strategy some agents use to get listings. Buying a listing means that they essentially told you that your home is worth alot more money than it actually is to excite you and get you to list with them. After you list with them, month after month after minimal showings they will tell you that your home is priced too high and that you must reduce the price. After six months go by and your home has still not sold, you're left with what we in the industry call a stale listing. You missed the initial excitement of the market during the first 6 weeks that your house was listed. Now, you find yourself in a bad spot where no matter what you do you're not going to get top dollar.

You're probably asking what's the point of agents doing that, they only get paid if they sell my home, so why list it unrealistically? The answer is #2.

2) They intentionally overprice your listing knowing that it won't sell at that price so that they can get buyers to work with from your listing. Here's how it works. An agent will overprice a home, host open houses and field calls on the property for the sole purpose of gaining buyers to work with to sell every home but your own. Your home is essentially a lead generator for them.

How do you combat this? Simply ask any agent that you are considering hiring the following two questions.

1) What is your sale price to list price ratio?
2) What percentage of your listings are actually sold?

-Kyle Kovats, New Jersey Realtor

Housing Inventory Near All-Time Low, Seller's Edition

Housing inventory is near an all-time low, but what does that mean for homeowners considering making a move?

Sellers find themselves in a great position in this market. With interest rates slowly rising and buyers flooding the markets looking to take advantage of the rates while they're still low, sellers are finding themselves choosing between offers rather than hoping to receive just one. As a seller you have a couple of options in this unique market in regard to pricing.

1) Price your home at market value: What we've seen in this market is that if you price your home at market value you will generate a ton of interest in your property and most likely wind up with a bidding war on your hands that very well can cause your home to sell above it's value. The only problem in this scenario is often times the buyer will have to come up with more money at closing because the bank appraisal will come in less than the sales price. It is important to have your realtor look over the details of the contract and put a contingency in the contract that the buyer will agree to pay the difference between sales price and appraisal at closing. This will deter any speed bumps in the closing process.

2) Try to stretch the market: in areas where there is very limited inventory for your specific home, you could potentially try to stretch the market and see what it will bear. However, I would recommend not overpricing too highly because in that case you'll have nobody even taking a look at your home. Again, you could potentially deal with appraising problems if you effectively stretch the market, so it's important to put necessary contingencies in the contract.

If it were my house what would I do? I'd price my home at fair market value and have as many potential bidders get involved as possible to entice a bidding war. Once a bidding war breaks out there's no telling where it can go, and you can REALLY stretch the market in this scenario. Keep in mind the most action on a home is in it's first 6 weeks on the market so pricing at fair market value will catch the publics eye and have the most people interested as possible.

-Kyle Kovats, New Jersey Realtor
NorthJerseySuburbs.com

Housing Inventory Near All-Time Low, Buyer's Edition

You've heard it on the news, you've read it online but how does low housing inventory effect the average consumer?

For buyers, this is one of the most competitive buying markets you'll ever come across. Homes for sale that are priced near market value are breaking out into crazy bidding wars where some houses have sold for up to 20% above asking price. Don't worry too much though because you have some options.

1) Make your offer stand out from the competition. Whether it means waiving various contingencies, putting down a larger down payment to give the seller confidence that your deal will hold firm and not fall apart at the closing table, or even just meeting with the seller face to face to explain why their home is so special to you (yes, some sellers take emotion into consideration). Find different ways to make your offer stand out from the rest in a multiple bid situation.

2) Hire a realtor who actively seeks out off-market properties. With the shortage of inventory I've been prospecting for a minimum of 3 hours per day for my buyers looking for off-market homes that might be open to offers. Basically, I have my buyers tell me exactly what section of town they are looking in and their housing preference and I will call every house in that area and even door-knock the houses that I feel are the best fits. In North Caldwell alone I was able to find 8 homes off of the market that were open to offers for my clients. What it comes down to is actually working and seeking out business rather than waiting for business to come to you.

By the way, I recently launched my website, check it out! NorthJerseySuburbs.com

-Kyle Kovats, New Jersey Realtor

VIP Buyer's List

With the inventory crunch we've seen over the past couple of years, Realtors must begin finding innovative ways to find their clients the right home. 

Many of my clients are faced with the problem of knowing where they want to move but not being able to find the right place. At this point in time with interest rates rising, time is of the essence and as a buyer you must seek out an agent who is going to expose you to more than just the homes that are on the market that everyone has access to. 

I recently had clients looking in North Caldwell who did not like anything that they came across on the market. It was at that time I began actively prospecting for them and I was able to find six (yes, six) homes off the market that were open to offers. They weren't just open to offers for the right price, these were people that were actually ready willing and able to move when a buyer was brought to them. 

If you're a buyer and you're having a tough time finding a place, give me a call. After we discuss your search parameters, I will be sure to find you a home that suits your needs. 

-Kyle Kovats, New Jersey Realtor 

E-Mail: KyleKovats@Gmail.com 

Cell: 201-403-1314 

Getting Homes Sold Before They Hit the Market

In the market that we find ourselves in right now where inventory is low and buyers demand is high, it's becoming increasingly tough to find buyers a quality home. To solve this problem, I don't wait for the quality homes to hit the market, I find them myself.

For three to four hours daily I call and door knock areas that my clients are interested in to find out what homes are off of the market that might be open to offers. This has been a huge part of my business lately and has really opened my buyers to more homes to choose from. Any agent can just look on the MLS and see the homes that are there, but if you want an agent who will find you a home that fits within your search parameters, seek out an active agent like myself.

If you have any questions about my services or any questions on the market in general, feel free to reach out to me, KyleKovats@gmail.com.

-Kyle Kovats, New Jersey Realtor

Consumer Confidence on the Rise

In a recent study released by Prudential Real Estate, the company found that 80% of all millennial's (ages 25-34) surveyed had a favorable view of the real estate market. This demographic is particularly important as they have been labeled as renters with home ownership not being a priority to them, a stark contrast to their baby boomer parents.

So, what does this mean for the average consumer? If millennial's come out in bunches to take advantage of the market conditions we're going to see housing prices rise at an even faster pace. Millennial's would fit into the first-time home buyer demographic and as we saw in one of my previous blogs, only about 25% of all buyers in this market are first-time home buyers.

In essence, whether or not the market can keep it's pace could come down to the millennial's, it's something worth keeping an eye on.

-Kyle Kovats, New Jersey Realtor

Should I Wait Until Next Spring to Sell my Home?



Now that the spring selling season is coming to an end, homeowners who have not been able to get their homes sold are asking themselves whether or not they should just wait until next spring to put their home on the market. There's really two ways to look at this.

In the spring you open your home up to more out of town buyers who have kids in school and are waiting until the summer to close so they can start their kids out fresh for the new school year.

On the flip side many people have a pre-conceived notion that the only time you'll sell your home is in the spring, and therefore that's a huge advantage to selling your home in the fall/winter. In the fall/winter, inventory is tighter than usual with less homes for sale. While interest rates slowly rise, buyers are still looking to take advantage of the mortgage market. With a steady influx of buyers and shrinking inventory in the fall/winter months it's a simple case of supply and demand that will cause your home to sell for top dollar.

If you have any questions, feel free to reach out to me, KyleKovats@Gmail.com


-Kyle Kovats, New Jersey Realtor

As Interest Rates Rise, so do Mortgage Applications



Over the past couple of months interest rates have been on a steady rise. During this time mortgage applications have also been on the rise as homeowners race to take advantage of historically low rates. So, what does this mean for the real estate market?

Inventory is staying just about the same but buyers are flooding the markets while interest rates are low. This is all leading to home prices rising and bidding wars breaking out on almost every home that is priced right. Even homeowners who bought at the peak of the market in 06-07 are selling their homes and taking losses because they realize that if they wait for their home's value to rise, their replacement home's value will rise as well essentially evening it all out. However, they actually save money rather than lose money when selling now because they can buy their replacement home with a low-interest mortgage.

In my opinion until mortgage interest rates hit 6% (the point where renting and buying are equally affordable), we will continue to see home prices rise.

As always, if you have any questions about my services or the real estate market in general, feel free to reach out to me. KyleKovats@gmail.com


-Kyle Kovats, New Jersey Realtor

Large Percentage of Move-Up Buyers

The Realty Times recently did a study that showed that roughly 75% of all buyers in today's market are "move-up" buyers. In other words these are buyers that are either moving into a bigger house or moving into a better district. I've noticed this myself as I specifically target move-up buyers with my marketing efforts.

For example, I market many of my listings directly to Clifton, Nutley, Belleville, and Bloomfield. Research indicates that a great deal of move-up buyers come to the West Essex area from those four towns. This has been a great source of business for me because any agent can just throw your home on the MLS and market it locally to the local agents. However, by directly contacting these homeowners myself, I have been able to increase my sellers pool of buyers immensely. This leads to more looks on the property, more offers, and the end result is having my listings sell for top dollar.

What is comes down to is going above and beyond for my clients, and that is something that I will always do.

-Kyle Kovats, New Jersey Realtor

How to Effectively Use a Property Website

Just because you're making a website for your listing doesn't guarantee that it will be exposed to the masses. So, how do you go about getting your home exposed to the most buyers possible? It really just comes down to hard work and endless promotion.

Any marketing piece that I send out with your properties information will include a link to this website. This website will include not only information about your home and it's features but also information about the area in general. The reason it is important to include information about the area is because you want to have your home exposed to the most people possible. I tend to market my properties directly to Hoboken and NYC because research shows that a great deal of these people move out to the suburbs. Being that some of these people are not familiar with the suburban towns that I list properties in, it is important for them to have all information on hand in order to make an educated decision.

To expose this website to the masses I directly contact people selling their units in Hoboken and NYC using mojo power dialer. Through this system, I will inquire where these individuals are considering moving then I will provide them with the personalized url to your home. Anyone that does not answer the phone will get a pre-recorded voicemail about your listing as well as your homes personal website.

As always if you have any questions feel free to reach out to me, KyleKovats@gmail.com

-Kyle Kovats, New Jersey Realtor

Why Sellers List Their Homes With Kyle Kovats

 

 

6 Reasons Why Seller’s List With Kyle Kovats

 

1)      Kyle pro-actively markets all of his listings. Kyle doesn’t just throw homes on the MLS while crossing his fingers and hoping for the best like most agents. On a daily basis Kyle contacts his buyers leads, other agents in the area who work with the most buyers, people currently selling their homes because they’re looking for somewhere else to move, and in general he targets the 5-mile radius around your property because stats show that 90% of all people that move, do so within a 5 mile radius of their home. Kyle seeks out buyers and doesn’t wait for them to come to him.

2)      Kyle’s technology is unmatched by anyone in the industry. To actively market your listing Kyle uses a system called, Mojo Power Dialer. This system allows Kyle to extract data from the MLS of people currently selling their homes and then uploads the data into his computer. Kyle then turns on the power dialer and dials three phone numbers at once, the first person to pick up is the person that he talks to. The two people that don’t answer get a pre-recorded voicemail about your listing. Again, Kyle doesn’t throw marketing pieces out there and hope that people see them, he actually contacts individuals directly and can track his numbers on how many people he’s marketed your home to. Kyle also syndicates your listing to over 300 of the top real estate websites, guaranteeing maximum exposure.

3)      Kyle expands his client’s pool of buyers immensely. Again, leveraging his technology he directly markets your listing to more than just the local markets. He directly markets listings to Hoboken, Jersey City, and New York City. Research indicates that a great percentage of individuals selling in those three areas typically move out to the suburbs. Let’s face it, anyone can market your home locally by throwing it on the MLS but having an agent expand your buyers pool gets more looks on the property, more offers, and the end result is top dollar for his clients.

4)      Kyle has an open door policy for all of his clients. As I’m sure we all know, realtors have a reputation for being lazy and working part-time. Kyle works full-time and gives all of his clients a copy of his schedule showing them the exact activities that he’s taking part in on a daily basis to get your home sold. Kyle believes it is very important to have an open door policy because it keeps him accountable and assures clients that Kyle is actively selling their home. At any time Kyle’s clients are free to walk into his office without notice.

5)      Kyle’s real estate credentials are unmatched by anyone in the industry. Kyle is the youngest licensed real estate instructor in US history and has been the editor of the #1 selling New Jersey real estate textbook, Principles and Practices of New Jersey Real Estate since he was 16. Kyle teaches real estate sales strategies to new licensees as well.

6)      Kyle has extensive experience in negotiating and has been trained by Scotwork North America, a company widely recognized as the number one negotiating training company in the world.

As always if you have any questions about my services or the real estate industry in general, feel free to reach out to me.

-Kyle Kovats, New Jersey Realtor

Local Buzz: Roseland

 

Throughout the summer and into the fall, Roseland farmers' market will be held at the Harrison Ave. field complex on the corner of Roseland and Harrison. The farmers' market is held every Friday throughout the fall from 12-7. At the market you will find everything from Jersey grown fruits and vegetables to New York style nuts and freshly squeezed lemonade.

My two personal favorites are the butterscotch covered almonds and you can't beat the Jersey grown blueberry's provided by the local farmers. Click the link below to check out the markets Facebook page.

Roseland Farmers' Market

My House Just Came Off The Market, What Do I Do Now?

So your listing agreement with your prior agent just expired (typically a 6-month listing agreement), what do you do now? If your first instinct is to get it right back on the market with the same agent, please walk over to a mirror, look yourself dead in the eyes and consider what I'm about to say.

Your prior agent just had your listings for six months and could not get the job done, what did that agent do in those six months to justify letting them sell the most valuable asset that you own? Let's be honest with ourselves, your agent probably tried their hardest to get your home sold for you. Your agent probably called their buyers leads, told all the agents in their office about your listing, and even put your home on the MLS. Fact of the matter is your prior agent couldn't get the job done given six months to complete the simple task of getting your home sold. So if someone would remind me what's the definition of insanity again?

Insanity- Doing the same thing over and over again and expecting different results. 

After working with their prior agent for six months, I always ask homeowners what exactly they expect that agent to do differently this time around. A lot of the time the responses I get are, "oh it wasn't my agents fault, the market just isn't good right now". If you weren't aware the market is doing phenomenal, it's actually up 10% over the past year. Don't listen to your agents excuses on why they couldn't get a simple task done given six months time. Another response I always get is, "I'm listing back with the agent they're a friend of mine." Think about this for a second! This is probably the largest sale you will ever make in your life! Do you simply just want to do a friend a favor and potentially lose out on tens of thousands of dollars or do you want an agent who uses a proven plan to get their clients top dollar every single time.

Moral of the story is, if your listing contract expires with your old agent do yourself a favor and at the very least get a second opinion from another realtor.

If you have any questions feel free to reach out to me, KyleKovats@Gmail.com

Kyle Kovats, New Jersey Realtor

How Do I Expand My Listing's Pool of Buyers

I've been getting a lot of questions on this recently so I'll just briefly explain how exactly I do this.

1) I have a referral network of agents/brokers in the Hoboken area. If these agents have past clients that are looking to move out of that market and to the suburbs, they will refer the client to me in exchange for a 25% referral fee. It is an agreement that everyone benefits from.

2) Mojo Power Dialer- Mojo Power Dialer is a system that I subscribe to that allows me to dial up to 300 phone numbers per hour. The way it works is I extract data from the MLS, Trulia, Zillow, etc. to get the contact information of all the people currently selling their home (because they're obviously looking for somewhere else to move). Next, I upload that information into my Mojo Power Dialer. This system allows me to call three numbers at once and it connects me with the first number that answers. When the prospect picks up the phone I will begin to ask them some questions to figure out where they're planning on moving to and their price range amongst other items. If they're looking to move to the suburbs I will then describe both my clients home as well as the general area. It is at that point that I will send them an e-mail complete with your listing information as well as area information contained in an "e-neighborhood" profile.

3) I will then contact agents and brokers in specifically targeted markets to see if they have any past clients or active clients looking to move to my listings area. If so, they'll get the same treatment as the prospect gets with the full listing sent to them as well as the "e-neighborhood"if they're not a local agent.

These are just a few of the simple tactics that I employ to expand my clients pool of buyers. I can't stress enough how important it is to choose an agent who will do more for you than just simply put your home on the MLS and hope that it sells. You need an agent who will not only market to the local market but expand your buyers pool by thousands by directly contacting qualified prospects.

Market More Than Your Home

When you put your home up for sale, make sure that your agent is marketing more than just your home. If the agent you're working with is marketing just your home, chances are that this agent is doing nothing more than throwing your home on the MLS. To expand your buyers pool and appeal to people outside of your direct market place you must also market the area that the home is located in.

How do you market the area?

One of the strategies that I use to market the areas that I'm listing homes in is I create an "E-Neighborhood" profile. This is a 23-25 page report that basically describes everything and more that you need to know about the area. This report will include the demographics, median incomes, education stats, school system stats, restaurants, NYC transportation info, entertainment, and much more.

Another simple strategy that I implement is making a facebook fan page for your home. This fan page will basically include information from the e-neighborhood and I will also post a feature every few days about the area. These features include restaurant specials, local news, and general entertainment in the area. The purpose of this is to give the potential buyers a good feel for what the area is like.

These are just a couple of the very simple strategies that I use to expand your buyers pool effectively.

If you would like to know what else I do to expand my client's buyers pool, feel free to reach out to me at, KyleKovats@Gmail.com

-Kyle Kovats, New Jersey Realtor

You Deserve More From Your Agent

In today's market, having an agent take your listing and put it on the MLS is simply not enough. Let's be honest with ourselves, anyone can do that including yourself. Make sure that your agent is earning their keep. Ask your agent what exactly they do for their marketing, pro-actively. 

You see, there are two types of marketing pro-active marketing and reactive marketing. Reactive marketing is hoping that buyers come to you, pro-active marketing is seeking out buyers and prospecting on a daily basis. A few examples of reactive marketing are putting a home on the MLS, putting a home on the internet, putting a for-sale sign in the ground, and putting a lockbox on your door. Quite frankly as a homeowner you can do all of that yourself, your agent must bring more value to the table than that, you deserve more. 

Proactive marketing is an approach that top agents take where we seek out buyers for your home and don't just wait for them to come to us. A few example of some proactive marketing I implement for my clients are as follows. I get in touch will my buyer's leads and let them know about your property and its features and benefits. I call the agents in the area that work with the most buyers and ask them what their clients are looking for to see if your property would be a fit. I reach out to people currently selling their homes because obviously they're looking for somewhere else to move. Just in general, I'm calling people in the 5 mile radius of your home because stats show that 90% of all people that move, do so within a 5 mile radius of their current home. 

What really separates me from all the agents in this area is my referral network in Hoboken and NYC. I've built relationships with agents/brokers in Hoboken and NYC where if they have a past client looking to move out to the suburbs, (which is quite often) I pay them a 25% referral fee to service their clients. This is a huge plus to my seller's because essentially I am expanding their buyers pool unlike any other agent is. 

If you have any questions feel free to reach out to me, KyleKovats@Gmail.com

Kyle Kovats, New Jersey Realtor 

Questions To Ask Your Agent

Selling your home is often the biggest sale that you'll ever make in your entire life. It is important that you have an agent working in your interests who is doing a whole lot more than just throwing your home on the MLS and kicking back hoping for the best. You want an agent who is pro-actively seeking out buyers for your home on a daily basis, rather than hoping buyers come to them. Here are some questions you should ask your realtor before deciding to hire them for the job of selling, what is most likely the most valuable asset you own, your home.

1) Are you a full-time or part-time agent?

You'd be shocked to know how many agents out there are part-time agents who just rely on referrals from friends and past clients to sustain their business. These agents will come out put on a nice show for you then just throw your home on the MLS and hope that it sells. You want an agent who is looking to earn your business, not just be handed your business. To dig deeper into this, ask your agent what a typical day entails for them. If they're not prospecting for at least 2-3 hours then you're working with a part-time agent most likely.

2) What is the average number of days your homes are on the market before selling?

This will again tell you how active they are in the market. If they have what seems like an abnormally high DOM (days on market), then that should be a tell tale sign that they "bought your listing". Buying a listing will be explained next.

3) What is your average sales price to list price ratio?

This will be able to tell you whether or not your agent "buys listings". Buying a listing is an unethical strategy used by some agents out there where they'll basically tell you that they can get far more money for your home than it is actually worth. By doing this they hope to excite you and in turn list with them. More often than not 6 months down the road you'll have an expired listing on your hands. Remember overpriced listings are only seen by 15% of all buyers on average where as homes priced at market value are seen by 60% of all buyers. You need maximum exposure of your home and overpricing will deter that from happening. Again, you don't want your listing to be one that sits on the market and becomes a "stale listing".

4) How many Seller's and Buyer's are you representing?

There's a few ways to look at this. If your agent is working with a number of buyers then there's a good chance that they'll be able to get your home sold very fast. Having your agent work with a lot of buyers is usually a good thing, however sometimes buyers can be very time consuming and take away from your agent's time to pro-actively market your home.  If your agent is working with a lot of sellers then there is a good chance that he/she is a very good agent. If your agent specializes in a particular price range then their prospecting will remain the same and you shouldn't worry that they won't have time for your listing.

5) What is your internet marketing program?

This is very important because in today's market nearly 89% of all home searches start on the internet. You need to ensure that your property has maximum exposure on the internet. For example, I subscribe to a service that has my listings syndicated to over 350 of the top real estate websites.

6) What is your policy on returning calls/texts/e-mails?

The #1 complaint amongst clients of their realtors last year according to studies was the lack of communication. Right from the beginning set guidelines and expectations for your agents regarding when you will communicate (before a showing, weekly review), how you will communicate, and anything else that is important to you about communication. You need to be able to contact your agent when you have something important to bring to their attention and knowing how to do so is very important.

7) Do you offer an "easy exit" listing so that I can end our agreement if I'm not satisfied?

If you are not satisfied with your agent you deserve to be let out of your contract with no liability. In all of my contracts with clients I have an out-clause for them stating that at any time they may cancel the agreement free from liability if they are unsatisfied with my service. On the flip side I also provide them with my daily schedule and have an open door policy stating that at any time they can walk into my office and see exactly what I'm doing. Make sure that your agent offers an easy out and is accountable to you.

Have a great weekend and to all my clients if you'd like to come in and watch me prospect tomorrow, you'll know where my office is located!

-Kyle Kovats, New Jersey Realtor

VIP Buyer's List

Every single morning Monday-Saturday, I prospect for three hours between the hours of 9-12. In the afternoon depending on my consultation/appointment schedule I prospect for an additional 2-3 hours. In total on an average day I usually prospect for between 3-6 hours.

What do I mean by prospect? By prospecting, I mean that I am calling for sale by owners, expired listings, withdrawn listings, and just in general calling my specialty areas trying to see if there are any homes off of the market that are open to offers. In the past week alone, I've found six homeowner's of expired/withdrawn listings that don't want to put their homes on the open market just yet but are open to offers. In turn, I am making my buyers aware of these homes and it's a win-win situation for everyone involved.

In this type of scenario, if I bring a buyer to one of these properties, the owner will be paying a lower commission rate because they're only dealing with one agent and in turn my buyer will be able to get a better deal because the owner can pass a part of the savings onto the buyer. Essentially, my buyer gets the property at a slightly lower price than usual and the seller winds up netting more money on the sale of their home.

If you're a buyer who's interested in purchasing a home in Essex County, contact me if you'd like to be put on my VIP buyer's list for the best deals that other agents simply cannot find for you.

As always, if you have any questions, feel free to reach out to me. Next week I will be launching my personal real estate website, so keep an eye out for that.

-Kyle Kovats, New Jersey Realtor

Pricing Your Home Right

When selling your home, if you want to maximize your profit and net the most possible money, you must price your home right. Pricing right means pricing the home at its fair market value, not pricing with some wiggle room so that you have some space to negotiate. In fact you won't ever have to negotiate the price of your home with a buyer if it is priced right because you will have multiple offers to choose from. In fact you'll be in position to tell all buyers the greatest line in real estate, "please submit your final and best offer, we will be choosing the best one on _______". The following are the main reason why pricing is so important.

1) If you overprice you will become a "stale listing": A stale listing is a listing that's been sitting on the market for a number of months and despite price reductions, buyers already have made their first impression of the house and mentally crossed it off their list. Homes for sale see the most action in the first three weeks and if you come out of those first three weeks without an offer that should be a tell-tale sign that you're overpriced.

2) The home won't appraise: When a buyer takes out a mortgage the bank/lender orders an appraisal to make sure that the money they lent will have the necessary collateral backing it in case of default/foreclosure. In essence if the house sells for more than it's worth the buyer will have to increase their down payment to meet the banks lending criteria and if they don't have the money to do that then the deal will be killed by the lender.

3) Buyers don't look at overpriced homes: Stats show that 60% of all buyers look at homes priced at market value, where as only 10% of all buyers look at homes that are priced 15% or more above their fair market value. The goal is to price your home to the most broad base of buyers because more buyers = more offers = bidding war = higher sales price. It's just common sense.

4) You position yourself as the best buy on the market: Typically homes are listed for about 5% more than they sell for. By listing your home at fair market value you look like you're a steal of a deal due to the competitions overpricing. What we see here is that there's a ton of interest in the property, multiple offers, and quite often a bidding war breaks out that causes your home to sell for above market value. This is really the only way to get your home to sell for above market value because if you were to list along with all the other homes you're not differentiating your property. Sure, you'll have a buyer or two interested but at that point they'll have all the pricing power and they'll really be able to beat you up on the price. Listing at fair market value is the same strategy that all the top agents in the country use, and is recommended by top real estate coach, Mike Ferry.

5) The longer the home is on the market the less it sells for: Sotheby's recently released a study that showed that homes that go under contract in 10 days or fewer sell for 98.9% of their asking price where as homes that sit on the market for longer than 121 days sell for just 86.9% of their asking price (stale listings).

In conclusion, you would rather have 10 offers to choose from and create a bidding war than have one or two low-ball offers that you have to negotiate on because your house is overpriced. If you price your home at fair market value from the beginning you will get top dollar. It doesn't matter what you paid for your home 5 years ago, the market determines the price today. For example, think of it like the stock market. Say you bought a stock 5 years ago for $100 but today it's only trading for $75. Sure, you'd love to get $100 for that stock and break even but the market is telling you that if you sold it today it's worth $75 and that's not negotiable. The same goes for real estate.

As always if you have any questions feel free to reach out to me KyleKovats@Gmail.com.

-Kyle Kovats, New Jersey Realtor

The Value of Exclusive Buyers Representation

If you would like to get the highest quality of service and be assured that your agent will be actively looking for your dream home, sign an exclusive buyers agency agreement with an agent. This should be an agent you're confident will find your dream home in your price range, and make the transaction go through as smooth as possible. Make sure this agent is a one-stop shop. What I mean by that is make sure that they have every kind of professional that you'll be in need of on speed-dial, whether it be mortgage brokers, attorneys, home inspectors, moving companies, you get the picture.

If you do not sign an exclusive agreement with an agent, they'll essentially have no incentive to take time out of their day to actively seek out the best deals for you because they'll have zero assurance that they'll get paid on the deal. Look at it this way, would you go to work every day if your boss couldn't assure you that you'd be paid? Most likely not. And that is the same here, as a client you are essentially an agent's boss and they only get paid if they close a deal with you. It's in your best interest to have an agent that's committed to you. Keep in mind you're not paying a penny to this agent, the agent gets paid through the seller's commission. The only way that you're liable for any type of payment to the agent is if you break your agreement by going behind the agents back and purchasing a property without their representation.

Just a little side note, when buyers sign exclusive agency agreements with me, not only am I actively seeking out the best deals for them and finding the bottom lines on properties, I am also calling around homes off the market that are looking into offers. By contacting these owners of homes off of the market, I am finding you deals where we will essentially be bidding against ourselves, we'll have an owner paying a lower commission, and in turn it results in my buyers getting great deals that they wouldn't find elsewhere. Keep in mind, I only do this for my buyers who sign exclusive agency agreements with me.

If you're serious about finding a home and you want the highest quality of service, it is in your best interest to sign an exclusive buyers representation.

As always if you have any questions, feel free to e-mail me KyleKovats@Gmail.com

-Kyle Kovats, New Jersey Realtor

In a Seller's Market, Buyer's Must Move Fast

Literally and figuratively in a sellers market, buyers must move fast. In the market that we're in today where inventory is low and homes that are priced right are selling in less than a week, buyers must be ready to make an offer immediately. In order to be ready to make an immediate offer, here are the steps buyers must take.

1) Get Pre-Qualified- You can't submit an offer without a pre-qualification letter from a bank. Sometimes you can't even see a home without being pre-qualified.

2) Have your attorney lined up and ready to go- If you happened to remove a contingency from an offer such as an inspection contingency, let your attorney know upfront that you really want this house and in order to get it you had to waive the inspection contingency. I can't tell you how many times a lack of communication between buyers and attorneys cause deals to fall through.

3) Put as few contingencies as possible in your offer- If it's priced right and it's a great value, odds are there are going to be many competing offers. To make yours stand out from the bunch waive as many contingencies as possible and make the deal look simple and easy to the seller.

4) Have your agent submit the offer in person- This will allow the agent to get a read on how many offers are in on the property and where your offer stands in line.

5) Don't try and lowball the seller- If it's priced right, just go right after it and make a full-priced offer right off the bat. What we're seeing in this market is that if the home sells in the first 5 days or so, it will sell for full price. If it sells in 2-3 weeks that usually means more buyers got wind of the property and a bidding war broke out to cause the home to sell for above asking. Come in strong with a full-priced offer right from the get go to ensure you lock up a great deal and don't get into a bidding war.

As always if you have any questions, feel free to reach out to me at KyleKovats@Gmail.com

-Kyle Kovats, New Jersey Realtor

Staging Your Home Before Putting it on the Market

When putting your home on the market, small changes can have a large impact on your bottom line. Professional staging services out there can range from a couple thousand dollars all the way up to tens of thousands of dollars, it's up to you to decide if the ROI is right. However, if you have a home that's worth under $750,000 you're probably best off staging your home yourself. Here are some small staging strategies you can implement to ensure you get top dollar for your home. 

1) Maximize all space: After living in a home for many years, we often tend to overload rooms with furniture that we view as "nice additions". Often times what we perceive to be nice additions just make the room look smaller than it really is. For example, often times people put their TV's in entertainment units. If you want to maximize the space of that area, take out the entertainment unit and hang the TV on the wall. To make the project look professional add floating shelfs to put your cable boxes on, in some cases you could be adding on as much as 20 square feet to a room. 

2) Put away all personal items: This includes family pictures, your sons hideous painting from 3rd grade (which my mom still had on display until a couple years ago), etc. You want the potential buyers walking through your home to be able to envision the house as theirs and that is hard to do when you have family portraits all throughout your home. 

3) De-clutter: In general just de-clutter your entire house. If something is not essential to your every day living, then just put it away. It is a good idea to rent a small storage unit while your home is on the market to put all your personal items and any furniture that you have removed from your home. It is essential that you de-clutter your kitchen, this is the room where you want the buyer to feel they have enough space to be comfortable while preparing a meal. This means putting away the coffee maker, wooden spoon holder, TV, toaster oven, and just in general anything that makes the room look messy. 

4) Make everything symmetrical: Rooms must have a certain flow to them to appeal to buyers. Less is truly more when it comes to getting a home sold. You want to have everything lined up, and perfectly angled when showing your home. This includes pillows on beds and couches, dog beds, side tables, kitchen knife sets, blankets, etc. 

5) Make sure the house smells nice: When a buyer first walks in the house by nature they rely on their 5 senses to make a first impression. If the house smells damp or like an old dog who hasn't been bathed in five years, do all you can to cover up that smell. Whether you air the house out before the showing, light candles, or bake chocolate chip cookies make sure the house smells good and has a "homey" feel to it. 

As always, if you have any questions or comments feel free to reach out to me. KyleKovats@Gmail.com. 

-Kyle Kovats, New Jersey Realtor 

Working With Investors

Over the past few years the real estate game has been jam-packed with investors looking to buy distressed properties and flip them for a quick buck. Knowing how to work with these investors is essential in times of low interest rates and depreciating markets. Now that the market is substantially picking up and interest rates are rising, investors are beginning to dwindle but to be a valuable asset as a realtor you must know a few things when servicing investors.

First and foremost, know what the comps are going for in the area. I'm not talking about just the comps of other fixer-uppers but also know the comps of what these houses are worth after a rehab job has been done. This is essential because this is where you're going to find out what your ROI looks like. My rule of thumb with real estate investing is you always want an ROI greater than 15% on a flip. There are much simpler investment vehicles where you can achieve an 8% return with not as much risk.

Second, know how much money will be put into the rehab job to get the house into a condition where it can be sold. Now, before putting in an offer I HIGHLY recommend having a contractor come out to the property to give you an estimate on how much work needs to be done so you know exactly how to position your offer. However, if you're running through a ton of potential properties with buyers like I've been doing lately, use a simple spreadsheet to estimate roughly how much money will be put into the property. This is a spreadsheet I made with prices based off of home depot to give my clients and estimate of how much work we're looking at.

Before submitting the offer, make sure that you run a thorough investment analysis because you do not want to have a "dog" (an investment that's not profitable) on your hands if the offer is accepted. Make sure to take all factors into consideration when running this analysis. Account for everything from mortgage/closing fees, rehab expenses, prorated property taxes, recording fees, time value of money and any other expenses you come across. On the sales side you're including sale price minus realtor commission, realty transfer tax, property taxes, attorney's fee, etc. A general rule of thumb is to always inflate expenses 10% because you're bound to miss something.

When it comes time to submitting the offer, it is absolutely necessary to submit this offer in person to the listing agent and owner of the property. When you're going to buy a property with the intentions of a flip you must show the agent/owner how you came up with your offer number because usually it will be extremely low. Included in this offer presentation should be the comps of similar homes in the area, the comps of homes in the area after the rehab work has been done, an estimate from a contractor, and your investment analysis showing how much you plan to profit on this property. Just a little tip of advice if you plan on profiting 50% ytd, the seller is probably not going to take you seriously.

Working with investors can at times be hectic because of the sheer volume of offers you'll have to submit but if you can establish your self as an investors specialist you'll have a nice source of recurring business. If you'd like me to forward along my investors spreadsheet please e-mail me KyleKovats@gmail.com.


- Kyle Kovats, New Jersey Realtor

The Value I Bring as a Realtor

Let's face it, most realtors are extremely lazy. I noticed this while I was in college and working as a realtor part-time in Hoboken and  a bulb went off in my head that with my work ethic and my energy, I could really differentiate myself from the bunch and be a great real estate agent. A couple years later, after much brainstorming and reading I've really been able to differentiate myself from the competition.

With the sellers I work with, I expand their buyers market. Now, 90% of all homes that sell, sell to buyers in a 5 mile radius of the home. I don't think it's a coincidence that 90% of all homes are also listed with a brokerage within a 5 mile radius of that home. To combat this stat and expand my clients buyers pool, I market my properties to people in the Hoboken and NYC markets. The reason I market to those areas is because the next logical step after you've lived in Hoboken or NYC is to start a family in the suburbs and the West Essex area is a great place to do just that. Bigger pool of buyers= more looks at the property= multiple offers on the property= bidding wars= higher sales price. Again, this isn't rocket science it's just about going above and beyond for your clients and that is something I will always do.

With the buyers I work with, it will be the easiest transaction you're ever involved in because I am a one-stop shop. Not only am I going to find you a house that fits your needs, I am going to refer you to just about every service you're in need of whether it be a mortgage broker, attorney, home inspector, landscaper, interior designer, general contractor, you name it and I will have a professional on speed dial for you to get in contact with. In the case that I cannot find you a house that is currently on the market that fits your needs, I will begin calling homeowners of homes that were previously pulled off the market whether their listing period expired or they withdrew the listing from the market just because they were frustrated. I will be able to find all my clients a home that suits their needs. What's even better is that in the case I do find you a home that is off the market that fits your criteria, we will be bidding against ourselves and the seller will be paying a smaller commission rate, which means that I can get you a great deal on the property.

As always, if you have any questions or know of any friends/family with questions about the services I provide, feel free to contact me on my cell phone (201-403-1314) or through e-mail (KyleKovats@gmail.com). Have a great day!

Does Social Media Help Sell Homes?

The answer is both yes and no.

If you're expecting to get your home sold strictly through social media networks such as facebook, twitter, or instagram, I'm sorry to say that you're sadly mistaken. However, these social networks can definitely be valuable assets to a realtors business. For example, for the clients that I work with, I make them a facebook fan page of their home. On this fan page I basically describe in full detail the features and benefits of both the home and the surrounding area with links of what to do and where to go. To check out a sample facebook fan page I made, check out this link here . Let me add that, I really don't think you can expect to sell a home on facebook, however for buyers that are new to the area and want to know more, this is a valuable outlet for them to do so.

On that facebook fan page you will notice that the pictures actually look pretty professional, I thank our friends over at instagram for that. Instagram is a valuable tool for taking pictures of homes you are trying to sell, nothing more, nothing less. Let me just reiterate, you are not going to get your home sold on instagram.

Twitter in my opinion is pretty much useless in regards to selling a home. The only value that twitter brings to the table is letting an agents center of influence know that they have a listing. It can't kill you to post it though as the ROI is infinite.

So how do you get homes sold? Well, in today's market, most housing searches begin on the internet. It is very important that your agent be up to date with the most popular real estate websites and has a sufficient SEO system that will get your listing featured. Also, make sure that your agent is someone that you like and trust. Keep in mind the typical sales process from original list date to closing is anywhere from 4-6 months, so you're going to have to deal with this person on a weekly basis for 4-6 months.

If you have any questions on getting your home sold whether you're an agent or a home owner feel free to comment below.

Seller's Tip of the Week: Simple DIY Project to Boost Your Home's Value

Pergo Laminate Flooring

When it comes time to put the for sale sign in the front yard of the house you've spent some of the best years in your life in, you must consider what homebuyers are looking for in this market. If you've lived in your home for 20 years and haven't changed a thing, chances are the buyers in today's market will make note of some of the small nuances that don't catch your eye.

Buyers aren't going to place the same sentimental value on things such as your old trusty oven which has been alive and kicking for 20+ years or the rug in the living room that you proudly boost has not once been replaced in 20 years. How ever great you think your rug looks in your living room, the trend today for 90% of buyers is that rugs in entertainment spaces is a big no-no, so get them out.

Here is a quick simple DIY project that you can do (yes anyone) to prepare your home to get top dollar. Pull up those old rugs in entertainment spaces and replace it with Pergo laminate hardwood floors. It's inexpensive, looks good, and will certainly provide a great return on your investment. Below I've linked some videos on how to install them, if you played with legos as a kid, you're qualified to install pergo laminate floors, they literally click into place.

Installation for Dummies
Simple Tip to Make the Project Look Professional

Buy or Rent?

Save Money and Buy a Home

Recently Business Insider published a story regarding "tipping points" of interest rates that would cause renting to becoming cheaper than buying. Nationally the tipping point of interest rates is 10.5%, so in other words interest rates would have to hit 10.5% for renting to be cheaper than buying. I'm not so sure we'll be seeing 10.5% interest rates any time soon.

Whether you realize it or not, it's more affordable to buy than rent. Granted you're going to have to save up some money first for a down payment if you do not want to pay PMI (private mortgage insurance which is typical 1% of the remaining principal balance of the loan paid every year until you reach 20% equity). However, if you are willing to pay PMI and make up for the cost of PMI in speculative appreciation (anticipation of the house gaining in value)  you can buy a house with as little as 3.5%.

Why is it more affordable to rent than buy? First and foremost, monthly payments. Generation Y (people in their 20's and 30's) has been slower to buy than their parents. Studies show that they like their flexibility and like to move around like gypsies. This increases demand for rental units which in turn leads to higher and higher rents which exceed the cost of a mortgage.

But don't you have to pay property taxes and get insurance when you buy a home? Yes, you do. Even taking into consideration a mortgage which includes PITI (principal, interest, taxes, and insurance) monthly mortgage payments still are typical cheaper on a comparable property. Here's the kicker, not only are monthly payments cheaper, you can also write-off your property tax expense and mortgage interest expense. Say for example you were in the 25% tax bracket, if you have yearly property taxes of $7,500 and a mortgage interest expense of $10,000 (yes interest is a lot in the beginning years of the loan), that's $17,500 in write-offs. Again, assuming a 25% tax bracket, that means you pay $4,375 less to uncle sam simply because you own a home.

To summarize, let the gypsies rent. If you have enough money saved up where you're comfortable to lay out a down payment of 20%, do it.

Today, we're going to piggy-back off my last post about interest rates going up to show you the correlation that it has with housing affordability.

It's not exactly breaking news for me to tell you that when interest rates go up your monthly payments go up as well. However, let me just show an example of the difference in home affordability had you bought a home just a couple of months ago when interest rates were at 3.5% vs. the 4% that are currently showing this hour.

I'll once again use our friends at bankrate.com to explain this example. If you were in the market to buy a $500,000 home (let's assume you put 20%/$100,000 down) just a few months ago when rates were at 3.5%, the monthly mortgage cost on a 30-year fixed rate mortgage (not including taxes and insurance) would have been $1796. Fast forward to this hour where interest rates are roughly 4.0% and that same $400,000 mortgage now has monthly payments of $1910.

But here's what really stands out to me, for the monthly payment of $1910 that you will now be paying on a 30-year fixed rate mortgage if you take the loan out this hour, just a few months ago when rates were 3.5% you could've gotten a loan for $425,000 for the same monthly payments of $1910. In other words you could've qualified for a house worth $25,000 more for the same monthly payment! Or another way to view it is that you could have put $25,000 worth of your own improvements/customization into the home for the same price!

With interest rates only going up from here, get the most bang for your buck and make that move you've been pondering ASAP

Next time, we'll talk about renting vs. buying.

Interest Rates Steadily Climbing

(Interest rates bottomed out in late 2012)

Since Ben Bernanke hinted in early June that the fed will look to begin cutting back on QE, interest rates have slowly yet steadily been climbing. Now what does this mean for us average Joes? This could mean one of two things. First, this could mean that buyers are going to begin backing off due to record low interest rates slowly going away. But, more likely what we'll see is that buyers will come out in troves to take advantage of these rates while they're still near all-time lows.

Here's a hypothetical example to think about for a second. Say you were to buy a $500,000 home, you put down the typical 20%, so you're putting down $100,000 in turn leaving yourself with a $400,000 mortgage. Still with me?

Now, according to the BankRate.com mortgage calculator, if interest rates were to go up just 1% from where they are today (which some economists are predicting) that is a difference in about $85,000 over the course of that loan or about $230 more in monthly mortgage payments and that's where you are REALLY feeling it, right? Because that's the money that's coming out of your pocket every single month. Just a little side note here but my sister's 2012 Honda Civic has monthly payments of $199, so we're talking the difference of more than an entire car payment here.

Moral of the story is if you're hesitating to sell your home because you want to see it appreciate a little bit more before selling, you're making a bad choice. Because although your home is appreciating in value, your replacement is as well so that all evens out. But you HAVE TO take into account the effect that mortgage interest rates rising are going to have. Essentially the longer you wait to sell it's only going to cost you more money in the long run, look to my example above for proof.

Next time, we'll talk about the affordability of houses changing with interest rates going up. Buyer's you're going to want to see this one.