Q & A with Barbara Corcoran

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Q1 - You've recently written a lot about the great deals buyers can find in today's market and how "these are the good old days we've all been dreaming about."  I really don't think you're writing about ordinary working people who live in New York City.  Where can I find this dream house in Brooklyn?  I've recently separated from my wife of 30 years, she's staying in the 3-story 4-bedroom rowhouse we own in Windsor Terrace, and I've moved into a $1500/mo 3-bedroom share in Bensonhurst where I pay half the rent. My wife will probably buy me out of the house, valued at about $600K.  I can afford a mortgage of about $600/month, and when I look around in Brooklyn, I can't find a house equal to, let alone better than, the one we currently own, certainly not in a desirable place like Windsor Terrace.  I need to stay in Brooklyn to be near my son, and I want a real house, with a garage, an attic and a basement.  Any suggestions?

A - Head over to Dyker Heights where Fillmore Real Estate has a 1,896 square-foot semi-detached charmer listed for $599,000. There's a front lawn and a driveway for parking, both in high demand in the neighborhood. The great parks are the perks here, along with the views of New York Harbor and the Verrazano Bridge. Tiger Woods' father taught himself to golf on the Dyker Heights Golf Course and the course still draws young golfers from all of Brooklyn.

Other good picks within your budget are Gerritsen Beach or Mill Basin, and your son will love them both!  They are beach communities filled with friendly neighbors, fishing, boating, and windsurfing. You can find a beach-bungalow type home for about $340,000 in Gerritsen Beach, or a good house in Mill Basin four about $420,000. With the $300,000 cash from the sale of your half of the Windsor Terrace house, that should bring your expense under your magic number of $600 a month.

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Q2 - I bought my house in January 2008.  Am I entitled to the new federal $8,000 tax credit?  My accountant told me I had to purchase my home in April 2008 or later.  

A - Your accountant is right.  You won't be getting an $8,000 credit from Uncle Sam because it's only available to first-time buyers who purchase a home between January 1, 2009 and December 1, 2009. 

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Q3 - I have a Countrywide Mortgage, have lived in my home for three years and I've never missed a payment.  Now I'm unemployed, so I asked Countrywide for help.  But because I never missed a payment and my house is not in default they say they can not help me.   They said I can get the loaned refinanced, but that takes money I don't have.  I am trying to be proactive, but this seems not to help.

A - Yours is a typical example of a good guy finishing last.  But Chase Manhattan recently bought Countrywide, so take another shot at talking to the bank.  Chase has a much better reputation for customer service and you'll probably get a better response.  Get back on the phone and call the loan mitigation or workout department.  Speak only with an officer of the bank who has the authority to modify your loan.  Once you've pleaded your case, send a certified letter to confirm your conversation so you can later pick up where you left off.  With so many distressed buyers calling the banks these days, it takes about 60 days to get a response from the lender.

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Q4 - About two years ago I purchased a townhouse in Florida with and for my son. He was supposed to keep up the payments for the next 30 years, but he died unexpectedly. Now I'm stuck with a huge mortgage and no equity in the property.  The townhouse is beautiful, but I'm not really interested in moving to Florida.  What can I do at this point?  Should I just walk away from the property?

A - Before you walk away, find out about renting it.  You can call a local broker to get a feel for what it's worth as a rental, or go online and look at other townhouses for rent.  If you can find a good tenant to cover your mortgage and maintenance fees, you'll be able to wait out the real estate storm for a few years and sell your townhouse for more later.

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Q5 - My husband took a job out of state and we need to sell.  I know this isn't the best time, but life goes on.  Could you share some suggestions on how to sell in this market?  Having moved six times in the last 20 years I'm not a novice, but I've never had to deal with today's situation.  I want to hire a real estate broker who is a Pit Bull, lipstick not necessary, to list our house. 

A - What you need even more than an aggressive agent is a very aggressive price.  So as you interview the top agents in your local market, ask them, "Where would I have to price my home to sell it within the month?"  If you put your question this way, you'll get the real price and you should hire the honest agent, the one who gives you the lowest price.  You should also invite a professional stager in to tell you what changes you should make to make your home more appealing to today's buyers.  You can find a good on at the International Association of Home Staging Professionals, iahsp.com.  You'll spend a few hundred dollars for their advice, but it will earn you thousands of dollars when you sell.

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Q6 - I am in the 2nd year of a mortgage and the balance is $261,000.  My interest rate is 6% and my monthly payment is $1,936.  I could bring my rate down to 4.5% with a new mortgage, but should I wait till rates drop more?

A - The 1.5% rate difference would save you about $500 a month, and in my book that's a lot of money!  If you get your new loan from your current lender, you'll be able to eliminate most of your closing costs.  But don't wait.  Money's cheap, and no one knows what tomorrow will bring.

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Q7 - My partner and I own a home on Staten Island and a year ago we bought a house in Asheville, North Carolina. We will be moving there some time in the next six months to a year. With prices what they are now, we don't want to sell our home here on Staten Island yet. We're thinking of allowing my niece and nephew and their new baby to rent from us with the option to buy. Can you explain just how this works? I have heard about it but I am not familiar with the process.

A - I wouldn't lease to your niece and nephew because you should never rent to anyone you wouldn't want to evict.  It's easy to find a tenant, but hard to find a new niece and nephew. 

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