Q & A With Barbara Corcoran

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Q1 - Most of the houses my sister and I are looking at have been on the market six months or more.  We've put in three low bids and they've all been rejected.  Where are the deals and what are we doing wrong?

A - Only one in ten sellers out there is truly motivated, and how long a property has been on the market is no indication of how negotiable the price might be.  It more often means that the seller is stubbornly holding onto their price.  The real key to finding out how motivated the homeowner is, is finding out why they're selling.  "We're being transferred to Houston" is a very different answer than, "We'd like to find a bigger house."  The first homeowner's hot to trot and ready to take a low offer.

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Q2 - I want to pay off my $85,000 home loan in 10 years rather than the 20 years left.  Should I refinance it from 6.75% to 5.75%?  It would raise my monthly payment from $658 to $965 and closing costs would be $2,200.  I can make an extra payment of $10,000 on my loan this year, should I do that instead?

A - You should refinance, and you might even be able to get a better rate than 5.75% if you shop around.  After that, you can again shorten the term of your loan by making whatever extra payments you can afford.

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Q3 - My husband and I own a condo in Wailea, in a resort area where we live full-time on Maui, Hawaii. We bought it for $155,000 in 1984 in cash, so never had a mortgage. The value for similar units has gone up so much over the years that they're now selling for $900,000 to $1,200,000. My husband is thinking about retiring and we are planning to sell our condo and buy a large home in Thousand Oaks, California, to be closer to our two kids.  Are we making a mistake, and is it wise to sell now?

A - I love my kids just as much as the next guy, but I wouldn't leave Maui for them!  Before you leave those beautiful beaches, take a deep breath and think about it.  Why not rent out your condo in Wailea for a year while you try out life in Thousand Oaks?  Most people who move to be close to their kids soon wish they hadn't and yearn for their good ol' life back.  At the very least, sit down with your kids and have an honest conversation.  Find out how much time they'd really have to hang out with you once you're living there.  Ask them if they'd rather have their parents around the corner 365 days a year or a round-trip ticket to Hawaii for a few weeks each year.  My bet?  They'll pick Hawaii.

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Q4 - My wife and I have moved to West Harlem from St. Croix and we're out looking for a small condo to buy.  Is it true that the real estate people we're working with are paid a salary here and get a big bonus when we buy one of the apartments they show us? 

A - All real estate agents rely totally on the commissions they earn if and when they make a deal.  So treat your agent nicely, pay for the taxi once in a while and you'll find they'll work super hard to find you the perfect place.

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Q5 - My son has put in an offer on a foreclosure, and it's been tough just to get the power on for an inspection. He finally got a contract but there appears to be mold in one of the rooms where a window leaked. If he finds mold during the inspection, the broker says it's easy to fix, but shouldn't this be the seller's responsibility? Everyone we ask has a financial interest in getting money, like the realtor or contractor, so what would you recommend?

A - Your son is jumping into murky waters because mold is a serious problem that usually can't be fixed.  He should spend $300 on a professional home inspector because who will have no conflict of interest and can give you real answers to the mold question.  Even though it's hard to spend $300 on a deal that may or may not happen, than money can save you tens of thousands down the line.  And forget about asking the bank for any guarantees.  Their only interest is to get rid of the house as fast as they can.

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Q6 - My brother and I inherited my mother's house, which is filled with 60 years of memories.  I want to clean everything out to get it ready for sale, but my brother says we should leave my mother's things there so the house looks lived in.  Is he right?

A - Buyers equate an empty house with a desperate seller, and all studies prove that empty houses always sell for less.  All buyers like bigger spaces, and even some bad furniture makes a house look bigger.  If you're smart, you and your brother should get the help of a professional home stager.  They'll quickly sort through your mother's possessions, get rid of the excess clutter, rearrange the furniture, and buy small decorative items to modernize and freshen up the home.  Professional home stagers charge by the hour, but they're not expensive and are happy to give free estimates.  You'll make back more than you've spent when your mom's home is sold.

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Q7 - I was getting ready to buy a new home but my wife just showed me a government report that said this is the worst year for new home builders in 50 years.  Should we wait a while?

A - When fewer new homes being built, it's actually good news for the real estate market.  It means fewer homes will hit the market six months from.  Get up and go out looking now.  The one thing you don't want to be doing a year from now is wishing you 'should've' and 'could've' when money was cheap and prices were low.

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