Dear Friend/Neighbor/Customer,

The Spring Real Estate season is now in full swing, and activity is brisk. Interest rates remain at near-historic lows, and the market remains quite healthy. Experts are forecasting a repeat of the 2004 real estate season - with single family home appreciation expected to reach approximately 10 % in 2005.

This is Doug Hayman's May, 2005, Real Estate Newsletter Edition.

In this Issue:

• Do I need to Sell my Existing Home First, Before Buying a New One ?
• The Great Mystery Behind Closing Costs Revealed (Repeated)
• Find That Perfect Dream Home
• Real Estate Services and Web Site

DO I NEED TO SELL MY EXISTING HOME FIRST, BEFORE BUYING A NEW ONE ?

The simple answer to this question is YES. The complex answer is IT DEPENDS.

In today's Seller's Market, a seller rarely will accept an offer from a buyer, who has yet to "sell" their own home first (by "sell" we mean that the house is in Full Contract). The reason for this is simple. By accepting an offer in this scenario, the seller is gambling that the buyer will be able to sell his/her home in a reasonable timeframe. By entering into a contract with the buyer under this scenario (where the buyer will have the sale of his/her home as a condition to the deal), the seller is effectively taking his/her home off the market, thus losing any other potential buyers during this period. If the buyer is unable to sell his/her home OR has a change of heart and decides to not sell their home, the entire deal will fall through, and the seller will be left holding the bag - i.e., they will still have their home to sell, and they will have lost several months of time, losing other potential buyers during this time. Hence, most sellers in this market will only enter into contract with a buyer who has sold their home first.

If the buyer does not need the equity from his/her existing home to finance the purchase of a home, then the rules above will not apply. The seller will gladly enter into a contract with a qualified buyer that has other available funds to purchase their home.

There are rare occassions where Sellers will be willing to enter into a contract with a buyer that has not yet sold a home, if the Real Estate agent is involved in both ends of the deal; and thus has major incentive to ensure that both ends of the deal consummate. Further, on rare occassion, a buyer can obtain a "Bridge Loan" committment from a lender, such that if the buyer's home is not sold prior to the purchase of the subsequent home, the bridge loan (or short-term interim loan) granted by the bank covers the purchase of the home, and the buyer has additional time to sell his/her home. Naturally, the buyer will need to find a lender that will be willing to issue this Bridge Loan, under this scenario. This is definitely an exception to the rule in the current Seller's market climate, but is sometimes (albeit, rarely) an avenue for consummating a deal.

Should the real estate market change in the future to be a Buyer's market, the above scenario will not necessarily apply. Due to decreased demand for housing in a Buyer's market, a seller may be more flexible, and be willing to accept a deal with a buyer who has yet to sell his/her home.

THE GREAT MYSTERY BEHIND CLOSING COSTS REVEALED (REPEATED)

Due to popular demand, here's a reprint of the article that appeared in my March, 2005 Newsletter:

Whenever you purchase or sell a home, both the buyer and seller will incur closing costs, most of which are paid for at closing. My detailed Real Estate website, has a page that I assembled, that details ALL closing costs that can be expected to be paid by Buyers and Sellers alike.

Please click on my "Closing Cost Checklist" link on my website menu, and you will see a detailed enumeration of all the types of closing costs that are involved from a Buyer's or Seller's standpoint. As a general rule of thumb, Buyers will pay between 5% - 8% of their mortgaged amount (loan) in closing costs. This is a general approximation here in NY, but should provide a general clue as to how much money a Buyer will need to close a deal (over and above the downpayment). Please visit my website and learn about the various types of closing costs including:

• Appraisal Fees
• Mortgage Tax
• Attorney Fees
• Recording Fees
• Title Insurance
• Mortgage or Loan Origination Fees
• Points
• Tax/Insurance Reserve (Escrow)
• Credit Report Fees
• Survey Fees
• Proration
• Lender Inspection Fees
• Flood Certificates
• Pest Inspections
• Engineer Inspections
• Broker Commissions
• Transfer Tax