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The Real Estate Cupboard # 83 The Cupboard Archives

by: Steve Hubbard
Certified Buyer's Representative

I have continuously, time after time, exploited to the fullest extent possible every opportunity to advise Real Estate buyers and sellers, alike, to rely only on the advice of experts when engaging in thoughts about Real Estate and Real Estate activity. Nothing can be less helpful and productive and potentially more misleading and even damaging than listening to or relying on anecdotal information and advice from those with a great deal of interest in your life and how you live it when it comes to Real Estate but with, at best, limited knowledge based on a few personal experiences. And so that is why when I began reading the article in last weeks issue of our beloved Woodstock Times entitled "Get ready, get set to buy a house" by Jon Fackler and soon realized that this two page article complete with Mr. Fackler's picture was written by a person whose qualification to advise people about all aspects of Real Estate was limited to his having bought four houses himself that I began to have trouble breathing. Mr. Fackler's advice covered how to start the Real Estate buying process, what to look for when looking for a house, that it is "smart" to look for houses that will earn you an income, whether or not to pay your mortgage off early, that paying cash will get you a better deal, gifts and loans from parents, buying Real Estate from estates, and looking for Real Estate with good intrinsic value. First of all, if Mr. Fackler's advice were in every instance correct as far as it goes, which it is not, it is so over simplified it could only be deemed inaccurate for that reason alone and so every bit of it is misleading. It is perhaps a bit thoughtless, as well.

Limited space and time prevent me from adequately addressing every piece of advice put forward by Mr. Fackler in his article but take for example Mr. Fackler's advice that rather than spending "a lot of time preparing to begin, just start looking at houses that are for sale. Great! Would somebody please tell me who is paying for this? You have no ideas what you are looking for or how much Real Estate you can afford to buy and you have spent no time even trying to come up with the answers to these question and Mr. Fackler wants you to ask a professional Real Estate Agent or Broker to spend his or her valuable time showing you around Ulster Co. and sharing with you their professional knowledge and expertise to help you understand what you should be doing and how to go about it while you haven't put forth the least effort in this direction. And presumably he wants you to ask this Real Estate agent to do all of this without regard for his or her livelihood.

Consider this: Fackler says financial aid from a parent for "making the down payment and paying the closing costs" "whether this is a loan to be repaid or an outright gift" will be appreciated. Well if you are financing the purchase with a conventional mortgage loan, you might appreciate a gift from a parent, but you certainly won't appreciate a loan. According to Barbara Zullo of the Ulster Savings Bank in Kingston, mortgage lenders only permit gifts (not loans) from a "blood relative" for down payment and closing costs. And the gift must be accompanied by a "paper trail" comprised of a "gift letter" and bank deposit receipt. What about buying for cash? Fackler says "cash is king" and will allow you to make a better deal. Think about it. At the closing the seller gets all the cash no matter where it comes from. So the only way in which cash might benefit a seller and motivate a lower selling price is speed to closing. Mortgage financing can be so fast now days if everybody is doing his or her job that cash is hardly the advantage imagined by some. And what if you buy for cash anticipating taking a good portion of your cash out via a financing after purchase and find you don't qualify for available mortgages according to guidelines governing mortgage lenders?

Don't be tempted to pay off your mortgage early advises Fackler. Henry Gleich of the accounting firm of Schwartz and Gleich in Kingston, a guy who should certainly know, cautions that every situation is different with regard to this question and each case needs to be looked at individually. There are circumstances under which it would be distinctly beneficial to pay off one's mortgage early. And finally Fackler advises that "intrinsic value" is the "alpha and omega of the Real Estate search." Would somebody please tell me what kind of intrinsic value we're talking about? Are we talking about intrinsic financial value, intrinsic aesthetic value or intrinsic convenience value? Talk to me about intrinsic financial value when you pull up in the driveway after a long day and can't bear to get out of the car or even look at your house. You just can't stand being there but you have nowhere else to go.

Steve Hubbard owns and operates Steve Hubbard Real Estate Services.
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Steve Hubbard, Broker/Owner
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Phone# 845-246-2022  Fax# 845-247-0306  E-Mail: steve@stevehubbardrealestate.com
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