The pandemic has forced many of us to rethink our ideas about work, school, and where we live. As we’ve sheltered in place for longer than anyone ever guessed possible, the importance of our homes has come to the fore.
Perhaps you’ve found yourself perusing real estate listings in less-crowded areas or in a location where you’ve always dreamed of living.
Is this a good time to think about a move? How is real estate being affected by all of this?
I asked Jeff Lichtenstein, a real estate expert and the president of Echo Fine Properties in Palm Beach Gardens, Florida, these questions, and more. Here’s what he said.
The Epoch Times: In the United States, the crisis has cast new light upon the states we choose to live in, the types of cities or small towns we settle into, and the way we live, school, and work. What new trends do you see emerging in real estate as a result?
Jeff Lichtenstein: Lots have learned that they can work from home. Businesses can save dollars and in some cases workers have been more productive from home. Overall there is definitely going to be a trend to work from home and in different more desirable locations.
People who have been on the fence or have thought about moving are now having serious discussions about this. Do you like to ski? Golf or boat year-round? Hate scraping ice off the car? You can now choose your lifestyle. Why live in a 13.3 percent or an 8 percent tax state when you can cut that out completely, especially as money has become more important. Low-density areas have also become more important.
This all points to movement to lower-tax states as that is now the same as what you earn. If a 13.3 percent tax state is paying $50,000 and a zero percent tax state is offering $45,000, the better-paying job is the lower offer. Then mix in cost of living and lifestyle, and it’s a whole competitive job market without boundaries.
The Epoch Times: What key considerations should people take into account before choosing to move to, say, a smaller town or another state at this time?
Mr. Lichtenstein: Does it fit long-term? Low density may only matter until a vaccine is developed. Is this just a short-term decision or a long one? Renting might be an option if you are on the fence. Try to visualize what happens if it doesn’t work out.
Are you leaving family and friends behind?
Is it your secret Never-Never Land? If you’ve always had a burning desire to move to an area, this might be your chance. As people reexamine everything, the realization that life is short and moving to where one wants should be considered. People generally wait until retirement and move in their 60s. Within a decade, health problems start to occur. Why not enjoy Montana or Santa Fe or Park City or Jupiter, Florida, right now?
Talk to people. I’d encourage one to visit the area. See if you like it. Drive around. Investigate. Look at the average monthly temperature. For instance, if one is moving to Florida, there is a big difference in temperatures north of Port St. Lucie. Do you like the west coast of Florida or the east coast? Once you visit an area for a few days, you start to get a vibe.
The Epoch Times: What can sellers expect to experience when putting their home on the market in this environment?
Mr. Lichtenstein: The word unprecedented is being thrown a lot for a reason. It’s very hard to predict right now so eyes must be wide open.
Get ahead of the curve. If the market drops, you must get ahead in terms of pricing aggressively. When there was a market drop in 2006–2009, some sellers would jump ahead and price it aggressively. Others just kept dropping as the market dropped. People search in rhythms of $25k, $50k, $100k, etc … I give people three ranges when I price something. The move-it price point, the probable price point, and the shoot-for-the-stars, highest realistic price point. The move-it price point right now needs to be considered. The reason is, if you price it right at the probable price point there is danger in the unknown that the move-it price point could become the probable price point, and then a new lower move-it price point is born.
If you are selling something and you are buying, what’s the difference? I’ve seen people get upset that they sold at lower than they wanted. Then I ask about the purchase and they tell me what a great deal they got. Usually in the same region, if your house goes up or down then the home you’re buying does the same thing.
Do what is necessary to have your home in show condition. Staging can increase the value by 5 to 15 percent. If your realtor can’t help then hire a stager. This is critical for the inside and the outside. An example on curb appeal.
Do a pre-inspection. Best to find out the uglies now and fix them at a competitive price rather than have a deal fall apart later because of a lot on the report or the buyer demanding a large credit.
The buyer will have more power in this market. Be careful not to push too hard in negotiations. Have short acceptance time periods and wrap things up quickly.
[Aim for] quick closings as buyer’s remorse can set in. Cash and larger deposits down are important. Take a hair less for a sure thing and a more qualified buyer.
The Epoch Times: What are the basic steps you recommend people follow in the relocation process?
Mr. Lichtenstein: Understand your costs of moving. Know your costs on the sell side and buy side—including moving, mortgage, and other costs.
Shop and read up on the city you want to go to first, community second, and home last.
Think about what you want in a home and what is important for resale. For instance, single-family homes in the Palm Beach Gardens area that are CBS (concrete block structure) construction, open floor plans, remodeled, have a pool, master bedroom on the first floor along with a lake or golf view, and southern exposure will depreciate less in a bad market and turn faster.
Do your homework in picking a realtor. Read bios and look at realtor websites. Many “rating” websites are pay-to-play so you really don’t see who is out there. See if you like their website, ask for references, and do a thorough interview with questions ready. Also, have them put in writing what they guarantee. We have a 57-point checklist of what we guarantee each client when we list a property.
See their office in person or do a Zoom conference and include the broker. You want to see everything you are getting in writing and understand where they are generating buyers and how they are specifically marketing your home.
Know the rules of the area. An as-is contract might mean different things to different people. When purchasing a home in Florida it means that the buyer has a right to inspect within a default of 15 days (can be changed) and cancel at their sole discretion at no charge and for no reason. We have another contract where the buyer is locked in and the seller has to make repairs. We don’t have on or about movable closing dates like in other states. Northerners come down and think they are signing a binder or can move the contract date. When in Rome, do as the Romans.
How do the taxes work?
Pick a mortgage broker who has synergy with the realtor, who is local, and who can shop multiple carriers. National firms who don’t know the area are usually trouble. Find a good local insurance company. Some national firms don’t write in Florida for example.
Markets can vary wildly by region. Urban cities with a high density of people, colder climate, and higher tax environment are taking a dramatic hit. New York City, which has been a hub for international and financial jobs with a super high cost of living and sky-high prices per square foot, will be in for a large adjustment.
Our area right now is actually more active and we are seeing a line up of pent-up demand at the same time. The northern Palm Beaches area is in a unique spot where all boxes are checked: no income tax state, lifestyle, ability to work remotely, infrastructure of culture, beach, golf, proximity to airport, weather, low-density population, less urban, and affordability.
When an earthquake occurs, the land settles differently. This virus is a massive earthquake and things are settling very differently than before.
The Epoch Times: Generally speaking, do you think this is a good time to consider moving?
Mr. Lichtenstein: Depends on you—it’s such a personal situation. Yes, if it’s a time for change. People are reevaluating everything. If you always wanted to be a nurse and can do it, then do it. I know someone who was not happy in their job and decided to make a life change.
If you move with a remote job and get laid off can you get another one? That’s a good question to ask.
Consider renting. It’s safest to buy a smaller home first or to rent.