Selling a home after superstorm Sandy
When superstorm Sandy struck, Marilyn Singer, 76, was already planning to say goodbye to the Island Park home she'd shared with her husband Sy, 82, since they were newlyweds in 1955. The couple, who raised three sons there, had listed the home for sale six months ago and were living in their second home in Boca Raton, Fla. Even though they were about to go into contract when the storm hit, the damage to their home left them shocked and without a sale.
"It's just so devastating. Until it happens to you, you just have no idea what it feels like," says Singer. "This may sound crazy, but you get a numbness about you. It's almost like somebody died."
Countless home sellers on Long Island found themselves in similar circumstances in the wake of the storms, and the question on everyone's mind is, "Now what?"
The market was frozen in place -- along with everything else -- in the immediate aftermath of the storm. "People were just paralyzed," recalls home seller Rick Hamberger, 57, a retired economist for U.S. Bureau of Labor Statistics.
Although his Sea Cliff home was undamaged, Hamberger recalls how he was unable to show it due to power outages and the gas shortage. "Now it's getting better as things get cleaned up," he says. Listing agent Sandi Lefkowitz of Daniel Gale Sotheby's International Realty agrees that activity is picking up: The home, listed for $599,000, had two showings in the days before Thanksgiving. Hamberger has also received inquiries from people seeking rentals.
But even as the most obvious obstacles are being cleared away, sellers with homes on the market are nervously wondering what the storm's impact will be on a slowly recovering housing market. Certain market forces, such as tight lending practices and the seasonal slowdown that typically occurs toward the end of the year, remain beyond their control. Others, such as the storm's long-term effects on momentum and pricing, are impossible to predict.
Real estate experts are beginning to piece together what the post-Sandy real estate market might look like. Here are their tips and strategies for handling some of the unusual challenges now faced by home sellers.
Repairs to your home
What if the storm damage to my home is beyond what I'm willing or able to repair?
"You have to figure out, 'How much is worth putting into this house versus what I'll get out of it?' " says Commack real estate attorney Lita Smith-Mines. If you can't or don't want to fix it and you're leaving anyway, you might consider selling to an investor, she suggests. A tree through the window won't matter to a builder who plans to take the house down to the studs, she points out. "Instead of addressing the house, address who you market it to. You may no longer have a desirable house, but you may still have desirable property," she says.
That's what the Singers are doing. They had their home gutted and reduced the price on the 100-by-120-foot property from $569,000 to a range of $400,876-$499,876 in hopes of attracting a builder. "The real reason why it's special is they're on a double piece of property. . . . It's two buildable lots," says listing agent Tom Tripodi of Douglas Elliman Real Estate in Long Beach. "The positive is that there could be two brand-new homes built on this, so someone is going to get a great deal compared to what they were a month ago," he says. "Everybody realizes it's a disaster, and with a disaster comes loss. But with every loss, there's a gain."
Condition of the neighborhood
My house was spared, but my neighborhood has unsightly damage. Should I hold off showing my home till the area is cleaned up?
Keep showing it, says Great Neck native Khashy Eyn, real estate broker and chief executive of Manhattan-based Platinum Properties. A storm-damaged roof or fence isn't the same as an unkempt yard or other signs of undesirable neighbors. "These kinds of things happen everywhere in the world . . . It's a natural disaster."
Riina Friedrich of Friedrich Real Estate in Babylon agrees. "I wouldn't stop showing a house. . . . It's not a secret, everybody knows what's happened," she says. The obvious exception is the hard-hit flood-prone areas. "It might be difficult to sell a house on the water if your whole entire neighborhood looks bad. I'm not showing my waterfront listings right now till they finish their repairs. I will be upfront if there's a water situation in the neighborhood," Friedrich says.
Length of time on the market
Should I remove and re-list my home?
While conventional real estate wisdom says that every day a home lingers on the market will chip away at its final sale price, analysts say that the rule of thumb doesn't necessarily apply here. That's because Sandy and the nor'easter forced the entire area into a standstill -- and when everyone around you is standing still, you can't get left behind.
"Houses that have a 30- to 45-day longer marketing period than they might otherwise have had without this event, they get a pass this time, because everybody is quite aware of the problems and the delays with the market that are attributable to the storms," says Jonathan Miller, a Manhattan-based appraiser who tracks the Long Island housing market. "It's a market-wide event."
Friedrich says it's even OK to leave it on the market through the typically slow holiday season. "I'm not a fan of resetting the clock. Buyers are so educated with the Internet these days," she says. Anyone who is interested in buying your home is already watching it -- and they are more interested in the price than the days on the market, she says.
Ken Aldrich, 66, an assistant superintendent in the Seaford School District, says that despite the storms and the holiday slowdown, he isn't taking his three-bedroom South Jamesport home off the market. "Come spring, I'm sure somebody will be by who really wants to have this. They'll want to know that the water didn't bother it . . . the home is high and dry and did very well." The house, which was recently featured in Newsday, is listed for $539,000.
How do I handle buyers' new concerns about potential hazards?
When it comes to the obvious things, such as flooding, sellers of unscathed homes have been quick to update their listing comments with phrases such as "high and dry" and "no hurricane damage." But post-Sandy sellers will also have to anticipate unprecedented questions such as, "How close is the nearest transformer?" or "Was there toxic sewage that came into the area?" To prepare for this, "you want to do some investigative work, even if the house wasn't touched by the storm. Find out what's going on in the area," says Smith-Mines.
Your county department of health or the New York State Department of Environmental Conservation could be helpful. You could consider having your own environmental testing done so you'll have the paperwork ready if buyers request it, she says.
Damage while in contract
What if my home was already in contract when it was damaged by the storms?
Lenders are requiring reinspections, but you may be asked to provide certification for boilers, air-conditioning units and other appliances that may have been affected by floodwaters, and you will be expected to repair the home to its pre-Sandy condition or close to it, says Baldwin attorney Chandra Ortiz, a member of the Nassau County Bar Association's Real Property Committee. Stay on top of your insurer to get it resolved as quickly as possible, and work only with reputable contractors, she advises. "You want licensed and insured contractors." Call your county's consumer affairs department to confirm license information and to check for complaints, she says.
What can I do about insurance complications?
Insurance presents a couple of potential snags. For one, if you have a pending claim for damage, the buyers' insurer may want to wait till it's resolved before granting the new policy. "Buyers want to put into the contract that, 'If I can't get insurance, I won't go through with the deal, even if I get approved for a mortgage,'" says Smith-Mines. Call your insurer to find out your options. "Sellers might at times be able to transfer their own insurance policy to the buyers. It never hurts to ask," she says.
It's uncommon, but a significant increase in the cost of insurance could create another problem for homes in contract: The lender could pull the buyers' financing. "If the total of the tax, insurance and mortgage exceeds the ratio of the program they applied for, it's possible," Smith-Mines says. "You have to be nimble and think on your feet," she says. "The seller could say, 'I'll pay your first year's premium,' and the lender might accept that." It may be a long shot, but if it could save the deal, it's worth trying, she says.