In the ever-changing Hamptons real estate landscape, there is no substitute for experience and in-depth knowledge of today’s market. Finding a real estate team with the combination of local awareness, understanding of the marketplace, honesty, and integrity is the goal of every buyer and seller. Add to that, the fact that financial planning and strategy for the purchase of a second home has had some significant changes as of late. Obtaining a mortgage or making a cash purchase is a choice that has long term consequences. Borrow at a low rate, hold on to your cash, and gain investment returns at a higher percentage than you borrow? Or play it safe and make the cash purchase?
With these questions in mind, it would be helpful to hear the answers to a series of questions posed to a well-respected Hamptons real estate team leader, and a trusted Southampton based mortgage expert.
Brendan Skislock has been a successful real estate broker for over two decades. Over the years, he has closed over a billion dollars in real estate development and luxury properties through an extensive global network. An exceptionally skilled negotiator, he has invaluable expertise in design and construction specializing in land use, zoning code requirements, and property value assessment.
According to the Elliman Report (4th quarter of 2017), the average sale for the Hamptons home has jumped to nearly $1,900,000. To what do you attribute the increase from the prior year?
BS: This past year the market conditions have improved in both sales price and number of sales which is reflected in increase average sales price.
As a longtime Hamptons resident, you have seen “hot” markets unfold. Years ago, before Sagaponack become a top tier zip code, it was a middle of the pack Hamptons town; then it skyrocketed. Sag Harbor was a sleepy “un-Hamptons” Village. Then, it became an incredibly hot real estate location. Where are the next two communities that you see as undiscovered gems?
BS: I feel the next two “hot spots” will be North Sea and Montauk. The North Sea area has a combination of very exclusive high end properties, along with boating opportunities, it’s close to New York City and offers easy access to other Hamptons via the back roads. Montauk will realize continued growth as millennials and high-net-worth individuals seek a laidback lifestyle, waves, nightlife, boating, and restaurants.
Many locals bemoan the growth we have seen throughout the years in our community. What are the most positive changes you have seen throughout the years to our area?
BS: The most positive changes are the cultural opportunities that have evolved along with restaurants, open space and general gentrification of villages.
If you could look into your crystal ball, where do you see the market in a year from now?
BS: The real estate market looks promising with the one caveat being interest rates.
We shift gears from the desired homes of the Hamptons to how buyers finance the purchase. Cash buyers notwithstanding, many finance the purchase of the second home for a variety of reasons.
Although many are versed in the ability to analyze interest rates and lending rates, few have the experience of Patti Frank. Patti is a Vice President at GuardHill Financial Corp. She has decades of experience in the mortgage business and countless clients turn to Patti for her expertise and guidance.
What changes in borrowers habits have you seen throughout the past 5 years?
PF: Since the financial crisis of 20017-2008 the US mortgage market has changed dramatically. The big banks have lost market share and the “non-banks” have gained market share. The big banks have only a few products they offer and if a borrower does not fit their guidelines then that is where GuardHill has a huge advantage. GuardHill Financial is the nation’s leading privately held mortgage banker and brokerage firm in business since 1992. We underwrite our own loans and sell off to more than 75 lenders which gives us a wide array of products and rates that the big banks do not offer.
Conversely, what changes have you seen in bank’s lending habits recently?
PF: Banks have mostly stopped dealing with brokerage companies and lean towards working with correspondent bankers such as GuardHill Financial. We have a large in-house processing and underwriting staff and a dedicated closing department which makes the loan process to the borrower exemplary and the post-closing compliance and sale to the investor seamless and efficient.
Why should someone choose a mortgage broker, instead of going directly to a lending institution?
PF: A borrower should choose a mortgage bank over a big bank or a mortgage broker because we have a diverse product selection offering the best mortgage rates and offering the highest standard of customer care. Since we have a correspondent relationship with so many lenders we can find the best product to meet a customers’ needs. We also have the ability to broker loans when necessary as well such as spec construction loans, commercial loans, niche lenders and private lender loans. When a borrower works with me they get daily/weekly updates on the process, I have a processor who works directly with me on every file to overcome any possible hurdles and get them to the closing table smoothly and expeditiously after having a great mortgage experience. I have been in the business since 1994 and most of my clients over the years have been repeat clients and my referrals from realtors, accountants, attorneys, personal financial planners, friends and past clients speaks for itself on the confidence people have in me to get the job done. This is the biggest investment for most in their lives, I want to make sure it is a positive experience from start to finish.
We have seen fixed rates for 30 year home mortgages jump from a low of 3.5 percent. Has the new higher rate affected the volume of loans that you are processing?
PF: The Federal Reserve was very out spoken about their gradual rate increases expected for 2018. I think because people are aware of what the Federal Reserve has in store in the near future they are more seriously looking for that primary residence, second home or investment property now before rates tick up more. On the flip side, because the rate hikes have been gradual people are not as affected by past hikes in history which came on without warning. Even if the rates for a 30 year fixed mortgage creep towards the 5 percent mark they are still much lower than they have been though out my 26 year mortgage career and rates historically.
We can’t see into the future of mortgage rates and real estate values, but we can learn local insight from experts, such as Brendan Skislock and Patti Frank. Most CP Complete renovation and construction clients view their Hamptons home first and foremost for the lifestyle and a family legacy. The increased value of their home is a welcome bonus.