Who Determines How Much Your House is Worth?

Your house is very special to you - no doubt it holds many warm memories, but buyers who are looking at your house have just looked at 20 houses and your house is just number 21. It's no more special to them than number 12 or 18 were. Therein lies the challenge when thinking about pricing your home.

In very basic terms: Real estate is a commodity, not a product.

With a product the manufacturer makes something, then establishes the price it will sell for. They advertise it, and the public either buys the product or not at that price. Think clothing or furniture in a store.

With a commodity, the sellers set an "asking price" and then buyers decide their "bid price". The buyers assign their own value based on two things: 1)what is happening in the market (prices fluctuate daily and are influenced by supply & demand) and 2)what are their perceptions of the value of the exact features and benefits inherent in that commodity. The buyer’s perception of value determines what your property is worth to the potential buyer. Think auction.

Also, with all commodities and especially real estate there are two market trends – either appreciating or depreciating which depend on the laws of supply and demand. When fewer properties come on the market than go off, there is a shortage of inventory and prices go up ... this results in an appreciating market. When more properties are coming on the market than are being sold, there is an oversupply of inventory, and prices go down ... this results in a depreciating market. It will probably come as no shock to you, but we are currently in the third year of a depreciating market.

Your potential buyers are comparing your home to similar houses in your town. They are visiting other homes for sale that are comparable in size, style, condition and location. They see what your competition is priced at, and are also working with their Realtor to see what comparable homes sold for in recent months. Putting all of their observations and data together they are determining the fair market value of your home. Hopefully you too have done some research and have come up with a reasonably similar fair market value and price your home accordingly.

The bottom line is: your buyer is an educated consumer and in real estate the consumers set the fair market price of a property. If you price your home based on your emotional evaluation of how "special" it is, and not what it is worth compared to similar ones in the eyes of a buyer you will lose time and money. Yes - money. Studies have shown that overpriced homes actually sell for less money (when they do eventually sell) than if they had been priced correctly from the start.

Of course your home is priceless to you, but to the homebuyer it is not the only choice out there. Use your Realtor's experience and resources to help you determine the value of your home to a buyer. Doing this is the first step to a successful sale. If there are any other questions you have about this, or any other real estate concerns or needs feel free to contact me, Mike Hunter at 978-580-1069.

How to Sell Your House: Tips for the First Time Home Seller

You obviously succeeded at being a first time home buyer, and now you are about to be a first time home seller! Below are 11 tips to selling your house faster and for more money:

1. Make your house easy to show. Accompanied showings or 24 hours notice are will discourage most of your potential buyers who will view other houses they can see easily when it is convenient for them.

2. Price it right. This may sound counterintuitive, but a house priced fairly will sell for more money than an overpriced home. You may think, "We'll aim high and negotiate down if we need to," but this does not happen. In reality buyers don't even bid on an overpriced house. After changing the price a time or two to what it should have been, your house is "stale" and your largest pool of buyers have already looked at it and ruled it out. More times than not, when you finally do sell, it will be for below what your original "fair price" would have been.


3. Keep your house neat and clean at all times. Vacuum, dust and pick stuff up. Pack away very personal items around the house like family photos. People want to see themselves in this space, not feel your presence all around them. Think of it as how you would like to see a nice hotel room when you enter it - neat, clean and free of signs of previous users.

4. Keep the kitchen as uncluttered as possible. Put away countertop appliances, keep counters clean and as empty as possible. Remove refrigerator magnets. A vase of flowers on an island or counter always looks cheery and brings attention to counter space.

5. Remove obvious religious icons. Remember, people from all religions and backgrounds will look at your home to buy it. You want it to be as neutral as possible. This may be a good time to pre-pack these items for your move.

6. Keep signs of your children's presence to a minimum. Of course you love your children, but it is a good idea to contain their toys and remove photos of them and items with their names emblazoned on them. Many househunters get distracted by messy toy areas and you also want to be security conscious.

7. Pack up your collections and knick knacks. You may love your collection of 30 chicken/rooster items you have all over your kitchen, but sellers will see them and not the size, layout and pluses of your kitchen. All they'll remember is that there were tons of chicken items. This goes for books too - some are nice, but if they're overflowing bookshelves and taking over rooms, pack them up. Boxes can be put neatly in a corner of the basement or in storage until you move. The less cluttered a room is, the larger it appears.

8. Have your house smell nice. Perhaps simple and obvious, but worth stating. Get rid of animal smells (ask a friend or your agent - you may be too used to it), don't cook strong smelling foods (fish, garlic, etc.) and don't smoke in the house.

9. Don't hide all your dirty/extra stuff in closets. People do open closet doors to see how much storage there is.

10. Provide good lighting. A well lit room looks bigger and has a positive emotional impact. Turn lights on before showings, and buy some floor lamps if you need to for rooms that may be poorly lit.

11. Curb appeal. I know this phrase is used to death, but it's true - the first impression of your house as buyers pull up to it is critical. Mow the lawn and trim the bushes. Plant a few flowers along the walk or put potted flowers on the steps.

Your Realtor will have made a lot of effort in researching comparable homes, helping you set a price and getting their marketing strategy implemented so your home gets the immediate attention of other Realtors and their buyers. If your house sells quickly it means you and your Realtor did everything right - congratulations! Now you can concentrate on the next step in your life!

If you have any questions or if there's anything I can help you with I'd be glad to talk with you. Call me at 978-580-1069 or email me at mike.hunter@nemoves.com

How do Short Sales and Bank Owned Properties Differ?

Bank Owned Properties (REO)

• The property is owned by a local bank or a national mortgage servicer( from hereon I'll use the term Bank). All negotiations are made between a Buyer and an employee of the bank (as opposed to a homeowner). REO properties are almost always vacant and utilities may be turned off.
  
  
• Standard offers to purchase are used in addition to the required Bank's addendums and disclosures. Consideration ($) will need to be in the form of a cashier’s check (no personal checks). Proof of funds for the down payment and a current loan pre-approval for the balance will also need to accompany an offer. Offers must be complete, correct and filled out according to the bank's requirements. Do not submit offers that are not in compliance, they will be rejected by the bank or delayed until corrected regardless of the price being offered.
  
  
• Your opinion of value and the Bank's may differ, but before a Bank forecloses they have at least one local broker provide an opinion of value. Once they decide to sell the property, they have their listing broker determine if the opinion of value is still correct. The Bank is almost always pricing near market and is expecting to sell the property close to the asking price. Your Buyer's Agent will give you a CMA (comparable market analysis) for the property prior to your making an offer. If you both feel that the asking price is well over market you should provide that CMA to the listing broker along with the offer. The lender has no obligation to see your CMA and frankly, they don't care anyway. But if your CMA includes recent sales or similar properties that might not have been included in the original opinion of value, a strong listing broker just might be able to make your case to the Bank.
  


• You may receive an answer within hours or it may take up to a week, but the response time should be fairly quick. Don't get impatient with the listing broker, they do not have any control over the response time no matter what time frame you put in the offer for acceptance. The best approach is to ask the listing broker for an approximate length of time needed for response and use that in your offer. If the offer is for less then the asking price do not be surprised if the response is an outright rejection or a "best and final" counter offer. Banks are not in the business of owning properties, they are in the business of lending money, but any decision they make will be strictly business. If the offer is a solid offer (close to asking price with minimal contingencies and quick closing date) it may get accepted without a counter.
  


• If your offer is accepted it is unlikely that the Bank will make repairs so an “as-is” sale should be assumed, and you should look the property over very thoroughly before you make an offer. If a few repairs need to be made to facilitate FHA or Conventional financing the Bank might be willing to make them so don't be afraid to ask, but support any request with a hard quote from a licensed tradesman. If the house is a fixer-upper or a tear-down or in poor condition, (in today's market ) traditional lenders probably will not lend on the property, so don't waste your time submitting an offer using an FHA (95-97%) loan. Also, many banks are beginning to have penalties for closings that run beyond the set date so make sure your lender can perform in that time frame and that you do nothing to hold them up.
  


• In summary, REO property sales are very much like conventional sales, just remember you are negotiating with a disinterested 3rd party, not a traditional homeowner, and that any deal you make will be "just business".
  

Short-Sales

• With short sales the property is owned by a homeowner and the house may be occupied by an owner/tenant or it may be vacant. The owner is "under-water", the sales price less closing costs is less than the debt(s) on the property and any offer needs lender(s) approval even though the lender(s) might not even know that the property is for sale.
  A standard offer to purchase is used, which should include an addendum acknowledging and accepting the fact that this is a short-sale transaction and requires 3rd party approval. Consideration ($) can be a personal check and a current loan pre-approval for the balance will also need to accompany an offer.
  


• Unlike a Bank owned REO, the listing price for the property may be based on something other than facts. The seller might be pricing it low to encourage multiple offers. They might be pricing it high to try to recoup as much money as possible. In rare cases it might be priced correctly. Unless the listing broker tells you they have an "approved" short sale (and even if they do it might be "stale" and will need to be updated at the time of your offer), the lender has not approved a sale at the list price so a Buyer doesn’t know if his offer even at list price will be accepted. Again, your Buyer's Agent will produce a CMA market analysis to determine the value of the home before you make an offer. It is always good to submit this with your offer because even though the listing price may be based on something other than facts your offer should be based completelyon facts. Closings can occur within 30 days but the 30 day clock will not start until the lender gives their approval.
  


• In the beginning, your offer is handled like it would in a non-short-sale situation. The listing broker will present it to the seller and they approve it. It will then be forwarded on to the lender for their approval at which point the listing broker and the Buyer have no control over the process and is in a "wait and see" mode. This approval process may take one week or it may take up to three months. One very important thing to keep in mind is that while you are waiting for an approval of your offer another department of the Bank is working on the foreclosure and may actually foreclose on the property even though there are offers in for approval. If that happens, your deal is dead and the listing contract is terminated as the former seller is no longer the owner of the property and does not have authority to sell. If that happens and you are (still) interested in purchasing the property, you should work with your Buyer's Agent to follow-up on the property when it comes back on the market as a REO.
  


• Again, an "as is" sales should be assumed, but there may be a little more wiggle room than with a REO. Also, while it might be nice to have repairs made, the seller most likely won't have the resources to make them and their lender is very unlikely to do so since they don’t own the property, so when you look at the property you should look it over very thoroughly before you make your offer and take into account any obviously needed repairs.
  


• In summary, short sales are not at all like conventional sales, you are dealing with a broke seller, an uncaring bank, and probably a neglected property so you should wade into this swamp slowly and carefully and assume the worst - it probably will happen.

Housing Market Conditions for Sudbury, MA as of June 21, 2009

Back in January I predicted that the market we were in then would be the market we would be in all year. While there has been some improvement, demand for housing purchases remains subdued. One bright point is that the lower end of the market seems to be having a pick-up in activity because of the Obama stimulus first time buyer credit. As more entry level houses are bought, the owners selling them can puchase their next home so this is good news for everyone.

So how are things doing in our neck of the woods?



Below is my current analysis of the Sudbury MA housing market as of June 2009:




Monthly Units Sold: there is very little activity compared to even 2007, which was not a banner year. The bright note is that what activity there is seems to be steady and trending slowly upward. The market environment is still unbalanced with too much inventory. Even though Sudbury continues to be a desirable town, the recent increase in interest rates and tightening of down-payment policies continues to shrink the real buyer pool, and prices will need to fall in order to sell all the homes that are currently on the market.





Selling Price to Original Price Ratio: The reality of this market has made even the most out-of-touch sellers get with the program or get out of the market. The ratios this year are all over the place (probably due to a low number of sales on which to base the statistics) but have remained just a bit below their historical averages. For the past 3 years, across the entire price spectrum, the average SP/OP ratio has remained consistently at 91%, that is, the houses that did sell, sold at an average of 91% of what they originally put it on the market for. You'll see a spike in April, but that is due to the sale of a single new McMansion that with added extras exceeded the listing price by hundreds of thousands of dollars, not statistically a repeatable event. As I've always said, we all know the laws of supply and demand. With fewer buyers due to economics and mortgage restrictions there are not enough shoppers to buy all the inventory. Obviously then the most attractive and best valued houses are the ones that will sell.





Monthly Average Sales Price: Studying this chart we see that over the first half of this year, the greatest demand is again coming from the smaller homes - incomes match better with the prices of smaller homes and the Obama credit coupled with price reductions has obviously gotten buyers excited. As the year has gone on, we see more homes in the mid-range selling, partially due to the inevitable movement of foreclosures and short sales up into this price point and even above. The spike in April is again a fluke due to one very high value home sale.





Days On Market: the trend is almost parallel to last year's, but slightly lower, which is very encouraging. I think this has again been more a function of "High-Quality" houses coming on the market and selling (while sellers who would like to sell but are waiting on the sidelines) than increased demand.





POSSIBLE IMPROVEMENTS IN THE MARKET: The big question on everybody's lips (especially sellers with great houses that are staying on the sidelines) is now not "When Will Prices Hit Bottom?" but "Have Prices Already Hit Bottom?" The supply probably has to decrease yet more until there is some competition among buyers for a property before price stability becomes a reality. What we probably can look forward to in the near future in Sudbury is a gentle bottoming-out in late 2009, possibly even delayed to the first quarter of 2010. Average sales prices will fluctuate a little just as they have over the past several months. Home sales will continue around their present rate for the coming months and sellers who price their homes for sale at fair market value will sell them reasonably quickly, say in 45-120 days.


The Bottom Line:
For sellers, the near future may continue to present challenges, but the market could start stabilizing this year and if you have a desirable house properly priced, selling it is going to get a little easier. For buyers, if you know for sure that the market has bottomed you've probably already missed it, and this is a GREAT time to buy.

If I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

Sudbury, MA Housing Market Conditions - January 2009

It is likely that for much of 2009 the real estate market will not be greatly different than it is now. That is not to say that there should not be some improvement, and that we might actually be within or near the bottoming period of the market. With confidence affected by the financial turbulence/negative media and having a look at the following statistical information, it is likely we will see demand for housing purchases remain subdued in the near future.
One caveat, before we delve into the statistics: the current real estate market is unlike anything many of us have seen in a long while. Although I will be presenting you actual historical information, it is risky to form opinions based on past indicators that most likely are losing their predictive power in this different market environment. As the saying goes, you can't drive forward by looking in the rearview mirror.

Monthly Units Sold: there is very little activity compared to the same periods last year, and what activity there is seems to have peaked in June and July and is in a general decline. Although it's tough to predict the future, given a five-month trend of less and less, especially when compared to the same periods for the previous year, the market environment is unbalanced with too much inventory and prices will have to go down. Even though Sudbury continues to be a desirable town, the bleak economy will make it out of reach for more people than in the past. When buyers' ability to afford to buy here dips, prices will need to fall in order to sell the homes that are currently on the market.

Selling Price to Original Price Ratio: In the beginning of the year sellers and their agents didn't get it that the market had changed and the prices had to drop. Once they figured that out, around May, the ratios climbed to just a bit below their historical averages. The spike in December is a good one, but too little data exists to call it a trend.
In a hot market everything sells, and condition, location and price are not as critical. They may add to days on market, but not prevent an eventual sale. However, in a weak market like we have now, only the "High-Quality" properties sell: homes with desirable locations, updated, staged and in perfect condition, and priced at the correct point where they are seen as the best value among their competition.
If your home is not that "High-Quality" house, for whatever reason, and you are in a situation where you must sell your house and you still have equity in the house, you should be extremely aggressive in your pricing strategy. Based on a number of market factors, including the current inventory levels in Sudbury, prices are likely to continue to fall. You have the option to price to sell quickly in an effort to preserve your remaining equity or you can hold out for a turnaround that probably will not happen for quite a while. We all know the laws of supply and demand. With fewer buyers due to economics and mortgage restrictions there are not enough shoppers to buy all the inventory. Obviously then the most attractive and best valued houses are the ones that will sell.

Monthly Average Sales Price: As the year started, the drop in sales price started with the small, older homes in the neighborhoods of central and south Sudbury. Later in the year, the decline had spread to the multi-million dollar homes in north Sudbury as well. The smaller homes were impacted sooner by foreclosures, short sales, and vacancies among the entry level homes, which in turn caused competitive pricing among sellers. In the middle of the year the slowdown rippled up to the mid-sized home and in the last half to the larger homes. So we see that over the year, the demand reversed itself, with the greatest demand now coming from the smaller homes - incomes match better with the prices of smaller homes and price reductions have obviously gotten buyers excited. Also, one has to wonder, without all the "trick mortgages" out there are we finding out how few people can really afford to pay over a million dollars for a house.

Days On Market: the trend is generally downward, which is very encouraging. It's probably hard to remember, but just a couple of years ago we used to think of a property as "stale" if it had been on the market for 90 days. Looking at the numbers for 2007, I think we can see that the market was much more stable than it became in 2008 when days on market jumped all over the place. I think the trend over the last few months may be more a function of "High-Quality" houses selling and sellers who would like to sell but are waiting on the sidelines for a while for the market to recover, than increased demand.

POSSIBLE IMPROVEMENTS IN THE MARKET The question on everybody's lips (especially potential buyers of course) is "Will Prices Stop Dropping?" Probably, possibly, maybe. Buyers are mostly on the sidelines, waiting for prices to correct. It will surely soon be apparent to most buyers and sellers, however, that prices are really so close to the bottom that it makes no difference where the exact bottom is. As buyers become more active, this will encourage more potential sellers to list their homes for sale. The likely effect is that there will continue to be a wide choice of homes to buy for the next few months as we approach the "Spring Market" , and it is quite possible that there will be a shortage of "High-Quality" homes to buy.
It generally takes a long-established sellers' market, or at the least a balanced market, with the levels of inventory matching the demand before price stability becomes a reality. What we probably can look forward to in the near future in Sudbury is a bottoming-out in 2009, possibly even happening during the Spring Market. Average sales prices will fluctuate a little just as they have over the past several months. Home sales will continue around their present rate for the coming months and sellers who price their homes for sale at fair market value will sell them reasonably quickly, say in 45-90 days.

The Bottom Line:

For buyers, especially first time home buyers, this is a GREAT time to buy. We are at or near the bottom range in prices, and mortgages rates are at record lows.
For sellers, the near future may continue to present challenges, but the market is expected to start stabilizing this year and if you have a desirable house properly priced, selling it is going to get a little easier.

Now that the traditional busy "Spring Market" is about to begin, if I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

Short Sales for Buyers

HOW TO BE SUCCESSFUL IN PURCHASING A HOME THAT IS A SHORT SALE

Mr. Seller goes to his mortgage company(s) and says, “I want to sell, but I don’t have any equity and the house is worth less than the amount I owe you. I need to sell anyway because based on my current circumstances, continuing to keep the home is a serious hardship and I can't hold on, so what do I need to do to get out?”

What the Seller has just done is to ask his lienholders to take a loss when his property is sold, this is called a SHORT SALE. Mortgage companies/lienholders don’t like to take losses (an understatement) and they are going to be resistant to this request from Mr. Seller. However, the current "perfect storm" of poor market conditions has forced them into a position where they may agree to Mr. Seller's short sale as long as it is going to be more favorable to them than going to foreclosure - in time, trouble or money lost.

But, (and there is a big, whopping BUT ...) the mortgage companies reserve the right to approve EVERY term, condition and cost of the sale. So not only are we in a Buyer's Market with lots of inventory to choose from, we have a seller who is virtually powerless in the transaction.

ARE THESE NOT THE PERFECT CONDITIONS FOR BEING A BUYER?!!!

There is another short-seller we should discuss, the reluctant seller. While Mr. Seller above is so very motivated, let’s take the case of the family that is forced to sell thanks to their loan being one of those adjustable rate or combination loans that has adjusted and is now beyond the point of their ability to pay. They have to sell, they are going through the short sale process, but they really aren’t motivated. Why? Because they have to move. And where are they going to move? Depending on their situation their credit may be less than stellar because of late payments and the short sale itself may show as a delinquency on their credit report. Who will rent to them?

Let’s say you get into a home to view it and you love it and want to put in an offer. You can do very well by buying a short sale house, but there are some things you need to know about this process. This is the point at which you need to put aside everything you have learned about the sequence of how a home is sold. Here's how you should go about it:

1. GET TO KNOW ALL YOU CAN ABOUT THE HOME.

You are advised by your buyer's agent that this home, typical of most short sales, is being sold "As Is" (see my blog post, "What does 'As Is' Mean?", for more detailed information on this legal term). The seller might provide you with a seller's disclosure of property condition if you're lucky, but that's about all you'll get. They may or may not have pulled permits for upgrades or work done on the house - you'll need to investigate. They definitely will not negotiate issues you uncover during a home/pest/lead paint/radon/mold/septic inspection. Do you spend money to have inspections done or wait for the bank's response? My advice, wait, but be prepared to move forward very quickly once you hear back from the bank.

Also if the property is a condominium or governed by a home owner’s association, your bank/mortgage company will most likely require a full set of condominium documents, meeting minutes, recorded deeds, occupancy rates, tenancy ratios, and more (what's called a Full Review). The condominium association can and will charge you money for this. Your mortgage is contingent upon receipt of this, but it's going to cost you around $400 for copying charges. What do you do? My advice is to ask your mortgage broker, but don't do anything to jeopardize your pre-approval/commitment.

You have decided to submit your offer and now the wait is on…

2. PATIENCE IS A VIRTUE, GET READY TO HURRY UP AND WAIT.
A short sale is the sale of a parcel of real estate that is short of the equity needed to sell it and pay off all liens। It is not short “time-wise”. You should plan on at least 120 days from your offer, but the amount of time can vary widely depending on the lenders, and if anyone says you will hear back in "x" number of days, you can't believe them.

What happens during the wait? Well, besides Mr. Seller getting anxious waiting for his departure, the short sale file/package/request gets in line in the lender’s short sale department (also called the Loss Mitigation Department). This line is long, sometimes very long.

So, what happens during the wait is just that….the wait. Oh, the agent for the seller will be in contact as needed to re-fax lost documents, explain their research, answer questions about the local market, re-fax lost documents, etc. But you, the buyer…you just wait. It’s like the military … hurry up and wait. Or better yet it's like the hospital ... wake up and take this sleeping pill.

Many sellers’ agents do not give your buyer agent status updates on what’s happening while you wait…you just wait. When I represent the seller, I email the buyer agent every week to say what I know, even if it's nothing, just to make sure that you, the buyer, are still there and somewhat paying attention. But as your buyer agent, there's nothing I can do ... if there were, rest assured, I'd be doing it.

Oh, as the buyer’s agent I know what’s going on….the paperwork is collected, the file is assigned to a “negotiator” who “negotiates” the short sale with the seller’s agent/attorney, and once the negotiator has the file’s required documents (exactly what that is varies by the lender) complete, it has to be signed off by their “team leader” or upper management, or a committee of managers. I check with the seller's agent regularly to ask what is happening but again, often there is nothing happening, just waiting….

3. KNOW YOU MAY GET "BUMPED".

Here is the big elephant in the room: you have no guaranteed place “in line.” If this short sale’s turn in the line comes up on the 80th day after submission, and someone else submits an offer slightly better than yours on day 79, you will be bumped! It is not impossible that a seller’s agent will work with offers one at a time until an acceptance is granted and you won’t get bumped, but this is a rare occasion, hasn't ever happened to me yet. It's not fair, it's not right, but it is reality. This is because the lienholders are losing money and need the most they can get, and it is the seller’s agent’s fiduciary responsibility to get the highest and best price for their sellers.

4. AFTER A LONG WAIT YOU MAY BE DISAPPOINTED.

If you are willing to be patient, knowing that you could get bumped, and you're convinced you want to purchase a home that is a short sale, I might advise you to submit multiple offers on multiple short sales. You may get the one you kind of like, and not the one you love, which might be a disappointment. You might not get any one at all, which can be very disappointing. The question then is, how well do you handle disappointment? Can you accept the lost short sale?

5. YOU JUST MIGHT GET A GREAT HOME AT AN EXCELLENT PRICE THAT MAY MAKE YOU SOME GOOD MONEY SOME DAY WHEN YOU SELL.

So why would anyone consider buying a home that is subject to a short sale?

Quite simply - price! If a seller is not going to make any money on the sale of their home anyway, you can imagine they are much more flexible on terms and price of the sale of their home. If you are the only person making an offer on the home, the bank will need to take the offer seriously, even if you offer significantly less than the asking price for the house. In many Massachusetts neighborhoods, short sales represent some of the best deals around.

There is no reason to be afraid of a home that will be subject to a short sale. In fact they may be some of the best values out there. Just be prepared for a longer timeline, a little more hassle and be sure to use an attorney, mortgage company and if I may be so bold, real estate agent with some experience in short sales. You may just find that incredible hidden gem at a bargain basement price.

4 Myths About Buying Through the Listing Agent

Through my own experience and by hearsay it seems that the urban legend about getting a better deal by buying a house through the listing agent is running rampant. This amazes me since a home buyer is always better off having a Buyer Agent working for them. Thus, here is the real deal on the 4 most common myths......

MYTH 1: I'll get a better price.

Some people think the agent will share negotiating information with them, such as how low the sellers are willing to go. Not so - make no mistake about this.... the listing agent is hired to get the best price possible for the seller. They are ethically and legally required to sell that house for the most money possible. I've also heard the argument that since the seller is saving half of the commission, they can lower the sale price by that amount. This is not the case - the commission is set in the original listing contract, so the seller is paying that amount no matter if the buyer has their own Buyer Agent or not.


MYTH 2: I will get a kickback of at least 1% from the listing agent

Almost all Real Estate brokerages discourage or don't allow this. No Realtor I know would do this. Although there seems to be the urban legend style "I know someone whose [friend, neighbor, cousin, coworker...] did this" it is actually very rare. You also need to know that your mortgage provider may not allow this, and that well into the buying process you could lose your mortgage approval.


MYTH 3: I don't need a Buyer Agent - the listing agent is my agent and will help me

Oh boy, this one always gets me.... Even if you agree to "Dual Agency" which means the agent works for both of you, the listing agent's primary responsibility is ALWAYS, ALWAYS, ALWAYS to help and protect the SELLER. No matter how nice the listing agent may be, when a choice is to be made that is in your interest or the seller's, the agent will always do what is in the seller's interest. This means they do not need to tell you that a dog kennel has been approved to be built on that lot behind you, or that 30 years ago this land was a gun club and no one really knows how much lead is or isn't still in the ground. It is important to remember that if you buy through the listing agent, no one in this whole process is looking out for you.


MYTH 4: The listing agent will get the seller to take a lower price because they are highly motivated to keep the deal together.

This can really backfire for reasons related to Myth 3. You have now created a situation where the listing agent is highly motivated to NOT tell you anything that may make you not want the house. The listing agent is not legally required to voluntarily disclose anything to you since they are primarily the seller's agent. Also, I can tell you from personal experience that a home seller has in their mind the price point they will accept, and what closing conditions they will accept. Their agent cannot "make" them accept a low offer.


A Buyer Broker is paid out of the seller's commission they pay to the listing agent's broker - it costs you nothing, and your Buyer Broker is the only person in the whole home buying process really looking out for your interests. Their role is to protect you from knowable pitfalls, and to get you the lowest price they can on that house. The majority of lawsuits against Real Estate Agents are by unrepresented buyers (those who bought without using a Buyer Agent).

I function as a Listing Agent and am accredited as a Buyer Agent. My preference is definitely to be one or the other in all my transactions. I find ultimately that all the parties involved are better off with the roles and loyalties not blurred.

Mike Hunter, the House Hunter - Your Neighborhood Realtor for Sudbury and Metrowest Boston. If I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

Blog: http://househunter3.blogspot.com Email: Mike.Hunter@NEMoves.com

Web: www.HunterTheHouseHunter.com

Coldwell Banker Residential Brokerage447 Boston Post Rd, Sudbury, MA 01776Tel: 978.580.1069

Information deemed Reliable but not Guaranteed.

Things to do in New England in the Fall

Fall is my favorite time of year in New England, the air is crisp and has the smell of falling leaves and harvest time is upon us.

If you like picking apples, there are lots of opportunities in Metrowest Boston, about 45 minutes from the city. You can pick your own or buy them in their country stores, and remember no pets allowed, so even though the idea of having Rover run through the fields sounds great, leave him/her at home (it's for their own safety). Here are some of my current favorites:

1. Honeypot Hill in Stow (http://www.honeypothill.com/) is open daily 10-5 and they have a petting zoo of farm animals, a hedge maze, hayrides and lots of easy apples to pick. Be sure to check out their apple cider donuts, yummy.
   
2. Berlin Orchards in Berlin (http://www.berlinorchards.com/) is also open daily 10-5 and a little later on the weekends, they also have barnyard animals and hayrides.


3. Shelburne Farm in Stow (http://www.shelburnefarm.com/) open daily 9-6. They have farm animals, pony rides, a moon bounce and on the weekends they have a hay mountain and toy tractor rallies.
   
4. Tougas Family Farm & Kitchen in Northboro (http://www.tougasfarm.com/) open daily. They have wagon rides to the orchards on the weekends, be sure to check out their apple crisp.


5. Belkin Family's Lookout Farm in Natick (http://www.lookoutfarm.com/) open daily 10-5. Lots of weekend activities, including train rides and an expanded childrens play area with burlap maze, hay pyramid, and pony/caterpillar rides.

There is also a unique place in Bolton, called the Nashoba Valley Winery (http://www.nashobawinery.com/) open daily 10-5, where you can pick apples as well as enjoy tasting some of their micro-brews and locally produced wines. Their restaurant is both excellent and has a spectacular setting so you can get great food with a view.

I hope you enjoy visiting some or all of these places.

Fall Foliage Touring in Massachusetts

The changing of the leaves from the many shades of summer green to the beautiful colors of autumn is the result of the tree's natural process of shifting the sugars and starches from their leaves to their roots for winter storage. The colors are always there, but as the green is removed the underlying colors are exposed to show their flaming glory before they return to the earth to nourish the tree in the following years.

Local TV stations will give you day-by-day updates on where the peak foliage colors are. Here are some of my favorite day trips to see mother nature in her crowning glory. Make sure you bring your camera!

My absolutely favorite trip to see the foliage is along Route 7 in the heart of the Berkshires. If you can only take a day to see the foliage, this is the drive you should take. The colors usually peak in the first two weeks of October. Best way to get there is to go west on Route 2 until you hit the end/NY border and then head south on Route 7. While there, be sure to take a detour on Route 20 into Hancock and the Shaker Village where you get a tremendous view of the Taconic Range to the west. It feels like you've gone back in history a couple hundred years.

Anywhere along the Connecticut river (starting in Hadley is usually my route and then going north until I hit Route 2) should be in full color from October first through the middle of the month. There are some spectacular farms and bottom-lands where you can also see local pheasants and woodcocks picking over the corn drops and asparagus berries.


Route 2 west, also known locally as the Mohawk Trail, is especially beautiful in the area between the Connecticut river and the Berkshires. While on your way there, be sure to stop at all the furniture outlets in Gardner, where you can find some great bargains, and don't forget to have lunch at the Ale House in the square. Once you get into the Berkshires, you should drive through Charlemont to Williamstown (surprize the family at the hairpin curve when you get to the Whitcomb summit, it's a blast).

In mid-October the foliage usually hits the north-shore of Boston, and a wonderful drive past the farms and coastal villages starts on Route 133, going through Essex, Ipswitch and Georgetown. There are usually little farm stands with local produce and baked goods and I rarely come back without a trunk-full of goodies.

Later in October, from the 15th pretty much until mid-November, your best foliage is found at the Cape (Cape Cod). Tour Route 6a starting in Hyannis or Yarmouth and go as far west as your time allows for a liesurely drive to enjoy the many shades of red, orange and gold. For an extra treat, if you're going south from the Boston area, you should get there by driving down Route 58 through Carver, as the cranberry bogs will be brilliant red and ripe with berries.


I think this year will be an excellent fall foilage season with some of the most brilliant colors we've had in years. So get out there and join the legions of "Leaf-Peepers" this year, you'll be glad you did.

The Market for Sudbury, Massachusetts as of September 2008

Hello and welcome to Mike the House Hunter's market analysis for the Sudbury, Massachusetts real estate market as of September 2008. Rather than the typical nominal Buyer/Seller market information, I am going to give you a complete picture of all segments of the Sudbury market. I hope you'll enjoy it and/or find it useful. BTW if I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

First, let's start with the Median House Prices


The median price is a useful statistic and is commonly used by the national market giants like Case-Schiller and others, as it shows the point at which half of the homes that sold in the time period are above and half of the homes are below.

As you can see on the chart the median for the year ending December 31, 2007 was $31,750 higher than we are seeing today.

Taking the difference between then and now you get a drop of 5.15% from last year, not great, but not catastrophic.

Now, let's go into more depth on the Sudbury market.

There are three distinct segments to this market: entry-level; mid-range; and luxury, and as might be expected, they've all behaved very differently this year.

Buyers and sellers of real estate in the Sudbury market need to look at four charts to truly understand what's happening for each of the price segments, noting that the figures shown are averages for the month.

• First, you need to see the number of units sold in each month that will give you an idea of the actual activity that is taking place.
  
• Next, you need to look at the monthly average price which will tell you the general part of the market that is moving off the shelves.
  
• Next, you need to look at the list to sales ratio which will give you the point at which sellers agree to sell and buyers agree to buy.
  
• And last, you need to look at the days on market, which will give you a general idea of the time it takes to sell one of these homes in today's market.

To Begin With,
let's look at the ENTRY LEVEL MARKET in Sudbury this year so far.
Monthly units sold: activity seems to have bottomed-out in early summer and is in a general recovery.

List to sales ratio: sellers and their agents needed most of the year to understand (and believe) that the market has changed and the prices have dropped. Once they figured that out, around May, the ratios climbed to just about their historical averages.

Monthly average price: As the number of units goes up, the prices go down - again the buyers, sellers and their agents seem to be getting the message.

Days on market: the time it takes to sell in this price point should not be this high, and reminds us all that a home is not a liquid investment.

Next, let's look at the MIDDLE LEVEL MARKET in Sudbury this year so far.

Monthly units sold: there is very little activity, and what activity there is seems to have bottomed-out in early summer and is in a general recovery, and although it may be too early to call, August figures may be predicting another slide.

List to sales ratio: sellers and their agents in this price range are still in denial that the market has dropped and this is evident in this chart.

Monthly average price: the few homes that are selling are in a very narrow range, which suggests that the traditional move-up buyers are having trouble selling their starter homes, and some of the buyers in this price point may well be first-time home buyers.

Days on market: the trend is generally upward, which is not encouraging if you're a seller, but great if you're a buyer with no house to sell.

And last, let's look at the LUXURY MARKET in Sudbury this year so far.

Monthly units sold: there is very little activity, and what activity there is seems to have spiked into a general recovery in June (it may be spurred by needing to get into a home before school starts), and although it's tough to predict the future on a three-month trend, August figures are looking like a steady downward slide.

List to sales ratio: luxury homes are very difficult to price, as once you get up to a certain square footage in size, the real differences in price are directly related to the level of detail, fit and finishes, updating, and desired amenities. This chart shows that buyers and sellers have very different ideas of what adds value, an age-old dilemma.

Monthly average price: the few homes that are selling are tending to be in the upper end of the range which sort of reflects the consolidation of wealth in our current economy. As a side note, there does not appear to be a market for properties above $2 million in Sudbury at this time.

Days on market: the trend is generally downward, which is very encouraging, but may be more a function of sellers who would like to sell but are waiting on the sidelines for a while for the market to recover.

To Summarize, All Real Estate Markets are LOCAL!

Just as the national statistics you hear on the news can't tell you how your local market is doing, buying or selling in different price points within a town can be a different experience. I hope the information I've presented here has increased your awareness of the inability to generalize even within a local market, and helped you to be a more informed consumer!


Mike Hunter, the House Hunter
Your Neighborhood Realtor for Sudbury and Metrowest Boston.

if I can be of help to you in buying or selling a home in Sudbury give me a call at 978-580-1069.

Coldwell Banker Residential Brokerage
447 Boston Post Rd, Sudbury, MA 01776
Tel: 978.580.1069
Blog: http://househunter3.blogspot.com
Email: Mike.Hunter@NEMoves.com
Web: www.HunterTheHouseHunter.com

Information deemed Reliable but not Guaranteed.

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