Economy a Mixed Bag, Buy Smart.

Buying Real Estate

Last weeks’ national numbers on employment were not what the economists expected.  With things in Europe unstable, we’re only guessing where the economy will go from here.  Having said that, our area, the Metro West area of Boston continues to move in a positive direction.  Interest rates are still at record lows, so if you’re considering buying in this area it’s a good decision to do so.

Here are some very important things to think about when buying to guard against losing value after you buy that property.

 

1. Buy on a quiet street, no double lines.
2. Make sure the property has ample parking.
3. Buy a home close to public transportation or highway, but not on it.

 

If the street that the house you like has a lot of traffic or a double line, really consider this because it will most likely only get worse over time.  If you’re looking at a multi-family home with 2 units, each with 3 bedrooms and you only have a total of 3 parking spaces for the entire house, you’re going to have parking issues and that too, will only get worse over time.  Today many younger buyers are conscious of their “carbon foot print” because of this they use public transportation and we all want as short a commute as possible.

 

 

Thanks for reading,

Michael Spurr

Owner/Broker, Certified Buyer Representative

OK, You can find what’s for sale, but can you find what has sold and for how much?

Buying Real Estate

Many people ask me “Why do I need to use a “Buyer’s Agent” when I can go online and see all the listings for sale myself?  Well, it’s true. Anyone can go online and see what’s offered for sale.  But how do you know if the asking price is fair market value?  It’s very important to look at a list of sold properties for the last 6 months to understand where the market is at this time.  And it’s also important to look at the trend over the last few years.  Has the single family sales market in Newton hit bottom?  Are prices still falling?  NO, here are the numbers from the beginning of the recession:

 

Single Family Home Sales

 

                                    2008                2009                2010                2011

 

Number of sales                      499                  511                   518                        519

Average List Price                 $940k              $880k                   $922k              $945k

Median Sale Price                   $755k              $710k                    $744k              $760k

Days on Market                     75                       78                        76                     87

 

 

As you can see, the single family sales market hit bottom in 2009.  But this is because I’m an agent, I have access to a lot a data and I know how to read the data.  And you can also see that the market is back to a level of 2008!  This year should be very busy!

 

Thanks for reading,

Michael Spurr

Owner/Broker, Certified Buyer Representative

An Offer to Purchase is a Binding Contract

Buying Real Estate

In Massachusetts, all Real Estate Offer to Purchase contracts must be in writing with consideration, that is, with a reasonable deposit to bind the offer.  Most often, the consideration is a check made out to the listing agency for $1000.   In the case of McCarthy v Tobin 1998, the court ruled that the offer to purchase stated all terms & conditions material to the completed transaction, signed by both parties, is a binding contract.  I have heard some agents say “well, we can put in an offer and if you decide in a few days that you don’t like it, we can back out of the deal by finding something wrong in the inspection contingency.”  WRONG!  A buyer should have reasonable cause for withdrawing from the contract and can be held to that assumption.  When you make an offer to purchase, do so with the intention of buying the property.  In light of the legal significance of this binding offer, buyers (and sellers) are wise to consult an attorney to review the Offer to Purchase before they sign it.

 

Thanks for reading,

Michael Spurr

Owner/Broker, Cert. Buyer Representative

Rent Payments in Advance?

Real Estate Management

It is not uncommon for me to have a prospective tenant that is being transferred to the area and the company is paying the rent for the move.  Sometimes the company has a policy of paying several months at one time.  This kind of policy keeps their cost down.  Or someone moves from overseas and offers to pay a year upfront in order to negotiate a reduction in the monthly rent payment.  However, in Massachusetts this is illegal.  A landlord cannot ask for or accept more than first month’s rent, last month’s rent and a one month security deposit up front.  By doing so, the landlord open’s themselves up to a Chapter 93a violation.  Under Chapter 93a, triple damages are often imposed.  If you do the math, one year’s rent multiplied by three…not a pretty number!

After thinking about the restriction, it makes sense to me because if a tenant pays a year in advance and the apartment has mice, no heat or other problems, an unscrupulous owner might not take care of the issues because he’s already got his or her rent.

 

Rental Market Update

The activity over the last few months has been slower than normal.  Sept/Oct numbers were down and the average time on market is 38.5 days.

 

Thanks for reading!

Michael & Carla Spurr

Appliances Left Behind by Tenants…

Rentals & Property Management

You might have had a tenant that bought a house or condo and they left their washer and dryer behind because the old ones would not fit in the new condo or the house that they purchased came with a new set.  Whatever the reason, if there are appliances in the unit that you have not intended to maintain as part of the apartment, it’s important to put in writing that you are not responsible for the washer/dryer.  The same goes for an air conditioner or any other appliance left behind in the apartment.  If the washer/dryer are there and it’s not explained to the incoming tenants that you are quoting hookups, not the machines, you could be required to maintain or replace the machines if something happens to them.  Just by the units being there is “implied” that they are part of the apartment and the owner might be required to take care of them.

Recently I had a client had an issue with a refrigerator in a property that I manage.  She then explained that she didn’t want to repair or replace it.  I explained that 1) we didn’t explain in the lease that the tenant was responsible for the refrigerator and 2) refrigerators are expected to be supplied with the apartment.  Years ago people had their own frig.  Today, we all move so often that no one carries a frig with them because of the hassle, not so much for the cost.  Because of this fact, landlords now include the refrigerators with the apartment.

 

Thanks for reading!

Michael Spurr

Walk Softly and Carry a Big Stick

Property Management

Teddy Roosevelt said this many years ago.  Teddy was talking about international relations.  But I feel it still has relevance, and can be used in our industry too.

It’s rare in our area that we have to serve a tenant with a notice, but if you do here is some food for thought.  You have the option of hiring a constable or a sheriff to serve a notice.   Both carry a badge & side arm, cost the same, both have the same legal power in declaring that the notice was served.  However, in my opinion, the sheriff will have a much great effect because of the uniform and patrol car.  The constable most likely drives a car like similar to the rest of us.  And will deliver the notice in common street clothes.  The emotional impact of having person in uniform at your door is simply a stronger and more powerful statement.  Not to mention the neighbors are going to ask questions too.  This tip was given to me by a client I do business with.  I wish I could take all the credit on this little “pearl” of wisdom, but I have to thank Ralph, -thanks Ralph!

 

Thanks for reading!

Michael Spurr

Pricing: Sell Your Home, Not Other Properties!

Real Estate Sales

Setting the right asking price is one of the most important parts of what goes into a sale.  These parts include: location, condition, terms, the market, staging and price.  We cannot control location (a quiet street or a messy neighbor) or the market or terms (demand, competition, interest rates etc.).  And sometimes a major repair (condition, a new roof) is out of reach because of cash flow.  But we have control over the asking price and how it shows, or the staging of the property.  The city assessment is not the best place to go for setting the asking price because these assessments are often years behind the current market value.  That assessment can be high or low compared to the current market.  You should base the asking price on properties that have sold recently and that are like/kind to your property.  Adjustments in asking price can be made for a garage, size of lot, number of bathrooms etc.  A home is only worth what one person is willing to pay another person for that home.

Staging is the other part of the sale we can control.  Most agents & sellers don’t understand the impact of staging on the sale process.  Staging is not interior decorating or baking a pie before an open house.  Staging is enabling the buyers to envision themselves in the home.  I will explain the staging concept in my RE show coming up in a few weeks.  Remember, if your property is over-priced or does not show well, it may aid the sale of other properties on the market. Price to sell your property, not theirs!

 

Thanks for reading!

Michael Spurr