by Laurie Cadigan on July 8, 2010
Good news continues for Sellers. The Massachusetts Association of REALTORS® (MAR) reported recently that sales of both single-family homes and condominiums experienced its largest May increase since the real estate boom. For the third straight month the inventory – the number of single-family homes for sale – also went up compared to the year before. However, Sellers should note that a good percentage of the May (and June) sales increase is due to the response to the Spring Tax Credit.
Locally, we have also experienced brisk sales through the Tax Credit period. Our clients, especially in Concord and Lincoln, have seen increased activity since the first of this year, especially during the Spring months. To summarize, the number of houses and condominiums selling in Massachusetts and in our area specifically is on the rise. We hope that prices will eventually follow the upward trend.
Along with the good news, I feel I must also offer a caution. The economic recovery may be slower than we hoped it would be and slower than expected according to the majority of market experts. Mortgage financing continues to be strained with guidelines severely tightened. Although prices appear to have stabilized, only homes considered to be priced for today’s Buyers, in a good location and condition, are getting activity.
We have all been frustrated and disappointed by the slow improvement of a lack luster market, but people should certainly highlight the success stories; most of which are from Sellers that stayed ahead of the market with regular price adjustments and repositioning and from Buyers that took advantage of great home values. We are coming on the summer months when activity naturally slows. Take this time to plan for the future, a future where for the short term, home prices are making a slow recovery.
by Ann Trudeau on June 5, 2010
Occasionally, The American Dream can become the American Nightmare. And I’m not even talking about the terrible problems people are facing because they owe more to the bank than their house is worth. No, I’m talking about the process of buying your dream home.
Finally, after saving enough money and searching for months to find the perfect home, you are ready to make an offer! And because of shrewd negotiating on the part of your Realtor, you get the house for a great price! Time to show the in-laws, let the kids pick out their rooms, and measure for drapes.
In Massachusetts, we have a two step process to buying a home. An offer is tendered and agreed to first and then a Purchase and Sale Agreement is signed. The offer will ensure that the most important issues are agreed upon by the Buyer and the Seller. These include price and the date of closing. If the Buyer has a major concern, then it might also be addressed in the offer. Some examples of this might be when a Buyer only wants to buy a house if it can be added onto or if horses are allowed or if the Seller needs to vacate the premises of a tenant. The offer will also let the Seller know if the Buyer is depending on getting a mortgage and if they want the house to pass certain inspections. 1-3% of the purchase price usually accompanies the offer.
Some of the more detailed items appear in the Purchase and Sale Agreement. For example, “Grass to be kept mowed until closing” or “Screens to accompany all windows”. Since the major items were agreed to in the offer, this document should fill in any small holes that remain. The deposit is usually increased to 5-10% at signing. But remember, everything is negotiable.
Can the Sellers ask for 20% down? Yes. Can they ask to use the deposit to buy screens? Yes. But the Seller doesn’t have to agree. This is one place the dream can become a nightmare. And often, emotions make the negotiating even more difficult. Continuing with the example of 20% down, the Buyer might say “Why don’t they trust me? I have a pre-approval.” The Buyer feels slighted.
Often times, the structural inspection will cause some additional negotiating. That leaky faucet in the basement must be fixed, according to the Buyer. The Seller has barely noticed it leaking, never uses the basement bathroom, and besides, the house was being sold “as is”! Reasonable people might agree to split the cost or one might decide that it’s not that big a deal and let it go. Or both parties might dig in their heels. “The deal is off!” Whatever human traits cause us to be stubborn have caused many a deal to fall apart over just such a small issue.
A very common sticking point these days is the mortgage. Everything has been agreed to; you can’t wait to move in tomorrow! And the bank calls. The title search has uncovered a problem in the ownership of the house, or they just discovered that you have only been in your current job for 1.5 years, or the appraisal came in $20,000 less than expected. What can you do?
Are these nightmares common? No, especially if you put together a good team of professionals to help you. We recommend you always use an attorney and a reputable lender. And remember that the term Realtor implies a certain standard for your main negotiator, the Real Estate Agent. Don’t let emotions make decisions. Use your team of experts and you’ll end up with the best home possible.