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Boston Real Estate Blog

John Ford Realty
137 Charles Street, Boston
realtyford@yahoo.com
617-595-3712
617-720-5454
151 Tremont Street
617-482-0010

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First-time homebuyer seminar held by city agency, June 16

The city of Boston’s Home Center is hosting a first-time homebuyer seminar.

It will be held at the South Boston Branch Library on June 16, from 6:30 – 8:30 PM. The address is 646 East Broadway, Boston, MA 02127.

Topics include: how to find money for a down payment, how to find the best mortgage loans, and how to search and find the perfect home.

More information: Boston Home Center

Home-buyer tax credit: a terrible idea

This is a terrible idea.

A temporary tax credit would be the best incentive to move hesitant home buyers into the market, the NATIONAL ASSOCIATION OF REALTORS® told Congress on Thursday.

NAR said the tactic has been successful before; A 1975 temporary tax credit helped to “clear an over-supply of newly constructed homes during an economic downturn.”

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, NAR treasurer and a partner in RSR, REALTORS®, in Lemoyne, Penn. “Failure to act quickly could further stall the housing market, hurting many of our members, who are predominantly small businesses owners and self-employed individuals.”

Testifying for NAR before the House Committee on Small Business, Helsel said there are “three critical features for an optimal home buyer tax credit.”

* The credit should apply to all residential real estate — not solely foreclosed properties.
* It should be temporary and only apply for a short period of time.
* It should provide higher income limits than those the House has imposed, particularly for single individuals.

“If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but also it could expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

Yes, giving people money might encourage them to act.

I don’t care.

This year, over 4.8 million homes will be sold. This is on par with the level of activity in the late 1990’s. Only during the past few, frenzied years did home sales skyrocket. And, only as a result of “easy money”.

Now that everyone is being more rational, sales have dropped to a more reasonable level.

Let’s let the free market run its course.

Lower home prices will bring people back into the market.

Oh, and by the way, if the home loan interest deduction isn’t enough of an incentive to get someone to buy a new home, I don’t see what else will. Enough with the giveaways.

Source: Tax Credit Would Get Buyers Off Fence – Realtor.org

Definitions of different types of agency relationships

Courtesy, National Association of Realtors

(In Massachusetts, most agents will be working for you, the seller, as a “listing agent” and for you, the buyer, as a “buyer’s agent”. Make sure you know, beforehand. If your agent is a “subagent”, he or she is working on behalf of the seller, not you.)

Understanding Agency Relationships

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:

Seller’s representative (also known as a listing agent or seller’s agent)

A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Buyer’s representative (also known as a buyer’s agent)

A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.

Subagent

A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

Disclosed dual agent

Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.

Designated agent (also called appointed agent)

This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.

Nonagency relationship (called, among other things, a transaction broker or facilitator)

Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

Learn all about buying a home (yes, people are buying)

MassHousing is holding a “home-buying” fair, May 30, in different towns across the Commonwealth.

Boston’s will be held at the Hynes.

The idea is, you go to the fair to learn more about taking out a loan. You can meet-up with some lenders.

Then, the next day, you go out to a bunch of open houses.

Many real estate agencies are scheduling a larger number of open houses than they would, otherwise, to take advantage of the opportunity.

(Only complaint I have is … they’re doing this after Memorial Day? That’s when the spring market ends, not begins …)

Source: Home fairs target working-class buyers – By Kimberly Blanton, The Boston Globe

Over-bids and multiple-bids back in vogue?

Anyone been involved in a situation where you competed with another buyer (or buyers) for the same property, and lost out either because you wouldn’t go as high as the competition, or the competition went above asking or removed all contingencies? Any sellers have to deal with this?

What happened, what did you think, and why is this happening, in a slower real estate market?

Housing is so cheap! (Part 2)

I read last week that, according to the Mass Association of Realtors, “affordability index” in the Greater Boston area is at the same level as 2001.

Meaning, based on average / median incomes and average / median home prices, the same number of people could afford to buy, in 2008, as could afford to buy, in 2001. (Or, something like that.)

I’m not saying it’s true or false (trust me, I have a problem with NAR/MAR etc., too), but what if it is? Does that mean anything to people? Do you feel housing is “cheaper” than it was one, two or three years ago? Will we ever feel housing is “cheap”?

A Consumer Guide to Buying and Selling a Home in Massachusetts

The Massachusetts Association of Realtors has put together a very useful pamphlet on buying and selling a home in Massachusetts. Lots of helpful information.

If you would like to download a copy to read later, click on the title, below (warning, .pdf).

A Consumers Guide to Buying and Selling a Home in Massachusetts

The purchase or sale of a home is one of the largest transactions that an individual makes during a lifetime. Following years of planning and saving, a buyer begins the process of ?nding the home of the buyer’s dreams. The search can provide a challenge and an opportunity. The assistance of a quali?ed real estate agent can transform complex negotiations into a most rewarding endeavor for buyer and seller. This pamphlet is provided as a consumer service to the home buying and selling public and demonstrates the Massachusetts REALTORS’® commitment to promoting home ownership opportunities for all citizens of the Commonwealth. For additional information on the home buying and selling process, we invite consumers to browse the public side of the Massachusetts Association of REALTORS®(MAR) web site at http://www.marealtor.com/. Community pro?les and practical information and guidelines for buyers and sellers of residential property are available on this site.

Role of the Real Estate Agent

Continue reading

Offer to purchase can be binding

Ugh.

No one likes airing dirty laundry, but when you’re talking lawsuits, you’re talking public record.

I was dong some research on the Suffolk Deeds site and came across a suit filed by a potential buyer against the seller of a unit in the Ritz Carlton towers (2 Avery Street).

The gist of it seems to be, the owner listed his property for sale through a real estate agent. Within a couple weeks, a buyer made an offer through his own agent, using the standard “Offer To Purchase” form used by just about every agent in the city (and world?).

The owner signed the offer.

There was subsequently a home inspection, and then, apparently, some negotiation on terms. The sides agreed to the changes, according to the lawsuit, and a draft purchase and sale contract was drawn up. The buyer signed the contract, and sent it on to the owner, within the time-frame set forth in the offer.

The owner did not sign the P&S.

The buyer is now suing to compel the owner to fulfill his obligations as set forth in the Offer. Meaning, sell him the unit.

What does this mean to you and me?

Well, I’m not an attorney.

What usually happens is, an offer to purchase is signed by buyer and seller, then a couple weeks later, a purchase & sale contract is signed. The P&S, for all intents and purposes, replaces the terms as set forth in the offer. If both sides sign a P&S, then the seller is compelled to close on the purchase. The buyer is compelled to close on the purchase. If the buyer doesn’t close on time, the seller can take any deposit put down upon signing of the P&S. If the seller doesn’t close on time, the buyer can sue. (The seller can sue the buyer, too, if the buyer doesn’t close, usually. Most often though, the seller just takes the deposit and walks away, to find another buyer.)

(The P&S contract should be specific in what happens if either side fails to comply with the contract – if you are a buyer, you want the contract to say something like, “if buyer doesn’t close, any deposits will be forfeited, but no further moneys will be required,” or something like that. This way, the seller can’t sue you for any out-of-pocket expenses or losses due to a subsequent sale at a lower price.)

However, whether or not the offer is binding is not as clearcut. There have been lawsuits over the years that have favored the rights of the buyer (this lawsuit references one of them, in fact), but each case is unique.

What you need to know if you’re buying real estate is, if you make an offer, and then back out for no reason, usually the only thing you’re going to lose is your $1,000 deposit. The seller, on the other hand, is almost always required to go through with the deal, no matter what. He/she can’t just return your $1,000 and say, “see you later”, not even if he/she gets a higher offer.

I don’t know what happened in this case, specifically. Did the seller get a better offer? Did the seller have second thoughts? Did the seller end up not having somewhere else to move?

Most buyers would get mad, then move on to another property, feeling it’s not worth the time, effort, or expense, of filing a lawsuit.

It will be interesting to see what happens!

(If you are interested in reading the documents in the lawsuit, search on Jackson Loomis on the Suffolk Deeds site.)

Economist sees lower prices in the future

Wait a minute!!! He wrote this, FIVE YEARS ago!

“What you are seeing are signs of a market peak at the high end,” said Robert Shiller, an economics professor at Yale University. “First there’s a rise in inventory, and then prices fall.”

If you had taken his advice in June, 2003, you would have missed out on one of the greatest wealth-creation periods in this nation’s history.

In fact, Mr Shiller (Dr?) was right only one year (so far) out of ten in his predictions for lower home prices.

A meteorologist does better than that.

A seismologist does better than that.

A major league baseball player does better than that. (Most of them, at least.)

Why do people trust him more? Because he was finally right?

People have preconceived notions, then fit the facts to what they believe.

We’re all the same that way, right?

(Sorry for this post, I had to be a Realtor for a minute.)

Source: For Luxury Properties, It’s A Buyer’s Market – By Thomas Grillo, The Boston Globe

Boston: best city in the WORLD!

We’re #1!

CNN has come out with a list of six cities where you might want to consider buying real estate (Boston, in this case, meaning “Greater Boston”, based on the map that accompanies the story):

One of the first places to experience the downturn, Beantown also appears to be among the first to rebound: In the last quarter of 2007, prices rose 1%. (Yes, because nothing makes you sound like a complete native like calling Boston, “Beantown”.)

Meanwhile, CBcampus.com (?!) and Apartment.com have compiled a list of the top ten cities for recent college graduates, and Boston ranks #2!

The “Top 10 Best Cities for Recent College Graduates” research was based on ranking the top U.S. cities with the highest concentration of young adults (age 20 – 24) from the U.S. Census Bureau, inventory of jobs requiring a degree and less than one year of experience from CBcampus.com, and the average cost of rent for a one-bedroom apartment from Apartments.com.

Here are the 10 best jump-start-your-life cities and the average cost of renting a one-bedroom apartment in them:

* Philadelphia, $962
* Boston, $1,343
* New York, $1,520
* Phoenix, $741
* Chicago, $1,029
* Dallas-Fort Worth, $755
* Los Angeles, $1,435
* Houston, $778
* Detroit, $699
* Atlanta, $773

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