Bill Gassett's MA Real Estate Blog

Working as a Metrowest Massachusetts Realtor one of the questions I am asked most often is when I think the market will turn around? While I don't pretend to have a crystal ball or a magic hat and certainly am not an economist, it is easy for me to see that the Real Estate market in Metrowest Massachusetts will not be changing all that much in the next year.

Let me say that this is not about being a pessimist or being negative. This is about being very realistic and honest. Over the last six months I have gone on a number of listing interviews where the seller has decided not to sell their home because they want to wait "till the market comes back". One of the things that I find amusing is the belief by many that the market is going to come back overnight.

Here in Metrowest Massachusetts the Real Estate market peaked in the Spring of 2005. The years prior to 2005 were marked by a run up in home values like we had never seen before. There were years during this time where property values increased by over 10%. These values were not sustainable much like other areas around the country.

Depending on what town you are located in values have dropped by around 20-25% since the peak. Are we near the bottom? That is anybody's guess at this point but if I were a betting man my money would not be on a recovery this year.

One of the things that I find most fascinating about the decision process is a sellers unwillingness to part with the lost equity on their current home, even though they will be turning around and purchasing another home under the same conditions.

In the article I wrote selling your home in a buyers market this concept is explained in greater detail. It seems that people get so caught up in their loss that they forget that when they go ahead and buy another home that property would have also dropped in value.

Another way to rationalize the Real Estate market and what kind of appreciation is necessary to get back to where we were at the market peak is to look at stocks.

Lets say you purchase a stock for $100 dollars and it goes down by 25%. The stock is now worth $75 dollars. Many would incorrectly assume that if the stock goes back up by 25% it would be worth $100 again. WRONG - it would be worth $93.75. The stock needs to appreciate around 33.5% just to get back to break even! It works the same way with housing folks but on a larger scale.

If you owned a home worth $500,000 in the Spring of 2005 and it has dropped by 25% it is now worth $375,000. Well guess what if the market goes up 25% the home will be worth $468,750. Still a long way off from $500,000.

Most economists predict that once we do finally hit bottom we will only see a more historical norm of 2-3% yearly appreciation on our homes. Do the math - with this kind of reality check it is very easy to see why it is going to take a very long time to get to the levels were were at prior to the Real Estate correction.

Some food for thought. As of this writing interest rates are outstanding hovering near 5%. There is talk that due to the massive influx of capital into the credit system that interest rates could be headed to 4.5%!!

If you have wanted to sell your home for whatever reason and are not because you don't want to lose the equity you once had then you could be making a huge mistake.

Interest rates are at a once in a life time level. When the economy does finally improve interest rates this low will not last. Interest rates should be a big X factor in your decision making process.

Seriously folks it could be 5-10 years before we get back to the levels of 2005. What are the chances that interest rates will be where they are when that finally happens? When your home finally does get back to 2005 levels so will all the other homes in the area.

Stop worrying about lost equity if you really want to move.

______________________________________________________________________________________________________

About the Author: The above Real Estate information on the Metrowest Massachusetts Real Estate Market what does the future hold was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Realtor. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

Recent lobbying by the National Association of Realtors (NAR) and more than likely other online prominent educational postings at such places like Active Rain to preserve commissions led Fannie Mae to recently instruct all servicers NOT to cut Real Estate commissions on short sales. 

Fannie Mae sent an announcement to its servicers stating that as of March 1, 2009 negotiations on short sales commissions below the amount established by the listing agent is prohibited unless the commission exceeds 6 percent. 

Fannie Mae has recognized that negotiating commissions for short sales is unfair because of the extensive work required in many occasions that occur over many months and working with numerous buyers. Paying real estate agents fairly benefits Fannie Mae because Realtors play a crucial role in short sales. The fact that many banks would turn around after a foreclosure and offer commissions much higher did not make much sense.

So as a home seller considering a short sale you may be thinking why do I care if the Realtor gets paid a certain amount of commission? The answer is real simple. When selling your home as a short sale there have been a couple of major issues that continue to plague the industry.

Reason number one is short sales take in many instances an exceptionally long time to get approved. There are times where it takes up to six months just to get a yes or no answer on whether or not the lender will even accept the short sale!

Reason number two is that everything has been open to negotiation up until this point. As a Realtor working with an excellent buyer, the last thing you want to hear on top of waiting months and months is that your commission is being significantly cut.

In a challenging market, a Realtor is your best friend. Banks shouldn't be alienating the party who is an alie in getting the sale accomplished. While it is always in a Realtors best interest to work on their clients behalf, can you see why a Realtor would begin to get a complex and instruct their buyers to stay clear of a short sale?

While this measure taken by Fannie Mae is an important one, the government really needs to step up their efforts of putting pressure on lenders to do whatever is necessary to get these short sales moved along. Whether is more staffing or better trained staffing, the problem starts and ends at the banks.

The announcement also reminded servicers that third party approvals like private mortgage insurers may be required and can affect commissions. 

According to NAR work they are continuing to work with both Fannie Mae and Freddie Mac to strengthen their policies against reducing short sales commissions.

NAR's next steps include continued work with Freddie Mac and other mortgage providers to enact similar regulations that will ensure that Realtors are compensated fairly. 

Currently, Fannie Mae's policy only applies to loans it owns and guarantees, therefore if a loan is owned or guaranteed by another lender the commission policy of Fannie Mae does not apply.

In order to find out if Fannie Mae is servicing your loan you can either call and ask your lender or if they are not forthcoming with the information you can get in contact with Fannie Mae by filling out the Fannie Mae mortgage request form.

If you live in the Metrowest Massachusetts area and are considering a short sale I would welcome the opportunity to answer any questions you may have. I have been successfully closing short sales and work with a local Real Estate attorney to accomplish this goal. So far I am batting 1000% and have not had a short sale rejected.

Here are a few articles I have written that you may offer you some additional insight about short sales:

Foreclosure avoiding it through a short sale or loan modification

Short sales and deed in lieu of foreclosure

Ethics in a short sale Realtor responsibilities

______________________________________________________________________________________________________

About the Author: The above Real Estate information on Fannie Mae short sale commissions no longer cut was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

In a very competitive Real Estate market one of the things that is vital to your success is how well your home shows in relation to the rest of the inventory for sale. There are quite a few simple things that you can do to improve your chances and maybe put a few extra dollars in your pocket at the same time.

Maybe you are not even thinking about selling your home right now. When the time comes, however these lost cost improvements could make a difference.

1st impressions are always important so you want to make sure the entry to your home shines. As the buyer approaches the front door the last thing they want to see is an old worn door with cob webs hanging from above.

Most buyers are going to assume right of the bat if the home is not well maintained on the exterior, the interior will not be much better.

The Entry Way

Painting the front door or even replacing it if it is beyond paint can make a real difference. A nice shiny door set always stands out as well.

If you have vinyl siding and you have not cleaned it in a while mildew, dirt and grime can accumulate. Giving it a quick spray can surprisingly make a big difference in the appearance.

Plant Some Color

When selling your home planting some flowers around the entry can really make your property come alive. Choose a variety of colors that really stand out.

Adding a few potted plants if you have a covered entry or a large enough stoop is always a nice touch as well.

Fix Up The Baths

While remodeling a bath is one of the highest returning home improvement projects it may not be in the budget at the moment.

If however, you still have your gold toilets and sinks from the 70's it may be time to let go and move on the something that 99% of the population would like better.

Have a gold shower too? There are lower cost alternatives to ripping out the shower. There are specially made bath fitters that are designed to be put over a shower. New faucets are another lower cost item that can make a difference. At the moment silver/nickel is back in and brass is less popular.

Changing towel ranks, toilet paper holders and shower heads are also nice touches for short money.

Paint Those Walls

Painting is one of the cheapest most effective improvements you can make in your home especially if the colors are not neutral to begin with. I know you love the pink entry way and purple bathroom but most buyers will not.

I know what your thinking painting is cheap...the buyer can just do it themselves. Most people think this way, however, there is a large part of the population that does not have any vision. They need to see it done.

Painting your home off white or if you want to be slightly more bold in earth tones, is the best way to go. When selling your home all decisions should be done to appeal to the masses.

Address the flooring

A little more expensive but one of the better returning investments especially if you are still hanging on to the orange shag.

Even if you have more modern carpet but just don't have enough in the budget for new carpeting, a good cleaning by a professional can help out dramatically. The same can be said for wood floors as well.

A good scrubbing can go a long way.

Clean Your Windows/Treatments

Cleaning your windows can really spruce up your home especially if they have not been done in a while.

A bright home always shows far better than a dungeon. Removing heavy drapes and curtains can help as well, especially if they are out of date.

It is far better to have nothing than to have a pattern that was popular in the 80's.

Change Old Lighting

Lighting is one of those things that are subtle but believe me a buyer will notice if the lighting is really dated.

There are some great lights that can be purchased rather cheaply in many lighting stores especially if they are looking to restock their shelves with the latest model.

Even little things like upgrading to brighter bulbs can help. Most home buyers are turned off by dark unlit rooms.

Although a little more expensive to add, recessed lighting can really change the level of lighting in a room. Recessed light work really well in kitchen and baths.

Declutter Your Home

This one can really go a long way. Buyers like spacious rooms that they can envision their own belongings in. Getting rid of things that you know you will not be taking with you can really change the appearance of your home.

Hold a yard sale for those items that still hold value. Have other things you know you want to take with you but know they spoil how well your home shows? Get a PODs (portable storage on site) or even consider putting your stuff in a short term storage facility.

Not every improvement has to be expensive. Sometimes it is the small things you do that make the biggest difference in a buyers mind.

Have an interest in knowing what some of the more expensive home improvements return on your investment? See:

Best remodeling projects cost v.s value for your home

Getting ready to put your home on the market? Here are some other important articles that discuss the home selling process and how to increase your chances of success:

Preparing your Massachusetts home for the Spring selling season

Top ten mistakes to avoid when selling your Massachusetts home

Selling your home in a buyers market

______________________________________________________________________________________________________

About the Author: The above Real Estate information on Low cost improvements when selling a home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

The handling of multiple offers can be a tricky subject in Real Estate. Let's just say they are every buyer's agents nightmare and something that most listing agents look forward to. I say most because some Realtors try to avoid controversy at all costs and a multiple offer situation can sometimes get contentious.

Before getting into the art of handling multiple offers lets 1st discuss some basic parameters of an offer in general. In Massachusetts all offers whether verbal or written MUST be presented to the seller.

It is not at the listing brokers discretion to determine what is or isn't worth the sellers time to listen to. No matter how ridiculous an offer sounds, it is not up to the listing agent to be the judge of the offer. It is a violation of the code of ethics to withhold any offers whether verbal or written.

According to the Real Estate code of ethics Realtors shall submit offers and counter offers objectively and as quick as possible.

There are a few different scenario's in which a multiple offer situation could arise. You could have multiple offers come in around the same time in a given day in which case all of the offers should be presented to the seller at the same time or you could be in the middle of negotiations with a buyer and suddenly find out you are getting one or more additional offers.

In the 1st scenario the listing agent should be informing the buyers agents that there are multiple offers being presented to the seller. The buyer's agents at this point should be instructing their buyer clients to think about what their best offer on the property could potentially be.

One point that should be made clear is that a listing agent is not allowed to reveal the terms of a buyers offer to another buyer or their agent. The code of ethics requires that real estate agents treat prospective buyers honestly and fairly.

A Realtor who reveals the terms and conditions of a competing offer to one buyer gives that buyer an obvious advantage over the others which breaches the duty of fairness owed to the other buyers. 

In most circumstances it would be in the sellers best interest to instruct their listing agent to ask all parties to come back with their "best offer".

The seller stands to benefit greatly as none of the buyers has any idea what the other offers are. If the buyers want the home they will be forced to step up to the plate and possibly pay more than they originally expected to.

Once the seller has received all the bids back, it is to them how they would like to proceed. It is possible that the seller could do one of the following:

• Reject all of the offers. Maybe the price isn't high enough or the closing date does not work. It is up to the sellers discretion on what is acceptable or not.
• Reject one of the offers and work with the others. Maybe this buyers financing was too risky no matter how good all the other terms are. In this scenario the seller could make a counter-offer to one of the other offers.
• Accept one of the offers and reject the others. This is the most common scenario because in most multiple offer situations the seller ends up getting the terms they desire.

The second scenario in which you have already been negotiating an offer and additional offer/offers come in needs a lot more care from the sellers/listing agent, as this is a scenario where emotions can create major problems.

Let me 1st state emphatically that there does NOT necessarily need to be any special treatment given to the 1st offer. After all, as a sellers agent it is your fiduciary responsibility to get your seller client the best terms and conditions.

Is it possible that the buyers agent is going to have steam coming out of his or her ears when this scenario comes up?

It sure is and you better plan for it. There are plenty of Realtors that don't know any better and will give a sellers agent an earful.You need to stand your ground and calmly remind the other agent what your job entails as a listing broker.

The code of ethics is very clear on this issue. "When acting as listing brokers, Realtors shall continue to submit to the seller all offers and counter offers until closing or until execution of the contract unless the seller has waived this obligation in writing."

The goal as a listing agent should always be to get the sellers the best terms and conditions. Is it frustrating to be in this situation as a buyer's agent...you bet it is!! Rules are rules though and this is how the Real Estate game is played.

Multiple offers are always a sellers best friend so to speak. In most circumstances a seller is going to walk away with more than if the multiple offer situation did not exist. The seller will most likely be in the drivers seat if minor issues come up with inspections as well. The buyer may fear the seller jumping to one of the other buyers who lost out if they raise too many issues.

Looking at the mutiple offer situation from a buyer's agents point of view should be to find out exactly what the seller is expecting for terms and conditions. It should not be assumed that PRICE is going to be the only deciding factor. Maybe the closing date or the amount of money the buyer is financing is just as important to the seller.

Over the years I have been involved with many multiple offers where the seller did not choose the highest bid. An example on a few occasions has been one of the parties being more flexible with extending a closing date so the kids could finish school. As a buyers agent you should never loose site of what could be important to the seller.

Besides increasing the price here are a few examples of what the buyer could do to make their offer more attractive.

1. Shorten the time to get inspections done.
2. Shorten the mortgage contingency date or remove it all together if the buyer is 100% certain they will get approved.
3. Increase the escrow deposit over the normal standard for the area.

A few other thoughts about multiple offer scenerios....Make sure you document everything! As a Massachusetts Realtor for the past twenty three years, I have learned that being involved in a multiple offer situation can be a highly emotional event.

Buyers and their agents can get really ticked off when they are not the winning bid. It is wise to have your basis covered in the event someone accuses you of a wrong doing!

One last rule and I don't know why you would want to do this but it is not required that you inform other agents of the fact there is more than one offer on a property.

In fact it is at the SELLER'S sole discretion and choice whether this disclosure takes place. When the seller does give authorization, Realtors shall also disclose whether offers were obtained by the listing agent, another agent in the same company, or a cooperating broker.

Frankly I love getting multiple offers! I know when this occurs my seller clients are real happy and my list price to sale price ratio has gone up up up.

Thinking of selling your home in Massachusets? See....

Preparing your Massachusetts Home for the Spring selling season

Selling your home in a buyer's market

Top ten mistakes to avoid when selling your Massachusetts home

____________________________________________________________________________________________________

About the Author: The above Real Estate information on Handling multiple offer for a seller in Real Estate was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. 

Have a home to sell in Metrowest Mass? I have a passion for Real Estate and love to share my marketing expertise! 

For Metrowest Massachusetts Real Estate and homes see Metrowest Mass Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

Click here to view Bill Gassett's Real Estate profile.

Subscribe in a reader

SUBSCRIBE TO MY METROWEST HOMES BLOG via email.

Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.