Market Conditions in Saugus>Question Details

KP, Both Buyer and Seller in 01970

I am going to be an active home buyer by Summer of 2008 with a budget of $450,000 - $600,000 for a price

Asked by KP, 01970 Wed Mar 26, 2008

range for a new home. The problem is that I currently have a townhome / condo in Salem (likely valued around $265 - 275K), and I really do not want to go through the hassle of trying to sell that as you can imagine. I have seen multiple occassions where builders are offering to buy your property in exchange for purchasing their (typically much pricier) newly built home. My interest is in new properties in areas like Saugus where I have seen multiple brand new properties in my price range of $450-550K. My question is for brokers out there - do you see this happening more on the market with contractors/home builders looking to sell their new prop? I would see this as an attractive option to a Sell-Side broker as I would not have nor need a buy-side agent who would split up your fee, and additionally, I could potentially use this agent as my sell-side rep so they would get the benefit of two sell-side commisions. Obviously would make the process for me much easier as well-thoughts?

Help the community by answering this question:

Answers

11
Kevin - a few agents (myself included) and fewer developers use a "trade up" program aka buy this home and Ill buy yours program. Condos can be a challenge for this type of program especially if you have restrictions on owner occupancy / renting (depends on the program). If you are interested in such a program being offered by a builder ask about the details and review them carefully to make sure it is win option for you and your real estate needs. I would be happy to talk to you about my program and how it works if that will bring you some additional clarity. Feel free to contact me. You can also check out my site at http://www.SOLD120.com Good luck.
Mark Gracy
mark@gracyteam.com
(office) 978-984-3107
(direct) 978-861-4016 tel & fax
http://www.GracyTeam.com
Keller Williams Realty
Web Reference: http://www.GracyTeam.com
1 vote Thank Flag Link Thu Apr 3, 2008
Good morning, Kevin. I'd first like to advise you to make a good real estate decision based upon the right reasons. Selling your condo shouldn't be about the service fee that you PAY, it's about what you will NET. It's not even about the marketing that's promised. It's about finding the qualified buyer willing to will pay the highest possible price for your home. It's about your agent's negotiating skills, and the experience that you have during the transaction. Hiring the right Realtor is about building a relationship of trust.
Now to address your question. Kevin, you won't WIN on both transactions. The builder/developer won't pay (trade) top dollar for your condo, then sell you a home at a discount. He/she would have to purchase your condo at a serious discount in order to 'flip' it over in a short period of time. Unless he/she has a compelling reason for wanting a condo in his/her inventory, this is not a popular option for many builders/develpers. If the value you mentioned was provided to you by a real estate professional and you agree with the price, my best advice would be to put your condo on the market below your competition, sell it, and move onward. You may also consider a 'home-sale contingency' on a home that you may wish to buy. Builders/developers are more likely to consider that option in today's climate. Kevin, you have other options to choose. Why not start by contacting a Realtor you know you can trust, and consult with them. I'm certain that won't obligate you to them in any way, and you'll receive good advice. Feel free to contact me directly if can be of further assistance. Good luck, Kevin!
1 vote Thank Flag Link Thu Mar 27, 2008
Hi Kevin,
It would be a big risk for a builder to take a 2 bedroom condo in Salem in this market. Much like the "Sell Your Home In 70 Days Or We'll Buy It" ads, you had better read the fine print before making a decision.
The listing agent is normally offering out half of the commission to an agent that will work in your best interest and have fiduciary duties to you. Why is it that you don't want free representation?
1 vote Thank Flag Link Wed Mar 26, 2008
Kevin,

I have seen this happen once before, but it was with a developement that was almost completely sold. The builder was looking to close out the project so was very motivated. I think this would be the case with most builders - they want cash for the bulk of their units to pay the financing that they took out. Most of their profit is in the last units that they sell, so they can be a little more flexible and open to some creative financing. Of course they are probably going to want to get your condo at a good price so that they can at least cover costs, if not make a small profit. As far as the broker goes, there would definately be some financial advantages to getting both sell sides. The only thing I would recommend is that you get a good real estate attorney if you persue this because you are not getting the value, experience and protection of a Buyer's agent. Remember the Seller's agent is trying to get the best deal for the Seller and him/herself.

Jim Armstrong
Web Reference: http://SalemMassCondos.com
1 vote Thank Flag Link Wed Mar 26, 2008
Kevin - Your condos superior condition will most certainly work in your favor! Best of luck. Let me know if I can be of further service to you.
Mark Gracy
mark@gracyteam.com
(office) 978-984-3107
(direct) 978-861-4016 tel & fax
http://www.GracyTeam.com
Keller Williams Realty
Web Reference: http://www.GracyTeam.com
0 votes Thank Flag Link Fri Apr 4, 2008
I certainly realize my advantage as a buyer on these properties and will certainly look outside my upper range and given that I check out the MLS listings, I am aware of how long some of these properties have been listed and what type of leverage I will probably have to negotiate. I just need to ultimately figure out what kind of hit I'm willing to take on my property. Hopefully the agent representing any potential buyer for my property will be smart enough to point out the fact that paying $10,000 or more for my much nicer townhouse vs. the outdated one on the next street will utlimately only cost them an extra 50 bucks or so a month on a 30 year mortgage, if not less.
0 votes Thank Flag Link Fri Apr 4, 2008
Hi again Kevin,
You are right in thinking that the recent foreclosures of similar properties will impact your market value. Be flexible in your pricing. It sounds like you have done some of the right things to ensure your property shows well compared to your competition. Follow that up with a great marketing program and you will be good to go in getting on the market. The good news is that while you may not realize as much on the sale side as you might have a year or two ago, your purchase side should be adjusted by the current market to your advantage as a buyer. Best of luck in your selling and searching for your new home.
Mark Gracy
mark@gracyteam.com
(office) 978-984-3107
(direct) 978-861-4016 tel & fax
http://www.GracyTeam.com
Keller Williams Realty
Web Reference: http://searchmlsma.com
0 votes Thank Flag Link Fri Apr 4, 2008
I feel pretty comfortable with my situation despite the market - my townhouse is completely updated and would stand out vs. others on the market in my area, I know this for a fact. Obviously I am very frustrated since a couple of folks in the community foreclosed I believe and that will probably impact my sale. I am somewhat flexible with regards to pricing and assuming I used the same broker for buy and sell-side, I would think they would be quite motivated to find a buyer for my townhouse given that I would be in a position to move quickly and make them a nice buy-side fee on a $500K+ property. I am fairly certain that given waht I have seen on the market I would be looking in the towns of N.Reading, Saugus, Lynnfield, Swampscott, Marblehead, Wakefield as a first choice - with towns like Beverly, Danvers, Lynn (very limited areas), Stoneham being my "Second Tier" areas.
0 votes Thank Flag Link Fri Apr 4, 2008
Hi Kevin,
Have you looked at homes on the Cape yet? Have you seen something/anything you like? Maybe you could think about working backwards....i.e., look around and see what town you like, then what home you want, narrow it down a bit. Once you have a sense of what you really want, who's to say you may find your dream home at $300k - $400k. There are g-r-e-a-t values for this money. Then you wouldn't feel so pressured to sell right away, either.

In other words, rather than only thinking about trading up, trading down, net value, broker commissions, etc., maybe start with what you really want. Picture it. Look for it. Find it. Fall in love with it. This is your home. If it's what you truly want, the fiscal arrangements will probably all fall into place for you.
Genie
(Responding as an ordinary person and a real estate agent)
0 votes Thank Flag Link Thu Apr 3, 2008
Thanks for the answers - to be clear - this is not necessarily the option I would use. I was just curious since many of the homes I am looking at are new builds. I am also not looking for "top dollar" for my place - I live over in the Pickman Park Condos in Salem, I have put in the following in 2007 - New Windows, New Deck, New Wood Floors - Kitchen and Bathrooms were updated in 2005. I have seen tons of other units, and mine is much nicer than all I have seen. Like many, i would love to break even (I owe about $265K or so), but being that we are in a much more favorable financial position than I was in '04 when I bought the townhouse, I am just looking at options that dont' leave me stuck with the townhouse for 6-9 months and prevent us from buying a nice house. I'm sure this is a common story given the market conditions.
0 votes Thank Flag Link Thu Mar 27, 2008
i am not a broker
but sounds like a plan
hope it works

anyways

good luck
0 votes Thank Flag Link Wed Mar 26, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer