Monthly Archives: December 2006

Selecting a professional to assist you in your buying, selling, investing

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I have seen experienced real estate agents and brokers out there who, for what ever reason, lack of knowledge, incorrect knowledge, whatever, simply do not know what they are talking about. They make statements that are flat out wrong, they mislead, or simply don’t know.

For example, in my neck of the woods, there are several high end houses newly built on a point of land overlooking the Narragansett Bay and the Mount Hope Bridge. The community of people living on this point, called Common Fence Point, of all things, as a group, own some 42 acres of waterfront, beach, and conservation land. In point of fact, all the houses at the end of the “point” are not waterfront, since the community owns the land. Of course, few people would argue that they can use the beach in front of their house as they would if it were theirs, short of disallowing other neighbors to access it, and short of constructing buildings or piers or docks on it (after all, it is not theirs)

But many real estate agents, knowing this, never the less tell the buyers they show these homes to that they own the land, that it is waterfront… when confronted with the facts by a neighbor who happened to be the President of the Common Fence Point Improvement Association (the group that owns and manages the community owned lands) the real estate agent countered that “they could build a dock if they wanted to, because it is grand fathered in from the previous owner”

No such grand fathering could possibly exist.

First, there is no dock their now, and for something to be grand fathered, it must exist

Second, there is no easement or anything else in the deed that could possibly be construed as grand fathering any such thing

Third, there are deeds and easements and etc that clearly indicate that the land belongs to the association.

This is not only misleading to a potential buyer, but clearly not according to the facts.

Be careful people! Verify what is said by agents trying to sell you things that may not be real. Read our Buyers Place section, and especially, read our sections on agency for buyers and for every other agent!

Advertising Listings

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There are many things that go into advertising a house for sale: Newspaper ads, Internet advertising, print mailings, e-mailings, signage, word of mouth, broker tours, the multiple listing service, and much more. These are all quite expensive, and vary radically in effectiveness. How would you like your house advertised? There are several questions that should be answered BEFORE advertising your house for sale, either with or without a REALTOR. We have excerpted some comments from a friends blog below, credited at the end.

The real questions are: First, what are you advertising; Second, what is the goal of your advertising; and third, how productive is your advertising. Let’s take a look at the existing, traditional strategies behind why we advertise a listing of a house for sale the way we do.

  1. Our home selling clients expect it, we do it for them. They have a misunderstanding that placing ads in newspapers or online with a long list of features will help to sell their house. Nothing could be further from the truth. In fact, advertising their house in the traditional way may delay the sale and it is definitely costing you, the real estate agent, tens of thousands of dollars a year in lost income and wasted advertising dollars.
  2. Most real estate agents have the same misunderstanding. Why? Because that’s the way it’s always been taught and the client is conditioned to expect a nice ad with their house proudly displayed.

But think back to the times you went through the want ads looking for a house. You either X’d out what you weren’t interested in or you circled what might work. In effect what you were doing was eliminating properties that you thought wouldn’t work for you. The perfect house might be there, but you eliminated it from the list to see because the agent gave you too many details, so you could jump to a conclusion without seeing it.

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Enter the Buyers Market

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In Southeastern Massachusetts and Rhode Island, we have now entered a buyers market. But what exactly does that mean for Home Buyers? What it means is that Home Sellers are going to be more flexible on prices, concessions, and are generally going to sit on their Homes For Sale for a longer period of time than previous markets required. A year ago, average Days On Market for homes in our region was about 45 days… that was the average… in certain locations, properties sold much faster than that… It also means that, to some extent, because of the increase in Days on Market, the inventory of homes for sale has increased dramatically! More homes for sale, lower prices, and…

Also noteworthy is that mortgage rates are still at near all time lows.

If you have been pre-qualified for a home loan, now might be the perfect time to buy! Talk to our Realtor staff… they are experts in the Rhode Island Real Estate Market, and also in Southeastern Massachusetts Real Estate markets… We can help.

For real estate investors, this might be the perfect time to start buying property… prices low, finance costs still low… check out our Investment Property consulting services for more details. Or look at Waterfront Finance for ideas on how to buy investment real estate.

Offers to Buy, Counter Offers, Acceptance, Revisited

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When a person makes an offer to buy real estate, several things can happen: the seller can accept the offer as it stands, the seller can counter offer, or the seller can reject the offer. When a counter offer is made to the potential buyer, that buyer then has the ball in his court, and can either accept, counter, or reject. And so it goes, until either party agrees to the purchase.

Frequently, a counter offer is made by the seller because the offer asks for concessions on the price, or because the buyer feels that repairs should be made prior to the purchase, and asks for those repairs in the offer document. The seller can then either agree to the repairs or concessions, or counter them with his or her own take on the matter.

Once accepted, the offer is binding, except in the case of inspection failures, or the inability to gain satisfactory financing on the part of the buyer.

We have had instances where, due to the buyer’s insistence on bargaining, the seller rejects the offer in the final phase of the negotiation… The insistence on bargaining has sometimes resulted in the buyer losing the property to another buyer, who was less insistent.

Our point here is not that a buyer should not bargain, but that they should be aware that doing so can result in the loss of the property to another buyer. This means that as a buyer, you should look to a successful negotiation if you really want the house, and not stand on principle of simply insisting that bargaining is the end goal… We realize that many people feel that they should get the best deal they can… and it is our job to help them get it. But at some point in the negotiation, a limit is reached beyond which the other party will not be willing to go.

Care should be taken, and offers should be considered seriously, so that a good deal is made for all parties, and that pushing beyond a fair limit may not help the process and could in fact result in a loss of the property to another buyer. This process can be greatly assisted by a seasoned professional Real Estate agent. We strongly recommend using a buyers agent to assist in such negotiations. Please see our Making an Offer To Buy Real Estate pages for more detailed discussion.