Identity is a complicated thing. One reader asked me whether agents are really like their clients. Other readers mentioned that they bought around people just like themselves. But what does this mean, just like me?

At a broker workshop, we were asked to spilt into pairs and spend a full five minutes describing the ideal client. Not in terms of wealth, but in terms of likes, dislikes, personality, time in life, and motivations.

I went on and on about enjoying couples who are really in love and take care of one another. I like smart people, funny people, and politically aware people. My specialty has been working with physicists, other scientists, and technically educated people who are daunted by the practical end of real estate decisions. Dumb people bore me. Mean people annoy me. I value intelligence, humor and compassion. I enjoy people with big, complex ideas in their heads.

Fresh Pond asked me:

Rona,

... is it allowed and/or ethical for a broker to list a house at, say, $100. Then, after it doesn't sell, drop the price to $80 and mention in the comments that parking is available for purchase separately at $20.
It gives the appearance that the home price fell 20% despite staying the same. And is, in my opinion, misleading at best.
What are your thoughts?

Brokers can change the asking price of a house any time to any number, if the seller directs them to do so. That’s the general rule: brokers must follow lawful instruction. If the marketing gets the seller better price and terms, the broker is doing his/her job. Marketing cannot hide a problem or misrepresent a property. It also cannot be intentionally deceptive. The question on the table is, “Is a fake price drop ethical?” Are these examples intentionally deceptive?

Your example I’m calling Tactic A. Here are some more tactics I see every year:

The addresses of the properties named in the multiple offer survey are in. I was going to wait until they all closed, but decided not to delay any further.

These were generated by readers. Most have very short market times, but a few were longer.

I agree with Charles that the asking/selling prices in isolation don't say anything about prices. However, there is something about these properties that made them successful using this tactic while other houses sat on the market.

The definition of a segmented market is one where some sectors are showing growth and others are declining. Binya showed that some areas are still growing. The presence of bidding wars shows that demand is not flat.

We are in a recession. The mortgage market is a mess. Real estate still has lots of life in it, in places, and is dormant or slow in other places. We have a segmented market, which is tricky to maneuver in. In this environment, please exercise caution and do not enter a bidding war without a firm handle on market value and your top price. When in doubt, pass on the house. There will be another one!

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I pay attention to your requests. Really!
Gus and others want me to talk about specific properties that have sold in competition. Once a property sells, I can tell you what it sold for and what happened in the marketing, since telling you can no longer interfere with a contract that is in play.

Below are the stories of four homes, all sold in competitive offer situations where I was personally involved in preparing an offer:

I wrote about neglect in houses last summer. If you buy a fixer-upper, you need sense of how deep the neglect is. Just like it costs more to fix bridges that are falling down than it does to maintain them, houses cost more to rehab than if they have been kept up, year after year.
Now your fellow readers share their experiences of buying neglected homes and bringing them into the 21st century. First timers, before you consider a fixer-upper, consider what readers say about the time and money it will cost you.

Nervous Nelson wrote:

Any advice --a checklist perhaps-- for due diligence on pending neighborhood or municipal changes potentially affecting a property's worth? ... Is there any good way to check for these kinds of things?

This brings up a great topic. We have touched on it before, but there is no harm in going there again.

As a buyer’s agent, I spend a silly amount of time reading the community newspapers and keeping my ear to local forums. As Charles pointed out, there is no simple way to know a neighborhood without following it over time (about two years.)

Julia Child’s house, where the kitchen went to Washington, encouraged Mark to mention that out-of-sync kitchens bother him.

My colleagues Hilda and Kathe and I used to make up definitions of real estate descriptions that we spot on listing sheets. Years ago, we defined “luxury kitchen” as “thin cherry cabinets, poorly laid granite, and stainless steel appliances.” Many of these kitchens were designed by people who never cook, which is obvious to anyone who tries to cook in them. Many are out-of-sync with the house.

The other thing we noticed was two to five year old houses with high-end appliances, which were hardly used. Some of these kitchens did not even have a set of pots suitable for the range.

My clients frequently tell me that they would prefer a functional kitchen to a slapped-together stereotype “luxury” kitchen. I regularly hear comments like, “I don’t need a granite kitchen, and I don’t want to pay for one.” Yet, anything that is being flipped has the requisite granite (or corian) kitchen. The floors may be tilting, but the kitchen is shiny.

Go figure.

Does this bother anyone besides me and Mark?

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I can’t seem to get away from real estate, no matter where I go. I played hooky one Saturday in June to attend a family event. There my cousin Bernice bent my ear about the two “McMansions” across the street from her on the north shore of Long Island. Across from Bernice, two houses sold at about the same time. Both ended up being torn down, replaced by houses that dwarfed the lot.

I know you have seen those “free” market assessment ads from agents that want to sell your house for you. Prospective listing agents provide these for sellers to show sellers how that agent intends to market the home, if hired.

Buyer’s agents also provide an initial meeting with prospective buyers. Here is what I think should be discussed:

Hey everyone, let’s really talk strategy this time! “1st timer” wants to know what to do.

If a house is listed at $369k in a solid town with good schools... How low would you go if you’re a first time homebuyer who is renting and has total flexibility.... The owner bought in 2000 for $255k.... Could I throw an offer of $315k -320k with no contingencies and be able to close immediately... How much might that be worth since I don’t have to sell a property...
Posted by 1st Timer Currently Renting

I read the local papers like they are my diary. I keep saying that real estate is a local market, I will not deny that larger economic and cultural issues will affect the way we live in the next 10-20 years. There are changes ahead in housing values.

The transportation cost increases this spring are already influencing buying and selling behavior. The past 20-30 years have been unusual in the availability of relatively cheap and safe travel options. Communication has become fast, cheap and available in many parts of the world. I know couples who set up homes in different cities and commute to see one another. Food from all over the globe finds its way to my table near Boston.

The conversation has turned to the topic of fixer-uppers. So, I have designed another survey. If you have done work on your old house, whether it was a fixer-upper or an OK-place-but-needed-something-along-the-way, you can help put some numbers to the projects.

Click Here to take survey

Thank you for your participation.

The Cambridge house where Julia Child lived and cooked for 40 years is on the market. Yours for just $4.35 million.

One big asterisk: The kitchen has been renovated completely. That's usually a good thing, but in this case it means nothing remains of the space most identified with Julia Child.

The original kitchen -- its counters raised for the comfort of the 6'2" chef -- is on display at the Smithsonian in Washington, D.C. It was shipped there after Child moved out of the home in 2001.

Other features, such as a wine cellar, apparently survive.

The listing agent, Jeffrey Goldman of Premier Properties of Boston, points out that the home also was occupied until 1916 by the once-famous Harvard philosopher Josiah Royce.

But don't be intimidated -- your name could be the third on the historical plaque.

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Sunday mornings, I figure out how to see the most likely property with the largest number of my clients without having an accident or otherwise wrecking havoc.

I started the in Cambridge. This was a second viewing for my buyer. The place was still filthy... There were a few buyers milling around.

Next we went to a little single family house in Arlington. It was clean and shiny, but not staged. It was swarmed with buyers. I was reminded a few times about how many people were there.

Then an overpriced single family in Arlington. The house was in nice shape, but the street and layout are atypical. Not many people there.

A question that came up from a couple of angles in the Lowballing entry was, “How do I do a CMA in a dynamic market?’

The first principle of a good CMA is to stay current and stay local. When local isn’t possible, sometimes there are parallel neighborhoods in a town. When current doesn’t work, I must resort to time-corrective calculations (usually done by town and type of property.)

The other part of the same questions is, “If the CMA is the center of pricing and negotiation, how do markets go up and down?”

I have worked through an up market, and I have worked in a down market and I have frequently found myself in a mixed market -- like we are in right now. (There are areas where prices are going up during a national recession. It boggles the mind, but it is real.)

I got a sad email recently underscoring a widespread problem: It isn't easy to find landlords willing to accept housing vouchers. Certainly not in neighborhoods where people live by choice.

The idea of a housing voucher is simple: Instead of providing public housing, the government promises to provide a share of the money necessary to rent a private apartment.

This seemed like a really good idea for two reasons: To get government out of the landlord business, and to scatter lower-income families into mixed-income neighborhoods.

The reality often is different:

"I am a holder of a voucher... I unfortunately do not make enough to pay for a mortgage or the entire amount of rent for my family but I do make a decent income. I do not have a record of destroying homes or paying my rent late. My issue is that because of my income status I am left with looking at homes in very unsafe neighborhoods and units that are highly outdated.

"I just wish that the condo-like home that I am willing to pay the agent and security deposit for is willing to accept me as a tenant. I cannot speak for all voucher holders but I am one that just wants a chance and really wants to understand why so many landlords are unwilling to give me a chance."

I suspect many readers will default to a widely-shared assumption that people with housing vouchers make riskier tenants. Maybe that's true. But all tenants need vetting. Is a housing voucher by itself reason enough to say 'No'?

What would make landlords more likely to say 'Yes'?

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To be a part of the survey on first-hand experience with bidding wars this year, please complete this survey. I will be publishing the results on Friday afternoon.

Click Here to take survey

Thank you!

Rona

A reader asked me a question about lead paint and condos. What happens if a unit is lead-safe, but the common area is not? How does the liability work? Since IANAL, I asked a legal colleague. She told me this:

Most people have sold or bought a used car. Suppose a car is blue-book priced at $4000. Many sellers will ask $4500 for it, and then bargain down to $4000. If the buyer has cash, or is otherwise hassle free, the seller may go down to $3800. But would a seller go down to $3500? Not likely, unless the car is really hard to sell, he/she really needs the cash, or he/she is under-the-gun to get it sold. The buyer may pay $4200 for it, but would find another car if the seller was stuck on $4500, unless the car was very special or rare.

The same holds for real estate transactions.

While I am waiting to hear from y’all about your experiences with multiple offers, I want to turn my attention to the other side of this market. Today, we will discuss the tired, overpriced and/or ugly stuff that is sitting on the market begging for a buyer’s attention. Today, we discuss lowballing.

First, I would like to define my terms: Low-balling is when a buyer makes an offer well below what the property is worth. One can make an offer well below asking that is simply a low offer, but reflects knowledge of what the property is worth. It may come in lower than true value, but high enough that the seller will say “OK.” If the seller has to sell and the price is fair and reasonable (even if it is $5-10,000 below what it is worth,) you may get a "yes." That is the “sweet spot” that I look for when I am negotiating for my buyers. Sellers do not give huge discounts to strangers. If he/she is selling for $50K less than it is worth, they will not sell or sell to a relative.

This season, I made two offers which were $79,000 below asking. Neither was a lowball. I made one at $30,000 below that was a lowball. Of those, only one of the -$79,000 was accepted.

I am enjoying a Kick A** cupcake with a candle in it to celebrate. Tuday marks one year since I began writing here at Boston.com Real Estate Now. My first entry was posted at 4:49, June 20, 2007. It was about the importance of knowing your limits before entering a competitive offer situation, AKA, a bidding war.

Remember the client I told you about who came in second of five offers on a condo? Well, they were the bridesmaid, not the bride, again this week. They were second of three offers. The top offer had the most flexibility regarding closing time. My buyers were unwilling to allow more than two months until closing.

That brings me to today’s topic:
What is the cost and risk of delaying a closing beyond the typical 4-6 weeks between offer and closing?

Last week, a landlord asked me to address the impact of the lead paint law on landlords.

The Massachusetts lead paint law is very clear: the owner of the property is responsible for making the property lead-safe if a child under six lives there. Once a child is born, that child has the right to a lead-safe environment. It is a health and safety law, just like a landlord must maintain a working toilet in a rental unit.
As a landlord, you must present this form to prospective tenants. Landlords may not discriminate against families with children. They cannot ask pregnant women or children to leave.

Sometimes, I feel like a marriage counselor, not a real estate agent when:

1. One partner is voicing an objection and the other one is ignoring it. Any time someone is not being heard.
2. I see a true difference of opinion.

Most of the time, when there is a difference of opinion, it is about cost or about comfort and style. If it is about cost, I side with the partner who wants to spend less and try to find the best house in that range before moving up. That one is easy!

When it comes to comfort and style, people put up with all kinds of things when they rent. They don’t want those things forever in a house. This is the advice I give:

There was a recurring moment in the process of shopping for a new home when the listing agent would hand me a copy of the glossy brochure, with its pretty pictures and fulsome phrases, and I would look, look, look for a floor plan...

I found a few precise plans, a few sketches. But mostly there was frustration, and time spent drawing my own plans, and more time later spent staring at my plans in puzzlement. Was the bathroom really half the size of the living room?

Which brings me to my question: Why on earth don't more sellers provide floor plans?

Rona recently described how hard it can be for buyers to keep track of all they have seen. Several of you responded with an obvious suggestion:

Wrote PTR, "Here's a problem that could easily be solved if agents and sellers drew up printed floor plans and offered them to prospective buyers when they come to look. That's standard in many parts of the world."

I completely agree. But in my experience floor plans are only common for new construction. The New York Times says they are common in New York. A recent post on this subject on Redfin's blog says they're common in Europe, too.

Not here.

Why?

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One of the challenges of modern real estate practice is communication. Everything happens quickly, through text messaging, cell phones and email. My clients are constantly on the move, which makes for some interesting moments.

This week, one of my clients needed to sign his Purchase and Sales agreement. The problem was that he was at work. “So what?” you say. Well, he works in the middle of the Gulf of Mexico. This contract needed to go by FedEx to Louisiana, then by helicopter to the oil rig, then back to Louisiana by chopper, and then us by FedEx.

As a buyer’s agent since 1991, I have seen shifts in what is “too common to negotiate about.” When I started, it was common to see old, wood, single-pane windows in most homes. Those with double-pane windows sold for high level of pay-back on improved windows. Now, homes with double-pane windows are normal. Homes with single-panes frequently sell slower and for less than similar homes with double-pane windows. The tide turned. Same thing happened with knob-and-tube wiring (from the 1920s.) Sometime in the 1990s, some insurance companies started to require that it be removed. More and more was removed, now it is the norm to remove it.

People seem to think that the commission system is inherently corrupt because the buyer’s agent takes a fee from the sale price, paid by the seller. Therefore, there must be a conflict if interest.

First: from the sale price.

In real estate transactions which come through a multiple listing service (MLS), the seller and seller’s agent offers a fee to entice other brokers to show and sell the home. When all is said and done, the typical agent pockets about 1 percent of the sale price at closing. Just for argument’s sake, we can pretend that agents don’t have expenses; their gas is free, so is their car, their insurance, their MLS service, their cell phones, lockboxes, and advertising. Let’s also pretend that they don’t split their commissions with their brokerage; everyone knows Coldwell Banker Residential Services is a charitable organization, so is ERA, Century 21 and RE/Max. Let’s inflate the pay to 3 percent, just to make the point. That is $30 more pay to the agent for every $1000 more that a buyer pays.

Small condo associations – those created in two- and three-family homes – are unique to the metro-Boston area. People in other parts of the country think we are nuts to own homes that way. Some days, I agree with them.

Why do people buy half-a house-condo? There are lots of reasons, but the biggest one is that they prefer the living space to other condos in the same price range. Most people do not want to have children in high-rise buildings; they prefer the yard, the neighborhood and the location where two- and three-family homes are found.

My entry about “buyer agents” who were getting incentives from builders led to a conversation about new construction. I am with LL when she wrote “New construction? That exists around here?”

There is a new reason to move. Until about three of four years ago; I heard the same old reasons to move:
we are getting married; I just got divorced; we are having a child; we are having another child; we have a child, or two, who need room to play; our children are grown, now we want to live the way we want; we hate the city and want to go to the suburbs; we hate the suburbs and want to go to the city; we hate our landlord; I want more room to (fill in the blank) garden, woodwork, weave, paint, cook, store my clothes, store my food, play in my yard...

The new reason to move is Dance Dance Revolution. I have had clients who want to move because they can’t play Dance Dance Revolution at home. I have had clients who want to move because someone above them plays Dance Dance Revolution.

Real estate agents are required to show consumers the agency disclosure before discussing a specific property with a prospective client. Have you seen it?

.... the real estate agent represents the buyer. The agent owes the buyer undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the buyer's interests first and negotiate for the best price and terms for their client, the buyer.

Read about what happens when so-called “buyer’s agents” are in the pocket of builders. It led to “buyer’s agents” making it seem easy for a renter to turn homeowner. “Buyer’s agents” offered one-stop shopping for a loan; so easy. This led to buyers with a 17% default rate.

Today, I had buyers in the middle of five-buyer competition. They came in second.

I was looking forward to a buyer’s market. I hear radio commercials about real estate services helping buyers and sellers in “this buyers market.” I am NOT pleased with what I am seeing in these hot spots. This is no way to buy a home.

This weekend, I showed or pre-viewed property in Bedford, Lexington, Concord, Winchester, Arlington, Newton and Needham.

I was caught in a thunderstorm and torrential rain in the north-west suburbs. There was a little hail, too. Later, in Newton, I was told that it had barely drizzled. The real estate market is something like that. The "weather" is very local. Anecdotal information is relevant to those who are shopping now for a home. Will the house-hunting readers share what you are seeing?

Here's an update on my morning post. The folks at Radar Logic were kind enough to provide specific data for the Boston area.

They report that 11.1 percent of sales in Boston in March were "motivated," basically meaning resales of foreclosed properties. That's up from 4.4 percent of sales in March last year.

Mortgage companies increasingly are offering foreclosed homes at sharp discounts, undercutting the market for other homes in the same communities. In Boston, the price per square foot on "motivated sales" dived 19.3 percent in March compared to the same month last year, according to Radar Logic. For other sales, the price decline was only 8.4 percent.

Radar Logic calculates that foreclosures are reselling at an average discount of 40 percent compared to other properties on the market. That's the kind of difference that can make it awfully hard for ordinary sellers to find a buyer.

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Mortgage companies owned 600,000 homes nationwide at the end of April, up from 493,000 at the end of January, according to the Wall Street Journal. To sell those properties, companies are cutting prices more deeply and more quickly.

Consider the case of Countrywide Home Loans, the nation's largest mortgage company. The properties offered for sale by the company are tracked and charted on a Web site called the Countrywide Foreclosures Blog. Countrywide currently has 297 properties on the market in Massachusetts, according to the blog. The average asking price is $174,628, well below the state's average sales price. And as the chart at right shows, the average is falling -- in large part because Countrywide keeps cutting the asking price on homes that don't sell.

Companies are much more systematic about selling properties than the typical seller. The company generally seeks the opinion of several real estate professionals to set the initial asking price. Then it reduces that price by a fixed amount if the house fails to sell during a predetermined period. I have heard that in the early days of the downturn, companies would leave the price unchanged for 90 days or more, then cut it by a few percentage points and wait another 90 days. The Journal says some companies now are cutting prices every 20 days.

This glut of discounted properties is weighing most heavily on the markets with the most foreclosures. A new report from Radar Logic finds "motivated sales" -- basically, resales of foreclosed homes or sales at a discount to avoid foreclosure -- comprised about a quarter of the market in Phoenix in March. In Los Angeles, the share was 29 percent. In San Francisco, it was only 9 percent.

I've asked Radar Logic for Boston-area data and I'll update when I get it, but past reports from Movoto, another analytics firm, show such properties accounted for about 6 percent of the homes for sale in Massachusetts at the end of April.

Obviously, in some communities the share -- and the impact -- is much larger.

Interested in buying a foreclosed property? Warren Group offers comprehensive listings for a fee. Trulia shows many listings free.

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If the readers who think real estate agency is a dying art turn out to be right, I know what I want to do next. On Saturday night, I went to the Museum of Bad Art in Dedham. There I found my retirement career: I want the curate the National Treasury of Dubious Home Decoration.

As a broker, I have had tons of experience. I put the awful decorating in a few categories:

David Leonhardt of the New York Times, among the most prominent apostles for renting, wrote a piece this week explaining why he just bought a home in Washington, D.C. The crux is that falling home prices and rising rents have made ownership relatively more affordable.

"I’m still not sure how good our timing was....

"In fact, if you’re now renting — almost anywhere — and do not need to move, I’d probably recommend that you wait to buy. The market is still coming your way.

"But it’s O.K. with me if our timing wasn’t perfect. After several years of reporting on the housing market, I’m convinced that the most common real estate mistake is viewing a house first as a financial investment and only second as a home."

Leonhardt is a numbers guy, and he grounds the decision in a simple comparison I've written about before. I'll let him describe it: "You find two similar houses, one for sale and the other for rent, and divide the sale price by the annual rent. You can call the result the rent ratio."

More sophisticated versions of this comparison adjust the cost of ownership by considering factors such as the down payment and the mortgage interest rate, which can differentiate the actual cost of ownership for two homes bought at the same price. The Times offers a calculator on its Web site.

Leonhardt writes that a rent ratio above 20 means ownership is very expensive compared to renting.

"At current mortgage rates, for example, a $500,000 house would typically bring monthly expenses of about $3,000 (taking into account taxes, repairs, a typical down payment and, yes, the mortgage deduction). When the rent ratio is 20, that same house could be rented for only about $2,000 a month.

"There are two problems with buying a house in this situation. The first, plainly, is the extra $1,000 you’re paying each month for the privilege of owning, on top of the thousands of dollars you spent on closing costs. The second problem is that a rent ratio above 20 is a good indication of a bubble. When the prices of houses get out of line with the competition’s prices — that is, those in the rental market — a correction is coming."

For both of these reasons, Leonhardt says he probably still wouldn't buy a home in Boston, where the rent ratio generally remains above 20.

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This evening, you get a cautionary tale. Sellers, be very careful who you hire!

I am working with a lovely couple from the mid-west who are buying a retirement home in this area. I am showing them about eight properties a day for the week, then they will decide what to buy.

There is a building that they like. There are four condos for sale there. There are four agents selling them. Tuesday, I called for appointments to show these condos on Thursday.

At the current pace, seven of every 1,000 residential properties in Massachusetts will be foreclosed this year. And fresh numbers from Warren Group show that the pace continues to accelerate: 800 in January, 860 in February, 1,167 in March, 1,334 in April...

All told, there have been 4,161 foreclosures so far this year, compared with 329 foreclosures during the first four months of 2005.

Some foreclosures are happening almost everywhere. The list of towns with no foreclosures so far this year now numbers 73, down from 95 last month. Winchester is now the largest unscathed place.

But most foreclosures are happening in the old industrial cities. I've ranked cities by the highest number of projected foreclosures per 1,000 residential properties. The first column shows the projected foreclosure total, the second column shows the rate:

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Not to get too political, but I do not think that “Don’t ask; don’t tell” is a good policy. It does not work in the military; it does not work in home buying.

The place where home buyers get hit with “Don’t ask, don’t tell” is in regard to lead paint. Lead paint was used in housing for a long time. Why? Because it lasts longer; it was the good stuff! It stopped being made in 1978 for housing. However, some of the paint was still around for years to come. Lead paint shows up on the exterior, the windows and on painted stairs and floors. Most disclosures presented to buyers at the point of Offer say the seller does not know if there is lead paint because the house was never tested. “Don’t ask; don’t tell.” The nicer the old house, the more likely there will be lead paint someplace.

Fresh data from Warren Group shows Massachusetts single-family sales and median prices both dropped 12 percent in April compared to the same month last year.

The price drop was the steepest since Warren started counting in 1987.

As in past months, however, some towns continue to buck the trend. At right is the latest installment of my homemade monthly map showing Boston-area towns where prices failed to fall in April. Topping the list are Winchester, where prices are up 38 percent this year; Brookline, up 20 percent; and Belmont, up 11 percent. (Regular readers will recall that the map shows only towns with at least 10 sales per month -- at least 40 sales so far this year.)

It is worth noting that the number of sales is down pretty much everywhere.

We've talked a lot on this blog about the reasons some towns are better insulated against price declines. The towns on this list -- which, while not identical to the list in previous months, remain fairly consistent -- tend to share a few things in common: Home prices and incomes are higher than for the region as a whole; the local schools are better; the commute to Boston is shorter; and the housing stock is mostly single-family.

Which factors are causal and which are coincidental, I don't know.

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A. B.-G. wrote about her market analysis problem in Dorchester in my last entry. Here’s my answer:

There are a lot of problems for me with your question:
1. Why do you trust me more than your agent? Do you have a contract with him/her? Do you know what to expect from him or her? I am a total stranger to you, really. He or she has a stake in getting you a place to buy. His or her behavior should show that getting you a good place at a good price is the goal. Your agent should be looking at the long-term care of his/her business: clients who make good decisions tell their friends. Clients who are hustled into a bad place tell even more of their friends! If your agent is not doing that, you have agent mis-match.
2. I don't work in the city of Boston, so there are a lot of specifics to consider there that I don't know enough about to help you. Questions of local density, distance from the MBTA, style of properties nearby, and level of area gentrification. These all factor into a market analysis along with the time on the market question.

To answer the time question:

I have been talking about market analysis and how asking prices are unreliable. As some of you mentioned, a lot of the data I use is public. For the do-it-yourselfers, here is the next set of questions that come to mind before making an offer. Good buyer’s agents ask these, and some others:

Local trends:
Is there suddenly a lot of sales in a complex? or in a neighborhood? This could indicate a special assessment or neighborhood problem.
Is the town and neighborhood stable? going down? going up?
What is average time on the market and how is this house fairing?
What is the price drop history?
Are there lots of places like this sitting on the market?

Then find out what you can about the sellers.
Have they moved? What are their carrying costs? Are they in foreclosure or pre-foreclosure? Is there a reason they need to sell fast, or can they sit there with their silly-inflated price until some fool buys the place?

If you know this stuff, you can negotiate from an informed and powerful place.

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Last week, Mish wrote:

Limited inventory in our price range, so when something nice is up, it goes within a day or two... This is in homes in the ‘burbs for upper six figures. ...There have got to be others out there like us. The way some inventory is moving so fast, makes me think that people out there are really looking to buy (pent up demand).

I will not often put my oar in regarding Binyamin's discussions, but this one is relevant to my clientèle, and therefore, my audience.

The most commons source for square footage on listing sheets is public records. Public records state perimeter measure of the outside of the foundation. That counts space inside walls, closets, under stairs. This is made worse by the garbage-in-garbage-out quality to the information in the public records.

This post is basically an advice column: I advise that you listen to a recent broadcast of This American Life, a public radio program that generally celebrates the mundane, but recently dipped into the arcane -- an hourlong explanation of the mortgage crisis. Irresistible, right?

The show opens at an awards banquet for Wall Street executives who make mortgages into securities. It closes with investors looking at customer records on a computer screen and talking about a person who fell behind 30 days, then 60, then back to 30, trying to hold on... In between, the stars include a mortgage salesman making $25,000 a month and partying with B-list movie stars, a mortgage executive who had been a bartender the week before, and some truly sketchy types. It's great radio.

I mention this apropos of today's news that the Federal government is close to finalizing its latest voluntary participation plan for lenders who want to help borrowers.

One of the biggest mistakes you can make, as a buyer, it to try to negotiate based on an asking price. Some asking prices reflect the market value, plus a little for negotiation. Some are just a fantasy that the seller wants to try.

Below is the market history of a real house.

More sellers seem to face competition from others on the same street. I recently walked along a block with units for sale in three consecutive triple-deckers. Michael Royce, the Concord homeowner I wrote about Friday, says six homes are for sale on his street.

With relatively few buyers in the market right now, it is particularly painful to consider the possibility that someone might like your neighborhood, your street, even the general style of your home -- and then make an offer on the home next door.

Boston largely is sheltered from the worst version of this problem, which occurs in new developments when several identical homes can go on the market at the same time. Our housing stock tends to be more diverse, in part because -- like twins -- identical homes tend to grow apart with age. A row of Dorchester triple-deckers built to the same plan a hundred years ago often look remarkably different now.

At the same time, the very density of Boston increases the odds that buyers will have other options in the same neighborhood.

What is a seller to do?

Why is spring such a great time to sell a house? Because everything looks better after the leaves, grass and flowers come out. From an energy conservation point of view, it is also easier to avoid demonstrating the cold spots in a house.

Buyers, watch for these things when house hunting in the spring and summer:

1. Attic insulation – if the insulation is good, chances are it will be so hot in the attic that you can’t stay there.
2. Floor insulation – watch out for finished porches with no foundations, and rooms over garages. Are they sufficiently insulated?
3. Is one part of the house much hotter than the rest of the house? Chances are, it will be much colder in winter, too.

Home owners, what did you find the first winter in your house?

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This is not an easy time to sell a home. I was curious to speak with someone trying it without a real estate agent.

FSBO.com, a listings site, is coordinating a "National Open House Day" both days this weekend for homes for-sale-by-owner. Don't get too excited. There is only one participating home in the Boston area, and the owners of that Arlington home didn't want to speak with me.

I spoke instead with Michael Royce, who is trying to sell a home in Concord, N.H. Royce tells quite a story. He built the home himself in the 1970s, left it to his first wife following their divorce, then bought it back from a subsequent owner in 1997 and has lived there since with his second wife.

A few years ago, the couple started talking about retirement. They decided they wanted to move to a Concord condo so they could travel more easily. They put their house on the market: A four-bedroom, two-bath ranch with about 1,800 square feet of living space and an attached two-car garage, listed for $394,000.

It has been on the market for two years.

Since the sellers and buyers make their own decisions, based on advice from the brokers, sometimes they do not act in their own financial interests. The process of buying real estate can be seen as a competition between the buyer and the seller. Or it could be a competition between the buyer and all other buyers. Sometimes, it is not a competition at all. Sometimes the seller is happy with what they got and the buyer is happy with what they had to pay.

Two fresh examples of square footage inflation in real estate listings, provided by a woman shopping for a home in Bay Village.

The first property is a townhouse at 22 Shawmut Street. City records list the living area as 1,116 square feet. The initial real estate listing shows 1,260 square feet. And the current listing shows 1,360 square feet.

The shopper, who doesn't want to be named because she's still looking for a home in the neighborhood, says she confronted the listing agent about the discrepancy and asked to measure the property herself. The result? About 980 square feet. (The city measures the outside walls of the building, while this shopper took a tape measure to the interior walls, which may explain why her number is smaller than even the city's.)

What's going on? The listing agent, Kyle Hancock of Gibson/Sotheby's International Realty, says the city numbers are wrong. She said the listing -- the second listing, which shows 1,360 square feet -- is based on an appraisal.

The second property also is a townhouse, at 2 Lyndeboro Place. City records list the living area as 1,253 square feet. And that's exactly the number in the initial real estate listing, which was still posted in a ground-floor window as of Tuesday morning. But an updated online listing for the property shows 1,885 square feet.

I have seen this before, and I will see it again:

Last week, one of my clients returned to house-hunting after a nine-month break. She was pleased to see a condo on the Multiple Listing Service (MLS) which she liked last year.
We get there. Now it is empty; it doesn’t look as nice. The halls look shabby...but that’s not all that has changed.

I began seeing this about three years ago. Now I see it much more frequently:
Sellers who cut corners when they market their homes for sale. Back in the last huge seller’s market, these mistakes were less costly, but now sellers lose time and money, and sometimes their homes.

Hi, I'm Rona Fischman. From June 2007 to February 2008, I was on this blog with a host of other people. Then Binyamin took over as the solo voice. I'm back and happy to be here.

Binyamin will continue to post each weekday morning, and I'll be posting in the afternoon.

Think of me as Virgil, the guy who showed Dante through Hell. I'm here to guide you through real estate hell, or heaven. I've seen both. What have you seen in real estate hell? or heaven? What guidance do you wish you got when you bought? What guidance do you want as you approach the underworld? Let me know.

Readers who know me already know these things: I am an exclusive buyers agent. I give real estate advice. I am not an economist, I do not make predictions, and I do not think buying is for everyone. I regularly tell people not to buy. I work for people who see buying a home as a positive step in their lives and want to make their best decisions.

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Six percent of the homes for sale in Massachusetts at the end of April were either resales of recent foreclosures or "short sales" -- basically, last-ditch attempts to sell a property to avoid foreclosure. That's a high level by historical standards, but in better news, it is the same high level for the third straight month.

The data comes from Movoto, a real estate search site. The full report is available here, including data by county:

Essex: 5.5 percent
Middlesex: 5.4 percent
Norfolk: 5.3 percent
Suffolk: 7.7 percent

Part of the reason distressed properties are not swamping the market is that the market continues to expand. More "troubled homes," but also more homes from good families. The number of listed properties in the Boston area rose about 6 percent in April. Altos Research says that was the largest increase for any of the 20 major markets it tracks.

In another sign of seller confidence, asking prices also are on the rise. Altos says average asking prices in the Boston area ticked up 1.2 percent comparing the end of April to the end of March.

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One natural consequence of the housing downturn: Fewer people are searching the Internet for information about homes.

A researcher for Hitwise, which analyzes Internet traffic, charted searches including the term "homes for sale" as a share of all Internet searches. The researcher, Heather Hopkins, writes that "homes for sale" is the most commonly used real estate search term, excluding searches for a particular brand name.

The chart above shows the trend in search data (the blue line) compared to the pace of home sales (the orange line) as reported by the National Association of Realtors.

Perhaps the most interesting question about this data, raised by a blogger at trade pub Inman News, is whether search volume can be used as a leading indicator of sales activity.

In other words, will the first sign of a real estate recovery be more people typing "homes for sale" into Google?

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Prices are falling. Sellers are eager to sell. And you, the buyer, want to get the best possible deal. How low can you go? That's the question posed by a piece on Bankrate.com, which explores the gentle art of making a lowball offer.

First off, I avoid giving real estate advice, but I'll offer this freely: If you like a house, and there is a price you're sure you'd be happy to pay, why not share that price with the seller and see what they say?

Making a bid works the same way as asking for a date: The worst thing you'll hear is laughter.

Home prices statewide may be down, but the cost of a home still is rising in Winchester, Arlington and a handful of other Massachusetts towns. You can click here for a spreadsheet showing single-family sales data for every town in the state, and here for a similar spreadsheet of condominium sales data. The information comes from Warren Group, which deserves the thanks of every Massachusetts real estate wonk. There is no equivalent data source in many states.

The map shows the small group of cities and towns where median single-family sales prices increased during the first three months of 2008, compared to the same period last year. (Membership requires a minimum of 30 sales in 2008.)

Here are the Top 5, statewide:

Winchester, up 45 percent
North Andover, 25 percent
Chatham, 22 percent
Arlington, 17 percent
Holden, 10 percent

It's worth noting that the number of sales is down in each of these towns, which may mean the market simply is lopsided toward high-dollar transactions.

The overall pattern returns me to my musings last month about the possibility that towns closer to Boston are becoming more desirable than towns even one step further from the city. Most striking to me is that prices in Boston proper actually rose last month, for single-family homes and condominiums. Basically, Boston and its closest suburbs are chugging along, while almost everything outside that tight cluster looks green around the gills.

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Curt Schilling has put his 26-acre Medfield estate on the market for $8 million. He bought the place for $4.5 million in 2004. So he's hoping nearly to double his money on a home he bought near the peak of the market. Well, no one has ever accused Curt Schilling of lacking confidence.

Note to Red Sox fans: He's not leaving Boston. He's not even leaving Medfield. The couple plans to buy a lot in a Medfield subdivision and build a home there. They want more neighbors, according to their real estate agent, according to Globe West.

The house is sized for the athletic ego. Drew Bledsoe was the previous owner.

It has eight bathrooms, a pool, a multi-purpose athletic court that can be configured for tennis, basketball, or even ice hockey... Other amenities include an eight-car garage, a spa, multiple fireplaces, a game room, a library, a home theater room, and centralized systems for security, heat, air conditioning, and vacuuming.

Sounds nice enough, but I wonder whether a developer might buy it as a teardown. Just look at all that space within an hour of Boston.

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The single-family homes selling most quickly in the Boston area share three characteristics, according to the fine folks at Redfin: They are 7 percent larger than other recently sold homes, they sit on lots that are 13 percent larger, and they are 78 percent more expensive.

Perhaps not surprisingly these quick-selling homes -- defined as homes that sold within seven days -- also tend to be significantly older, often predating World War II.

Redfin is a discount real estate brokerage with a penchant for number-crunching. In this case, they looked at about 9,000 single-family sales in the Boston area over the last six months and found the cities and towns where the most homes sold within seven days of being listed.

Twenty-seven Newton homes sold within seven days, the largest number in the Boston area. The rest of the top five were Boston (21 homes), Arlington (18), Brockton (16) and Needham (14). Arlington ranks first in the share of all sales within seven days (23 percent), followed by Needham (20 percent) and Newton (16 percent). [A note to the people obsessed with Arlington: We don't publish these numbers to drive you crazy. Honest.]

Redfin then took all sales in these towns and compared properties that sold within seven days to those that took longer. Their results are described above. They draw the same conclusion that I would: The upper end of the Boston market remains relatively strong.

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A California jury has ruled against a couple who sued their real estate agent because they overpaid for their home.

Vern and Marty Ummel paid $1.2 million for a four-bedroom house in the summer of 2005. The New York Times reported in January that the couple soon learned several same-sized, same-looking homes in the same McMansion subdivision had recently sold for considerably less. The couple came to believe they'd overpaid by $150,000.

Marty Ummel spent a year picketing the offices of the real estate agent's company. Then the couple sued the agent for withholding and distorting information. They said he was too eager to earn a $30,000 commission.

The real estate agent's defense? "The lady's a nut job. I didn't do anything wrong."

Last week, a jury sided with the agent after two hours of deliberation. The forewoman told the San Diego Union-Tribune that the Ummels were responsible for their own decisions.

"In any kind of purchase, especially one that big – and most of us have had our own situations w