The first-time home buyer’s tax credit has now become an any-home buyer’s tax credit. This credit has been a recurring topic here. I find this credit bad for buyers, in the long run. I think the tax credit is a way to stimulate demand. Increased demand is not in buyers’ interest.

Late in September this year, I went out of a limb. Not only did I predict the continuation of the tax credit, I named the week it would happen. This prediction was instinctive; it was based on my feeling about how the tax credit would most influence buyers to buy now.

Since I know the government doesn’t listen to little old me, let me explain why this timing makes sense:
The old deadline (closing by November 30, 2009) gave would-be buyers a sense of urgency. That flogged sales through the fall market. The new deadline is at April 30, 2010 (to be under agreement. Closing can take place until July 1, 2010.) That will give buyers incentive to be under contract by the end of April, feeding the spring market. Very smart, if you want to create a frenzy. Buying in a frenzy is not the way for a buyer to get a good deal.

Now that I am done dissing the credit, some of you still want to know what it is all about, right?

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Another arguably ill-conceived luxury condo complex is hitting the auction block.

This time the address is 20 South Ave., a stylish mid-rise sandwiched between the Natick center commuter stop on one side and the rear of the police and fire stations – complete with parking lot views galore – on the other.

It’s a project I am somewhat familiar with. I live half a mile away in a fixer-upper village colonial that cost less than half what 20 South’s developers at one time hoped to get from prospective buyers.

I also cited the project in a story I wrote for the Globe last January about condo developers who were plunging ahead, despite the economic hard times.

At that time, the project’s builder had already abandoned hopes of selling his units for more than $600,000 and was looking farther down the price scale.

Alas, even pushing prices down into the $500,000s and below does not appear to have done the trick, with plans to auction off 13 units of the mid-rise’s 24 units on Nov. 19.

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If you want to sell your home in this market, HomeGain.com has two words of advice for you: clean up.

That’s the gist of HomeGain.’s annual survey of Realtors on what is billed as the top 12, do-it-yourself home improvements that can be done on the cheap.

It is a pretty sensible list, though I am not so sure about the survey’s claims of specific dollar gains from some of these common sense measures when sell your house.

Certainly trying to sell a dirty, cluttered home in this market is not a recipe for success when there are a lot of other homes, many of them cleaned and primped, sitting on the market.

Not surprisingly, cleaning and decluttering your home tops the list. At an average cost of $200, it supposedly yields an extra $1,700 on the final sale price.

Apparently it’s a perennial favorite on the HomeGain list, which has been tracking this stuff since 2000.

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Boston.com/renow readers know about, US National Bank vs. Ibanez, the decision that was decided twice about foreclosures. Judge Keith Long ruled that US National Bank could not foreclose without the proper papers on record. He upheld his decision on October 14th . Expect an appeal. Meanwhile, about 40 percent of Massachusetts titles that have been through foreclosure are clouded, according to this court decision.

Now that the dust has settled, I can tell the story of how the Ibanez decision has affected one of my clients. I have a client who had a Purchase and Sale on a property after the first decision and before the second on October 14th. The current owner bought it as a foreclosure before the first court case was heard.

Before making an Offer to Purchase, the agent told me that the title was clear and insured. Before working on the Purchase and Sales Agreement, the buyer’s attorney was told by the seller’s attorney that the title was clear and insured. It was after the Purchase and Sales Agreement was signed when the buyer’s attorney started examining the title. There it was: the hallmark title defect that clouds the title under the US Bank vs. Ibanez decision.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team shows you how easy it is to lose your deposits.

This is the true story about a buyer that did not follow through with the agreement that she made in the Purchase and Sale agreement.

The purchase and sale agreement called for Kim (not her real name) to “submit a completed loan application within four business days of receiving a fully executed purchase and sale agreement from the seller”. When she signed the purchase and sale agreement, Kim also provided the customary deposit. The deposit was returnable only if she did not get a mortgage commitment by the mortgage contingency date specified in the purchase and sale agreement.

The attorney and buyer’s agent both reviewed Kim’s deadlines and obligations with her. Her buyer’s agent checked in with her to be sure that Kim provided everything she needed to her lender. In addition, Kim’s lender assured the buyer’s agent that the lender had “everything” he needed. Despite everyone’s best efforts to keep Kim and the lender on track, somehow she still submitted her mortgage application late. To make matters worse, when the listing agent called the lender to find out why she hadn’t heard from an appraiser yet, the lender told the listing agent that the appraisal was ordered late because Kim’s formal loan application was submitted late.

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So now we are down to the wire with the extension of the home buyer tax credit.

There’s the usual horse trading and posturing and 11th hour deal making Washington as the end of the month deadline fast approaches – at least this time it’s just the real estate market we are talking about and not the entire global financial system.

The extension, when it finally gets hammered out, is likely to include trader uppers as well as first-timers.

There are even signs the income limits will be boosted, with a Senate proposal of a cap of $125,000 for single buyers and $225,000 for couples.

If it survives to the final bill, that might help some. Still, even that increase probably falls short of providing a big boost to the high end in the Boston area, where home prices are still some of the highest in the country.

While the credit has spurred lots of activity on the low and mid end of the market, the high-end, despite some recent, positive signs, is struggling under much tougher lending restrictions.

Just check out these numbers on home prices and sales in some of our ritziest surburbs. After years of never ending price increases that bucked the downturn, reality has finally caught up with towns like Weston and Lincoln.

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This happened to me.

There once was a house for sale. It was below market rate, by about 10 percent. There was a note on the listing sheet that said something like “ask listing agent about details of the notorious status.” This happened during the period when agents were legally compelled to disclose such things.

I didn’t think much about the notorious status. I went to preview the house, looking for something wrong with it. It was clean; it had modern windows, kitchen and bathroom. The floors were even and newly refinished. The heating system and electrical system was modern. The roof was new enough. It was sunny and pleasant…

But, from the second I stepped into the place, my stomach hurt. A lot! I thought I must have eaten something bad. I don’t usually get indigestion. Despite that, I was excited. I had two current clients who could benefit from a deal like this.

I didn’t look into the notorious status beyond a quick call to the listing agent after I previewed the house. The answer: there was a domestic murder in that house.

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In the conversation last week, jbf wrote in to correct a mis-assumption:

The "little red note" next to an mls listing is not an indication of a scam! It is an indication that Back Up Offers are be entertained pending some event, such as signing of the P&S, Loan Commitment, Subject to Lender Approval.

Clearly, not everyone gets this. I wrote about the red notes before. Here’s a crib sheet of the symbols you may see:

The little red note and red ACT means that the seller has an accepted Offer to Purchase on the home. That contact is binding unless the buyer wants to make a change (like requesting money back after inspection or needing an extension on the loan commitment date.) Some sellers ask their brokers to continue to market the house until closing, just in case.

PCG means that the price has changed. This can be any change in price; a big reduction, a little one, or even an increase. Whenever a price is changed, the listing pops back to the top of the list for those searching with the newest listings on the top.
Here’s a real example from a current listing:

10/6/2009 Listed for $479,900
10/15/2009 Price Changed to: $478,876

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When I published comments from readers who thought their Offers were not being presented to lenders in short sales and foreclosure situations. I suggest that agents and consumers could do something about it. James wrote:

Where's the incentive for an honest agent in all of this? It seems like it's a lot of work for the agent, and he still won't get a commission. If the lender thinks the borrower is crooked, there will be a Fraud Alert flag on that file forever, making reasonable Offers nearly impossible to approve. Sure, it's the right thing to do, but it takes a lot of time, effort, and money (lawyers ain't cheap), and it doesn't get your client any closer to buying the house. Good community service (if you can get the bank to listen to you), but it won't pay the bills.

First a disclosure: on the bottom of the email address that I use with my clients is this statement:
Always do right. This will gratify some people and astonish the rest. --Mark Twain
So, I am someone who tilts at windmills; that’s who I aspire to be. Marcus thinks doing right to do right is a sign of hopeless naivety. But so be it. Attorney Michailidis thinks I owe someone an apology for saying there is something wrong with hand-picking low Offers to send to a lender in a short sale.

Back to James’ comment: why blow the whistle on sellers and their agents? James is right that the self-interest angle is weak, in the short run. The long-run upside is that action to stop those messing with the process will clear the path for buyers to buy properties; if the lenders are waiting forever to see market-rate Offers, would-be buyers are waiting along with them.

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That seems like a fair question to me with a big State House hearing on casino gambling coming up Thursday.

Casino supporters for years have pointed to polls that show roughly 60 percent support for expanded gambling among Massachusetts residents.

That’s not terribly surprising given we have some of the highest lottery sales in the country.

But before lawmakers start counting all that extra casino cash rolling in, they might consider the Bay State’s reputation as a particularly difficult place to get big development projects through the local approval process.

If new apartment projects with a few token “affordable’’ units are enough to create a furor in the typical Bay State suburb or small town, just imagine the kind of town hall bickering a proposal for a Foxwoods style casino might generate.

Beacon Hill, as it prepares to hear gambling supporters and foes later this week, is not totally clueless about the challenges of getting big casino projects approved in our ornery little state.

Some lawmakers, looking to pass off a very hot political potato, are pushing for a “commission’’ that would select sites on which casinos might be built.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

The first time it happened, I was in a home with a couple and their child. The wife seemed nervous about something. When she was able to distance herself from her husband and son, she turned to me and nervously asked; “Is their any way that we can find out if this house is haunted”?

Maybe there are supernatural spirits, and maybe there aren’t, but that really isn’t relevant when a buyer-client wants to know. As far as I am concerned, there is no such thing as a silly question from a client. After all, I wouldn’t want them to be haunted by their decision even if the supernatural did not manifest itself.

What do you do with a concern like that?
Buyers should discuss any concerns with their buyer’s agent. If you are not represented, ask the seller. In Massachusetts, you have the legal right to know about any material facts that would affect your decision to purchase property. You can ask other questions, but the seller or agent may not necessarily be obligated to answer. If the seller does not answer your questions, you might rethink whether the property and seller are a good fit for you,

Buyers and their agents may consider investigating further and perhaps having a special clause to address concerns. For instance, “this offer is subject to the buyer’s satisfactory inspection for the presence of supernatural spirits.” (Consult with an attorney for exact language.)

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Sunday, October 18, 2009, was a perfect example of the kind of dismal day that provides great information for a would-be buyer. (For the benefit of my out-of-town readers, Sunday was a dark, leaden-skied day. It was rainy and windy. By two o’clock or so, we had by wet snow. I was in Middlesex County, where it came down white and turned to mush beneath my feet. Farther from the city, they got a dusting that stuck. There’s lots of footage of this, if you check out pictures from the Patriot-Titan game that afternoon.)

Those who roused themselves out from under the covers that day and went to open houses could find the following things:

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Check this one out.

What could be better to spice up the debate over whether to extend the home buyer tax credit than some good old fashioned fraud?

Thousands may have illegally scammed the federal government to cash in on the $8,000 tax credit, whether or not they qualified or had even bought a home, a treasury department inspector told lawmakers Thursday.

There’s even the case of tots being used to claim the credit by greedy parents who make too much to qualify. (The cap is $150,000 for couples, $75,000 for individuals.)

You couldn’t make this stuff up.

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Mary wrote:

Like JGC, I wish regulators would look more closely at short sales. My suspicion is that not only are some brokers not submitting all offers, they are in collusion with the seller to sell the property to a relative or friend (a not "at arm's length" buyer). I have buyers putting in very good offers on short sales who are not getting the properties, and watching the properties sell for less than their bid. Where are the regulators?

There are a lot of accusations in what Mary wrote above. She’s not the only one. I also got this email from another commenter and blog-buddy of mine:

Rona, I’ve heard tales of people taking out cash loans on credit cards and cars in order to appear in dire straits and qualify for a short sale. If a savvy person knows the rules, I could see it working in this business/banking climate.
They'd be short selling it to someone they know as cheaply as possible, then renting it back. The idea is also to buy back after some time. Works well with tight knit ethnic groups. I think this is happening more where similar, although arms length, deals are common. Say, CA, FL, NV, AZ.

So, here’s the scam:
1. Get behind in your bills, so you can prove that you can’t keep the house that has depreciated below to loan amount.
2. Make a case for a short sale with your lender.
3. Go through the motions of selling on the open market with a crooked agent. Have the agent send only the low Offer of your confederate to the lender.
4. Once you sell to your not-arm’s-length partner, rent it back from him/her or buy it back at a later date.
(I have, in the past, run into agents who don’t present Offers. But, I can’t prove it is happening now, or for this reason, based on my experience in the marketplace. I am experiencing the inability to see properties, which may be a symptom of the same disease.)

Readers, I don’t recommend that you try this for a number of practical reasons that go beyond the obvious moral reason: it is stealing and bank fraud. You go to jail if you are caught; it’s a nice jail (Devons or Danbury), but it is still jail.

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Many would-be buyers think that termites are too scary to cope with. For bug-phobes, any house that has been treated, or is on a maintenance program is ruled out. In my experience, that is an over-reaction. In Massachusetts, termites live in the soil and are pretty slow-moving; they are dormant when the ground is frozen. Most of the time, they can be found and stopped before they do serious damage.

Today, James Morrison tells you what he looks for when he does his general home inspections:

If you are serious about buying a particular home, I recommend that you begin by going to the Town Building Department and ask to see the folder for that address. It is public information to which you are entitled access. This will tell you what work has been done on the property that has been approved by the Municipality. You should also try to obtain a written disclosure on the condition of the property from the current owners. While these are not mandatory in Massachusetts, some homeowners will provide them to you. At the very least you should ask them if they have ever had the home inspected for wood boring insects, radon, or lead paint and if there has ever been water in the basement.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series. Short sales are going to be with us for a long time. What should a buyer know if he/she wants to buy one?

A “short sale” is typically the sale of a property by a seller that cannot continue to pay his monthly mortgage(s) and cannot sell the property for enough money to pay off his mortgage balance(s) in full. In a “short sale” the seller must ask his/her lender(s) to take a loss on the mortgage(s) in order to allow the seller to sell the house and move on. The seller’s lender(s) will accept a discounted mortgage payoff and usually forgive the seller’s debt. Buyers, sellers and their agents need to know that lenders have the last word in accepting an offer and final purchase price even after the seller “accepts” an offer.

Lenders might agree to short sales when it’s obvious that they will probably never be able to get paid the full amount of the mortgage balance and it is cheaper and faster to agree to a short sale. (Maybe the seller lost his job or had serious illness that prevents continuing mortgage payments. Maybe the value has declined substantially.) If the seller can’t pay off the mortgage from sale proceeds, the choices are: foreclosure or short sale of the property.

Most people think that short sales are automatically granted but that is not true. In order to grant short sale permission, lenders typically consider two things: the seller’s financial situation and the property’s market value.

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Back Bay’s gorgeous and palatial Ames-Webster mansion just hit the sales block.

The price-tag, of course, is a modest $18 million to $25 million.

Now I am sure in an ideal world the stately 50-room, 26,000- square-foot abode is worth every penny of its listing price.

Built in 1872, the sprawling, brick Back Bay mansion has served in recent years as the corporate headquarters of the Raymond Group, a local development firm.

While $25 million is a stunning number – and likely a record breaker for Boston should someone actually put down that kind of cash – it is actually a little less than $1,000 a square foot.

But the mansion, for all its beauty and 28 fireplaces, faces a tough market.

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The home inspections that my clients get before buying take two or three hours. At a recent home inspection, the listing agent started to get antsy after about an hour. He was downright whiny by the time we got to hour number two. He was sarcastic by the end. The inspection that my client did went well, with a very quick and simple negotiation afterward.

This very same agent, that very same day called the very same home inspector. I got this email from the home inspector:

After yesterday, *** from *** Realty never wants to see me again! I get a call in the PM - it is ***** and he is asking for a quote on a condo inspection. However he doesn't realize it is me he is talking to. So we cut a deal and I end by saying thank you for your help today - he finally realizes who he is talking to.

15 minutes letter he calls back - I know he is calling to cancel the inspection. I could of answered and "busted his chops" but I wasted enough of my time with him. I didn’t pick up. He leaves a message "canceling the inspection."

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Welcome back to Attorney Richard D. Vetstein. Today, he explains the new FHA regulations and how they will put more obstacles in the path of would-be condo buyers.

Under revised guidelines set to go into effect November 2, 2009, the Federal Housing Administration (FHA) is implementing a new stricter approval process for condominiums to be eligible for FHA financing. Similar in some respects to the new Fannie Mae regulations issued earlier in the year, the FHA guidelines will surely slow down condominium mortgage financing, and negatively impact first time home buyers for condominium units.

For those who don’t know, FHA is a government program designed to help more people buy homes, and more borrowers will qualify with FHA financing than with conventional financing. It is a low down payment (3.5% down) program and the credit standards are much looser. The mortgage rates are typically better, as well.

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Well, melontherightcoast nailed it that sellers would hire more productive listing agents if they had to pay them by the hour. The real estate commission system pays agents for results. That gives consumers no motivation to get results, since the agent’s time is “free” until there is success. That, mel thinks, leads to hopeless listings that are there to “test the market.” Problem one: unmotivated sellers.

The next question was how can consumers avoid self-serving agents – the ones who get results at the expense of the consumer? The commission system rewards agents who treat ‘em and street ‘em -- in other words, push consumers into selling low or buying high. Problem two: self-serving agents.

I can help you with problem two. Consumers do themselves no favor by hiring the first agent who is “nice” at an open house. As Sam put it “…most people put more effort into finding a hairdresser or mechanic than they invest in finding their real estate agent.” That, dear readers, is why consumers are bad.

Now to make consumers better:

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How am I not surprised by the big haircut the owners of the Nouvelle at Natick took at over the weekend?

For those unacquainted with what may be one of the bigger real estate fiascos of the downturn, the Nouvelle is a Back Bay style condo tower stuck in the heart of suburban mall country.

And, after managing to sell only a fraction of the mall tower's 215 condos after a year or so of traditional sales efforts, the owners auctioned off 55 units this past Saturday at prices far, far below their original, highly inflated, bubble-era asking prices.

For its part, the high-rise was a centerpiece of General Growth Properties campaign to go upscale with the old Natick Mall. The decidedly middle class retail complex was made over into the Natick Collection, with its very own downtown style condo high-rise to boot.

I guess someone thought there was a long line of wealthy suburbanites out there in Wellesley and the like who just couldn’t get enough of the mall during regular business hours and just had to live there.

Here’s a hint – most of those folks are heading east with their money towards Chestnut Hill, not west to Natick and Framingham.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Last Monday and the Monday before, we’ve been discussing the market forces that concern buyers and sellers. We wrapped up the last discussion by briefly discussing the concept of an “exit strategy” for buyers. In other words, before buying a home, condo or investment, the buyer should plan for her “exit” from the property.

When I sit down with a prospective buyer one of the questions that I usually ask is: “What are you going to do with this property when it’s time for you to move on?”

Most buyers figure that they’ll just sell when it’s time to move on. That works if the buyer believes that values will appreciate enough to cover sale costs and/or improvements. It also works if a buyer is not concerned about breaking even or making a profit. That can take time. Even in the best of markets, I rarely recommended buying if the term of ownership will be under five years. In the current market, seven to ten years makes more sense based on my experience with market cycles over the past 25 years. Longer is better.

Here are some examples of exit strategies:

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I welcome readers from the print edition of The Boston Globe. Some of you may be here for the first time.
My entry that was noted at the bottom of Jenifer McKim’s article today is this one.
(Boston.com online readers were sent right to it, but newspaper readers would need to scroll down a bit to find it.)

I have been writing about this $8000 credit since February, when I explained how to calculate adjusted gross income to be sure you qualify for it.
I explained how the credit works.

I posted another resource about how it works in April.

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I started working in real estate in the Stone Age, well actually, it was the Paper Age. In 1991, I was the only agent I knew who read the Multiple Listing Service (MLS) data at home from my computer. (The owner of the first company that I worked for was way ahead of his time. But I digress; more on him some other day.)

Now that anyone can get house listings on their home computer, my job as a buyer’s agent has changed. I no longer provide the house listings. I provide advice on how to handle the house search on the computer.

The most common mistake that consumers make when setting up an MLS search is to limit their search too much or too little. The ideal search yields properties that are closer and closer to the goal. Bad searches yield either too few options or properties that don’t work, in the same way, over and over.

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In the course of doing my real estate business, I have worked with lots of different home inspectors. Today, I introduce James Morrison. His father, Allan Morrison was also a home inspector, so Jim comes by it honestly... Morrison’s slogan is “Each house tells a story. We write 'em down.”

Today, Jim writes on home exteriors:

A home inspector’s job is to diagnose and document major problems in houses. Most of the time, the people who live in these houses are unaware that the problems exist, making our job more difficult. It’s analogous to a physician trying to diagnose an illness in a patient who has no complaints. You have to look closely to pick up on the symptoms and exercise judgment based on your experience in order to figure each puzzle out. It’s even harder for the average person to recognize signs of trouble. Whether you are looking to purchase a new house or you’re just trying to maintain the house you live in, here are some things you can look for to flesh out potential problems that are not always apparent.

Here’s three tips I picked up during my first year in the house I lived in two houses ago: 1) That long circular driveway that I thought would be great when we have parties seemed twice as big when it came time to shovel! 2) For every minute I spent in the nice weather playing fetch with my black lab in that enormous back yard, I spent an hour marching behind a lawnmower, and who do you think is going to do all that raking? 3) Apple trees add a lot to the landscape, picking apples up off the ground before mowing the lawn each week does not. Keep all seasons in mind when looking at the yard.

Most of the time you won’t be able to see the roofing material up close, but you should ask the owners if they know how old it is. Most homes in our area have asphalt shingles on their roofs which can be expected to last a total of about 20 years. If you are able to see the shingles up close, check the south and west facing exposures because they wear out sooner due to increased exposure to the sun. Some signs that a roof may need to be replaced include: loss of shingle grit in the spaces between the tabs, curling, cracking, and missing shingles.

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A friend of mine, who is not my client, had a transaction fall through last week because of a “right of first refusal.” Her closing got delayed and delayed again because of it. She and her husband gave up on this place, they lost their apartment, they moved to another rental, and are about to go back to house-hunting.

I get a call about “right of first refusal” every couple of years from one of my condo-owning clients. Usually, someone else in the association is selling and the prospective buyer needs a sign-off from my client.

So, what is it? Here’s a hypothetical example:
There is a condo association with three units. The deeds were drawn up so that if a unit went up for sale, the other owners would have first crack at buying them. In this example, the owner of Unit A put the condo up for sale and got an offer of $335,000. The owners of Units B and C need to sign off that they exercise or waive their right to buy it for $335,000.

Why does this matter? The prospective buyer should care, since the seller of Unit A cannot sell it to them until the owners of Unit B and Unit C have their chance to buy it. The lender cares, since the deed is not clear until the other unit owners waive their right to buy it. The wording of “right of first refusal” clauses vary from deed to deed. A lawyer can tell you what is involved in getting the correct paperwork.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Last Monday, we began a discussion about market forces to consider when buying.

I asked two questions:
1. Based on a good look at the indicators, do you think that timing the market is really possible?
2. Should buyers and sellers try to time the market or just move when they are ready?

Overall, those that answered the questions were balanced between those that thought the market could be timed and those that thought it could not. If our small survey is correct, then Lai was correct when she said:

“I find people who said the market will bottom in next 12 months and people who said the market will crash 20% in next 12 months equally overconfident about their opinion. We just don't have that crystal ball.”

There were also those that were buying or in the market because they were ready or needed to at this stage of their lives and they could get a mortgage they could afford. I agree with John, who said,

“There is really only one factor that drives home prices and that is the ability of a person or household to service the mortgage debt (and all other related household expenses). The ability to service the debt in turn, is tied to wages, interest rates and credit availability.”

What surprised me is that there was not much talk about prices vs. interest rates.

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About this tax credit thing. In the Boston area, where prices are high and houses are old, this $8000 credit does not do all that much to make buying easier. The income limits for this program are not much above the income needed to consider buying here.

Susan asked this morning,

Just curious. If $8,000 (for those who qualify for the full amount) isn't enough to push people off the fence, how much would be enough?
The typical two-bedroom condo that I have worked with lately requires $80,000 for 20 percent down. That is a bucket-load of cash! For someone who hasn’t been saving for years, that $8000 is a drop in the bucket. Maybe, you can qualify with 10 percent down; you’d still need $40,000 or more in your pocket.

I do not think there is a single cash amount that would universally help first-time home buyers. The $8000 is enough to give a push to those who have been planning to buy and have most or all of their deposits in place. Those who have been saving up and waiting for a dip in prices and low interest rates are jumping in. Good move!

Now, for the rest of you, if you earn more than $75,000 a year and you are single, don’t qualify for the credit. A couple can earn double that, $150,000. To readers in normal places, this seems like a lot of money. But, where I work most of the time, that income does not qualify a buyer for a big house unless the prospective buyer has a large deposit saved up.

A single person who earns $75,000 a year should spend about $2000 a month for principal, interest, tax and insurance (using the 30 percent of income rule). That monthly payment would buy a $400,000 house if that buyer has a 20 percent down payment and gets a 5.5 percent lending rate.

With a 10 percent down payment, the principal is much more and PMI kicks in. Then that borrower can buy a $310,000 house.

If this property is a condo, the purchase price must be scaled back again. The condo fee is part of the loan limit calculation. Thirty percent of the $75,000 income purchases a condo at about $260,000 with 10 percent down, once you add in PMI and condo fees.

The income limit is double for a couple. So a two-earner couple has options, if they have down payment money.

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One of the real estate attorneys that frequently works with my clients said something like this to me, “I wish Obama would extend the first-time home buyer tax credit already; my daughter doesn’t know whether she has to buy now in order not to miss it.” Her daughter is buying on the Cape, where prices are lower than around here. In her opinion, that $8000 makes a significant difference.

Although I get flack on this site because I wear the uniform of a Realtor – a member of the National Associations of Realtors (NAR) – most of you know that I am consumer-oriented and buyer-friendly. Today, I am going to let my cynic flag fly:

I told my attorney-colleague something like this: “The extension of that credit will not be announced until the first week of November, or later. If it is announced before that, I owe you lunch.” (The current deadline requires that the property closes by November 30th. In order to collect, buyers need to be under agreement early in November in order to close on time.)

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That, not surprisingly, is what the battered real estate industry is arguing as it lobbies for an extension of the $8,000 first-time homebuyer tax credit.

So how important is the extension for the future of the real estate market as we know it?

According to a new Zillow.com survey, the extension could make a small but crucial difference, though not without a big cost to taxpayer.

With the tax credit now set to sunset in November, home sales, after months of steady increases, could fall back into flat or negative territory, the new report finds.

To back up its claim, Zillow.com is rolling out a new survey of homebuyers that finds that extending the tax credit would bring an additional 334,000 buyers into the market over the next year starting in December

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My series on landlord-tenant hell lives on through the internet and gets occasional hits. I got a comment that was longer than two (maybe three) blog entries put together. It was about a lease-to-own agreement gone bad.

I published the whole comment on the entry, but I will summarize here:

Dawn writes:
She had a lease to own agreement with a landlord. Her family moved into the place this March. They lived in the whole multi-family property and she paid rent. They did improvements to accommodate her elderly mother. (They do home improvement as a business; value of the work is $15,000.)

The landlord asked to come in with an appraiser at the end of June. Landlord said he was taking a loan out on the property. He asked for rent a day or so early.
Turns out -- you guessed it -- the seller was in foreclosure. The property value was down about $80,000.

The landlord then offered a short sale deal for the appraised amount, plus a side gift of the rest of what the place was “worth.”
These lease-to-owners finally had the light bulb go on. They didn’t pay him the next month’s rent. They called a lawyer. They are now buying the place as a short sale, with some legal help.

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Scott's entry yesterday about starter homes inspired me to repeat an entry I posted last winter. I think true starter homes are a big mistake for buyers. Only in times when prices are inflating rapidly can a buyer get ahead by choosing a starter home. This is not one of those times.

You probably know someone who married too young or too impulsively because it was “what you are supposed to do.” In some cases this works out great, as the couple grows along parallel courses, Many times it is an emotional, financial, and legal mess. The same is true of a starter home.

John Perkins, in The Globe article I mentioned yesterday, (August, 2008) did a great job of outlining the costs of a real estate transaction to show the young couple that buying for the short term was not a good idea.

Short-term ownership does not pay. Well, actually, it does pay... It pays the mortgage broker, the real estate broker, and the real estate attorney, and the seller. It is just a bad idea for the buyer.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Real estate values tend to cycle up or down based on supply and demand that depends on a number of factors: consumer confidence (which includes unemployment and perceived economic conditions), mortgage interest rates, availability of mortgages, demographics, pent up supply and pent up demand.

In good times, timing the market is easy because all of the factors typically point toward buying. These days, timing the market is more challenging. Let’s take a close look at some of the factors that shape the housing market:

Consumer confidence: Economic indicators appear to be inching their way toward improvement but are hardly rosy yet. More stable employment and job creation will help a lot.

Mortgage interest rates: At historic lows. When rates go up, prices tend to stabilize or fall.

Availability of mortgages: Potential buyers with good credit, reasonable short-term debt and income they can document can get mortgages for homes that appraise. The days of grossly inflated appraisals and no-document loans are gone, at least for the foreseeable future. That means that fewer people can get mortgages now than a few years ago, but housing “affordability” is at the best point in years for those who can buy now.

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Home prices have certainly fallen from their 2005 peak here in the Bay State.

But have their fallen far enough to make a starter home, that mythical launching pad into the real estate market for young families and the like, affordable again around here?

A Globe article on Sunday suggests that lower prices are certainly helping. In fact, some first-time buyers are encouraged enough to shift their sites from condos, which have become for many the first-time buy, to single family homes, the story notes.

Still, it all depends on where you are trying to buy, especially in the Boston area.

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Planners need to involve the doer in implementing plans. Doers need to get planners to imagine the “be here now” value of the house. Then they must agree to stick their agreement as each opportunity comes up.

Doers have opinions about planning issues and vise versa.
The doer cares about the monthly payment because it impacts daily life. Doers will not naturally think about questions like whether a 15-year note would be better, or if paying down the mortgage in the first 5 years is a good idea. The planner needs to get the doer to agree to long-term costs of buying. Doers tend to minimize the expenses of repair, maintenance and improvement.
Step one: Make spending limit decisions before house hunting. Promise one another.

The planner cares about the long-term comfort of living in the property, as does the doer. The planner should be involved in picking the properties to see; the doer will tend to pick properties that are more out-of-the envelope. The doer must share his/her perceptions about why a given property will work for the couple because, generally, the doer feels it sooner and knows it more clearly.

Choose the features of your future house together, then search within those limits. Develop a list of top features that must be, then some that would be good to have. Keep it simple. If your budget limits you, agree to a matrix that meets both of your living needs. This involves both doer and planner skills. Give the doer a chance to imagine the house, the community and the life. Let the planner imagine problems with the compromises on any of the three variables: size, location and condition.

Step two: A. Agree to key features that are either there or feasible to add. B. Agree to the same compromises on the size-location-condition matrix. Agree to only buy a smallish place in certain locations, or in a certain condition. Agree to buy in some towns only if the place is big, in good condition, or both. Promise one another.

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When I wrote about the doer and the planner, a la the book Nudge, this Tuesday, Jim wrote:

It can get very stressful when a couple is buying and one person is more of a planner and the other is more of a doer. hypothetically, of course!

His question went unanswered on Tuesday. The conversation went back to the same old, same old trope of “to buy or not the buy” even though that wasn’t the question. The question was about cognitive styles that come into play, when buying is what you want to do. The still-renting crowd can refer to this when prices are back at 1974 levels and they are ready to jump in.

Today, I launch “Marriage Counseling for Home Buyers.” (I use the term “marriage” loosely here, since some of the couples I work with are not legally married.)
More couples have one doer and one planner than two of one type. Very few individuals are internally 100 percent planner or 100 percent doer. The key within every person and within every couple is to give the planner the planning work and give the doer the doer’s work.

First, a basic idea in all couples counseling: what attracts you to your partner has a shadow side. The character traits you fell in love with are also the traits you occasionally hate.

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Every once in a while, I discuss something that strikes me from my current reading. Sometime this summer, I read Nudge by Richard H. Thaler and Cass R. Sunstein. This book discusses how to improve decision making. I liked Stumbling on Happiness better, because it explains why we get in our own way rather than how to create structures that get people to decide in a specific way.

But today, I am writing about Nudge. This is not part of the ongoing trope of the book, but I find it useful for buyers and sellers of real estate:

Here’s the concept: The planner is the part of everyone’s psychological make-up that puts off gratification and does the necessary things. The doer just does what comes to mind. Going to work every day is an act of a planner. We work to get paid; we get paid to enable our future self to have food, shelter, and spending money next week.

Nudge says the planner gets up in the morning to get to work. The doer hits the snooze button, starts work later. (The author suggests a clocky for the doer.) As someone who doesn’t start work early, I have to pay attention to honoring the planner within. I encourage you to do the same, especially in buying and selling house.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series. Sam has some details for renters who plan to buy, like J.

It is amazing how many tenants do not understand the terms of their lease and how to legally terminate it.

A lease is a contract that defines the terms of the business relationship between the tenant and the landlord.
Before committing to buy, a tenant should understand their lease. Failure to abide by its terms can cost thousands of dollars.

Most leases begin on the first of the month and end on the last day of the month, but it is possible to have a lease that begins on any other day of the month. For example, a “monthly” lease that begins on the fifteenth day of the month would end on the 14th day of the following month.

There are different kinds of leases. Here is brief discussion of the most common types of residential leases:

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I know I wouldn’t.

The subject, of course, comes to mind with the Globe’s story how the bankrupt owner of the Natick Collection will start auctioning off condos at the deluxe and mostly empty Nouvelle.

Back during the heady days of the boom, General Growth rolled out plans for downtown style condo high-rise as part of its plans to transform the tired Natick Mall into the upscale Natick Collection.

The revamped mall, packed with all sorts of glitzy stores, opened up just as the economy began to slow and the luxury tag began to quickly lose its luster.

The condos have not fared so well either, with just 37 of 215 units sold.

OK, maybe it’s a guy thing, but I never really got this idea. My wife and I live in an old and slowly improving fixer-upper near Natick center and I do my best to avoid frequent trips to the traffic clogged, retail-crazed strip on Route 9.

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I have been following this promotion since it started. Here’s the pitch: a fashion retailer, Daffy’s, is offering a one-year lease at $700 a month for a $7000 a month loft on Carmine Street and 7th Avenue. (That’s smack in the middle between Greenwich Village, Soho, and the West Village.) Contestants were asked to come to the apartment to do a 30-second interview explaining why Daffy’s should give them the rights to the lease. It’s like, “what will you do for a Klondike bar?”
Mostly, these are commercials for Daffy’s. They amused me. So, I’m passing them on…
This ad campaign made me wonder. Does this advertising help the folks at OneSeventh, the owners of the building? There were lots and lots of people coming through to record their interviews; I wonder if any will ever rent there at market rate? I doubt it.

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Richard D. Vetstein, today, he explains why buyers and sellers should treat an Offer to Purchase as a legally binding contract:

The first step in purchasing or selling residential real estate is the acceptance of an Offer To Purchase. Most often, the real estate broker prepares the offer on a pre-printed standard form offer and presents it to the seller for review and acceptance. Attorneys are not typically involved in the offer stage but given the amount of recent litigation over offers to purchase, it’s never a bad idea to consult an attorney even at the earliest stages of the home buying process.

Many buyers and sellers (and their brokers) are under the misconception that the offer to purchase is merely a formality, and that a binding contract is formed only when the parties sign the more extensive purchase and sale agreement. This is not true. Under established Massachusetts case law, a signed standard form offer to purchase is a binding and enforceable contract to sell real estate even if the offer is subject to the signing of a more comprehensive purchase and sale agreement. So if a seller signs and accepts an offer and later gets a better deal, I wouldn’t advise the seller to attempt to walk away from the original deal. Armed with a signed offer, buyers can sue for specific performance, and record a “lis pendens,” or notice of claim, in the registry of deeds against the property which will effectively prevent its sale until the litigation is resolved.

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J. had a second part to his question about buying off-season:

If we would be able to save a significant chunk (while still getting a quality property) by buying off-season, say 5% or more, it might be worth turning our lives upside down a bit to make it work. We are currently on the September rental cycle, and understandably, our landlord is not keen on letting us go month-to-month in late 2010. Our apartment is not cheap, and we would potentially have to eat a huge chunk of rent were we to sign a lease for 2010-2011 and then break it to move into a purchased home.

There are two parts to this answer:
The first is about the depth of the savings. Yesterday, I wrote about what I expect. It varies house to house. If a really good deal comes along, and it is a good place ---- not a yellow and pink XXL guy’s Speedo --- it could be worth the leap.
The second question is about the financial risk of breaking a lease on an expensive apartment.
I say this over and over: in the real world, percentages are a bad way to calculate savings. Real numbers work much better. J. and his girlfriend need to look at the hard numbers of what they need to save to make this purchase worth it. If the numbers don’t work, they should stay until the end of the spring market, 2010.

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A new Reuters poll of economists in fact seems to suggest just that.

A poll of 41 economists by the news service finds that all but one now believes that home prices have either already reached the bottom or will in the next year.

The overall consensus is that prices will fall another 3 percent before bottoming out and then rebounding next year. That would mark a 33 percent decline from the market’s peak in 2006.

That’s likely welcome news for many homeowners and would-be sellers, but not necessarily anything to cheer about for prospective buyers, especially here in the Boston area.

Not just a national trend, there are growing signs locally as well that the end may be in sight to the seemingly endless series of home price declines.

But the correction has been less dramatic here than in many parts of the country, especially Sunbelt cities that were flooded with new homes and condos and now hammered with foreclosures.

That, of course, still leaves a Boston market that is still pretty expensive for most people, even if prices have retreated from boom-time levels.

But let’s get back to the housing poll, which makes a sure-to-be-debated connection between the battered real estate market and the economy.

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J. is a long-time reader. He sent this to me last week:

… I am looking to buy my first house or condo fairly soon, either by mid-2010 or 2011…
I know that housing sales tend to pick up a lot in the spring and early summer, but I have some questions for you about seasonal shifts in average sale price.

First, remember that I am looking at this from the buyer’s side; that’s what I do. I don’t know the minds of sellers; I only know the history of past seasons and the gossip of listing agents about what is coming up.

Here’s a quick and easy analogy: seasonal house buying is like seasonal clothes shopping. Think: bathing suit. If you go shopping in May or June, there are lots for sale and they are at top price. By September, the pickings are slim or none. But, if you find one that fits, the deal is probably going to be pretty good. It’ll be off in some dark corner of the store, if it is there at all.

So far, 2009 has followed a pretty normal cycle. The presence of short sales and foreclosures is not increasing the supply for my buyers. Many of those homes are too hard to buy, too run down, or still too overpriced for their condition, size and location. I know that in other areas, this is not the case. I write about what I see.

This is what the fall to winter cycle tends to look like:

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This spring, my office had two client-households close on homes that they planned to tear down and replace. Both went modular. I wrote about the first one, when it landed in July. The second one just landed.

This house is twice as big as the one that landed at the end of July.
Because of its size, I learned something new about modular design: thirteen feet is the magic number for room width. A room can be as long as you want it, but width beyond thirteen feet takes a little extra work. My client’s master bedroom is more than thirteen feet wide. Part of it was in one box and part of it is in the other. Their family room was too wide, too, so it had to have a police escort from New Hampshire for highway safety.

The land these clients wanted had a house on it. The house was much loved by an extended family. It was outdated, but still very serviceable as a nice family home. It had a new bathroom, lots of nice woodwork and wood floors, some good light fixtures, sinks, and appliances. This created an ethical dilemma for my clients: How to mitigate the waste of good house materials.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

When most people think about condominium life, they envision life with fewer maintenance responsibilities than they’d have with single family home ownership. After all, isn’t that why there’s a condo fee?
Well…..not always.

While the living may be easy in larger condominium associations that employ management professionals and pro-active board members, I often see problems in smaller associations (typically with under six units) that lack the knowledge and/or funds to properly maintain the building. While those owners enjoy lower condo fees, dealing with obvious problems as they arise, lack of pro-active preventive maintenance has caused many smaller condo buildings to literally decay around them or create dangerous situations that the condo owners are not even aware of. Usually, the damage caused by deferred maintenance is not discovered until one of the condo owners decides to sell and the buyer brings in a home inspector who discovers things like:

- gutters that are damaged or overflowing
- water leaks from the exterior into the structure, foundation or, worse yet, electrical panel
- siding that needs to be replaced because it wasn’t painted on time
- water penetration that caused wood rot or mold
- clogged chimneys that force carbon monoxide into basements or living areas
- chimneys that are about ready to topple over
- rusting main sewer pipes that are beginning to leak raw sewerage
- porches with structural problems because they weren’t maintained or were improperly repaired

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As a city girl, I traded increased density for walkability. My house has a walkability score of 92 percent. I find it a perk to living here. I think it has value.

So, I was pleased to see walkability validated by CEOs for Cities.

“A new analysis from CEOs for Cities reveals that homes in more walkable neighborhoods are worth more than similar homes in less-walkable neighborhoods. The report, “Walking the Walk: How Walkability Raises Housing Values in U.S. Cities” by Joseph Cortright, analyzed data from 94,000 real estate transactions in 15 major markets provided by ZipRealty and found that in 13 of the 15 markets, higher levels of walkability, as measured by Walk Score, were directly linked to higher home values, according to CEOs for Cities's press release.

The study found that in the typical metropolitan area, a one-point increase in Walk Score was associated with an increase in value ranging from $500 to $3,000 depending on the market. The gains were larger in denser, urban areas like Chicago and San Francisco and smaller in less dense markets like Tucson and Fresno.”

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OK, so home prices appear to be edging up here in the Bay State after hitting bottom this winter amid fears that we were headed for another Great Depression.

It may turn out to be the turnaround we’ve all been waiting for, but it’s a bounce after a very long and hard fall.

But many homeowners around here apparently believe the days of haggling with bargain hunting buyers are now officially over, according to a recently released survey of local Realtors by HomeGain.

Wow, that’s sure one quick turnaround

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Richard D. Vetstein, is back with some notes for buyers about the Purchase and Sales Agreement:

In Massachusetts, the purchase and sale agreement (known as the “P&S”) most often used is the so-called “standard” form agreement supplied by the Greater Boston Real Estate Board or one modeled very closely to this form. The “standard” form P&S is, however, far from standard, and should be modified by way of an attached “rider” to address some very critical issues arising in most every transaction.

From a buyer’s perspective, there are two major problems with the “standard” form P&S:
1. It significantly favors the seller, and
2. It doesn’t adequately address such important issues as seller repairs, septic system/Title V compliance, radon gas, lead paint, buyers’ access to the property while it is under agreement, to name a few.

I’ll outline a few common issues not addressed adequately in the “standard” form, saving others for a later post.

Septic Systems/Title V
If the home is serviced by a septic system, Title V requires the inspection of the system within 2 years of the sale of the home. Failed septic systems can cost many thousands of dollars to repair or replace. The standard form P&S should be modified to provided an “out” if the septic system fails inspection, or give the buyers the option to close if the seller can repair the septic system during an agreed upon time period, provided that the buyer do not lose their mortgage rate lock.

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I have clients who are in the middle of a standoff. The sellers of a place they want to buy are under water. They will be bringing cash to closing to cover equity, plus fees. Needless to say, they bought a few years ago, had low equity to begin with, and don’t have piles in the bank to help them get out of this place. One of them has a great job offer on the West Coast. It is a really nice place. I wish they had gotten more enjoyment out of it before being tempted across the country.

This kind of problem makes my buyer-broker heart heavy. I have no joy in seeing someone so stuck in their real estate. But I also don’t want my clients paying top-dollar to mitigate their mistake. Thus, the standoff.

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Condo prices have fallen to rock bottom levels in Dorchester and Mattapan.

Back during the boom, sales of triple-decker units for more than $300,000 were routine.

Today, the media condo price has plunged in Dorchester to $110,000, with Mattapan even lower, at $55,900, according to the Warren Group, publisher of Banker & Tradesman.

Pushing down prices has been a flood of foreclosures, with banks and other lenders having seized more than 928 condos and homes, the vast majority in Dorchester, East Boston, Mattapan and Roxbury.

So after years of soaring prices, is there a small affordability silver lining to this grim picture?

Forget it. Unless you have cash stashed in the bank, you can’t get these deals.

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H and L faced the prospect of selling their condo, but found another way. They are a lot like other young college educated adults. They are hard workers and good planners. They are 27 and 28 years old. They are willing to make compromises in order to not go backwards on their life plans.

L is still in graduate school. H is now out of full-time work and going back to school. Their combined student loans are $250 a month, so far. That is better than average. Finaid.org lists near $93,000 as average debt for H’s degree and $40,000 for the one the L is pursuing. One of the compromises that H made was to go to a less prestigious professional school. That is one of the bars to his ability to get another high-paying job now. Compromises have consequences.

OK…back to how they kept the wolves from the door of their condo:
They are renting it and moving to a cheaper place. Kudos to those who guessed right last week.

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As most of you know, I am a person of sound self-esteem. That’s why I don’t take it personally when I don’t get calls back from other agents.

I remember when everyone in real estate had an answering machine. Yes, I am a dinosaur. The days of busy signals evolved into the age of voicemail and call interrupt – I mean -- call waiting. By the early 1990s, most agents had cell phones, but still used an office land line for business calls.

In the days of yore, the norm was that some offices had paid staff that did all the scheduling; some had agents doing required hours on the phone scheduling for everyone. Sometime in the past few years, a majority of agents began to either use MA PASS or do their own scheduling. A few offices still do their scheduling from their front desk. They are few and far between.

With a large number of agents who schedule for themselves comes a new set of protocols. Since agents use cell phones as the place to call, my scheduling calls interrupt business as well as social time. This gave rise, initially, to comments like “I’m driving, can you call back and leave a voice mail with your contact information and the time?” The next generation of this is “please email me your contact information and the time.”

Now, some appointments are wholly made by email. That works fine unless my initial email lands in their junk folder… (It happens.)

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Last Monday I wrote about How To Insure A Smooth Closing Day. After writing that blog, I began thinking that too many people set themselves up for stressful situations by timing their move based on incorrect information. With that in mind, today we will review some of the economic factors that can often be manipulated with wise scheduling when cash is tight:

The first thing that most buyers need to understand is that the day of month that they close will affect the amount of money that will be needed at closing. It is important to understand that unlike rent that is paid in advance (for the following month), mortgages are paid in arrears (for the prior month).

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H and L nearly lost their condo this summer, when H lost his job.
They bought in the summer of 2008. They had just returned from living abroad and were living in a sublet. Not a living soul wanted to rent to a young family with a newborn and a pre-schooler. The place they sublet didn’t have a functioning toilet. Life was pretty tense…

They had saved a 20 percent down payment based on H’s professional job. They were able to spend far less than the 31 percent their lender would allow, so they would be able to continue saving while paying the mortgage. It seemed like the right time to get out of the rental market with their children.

Now it seems that another job like H just lost is not going to come around again in the current economy. He needs to get some more education so he could sell his skills in a lower-paid, but saner, part of his field. That will require a year or two of much lower-paid work while going back to school.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Most purchase and sale agreements have a clause that stipulates that the property will be delivered vacant and “broom clean” at the time of closing. Well drafted purchase and sale agreements also entitle buyers to walk through the property prior to closing. Therefore, it seems logical to assume that when someone signs a purchase and sale agreement with that language, the sellers understand that they need to be out by the closing time and the buyers understand they can’t move into the property before the closing, unless other arrangements are made in advance.

Any active real estate agent or attorney will tell you that things don’t always go the way that they are supposed to, especially on closing day. Sometimes, moving trucks show up late or it takes longer than planned to move out. To complicate things further, lately I’ve seen more and more buyers that can take only a few hours off from work to close and have little flexibility in their schedule. Often, they don’t announce their plans until the last minute and sellers can not always be out in time for the closing.

For buyers and/or sellers that need to sell one property before buying another, things can get even trickier if their sale gets delayed for any reason. While most often things can get worked out amicably in a few hours, stress levels can soar. Expenses for overnight furniture storage, mortgage interest, property insurance, hotels, document re-draft and legal fees can also add up if the closing doesn’t happen on the scheduled day.

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Recently, I showed a house that had a very odd pattern of damage. There were water marks that were not coming from the roof, or the bathrooms, or the kitchens. We found the source of the water in the attic. There were signs of a fire there; the water was from the fire hoses. A Google search yielded the date of the fire (a couple of years back) and the number of the fire report at the town fire department. The fire department had more information.

My client lost interest at that point. The house has some fire repair, but there was still tons of work to do. The project was over his head.
Had he been interested, the next step would have been to purchase a CLUE report. This Comprehensive Loss Underwriting Exchange report covers the last five years of insurance claims on a property. This is a handy tool, but it doesn’t go back long enough to help with most of the fire and flood damage that I have seen in my career.

Older fire records are not so easy to find. Many towns file their fire reports by date. So if you do not know the date of the fire, you are out of luck.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Nine years ago, Jason and Elizabeth were a young couple living in an attic apartment on the Brookline/Brighton line. Someone told them that they couldn’t afford to buy on their own, but they had friends willing to help them with the down payment on a two family in return for a percentage of the tax benefits and profit.

They had questions about home buying, becoming landlords and buying with partners. We talked and it became obvious to me that if we could find them a two family with numbers that worked, they could buy without partners and keep the tax benefits, income and profit potential for themselves.

Since children were part of their 5 to 10 year plan, we discussed what would happen when they needed more space. We came up with four options that would depend on their incomes and the future market:

1. They could expand their living space into the second apartment.
2. They could keep the two family as an investment and buy a single family.
3. They could sell the two family and buy a single family.
4. If the location warranted, they could convert to condos and sell them for more than the two family would be worth.

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As developers chase potential buyers, they are getting aggressive with the incentives.

I mean really aggressive.

Just take the Carruth, a new residential complex in the Ashmont section of Dorchester that had the misfortune to open just as the real estate market was starting to fall apart.

Trinity Financial has sold just a handful of units, renting the remaining 36 units out.

The developer has already cut prices – down to the $239,000-to- $399,000 range, down from $299,000-to-$499,000 previously.

Now Trinity Financial is rolling out two more incentives in a bid to turn renters at the Carruth into buyers.

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A year ago, I had clients who got fed up with bad designs in expensive new construction. Instead, they set out to find land to put a modular home on. When they looked at what modular homes had to offer, they were pleasantly surprised. Since then, two of my clients have chosen the modular route to a new home. Both, as it turns out, ended up with the same builder.

A lot of my old opinions were replaced by moderate curiosity and later a favorable opinion. Today, I am a true fan. Last Thursday, I attended my first “house setting.” It was really fun. My clients were there, cameras in hand. Neighbors came to watch. A week before, the land was a pile of dirt! Now a new house has joined the neighborhood.

The house came down on two trucks from New Hampshire. A crane put the first half on the foundation. (I’ve never seen a half a house swing around on a crane before; it looked like a doll house because the cabinets and plate rail were already installed.) Then they nailed plastic on the marriage wall of the second half and swung it into place. A little ratcheting to tighten them together and voila! The house is set. The roof was flat for transport, but it folded up to a peak. By early afternoon, both halves were set and connected. The roof was up. By the middle of the afternoon, the house was ready for our rainy summer.

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I had a conversation with a listing agent whose seller is insisting on a price that has no basis in current comparable properties. Partly, it is an odd-duck kind of place. Partly it is over-improved (that means that it is too nice for the building and the neighborhood.) Partly, the sellers bought it at peak.

My buyers like this place. When I did my CMA, I could not justify the price. Not even close. I asked the listing agent what he was thinking. He gave me comparables in a totally different neighborhood (it would be like comparing Jamaica Plain to Back Bay.) When I said that the comparables don’t work based on location and an appraiser would know that, he reminded me that the appraiser may very well be clueless about this location issue.

He might be right about that.

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Cut prices and the buyers will come.

That appears to be one emerging lesson from the current housing downturn.

New home sales jumped 11 percent in June, for the third, month over month increase in a row, the Commerce Department reports.

But, you guessed it, prices fell even faster than sales rose, plunging another 12 percent, bringing the median price for a new home down to $206,000.

Clearly, falling prices are spurring an upsurge in sales, even as jobless rates continue to climb upward.

The Christian Science Monitor has an interesting take on the price issue in a feature on Cape Coral in Florida, which soared during the boom only to crash hard in the bust.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Last Monday, I wrote about lifestyle vs. budget. Some of you commented that potential buyers should think ahead 5 years and project what their needs are likely to be, especially now that real estate appreciation can’t be counted on.

From my experience and the comments on this blog, I know that many people bought homes without thinking too far ahead. Some were so blinded by love at first sight and the pressure of a hot market that they bought homes they should have walked away from. (When I’m called in to sell those homes, I always wonder what their buyer’s agent told them about the future marketability of the property before they made the offer!)

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It seems like an old fashioned notion from a more settled time, the idea you could break even or maybe even save a few bucks by moving from renter to homeowner.

Now, in this time of plunging home prices, it appears this quaint notion, a thing of the past in the heady years before the real estate price bubble burst, is back.

An Associated Press analysis of 45 metro markets reveals a dramatic narrowing of the cost gap between owning and renting. In some markets, like Cleveland, St. Louis and Atlanta, the gap is $100 or below.

Three years ago the gap was $777 a month. Now it’s down to $221 – and falling.

That said, jumping into the housing market right now is a risk as well given the probability that prices will just keep on falling, albeit maybe at a slower rate.

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I remember gawking at some of those spectacular Gilded Age mansions on the Newport waterfront a few years ago during a weekend getaway with my wife.

That was back in 2005, during the height of the real estate boom.

And if you had told me four years later, at least one of those mansion owners would be desperate enough to try and unload their Victorian masterpiece through an online auction, I would have thought you were babbling nonsensically.

After all, real estate was gold back then, especially grand old Newport mansions.

But as real estate values continue to spiral furiously downward, that’s just what’s happening now.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

I was recently talking with an economist about helping him buy his next home. As we were discussing his wants and needs, of course the subject turned to price.

This gentleman, who we will call George (not his real name) has been around the real estate block a few times. He has lived in several cities and is now retired. We spoke about homes he has lived in over the years and he reminisced about his first apartment, a suburban single family home that worked well as he was raising children and the condo he is in now. Now that his children are grown, we discussed his desire to spend his retirement years in an urban condo where he can walk to most amenities.

As we discussed his targeted price range and condo fees, George shared his philosophy about home buying.

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Some of my fellow agents were busted for failure to provide consumers with the lead paint disclosure. As a broker, I complain about paperwork. But there are certain papers that consumers must see and understand, before going forward. If you do not see these disclosures, you are not working with an agent who respects consumer-protective laws.

Before you discuss any specific property, you should see the licensee-consumer relationship disclosure. It covers how your agent is planning to hold your confidential information. (The first discussion means the first professional discussion; if you are jawing at a party, that doesn’t count.) It is important to know who an agent represents and who other agents in the office might represent. The National Association of Realtors has shown that only about 30 to 35% of home buyers actually receive agency disclosure statements at their first meeting with a licensee. (This test by NAR in 2002. The level is virtually unchanged since it was first revealed by the FTC in their 1983 study.)

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With Boston luxury condo sales dragging, maybe the developers of some of these pretentious new addresses could take a page from their Big Apple cousins.

Some multimillion-dollar New York apartment owners, unable to find any buyers domestically with a job and the dough needed to cut a deal, are managing instead to get scooped up by wealthy, oil rich Russians, Bloomberg reports.

Edward Mermelstein, a lawyer based in Moscow, tells the news service he has closed two deals on behalf of Russian clients for New York apartments at pricetags of $1 million and nearly $4 million.

By his estimation, real estate prices in the U.S. are now down 30 percent to 40 percent.

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Remember those broken promises? Shaun Donovan told a room full of Realtors that buyers would be able to get their $8000 credit at closing. Then the back peddling two days later. Then, Shaun was at it again, promising the National Association of Homebuilders.

Well, the mischief has been managed by the Commonwealth today. [the link is https, so your browser may object]

First-time homebuyers who use MassHousing loans can now have their $8000 tax credit up front. Payback is due by June 1, 2010.

Here is the first set of details:

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Matt asked:

I need help figuring out how much of my income should be devoted to owning a home. As a 1st time prospective homebuyer I don't want to over extend my family's finances at all. Some people say 33% of your gross income and others say 33% of your Take-Home income... What should I be limiting my housing expense at? Ball park we make $105k combined with zero debt of any kind except for 2 more year on a car loan which we owe $6,000. Any advice would be greatly appreciated!

For the total novices:
There are two ratios that lenders look at
1. First there is a ratio of your income compared to your housing cost (principal, interest, property tax and home hazard insurance.)
2. The second ratio is your income compared to your housing expense plus all your other ongoing debt (rotating balances on your credit cards, car loans, student loans, mortgages on other homes, home equity loans…)

Back to Matt’s question:
In regard to your car loan: If you can qualify for a loan with 33 percent of your gross pay for your housing expense, you should be able to handle the next two years with a car loan also. The key is to keep your housing costs where you can handle them.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Most buyers elect to have a professional home inspector inspect the property that they want to buy. Personally, I always recommend an inspection, especially on new construction.

The purpose of the inspection(s) is to give buyers the opportunity to confirm that the physical aspects of the property are, in fact, as represented and as the buyers expected when the offer was finalized. Sometimes sellers have their property inspected before putting it on the market, but that is rare in the Greater Boston real estate market.

Good inspectors carry carbon monoxide detection equipment, moisture meters and other detection devices. Good inspectors seem to have a sixth sense and are able to point out things as rare as hollow areas under the concrete floor of new construction. (To view a handout about inspections designed for consumers by the state Office of Consumer Affairs and Business Regulation click here.)

Normally, an inspection clause is included in an offer to purchase. Buyers need to realize that their offer contains a deadline that specifies when and how they must notify the seller if they have issues with the inspection. Buyers that ask for concessions also need to notify the seller in such a way that preserves their ability to get their deposit back, or they risk losing their deposit. (If their agent does not do that, their attorney should.)

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I got this email today from R. I find myself supporting what Sam calls "weasel clauses" the day after he wrote about them. Well, that's life in real estate...R. wrote:

Hi, I was hoping you could provide a little sanity check here. I am in discussions with a Seller, on a multi-family and it is FSBO. We have a handshake agreement on price, closing and terms of the close (1 unit being delivered vacant and 1 units tenants being subject of a satisfactory interview - if not, than that unit being delivered vacant as well). The seller isnt using a realtor (thus FSBO) and I am a little concerned that this will delay things. He isnt familiar with the process. I have an attorney working on the PSA, we have a home inspection scheduled (and if that goes well, we will sign the PSA). From there, the Seller will give the tenants notice and 45 days later we will close with the units vacant. What steps can I take to make sure the process is moving along on his end smoothly (where a Realtor normally would be making sure things are moving smoothly)? Can I ask to speak with his attorney? I want to make sure that notice is properly given to the tenants, that everything is in order with the title, that a fire department certificiate of conformance is given, etc Do you have a list of things that I can expect from the Seller and that I can reference when speaking with him to make sure things are moving?

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

Real estate agreements and contracts (including offers, Purchase and Sales agreements, option agreements, leases and letters of intent) must be in writing to be enforceable in Massachusetts. Therefore, an agreement is only as good as its language.

Language in a contract that allows either party to get out of the agreement easily is called a “weasel clause”. Some weasel clauses are very obvious, like “subject to satisfactory review by the buyer’s or seller’s attorney” because any good attorney could find something unsatisfactory about an agreement if her client wanted to back out.

Other weasel clauses are harder for inexperienced readers to fully understand, like a clause that many sellers are including these days; “subject to seller(s) finding suitable housing”. Inexperienced buyers or agents might think that means that the seller will locate another place to live before they can set a final closing date on the seller’s home. What happens if the seller doesn’t find “suitable housing”? The buyer would have spent money on inspections, attorneys and appraisals only to have the seller say “sorry, couldn’t find a suitable replacement home so I am canceling the deal”.

There are three types of weasel clauses that I know of:
1. clauses that allow buyers to cancel deals (like the inspection clause)
2. clauses that allow sellers to cancel deals (like the suitable housing clause)
3. clauses that allow either party to cancel a deal (see next paragraph)

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Bill Wendell at the Real Estate Café has been a consumer advocate for real estate consumers since before it was popular. Another ally, Erle Rowlins, wrote these “Real estate consumer’s Bill of Rights” in 1999. They are on the Real Estate Café web site.

1. Right of information access without limitation.
2. Right not to be coerced into using products or service providers.
3. Right to be respected as an individual.
4. Right to a full disclosure of all material facts known.
5. Right to have advance, competent legal advice.
6. Right to legal remedies for wrongful actions.
7. Right to protect confidential information.
8. Right of access to alternative service providers.
9. Right for an advance disclosure of all fees and to pay for services based on the value of the service received.
10. Right of security for all electronic transactions, communications and information seeking.
(Copyright 1999, Erle Rawlins III, 214-363-7400)

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OK, what is it with sports stars and real estate?

Anyway, here’s another example of a big name jock losing millions in the real estate market.

Soon to be Cavs star Shaquille O’Neil just lost $3 million on the sale of his palatial Miami estate.

Shaq recently unloaded his nearly 20,000 square foot waterfront palace – complete with a pool emblazoned with the Superman logo – for $16 million.

Sounds like he made out, right? Wrong.

The NBA superstar had shelled out nearly $19 million for the estate in 2004, before putting it on the market the next year for a whopping $32 million.

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MA PASS is a property showing service that many brokers use. When I call MA PASS, they verify that I am a member of MLS, and then the operator arranges the showing for me.
I have gotten used to how bored the operators can be. They read the instructions out to me in a dead-pan voice. Usually, the instructions will be things like, “in wet weather, please remove shoes upon entry,” “please lock all doors, including the one to the porch,” “the dog’s name is Fred; he will be crated in the office.”

One request is still making me scratch my head. It was in a three-family house:

First floor showings only with an Offer.

My buyers were puzzled, too. I put the best face on it. I hypothesized for them: Maybe the seller doesn’t want to be bothered because most people don’t ask for a second showing. Maybe the tenant (or owner) on the first floor is old, or infirmed, or has young children.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series.

The time after the home inspection is a critical time during a transaction. Buyers are often overwhelmed by the inspection and sellers are nervously waiting to hear if their property “passed” inspection.

Since there are many systems and components, a home rarely “passes” an inspection. In older homes, defective windows, improperly installed insulation, roof venting, plumbing or electrical issues are common. New construction issues often include defective door and window installations, defective plumbing and electrical components or installation, and poor finish work.

Presumably, an inspection is for the buyer to assure himself that he is getting what he was expecting when he made the offer. The challenge is that since most people don’t buy property often, they don’t always have realistic expectations about what they should get for their money or the age of the property. First time buyers that are buying older property have the biggest challenge because they don’t understand what constitutes normal wear and tear vs. what constitutes deferred maintenance or neglect. I’ve worked with many repeat clients that expressed concerns about certain “defective” items on their first purchase and didn’t even raise an eyebrow about the same item when they moved up to their next property years later (i.e. leaky faucets and routine maintenance items like exterior paint).

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I started writing here at Boston.com on June 20, 2007. Since then I have written to, talked to, and met readers. But rarely do I meet them at open houses.
Saturday, some house-hunters spotted my name on the sign-in sheet. They asked the broker doing the open house if she was Rona Fischman. She pointed them in my direction… This is the second time in two years that this has happened.

I introduced myself and shook hands. I thanked them for reading and asked if they comment. No, neither one comments. They read me; they know what I think. Now, they know what I look like. I bumped into them a few times with my clients in the open house and again while we were walking the route to the Red Line. I felt a little self-conscious.

The broker at any open house works for the firm that has the listing for that property. Sometimes he/she is the seller’s agent, sometimes not. In either case, it is bad form for me to pick up new buyers at someone else’s open house.

Open houses are more effective in collecting the names and email addresses of new buyers than it is at selling property. Therefore, I pay attention to the needs of my clients and have very little chit-chat with other buyers at the property. I hope I wasn’t rude to those readers.

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Home builders aren’t the best loved guys on the block in many parts of the country.

The Boston area, for the most part, dodged the overbuilding bullet. Not so, of course, for once hot markets in Florida, California, Nevada, which are now struggling to dig out after being buried in an avalanche of empty new homes after a frenzy of overbuilding by the big, publicly traded home builders.

But you have got to hand it to these guys, some of the same builders who created the mess are coming up with some creative ways of cleaning it up.

Realtors take note here.

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Last week, Bill Wendel at the Real Estate Café wrote to me and to Scott. He had a legitimate complaint. Bill got a Google Alert saying that one of our commenters called his business “scary.” Bill’s rebuttal got stuck in our junk filter (which blocks anything with a full URL.) I have known Bill and The Real Estate Café model since I started in real estate in 1991. Bill has been working a fee-for-service model for years and years before anyone else I know. I like Bill. Here’s the URL to his rebuttal.

I don’t find Bill or his business scary at all. The fee-for-service model is perfect for a consumer who is self-motivated and interested in doing a lot of his/her own footwork and research. I offer a fee-for-service contract, too.

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The New York Times had an article about our triple-deckers this month. Besides quoting what Dennis Lehane thinks of them, Abby Goodnough quoted these statistics about foreclosure in this kind of housing:

In Boston, three-family homes represent 14 percent of the housing stock, but made up 21 percent of foreclosed property in 2008, according to the city’s Department of Neighborhood Development… Ms. [Evelyn] Friedman, [chief and director of the Boston’s Department of Neighborhood Development] believes the foreclosure rate on triple-deckers is even higher than the data indicate, because many were converted into condominiums in recent years. These are counted in a separate category that made up 48 percent of the city’s foreclosed properties last year.

I am a huge fan of owner-occupied multi-family housing. The Times’ reporter reiterates what I think:

Best of all, three-deckers put homeownership within reach of the working class. Buyers could live in one unit and rent out the others, assuring they could afford payments and upkeep for years to come.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series. One of my clients asked me about this yesterday!

Many years ago, I represented buyers that were buying from an estate. The final price included items like the washer/dryer, refrigerator, etc. The heirs wanted to keep other personal items (like furniture) that the buyers wanted. The Purchase and Sales agreement detailed all the minutia of the sale, and the buyers happily signed the Purchase and Sale agreement.

Prior to closing, I accompanied my buyer-clients to the final walk through. The wife, Elizabeth, was beside herself when she did not see the Peony plant by the front steps. She turned to me and asked what happened to the plant. Of course, I had no idea whether it was stolen by a plant thief or removed by the sellers, but it really didn’t matter because Elizabeth considered it a good luck omen when she saw on her first visit to the property. Now that omen was gone!

Whether it’s a Peony plant, lighting fixture, shed or stove, I’ve seen this story re-played numerous times. Sellers think that they can take what they want as long as they leave the house, and buyers expect that aside from furniture and art work, what they see is what they will get when they close.

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Wednesday this week was the perfect day. It was a coolish, late spring day. The sun was shining; there was a bit of a breeze in the air. It was a day and an evening to be outside. But you know how people talk about the weather…

I came into the office, high on fresh air and sun. What did I hear? People complaining about the impending wet days ahead. It was like saying “ouch” before you hit your thumb with a hammer. I don’t get it. I am an optimist by nature. An optimist, BTW, is not just a positive, sunny personality; I’m not much like that. An optimist is someone who thinks that his/her actions have effect in the world.

Since I don’t say “ouch” before something hurts, I don’t shy away from putting in a market-price offer on a property. This week, I presented another low offer that wasn’t a “lowball” offer. I define a “lowball” as one that is well below what the market is bearing in that area. The Comparative Market Analysis price for this low offer was about where my buyers were offering. The asking price was about $80,000 more. The agent told me that the seller is an investor, a businessman. He is all business and I should not expect compassion. I don’t expect compassion; I do expect a sense of reality.

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C., a client of mine, asked me this question:

… I was also wondering if you had any opinions on the proposed Green Line extension. Personally I think I'll be dead by the time it's done, but was wondering if you'd heard anything to the contrary. I do know about that lawsuit that said it was supposed to be completed by the end of 2014. But I'm not holding my breath.

I answered:

I think you will live to see the Green line, God willing. Based on normal actuarial tables, you have another 50 or so years to go. That said, I think the Green line will get established in Somerville and will truly make an economic difference beginning 2020 or later. By that time, you will not be so very old. Buying based on the Green Line is premature at this time. The Red Line opened in Davis and Porter Square in 1984, but the housing boom there did not take hold until the mid-1990s because of a general economic slump. Same thing could happen with the Green Line extension, whenever it really arrives.

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Appraisal discrepancies… That’s broker-speak for “the house is not worth what the buyer wants to borrow on it. The investor will not cover that mortgage.” Jenifer McKim reported on this for The Boston Globe this week.

Usually, appraisal discrepancies happen when a market is going up. Let me explain:

Let’s use something fairly perfect: condos in the same building that are the same size. They should be worth about the same, unless one has over-improved the interior with some over-the-top kitchen or flooring. There will be slight variations for view and balconies, but let’s pretend that none of the views are much and everyone has the same balcony. Also, let’s say we are in 1999.

Condo one sells for $279,000 in January and closes in February. Condo two sells in February for $282,000; closes in March. Then the spring market hits. Everything in the town goes up 10 percent. February 15th, condo number three comes on the market at $299,000; March 1st, condo four comes on at $309,000. March 15th, condo five comes on for $319,000.

Some buyers start condo shopping in March. They see $299,000 as a bargain, compared to $309,000 and $319,000. Even if they looked at the properties that recently sold, this was 1999; buyers were more resigned than I was about accepting the presumption of an annual price increase.

Sometimes the first condo after the increase didn’t appraise. Rarely, the second one wouldn’t. The third one had no problem. That was the reality when the market was kicking up.

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The Globe’s front-page story on Gov. Deval Patrick putting his Milton mansion up for sale was certainly an attention grabber.

It also got me thinking on the unusual dynamics involved with this sale.

Our governor did his best to kind of pitch himself as just another aging empty nester putting the big suburban spread up for sale now that the kids are off to college.

Nice try, but it doesn’t fly.

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A San Francisco based web site, Roost, recently conducted a survey that showed that the new top requirement for Americans when searching for a new home was affordability. In 2005, a Kelton Research poll found 72 percent of respondees stated that when looking at available property, the neighborhood was more important than the house itself.

So “location, location, location” is dead, dead, dead. At least for now.

The Roost opinion poll of 1,002 U.S. adults was conducted by phone in May, 2009. 43 percent of respondents across the board – male/female, married/not married, and from every corner of the country – said that finding a home they can afford and maintain was the most important consideration when researching a new home.

“These are challenging if not sobering times for home owners as well as buyers and I think this research indicates that people have become more realistic and responsible about their preferences and plans with regard to the real estate market,” said Alex Chang, CEO of Roost.

The Opinion Research survey also revealed that on average, home buyers spend a significant amount of time researching potential homes to buy online – a full eleven and-a-half hours per week, a number that is even higher for women. Home buyers in the Northeast spend the most time researching prospective homes at 15.2 hours per week.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series:

Last Monday, I asked what a “good value” meant. Your responses varied from those focused on the bottom line to those that were concerned about quality of life issues, regardless of the bottom line.

Whether you are like Harry (whose “good value” is a great deal financially) or like Holly (whose good value is based on “non-financial factors” like access to a good school system, child care and a yard for her kids), you probably have some expectations of how the seller and the property will meet your expectations.

Ask any experienced real estate agent or attorney what can kill a deal and you will most likely hear that it could be anything at all that fires up emotions on either side. Nothing can do that quicker than expectations that differ radically between the buyer and the seller.

Sometimes personal standards differ between the parties. If they buyer disrespects a home’s cleanliness or upkeep, it shows. The seller who disrespects the buyer in return may not put in the effort to prepare the house for closing. Closing day the lawn is overgrown or the seller left furniture for them to put out on trash day. The buyers can’t understand how the seller could behave like that toward them.

Move-out expectations differ, too. I’ve encountered sellers that expected to remain n the house until they were ready to move out, even after the buyers closed and paid for the house! They just thought that the buyers should understand how tough it was to pack and move out with a young infant.

Some buyers or sellers immediately stop negotiations when the other side reneges on a promise that was previously hinted at during earlier negotiations, despite how good the deal still is.

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D. Asked:

We need to find a house in an area close to the school my son will be attending in August. We have been pre-approved for a mortgage and the same company has offered an agent they can work with in the area at no charge. The new area is 3 1/2 hours from where we currently live. We had begun the process of looking on-line previous to the pre-approval and had spoken to another agent on the phone and via email. Is there a problem with have them both look for us. We have no commitment by word or paper with either?

This is a question that comes up frequently. Should you work with one agent, or is it “the more the merrier?”

First, do you know your relationship with the agent? If you are working with two agents, have you signed two Massachusetts Mandatory Licensee Consumer Relationship Disclosures? That is not a contract, but it does explain whether you are expected to become their client or their customer. If you are house-hunting without seeing this form first, you are working with someone who does not follow licensing law.

Second, does that agent know that you are working with someone else?

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Tim wrote to me and to Scott looking for a good on-line source. I don’t know where to find what he’s looking for, but I thought maybe someone in the blog readership did. So, can you help Tim?

I am currently looking to purchase a home in central Mass and I was wondering if you know of an interactive map that shows the change in home value over the past year. I saw the map on boston.com/homes that is color coded with percentage change but it does not let you select the town and I was just wondering if you know of anything that will let you pick individual towns.

So, please help Tim find a one-step place to find the average percentage changes for towns in Central Mass. The software on this blog will bounce anything with a full URL into the junk folder. I promise to go in daily to retrieve your suggestions.

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The idea of buying into the South End for less than $200,000 back during the boom would have seemed unthinkable.

But in another example of how the real estate downturn is now starting to hit even the top tier neighborhoods and towns, the developers of the 1850, a loft complex in the South End, plan to put more than half their units up for auction on June 28.

And yes, the minimum bid for some units will start below $200,000, actually $175,000 to be exact.

The auction phenomenon has been sweeping the country, with developers using these one-day sales extravaganzas to unload big blocks of unsold units in new condo projects.

Ironically, the trend got its start with the auction of dozens of units at the Folio complex in downtown Boston nearly three years ago.

But after that big splash, the auction concept never caught fire here, even as developers in cities across the country latched onto the idea to cut their losses and move unsold units.

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HUD Secretary, Shuan Donovan is at it again. On Friday, he told the National Association of Home Builders that FHA will be allowing borrowers to use their $8000 tax credit at closing toward down payment and closing costs.

Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

This time, it looks like it is for real.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series:

It's not uncommon for two potential buyers to view the same property and walk away with very different opinions.

One buyer might think that a property is a great value in as-is condition and another might think that it’s overpriced and needs a ton of work. Maybe it's a matter of the buyer's perspective, attitude, or experience. Maybe it just depends on what a buyer needs at this point in their life and what she wants to spend to get it.

For example, someone that is fond of older homes will probably value the history, ambience and original architectural details of an “antique” home. (Older homes are often referred to as “antiques” in real estate lingo.) That buyer will probably understand that the stewardship of an antique home may also involve projects during their term of ownership that may be required to update the home to today’s energy efficiency or other standards. Another buyer might look at that antique home and focus on the “need” for more electrical outlets, larger and/or newer windows, more closet space, a more contemporary floor plan, or whatever they value more than the home currently offers.

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I got this from a reader who wanted me to help him and his wife buy a 2-family house. I like working with small investors. As they probably know from reading me, I am a huge fan of 2- and 3-family housing. They were in the right towns and seemed like a good match. Then I read this:

...but in this market, we're pretty sure we'll never get a shot at such a property unless we've got someone (maybe you) who often knows what's going to come on the market before it has a "for sale" sign on it, and before it shows up in the MLS.

My reservation about working with them is this: I cannot promise them that I can identify properties before they come on the market. I generally have bad luck with buyers who expect that service. It locks me into things I can't reliably do.

Most pre-listed or pre-FSBO-marketed property passes between people who know one another. If I know the owner in a real way, then I can't be a buyer's agent without a conflict of interest arising. FSBO hunting on the internet is not easier for me than for anyone else.

The last time that I had someone say how important it was to find a place before it was listed, I told her that I didn’t want to work with her. Period. She was quite put out. We had been getting along fine before that.

...Wouldn’t you know it, the same day (I can’t make stuff like this up!) I got a call from the brother of a recently deceased friend who needed a listing agent to sell my friend’s condo. The condo was uniquely good for the buyer I just turned down. In this case, I couldn’t be the buyer’s agent for this unlisted property because I had a personal relationship with the seller. I had an attachment to the property through my friend, and I knew her family. Although I had no legal conflict of interest, I had a moral one.

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FSBO, that’s broker lingo for For Sale By Owner properties, are pretty easy to find. They should be, since the sellers are trying to advertise them!

Until about three years ago, The Boston Globe Sunday real estate section was the best place to find FSBO and FSBO open houses. Back then, The Globe allowed Realtors to pick up the Sunday Real Estate section on Saturdays. At that time, I had an assistant who got the paper and reviewed it for FSBO and FSBO open houses that were relevant to my clients.

Those days are over.

It was about five years ago when I started augmenting The Boston Globe FSBO listings with other on-line sources. Many of the databases out there were very dirty; full of properties that were no longer for sale because the sellers gave up, listed them with a broker, or sold them. Over time, some of them got better.

I know I am going to get flack for this, but the Multiple Listing Service, MLS, that is supported by broker and agent subscription is still the best database out there for FSBO listings. A seller can hire a company that works fee for service to post the home on MLS. Some will design the sheet, for a fee.

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Would you consider buying a foreclosed condo or home?

If so, you apparently have company.

Whatever stigma there is attached to looking for a bargain amid the ever growing number of bank-owned homes out there appears to be fading fast, a new survey finds.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series:

Many offers and Purchase and Sale agreements contain the words "time is of the essence". Those words give legal teeth to the deadlines (also known as the "time for performance") in those agreements. If deadlines are missed by a buyer or seller, consequences are typically spelled out in the offer. For a buyer, consequences can range from losing the ability to request repairs after an inspection to losing one's deposit money and losing the ability to purchase the home, too, if the seller elects to exercise his legal right to collect on the consequences. For a seller, failure to perform on time can cause him to be sued or the buyer might be able to back out of the deal.

While some consequences may seem harsh, failure to meet deadlines can cause monetary and other damages to buyers or sellers. Therefore, most real estate contracts include consequences that should motivate the average buyer. For example, if a buyer comes to a closing a day late, the seller may lose his ability to purchase his new home with the proceeds of his sale. Therefore, consequences usually include the seller's ability to cancel the sale and keep the buyer's deposit.

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Last Saturday was one of those New England days when the weather couldn’t make up its mind. I wore my rain jacket, I wore my sunglasses, my jacket, my glasses, no glasses and no jacket… I was hot; I was chilly.

For my clients, it is hard to not be affected by seeing one house in bright sunlight and then seeing the next with overcast skies. To further complicate things, this weekend was the first one of the year since the trees have gotten to full leaf. Everything changes when this happens. Suddenly, the back yard is green, but shady.

Saturday night it poured, dramatically. That first torrential, windy rain that reminds us that summer thunderstorms are on the way. Sunday dawned clear and cool, with a heavy wind. The air was fresh and the sun was bright. Things looked good. Open houses were packed.

Here’s where God does the best staging for the sellers. No matter how much staging a house gets, the sunlight is the sunlight. The greenery is the greenery. On days like today, even empty houses looked good. Even neglected yards looked fresh.

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Lance, who is now a regular here, wants to know if you are seeing sharp declines in asking prices.

Put aside for a moment the issue of whether or not this particular seller's agent misbehaved... Am I the only one here who is not surprised to see the asking price for a property cut by 15-30% since last year? I can provide many similar examples if people don't think price reductions of this magnitude are really happening. The credit bubble popped last summer and real estate prices are tanking. Is nobody else seeing this?

I have been consistently saying that asking prices are not real. Some are too high, some are intentionally too low, and some are pretty close to what the property should sell for. One of my tasks as a buyer’s agent is to help the buyer know the difference and to negotiate accordingly.

So, for the record: Rona sees that many asking prices come down dramatically from the original asking price before they sell.

However, sharp declines in original asking prices are not necessarily an indicator of a declining market. Suppose a listing is 10 percent overpriced, and comes down 5 percent for a sale; it is still selling at 5 percent over the present market price. Inflated prices are an indicator of continued denial of the changes by sellers and their agents. Sale prices are the only price measure that matters. Period.

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Soon, FHA's approved lenders will be permitted to "monetize" the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table. Shaun Donovan, HUD Secretary said yesterday,

We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment.

This is not really news, yet.

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Sam Schneiderman, Broker-owner of Greater Boston Home Team continues his Monday series:

Some say that there are three values for every property; the one that the seller wants to get, the one that the buyer wants to pay, and the real value of the property that is in between. The one in the middle is the one that is most often considered “market value”.

When I appraised for Freddie Mac through the last deep recession, I would give them four values for the same property; an as-is value, as-repaired value, quick sale value and a value based on the average time on the market.

Then there is the assessed vale (not to be confused with the appraised value). The city or town assessor calculates a value based on the property’s characteristics and the municipality levies a tax to property owners based on that assessment. Assessors typically use computer programs to come up with the assessed values and often their files contain outdated information about the property, so their value could be high, low or spot on. Assessed values are based on a value as of January 1, which is calculated with data from the prior year.

There are automated valuation systems that were widely used by lenders during the boom years, based on their computer models.

Zillow is a good example of a computerized evaluation system. It may work great in a neighborhood of similar homes, but is not so accurate in an area like Greater Boston with a wide variety of older homes of various styles and condition.

Appraisers define market value as the price that a willing buyer would pay a motivated seller that is not under duress. This assumes that the property has been marketed to the general marketplace (i.e. put in MLS) for a period of time. In today’s internet age, is that three days, three weeks, or three months?

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This property first came to my attention when I was looking for examples of properties that were selling for over asking price. I was not involved in this purchase. So, I am a spectator, like you.

This one has a couple of interesting moments in marketing:
7/XX/2008 Listed for $X49,900
9/XX/2008 Price Changed to: $X99,000 (-$50,900)
10/XX/2008 Status Changed to: Extended…withdrawn…
1/XX/2009 Status Changed to: Back on Market
1/XX/2009 Price Changed to: $X39,000 (-$60,000)
2/XX/2009 Price Changed to: $X99,000 (-$40,000)
2/XX/2009 Listing Alert Flag set to: Yes - Accepting Additional Offers
2/XX/2009 Status Changed to: Under Agreement
3/XX/2009 Status Changed to: Back on Market
3/XX/2009 Status Changed to: Under Agreement
3/XX/2009 Status Changed to: Sold
3/XX/2009 Sold for $X05,000 (+$6,000)

It came on the market last summer, way overpriced. In about two months, it came down over $50,000. Then it went off the market for a while in the winter. It came on the market more than $100,000 below the original price.
It still had to come down another $40,000 before it hit the “sweet spot.”
There, at the sweet spot, it found more than one buyer. It sold for over that final asking price...Ooops. Something happened and it came back on the market, about two weeks later. But, the sellers had another interested party, or two. The second Offer went through without any further hitches.

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Sometimes, real estate writing is just amusing. It is easy to be amused if it isn’t your house.

Some of the listing sheets that fill the MLS system are terrible advertising for houses. I have clients who stay on the MLS for years after they bought their properties. Why? Some like to follow the market. But most enjoy reading the remarks as exercises in creative (or uncreative) writing. The spring market is the best time to find the best and the worst of remarks. So, if you read ads for your amusement, sign up for the MLS sometime soon. Or if you are interested in the best of the worst, there is a national website for listing sheets that advertise what they don’t intend to.

If you are the book-reading sort, I would recommend Sex and Real Estate . It talks about trends in real estate advertising and how homes are written about.

But, I digress… back to those ads which amuse my former buyers. Over the years, I have seen some real howlers…

Some mistakes are typos: “burn this one into your dream house”
Some fail for want of punctuation: “huge living room parking for six cars.”
Some fail in their choice of pictures. One of my Happy Homeowners sent me this Lexington listing. I am sure that is not the only house they are selling.

Advice for sellers: look your house up on MLS and all other posting sites. See what the buyers are seeing. You may be surprised, happily or unhappily.

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Yes, these are tough times to be in the business of selling homes. Or for that matter cars, newspapers, computers, stocks, you name it.

But the downturn also appears to be sparking some creativity out there in Realtor Land as well.

And that is not such a bad thing for a business that too often has been set in its ways and grumpily fending off challenges from upstart competitors.

Just take Coldwell Banker’s new YouTube branded channel, which the company’s New England division has just signed up with.

The idea is to cast real estate agents in the role of community experts, narrating videos that offer insights into what the real estate market – and life – is like in various communities.

Certainly sounds like an idea that has potential. After all, when you are buying a home or condo, you are also buying into a community. And while there are loads of information out there about various towns and neighborhoods across the Boston area, pulling all that together can be a tall order for a harried house hunter.

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Everyone knows about buyer’s remorse. That’s the sick feeling that a buyer has after making the commitment to buying something. It isn’t unique to buying houses. It happens with cars and other big purchases.

This spring, I ran into something that I hadn’t seen before: Seller’s remorse. That’s when the seller accepts an offer, maybe even signs a P & S, then decides that he/she just can’t part with the house. Probably seller’s agents see it all the time, but it was new to me. This seller was just too attached to the house. She couldn’t leave it.

I asked around. Most seller’s agents have seen seller’s remorse, but usually it shows up before an offer is accepted. It sometimes causes offer rejection, even if it is a good offer. It is rare to see remorse lead to cancelled offers an unheard of after the Purchase and Sales Agreement is signed.

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Many of you have experienced the hurry-up in real estate. The tactic of under-pricing a house, slightly, in an attempt to create mass interest is a good tactic in this market. However, there are several flaws.

The first is that buyers understand more about the lingo and are better able to distinguish reality from marketing fluff. Last week, Anna hit the nail on the head about Phantom offers: She summed up the experience from the buyer’s side:

I do believe that if the agent is saying “We HAVE an offer in hands”, then it is true. At least that was always true in our experience. But if s/he is saying “we WILL have an offer (tomorrow)”, it’s never true.

Second, it is unreasonable to be expected to make such a huge financial decision in a hurry, under pressure. This is how it goes: See the house on Sunday; make an offer on Sunday night or Monday morning; Tuesday morning at 3 AM, experience a whopping case of buyer’s remorse.

With my clients, I make an attempt to slow them down. We review the positives and negatives of the house. I try to get them to ignore the competition and focus on the house and the price. If the client is determined to buy this house based on the house, then we figure out the best negotiation tactic to get the house at the lowest possible price. It doesn’t always work; that fear of loss is a powerful thing.

I am pleased to report two current experiences where the hurry-up hurt the sellers. Both of these houses were the kind of shiny, redone properties that have been selling quickly. Both are in good locations.

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Home staging is hardly new. But in their desperation to move homes in the worst downturn since the Great Depression, some builders are taking this art form to a whole new level.

The Wall Street Journal takes a look at the cottage industry that has sprung up as builders, desperate to sell new homes and condos, hire faux owners to liven things up.

The article looks at a Los Angeles event planner hired to give a lived-in feel to a $1.2 million seaside California townhouse that a builder has been trying to unload for more than a year.

The faux owner, who pays a modest rent and gets a bonus if the home sells fast, plays the part to the hilt, putting on some jazz and lighting scented candles before buyers come over. With a little advanced warning, she’ll even throw a batch of cookies into the oven.

She’s even set up a small yoga studio and put up a picture of a baby on the wall.

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I wrote about why your pre-approval letter should be clear, but not give away your personal finances.

BV mentioned a tactic that I used for years. That is: have a pre-approval letter tailored to the offer amount. But, BV ran into a problem with this:
BV writes:

In essence, we got preapproved for the offer price we wanted to make. The seller called the broker and asked it would be approved for more before rejecting our offer and asking for more.

Were I BV’s agent and I got a call from the listing agent about whether the pre-approval was their top financing level, this is what I would do:
I would have called BV. I would have passed the information that the seller is trying to make a counter-offer. Do you want to stick with your current offer, or do you want to give room for a counter-offer? The choice should be up to the client, not the agent. I honor that.

I used to recommend having the pre-approval letter match the offer price. However, the problem I saw was a variant on what BV experienced. A while back, some seller’s agents didn’t ask if the pre-approval was the top financing; instead, she rejected my client’s offer and counter-offered to another buyer. She thought, incorrectly, that my client could go no higher.

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A few times a month, I get a comment about an entry that has been hanging around in cyberspace for months. About a month ago, DBL wrote this about last year’s bidding war poll results (three pages, 1, 2, 3.)

DBL wrote:

This poll is interesting. I think it points to some unethical practices by real estate agents. Doesn't seem suspicious that it is only buyers who are experiencing multiple offers (80%) and not sellers (only 9%)? I've been trying to buy a house in Ohio and have made two offers. Each time another offer has miraculously appeared. I think these are phantom offers to get buyers to put in a higher bid. In one of my cases, I think the other offer was legit - but that deal hasn't closed yet - so we'll see….

Are the other offers legit, or do brokers make them up?

I want to hold brokers accountable for their claims that offers are coming in. I need your help, house hunters. If you are hurried by a broker who says another offer is in, I want to know. Please note it on my survey. If no offer gets accepted, I will see it. I will report on these offers, real and phantom, for the rest of the spring season.

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Living well seems to have a lot to do with figuring out what is a good school. How do find out about the schools when you don’t live there yet?

First, check out the town.
By going to places where children and their parents go, you can find out what the children are like, and their parents, too. Do what you normally do: Go grocery shopping, go to a playground, go to a movie, walk through town, and/or go out to dinner. If parks are important to you, then go to the parks, same for libraries, and little league games. If you do not like being there, you are in the wrong place. Watch the behavior of the children and their parents in town; that is the culture you children could grow up in.

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Go first-time home buyers. You are the key to getting us out of this housing mess.

The real estate industry has known all along that the only way to jump start sales is to get first-time buyers back into the game.

People like me, who already own a home, have already figured out that there is not much chance of finding a buyer at a decent price unless you live in one of a chosen handful of hot communities or neighborhoods.

My wife Karen and I last spring decided to build onto our Natick fixer-upper, having concluded there was little chance of selling our house and finding another home in town at a comparable price.

Now those efforts, bolster by a massive federal effort to bring down mortgage rates and give buyers thousands in tax credits, is starting to pay off.

Oh, and of course, falling prices haven’t hurt either.

The Globe recently examined growing signs, both locally and nationally, that first-time buyers are getting back into the market.

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At the end of March, I asked my colleagues in the Massachusetts Association of Buyer’s Agents about what they are seeing with their buyer clients at the start of the spring market. I call these the “buyer agent eye view” of the market.

I am curious if buyers out shopping are running into what we see, too.
First, what I’m seeing:

My clients are frustrated. One told me: “I am so sick of having people at my office tell me that I should be able to buy anything I want at $20,000 below asking price. I can’t find anything decent to buy at any price!”
I have clients who are not abnormally picky who cannot find good properties to buy. On the other side of the coin, I am seeing prices dropping on less desirable properties, with compromised locations, in need of updating, or smaller houses and condos.

Because asking prices have a tenuous relationship with value, I don’t judge how well my buyers do based on asking price. I have clients who have been outbid. I have clients who are paying full price, and I have buyers who are negotiating well below asking price. It depends on the property. My recent experience is that some properties are winners and the rest are truly losers.

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We’ll just have to wait and see how this spring market turns out.

But after opening with a thud amid the tail end of the last stock market swoon, signs of life are starting to appear in the previously moribund home sales market.

In fact, there are signs that sales may be picking up in the Boston area as well, which, so far, has been a laggard compared to other parts of the country.

Norwell-based HouseSavvy contends home sales in the Greater Boston market rose nearly 30 percent in March over this February, for the second month-over-month gain.

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Many people are still confused about the home buyer tax credit. I needed tax advice to give you tax advice. Try this video. I found the explanations provided by the chief tax accountant at NAHB very well done.

I found the introduction too chirpy for my taste, but the rest was very good, IMHO. He covers the questions that a tax man can answer.

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The idea of buying a house and then reselling it for a gain a few years down the line is definitely out of fashion amid the worst downturn since the Great Depression.

Yet a note from “Jennifer,’’ as we will call her here, is a good reminder that this idea is far from dead among more than a few would-be buyers out there.

Jennifer, who is looking to get started in financial services, and her fiance, who works in design, are also looking to get started in the local housing market.

As is the case when you are just starting out, the possibilities can appear limitless. Jennifer writes she and her fiance are getting ready to look for a condo in the $300,000 to $500,000 range, though they haven’t ruled out buying a house, if that makes sense.

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Back during the boom there were few if any barriers between you and the home or condo you wanted to buy.

We all know how that turned out – with a deluge of crazy subprime loans and a foreclosure epidemic of the likes not seen since the Great Depression.

But now the pendulum has swung the other way – and boy how it has swung.

The Boston Globe Sunday Magazine looks at the increasingly important role appraisers are playing in the sale process once again, and, in the process, making more than one would-be condo or home buyer miserable.

Long gone are the days of drive-by appraisals. These days, appraisers are not only getting out of their cars, but they are pouring over every minor detail that might call into question the proposed sale price.

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I will be providing more complete answers than the ones I gave on the chat this Monday. I will do my best to cover what I know or can find out about. (For example: I am polling agents in other regions of Massachusetts about what they are seeing in the spring market.) If your question went unanswered, send me an email.

This, from the chat:

em3’s comment:
as buyers, we are refusing to pay top dollar for homes that aren't worth it, (i.e. house needs gut job, rehab, school system is only ok, etc.) What if we see a fair market value as below the 5-20k you mentioned?
I answered:
that's not fair market value, that's your gut market value. Fair market value means someone else is paying that much for something like what is for sale.
The term for people who will only buy something for less than what it is worth is RENTER.
OK, now that I have the rude joke out of my system…
you may be able to get $5-10K off a fair market value if the seller is in distress. I research the sellers to see if I can find something that indicated distress.

Here’s a longer, and less snarky, answer to a good question:

Real estate is a very imperfect market. Perfect, in this sense of the word, means one thing is like another. No two houses are the same. Even when they are first built, little differences in light, and lot, and finishes are built in. Then after 10 or 30 or 120 years, rooms have been added, walls knocked down, repairs done or not done.

So, I agree, there is no single “fair market value” established by a Comparative Market Analysis (CMA); it’s usually a range of $5,000 or so. A thoughtful person with the skill to calculate for the imperfectness can get an estimate of what the property should sell for based on what other people have been spending on properties like it. As always, the devil is in the details. CMAs are not based on a single house that sold nearby. It involves looking at three or more properties and the market trends. This is a far better way to sell a house then waiting for a buyer to buy based on a gut sense of value (which for a seller is inflated, just as for a buyer it is deflated.) CMA is the best tool we have.

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Last Monday , Sam Schneiderman, Broker-owner of Greater Boston Home team discussed how his ideal three family purchase came to an abrupt end. His weekly series continues:

Last week, I described how the seller cancelled my three family purchase because my lender would not commit to financing without having the exterior painted before closing. The seller’s agents weren’t happy that the lender was moving so slowly, and the seller wouldn’t extend the mortgage contingency so that we could explore other financing options. She put the house back on the market and sold the property within days for an extra $10,000.

Fortunately, I gave proper notice and got my deposit back. Unfortunately, it was a month to moving day.
My landlord rented my apartment and my fiancé and I were about to become homeless.

A friend told me about a single family right around the corner from him. We looked and got seduced by the low price and the idea of renovating. Without looking at another house, we made an offer on the spot. We were feeling kind of desperate and thought it would be nice to live so close to my friend.

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I thought of this when I was writing about two-family homes last week. My husband and I once lived in a two-family home, which was not owner-occupied. The guy upstairs was from another country. He liked to keep his apartment cool. If his apartment was 60 degrees, our apartment was 55 degrees. We shared a thermostat. It was in his apartment.

November that year we froze our toes off. December, it got worse. The landlord switched the thermostat to our unit. His heating bill doubled. We had the thermostat on 68 degrees and the guy upstairs had all his windows open. My landlord started referring to my neighbor as “the fresh-air freak.” In April he moved the thermostat back upstairs. In July we moved out for unrelated reasons.

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I’ve always had a love for old homes and old buildings.

Growing up in Massachusetts, with history all around, I thought everybody shared that passion.
Of course, the last four decades have disabused me of those notions.

Sure, some people like old homes, but many more prefer to skip the hassle and jump right into new construction. That’s why it carries a premium.

All of which brings me to the Globe's story on the pending auction April 4 of 40 units at Longwood Towers in Brookline, next door to the hospitals and labs of the Longwood Medical Area.

Let’s just say the partially revamped, 1920s apartment complex faces some pretty serious challenges.

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Here’s more evidence that there are still a lot of deluded homeowners out there, even amidst the worst housing market crash since the Great Depression.

A nationwide survey of real estate agents reveals more than a few are tearing their hair out as they try and talk down homeowners stuck on prices they just aren’t going to get in this market.

The HomeGain survey finds that 45 percent of homeowners believe their homes should be listed 10 to 20 percent higher than what their Realtors have advised.

And nearly 20 percent think their homes are worth 20 percent more than the listing price recommended by their real estate agents, according to the survey, which polled 700 Realtors across the country.

Yet this may be even more interesting, especially here in the still pricey Boston area.

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Hey Manny, ever hear of the housing market crash?

Manny Ramirez was one of the most clueless sports stars to ever play in Boston, though granted he did have quite a knack for connecting with the baseball.

Manny has decided to put his downtown condo back on the market, seeking a sky-high $8.5 million for his four-bedroom, 4,500 square foot unit on the 37th floor of the Residences at the Ritz-Carlton.

But Manny’s move to boost his asking price by $1.6 million may add a new dimension to his already well-crafted reputation for mentally inhabiting another galaxy.

If he couldn’t get $6.9 million back in 2005 during the height of the boom, how’s he going to get $8.5 million now?

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Here’s a sign of the times.

In a bid to move a boatload of New York condos that just aren’t selling amid the downturn, Toll Brothers is offering a new incentive to help buyers move beyond the fear of losing their jobs.

The big national residential builder is offering mortgage insurance to potential buyers under which their payments are covered for a year if the buyer loses his or her job.

That comes atop a 37 percent price cut at one of Toll Brothers three New York condo projects - Northside, 5SL in Long Island City, Queens, and 303 East 33rd in Kips Bay - which range from under construction and no sales closed to 85 percent sold.

The program is free of charge the first year, after which it amounts to 3 percent of the monthly mortgage payment.

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Real estate tech guru, Amy Chorew is on a mission. She's been trying to bring brokers into the new millennium. She asked some buyer agents what buyers want to see in virtual tours. We had some answers, but I bet y’all have lots more.

My clients hate bad virtual tours. There is nothing to be learned from dark, distorted or wavy pictures of empty rooms. A bad virtual tour is worse than bad pictures. Many of my buyers gave up on seeing decent ones and don’t even open them.

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Many of my peers are excited about the $8000 tax credit for home which that is part of the stimulus package. Prospective buyers that I’m meeting are not. They just do not see this as the stimulus of their decision to buy. Makes sense to me. If you understand this credit, you know that this $8000 credit will go for improvements, furniture, or towards replenishing your reserves. Economic stimulation for contractors or retailers, maybe. It doesn't make or break the ability to buy a home.

Would-be buyers, here is an outline of the new program (thanks again to Eric Heinrich from Mortgage Master, Inc., who sent the first copy. Posted is the NAR page on it.)

Before leaping in, consider these things:
1. It is a grant, not a loan; that’s great. But, it’s a tax rebate, so it is tied to your annual tax refund. The funds are not available as part of your down payment or closing costs.
2. There are income limits. If you fall within the income limits for the rebate, you also fall within these limits for your loan.

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It feels like 2002 again, the year I bought my Natick fixer-upper.

Housing sales were down yet again across Massachusetts last month. And prices were down even more.

Home sales fell another 12.5 percent in January, the Massachusetts Association of Realtors reports in monthly numbers released today.

Meanwhile, prices fell by nearly 18 percent in January, pushing the median sale price down to $263,500. That’s down from $321,000 last January.

In fact, we haven’t seen home values like that since 2002, when my wife and I bought our Natick fixer-upper for $280,000.

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I welcome back Sam Schneiderman. Sam is a colleague and native Bostonian who will share his experiences and lessons learned during his journey from first-time buyer to home owner, renovator, landlord/investor and successful broker. He is president & principal broker of Greater Boston Home Team. And now, Sam's story, part 2:

When we concluded last week it was 1981 and I had just closed on my first condo in Cleveland Circle, a well-worn student ghetto with weekly apartment break-ins. I bought an unrenovated 1929 studio with the original bath and kitchen that featured oversized orange, green and white flowers on the kitchen wallpaper. Every inch of the place needed serious help!
Sure that I had just made a huge mistake; I started removing layers of wallpaper. My vision of converting that dark studio into a bright open plan kitchen/living area with a breakfast bar, double bed sleeping alcove (stolen from part of the kitchen) and foyer/dressing area with a 7’ closet began to invigorate me.

With six weeks of free rent in another apartment before starting to pay rent PLUS mortgage payments, I was focused on sticking to my five-week rehab plan. When the developer learned that I was removing five feet of wall, he made me hire a structural engineer that took a week to write a one-page report before I could proceed. Kitchen cabinets arrived late, installers rescheduled and flooring finishers never showed up.

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Mitt Romney didn’t perform any economic miracles here in Massachusetts when he was governor, though I guess in retrospect he doesn’t look too bad.

Heck, during his final months in office, he wasn’t even here as he pursued his presidential ambitions at county fairs in Iowa and cookouts in South Carolina.

But good old Mitt, now looking to downsize after his historically expensive White House run, may wind up giving us all a boost as he dumps half of his personal real estate empire on the market, the Globe reports.

An already delicious story, it is getting even more so as additional details dribble out.

Apparently suburban living isn’t to our former governor’s liking anymore, now that the kids have left home and there’s no need for a big yard anymore.

Among other things, Romney now wants to buy a condo in Boston as he sells his Belmont estate and unloads a $5 million-plus “cabin’’ in Utah, his spokesman told CNN.

Given most new condo projects in downtown Boston are averaging just one sale a month, I am sure that will be welcome news for any number of developers hungry for buyers.

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Shaun wrote me last week with a few questions. Two had quick answers, but the middle one, about foreclosures, is more complicated:

Good afternoon Rona, hope this finds you doing well…[I] was hoping to ask a few quick questions about the foreclosure process as I am a first time homebuyer.
1) Do you have any recommendations for a good attorney?
2) Do you have any primers on the foreclosure process?
3) Besides an inspector that comes with me to visit the property, whom else should I bring with me?

I have recommendations about attorneys. I also think any first-time home buyer should have their own agent.

I wrote on the basics of foreclosure purchasing in October. Here is “the primer” on foreclosure:

First a few definitions:
Mortgage holder or lender is the entity that is owned the amount of the mortgage.
Seller is the owner of the house.

A short sale means that the seller does not have enough money to pay off the existing loan on the property at the point of sale. (Example, the seller owes $350,000, but the sale will yield $320,000) This is sometimes called “upside down.” Most people are saying “under water.” The seller is short because the mortgage holder will get less than the mortgage amount when the property is sold. The seller is “short of cash” to cover the debt. In this case, the mortgage holder has a say in how much of a loss they are willing to take. If a seller can pay the entire mortgage amount, plus whatever closing costs are attached to the sale, then the seller is not short. The seller may have lost equity, but the lender does not have a say in the sale.

Foreclosure happens when the seller stops paying the mortgage holder. By right, lenders can take the house and sell it to get their money back.

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Today, I would like to introduce Sam Schneiderman.Sam is a colleague and native Bostonian who will share his experiences and lessons learned during his journey from first-time buyer to home owner, renovator, landlord/investor and successful broker. He is president & principal broker of Greater Boston Home Team, an established boutique brokerage and consulting firm serving buyers, sellers and homeowners in all price ranges throughout urban and suburban Boston. Sam brings us over 28 years of perspective on the Boston real estate scene. He will be blogging here on Mondays.

Since this is my first post, it seems that you should know a bit about what contributes to my outlook on real estate. By sharing some of my experiences, I hope to provide a longer term perspective of the market to our younger readers and bring transparency to my comments to everyone else.

I bought my first condo in the 1981. As a real estate dummy, I paid the asking price of $30,000 for a studio condo with parking in one of Brighton’s first condo conversions because I liked the building. Luckily, I was able to get a below market 16 percent mortgage for 90 percent of the purchase price, while market rates hovered around 18 percent. I would have happily paid 18 paid if the numbers worked for me.

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If you walk passed Liz’s house, watch your step!
For those who don’t know Liz, she is the poster-child for people who don’t shovel their walks. Followers of Liz can use fear of litigation as a reason to make things harder for their neighbors.

According to some legislators, as the law stands now, if you don’t shovel your walk, you are not liable if someone walks through the snow and falls. If you shovel your walk, you are liable if someone slips on a spot that has refrozen. A bill to change this was not signed by its deadline by our governor. Some of you wrote in to say that the legislators misunderstand the current law. Well, apparently, the governor agrees with you.

We’ve talked this one to death. This was just an update.

Now for the broker angle on the snowy winter:

Because we have not had a long enough thaw to melt the snow-cover, I am hearing more debate about what is “normal maintenance” in regard to snow shoveling. A seller is responsible to continue normal maintenance of their home until closing. Lawyers can get more specific, but the gist is that if something breaks, fix it; water and mow the grass so it doesn’t die. Does it mean shovel the snow?

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There are two ways to at least try and get out the housing mess we are in.

One is finding ways to shore up struggling homeowners in danger of foreclosure in a bid to curb the tidal wave of distressed properties hitting the market.

The second is stimulating demand, which is clearly the aim of a Republican plan that,just cleared the Senate. The bill would dole out a nice, fat tax break, up to $15,000, to anyone who buys a home in the next year.

This idea, not surprisingly, was a darling of the Realtor and home building lobbies, which are desperate to thaw the ice cold residential market.

Will it work? Your guess is as good as mine. Combine that tax break, which is based on 10 percent of the purchase price of a new or existing home, with some of the stunningly low mortgage rates out there and buying has got to look pretty tempting.

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Business Week did a survey of the luxury housing market two years ago. The examples were million-dollar homes. This year, Prashant Gopal says that in humbler times, we need humbler examples. This year, he used $500,000 homes.

Luxury homes are “the stuff of fantasy” says Mr. Gopal. Do you have such fantasies? I don’t. I know I’m not the only one with better things to fantasize about. I wouldn’t watch Lifestyles of the Rich and Famous even if I was home sick with the world’s most depressing cold.

Mr. Gopal mentioned these features as hallmarks of luxury homes:
SubZero fridge
Pool
Two-car garage
Media room.

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Wow.

That was quite the response to my call for advice to Jen, the homemaker with the engineer husband who wants to know if it’s possible to buy a home in the Boston area on one income.

Jen wanted advice and she sure got a boatload – and then some.

Reading through the comments, though, raised some additional issues.

For most of us, buying a home is the biggest financial decision we will ever make. Is it necessary to stretch and stretch and stretch, whatever the cost to our finances and core beliefs, all in a quest to grab a piece of the American real estate dream?

Or has this very mindset helped fuel some of the problems that are now sinking our economy?

In that vein, I thought it was interesting to how some readers responded to Jen’s line in the sand when it comes to buying a home.

She has young children at home and, no matter what, will not give up these precious first few years with them to seek employment outside the home.

And she and her husband give 10 percent to their church.
While most readers offered constructive suggestions, one argued Jen should go to work at nights, after he husband comes home, to bring in extra cash.

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A note from Jen, a reader of the blog and a would-be first time home buyer, raises some important questions.

Is it possible to buy a home in the Boston area on just one income? I’d love to say yes, but I am not so sure.

Jen works at home and has young children. Her husband, an engineer, brings home $82,000 a year. Fortunately, for him, he’s in the defense industry, where there is no lack of demand right now for his skills.

Jen and her husband pay $1,300 in rent a month and want to buy but are not prepared to spend more per month on housing. Both are frugal, putting a good portion of their weekly paycheck into savings.

So far, the two are searching in Woburn, Billerica, Tewksbury and Wilmington, and even considering buying land and putting up a prefab. Jen has no interest right now working outside the home and would rather keep renting if the alternative means missing these crucial years with her children.

I’ll let Jen tell her story and then turn it over to the brilliant real estate minds that follow this blog for their two cents and advice.

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I never thought of Cape Cod as a fount of affordable housing.

But the real estate recession that is hammering cities and towns across Massachusetts and the country has finally brought home prices on some parts of the Cape down to recognizably affordable levels, the Globe reports.

The median price in Hyannis, home the Kennedy’s summer compound, has fallen to a shocking $205,000.

That’s good news for first-time buyers, though not without an obvious catch. You have to either have a job in the area, or be ready to brave a brutal commute up Rt. 3 to Boston.

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One of the great things about this blog is the level of the comments made by readers.

I feel like I am getting a PhD in real estate just by sorting through the responses to my posts.

No one is afraid to offer their opinion, and back it up with some fairly meaty arguments and stats.

That brings me to the case of Jason, a reader of the blog who recently e-mailed me for advice.
In his early 30s, Jason works in the financial service industry and shells out $1,900 a month for a one bedroom in a brownstone in Brookline’s Washington Square.

He is now struggling with the dilemma many buyers on the fence in this are faced with: Should I buy now in a clearly declining market, or take a chance and wait another year in hope of getting an even bigger discount?

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It’s a nasty spat between a superstar downtown broker and an up-and coming wannabe.

Even better, these guys were actually business partners.

But whether the budding legal war between real estate market heavyweight Kevin Ahearn and his challenger, Anthony Longo, is about a bully trying to crush a pesky competitor, or simply a betrayal of business trust, depends on how you look at the facts.

One thing is clear, though. Bad times don’t necessarily bring out the best in people.

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Now this is a concept that is hard for my Boston-centric mind to grasp.

Banks so eager to get rid of the foreclosed homes that lenders are selling them for as little as a thousand dollars.

Practically giving away half decent, or at least at one time half decent, homes that would go for a small fortune around here.

That’s how far the real estate market has crashed in some cities around the country. Flint, Michigan has 18 homes listed for $3,000 and under, Cleveland 46 and Indianapolis 22, CNNMoney.com recently reported.

Some of these homes, if they were transplanted to Wellesley or Weston, would fetch several hundred thousand dollars.

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Yesterday, Anon asked me what ever happened to John Dough. Today, so did RE Maven. I know that John will be happy that his fan base misses him. He wrote me around Christmas with an update. His entry is in queue for tomorrow.

For those who don't know about John Dough and his project, follow the links. I introduced John in early November. He explained his financing plans a week or so later.

Yesterday, I told N. that she needed an appraisal. Why didn’t I say she should get a Comparative Market Analysis from a real estate agent? Because N. will be working with a lender. The value figure she needs is the amount that a lender will accept for collateral.

An appraiser uses the standards that lenders require to establish the value of property used as collateral. They also valuate in legal matters such as divorce and estate sales. That’s their job.

Real estate agents establish fair market value in order to help their clients sell and buy homes. Potential listing agents do a Comparative Market Analysis as data to establish fair market value. This is only one piece of the marketing plan to establish the highest price that a buyer may pay for the property. Buyer’s agents work a lot like potential listing agents. Their goal is to establish a fair market value as part of a negotiation plan. That information is one part of the advice on how to make an offer that is the lowest possible one that a seller would accept.

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I always thought if you owned one of those Gilded Age waterfront castles you had it made in the shade.

But in this real estate market, apparently not.

The Globe, in this Sunday’s Homes section, looks at some of the latest markdowns in the local real estate market.

Take the Wyck Estate in Manchester-by-the-Sea.

When it was first put on the market four years ago, it was priced at $23.5 million. Now it’s been reduced to an all so affordable $12.25 million.

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When even your friendly local real estate agent is down in the dumps, you know these really are tough times.

That’s my take on the results of an annual survey of real estate folks from across New England by Winchester-based Rexer Analytics.

Back in April, 31 percent of those surveyed – roughly 200 with at least two years of experience – reported being “completely satisfied.’’

Not bad for any business, especially one where sales are dropping. I mean I can’t imagine 31 percent of any newsroom ever being “completely satisfied.’’ Maybe try 3 percent.

But throw in a recession and a global financial crisis, and six months later the number of those reporting to be in the equivalent of real estate heaven had dwindled to 13 percent.

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There is a designation on the Multiple Listing System (MLS) of a little red contract and the letters ACT in red. It means, "the seller is accepting back-up offers." If an Offer to Purchase (or a Purchase and Sales Agreement) has already been signed, how can a Seller accept a different offer?

The Seller can’t. There is a problem with language. If there is an Offer to Purchase or a Purchase and Sale Agreement signed between the Seller and the Buyer, the Seller cannot unilaterally dump that contract to make way for the back-up offer. The Seller can collect other offers, but the Seller cannot accept one.

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Last week in the Voices section of The Boston Globe, Meredith Goldstein discussed disputes over who keeps the ring in the event of a failed engagement. She says the woman should give the ring back, since it was a binder for proposed marriage (which is a contract) more than it is a gift. If the recipient was not financially hurt or abused, the ring should go back. You should “be glad you didn’t marry the guy for 20 years.”

Making a real estate Offer to Purchase is a lot like proposing marriage. You need to have enough to offer and it hurts to have your offer turned down. Not all Offers to Purchase get accepted. I work to get the lowest price for my clients, so if they listen to me, they get out-bid more often than if they do their own thing.

If you make an Offer to Purchase and it is accepted, you have declared yourself. In real estate, you are still “engaged to be engaged .” The seller’s agent or attorney starts holding good faith deposits in escrow to bind the contract. But contingencies abound: home inspections, attorney’s review of tenancy or condo documents (if applicable,) the buyer getting their mortgage and the signing of an agreeable Purchase and Sales Agreement (P & S).

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WS started a conversation about neighborhoods which got side-tracked to a conversation about the term he used to describe bland, homogeneous neighborhoods. He got some good answers. Are there more?

Where can a person find a neighborhood that is not bland? Where are the neighborhoods to find people of different ages, income levels, cultural backgrounds and family constellations? Where are places where the housing doesn't all look the same? There are a lot of people who prefer these areas to those that remind them of Leave it to Beaver. or Father Knows Best.

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Goldman Sachs hotshot Jon Winkelried apparently never got the memo about the real estate downturn.

The co-president of the Wall Street powerhouse put his Nantucket waterfront estate on the market last month for a whopping $55 million. That’s real money even on Nantucket, where the current record for a property sale, while less than half that, is still an eye-popping $26.5 million.

But Winkelried’s chances of notching a real estate record are now looking slimmer by the day, with the nation’s hard times taking a toll on previously immune mansion sales.

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Not everyone in this real estate market is hurting.

Just take Showhomes. The Nashville, Tenn. company, which operates a nationwide franchise, has found a lucrative niche.

It will make your home look lived in, even if you are no longer actually living there. You can just imagine the possibilities, especially for banks trying to unload foreclosed homes.

A sweet spot in this market if there ever was one.

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When I wrote about the freeze on foreclosures, I got this question:

Rona - as a new homebuyer with a few defaults on my credit report can I go to the bank and get a new "something I can pay for" for 40 years?

As a new homebuyer? I wondered, how new?

A little recent history:

Subprime mortgages were restricted about the time I started on this blog, summer 2007.

It was (and is) still possible to hang yourselves without being in a subprime mortgage. FNMA would allow 50% for mortgage debt in October 2007. Now, it’s hard to borrow with small down payments or above the jumbo limit. But debt is there for the accepting if you have the money to put down with your real estate purchase.

Today (!) no doc loans are still being advertised.

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So far the real estate downturn has hammered poor urban neighborhoods and middle class towns.

But will the tide of distress reach the golden shores of Weston, Wellesley and Brookline before it finally recedes?

It’s a fair question and one that has sparked a lively debate on the blog.

In one camp are the “location, location, location’’ devotees who appear convinced that no spate of foreclosure auctions will ever taint a Wellesley or Weston.

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I’m not the pickiest person when it comes to location. My wife and I bought a house on a fairly busy street within earshot of the railroad tracks.

But there are a few things I would draw the line at when it comes to checking out the neighborhood. The local dump, a major highway and a pig farm top my list.

Now, thanks to the Globe’s Keith O’Brien, I have a new item for my list of deal killers: an “odor-control’’ plant.

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A lot of people got burned toward the end of the late, great real estate bubble. They stretched to buy homes they couldn’t afford, convinced they could cash in at will in a rising market.

That worked out real well.

Yet while the real estate market now bears as much resemblance to that of 2005 as the North Pole does to the tropics, the penchant for trying to time the market appears to have continued undiminished.

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Call me cynical. But if the National Association of Realtors is studying the questionable practice of “re-listing homes,’’ a lot of real estate folks must be doing this.

Just to fill you in, that’s the creative tactic of pulling the listing of a home that has been languishing on the market, and then, presto, putting it back on as a “new listing.”

Enter the National Associate of Realtors. At their recent national conference in Orlando, the trade group released a white paper delving into the questionable marketing tactic.

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The real estate market may be tanking and values plunging. But hey, don’t look at me. My home is actually gaining value!

That seems to be the attitude of a surprisingly large number of homeowners amid the current downturn, a recent AP story found, which interviewed real estate agents across the country.

Already battling a tough market, some brokers apparently find the biggest challenge is getting their clients to face up to the unpleasant realities of a down market.

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Q: Why would agents not tell you about the great schools?

Answer number one: Unless the agent says the same thing to every customer or client, that agent may be seen as practicing “steering.” Steering violates fair housing laws. It is the attempt to encourage people to buy in areas with people “just like” the buyer. In the past, this practice maintained segregated communities.

Here’s an example:

Suppose Dullsville has a reputation for great schools and town service. It is more expensive than the town next door, Blahburg, known for mediocre schools and town services. Of course, Dullsville is more expensive.

If an agent assumes that a buyer will want Dullsville for the good schools because of who the buyers are, that agent is discriminating. If the buyer is in a protected class, that agent is breaking the fair housing law.*

If an agent says this, the agent is breaking the law:

To a heterosexual, white, couple: Since schools are important to you, it might make sense to look in Dullsville and buy a smaller house. Blahburg has lower MCAS scores and sends fewer kids to 4-year colleges.

and

To a couple with a foreign accent: You will find a bigger house in Blahburg. Schools? They have MCAS scores at about the State average and send about 30 percent of their students to 4-year colleges. You can’t get a house as big as you want in Dullsville.

and

To two married men: You can get more house for the money in Blahburg (assuming they do not intend to have children.)

Answer number two: Agents avoid subjective judgments.

Realtor AJS commented that this was LAW [his capital letters.]

I don’t think it is actually law. I think it is one of those things that agents are taught in agent-school. “It is best to keep your opinion out of things that you can’t quantify,” say the real estate instructors. The problem is that one person’s nice neighborhood is another person’s slum.

This should not stop an agent from knowing the comparative, measurable quality of the town(s) their client or customer is asking about. The objective measures should be quoted. Clients or customers need to ultimately make their own decisions.

*Protected classes: Race, color, religion, national origin, ancestry, sex (gender), sexual orientation, marital status, veteran status, disability (mental or physical,) age (except elderly retirement communities that meet certain standards.)
There are additional classes in regard to rental housing.

By email, Mark asked:

I have a house listed for sale and I was wondering if you could tell me what the protocol that you might typically expect to see out of a listing agent... I guess that I am more curious what you could say are the most effective qualities of a listing agent in marketing a house and helping it to sell. Does the listing agent often attend showings (I seem to remember the listing agent attending a showing maybe half the time)?

This is a question more sellers should be asking. I wrote about what listing agents do for sellers, (1/8/08) but not specifically about attending showings.

As a buyer’s agent, I am sometimes at showings alone with my clients and sometimes we are accompanied. I know what to expect depending on what town I am showing. Showing protocol varies by community. In some towns, only the laziest agent fails to attend every showing. In other towns, agents are not expected to be there. It also varies by office. There are offices that share all the listing appointments; the down side is that some agents doing the showing may not know the property well. The good side is that it is easy to see on your schedule.
What did you see when you were house-hunting? Tells us what town you were in.

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Before deciding to work with a real estate agent it’s important to check out this person to see what kind of track record they have. One of the best ways to find an agent is to get referrals from friends and family, but there are other options if you can’t get a referral from a trusted source. For instance, you can meet agents who work in the area you are interested in and ask them for references, then call up the clients and ask them about their experience with the agent.

However, some websites are offering their own systems for rating real estate agents. ZipRealty recently started letting customers rate its agents with a 5-star method.

You can search the online real estate company’s site for agents by city and town, then compare agents who cover the area that you are interested in.

When I checked out ZipRealty’s rating site, it looked like a lot of the agents had rather high ratings, 4.3, 4.5, and 4.8 stars were common. The agents’ profiles also include comments from customers they have worked with, but many of the comments are anonymous and are overwhelmingly positive. For me, I like critiques that point out weaknesses as well as strengths, so I can get a better idea of what I might be getting into. (For example, great at walking you through the paperwork, but didn’t always return phone calls promptly.)

Another website, Homethinking.com, offers a way for sellers to check out prospective real estate agents.

The site gives you a rating, but it also lists the types of properties the agent typically works with (single-family, condo, etc.) and the price range they typically work within. Also, it lists the agent’s recent sales, including the property address, the listing price, and the sale price. It also lists current properties the agent has listed. I liked having access to the details, because it makes it a little easier to track down more information about your prospective agent.

Have you found other services, online or off, that are helpful for checking out real estate agents? What are they?

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If I didn’t get paid to do this job, I could find better things to do with a Sunday afternoon than go to open houses. Sunday was an extraordinary day; it was perfect autumn. What were all these people doing out there?

I was out for three different households, so I had a reason to be doing a some-of-these-things-are-not-like-the-other tour. I saw the same people in homes that were nothing like one another. Some admitted to being neighbors. Most were just house-wandering.

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Last week, I mentioned the increased scrutiny that appraisals are now getting. Today, an attorney-colleague told me there is also a trend for underwriters to not accept unrecorded condo document drafts; they want to review only final, recorded documents. I am wondering whether the underwriters care whether the rules make sense to owners, or if they will just be checking that they are recorded.

I have seen some questionable condo rules in my day. I have heard of even more. I have seen rules that require:

The outward facing side of all curtains had to be white or off-white.

No flags, furniture or satellite dishes on balconies.

No dogs and cats. However, this was a change. The existing animals were grandfathered-in. (I showed a condo where the owner had to sell because his dog died and he got a new one -same breed- but was found out and fined.)

One of my clients was a trustee in a big condo association before he came to me in search of his single family home. He told me, I paraphrase:

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I called to make a showing appointment for an under-priced but unremarkable home. I got an amazing voicemail in return from the listing agent. He sounded like he was doing me a favor by interrupting his busy day to call me. This is what he said, I paraphrase:

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I have been hearing about the Green Line extension into Somerville for fifteen or so years. I have been hearing listing agents “sell” it as a feature of a property for two or three years. Since this summer, I hear it being “sold” as a done deal. Brokers are saying “The Green Line stop is going to be three blocks away.” “The new Green Line will make this an easy commute.” “See that building there? It is going to be torn down to make a new Green line stop.”

The Green Line is coming, but so is Christmas. Christmas will be here first. The Green Line is coming, expected in a neighborhood near you in 2014. Six years. A lot can happen in six years. Do you believe in the Green Line? Do you believe in Santa Claus?

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A lot of readers don't understand what short sales and foreclosures are. I am getting comments and emails. This is foreclosure and short sale 101. Skip it if you know this stuff and have no advice fot those who don't.

Tim responded to Monday’s post. He is in a situation that has become more common since the sub-prime meltdown in the summer of 2007:

One of the problems we are facing is, when we tried to sell it, we asked if we could just pay off the difference to our mortgage holder, that was unsuccessful as they tried to push us into a short sale, which I didn't understand because we're current on our mortgage. We tried to take out a personal loan, however the amount was too much and exceeded personal loan limits. We've tried to refinance to make the mortgage lower - so we would actually want to keep it and maybe break even or make money off of the house (with the rental), but we cant refinance since the value has dropped so much we'd have to finance more than 100%, and banks just dont do that now-a-days. What does a person do!?

Tim

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The very next day – I am not making this up! -- Another client wrote this:

BTW, I'm not sure I understand this business of tenants not letting prospective buyers into the house. If I had a house listed with an agent that couldn't get it shown, well, what's the point of putting it up for sale? (Or, less kindly, what's the point of using that particular agent?) Don't owners have clauses in their rental agreements requiring tenants to allow the house to be shown, given adequate notice? I don't get it...I know that if I was a tenant, I wouldn't be happy at the prospect of a new owner giving me notice to leave, but I'd let that person in since it's part of my rental agreement...and, I'd probably be seriously looking for a new apartment anyway...

And I answered:

About tenants. No, there isn’t a clause that says that they must allow the house to be shown. Tenants have the right of "quiet enjoyment" which means they have the say about who comes in and when. The sellers who do not empty a house for sale want to have their cake (sale) and eat it (rental income), too. If you have a house with problem tenants, they probably don't have the cash ahead to move (an extra month's rent can be hard for some people.)

So today’s sale and rental issue is about the people who rent a home while it is for sale.

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An email from one of my clients said this:

Hello, I had a question... today I noticed the same house is both for sale and for rent... does this often happen?

[Attached here was a link to a rental notice on Trulia for about $2000 a month. This house is on my client’s MLS list for sale around $400,000.]

It seems like the way the system works, sellers agents would be very reluctant to see a house offered for rent. I was pleased to see the ratio of price-to-rent was relatively low. I'm curious what, if anything, this means about the state of the Market, as they say.

I answered:

Did you notice that the same agent is doing the rental and the sale? That means he will sell it now, or sell it later. So his disincentive is minimal.

Renting homes that don’t sell is happening more and more in the unstable market. It means that sellers are insecure enough to be willing to rent a place until next spring so they don't need to sell it during the winter slump. Also, he won’t have to heat an empty house all winter.

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I promised to report on my current clients' adventures in the financial chaos. The persistent rumors that no one is getting mortgage loans are just that, rumors. The lenders I work with are still writing loans and buyers are still buying. My buyers are facing competition for houses, so I am not the only broker with buyers who can borrow for a home.

These are the financing issues I am seeing:

1. Weird rate trends.
2. Appraisal scrutiny.

1. Thursday, the daily rate sheet that I get from a lender had “N/A” marked on the adjustable-rate chart. What does that mean?

Adjustable-rate mortgages have occasionally been nearly equal to fixed-rate products in the past. That made them useless. But this week, they are higher than fixed-rates, which make them worse than useless. Therefore, good lenders did not advertise them. The new Fannie and Freddie rules have driven up adjustable-rate loans. There are a few portfolio lenders who have adjustable-rate products that are lower, but there are only a few.

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Yesterday I wrote about one reader’s trouble buying a condo in Boston over the summer and trying to get contact information for the property owner. Today, I wanted to list some of the resources for condo buyers, sellers, and tenants that I came across while trying to help this reader out.

The Massachusetts Attorney General’s office, which couldn’t specifically address the reader’s situation, pointed out some options. First, the AG’s office has a section with information on Housing on its site, click here to check that out.

A spokeswoman said Chapter 183A: Section 10 of Massachusetts General Laws specifically might cover the reader’s trouble. It spells out the owner's interes and powers and duties of condo tursts or corporations. The various chapters of the Massachusetts Condominium Act can be found here.

Condo buyers unable to reach a resolution with a seller may be able to seek help through the AG’s mediation program.

Thre's also a New England Condominium magazine, which may be helpful and can be found by clicking here.

Also, the Massachusetts Association of Realtors pointed me to the Massachusetts Legal Reform Institute’s book “Legal Tactics: Tenant’s Rights in Massachusetts,” which can be purchased through the Massachusetts Continuing Legal Education office in Boston for about $45. The book addresses tenant’s rights in private housing, and explains the rights of tenants in apartments that are being converted to condos.

Finally, it really is a good idea to have a lawyer to help you through such deals, and condo sales can have a few extra twists and turns so it’s a more specialized area of real estate law. It may be a good idea to hire a lawyer who specializes in condo laws. Try to get references from friends and family for a lawyer. However, if you don't know of any lawyers, the Massachusetts Bar Association does offer a referal service. (To reach the referral line, in Massachusetts you can call the toll-free line, 866-627-7577, or visit www.MassLawHelp.com. Hearing impaired people can reach the TTY line at 617-338-0585.)

Does anyone else have suggestions for resources that may help condo buyers, or sellers?

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ZipRealty.com has a great new utility on its site. It’s from Walk Score. It ranks a home in relation to how conveniently located it is to grocery stores, parks, restaurants, coffee shops, parks, movies, bars, mass transit stations and more. Homes that score 90 or above are deemed a “Walker’s Paradise,” homes scored between 70 to 89 as “Very Walkable,” 50 to 69 as “Somewhat Walkable,” and 0 to 49 as “Car Dependent.”

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Buying a condo includes some different challenges than buying a single-family house. There are condo fees, condo associations, special assessments, and condo association rules to consider. In an established condo association, it’s usually a pretty routine matter to nail down those items.

But what about buying in an old apartment building that is being converted into condos?

One reader who recently wrote to me stumbled onto some problems when he purchased a converted condo in Boston over the summer. One of the most frustrating problems he faced was the fact that a board of trustees had not yet been set up, so there were questions about who to contact about repairs and other building issues. The buyer dealt with the property owner’s lawyer during the sale process, and the property owner was going to act as the trustee until 60 percent of the units were sold. (By the way, this was the property owner’s first time developing this kind of project.)

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A lengthy discussion about square footage was held here in March and again in May, led by Binyamin (remember him? Man, I miss him!) I chimed in.
Now it rears it’s head again. Katt is tired of house size inflation and thinks it does a disservice to sellers.

The only thing [broker name omitted *] is known for is inflating the square footage of the homes they have listed, along with sale prices.... .... Please add up the room dimensions and see for yourself. It's been under agreement 2x, and both times the deal has fallen through- I wonder why?? Could it be that the lenders are saying that the loan to value ratio is a little screwed up? Consequently, the realtor of this property will not admit that the square footage is grossly inflated, and the seller's will not come down on their price to a reasonable dollar amount for the size of the home....they will have to hope that someone has cash to pay in order to get ripped off by this [broker name omitted ], because I can't imagine a lender giving someone that amount of money for such a truly small home.... I could fit this home inside of mine, and mine is listed at 2700 sq. ft. Check out their other listings in the area- gross and overpriced, and stagnant. [broker name omitted ] needs to realize that they ain't in the driver's seat anymore, and they're doing the client's a great disservice.

I want to clarify:

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A lengthy discussion about square footage was held here in March and again in May, led by Binyamin (remember him? Man, I miss him!) I chimed in.
Now it rears it’s head again. Katt is tired of house size inflation and thinks it does a disservice to sellers.

The only thing [broker name omitted *] is known for is inflating the square footage of the homes they have listed, along with sale prices.... .... Please add up the room dimensions and see for yourself. It's been under agreement 2x, and both times the deal has fallen through- I wonder why?? Could it be that the lenders are saying that the loan to value ratio is a little screwed up? Consequently, the realtor of this property will not admit that the square footage is grossly inflated, and the seller's will not come down on their price to a reasonable dollar amount for the size of the home....they will have to hope that someone has cash to pay in order to get ripped off by this [broker name omitted ], because I can't imagine a lender giving someone that amount of money for such a truly small home.... I could fit this home inside of mine, and mine is listed at 2700 sq. ft. Check out their other listings in the area- gross and overpriced, and stagnant. [broker name omitted ] needs to realize that they ain't in the driver's seat anymore, and they're doing the client's a great disservice.

I want to clarify:

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This is an encore publication of an entry first published on July 26, 2007. At that time, I was looking forward to a buyer’s market (which has not yet materialized) and I had just finished reading the last of the Harry Potter novels.

2008 questions:

The buying advice remains the same. What’s changed since then?

Do you think style matters?

What makes a house fly off the market?By Rona Fischman

JULY 26, 2007 | 01:07 PM

I just finished Harry Potter and the Deathly Hallows. Don’t worry; I won’t tell what happens to He-Who-Must-Not-Be-Named to Those-Who-Have-Not-Yet-Read.
The real estate topic that I can draw from these books is the ever-magical issue of “what is it about style that makes a house fly off the market, or not?”
The Dursley’s house (Harry Potter's much-hated uncle and aunt)is a nice, neat suburban home, much like its neighboring homes. It’s in a little town outside London -- sort of Britain’s answer to Long Island. Were it in America, it might be a ranch or a Cape Cod or a split-entry built in the 50s,60s or 70s.

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This is an encore blog entry, first posted on August 10, 2007. Since then, I have had two more two-family buyers. The good choices for two-family homes have been few and far between. Both houses I have worked with were old, solid, but needed extensive updating.

I had buyers close on a two-family home last week. They had a long and hard search because there were so few nice options. I am glad to have them join the dwindling ranks of two-family homes owners.

The mass conversion of two-family homes into two-condo associations has reduced the supply. The steep increase in sale prices without a proportionate rental increase made the economic benefit of owning a two-family less appealing.

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Follow up on this comment:

cue the usual responses . . . half will say that now is an absolute terrible time to buy, the sky is falling, boston continues to be overpriced, you're an idiot with no financial sense if you buy now, etc. The other half will say that things aren't that bad, they or someone they know is looking to buy soon, a house is a home more than an investment, etc. What am I seeing? Same topics and responses over and over and over again.

Posted by same old thing October 3, 08 03:38 PM

I see his/her point. My latest post about buyer behavior in the current, unstable environment did invite the usual suspects to say their usual things about what is going on in the market. Among the comments, however, there are some new and fresh perspectives, based on personal experiences. I enjoy those, even if same old is bored.

I can continue to report to you what I am seeing in the marketplace. Clearly, some of you have been surprised at what I report. Should I continue to do so, at the risk of getting the repetitive comments from the usual suspects?

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Today, I found out about a promotion that is different than anything I have ever seen before. I’ve seen “Big Move” advertising blitzes, special open house weekends (where every listing is open), and give-aways of televisions, vacations, and even a car. But this is widespread and different. Coldwell Banker Residential Brokers is holding a sale. They are convincing their sellers to lower their prices for ten days, starting this Friday, October 10th. Reuters covered it today.

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I frankly do not understand what I am seeing in my market area this week. I am still experiencing an unusual amount of activity in my little office. I am over-loaded and my clients are buying. I had one prospective buyer write me “we'd just rather not wait a month and lose psychological momentum as it has taken along time to get to this decision.”

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In my email: Tycho wrote:

Hi Rona,

... One topic I don't recall reading about and which is interesting is for sale by owner properties. Maybe compared to short sales they aren't on folks' minds. For one compared to a traditional broker-offered listing they appear more complicated.
As a buyer's agent have you been involved with any? What were your
experiences?

F.S.B.O., For Sale By Owner, is a good topic. I agree that short sales and foreclosures are getting more attention. I work with sellers who are selling their own property whenever one of my clients wants to buy a house marketed that way. Are they better deals? It depends on the seller.

A seller who does not have an agent does his/her own pricing, staging, advertising, showing and negotiating. If the seller has some skills, he/she may succeed at selling on his/her own. Frequently, I see sellers who don’t have skills in one or more of these areas. This risks time wasted in weak exposure, poor presentation and mistakes in negotiating. All this can benefit the buyer (and my buyer-broker heart goes pitter-pat!)

Selling a house is not as simple as putting it on the MLS and collecting a check. Back in January I wrote on this blog about what seller’s agents do for their clients.

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This is another encore entry. It was originally publish August 6, 2007, in the wake of the bridge collapse in Minnesota.

2008 update: Neglect of property costs five times as much to repair than it would to maintain, is this true of our economy? How do we maintain an economy -- with more regulation? or less?

Now: the encore.

Neglect. That’s a nasty word. Our national lesson this week is that when we neglect our infrastructure, disaster follows. I see neglected homes every week. If homeowners neglect their homes, they still get to sell it to some ambitious buyer.

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Though the Wall Street rescue bill’s future is still uncertain, government officials are still trying to resolve the country’s housing market problems by helping communities purchase foreclosed homes. Massachusetts learned last week that it will receive $55 million from federal housing officials to help communities purchase foreclosed properties and revitalize neighborhoods, according to a Kimberly Blanton story in today’s Globe.

However, Bay State communities, such as Chelsea and Brockton, have not been successful so far in their attempts to acquire foreclosed properties, Blanton reports.

Earlier this year, the state created a $20 million fund to help cities and towns buy foreclosed properties, but no community has purchased foreclosed homes with the funds yet.

The problem stems from the fact municipal officials are having trouble tracking down property owners, or that investors who have assumed control of the property don’t want to sell because they are holding out for more money. Mortgages are bundled together by financial companies and then sold to investors as securities. Local housing officials told Blanton that they have not been able to break through the “tangled web of Wall Street investors, trustees of investment funds, and the loan-servicing companies.”

In Brockton, housing authority officials said they had to drop their attempt to buy one particular foreclosed property, which is near a newly renovated city apartment complex and has become a gathering place for local kids. City officials had signed a purchase agreement with an out-of-state bank in February, but then the bank said it didn’t have clear title and couldn’t sell the property. This left Brockton housing officials frustrated.

Do you think municipal officials should be trying to buy up foreclosure properties? Is there some better way this could be accomplished?

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This is an encore (a disingenuous name for a repeat.)
This entry was posted August 22, 2007. Back then, the comments feature wasn't working and not many people knew we were writing here. Much of it is even more true today than it was 14 months ago:

Whenever a house sells in my neighborhood, my neighbors ask me, "how much?" Then one will say something like this: "If he got $325,000 then my house is worth $390,000..."Invariably, my neighbor has inflated his home's value by $20-30,000.

Why is this? According to Daniel Gilbert in Stumbling on Happiness we agree with information that reinforces what we already believe. Therefore, the single fact of one house sale allows my neighbor to feel confident about his (wrong) price.

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I got soaked today, literally. Tuesday, I wrote about Walk/Ride day. Well, I am not on bicycle, but I hoofed it at lunch to run my errands...The weather is not the only unpredictable thing these days.

It is hard to know what is going to happen economically over the next few years. We are on the eve of a national election, our banking system is in chaos, and the state tax structure is up for ballot question. This week has been unrelenting: bad news, indecision, confusion...and my phone ringing with buyers who want to buy...huh?

The uncertainty affects people in many ways, but what I see most often with prospective buyers is one of these two reactions:

1. Burrow into a nest (home) and weather the storm as best you can.
2. Freeze, stay where you are, and weather the storm as best you can. (Some of these buyers come back years later, when they see better opportunities.)

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The foreclosure entry that I wrote on September 9th is still drawing comments. Today this one came in from Polly:

I was a buyer in a short sale and today I got news the deal is off and the house is going into foreclosure. I paid for a home inspection and an attorney to review the P&S. (Wells Fargo was the Seller's lender.) Any advice for me? I really love the house and still want it.

My advice to Polly is the same as my advice so far for buyers who are trying to capitalize on foreclosed homes:

The time is not yet right for buying foreclosed properties. The lenders do not have their systems in order. They can’t manage the sales efficiently. The wait time is long; deals fall through for no reason. Prospective buyers end up wasting time and money. Sometimes they succeed, but the discounts that I have seen have been modest.

If you are going to deal with short sales and foreclosures, hire a lawyer who knows the ropes. Expect delays. Be prepared for the sale to fall through. Choose something that is worth the risk and bother -- or don’t buy that property. If you are expecting a normal deal in a normal time, you are dreaming.

***

I started in real estate during the last recession, in 1991. By that time, foreclosure sales were working for buyers. There was an agent who handled foreclosed properties who had good communication with her investor’s office. The investor was offering good financing options for the buyers. The management of foreclosure sales worked like a well-oiled machine.

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Remember “Bridesmaid Revisited,” the frustrating story about my clients who lost two properties in competition? That was in June. That couple did find a home for themselves and closed on it today.

The home was a small Colonial on a quiet street. It was being sold by an elderly woman, with the help of her children. My buyers found out that they were one degree of separation from their neighbors on both sides. They attended the neighborhood block party ten days before closing. They heard about how nice the seller’s family was and how the neighbors miss the seller. This was a happy home where a happy family grew up. After 47 years, it was time for the seller to move on. My buyers found home!

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On Saturdays I have my appointments stacked up all day, with some wiggle room. If I am showing to three households, I will see the first from 10-12, the second 12:30-2:30, and the third 3-5. If some of the houses are duds or couldn’t be set up in time, I find myself with a half-hour to use. From April until October, I follow the yard sale signs to see where they lead me.

What I heard this week: One yard-seller was also selling her house. I overheard her telling someone else why: the water bills. She spent over $6000 last year for water. Her town doesn’t separate the yard water from the house water. She is moving to a town that does. She’s fed up with paying sewer charges for the water she uses to fill her pool and water her lawn...

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(Written Monday, September 15, 2008)
Yesterday was Sunday-open-house-day-from-Hell, which found me in Cambridge, Somerville, Bedford, Lexington, and Needham. The houses were great, but that’s a lot of driving in a three-hour window. I love my car, but I prefer my bicycle...
Thank you, Carol, for canceling this afternoon’s appointment at the last minute! Today is the perfect day to play hooky. I’m going to write tomorrow’s entry and hit the road with my two wheels!

There are two brokers who make bicycling it part of their business.

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The latest fad in writing real estate ads is apparently brutal honesty.

Several real estate agents interviewed for a
story in the Homes section of Sunday's Globe offered tips for marketing a home and writing the ad copy. Turns out revealing your property’s faults won’t necessarily scare off potential buyers.

“You definitely want to paint an interesting, intriguing picture without over promising or under delivering,” Keller Williams Realty broker Paul Campano told correspondent Kate M. Jackson.

For example, Campano recently listed a “fixer-upper” in Cambridge that needs lots of work in the kitchen. To make sure prospective buyers have an idea of what they would be dealing with, he made sure to post a picture of the kitchen with the listing, even though it was the worst room in the house. It’s better to be upfront than to lure buyers to the house and have them feel they were misled, he said.

Washington real estate agent and Active Rain blogger Anna Matsunaga told Jackson buyers are demanding truth in advertising now. It’s a bad idea to sugarcoat the truth, she said. Though it may seem like a crazy strategy, Matsunaga said it works.

Honesty sounds like a good policy to me. When real estate ads are cryptically worded, it does tend to raise questions in my mind about the property. For instance, the phrase “must see” often makes me wonder if they mean I have to see it because it’s so beautiful, or because there’s simply no way to adequately describe the shade of lime-green used to paint the bedroom woodwork.

Are there any particular phrases that are sure to pique your curiosity in a real estate ad? What’s the worst ad you’ve ever encountered? Do you have any tips for people writing a home ad?

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The weather has changed in real estate again. We are in the autumn market. All of a sudden, there are more homes for sale, and more new choices for my buyers. I'm happy with what I have seen this weekend.

Why the change? It happens every year around this time. The autumn market is sort of like a mini-spring market. Buyers generally want to move sometime other than the winter. Most want to move in time to start the school year in a new place; thus we have the spring market. Then, around late July, buyers and sellers get bored with real estate. They want to go on vacation without thinking about houses; thus we have the summer doldrums. Now vacations are over. People are thinking about buying and selling before the winter sets in. Sometime between Veteran’s Day and Thanksgiving, it will probably slow down again. Sales volume is down this year, but the seasonal pattern remains.

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I got an email from a reader who signed a Purchase and Sales Agreement on a short sale. He was unhappy when his agent called to say there would be a two-week delay in closing. He was paying cash. He had no lawyer. What should he do?

First thing, if you don’t hire a lawyer you should read your Purchase and Sales Agreement. Most people don’t. They almost all have an automatic thirty day extension to perfect title (get liens and encumbrances off the title.)

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I get asked regularly about how deep the discount for short sale and foreclosure homes are in my area. My answer is “barely deep enough to be worth it.” When I work with buyers of this kind of property, I prepare them for a long wait, more aggravation, more risk...and some financial reward.

Only undertake a short sale if you have time, flexibility, and risk tolerance. Some things that I regularly see:

1. Slow communication with the investor’s office, which must approve all contracts.
2. Generally poorer condition of the property.

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I got this email from a reader:

My agent is not bad, but in the two months since I've met her, she hasn't been very helpful in finding properties. The agent gave me a contract to sign the day I met her. The catch is that I took the contract home with me to review, and since we haven't seen many properties together, I never gave it back to her. Ethically speaking, I am under contract, since she assumes I have signed the contract and I am working only with her. Is there a polite way to get out of this situation? I was much more comfortable looking for condos on my own. Please help me find a kind way to tell my agent I don't want to work exclusively with her.

I know you feel ethically obligated. I respect that you have given your word and that means something to you. However, your story sounds like you are getting bad service. Have you heard from this agent since you were asked to sign a contract? Has he/she had any ideas about what you should do to jump-start your search?

First, look at your contract. Does it outline what the agent promises to do? My contract clearly states that I am responsible to show properties by appointment, as well as at open houses. I looked at the standard form published by the Greater Boston Real Estate Board; that one expects agents to find property, too. Chances are this one does, too.

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When I began in real estate in 1991, I specialized in adaptive housing. That’s the art and science of figuring out where someone with special needs can live comfortably. As a buyer’s broker, I began in this profession actively trying to work with people who used wheelchairs, were deaf or blind. Some of that early advertising catches up to me, once in a while.

Last week, I got a call from a broker who needed help with finding a home for a family friend. The home must be wheelchair accessible for their son. After giving her the names of several great organizations, I headed off to my other appointments. Five hours later, I called back to ask about whether she needed other resources. She told me that she couldn’t find the places I mentioned.

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This year, Boston Magazine looks at high schools not only for showy scores; the schools must also show good use of tax dollars. Now, that’s an idea I can get behind!

As an agent, I am constantly asked about schools. I regularly remind buyers to check out the quality of the buildings, the teachers, and the tax structure. If a town does not have sufficient commercial or industrial development, the tax burden falls on homeowners. If there is not enough tax revenue, then the schools are not rebuilt, the classes get larger, enrichment classes – like art, music – and sports get cut. Override votes leave nearly half the town unhappy, whichever way they fall. The article that accompanies this year’s list is the story of Newton North, the nearly $180-something million-dollar, already obsolete, beauty.

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Some local condo developers are getting creative to get through the current real estate slump. When they found that units in their developments weren’t selling as hoped, they opted to go the rent-to-own route. (To read the story that was in the Globe’s Sunday Homes section, click here.)

This option lets the developers earn some income from the units and gives prospective buyers a little more time to pull together down payments and get their credit in order, etc.

This could prove a successful tactic for some of the developers mentioned in the story, because they are skipping a common provision that deters many people from rent-to-own deals – their renters will not be legally required to buy the unit in the future.

Financial and real estate experts, such as the folks at Bankrate.com, advise caution when entering rent-to-own deals. Mandatory purchasing provisions are among the chief reasons for that advice.

So what do you think, will this help the developers get through the slump? Have you ever been involved in a rent-to-own deal? If so, what did you learn from that experience and would you recommend other people try it?

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I was told to brace myself. My client called to say her parents were coming to town and they wanted to see the house. Brace myself?

My fellow brokers have been known to say that the parental visit is “the kiss of death” for a transaction. I generally disagree. I would like to think that parents love their children. Parents are supportive of the choices their adult children make. My experience bears this out.

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There were some intriguing responses to yesterday’s entry about “fixing” the nation’s mortgage mess and the foreclosure epidemic, such as giving a tax break to people who are upside down on their mortgage –- but requiring them to use it to pay down the mortgage. I’m not sure how politically feasible all the ideas were, but I certainly am still mulling over many of them.

One thing that surprised me, however, was some people’s opposition to my suggestion of making financial education a mandatory component of the mortgage process. Honestly, I thought that was about as safe a suggestion as you could make.

For the record, I am not advocating re-education camps, or creating new government agencies.

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BubbleBoy asked me:

Here is a good topic to blog on: How do you do comps for homes when so little is selling? The comps from 07 or even 08 before the big mortgage meltdown are a whole different planet.

I am having no significant problem finding comparable homes which have sold in the past three months. State-wide, according to MLS, 11,509 single family homes sold in the past three months. Last year during the same 90-day period, 13,013 homes sold. That’s less than a 12 percent decline in sales volume.

There are enough sales to do a comparative market analysis. Mostly, property in Massachusetts is pretty homogeneous; it’s not hard to find three Capes or three Colonials near one another. If a property is unusual, I have a problem in any market.

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Congratulations! Yesterday M_ and M_ announced their wedding date in August, 2009. A little while later, they told me their house hunting plans. They want to start looking in January and move into the new place before they are married.
I really enjoy working with people who are in love. I have often worked with engaged couples as well as women who are pregnant. Many people decide to house-hunt at these happy times in their lives.

Let’s talk about stress...

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I am pleased to say that this cooler weather has lessened the overwhelming smells that plagued my house-hunting in early August (this year and last year.) The results of the smell survey I set up on August 8th are here.

Only one thing surprised me: There was not a single smell that I listed that someone else hadn’t experienced. I thought I was digging kind of deep with “aquarium/reptile” and “dead animal.”

Sellers, take note that buyers reject homes that smell mildewy, moldy, musty, or urine-soaked.

Buyers, take note of how much time or energy it takes to remove smells from your home.

Survey respondents said “run away!’ if the house smells of mold/mildew, musty/dusty or stale, oily, of chemicals (cleaners, fertilizers), smoky (from heater or cooking), smoky (from cigarettes/cigars/pipes), of urine, of cat, of dog, of bird, of aquarium or reptile, of neglected laundry, of overwhelming cleaners (ammonia or chlorine.)...and some of you think I’m harsh!

What is your smell story? How do you keep your home pleasant-smelling?

Have a pleasant-smelling weekend.

The number one priority of most first-time home buyers these days is affordability, according to a survey of Coldwell Banker brokers. That finding doesn't really seem like news.

However, the survey had one sort of interesting finding: 81% of the brokers said first-timers were very concerned with buying a property in move-in condition. About 7% found that first-time buyers were interested in purchasing a fixer-upper.

This could mean first-time buyers’ expectations are too high, according to Coldwell executives, who released the survey results this week.

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Termites really scare people. The idea of bugs that do nothing but eat wood seems like the ruin of a good house. What I have been told by home inspectors and termite inspectors is that these buggers eat very slowly. They are sort of simple creatures. They don’t do much besides eat and reproduce. They can’t see, so they smell wet wood and eat the nearest wet wood they can find. Your job, as a homeowner, is to avoid being the owner of that wet wood.

Prevention is easy: don’t leave wood near the soil; keep wood from staying wet.

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Today, I met a contractor who will do a “contractor’s inspection” for people who are about to be homeowners, but don’t own the house yet. Great service! This is not a pre-purchase inspection; it is more a life-of-the-house estimate.

Because he is a contractor, he can give estimates on work he may do. He also gave what I thought was great advice on how to think about working with contractors. I like his advice, what do you think?

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AV1 asked me:

There is a new construction custom built home being built right next to mine. The builder is asking for $579k. My house is an older single family home which I have updated over the course of the last year. I purchased my home for $328K and put in about $50k between a new kitchen, updated electrical, security system, refinished hardwood floors, fresh paint and new roof. I was just wondering if this house sells close to it's asking price, what does that mean for the value of my home or how is that utilized in terms of comps?

When I do a Comparative Market Analysis (CMA), I look at all the objective features like size, lot size, number of bedrooms, etc. Then I check for more subjective judgment items such as the overall quality of the home. Good, old construction which is updated in a conscientious way is as good as, and sometimes better than, brand new. The style of the house can matter. Some additions wreck the flow of the house and make it less valuable; some additions enhance the flow and usefulness of the home. I think that the house in question will probably benefit in value, as long as the new one doesn’t dwarf it.

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Some real estate industry observers are predicting "liar loans," which didn’t require borrowers to provide proof of income or a job, could drag out the country’s foreclosure crisis another two years.

Great. Like things weren’t already pretty bleak.

In the first half of this year, 6,707 residential properties were foreclosed in Massachusetts, up from 3,083 in the first half of 2007.

But for some people, the crisis has created an opportunity to buy a home in the Boston area -- a market they otherwise wouldn’t have been able to afford. On the front page of today's Globe, business reporter Jenifer McKim tells the story of several people who have purchased homes in distressed Boston neighborhoods.

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I have buyers who made a big mistake in their house hunting; they fell in love. This happens to some people, and it usually happens in regard to a property that was too expensive for the buyer. Sometimes, they are in love with “the one that got away.” The home someone falls in love with is usually the first one they can fully imagine living in. Something charms them about the idea of living there. It is often irrational, but it is always important.

Invariably, when I question the buyers about the flaws in the beloved property, they have forgotten them. One of my buyers rejects all homes with no bathroom on the first floor which have no good place to add one. However, he is looking for a place to make him forget W____ Street. Right, you guessed it; W____ Street had no first floor bathroom and no place to add one. But W____ Street is now perfect in every way.

This all sounds like my love life in high school. Very sad! Aren’t there self-help books written for people who fall in love with unattainable (love) objects?

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In an Offer to Purchase, a buyer outlines not only how much he will pay, but also the deadlines by which he’ll get the process completed. The first date on the Offer is the deadline for the offer itself.

A reader named Mike wrote me about Offer deadlines. He lost to another buyer because he left his Offer on the table too long. He thought he was being respectful to an elderly seller when, instead, he was allowing time for another bidder to juggle their assets and come up with a better offer. He’ll never do that again.

Where is the line between being considerate and being taken? How long is too long? How short is too short?

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I was emailed this story and asked what I thought of it, as a broker:

A house was listed as roof being 4 years old. My inspector said it’s 15-20 years old. After seller/agent repeatedly told us the inspector was wrong and we insisted on some evidence, they finally admit it’s 14 years old. The excuse being bad memory.

So is there any consequence for such false information? Should the
seller’s agent check the fact before posting? Thanks.

When a seller’s agent puts information on a listing sheet, it must be reliable. Seller’s memory and the public record are considered reliable sources of that information. Neither really are. Binyamin and this blog have talked about the inaccuracy of square footage on these sheets. That’s just one more glaring example of inaccuracy run rampant.

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You probably know someone who married too young or too impulsively because it was “what you are supposed to do.” In some cases this works out great, as the couple grows in parallel courses. Many times it is an emotional, financial and legal mess. The same is true of a starter home.

John Perkins, in The Globe article I mentioned yesterday, did a great job of outlining the costs of a real estate transaction to show the young couple that buying for the short term was not a good idea. Short-term ownership does not pay. Well, actually, it does pay... It pays the mortgage broker, the real estate broker and the real estate attorney and the seller. It is just a bad idea for the buyer.

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Last week, my nephew Nate stayed with us. Nate is 21, a college graduate in mathematics, with a minor in political science from UConn. He’s moving to Boston. He began job hunting and the neighborhood research toward finding an apartment to share with other recent grads.

The Boston Globe just published two articles about young adult housing. One discussed how recent graduates should not jump into buying a condo or starter home.

The second Boston Globe article reports that higher number of juniors and seniors are choosing dormitory housing because of increased costs.

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I got my driver’s license at 18 and my first car shortly thereafter (a 19 year-old VW Beetle.) I didn’t know any adults who didn’t have a driver’s license except for a few New York City dwellers and my vision-impaired friends and colleagues. But, since the mid-1990s, I have met more people going car-free, if not license-free. Some as a matter of principle and some to avoid car expenses and hassles.

An increasing number of buyers ask me where their prospective home is in relation to bike paths and bicycle-lane roads. When I don’t know, I ask my local bicycle guru, Andy Rubel. There are also good resources on line, statewide.

I see bicycle commuting in a growing number of buyers. Many will travel more than five miles each way. Now I ask not only where a buyer commutes to, but how. It is not safe to assume a commuter uses a car or MBTA alone.

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I spent most of today in depressing homes. A few were merely overpriced. Others were sad. When I dropped my second client off at home, we dubbed today’s tour "the smelly house tour."

I wrote about this last year, right around this time. Here I go again! Houses collect and hold odor in the heat of the summer and in the dead of the winter. Sellers, ventilate. Sellers, clean your homes. Sellers, don’t cover it with perfume!

Which smells bother you most? Where do you find them and what can you do about them? Please take a minute to participate in another survey. I will publish it next week. Click Here to take survey

Which is worse: stale cigarette smoke or stale cigarette smoke covered by perfume? How about mildew bathroom versus mildew bathroom with chlorine cleaner?

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Although every year is a little different from the one before, there are patterns that I see again and again. The summer leftover sales began in the past week or so, and were clearly on this weekend. Prices are dropping, demand is down, and listing brokers look tired. I am spending more time giving “feedback” and hearing the listing agent trying to sell me on getting my buyers to return. Humm...

Why does demand fall suddenly in mid-to-late July? It’s pretty simple. Those who are buying in order to get their children established in school for September must have their purchase closed in August. In Massachusetts, it takes a minimum of three weeks to get from Offer to Purchase to closing. Most people take four to six weeks. Thus, demand drops every summer around this time.

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My clients frequently ask me where I would live. The problem is, I am not in the same place in my life, so my choice of home is not relevant. So, please share your experiences. What do people enjoy about condo living? Which condo would you live in? At what time of your life would you be attracted to some one type? There is something for everyone, for a price.

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About ten years ago, clients of mine saw a house which they liked. The price was pretty good, considering the market. The neighborhood was good; the right school, close to the MBTA and shops.

But something was wrong. The house next door had long grass. Was it abandoned? It didn’t look like it; it was in good repair and it seemed like someone was living there. Maybe they are just behind on their mowing...

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I used to think of modular homes as something that looks like a double-wide trailer. About ten years back, I saw a manufactured home that was not properly on its foundation (in the opinion of my client’s home inspector.) It also had electrical problems and safety issues. That didn’t help my opinion any. Like most people, I had not seen modern modular homes and I confused them with manufactured homes.

Modern modular homes are attractive. I am pleasantly surprised. Modular homes are not “manufactured homes” which offer little flexibility. A modular home can be in almost any design. I started seeing very attractive ones landing in Lexington and Needham over the past few years. After a little snooping around, I found they are all over the area.

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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.

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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:

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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:

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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.

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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.)

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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.

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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:

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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

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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.

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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.

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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.)

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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:

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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.

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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.

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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.

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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?

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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.

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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:

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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.

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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.

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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.

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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.

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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?”

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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.

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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.

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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.

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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?

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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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