Q: "We need to sell our house in Truro and we are wondering when is the best time to put it on the market. Should we wait until spring and how can we position it to move quickly?"
A: It is no secret that the real estate market is still adjusting. Those who don’t have to sell right now may be better off waiting until the market stabilizes. For those who ‘need’ to sell, don’t fret. Property is still selling and there are steps that you can take to maximize your chances of standing out amongst the competition in your price range.
1. TIMING: Should you list now or wait until spring? The answer is simple. List it now. Spring may be the ideal time to list a property in a primary home market, but in a second home market, buyers start looking in the winter so they can ensure that they will occupy the property before season begins. Another reason to list sooner than later is to get your property out there before all the others who think they have to wait until spring!
2. STAGING: Give your house the best odds to impress by making it as attractive as it can be. Clean it thoroughly, clear away unnecessary clutter, and light the rooms well. You would be surprised how many buyers are instantly turned off by an untidy or dark house and they dismiss a property like that within the first five seconds. Give your buyers a reason to look through the whole house. Prepare the house as if it going on a first date! It’s all about first impressions.
3. PRICING: We’ve saved the most important for last! It is critical that you price your property appropriately. Over priced homes are not selling in this market. Look at the comparable properties that have sold within the past few months and work with your Realtor® to price your property to sell. Resist the urge to listen to the opinions of your family and friends. Remember, your Realtor® is in tune with the market and knows the value of your house. If you want results, price the house competitively. Keep in mind that, for every month the house doesn't sell, you will pay carrying costs, and ultimately you must deduct those from any higher price that you may have achieved by waiting an extra year to get your price. Furthermore, with the current market conditions, there’s the risk that every month that passes may equate to a decrease in your home’s value. Can you afford to wait?
If you would like to sell, please contact us for a complimentary market analysis of your property.
Thursday, December 18, 2008
Thursday, December 11, 2008
What is smudging? Will this help sell my house?
Q: "What is smudging? Will this help sell my house?"
A:These days, sellers are turning to non traditional means to use as tools in selling their homes. Forget the gimmicks of bonuses, new cars, vacations and more. The latest is energy cleansers, house blessings and smudging. These unorthodox strategies have increased in popularity over the past few years as sellers eager to move their property will try anything.
We strongly believe that potions and powders will not be as effective as a calculated, realistic listing price.
However, according to a recent report by NBC News, homes that are smudged and cleared of negative energy have actually sold.
One real estate agent reported that the condominium of a couple who was divorced and had bitterly argued in the home, was on the market, reasonably priced for over two years. The property was in a good location, clean and priced right. The desperate listing agent could not understand why the property had not sold after numerous showings. Hesitantly, she hired an energy cleanser to smudge the house and release the negative energy. She reported that immediately after the smudging, the next customer who looked at the property made a full price offer. She was stunned.
There is no scientific proof that this works so beware. If you are going to pursue an energy cleanser, be careful that your wallet isn’t cleansed. But if it’s cheap enough, you may want to try it as it can’t hurt.
A:These days, sellers are turning to non traditional means to use as tools in selling their homes. Forget the gimmicks of bonuses, new cars, vacations and more. The latest is energy cleansers, house blessings and smudging. These unorthodox strategies have increased in popularity over the past few years as sellers eager to move their property will try anything.
We strongly believe that potions and powders will not be as effective as a calculated, realistic listing price.
However, according to a recent report by NBC News, homes that are smudged and cleared of negative energy have actually sold.
One real estate agent reported that the condominium of a couple who was divorced and had bitterly argued in the home, was on the market, reasonably priced for over two years. The property was in a good location, clean and priced right. The desperate listing agent could not understand why the property had not sold after numerous showings. Hesitantly, she hired an energy cleanser to smudge the house and release the negative energy. She reported that immediately after the smudging, the next customer who looked at the property made a full price offer. She was stunned.
There is no scientific proof that this works so beware. If you are going to pursue an energy cleanser, be careful that your wallet isn’t cleansed. But if it’s cheap enough, you may want to try it as it can’t hurt.
Thursday, December 4, 2008
Is It Time Yet?
Q: "My partner and I have been looking to buy in Provincetown for a couple of years. Every time we find a property that we like, my partner says we should wait a little longer, that prices are still dropping. We’ve missed out on a few properties at this point. When will the prices level off?"
A: From our perspective, the leveling off has already begun. There are indicators to suggest that there is no time like the present to make a move. As a result of the crash of the financial markets, we are seeing sellers withdraw their properties from the market. Those without an urgency to sell are deciding to wait out the cycle. The result will be a reduction of inventory, a shrinking of the supply. Demand may begin to rise after this week’s news of the proposals on the table for the Treasury to buy securities backed by 30-year fixed rate mortgages from Fannie Mae and Freddie Mac. If rates drop to 4.5% as proposed, we expect more buyers to enter the market to begin absorbing the current inventory. The result of this equation will be an end to the price reductions and an increase in buyer activity. With more buyers in the market, prices will be poised to level off.
A: From our perspective, the leveling off has already begun. There are indicators to suggest that there is no time like the present to make a move. As a result of the crash of the financial markets, we are seeing sellers withdraw their properties from the market. Those without an urgency to sell are deciding to wait out the cycle. The result will be a reduction of inventory, a shrinking of the supply. Demand may begin to rise after this week’s news of the proposals on the table for the Treasury to buy securities backed by 30-year fixed rate mortgages from Fannie Mae and Freddie Mac. If rates drop to 4.5% as proposed, we expect more buyers to enter the market to begin absorbing the current inventory. The result of this equation will be an end to the price reductions and an increase in buyer activity. With more buyers in the market, prices will be poised to level off.
Thursday, November 20, 2008
Leaving for the Season
Q: Thanks for last week’s written blog about preparing my Cape Cod home for the off season. If I leave Provincetown for the entire winter, are there any additional steps I need to take?
A: The first step should always be to give your property one last thorough cleaning. This eliminates potential mold and mildew that may have grown over the summer and fall months with the high humidity. It also gets rid of food particles that rodents and the like can sniff out.
Take crisp white sheets and cover your furniture and electrical components like your tv and stereo. This prevents dust from getting on the upholstery or inside televisions, video players, computers and clocks. These days you may have an Ipod station. If you leave it, be sure to unplug it.
Once you have identified a date that you’ll be leaving, for some it will be right after New Years, call a plumber and set an appointment to drain your water and shut it off as we briefly discussed last week. This will eliminate the threat of frozen pipes and damage. Be sure to leave your taps open both in the kitchen and bathroom. This lets extra water escape.
If you do leave your interior water on, at least make sure the water source to your exterior spigots is turned off and your spigots left open. As mentioned last week, make sure your temperature is kept at least 55 degrees or preferably 60 degrees. If you are leaving, it is best to completely shut your house down.
With this quick checklist complete, you can close the door to your vacation home and on what was hopefully a fun filled and relaxing summer and fall here on Cape Cod.
A: The first step should always be to give your property one last thorough cleaning. This eliminates potential mold and mildew that may have grown over the summer and fall months with the high humidity. It also gets rid of food particles that rodents and the like can sniff out.
Take crisp white sheets and cover your furniture and electrical components like your tv and stereo. This prevents dust from getting on the upholstery or inside televisions, video players, computers and clocks. These days you may have an Ipod station. If you leave it, be sure to unplug it.
Once you have identified a date that you’ll be leaving, for some it will be right after New Years, call a plumber and set an appointment to drain your water and shut it off as we briefly discussed last week. This will eliminate the threat of frozen pipes and damage. Be sure to leave your taps open both in the kitchen and bathroom. This lets extra water escape.
If you do leave your interior water on, at least make sure the water source to your exterior spigots is turned off and your spigots left open. As mentioned last week, make sure your temperature is kept at least 55 degrees or preferably 60 degrees. If you are leaving, it is best to completely shut your house down.
With this quick checklist complete, you can close the door to your vacation home and on what was hopefully a fun filled and relaxing summer and fall here on Cape Cod.
Thursday, November 13, 2008
Commercial Sales
Q: "I own a business (with the real estate) on Commercial Street and I have been thinking of retiring. My concern is about the current economic climate and whether now is a good time to sell."
A: There is no doubt that these are challenging economic times. We have reported extensively on the state of the real estate market and the price corrections that have occurred. Your decision process about whether to sell must consider your own personal life plans and goals, in addition to market trends.
There is some activity in the commercial market. There have been approximately 10 Commercial Sales in Provincetown since January 2007. All but one have sold for less than the assessed value of the property. If you are looking to sell the business as well as the real estate, the income will play a very important role in your value. It is a good idea to have us run a Comparative Market Analysis to give you an idea of the value you can expect.
Our team of brokers specializes in Commercial Sales: we are the top selling MLS real estate company on the Outer Cape, with over 56% of the market share for commercial sales, outperforming our closest competitor by 4 to 1.
Because there is no way to know how long it will take for the market to become robust again, now is as good a time as any to test the waters. Most commercial sales transact during the winter months and it would be most advantageous to list your property immediately to see if there are any interested parties. You may receive a satisfactory offer that will allow you to move on to the next phase of your journey. If you don’t list the property, you may find yourself in limbo for an indefinite period of time.
A: There is no doubt that these are challenging economic times. We have reported extensively on the state of the real estate market and the price corrections that have occurred. Your decision process about whether to sell must consider your own personal life plans and goals, in addition to market trends.
There is some activity in the commercial market. There have been approximately 10 Commercial Sales in Provincetown since January 2007. All but one have sold for less than the assessed value of the property. If you are looking to sell the business as well as the real estate, the income will play a very important role in your value. It is a good idea to have us run a Comparative Market Analysis to give you an idea of the value you can expect.
Our team of brokers specializes in Commercial Sales: we are the top selling MLS real estate company on the Outer Cape, with over 56% of the market share for commercial sales, outperforming our closest competitor by 4 to 1.
Because there is no way to know how long it will take for the market to become robust again, now is as good a time as any to test the waters. Most commercial sales transact during the winter months and it would be most advantageous to list your property immediately to see if there are any interested parties. You may receive a satisfactory offer that will allow you to move on to the next phase of your journey. If you don’t list the property, you may find yourself in limbo for an indefinite period of time.
Thursday, November 6, 2008
Counting The Days
Q: "What are the average market times for properties that have sold on the Outer Cape?"
A: When looking at average Days On Market (DOM), it is helpful to look for trends by looking at a comparison of the last four years. Since market times are generally longer for single family homes as compared with condominiums, we have created a separate table for each.
2005: 151
2006: 222
2007: 200
2008: 289
A: When looking at average Days On Market (DOM), it is helpful to look for trends by looking at a comparison of the last four years. Since market times are generally longer for single family homes as compared with condominiums, we have created a separate table for each.
2005 was the height of the market. Real estate prices and sales began to soften in 2006. Average market times for single family homes in Provincetown appear to be leveling off for the first time since the decline began in 2006, while DOM continue to increase in Truro and Provincetown. In the condo market, we see a leveling off across the board in all three towns.
Average DOM of SOLD SINGLE FAMILY HOMES
Provincetown
2005: 153
2006: 216
2007: 308
2008: 293
Truro
2005: 172
2006: 258
2007: 239
2008: 335
2005: 151
2006: 222
2007: 200
2008: 289
Average DOM of SOLD CONDOMINIUMS
Provincetown
2005: 121
2006: 167
2007: 181
2008: 177
Truro
2005: 155
2006: 182
2007: 203
2008: 176
Wellfleet
2005: 108
2006: 175
2007: 311
2008: 164
Thursday, October 30, 2008
Winter Watch
Q: "What is winter watch and do I need it for my vacation home on Cape Cod?"
A: Winter Watch, simply put, is when you hire an individual or company to routinely inspect your home or condominium throughout the winter months.
If you visit your cape home practically every weekend during the winter you may not need this service. If you live here year round, you don’t need it. However, if you close your house for the winter, it is strongly recommended that you hire a manager for winter watch.
New England winters wreak havoc on your home. Pipes freeze and burst, windows blow out, animals seek shelter, heaters stop working and the list goes on. If no one is there to monitor your home and catch these potential issues as they occur, a disaster is what you’ll find come spring.
Here is a true story about homeowners who opted not to use a winter watch service: One of their friends used the home for a late fall weekend. He turned the heat completely off when he left in order to save the owners money. Needless to say, when spring came and no one had checked their home, they were met with a soggy mush where walls had been and the furniture ruined. Because the heat was off, a pipe froze and burst causing much damage and thousands of dollars in repair.
Most of the time, when it comes to winter watch, it is better to be safe then sorry.
A: Winter Watch, simply put, is when you hire an individual or company to routinely inspect your home or condominium throughout the winter months.
If you visit your cape home practically every weekend during the winter you may not need this service. If you live here year round, you don’t need it. However, if you close your house for the winter, it is strongly recommended that you hire a manager for winter watch.
New England winters wreak havoc on your home. Pipes freeze and burst, windows blow out, animals seek shelter, heaters stop working and the list goes on. If no one is there to monitor your home and catch these potential issues as they occur, a disaster is what you’ll find come spring.
Here is a true story about homeowners who opted not to use a winter watch service: One of their friends used the home for a late fall weekend. He turned the heat completely off when he left in order to save the owners money. Needless to say, when spring came and no one had checked their home, they were met with a soggy mush where walls had been and the furniture ruined. Because the heat was off, a pipe froze and burst causing much damage and thousands of dollars in repair.
Most of the time, when it comes to winter watch, it is better to be safe then sorry.
Thursday, October 23, 2008
Need to Sell Before You Can Buy?
Q: "I have found a condo in Provincetown that I would like to buy, but I will need the money from the sale of my condo in Ogunquit. Can I make an offer subject to the sale of my other property?"
A: In general, offers that require the sale of another property tend to be viewed as weak by the seller. At the height of the market a few years back, it was unheard of for a buyer to include this kind of clause. We are seeing more of these today since the market has softened, but they are still viewed cautiously by sellers.
The obvious downside for the seller is that the property will be out of circulation while waiting for you to sell your other property. Oftentimes, the seller will only accept this type of offer with a kick-out clause, which allows the property to continue to be shown. If another offer is received, you will have a short period of time (usually 24-48 hours) to figure out a way to drop the contingency and move forward with the purchase, otherwise, the seller can accept another offer. Even an arrangement such as this is viewed as a negative by sellers, because it may deter other buyers from becoming interested in the property, as some buyers do not wish to engage in any competitive bidding situations. The other wild card in this equation is the uncertainty of how long it will take for a property to sell in another market.
The best advice we can give is to wait until you sell your other property so that you can move with confidence toward a purchase in Provincetown. But, in this market, we have seen many untraditional deals come together, so, if you are determined to buy this particular condo, it may not hurt to try.
A: In general, offers that require the sale of another property tend to be viewed as weak by the seller. At the height of the market a few years back, it was unheard of for a buyer to include this kind of clause. We are seeing more of these today since the market has softened, but they are still viewed cautiously by sellers.
The obvious downside for the seller is that the property will be out of circulation while waiting for you to sell your other property. Oftentimes, the seller will only accept this type of offer with a kick-out clause, which allows the property to continue to be shown. If another offer is received, you will have a short period of time (usually 24-48 hours) to figure out a way to drop the contingency and move forward with the purchase, otherwise, the seller can accept another offer. Even an arrangement such as this is viewed as a negative by sellers, because it may deter other buyers from becoming interested in the property, as some buyers do not wish to engage in any competitive bidding situations. The other wild card in this equation is the uncertainty of how long it will take for a property to sell in another market.
The best advice we can give is to wait until you sell your other property so that you can move with confidence toward a purchase in Provincetown. But, in this market, we have seen many untraditional deals come together, so, if you are determined to buy this particular condo, it may not hurt to try.
Thursday, October 16, 2008
Properties Sold: Quarterly Check-up
Q: "I’d be curious to see a quarterly comparison of property that sold in the third quarter 2008 versus third quarter 2007 on the Outer Cape. Is that easy to do?"
A: We’ve compiled four tables for you to compare the sold activity in Provincetown, Truro, Wellfleet and Eastham. This is based on actual sold property for the third calendar quarter 2007 and 2008. There were no land sales recorded according the Multiple Listing Service in all four towns. Provincetown recorded the only multi family and hotel sales.
2008
Single Family = 7
Condominium = 1
2007
Single Family = 21
Condominium = 1
A: We’ve compiled four tables for you to compare the sold activity in Provincetown, Truro, Wellfleet and Eastham. This is based on actual sold property for the third calendar quarter 2007 and 2008. There were no land sales recorded according the Multiple Listing Service in all four towns. Provincetown recorded the only multi family and hotel sales.
PROVINCETOWN
Quarter 3
2008
Single Family = 8
Multi Family = 3
Hotel = 1
Condominium = 29
2007
Single Family = 8
Multi Family = 1
Hotel = 0
Condominium = 27
Total Sales 3rd Quarter
2008: 41
2007: 36
TRURO
Quarter 3
2008
Single Family = 13
Condominium = 8
2007
Single Family = 11
Condominium = 8
Total Sales 3rd Quarter
2008: 21
2007: 19
WELLFLEET
Quarter 32008
Single Family = 7
Condominium = 1
2007
Single Family = 21
Condominium = 1
Total Sales 3rd Quarter
2008: 8
2007: 28
EASTHAM
2008
Single Family = 30
Condominium = 0
2007
Single Family = 29
Condominium = 6
Total Sales 3rd Quarter
2008: 30
2007: 35
Thursday, October 9, 2008
Pets: Exclude or Accept?
Q: "We will be listing our condo as a rental for next summer and we are torn about whether we should accept pets. What are the pros and cons, and if we do, should we charge more?"
A: When considering whether or not to accept pets, be sure to first check your condominium rules and regulations. Many properties allow pets for owners but not for tenants.
On the positive side, you may get more weeks rented than if you did not allow pets. There is definitely a shortage of pet friendly rentals, In addition, you may command an additional fee for accommodating tenants with pets. Some owners charge an add-on to account for extra cleaning.
On the down side, allowing pets can lead to greater wear and tear on your unit. You may find yourself repainting or refinishing your floors more frequently and that can ultimately cost you. Also, pets in unfamiliar surroundings may be noisy and disturbing to other owners in your association, causing future friction for you in your condo dealings.
A: When considering whether or not to accept pets, be sure to first check your condominium rules and regulations. Many properties allow pets for owners but not for tenants.
On the positive side, you may get more weeks rented than if you did not allow pets. There is definitely a shortage of pet friendly rentals, In addition, you may command an additional fee for accommodating tenants with pets. Some owners charge an add-on to account for extra cleaning.
On the down side, allowing pets can lead to greater wear and tear on your unit. You may find yourself repainting or refinishing your floors more frequently and that can ultimately cost you. Also, pets in unfamiliar surroundings may be noisy and disturbing to other owners in your association, causing future friction for you in your condo dealings.
Thursday, October 2, 2008
Fallout from the Bailout?
Q: What does a potential bailout plan mean for the real estate market?
A: We were hoping to be able to write about the economic rescue plan in this week’s blog. However, as of the writing of this, there are only hopes that the Senate and House of Representatives will pass a plan by the weekend. There are expectations that there will be some decision on a plan by late Friday morning.
How this impacts the real estate market really depends on what is passed. The focus has been on the large amount of foreclosed properties nationwide and how to remedy this issue. Keeping homeowners in their homes should be a priority, however, for many lawmakers it is not. There are mixed feelings about consumers who took advantage of the subprime mortgages. The low teaser rates enticed them to buy high and now find themselves facing foreclosure or have been displaced by foreclosure. The plan may have a condition that requires the government to negotiate gentler terms with existing homeowners with the loans that are acquired. This may help some stay out of foreclosure.
It is hard to tell how a bailout plan will help the real estate market as a whole. In order to jump start the volatile real estate market and turn around the current trend, consumers need to start buying property and lower the inventory that is available. A plan may be able to present attractive financing but may not have ultimate control over generating buying activity.
One thing that is certain, and sales aside, real estate will always be a tangible, good long term investment.
Let’s stay tuned on this one. Once the plan is released we can answer more intelligently.
A: We were hoping to be able to write about the economic rescue plan in this week’s blog. However, as of the writing of this, there are only hopes that the Senate and House of Representatives will pass a plan by the weekend. There are expectations that there will be some decision on a plan by late Friday morning.
How this impacts the real estate market really depends on what is passed. The focus has been on the large amount of foreclosed properties nationwide and how to remedy this issue. Keeping homeowners in their homes should be a priority, however, for many lawmakers it is not. There are mixed feelings about consumers who took advantage of the subprime mortgages. The low teaser rates enticed them to buy high and now find themselves facing foreclosure or have been displaced by foreclosure. The plan may have a condition that requires the government to negotiate gentler terms with existing homeowners with the loans that are acquired. This may help some stay out of foreclosure.
It is hard to tell how a bailout plan will help the real estate market as a whole. In order to jump start the volatile real estate market and turn around the current trend, consumers need to start buying property and lower the inventory that is available. A plan may be able to present attractive financing but may not have ultimate control over generating buying activity.
One thing that is certain, and sales aside, real estate will always be a tangible, good long term investment.
Let’s stay tuned on this one. Once the plan is released we can answer more intelligently.
Thursday, September 25, 2008
Bidding Wars
Q: "Recently, I lost out on a house in a multiple bid situation. When I found out there was another offer, I freaked out. What advice can you offer me for the future, in case this happens again?"
A: Multiple bid situations are tricky. Sellers who receive more than one offer have several options: they can accept the best offer, they may counter one offer while putting the others aside, they can ask all parties to submit their ‘highest and best’ offer, or they can negotiate one offer while rejecting the others. They can even disclose the amount of one offer to the other buyers in the hopes of getting the price up (Although this is not a common practice in this market, it is routinely practiced in other markets).
Being a buyer in this situation can be frustrating. Keep in mind that the amount of your offer is only one part of the offer package. Oftentimes, other terms like the closing date or financing contingencies, can carry as much weight for the seller as the amount of your offer. If two offers are the same amount, but one is offering cash while the other is dependent on financing, the seller may opt for the cash offer so as to ensure a more expedient closing. Try to keep your terms as simple and ‘clean’ as possible.
It is important that you try to remain as unemotional as possible when you make an offer. Study the comps and decide ahead of time what price you would go to and stick to it. Don’t let the competitive bid scenario cause you to offer an amount outside your comfort zone. By the same token, when you are in a multiple bid situation, don’t waste time getting to that number. We have seen buyers lose out on properties because they did not go right to their ‘highest and best.’
You may feel that the seller has all the power in these negotiations but remember this: you are always in the driver’s seat when it comes to spending your money. Keep in mind that inventory is high these days, and if you miss out on your #1 choice, it is likely that another property will come along that meets your needs.
A: Multiple bid situations are tricky. Sellers who receive more than one offer have several options: they can accept the best offer, they may counter one offer while putting the others aside, they can ask all parties to submit their ‘highest and best’ offer, or they can negotiate one offer while rejecting the others. They can even disclose the amount of one offer to the other buyers in the hopes of getting the price up (Although this is not a common practice in this market, it is routinely practiced in other markets).
Being a buyer in this situation can be frustrating. Keep in mind that the amount of your offer is only one part of the offer package. Oftentimes, other terms like the closing date or financing contingencies, can carry as much weight for the seller as the amount of your offer. If two offers are the same amount, but one is offering cash while the other is dependent on financing, the seller may opt for the cash offer so as to ensure a more expedient closing. Try to keep your terms as simple and ‘clean’ as possible.
It is important that you try to remain as unemotional as possible when you make an offer. Study the comps and decide ahead of time what price you would go to and stick to it. Don’t let the competitive bid scenario cause you to offer an amount outside your comfort zone. By the same token, when you are in a multiple bid situation, don’t waste time getting to that number. We have seen buyers lose out on properties because they did not go right to their ‘highest and best.’
You may feel that the seller has all the power in these negotiations but remember this: you are always in the driver’s seat when it comes to spending your money. Keep in mind that inventory is high these days, and if you miss out on your #1 choice, it is likely that another property will come along that meets your needs.
Thursday, September 18, 2008
Increased Inventory
Q: "Lately, whenever I come to the Cape, it seems like I am seeing more and more For Sale signs. Are there more properties on the market or is it my imagination?"
A: Inventory in the three Outer Cape towns is up 25-35% from just six months ago. This increase mirrors the national trend, but also reflects the uniqueness of the Outer Cape market. Many of the properties on the Outer Cape are second homes, and many sellers are in a position to hold on to their properties if they do not get their price. While sales volume is up in Provincetown YTD (year to date) over last, the total volume for the three towns is down 7% YTD.
What does this mean for buyers and sellers? Well, if you are thinking of buying, the increase in inventory is a positive thing. You have more to choose from. Even though many sellers don’t HAVE to sell, there are many who are motivated and realize they can stand out from their competition by pricing their properties aggressively. If your offer isn’t accepted on your #1 choice, your #2 choice will likely be just as desirable considering the amount of inventory you have to choose from.
As a seller, you need to be aware of how many choices there are for buyers these days. Some of your competition is including bonuses to buyers, like covering closing costs and prepaying a year’s worth of condo fees. If you are serious about selling, price your property competitively. If you don’t need to sell and you are holding out for a high price, you are better off taking your property off the market until conditions improve. You will stand to make more in the long run and you will keep your listing from gathering dust.
A: Inventory in the three Outer Cape towns is up 25-35% from just six months ago. This increase mirrors the national trend, but also reflects the uniqueness of the Outer Cape market. Many of the properties on the Outer Cape are second homes, and many sellers are in a position to hold on to their properties if they do not get their price. While sales volume is up in Provincetown YTD (year to date) over last, the total volume for the three towns is down 7% YTD.
What does this mean for buyers and sellers? Well, if you are thinking of buying, the increase in inventory is a positive thing. You have more to choose from. Even though many sellers don’t HAVE to sell, there are many who are motivated and realize they can stand out from their competition by pricing their properties aggressively. If your offer isn’t accepted on your #1 choice, your #2 choice will likely be just as desirable considering the amount of inventory you have to choose from.
As a seller, you need to be aware of how many choices there are for buyers these days. Some of your competition is including bonuses to buyers, like covering closing costs and prepaying a year’s worth of condo fees. If you are serious about selling, price your property competitively. If you don’t need to sell and you are holding out for a high price, you are better off taking your property off the market until conditions improve. You will stand to make more in the long run and you will keep your listing from gathering dust.
Thursday, September 11, 2008
Real Estate Stamps
Q: "What are real estate stamps and why do I have to pay them?"
A: Stamps are the taxes a seller pays when selling their home. The current rate in Barnstable County, Massachusetts is $5.70 per thousand dollars. If you sell a home for $600,000, your tax would be 600*$5.70, or $3420.00. The county uses the revenue generated from the tax stamp for human needs and social services for towns in that county.
This tax is a law and must be paid at registry of deed before a sale is recorded.
A: Stamps are the taxes a seller pays when selling their home. The current rate in Barnstable County, Massachusetts is $5.70 per thousand dollars. If you sell a home for $600,000, your tax would be 600*$5.70, or $3420.00. The county uses the revenue generated from the tax stamp for human needs and social services for towns in that county.
This tax is a law and must be paid at registry of deed before a sale is recorded.
Thursday, September 4, 2008
Pay It Forward?
Q: "Should I extend a gratuity to a carpet installer, plumbers, carpenters, painters and other contractors who work on my house?"
A: Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.
When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.
When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.
By all means, if the service provided by anyone is exemplary, use your judgment as to what reward is suitable. Sometimes the most effective gratuity extended can be a compliment.
A: Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.
When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.
When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.
By all means, if the service provided by anyone is exemplary, use your judgment as to what reward is suitable. Sometimes the most effective gratuity extended can be a compliment.
Thursday, August 28, 2008
On the Eve of Foreclosures?
Q: "Are we on the eve of an abundance of foreclosed properties on the Outer Cape?"
A: Most likely we won’t see this in Provincetown, Truro and Wellfleet. Here’s what we’ve seen so far this year.
Sellers who have a large equity stake or those who need to sell, have priced their properties in line with what the market is doing. This alone presents opportunity for those buyers waiting for the right time. There has been talk of more adjustment over the next year, but even so, the time to buy is now. On the average, Provincetown, Truro and Wellfleet have experienced a 10% adjustment in the market.
Most sellers who had been aggressive with their pricing and wanted to stick to a certain bottom line, took their homes off the market. They are waiting for the turnaround.
The factors that produce buyers this year are pretty straightforward. Besides the low prices, when mortgage interest rates adjust down, a flurry of buyers rush to town and take advantage of the low priced homes and condos. They buy creating a hiccup of activity.
When rates go up, the activity seems to stop. When this happens, cash buyers have strong negotiating leverage and use their buying power to make the dream of owning on the cape a reality. A cash buyer is now worth his or her weight in gold.
One thing is for sure. The remainder of 2008 will be an interesting time to see how the market performs.
In regards to the question: we have seen very few foreclosures and may see some more, however, the outer cape will most likely not see an over abundance of foreclosures.
A: Most likely we won’t see this in Provincetown, Truro and Wellfleet. Here’s what we’ve seen so far this year.
Sellers who have a large equity stake or those who need to sell, have priced their properties in line with what the market is doing. This alone presents opportunity for those buyers waiting for the right time. There has been talk of more adjustment over the next year, but even so, the time to buy is now. On the average, Provincetown, Truro and Wellfleet have experienced a 10% adjustment in the market.
Most sellers who had been aggressive with their pricing and wanted to stick to a certain bottom line, took their homes off the market. They are waiting for the turnaround.
The factors that produce buyers this year are pretty straightforward. Besides the low prices, when mortgage interest rates adjust down, a flurry of buyers rush to town and take advantage of the low priced homes and condos. They buy creating a hiccup of activity.
When rates go up, the activity seems to stop. When this happens, cash buyers have strong negotiating leverage and use their buying power to make the dream of owning on the cape a reality. A cash buyer is now worth his or her weight in gold.
One thing is for sure. The remainder of 2008 will be an interesting time to see how the market performs.
In regards to the question: we have seen very few foreclosures and may see some more, however, the outer cape will most likely not see an over abundance of foreclosures.
Thursday, August 21, 2008
Insurance: Will I be Covered?
Q: "I have heard that it is difficult to get insurance on the Outer Cape. How will this affect me in my search for a property and the ability to get financing?"
A: It is true that in recent years, and especially since Katrina, many large insurers have pulled out of Cape Cod and other coastal markets based upon the great potential risk of a hurricane. But don’t worry, you will be able to get insurance (and therefore financing) and depending upon what type of property you are buying, it may not be a concern for you at all.
For example, if you are purchasing a condominium, insurance will already be secured for the property, and you will be paying your share through the monthly condo fees. Insurance policies for condominiums cover you for most damage to the building(s) and allow for rebuilding after a catastrophe. We recommend that you take out an additional policy to cover the interior of your unit and your contents.
If you are purchasing a single-family home, first try the local insurance companies to secure coverage. If there are no private insurers that will take your property on, you are guaranteed coverage through the Massachusetts FAIR Plan, which is a legislatively created program to provide coverage for those who cannot secure private insurance. Our local insurance agents (call us for recommendations!) can guide you through the process with the FAIR Plan.
One note to property owners, whether you are in a condo or a single family. Discuss flood insurance with your insurance agent. If a property is not located in a flood plain, you are not required to carry this type of insurance. But being so close to the water, it is not a bad idea to opt for additional coverage. If you are in a condo, bring it up at your annual meeting.
A: It is true that in recent years, and especially since Katrina, many large insurers have pulled out of Cape Cod and other coastal markets based upon the great potential risk of a hurricane. But don’t worry, you will be able to get insurance (and therefore financing) and depending upon what type of property you are buying, it may not be a concern for you at all.
For example, if you are purchasing a condominium, insurance will already be secured for the property, and you will be paying your share through the monthly condo fees. Insurance policies for condominiums cover you for most damage to the building(s) and allow for rebuilding after a catastrophe. We recommend that you take out an additional policy to cover the interior of your unit and your contents.
If you are purchasing a single-family home, first try the local insurance companies to secure coverage. If there are no private insurers that will take your property on, you are guaranteed coverage through the Massachusetts FAIR Plan, which is a legislatively created program to provide coverage for those who cannot secure private insurance. Our local insurance agents (call us for recommendations!) can guide you through the process with the FAIR Plan.
One note to property owners, whether you are in a condo or a single family. Discuss flood insurance with your insurance agent. If a property is not located in a flood plain, you are not required to carry this type of insurance. But being so close to the water, it is not a bad idea to opt for additional coverage. If you are in a condo, bring it up at your annual meeting.
Thursday, August 14, 2008
Basics of a Refinance
Q: "I just went through a three month process trying to refinance my Provincetown home. After all was said and done, the loan was not approved due to lack of accurate comparable homes that sold. Can you please address this issue and provide some advice in regards of what my next step should be."
A: This is a very good question and one that has been appearing repeatedly lately. Firstly, let us outline the basics of a refinance:
1. Once you have a pre-approval from your bank or mortgage professional, you complete the official application process.
2. The appraisal is ordered.
3. You will receive an approval letter from the bank or mortgage professional usually stating an appraisal contingency.
4. The property is appraised.
5. Your loan closes.
This is the most basic break down of the refinance process and of course, each case can be different and come with its own set complications. We are using this simple outline to answer your question.
Where your loan met its demise, based on your question, is on item 4. This is very common today as home sales are still slow. We are in the middle of our third consecutive year of a declining real estate market. This is important to know because banks will only use an appraisal that is six months old. The reason for this is the need for banks to use current comparable sales to justify the amount of the loan. In most cases there have been no sales in certain categories and the banks have nothing to use. Instead of taking the risk, they decline the loan.
You may want to check with a local bank. Rates may be a bit higher, but local institutions know the market and may be more inclined to be flexible with the appraisal process. The key word is “may.” Your local bank may also be rigid in the qualifying process if there are no accurate and current comparable home sales that match your property type.
If you can, an option may be for you to put more cash on your property and refinance less than what you originally wanted. The lower loan amount may meet the appraisal criteria of the original lendor you were working with. This, however, may be contrary to why you wanted to refinance.
We hope this helps.
A: This is a very good question and one that has been appearing repeatedly lately. Firstly, let us outline the basics of a refinance:
1. Once you have a pre-approval from your bank or mortgage professional, you complete the official application process.
2. The appraisal is ordered.
3. You will receive an approval letter from the bank or mortgage professional usually stating an appraisal contingency.
4. The property is appraised.
5. Your loan closes.
This is the most basic break down of the refinance process and of course, each case can be different and come with its own set complications. We are using this simple outline to answer your question.
Where your loan met its demise, based on your question, is on item 4. This is very common today as home sales are still slow. We are in the middle of our third consecutive year of a declining real estate market. This is important to know because banks will only use an appraisal that is six months old. The reason for this is the need for banks to use current comparable sales to justify the amount of the loan. In most cases there have been no sales in certain categories and the banks have nothing to use. Instead of taking the risk, they decline the loan.
You may want to check with a local bank. Rates may be a bit higher, but local institutions know the market and may be more inclined to be flexible with the appraisal process. The key word is “may.” Your local bank may also be rigid in the qualifying process if there are no accurate and current comparable home sales that match your property type.
If you can, an option may be for you to put more cash on your property and refinance less than what you originally wanted. The lower loan amount may meet the appraisal criteria of the original lendor you were working with. This, however, may be contrary to why you wanted to refinance.
We hope this helps.
Thursday, August 7, 2008
To Re-fi or not to Re-fi, that is the Question
Q: " Interest rates have gone down since I got my mortgage a few years ago. How do you know when it makes sense to refinance?"
A: Homeowners refinance for many reasons. Common reasons include: the desire to change the type of mortgage you have (for example to go from an ARM to a fixed rate loan), the need to use the equity in your house for another expenditure (like a remodel or a child’s tuition), or simply to save money on your monthly payment.
The formula to figure out whether a refinance will be favorable for you is quite simple. First, you need to figure out how long you plan to be in the house. Take the amount of your monthly savings with the new loan, and multiply it by the number of months you plan to be in the house. Compare this number to the fees that you will be charged for the refinance. If the fees are higher than the savings, then it may not be worthwhile to refinance at this time. Many people never get past the illusion that a lower monthly payment can create. Remember, you must consider the long-term equation.
It is always a good idea to consult an expert. Speak with your mortgage broker and ask him/her to lay out the comparison for you. If you don’t have a trusted broker, ask a friend for a referral, or ask us. We work with many trustworthy professionals.
A: Homeowners refinance for many reasons. Common reasons include: the desire to change the type of mortgage you have (for example to go from an ARM to a fixed rate loan), the need to use the equity in your house for another expenditure (like a remodel or a child’s tuition), or simply to save money on your monthly payment.
The formula to figure out whether a refinance will be favorable for you is quite simple. First, you need to figure out how long you plan to be in the house. Take the amount of your monthly savings with the new loan, and multiply it by the number of months you plan to be in the house. Compare this number to the fees that you will be charged for the refinance. If the fees are higher than the savings, then it may not be worthwhile to refinance at this time. Many people never get past the illusion that a lower monthly payment can create. Remember, you must consider the long-term equation.
It is always a good idea to consult an expert. Speak with your mortgage broker and ask him/her to lay out the comparison for you. If you don’t have a trusted broker, ask a friend for a referral, or ask us. We work with many trustworthy professionals.
Thursday, July 31, 2008
Sale Price vs. List Price
Q: "What is the relationship of sale price to asking price in the current residential market?"
A: There is not a common pattern amongst the three outer Cape towns, but in many segments of the residential market, we have seen a slight drop during the past 12 months in the percentage of sale price to list price. Keep in mind, however, that these percentages do not reflect original list prices. Many of the properties that sold experienced one or more price reductions during the course of their time on the market, and the statistics that are published reflect the percentage of Sale Price to current list price. For examples of this in chart form for Provincetown, Truro and Wellfleet, see this entry on provincetownrealestate.com.
A: There is not a common pattern amongst the three outer Cape towns, but in many segments of the residential market, we have seen a slight drop during the past 12 months in the percentage of sale price to list price. Keep in mind, however, that these percentages do not reflect original list prices. Many of the properties that sold experienced one or more price reductions during the course of their time on the market, and the statistics that are published reflect the percentage of Sale Price to current list price. For examples of this in chart form for Provincetown, Truro and Wellfleet, see this entry on provincetownrealestate.com.
Thursday, July 24, 2008
Timing is Everything
Q: "I own a home in Provincetown. I recently accepted a position in Chicago, put my South End condo on the market and actually sold it for a fair price. I guess timing is everything even in a slow market. Here’s my question: Should I rent or buy in Chicago?
The market is such a buyer’s market that I’d hate to miss an opportunity. Follow up: Since I won’t be going to Provincetown nearly as much, should I sell the home? I bought it in the mid nineties, have a strong equity position and can be a realistic, competitive seller. "
A: What a great question for the current times. Let’s start by addressing the inquiry about renting or owning. The current real estate market is projected to remain soft for at least another year. You may want to find a rental unit in a suitable location for one year. In that time you will determine which neighborhood in Chicago suites your lifestyle and real estate needs. One year should also be telltale as to whether the job you accepted is going to work out. You may find yourself not liking Chicago or the job.
The first half of 2008 was strong for Provincetown sales. We have seen a correction of about 10+% decrease of value in most cases. If you don’t have to sell than exercising prudence in this instance is strongly recommended. If you can handle the expense of a home in Provincetown then you may want to hold it until the market rebounds, which it will inevitably do. You may want to protect that strong equity position and watch it grow with the next upturn. In the meantime, you may want to rent it out for extra income, hire a management company to look after it and wait.
The market is such a buyer’s market that I’d hate to miss an opportunity. Follow up: Since I won’t be going to Provincetown nearly as much, should I sell the home? I bought it in the mid nineties, have a strong equity position and can be a realistic, competitive seller. "
A: What a great question for the current times. Let’s start by addressing the inquiry about renting or owning. The current real estate market is projected to remain soft for at least another year. You may want to find a rental unit in a suitable location for one year. In that time you will determine which neighborhood in Chicago suites your lifestyle and real estate needs. One year should also be telltale as to whether the job you accepted is going to work out. You may find yourself not liking Chicago or the job.
The first half of 2008 was strong for Provincetown sales. We have seen a correction of about 10+% decrease of value in most cases. If you don’t have to sell than exercising prudence in this instance is strongly recommended. If you can handle the expense of a home in Provincetown then you may want to hold it until the market rebounds, which it will inevitably do. You may want to protect that strong equity position and watch it grow with the next upturn. In the meantime, you may want to rent it out for extra income, hire a management company to look after it and wait.
Thursday, July 17, 2008
Wait to Buy?
Q: "If I wait until the late fall or winter to buy, will prices be lower?"
A: Buyers often ask us if prices decrease during the winter on the Outer Cape. It’s a good question, but the answer is contrary to what you might expect. Even though our local population diminishes during the cooler months, the real estate market on the Outer Cape is active year round, and we don’t see a seasonal shift in pricing. In fact, one of our busiest periods traditionally falls in January, right after New Year’s. Determined buyers often begin their search during the winter months so that they can be assured of summer occupancy in their new properties.
There are a couple of aspects to the market, however, that you might observe to be seasonal. We tend to see a slight increase in market inventory immediately following the summer season. Owners often think about listing their property at the conclusion of one rental season, and prior to the next. Another ‘trend’ that we have seen is increased activity in the Commercial market during the winter months. Future business owners tend to shop for and purchase property during our quiet months, in order to allow themselves enough lead-time to prepare for the summer crowds.
The best time for you to buy is when you find the perfect property! Remember that, in addition to being the ideal summer destination, the Outer Cape is a beautiful and restful place to visit in the quiet-season.
A: Buyers often ask us if prices decrease during the winter on the Outer Cape. It’s a good question, but the answer is contrary to what you might expect. Even though our local population diminishes during the cooler months, the real estate market on the Outer Cape is active year round, and we don’t see a seasonal shift in pricing. In fact, one of our busiest periods traditionally falls in January, right after New Year’s. Determined buyers often begin their search during the winter months so that they can be assured of summer occupancy in their new properties.
There are a couple of aspects to the market, however, that you might observe to be seasonal. We tend to see a slight increase in market inventory immediately following the summer season. Owners often think about listing their property at the conclusion of one rental season, and prior to the next. Another ‘trend’ that we have seen is increased activity in the Commercial market during the winter months. Future business owners tend to shop for and purchase property during our quiet months, in order to allow themselves enough lead-time to prepare for the summer crowds.
The best time for you to buy is when you find the perfect property! Remember that, in addition to being the ideal summer destination, the Outer Cape is a beautiful and restful place to visit in the quiet-season.
Thursday, July 10, 2008
A Fully Furnished Sale
Q: "I am selling my condo in the East End of Provincetown fully furnished. Is there significant value in doing so?"
A: This is a good question that many sellers are on the fence over. The best way to determine value is by attaching an executed offer to it, no matter what you are selling. If you have no need for the furnishings and your home is for sale, than list it as furnished. You’ll have to spend money having it cleared out if the buyer doesn’t want it. Or you can sell it furnished and let the buyer have it all. There is a perceived value by certain buyers when furnishings convey, but whether or not it is of real value can only be determined on a case by case situation.
In our experience, when furniture does convey, it is in excellent condition, relatively new and part of a tasteful décor.
A: This is a good question that many sellers are on the fence over. The best way to determine value is by attaching an executed offer to it, no matter what you are selling. If you have no need for the furnishings and your home is for sale, than list it as furnished. You’ll have to spend money having it cleared out if the buyer doesn’t want it. Or you can sell it furnished and let the buyer have it all. There is a perceived value by certain buyers when furnishings convey, but whether or not it is of real value can only be determined on a case by case situation.
In our experience, when furniture does convey, it is in excellent condition, relatively new and part of a tasteful décor.
Thursday, July 3, 2008
High Speed Re-Fi?
Q: "I am in the process of refinancing my home. The loan has been in the underwriting department for a few weeks already. Apparently, the appraisal process is taking an abnormally long time. Is there anything I can do to speed this process up?"
A: You are not alone. Due to the chaos in the mortgage industry, refinancing a mortgage can be next to impossible. You must make sure that you have enough equity to refinance. The part of the process that is hindering your effort, the appraisal, can take an undeterminable amount of time. Investors want to see accurate comparable sold properties to determine value. Appraisers are having a difficult time in one segment of the market obtaining this information due to low sales. Basically, there is nothing to compare the subject property to in order to determine value. Usually, an appraiser will use comparable properties that have sold within the past six months. Banks are now asking appraisers to provide comparable properties that are still for sale, expanding beyond the normal geographic radius and potentially using comparable sold properties from within one year.
These are truly challenging times for homeowners seeking to refinance. However, with the rates as low as they are, there is value if the loan clears and you put on a patience cap during the process.
A: You are not alone. Due to the chaos in the mortgage industry, refinancing a mortgage can be next to impossible. You must make sure that you have enough equity to refinance. The part of the process that is hindering your effort, the appraisal, can take an undeterminable amount of time. Investors want to see accurate comparable sold properties to determine value. Appraisers are having a difficult time in one segment of the market obtaining this information due to low sales. Basically, there is nothing to compare the subject property to in order to determine value. Usually, an appraiser will use comparable properties that have sold within the past six months. Banks are now asking appraisers to provide comparable properties that are still for sale, expanding beyond the normal geographic radius and potentially using comparable sold properties from within one year.
These are truly challenging times for homeowners seeking to refinance. However, with the rates as low as they are, there is value if the loan clears and you put on a patience cap during the process.
Thursday, June 26, 2008
Seller Financing
Q: "I received a decent offer on my property but the buyer has asked for me to hold a second mortgage. What should I do?"
A: Seller Financing is becoming more common in today’s market. Traditional financing requirements have tightened significantly and in general, our ailing economy has made it more difficult for potential buyers to save money.
You may stand to benefit from ‘holding paper’ on the sale of your property. Firstly, agreeing to participate in the financing could result in a higher sale price for you and more favorable terms overall. You may negotiate the interest rate and terms, and sometimes this rate can be higher than traditional financing. You will be earning interest on your equity in the property, and in the end, you stand to make more money in the transaction. Also, you may qualify for the tax benefits of an installment sale where you can defer a portion of your gain until the loan is paid off. (Consult an accountant on this!)
There are also risks in providing seller financing. Most often, your loan is subordinate to the primary financing, and in the case of default or foreclosure, your equity may be at risk, since the mortgage in first position must be satisfied before you receive any funds. There are steps you can take to protect yourself, however, and you should seek the assistance of your attorney and/or accountant. Make sure you verify the credit worthiness of the buyer. Require the buyer to carry hazard insurance on the property and include a due-on-sale clause. Also, in some instances, you can require the buyer to carry PMI to insure your loan against default.
In summary, you should not be scared off by an offer that asks you to hold financing. With professional advice and the proper protections in place, agreeing to participate in the financing can result in a win-win situation.
A: Seller Financing is becoming more common in today’s market. Traditional financing requirements have tightened significantly and in general, our ailing economy has made it more difficult for potential buyers to save money.
You may stand to benefit from ‘holding paper’ on the sale of your property. Firstly, agreeing to participate in the financing could result in a higher sale price for you and more favorable terms overall. You may negotiate the interest rate and terms, and sometimes this rate can be higher than traditional financing. You will be earning interest on your equity in the property, and in the end, you stand to make more money in the transaction. Also, you may qualify for the tax benefits of an installment sale where you can defer a portion of your gain until the loan is paid off. (Consult an accountant on this!)
There are also risks in providing seller financing. Most often, your loan is subordinate to the primary financing, and in the case of default or foreclosure, your equity may be at risk, since the mortgage in first position must be satisfied before you receive any funds. There are steps you can take to protect yourself, however, and you should seek the assistance of your attorney and/or accountant. Make sure you verify the credit worthiness of the buyer. Require the buyer to carry hazard insurance on the property and include a due-on-sale clause. Also, in some instances, you can require the buyer to carry PMI to insure your loan against default.
In summary, you should not be scared off by an offer that asks you to hold financing. With professional advice and the proper protections in place, agreeing to participate in the financing can result in a win-win situation.
Thursday, June 19, 2008
Lease for an Apartment?
Q: "Should a lease be used when renting an apartment, whether a landlord or tenant?"
A: In most cases, the answer would be yes to protect both the renter known as the Lessee and the landlord known as the Lessor. However, it all depends on personal circumstances.
A lease should clearly define the amount of rent due, names of both parties, the rental start and expiration date.
The Lessee is protected by the terms of a lease. The property must be kept habitable per the criteria stated in the Massachusetts Sanitary Code. Also, the rent amount stays fixed per the lease. The only time a Lessor can increase the rent is at the end of the lease upon renewal. This should be done with at least a thirty days notice. The Lessor cannot ask the Lessee to vacate the property prior to the expiration date unless the Lessee is in violation of the terms of the lease. The Lessor must give at least a thirty days notice when planning on not renewing a lease.
The Lessor is also protected in a lease. The lease guarantees the Lessor that the property will be rented for a specific period of time for a certain amount of rent. There may also be certain terms that the Lessee must abide by that can protect the Lessor’s property. Many leases have clauses that prohibit smoking, clutter and loud noise. Most leases allow only the Lessee to live in the rented space to avoid overcrowding. The Lessee must also give at least a thirty days notice when planning to vacate upon the expiration date.
If there is no lease a “tenancy at will” is in effect. In Massachusetts this unwritten, and sometimes written agreement is subject to all Tenant/Landlord laws, including the thirty day notices to vacate or increase rent.
A: In most cases, the answer would be yes to protect both the renter known as the Lessee and the landlord known as the Lessor. However, it all depends on personal circumstances.
A lease should clearly define the amount of rent due, names of both parties, the rental start and expiration date.
The Lessee is protected by the terms of a lease. The property must be kept habitable per the criteria stated in the Massachusetts Sanitary Code. Also, the rent amount stays fixed per the lease. The only time a Lessor can increase the rent is at the end of the lease upon renewal. This should be done with at least a thirty days notice. The Lessor cannot ask the Lessee to vacate the property prior to the expiration date unless the Lessee is in violation of the terms of the lease. The Lessor must give at least a thirty days notice when planning on not renewing a lease.
The Lessor is also protected in a lease. The lease guarantees the Lessor that the property will be rented for a specific period of time for a certain amount of rent. There may also be certain terms that the Lessee must abide by that can protect the Lessor’s property. Many leases have clauses that prohibit smoking, clutter and loud noise. Most leases allow only the Lessee to live in the rented space to avoid overcrowding. The Lessee must also give at least a thirty days notice when planning to vacate upon the expiration date.
If there is no lease a “tenancy at will” is in effect. In Massachusetts this unwritten, and sometimes written agreement is subject to all Tenant/Landlord laws, including the thirty day notices to vacate or increase rent.
Thursday, June 12, 2008
How accurate is Zillow?
Q: "I have a confession. I am addicted to looking at property values on Zillow.com. I watch my own property value go up and down, and although it makes me nuts, I keep checking. How accurate are the Zestimates?"
A: There are many websites out there that are estimating property values and each one needs to be taken with a grain of salt. Zestimates (the property value stated by Zillow) are all over the place. We have seen them come within 5% of the sales price and other times we have known them to be off by over 20%. They rely upon data from your town’s tax assessor’s database and also upon recent sales data. The problems are many. They have no way of accurately assessing the condition of the property or of taking into account location attributes. When you call up a property, the list of comparable recent sales almost always includes properties that have nothing in common with the subject. A perfect example of this flaw is evident when you search a waterfront property on the outer Cape. You will see comparable sales listed that may only be a half mile from the subject but are light years away in terms of value, yet they are being figured into the equation.
The best way to determine the value of your property is still the human way. Hire a Certified Appraiser to do an appraisal of your property. This can cost a few hundred dollars and will provide you with the definitive value of your property. Or, ask your Real Estate Broker to provide you with an opinion of value and a Comparative Market Analysis. In preparing a CMA for you, we visit the property to assess the condition and attributes, and we do a careful comparison of your property with similar properties that have recently sold to come up with our best assessment of your value.
If you are interested in receiving a complimentary CMA, please contact us at 508-487-2430. info@provincetownrealestatenow.com.
A: There are many websites out there that are estimating property values and each one needs to be taken with a grain of salt. Zestimates (the property value stated by Zillow) are all over the place. We have seen them come within 5% of the sales price and other times we have known them to be off by over 20%. They rely upon data from your town’s tax assessor’s database and also upon recent sales data. The problems are many. They have no way of accurately assessing the condition of the property or of taking into account location attributes. When you call up a property, the list of comparable recent sales almost always includes properties that have nothing in common with the subject. A perfect example of this flaw is evident when you search a waterfront property on the outer Cape. You will see comparable sales listed that may only be a half mile from the subject but are light years away in terms of value, yet they are being figured into the equation.
The best way to determine the value of your property is still the human way. Hire a Certified Appraiser to do an appraisal of your property. This can cost a few hundred dollars and will provide you with the definitive value of your property. Or, ask your Real Estate Broker to provide you with an opinion of value and a Comparative Market Analysis. In preparing a CMA for you, we visit the property to assess the condition and attributes, and we do a careful comparison of your property with similar properties that have recently sold to come up with our best assessment of your value.
If you are interested in receiving a complimentary CMA, please contact us at 508-487-2430. info@provincetownrealestatenow.com.
Thursday, June 5, 2008
Property Manager
Q: "My partner and I just purchased a second home in Truro. We will be using it for two months in the summer. When we are not in Truro we shut the house down. Do we really need a property manager?"
A: Yes, property managers are your eyes and ears for your home when you are not here. When you are hundreds of miles away and something goes wrong, you need to have a trusted manager available to remedy that issue. A skilled property manager will have a network of contacts and vendors to call upon if needed for emergencies or home improvement projects. You can also enjoy peace of mind knowing that someone is a phone call away if needed.
Management companies in Truro usually charge on a monthly basis for a variety of home care packages. A basic management plan may be best for your needs. Always ask for references.
A: Yes, property managers are your eyes and ears for your home when you are not here. When you are hundreds of miles away and something goes wrong, you need to have a trusted manager available to remedy that issue. A skilled property manager will have a network of contacts and vendors to call upon if needed for emergencies or home improvement projects. You can also enjoy peace of mind knowing that someone is a phone call away if needed.
Management companies in Truro usually charge on a monthly basis for a variety of home care packages. A basic management plan may be best for your needs. Always ask for references.
Thursday, May 29, 2008
Parking Anxiety
Q: "I have been looking to buy a place near the center of Provincetown. I do not have a car and don’t need parking. If I buy a place without parking, will that hurt me down the road when I go to sell?"
A: Many properties in Provincetown don’t have parking, particularly properties on the water and close to the denser downtown area. Many people, like you, do not have cars. If they come from Boston, they take the ferry, Cape Air or the bus. As you clearly realize, one can get along fine in Provincetown with a bicycle instead of a car.
If you are planning to rent your unit, parking does come in handy for tenants and it is an amenity that helps to attract renters. One option is to rent a space nearby on a seasonal basis and leave instructions and a parking pass in your unit for the renters. That way, you can compete with other rental properties that provide parking. Another option is to market your unit to people who don’t have cars. There are certainly a great number of tourists who come to town without cars.
How will your re-sale value be impacted if you don’t have parking? A parking space in Provincetown is worth about $20,000, give or take. The lack of parking will be figured into the re-sale price. Keep in mind that there will always be a buyer who is not concerned about the lack of parking.
A: Many properties in Provincetown don’t have parking, particularly properties on the water and close to the denser downtown area. Many people, like you, do not have cars. If they come from Boston, they take the ferry, Cape Air or the bus. As you clearly realize, one can get along fine in Provincetown with a bicycle instead of a car.
If you are planning to rent your unit, parking does come in handy for tenants and it is an amenity that helps to attract renters. One option is to rent a space nearby on a seasonal basis and leave instructions and a parking pass in your unit for the renters. That way, you can compete with other rental properties that provide parking. Another option is to market your unit to people who don’t have cars. There are certainly a great number of tourists who come to town without cars.
How will your re-sale value be impacted if you don’t have parking? A parking space in Provincetown is worth about $20,000, give or take. The lack of parking will be figured into the re-sale price. Keep in mind that there will always be a buyer who is not concerned about the lack of parking.
Thursday, May 22, 2008
Coolin' Off
Q: "I rent out my small west end studio to weekly renters to help with the mortgage. Should I provide an air conditioner?"
A: Thanks for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.
On Cape Cod, it is rare that we need air conditioning, however, it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back.
You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal.
Be conscious of neighbors who may sleep with their windows open and enjoy sea breezes. Purchase energy efficient low profile air conditioners that are quiet.
Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.
A: Thanks for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.
On Cape Cod, it is rare that we need air conditioning, however, it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back.
You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal.
Be conscious of neighbors who may sleep with their windows open and enjoy sea breezes. Purchase energy efficient low profile air conditioners that are quiet.
Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.
Thursday, May 15, 2008
Pre-Home Inspections for Sellers
Q: "I’d like to put my house on the market. I have been dragging my feet because I know it needs updating and I am nervous about what might come up when a buyer has a home inspection. I feel stuck. What should I do?"
A: Stop worrying and find out exactly what your property needs. Home inspections are typically done by Buyers but there is no reason that a Seller can’t hire a home inspector prior to listing his/her property. This can be very helpful in preparing your property for market. After the inspection, you will be given a report that outlines the repairs that your home needs. If you take care of these problems prior to listing, you will do yourself a big favor in simplifying the negotiations once you have an interested buyer. Issues that arise as a result of the Buyer’s home inspection can sometimes cost the Seller thousands of dollars, either in actual repairs or in credits toward the sale price. Why not pre-empt any contentious negotiations before they happen? You will have to spend some money up front, but getting your home inspected by a licensed Inspector prior to listing can save you lots of money in the long run.
A: Stop worrying and find out exactly what your property needs. Home inspections are typically done by Buyers but there is no reason that a Seller can’t hire a home inspector prior to listing his/her property. This can be very helpful in preparing your property for market. After the inspection, you will be given a report that outlines the repairs that your home needs. If you take care of these problems prior to listing, you will do yourself a big favor in simplifying the negotiations once you have an interested buyer. Issues that arise as a result of the Buyer’s home inspection can sometimes cost the Seller thousands of dollars, either in actual repairs or in credits toward the sale price. Why not pre-empt any contentious negotiations before they happen? You will have to spend some money up front, but getting your home inspected by a licensed Inspector prior to listing can save you lots of money in the long run.
Thursday, May 8, 2008
Saving Grace
Q: "Are there any laws, in the Commonwealth of Massachusetts that allow for a grace period in mortgage payments? Say for example, forgive a couple months payment prior to commencing foreclosure activities, provided the homeowner can prove and actually is pursuing remedies to the situation, e.g., selling the property, etc.?"
A: This is a common question these days.
Today in the immediate wake and occurrence of the mortgage meltdown the last thing a bank wants to do is foreclose on a house. The typical foreclosure will cost a bank around $50,000 when all is said and done. Many banks are negotiating new terms with their clients rather than foreclose. Call your bank and see if there is a way to renegotiate your mortgage. This is very common in today's market. Please note that some lenders will not negotiate new terms.
We are not aware of any laws that grant leniency to homeowners for unsatisfied or late mortgage payments. Again, the best place to start is your bank. Using a short sale could be a solution. A short sale is when the house sells for less than the mortgage. Right now, if your bank grants a short sale, one of two things happen: 1. You owe the bank the difference in a separate loan usually with a monthly payment similar to a car payment. 2. The bank forgives the difference, however, you will be exposed to a capital gains tax on the difference. Since the bank granted you this amount it is considered a gain.
You would best be served by calling your bank and asking them about renegotiating your terms. Tell them you are aggressively marketing your home for sale and will work with them to prevent foreclosure. Also, inquire about a short sale. This may be the remedy you need to lower the listed price on your property and compete realistically to produce a buyer. Beware though, some banks record a short sale balance as a negative on your credit.
A: This is a common question these days.
Today in the immediate wake and occurrence of the mortgage meltdown the last thing a bank wants to do is foreclose on a house. The typical foreclosure will cost a bank around $50,000 when all is said and done. Many banks are negotiating new terms with their clients rather than foreclose. Call your bank and see if there is a way to renegotiate your mortgage. This is very common in today's market. Please note that some lenders will not negotiate new terms.
We are not aware of any laws that grant leniency to homeowners for unsatisfied or late mortgage payments. Again, the best place to start is your bank. Using a short sale could be a solution. A short sale is when the house sells for less than the mortgage. Right now, if your bank grants a short sale, one of two things happen: 1. You owe the bank the difference in a separate loan usually with a monthly payment similar to a car payment. 2. The bank forgives the difference, however, you will be exposed to a capital gains tax on the difference. Since the bank granted you this amount it is considered a gain.
You would best be served by calling your bank and asking them about renegotiating your terms. Tell them you are aggressively marketing your home for sale and will work with them to prevent foreclosure. Also, inquire about a short sale. This may be the remedy you need to lower the listed price on your property and compete realistically to produce a buyer. Beware though, some banks record a short sale balance as a negative on your credit.
Thursday, May 1, 2008
Tax Break for Selling Your Home
Q: " I bought my house 8 years ago for $250,000. Since that time, the value of my property has tripled. I would like to sell my house and downsize. I have never sold a property before and I heard that I do not have to pay Capital Gains tax if I am selling my primary residence. Is this true?"
A: That is not entirely correct. The current tax law states that an individual is exempt from the first $250,000 of Capital Gains ($500,000 for a couple) on a property that you have lived in for at least two of the past five years. If your gain is larger than $250,000, you will likely be taxed on the excess amount.
To figure out your gain, you must first know your cost basis. That is the amount you paid for the property plus any improvements you have made. The difference between your sale price (minus your expenses of selling) and your cost basis is your gain.
In your case, if you spent more than $250,000 on improvements, then you will probably be exempt from Capital Gains taxes.
This tax break is a huge benefit for homeowners. Two bits of advice: 1- Always consult your accountant and your attorney before buying or selling real estate to understand all of the tax ramifications. 2 - Keep good records of all of your capital improvements in order to assist your accountant with the task of determining your basis when it’s time to sell.
A: That is not entirely correct. The current tax law states that an individual is exempt from the first $250,000 of Capital Gains ($500,000 for a couple) on a property that you have lived in for at least two of the past five years. If your gain is larger than $250,000, you will likely be taxed on the excess amount.
To figure out your gain, you must first know your cost basis. That is the amount you paid for the property plus any improvements you have made. The difference between your sale price (minus your expenses of selling) and your cost basis is your gain.
In your case, if you spent more than $250,000 on improvements, then you will probably be exempt from Capital Gains taxes.
This tax break is a huge benefit for homeowners. Two bits of advice: 1- Always consult your accountant and your attorney before buying or selling real estate to understand all of the tax ramifications. 2 - Keep good records of all of your capital improvements in order to assist your accountant with the task of determining your basis when it’s time to sell.
Thursday, April 24, 2008
Rent Money
Q: “My year round rental tenant just told me that rent is not legally due until the end of the month. When is rent legally due in Massachusetts?”
A: The word legally in the question makes the answer pretty straightforward. If it were worded, “When is rent due in Massachusetts?” I’d respond by asking you to check your lease agreement with your renter.
Typically, leases state that rent is due on the first of the month unless a renter (Lessee) has a special agreement with the landlord (Lessor). However, per the Tenant/Landlord laws that governs this relationship in Massachusetts, rent is not considered late until after the 30th of the month.
This isn’t license for your tenant to pay rent on the 30th. The written lease agreement should state the date that rent is due. If you have an agreement with your Lessee to pay the rent on the first of the month, that is when it is due. If the Lessee does not, you reserve the right to start eviction proceedings as soon as the second of the month. If your Lessee pays rent consistently late you may be inclined not to renew the lease.
As a Lessor, knowing the laws in Massachusetts as they pertain to year round rentals is important. Please check with your attorney for any legal advice on this matter. You may also want to visit www.lawlib.state.ma.us/landlord.html for more information on the Tenant/Landlord Laws in Massachusetts.
A: The word legally in the question makes the answer pretty straightforward. If it were worded, “When is rent due in Massachusetts?” I’d respond by asking you to check your lease agreement with your renter.
Typically, leases state that rent is due on the first of the month unless a renter (Lessee) has a special agreement with the landlord (Lessor). However, per the Tenant/Landlord laws that governs this relationship in Massachusetts, rent is not considered late until after the 30th of the month.
This isn’t license for your tenant to pay rent on the 30th. The written lease agreement should state the date that rent is due. If you have an agreement with your Lessee to pay the rent on the first of the month, that is when it is due. If the Lessee does not, you reserve the right to start eviction proceedings as soon as the second of the month. If your Lessee pays rent consistently late you may be inclined not to renew the lease.
As a Lessor, knowing the laws in Massachusetts as they pertain to year round rentals is important. Please check with your attorney for any legal advice on this matter. You may also want to visit www.lawlib.state.ma.us/landlord.html for more information on the Tenant/Landlord Laws in Massachusetts.
Thursday, April 17, 2008
Savings on Capital Gains?
Q: I am thinking of selling a condominium that I have used as rental property and have heard that I can save on capital gains taxes with something called a 1031 exchange. What can you tell me about this?
A: 1031 exchange may also be known as a “like kind” exchange or tax deferred exchange. Section 1031 of the IRS code allows you to defer capital gains tax on a property that you are selling by exchanging that piece of property for another one that is of equal or greater value. Both properties must be used in trade or business or held as investments. In essence, the 1031 exchange allows you to put your profits to work for you.
The first and most important step is to consult with your tax, financial and legal advisors to determine if a tax deferred exchange is appropriate for your circumstances. Secondly, during the contract process of selling your property, you would disclose your intentions and ask for the Buyer’s cooperation in the process. There is no cost or disruption to the Buyer. You would choose a Facilitator, a third party who would coordinate the transfer. All deposits and proceeds for the transaction will be held by an Escrow Company. These monies are never in your possession. Once the property transfers, you have 45 days from that date to identify a new property to purchase, which then must close within 180 days of the transfer of your first property.
The Team at Atlantic Bay Sotheby’s International Realty has assisted many clients with Like-Kind Exchanges. Make us your first call, and we will put you in contact with all of the necessary experts to guide you through the process.
A: 1031 exchange may also be known as a “like kind” exchange or tax deferred exchange. Section 1031 of the IRS code allows you to defer capital gains tax on a property that you are selling by exchanging that piece of property for another one that is of equal or greater value. Both properties must be used in trade or business or held as investments. In essence, the 1031 exchange allows you to put your profits to work for you.
The first and most important step is to consult with your tax, financial and legal advisors to determine if a tax deferred exchange is appropriate for your circumstances. Secondly, during the contract process of selling your property, you would disclose your intentions and ask for the Buyer’s cooperation in the process. There is no cost or disruption to the Buyer. You would choose a Facilitator, a third party who would coordinate the transfer. All deposits and proceeds for the transaction will be held by an Escrow Company. These monies are never in your possession. Once the property transfers, you have 45 days from that date to identify a new property to purchase, which then must close within 180 days of the transfer of your first property.
The Team at Atlantic Bay Sotheby’s International Realty has assisted many clients with Like-Kind Exchanges. Make us your first call, and we will put you in contact with all of the necessary experts to guide you through the process.
Thursday, April 10, 2008
Up in Smoke
Q: I just purchased a condominium in Provincetown that has a terrible odor of cigarette smoke. The previous owner lived in the townhouse year round and smoked indoors. What measures can I take to eliminate this smell as it is everywhere?
A: Here are few basic steps you may want to take in order to rid your house of the smell of cigarette smoke.
A: Here are few basic steps you may want to take in order to rid your house of the smell of cigarette smoke.
- White Vinegar. Start by filling small bowls (cereal or soup) with white vinegar and placing them in each room throughout the house. You may want to place multiple bowls in rooms that have a stronger smell. Open all the windows. Let these bowls sit for up to one week. Empty and repeat the process. If it is winter, you may want to open the windows slightly to avoid too much heat loss. Otherwise, open the windows wide.
- Paint the walls and ceilings in the rooms that have the strongest odor. Be sure to use an odor eliminator primer. Also, wash the walls and ceilings with soap and water prior to painting.
- Remove all carpets, padding and area rugs that may have been left behind by the previous owner.
- Remove cloth shades and window treatments.
- If the property is heated or cooled by forced air, replace all HVAC filters with brand new ones.
Thursday, April 3, 2008
Seasonal Cottages in Truro and Provincetown
Q: I have been looking at condo cottages in Truro and Provincetown and I notice that many of the descriptions note that the units are seasonal. What does this mean?
A: The town of Truro has a zoning by-law that limits the use of condominiums to seasonal use only. The dates of permitted use are April 1 through November 30. You may not occupy your unit between December 1- March 31. Often times the association will drain the water and turn off the utilities during this period. There is an exception included in this by-law which allows for one unit in each complex to be lived in year-round as a “manager’s unit.”
By contrast, there is no law against using property year-round in Provincetown. If a unit is noted as “seasonal” and it is located in Provincetown, it is likely that the unit is not insulated or that the pipes are not deep enough in the ground to avoid freezing. Many of the cottages in the beach point area of Provincetown are seasonal simply because they were never built with year round use in mind. Each association can decide for itself how the property will be used; a seasonal association in Provincetown may vote to change to year round, but they would have to make sure that the utilities and the units themselves are sufficiently insulated for year round use.
For a complete list of COTTAGES for sale in Provincetown, Truro and Wellfleet, email us: info@provincetownrealestatenow.com.
A: The town of Truro has a zoning by-law that limits the use of condominiums to seasonal use only. The dates of permitted use are April 1 through November 30. You may not occupy your unit between December 1- March 31. Often times the association will drain the water and turn off the utilities during this period. There is an exception included in this by-law which allows for one unit in each complex to be lived in year-round as a “manager’s unit.”
By contrast, there is no law against using property year-round in Provincetown. If a unit is noted as “seasonal” and it is located in Provincetown, it is likely that the unit is not insulated or that the pipes are not deep enough in the ground to avoid freezing. Many of the cottages in the beach point area of Provincetown are seasonal simply because they were never built with year round use in mind. Each association can decide for itself how the property will be used; a seasonal association in Provincetown may vote to change to year round, but they would have to make sure that the utilities and the units themselves are sufficiently insulated for year round use.
For a complete list of COTTAGES for sale in Provincetown, Truro and Wellfleet, email us: info@provincetownrealestatenow.com.
Thursday, March 27, 2008
Converting to Condos
Q: I own a multi-unit building in Provincetown and I am thinking about converting it to condominiums. What do I have to do?
A: Hire an engineer to create a site plan and individual unit plans. The engineer will come to the site and measure each unit as well as the entire lot. When the engineer finishes, he/she will give you a preliminary plan. From that plan, you will decide which areas of the property will be exclusive to which units, where the parking spaces will be, and any common storage areas. You will then have an opportunity to mark up the plans. You should review them with your attorney and based upon that review, your engineer will amend the plans and make them final.
Next, work with an attorney to take the plan and draw up condominium documents. Your attorney will create a Declaration of Trust and a Master Deed. Part of the process will include a description of the units and a determination of the percentage of ownership for each unit. Your attorney will arrive at these percentages after you let him/her know what you intend to sell the units for. Your Broker can assist you with pricing the units based on recent sales. The percentages of ownership are based upon value.
Your attorney will also need you to provide: a master insurance policy, a description of the property, (i.e. is the heating oil, propane or electric, is it private septic or sewer, are there separate electric meters, are there any other costs associated with the common areas of the property? What rules would you like to see in the association (i.e. will weekly rentals be permitted, will pets be permitted, etc). Consult with your Broker when you are considering the rules and restrictions and when you are ready to create a budget. Your Broker can shed light on the reactions of buyers to certain rules.
When documents are complete, the attorney will record the Master Deed and Declaration of Trust with Barnstable County. At this time, you should establish a bank account for the Condominium Trust.
Now you are ready to sell your units. It is best to complete this process before you list the units for sale. It will save you many headaches in the end.
The Broker Team at Atlantic Bay Sotheby’s International Realty has assisted countless clients with this process. If you are thinking of a conversion, contact us first. We can connect you with all of the necessary players to get your job done properly and efficiently.
A: Hire an engineer to create a site plan and individual unit plans. The engineer will come to the site and measure each unit as well as the entire lot. When the engineer finishes, he/she will give you a preliminary plan. From that plan, you will decide which areas of the property will be exclusive to which units, where the parking spaces will be, and any common storage areas. You will then have an opportunity to mark up the plans. You should review them with your attorney and based upon that review, your engineer will amend the plans and make them final.
Next, work with an attorney to take the plan and draw up condominium documents. Your attorney will create a Declaration of Trust and a Master Deed. Part of the process will include a description of the units and a determination of the percentage of ownership for each unit. Your attorney will arrive at these percentages after you let him/her know what you intend to sell the units for. Your Broker can assist you with pricing the units based on recent sales. The percentages of ownership are based upon value.
Your attorney will also need you to provide: a master insurance policy, a description of the property, (i.e. is the heating oil, propane or electric, is it private septic or sewer, are there separate electric meters, are there any other costs associated with the common areas of the property? What rules would you like to see in the association (i.e. will weekly rentals be permitted, will pets be permitted, etc). Consult with your Broker when you are considering the rules and restrictions and when you are ready to create a budget. Your Broker can shed light on the reactions of buyers to certain rules.
When documents are complete, the attorney will record the Master Deed and Declaration of Trust with Barnstable County. At this time, you should establish a bank account for the Condominium Trust.
Now you are ready to sell your units. It is best to complete this process before you list the units for sale. It will save you many headaches in the end.
The Broker Team at Atlantic Bay Sotheby’s International Realty has assisted countless clients with this process. If you are thinking of a conversion, contact us first. We can connect you with all of the necessary players to get your job done properly and efficiently.
Thursday, March 20, 2008
Buying a Guest House in Provincetown
Q: My partner and I have had a long time dream of owning a Bed and Breakfast, and we are thinking more seriously about starting to look in Provincetown. Can you tell me about the process and how much we will have to put down?
A: There are over 85 Guest Houses in Provincetown, and at any given time, approximately 10-15% of the properties are on the market. There are currently 12 being offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.
It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have any outside sources of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.
Once you have identified a property and chosen a lender, you will work with your agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.
The present climate is very favorable for commercial loans – rates are lower than they have been in some time and there are some great loan products available. In addition, there is money available through the Small Business Association (SBA).
Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of the local business community.
For a complete list of all of the bed and breakfast properties currently on the market, please email us at info@provincetownrealestatenow.com.
A: There are over 85 Guest Houses in Provincetown, and at any given time, approximately 10-15% of the properties are on the market. There are currently 12 being offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.
It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have any outside sources of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.
Once you have identified a property and chosen a lender, you will work with your agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.
The present climate is very favorable for commercial loans – rates are lower than they have been in some time and there are some great loan products available. In addition, there is money available through the Small Business Association (SBA).
Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of the local business community.
For a complete list of all of the bed and breakfast properties currently on the market, please email us at info@provincetownrealestatenow.com.
Thursday, March 6, 2008
Assessed Value
Q: I have been looking to buy a property in Provincetown. Can you explain to me what the Assessed Value of a property is and how that relates to the actual value of the property?
A: When you see a figure for the assessed value, this number represents a value for the property that the tax assessor has placed on that property. It is the number upon which a property owner’s taxes are based. The tax assessor arrives at this value by relying upon information from the property owner or by actually inspecting the property. Sometimes this figure is very close to the market value of the property and other times it may be quite different.
For this reason, we suggest that you not place too much weight upon this figure in your search. A more accurate measure of a property’s value is an analysis of similar properties that have sold within the past six months. When you have narrowed your search and you arrive at a property that you would like to pursue, ask your Buyer’s Agent to run a report for you of COMP SALES. This will be the more helpful to you than the assessed value in deciding what to offer for a property.
Remember, a property is only worth what someone is willing to pay for it, and an examination of comparable sales is most helpful in figuring out what a property is worth.
A: When you see a figure for the assessed value, this number represents a value for the property that the tax assessor has placed on that property. It is the number upon which a property owner’s taxes are based. The tax assessor arrives at this value by relying upon information from the property owner or by actually inspecting the property. Sometimes this figure is very close to the market value of the property and other times it may be quite different.
For this reason, we suggest that you not place too much weight upon this figure in your search. A more accurate measure of a property’s value is an analysis of similar properties that have sold within the past six months. When you have narrowed your search and you arrive at a property that you would like to pursue, ask your Buyer’s Agent to run a report for you of COMP SALES. This will be the more helpful to you than the assessed value in deciding what to offer for a property.
Remember, a property is only worth what someone is willing to pay for it, and an examination of comparable sales is most helpful in figuring out what a property is worth.
Thursday, February 28, 2008
Fractional Ownership
Dear Atlantic Bay Sotheby’s Team,
Q: Can you address the question of fractional ownership? We are attempting to sell a condominium in the west end of Provincetown and our realtor keeps telling us to adjust the price. We’ve recently heard a real estate guru speak about maintaining home value by selling property fractionally? Tell me what this is.
A: This is a very good question and a topic that I’ve been asked to research by one of my clients. One obstacle we keep hitting is the collateral aspect. Each lendor wants to be in the number one spot if the payments are not made and the property needs to be sold.
With short sales now happening, it is easy to see how banks fight for every piece of the pie before a foreclosure occurs. With fractional ownership, the financing is difficult if not impossible to do. Each lendor will be vying for the number one spot for receivership. When conveying an entire house with multiple buyers, the best way is to have the buyers set up a corporation or limited liability partnership. This, so far, has proven difficult when most people who would "buy in" to this type of situation are buying one and two bedroom condominiums that are now reasonably priced. In your case, the best hope is to find two or three friends who buy your condominium together.
2008 is projected to be the bottom of the market and the best way to sell your property right now is to price it right. Real estate sells if it is priced correctly and fractional ownership seems to me like a complicated gimmick created to sell over priced real estate that will ultimately fail leaving your property on the market longer making it a stale listing.
Use your realtor and the tools at his or her disposal.
Here are three basic things to check.
Q: Can you address the question of fractional ownership? We are attempting to sell a condominium in the west end of Provincetown and our realtor keeps telling us to adjust the price. We’ve recently heard a real estate guru speak about maintaining home value by selling property fractionally? Tell me what this is.
A: This is a very good question and a topic that I’ve been asked to research by one of my clients. One obstacle we keep hitting is the collateral aspect. Each lendor wants to be in the number one spot if the payments are not made and the property needs to be sold.
With short sales now happening, it is easy to see how banks fight for every piece of the pie before a foreclosure occurs. With fractional ownership, the financing is difficult if not impossible to do. Each lendor will be vying for the number one spot for receivership. When conveying an entire house with multiple buyers, the best way is to have the buyers set up a corporation or limited liability partnership. This, so far, has proven difficult when most people who would "buy in" to this type of situation are buying one and two bedroom condominiums that are now reasonably priced. In your case, the best hope is to find two or three friends who buy your condominium together.
2008 is projected to be the bottom of the market and the best way to sell your property right now is to price it right. Real estate sells if it is priced correctly and fractional ownership seems to me like a complicated gimmick created to sell over priced real estate that will ultimately fail leaving your property on the market longer making it a stale listing.
Use your realtor and the tools at his or her disposal.
Here are three basic things to check.
- Have your realtor show you comparable properties that sold. Look at the closed prices.
- Are there any defects that need to be accounted for that will impact the price
- How many days was the property on the market before it sold.
Thursday, February 21, 2008
Quick & Easy Ways to Impress
Last week, a reader wrote in asking about the value of staging a property. Our response focused on the benefits of hiring a professional company to do the staging. There are many things that a homeowner can do without spending a lot of money that will optimize the marketing of his/her property and ultimately bring a higher sale price. When readying your property for market, follow these few easy suggestions:
1) FIRST IMPRESSIONS: FOCUS ON THE EXTERIOR
A buyer develops a first impression of your home when he or she drives up to it. Do not underestimate the power of Curb Appeal. Make sure your yard is tidy and that everything is in its place. Is the front door showing signs of wear or do you have to jiggle the handle in a particular way to get the door open? Give your door a fresh coat of paint and make the necessary repairs to windows and doors. Plants and flowers go a long way in establishing a positive impression.
2) CLEAN THE HOUSE
This is the single most important step in preparing your home for successful showings. The house should be spotless! When your home is clean, the buyer makes other assumptions about you and the way you have maintained your property. Dust all surfaces, vacuum rugs, make sure there are no dirty dishes in the sink. Take extra care in the bathrooms and make sure the shower is dry and toilet lid is down! Don’t forget the windows and shine the wood floors. Buyers notice everything.
3) DE-CLUTTER YOUR HOUSE
Once you sell your house, you must move. Why not begin packing today? Pack away all of your personal objects, including family photos, any collections you may have on display, and anything else that you don’t need. The idea is this: The buyer needs to envision him or herself in the space, and it can’t be done if there is an abundance of your personal property in the way. Take extra care in kitchens and bathrooms to clear the counter tops. Remove any papers or photos being held up by magnets on your refrigerator. Make sure that closets and cabinets are tidy – the buyers look everywhere!
4) TURN ON ALL THE LIGHTS AND RAISE THE BLINDS
It is very important that the house be bright. Leaving a lamp on in each room gives the house a warm, homey feel.
5) PAINT ROOMS WHERE NECESSARY
Take a good look around your house. Are the walls scuffed? Do you have a room that you painted in your favorite purple? Painting is relatively cheap and goes a long way. Get rid of brightly colored walls – use neutral colors. It is easier for buyers to imagine their own belongings in a neutral space. Plus, the smell of fresh paint strengthens the positive impression of your house.
6) LEAVE THE HOUSE DURING SHOWINGS
Staying in your house during a showing is not a good idea. Buyers are instantly turned off to the property because they are inhibited by your presence. Also, when you go out, take your dog with you. Cats are less disruptive and may be left behind.
1) FIRST IMPRESSIONS: FOCUS ON THE EXTERIOR
A buyer develops a first impression of your home when he or she drives up to it. Do not underestimate the power of Curb Appeal. Make sure your yard is tidy and that everything is in its place. Is the front door showing signs of wear or do you have to jiggle the handle in a particular way to get the door open? Give your door a fresh coat of paint and make the necessary repairs to windows and doors. Plants and flowers go a long way in establishing a positive impression.
2) CLEAN THE HOUSE
This is the single most important step in preparing your home for successful showings. The house should be spotless! When your home is clean, the buyer makes other assumptions about you and the way you have maintained your property. Dust all surfaces, vacuum rugs, make sure there are no dirty dishes in the sink. Take extra care in the bathrooms and make sure the shower is dry and toilet lid is down! Don’t forget the windows and shine the wood floors. Buyers notice everything.
3) DE-CLUTTER YOUR HOUSE
Once you sell your house, you must move. Why not begin packing today? Pack away all of your personal objects, including family photos, any collections you may have on display, and anything else that you don’t need. The idea is this: The buyer needs to envision him or herself in the space, and it can’t be done if there is an abundance of your personal property in the way. Take extra care in kitchens and bathrooms to clear the counter tops. Remove any papers or photos being held up by magnets on your refrigerator. Make sure that closets and cabinets are tidy – the buyers look everywhere!
4) TURN ON ALL THE LIGHTS AND RAISE THE BLINDS
It is very important that the house be bright. Leaving a lamp on in each room gives the house a warm, homey feel.
5) PAINT ROOMS WHERE NECESSARY
Take a good look around your house. Are the walls scuffed? Do you have a room that you painted in your favorite purple? Painting is relatively cheap and goes a long way. Get rid of brightly colored walls – use neutral colors. It is easier for buyers to imagine their own belongings in a neutral space. Plus, the smell of fresh paint strengthens the positive impression of your house.
6) LEAVE THE HOUSE DURING SHOWINGS
Staying in your house during a showing is not a good idea. Buyers are instantly turned off to the property because they are inhibited by your presence. Also, when you go out, take your dog with you. Cats are less disruptive and may be left behind.
Thursday, February 14, 2008
Setting the Stage
will help it sell quicker?"
A: Thanks for your question and it is one that has Sellers on the fence as to whether or not to go through the hassle. There is actually some factual data that we can draw on in order to try and answer this inquiry.
In 2003 when the market was strong, an organization called HomeGain researched the results of staging a home and found that a properly staged home or condominium sold for close to $3,000 more than an un-staged or vacant property.
In 2005, the online training company Stagedhomes.com discovered that staged properties did indeed sell for 6.9 percent higher than other homes.
These stats did lead many entrepreneurs to start home staging companies for both resort markets such as Cape Cod and primary markets. Staging fees range from $500-$1000 for consultations and actual staging.
Our buyers on Cape Cod seem to go off instinct and know immediately if they like a property based on a gut reaction when entering for the first time. If you are selling your fully furnished second home, make sure it is clean and de-cluttered at all times as if a renter will be using the property. Just doing this, according to HomeGain, made homes and condominiums sell for close to $2,400 more than the competing untreated properties. As for staging homes on the cape, if it is brand new and vacant, you may want to add a few pieces of furniture and touches to warm it up. However, there is no factual data to support that this will sell your property.
In my experience, the best thing to do is keep your house clean and ready for showings at any moment’s notice. Get rid of clutter and any extreme personal affects such as religious icons and an overload of family photos.
The theory “less is more” is true in selling real estate. Just remember: Price it right, keep it clean and it will sell. Just be patient.
A: Thanks for your question and it is one that has Sellers on the fence as to whether or not to go through the hassle. There is actually some factual data that we can draw on in order to try and answer this inquiry.
In 2003 when the market was strong, an organization called HomeGain researched the results of staging a home and found that a properly staged home or condominium sold for close to $3,000 more than an un-staged or vacant property.
In 2005, the online training company Stagedhomes.com discovered that staged properties did indeed sell for 6.9 percent higher than other homes.
These stats did lead many entrepreneurs to start home staging companies for both resort markets such as Cape Cod and primary markets. Staging fees range from $500-$1000 for consultations and actual staging.
Our buyers on Cape Cod seem to go off instinct and know immediately if they like a property based on a gut reaction when entering for the first time. If you are selling your fully furnished second home, make sure it is clean and de-cluttered at all times as if a renter will be using the property. Just doing this, according to HomeGain, made homes and condominiums sell for close to $2,400 more than the competing untreated properties. As for staging homes on the cape, if it is brand new and vacant, you may want to add a few pieces of furniture and touches to warm it up. However, there is no factual data to support that this will sell your property.
In my experience, the best thing to do is keep your house clean and ready for showings at any moment’s notice. Get rid of clutter and any extreme personal affects such as religious icons and an overload of family photos.
The theory “less is more” is true in selling real estate. Just remember: Price it right, keep it clean and it will sell. Just be patient.
Wednesday, February 13, 2008
Looking Forward to Retiring in Provincetown
Q: My partner and I would like to retire in Provincetown, but we are still three years away from our freedom. When should we start looking?
A: Even though you are not ready to move to Provincetown yet, you might consider beginning your search now. Over the past two and a half years, we have seen a dramatic shift from a seller’s market to a buyer’s market. Between 2006 and 2007, prices dropped an average of 5-8% in the residential market. If you wait three more years, you might miss the advantages that buyers are enjoying today.
Consider buying your future property today, and renting it out until you are ready to make it your home. You stand to benefit in many ways:
A: Even though you are not ready to move to Provincetown yet, you might consider beginning your search now. Over the past two and a half years, we have seen a dramatic shift from a seller’s market to a buyer’s market. Between 2006 and 2007, prices dropped an average of 5-8% in the residential market. If you wait three more years, you might miss the advantages that buyers are enjoying today.
Consider buying your future property today, and renting it out until you are ready to make it your home. You stand to benefit in many ways:
- You will be buying at a time in the market where prices have dropped for the first time since 1994.
- The rental income will contribute to your mortgage payments, property taxes and other maintenance costs.
- You will have the advantages of using your vacation home when it’s not rented.
- You will receive tax benefits of mortgage interest deductions.
- Interest rates are currently very low.
Thursday, February 7, 2008
Give a Little. Get a Lot?
Q: "I am thinking of putting my house on the market and would like to really stick to the price I paid in 2004. I know the market has adjusted but how can I get the price I want with the market so weak? I’m thinking an agent bonus and maybe a giveaway?"
A: Your question is very common in today’s environment. The slow down in the real estate market has left many sellers scrambling for creative ways to sell. It’s a popular time for gimmicks ranging from broker bonuses to mortgage buy downs. However, keeping within the model of old fashioned solid real estate principals, only one thing matters. That is the price.
It's quite simple if you have two competing properties that are in similar condition and location. The one that typically sells quicker is the more competitively priced home. Gimmicks only work when you have competing properties that are priced nearly the same.
A gimmick may help a buyer choose one property over another. Of course, its all about the dollar. If a buyer can buy a condominium or a house for thousands less than a competing property, the fact that their buyer agent will get a bonus doesn't matter. The same goes for giving a car away, a buyer payback and so forth.
A buyer in today's market is going to look for a purchase that represents an opportunity. They want a low mortgage balance as rates slowly increase but are still historically low. If you are a seller who has implemented bonuses to either the buyer agent, listing agent or buyer themselves, or if you are giving away a car or a vacation...you may want to try a different strategy...something that really matters to buyers in this sensitive market, adjust your price to a realistic value where it belongs and remove the gimmicks. Next week we’ll answer a blog visitor question regarding staging your home and how that may help it sell in the current market.
A: Your question is very common in today’s environment. The slow down in the real estate market has left many sellers scrambling for creative ways to sell. It’s a popular time for gimmicks ranging from broker bonuses to mortgage buy downs. However, keeping within the model of old fashioned solid real estate principals, only one thing matters. That is the price.
It's quite simple if you have two competing properties that are in similar condition and location. The one that typically sells quicker is the more competitively priced home. Gimmicks only work when you have competing properties that are priced nearly the same.
A gimmick may help a buyer choose one property over another. Of course, its all about the dollar. If a buyer can buy a condominium or a house for thousands less than a competing property, the fact that their buyer agent will get a bonus doesn't matter. The same goes for giving a car away, a buyer payback and so forth.
A buyer in today's market is going to look for a purchase that represents an opportunity. They want a low mortgage balance as rates slowly increase but are still historically low. If you are a seller who has implemented bonuses to either the buyer agent, listing agent or buyer themselves, or if you are giving away a car or a vacation...you may want to try a different strategy...something that really matters to buyers in this sensitive market, adjust your price to a realistic value where it belongs and remove the gimmicks. Next week we’ll answer a blog visitor question regarding staging your home and how that may help it sell in the current market.
Thursday, January 31, 2008
A Short Sale
Q: "In regards to opportunities to buy in the current real estate market, I’m not familiar with a short sale. What is it?" - Dorothy Ann, Wellfleet
A short sale, quite simply put, is when a seller sells his or her property for less than the mortgage.
Where it gets tricky, is when there are two mortgages or a home equity line of credit that has a balance.
Typically. The first mortgagee is in the position to make the agreement of short sale. However, in other cases, the second mortgagee needs to also give approval and may take as little as a token payment in order to approve the short sale.
However, the balance leftover after a short sale happens can either be written off by the bank, charged to the seller, or reported to a credit bureau as a default.
As we pioneer our way through this new way to sell property, mortgage brokers, realtors, sellers, buyers and bankers are all learning new ways to make short sales a possibility and make sure no one gets the short end of the stick.
A short sale, quite simply put, is when a seller sells his or her property for less than the mortgage.
Where it gets tricky, is when there are two mortgages or a home equity line of credit that has a balance.
Typically. The first mortgagee is in the position to make the agreement of short sale. However, in other cases, the second mortgagee needs to also give approval and may take as little as a token payment in order to approve the short sale.
However, the balance leftover after a short sale happens can either be written off by the bank, charged to the seller, or reported to a credit bureau as a default.
As we pioneer our way through this new way to sell property, mortgage brokers, realtors, sellers, buyers and bankers are all learning new ways to make short sales a possibility and make sure no one gets the short end of the stick.
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