Should I Remodel?

Seems everyone is in spring cleaning mode. A common question I get asked is “Should I remodel or renovate my home if I plan on selling it?”

Here’s my answer:

Hi, it’s Ruth. I wanted to quickly talk about a topic that I’ve had a few conversations recently about and that’s should I remodel my home, or should I sell it and buy a different home? Here are a few ways to think about it that I hope will be helpful to you.

If you are generally enjoying your home and you see yourself making some changes and making that home work for you for the next seven years or longer. Seven, 10, 15 years, then by all means, do whatever you want to the home to get the most enjoyment out of it. That’s my recommendation if you really do enjoy the home and it’s working for you, for your family.

If you’re looking to stay in the home for one to seven years, then as always you should do the basic maintenance to keep the home functioning as it should. Any modest modifications would be a good idea so you do enjoy the home for the next few years, but I would say don’t go nuts. You may want to think about the return on investment in some of the renovations. So you do want to enjoy the home, but you don’t want to invest money that you’re not going to get back if you know this home is not going to be working for you in just a few years.

If you’re looking to sell the home within the next year, if you really do know that you want to move, my recommendation is, as always, maintain the home. Make sure everything is working, but do not invest a huge amount of money into the house. Certainly not on cosmetics.

As long as everything is functioning, I would say speak to me or your local real estate agent and figure out which items would be a good investment in and which would not, what are really buyers looking for in a house. But investing and redoing say a kitchen right before you’re going to sell it, we’re not sure you’re going to get that money back necessarily. It also may be an unnecessary hassle for you as well. So don’t start a huge project if you know you’re going to sell the house.

It’s amazing to me how many sellers, home sellers, we catch right before a huge renovation and when their intent is really to sell. We’ve saved them a huge amount of time and a huge amount of work. The best option observations is to speak to a real estate agent in your area who knows the local market, knows what the buyers are looking for, and you know what the prices are and what the return is.

Most likely major renovations in the short term are not going to pay back. By all means, if you’re going to enjoy that home for many years, go nuts. Do whatever you want to make it a wonderful home for you. If you have any questions, give me a call, text, write. Love hearing from you.
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Ruth Malkin Brookline Real Estate Expert

Redfin and Similar Discount Brokerages – What You Need To Know

You’ve probably heard the ads from different discount brokerages such as Redfin. Here’s some things you’ll definitely want to consider if you’re thinking of working with a discount brokerage.

Ruth:         Hi everybody, it’s Ruth and Cori.

Cori:           Hi.

Ruth:         We wanted to discuss with you and talk to you about discount brokerage firms, Redfin, but not only Redfin. Cori, what are you finding is the trend right now?

Cori:           Yeah. We’re not here to knock any specific agent. There’s lots of good agents out there, but it’s just really the idea of these discount brokerages in general. I’m sure you’ve seen the ads on TV talking about we offer a discount for our services, we’ll give you money back. We just feel that they don’t have same level of expertise that a local brokerage and the local agents have, so we’re here to kind of talk about some of the risks.

Ruth:         What are buyers saving?

Cori:           On average your saving around $2,000 for the transaction, which really is a drop in the bucket. This is the biggest purchase of your life. You’re purchasing a home. Are you really willing to forego that knowledge and expertise that comes along with using a local agent?

Ruth:         Let’s talk a little bit about what a buyer is risking when hiring a discount broker.

Cori:           If you’re hiring a discount broker instead of somebody full service you could have improperly done paperwork. You could lose the home. This is a really competitive market. You need somebody who knows those local market trends well and knows what’s happening now. You could also have transactional mistakes. A messy start can lead to a messy transaction in general. Ruth, I know you’re doing a lot of listings these days, so can you tell us what you’re seeing on your end?

Ruth:         What I’m seeing is we have a lot of multiple offer situations for listings. What we’re finding is that discount brokers often have incomplete or imperfect paperwork, and those are not the winning bids, because when a seller has a choice of who to pick they do want a well-represented buyer. They want a buyer with complete paperwork, with a nice offer, because they foresee incomplete paperwork as a risk. The other thing I’m finding is that discount brokers are not fighting for buyers after inspection. That is worth a lot more than … What did you say, $2,000 savings?

Cori:           Yeah. Those inspection items can add up.

Ruth:         Yeah, they can add up, so we’re finding they’re not being … Buyers are not represented as best as they can be. There is a certain want to get the deal through, get the deal through, get the deal through, while full service agents who work a referral based business, they want you to be happy no matter what, whether it’s this deal or a different one.

The last thing I do want to touch on is that when you hire an agent who is not totally local or who is not totally vested from a discount agency you’re not going to have the best team around you. They’re not going to connect you with the best mortgage brokers, the best attorneys, the best contractors. This is what I’m finding from my end, working with a lot of sellers. This is what I’m finding during these transactions.

Cori:           By the way, did you know the way they connect you with someone is just the closest agent, not someone who’s from the particular neighborhood you’re looking at? In today’s market you really need someone who’s in touch with the trends within the neighborhoods you want to buy in. It’s very important.

Ruth:         Right. A market is very specific, so-

Cori:           People, it’s just too important, way too important.

Ruth:         Way too important.

Cori:           If you don’t think you need an agent, then don’t work with a buyer’s agent. That’s fine. Go out on your own. But if you want to have a buyer’s agent, get representation from a full service agent. If the only claim someone can make is that they’re offering you a discount and that’s their biggest thing they’re bringing to the table, you have to wonder about the value of that service.

Ruth:         And that’s true I think about all service and most products. Thank you so much. You can call, write a comment below. We’d love hearing from you, and we’ll talk to you soon.

Cori:           Thanks guys. Bye.

 
 
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Ruth Malkin Brookline Real Estate Expert

 

 

condo conversion

Should I Do a Condo Conversion for My Multi-Family House in Brookline?

If you own a two or three family house, I am sure you thought about the option of converting the house into condominiums.

 Watch this video to learn about condo conversion of a multi-family home in the Greater Boston area:

Doing a condo conversion is a tempting prospect, especially in a booming real estate market. Since the sum of condo values will exceed the house’s value, it is an idea worth exploration.

But just because the market is hot doesn’t mean it will be profitable for you!  Whether or not you should turn your two or three family house into condos depends on a few factors.

Here are three important questions to ask before you consider a condo conversion for your house.

1. What is the value of the home as a single entity versus as condominiums?

Your very first step is to ask a highly experienced real estate agent to give you a current price evaluation. The agent will need to provide you with a market analysis for several properties.

  • One analysis will be of the current market for multi-family houses Brookline.
  • Another analysis will be for the condo market in your neighborhood. For each unit in the building you will need a separate analysis, unless they are identical.

Once you know the value of the homes, you will be able to figure out how much you are willing to spend on a condo conversion.

Paperwork for cash money

2. What are the costs associated with the condo conversion?

There are several steps to the process, and each will cost money. There are two substantial expenses in a condo conversion.

– Legal expenses.

You will need to hire a real estate attorney who will write and file the documents, and advise you on the legal process. This may cost $12,000-$15,000.

– Rehab expenses.

This will be the bulk of your expenditure. In order to sell a two family home as two condos, the City will need to inspect the home and ensure it is up-to-code.

If your house is built in the late nineteenth century or early-to-mid twentieth century, like the overwhelming majority of the multi-family homes in Brookline, it is likely there is considerable work to do to get the house up to current standards.

I am not talking about the cosmetic changes.  These are electrical, plumbing, building and safety upgrades, and getting the property up to current codes required in order to obtain a certificate of occupancy necessary to close.

I cannot estimate this cost. If you’ve maintained and updated the house meticulously over the years, it may be $10,000 of various upgrades. If your house is needs a lot of work, it can cost $300,000. There is no way to estimate this without a licensed contractor.

– Expense of selling the home.

Other than the commission, which will be a percentage of the sales, you may also have to supply an engineer’s report for the condo conversion.  This will likely be less than $1,000.

 3.  Do I have the time, energy, and financial resources (cash) to do the necessary work?

This question is self explanatory.  You need to want to do the work involved in a conversion and have the money to pay for it.

Click on the link if you are curious to learn the value of your Brookline multi-family house. Or fill out the form below.

Free Home Evaluation Sign-Up

Free, no obligation and accurate home evaluation.
should I accept first offer on home

Selling My Home: Should I Take The First Offer?

You put your home on the market. You got an offer. You’re thrilled. It’s the first offer though. Should you take it?

Hi everybody. It’s Ruth. Today I want to talk to you about whether or not you should be taking the very first offer on the property. So you’re a seller. You have your home on the market. And you have an offer coming in. Should you just accept it, or should you negotiate a little bit? Of course it depends on the offer how much you will negotiate, but I do not buy into the notion that the very first offer you’re going to get is going to be the best one. And I hear a lot of agents saying that. I do not agree. You should always negotiate. It doesn’t necessarily have to be the price. It can be other elements such as a closing date, an inspection date, some other contingency, the deposit amount, etc. It’s not just about the price.

Why you should always negotiate. First of all, a little bit of negotiation will let you know whether this buyer is serious or not about the property and the closing. Sometimes buyers themselves don’t know that they’re not really ready to buy. They get caught up in the process. They get caught up in making offers, or their agent has talked them into this. A little bit of going back and forth and a little bit of time and negotiation and what it requires will help you make sure that the buyer is in fact committed to the property and to closing.

Another reason why you should not accept the very first offer that comes in is that a buyer may feel like he or she overpaid for the property. This may not be necessarily true. They may be paying exactly what the market says they should be paying. But the feeling could be that if their offer is accepted as is, that they have conceded too quickly, too much. And this can backfire later after inspection or during the process, towards closing.

Don’t accept the very first offer that comes on your table, because you should always ask for everything you want. I do believe that. If you want something, ask for it. The worst case scenario is that the buyer’s going to say no. I have some clients sometimes that are afraid of asking for too much from the other side, and I tell them, “Just ask. Ask. Ask nicely. And the worst case scenario is that you will get a no. Maybe we’ll get a negotiation. Maybe you’ll end up with something closer to what you want, and that’s fine.” But some people think that if they ask for too much, they will scare off the other side. I don’t believe in that. No one should easily be scared off by a request for a better closing date or a little bit more money. The right buyer will always be open to a conversation. They may not give you everything that you want, but they will not be easily scared off.

To summarize, never accept the very first offer that comes your way. Look at it. Look at the good stuff. Look at the bad stuff. There’s always something that can be improved. Ask for what you want. Don’t be shy about that. And never be afraid for asking for more. Worst case scenario is that you will get a no, and you can still move forward with a fantastic buyer who’s going to love your home.

If you have any questions, contact me. I’m easy to contact through the website. I love hearing from you.
 
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Ruth Malkin Brookline Real Estate Expert

 

winter real estate market boston

Winter Real Estate Market in Greater Boston

Yes, it’s cold outside and everything is frozen over. Does that mean the same holds true for real estate in Greater Boston?

Hi everybody, it’s Ruth. I want to talk to you quickly about the housing market in the winter. It is winter, it is cold in the Boston area, I know. We’ve got a ton of snow, and how is the housing market affected by it? Well traditionally, January, February, these are quiet months in the market. This is not a great time to go out looking for housing. But if you are a serious buyer, this is a fantastic time for you look at homes.

Any houses that are on the market right now, these sellers are serious. They are serious about selling. Having a home on the market during holidays, when it’s snowing, this is an inconvenience to most people. And if they are still on the market and their agent is doing open houses, you better go to those open houses if you’re serious about buying a home.

In the spring market, I usually advise buyers to look a little bit under their budget. So if you tell me your budget is $1.2 million, I say, “Well, lets look up to the $1,111,500 so you have room to make a bid stronger than the asking price,” for example.

Right now I would give the opposite advice. Look over your budget. Sellers out there that have been on the market a while, they may be ready to negotiate. And it is worth a look to see what is out there on the market, even a little above your budget, don’t be shy about that.

If you are in the market for a luxury home, this is your moment. Get out there now, there is a great luxury market out there and it is fairly slow right now. This is a great time for you to look at those houses in Brookline, Newton, that are listed at $2.5 million and higher. Perfect time. This is your moment. This is a great time to buy a beautiful house and maybe negotiate. There may be a little bit more room for negotiation than there will be in two, three months, when the spring comes.

In conclusion, if you are serious about your real estate transaction happening, this is the time to either be a seller, because there’s serious buyers out there. And definitely a time for a buyer to go find those places that have been on the market for three, four, five months, make an offer, secure housing before the market gets crazy. Look a little bit above your budget, take advantage of these slow months, where everybody is staying home for the weekend. You may find yourself putting in an offer with no competition. You may find yourself at an open house, even at a new listing, without a lot of people at that open house.

If you were burned out by the spring market, made one losing offer after another, I hear your pain. This is the time for you to get out there. Find your perfect home.

If you have any questions, call, text, write a comment below. We’d love to hear from you. Happy New Year.
 
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what happens to home prices in the winter

What Happens To Home Prices In The Winter?

Many of you have been contacting me asking what happens to home prices in the winter:

 

Hi, everybody. It’s Ruth. It is a very cold Saturday morning here in Brooklyn, Massachusets and I wanted to talk just a couple of minutes to answer a question that several of you have been asking me recently, which is what happens to the real estate market in winter? So there is indeed very much a cycle in the real estate market and the average pricing, if we look over the whole country, on average what do prices do? They go down in the winter. Does that mean that the value of your home goes down in winter? Well, looking at the statistics more closely what I recently learned from actually Lauren Tune, the chief economist at the Nation Association of Realtors, is that those prices go down not because your home is worth less, but because more smaller homes are purchased in the winter while the spring and summer markets are dominated by large, family houses. So it’s really the whole nature of the real estate market that changes during the winter. Not the value of the properties.

If you have any questions about how to successfully sell a property, any time of year, give me a call. I’d love hearing from you. Call, text, comment below. Thanks.

real estate tax rate

Massachusetts Real Estate Tax Rates

Below find an interactive map of Massachusetts tax rates by towns created by Kurt Rosenfeld, including information on residential exemption.  Some of the highest real estate taxes, per $1,000 in assessed value, are in Longmeadow at $23.58, Wilbraham at $22, and Maynard at $22.

Lowest real estate taxes are paid in Hancock (Berkshire County) at $2.94 and Chatham at $5.03.  

Remember, the tax rate is calculated per thousand dollars of assessed value.  Even though Brookline’s real estate taxes seems fairly low for Massachusetts at $9.88, the high property value accounts for the sizable tax liability homeowners pay.  But Brookline, along with a handful of other towns, has a residential exemption. 

A residential exemption allows homeonwers to pay less taxes than real estate investors.  The exemption is a reduction in the assessed value of the home.  In Brookline the residential exemption saves homeowners nearly $2,300 for fiscal year 2017.  In Boston, homeowners save $2,435 this year, and in Cambridge $2,046.

For an interactive version of the map, click on it.  

Massachusetts Real Estate Tax Rates

massachusetts real estate taxes

Massachusetts Real Estate Tax Map by Kurt Rosenfeld, March 2017. For details, five year rate history, and residential exemption information, click on the map for an interactive version.

 

underpricing a home

The Danger of Under-Pricing Your Home and the Big Lie Real Estate Agents Are Telling You

You may think under-pricing your home is the key to making a swift sale. After all, everyone hears about bidding wars and homes which fetch $100K over the asking price in the Brookline or Boston markets.

However, there is a difference between things that sound good and things that are good. Homes sometimes enter these kinds of bidding wars when they’re under-priced in the first place, which means the sellers of these homes will never know if they could have gotten more money.

And here’s the hard truth: they probably could have.

Of course, some sellers aren’t aware of what’s going on: they’re just following the advice of real estate agents who are are happy to make a little less money themselves if it means they don’t have to work particularly hard.

How to Spot a Lazy Realtor

There are two things to look out for here.

The first is the agent’s own marketing. Any agent who boasts about consistently selling homes for 10% above the asking price is under-pricing their offerings almost every time they sell a home. They’ll try to tell you this isn’t the case. Instead, they’ll try to make you believe they’re doing some special kind of marketing to create this advantageous price war.

Unfortunately, that’s a lie.

There is no marketing trick that can magically make a bidding war happen or get you 10% more than the house is worth.  An agent consistently fetching 10% over asking price is consistently under-pricing the home.

Second, these real estate agents will try to tell you that there’s “no such thing” as pricing a home too low. They’ll point out there will be multiple offers over the sales price and will try to convince you these multiple offers will get you to the true value of the home in no time at all.

That is a very easy way to get out of the challenging task of understanding the market well enough to price a home correctly.

boston neighborhoods report

The Math Doesn’t Add Up

All you need to debunk this claim is to give some thought as to why there might be a bidding war at all. Why would people race to pay more instead of paying the low price the seller is asking for?

It’s because even if they win the bidding war and pay more than what is asked for they are nevertheless getting a steal of a deal.

Let’s say your lazy agent lists your $600,000 house for $500,000. Now let’s say you get 10% over the asking price.

You’ve just sold your $600,000 house for $550,000, which means the buyer gets a $50,000 discount. Suddenly that bidding war doesn’t look so good. Even if you get 10% more than you asked for you’re still getting $50,000 less than the home is worth.

The bidding war only tells you some savvy buyers recognized they’d gain immediate equity by making an aggressive offer.

In a seller’s market, there could be enough pressure to push the price well over the asking price.  But it is better to start with a price which reflects the value of the home.  

Remember: Good Agents Don’t Play Pricing Games

Good agents price homes at market value and help you find the right buyers for those homes. You might only get fewer solid offers this way, but they’ll all be offers which honor the value of your home and the investment you’ve already made.
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yard

10 Tips to Make Your Small Yard Look Inviting

Here in the Boston Metro Area it can be very challenging to score a home with a big yard. However, that doesn’t mean you can’t enjoy the outdoors in your new home. You just need to give your smaller yard some TLC to transform it into a spot you’d be content to spend time in. You should feel proud to invite your friends and family into your yard, too!

1) Choose plants which will not overwhelm the space.

Don’t go for a huge, overbearing tree or a boring boxwood shrub that will simply clutter up the space. Instead, choose a variety of small-to-medium plants. Natives are a good choice, since they’re low-maintenance and look natural. Treat each plant like you might treat an interior decoration, taking note of how adding or subtracting each element contributes to the whole.

2) Use built-in seating.

Garden furniture can be challenging and may quickly overwhelm your space. However, building benches into your fence or planters gives you space to relax while conserving some square footage. If you can’t develop built-in seating consider using small, comfortable pieces. Skip the huge 8-piece dining set with a giant umbrella in favor of a small conversation table paired with rocking chairs, Adirondack chairs, or lounge chairs. Colorful cushions can make each of these pieces look absolutely irresistible. If guests suggest going out into the back yard, you’ve won.

3) Make it intimate with a fence or pergola.

Enclosing your space makes it look planned and cozy. You get out of “small yard” territory, instead entering into the “charming outdoor room” zone. You’ll also enjoy more privacy, and you’ll get an opportunity to block less-than-optimal views if you want or need to.

Best Neighborhoods Ad

4) Get in the zone.

Create distinct zones or areas in your yard. One zone might serve as the play area for the kids. Another might serve as a meditation garden or relaxation station. Use pathways, terraced decks, or other features to delineate these areas.

5) Incorporate design elements from your home.

Small yards are at their most inviting when they seem to be extensions of your home. Use similar colors or motifs to create a seamless transition.

6) Mirror, mirror.

You already know a mirror can make a small room seem larger. It can do the same for your yard. Pick a strategic location on your fence. Choose a mirror that’s whimsical or artistic, something that will add visual interest.

7) Play with your colors and textures.

Use bright, bold bursts of color to dazzle the eye. Vary up textures to create an interesting, vibrant garden. Get this right, and you’ll feel like you’re sitting inside of a living work of art.

8) Go vertical.

Plant vertical gardens to get more out of your space. Herb gardens respond particularly well to the vertical treatment, but so do climbing flowers, succulents, and other small plants.

9) Create a focal point.

Look for something to help draw the eye immediately. Fire pits or water features are both natural choices–choices, in fact, that few people can resist getting close to.

10) Think outside the lawn.

Grass isn’t the end-all, be-all of great landscaping. If you have to choose between creating a tiny patch of grass or featuring a vibrant splash of interesting plants, choose the plants every time. You can create paths, walkways, and porch spaces to help people navigate around the space.

Making the most of your new yard can be a fun part of moving into your new home. It can also be a great way to stage and sell your old one, as a gorgeous back yard attracts sellers. Bottom line? Every improvement you make is a great investment, either into your current lifestyle or your future one.

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interest rate increase

Interest Rate Hike & The Boston Housing Market in 2016

The Federal Reserve’s recent interest rate hike from 0.25% to 0.5% on December 16 is expected to be the first in a series of hikes expected in 2016.   Many people asking me, “What will happen to the Boston housing market, now?”

Believing a Fed rate hike will lead to a slowing housing market is a common concern, and there is a logic behind it. The logic is the Federal Funds Rate increase leads to a mortgage rate increase, thus housing prices are lower. Affordability for homes go down as monthly mortgage payments increase.

interest rate increase

The recent interest rate hike will not impact Boston real estate

As with all things economic, it is not quite as simple as that.  There are several reasons why the recent hike, and additional ones expected in 2016, will have minimal impact on the Boston Housing Market.

To understand why, we need to understand what a Federal Reserve interest rate hike really means.

The reason the Federal Reserve decides to increase the interest rates is to avoid inflation, caused by an overheated economy.  Although many workers and earners in the United States don’t feel it yet, the economy has expanded and growth has picked up.  If the Fed finds it necessary to increase the rate, it means they are seeing a robust economy.  A robust economy means more income and more employment.  

In Massachusetts, Boston especially, the economy has been outperforming the national one.  The Beauru of Labor Statistics estimates Boston unemployment rate at a low 3.7% and the Commonwealth at 4.7%.  More citizens are working and earning.  So what does a rate hike mean at this point of the economic cycle? A growing economy, lower unemployment, which in turn, will lead to higher wages.

Although the Fed is expected to raise interest rates further in 2016, it may not be a very aggressive plan.  Falling oil prices and a slow economy in Europe, and a weakening Chinese economy will mean tepid demand for U.S. exports, and a strengthening dollar.  And, the Fed will have to think carefully before any rate increase which will damage our global trade partners’ economies further.

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Another reason why Boston real estate will not be easily impacted by interest rate increases is due to the lack of inventory in the area.  The demand for housing outstripped supply of homes in 2015.  Although I expect more homes to come on market in 2016, the balance will be on the side of shortage, and thus pushing up prices regardless of cost of financing.

Between high rents, an increase in income, and tight housing inventory, home buyers will take on the added costs of a slightly higher mortgage in order to build their equity as homeowners.  Here is an article from Forbes.com from last April explaining why higher interest rates are good for housing.

One last note, a reminder to put the interest rate hike in perspective!  This week interest rates are quoted just around 4%.  This is still a very low rate to start from when looking at a future rate increase.

Even with 12/16/15 rate increase and the predicted rate hikes of 2016, the Boston housing market will remain strong. It will remain robust in face of higher rates as high as 5%, and up to 6%.

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