Boston Real Estate Abatement: Don’t Overpay Real Estate Taxes!

January 3, 2013 By Leave a Comment

Avoid overpaying taxes by understanding Boston’s abatement process for real estate taxes

Every year the City of Boston adjusts assessed home values for a real estate tax base, and there is a lot of confusion around this number. Allow me to offer some clarifications and suggest how to avoid overpaying real estate taxes.

What is the city’s Assessed Value?

The City’s assessed assessed value for your house or condominium is not the market value of your home. It should roughly represent the market value of three years ago, I was told anecdotally. But I recommend you attach no interpretations to the number provided by the municipality.

Most likely, Boston’s assessed value of your home in Brighton, Jamaica Plain, West Roxbury and almost anywhere in Boston is well under current market value. This is a good thing. Remember, this number is your tax base, so a lower assessed value means a lower real estate tax liability.

What is Abatement?

The Commonwealth of Massachusetts allows homeowners to request abatement from their town or city if it is believed the assessment is wrong and needs to be adjusted. Most commonly, the abatement process is used when the home’s assessed value is higher than the market value.

I requested abatement when my Brighton condo’s value well exceeded the market value. If I would have sold the condo at the time, it would have been worth about $30,000 less than the value the City used to calculate my taxes.

The abatement procedure was painless and quick, and my condo’s assessed value was adjusted and my taxes lowered. But I realized many of my neighbors did not do the same. Either they didn’t realize there was a way to lower assessment or they didn’t realize the assessment was too high.

Should I Request Abatement from the City of Boston?

If you believe your condo’s assessed value is too high, meaning it exceeds the market value, you should request an abatement. If your neighbor’s similar condo just sold for less than your assessed value, apply to have your value reduced.

If you are unsure of the market value, contact me and I can provide you with this information for free.

Don’t know your Boston property’s assessed value? Find it here: http://www.cityofboston.gov/assessing/search/

Abatement instructions are provided here: http://www.cityofboston.gov/assessing/abatement.asp

Boston’s abatement application is not available online, you must pick it up from City Hall or give them a call:(617) 635-4287.

If you want to apply for abatement, do it NOW, deadline is February 1!

Filed Under: Real Estate News Tagged With: , , , , , , , , ,

Newton Houses in High Demand, But Are You Positioning Your Home Correctly?

November 8, 2012 By Leave a Comment

Newton real estate is in high demand and in analyzing the market for Newton houses; you find almost across the board, the market is favoring sellers. Inventory of houses on market in Newton is just meeting demand or falling shy of it in some price ranges.

The price range with most pressure is the $800,000-$899,999 price range in Newton, with only one month of inventory. Houses in this price range are sitting the least time on the market at only 51 days.

Alternatively, luxury Newton homes priced $3,000,000-$3,999,999 have 16 months of supply. This means the sellers can expect their house to sell in 16 months, even if their home is the best of the lot.

What does this mean to you if you are selling your house in Newton?

First, you can use this information to set expectations on roughly how long it will take to sell your home. The months of supply tell you if you have a lot or little competition in relation to the demand in recent months. Many people thing the average days on market is the best indication for how long it will take for a home to sell. But average days on market don’t always go hand in hand with months of supply.

Second, if you plan to price your home near the top or bottom of a price range, it may make sense to price higher or lower just a bit. For example, if you plan to price your Newton home just over $900,000, it may be worth to price your home at $899,999 where you’ll have less competition and more buyers.

No matter where your home is priced, and regardless of competition, there is a guaranteed way to a quicker and easier home sale. To beat the competition you must offer the best value in the price range. This doesn’t mean you should have the biggest, newest, prettiest house, but the one offering the most solutions for buyers for every dollar they spend.

Next, the house needs to be marketed correctly, online exposure being the single most important element of property marketing. Regardless of the low inventory and high demand, to attract a better buyer faster who’d pay top dollar for your home, your house must stand out in the crowd of 152 Newton houses.

A home priced correctly and marketed properly, should be the first one sold in the price range, within the period of months of supply. Newton houses may be a hot commodity in most price ranges, but there are still houses lingering on market for months without an offer. Don’t be the home seller of such a house.

Search Newton Houses

Filed Under: Selling a Home Tagged With: , , , , , , , , ,

Common Mistakes in Pricing Your Home in Rising Market

September 10, 2012 By Leave a Comment

 

In a real estate market with rising prices, pricing your home can be a bit tricky. I meet some home sellers who think it is easier to price a home in a rising market, but that’s not necessarily true. The risk of mispricing is always the same, and leaving thousands of dollars on the table is at stake.

Prices are just starting to inch up around the country, but as usual, Boston real estate is a bit ahead in this regard. Many of Boston’s neighborhoods and immediate suburbs are enjoying visibly higher home prices for some months. And the vibrant market has encouraged many who’ve been waiting to sell.

So how much is your home worth now? In pricing your home, ensure you receive top dollar by avoiding the following common mistakes.

Looking at sold home prices online. Sold home prices are a great place to start your research on your home’s value, but there are some issues. Although the information is public and generally accurate, it can be misleading when using the mapping features of Zillow or Trulia. A house nearby of similar size could have sold for a vastly different price than what your home is worth. Unless you know a house well, it is dangerous to compare it to yours.

Furthermore, don’t confuse recent sold home prices with the “Zestimates” on Zillow. Those are generally useless in Newton and Brookline, and many parts of Boston. I’ve written about my reservations about Zillow as a data source before in my article, “No More Zestimates for Newton and Brookline.”

Pricing too high. You may think pricing a bit high in a rising market is not a big deal, but remember, we are just coming off a pretty ugly real estate slump. Market is just starting to perk-up, buyers still hold some cards. First-time home buyers are moving the market, and they are buying on a tight budget. There is less negotiation, so do not assume that if you price high, you’re leaving “room to negotiate.” Instead, you’re leaving room to sit on market and wait for an inevitable price reduction.

Pricing too low. Some real estate agents will tell you there is no danger in under pricing a home because there will be multiple offers, and you’ll get the full value of the home as buyers bid up the price. Bologna. Agents say this because a cheaper house is easier to sell. There is a strategy involved in multiple-offer situations, and it involves some thought.

Generating a multiple offer situation is never a guarantee, and can be risky when you are depending on the multiple offers to bring you the full value of the home. Here’s a post I wrote about the dangers of under pricing. A neighbor of one of my properties under-priced for a quick sale, and after the bidding war, the condo sold for about 10K short of top dollar.

Asking the wrong agent. Real estate is not neurology, but it does require expertise. This expertise is labor intensive, including looking at homes, meeting with buyers, writing offers, learning the market, reading the news, etc. Ask the wrong agent, and you’ll get the wrong answer. Speak with local agents who seem to know what they are talking about, preferably more than one if you have reservations. A competent agent will be able to give you a price or a price range, with some precision and confidence, and back it up with recent sales and inside knowledge.

Input from a professional will always be the best place for you to price your home. Make sure you don’t get caught up in the mistakes outlined, and you’ll sell your home for top dollar in no time.

If you are curious about how much your home is worth, click here.

 

Filed Under: Selling a Home Tagged With: , , , , , , , , ,

Boston Real Estate Prices Going Up: Danger of Under Pricing Your Home!

July 23, 2012 By Leave a Comment

When home prices are going up, and going up fast, you should be concerned about under pricing your home. Boston real estate prices have been coming out of the slump, most prominently in the last few months. And as more sellers are getting ready to finally sell, under pricing can be a problem.

It is hard to imagine discussing the danger of under pricing just a couple months ago. But then I saw it done to a condo in Brighton. The condo, two bedrooms plus parking in an excellent building in Cleveland Circle, was barely on market before the seller accepted an offer. Because it didn’t close, I don’t know the final sale price yet.

I am so sure this condo was under priced because two comparable condos were off market just as fast, even though they were priced 30K more – about 10%.

There are two reasons the condo could have been deliberately under priced. First, the seller may have been under duress to sell quickly. Second, the seller may have been advised an under-pricing strategy to encourage multiple offers and thus have higher bids.

I don’t know the seller’s motivation, frankly. But I speculate a third reason the condo was under-priced – lack of knowledge on current market conditions. Brighton condos have been flying off market as first time home buyers are ready to buy, and there is very little inventory. The fast turnaround limits an agent’s ability to price accurately on recent sales.

The only way for an agent to know about this market pressure it to go to the jam-packed open houses with buyers writing offers on the steps of buildings. If the agent didn’t come to see Brighton condos in open houses in the past two months, accurate pricing would be almost impossible.

I hope, and expect, the condo sold well over asking. I’ll keep you posted.

For an accurate and free market evaluation of your home, click here.

Filed Under: Selling a Home Tagged With: , , , ,

The #1 Deal Killer for Newton and Brookline Houses

July 2, 2012 By Leave a Comment

Last Spring market, which ended roughly a week ago, looked something like this: buyers want to buy, sellers unsure they want to sell, plenty multiple-offer situations and many deals falling apart mid-way to closing. This is the nature of a market with rising prices.

Homeowners, believing prices will rise, stay on the sidelines and don’t feel a need to sell their homes. On the flip side, there are not enough homes on the market to satisfy all the buyers, who are bidding up the prices of homes.

But many of the home sale transactions don’t make it to closing, or at least not without some disappointments and fighting. The dreaded appraisal is the culprit!

The appraisal is a third party evaluation of the home which the bank requires for a mortgage approval. An appraiser comes to the home and compares it to recent sales. In our market, the appraiser has a difficult job because there may not be enough recent sales of similar properties, and the price buyers are willing to pay is higher than it was just a few months ago.

Because of the formulas, regulations and rules the appraisers must follow; their evaluation is often coming short of the offer price, which the buyer and seller already agreed upon. What does this mean? Here’s an example:

Four offers are submitted on a house in Newton, and the best offer was accepted at $800,000. The buyer agrees to pay a 30% down payment, $240,000 and submits a mortgage application for a 70% loan, $560,000.

The appraiser uses the limited recent sales data for similar houses nearby, and comes up with an appraised value of $750,000. The mortgage company will still fund 70% of the appraised value, but now this number dropped to $525,000.

Once of several things may happen next:

  • The buyer may demand the price reduced to the appraised value. Why should he pay more than that?
  • The buyer can make up the difference in cash.
  • The buyer and seller can negotiate a price between the $800,000 and $750,000. The buyer will pay cash for anything over $750,000.
  • The buyer and seller may terminate the agreement, (if there is an appraisal contingency in the agreement, which I’ll discuss in another posting).

Whatever the decision, it is never a romantic time during a real estate transaction process. Both parties are usually upset – buyer fearing he is over paying and dreading the added cash expenditure and seller annoyed she is making less than expected. This is especially disappointing when there were several offers, four buyers is willing to pay more than the appraised value!

Five years ago appraisals were rarely a problem. But are and will continue to be an issue everywhere prices are going up, inventories are low, and buyers are ready, willing and able to buy.

Buyers and sellers must prepare themselves for the appraisal. I’ll discuss that in upcoming posts.

Filed Under: Buying and Selling a Home Tagged With: , , , , , , , , , , , , , , ,

Finding Your Newton or Brookline House: A Guide for Frustrated Buyers

May 4, 2012 By Leave a Comment

I overheard someone talking about the long and disappointing process of looking for a home in Brookline the past year. “There is nothing in our price range.” I hear this often, especially about Brookline and Newton houses. So I want to give all the frustrated buyers a few words of advice from experience. Here are three questions to ask yourself and ponder.

1. Am I looking in my price range?
Sometimes I find buyers, especially those looking in a seven figure price point, looking at homes with the dream criteria list, but not the right price range. These buyers go see Brookline homes that have a specific number of bedrooms, square footage, certain style, etc. But the houses are totally out of the price range.

Instead, only look at home you can afford, plus 5-10%. (See my previous post about looking at homes above your price range). Are you sure they won’t do? Don’t rely on the pictures on the computer only, go look at some of the homes. Perhaps with some imagination and a little investment down the line it will be the dream home you can’t afford now.

2. Am I giving up easily?
Buyers going from house to house they can’t afford tend to give up. Looking for a home is a long process so why spend all these hours on something you don’t think will come together?

Hang in there! In fact, I suggest that buyers who are outbid regularly to keep at it. Yours will be a longer and more intense search, but with the dedication and persistence, you can find the right home. Sometimes a home that sits for many months on the market will sell for less than it would otherwise, or a poorly marketed for-sale-by-owner will sell for too little (FSBO’s have many disadvantages in the market ).

Luck, it is said, is preparedness and openness for opportunities. If you quit your search, you will not be positioned for much real estate luck.

3. Am I working with the right agent?
You can find the right agent who’ll be dedicated to your long home searching journey. Don’t commit to anyone until you find someone who is impatient or pushy.

One of the very first things an agent does with a buyer is set expectations. Sadly, though, most agents think this means to set YOUR expectations of what you’ll not get for your money in TODAY’s market. There is more to it.

If an agent says your expectations are unrealistic, walk away and hire someone else. Seriously. No agent knows when and how things will change. There are various opportunities, situations, and if you are serious about moving, you will find the right home.

If you are committed to finding a new home, and you know your needs are as such that you MUST move, then please give yourself plenty of time to search for a home. Find an agent to be your partner, and make the decision that this will take a while. As my Grandmother used to say, “With a bit of patience and some creativity, anything is possible.”

Filed Under: Buying a Home Tagged With: , , , , , , , ,

Brighton Feels Like 2004

April 30, 2012 By Leave a Comment

Looking at the Brighton real estate market numbers I feel like I’m time traveling back to 2004. Not enough inventory! Instead of anecdotal stories I will give you actual multiple listing service statistics.

In researching the difference in our local Brighton, Brookline and Newton trends versus the National real estate trends, I came across these year-over-year figures for Brighton, and I simply had to share them.

The average time on market for Brighton properties went from 89 days to 45 days comparing March 2011 to March 2012. Market time has cut in half! Prices are pretty much flat with median home prices going down from $248,000 to $250,000 in the same time frame. But the number that I find most interesting is the number of active listings on market. On March 31, 2011 there were 118 homes on market. On March 31, 2012 there were only 68. A 42% drop in inventory.

I can go on and on about statistical insignificance of all sorts of numbers the National Association of Realtors provide, and the numbers we real estate agent give to prove a point. But the drop in Brighton real estate inventory is sufficiently large that it can’t be ignored.

Is everyone sitting on the sidelines waiting for something to happen before they can sell? It’s happening, folks. The market is tight; A six week average market time and a lack of inventory sends me back to my early days of real estate, when every new listing was attacked by a mob of first time home buyers.

These days the mobs are smaller, more educated, and less prone to overbidding, but significant changes are underway from the slow, sleepy, depressing market.

Even if you are not buying or selling in Brighton, this information is important to you. A couple weeks back I wrote about how the Brighton real estate market is a leading indicator of change. This market is dominated by first time home buyers, who set off a chain of real estate events.

I’m not saying everything is fabulous, only that change is in the air.

Filed Under: Brighton Housing Market Tagged With: , , , , , ,

Why First Time Buyers in Brighton Are a Leading Economic Indicator

April 13, 2012 By Leave a Comment

In 2007 I found self telling many potential home sellers to NOT sell! The Brighton condo market started taking a downturn, ahead of the rest of the market. While Newton and Brookline real estate agents were celebrating million dollar deals, I felt like Cassandra around my colleagues.

Although I had a stellar year in real estate, I knew something was wrong. My first-time home buyer business was slowing down considerably. Brighton condos, even great ones at high owner occupancy buildings, could not be sold profitably if bought within a few years earlier.

So my business naturally focused higher end homes, but I knew this was about to take a nose-dive. I learned very quickly that if Brighton condos are not selling in 2007, nothing is selling in 2008. Why?

The Cleveland Circle condos were bought mostly by first time home buyers. If they are not in the market, then everything else slows down. Real estate transactions are a chain of events; first time buyer moves into a condo. The condo owner upgrades to a larger condo or a single family home, which is sold years later and traded up again.

If the initial event – which is the first time buyer becoming a homeowner – does not happen, everything else soon comes to a halt. And it did, in 2008.

So here we are four years later and I am here to tell you that home buyers have been in the market for about a year now, and the Brighton condo market is hot! Rents are way up, mortgages rates still low, and conditions are ripe for the first time home buyer.

Next time you are looking for some economic predictions, at least in the real estate market, forget the pundits. Ask a potential first time home buyer what they plan to do and why. Then make plans accordingly, no matter where you are on the real estate transactions chain.

Filed Under: Buying a Home Tagged With: , , , , , , ,

Businessweek Article: “A Solution to the Housing Crisis Could Be At Hand”

February 14, 2012 By Leave a Comment

Great article explaining solutions to the short sale and foreclosure glut, turning around the housing market, and why the recent programs have not worked.

http://www.businessweek.com/magazine/a-solution-to-the-housing-crisis-could-be-at-hand-02082012.html

Filed Under: Real Estate News Tagged With: , , , , , , , , , , , , ,

How Landlords Save the World

January 18, 2012 By Leave a Comment

The title of this entry is over-the-top, I admit, but I am just here to stick up for the landlords out there who are trying to do some good. The word “landlord” in itself has some negativity associated with it, and the use of “lord” in this context is distasteful in our American sensibility. In media, landlords are portrayed as misers ready to make a buck on the poor and take advantage of families.

Please!

Let me tell you about the landlords, the real estate investors, I know.

First and foremost, there is a commitment to maintain the property and keeping the tenant happy and comfortable, even with the high occupancy rate and the increasing rents. I am not suggesting any altruism here, but it is cheaper to keep than replace tenants. It only makes sense that tenants stay for a long-run, and take care of the property, as it is their home. Fostering that environment is essential for positive tenant-landlord relations, which is the relationship you want in between any consumer and supplier.

A rental property is a huge financial commitment and a landlord idiot enough to not take care of it and ensure it’s livability is ill suited for the job.

Yes, there are many terrible landlords out there. The worse of them are the ones who neglect their properties, fail to keep up with safety codes, and don’t treat their tenants with the respect they deserve. Just like in any occupation, in any aspect of humanity, there are some bad apples.

For more on tenant-landlord rights in Massachusetts, go to http://www.mass.gov/ago/docs/consumer/landlordtenant073007.pdf

Filed Under: Uncategorized Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
« Older Posts