How Home Sellers Can Maximize Buyer Offers

Today’s market can be a difficult one for many sellers to navigate. While your real estate agent can advise you, the ultimate decision of what offer to accept is entirely up to you.

This decision can come with quite a bit of pressure. Even in the most favorable of markets this can be a difficult time. How do you know when to accept an offer?

maximize offers
Here are some questions to consider:

•  Is the buyer pre-qualified/approved? Selling will require an investment of time and money. You may need to find a new home or a temporary rental. There’s nothing worse than buying a new house only to find out the deal to sell yours has fallen through.

•  Do you need to move? The urgency of your move may dictate what offer you accept. Many sellers need to move quickly for a new job. You may need to sell to avoid foreclosure. If you are in a rush, you may need to accept an offer that is less than ideal.

•  How much do you owe? You don’t want to sell your home at a loss. And be sure to take closing costs into consideration. Many markets experienced high levels of depreciation over the last year. If you are underwater on your loan, now may not be the time to sell.

•  What is the market climate? Are you likely to get another offer? How long has your home been on the market? Have you had many showings? All of these are factors to consider when contemplating what offer to accept.

Above all, ask yourself if this offer was a reasonable offer. There are buyers that may attempt to low ball you. They may see that your home has been on the market longer than your competition. They may know that it’s a strong buyers market. In response they offer a much smaller amount for your home than it is worth. You are not obligated to accept these low ball offers. However, if you are in need of selling now, every offer warrants consideration or a counter offer.
In the end, you must accept an offer that works for you. You may be willing to accept a lower amount in exchange for a faster closing date. Or you may wish to hold out for the highest dollar amount.

Written by Carla Hill, RealtyTimes

Brighton, MA condos

Brighton, MA Condo Update: Summer Numbers, Fall Predictions

The Brighton condo market has seen a visible change for the better this summer compared to last, and I’ve put together some numbers for you to see.  Notice average prices are up 8%, and days on market as much shorter, 33 days less time on market!  The number of sales during the summer of 2011 and 2012 are fewer but I think this only points to a very dynamic fall.

Brighton, MA condos

One of my favorite statistics is the average sale price to original price ratio.  This number tells us how far apart buyers and sellers are.  The lower the number, the more price reductions and negotiations.  SP:OP in Brighton is up 2%.  It is now at 96%, which means the final sale price is on average 4% lower than the asking price.  A shrinking gap indicated a tightening market.

Expect a busy fall real estate market for Brighton, MA condos.  I have several listings coming on, and sellers are excited to finally be able to move into bigger homes, or sell unwanted investment properties without losing money.  This is the first time since 2008 that I can regularly give home owners in Brighton good news.

Do you want some good news?  Give me a call and let me know if you are ready for a bigger home, or you are sick of being a landlord.  It may not be your time to sell quite yet, but you may be surprised.


Pricing Your Home

Common Mistakes in Pricing Your Home in Rising Market


Pricing Your HomeIn 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.


real estate contract ripped

The #1 Deal Killer for Newton and Brookline Houses

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.

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

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.”

How Landlords Save the World

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.


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

Three Ways to Invest in Real Estate

Investing in real estate can seem overwhelming and reserved for the very rich.  In the current economic conditions and marketplace, it may even feel a bit too risky.  But if you’ve ever thought real estate investing may be right for you, this is a great time to learn about your options and how it can be done by almost anyone.

Before we learn about our options, though, let me say that I believe real estate investing can be a long a cumbersome process if you are new to it.  That is not a bad thing, and I think of a lengthy process as a series of checkpoints that will make me very sure of my decision at the end. But it does mean that you have to have a critical eye, some good research skills and an a greater-than-average supply of patience.  If this sounds like you, then let’s review how you can get into the lucrative business of real estate investing.

Whatever your budget, real estate can be your investment vehicle.

1.  All cash deal.  If you have lots of cash, you may be able to find an investment property in your area and buy it without a mortgage.  The advantage of this is that you will be a highly qualified buyer and you can probably secure a property for a bit of savings over a buyer who has to get a mortgage.  Another advantage of a cash buyer is that her expenses are much lower, as there is no monthly mortgage payment.  This enables her to be more flexible on the rent, giving her more options in choosing tenants.

The disadvantage of an all cash deal is that it is not taking advantage of very low mortgage rates.  Borrowing is pretty cheap, and if all your cash is in one place, you can’t use it elsewhere.  Leverage is a real estate investor’s friend.

2. Part cash, part mortgage.  The down payment minimum is 20-30%, depending on various circumstances and your financial qualifications.  My rule of thumb is that you should make money, or at least break even, with this kind of down payment.  If you lose money on a monthly basis, the property is not worth the price, (at least not not for an investor). Your mortgage payments, any association fees and taxes should be covered by the rent.

The advantage here is that you’ll be taking advantage of the cheap borrowing costs, and you’ll own a property with an income without the whole cash outlay.

The disadvantage is, obviously, the cost of borrowing money and the higher cost due to your mortgage payment – same as the mortgage on your home.

3. Pool of investors with little cash.  Gather a few friends and family, and pool your money together to buy one property.  It can even be a small property at first, but at least get into the market.  If ten friends get together with $15,000 each…you do the math.  The advantage is that you are in the real estate market, getting a piece of the pie, however small.  It is a start, or a great single investment you have.  You can hire a real estate broker and an attorney to help maybe for a stake in the property instead of commission and fees.

The disadvantage is finding like-minded individuals and putting it all together in a legally binding agreement.  To me, this is just a bit of leg-work, and not so much a disadvantage, but it does add to the complexity of the transaction.

Entering the real estate market as an investor is not simple at first, but once you are in, it gets easier and easier.  If you’ve ever considered investing in real estate, this is a great time to get in.  Just choose your strategy and do it!

Top Three Reasons Why Property Investment Is King

No one wants to hear this, but I’m saying it anyway.  Real estate is the best long-term financial investment.  Phew…that’s a relief.

With the real estate market in the dumps for several years now, it is not easy to get back into the pro-property mind-set.  But, it is exactly at these times that you should be considering expanding your real estate portfolio.

One reason I know this is because while the real estate market is dragging in most of the country, it is dominated by the professional real estate investors.  Don’t you want to learn a lesson or two from them?

The professional investor loves real estate above all other investments.  There are three main reasons for this.

First, real estate investing can come in many forms, just like any other investments.  There are small condos, multi-family buildings, commercial, residential, mixed use properties, different towns, neighborhoods, etc.  For every budget, preference and style, there is an investment instrument.

Second, real estate has a certain tangible value that you just don’t see in other investments.  Property investors love that there is an asset they can visit, fix and maintain.  There is a satisfaction in knowing that you have some control and responsibility in the relative value of the property.

Third, although real estate is illiquid – meaning it takes relatively a lot of time and effort to sell it – it is a versatile investment.  You can hold it, or resell it when the market turns your way. You can do extensive renovations and have a quick resell, or you can hold it with tenants for years to come.  Whatever it is, you have options and you can make decisions based on the best scenarios for your needs and the market conditions.

All of this assumes that you have sufficient funds for a down payment and that your expenses on the property are covered.  The major drawback in investment real estate are the unavoidable expenses in maintaining it and the difficulty of selling it if you need the cash.

But this said, it may be time to consider an investment property, especially in such a critical time in the market.  Opportunities and possibilities are present, and real estate investing can be a perfect fit for long-term financial goals.

Top Five Reasons to Own a Home

A soft real estate market that is ripe with all the conditions that should entice people to purchase a home still has some renters asking, “Why own my own home?”

Low interest rates, lower home prices and an improving job market still have some buyers sitting on the fence fearful of an uncertain real estate market. Real estate agents and even sellers are finding that prospective buyers (current renters) may need a little more “emotional” attention in these market conditions. They may need a little more explanation to ensure that they understand the benefits of purchasing your home rather than renting another.

While deciding to own a home or rent one is very personal, many tend to let fear of the unknown be the driving force in making their decision and that can later create an unhappy decision.

Here are five top reasons to at least consider owning your own home.

1. No more landlords: This may be a highly influential factor depending on a potential buyer’s experiences. Many renters have poured a ton of money into a home that they’re living in to keep it at the standard of living they enjoy, only to find that their landlord is soon planning to sell the home. Their hard-earned cash and money invested into their rented home will then only benefit the seller.

2. Making a home your style: This is much more difficult to do in a rental. Yes, as I just mentioned, you can make some modifications, but many things that can be done to a home you own can’t be done to one you’re renting. Taking into consideration Homeowner’s Associations or planned community development restrictions, owning still provides more control and flexibility over renting.

3. Weighing the costs of homeownership: Of course, with homeownership you won’t be calling the landlord to come fix your toilet or dishwasher. So, having a financial reserve is important to carry you through the months when you run into unexpected troubles. Websites such as offer price charts that help you compare how much you’ll save by buying or renting. It’s a helpful tool that allows you to analyze factors such as how much tax savings you’re likely to receive, how much possibly equity you’ll gain, and how much your rent may increase.

4. Long-term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said, “For people with long-term plans, the rent vs. buy equation is tilting heavily toward buying because housing affordability is at record highs dating back to 1970,” he explains. “Homes are undervalued in many areas—selling for less than the cost of replacement construction—and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation.”

5. Low interest rates and affordable homes will not last forever: If you’re not ready to buy or simply can’t afford to own a home, even the historically low interest rates and exceedingly affordable home prices might not move you to take the leap into homeownership. However, understanding that these conditions won’t last forever is important. Sometimes when conditions persist, we tend to think they’ll always be this way.

Distressed sales will begin falling in 2013 and that would then cause home prices to creep upward, predicts Moody’s Analytics. With little activity on the homebuilding front, and still a heavy supply, it’s not expected to increase much more. Also, the number of new households each year is rising, which is expected to help alleviate the oversupply in the coming years.

Written by Phoebe Chongchua

It’s Not All About Money

When I just started in real estate years and years ago, I had a mentor.  I’ll spare you the details of that relationship but tell you about one piece of advice I remember well.  We were working on listing presentation in the hopes of getting a couple of different home owners to list their home sale with us when she told me, “It’s all about the price.”

That line has stuck with me all the years –  every time I look at a home’s price in both my inventory and the general inventory of homes on market.  It’s all about price, everything can be figure into the price…the price, the logic goes, says it all.

For a while I liked that piece of advice and worked with it.  It worked well – after all, if the price is right then there should be no trouble selling the house.  But after some experience, and a changing market, I realized that this is not necessarily so.

It is true, we can figure anything into the price.  After inspection, we can renegotiate the price figuring in the costs of repairs, we can set the price around what the house looks like.  But, does this absolve us from marketing the home aggressively and preparing the home for greatest appeal?

If we only focus on price, then we are missing some important aspects of a successful home sale.

In the sea of housing inventory, it is more vital than ever to have the right marketing in place.  How else would a buyer find your home when looking at a list of fifty suitable homes in the area?  How does your house “pop”?  Your house must be promoted in the right place using the right pictures and text to appeal to the right buyer.

Saying that everything can be figured into the price also assumes we can methodically and very precisely know the price of the home in advance.  That is hogwash.  We can’t know exactly.  Furthermore, even the best real estate agent can be off a bit on the price sometimes.  The housing market is too dynamic and complex for there to be an exact price, and getting it wrong isn’t the end of the world.

Sure the final sale price figures in everything about the house, but to each buyer that is something different.  One buyer will pay a premium for a large yard, another will focus on a discount for a damp basement.  Remember, the buyer is not only seeing your house and making an offer based on your home’s features.  The buyer is making an offer based on all the homes he or she saw, paying more or less for features in comparison to the competing homes.

So is it all about the price?  Pricing the home well is extremely important, but without an aggressive, well-thought-out marketing plan, and investing in the preparation of the house for sale, you will not be getting everything you can for your home.

How did you price your home when it went on market?  Have you had to adjust the price?