Question: About A Listing Contract

Question: We are in a contract listing with an agent to short sell our property. There was an offer made and the listing agent did not even tell us about it. They rejected the offer and claimed they made a counter offer, but no counter offer was provided. There was nothing on the offer that they said they rejected it for except it was $2,000 less than the list price. What are our options? Can we cancel this and go with another broker (they have a fee for taking our listing off)? Would we still be able to work with the person that made the offer if we are relisted with someone else (90 days limit within contract unless we sign an exclusive listing with another broker)? Thank you.

State: GA

Category: Foreclosure / Short Sell

City: Alpharetta

Zip: 30005

Answer:  You would have to check with an attorney or another Realtor who is familiar with Georgia laws, but in Massachusetts all offers must be presented to the Seller in a timely manner. Unless it is stated in your listing contract, your agent has no legal authority to make counter offers without your input. This alone could be enough to claim a breach of contract and allow you to cancel your listing contract with your current agent. You should not have to pay any fee to do so. Typically, after cancelling your current contract you can sign a new exclusive contract with a different agent and the 90 day requirement to pay a fee to the old listing agent would not apply if buyer purchased your home that had seen it before. 

My Disclaimer: The above information is not to be construed as legal advice, but is merely my opinion. Please consult with with an attorney to verify any and all of the information I have given you.

Good luck.

Jim Armstrong

Read more: Ask a REALTOR Answer | REALTOR.com® Blogs 

Massachusetts Pending Home Sales Up for 10th Straight Month in February

WALTHAM, Mass. – March 13, 2012 – The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes put under agreement in February went up again for the 10th straight month compared to the same time in 2011. Condominium pending sales were also up from the same time last year. Pending figures are a leading indicator of actual housing sales in Massachusetts for the following 2-3 months.

“This was the largest year-over-year increase in pending sales since we’ve been tracking this data,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “Buyer confidence continues to grow and the numbers confirm what REALTOR®-members across the state have been reporting; they’re busy. If these pending sales hold together through closing, we have the potential for impressive increases in April and May closings.”

The number of single-family homes put under agreement in February was up 44.2 percent compared to the same time last year (*2,335 homes in 2011 to 3,368 homes in 2012). This is the 10th straight month of year-over-year increases. This was the largest year-over-year increase since MAR has been tracking this data. Prior to the previous record in January 2012 (39.4 percent increase), the largest increase year-over-year was 32.3 percent in April 2010. On a month-to-month basis, single-family homes put under agreement went up 18.3 percent from 2,846 homes in January.

The number of condos put under agreement in February was up 35.3 percent compared to February 2011 (*944 units in 2011 to 1,277 units in 2012). On a month-to-month basis, condos put under agreement were up 20 percent from 1064 units in January.

About Pending Sales:
The tracking of signed purchase and sales agreements (also called “pending sales”) provide reliable information about where the real estate market is heading in coming months.

A pending sale or a sale “under agreement” is when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such. MAR is the only organization which compiles this statewide information from Multiple Listing Services each month.

About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 18,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.

*Please note: As of January 2012, all 2011 pending home sales data has been updated to reflect new collection methods from the three REALTOR® affiliated Multiple Listing Services in Massachusetts via 10K Research and Marketing.

http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1777&news=31 

Do I Have to Pay Taxes on my Short Sale Debt That Was Forgiven by my Lender?

Question: I did a short sale on my home in 2011, and I received an IRS form 1099 for the difference on what I sold my home for and how much I owed on the mortgage. That's almost $50,000 in extra income I now have to report on my tax return and pay taxes on - and I don't have the money. What can I do? Help!


Answer: Your former mortgage holder sent you a 1099 because the IRS requires any debt that is forgiven to be reported as income. They were required to send them out by February 2nd. The good news is that you won't have to pay taxes on it. Because of all the foreclosures and short sales, the IRS in their divine wisdom and ultimate compassion (yeah, sure) has decided through 2012 not to tax people on income derived from forgiving debt (that was really only received on paper). When you do you taxes you will need IRS form 982. Please consult your tax adviser for more information, and go to the IRS link below:

http://www.irs.gov/individuals/article/0,,id=179414,00.html 


There are still plenty of people out there that owe more than their home is worth in this current real estate market , and if they want to sell they will have to do a short sale (or come up with the difference in cash). Although we are hoping that the IRS will extend the exemption to pay taxes on debt forgiveness incurred during the sale of a home, you can't count on it. If you are considering doing a short sale, you should make sure it happens in 2012 or you could owe thousands in taxes. With the timeline needed to process a short sale, that means you need to get your home on the market by early summer at the latest.


Contact me directly if you want more information on selling your home when you owe more then its market value. 
Jim Armstrong - 978-394-6736
jarmstrong@armstrongfield.com


The information above should not be construed as tax advice, but is given just to make you aware of some important tax information. You should always consult your accountant or tax professional for advice.

Make Your Home Appealing to Buyers

As you start to gather up your belongings and pack them away for your move, many sellers question which items they should leave out for buyer appeal.

Often the wrong items are left on display; things like family photos, personal keepsakes, and treasured belongings. All of these items should be safely packed away which very often creates open space (a plus for buyers) on shelves, refrigerator doors, and desktops.

Buyers often make a decision within just seconds of seeing your home about whether or not they want to buy it. So picture your home through the eyes of your potential buyers. What do you see in about 10 seconds?

When you walk up do you see children's toys scattered across the front lawn? Do you see overgrown shrubs and weeds? Do you see chipped paint on the front door, a screen that's torn? Do you spot oil spills on the driveway?

Even answering yes to just one or two of those questions can be damaging, and that's before your potential buyer has entered your home. Sometimes, those seconds are all the buyers need to decide to simply do a "drive by" and not even stop to go inside.

Of course, the goal is to get the buyers inside. To get them to spend time, feel like your home could be their home. But even though that goal is so widespread and common among sellers, somehow the decisions some sellers make are almost completely polar to the goals.
Let's look at five tips that can make your home appealing to buyers.

Check all the screens and molding around your windows and doors. This isn't at the top of a seller's list but it ought to be. Even slightly torn screens send a careless message to buyers. It gives an unconscious uneasiness that there's been, at the very least, lack of care for this home.

Something simple like fixing a screen is often overlooked by a seller because it is so simple, yet, just seconds of seeing the ripped screen can cause a negative impact for buyers.
Add artwork to long hall ways. You don't have to buy artwork that costs thousands of dollars but, if your home has long hall ways, it's nice to break up the monotony with some tasteful artwork. Use contrasting shades and hues to coordinate with the flooring. When you're shopping for the artwork or borrowing it from a friend or your real estate agent or homestager, bring swatches of the carpet or flooring and wall paint to match the artwork colors.

Make the kitchen a focal point. Whether they cook or not, the kitchen is of primary interest to many buyers. Winning over buyers with an appealing kitchen can often convince them that they must have the home. Make sure your appliances are clean, sparkling, and working. Return on investment in the kitchen is usually high and worth every penny, and more, you put into it.

Put the "ah" in the bedroom. The bedroom needs to look like a bedroom. Sounds funny, but many people use their bedroom for other things such as an office or storage. Boxes or newspapers are scattered or stacked in a corner. There's no "ah" or sense of relaxation with that kind of room. So even if that's how you've been living, understand that's not how you should show a home.

If there isn't much space, clear the clutter out. Remove excess furniture. It doesn't matter if you use it. You can walk to another room to get what you need if it means you sell the home faster because it now looks more inviting and spacious.

Making your home more appealing is about seeing your home through the eyes of your potential buyers. When it comes time to go over the offers, you'll be glad you did. 

Home Affordability Climbs to its Highest Level Ever

The National Association of Home Builders/Wells Fargo Housing Opportunity Index came out with the latest figures for housing affordability. Housing affordability rose to a record high during the fourth quarter of 2011, which means a home buyer’s purchasing power is greater than it ever has been before.

The index showed that 75.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200, according to the index. That marks the highest percentage recorded in the index’s 20-year history.

"While today's report indicates that home ownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting home buyers and builders remain significant obstacles to many potential homes sales, even with interest rates at historically low levels," says Barry Rutenberg, chairman of the National Association of Home Builders.

See more here: http://realtormag.realtor.org/daily-news/2012/02/17/housing-affordability-reaches-new-records

30-Year Rates Continue to Hold at Record Lows

30-Year Mortgages Rates Continue to Hold at Record Lows

Fixed-mortgage rates continue to hover at record lows, with the 30-year fixed-rate mortgage staying at the record low of 3.87 percent since the first week of February, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has been below 4 percent for the past 11 weeks.

See more details at the National Association of Realtors' web site:
http://realtormag.realtor.org/daily-news/2012/02/17/30-year-rates-continue-hold-record-lows

Pending Sales in Massachusetts is up 39.44% in January 2012

 The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes put under agreement in January went up again for the ninth straight month compared to the same time in 2011. Condominium pending sales were also up from the same time last year.
 
The fact that we have been experiencing a very mild wither with minimum snowfall has kept home buyers out there looking - and placing properties under agreement. Compare that with last year when we were buried with snow, which keeps the buyers from venturing out of their homes (or apartments).

By the weather isn't the only thing driving the real estate market. The continued improvement in the unemployment rate and more confidence in the economy in general reassures potential home buyers that they won't be losing their job anytime soon. The low mortgage interest rates combined with lower housing prices has made homes more affordable than any other year since the early 1970's.

The number of single-family homes put under agreement in January was up almost 40% percent compared to the same time last year (*2,041 homes in 2011 to 2,846 homes in 2012). That is a huge increase that can't just be contributed to a milder winter. This is the ninth straight month of year-over-year increases. On a month-to-month basis, single-family homes put under agreement went up almost 2 percent from 2,794 homes in December.

The number of condos put under agreement in January was up 25.77 percent compared to January 2011 (*846 units in 2011 to 1,064 units in 2012), another big increase.  On a month-to-month basis, condos put under agreement were up less than one percent at 0.66 percent from 1,057 units in December.

What does this mean to you? Well, if you are thing about placing your home on the market, this is a good time to do it. The inventory of homes is at a low point right now, which means less competition for your home. Less competition means you should be able to sell your home quicker and for more money.

About Pending Sales:
A pending sale or a sale “under agreement” is when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such.  MAR is the only organization which compiles this statewide information from Multiple Listing Services each month.
 

Home Affordability Offering Up 40-Year Deals

   Home affordability is at 1971 levels, due to falling home prices and record low mortgage rates, pushing home ownership in reach to more families, according to the U.S. Department of Housing and Urban Development (HUD). Home owners are bringing in nearly double the median income they need to cover the cost of an average home, HousingPredictor reports.
 "With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. 
    However, some consumers are finding more stringent lending standards for getting a mortgage a roadblock to home ownership.
http://realtytimes.com/159/JimArmstrong

Questions About Market Value of a Home

Question: Hi Jim, Why is this house priced almost $20,000 than it's assessed for? I know they bought it on 2005 for $350,000, but at today's market it seems unrealistic. It has no garage which would have to be built! I know this is not your listing, but do you know anthing else about it? It's been on the market since November 2011 and already has been reduced, but I believe it is not enough of a reduction. Thanks so much. - Kathy
In reference to the follow property: http://www.afhomesearch.com/properties/Danvers/Wadsworth-St/2850427

 Answer: Kathy,

The assessed value of a home has no relationship to the market value of a homes. The way the town determines assessed value differs from the way a Realtor or an appraiser determines value because it is done for tax purposes. Plus, assessments are usually 2 years behind market value, and many times don't include any recent upgrades.

This particular home is actually under agreement, but they are continuing to show it for back up offers. It is a short sale, which means they are selling it for less than what the seller owes to the mortgage holder. According to public records, the seller still owes more than $300,000 to the lender. There no way of knowing what the current offer is on the property, but it is property close to the current list price.

No, it doesn't have a garage, but that doesn't matter to many people. It is in a nice neighborhood, has a good size lot, and has no neighbors in back of the property, so it is a desirable home. It is also in very good condition and shows very well, which many buyers are willing to pay a little more for. The inventory of available single family homes on the North Shore is actually quite low right now, partially due to the time of year, but also because the market is very busy. This is keeping home prices stable, and in some areas we are even seeing slight increases in value. Danvers, MA only saw a 1.45% drop in home prices in 2011, and most of that happened at the beginning of the year. Towards the end of the year the prices were starting to edge up.

I am always available to answer any questions you might have. It doesn't matter if I am the listing agent or not. Let me know if you would like to see any home on the market.

Thanks.

Jim Armstrong
Broker/President
Armstrong Field Real Estate
Mobile 978-394-6736

Boston among cities set for a real estate rebound

The New England hub has a low 5.7 percent unemployment rate thanks to the presence of more than 100 universities and colleges in the metro area and a variety of biotech and financial services companies. “Income is well above average. The housing boom was mild, with a 16 percent rise in prices followed by a 10 percent drop. The recession also was mild, with jobs down just 2 percent,” explains Winzer. Clear Capital and Trulia also have positive forecasts for Beantown this year

See the entire article at: San Jose, Boston among cities set for a real estate rebound

The North Shore Massachusetts Real Estate Market in 2012

Where is real estate going in 2012?

I know everyone gets confused by all the real estate news that you read about almost every day with each report contradicting the other. Each author usually has an ultimate agenda when writing an article. Those who make their living in real estate try to paint a good (or not so bad) picture of the market because they want to encourage people to buy or sell a home. On the other hand the typical reporter working for a newspaper wants to attract viewers to his/her article, and nothing does that better than doom and gloom - bubble bursting, rising foreclosures, etc. When reading these articles, if you are interested in what is happening with your north shore home's value, or want to know if now is a good time to buy in Massachusetts, then ignore all the national statistics. What is happening in Nevada, Michigan or Florida has almost no bearing on the local market here in Massachusetts.
Trulia.com, a leading internet real estate company, has come out with its top five places slated for a quicker recovery. They are Austin, Houston, San Jose, Boston, and Rochester, NY.  The Boston area is home to the technology belt with lots of smart, well-educated people.  Highly educated, tech-savvy cities tend to push through the recovery quicker than other parts of the country. 2011 brought a stabilization of prices on the north shore, with the average home selling for $386,251, statistically insignificant from the average of $390,794 in 2010. Even though I predict it will be a robust year, watch for stable prices in 2012 as more foreclosures coming on the market, holding down any valuation increases.

Right now we currently have 5.7 months supply of single family homes on the market. A normal market is considered to have 5 to 6 months worth of inventory, so we are approaching something close to "normality". The average days on market (DOM) for sold single family homes last year was 137 days. I would like to see the days on market below 125 before I feel we are back to a normal market. During the last few years the DOM has been between 125 and 140, while during the "Home Rush" of 2000-2005 it was just 71 to 93 days. Back 15 years ago in 1997, which was what could be could a "normal" year, the average DOM was 102 days.

The total number of homes sold, down slightly last year over 2010, will increase as interest rates stay at record lows, unemployment continues to drop and job security increases, and home affordability remains the highest in decades. Buyers will step off the sidelines and into home ownership as consumer confidence returns and realize that owning is now less expensive than renting on the north shore of Massachusetts. 

Jim Armstrong

Broker/President

Armstrong Field Real Estate

But MY House is Worth Much More Than That!

This weekend, on New Years eve, I place an offer on behalf of one of my buyer clients on a property in Lynn. This home is a 3 family in a nice area and has a good size double lot. It also has new heating systems, a newer (7 years old) roof and a garage. The kitchens and baths are outdated, however, and there is quite a bit of cosmetic work that needs to be done in all three units. The 2nd and 3rd floor units also share a heating system and a hot water heater.


 This home is listed in the low $300,000's. I looked up what sold within the last 6 months in Lynn for 3 family homes. There were only 3 sales in Lynn that went just above $300,000 - and those were properties that were completely rehabbed with new kitchens & baths. The average 3 family sold for just over $220,000. Now there are many factors that go into determining the market value of a home, so you can't just take the average price and think that this is what the property is worth. After looking at similar properties, I determined that $280,000 was a fair price to offer to the seller. In fact, there had been only 5 three family homes in Lynn that had sold for more. I submitted my buyers' offer along with an explanation to the seller of how we derived at that price, and a list of all three family homes that had sold showing that his asking price was too high.

The seller rejected the offer without even giving us a counter-offer. The listing agent said the the seller wanted to get a offer very close to his asking price. He didn't care what the reality of the market was, and that he had put a lot of work in the house and it was worth much more than what the statistics showed. Needless to say my buyers were put off by this, and didn't want to submit another offer.

Before this property was listed, the seller's agent showed him all the comparable properties, the market stats, and the properties that were currently listed that would be competing for the same buyers. He chose to ignore all that information and the advice of the professional that he hired, and came up with his own list price.

It will be interesting for me to watch this listing, because if it is follows the usual pattern of overpriced listings this property will have its list price drop until it reaches a point where it is in line with (or below) the market. The multifamily market is hot right now, and if a property is priced right it sells in a matter of days. If it is not priced right, it will just sit on the market for months. This particular property had just come on the market last week, and had it been priced right it would have had several showings. My buyers were the only ones to look at it, and that was because the property suited what they were looking for, even if it was overpriced.

I will probably receive a call from the listing agent in the near future asking me if my buyers are still interested in home because they hadn't received any other offers. Unfortunately for the seller, my buyers will probably have already purchased another home.

- Jim Armstrong
Here is a good article on overpricing a home:
http://www.forbes.com/2002/11/22/cx_bs_1122home.html

Barter Your Goods and Services For Marketing and Selling Your Home

Armstrong Field Real Estate is now a member of New England Trade - a business bartering group that serves New England with affiliations across the United States. What does that mean for you? If you own a business, and want to sell your home or business, we will represent you and market your Massachusetts home (or business) for no cash out of your pocket! You trade your services or goods for it. Now many of us already do some private bartering with other business owners. But if you are an electrician who does a $1,000 job for someone that owns a dog grooming business, well, you probably don't need $1,000 work of dog shampooing and styling. What happens with New England Trade is the $1000 gets credited to your account, which you can then spend with any of their other members - and there are literally thousands of different products and services available. See a sampling here: http://www.newenglandtrade.com/what-can-i-buy/goods-and-services.aspx

What are some the advantages of bartering through a trade group?

• You will receive new customers who would not normally do business with you. New England Trade members tend to travel longer distances then your regular customers because they would rather pay in trade credits.
• You can buy things that you need for your business - office equipment and service, printing, advertising, bookkeeping, web design, etc. on trade, and save your cash for the utility bills and rent.
• Increase your inventory turnover of billing hours.
• Fill up your slow times with business you normally wouldn't receive.
• Barter credits can be used regionally and nationally.
• Take a vacation on Trade (I've been on a cruise to Bermuda and a trip to Jamaica on trade with a previous business)

There are many more advantages. So if you own a business of any kind, and you want to sell your home, call me and I will explain how it works. If you don't want to sell your Massachusetts home or business (at least not now), but would like more information on joining this trade group, contact Tammy Penny at New England Trade at 781-388-9200.

Jim Armstrong
Broker/President
Armstrong Field Inc.

Cell 978-394-6736

Office 978-740-8700

Homes Sell Better in the Winter?

RedFin Corporation, a Seattle based real estate company, released some statistics on selling a home in the winter versus other times of the year. The data is from approximately 750,000 homes sold over a year across the country, and then analyzed by season. Here are the basics:

• Homes listed in the winter sell faster compared to the summer: 46 days versus 55 days.
• Homes listed in the winter are more likely to sell at all: 59.2% versus 53.1%
• Homes listed in the winter sell closer to their original list price: a drop of 2.7% in winter versus a 5.2% drop in the summer, which is more than $7,000 on a $300,000 home.

Surprised? Most people would be. But the fact is, there are less homes on the market, which means less competition for qualified home buyers. There are less home buyers in the winter, also, but the ones that are looking are the really serious buyers and not just the lookers and nosey neighbors, who we don't want anyway.

The time of year where a home sells the fastest is still the spring, spending 15% less time on the market than the median for the entire year. Winter takes second place in this category, though (over summer and fall), selling 6% faster than the median.

I'm not guaranteeing that your home will sell quicker and for more money than other times of the year... or even at all. There are too many other factors and variables that come into play to make an across-the-board statement like that. What I am saying is that in most cases, winter is NOT a bad time to list and sell your property, and if you want to sell - don't wait until spring!

- Jim Armstrong
Want to talk? Call me at 978-394-6736
Armstrong Field Real Estate

http://blog.redfin.com/boston/2011/12/should_i_wait_until_spring_to_list_my_home_-_boston_edition.html

Real Estate Facts & Figures

Below are some facts and figures about the current real estate market, and what people think about it.

• 81% of Americans view real estate as a good investment
• 78% of Americans feel that housing prices will hold steady or increase over the next 12 months.
• It is cheaper to buy/own a home than to rent in 80% of the major markets in the US.
• 25% of young Americans plan to buy a home in the next two years.
• 95% of homeowners are happy they decided to buy a home.
• First time home buyers comprise 35% of the total home sales.
• 67% of first-time home buyers said that the real estate market conditions gave them the opportunity to purchase a home sooner than expected.
• 50% of buyers found a home in a better neighborhood than expected.
• 61% purchased their home at a price better than expected.
• 43% received a mortgage interest rate better than expected.
• 69% of Americans say that now is the best time to buy a home
• 88% of people search for homes on the internet, and 40% found the home they eventually purchased on the internet.
• 87% used a real estate agent to buy a home.
• For Sale by Owner homes reach a record low, only accounting for 6% of total sales.
• The average home seller was in their home for 9 years, and had 16% increase in equity when they sold it.
• The median age of a first-time home buyer was 31. The median age of a home seller was 53
• 60% of first-time home buyers bought because they "just wanted a home of their own".
• The median down payment for first-time home buyers was 5%.

This information was compiled from two surveys, including one just released by the National Association of Realtors.

U.S. Pending Home Sales Show Significant Rebound In October

Pending home sales rose strongly in October and remain above year-ago levels, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said improved contract activity is a hopeful sign. “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this is indicates more buyers are taking advantage of the excellent affordability conditions,” he said.
“Many consumers are recognizing that home buyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market,” Yun added.

The PHSI in the Northeast surged 17.7 percent to 71.3 in October and is 3.4 percent above October 2010. In the Midwest the index jumped 24.1 percent to 88.7 in October and remains 13.2 percent above a year ago. Pending home sales in the South rose 8.6 percent in October to an index of 99.5 and are 9.7 percent higher than October 2010. In the West the index slipped 0.3 percent to 105.5 in October but is 8.1 percent above a year ago.

“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” Yun said. “Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying, or they might get a loan but with less favorable terms.”

Plan now for home improvement throughout the year

(ARA) - If you've finished making your holiday gift list, don't put the pen and paper away just yet. While the holidays take up a lot of attention right now, it's also a great time to look a bit further into the future. With the new year just around the corner, planning for home improvement projects now can help you prioritize and budget.

Spending more time indoors at home might be bringing some potential projects to your attention. Maybe you've noticed fraying carpet under your toes, chipped paint on a window frame or a paint color that feels outdated - whatever needs to be addressed should get marked down on your fix-it list.
Give yourself a deadline for completing the list and then call a household meeting to start prioritizing. One of the most important things you can bring to that meeting is an idea of how much you can afford to spend. Given that the economy is still lagging - and many people are feeling that pull on their pocketbooks - it's wisest to avoid going into debt to accomplish everything you want to do.

Setting a home improvement budget gives you parameters to work within as you weigh the importance of each project on your list. However, you should also come to the table with a reasonable idea of how much it will cost to complete each of the tasks you want to finish.

Armed with your list and your budgetary figures, go through each item, weighing the pros and cons of both doing it now and letting it wait. You'll inevitably have a lot of options, including putting things off and saving more money throughout the year, or investing some money in repairs now and letting your savings grow for midyear projects. Naturally, you'll also need to consider the constraints of weather on your projects - if you want to put on a new deck, you'll have to wait until at least spring. Consider the fact that an outdoor project might feel a lot more necessary when warmer weather arrives than it does now.

Your long-term plans for your home should also come into play. If you're planning on selling anytime soon, consider carefully whether the projects you plan on doing will pay off at sale time. Additionally, if you plan on catching a buyer's eye, take an objective look at what might help you make the sale. If you're working with a Realtor, you might even want to discuss with them the best fix-ups and repairs within your budget.

New Massachusetts Scrap Metal Law Passes House

A law that will require scrap metal dealers to obtain a photo ID from anyone that sell metal to them has finally passed  the House of Representatives today. This bill (and various forms of it) has been back and promoted by Massachusetts Realtors for the last few years because of the rash of copper thefts from vacant, and sometimes occupied, homes across the commonwealth. Many homes have been broken into by lowlifes who cut out all the copper pipes, tearing apart walls and leaving extensive destruction in their wake, including the flooding of the property in some cases. They then sell the copper to scrap metal dealers who give them cash for it. The rise in the price of copper (and scrap metal in general) has lead to a huge increase in this activity. It has gotten so bad that thieves are stealing manhole covers, iron fences, statues, and just about any metal that they can get their grubby hands on.

This law will require the scrap dealers to get a valid photo ID from anyone selling metal, and record their information along with a description of the metal they are selling. They must also hold onto any scrap metal for at least 24 hours before reselling it. It will make it illegal for any private citizen to sell metals that are obviously not household items such as manhole covers, metal bleachers, fire hydrants, etc. Currently someone can sell those items with no questions asked.

See more information on the law and scrap metal problem below:

http://www.malegislature.gov/Bills/187/House/H03723

http://www.salemnews.com/local/x67365945/Bill-aims-to-end-rash-of-metal-thefts

http://boston.cbslocal.com/2011/07/19/coakley-wants-laws-to-track-scrap-metal-sales/

http://www.tauntongazette.com/news/business_news/x2063885724/Massachusetts-scrap-metal-dealers-push-for-tougher-laws-to-deter-thieves

House Prices: Where They Will Be in the Spring

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

1. They don’t want to be inconvenienced during the holiday season.
2. They believe that they will see more potential buyers and as a result will get a higher price.
3. In the northern part of the country, they might not want people walking through the snow and then into their house.
4. All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

• Zillow believes we will not see a bottom in prices until the first quarter of 2012.
• Standard & Poors thinks prices will drop %5 in the next few months.
• JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
• Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

Originally posted at the KCM Blog: House Prices: Where They Will Be in the Spring

Selling your home out of season? A great deck makes a difference

In a perfect world, no one would ever have to face the challenge of trying to sell a house when there's snow on the ground and the trees are bare. In reality, people have to sell and buy homes throughout the year.

While winter may not be the optimum season to showcase your landscaping, there is one improvement you can make that will help you boost your home's outdoor appeal no matter what the season: a deck.

When potential buyers visit your home in winter, they might not be able to envision how green and lovely your backyard will look come spring. But they will be able to see with their own eyes the square footage that a deck adds to the home's living space.

Decks, patios, sunrooms and porches have always been popular with home buyers, but real estate agents say that too often those spaces are neglected or not used to their best advantage. Yet outdoor improvements like a deck can significantly enhance your home's value and appeal. In fact, at the time of resale, a deck will recoup, on average, about 73 percent of the original cost of building it, according to Remodeling Magazine's Cost vs. Value report.

"Anything that adds living space adds value, and the least expensive way to gain space is to build a deck or turn the one you have into an outdoor room by staging it so that it flows seamlessly with the rest of the house," says Mary Beth Harrison of The Harrison Group, a Dallas-based real estate agency. "A great deck can set your home apart from others with the same interior floor plan or square footage, and deck additions typically add value when it comes time to sell."

The cooler temperatures of fall and early winter make the season a great time to add a deck to your home. Or, if you already have a deck, you can enhance its appeal by adding simple touches and accessories.

A bonus space - for example, a tiny deck or rarely used balcony off a master bedroom - can be transformed into a romantic getaway by staging it with cozy, cushioned seating and a raised firepit. You can safeguard your deck and add designer style with Latitudes deck stones, 16-inch interlocking square tiles made of natural slate or granite. Deck stones can provide an effective fire barrier that's an asset under firepits or grills, or when used to create an outdoor kitchen.

Lighting is another way to boost appeal. LED deck lighting kits, like those offered by Deckorators, are both practical and visually appealing. Adding lighting to a deck can be an important safety feature, and also helps create a warm, welcoming mood for evening entertaining.

Another improvement that speaks to both safety and visual appeal are deck railings. Decorative railings with ornate balusters, post cap and postcovers can give virtually any wood or composite lumber deck a distinctive look for a modest investment.

"More than ever before, people look at their decks as outdoor entertainment areas," says Chris Fox of Universal Forest Products, producers of Latitudes Composite decking and Railing and Deckorators, a leader in decking railing systems and deck accessories. "For some, it's a kitchen; for others, a living room. Decks can be party spaces or quiet retreats. With so many different types of deck materials, lighting, rail systems and decorative accents, it's possible to turn a plain deck into a great outdoor space."

"Potential home buyers always react positively to nice decks that look like a great place to hang out," says Harrison. "From a buyer's perspective, if all else is equal, it's true that the home with the best deck wins."

Common credit myths about buying a home

(ARA) - Whether your annual earnings range well into six figures or are on the more modest end of national salary averages, you know you'll probably need credit to buy a home. While you likely know how important credit is to your home-buying plans, you may not be aware of the truth behind some common credit myths.

Myth: If your bills are paid and you've never defaulted on a loan, mortgage or credit card bill, you don't need to worry about your credit report or credit score.

Truth: Many factors influence your credit score, and payment history is just one of them. When calculating your score, credit bureaus also consider length of credit history, types of credit used and ratio of credit available to credit used. Even if your payment history is good, scoring lower on one of the other factors could lower your overall credit score.


Myth: As long as you know your credit score, you don't need to look at your credit report before applying for a mortgage.

Truth: A lender will certainly look at your credit report, so you should know what's on it before they do. Errors may occur on a credit report, and if there are any negative marks on your credit history you'll want to know about them - and address them - before a lender asks.


Myth: Checking your credit score is a hassle, and it can't really help you manage your credit in the long run.

Truth: Websites like FreeCreditScore.com make it easy to check your credit score. Keep in mind that lenders use a variety of scores when evaluating credit worthiness, and the one you obtain online will vary from what a lender might see. Still, any score can be a valuable educational tool that helps you better understand how lenders view your credit. FreeCreditScore.com's Credit Score Center can help you understand how your score is calculated, which factors impact it and the best time to apply for credit.


Myth: If your credit is not perfect, you won't be able to get a mortgage.

Truth: Lenders are more strict than they've been in the past and a good credit score and report can certainly make you a more appealing prospect to them. However, a score in the lower range doesn't mean you can't get a mortgage at all. But a higher score is likely to net you more options - and better terms.


Myth: When you apply for a mortgage, the lender could share your personal information (including your credit score and history) with other companies.

Truth: The law limits how banks and other financial institutions can use your information and to whom they can disclose it. If you're not sure how a lender may use your information, ask. Depending on the situation, you may be able to limit disclosure of your information.


Home prices and interest rates are still low across the country, making it a good time to buy a house, real estate experts say. Knowing the truth behind some common credit myths - and understanding your own credit history and score - can help you take advantage of the many opportunities still available for home buyers.

Moving with Children? Here Are Some Tips To Make It Go Smoother.

 When adults decide to move, it's often to pursue an exciting opportunity or discover a new place. But for children, moving can be much harder to understand, as often they've only known one place as home.

As you travel through adulthood, the unknown becomes more alluring, but it's because you've been through major life changes before. That's why it's important to take some steps to make this major transition easier on your kids. Here are some tips from the moving experts at Penske truck rental for helping your children adapt to a new place, along with some practical moving advice for families:

* Open a line of honest communication. It can be hard to tell your kids that they'll be moving, but making sure that they know they can talk about how they're feeling about the move is important. Try to keep the conversation positive by telling them about all the fun things they'll be able to do in their new home, but acknowledge that they'll feel some sadness about leaving their old one.

* Help them say goodbye. Organize a going-away party for your children and their friends, and work with the parents of their friends to gather contact information so they can keep in touch after you move.

* Take inventory. Take a minute with each child to go through toys and clothes to see what can be donated. By letting them help with these decisions, you can eliminate any angst that might come if they realize something they wanted was left behind when you get to your new home.

* Pack a first-day box. Have each child pack a box of things that they will want the first day you move into your new home, like favorite toys, books or stuffed animals. Have the movers pack these boxes last so they are the first thing that is unloaded when you arrive. If you are moving a long distance, have each child pack another bag with items to keep them entertained during the trip.

* Form a moving team. Creating roles for your older children so they can help you move can make your move go quickly and smoothly. If possible, arrange for somebody to watch your younger children so you can focus on moving tasks. Hiring movers can also help take some of the pressure off you so you can tend to your children. Your younger children may also be thrilled by the chance to see the moving truck up close, so take the time to show them.

* Help them feel at home. Showing your children new parks and other attractions in your new community will help them feel excited about their new home. Plan ahead to get them enrolled in activities with other children so they can quickly make new friends. However, be sure to explain to them that making new friends takes time, so they aren't discouraged if it doesn't happen for them right away. Communicate with their teachers to see if there's anything special you can do to help your children feel more comfortable at school.

By doing the little things to help your children cope with the tough parts of moving, you'll put them in a position to acclimate themselves to their new home quickly and easily. For more helpful moving tips, visit www.pensketruckrental.com. 

July 2011 Pending Home Sales Up Almost 15% Over 2010

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors®. All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said sales activity is underperforming. “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he said. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”

The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun said. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”

New Law for Homes Heated by Oil Effective Goes Into Effect September 30th

A new law requires that by September 30, 2011, owners of one- to four-unit residences that are heated with oil must already have or will need to install an oil safety valve or an oil supply line with a protective sleeve on their heating equipment. Installation of these devices must be performed by a licensed oil burner technician. Technicians are employed by companies that deliver home heating oil, or they are self-employed. It is important to note that heating oil systems installed on or after January 1, 1990 are most likely already in compliance because state fire codes implemented these requirements on new installations at that time.

For those who need to install this equipment, state officials estimate that the typical cost of installing either an oil safety valve or oil supply line with a protective sleeve ranges from $150 to $350 (including labor, parts, and local permit fees). While it is an expense that is not insignificant, the costs to clean up a leak can be thousands of dollars.

It is important for home owners to remember that this rule applies to all home owners, regardless of whether they are selling their home or not. The Massachusetts Department of Environmental Protection (DEP) has an excellent, easy-to-understand document that explains this new rule. The document can be found at www.mass.gov/dep/cleanup/laws/hhsl.htm.

Question About the Costs if Selling a Home

Question:
 If we sell our house for 245K, and we owe 232K, the Realtor's commission is 5%, and then there are closing costs. How do we do this? Do we just show up with our check book to pay any money owed? Will there be money left over for us to have any small profit? What do we expect? Do we need to be prepared to have several thousand dollars in cash?

Answer:
Here are your typical seller costs:

• Marketing Fee/Broker Commission (using 5% as an example*)
• $12,250
• State Transfer/Stamp Taxes ($4.56 per $1000)
• $1117
• Deed Preparation
• $150
• Recording Fees (mortgage discharge)
• $75
• Misc Charges (tracking, Fedex & payoff fee, etc.)
• $200

These fees would total $13,792. Subtract this from the selling price and you end up with $231,208 towards paying off your mortgage, so you would have to bring $792 to the closing table to pay off the balance of your mortgage. Typically, you would have to bring a bank or certified check for that amount to the closing.

These numbers are only examples. Your mortgage balance changes daily. This example also does take into consideration any real estate taxes that are due or paid in advance on the date that the property closes, so the amount could be more... or less. The attorney or title company handling the closing will be computing the final numbers, so that it the best person to talk to.

*The 5% commission rate is used as an example only. Each company or office sets its own fee structure. By law, all real estate commissions are negotiable.

Questions About Commissions and Contracts

Question:
How much does a real estate agent charge for commission? Is there a grace period in the listing agreement in case I change my mind?

Answer:
By law commissions are negotiable. Each agent or company sets their own commission rate, and each one decides how much, if any they will negotiate. With our company it varies by each property. If a seller wants try "try" a higher selling price than we recommend, we charge a higher commission because it is going to take longer to sell the property. The same goes for properties that is going to be a short sale because it is a lot more work for us and takes longer to close. If the property is in a location that sells very quickly, and the seller listens to our expert opinion on listing price, we may consider lowering our commission.

Before you enter into a listing contract, make sure you really want to sell your home and do not just want to "test" the market. There is typically no "grace period" in a listing contract. However, just like other relationships, sometimes you find out it's just not a good match for the long haul. Make sure the agent (and broker/company) gives you an easy out option if you feel the agent is not meeting your expectations so you can move on (and get it in writing). But remember to give the agent you do choose a chance. Just because you don't receive an offer in the first week or month doesn't mean your agent isn't marketing your property correctly. This is a difficult, unpredictable market for even the most seasoned experts.

Good luck. Contact me through Trulia if you have any questions.

Jim Armstrong
Broker/President
Armstrong Field Real Estate

Mortgage Interest Rates Tick Up

Rates Tick Up

     In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 4.55% for the week ending July 28, 2011.

That is up from the previous week when it averaged 4.52%. Last year at this time, the 30-year fixed-rate mortgage averaged 4.54%.

Macroeconomic data released this week were a mixed bag. On the positive side, the index of leading indicators in June rose for the 2nd consecutive month. Partly offsetting this, orders for durable goods were weaker than market expectations for the same month.

Mortgage Rates

 
U.S. averages as of July 28, 2011:
30 yr. fixed:   4.55%
 15 yr. fixed:   3.66%
 1 yr. adj:        2.95%

Why Do People Actually Buy a Home?

It seems that every time we talk about real estate today the conversation immediately goes to the financial aspects of buying a home. Where are prices headed? Where are interest rates headed? Should I wait to try and get a ‘better buy’? Should I wait until I can get a ‘steal’?

The odd thing about all these questions is that survey after survey keeps telling us that price is not the reason families actually buy a home. When money is considered at all, it is in light of not paying rent to a landlord. Let’s look at two recent surveys as examples:

National Housing Survey

The top five reasons given in the survey for buying a home, in order, are:

§                      It means having a good place to raise children and provide them with a good education

§                      You have a physical structure where you and your family feel safe

§                      It allows you to have more space for your family

§                      It gives you control of what you do with your living space (renovations and updates)

§                      Paying rent is not a good investment

The Myers Research and Strategic Services Survey

The top five reasons given in the survey for buying a home, in order, are:

§                      Home ownership provides a stable and safe environment for children and other family members

§                      Home ownership means the money you spend on housing goes towards building equity, rather than to a landlord

§                      Home ownership creates the opportunity to pay off a mortgage and own your home by the time you retire

§                      Home ownership creates the opportunity to live in a neighborhood that you enjoy

§                      Home ownership allows you the right to decorate, modify and renovate your home as you see fit

Bottom Line

Price dominates conversation when we talk about buying a home. However, when it comes down to it, we actually buy for the same reasons our parents and grandparents did – we want a better lifestyle for ourselves and our families.

See the original article here: http://kcmblog.com/2011/07/19/why-do-people-actually-buy-a-home/

Housing Trends eNewsletter- Jim Armstrong

Here is a link to my newsletter with the latest housing trends in Massachusetts. It includes foreclosure information, employment stats, new housing construction, economic indicators and more.

Massachusetts Housing Trends eNewsletter- Jim Armstrong

U.S. real estate prices see slight monthly rise in April | Inman News

U.S. real estate prices see slight monthly rise in April | Inman News