There are many things along the course of a real estate transaction that can cause problems or even kill a deal: a bad inspection, issues with a condo association, disagreements over P&S language, financing… And even in the final days before closing, when buyers and sellers assume it’s smooth sailing, a problem can still arise over something as seemingly trivial as whether a ceiling fan is supposed to stay with the house. The New York Times recent article, “How Fights Over Fixtures Can Derail a Closing,” offers some real world examples of this phenomenon. It would be funny if it wasn’t so true…

NYT_fixtures

Real estate attorney and blogger extraordinaire Rich Vetstein recently invited me to participate in a “round table” discussion for The Massachusetts Real Estate Law Blog — following is an excerpt. There’s a link at the end to click over to the full article…

Strategies to Succeed In A Seller’s Real Estate Market: A Roundtable Discussion
Put Your Best Offer Forward & Get Pre-Approved Beforehand, Says Local Experts

Well, it’s official now. With buyers back in droves, an abnormally low inventory of good properties, and bidding wars popping up all over the place, the Greater Boston real estate market has now made full circle into a seller’s market. As the Boston Globe recently wrote, we are “desperately seeking sellers.”

For prospective buyers in a seller’s market, the strategies to succeed and find your dream home are very different from just a year or two ago. To help you navigate these unfamiliar waters, I’ve asked Cambridge-Somerville Realtor, Lara Gordon of Coldwell Banker, and Brian Cavanaugh, Senior Mortgage Banker at RMS Mortgage, to join me in this “round-table” discussion about how buyers can succeed in a seller’s market…

Mass Real Estate Law Blog Roundtable

About a month ago I was interviewed by a writer for Boston Magazine about what’s going on in the Greater Boston real estate market. I gave her my two cents on the Cambridge & Somerville side of things, which you can read about in the article, which just came out today…

Boston Magazine: Getting in the Game

Real estate attorney Rich Vetstein does a good job of explaining the piles of papers buyers sign at closing. In case you’re curious…

Leaving With Keys and Carpal Tunnel: Why Do Buyers Sign So Many Closing Documents? | The Massachusetts Real Estate Law Blog

paper-files-stack-of-papers-surprised

You can pretty much substitute “Cambridge,” “Somerville” or “Boston” every time New York is mentioned in this piece — same situation here. Very important that your lender works with experienced, LOCAL appraisers who know our market. Not sure? Ask your agent…

Getting Started – Assessing the Value of a Home | NYTimes.com

 

Dealing with a Multiple Bid Situation — Advice for Buyers & Sellers

Originally Posted March 29, 2012

Most home buyers and their agents are not thrilled about competing in a multiple-bid situation, and contrary to popular belief, it can also be stressful for sellers and listing agents. BUT multiple-bids are a fact of life in this market, so if you’re buying or selling your home, you need to be prepared. Here’s my advice:

ADVICE FOR BUYERS:

1) Accept the situation. In an ideal world, you would be the only buyer for your dream home. You’d see a great place, take a few days to think things over, then make a fair offer, which would immediately be accepted, and you’d move right into your new place. But in the real world, there IS competition and you won’t necessarily get the first house you bid on. Maybe not even your second or third. None of this should deter you from buying, though–you just need to know how to play the game.

2) Know what you want, know the market, and be prepared to act. Many list agents are now holding off on showings until the Sunday open house, and then reviewing offers with their sellers on Monday or Tuesday night. This means you will have a limited amount of time to view the property, make a decision and prepare your offer–it’s all easier if you have your pre-approval ready, have enlisted a buyer’s agent, and have a comfort level with the local inventory and market values.

3) Put your best foot forward. In a multiple-offer situation, it’s a waste of time to come in low, expecting to raise your bid during negotiations. Fact is, you may never get that opportunity–if a seller receives several offers and one is significantly stronger than the others, they will likely accept it. Going back to all buyers for their “best and final” offers is not a given. My advice to any buyer going into a competitive situation is to offer no lower than asking price. If you don’t think the property is worth it, or if you can’t or don’t want to go that high, then this is likely not the home for you.

4) Don’t underestimate the terms of your offer. Price is important, for sure. But so is the strength of your pre-approval, the amount of your downpayment, your willingness to work with sellers’ preferred dates, and how your agent presents you: as a knowledgeable buyer, committed to buying this home, regarding the home inspection as informational, rather than as a tool for renegotiation, etc.

5) Don’t get swept up in the hype. Know what a property is worth to you and set a limit on what you will spend if the sellers do come back asking for “best and final.” It’s not worth *winning* the home if you regret it later.

ADVICE FOR SELLERS:

1) Make sure you and your agent discuss a plan for showings and offers. Will you begin showings immediately or wait until the open house? If showings begin immediately and a strong offer comes in before the open house, will you consider it or do you want to wait to get the full market exposure of the open house? There’s not necessarily a right or wrong answer here–what’s best for one client and property may be a bad idea for another–but you should talk these things through and have a plan.

2) When reviewing multiple offers, don’t put all the weight on price. The size of the downpayment is important, especially if there are not a lot of good comps for your home, because if the appraisal comes in low, a bigger downpayment may prevent the deal from tanking. Also consider the strength of the buyers’ pre-approvals, review their contingencies, and try to get a sense of their attitude toward this purchase–it is not uncommon for someone to get caught up in the competition and later second-guess themselves. An educated and level-headed buyer is a good buyer.

3) Be happy. We are incredibly lucky to live in a place where homes have retained their value through the national housing crisis. It’s good to remember this when things get stressful.

While we don’t see a ton of new construction in Cambridge and Somerville, a lot of gut renovations are practically new construction, so a lot of the same good advice here applies. Something I’d add too, from my experience working with buyers of new or just-renovated homes, is that you should really be prepared for a few kinks in the first months of living there — this home has never been lived in and is therefore “untested.” Even the most thorough home inspection won’t turn up everything and sometimes only time will reveal issues with the home’s construction and/or systems.

Avoiding The Money Pit: Advice For Buying New Construction | The Massachusetts Real Estate Law Blog.