The Co$t of Heating

The cost of heating oil has skyrocketed to unseen heights in the past few weeks.
Homeowners who didn’t lock not discounted pre-season rates or prepaid at a lower per gallon cost are now facing huge oil bills for heating this homes this winter.

In September and through October, local fuel companies invited their customers to pre pay for their heating oil or to buy into packages for a discounted rate per gallon. Consumer who took advantage of these offer paid around $2.79 per gallon if purchased in bulk or $2.89 per gallon if purchased on a plan.
Now, heating oil has escalated to up to $3.59 per gallon in most places on the outer cape.

This is astronomically obscene and we’ll most likely see it climb higher. We could see the days of wearing winter coats and hats in the house come back
Please conserve this winter by keeping doors closed, make sure storm windows are down if you have them. Close the damper to your fireplace when not in use. Get fabric snakes ot put under doors to stop breezes and you may wna to think about heavy drapes around sliders.

If you are in need of assistance with heating oil this winter, please contaqct the following:

• South Shore Community Action Council: Federal funds are available to assist families during the winter. For an application or eligibility information, call 508-778-0870.
  
• Citizens Energy Oil Heat Program: This private nonprofit program assists families in need of heating oil. Call 877-563-4645.
  
• Utility discounts: All Massachusetts electric companies and most gas companies have low-income discount programs. You automatically qualify for the discounts if you receive Food Stamp benefits, MassHealth, Supplemental Security Income or fuel assistance. These discounts can save you 25 to 35 percent on each bill. To apply for discounts, call your gas and electric companies and ask for an application.
  
• Cape and Islands Self Reliance Corp.: This consumer cooperative provides members with inexpensive home heating oil. Call 888-808-0120.

Lets all hope the prices have stopped increasing or better yet for a warm winter.

A Short Sale

Q: "Mike, I just heard the closing table regarding opportunities to buy in the current real estate market and if I heard right, you mentioned a short sale but didn’t elaborate. I’m not familiar with a short sale. What is it?" - Dorothy Ann, Wellfleet

A short sale, quite simply put, is when a seller sells his or her property for less than the mortgage.

Where it gets tricky, is when there are two mortgages or a home equity line of credit that has a balance.

Typically. The first mortgagee is in the position to make the agreement of short sale. However, in other cases, the second mortgagee needs to also give approval and may take as little as a token payment in order to approve the short sale.

However, the balance leftover after a short sale happens can either be written off by the bank, charged to the seller, or reported to a credit bureau as a default.

As we pioneer our way through this new way to sell property, mortgage brokers, realtors, sellers, buyers and bankers are all learning new ways to make short sales a possibility and make sure no one gets the short end of the stick.

Assessing an Upgrade

Q: "Mike, I am struggling over the fact that it is a great time to buy but I don’t have any liquid cash to do so. I don’t mean to exploit someone’s financial distress, however, I’ve identified a home in a location I’ve wanted for years that seems to have a selling price created out of urgency. In Provincetown dollars of course it is still pretty high, but manageable for me if I can sell my house and apply the equity. Is it realistic to think that I can sell my property in this market and upgrade to this house in what I perceive as a better location? Should I wait for the house to foreclose?" - Matthew, Provincetown

Thanks Matthew and this is a very good question. Let me start by strongly advising not to wait for a foreclosure. In Provincetown, the foreclosures we’ve seen have not been Earth shattering deals. If you identify a property you like and the seller has disclosed extreme motivation, you are in the driver’s seat for a great deal. Maybe even a short sale. Once the bank takes over, they attempt to hold to their bottom line and recapture some of the expense of the actual foreclosure.

The real estate market remains soft. We are definitely seeing activity but 2007 is in line to be a slower year than 2006. However, with that said, what is selling is property priced according to the market conditions. I’ve said this before and I’ll say it again. Property priced right in any market sells. Priced right does not mean pricing high and it does not mean under-pricing either. 

If you have sizeable equity in your home and you can afford to price it competitively. Then I recommend you go for it. The perceived loss on what you’d want to sell your existing property for in a stronger market will be re-couped in the appreciation of the home in the better location, not to mention the happiness you’ll feel achieving the goal of living in a location you really want to be in.

Consult your realtor and you’ll see that there are many incredible opportunities out there. Go for it and next year you’ll be thankful this week, that you made the move. Remember, in the current market, it is taking 9 months to one year to sell properly priced real estate. Key word…properly priced.

Turning Back the Clocks

On Saturday, November 4, we turned our clocks back one hour giving us an extra hour of sleep.

It is also that time of year when we should change the batteries in our smoke detectors. Bi annual changing of the batteries will ensure that they work when needed and can save a life. Please be sure to check the detector once you change the battery. Especially in today’s environment, you want to be sure you are protected at night when asleep.

It may be wise to also create a fire escape route in case of an emergency. Your household may want to meet and discuss safety precautions such as fire extinguishers, rope ladders in each bedroom that is on an upper level and making sure that windows open and are not painted shut. You never want to think about these things when it is too late.

Also, plan to hold an actual fire drill for you and your loved ones, or roommates. Being overly cautious does not seem too crazy these days.

This is also a time to check your timers for exterior and interior lights. Make sure you adjust the time so your lights go on once it gets dark. You do not want your property sitting in the dark for too long.

We all read the headlines these days and know what’s happening. An ounce of prevention is worth a life in this case. Please be wise and exercise fire safety. Be sure to tell your neighbors and friends. And report any suspicious behavior to the police immediately.

Q&A: Who's Responsible?

"Mike, I rent a house in Wellfeet. My grass is growing really high and my landlord has not trimmed it yet. Isn't this his responsibility?"

Thanks for you letter and firstly, I would check the lease. If it is not clearly defined in the lease you may need to have a discussion with your landlord. Typically, if you rent a house, you, the renter or lessee is responsible for mowing the lawn and trimming the shrubs. And you usually need to have your own mower. When you rent in a multi unit setting, the landlord is responsible for the upkeep of the property. Renting a single family home is much different. Please talk to your landlord as each tenancy is set up differently yet the rules around landscaping are pretty much the same.

A Real Effect

Real estate impacts all our lives on Cape Cod. It seems like wherever you go, someone is excited or angered by the real estate industry.

Whether you live here on Cape Cod year round or seasonally, rent or own, the happenings in each of our beloved towns carry lasting effects that can drastically change property values and rent amounts. These influences can ultimately shape our lives for the better or not.

Upcoming segments of The Closing Table will address some of these issues that impact the real estate market and home ownership. Current market conditions, property management, foreclosure, renting, affordable housing and other topics will be covered.

Sell the Pilgrim?

Happy Memorial Day week and thus another tourist season is kicked off here on Cape Cod.

In this buyers market, just to be silly this week, I wonder, how has the value of the pilgrim monument been impacted? 

With the market showing signs of rebounding in the first quarter, this excitement could be used to market the monument and get it sold. Use the wow factor of the view and privacy. What an opportunity. However, not to be a gloomy Gus, with projections of a flat real estate market for the next year, how will this impact the value?

Who knows, perhaps some eager real estate developer will see fit to make an offer and convert it to condos. That could drive a nice price….Can you imagine Monument Heights Condo Association? Hmm. Weirder things have happened.

What about its marketing qualities? ...well let's see...it does have an incredible view from its yard, of which green grass of any size is a rarity here. There are also stellar views from the top floor, However, the walk up is a killer -- deduct for no elevator! It is made of stone, so the structure is solid. However, it can't be demised into condominiums so deduct more from its value. The parking lot yields many spaces so no anxiety there, however you need to climb more stairs to the door. Imagine carrying groceries and perhaps a baby? And let's not even mention the title V. 

Of course I jest, and on this Memorial Day week, let's take time to think about those who have passed on before us, both family, friends and the unknown especially those whom the Pilgrim monument is dedicated.

To all of us who live here year round...have a great season on Cape Cod.... and I’d like to extend a special Closing Table welcome to tourists and seasonal residents. Have a good summer and remember to be patient and smile.

Headache-free Home Improvement

Renovation is a big topic. I will summarize what work needs a permit and who can do the work.

Generally in residential work, interior finishes such as painting, wall covering and floor covering don’t require a building permit.

Assume that all other work does require a building permit, including windows and siding.

With a building permit, a homeowner is allowed to perform work on their own single or two family dwelling.

Also, with a building permit a registered Home Improvement Contractor is allowed to perform renovations to a 1 to 4 family owner occupied building.

And, the most regulated, a state Licensed Construction Supervisor can perform all residential renovations.

Keep in mind that licensed trades such as plumbing and electrical may be required.

I want to reiterate that this is a very simplistic summary.

It’s always important to ask questions of the building department early and if you are having problems contact a good designer or contractor.

Lease: To sign or not to sign?

I’ve been asked to discuss whether or not a lease should be signed when renting an apartment. In my opinion, in most cases, the answer would be yes to protect both the renter known as the lessee and the landlord known as the lessor. However, it all depends on personal circumstances.

A lease should clearly define the amount of rent due, names of both parties, the rental start and expiration date.

The Lessee is protected by the terms of a lease. The property must be kept habitable per the criteria stated in the Massachusetts sanitary code. Also, the rent amount stays fixed per the lease. The only time a lessor can increase the rent is at the end of the lease upon renewal. This should be done with at least a thirty days notice. The lessor cannot ask the lessee to vacate the property prior to the expiration date unless the lessee is in violation of the terms of the lease. The lessor must give at least a thirty days notice when planning on not renewing a lease.

The Lessor is also protected in a lease. The lease guarantees the lessor that the property will be rented for a specific period of time for a certain amount of rent. There may also be certain terms that the lessee must abide by that can protect the lessor’s property. Many leases have clauses that prohibit smoking, clutter and loud noise. Most leases allow only the lessee to live in the rented space to avoid overcrowding. The lessee must also give at least a thirty days notice when planning to vacate upon the expiration date.

If there is no lease, a tenancy at will is in effect. In Massachusetts, this unwritten, and sometimes written, agreement is subject to all tenant landlord laws, including the thirty day notices to vacate or increase rent.

Lengths of leases vary from one year to one week depending on the owner’s or renter’s needs.

The tenant landlord laws are lengthy and complex. This short description only covers the basics.

Starting from Scratch

To build or not to build and buy turn-key. That seems to be the question these days. Second home buyers looking for that deal in today’s environment are increasingly inquiring about land to design and build their dream vacation home.

Although the idea seems romantic, you may want to think about the costs involved…not just the financial cost but the stress that may accompany new construction. Take into consideration the following when it comes to new construction:

1. Once you identify a lot of land ask your realtor about setbacks, basically how close to the boundary are you allowed to build and….. facilities…this being electricity, potable water supply and title v capability.
   
2. Hire an attorney who is versed in new construction. They will guide you through homeowners association covenants, growth management by laws and other issues that will arise.
   
3. Hire a good architect to design the house. Make sure they can work well with town officials for your application with the planning and zoning boards and building department.
   
4. Plan on spending an estimated $200 to $250 per square foot on construction depending on your finishes. Count on delays.
   
5. And finally, it may be more challenging to acquire financing for the purchase of land.

A Helpful Tip

I was stopped on the street last week and asked the following question: “Mike, should I extend a gratuity to carpet installers?” This triggered memories of the same question being asked in regards to plumbers, carpenters, painters and other contractors who come to your house to do work. In my 15 years of real estate management, as a rule of thumb, the following usually apply:

Contractors who come to your house for a one time project such as carpet installation, window installation, hardwood flooring or appliance delivery, usually do not expect a tip. Some companies forbid their workers from accepting gratuity.

When contractors renovate or do minor electrical, plumbing or painting jobs you do not need to tip them. If the service is outstanding the biggest tip you can provide is positive word of mouth or the referral of a paying customer.

When it comes to service-related contractors that offer repeat services at your house such as cleaners, landscapers, meal preparers and paper deliverers, you may want to give them a bonus at the end of the year. But generally you do not pay a tip at time of service.

By all means, if the service provided by anyone is exemplary, use your best judgement as to what reward is suitable. Sometimes the biggest gratuity extended can be a compliment. 

A Snapshot of Section 8

This week, I’d like to tell you a short story about Section 8. Section 8 is a state subsidized rental housing assistance program. Most landlords are afraid of Section 8 because instead of program success stories, we hear more about program abuse and the myth that the participants are just too lazy to work. When used for its intent, it does work and can transition former participants into the workforce to contribute to our economy. 

Flash back 15 years ago. I was a leasing agent when a woman named Flavia and her two young daughters walked into my office. She was a single mother who was working full time nights and going to school to get her college degree. She wanted to rent a two bedroom apartment.

While showing her an apartment, she disclosed that she would use Section 8 to help pay her rent. At first my own prejudice came up and I was irritated that she didn’t tell me earlier. However, I realized that here was a single mother with two girls, working full time and going to school. She was no slouch. She needed a break. I rented the apartment to her much to the dismay of the complex owners. Their own objections, mainly image for the complex, were hard to overcome, however, my response to them was that section 8 is guaranteed rent…which it is.
So Flavia moved in with her daughters and her rent was paid every month on time by the program. The amount just slightly less than market rent.

Three years later I ran into Flavia. I learned that she was no longer on Section 8 or assistance of any kind. She had earned her degree, was making a respectable salary and was renting a house in a nearby town. She was pursuing her masters degree and saving money for her daughters’ educations.

I know that there are people who do abuse the program. I’ve been exposed to this element throughout my career and its not always who you think. However, landlords, please remember that there are people who genuinely need it and can get ahead by properly using it. Landlords, you may want to get the whole story before dismissing a Section 8 participant next time one inquires about renting your apartment. 

A Talk on Title V

There has been a lot of talk about Title V lately. Title V refers to the state regulation of the type of septic system your house or condo association has in order to dispose of waste. Many homes on the outer Cape have cesspools or a version of a septic system. However, these systems do not pass as Title v systems.

When selling your home or condo, you must be sure that the health department for the town where your property is located, has a passing Title V report. This means that your system has been tested by a licensed inspector and filed with the town. Your system should be tested every two years to keep the report current. If you are not selling your property there is no need to test, but proper maintenance by pumping should be done occasionally. If you are not aware of the type of system you have and you are planning to sell your home, make sure your realtor gets a copy of the Title V report prior to listing your home for sale. You should know what type of system you have and whether or not it passes. 

Effective February 1, 2005, all homes and condo associations in Provincetown and most other communities in the state, must have a passing Title V when selling property. Sellers who offer town approved engineering plans are on the right track, however, it is difficult for a buyer to obtain financing with competitive interest rates when a property does not have a passing Title V. Seller beware, considering the current market conditions, this could make your property a challenge to sell.