The Cost of Selling

The performance of the real estate market isn’t the only thing to hit rock bottom. This week we travel off cape to the west coast where an all new low was reached by a couple in San Diego, Ca. They decided to sue their real estate agent for selling them an overpriced property. 

The house in question was sold to the couple for over one million dollars in a neighborhood where homes were selling for similar prices. Upscale for sure.
Here’s where the homeowners have a beef with the realtor. They claim that the agent knew a comparable house sold for $150,000 less just two doors down. This house was 300 square feet larger and had a pool. They claim the realtor knew they were overpaying and pushed the sale to get a commission.

I’m usually not one to inject my opinion but I just have to say that this sounds like one of those frivolous lawsuits you hear about. Remember that woman who burned herself on a cup of coffee? Or the guy who cut his toe off with a shovel while working barefoot? Enough is enough.

The realtor in question has been in business for over 26 years. When you’ve been around that long your reputation is much more valuable than any commission can pay. The house was appraised high enough to justify a mortgage. The property next door may have had serious deficiencies in it or the seller may have been more motivated to sell the home. You never know what factors impact a seller’s judgment. 

When buying property at that price point, the consumer is typically on top of their game and knows what they are doing. Crying foul after the fact and blaming the realtor is par with a deadbeat tenant breaking an appliance in a rental unit and calling the board of health in order to get free rent. This screams of a scam.
This is buyers remorse gone insane and with the conditions of the market where they are, this couple should be thankful that they could afford a $1million dollar house and not clog up the system with a sleezy endeavor.

Fractional Ownership

Mike, can you address the question of fractional ownership? We are attempting to sell a condominium in the west end of Provincetown and our realtor keeps telling us to adjust the price. We’ve recently heard a real estate guru speak about maintaining home value by selling property fractionally? Tell me what this is.

This is a very good question and a topic that I’ve been asked to research by one of my clients. One obstacle we keep hitting is the collateral aspect. Each lendor wants to be in the number one spot if the payments are not made and the property needs to be sold. With short sales now happening, t is easy to see how banks fight for every piece of the pie before a foreclosure occurs. With fractional ownership, the financing is difficult if not impossible to do. Each lendor will be vying for the number one spot for receivership. When conveying an entire house with multiple buyers, the best way is to have the buyers set up a corporation or limited liability partnership. This, so far, has proven difficult when most people who would "buy in" to this type of situation are buying one and two bedroom condominiums that are now reasonably priced. In your case, the best hope is to find two or three friends who buy your condominium together.

2008 is projected to be the bottom of the market and the best way to sell your property right now is to price it right. Real estate sells if it is priced correctly and fractional ownership seems to me like a complicated gimmick created to sell over priced real estate that will ultimately fail leaving your property on the market longer making it a stale listing.

Use your realtor and the tools at his or her disposal.

Here are three basic things to check.

1. Have your realtor show you comparable properties that sold. Look at the closed prices.
   
2. Are there any defects that need to be accounted for that will impact the price
   
3. How many days was the property on the market before it sold.

Use a professional, price it right and toss the idea of fractional ownership in the trash.

Mortgage Meltdown

The mortgage meltdown has claimed its largest victim. Countrywide Financial, after being bailed out last year, is the latest to succumb. It will be assumed by Bank of America, and the buyout will be finalized later this year. 

This week The Closing Table is not about Countrywide or the tighter restrictions placed on potential mortgagors when looking to buy property. I thought I’d talk about optimism. Remember what it was like to get a mortgage ten years ago? Well, we’re pretty much there again. When you get approved it actually means you really are qualified to buy a house. One could say, these are a return to normal times. And with normal times comes optimism for a better future.

This year, we are already seeing excitement creeping back into the real estate market. Activity has been up in Truro and Provincetown. Buyers who have been spectator prospects for the past three years, are now putting themselves in the field and making the decision to buy. 

Although it is harder to get a mortgage and even the most seasoned mortgage brokers are sharpening their pencils, qualified buyers are recognizing that we are most likely at the bottom of the market. 

Even the so-called experts are saying that the first half of 2008 is the absolute bottom of the real estate crash. With mortgage rates recently decreasing, now under 6% for a 30 year fixed, qualified consumers are taking advantage of low listing prices and low interest rates. In 2009, this optimistic and toe testing consumer behavior, will turn into an all out feeding frenzy on low priced property, fueling buyer activity which will make the market come back with a vengeance.

This is an interesting prediction and one that I hope, proves to be true, for my clients’ sake, both buyers and sellers.

Energy-saving Tips

The price of heating oil these days could be worth more than its weight in gold.

With this in mind, there are some energy saving measures you can take to hopefully save money this winter.

If you were able to prepay for your oil, that was the best measure with the per gallon cost at $2.79 according to the local oil companies. However, this is a large amount to pay at once and many of us don’t have that kind of change hanging around.

If you locked into a pre-pay rate and could not pay ahead of time, price per gallon could be as much as $2.89. If you had the misfortune of not being able to take advantage of either of these, oil is now over $3.00 per gallon.

In this new oil crisis, here are some simple steps you may want to take:

Turn your thermostats to 65 degrees. Wear sweaters and housecoats along with slippers. The days of wearing shorts around the house in the winter should be over.

If you do not have new windows or storm windows, wrap your windows with a plastic thermal covering that prevents cold drafts and air from entering your home.

Get small rugs or draft stops to put by exterior doors. This will help. Also, for sliding glass doors, you may want to hang draperies.

Limit the amount of fires you have in an open fireplace as that sucks hot air out of a room. Always remember to shut the damper once the fire is completely out the next day.

With these helpful tips, you may be able to tip the scales on your home heating expense this winter.

2007: The Year in Real Estate Activity

This is a review of the single family and condominium sold activity in the outer cape towns of Eastham, Wellfleet, Truro and Provincetown for 2007.

In Eastham, 101 Single family homes and 17 condominiums sold in 2007 for a total of about $59 million dollars. In 2006 118 Single family and 13 condominiums sold for a total of about $64 million dollars. This is a difference of about $5 million dollars more being sold in 2006.

In Wellfleet, 64 single family homes and 16 condominiums sold in 2007 for a total of about $52 million dollars. In 2006 52 single family homes and 13 condominiums were sold for a total of about 38 million dollars. This is a difference of about $14 million dollars more real estate sold this year in Wellfleet.

In Truro, 33 single family homes and 20 condominiums sold in 2007 for a total of about $29 million dollars. In 2006, 30 single family homes and 19 condominiums sold for a total of about $31 million dollars. This is a decrease in the dollar volume of real estate sold in truro by $2 million dollars.

In Provincetown, 26 single family homes and 121 condominiums sold in 2007 for a total of $72, million dollars. In 2006 16 single family homes and 123 condominiums sold with a total dollar volume of $64 million dollars. Provincetown saw $8 million dollars more real estate sold this year than last.