Meaning Behind 'Floaters' Rises to the Top

This week’s Closing Table is provided by Emily Flax of Provincetown.

Have you ever wondered about the meaning of the blue plaque that is found on many Provincetown homes? Throughout Provincetown, but mostly in the West End, you will find antique homes with a blue and white ceramic tile affixed that depicts a house on a boat.

These homes are known as Floaters. They were built beginning in 1818 on the peninsula that we know as Long Point. Many of today’s visitors are not aware that at one time, a settlement existed on Long Point. There was a thriving community, with a Salt Works being the primary industry. The Light House was built in 1826 and there were windmills, a store, a school, boat landings, and a total of 200 people that lived in 38 houses.

When a large salt deposit was found in Syracuse NY, it essentially put the Long Point Salt Works out of business and eventually in the 1850’s, the settlement was abandoned and the families moved to the mainland. Wood was a precious resource at the time, and rather than just leave their homes, the settlers floated them over the bay on rafts. They were placed on foundations, and many still stand today.

That’s a little Provincetown history for you on the Closing Table.

The 'Skinny' on the Short Sale

This week, the Boston Globe printed an article about the pitfalls of the short sale.

We’ve discussed short sales quite a bit recently and how they can be used to aggressively liquidate real estate in a declining in market.

A short sale, if you don’t remember, is when a bank approves the sale of a property for less than the mortgage principal in order to avoid a foreclosure.

What isn’t known is that short sales are unpredictable, difficult to manage and downright tedious. The short sale process is frustrating to say the least. Bank employees are shuffled around and in most cases, do not really know the process. In some cases, within the final hours, the bank will rescind its approval having put everyone’s hard work to waste.

This happened in the short sale I was recently involved in as an agent. Getting a bank employee on the phone was impossible. Despite efforts of the seller, listing agent, buyer’s mortgage company and buyer’s attorney, the sale took over four months to process. Once all the t’s were crossed and I’s dotted, days before the closing, the bank informed all parties that the short sale was not approved.

If not for the diligence of both realtors, mortgage broker and both attorneys, who all kept a paper trail via email of the bank’s approval months earlier, the sale would not have happened.

This particular transaction closed shortly after. The benefits of the short sale were clear… the seller got out of the mortgage, the buyer stuck it out and now owns property that has already appreciated in a down market. And the bank...they don’t have to spend money to foreclose. 

The short sale is a good tool to use. Just remember that all parties involved need to have patience and keep a record of all communication with the bank.

Shying Away from the Shiny Metal Box?

Last week we answered a letter from a listener in Provincetown who needed some advice on whether or not an air conditioner would attract weekly renters to her condo in the west end. My response prompted the following email from Heather in Provincetown. 

This is an abbreviated version for the limited time we have.

Hi Mike,
As a WOMR listener, I enjoy your show, but don't agree with your recommendation of window unit air conditioning for summer rentals. Many Condo Associations prohibit the installation of these noisy and unsightly appliances.

The constant hum of neighbors' aging air conditioners is something urbanites who frequent our shores like to leave behind. We have the luxury of being able to have open windows allowing fresh air to circulate. Perhaps listeners who are keen on the idea of air conditioning should consider portable models to keep the peace with their neighbors...just my two cents...thank you…Heather

Thanks for your email. You do indeed bring up a legitimate point. One that I fear may not be as important to homeowners attempting to grab rental income. Just this week while I was showing property, the prospects and their agents expressed the need for air conditioning to attract weekly renters. I told them that sea breezes and fans usually suffice, but if this was important, they purchase a new air conditioner that is quiet and to keep it locked up unless needed in extreme heat. They seemed receptive to the idea but what happens after the closing is anyone’s guess. 

I agree that seeing a shiny metal box sticking out of a window is pretty unsightly. New low profile ac’s are smaller and don’t protrude as far out. Most new construction in Provincetown has central air which eliminates the noisy rattle and grinding noise that older ac’s make, annoying neighbors who keep their windows open wanting to fall asleep to the sound of the town.

If the association you live in or next to does not prohibit the use of the air conditioners, and this is important for you. Address your concerns with the association’s trustees.

'Air-ing' Concerns on Summer Rentals

This week, we answer a listener email:

Mike, I enjoy listening to The Closing Table as we have WOMR on the radio at work all day. I was asking co-workers a question about my summer rental and they suggested I email you. So here it is: I rent out my small west end studio to weekly renters to help with the mortgage. Should I provide an air conditioner? Signed, West End Studio Gal. 

Thanks for listening and for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.

On Cape Cod, it is rare that we need air conditioning, however it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back. 

You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal. 

Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.

Sight-seekers Extend Their Stays

In conversations I’ve had throughout the years with various individuals who decide to move here, the natural beauty of Cape Cod always comes up as one of the reasons.

This past week, we’ve been treated to a spectacular show of Right Whales feeding off Race Point and at times Herring Cove Beach. If you live here or hear this broadcast and have not witnessed this magical happening, try and see this before it ends. A whale watch from the beach is rare.

With that being said, the wonders experienced on the outer cape are breathtaking. From our sunsets and world’s most beautiful beaches to the manic culture of summer and isolation of winter, there is nowhere like the outer cape.

Why do I bring this up? Well, it seems that folks are buying on the outer cape now for the absolute love of the area, not for a quick buck to be made on a flip. This is good news for us year round residents as it means more concern and care from homeowners who vacation here.

Since 2005 the median real estate price for a single family home in Provincetown dropped 12.6% to $594,500. In Truro, a drop of 8.7% to $582,500 and Wellfleet a 10.7% drop to $500,000.

This means that a second homebuyer who missed out on opportunities before the radical appreciation of the early 2000’s can come back and make that dream of owning a vacation home on Cape Cod come true.

To List, or Not to List ... Your Property

This week we start a three part series pertaining to listing your home, buying property and open houses.

Today we’ll discuss the reasons to list your property and whether or not you may want to wait.

Most consumers by now are aware that selling your home in today’s market is taking longer and you will not yield the strong profit you desire. If you purchased your property within the last few years and you don’t have to sell, then you shouldn’t. If you have a strong equity base but no reason to sell, then don’t. You can maximize the profit on your house when the real estate market comes back.

Here’s why you should sell. If you are in financial distress and need to liquidate a real estate asset, banks are working with consumers to sell property through short sales. This allows you to market your property in line with today’s prices in order to stay competitive.

Another reason to sell is if you want to buy a larger property. Now is the time. Selling your existing home at a slight loss or for a lower yield is worth the gain you’ll receive on the new property when the market rebounds. The potential loss that you incur due to selling at a lower price will all be forgotten when you are in a new home and the appreciation starts.

If the property is an investment home, the loss could be a potential tax benefit. Check with your accountant.

Check back next week when we explore what is motivating buyers to act in this market.

First Quarter Recap

Here's a recap of the real estate activity for the first calendar quarter 2008.

Let’s start in Eastham
33 properties sold between January and March
24 single family homes, 1 lot of land and 8 condominiums
The average sales price in Eastham right now is $521,000 and property is on the market for an average 149 days.

Moving up to Wellfleet
13 properties sold between January and March
8 single family homes, 1 lot of land, 2 businesses and 2 condominiums
The average sales price in Wellfleet right now is $519,000 and property is on the market for an average of 321 days.

In Truro
8 properties sold this past quarter
4 single family homes, 1 lot of land and 3 condominiums
The average sales price in Truro right now is $527,000 and property is on the market for an average of 232 days.

And finally in Provincetown,
37 properties sold between January and March 2008.
4 single family homes, 1 multi family home, 31 condominiums and 1 hotel (The Brass Key)
The average sales price in Provincetown right now is $577,000 and property is on the market for an average of 190 days.

For more information and additional statistics on this wrap up of real estate activity in the first quarter 2008, please email me at mike.dubour@verizon.net.