David Gordon’s Blog

You are reading this thinking “What does he mean??  Buy where they say No?”  Well, in talking with another Realtor she mentioned to me that she had seen on the news someone talking about this exact thing….  I thought about it and they are right.

You should look to buy real estate in towns that say “no” a lot.  This isn’t a bad thing.  It means the town is very stringent and particular about what goes on and what they permit.  It means you probably have very little chance of a surprise commercial or parking area going up next or behind you…

Yes, it can be a pain when wanting to do something.  But, if you are looking to buy a home for sale in Brookline, MA, you know that they keep a close eye on things. In the end, it really benefits you.  Rarely, as a homeowner, does it restrict you from doing things that you want as long as it abides by the rules, regulation and restrictions of your town or community.

 Definately something to think about.  Your thoughts??

Real estate is like the weather.  No matter if it’s homes for sale in Wellesley, MA; homes for sale in Newton, MA; homes for sale in Needham, MA or homes for sale in Boston, MA things are always changing out there and it’s never the same.  It all depends on where you are standing and what you are looking at.

You hear in the news general reports about how dire things are out there.  Well, that’s true in some places; some parts of the country are in really tough shape.  Here, close to Boston things have held up a lot better that in many places.  Yet, it’s town by town and price range by price range.  There are opportunities out there for certain types of buyers while there are limited choices out there for others.  In the current market there is true opportunity for first time homes buyers, true investors and those trading up in price.

The thing to note is towns that were off in price a couple of years ago such as Needham, MA have rebounded.  Yet, homes for sale in Wellesley, MA are down almost 50% with respect to number of transactions and average price is down more than 10%.  Wellesly is a town that has been traditionally insulated to market gyrations but that hasn’t been the case lately.  Still, this presents opportunity.

Basically, real estate is like the weather.  It all depends where you are standing.  Where one side of the street it might be raining when the other side it’s not, one price range in a town might be doing well while another price range may not be.

Your trusted local Realtor can best advise you as to what is happening.  Reach out to him or her for information and/or insight.  They are there as a resource for you and will be happy to let you know what the true picture is in a particular area or price range.

Yes…  You read correctly.   The lower offer sometimes wins!

As you know, I work for both Sellers and Buyers.  I just had an experience where “The Lower Offer Won” and it was for my client looking to buy a home.  Now, my sellers have heard me say to them that “the highest offer isn’t necessarily the best offer.  The best offer is the one you are most likely to get to the closing table with.”  In this particular case, it was also good to be working with great agents on the selling side that may have realized this.  Most importantly, I truly believe the sellers felt that my buyers were the best buyers.  This is the story… 

A home comes on the market on Thursday evening.  I am able to get my buyers into the home on Saturday.  They happen to love it.  It fits everything they are looking for.  We feel that the price is in the ballpark…  It’s priced so it doesn’t seem to be a “steal” but we all feel initially it’s in striking range.  My buyers are ready to offer full price to take it off the market.  I tell them though that the market dynamics have been so unique that we really need to do a full analysis of the property to see if current comparable sales validate the asking price.  Now, dynamics in the market have been so crazy that these days a great Realtor also needs to go back up to a year to look at comparable sales and then take into account what the trend has been in the market.   Which is what we did. 

Now, what I tell my buyers is that a home is worth a different amount to different people depending on what it offers or doesn’t offer a buyer.  That value could vary by tens or hundreds of thousands of dollars depending on the price of the property.  Our analysis showed us that we could make a great case for an offer substantially lower than the asking.  I even told them that based on these numbers we may not want to offer asking which they initially intended to do.  In situations like these though the seller and seller’s agent may be looking at different comparable properties to value the home.  What I did was pick up the phone to inquire with the seller’s agent.  What did she tell me?  There was already one offer in and that they would be entertaining all offers the following day at noon.  I immediately scheduled my clients to get back in the following day to make sure they saw the property again and then we could decide what to do…

My buyers still loved the property and were even willing to go above asking.  Still, buyers don’t ever want to pay too much for a property.  What did I do?  Well, I suggested something that I have written about before.  We put an escalator clause in.  We felt that based on the comparable sales that an offer amount under asking was still a great offer to the sellers and we would validate that with the comparable sales we had and even show that our offer was generous.  The crazy twist in this was that the sellers wanted the initial offers to be best and final so there would be no second chance.  The escalator clause let them make the offer they wanted and stated that if the seller received a higher written offer that my buyers would increase their offer to be “x” amount over the highest offer putting a cap on the amount that their offer would go to…  Now, many agents haven’t seen this before.  I knew I needed to definitely present this offer in person to the seller and seller’s agent.  When I called agents to let them know I wanted to present the offer in person, they told me they had 4 other offers in hand.  My goodness, were we out of line with our analysis?

Luckily, I educate my buyers to be prepared going into an offer situation.  I ask them to decide what their top price will be going in.  If they lose the property for $1000 that the number they offered they will have been happy with their effort, know they did their best and it just wasn’t to be.  My clients decided on a number above asking, just in case, to escalate too.  They didn’t want to lose the property for a couple of thousand dollars up to a certain price.  It they lost it for $100 above their number they told me they would be fine with that…

I went and presented the offer in person.  I stressed that my buyers had been in twice in two days and had thoroughly gone through the home, probably unlike many of the other buyers who had presented offers.  I told them my buyers had noted certain things in the house that would have been revealed in the inspection and were making their offer based on knowing those items…  I also stressed that not only do the seller and buyer have to come together in price but that the property also needs to appraise to that value…  Oh, and did I mention that the sellers were home each time I showed the property so we interacted, asked many questions and we were a somewhat known quantity to the seller… Yeah, that definitely makes a difference…  Still, I feel that I want a little credit for a dynamite, sharp and detailed presentation of the offer and helping make the sellers feel comfortable regarding my clients and making them see that my buyers were the best buyers for them… (Can’t I take just a little credit??)

Well, in the end, the sellers had an offer for a fair amount more than what my buyers were offering -  I do not know what the difference was with respect to terms, contingencies and financing was -but the sellers took our offer as they thought they would most likely get to the closing table and get the highest amount in the end.  I am so excited for my clients.  How many times can you say that they won a bidding war with the lower offer?

In certain situations, it’s best to present an offer in person.  This was definitely one of them.  In fact you hear many managers say that all offers should be presented in person by the buyers agent.  Now, I don’t agree with “all” but I think that it is true more often than not.

Have you had similar experiences?  Let me know.  Better yet, tell me what you think of this story which is true!!

Oh, and sellers, it is true.  The highest offer isn’t necessarily the best offer.  You need to take not only the terms and conditions into account but also who the best buyers are who will actually go through with the sale and give you the best chance of closing at the highest price.  It’s not always the offer that comes in at the highest price initially!

Unlike a number of Realtors I work with sellers and buyers in a number of communities in the Greater Boston Area, not just a town or two.  On one recent listing call, which was not in my home town but several miles away, I had potential sellers who were concerned about me not being a “local” agent.  Although this could be a valid concern, it is a community that I work quite frequently since it has a solid school system and is a town that people migrate to as they find the cost of homes closer to Boston too expensive.  Many of the people I work with who are relocating from other parts of the country usually end up considering this town. 

What I believe was/is the real concern to them is do I understand values within that town.  The answer to that is Yes!  More importantly, it is for me to convey to them that in this market it is critical to present value from day one for them to get the highest price possible.  Value sells everywhere no matter where or what the market conditions are. 

The fact is that you can’t under-price a property.  If you position it at a price that creates a great value then the likely-hood of buyers recognizing this is great.  They come in saying “This is the best property I have seen at this price”.  Preferably you want them to be saying “This is the best property I have seen at this price and even much higher prices”.  This value should be recognized by multiple buyer when it hits the market since the people coming through the first weekend and first 2 weeks are the educated buyers, having been looking aggressively for a home, understand what is currently on the market and the values out there.  They should be saying to themselves “This property is worth the asking price and even more” which should drive them to bring an offer (and hopefully others as well).  Now what those buyers are thinking is “How much more is this property worth and what will it take to get it” and not thinking “how much under the asking price can I get it for”.  In value pricing, multiple offers should occur the first weekend a home is on the market which is what happened to me last week which I will relate shortly.

Once someone brings an offer they are emotionally involved.  It is human nature to want to win, not lose.  This will assist in getting the best price possible.  More importantly, there is what I call the “X” factor.  These people bringing offers have probably been looking for a while.  This “X” factor is the person, couple or family saying “How much more is it worth to get this house and put ourselves out of our misery in having to spend weekends and evenings (which is precious time) looking for a home to buy.  That in itself is worth something to the potential buyers. 

This happened on my listing last week where I had 5 offers in 19 hours on a home.  My sellers, like all sellers, had asked me “How do we get the highest price possible and sell it quickly”?  I told them this strategy, the believed in it, and thus the results.  Should you not get multiple offers or any offers then the home was not truly value priced.

Getting back to my potential sellers, most great Realtors can spend a few days coming up to speed in a town to understand value.  With due diligence, research, visiting the town hall and library and web research they can also quickly become knowledgeable in what the town has to offer in services and programs for residents.  Luckily, my potential sellers are in a town that I work quite frequently.  The question is will they become comfortable in the fact that my desk, which is only where I keep my paperwork and desk phone, is several miles away.  Hopefully my testimonials and references of current and past clients will speak for the level of knowledge and expertise I bring to the table.  Only time will tell.

The point of my rambling is this, if you are a seller price your property aggressively and do it on the low side.  Create value and people will see it.  It is then up to the buyers to put a value on it themselves which should be above the asking price and coupled with multiple offer which you should receive and the “X” factor will get you the highest price possible.

I’m interested in hearing your thoughts on this.  I have sold multiple homes in the last several months using this philosophy so I know it works…  What about you??

I hear it all the time… The real estate market is dead and nothing is selling…  Well, I just had 5 offers in the first 19 hours of putting a single family on the market.  Oh, and this was even before the first weekend it was on.

94 Parker Avenue in Newton, MA is a very sweet home with 3 nice size bedrooms, 2 full baths, terrific yard, finished basement and a walk to Newton Highlands.  My sellers, like all sellers, wanted to know how to get the top price in the least amount of time.  This least amount of time was important since they had 2 young children and keeping the house in show condition let alone being displaced for showings was a real inconvenience! 

Now, I love it when sellers actually listen, get it and also execute.  We went through the home, I said that it was important to do A, B and C and we needed to price/position the home at a certain price.  Well, they did all of it…  and more importantly believed in me, my experience and my past success!

The methodology was to present tremendous value from day 1.  Present it and buyers will realize it.  The people coming through the door the first day and first week are the people who have been hunting hard for a home, have seen a lot, understand value and there because they want to buy a home.  Now, yes, I am pricing a property on the low side.  If it’s perceived as a value, more than one person should realize it and with multiple offers you will get market value and sometimes a little more.  Yes, there is a chance that you won’t get any offers or even lower offer than asking but if that is what happens… guess what…it really wasn’t valued price…

Don’t we just love it when our clients hire us and actually trust our experience, knowledge and ability to execute.  I wish it happened more often!!!

Wow…  It’s been a few years since I had seen an escalator clause but I not only received one in one of several offers I received on a property I just listed in Newton, Massachusetts but also just used one to get one of my buyers a home!

What is an escalator clause?  Well, it is a clause that you can put into an offer that will raise the price of your offer by a certain amount over another offer currently being considered by a seller.  Now, before I go into it, it is imperative that you are working with a well seasoned and experienced agent to make sure you don’t get yourself in financial trouble.

If there is home that you truly love, you know your are in a multiple offer situation, absolutely don’t want to lose the home for less than a certain price but don’t want to overpay by a substantial amount this could be a great thing to use.  I never use this clause unless we are in a “best and final offer” situation.  When clients know what their top price is that they are willing to pay to get a home but just isn’t sure where everyone else stands who has brought offers (which is almost all of the time) you can write an offer at a given price.  The escalator clause will say that you will pay “$X” over any other written offer currently being presented and considered by the seller.  Now, not only is the wording exceptionally important but also considering what your top number is which should be included.  If you don’t have “an offer price not to exceed…” then you could very well end up paying 10’s of thousand of dollars more than you wanted.  The good news is that if other potential offers are below the number you set as your limit, you won’t end up going to the limit… usually… 

There are benefits and drawbacks of using an escalator clause.  Please make sure you consult with your Realtor with respect to all that is involved.

Let me know what your thoughts are about using this to assist in purchasing a property…

Do you wonder how the assessor establishes what your taxes are?  How can the assessed value of your home go down yet your taxes go up?  Why you may pay less or more than your neighbor?  Have you assessed that the assessor isn’t on the mark for your current homes value?  Many cities/towns/counties do things differently but in the Boston area, Newton in particular, here are 10 things you should know:

1. The assessed value is based on perceived market value 1 year ago from the precious January 1st, not as of January 1 in the current year.
2. The assessed value is based on sales of similar style homes within you enclave/village/neighborhood or immediate vicinity.
3. Assessed value is usually just a comparable figure of what you pay in taxes relative to your neighbor, not actual current market value as of the current year as mentioned on line 1.
4. Assessed value can go down but the taxes you pay can very well go up.  The opposite can also be true…  Check out #5
5. The assessor doesn’t set your taxes.  Your town/city/county decides on a budget first.  After the budget is decided, the assessed value of all taxable properties is divided into the budget setting the tax rate. (commercial and residential accounting for different percentage of the budget). 
6. Condition of your home and updates or lack of them play an important role so don’t be afraid to let that person in from the assessors office if you haven’t done any work on your home.
7. If you don’t let the assessor in, and you don’t have to, at some point they will assume that work or updating was done.  It will then be up to you to appeal and show them that is not the case….  Let them in, your time is too important
8. The assessors office is usually more than happy to run a report to show you sales in your area and what their condition is (although they may not always be accurate as to the condition).
9. Your trusted Realtor will be more than happy to share information as to the condition of various homes that may be deemed comparable sales to validate to invalidate what the assessors office may basing things on.  He or she can give you the pertinent MLS information to assist you should you decide to.  This can help your appeal if you wish to appeal the valuation.  Make sure you supply the list of homes the assessor gives you as comparables.
10. Don’t be afraid to appeal.  Just remember the assessed value can be almost a year and half old.  Great news in an up market, not so great in a down market.  Go to the assessors office again, once you have the information they gave you and the information your trusted Realtor has given you.  With facts, details, differences of desire-ability you can win the fight.  The great news is that many times it’s not a fight, just a presentation of the facts! 

Hopefully you are better prepared now should you consider appealing your assessed valuation.  Don’t be scared.  Go in and talk to the assessors department to get the facts.  Oh, and do it civily.  You will find most of the time they are great people and there to help you; at least they are here in Newton….

Let me know your thoughts…..

Thinking of buying a home?  You should be truly pre-approved!

What do I mean by “Truly Pre-Approved”?  I mean that you should have all your information and required documentation required on the application in getting the pre-approval.  Not just speaking with someone over the phone and giving them numbers for them to issue a pre-approval.  It will or should indicated on your pre-approval letter that the conditions are only subject to no change in status of what was given to them, conditional upon signing of Purchase and Sale and appraisal of the property at or above the agreed upon sales price.

Most pre-approvals aren’t really worth anything.  They are subject to formal application and all the needed supporting paperwork.  Many people don’t realize this.  It’s almost an empty promise to both the seller and buyer since the buyer hasn’t gone through all the formalities of the application process and the lender has not really committed.

If you are “Truly Pre-Approved” you can leverage that in negotiations.  A great agent will communicate that and it’s worth something to a seller.  A seller will definitely appreciate the difference and relative security that it brings.

It can take a little time but do it.  Being truly pre-approved can get you the home you want!!

What happened in 2008?  Well, you may also be wondering what is going to happen in 2009.

The good news is that in a number of communities close to Boston did not experience the price declines that you hear in the media.  As I have written before, it is the number of transactions that are down substantially in many cities/towns around Boston, not the prices.  The following is a snapshot of single family homes in just a few of the cities and towns around the Greater Boston Area according to our MLS system, MLSPIN, in no particular order:

City/Town         Median Price 2007   Median Price 2008  %Change

Newton             $777,000              $755,000              -2.8%

Wellesley           $960,000              $1,102,000           +14.7%

Brookline           $1,100,000           $1,030,000           -6.3%

Cambridge         $659,000              $766,000              +16.2%

Lexington          $696,000              $750,000              +7.8%

Arlington           $472,000              $475,000              +0.5%

Winchester        $676,750              $731,575              +8.1%

Needham           $626,500              $659,000              +5.2%

Now, number of transactions were down in all towns and down substantially.  Still, value is holding in many areas. 

What will happen in 2009 I am not sure but personally I think we are getting to the botton of the bell curve with respect to pricing as long as the government goes forward with buying the “bad paper” from the investment companies that purchase the financial mortgage instruments from the banks.  With historically low interest rates I think it is an opportune time to buy or trade up.  Yes, the market may slide a little more but focusing on location, location, location I am positive that buying or trading up is a tremendous long term investment!

Let me know your thoughts.

That time of year is coming upon us.  The holiday season.  A time when traffic thru listings and the number of transactions occurring hit what I believe is there lowest monthly levels of the year.  Thanksgiving thru the New Year.

The quandry for people looking to sell is “Do you keep your home on the market to sell or do you take it off?”  Well, personally I sell homes 12 months a year and I will bet you that you know someone who has probably bought their own home this time of the year.  The answer?  It depends!

People need to buy or sell based upon their own needs.  People are re-locating all the time so their are buyers out there 12 months a year, conversely there are homes for sale.  As a seller, it could present opportunity as other people pull their homes off the market so as not to be inconvenienced with showing during this period.  On the other hand, a property may not show as well such as someplace that is situated on a tree lined lot that offers extreme privacy most of the year before the leaves drop off the trees.  This home would not have as high a perceived value after the foliage season as it would during the Spring, Summer or early Fall.  In this particular case I would probably advise the person if they didn’t need to sell immediately to hold off.  They would probably net more in the end by doing that.

It’s a case by case basis.  Don’t mean to sound elusive but that is the truth.  It comes down to whatever the sellers objective and goals are.

For buyers, there is definitely less inventory to choose from but potentially there are great values that just might be gotten.

Let me know about your experiences or thoughts.  Mine is just one perspective…