David Gordon’s Blog

If you aren’t familiar with the area, Boston’s Back Bay neighborhood is one of America’s most desirable neighborhoods.  Primarily you will Boston Condos For Sale located in Brown Stone buildings.  Located steps from the Charles River, parks, unique shops, trendy restaurants and vintage homes, you will see why the Back Bay an extremely fashionable destination for Boston residents and visitors.  Back Bay homes for sale are few and far between usually costing several million dollars.  Back Bay condos for sale command a premium and range from what some might consider moderately expensive to several million dollars.

When it comes to pricing, you will find most condos in the Back Bay range in price from $750 per square foot, if they have a deeded parking space, and can reach almost $1000 to $2000 per square foot in the extreme high-end luxury condominium complexes that are just coming to market.  Don’t be scared by these numbers as there are still values to be had.  More importantly, the Back Bay has held it’s value and in many instances appreciated during the last several months contrary to the general dire market reports you read in the news.

Don’t hesitate to reach out and ask me any questions.  You can also receive free market reports and updates by visiting my website at www.4MassRealEstate.com. 

In this market if you are a seller it is crucial to present true value to buyers if you want to net the highest price possible.  Don’t try to get a price, make a buyer try to get the property!!

My last three listings have had multiple offers the first weekend they have come on the market.  Why?  Because I educate my sellers about the current market conditions and what they need to do in order to get the highest price possible.  It doesn’t matter if you are selling a luxury condominium, high-end home or a 2 bedroom ranch.  But, the seller’s need to buy in to the concept and philosophy to achieve this result.

As I have written previously, the first couple of weeks and more importantly the first weeked is critical.  The buyers viewing the property during this time are the most educated with respect to the market and value as well as motivated.  This is why they are there as soon as the property hits the market.  If you are not presenting value these buyers will move on.  If you are overpriced, they will note that and really remember the shortcomings of the property for that price.  If you lower the price down the line what do the buyers remember?  Well, they only remember the shortcomings and what didn’t work for them when they saw it.  They won’t usually look at it again and consider the value at the new price.  You have lost them.

Some people will say you are under-pricing the property.  Fact of the matter is that you can never under-price a property.  If you do, people coming in the door will realize that and want to react.  This being the case, most of the time more than 1 party realizes this and is spurred on to make an offer.  Once they do this, you have them emotionally involved which will help you get the highest price.  A property will seek it’s true market value and many times a little above that when it’s under-priced.  

At the time they are making the offer, the buyers are putting their own price on the property knowing it is a great value.  Many will be saying in their head that it is worth “x” dollars more.  Even if they come in at asking, with multiple offers in hand, the buyers are now establishing a value in their mind for what the property is worth.  Because they are emotionally involved they are also likely to go higher than that number.  Usually well above asking and my experience has been that the final number is usually well above the number that a seller could have gotten by listing the property at a price that might represent current market value or above.

My last listing the seller wanted to have it sold in 60 days.  My comment to him was that if that was the case, we need to have it sold the first weekend.  Explaining what I have written above and examples of the success that I have had he was astute and understood what I was relating.  He chose a price that presented true value and a good bit under what he really wanted to get.  What happened?  We had four offer the first weekend and I was able to get him a price above what he said he would really like!

Bottom line?  A seller needs to present true value from day 1 to net the best price possible.  It’s a pruven fact!!

As we all know, the first few days and maybe the first 2 weeks on the market for a new listing is crucial.  Crucial to be priced correctly and present value to buyers out there.  The most challenging thing is for a buyer who sees a brand new listing, just a day or 2 on the market, that presents value and most of what that buyer is looking for.  What to do…?

Today I was speaking with an agent who has a client putting in an offer on a property that came on the market just a day or so ago.  He was asking me how to best council hit client.  Should they come in at asking?  Should they offer slightly above?

My response to that agent was that if the buyer’s saw value in the property and were stepping up to make an offer immediately, than the likely-hood that other buyers will see the value in it too is relatively high.  The good news for him is that these clients have seen other properties they have liked but have lost them in multiple bid situations, even when they were tens of thousands of dollars above asking.  These are buyers who understand the values in the market place, know what they want and what a dollar gets them.

How I council buyers in this position is to ask them “What is this property worth to you so if you lost it for $1,000 you wouldn’t be unhappy and know you brought your best offer?”  Now, one thing you the reader should know is that if multiple offers come in to a seller they have many options.  The seller can negotiate with all parties, some of the parties or even just one of the parties.  In fact, they can just decide to take a particular offer and not go back to anyone for final and best.  This question that I ask prepares them for the process and let’s them define what the property is worth to them.  As I have written in other blogs, a homes value is different to each buyer depending upon the required attributes that it offers them.

Now, I am going to make an assumption that the property is worth substantially more than the current asking price.  Let’s say this property is asking $900k.  The buyers have said to me that in their eyes the property is definitely worth $925k and that they would actually go as high as $940k.  If they want this property I would advise them to strike quickly and make an offer only good within a short window of time, a couple of hours.  I would also, based upon what they have said the value is to them, suggest that they come in above asking, probably by $10k or $15k but not waive any of the contingencies such as mortgage or inspection (neither of which I ever suggest to waive).  This brings an exceptionally strong offer that the seller is sure to consider seriously.  Hopefully before any other offers come in the seller will accept the offer.  If other offers are on their way, it still leaves the buyer room to go up in price should they wish or plan the strategy they want to employ.

If you see value in a property it is likely that many others will as well.  Prepare yourself for that.  Know your top price at the outset before things get emotional.  Step to the plate because in the long run, if you plan to live in the property for many years, $5k, $10k or even $50k depending on the price range can be very short money for the quality of life your new home will bring.

 Let me know about your experiences in situations like this.

Yes, the title is correct.  The Boston Globe deserves some credit for finally writing an article that is an accurate assessment of what is happening in the real estate market.  I needed to note this since I myself am very critical of a lot of what they write for much of it is sensationalism based on manipulated numbers.

This past week they wrote an article regarding how important it is to price a home correctly to start.  Otherwise, it will become stale on the market and just be forced to chase the market down, or it’s price down, until someone finally recognizes it as a true value.  The good news here is that this is a recognized fact among Realtors and statistics show this.  This you should definitely note.  It doesn’t matter if you own a condominium, single family home or a luxury home, facts are facts.

Needless to say they used an extreme example of a home that was not even priced in the proper realm.  The home was priced six figures plus above where it should have been.  Sensationalism again to prove a point but, at least the Boston Globe was on the mark with respect to the topic.

 Kudos to the Boston Globe.  I note it when they are wrong.  I wanted to make sure to note it when they were right.  Hopefully we will see more articles that benefit consumers, both buyers and sellers with accurate information, rather than sensationalized articles meant to grab a readers attentions.

The inspection is a crucial part of buying a home.  It is to make you aware of where in the life-cycle everything is such as the heating systems, hot water tanks, air-conditioning, roof, electrical, etc and to make sure that is acceptable to you based on the price and value that you have negotiated.  It is also to make sure that the house is as it appears.

Some people utilize the inspection to try and negotiate a better price.  In fact, some will negotiate a price which they know is unacceptable to them and will plan on using the inspection to lower that agreed upon price.  Others will try to negotiate down based upon things that are clearly visible to them when they see the property such as broken fence, exterior in need of painting or a disclosure made up front by the seller.

Even as a buyer’s agent, trying to get my buyers the very best terms and price possible, I think it is very important for buyers and sellers to take the position of what is “Fair and Reasonable”.  Take the view of what if the roles were reversed and one party was in the others shoes.

Recently I had buyers who after months of looking found a terrific place that literally had just hit the market the night before.  They stepped up and brought a solid offer to make the property theirs and take it off the market.  In fact, they came in slightly above asking to make sure they could get it (still a good value based on the home, layout and location).  They then had the inspection…  The inspection revealed a number of things.  Some which were visible, some which were not.

Many times an inspection reveals things which are somewhat subjective that a buyer wants addressed but is something the seller has found acceptable in the past.  For example, water pressure.  In and around the Boston area many homes were built with iron water lines coming into the house.  As they age, they decay and constrict from the inside lessening water pressure.  My buyers initially wanted to ask the seller to replace it.  As a buyer’s agent, I agreed to present whatever they wanted but asked them this…  “If you were the seller and had lived in the property for several years, had no issues with the water pressure, would you agree to replace or do work on it?”  The same question can be asked with trees too close to the house, clearly visible when you look at the property, or even the roots from the trees effecting the driveway.

In my opinion, the buyers and sellers need to take a look at it from the perspective of what is fair and reasonable.  What would they want if the roles were reversed.  It is important to make sure the house is at it appears.  It is also important to make sure that the systems of the house are in safe and working order.  Other things are objective.

Treat others as you would want to be treated.  Reverse the roles and look at it from their perspective.  Be fair and reasonable.  Also, try to get as much as you can but be reasonable in the end.

A new property hits the market that you really love.  It hit the market late last night.  It’s unique, fit’s your requirements, fit’s your budget and you love it.  You want it but think it’s a little over-priced.  Thing is, there is nothing that compares that has hit the market recently anywhere close to what they are asking (and I mean for more money…).  What to do????

This a quandary many buyers could face.  I recently have had this happen to a few myself.  What to do?? 

Well, the question to ask yourself is what it’s worth to you.  Does it offer you everything you are looking for?  Have you seen anything close to what it offers? Do you even think it could be close to what they are asking?  If other buyers see the same thing you see and you got into a bidding war, would you go as high as what they are asking?

Given that it is the first day on the market, the seller may not be prepared to take much less than asking price on an offer; especially if it’s before the first open house.  You can try to negotiate the best deal possible but that can take time.  Another party may come forward with an offer then making it a bidding war driving the price up or out of your reach. One may not though…  What to do? 

As a buyer’s agent it is my obligation to inform my buyers of every possible scenario.  It is up to them to make a decision on what to do.  Do they offer asking and ask for an immediate decision from the seller?  Do they look to negotiate?  Do they offer asking or a few dollars more?  The one question I will ask to the buyers is “What is the top price you would pay for the property and would be happy to lose it even if it meant losing the property for $1000.

Five, ten or even twenty thousand dollars is a lot of money any which way you look at it.  Translated into a mortgage payment it’s really not that much per month.  Historically over the course of time property has continued to appreciate even with the bumps in the road if you are in the property for many years. 

You need to ask yourself a few questions and do it honestly: ”What is the cost of enjoyment and having the home you want (is it worth the few extra dollars a month)?”; “Even though the property might be priced a little on the high side, in a bidding war if it was priced lower, would you go up to the current asking amount?” and in my opinion one of the most important questions is “Does this feel like home?”.

Only you, the buyer, can make the decision and whichever decision you make is the right one as it’s your choice and your money.  A buyers agent is there to counsel you, advise you on negotiation strategies and make sure you have the information needed to make the best informed decision. 

If you love the property and it feels like home, go for it.  The new listing quandary is a tough thing for buyers.  Sometimes one just has to lose out to be sure and comfortable when the next opportunity comes along.

Let me know about your experiences.

Many people have been asking me about the current market conditions for communities in and around Boston.  It varies town to town but close to Boston it has been pretty good.

Here in Newton things have been strong.  In fact, I might say that even the Fire Department in Newton can tell you that’s the case.  The fire inspector just let us know that they will look for a minimum 30 days to perform smoke and carbon monoxide testing since they have been absolutely swamped with requests.  This is something I don’t believe I have seen in my years in real estate, quite frankly.

As you know, a smoke and carbon monoxide certificate must be issued by the Fire Department certifying that those alarms/protectors are in proper working order.  It directly correlates to what is happening in the market with respect to transactions that are going on.  So, you might be hearing things that you don’t necessarily believe but you should be able to believe the Fire Department!  After all, they are a neutral party!

As I sit here at my desk reviewing trends in the Real Estate market it occurred to me that most people don’t realize numbers don’t always tell the truth…  Let me rephrase that…  Numbers don’t always give you an accurate picture of what’s going on in the real estate market.

The media touts large double figure percentages about the doom and gloom in the real estate market.  The majority of the time they are referencing the number of sales that are occurring, which in fact are down throughout most of the country.  What they don’t mention is that although actual transactions are down, prices in a number of communities are up, at least here in the Greater Boston area.  This is why I say that accurate numbers don’t always tell the truth.

Recently in the local news it was mentioned that Boston Luxury Condo sales had slowed substantially.  I think the number they mentioned was almost 30%.  Let’s say that is the accurate number…  What they failed to mention is that in the previous couple of years high end condo sales had escalated dramatically due to new construction projects that had been completed focusing on that end of the market.  The available inventory had also gone up exponentially with it.  Once these projects sold out, such as the Mandarin, the number of units came down to levels of old.  Once again, the numbers may be accurate but they don’t reflect the truth.  You would be hard pressed to realize that average price is holding steady in the Back Bay and South End.

What’s more, you will hear that the average or median price may be down by tens or hundreds of thousands of dollars in an area.  Like the example I just gave for Boston, a period of high end condo sales will push the average or median price up substantially.  When that new inventory is gone, there is no where to go but down.  Once again, the numbers are correct but they aren’t reflective of what’s going on.

You need to look and assess each town or city, each segment of the housing inventory (i.e. single family or condos) and even each price point range.  This is the only way to to get an accurate assessment of what’s going on.  Your Realtor can help you do this.  Give them a call, they will be more than happy to share the information with you so you are able to make a fully informed decision with respect to  buying or selling a property.

Getting a loan done is challenging in the current environment!  Having a great mortgage person who can deliver what is promised, keep you apprised of the situation and stay on top of everything is truly important.  They can be priceless for making the process as painless as possible.  A bad appraiser can send a good deal, for both the buyer and seller, into the toilet quicker than you think possible.

I recently had a situation where a property was appraised by a person who had never worked the area, was unfamiliar with a complex and didn’t know the town.  To everyone’s shock, the appraisal came in low even though smaller units had sold for more recently. Even though I supplied comparable sales in and around the area, this appraiser did not use any of them even though they were accurate and current.  The properties they used were older, not in the complex and did not offer the same amenities of the property that was under agreement.   

The buyer’s agent communicated to me that the appraisal was clearly incorrect that that both she and the buyer’s attorney knew it.  I knew of a similar unit, not in as good a condition and on a lower floor that was under agreement and more importantly, the mortgage company and appraiser being used for that unit.  I immediately contacted the appraiser to find out if that lower unit was going to appraise to it’s value and, based on his analysis, if the unit I was selling would appraise to the agreed upon sales price or higher.  I was told that it would easily appraise to the number making me feel much better and communicated this to the buyer’s agent who agreed whole heartily that it should and would based upon her experience as well.

You think it would be a happy ending.  It wasn’t.  The bad appraisal gave the buyer second thoughts.  She also tried to use the situation to negotiate a better price which the sellers wouldn’t agree to.  Now, I don’t blame her in trying to negotiate a better price, I probably would have tried to do the same…  In the end, she decided not to go forward with the transaction.

The moral of the story?  Having a great mortgage person is imperative.  But, don’t forget to ask them about the appraiser or pool of appraisers they use, their experience and if they have worked the area you are buying in before.  You want to make sure the the appraisal is accurate and reflective of the true value of the property no matter if that appraised value is higher or lower than you think.  You want to prevent yourself from buying a property that is not worth what you are paying.  Conversely, you want to make sure that if have the opportunity to buy a property at a good or fair value, that it won’t be derailed by someone’s inexperience or lack of knowledge.

Let me know if you have any similar stories to share… good or bad.

What is Assessed Value?  I find that most people don’t really understand it.

The most important thing to note, no matter where you live, is that assessed value by your town/city/county tells you what you are paying in taxes relative to your neighbor.  In many communities the assessed value is what the town/city/county valued your home at on a particular date.  In Newton, Massachusetts it is from the previous year.  Some communities are from 2 years ago…

Assessed value is not always accurate.  Yes, you can use the number to see in an area at what percentage over or under homes are selling at compared to assessed value but this is not always accurate.  Communities usually use recent sales in the neighborhood.  The problem is that many times the person from the Assessors office has not had access to those properties to update their records as to condition or recent updates.

I know in Newton if the Assessor has not been granted permission to go into a property for several years at a certain point they make the assumption that updates will have been made.  It will then be on the home owner to let them in to see that nothing has been done should the owner want to appeal the new assessment.

Here in Massachusetts there is a law that assessed value needs to reflect current market value as of the date or time period specified (i.e. January 1st the previous year).  Though this might be the case, it is not always accurate. In fact, it is usually far from the true value of a home!