Good Reasons for Lowering Your Price

Housing prices are, as economists say, “sticky downward.” While stock prices can plunge dramatically in a single day,

Good Reasons to Drop your Price

Good Reasons to Drop your Price

housing prices sometimes take years before they fall enough to restore the balance between supply and demand.

Don’t blame buyers for this. They always adjust quite readily to the new reality of lower housing prices. Sellers, though, are slow to come around. And so we must wait while they gradually whittle their prices down to the new levels. Here are some reasons you should consider cutting yours right away:

1. It’s often best to get out of a weak or falling market as early as possible.

In 2007 the median price of a home in the Berkshires fell from $210,000 to $188,750—a little over -10%. In 2009 so far the median selling price has dropped by -7.28% to $175,000.  Smart sellers were quick to lower their prices so they could get out early.

2.  There’s a risk that prices could fall much lower.

A fair percentage of homeowners may be “underwater” in that they owe more than their properties are now worth; some may even be facing foreclosure in the near future. Foreclosures depress property values, since the homes are often sold at bargain prices.

3. Statistics that are showing only modest declines in median sales prices may be misleading.

Some sellers (including developers/”flippers”) have been offering generous incentives and credits to sell their homes. So while the statistics are showing modest drops in sales prices, the amounts sellers are actually netting have been dropping by somewhat more.

Median sales prices can also be misleading if certain kinds of homes are selling better than others. It’s even possible for the median sales price in an area to rise at the same time that individual home prices are falling dramatically.

Here’s an extreme example of how this could happen: Suppose that there are just two kinds of properties in the town of Homesville: luxury homes and starter homes. In 2007, 20 luxury homes were sold for $800,000 each and 30 starter homes were sold for $400,000 each. In 2009, 15 luxury homes were sold for $600,000 each and 10 starter homes were sold for $300,000 each. Even though the prices of all homes in Homesville dropped by 25% between 2007 and 2009, the median sales price rose from $400,000 to $600,000.

4. It’s a great time to buy.

Your house may have dropped by 15%, but so has your replacement house. If you’re selling in order to trade up, this market may be working in your favor.

5. The amount you’re “bleeding” each month may be larger than you think.

Say you have a vacant $500,000 home with a $400,000 mortgage and monthly payments of $2,400 a month. You may think it’s only costing you $2,400 a month to wait for a buyer. Not so. You’re also missing out on an opportunity to earn interest on your $100,000 of equity. If the interest rate is 6%, you’re losing an additional $500 a month. Of course this analysis doesn’t even take in to account costs of upkeep, utilities, taxes, insurance etc.

6.  Some real estate agents themselves are out of touch with the market

Some inexperienced or even unethical real estate agents suggest unrealistic prices to sellers to either get the listing in the first place or out of lack of due diligence or experience. Those listed properties then languish on the market. Sooner or later, those listings expire and the seller moves to another agency or the listing agent is recommending a series of price reductions. Time has been lost and so has the opportunity to sell during the initial rush when a property is first placed on the market. In either case, its an expensive mistake.

7. The asking prices of neighboring properties may be giving you an inflated sense of your home’s worth.

In a falling market, many sellers (and agents too) have unrealistic expectations of what their homes are worth. Just because a neighbor with an similar home is asking $600,000 doesn’t mean that your house is worth $600,000. The ultimate selling price for the neighbor’s house might end up being only $500,000 and if you price your home according to the neighbor’s asking price you could well have missed an entire selling season not to mention the added carrying costs and inconvenience of a long delay in your plans.

Berkshires’ Williamstown emphasizes Livability

Williamstown in the Berkshires is renowned for Livabilty

Williamstown in the Berkshires is renowned for Livabilty

Putting an Accent on Livability This Berkshires Community Is Much More Than a College TownBy KATHLEEN MITCHELL  
Peter Fohlin says Williamstown offers plenty of arts and recreation options without the traffic and bustle of a large city.  
 
 
In 2007, Money magazine named Williamstown as a contender for one of the best 100 places to live in the U.S., an honor that speaks to how much this Northern Berkshires community has going for it.The town earns high marks because it is home to Williams College, which has consistently been ranked as the top small liberal-arts college in the country, but also home to the prestigious Sterling and Francine Clark Art Institute, which sits a short distance from downtown and attracts tourists from around the world, and also the Tony Award-winning Williamstown Theatre Festival, which runs every July and August.“This is one of the easiest towns in Massachusetts to live in,” said Town Manager Peter Fohlin. “We don’t have choking traffic, there’s lots of outdoor recreation space, and we have a great variety of restaurants and entertainment. The college provides a great deal of opportunity for people to take part in cultural events, music, and drama, and we are centrally located — just a few hours from Boston, New York and Montreal. Where else would you want to live?”Williams College is the predominant physical presence downtown, and its buildings line both sides of the main street. But they are punctuated by shops, businesses, and eateries, and the college and the town share a peaceful and mutually beneficial coexistence.In this, the latest installment of its Community Profile series, BusinessWest takes a close look at what makes Williamstown such a desirable place to live, and also at two exciting new multi-million-dollar projects which will provide new office space, luxury condominiums, and a rebirth of the town’s noteworthy Purple Pub.Town and GownOriginally called West Hoosac, the area was incorporated in 1765 as Williamstown after Ephraim Williams, who was killed in the French and Indian War, bequeathed a significant sum to the town on the condition that it was named after him.

He started a free school that opened in 1791 and was named Williams College in 1793. Today, that early learning institution plays a vital role in the town’s economic and geographic profile.

“We don’t have tracts of land suitable for large-scale industry,” Fohlin explained. “The industrial space we have is intensely developed, and the downtown is occupied largely by Williams College. Its academic and athletic facilities are all downtown, with retail and commercial businesses sprinkled along the campus. So there is no identifiable boundary between the campus and the community. You don’t cross a line on campus or off campus.”

Even the college offices are housed in rented spaces in commercial buildings on Spring Street, which is where the hub and bustle of the town is found. “There is nothing on Main Street. It runs through the center of town, and the town’s businesses and campus buildings are all on the veins of side streets with a fair number of residences sprinkled in,” Fohlin said.

As a result, the downtown area is very compact and an attractive draw for people who want to be park their cars and walk wherever they need to go. “It’s easy to find a place to own or rent where you can walk to restaurants, the movie theater, a golf course, or the college’s cultural and sporting events,” said Fohlin.

Since townsfolk and college students intermingle, the town and college have established and maintain an excellent working relationship. “We have a peaceful and amicable relationship with the students,” he continued.

There are seven crosswalks on Main Street, and Fohlin says officials monitor the status of the town/gown relationship by the number of hand waves exchanged between students and drivers at the crosswalks. “I sent a letter to the college about how polite the students are this year,” he said.

The college, the community’s largest employer, works hand-in-hand with town officials and has consistently provided support to the community. “In 2002, they donated $1.5 million toward the construction of a new elementary school,” Fohlin said. “They have endowed a staff position at the high school in language arts and continuously donate computers and furniture to the school. We have a continued collaboration over sidewalk maintenance and the roads where the college and the town intersect, and we try to identify mutually beneficial projects, because the dividing line between the town and college is imperceptible.”

As a result, the two entities work out a cost-sharing agreement for infrastructure projects. Last year the town increased the size of its municipal parking lot by 50%. The project cost $400,000, and the college managed it and paid for it. “Their students use the parking and they are part of our community,” said Fohlin.

Even the Town Hall history is associated with the college. It once operated as a fraternity house and Fohlin said every year former students who once lived in it come back to walk its halls.

Going Up

There isn’t much room in the town for new development. So growth comes from the redevelopment of existing properties. At present, there are only two projects that fall into that category. Both are former restaurants, with one located on Route 2 and the other on Route 7. However, it’s unlikely they will open again as eateries.

“The restaurant market in Williamstown is pretty much shaken out,” Fohlin explained. “We have pub-style, Greek, Italian, Mexican, American steaks, chops, and fish. There’s a lot of diversity, and most of them have been in business from 10 to 50 years. We are right-sized in the restaurant business.”

The town doesn’t have any fast-food restaurants or big-box stores, but Fohlin said there is no need for them, as they can be found in nearby North Adams. “Wal-Mart just built a Superstore there and has other stores in Pittsfield and in Bennington, Vt.,” he said.

The town has a single-screen movie theater, and although it’s small, it’s located on Spring Street. “People can walk to Spring Street, eat there, go the movies, and even cross between crosswalks without any problems. There is also a marvelous coexistence between vehicles and pedestrians,” Fohlin said.

A major redevelopment project on Spring Street, which Fohlin calls “exciting,” is expected to be completed in January. “The former Hopkins Furniture Store is being rebuilt as an environmentally friendly LEED-certified building,” he said. “There will be retail shops on the first floor, including Nature’s Plaza, an outerware and outdoor activity store which is moving from Bennington, Vt.

The $4 million project was initiated by Mark Paresky, a major Spring Street landlord, who gutted the building and rebuilt it. The LEED gold status he is seeking requires high-efficiency heating and cooling mechanisms and materials, insulation, and the use of recycled and regional products wherever possible.

The first floor will also house a resurrection of the town’s famous Purple Pub, which burned down about two years ago.

“It was a town institution frequented by generations of college students,” Fohlin said. “Everyone is looking forward to it coming back. It’s a great social gathering place. Williamstown without the Purple Pub is like a flagpole without a flag. It’s not Williamstown if the Purple Pub is not open.” The restaurant will be housed in the new back addition to the building and will feature folding doors that will open onto a small patio for outdoor dining in good weather.

The 63,000-square-foot structure’s second, third, and fourth floors will be professional office space and will include a ‘penthouse’ office on top of the original building with an open deck above the third floor. “The building will house the first new Class A office space built in northern Berkshire County in the last 30 years,” Fohlin said.

Another project that is generating excitement is the conversion of the former General Cable Mills into a mixed-income residential community. The mills’ history of making wire and cable dates back to just after the Civil War, and their renovation will be a dramatic addition to the town.

The mills run along the Green River on Water Street. The first phase of the project involves the rehabilitation of the three existing mill buildings into 61 luxury condominiums. Fohlin said 12 of the units will be reserved for people who make 80% percent of the median income or less and will be priced according to their incomes, while the other 49 will range in price from $300,000 to $700,000. Occupancy of the first phase is planned for the fall of 2010.

The second phase will be the construction of 21 new riverfront townhouses and duplexes, while the final phase of the project will be the development of a 30,000-square-foot parcel on the southern end of the property, which is zoned for business. The use of that area has not yet been determined.

General Cable Company manufactured wire and cable in the buildings until the early 1990s. Before being closed for redevelopment, it served as incubator space for small technology and investment companies.

“General Cable mills sit right on the edge of the downtown area,” Fohlin said. “It would have been a disaster to have an abandoned mill there. To add housing stock where people can walk to restaurants, movies, and the golf course is a pretty cool thing, and adding 61 units when the economy is in such difficult shape is something to feel good about.”

Williamstown is known as ‘Town Beautiful,’ and its bucolic landscape is part of its attraction. “The town is surrounded by mountains on all sides. One of the most spectacular sites is when it snows in the winter at the high elevations. It’s like someone took a paintbrush and put a white line around the town. It’s like we are living in a bowl,” Fohlin said. “Above 1,300 feet, there are no buildings, which reduces the area that can be built. Water, sewer, and natural gas are all limited to the greater downtown area.”

Although many people love living downtown, the town offers a variety of residential options. People who want more privacy live in south Williamstown. The majority of that area contains farmland and converted farmland, with homes that range in price from about $1 million to $10 million.

On the other end of the spectrum, there are two mobile-home communities, which Fohlin is proud of, as they make it possible for people of all income levels to enjoy the town. One community has about 100 homes, while the other houses about 40 units.

New construction is also ongoing. “We have a steady homebuilding business here, especially for second homes,” Fohlin said. “We have 11 new homes under construction right now. This is a highly desirable community because of the quality of our public schools and municipal services. It attracts people who move here and causes parents to bring their children here under school choice.”

The Big Picture

Fohlin said that, in addition to being a college town, Williamstown is known for its culture. “The Sterling and Francine Clark Art Institute is world-famous. It was built here in the 1950s by the Clark family as a safe depository for their art collection in the event of a nuclear war with Russia,” Fohlin said. “After they passed away, it was turned into a public institution of world renown. People from all over the world come here to see the Clark art collection.”

The museum is in the beginning stages of a $25 million expansion project. Pritzker Prize-winning architect Tadao Ando and landscape architects Reed Hilderbrand Associates will design a campus plan that enhances the institute’s setting, expands the facilities for its public and academic programs, and reconfigures its galleries to broaden the ways in which visitors experience works of art.

Tourists frequent the town in every season. “In the summer we host the Williamstown Theater Festival and the Williamstown Film Festival. Conferences are also held at Williams College by the Massachusetts Teacher’s Assoc. and smaller organizations,” Fohlin said.

The Williams Inn, a dozen or so motels, and a half-dozen bed and breakfasts house the tourists, who frequent Williamstown in the fall for the foliage and in the winter for the nearby ski resorts.

“The college is our economic flywheel, and tourism is on top of that wheel. It’s what makes our economy go,” Fohlin explained, adding many people visit the town in tour buses.

Tourists also visit the town to enjoy canoeing on the Hoosic River and the Rural Land Foundation’s network of hiking trails.

Fohlin sees the town as a great place to visit and an even better place to take up residence. “Everyone has to live somewhere, and anybody who can should live in Williamstown. It’s a great town,” Fohlin said. “I’ve always said Massachusetts gets better the farther west you go. And if you can’t find what you want in Williamstown, you don’t have to travel far to find it.”

Just a few of the reasons why this college town receives high grades for its livability and should continue to do so in years to come.

Pending Home Sales Down from Surge but Higher than a Year Ago

Berkshire homeowners, buyers and sellers are very much aware of the trend in home sales described in the article below.  Berkshire home sales have trended downward for months and 2010 seems to indicate that this downward trend in Berkshire County is leveling off.  Here at Harsch we evaluate all trends related to Berkshire home buyers and home sellers for the best pricing and marketing strategy.  Located in Williamstown for over 35 years we are one of the oldest Berkshire Real Estate service agencies in this region.  House and Keys in Female Hands

Washington, January 05, 2010

Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit but remains comfortably above a year ago, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 16.0 percent to 96.0 from an upwardly revised 114.3 in October, but is 15.5 percent higher than November 2008 when it was 83.1.

Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.”

Buyers who have a contract in place to purchase a primary residence by April 30, 2010, have until June 30, 2010, to finalize the transaction to qualify for the tax credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.

The PHSI in the Northeast dropped 25.7 percent to 74.4 in November but is 14.7 percent above a year ago. In the Midwest the index fell 25.7 percent to 82.0 but is 9.2 percent higher than November 2008. Pending home sales in the South fell 15.0 percent to an index of 97.8, but are 14.7 percent higher than a year ago. In the West the index declined 2.7 percent to 124.6 but is 21.4 percent above November 2008.

Yun projects an additional 900,000 first-time buyers will qualify for the extended tax credit in addition to about 2 million who have already purchased; 1.5 million repeat buyers also are expected to benefit from the credit.

“Many trade-up buyers, who have historically timed their purchase based on school-year considerations, will have to accelerate their buying plans if they need the tax credit to make a trade,” Yun said. Repeat buyers do not have to sell their existing home to qualify for the credit, but they must occupy the home they buy as their primary residence.

Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010. But the tax credit impact in the first half of the year and expected job growth impact in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. Home prices are expected to stabilize or even modestly rise as a result in 2010.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Adaptive Reuse: Building on Tradition

Turning industrial buildings into Home Sweet Adaptive Home

Turning industrial buildings into Home Sweet Adaptive Home

Adaptive Reuse is a process that adapts buildings for new uses while retaining their historic features.  The simplest example of architectural adaptive reuse is the antique barn resurrected as a unique and stunning new residential home.   Initially architects and structural engineers evaluate foundations, beams, columns and flooring to determine the stability of the building.  Once it is determined that the fundamental structure is sound the process of renovation begins.

The trend of adaptive reuse has caught on with a passion in larger metropolitan areas such as Boston, New York, Chicago and Atlanta. An outstanding example is   Chicago Soldier Field,   the Chicago Bears’ historic stadium.  The ability to reuse this site and adapt it to the requirements of a modern professional football stadium is impressive.    The Power House  is a fine example of adaptive reuse of a turn of the century steam plant located in Long Island City, New York.   Massachusetts boasts many adaptive reuse projects including Old City Hall,  The Apartments at Coolidge School in Watertown, MA, and The Atlas Lofts

The last two adaptive reuse projects are part of the Mitchell Properties LLC portfolio of adaptive reuse projects.  Their newest project  coming online in 2010 is located in Williamstown MA.  Cable Mills Condominiums will be a community located in the Berkshires with stunning views of river, mountains and Williamstown.  A short two minute walk to the Taconic Golf Club, the Village center and Williams College are a few of the amenities that will make this development truly unique.  Berkshire Living Urban Style describes Cable Mills Condominiums.  The condominium residences comprise the style of the Boston Loft with the visual and sensual beauty of the Berkshires. 

Harsch Associates Real Estate a well know Berkshire Real Estate Brokerage firm is now taking reservations for Cable Mills Condominiums.  Whether a second home, a primary home, or an investment in the Berkshires you will appreciate the easy lifestyle that Cable Mills Condominiums offers.  New wine, old bottle and vintage perfection.

Berkshire Real Estate: Buy, Sell, or Hold?

What Road will Berkshires Real Estate take?

What Road will Berkshire Real Estate take?

I recently spent a sunny afternoon looking back over 23 years of statistics for the Berkshire Housing Market.  I was seeking some indication of what is in store for the Northern Berkshire Housing Market in 2010.  However, as Yogi Bera once said “predictions are difficult to make, especially about the future.”

That verity aside, I do believe that statistics provide some useful assistance to us as we look ahead, and so does information about the state of the general economy, historical trends, and so forth. Taking all of this in to account, it is my expectation that the level of inventory will remain at higher average levels for some time to come and will take longer to absorb than the past, leading to longer days on the market on average as well.

These changes will not only effect Berkshire real estate, but the industry as a whole.

Read the rest of this entry »

Berkshire Real Estate Predictions for 2010

The new year promises some changes to the Berkshire real estate market, as well as the market as a whole. So what road will the real estate market take in 2010?

Here are some of our 2010 Berkshire real estate predictions:

  1. There will be a greater diversity of buyer types.  This ranges from seniors with little or no interest in high technology to the middle range of empty nesters who have a mixed level of technological interest and expect instant response to their text messaged inquiries.
  2. Top Realtors® will need to be on the leading edge of technological advances–such as Facebook, Twitter, and mobile applications–in order to provide accurate, meaningful, and advanced services and results to their clients.
  3. Part time practitioners will struggle to keep up; full time professionals will continue to expand their market share. For clients seeking superior results, the full time professional will be the preferred and necessary option although “friends” and “relatives” of part timers will always account for some business, sometimes to their client’s disadvantage however.
  4. That being said, requirements by law and the costs to remain in the business will steadily increase which in some cases will cut out the weaker and less dedicated licensees
  5. The stock market will advance, real estate values will stabilize and consumer confidence will improve modestly. Job growth will be slow and as such will continue to be a dampening weight on any potential rebound.
  6. Downsizing, rightsizing, and greening will be significant trends and have an impact on value
  7. There will be more single and alternative household formations as compared to traditional families.
  8. Condominium sales will remain relatively strong for the obvious advantages to today’s busy lifestyles and shrinking family sizes. There is a substantial oversupply of condo conversions of former apartments and these will not fare so well.
  9. Along with the aging of the baby boomer population, more growth in the sunbelt and even overseas as Americans discover attractive and less expensive foreign alternatives such as Central America.
  10. No new housing price bubbles in sight. Baby boomers selling one of their two homes, relocations out of the area,  job losses, shrinking populations in the Berkshires: these trends as well as the losses suffered by speculators and get rich quick flippers, will all help to keep prices at moderate levels.
  11. First time and repeat buyer tax incentive programs will attract qualified buyers and motivate them to take action before these programs expire thus helping to stimulate the market in important but still modest ways.
  12. Many sellers accept diminished expectations and in some cases where they purchased during the boom, even losses.

What are your real estate predictions for 2010? We’d love to hear them.

Alternative to the College Housing Dilemma

Stability, fixed expense, equity building, an excellent learning experience…. and a college education?  Does it sound too good to be true? Buying a home for your college student to live in while s/he attends college is one potential investment option that could benefit everyone.

The student benefits from the stability of knowing they will not have to search out a different apartment each year before returning to college.  The cost will remain stable as fixed mortgage rates lock in the monthly cost.  A location close to the college reduces transportation expenses.

Where better to try this innovative strategy than with our beautiful Berkshires real estate? We have four colleges in the Berkshire, and they include:

Affordable home in Williamstown MA

Affordable home in Williamstown MA

Your college student owning a home has its benefits:

  • No storing furniture over the summer break
  • Security deposits will not be required each semester.
  • Students can choose share the expenses of home ownership by taking in another student and splitting the monthly home costs.
  • Students learn about the process of investing in real estate along with the responsibilities that go along with property ownership.
  • The student can build up home equity that can be cashed out at the end of the four-year college period or held for longer-term appreciation.
  • If a parent has more than one child attending college, the home can be used for as long as the family needs student housing or until the last child graduates from college.
  • Depending upon the size of the home (2-3 bedrooms) the student can supplement his/her income by allowing for rental roommates
  • Pets, which are not permitted in typical campus housing, can accompany your student to college and be a great comfort during lonely semesters away from home.

If you decide to have your student on the mortgage and deed you, can help the student establish credit prior to graduation?  Talk to your accountant and attorney to determine which method of ownership will work best for you and your student.  Some parents will choose to buy owner occupied property and others will choose to buy rental property for tax benefits.  There are many ways of holding title including creating a limited liability company.

Choosing your Massachusetts condominium or a single-family home for your student requires several choices.  If you choose a condominium, your student will have the advantage of no lawn care, snow shoveling or exterior maintenance.  The disadvantages of a condominiums include a Homeowner’s association fee that may be too high and loud stereos may bother neighbors.

A single-family residence might be easier to sell once your student has graduated.  However the student will be responsible for external maintenance tasks such as mowing, watering the lawn and snow shoveling.  Some neighborhoods may be less friendly to a group of students living there.  This is less likely to be a problem if the home purchased is close to the college and other homes are either owned or rented by students.

Disposing of the property once your student is ready to move on can be accomplished by converting your investment to a rental property or selling the residence on the open market or even exchanging it for a piece of real estate in another location.

The potential financial and educational benefits of buying a home for your college student to live in while away at college include:

  • Possible appreciation in value
  • Tax benefits
  • Build up of equity over the time your student attends college, which can be used to finance a home when your student moves on to his/her first job.

Talk to your accountant, your attorney and your student about this investment option and then contact Harsch Associates or a top flight Realtor ® in your market area to begin your search for that perfect home away from home for your college bound child.

Berkshire Real Estate Buyers: Northeast Prices are down 10.5%

Real Estate Home Appreciation – Last 12 Months

Last Updated: 10/5/2009

The median home price, the point at which half of all homes are sold for more and half are sold for less, dropped in all regions but the West, as well. The price increased to $220,500 in the West, up from $217,900 in July, but it is still down 12.2 percent from last year.

The median price in the South dropped to $157,400 from $162,100 and is down 11 percent from August 2008.

In the Midwest, the price rose to $155,900 from $149,900 in July. In a year-over-year comparison, the price is off 10.4 percent.

The Northeast region’s median price declined the most of any area, dropping more than $10,000 to $241,100 from $251,500. Since last year, the price has fallen 10.5 percent.

Data Source: National Association of Realtors

Monthly Fluctuations in Median Home Prices by Region Overall

First Time Homebuyers & Tax Credits: What Berkshire Real Estate Buyers Need to Know

We have been receiving so many questions, I thought it might be a good time to weigh in on the First-Time Homebuyer issues, including the IRS tax credit and financing information.

IRS Tax Credit

It is always best to refer clients to the website www.irs.gov for information regarding their tax situation.  If they use the search box, and type in “Form 5405” they will get the most current and correct information for filing.  There is a “Ten Facts” page that can be printed and handed out, and I have been using that to answer questions as they come up.  As we all know, the deadline to close and record is November 30.  Borrowers should be under contract by October 20 to be sure they can close on time.  We have no information right now to indicate the desire of Congress to modify or extend this program, although hope remains high.

Financing

MassHousing has simplified their first-time homebuyer loan, with expanded income limits, lower rates and cheaper PMI.  They offer 30-year fixed-rate financing for first-time buyers with annual incomes up to $90,315 per household.  They will, in limited cases with excellent credit (720 score or higher), go to 100% financing, but the buyer must still have 3% of the purchase price of their own money – even if they are not putting it into the purchase.  For this reason, it is best to assume 97% when calculating your loan amount.

We continue to be a preferred MassHousing lender, and can provide additional information to buyers as needed.

PMI – Private Mortgage Insurance

As a credit union, we enjoy preferred rates from all PMI companiesup to 25% less than banks for the same loans.  We can often save buyers the equivalent of .25% in rate with lower PMI premiums.

We offer Job Loss Protection as an added benefit on all loans insured through MassHousing or Genworth PMI.  This coverage pays the borrower’s monthly payment for up to six months if they become unemployed and qualify for state unemployment insurance.  If you are a borrower who is afraid to buy due to the current job environment, we can help you. Ask us for more information.

This is still a historic time in our industry: LOW RATES, LOW PRICES, and AVAILABLE FUNDS TO LEND.

Maureen A. Phillips
Assistant Vice President
Greylock Federal Credit Union
mphillips@greylock.org

Professional or Hobbyist – Who is Your Berkshire Realtor®?

The Professional

  • Full time – typically 40 to 60+ hours a week
  • Years and depth of experience – the Professional is often a multi-year veteran of the profession, someone with sufficient experience, skill and sophistication to add significant value to the transaction process. The true professional has actually closed hundreds of sales and can demonstrate his or her sales track record
  • Professional designations – this indicates the Realtor® has taken the time and expense to increase their knowledge and education in the profession
  • Professional office – the Professional is affiliated with an office or company that maintains fully equipped technology and can provide appropriate privacy and confidentiality within an attractive office environment
  • Full time support staff answering the telephone during all normal business hours. Walk-ins greeted and accommodated during all business hours
  • Website is highly developed with ease of use, interactive features, access to all area wide inventory using IDX and registration capability for instant feeds of new listings to registered users
  • Professionals takes their business seriously and diligently and their responsibilities to their clients in the same vein.
  • Most professionals are much more concerned with serving their clients diligently than becoming “friends”. Professionals earn their reputations and as such derive a considerable amount of their business from professional referrals and by word of mouth based on excellence of performance.
  • The real cost of using a Professional can frequently be lower. Due to superior skill, knowledge, experience and dedication, the final outcome with the Professional is usually a better one for the client, yielding a higher return, even if the nominal brokerage fee may sometimes be higher
  • The Professional always carries Errors and Omissions insurance.
  • The Professional is totally dedicated to conducting their business with absolute integrity, committed personally and professionally to serving the public’s interests above their own, insuring that their client is always achieving the best outcome possible.
  • The Professional understands and offers all forms of representation, from traditional “agency” to the newest option in the marketplace, Facilitation.

The Hobbyist

  • Part time – has another job or serious outside interests such that they spend on average less than 20 hours a week in professional real estate activities
  • The Hobbyist may be new or relatively new to the business
  • Typically no designations – the part time hobbyist is doing the minimum necessary to remain licensed within a state.
  • Work in group setting lacking private office or meeting space thus all aspects of a client’s confidential business can be compromised
  • Sporadic or no office staff – phone calls often answered by machine, walk-ins may find the offices temporarily closed during normal business hours
  • Minimal Internet presence. The site offers only the most basic of information, often limited to only listings of that one agent or agency thus greatly reducing its effectiveness in marketing client inventory
  • The hobbyist may make claims about “experience” but their actual experience and track record is limited to only a few sales each year or a limited scope of types of real estate.
  • The hobbyist is in the business because its “fun” and they “love houses” or it may be an avenue for them to cherry pick properties they then “flip” for their own profit.
  • Hobbyists can be much more expensive – fees can vary between Professionals and hobbyists with the latter sometimes being nominally lower, but not always. Negotiation skills may be weak, motivation to get a sale at any price, much higher with the hobbyist and costly mistakes are more likely.  
  • Hobbyists sometimes do not carry Errors and Omissions insurance thus expose their unaware clients to uncovered exposure.
  • The hobbyist lacks the commitment quite frequently to the highest and best outcome for their clients, sometimes sacrificing the client’s best interests for a selfish motive – putting their own buyer first for example, in order to get the “full commission” instead of insuring the best buyer for a property outcome for themselves.
  • The hobbyist has only the most basic understanding of their legal responsibilities as an agent and not understanding or offering the alternatives such as Facilitation.

Dear Paul,
Selling your home of 29 years can be quite a task! Luckily we had you to help with the sale. I highly recommend your agency. You were forthright, honest, reliable and persistent. Frankly, not all Realtors could stand up to these qualities.
There is no doubt in my mind that if there was a way for the sale of our farm to happen and in the special time frame we needed, that you, Paul, were going to make it happen.

Best regards and many thanks to you and all your staff.

Sincerely,
Virginia Skorupski