Paul J. Frank's Real Estate Blog http://www.masshomefinders.com/blog/ en Copyright 2008 Sun, 02 Mar 2008 11:21:52 -0500 http://www.sixapart.com/movabletype/ http://www.rssboard.org/rss-specification Buying Bank Owned #2
Some sellers won't make the offer contingent on a home inspection so the buyer has two choices.  Buy the property without inspecting it or pay for a home inspection before negotiating further and without a written agreement.  Given these two choices I recommend the later. 

I had a buyer start negotiating on a property and they wouldn't make it contingent on a home inspection.  They also rejected the price and wanted close to asking price which wouldn't have made sense if the house needed many big ticket repairs.  But, without the home inspection how do you know the extent of the damage.  They also would not de-winterize the house.  The buyer went ahead with a home inspection anyway.  Even, without the heat, electric, and water running the home inspector uncovered so many other defects in the property that it didn't matter.  It turned out that the boiler was rusted through so it wouldn't have fired up anyway and the electrical panel was fried which is why the electric wasn't working.  The buyer realized his original bid was too high so we broke off negotiations and the buyer passed on the property.

The sellers of bank owned properties are not making it easy for buyers to properly evaluate the condition of the property.  They want to pass their headache onto you with as little work and cost on their part.  My feeling on this is that if you are going to take on the added risk of buying a bank owned property the rewards need to be very high otherwise why bother.
]]> http://www.masshomefinders.com/blog/2008/03/buying-bank-owned-2.html http://www.masshomefinders.com/blog/2008/03/buying-bank-owned-2.html Buying Bank Owned Properties bank owned bank owned properties fixer upper foreclosure Sun, 02 Mar 2008 11:21:52 -0500 Buying Bank Owned #1
The first thing you have to have is a laid back attitude and faith it will work out and that some of the people you are dealing with will do most of what they say they will do.  Otherwise, you will drive yourself crazy and the frustration will put you into an early grave.  Many of the actions of these lenders/sellers doesn't make sense to a normal, rational person.  You just have to keep reminding yourself that these are the same people who caused this mess in first place so why should they act more rationally now. 

The paperwork is heavily written in the seller's favor.  It seems like they can do whatever they want even though you have a signed contract but if you deviate from the contract they can come down on you. So, my first piece of advice is to make sure the addendum caps your losses to your deposit and they can't come back after you for more money.  This is called liquidated damages. Therefore put as little money down as possible.  Let, me repeat put as little money down as possible.  That way if the people you are dealing with, and there are several layers of bureaucrats between the buyer and seller, end up not doing what they said they would you can pull the plug on the deal and only lose your deposit.


]]> http://www.masshomefinders.com/blog/2008/03/buying-bank-owned-1.html http://www.masshomefinders.com/blog/2008/03/buying-bank-owned-1.html Buying Bank Owned Properties bank owned bank owned properties foreclosure mortgage meltdown mortgage mess Sat, 01 Mar 2008 16:13:49 -0500 Written Up

Realty Times - Real Estate News and Advice

Paul J. Frank, with Homefinders Real Estate in Foxboro, MA, started with buyer brokerage as a salesperson in 1992. "I was living in a condo complex with my ...
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The Sun Chronicle Online - Business

The Ambassador Award was given to Paul Frank from Homefinders Real Estate, who has been an active member of the ambassadors program since 1995 but is ...
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 ]]> http://www.masshomefinders.com/blog/2008/02/written-up.html http://www.masshomefinders.com/blog/2008/02/written-up.html Introduction realty times sun chronicle tri-town chamber of commerce Tue, 26 Feb 2008 12:51:56 -0500 Trailing the Market Down
While I was researching for another property I came across a property that sold recently and it's a great example of a property that trailed the market down.

The property was first listed for $559,900 on 7/14/05.  Over the next two years there were price reductions on the property at regular intervals.  On 11/8/2007 the price was reduced to $384,000 with the property having an accepted offer on 12/5/07.  The property closed on 1/10/08 for $360,000.

Ouch!

In a declining market your home is losing value everyday and if you don't adjust quickly and correctly you will be constantly overpriced even as you reduce your asking price.
]]> http://www.masshomefinders.com/blog/2008/02/trailing-the-market-down.html http://www.masshomefinders.com/blog/2008/02/trailing-the-market-down.html Seller Tips Seller Tips selling a home trailing the market down Mon, 25 Feb 2008 17:03:10 -0500 Looking at Vacant Properties in the Winter
The downside to these properties is that almost all of them have all the utilities shut off. The first time I experienced how cold a building could get in the winter without heat was when I was in construction.  To this day, it still amazes me how cold a vacant building can get. It's always colder than the temperature outside especially if you are outside in the sun or up against the sunny side of a building. 

Forget looking fashionable.  I dress as if I was going to be outside for the whole time. Many layers and warm gloves.

I now equip myself with a emergency flashlight that doesn't need batteries as they would get very cold and lose power quickly.  I picked up one of those flashlights that have a handle you wind which charges up the flashlight.  A flashlight is a necessity because the basements get very dark even during the day.  Also, you can't see a thing in the attic without a light.

The other inconvenience is that you can't go to the bathroom at the house because the water is turned off and the house is winterized against freezing pipes.  I don't know about you but after spending hours out in the cold I seem to need to use the bathroom more often than normal so pit stops need to be planned for.  Unfortunately, I have been in more than one house where someone used the toilet anyway and boy does that get to smelling bad. 

With the price of copper being what it is these days you are finding more properties with the copper piping missing so now I look for that right away.  Lot's of time the baseboard heating covers are intact but the copper piping behind it are gone so you have to get right up to it and take a good look.  Without the plumbing being intact it's harder for someone who needs financing to buy the place.  You can shorten your time in the house by discovering that right away.  Most of these properties are in rough shape needing roofs, kitchens, bathrooms, new flooring, electrical and plumbing updates.

I always wonder what happened to the owners of the properties that caused them to lose their home.  In one home, on a shelf in the basement the kid's sports trophies were still all lined up in a row.  A very sad reminder of things gone wrong.
]]> http://www.masshomefinders.com/blog/2008/02/looking-at-vacant-properties-i.html http://www.masshomefinders.com/blog/2008/02/looking-at-vacant-properties-i.html Foreclosure foreclosure Tue, 12 Feb 2008 16:54:46 -0500 Foxboro, MA Single Family Market Update
The absorption rate, which is the amount of months it would take to sell all the properties currently on the market based on the last 12 months sales rate, at this moment for Foxboro is 7.04 months of inventory.  Conventional thinking is when you get below 6 months the market favors the seller and over 6 months it favors the buyers. When the market was booming the absorption rate was around 2 months.  If this trend holds were are getting very near the bottom of the market.  Whether it plateaus at the bottom for a while we will have to watch and see.

If we segment the market into price ranges, let say for first time homebuyers, and look in a range from zero up to 400K which from my experience is the range most first time homebuyers look in, the absorption rate is down to 5.89 months.  If this trend holds going forward then the lower end of the market has bottomed for Foxboro.  If you're timing the market you should get ready to move soon to catch the bottom and take advantage of the low interest rates.







]]> http://www.masshomefinders.com/blog/2008/01/foxboro-ma-single-family-marke.html http://www.masshomefinders.com/blog/2008/01/foxboro-ma-single-family-marke.html Buyer Tips Seller Tips absorption rate Foxboro homes for sale MA Market update Tue, 22 Jan 2008 11:06:50 -0500 Massachusetts Benefits from Reverse Migration
 "Meanwhile, the up-scale states—California, New York, New Jersey, and Massachusetts—are seeing fewer residents leave for a lower cost of living elsewhere. And those states benefiting from the previous flight to affordability—Nevada and Arizona in the west; Florida in the south; and Pennsylvania and New Hampshire in the east—have shown slower migration gains or greater declines." according to Brookings Institution's "Housing Bust Shatters State Migration Patterns".

Stemming the tide of Massachusetts residents leaving the state is good news for those of us who own real estate and are planning on staying here for some time.
]]> http://www.masshomefinders.com/blog/2008/01/massachusetts-benefits-from-re.html http://www.masshomefinders.com/blog/2008/01/massachusetts-benefits-from-re.html Seller Tips MA population migration reverse migration Thu, 17 Jan 2008 13:57:43 -0500 Find It, Fix It, Flip It! by Michael Corbett
The book explains the nuts and bolts of rehabbing a house like most rehab books.  How to put your rehab team together, how to find the right property with the right things wrong with it, how to finance the deal, how to write up the offer and how to sell the property.

Where the book excels is in Part Two: Fix it.  The author breaks the rehab process into "The Six Levels of Improvements."  The six levels are further broken down into the "Fix-It Levels" and the "Profit Levels."  The "Fix-It Levels" is made up of Serious but Fixable Problems, System Upgrades, and Fix-It Essentials.  Where as the "Profit Levels" is made up of Lifestyle Upgrades, Designed-Flip-Techniques, and Dressed-to-Sell Essentials.  By working through the levels the goal is to not only fix up the house but to create a lifestyle that pulls at the heart strings of the buyer.  The big money profits occur when the property delights the senses and creates an emotional connection with  the buyer.

I've seen too many poorly rehabbed houses where the property was either superficially beautiful but the bones of the building were broken or were the building was structurally solid but the finished product was so cheap and amateurish that the work needed to be ripped out and done again.

If you are in the rehab business or looking to get into the rehab business and you want to get your whole rehab project done correctly so you can maximize your profits this is a must read book.
]]> http://www.masshomefinders.com/blog/2008/01/find-it-fix-it-flip-it-by-mich.html http://www.masshomefinders.com/blog/2008/01/find-it-fix-it-flip-it-by-mich.html Book Reviews book reviews fixer upper flipping Michael Corbett property rehab Thu, 10 Jan 2008 22:29:30 -0500 What Listing Agents Should Do for Sellers Boston Globe Real Estate Blog Rona Fischman tried to explain what good listing agents should do for sellers.  Since she only works for buyers and not sellers she really only covered the basics.  Below is my comment adapted from my "Seller's Benefit Statement" that she graciously posted to her blog entry.  To see what she wrote and the other comments. Click here.

Hey Rona,
You only touched on the basics of what a good listing agent does.
Good listing agents market your property of which advertising is one part of it. Before you promote the property you need to decide what kind of buyer is most likely going to buy this property and then build your marketing plan to attract that type of buyer. A comprehensive marketing plan should have these elements in it:
1. A Competitive Market Analysis to position the property properly.
2. Determine beforehand the best type of financing for the property so the property conforms to that financing.
3.Home Enhancement and Staging
4.Estimated Proceeds the seller will expect from the sale.
5.Determine the "Salability Potential" of a property by preparing a salability checklist
6.Enter the listing in the Multiple Listing Service (MLS) and then have it upload to Realtor.com with an enhanced listing and upload to all the other sites linked to the MLS like Boston.com
7.Prepare Property Information Flyers
8.Put up a yard sign and directional signs
9.Internet exposure
10.Just listed postcards to appropriate people and target areas where your target buyer is living.
11.Office/Broker Promotion
12. Open Houses
13.Local Advertising
14.Progress Reports
15. Review and assist negotiating the purchase offer
16. Relocation Assistance
17. Provide a Sales Guarantee and Easy Out Pledge


]]> http://www.masshomefinders.com/blog/2008/01/post.html http://www.masshomefinders.com/blog/2008/01/post.html Seller Tips Homefinders Real Estate homes for sale listing agents marketing plan Seller Tips selling a home Thu, 10 Jan 2008 11:12:38 -0500 Buy It, Fix It, Sell It, Profit! Second Edition by Kevin C. Myers
The book goes through all the steps to successfully run a property rehab business.  The author explains that if you want to get top dollar you have to add some sizzle items to make your property special.  To get top dollar you just can't slap a coat of paint on the walls and put it back on the market.  I've seen many poorly done rehabs where this was done.  Because of it, the property stayed on the market longer racking up carrying costs and then it sold for less further eating away at the profits.  Learn how to make your property special so it stands out in a crowd so it will sell faster and for more money.

I highly recommend this book.  It's obvious that the author has hands-on experience and has rehabbed many properties. You will learn from his experience on how to run a successful rehab for profit business and be put on the path with other professionals who actually rehab properties and not just talk about it.

If you want to learn more about the book, rehab techniques, or the author go to his website at  http://www.rehabwiz.com/
]]> http://www.masshomefinders.com/blog/2007/12/buy-it-fix-it-sell-it-profit-s.html http://www.masshomefinders.com/blog/2007/12/buy-it-fix-it-sell-it-profit-s.html book reviews house rehab making money in real estate Mon, 17 Dec 2007 08:57:51 -0500 Has the residential real estate market hit bottom? How will we know when it has? Linkedin.com and this was my response:


Real estate is local so some areas have hit bottom and many areas have not.

A good indicator is when the days on market start declining and the absorption rate is six to seven months or less.

The absorption rate is derived by dividing the active properties on the market by the number of homes that have sold in the last 12 months so if no new homes come on the market the inventory would sell in x number of months.

In my town of Foxboro, MA at the height of the market the absorbtion rate for single family homes was 2 to 3 months. It went up to around 8 to 9 months and now this morning, Nov. 25, 2007 it is at around 6.5 months. I'd say my home town is getting near the bottom or is close to the bottom.

The days on market for the first six months of 2007 in Foxboro were 164.12 days and the second half of the year so far the days on market is 144.44 days.

The stats came from my local MLS.

If you want to really get into this you could look at different price points and see if the lower end is doing better than the higher end or vice a versa. ]]> http://www.masshomefinders.com/blog/2007/12/has-the-residential-real-estat.html http://www.masshomefinders.com/blog/2007/12/has-the-residential-real-estat.html Buyer Tips Real Estate Market Days on Market real estate future real estate market Mon, 10 Dec 2007 09:00:00 -0500 When do YOU think residential housing will turn around from a macro perspective? Linkedin.com and this was my response:


Real Estate is local. So the bottom is going to be different for different areas.

Even in the Boston area the better perceived towns will bottom out first and the lesser perceived towns will follow. It also differs depending on what price range you are in.

People were moving farther away from Boston to find affordable properties and now these people are not having to go so far. The towns closer to Boston and the Boston neighborhoods are benefiting from this migration back to the center. The towns farther out will suffer.

It's hard to over build in Boston. We don't have large tracts of land to build large number of homes. The towns south and west of Boston have restricted growth of homes through the increase of lot sizes that reduce the number of lots per acre. The towns have done everything to reduce density. The Commonwealth has done what it can to push back. So, what ended up being built due to this struggle have been 55 and older complexes and rental units in the towns that still have less than 10% of their housing inventory deemed affordable. Once you hit the 10% threshold the Commonwealth fast track permitting doesn't apply. The other area of growth is areas around train stations which gets special treatment/incentives by the Commonwealth.

The macro is having an effect but the micro economics of an area also has an effect on the real estate market. You have to look at both for each area to see the overall effect. ]]> http://www.masshomefinders.com/blog/2007/12/when-do-you-think-residential.html http://www.masshomefinders.com/blog/2007/12/when-do-you-think-residential.html Real Estate Market real estate future real estate market real estate questions Sun, 09 Dec 2007 11:49:16 -0500 Market History and Days on Market - Two Great Stats to Have as a Buyer!
Time is a lubricant that greases the seller's motivation to sell.  When a property comes on the market the seller is full of expectations of a quick sale at full or near to full price.  If the property is priced correctly it will happen.  If it doesn't happen it's only with time and with feedback from the market does the seller realize that the market has rejected the initial offer.  For the serious seller, s/he will adjust the price to better align their property with the market.

This is where the market history comes into play for the buyer.  In MLSPIN, the multiple listing service for my area, they compile the market history for the listing of the property.  Changes to the listing sheet such as going under agreement and then coming back on the market or price changes with the date of the change are noted in the market history of the listing.  This info. is available to the agents only.  So, if you are working with a buyer agent they should be sharing this information with you as part of their fiduciary duties.

When you look at the market history in conjunction with the DOM you get a good picture as to the motivation of the seller.  For example, if the property has been on the market for 155 days and no price drops and no accepted offers in a declining market you will have a strong sense that the seller is not serious about selling and they are waiting for someone with "sucker" tattooed on their forehead.

Which reminds me of a story.  I showed a multi-family to this couple one day.  The husband had all kinds of artwork on his body which you could see when he wore shorts and a T-shirt.  After looking at the property we were in the backyard discussing the property which needed a ton of work. It was in rough shape. This couple thought the property was way over priced. They were asking out loud how the seller could ask that kind of money for the property and without thinking I said, "They are looking for someone with sucker tattooed across their forehead."  Upon which the wife said, "My husband has a lot of tattoos but that isn't one of them."  We had a good laugh over that one.

On the other hand, if you see the property has been on the market for 155 days with no accepted offers and the seller has been lowering the price consistently over that 155 days then you get a strong sense that they are motivated to sell the property and should be more welcoming to your lower priced offer.

You, as the buyer, armed with this information with your buyer agent will be better able to read the motivation of the seller and therefore negotiate from a stronger position.  Unless you have "sucker" tattooed across your forehead find out the Market History and Days on Market on a property before making an offer.




]]> http://www.masshomefinders.com/blog/2007/12/days-on-market.html http://www.masshomefinders.com/blog/2007/12/days-on-market.html Buyer Tips Seller Tips Buyer Tips Days on Market DOM Market History Seller Tips Tue, 04 Dec 2007 12:08:06 -0500 Are you a Real Estate Spectator?
Serious sellers are the people who want or have to sell.  They are people who have equity in their properties, who have fixed their property for maximum resale or have discounted it heavily because of the properties flaws.  They have sweeten the terms by offering seller concessions such as paying for the buyer's closing costs.  If the property gets rejected by the market they quickly adjust to the market to better align their property with the market.  People who fall into this category are those who want to move to get to a warmer or cheaper area.  Those relocating into the area.  Lenders who have bank owned properties.  Landlords who don't want to be landlords.  Estate sales or people going into nursing homes and finally people getting divorced.  They want to preserve as much of their equity as possible.

Some of these serious sellers will also be serious buyers too.  Those of us who own a home know if we lose value on the property we own we will make it up on the next house so we are floating with the market.  Other serious buyers are people who would rather own than rent.  They might be renters now but they are starting to have kids and want to settle down in a  neighborhood that's more conducive to raising kids or they are having more kids than their present home can accommodate. They can't wait for the market to turn around.  Maybe they are relocating into the area and are used to owning a home and renting is out of the question.  Maybe they are making good money and their financial adviser is telling them to trade in the rent payment for a mortgage payment so they can get the tax benefits.  Most of these buyers have a long term look at real estate and know the market is still going down but they know that they will ride it out, enjoy the benefits that the property is giving them now and that the market with go back up by the time the need to sell.

If you don't fall into the descriptions above then you are a spectator and that's okay as long as you know you are.  If you are a spectator and you are upset that the game is being played without you.  Stop watching, become serious and get into the game.
]]> http://www.masshomefinders.com/blog/2007/11/are-you-a-real-estate-spectato.html http://www.masshomefinders.com/blog/2007/11/are-you-a-real-estate-spectato.html Real Estate Market real estate market Sun, 18 Nov 2007 12:05:42 -0500 "All Real Estate is Local" by David Lereah
I expected more from this book since David Lereah was the Chief Economist of the National Association of Realtors.  You can tell the book was written by an economist as it is not very exciting to read and it is filled with statistics, lists, and charts.  I was more interested in where the information for the charts came from so I could compile my own statistics for my area.  I am not likely to buy real estate far from where I live now so I am not that interested in what the real estate market is doing in San Fransisco, for instance.

The book explains there are forces outside the local area that affect the value of real estate with chapters like "The Power of Influence, "Baby Boomers and Other Megatrends", and "What Bud Selig and Oprah Have To Do With Real Estate." 

For me the most interesting part of the book was the chapter "Real Estate Markets and DNA."  The chapter explains that each market is unique and it has it's own DNA.  This DNA is made up of notable characteristics such as affordability, sports teams, education/universities, and geographic amenities like mountains, lakes or oceans.

The DNA is also made from the demographics of the people living there.  So, do you live in an area of highly educated people?  Are you in a retirement area of older people or a town filled with college kids?  Are people moving into your area or moving out?  It made me look more closely at the area I live in and what my local area's DNA is and what type of real estate would be a good investment.

One thing about the book that surprised me was the talk about buying real estate investments with a negative cash flow with the expectations that rents will go up and you will at some point have a positive cash flow.  I don't know about you but I was never interested in owning a rental property where not only did I have to put up with tenants and maintenance problems but I had to pay money every month toward the expenses of the place.  I always wanted positive cash flow when I bought a property.  My family and I just sold a condo that I bought eight years ago and I was never able to increase the rents that much.  More supply kept coming onto the market that kept rents in balance.  Luckily, we had a positive cash flow from the day we bought the place.  This was the local DNA of my market. 

So, bottom line of the book is to know your market and figure out where it is going and what outside influences are affecting your market.

I was able to borrow the book from my local library.  I wouldn't recommend spending your own money to get the book but if you can borrow it from the library.  I say go for it.
]]> http://www.masshomefinders.com/blog/2007/11/all-real-estate-is-local-by-da.html http://www.masshomefinders.com/blog/2007/11/all-real-estate-is-local-by-da.html Book Reviews All Real Estate is Local book reviews David Lereah Wed, 14 Nov 2007 11:01:54 -0500