Monday, February 25, 2013

How is selling a newspaper like selling a house?

The question of who will be the next steward of the Boston Globe is big news. My former writing space,, is up for sale. New York Times Vice Chairman, Michael Golden told Boston Globe employees (from the Globe):
“We will take what we consider to be the best bid,’’ Golden said, describing a process that he estimated would take six to nine months. Price is important, he said, but leaving the Globe in capable hands will be a consideration.

So how is selling a newspaper like selling a house?

For house sellers who are investors, it’s all about the Benjamins, period. Their goal is to get the most money, then about how quickly and securely they will get it. So, the highest offer with solid financing wins. The Times doesn’t intend to act solely as an investor. It has reason to care about journalism and its reputation. 
For owner-occupant house sellers, price is important, but leaving the house in capable hands matters too. Many are attached to their houses and the memories of events that took place while living there. If given a choice, sellers will choose a buyer who seems to be the next set of capable hands to care for the house. Being the right steward can get you a house, when in competition. It may even get you the house at a slightly lower price. Being disrespectful can lose you a house, or cost you more.

As a buyer’s agent, I am all about getting the best house at the lowest price. Keeping the seller’s motivation in mind is part of that process. For owner-occupants it is price first, but then, that something else. Everything you do and say in front of a seller or a seller’s agent is part of the picture of who you are as a buyer and as the next steward of the house.  As a buyer, you should be aware that negotiation begins with “hello.” There are things you just should not be saying, ever.
Sellers can be turned off by aggressive buyers who openly criticize the property, talk about renovation, or discuss tearing it down. Your snarky opinions may be clever, but that joke could cost you thousands. If you want to make fun of the 50’s decorating, do it outside. If you include a letter about how much you love their house, it better be honest. If it sounds like a buttering-up job, it is not going to work. Sellers weren’t born yesterday.

I have been lucky that my business has grown to attract people who are smart and respectful. I can’t teach respect, but I remain mindful of their communication and its affect on negotiation. With clients like this, I can fine-tune the negotiation from the first phone call.

Thursday, February 21, 2013

What you say on email can be a binding contract

Last week, the New York Times reported on a court appeal regarding email communications. I sent the link to one of my clients, who was in a transaction with a seller, and a seller’s agent, and a seller’s attorney who did not understand the importance of email communication.

Here’s what happened:
The seller and the buyer had email communications through their agents regarding chattel (personal items) and some built-in items that could stay or go after closing. In the course of that conversation, the seller offered two small mounted TVs. The TVs were a distraction from the negotiation at hand. My client, the buyer, frankly didn’t care if they stayed or went. A deal was reached regarding some other, more expensive, items; the more expensive items were included, specifically, in the Purchase and Sales Agreement.  
However, the fur started to fly when -- several weeks later -- those same TVs were offered, for a fee, along with some items that were clearly built-in and part of the property. When I explained to the seller’s agent that these TVs had already been offered, agent said that offer was not binding because it was not in the Purchase and Sales Agreement. My client was annoyed that the seller was going back on his word. My client was also annoyed that the seller was attempting to sell built-in items at the last minute. 

“Not in the Purchase and Sales Agreement” does negate the written offer, by email, to my client. As of last week -- at least in New York State -- email promises are confirmed as binding. “As much as communication originally written or typed on paper, an e-mail retrievable from computer storage” is proof of a deal, according to the court’s opinion, which was written by Associate Justice David Friedman.
The Times, quotes an attorney who is using a disclaimer to avoid email backfires:

In most cases a disclaimer can inoculate senders from having e-mail backfire, real estate lawyers said. Mario J. Suarez, a lawyer at Thompson Hine who handles many commercial transactions, suggested that the wording might say the communications “shall not be deemed an offer, as no documents are binding unless and until executed.”

Should real estate agents have a disclaimer on all their emails? I vote, “no.” I like the idea of saying or writing what I mean and I don’t mind being held to my word.

Monday, February 18, 2013

What is going on with inventory and prices?

The Wall StreetJournal   is on the bandwagon about rising prices. More “Happy Days are Here Again” playing in the background. 

The number of homes listed for sale at the end of 2012 stood at the lowest level in more than five years, a development that helps explain why home prices have rebounded so strongly over the past year.
I had some fun with these interactive graphs today. Because they are working with median price averages for the whole area, and not my particular towns and cities, they are not as meaningful as local market information would be. 

I added Boston into the first tab “most expensive.” (You can do that by clicking on the list below.) I am happy that we didn’t make the list of the most expensive markets in America. Orange County, San Diego, Washington and New York hold those top spots. 

Here in the Boston area, the median price changed from $333,000 in May 2011 to $345,000 in May 2012. That is a price rise that matters. If you look at the Boston line, you will see that prices were flat in the Spring of 2011, and rose sharply in the Spring of 2012. That is the difference that my clients felt last year. When the market is flat, buyers don’t have as much pressure to buy now, or suffer higher prices later.

The more telling chart is the inventory chart to the right. Boston has its normal seasonal inventory curve. That humped shape is typical of a large increase in listings in the spring and the lowest ebb in the winter. (New York has one, too.) What we really felt last year was the depression of the seasonal hump. In 2011, there were roughly 31,000 properties for sale at peak, whereas in 2012, there were roughly 25,000. Boston’s inventory shortage is more dramatic than the highest-priced markets in America. Look at the chart below the graph. You will see only a few other places that have inventory declines in the teens, like our decline of 15.8%. Our prices are not suffering a staggering increase. This is the good news for buyers.

My advice for buyers is to keep their eye on the value of any particular property you might like to purchase. Ignore the hype that is all over the newspapers. Considering how steep our inventory shortage is, we still have a pretty stable market. Poke around on these charts for yourself.

Wednesday, February 13, 2013

Can your agent help you plan a move that is good for your children?

If you have been looking for my blog this week, you probably figured out that I had a traumatic move. The blame goes to a certain internet domain registry that will remain nameless for now. I apologize to you for any inconvenience.
More to the point, today I write about moving house and home. Adults hate it, as I wrote last week. Children can have a much harder time of it. According to the U.S. Census Mobility Report, more than eight million children between the ages of one to fourteen move or are relocated by their family on an annual basis in the United States.
Help for children in regard to moving comes from an unexpected source. Johnnie Johnson, a former Rams All-Pro safety now  serves as President and CEO of World Class Coaches.  Johnson has launched a national program designed to help children and their families deal with the difficulties of moving. The program, called Moving Families Initiative, connects moving families with REALTORS® to take a proactive approach on the physical and emotional strain kids face when changing neighborhoods and schools.

 “Millions of children move with their families every year, but the emotional and physical strain of changing schools, neighborhoods and friends is rarely addressed,“ said Johnson.  “The Moving Families Initiative aims to alleviate the stress that inevitably comes with moving.  It’s important that kids develop the behavioral skills to thrive socially and emotionally in a new climate.”

 I took a look at the website for Moving Families Initiative. I find their bibliography fascinating. More promising, here is some materials they sent me as advertizing. It has a lot of common sense, plus a promise of more.

Challenges that kids face when moving:
·        Sense of loss and separation from people, places and things, coupled with the frustration and anger that comes with not having the emotional maturity to adjust to this loss.

·        For young children, the normal process of separation can be interfered with, causing them to return to a more dependent relationship with their parents.

·        Susceptibility to a wide range of emotions: depression, loneliness, anger, changes in appetite, social withdrawal, irritability, sleep disturbances, fear, all from the stress associated with loss and interruption.

·        Interruptions/disruptions in schedules, routines, friendships, and not having the maturity to deal with this and what they miss.

·        Insensitive parents who may not understand children’s sense of powerlessness and the absence of a sense of safety. These parents need resources to help them and these children needs parents to normalize things and make sense of their feelings.

·        A misunderstanding that the chaos and frustration that their parents exhibit is their fault.

·        Confusion, stress and anger if they have not been successful in making new friends.

·        The "new kid" syndrome that can bring on bullying or being bullied.

·        Falling grades and adjustment to changes in curriculum. There are often negative effects on learning.

·        Post traumatic stress disorder in rare cases when accompanied by other changes in the child's life such as death or divorce.

It is a good idea for Realtors® to have some tricks up their sleeve to help parents plan a move for their children. I have a background in counseling and education, so I understand child development. However, many of my peers lack that training. I think many would benefit from a program like this. I will consider it when it gets to Massachusetts.

Monday, February 4, 2013

Do you hate to move?

When people come to me to discuss buying a house, I am not being negative when I ask them “why?” Buying a house is not easy; neither is moving. After I have done my job, and the work that gets them to the closing table is done, there is still the job of moving in.

According to a recent survey by Unpakt, 23 percent of Americans, when surveyed, said they would rather forfeit their hard-earned vacation days for two years in lieu of moving. Moving is that toxic to people.  Yet Americans move an average of 8.2 times in their lifetime.

88 percent of Americans chose to move by themselves rather than hire a moving company. There are a lot of reasons for this, some real and some just plain fear. According to Unpakt, almost half (46 percent) of Americans are afraid movers will steal their belongings during a move. 69 percent of Americans fear that movers will damage belongings during a move. In my experience, movers are not nearly that dishonest or careless. I am aware of only two cases where my clients had valuable items “lost” during a move. Damage is more common, but I would gauge that at about 5-10 percent of the moves I hear about.

The most common problem with movers -- the problem of damage – frequently can’t be helped. When moving large, heavy objects, things happen. Here are some common moving mistakes. (Reputable companies have insurance that will cover repair of the damage that was caused.)
1.     Dropped furniture can cause damage to the furniture or the walls of the house. It is not uncommon for walls to get scratched and dinged, stair balusters to get broken, or windows to get broken.
2.     Plumbing fixtures can cause trouble around a move, whether the movers are touching them or you are. Frequently washing machine faucets have leaky valves. Homeowners wouldn’t know about the leak until the machine is removed. Then, the new owner finds a puddle. The solution is to buy caps for those faucets so that you can be sure there will be no leaking.
3.     Another plumbing incident that happened to one of my clients involved a mover who broke the ice maker line when he scooted the refrigerator out of the way of the back door.  When the refrigerator was moved back in place, the line was leaking and had to be replaced. An emergency plumbing visit was a tiring end to a tiring day for the new homeowners. 

In terms of the cost of moving, one frequent complaint from consumers after using a moving company is that they paid more for the move than anticipated. This is likely because of hidden fees, given that many moving companies use estimates rather than exact price quotes. Of Americans that paid more for their last move than initially anticipated, 57 percent paid upwards of $175 all the way through $1,000 more for the move than expected.

Unpakt is bringing moving pricing into the 21st Century. The information age has make easy to compare costs, receive guaranteed prices and access customer reviews when booking travel or searching for good restaurants, so the same should be true of booking a move and finding a reputable mover. Unpakt is now providing these services. Sounds like a good idea. I hope my clients try it out, so I can write some more about it.