Technology continues to change the way real estate transactions are done. A few years ago I started using electronic signature software for my clients. This has greatly simplified signing documents for both local clients and people from out of state. Scanners have made it easier to read real estate contracts are they are sent around for signature. However there are still agents who don’t use a scanner so even a one page change document can be difficult to read once it’s been faxed 2 or 3 times in order to get all of the parties’ signatures. I want to make sure that my clients can read (and understand) these very important and legally binding documents!

Electronic signing is easy and can be done on any computer or smartphone. The document remains clear and easy to read. As an extra bonus – this also saves paper. We used to need 4 copies of each Purchase and Sale Agreement (which run anywhere from 7 – 20 pages each). With electronic signatures, everyone receives an electronic version so no trees are cut down :)

I’ve had clients sign and accept offers on their properties while in Europe, on family vacations and even on the T commuting home from work!

Let’s take a look at what’s been happening with single family real estate values over the last year in Somerville, MA.

The black line which shows the median sales prices. Not surprisingly, prices peaked in July – the reason why I say it’s not a surprise is because home prices are negotiated when the buyer’s offer is accepted and it takes about 2 months from then for the closing to happen and the sales price to be made public. This means that sales in July were from prices agreed upon in May during the spring market which is historically the most active selling season of the year.

Because of last year’s extremely snowy winter, the real estate market stalled for a while. Stay tuned to see what 2012 will have in store for real estate prices in Somerville!

The National Association of REALTORS released its 2011 Profile of Home Buyers and Sellers and there is some interesting information in it.

45% of the buyers who responded to the survey said that they did not even consider purchasing a foreclosure when they looked for their home.

Although the survey didn’t ask respondents for reasons, purchasing a foreclosed property can be a frustrating process. With a typical real estate purchase, you submit an offer and within 24 hours the seller responds. If you are buying a foreclosure, receiving an answer in a week is a fast turn around for a bank and waiting up to a month to get a response is not unusual. Foreclosures are sold in “as is” condition meaning that you have the right to have a home inspection, but if you aren’t happy with the results, your only recourse is to back out of purchasing the house.

I’ve seen banks do some pretty illogical things, too. In one recent sale, it took the bank 6 weeks to have the house dewinterized for the home inspection. Then they said if the closing didn’t happen by the end of the month (which was 3 weeks away), they were going to put the property back on the market. They were the ones that had caused the delay! Even their attorney told them it was irrational.

The moral of the story is that you can get a good deal buying a foreclosed home but you need to have patience and fortitude and be prepared for frustration as you go through the process.

There are just too many passwords to remember!  I’m waiting for the day when my car will refuse to start because I don’t remember my password.  Sometimes we get lazy and start using the same password for many sites.  Although this makes it a lot easier on you, it also makes it a lot easier for the bad guys – if they get your password they can then have access to a lot of your sites.  Think of all of the information you store online.  As an alternative you can use www.LastPass.com.  This highly rated service stores your passwords for you.  You just need to remember 1 password to log in.  It can even automatically fill out online forms for you.  Help protect yourself from identity theft by using different (and difficult) passwords on each site.  LastPass is free or for $1/month you can upgrade to their premium service which includes a version for your iPhone or Android phone.

In the 3rd part of my series on selling real estate with a tenant, let’s look at larger multi unit properties – those with 4 or more units. Once you have a property with more than 3 apartments, you are solidly in the land of investors. Owner occupants aren’t interested (and usually can’t afford) to buy larger multi unit properties. Banks will require a higher down payment as well. 25% of the purchase price is normally the minimum.

As far as your tenants, as long as they pay market rent and keep their apartments in reasonable condition, an investor will be happy to inherit the tenants with the sale. Hopefully you wrote provisions in your lease allowing you to show the apartments to prospective purchasers. Even if your tenants are tenants at will and go month to month without a longer term lease, it’s best to have a written tenancy at will agreement.

Of the 3 different “Selling with a Tenant” scenarios we talked about:
Selling a Condo
Selling a 2 or 3 family house
or
Selling a 4 unit or larger – this last scenario is the easiest at least as far as the tenants go. Since owner occupants won’t be a potential buyer, you don’t have to worry about your sale hinging on whether or not a tenant moves out when they are supposed to in order to satisfy the buyer’s bank’s requirement that they have a vacant unit to occupy. Your biggest hurdle in selling a larger investment property is ensuring that your buyer can secure financing.

We’ve already gone over how to sell a condo with a tenant. Today let’s discuss how to sell a multi family home with a tenant.

If you own a 2 or 3 family home you’ll want to look at who the most likely buyer will be:

• If your property is in great shape and has been extensively updated, your most likely buyer will be an owner occupant.
• If your property needs some updating (and you price the house to reflect this) or you are willing to price it a little bit below the market value then you open up the potential buyer pool to investors as well

An owner occupant must occupy the property within 30 days of the closing. This means it’s easier to sell a 2 family or 3 unit home with at least 1 vacancy. This way your closing isn’t subject to whether or not a tenant moves out on time. Owner occupants normally prefer to live on the top floor of a multi family home.

If your property is fully rented with good tenants paying market rents, this will normally make the property more attractive to investors. If your property needs work, then investors are okay with vacant units since it makes it easier for them to do work on the property.

As you can see, it’s a bit more difficult to give a hard and fast rule for multi family properties – it depends on the location, condition, rents and price you want for your 2 or 3 family home. If you need some advice, just call me at 781-608-4692, or email or text me and we can discuss your property and what makes the most sense to attract a buyer in today’s real estate market.

Selling a piece of real estate in most markets can be a challenge. When you are selling a property that has a tenant or tenants in it, it adds another layer of complexity to the sale. Over the next few weeks, I’ll discuss different tenant scenarios. Today let’s assume that you own a condo that is currently rented out. You’ve decided to sell the condo. In today’s real estate market, investors aren’t interested in buying single unit condos so your prospective buyer is an owner-occupant (bank speak for someone who will live in the condo).

When a buyer is buying your condo to live in, one of the conditions of their offer will be that your condo must be delivered vacant at the closing. Not only will the buyer require this but their bank will as well so the next question is whether your tenant has a lease or not. If your tenant is a tenant at will (where the rental period is 30 days and automatically renews each month when your tenant pays you their rent) then you can put the condo on the market at any time. If the tenant has a lease, then you’ll need to do some backwards checking with a calendar. It takes 45 – 60 days from the day you accept an offer to the closing. Determine what the average days on market is for your area and then put the condo on the market giving you enough time to find a buyer and close on the sale.

NOTE: When you give your tenant notice either that you are not renewing their lease or given them a 30 or 60 day notice to quit as a tenant at will, make sure you give them the notice before their next rental period begins. If you have a tenant at will that starts on the 1st of each month, you must serve them notice before the 1st of the month. If you give them notice on the 2nd of the month, then the current month doesn’t count and the 30 day notice doesn’t start until the 1st of the following month. The best idea is to have your attorney send the letter. If you’re doing it yourself, make sure to send a registered letter with a return receipt so you have proof you served the notice in time.

There’s one more piece to this puzzle – your tenant needs to cooperate and move out when they say they will or when their lease expires. Just one more reason to have a good relationship with your tenant. You don’t want to have your sale fall apart because they refuse to move out.

Selling with a tenant can make a sale more complex, but as long as you (and your agent) keep a good relationship with your tenant, it can work.

I've been helping people buy and sell real estate for a long time and have seen issues arise with UFFI, radon, lead paint and bed bugs.  Imagine my dismay when I saw an email titled "Real Estate Lice".  Now we have to be on the lookout for lice in properties!

Thankfully the email title had been cut off  - the real message was:

At least it was good for a laugh!

XXX – okay, now that I have your attention, I really do want to talk about adult entertainment.  You can now buy domain names that end in .xxx.  These domains are, of course, meant for the adult entertainment field.  However, if you’ve spent years building up your website how would you feel about a porn site using www.YourSite.xxx? 

 Large companies like Target and Coke have been buying up .xxx versions of their domain names and you can too.  Unfortunately it will cost you $99 each year to ensure no one else can use the name. 

 For years I’ve been joking that DebOnTheWeb.com sounds like it could be used for a porno site.  I now own www.DebOnTheWeb.xxx to make sure that doesn’t become a reality!

We’ve already discussed preparing for the walk throughso today I want to talk about the process of moving out. After many years of helping people sell their homes, there’s one universal truth about moving out that I’ve learned. . . it takes longer than you think!

I know how busy it gets when you’re close to a sale. Don’t put extra stress on yourself by waiting until the last moment to pack. There is one way to not live surrounded by boxes and still keep your sanity – hire professional movers. If your budget doesn’t allow that, then start the packing process early by boxing up the things that you don’t use often. Things that can be put away early include:

• Off season clothes
• Books
• Kitchen items (will you really be making waffles or a souffle in the last few weeks in your house?)
• Some toys (the plus side to this is when you unpack those old toys at your new house, they’ll seem like new toys to your child!)

Take the day off from work on moving day even if you’ve hired professional movers. You’ll want to oversee the move.

There’s a lot of stress involved in moving out of a house especially when you have a deadline with the buyer’s walk through. To stay on track, begin packing early, download a moving checklist and plan for the move to take longer than you expected.