Once upon a time, the American Dream was about owning a home with a yard in a subdivision in the suburbs. But today’s Americans are dreaming differently. Many of my clients have recently proved to me that the American Dream comes in a wide range of styles, locations and floorplans. First I think of “Jason and Lyn”, with one pre-schooler now and plans for a second child. While I was sure they’d want a single family with a yard for the children, they were sure they wanted a townhouse with no yard and no maintenance. Of course they themselves grew up in China in highrises… and they were thrilled with the condo options available to them here! Then there was “Matt and Pauline” who were pregnant when we tried to sell their 850 sf garden style condo. At the time, values were plummeting, and like anyone who bought within the last few prior years, they would be taking a loss to sell. I was sure they should “get out” before they got “stuck” there and prices dropped so far they couldn’t afford to sell. Their response was “No problem… we’ll just stay. We really love living here. It will be fine!”. Then there was Sharon, who asked a seller why they were moving. The seller said “with 2 kids, I’m busting out at the seams”! Meanwhile, Sharon has three kids… and was thrilled at the prospect of an extra bathroom and modern kitchen! Common traits are comfort and security. But beyond that… to each their own American Dream!
In April of 2010 new laws went into effect in Massachusetts concerning the placement of smoke and carbon monoxide detectors in homes transferring title. The new requirements expound upon what was previously required. Photoelectric smoke detectors are now required when placed within 20′ of a kitchen or bathroom. Carbon monoxide detectors are generally needed on every level, within 10′ of bedroom doors. This much is clear when you read the Department of Fire Services “Guide to the Massachusetts Smoke and Carbon Monoxide Requirements…”
What is more difficult to find in this guide are the requirements spelled out by local fire deparments. For instance, I was recently told that the 1950′s ranch I sold would need more than one CO detector if over 1500 sf, yet “The Guide” states that the square foot requirement kicks in for homes built after 1975 and the maximum per detector is 1200 sf. I’ve also been informed that the common areas of the 100+ year old bank-owned 2-family home I’m selling need to be hardwired, with heat sensors in the units, yet “The Guide” doesn’t mention heat detectors for anything built prior to January 1, 2008.
Keep in mind that “The Guide” is what you are given when you make your appointment to have the detectors inspected. Assuming you pass the inspection, you receive a 26F certficate of compliance, which is a required document at all closing tables. If you don’t pass the inspection, you may make the necessary changes, pay the fee again (in Framingham it’s $50 for a single family and $100 for a 2-family) and schedule a repeat inspection.
I’m not arguing that the new law is unfair or unnecessary or a bad idea. I think that the safety measures put in place are critical. I do wish, however, in the interest of everyone’s time, money and patience, that the instruction was clear.
To view “The Guide” for yourself, click here!
Bob and Mary REALLY wanted a 4th bedroom. They wanted each of their three children to have their own bedroom. They wanted it so badly that they sold the home they had lived in for 18 years. Even though they had just spent a small fortune putting in a gorgeous new kitchen, finishing the basement, replacing a heating system and adding central air. No matter what they did to their house, it did not have 4th bedroom. So… we sold it. Relatively quickly. They took a leap of faith. And there was no suitable 4 bedroom house for them to buy. They wanted only certain locations, and were not going to betray their budget. I even talked them out of buying one house they were seriously considering because I worried about the resale potential. They moved into a “short term rental”… and a month or two turned into 6 (!) It seemed they may miss out on the tax credit – oh, well. They never complained. They never worried if they had made a mistake. And then it appeared. Great neighborhood, cul-de-sac, central air, finished basement, 2 car garage… true, no new kitchen but… can that price be real? Well, it’s a “short sale”, a “maybe” listing. But seriously, a 4 bedroom 2.5 bath colonial on a cul-de-sac in North Framingham for THAT price??? We offer, it’s accepted. We inspect, no big surprises. The seller’s lender approves the sale, it’s official. Bob and Mary are getting a fabulous 4 bedroom home PERFECTLY suited to their needs! They didn’t settle. They didn’t panic. It took a year, but it’s happening. Never settle for less than you truly desire.
I recently wrote an offer on a short sale listing, which I nearly never do because of all the variables involved. They are “maybe” listings, with “maybe” terms. Most buyers simply cannot be flexible enough to weather the unknowns. This particular buyer could serve as a model for who is best suited to purchase a short sale – here’s why:
1) they don’t have to sell a house in order to buy
2) they are living in month-to-month rental housing
3) they do not have close deadlines for when they need to be in the next house
4) they are not first time hombuyers – they are savvy and handy and can handle some deferred maintenance
5) they are buying below their means – if interest rates go up a bit while we are waiting for the seller’s bank to approve the sale, these buyers will still qualify for the mortgage and be comfortable
6) they are looking for something that is not readily available in the market; chances are, there won’t be several homes that fit their criteria coming on the market in the next couple of months.
7) the tax credit is not critical to their decision – if they don’t close on time to receive them, they’re OK with that
Not everyone is a good candidate for purchasing a short sale. It can take months for the seller’s lender to review the transaction, and even then, the response can be “no”. Meanwhile, the buyers may have spent money on inpsections, mortgage and attorneys fees…with nothing to show for it. Before jumping into a short-sale purchase, evaluate your flexibility!
…and of course this happens a day or two before the mortgage commitment deadline is expected! Alas the townhouse that sold for $287000 has been appraised by the buyer’s lender at $275000. Which means the buyer’s mortgage is…denied!
The root of the value differential? The listing broker (not me…) was using the town’s public record as the source for square footage, and that square footage was approximately 400 sf overstated. When I approached the listing broker, his attitude was “public record is good enough for us – if I need to go back on the market, I’m leaving the square footage as is”. In my opinion, this would have been blatant misrepresentation. I contacted the town’s assessor and explained my dilemma. He took it upon himself to complete his own investigation -reviewing deeds, original builder’s plans and measuring the building himself, and he ended up changing the public record for all units in the subject’s block. We ultimately resolved the matter with the seller coming down $10,000 in price (the most he could afford, as he was already losing significant money since purchasing the condo several years ago), and my buyers were able to chip in another $2000 in cash to keep the sale together.
I actually have a list of 75 things that can go wrong in a transaction, and a low appraisal is one of them. Fortunately, I’m skilled at hurdling obstacles!
Have you ever been faced with a low appraisal, perhaps as part of a refinance? How did you handle it?
I’m excited to press deeper into the world of online information sharing! I see most of my fellow associates blogging about listings, sales, market data, financing options etc – and I thought I’d take a different approach. Even after 27 years of full-time practice in the real estate industry, I’m constantly dealing with “new situations, ”new” obstacles, “new” challenges. I think the most valuable information can be found via these “new” stories. They provide real resources for solving problems, and open up possibilities that may not have been apparent. I have a very interesting appraised value vs. sale price situation unfolding right now… I hope you’ll check back here next week to read about it!