The Real Estate Broker's Corner

I have been busy ( which is a good thing), so I apologize in advance to those watching this space for my tardiness.

Having said that, some observations about the local markets here.

A Westport customer of mine has a home on a large lot, and was considering subdivision prior to selling. Unlike the super hot market of 3 years ago, when it would have been a no brainer, I had to go through a rather lengthy analysis of the costs associated with subdivision, the likely impairment to the existing property that would result (easement driveway, construction in adjacent lot, etc) and come back to the customer with the following question ( which coincidentally, is usually the first question I ask customers), "what is it that you want to accomplish here?".

Most people would say "Mike, I want to sell for the highest price!". But that is a little bit vague. If the highest price is say, $20,000 over the lowest price, and it will take 6 months to achieve the highest price, is that still going to be your goal? If you have been waiting for the market to recover, are you willing to wait another 2 years for that "highest price"?

I had to preface my recommendation with " I am assuming you want to sell the house at a reasonable price as soon as possible", and then tell the customer that while there was a potentially greater gain involved in subdivision, there was huge incremental risk, and that the risk reward ratio was not all that favorable. (If professional, experienced developers are putting the brakes on projects, why does anyone want to jump into small potatoes development?).

The Dartmouth market is actually reasonably active for stuff that is priced right. By priced right, I mean less that brand new construction of like size and style. There are tons of homes on the market. If you price it below comparable new construction, you have a chance of selling. If you don't, well, then you don't.

Regards to all readers. Watch this space for buyers' seminars that we will start running in mid May.

Mike Powers

I was doing some due diligence for a client who has engaged me as her buyer's agent, shopping for a condo in the greater Fall River / New Bedford area. I had identified several condominiums, (all FHA approved, all with operational track records) which I thought might work for her.

I like to visit the properties, see how they are maintained, etc. before I bring my customer out. At the development I chose to visit, the prices range from 200-330k, with about a dozen units on the market, out of 144 total. And in visiting this one, I met a little old lady in the parking lot who was looking for someone to talk to.

Eureka!

Through this very nice woman, I learned that the condominium had recently had a special assessment on the order of $8000 per PERCENT of beneficial interest! (So if you had a 1.25% interest, you need $10,000) That was on top of the approx. $3000 per % ordinary maintenance fee. And for what? For things that should have been done and budgeted for all along, and for the lack of reserve analysis by previous management, but most of all, for the lack of previous trustees to responsibly allocate reserves into their budget.

Now many units are for sale, and not in the best of times for sellers. A local bank was offering some financing to owners of the special assessment, but under the law, the assessment is a lien due on any sale. 

The lesson to be taken is this; pay me now or pay me later, you will pay for maintenance, and real estate buyers do not pay for the same thing twice.

I am happy to open our new blogger forum with this solicitation for market questions, observations, or comments.

Mike Powers, Managing Broker, FCM