McGeough Lamacchia In The News

Spring is here and that’s usually when house hunters really get going and everyone wants a deal. Joining us now are our real estate experts John McGeough and Anthony Lamacchia of McGeough Lamacchia Realty thanks for being here this morning.

I love this idea of doing this we picked the price range here is $300,000 and you’re going to tell us what we can get for our money in three different locations. So where shall we start. Let’s start with Framingham and we have pictures here so this is the $300,000 dollar range, tell us about this one.

On for $339,000, it’s a 4 bedroom, 2 and a half bath, extremely well priced this house was sold in the mid $400,000 range and I want to say that again, it was sold for in the mid-$400,000 range back in ’06 or ’05, and now we got it on for $339,000.

Wow- a massive difference!

Absolutely. And we’ve been saying now for months how unbelievable it is to buy right now, these are just kind of tip of the iceberg as far as the availability right now

And at least as of Friday the interest rates were 3.75% with an FHA loan so someone could put 3 and a half percent down on that house and buy it for $2000 a month. You couldn’t even rent a 4 bedroom single family house for $2000 a month.

In fact I think it’s more expensive to rent now than it is to buy if you can get the down payment in there. So with an FHA some people could probably afford that. Ok let’s look at you mentioned Mendon also in the $300,000 range. Tell us about this one.

On for $299,000 it’s a 3 bedroom this one I love because this one is [built in] 1730 this is older than our country so you’ve got this unbelievably historic property, you’ve got the post and beam construction, and you’ve got all these nice little nooks so we loved this house and it’s priced so competitively you cannot touch this type of home once again 5 or 6 years ago, for the $299,000 price point and you’re talking about 16, 17 hundred per month once again with the unbelievable interest rates.

How close to the price do you think someone would actually get it, because sometimes you say these prices are rock bottom then you end up in a bidding war with somebody do you think that would even happen this time

Sometimes it happens it depends on how much the interest is at one time now on these properties we represent the sellers, so obviously we want to get as much money as we can for them so we have to be careful how we answer that, but they can be had for a fair price.

Ok now’s a good time so this last one here is in Hudson also in the $300,000 range.

This one we just dropped the price down to $290,000. This is a great place a single family house in somewhat of a community I forget how many units are in there a great place, 3 bedrooms, 2 and a half baths, built in ’06, or ’05, they had bought it somewhere in the $300,000 and we’ve got it on for $290,000. So again a great deal you can buy this home for $1700 a month you could not rent if for $1700 a month.

Unbelievable so with something like this, I mean some of these look, they’re beautiful homes, and some of them not terribly updated necessarily, is this a chance for people to get in, get into a home, just so you can do whatever you want down the line, is this a golden opportunity?

I mean I’d say for these homes you’ve got some updates but even sometimes a home that’s two or three years old, and you want to go in and still want to redo a bath or redo a kitchen but we always advise buyers to be careful with the budget and the expectation but all of these homes you move right in and once again priced extremely well.

Are you seeing a lot of this at this time, I mean it’s pretty good inventory than they were a couple of years ago.

And also this is the peak time of year for homes coming on the market, if anyone’s even thinking of buying they should really be paying attention right now because from now until about May 1^st is the peak time of year that things are really coming on the market peak time for active inventory.  It’s a good time.

All right, keep your eyes peeled out there so John McGeough and Anthony Lamacchia of McGeough Lamacchia Realty thanks for being here. 

If you’ve been trying to sell your house over the last year or so and you haven’t been able to do so, you can blame the market, you can blame the buyers, you can blame your agent, but maybe you should be blaming yourself. If your house isn’t getting much attention maybe it’s time to take a look at the price. Our real estate experts John McGeough and Anthony Lamacchia from McGeough Lamacchia Realty are going to delve deeper into this matter. And it’s kind of a tough pill for people to swallow I think when they say, “what do you mean we’re overpriced?” because they certainly had an amount of money that they have in mind that they want to sell for, and the first question is, how do you determine if your pricing is off on this?

Well if your home is on the market for 3 to 4 weeks and it’s not selling and you’re not getting any offers not getting very many showings, that’s a very good indication that your price is off and now the question becomes how much do you adjust the price and that’s where we came up with a bit of a formula for that.

Ok and I think we have something we can display to underscore what that is, but before we get to that, you say 3 or 4 weeks– is that a fair sample time?

Depends on the time of year. So this year we’re starting out with much more activity that we’ve seen in the past based on the light winter, so on average as Anthony says 3 to 4 weeks, 30 to 60 days is pretty much the mark that we look at depending on the type of home, if it’s a typical home, say it’s a Colonial, and there are plenty of comparables, the market’s going to react very quickly and you don’t want to let too much time pass because you’re going to miss the market

So that time frame we talk about coupled with how much activity you’re getting, you got to factor those two together and then maybe you’re overpriced. What if you’re in a tight spot and you really can’t afford to lower the price, you start lowering your price and you think hey, I’m selling the house for less than what I owe, I owe more than what it’s selling for. It can be a problem.

That’s the biggest thing that sellers say, they call us and say, well  I need $300,000, I want $300,000, and I always nicely say to them, when you were buying the home did you ask the seller what they needed or what they wanted? No! Buyers don’t care what sellers want or what sellers need they want to pay what the property is worth.

So  John tell us more about the formula you use.

So on average if a property’s on the market for 3 to 4 weeks, and there’s some decent activity but no offers yet, you might just be slightly off– it’s maybe 3% to 5%. If you’re getting real low showings, we call it just drive-bys, you see folks just kind of peering into the house, it’s more like 6% or even 10% off. If there’s just, as we say, it goes dark: no showings, really just drive bys, nobody’s even peering in, not even slowing down, then you might be 11% to even 12% off. And those are basic numbers, it’s a model we’ve always used and most industry experts support it. If you follow that to a T, your pricing will get dialed in a little better and immediately you’ll have increased activity. And we always say it’s better to have an offer and work with somebody than having nothing at all. And nobody’s wasting time making an offer unless there’s some real interest.

Ok and quickly our final question, what if  you’ve had your house on the market for a while and then you say well let me take it off the market and then I’m going to put it back on again, what are the pitfalls of that philosophy?

Well I’m glad you asked that, if your home’s not on the market it has no chance to sell. And I had a seller who we put his home on the market back in November and he called me the first week, or second week in January and said, “I can’t believe we’re not getting any action, let’s just take it off the market until the spring.” And I said “I don’t recommend you doing that because then you have no chance to sell.” Yesterday I spoke with him and he said, “I can’t believe it we’ve had three showing this weekend and  we had one yesterday,” so clearly he’s happy he stayed on the market.

And another quick question if you do take it off the market and then buyers start to say, “wait a minute, they had it on the market and then they took it off, then they put it back on.”

Right, it happens, but you can’t reset the market history anymore. So it used to be you take it off for one month and all of a sudden it starts back to zero, you can’t do that anymore with MLS–that number follows you to the end that’s why we tell folks you can’t fool buyers in this market.

All right, thanks guys, check them out at McGeough Lamacchia Realty and find out more on mlrealtyne.com.

If you’ve been looking for an apartment in Boston this news comes as no surprise to you: rents in the city are climbing, now averaging over 1600 bucks a month. Inventory is low making it tough to find a place, joining us this morning to shed some light on all of this and what it means for the housing market our real estate experts here, John McGeough and Anthony Lamacchia joining us from McGeough Lamacchia Realty and first of all what is driving up the rents?

Good question, primarily it’s just the demand. You’ve got more folks who used to own a home they’re not owning now over the past 5 years they have either been foreclosed on,  they short sold their home or they’re just not interested in owning for awhile,  so you have more demand and you’ve got this limited supply.

We’re all familiar with the bubble that burst in the housing marketing and everything seems to climb and then burst, is there room for more growth here in terms of how much rent people are charging or do you think this at some point this is going to level off or maybe come down?

I think rents are going to continue to go up a couple more years because there are still people getting out of homeownership .That homeownership rate was like 69% at its peak in ’06, and now it’s anywhere between 62 and 66 percent depending on the area so I think that it’ll go down a little bit more which is going to drive rents up a little more because people have to live somewhere.

So this is a reflection of sort of what’s happening in the housing market, but it won’t affect sales do you think, because people are going to need to move out anyway know what I’m saying?

That’s a good question, I’d say it will have some impact on sales because a lot of these folks who are renting they could opt to buy, they’re just choosing based on  possible uncertainty in the market, or just some folks just aren’t ready to purchase. You know we always encouraged our buyers to commit to buying, it’s a long term experience so I would say that yeah it’s going to have a slight impact on sales and I think as Anthony highlighted, you might have just a little more of a decline in overall pricing.

I want to follow that up Anthony, is part of the equation at all the fact that if you can pay 1600 bucks a month that’s a mortgage payment for some people, is the down payment the issue, is difficulty getting a mortgage or credit part of that too?

In some cases that’s it and in some cases people are scared. You put the news on you think prices are collapsing they’re really not. There was a period from ‘06 to ‘09 that prices went down a lot but now they’ve been kind of floating along the bottom so what’s going to happen is people are going to start to realize wow, I can own a home for almost the same as I can rent. It might even be cheaper in some towns. As that starts to happen more and more over the next couple of years with the interest rates so low people are going to get right back into homeownership.

So it’s a psychological thing at play here, mortgage rates are great, inventory pricing is good, all things point to: hey it’s a good time to buy.

Every time we think the rates can’t go lower, they’re going lower. It’s amazing.

As an example yesterday they hit another all time low, 3.75% for a 30 year fixed so if you’re borrowing $350,000 it’s like $1625 as far as a mortgage payment so that is comparable now to the average rent out there so it’ll be interesting we’re always shocked more folks aren’t buying it is such a great time to buy.

And lastly real quick on this, if you do have a house that hasn’t been sold does it make sense to rent it out?

It depends, if people are going to be getting out of the home temporarily, maybe a temporary job relocation, something like that, then fine, but if people are in a situation where they can’t afford the home, and we all know there’s a lot of people in those situations right now, renting it is really just a temporary band aid, because most people’s mortgages are higher than what they can get for rent now because their mortgages are from 5 years ago, so you don’t want to rent for a year and then be in the same situation a year from now that you can’t afford it, and now you’ve got a tenant in the house.

Thanks guys as always McGeough Lamacchia Realty we appreciate the expertise.

You know it’s a buyer’s market in real estate out there and yet many people are hesitant to search for a home, they’re shackled by myths that they either don’t have the cash or have enough credit to own a home, but John McGeough and Anthony Lamacchia of McGeough Lamacchia Realty say that’s not true they’re here to dispel some myths thanks for being here guys.

I think a lot of people feel this way especially if you haven’t been through the process of buying a home for the first time you think, oh there’s no way I can’t do it because it’s a lot of money, it’s a big commitment and you just think that is too much for me, but that’s not really the case.

That’s right, in 2008 when the mortgage crisis hit the news for the last two years well three years has been the banks aren’t lending, you need 20% down at least, you need an 800 credit score, and that’s not true, all those things aren’t true.

Let’s talk about the first one the fact that banks aren’t lending. There was a time for a while where it wasn’t as easy to get a loan as it was before the crisis and that still is somewhat true but that doesn’t mean that they’re not giving out loans.

No not at all I mean obviously you need to be employed, you need to have documented income, so you can’t say you’re making a hundred thousand and making fifty thousand

but you’d still be surprised at still how liberal it is to get a loan. Where you can have a credit score as low as 600. most of first time buyers are still putting down as little at 3 ½% and a 100% of that can be a gift money, so mom and dad can give you help with the down payment. So those are things a lot of folks are floored by, they still think they need, as Anthony said, these high credit scores and 20% down and that is not the case.

For a long time there was, I mean a certainly in another generation, you did have to have that 20%, it’s a lot of money to put down on a home, that changed, but now banks still want to see some money up front.

Oh that’s right and the big thing that happened is from about ’02 to ’07, banks were giving money to anyone that wanted it almost unrestricted.

If you were breathing and you could tie your shoelaces you were good to go.

And they were given crazy amounts of money, I mean $500,000 loans to people who were making $40,000 a year now they’ve tightened it up to make sure that people actually can afford the payment, can afford the mortgage, and that’s how it should be, so now things are how they should be.

What is the percentage that it should be because I know that there were people who were leveraging up to 80% of their salary or more to be in certain homes but the banks are now saying you want to be safer, to be on the safe side of things.

That’s right, I mean most banks and most numbers that you look at say you should be 30% sometimes even as high at 40% of housing expense as a percentage of your income. So we don’t really believe that it should exceed that, but still you don’t need a lot of this 20% down, you don’t need all of the criteria folks continue to think, and that’s a huge piece.

You can still buy with 0% down, USDA promotes that in rural areas like Pembroke and some other parts of the state, VA loans are 0% down, and FHA which are federally insured loans which make up the majority of first time buyers it’s 3 ½%.

And the other thing too is because the market is flush with inventory right now you don’t have to very wealthy you don’t necessarily have to be married you don’t have to have two incomes in order to purchase a home, there’s so many different options.

That’s right, but don’t get us wrong if you do have 20% to put down, wonderful, use it, you know that’s a great thing, the point we’re trying to make is, there’s been a lot of false media out there about you have to have 20%, banks aren’t lending, that’s not true, banks are lending every single day of the week, there are thousands of homes selling every week across Massachusetts so banks are lending to make those deals happen.

They want to lend. We’re shocked that buyers aren’t trying to gobble up the inventory that’s out there. Price points continue to come down, and we’re going to see more of that next year, we’ve got the lowest interest rates that we’ve ever seen on record, so it’s still a great time to buy a home and that’s the big message that we hope more and more folks start to resonate with.

If you want more information or if people want to get in contact with you where can they go?

They can always go to MLRealtyNE.com or they can call us.

The old adage in the real estate world in these parts you don’t try to sell your house in the winter, the weather stinks, no one is looking to buy, it’s a waste of time, but our next guests are here to tell us that theory is bunk!  Real estate experts John McGeough and Anthony Lamacchia of McGeough Lamacchia Realty are here to tell us why, and traditionally we start we look at this month and say well this isn’t really an active time of year, doesn’t make any sense to list my house. How busy is it this time of year in terms of buyers and sellers usually we think other times of the year there’s more happening. What’s going on this time?

It is actually busy. We’re having a great month, November was a great month, there was a bit of a slowdown, for maybe the week before Thanksgiving and the week after but in the last week we’ve had a lot of contracts come in and a lot of properties going under agreement and we expect that to continue right up until about Christmastime, and then pick up again after the New Year.

Let’s start right there, a lot of sellers won’t list or just pull their home off the market because they hear, well it’s kind of a waste of time.

That’s right. If you’re going to sell your home, absolutely keep it on the market. It’s definitely is a myth that homes don’t sell through the winter months. There’s a quick statistic, in the first week in May there were about 750 closings in Massachusetts, this past week, just last week, there were 784 to be exact so there was a 3% uptick in sales in December and we anticipate that to continue so if your home is ready to sell, it’s currently on the market or you’re going to put it on the market, if it’s priced correctly, marketed correctly, absolutely it needs to be “on the shelf” as we say, so people can actually see it.

So we just did a little myth-busting here, so where do they get started?

If you don’t have your home on the market it has no chance of selling.

Obviously there are some months that the market tends to be busier like in the spring it tends to be a little busier but there’s still a ton of homes selling in the winter, in the summer, in the fall, we sell homes 12 months a year 52 weeks a year. And in fact my own house, I was telling John I was going to tell this story, a year and a half ago, we decided well I’m going to put my house on the market in April, and we did that and as it turned out, February and March ended up being busier, and I ended up kicking myself wishing that I put it on the market in February.

The bottom line is when you want to sell, put your home on the market, it’s the only chance of your house selling.

Whatever time is right for you is right for the market. Now what type of buyers are you seeing now?

That’s a good question, there’s three types of buyers that will buy really year round, but especially in the winter, you’ve got relocation buyers so the home’s got to be there because they’re coming from Texas, or Arizona wherever they’re relocating from, you’ve got trade up and trade down buyers, so you’ve got empty nesters looking to downsize, you’ve got folks who are extending their family looking to upsize and their home is currently on the market, and then you have obviously qualified first time buyers, so all three of those are quality buyers that are going to potentially buy your home.

All right, so with this in mind, should people change their approach, let’s say you have it listed this time of year and your house isn’t moving, you keep it on the market, but then you say well it’s probably that time of year is why it didn’t sell, should you take a look at the price how you market it and everything else and not use the time of year as an excuse as to why it didn’t sell?

That’s a good point, you answered the question, yes any time a home’s not selling after a few weeks of it being on the market and not selling or a month you need to look at the price, you always need to. Nothing drives an offer like the right price. But if I had my home on the market right now and I wanted to sell I would not take it off. Some people take it off ‘cause they say well I don’t want people coming in and out for the holidays and that’s ok, but if you’re serious about selling and wanting to get your home sold the only way to get it sold is to have it on the market.

And people could look at that on the flip side too, if you do your home in a very festive holiday theme, maybe that’ll get people in the spirit to buy it.

And you know there are less homes on the market in the winter so isn’t that the time you want to be on the market? Do you want to be on the market in the spring when everybody else is there but do you want to be on the market when there are less homes, because the buyers are out there as John just mentioned the first time buyers that are out there now are serious ones.

Well you guys have changed my point of view ‘cause I always said, ah forget it

So we’re going to put your home on the market

I don’t even know where I’m going but I’m ready to sell it now!

One price, 3 homes, and 3 different communities, how do you decide? Joining us this morning is John McGeough and Anthony Lamacchia of McGeough Lamacchia Realty nice to see you guys. I didn’t get the message guys or I would have dressed in my gray outfit!

We have different ties to mix it up!

Ok so let’s talk about this, you’re out there looking for a home before you choose a community there’s a couple things you need to think about.

That’s right, the big three things that we always highlight are: where you work, proximity to family, and essentially what you can afford.

Because if every community can offer you something different for your price.

There’s always a balance between getting more for your money but not being too far from where you work or from your family.

Absolutely, one of the things we were chatting about before we went on the air is that you really advise people, you’re out there buying your first home: you think it’s your first home and you have no children so your situation is one and then it suddenly changes.

I’ve had a lot of friends do that. I got into this business in 2004, and at that time I had a lot of friends in their mid-20s going out buying, “Oh it’s just our first house we’ll move in a few years.” Sometimes it’s not always easy to move because of pricing, and there were some people who would move further away and say, out here I get more for my money, I get a bigger house, and that’s true but they also have to think about that commute because that commute can get old if you keep doing it. So you have to take that into consideration and you also have to take family into consideration.

First baby comes along and grandma is really far away!

Right, a lot of people don’t think about that when they’re looking.

Alright, so what you guys have done, you’ve chosen 3 different communities for us for one price so let’s take a look and the 3 communities are:

Watertown, Dunstable, and Milford.

Ok and this house here is a ranch in Watertown, actually down the street from where I grew up, and it’s about 1000 square feet, 3 bedrooms and 1 and a half baths, 7,000 square foot lot and just sold for $360,000.

Ok so that’s what about $360,000 will buy you in Watertown.

If you want to be close to Boston, about 8 miles, for a more urban feel that’s Watertown.

The closer you get to Boston it’s going to cost you more?

Absolutely, yes.

Ok let’s talk about the next town.

The next town is Dunstable. It’s about 1/10^th the size as far as population as Watertown so a much more rural feel, south of Nashua, close to 495, more of a 45 minute [commute] outside of Boston, sometimes a little more depending on traffic, you’re getting a 4 bedroom, 3 full bath, 2600 square feet, a couple acres, much more of a traditional Colonial so much more of a larger family style home but you can expand and hopefully put some roots down.

Did that house recently sell?

That one is on the market right now.

It’s going for $360,000.

Where’s our 3^rd community?

The 3^rd one is Milford. So that community is similar in size to Watertown, it’s about 27,000 as far as population, close to 495 as well, you’ve got EMC employer [nearby], the town has done fairly well, obviously it’s been hit a little bit, you’re getting good bang for your buck, another $350,000 to $360,000 range, newer Colonial, it’s on a small subdivision, 4 beds 2 and a half baths, a great room over the garage, so once again depending on where you’re looking to live, quite a bit of house in comparison to say Watertown, a little smaller.

Absolutely, but keeping in mind too that if the commute is an issue for you or if you have issues with parents maybe taking care of your children at some point in your life, then maybe a smaller home is for you if you can get closer and it just depends on what works for your life.

That’s right and the commute is a big thing, I’ve had some people say oh it’s only 20 minutes, and I say when, in the middle of the night? Drive it at peak times and make sure you can do that every day, if you can and you’re happy with it, then buy the house.

If it works into your lifestyle then go for it.

And these are the critical 3 things so they actually stay in the home for 7 to 10 years, build equity, and hopefully establish some strong roots in that town and that home.

Great tips you guys like always, great to see you and Happy Thanksgiving.

Happy Thanksgiving to everyone.

It is a buyer’s market, and for homeowners looking to sell, that may not necessarily sound like good news yet new numbers say home sales are up. John McGeough and Anthony Lamacchia from McGeough Lamacchia Realty say the key to getting that sold sign in the front yard centers on a few resources, a little elbow grease and not panicking. Inevitably when you live in the house for a long time there are things that have been on your to-do list like getting rid of clutter and taking care of repairs, these should be done now.

One of the things I always tell sellers is to walk through your house as if you were a buyer and not as if it were your home. And don’t over think it, you read about the fundamentals like cutting down on hanging too many pictures, too much clutter, the obvious fixes, but don’t go too crazy. Just make sure fundamentals are taken care of, a throw rug is put somewhere, a lamp is positioned correctly.

Do you need a stager? I hear about them all the time. I imagine they’re wildly expensive.

They’re not wildly expensive and you don’t necessary need a stager, unless you have a high end home or you don’t know how to get your home looking just right, but generally speaking just remember to organize, declutter, hire the right agent, and price the home right and it will sell.

Let’s talk about pricing because people look at their mortgage and they look at that amount plus a little bit to cover costs but you can’t do that in this market , can you?

You can ‘t just look at what’s active on the market, you need to look at what has actually sold and what comparable properties are selling for. If you price it to sell, and it will sell. It’s not uncommon for a home to sell within the first month if it’s done correctly. Don’t think that buyers will always offer a lot less than your asking price. If your home is priced correctly buyers will see the value and make a good offer right away.

Some homeowners think they need to overprice in order to have some room for negotiating so that they can make more money. This actually allows the opposite to take place. Buyers don’t like to look at overpriced property and will not even view the property if the price is off.

I recently saw a neighbor who put up a sign for sale by owner, but that’s not the best idea in this market is it?

Many cases people are doing it because they owe 200,000 and they realize it’s worth 210,000 and don’t think there’s room for a commission. So they overprice, which never works. And selling it on your own almost never works.

We have more information and these are great resources you can head to MLRealtyNE.com

What if they cut mortgage rates to record lows — but no one could take advantage of them?

According to mortgage finance company Freddie Mac, the average 30-year mortgage rate hit 3.94 percent this week for 30-year loans, below the previous recorded low of 4.08 percent in the early 1950s, as reported by the National Bureau for Economic Research.

Mortgage brokers like Debbie Siegel of Westchester Mortgage in Newton Centre, Massachusetts say they are seeing a lot of disappointed people learning they can’t qualify for a refinance or a new mortgage at these rock-bottom rates.

Despite the plummeting rates, the Mortgage Bankers Association reported this week that mortgage applications actually dropped 4.2 percent from the previous week, and refinances 5.3 percent, as their overall purchase index is down 12 percent from a year ago.

Some of the hurdles and reasons people aren’t getting mortgages or refinancing deals are that lending standards have tightened dramatically, especially compared to the wild and crazy, fast and loose days of the mid-2000s as the real-estate and credit bubbles were swelling to a disastrous burst.

Now, lenders are demanding more money down on a mortgage, in some cases as much as 20 percent on a purchase.
But some call the gloomy reports about refinancing and mortgages overdone, like John McGeough, of McGeough Lamacchia Realty Inc. in Waltham, Mass. west of Boston, which sells homes and condos as far out as Worcester County, southern New Hampshire, and Cape Cod.

“People should be gobbling up properties at a feverish pace right now, but they’re not,” McGeough said, adding that he’s finding many buyers who think they won’t get a mortgage can, sometimes with 10 percent down, sometimes with a credit score only in the mid-600s. “Right now is by far the best time to buy that we’ve ever experienced. We’re hoping that as the rates continue to stay at this rate, and some of the hype” about impossible-to-get mortgages wanes, “we’re going to actually see a very healthy market.”

How to you get the most for your home with the least amount of stress? Realtors McGeough and Lamacchia say you need to hire the right agent. There’s a lot to be said about those who represent you when you’re selling your home.

The biggest problem we always talk about when hiring the right agent is make sure they have enough experience because with short sales, foreclosures, or traditional home sales there’s a lot more that goes into actually buying and selling a home so you’ve got to know what you’re doing.

How do you know if this realtor has experience, as a seller how do you go about finding out?

People should question them about their experience. Some people are so quick to hire their friend, hire their cousin, hire their uncle. We hear it all the time: “well I’m selling my house and I feel like I have to go with my cousin.” They tell me who that person is and I look them up and it turns out they only sold 3 houses in the last 2 years. You shouldn’t hire people who have only sold 3 houses in the last 2 years. You need to hire people who are in this business full time.

So let’s talk about what this agent should bring to me as a seller.

First they should bring complete honesty, whether it’s through a home inspection, whether it’s through looking at purchasing for a certain price. Some agents just need that deal because they don’t sell a lot of homes and they’ll say, oh that’s a fair price or they will overlook a heating system issue.  A true experienced agent is going to represent you at a high level and if it doesn’t  make sense for their client they’re going to say, hey this isn’t the right call, this is going to cost too much, or this location isn’t good for resale: all of those things are what is needed, that honesty is absolutely critical.

On the selling end honesty is just as important. You need to tell sellers what the house is really worth. There are so many agents who say,  ”so what do you want to sell for?” The seller tells them the number and the agent half an hour later says well we should list for 400,000 because that’s what the seller said when they walked in the door . That’s not what it’s about. When you go to the doctor he or she doesn’t always tell you what you want to hear —though sometimes they do!

Do Ineed to like this person, too, because I’m going to spend a lot of time with this person?

You’ve got to like them but you’ve got to respect their experience more. I mean there are plenty of doctors–to use that analogy–you may not like them but you sure respect what they can do for you.

Ok so what happens if I get this agent and they’re not selling the house and I don’t think this is working out, what should I do?

Well if you’re in a contract most of the time you need to wait for the contract to expire. You can call and talk to other agents but we simply tell people if you’re in a contract we really can’t help you until you’re out of it. But it happens a lot. One of the things I find very interesting is people will call and say, “My house has been on the market for 4 months and I haven’t heard from my agent in 3.”

That is incredible to us! We talk to our sellers every week whether there’s something to talk about or there’s nothing to talk about..

Every week we’re saying hi. And that’s a function of agents not knowing what to say. Instead of looking their seller in the eye and saying “we initially thought the house was worth 300,000 and it’s actually worth more like 260,000.” Instead of just telling them that, they’re holding back because they don’t want to break the seller’s heart.

That comes back to the honesty issue, right? Ok so we want experience, honesty, and for the agent to be pretty likable, and respectable, and if you can get that person working for you then you’ll be in pretty good shape.

For those looking for a bargain, is now really a good time to buy a home? John McGeough and Anthony Lamacchia are the owners of McGeough Lamacchia Realty and they have some advice on avoiding the pitfalls. Most cases people don’t want to say, look at the market and say oh the market looks like this, unless you’re looking to invest or flip a home you really have to do what’s right for you.

We’ve been saying that for years. You never want to time the market. When buying a home you should look at it as something long-term. The days of flipping a home are long gone. Even investors aren’t seeing the margins they once did. So we encourage homeowners to do the research on the schools, on the neighborhoods and make sure they’re willing to plan some roots for 7 to 12 years because even 5 years isn’t enough time to build equity and really benefit from home ownership.

There was a time when you could put in 5 years

That was as early as 5 years ago. Those days are long gone. This is a market we anticipate to be around for the next 15 to 20 years.

You should look at what loan you’re approved for and what you can afford

Years back when the market was hot, I can remember friends calling saying “I got approved for 400,000” And I’d say, “well maybe you should look at homes for 300,000.”

I remember for my first house I was approved for a ridiculous amount and I just thought this is insane.

People were spending upwards of 40% to 50% of their income on their mortgage and now I think it’s more where it should be, now you need good credit, you need to have a down payment and be able to make payments without a problem.

If you decide to go for an even lower percentage with Adjustable Rate Mortgage (ARM) there’s a danger there, because you can get a lower rate but it’s going to go back up.

Once again buying into that philosophy of stay put for quite some time, it’s not that we frown upon 3 or 5 years ARMS but rates are low enough now if you’re going to do any type of reduction instead of a 30 year fixed rate, do a 15 year. You’re going to be in the 3s, be able to pay the principal down much faster,  rates are so low, if you get an ARM what do you save a couple of hundred dollars? Why take the risk, the rates will go up. There’s no question, they cannot stay at these levels forever. So buyers are getting spoiled so there’s some caution they should take.

Guys I appreciate you coming in giving us buyer beware and giving us some advice.

Our top story this evening, the economic struggle hits home. Housing prices, a bargain in many areas, mortgage rates are at their lowest in decades. Still buyers are not buying. Sales of previously owned homes fell 27% last month, the lowest level in 15 years. The report added to fears the housing market will pull the rug out from under the already slow economic recovery. Stocks sold off, the market is at a seven week low.

All regions of the country recorded sharp declines. Massachusetts, which has been doing well this past year, saw home sales drop for the first time in 12 months. Our Peter Howe joins us with the local angle, Peter.

Yeah thanks Chet. This certainly is as true in Massachusetts and New England as the rest of the country. The first time home buyer tax credit this spring clearly was playing a huge role in driving up home and condo sales, and now that that tax break is expired, it looks like, from these new data, another bubble, a mini bubble in the housing market has burst.

Like real estate agents across New England, Anthony Lamacchia was expecting to see a slow down this summer after the first time home buyer tax credit expired.

Anthony- “A lot of the people, who would’ve bought in May and June, ended up buying February, March, early April. So it created an urgency because of that April 30^th need for a signed contract.”

What stunned Lamacchia though, was just how badly sales dropped in July, down 28% from a year earlier, according to the MA Realtors Association. That’s the biggest drop since March 2008 and represented the fewest homes sold in a July since 1990. Nationally, the same. US homes sales off 27%.

Anthony- “We expected the market to greatly slow down following the expiration of the tax credit. The thing that did surprise us, it was a worse slow down than we had anticipated.”

Vincent Valvo with the Warren Group, publisher of Banker and Tradesman. He looks for sales and prices to drop the rest of the year.

Vincent – “The first time home buyer tax credit clearly took lots and lots of people and pushed them into the market. I mean you’re going to give somebody and $8000 gift to buy a house? It’s a great incentive.”

So what if you’re trying to get from “Home for Sale” to “Sale Pending”? Well experts say the key in this market is to be realistic, not greedy about what your home or condo is worth.

Vincent- “If you’re a seller, if you recognize that the market is working against you, price your house accordingly.”

Anthony- “You definitely want to price your home as well as you can from the beginning. One of the biggest mistakes that we see is people shooting too high from the beginning and then their home sits on the market for months on end. And what happens after months on end? Their value comes down.”

Vincent- “It’s going to be painful to price at what the market level is really at right now, but don’t delude yourself.”

Now one interesting thing is you dig into these numbers in eastern Massachuetts, town by town, as a general rule, home sales fell even more than the state average in communities along Interstate 495, places like Franklin and Shrewsbury and Billerica. But closer to Boston, Cambridge, Revere, Quincy, Somerville, sales held steady or dropped considerably less than the state average. You can certainly look at that as more evidence that what was leaving the market were people shopping in first time home buyer communities out on 495. Chet.

Business reporter Peter Howe, thank you Peter.

Part of the reason home prices are so low is that foreclosures are running about ten times higher than before the housing bust. Some good news on that front tonight. A group of banking officials say earlier predictions of a coming wave of defaults may not pan out. They say borrowers who’ve had their mortgages modified recently are faring better than those who had them altered earlier in the housing crisis.

The housing slump continues in Massachusetts. Home sales plunged last month and prices are down.

So is this a sign of things to come? And what’s a homeowner really to do? Business reporter Peter Howe joins us with a closer look. Peter, I mean it’s hard not to be depressed by these latest comparisons.

No, and I got to warn you Latoya, I’m not going to make you a whole lot happier in the next two minutes. Now, of course you do have to be a little careful comparing this market to a year ago because this time last year the first time home buyer tax credit was in full swing. But, back then it was widely hoped that that credit would just be a short term stimulus, and by now the real estate market would have fully recovered. But the reality is, sales remain deeply depressed and really don’t show signs of improving this year.

Here in Watertown, Massachusetts, Anthony Lamacchia recently accomplished something that’s tougher and tougher for New England realtors these days.

Anthony- “We sold this property in about a month.”

The owners had bought the two-family at the worst of the bubble in 2005 – $645,000. Now facing foreclosure, they agreed to a short sale at just $489,000.

Anthony- “We put it on at the best price that we thought was right. And after about 3 or 4 weeks it didn’t sell, so we brought the price down.”

By cutting another $50,000, Lamacchia landed a buyer. It’s a success to celebrate because new data from realty experts, the Warren Group, show May home sales were down 25% in Massachusetts from last year, condos off 38%. Year to date, 19% fewer homes are selling.

Unfortunately I can’t give a positive prediction for the rest of the year. I actually think we’re in shape right now to finish the year, in terms of housing sales, as probably one of the worst years we’ve had in almost the last decade.

Last spring, of course, sales were being juiced by the $8000 tax credit for first time buyers. Besides the end of the first time home buyer tax credit, another big factor chilling the market experts say, mortgages. Much harder to get them these days. Banks used to throw money at borrowers five years ago. No doc liar loans have tightened up lending standards dramatically in the last year.

You have to go through a lot more hoops to get the mortgage these days. So that has had a bit of an effect.

The lesson if you are selling a home?

Anthony- “Price it right. Don’t get caught up in trying to getting the extra dollar or trying to outdo your neighbor. Price it right from the beginning and try to sell it as soon as possible. Homes sell for the most money when they’re sold in the first month.”

Now, after all that, one small bright spot. Sales prices in Massachusetts in May were up, a little over 3%. Highest average prices that we’ve seen since August 2010. With that said, Vincent Valvo from Banker and Tradesman, the Warren Group, and other experts think that May increase is probably just a one month fluke and for the long term, as long as the number of homes selling stays so far down, prices are probably going to go down with them as well. Latoya.

It can’t be all bad news Peter, I won’t believe it. Any geographical trends, places where homes are selling better than others?

Well, you know, that it is a good point. It’s definitely still very tough in Massachusetts, in Brockton, Peabody, Lowell, some of the depressed order cities. But there certainly are some upscale markets, upscale communities with great schools like Brookline, in Massachusetts, Duxbury and Hingham on the South Shore. Those are doing really well in May compared to a year ago. Both sales and prices up. There is a reason you’ve heard the phrase a million times. Location, location, location.

Alright, Peter Howe thank you.