Article 1 (The Back Bay Boom.) Article 2 ( Four Common Mistakes Made By Home Sellers, And How To Avoid Them) Article 3 (Happy 1998... The Right Year To Buy!) Article 4 (Seller - A home inspection prior to listing may be the ounce of prevention you need.) Article 5 (Insure Your Possessions Properly) Article 6 (Michael Merrill Q&A) Article 7 (What to Consider When Preparing and Pricing Your House or Condominium for Sale?)

The Back Bay Boom By Rick Fedele Boston's Back Bay, once grassy wetlands, is today an exclusive, desirable section of town - and the location of fantastic real-estate opportunities. Nothing compares to Newbury Street adorned with sidewalk cafes and boutiques. Or the appearance of brick sidewalks and lantern-like street lamps juxtaposed with skyscrapers and subway stations. Turn-of-the-century brownstones line many of the streets in this historic neighborhood, surrounded by modern, multi-story complexes. Additionally, the proximity of many world renowned educational institutions makes Boston alive with youth and diversity. In this respect, the real estate market in the Back Bay holds something for everyone. The boom in the Back Bay is primarily a reflection of the upswing in today's economic climate. Craig Gilmartin, a lawyer who specializes in real estate, said, "The difference is now inventory. In the 1990s there are many more owner-occupied properties than in the 1980s when there were many more investor-owned properties." The market in Boston was filled with foreclosed-on properties, and many developers - upon completion of renovating Back Bay buildings - found themselves unable to sell and were forced to under price their units. "In my experience, when the stock market is doing well, interest rates are low on mortgages," Gilmartin said. "People feel good about the future - they can get good interest rates - and they feel good in general about the economy." It's a simple law of supply and demand. Over the past two years, there has been a shortage of inventory, which drives up sales. "Couple this with paying rent," said Gilmartin. "When people run their numbers and realize they could be paying less by owning, this makes for a frenzied market - opposite of the market in 1990 and the late eighties." Colin Lord, a local real-estate appraiser thinks that the booming market in Boston's Back Bay can be attributed to a number of factors. "The economy has really turned around, giving buyers a renewed sense of confidence," Lord said. "There are lots of properties on the market, and they're being sold in as little as three months. People decide quickly, and so there's a very fast turnover." "There are more buyers due to a hot, strong economy," said Lord. "Hiring trends are drawing people to Boston in droves and this leads to heightened prices. If five buyers are bidding, it drives up the price and the market gets smaller, exaggerating the shortage." Mark Bensky of Hunneman & Company/Coldwell Banker also feels that the influx into the area is due to the strong economy. "A lot of people are moving to the area from outside Massachusetts - especially the 'empty nesters,'" said Bensky. "They'll sell a house in the suburbs to buy a house or condo in the city or maybe a summer home. It's a completely different profile buyer now in comparison to the 80s - ranging from the mid-20s to senior citizens. Now everyone is buying for a place to live, rather than buying and flipping the property to make money. Enrique Darer of Russell Development agreed with Bensky's view, "Not only the economy, but I think that the demographics have a lot to do with it. The empty nesters are basically who we're seeing... lots of people in their mid-to-late-fifties are selling their houses in the suburbs and moving to the city." "I foresee that this high level of demand will continue to exist for one or two years, at least," continued Darer. "There is very little supply to meet the demand that exists. I have purchased quite a bit of property and sold it all. I've bought townhouses and turned them into single family homes, and I've rehabbed 3 to 4 townhouses and turned them into condo units to meet the demand. I'm finding it very difficult to find and buy property." Scan the real-estate section of the Boston Globe, or surf the 'net and you'll see the features that have made Boston's Back Bay the hippest place to live... elegant, spacious rooms, fireplaced living rooms, spectacular views, hardwood floors, high ceilings, tin ceilings, charming, detailed woodwork. "Commonwealth Avenue - from Arlington to Fairfield - is the nicest area. It has the beautiful mall of Commonwealth Ave. and it's near the Public Garden." With features this compelling, it's no wonder that choice properties in the Back Bay are selling for over $500 sq. ft., and price tags have skyrocketed into the millions. For more details on the real-estate market in the area that everyone is talking about, contact Rick Fedele at Summit Funding. Richard Fedele is President of Summit Funding, a Boston-based mortgage company with offices at 376 Boylston Street. Summit is an affiliate of Pacific Guarantee Mortgage Company (PGM), based in Greenbrae, California. PGM is the largest mortgage broker in the United States with a full line of loans and an annual volume in excess of $1 billion. PGM has more than 40 offices and 135 loan originators throughout the country, and brokers its loans to a network of more than 200 nationwide lenders. For additional information, please call 617/859-0900.

Four Common Mistakes Made By Home Sellers... And How To Avoid Them By Jay McHugh of RE/Max Affiliates   1. Not Preparing Your Home To Look Attractive To Buyers. Your home is competing with more than 1,000 other homes. Buyers buy on emotion, not logic. The best marketing program in the world can only bring lots of buyers into your home, it can't make them like the home. See our "How to Show Your Home" brochure. 2. Signing A Long Term Listing Without A Written, Specific Performance Guarantee. Don't rely on verbal promises. Make sure that you receive a written promise stating that you can cancel without charge of the performance is other than what was promised. 3. Not First Obtaining A Qualified Bank Appraisal And Commitment For Financing From A Home Lender. How would you feel if your home sold for $56,500 and then you find out from the bank appraiser that it was worth $60,000? In today's real estate market, this happens often! Your home will have to be appraised by a state licensed bank appraiser sooner or later. Sooner can result in several extra thousands of dollars in your pocket. Bonus: Buyers are afraid of paying too much for a house. That's why they often make low offers. A certified bank appraisal helps you sell for full price because the buyer can see that the price was established by a professional third party. 4. Not Obtaining Written Pre-Approval For A New Home Loan For Your Next Home. Nothing is more heart-breaking than to sell your home and find your new dream home, only to find that you can't obtain financing for the dream home. A pre-approval is a formal, written promise by a home lender to make you a new home loan. It costs only $100, which will be applied to your down payment when you get your new home. Do not confuse a "pre-qualification" with a formal pre-approval! Verbal pre-qualifications are just that - verbal. They are not binding on the home lender. Many people have received verbal pre-qualifications only to later be denied a home loan.

Happy 1998... The Right Year To Buy! by Peter Ziegelman Tick Tock... Tick Tock... Tick Tock... 1997... 12 AM... 1998... A new year is dawning and with all the holiday festivities behind us, one's mind is jolted into the realities of January, tax season fast approaching and the quandaries of the New Year! Where do I go from here... Job change, making a change in living arrangements, new relationships, what to do with all those unwanted gifts... and much more! In any case, one of the things you should be asking yourself is, "Am I using my money to the best advantage?" If you have never considered the possibility of owning a home, now is a great time to do so. If you are currently renting and have been thinking about buying, take into consideration the following: 1. Renting does not afford you any of the major tax savings that buying does. 2. The interest rates are lower than they have been in years. 3. You can put as little as 3% down of your own money with some loan programs now being offered. 4. Property taxes can be written off. 5. You gain equity in what you own versus a rental where nothing is gained along with the satisfaction of owning your own place. After considering those five major points, there are a couple of general points you might want to consider. The first one being that although quite a few articles have been written saying it is a sellers' market, keep in mind that the interest rates are the lowest they have been in years, so it all evens out in the end. The second point that you might want to consider is that the South End is a premium place to live and with rents as high as they are, you will be surprised how owning can be cheaper in the long run after all tax savings. The market in January has become very busy the last couple of years with sales in the South End being almost as high as in the middle of the Spring season. Don't be fooled by the cold weather... There are plenty of great properties on the market and people are buying them up quickly, so you need to do your homework and be ready to act on that one special property you really like as there are no two alike. Once you have decided that maybe it is a good idea to buy, the best way to do this is two-fold. First, you want to choose a Realtor. This can be a difficult process if you are not familiar with the area, but you should drop in on a few brokers and chat with them to see who you are comfortable with. Keep in mind that corporate real estate companies are not always the best choice... just flashier. Many times you will find in smaller, local companies real estate brokers who have been doing business for years in the area where you want to buy. If you are looking for that one on one personal approach, check them out. Also, the smaller companies have the same listings as everyone else so you will see everything that is available. The key is to be comfortable with who you are working with. The second thing you will want to do is go to your local bank and see what you can spend on your new home. This will give you a ball park figure to work with. This by no means ties you to that particular bank and you should mortgage shop once you find the place of your dreams, but at least you have a starting point. Now that you have found the broker you want to work with and have a general idea of what you can afford, make up a wish list of what you would like in the home of your dreams. remember that you may have to be a little flexible but should be able to find what you are looking for. Also keep in mind that a home with some work to be done will probably be cheaper than a newly constructed or "flashy" home will be. If you are willing to do a little work to make it your dream home you may be able to save quite a bit of money and have it exactly to your specifications. Just remember one final thing when you are contemplating the buying process... Let it be FUN. If it becomes a chore then maybe you should wait until a better time. Most of us make mistakes when we don't like what we are doing. So ENJOY! Check out the South End as it has some of the best neighborhoods, restaurants and shops in all of Boston. It is a great place to live!

Seller - A home inspection prior to listing may be the ounce of prevention you need. By Joe Rizzo   Much has been written of the value a home inspection provides. To a buyer, it is a safety net -- a realistic assessment of a property's condition, and evaluation of deficiencies. Although not its primary function, a home inspection can serve as the catalyst for a re-negotiated purchase and sale agreement. Such re-negotiations may result in repairs assumed by the owner, a reduced selling price, or, where serious defects are discovered, revocation of the offer by the purchaser. More and more, buyers are having home inspections performed prior to purchasing a property. Buyers frequently seek the realistic, third party, professional assessment to confirm that their choice is sound, or shed light on what future repairs mat be needed. While inspectors do not recommend whether a buyer should or shouldn't purchase, their findings carry considerable influence. Historically, inspections have been performed at the request of the home buyer. But consider the plight of the seller. He (or she), too, has a lot riding on the transaction. A sale that falls through can be disastrous for the seller, too! He may have purchased a new home, contingent upon the sale of the existing property. Without funds from the present sale, the new purchase would likely not go through. No one wins when a transaction doesn't go forward. A home inspection report with negative findings may surprise the sellers as much as the buyer. The seller may genuinely believe the property to be in good shape. Unknown conditions, however - termites, for example - could alter that assessment.   GOOD INSURANCE FOR SELLERS AS WELL Home buyer's sales agents or lawyers generally recommend an inspection. In this case, what's good for the buyer is also good for the seller. Because surprises are equally damaging to sellers of property, the seller should get a "pre-sale inspection." While an inspection prepared for a seller will not be a substitute for a buyer's inspection, it nevertheless serves a useful purpose -- alerting the seller to potential conditions that could alter or delay a sale. People who live in a house get accustomed to the property and may not see conditions as shortfalls that a potential buyer might. For example, a 22-year-old furnace may still be working beautifully. But statistically, it will need replacement within five years. That's an outlay of $1,000-$2,500 that the buyer might not anticipate. A professional home inspector is trained to notice what most people are not trained to see. An inspector serves as a detective, looking for existing or potential problems. With no vested interest in the sale of the property, the objective diagnostic report of the home inspector will enable the seller to determine what needs repair prior to putting up the "for sale" sign.   CHECKING EVERYTHING, INCLUDING THE KITCHEN SINK! An inspector will check the complete exterior of the house, including the chimney, surface condition of the roof, flashings, gutters and down spouts. He will check the exterior sill, foundation, and the grading of the lot to be sure it is pitched away from the house. The inspector will then enter the basement and view the mechanicals, such as plumbing, heating, electrical and central cooling system. He will check the sill, foundation, floor joists, main carrying beams and supporting members. The inspector will also check for wood boring infestation and water penetration, past or present. He will check the kitchen and condition of appliances. All doors, ceilings and floors on interior rooms will be checked. An inspection will also check the ventilation and insulation in the attic, which provides a better idea of the exact condition of the roof. Inspection companies provide two kinds of reports. One is an itemized list with written commentary that is delivered on site. The second is a written narrative that the client receives several days later through the mail. A thorough home inspection takes between two and three hours. It is advisable to accompany the inspector for the complete inspection. Home inspections generally range in price from $150 to $350. The best source for finding a competent home inspector is the recommendation of someone who has used a firm's services in the past. In determining if this firm is the right one for you, ask about their level of experience--how many inspections the company has performed, how many they do annually, and what kind of training their inspectors receive. Also, the inspector you choose should belong to a national organization that requires compliance to a code of ethics. As a prospective seller, an objective, realistic evaluation of your property's condition will be of great assistance when placing it on the market. Knowing what objections, if any, are likely to be raised in advance will help you deal with them in a way that keeps the sale moving along smoothly.   (Editor's note: Joe Rizzo is president of Tiger Home Inspection Inc., a firm providing a full range of home inspection services. The company provides immediate, on-site reports to clients and completed more than 15,000 inspections last year. Tiger Home Inspection has been serving Eastern Massachusetts, Rhode Island, Cape Cod and the Islands and Southern New Hampshire since 1987. In addition to home inspections, testing is available for RADON, water quality and quantity, Title 5, and the detection of wood-boring insects. The firm maintains central offices at 969 Washington Street, Braintree, MA 02184 and has field inspectors at locations throughout New England. For additional information on services provided by Tiger Home Inspection, please call 1-800-628-4437.

Insure Your Possessions Properly by Richard Mazzerala, Eastern National Insurance   Replacement cost by definition in the typical insurance policy is the replacement of the destroyed or stolen item with a new one of like kind and quality without any deduction for depreciation. Most homeowners policies today are written with replacement cost valuation on the building, but many still provide actual cash value on the contents. It is important to make sure that you can have replacement cost coverage on your contents as well. Many insurers increase the Contents limit from 50% of your dwelling limit to 70% of the dwelling limit when you add replacement cost coverage on your contents. This substantial increase in the Contents limit when you have replacement cost coverage should be a clear indication that reduction in value due to depreciation causes a significant decrease in the amount of money you will collect when your insurance is written on an actual cash basis. Whether the item destroyed is real property, such as a house or part of contents, such as furniture, the process is simple as long as the item in question is widely available at standard pricing. Let's consider some examples to illustrate: Example No. 1 - Kitchen set bought at Wal-Mart for $349 five years ago and recently destroyed in a fire. You go back to Wal-Mart after the loss and buy a comparable set for $489. If you carry replacement cost coverage on your contents under your homeowner's policy, there is no problem, your homeowners insurance company reimburses you for the $489. Without replacement cost coverage, you would receive the actual cash value of the destroyed kitchen set, which is equal to the replacement cost at the time of the loss less depreciation. While there are no hard and fast rules involving the depreciation, let us assume that the adjuster gives a kitchen set a useful life of twenty years. If you had a cash value policy, you would receive $489 less 25% depreciation = $367. You would make up the $122 out-of-pocket. Example No. 2 - Items with a much shorter useful life pose more of a problem to homeowners without replacement cost coverage on their contents coverage. Clothing is perhaps the most common item. Let us assume there is a fire in a closet. There is $2,000 worth of suits, dresses and shoes that are two years old on average. With replacement cost coverage, you would go out and buy new suits, dresses and shoes of like kind and quality and be fully reimbursed by your insurer. On the other hand, if the insurance is written on an "actual cash value" basis, the depreciation expense in this case could be 50% or more, which means that you could be out of pocket for more than $1,000. There are a couple of wrinkles that you should be aware of regarding valuation regardless of whether you have replacement cost coverage on your contents. 1. Certain items such as jewelry, furs, cameras, musical instruments, silverware and golf clubs must be specifically listed in order to obtain "replacement cost" coverage on them. 2. Other items such as antiques and collectibles are not eligible for "replacement cost" coverage, but must be separately listed and valued in accordance with a current qualified appraisal. Replacement cost coverage on a piece of jewelry does not mean that you will receive the appraisal value in cash in the event that it is stolen or destroyed. There is a tremendous mark-up between wholesale and retail jewelry. Most of the insurers have an account with one or more of the large jewelers in the area and can buy the jewelry at wholesale prices, which average about 65% of retail. What this means to you in the event of a loss is as follows: Example No. 3 - Ladies diamond ring, listed on the homeowners policy with qualified appraisal slip with a detailed description and appraised retail value. As part of the description is the size, the type of cut, the number of facets and the quality of the stone. For this example, let us assume that the ring is valued at $5,000. The insurer will typically tell you to take a copy of your appraisal slip to a designated jeweler and pick out a replacement ring. If you decided for some reason that you didn't want to replace the ring, you opted for the cash, the insurer would offer you approximately $3,500, which would be the price that they would have to pay to replace the ring.

Q&A with Michael Merrill of Merrill & McGeary, a real estate attorney.   Q: I am a Trustee in a condominium. Recently, a unit owner complained to the Trustees because the ceiling in his unit was sagging and appeared to be buckling. The Trustees retained an engineer to investigate the ceiling. The engineer found the roof trusses to be in need of support. Apparently, the original installation was not performed correctly by the builder. The repair of this problem could be a substantial cost to the Trust because the ceiling trusses are common area. The condominium was constructed in the late 1980's. Can the Trust sue the builders?   R.Z., Cambridge, MA   A: The Trust can sue the developer, builder, architect and/or subcontractors for breach of contract, breach of express and implied warranty, negligence, misrepresentation, and perhaps violations of the Massachusetts Consumer Protection Statute. The key issue, however, is not whether or not the Trust can win. Litigation is very expensive and unless there is a reasonable likelihood of success I do not recommend heading down that trail. A likely defense which will be raised in a case of this nature is the statute of limitations and/or the statute of repose. The statute of limitations states, for example, in part that action for breach of contract should be commenced within six years after the contract is breached. Actions for misrepresentation and negligence must be commenced within three years after the cause of action accrued. The statute of repose indicates that any action of tort for damages arising out of any deficiency or neglect in the design, planning, construction or general administration of an improvement to real property shall be commenced within three years after the cause of action accrues, provided, however, that in no event shall such be commenced more than six years after the earlier of the dates of: 1) the opening of the improvement to use or 2) the substantial completion of the improvement and the taking of possession for occupancy by the owner. As this claim appears to be arising at least eight years after the condominium construction was complete, it is unlikely the Trustees' claim would prevail.   Q: I decided to look at houses just to see what was available on the market for sale. I had no intention of actually purchasing a house. However, last week I found the perfect small house in a good town and in a nice neighborhood. My husband and I really want this house, but our condominium unit is not even on the market for sale. I can't afford to purchase the new house without selling my condominium. Is there anything I can do to buy this house?   T.C., Boston, MA   A: There are a number of options available to you. Much depends upon the willingness of the seller to work with you in terms of the contingencies in the purchase and sale agreement and the closing date. My advice is to move quickly to make an offer on the property because the real estate market in the Boston area is quite strong. I recommend you push the closing date for the property out as long as the seller will, for example, ninety days. This will give you time to put your condominium on the market and hopefully sell it before the ninety days elapse. If the seller is agreeable you could make your purchase of the house contingent on the sale of your unit. However, many sellers will not agree to these terms. Try to negotiate as low a deposit as possible. In the event your condominium does not sell and the purchase fails, your deposit will be the damages retained by the seller. If your condominium is not under purchase and sale within thirty to forty-five days of the closing date, you should investigate whether or not your bank will provide bridge loan financing on your condominium to provide the balance of the funds you need to close. There are lenders that provide this service when their is sufficient equity in the buyer's property. Essentially you will carry two loans while waiting for your condominium to sell. One key to making this strategy work this is not to over price your condominium. The more realistic the price the faster it will move.

What to Consider When Preparing and Pricing Your House or Condominium for Sale? by David Friedberg/ Sarah Rosenfeld, Sr. Vice President, Co-Manager of Hunneman & Coldwell Banker I assure you that the most often heard cliché is, "Location, Location, Location!" While there is truth to that old adage, a new factor has taken hold... "Condition, Condition, Condition." It may now be the best reason today that property is selling quickly as long as it has the right "Price, Price, Price." A "good location" still commands a "good price" while a "poor location" may command a lesser price. However, the big equalizer in today's marketplace is the condition of the property. More and more buyers are of a dual income profile. They oftentimes have sufficient down payment for purchase and a wonderful income that may support a higher purchase price. The problem comes into play if the home or condominium needs cosmetic fixes because it is dated or simply is in need of repairs due to deferred maintenance. The buyers are both working and probably have a hard time finding the time to renovate. The income is available to support a sizable mortgage, but often times, when you figure out how much it may cost to buy a home, the additional money for renovations may not be readily available, but more importantly the desire to do the work may be very low. What is the solution? Make yours a Blue Ribbon property. You should make the condition of your home as appealing as possible and price it according to the comparable sales in the area. The cosmetics and the systems are of major importance. It may sound like a lot of work to do to sell your home, but if it means finding more qualified buyers for your home who can and are interested in purchasing your home, then you are more likely to obtain the highest price in the shortest possible time... a goal that most sellers maintain when placing their home in the market for sale. "Dress your house for success!" Naturally, there are certain fixes that are "do-able" while others are not - this is not to suggest, though some do, that you should renovate much of your home before you sell. Some simple things such as cleaning out the clutter, or rearranging the furniture to show off the space are often an easy fix. Other more involved changes may include ripping up some carpet that is sorely worn or in great shape but extremely dated. How about repainting? Fixing the bathroom tile or replacing the linoleum in the kitchen? Freshen up and neutralize the look of the rooms thereby allowing more prospective buyers to "see" the home. They may then be able to place their belongings within the space they have to work. It is difficult for many when all the see is harsh color of the walls or the items that need replacement or repair. When a buyer can move into a home and not have to do any work, they will generally pay more for that home and are more apt to stretch to make it work. In some cases, it may mean attracting a buyer at all in a reasonable price range. Make your home clean, fresh, in good working condition and price it well and you will attract more ready and willing buyers. In the end, you may get more than you thought you would be able. We specialize in presenting you with all the options and working with you to custom tailor a strategy that best serves your needs and desires. Let us help you decide how best to "dress your home" for a successful sale.