On the Connecticut Shoreline, this is the best market for buyers in years.  That said, you still need to be ready when you see the property you want to buy.  Most important:  if you need a mortgage, do not pass GO, just get financing arranged so you have a solid preapproval letter to go along with your offer.  (I feel the need to do a post on financing, but stay tuned.)  The best offer you can make is the one that gives the seller the most confidence you can actually close.  So, put down a serious downpayment — 10 percent or more if you can.  Make the inspection period as short as possible.  Ask your agent to ascertain from the seller’s agent when it would be attractive to the seller to close.  Hint:  if the property is vacant, the answer is “yesterday!”  Once you’ve made all the non-price terms as attractive as possible, then if you want to make a low offer, I say, do it.  The sellers will likely counter and you’re in the wonderful world of real estate negotiation.  As long as you haven’t overly attached yourself to the house — a BIG mistake — you will be able to be hard-nosed about letting it go if you can’t get reasonably close to your price.  Negotiating is one of the most important things your agent will do for you, so be sure yours is comfortable with it.  As a former attorney, it’s one of my favorite tasks!

If your property is listed for sale with a Realtor in Connecticut, you should have signed not only your listing agreement, but also the long data sheets used to collect information to be entered into the MLS (Multiple Listing Service.)  Why do you need to see that stuff, you ask?  Well, for one thing, you know your house or condo better than anyone and you’ll immediately spot any mistakes.  But you also want to be sure that the paperwork correctly reflects how the commission that you’ve agreed to pay the listing brokerage will be shared with the buyer’s brokerage.  If you negotiated a total commission of 5%, for example, and expect the offer to buyers’ agents to be half, or 2.5%, you’ll want to be certain that your wishes are being carried out. 

With the slower market, some selling brokerages are, rightfully, feeling that their expenses for selling a listing are increasing because of longer market time.  To compensate, often they are not sharing the commission 50-50.  That is absolutely fine, as long as the seller agrees. 

However, remember that in this market, buyers are precious and you need every incentive to get them to see your property, including a competitive offer of commission to entice their agent to be sure to put it on the list to see.  Some buyers’ agents have, also rightly, tired of skimpy commission offers and are striking back by requiring their buyer clients to pay the difference and reducing offers to sellers by that amount.  So, if you, Mr. Seller, have agreed to a commission of 5%, and your listing brokerage is keeping 3%, such that the commission being offered to buyers’ brokerages is only 2%, don’t be surprised if an offer comes in with a note that the offer would have been higher, but the buyer is compensating his agent one half to one percent to make up the difference.

Under Connecticut law, real estate commissions are negotiable.  So, don’t stop negotiating after you agree on a percentage.  Continue negotiating with your agent to be certain that “cooperating brokerages, ” that is, buyers’ agents, will be offered an attractive portion of what you’ve agreed to pay.

Well, if you know me by now, you’ll already know the answer is:  it depends!  Before undertaking any project, be very clear about what your goal is.  Perhaps you want to renovate, add on or remodel strictly for your own use and comfort.  Perhaps your house is on the market and not selling so your goal is to increase its appeal to buyers and perhaps sell for more money than without the renovations.  I strongly urge you to ask a Realtor to help you make these decisions. Even though the market is tougher for selling now, making it more difficult to recoup costs directly, sometimes upgrades help to sell a house more quickly, which is more money when you consider the costs of carrying a property, such as taxes, insurance, mortgage and utilities.

Making it Too You.  Even if you plan to stay in your home, so you think it doesn’t matter if you add a custom indoor pool by putting an addition that takes up, say, all of your level backyard, life has a way of changing our plans for us.  Unexpected relocations, the need to live with aging relatives, divorce, or health issues can take us by surprise, and suddenly you might have to sell a home that you’ve overcustomized and made less valuable.  If you consult a Realtor before making costly personalized changes, maybe you can find ways to accommodate your desires with less downside to value.  Maybe you’ll decide to forge ahead, but at least you’ll be informed as you make those choices.

What are my best bets if I want to spruce up a house that’s not selling?  Two words:  Curb appeal.  If buyers don’t like the looks of the exterior of the home and the property, you’ve already lost a portion of the buyer pool.  The December 2007 issue of REALTOR Magazine, through an agreement with Remodeling Magazine, contains the annual “Cost vs. Value” report.  This 20th year issue demonstrates that exterior upgrades are tops in recouping investment in the current market. 

Projects with the highest percentage of cost recouped nationally were:  Upscale Siding Replacement 88%; Wood Deck Addition 85%; Window Replacement (with wood windows) 81%; and Kitchen Remodel (minor) 83%.  Interestingly, here in New England, land of practicality, replacement windows of vinyl and wood brought similar returns (and vinyl even beat out wood for return on investment in upscale applications, probably due to the much higher cost of wood.)

Because of the focus of this report, improvements such as landscaping, aren’t included, but there is no question that attractive and well maintained landscaping and hardscaping, such as walkways, retaining walls, driveways, and patios, can dramatically affect the appeal and value of a property. 

So the lesson of 2007:  pay attention to how your property looks from the street.  Consider how to address concerns, keeping costs in mind, but know that buyers prefer the work already done to doing it after purchase.  Not investing in needed upgrades will likely lose some potential buyers, lose you money in the form of additional time on the market, and, for those buyers who will undertake work, they likely will take more off their offer than the work would actually cost.  As always, there are no easy answers, but Realtors can help you make these choices.  Let me know what you decide and how it turns out!

Yes, this is still my real estate blog!  However, I am also a member of the Madison Board of Education and yesterday attended the CABE Conference in Mystic.  Board of Ed service is such a gratifying aspect of my life, but it can also be a major source of anxiety, stress and exhaustion.  It is precisely because of the potential for burnout that conferences with people who understand the work can be so uplifting.  Sharing information about current education issues and seeing some of the incredible work of colleagues around the state and the talents of students were highlights.  But, as I had expected, I found the most inspiration in the keynote by David Warlick of the Landmark Project.  He spoke on Redefining Literacy.  David’s premise is that in the rapidfire change that today’s students do and will live in, we can’t know what they will need to know, so they must become equipped to learn how to learn.  Read text, yes, compute with numbers, yes, write prose, certainly.  But in a world in which everyone can publish to the globe on the internet, kids have to know how to evaluate the quality of what they find there; how to use numbers to tell stories or make music; how to convey messages effectively using every multimedia tool available, not merely words.

David had spoken at the convocation for our opening of the Madison Public Schools in August.  [In fact, he prompted me to start blogging.  We all need to keep learning or be left behind.  Lifelong learning is no pleasant abstract phrase anymore.  It is the minimum we must all do.]  Let’s think about harnessing the creativity in our youth, let them run with the tools they know, and liberate them from a pencil and paper world.  In Madison, we’re taking steps in that direction, with the implementation of Blackboard, a course management software, which will help our teachers be 21st Century educators in delivery of instruction.  We’re on the journey.  I hope our country, State, and town can keep the focus on the future and be willing to invest time, energy, and money in education.  It’s never been more important than it is today.

This time of year, typically, sellers ask their Realtor whether they should keep their house listed over the holidays or take it off and put it on again “fresh” after the New Year.  As always, there is no universally correct answer, but my suggestion is to keep the listing active.  Some agents would tell you otherwise, but consider everything yours truly has to say, and remember that it could be that your agent would prefer uncomplicated holiday time off, though that may not be in your best interest.

Best reasons to keep your house actively listed over the holidays:

1.  In a slow market, with lots of inventory, you should stay in the game while others head for the sidelines.  Who WOULDN’T want to be on the field when the other team has players in the penalty box?
2. People who look at houses over the holidays are normally very serious buyers, or they’d be shopping and partying instead.  January is a big month for corporate transfers, making for holiday househunting and closings.
3. Houses look warm and inviting when decorated for the holiday season, which plays on the emotions of buyers.  Keep the fire crackling and the heat warm to make your home a haven from the winter chill.
4. Showings needn’t disrupt your plans — just inform your agent what times the house can’t be shown.  Most buyers will be able to be more flexible over the holidays because they have some time off.  Remember, showings don’t usually take all that long, so if you can, let your agent show the house around your plans — selling your home over the holidays could be your best gift!
5. If you’re thinking about pulling your home off and relisting in the Spring, remember that you won’t need for your listing to be “fresh” if it’s already sold!

 And what if it doesn’t sell, despite keeping it listed through the holiday season?  Have another eggnog and think about reducing the price.  Happy Holiday Home Buying and Selling!

From conversations around the town of Madison in the past week, it seems there is largescale confusion regarding the revaluation. 

News reports state that the Grand List increased by 39%.  If your revaluation increased by about that percentage, your relative taxes will remain about the same.  If your increase was more than 39%, your portion of taxes will be greater than it had been.  Obviously, if your increase was less than 39%, your relative taxes will be less. 

In my last post about the reval, I explained the process and gave details regarding more information and informal meetings with the revaluation contractor, Appraisal Resource.  Having visited the www.AppraisalResource.com website again during this week, I did note that the issue with the numbers of rooms and bedrooms seems to have been resolved — it seems the number of rooms had double counted bedrooms and then the bedroom number had been zero.  Now, I’m glad to report, I again have a 4 bedroom house with 9 rooms, rather than a 13 room, zero-bedroom oddity.  But it is still overvalued by at least 10%, so I’ll be making an appointment myself.  If you’ve been to one, fill us in on how it went!  Everyone wants to know!!!

Most residents of Madison opened the mail this weekend to find their “Revaluation Assessment Notice.”  I’m guessing few found their property decreased in the view of the Town’s revaluation contractor, Appraisal Resource.  That is as it should be because the last revaluation was in 2002 and property values have increased significantly since then.

 A few facts about assessments in Connecticut:

1. The figure property owners are taxed on, e.g., the “assessed value” is intended to represent 70% of the fair market value of the property as of the revaluation date.  To obtain the appraised, or fair market value, figure, divide the assessed value by 70%.  [For Madison residents:  this is what Appraisal Resource believes your property was worth as of October 1, 2007.]
2. Mill rates normally decrease after revaluations because the amount of money raised in the budget is essentially the same, while the Grand List has significantly increased.
3. The frequency of revaluations is in flux.  Formerly they had to be done every 10 years, but that was considered too long an interval, and the period was changed to 4 years, but, that is turning out to be too frequent, as towns find it very costly and barely clear the legal challenges before the next revaluation must be done.  Many towns have opted to defer for a year or more to 5 years.  Only time will tell if 5 years is, as Goldilocks would say, “just right.”
4. Some revaluations involve inspection of as many properties as the revaluation contractor can gain access to, while others are so-called “statistical revaluations” based on market value as interpreted by the revaluation contractor.

So, what to do if you don’t agree with your revaluation assessment?  In Madison, property owners may schedule an informal meeting to review the assessment with Appraisal Resource by calling 1-800-340-2262 between 8:30 am and 4:30 pm by November 9, 2007.  Appraisal Resource has a website that has the database information at www.appraisalresource.com however I wasn’t able to find explanations for how they calculate the number of rooms or make other determinations.  In fact, everyone on my block seems to have “zero” bedrooms according to the website.  Hmmm.

If you do have a meeting, take copies of photos or other records.  They don’t return originals.  Best wishes!

This is such a tough issue for homeowners whose houses aren’t selling.  They’ve already relocated, but the old home sits on the market.  I know this feeling first-hand because we had that happen to us 11 years ago.  Here are the factors you need to consider:

• Do I want to be a landlord?  A long-distance landlord?
• Can I sleep wondering if a tenant is harming my property?
• How long will it be before I can sell the house if I do rent it?
• Even if my tenants agree to allow my Realtor to show the house, will they make any effort to make it look good?

On the other hand:

• Can I afford to keep paying the mortgage, taxes, insurance and utilities without some rent offsetting a portion of those costs?
• How safe is my home if it is vacant?  Will anyone notice if the furnace fails before the pipes freeze?
• How well is my vacant house showing if the agent has a lockbox on it, the lights off, and the heat turned down to 50 degrees?
• Will the market be better in six months or a year? (If you have the answer to this, call me!!!!)
• Am I better off leasing to a tenant with an option to buy than keeping the house vacant?

Only you will know how you come down on these questions.  We never thought seriously about renting our house because we are the types who worry.  We had rented a furnished place in our new locale, so all of our furniture was in the house, and we didn’t want it damaged.  Our agent lived down the street, so we knew she was keeping an eye on the house.  And eventually the house did sell.

Still, renting could be the right thing to do if you might want to turn the house into investment property, or if you can find a tenant you trust, or if you just don’t want to or can’t afford to pay rent and the expenses on the house.  If you do decide to rent, however, do consider looking for a tenant who wants the option to buy.  These tenants will be more inclined to take care of the house, and you might actually get it sold faster than if you rented to tenants with no interest in a lease with option to purchase.

While in some parts of the country it is common to build new construction, in these parts the land available is becoming much more scarce.  Still, new subdivisions do exist, and some individual lots are available for sale.  So, what makes one lot better than another?  This is a key consideration because resale of whatever home you build on the lot will continue to reflect the relative desirability of the lot itself. 

LOCATION.  In Real Estate, location is always king, both in terms of the town and in terms of the placement within a subdivision. 

SIZE DOESN’T ALWAYS MATTER.  One important thing to know is that, when it comes to lots, larger doesn’t necessarily equal better.  If much of a lot isn’t usable because of steep grade or wetlands, that additional land has little additional value.

TOPOGRAPHY COUNTS.  In general, level lots are easier to sell.  Lots that look down at the street trump those that have to look up.

GET GOOD ADVICE.  What size house can be constructed on a particular lot will depend on many factors, including zoning requirements, such as setbacks, location of surrounding houses, quality of soil, availability of utilities and so on.  Particularly if you are buying raw land or if you are buying land and not a house package from a builder, your Realtor should make the purchase contingent on factors that are important to you, for example, obtaining required approvals for construction of a house of x bedrooms.  Be sure you know what you need to know, and find people who can answer your questions.

 FINAL WORD OF ADVICE:  If you have to make tradeoffs (and who doesn’t when buying a home?) go for the best lot and scale back on finishes in the house — you can always upgrade to granite countertops, but the lot is forever.

Market stats from the end of the third quarter are in.  In Madison, where the median sale price of residential real estate had risen 11.11% from 2004 to 2005 and 4.75% from 2005 to 2006, the median sale price dropped 3.25% from 2006 to date in 2007.  Still, with a median sale price of $532,000, most Madison homeowners should be feeling good. 

Guilford, where the gains from 2004 to 2005 had been 12.5%, and from 2005 to 2006, 6.06%, saw a very modest decline in median sale prices of 0.63% to date in 2007, and the median sale price stands at $474,000.  Guilford residents should be feeling good about their property values.

Th number of days on the market is an interesting stat also.  The average has risen in Madison from 62 in 2004 to 80 in 2006 to 95 to date in 2007.  In Guilford, in 2005 the average number of days a house was on the market was 62. In 2006, it was 83 days; so far in 2007, 81 days.  This is an average, of course, so some houses are still selling pronto, while others are on the market for many months.  Each price range has its own micro-market, so keep that in mind.