Sellers are Recording Buyers at their Showings

 

Here’s a story about a conversation I had with a referral partner of ours. She was showing a property. After leaving, she received a phone call from the Seller who is her client. He asked her, “Why didn’t you tell them about the fireplace? Why were you so bearish on the pool? The pool is great!” The listing agent sat back and thought: how could the Seller possibly know about these conversations? “Were you taping us?”

In MA it is illegal to record the audio of people who do not know that you are recording them. So what should you do?

Sellers: We recommend against recording anyone at your open house, especially without disclosing the fact that you are recording to them. You may be committing a crime. Technically, video taping may be acceptable but it is probably bad faith. You are trying to gain a competitive advantage by recording prospective Buyers. Sellers should disclose that the property is subject to recording.

Professionals: if you are aware of recording, you need to disclose that fact. It should be disclosed on the MLS. It should also be disclosed to each person that is walking into the house. We recommend asking the Seller if they are recording. If so, you should tell them that you will have to disclose this to all prospective Buyers. Further, if a Seller is able to view a potential Buyer and use their appearance in deciding whether to sell to that particular buyer, there may be a potential fair housing violation.

Buyers: you should assume that any house you may be walking through has recording devices. Simply walk through without emotion, without conversation and discuss once you leave the house.

Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

Assessment vs Appraisal: What’s the Difference?

 

We received another question: “What is the right number, an appraised value or an assessed value?”

First, what’s the difference? An appraised value is a number that is determined by a licensed appraiser. Appraisers must take continuing education classes, they must go through licensing, and often use multiple factors to determine what a fair market value for the property may be. For instances, comparable properties that have recently sold, quality of finishes, or other improvements can impact the appraised value.

Assessed value is determined by the town through the assessor’s office. An appraised value is almost always closer to fair market value. Assessed value is less accurate and is used only to determine your tax obligations.

Appraisals cost money, so what should you do if you want to sell? We always recommend against relying on an assessment. Usually, spending money on an appraisal not necessary because a quality agent can generate an estimated value by doing a comparative market analysis. The agent will come up with a range of what the house may be worth.

Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.

Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

Is a Handshake Good Enough?

 

We received this question from a referral partner: “if we agree verbally that we’ve accepted an offer, is that binding?” In short, no. To form a valid real estate contract in Massachusetts, the contract must be in writing.

Massachusetts Courts have upheld verbal contracts in other circumstances. There are certain types of contracts, like contracts for the sale of real estate, which must be in writing. Take a look at M.G.L. 259 § 1 if you are curious about the other types of contracts. We often see this become a sticking point in a situation where there are multiple bidders. When the high bidder is notified verbally that their offer has been “accepted,” the high bidder often think the contract is legally accepted. If it’s not in writing, it’s not technically accepted.

You may ask, what officially constitutes “writing?” Massachusetts courts have construed emails as acceptable writing. Be careful, texts may be sufficient to create a binding contract. If you are negotiating terms over text message, be mindful that a valid contract can be formed.

Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.

Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

Ghosts, Suicides and Homicides: Do Sellers Need to Disclose?

 

We received another viewer’s question: I am listing a home and I have learned that the former owner committed suicide, do I need to disclose this to all of the potential Buyers? We often receive this and other similar questions like: there is a suspicion of a ghost in the house, someone has died due to a homicide, do I need to affirmatively disclose these facts?

In short, under M.G.L. 93A § 108, there is no need to affirmatively disclose these types of items. It is important to remember that if a Buyer asks a specific question the Seller cannot lie whether that lie is explicit or by omission. Misrepresentation is very different from a duty of affirmative disclosure. The Seller must be truthful and honest when specifically asked. The statute specifically states that if a property is psychologically impacted, that is not a material item that must be disclosed.

If you have a question about what needs to be disclosed in a MA real estate transaction, contact Stiles Law at (781) 319-1900 or stiles-law.com.

Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy. Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

What is a 1031 Exchange?

 

In the last few videos, we have discussed topics related to real estate investing. This week, we are discussing 1031 exchanges. Your natural question may be, what is a 1031 exchange? A 1031 allows a real estate investor to defer the payment of capital gains by allowing a “like-kind exchange.”

When a real estate investor sells, they may have to pay capital gains tax. If that real estate investor intends to sell their property but wants to acquire another investment property, they can utilize the services of a qualified intermediary to perform a like-kind exchange. A like-kind exchange simply means that the property that is sold and acquired is of the same kind, that is, investment property.

What will you need? First, you must use the services of a qualified intermediary. An ordinary CPA or real estate attorney will not suffice—though you should consult both before attempting to perform such an exchange. A qualified intermediary is certified by the IRS to handle the proceeds of the sale. The real estate investor never touches the proceeds.

What are the basic limitations? A 1031 exchange is only available for investment properties. The investor must identify three properties within forty-five (45) days of the sale. Finally, the second transaction must occur within six (6) months of the sale.

1031 exchanges can defer capital gains taxes and substantially increase the real estate investor’s purchasing power. If you have any questions about 1031 exchanges or would like a referral to a qualified intermediary or CPA, contact Stiles Law by calling (781) 319-1900

Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.

Copyright © 2019 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts.

Massachusetts South Shore Real Estate Blog: Repair Negotiations 101 for Buyers

Nothing causes more hassle in the purchasing process than negotiating repairs after a Buyer’s home inspection. The scene is recurring: Buyers see their dream home at an open house, they spend twenty minutes walking around among their fierce competition, and then make a strong offer as quickly as they can. After a few rounds, their offer is accepted; then reality sets in. Their home inspector finds a myriad of latent defects which leave the Buyers reeling. What is a Buyer to do? This week, we’re going to tackle the psychology and logistics of negotiating repairs when buying a home.

Position your Request Strategically:  Remember that this is a negotiation, not a Seller obligation. It may be the case that the Buyer “wants” certain repairs completed, but the Seller needs to understand why. First, be sure to explain that the defects were latent or not easily noticed as they were certainly factored into the Seller’s pricing strategy. The apparent defects, peeling paint, outdated kitchen, and cracked tiles should have been factored into your initial offer. It is much more compelling to explain to the Seller why you could not have seen the defect that is causing you to revise your offer. Second, as soon as possible, send a proposal that is concise, professional, and understandable. Rambling emails, with misspellings and exaggeration, do nothing but anger the Seller. Third, be realistic. Some Sellers are incapable, for physical, logistical, or financial reasons, of making repairs. There is a difference between asking for more than you expect and overreaching. Fourth, the repair items may have been disclosed and factored into the price. Avoid the impression that you’re “double dipping.” Fifth, no house is perfect. Demanding the Seller deliver a perfect house is unrealistic. Finally, negotiations will often boil down to a simple question of whether you want to fight for sport or get the deal done.

Include the Repairs in the Purchase and Sale Agreement:  You may be advised to keep the repairs from the bank since “it might complicate things.” Our advice is to be fully transparent with your lender. While it may be aggravating to pay for a re-inspection by the appraiser, it is far better than allegations of mortgage fraud or violating consumer protection laws. Keep everything above board and disclosed.

Don’t Ask for Repairs:  You read that correctly. Sellers have a lot to do and most do not have the time and some do not have the money to make extensive repairs prior to closing. By getting, thorough, written, reasonable quotes from licensed service providers and proposing the Seller cover some or all of that expense by reducing the price or providing a credit, it gives the Seller the most flexibility with little effort. A credit, with the lender’s approval, is an appealing option as it will generally leave the Buyer with additional funds to complete the repair after closing or to compensate the Buyer for the effect that a repair item has on property value. One quick pointer: Sellers will often foresee your concern with a particular issue and gather quotes in anticipation of negotiation. As a Buyer, you may want to ask the service provider to state, in writing, that they will honor the quote for some period of time. It is unpleasant for Buyers when the cost of a repair balloons after a service provider refuses to honor their previous quote.

By following these tips, you maximize your chances of having the Seller agree to your proposed repairs or concession. Many deals fall apart during this stage of negotiation. By approaching with strategy, diligence, and integrity, a Buyer will be best positioned to have their proposal accepted.

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Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.

Copyright © 2016 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts. No child labor laws were breached during the creation of this Blog, further Bob Bonkley was compensated for his likenesses and appearances in the same.