Month: October 2009

Check with the Building Department Before You Buy A House

Last week I took my buyers to a new listing in Needham. The house was great for $599, it seemed almost too good to be true. The open house was scheduled for the next day and my buyers were the first to view the house. They both loved the house and wanted to make an offer. We walked around outside and saw that there was a sizeable wooded field across the street but you could see that cars or trucks had been going onto the field. I inquired with the Broker about the land and was told that the land is zoned for 4 houses each on a one-acre lot. We drove around the corner and down a side street to the other side of the land. The buyer got out of the car and headed down a wooded path only to discover a few deer, a large flat area surrounded by trees and brush, but nothing going on. Satisfied we went back to my office and wrote an offer. Since we wanted this offer accepted before the open house, we made an above asking offer. The sellers countered and my buyers agreed, we had a deal. The open house went on as planned and the buyers took one of the mom’s to see the house, as expected it was mobbed with prospective buyers and my clients were thrilled. The inspection was planned for Monday. I arrived at the property 10 minutes after the inspection started but my partner was there. She said you could here drilling of some type across the street. I walked over to investigate a little further and was stopped by a gentleman testing the soil. We chatted a few minutes and asked when the groundbreaking would begin for the new homes. Looking a little uncomfortable, he told me he did not know anything about homes, they were testing the soil for a building. Alarmed, I immediately drove over to the building department, I gave the address and told my story but there was nothing “on the books” for this lot. I walked over to the engineering department and told my story again. The engineer pulled out the town maps and lo and behold, we saw the field had become a cul-de-sac with a new name. Sure enough, there were 4 one-acre plots on the lot. I went back to the building department and now asked for the information on the new street-oh, she said, “that is our huge project”. She handed me an enormous package and in it contained APPROVED plans for a 49,000 square foot building and parking for 70 cars, all directly across the street and within view from my buyer’s new home. I drove back to the house and briefed the buyers about what I had discovered, the husband and I went back to take a look at the plans. The look on his face was enough to know that their dream home would turn into nightmare home. We went back to the house; the inspection was still taking place and relayed all the information to his wife. Needless to say we halted the inspection, Susan and I paid for the inspection and left. I later called the Broker to inform her that the buyers were definitely walking away and to return their $1000.00 good faith offer, of which she has.

Luckily, for all of us, no harm came to the buyers and they did not lose any money. Never again will I see something that doesn’t look right to me and take someone else’s word. I am not suggesting she mislead us, I don’t think she knew. Nevertheless, my instincts were right to question the future plans and under normal circumstances, I would have gone to City Hall, but since time was of the essence, it was not possible. Do not put down your P&S money without knowing as much as you can about the site of your future home.

Newton 3rd Quarter Real Estate Stats

Fall continues to be very busy with buyers in all segments of the market. The stagnant high-end market has also seen a turn around since many buyers have stepped up to the plate in the past month or so.
So far the 3rd quarter of ’09 130 homes have pending contracts and 199 have sold. 2008 saw 99 homes pending in the 3rd quarter and 168 properties sold, a 30% increase in pending contracts and about a 20% increase in solds. The most significant change has been in the high-end. That segment of the market came to a virtual hault until the summer. The break down follows:
2008 UAG
9 homes 1-1.499 million
3 homes 1.4-1.999 million
4 homes 2-2.499 million
0 homes avove 3 million
17 homes 1-1.499 million
4 homes 1.5-1.999 million
1 home 2-2.499 million
1 home 2.5-2.999 million
5 homes 3-4 million
So why are homes moving again? Quite simply, the prices have dropped. The median price of a single family home 3rd quarter of ’08 was $817,000, vs. $754,000 for the same time period in ’09; a decline of slighlty less than 8%. Interest rates are also lower than this time last year, although guidlines seem to change on a weekly basis. Historically, October has always been the smost volatile month on Wall Street; if we do not see any debacles there, I would expect the housing market to be on the upswing in terms of volume. I do not see prices rising substantailly if at all, but I do expect a more steady housing market here in Newton. Realistic buyers and sellers are the key to healthy real estate market.