Michael Seward Real Estate: Pioneer Valley & 5 Colleges Area Agency for the 21st Century Consumer


 

Pioneer Valley first-time home buyers can now make an offer on a home with zero money down thanks to a new program offered by MassHousing, the quasi-government agency that provides financing assistance for affordable housing.  MassHousing's down payment assistance comes at a crucial time, as home shoppers continue to struggle in a real estate market with few options in their price range.  With home prices rising as the inventory of homes for sale continue to dwindle, first-time home buyers need all the help they can get.    


The down payment assistance is a 15-year, fixed rate loan at 1% interest.  First-time home buyers can get as much as 3% of the purchase price or up to $12,000, whichever is less.  Under these terms, the maximum purchase price is $400,000.   The loan would be due in full if a homeowner sells or refinances before the 15-year loan period is up, as well.  Eligible first-time home buyers must also meet income requirements, and be credit-worthy.  


Some home buyers who qualify for a MassHousing mortgage may not quality for down-payment assistance.  


"To qualify for a MassHousing Mortgage, borrowers may earn no more than 135% of area median income (AMI)," MassHousing website states.  "To qualify for MassHousing Down Payment Assistance, borrowers may earn no more than 100% of AMI."


MassHousing lists the income guidelines to qualify by county on a spreadsheet linked from their website.   According to their data, home buyers can't make more than $80,000 in Franklin County, and they can't earn more than $66,600 in Hampshire County or Hampden County.

   

To qualify for a MassHousing mortgage, one can't make more than $108,000 in Franklin County, and $89,910 in Hampshire County and Hampden County.


Although MassHousing's spreadsheet lists Franklin County's area median income as higher than that of Hampshire County, the median single-family home price in Hampshire County was $68,000 higher than that of Franklin County in 2017, according the REALTOR® Association of Pioneer Valley (RAPV). The median single-family home price in Hampshire County was $272,000, while it was $204,000 in Franklin County.   Further, while Hampden County and Hampshire County are listed on MassHousing's spreadsheet as having the same area median income, the median sales price of a single-family home was $189,900 in Hampden County➖a $82,100 difference.  


The difference the single-family home median sales price between Hampshire County and Hampden County, despite having the same median income, is an indication that it is mostly people with higher-than-median incomes who can afford to buy a home in Hampshire County.  


The Boston Globe offers further details about what you need to know about this program here.   Ask you lender if they offer MassHousing loans.  Call Michael Seward Real Estate to buy or sell a home in the Pioneer Valley at 413-531-7129.  


Michael Seward is a Massachusetts licensed real estate broker and member of the REALTOR® Association of Pioneer Valley, Massachusetts Association of REALTORS®, and the National Association of REALTORS®. He is also a Certified Residential Specialist, Certified GREEN, Certified Buyers Representative, Certified New Homes Specialist, and Loss Mitigation Specialist. He has been a REALTOR® since 2003. Mike also holds a Bachelor of Arts Degree in psychology and a Master of Arts Degree in anthropology.




 

If you are planning on selling your home and your real estate agent suggests that you allow him or her to keep your most valuable asset off the multiple listing service (MLS) so they can only show it to their buyers, you should tell them no. You may also want to show them the door.  

While it is ok for a seller to request that their home be kept off the MLS, it is not ok for a real estate agent to suggest it.  


When selling your home, you want your home exposed to as many home shoppers as possible. More exposure means more interest in your home, which translates to a better sales price.  It is not in a home seller’s best interests to allow a real estate agent to keep their listing in a real estate agent’s pocket. That’s why it is also known as a “pocket listing”. 


The whole point of the MLS is to maximize exposure.  It syndicates listings across numerous real estate search websites. The MLS also allows other real estate agents to share your listing with their clients. The main reason for real estate agents to keep a listing off the MLS is to keep more of the commission for themselves. It’s greed. Massachusetts real estate agency law requires that agents put their client’s interests first. It’s called a fiduciary responsibility. Further, the MLS that local real estate agents use requires that sellers sign a form if they want their listing kept off the MLS. The same form also states that the real estate agent the home seller initiated the conversation. 


 Here is what a non-MLS listing form states exactly.


“The Owner(s)/Seller(s), by signing below, acknowledge(s) that the Broker has fully informed the Owner(s)/Seller(s) of the potenal benefits to the Owner(s)/Seller(s) of using the MLS for the sale/lease of the Property. The Owner(s)/Seller(s), by signing below, acknowledge(s) those potenal benefits and further acknowledge(s) the following:


1.  That, by not listing the Property with the MLS, (a) the Property will not be exposed to the more than 26,500 real estate agents who use the MLS and (b) without such exposure, the Owner(s)/Seller(s) may not have the opportunity to achieve the highest market valuaon for the Property. 

2. That the decision not to list the Property with the MLS is solely the decision of the Owner(s)/ Seller(s), iniated by the Owner(s)/Seller(s).

3. That the Broker is a subscriber to MLS PIN and, as such, the Broker has an obligation to report all properties to MLS PIN for listng with the MLS, unless the owner/seller, at its own initiative, decides that it does not want the property listed with the MLS.”


A home seller doesn’t want to employ a real estate agent who looks out for their own interests instead of that of their client."


Michael Seward is a Massachusetts licensed real estate broker and member of the REALTOR® Association of Pioneer Valley, Massachusetts Association of REALTORS®, and the National Association of REALTORS®. He is also a Certified Residential Specialist, Certified GREEN, Certified Buyers Representative, Certified New Homes Specialist, and Loss Mitigation Specialist. He has been a REALTOR® since 2003. Mike also holds a Bachelor of Arts Degree in psychology and a Master of Arts Degree in anthropology. 

  


 
 

The Wall Street Journal and Inman News recently reported that new home sales were down in December and January, but economists reportedly aren't worried. Both articles offer different perspectives, even different data from different government sources.  Nevertheless, in light of the challenges homebuilders face with today's market conditions, home builders could save money on one of their most expensive sub-contractors to either increase their profits or to provide more negotiating room, their real estate agent.   


Inman News reported that the northeast saw a drop of 33.3% in new home sales.   This data isn't specific to the Pioneer Valley, but inventory is generally way down everywhere, which is raising prices out of reach for many home buyers.  While not specific to new construction, the REALTOR® Association of Pioneer Valley reported in its January sales report that single-family inventory was down in January 32.6% when compared to the same period last year.   New construction simply isn't keeping up with demand, and I've talked to home builders who are no longer building homes because they weren't making enough money.  Adding to the dilemma is lumber shortages, which will reportedly be adding to construction costs, thanks to a combination of factors, including Trump administration tariffs on Canadian sawmills (from where a 1/3 of lumber is imported),  wildfires, weather events closing sawmills in the American southeast, and the lack of available railcars, according to the Wall Street Journal.  It makes sense to explore different brokerage models to make buying and selling a home more affordable for home sellers and builders to help increase inventory.   


According to the Wall Street Journal's report, one reason why some economists reportedly aren't concerned about recent declines in newly constructed home sales is they weren't nationwide.   The Wall Street Journal cited the U.S. Commerce Department, while Inman News cited the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) to report the same news--that newly built single-family homes saw a 7.8% drop after a drop in December.  However, The Journal reported a 7.6% drop in December, while Inman News reported a 9.3% drop.  Go figure.   


"If the drop in January were related primarily to economic factors, it is likely that all regions would have experienced declines,” Nationwide chief economist David Berson was quoted as saying in the Wall Street Journal article


Adverse weather conditions was cited by The Journal for the reason of drastic declines in the northeast. 


“Weather likely played a factor in new home sales falling for the second straight month in January,” T.J. Connelly, head of research at Contingent Macro Advisors, said in a note to clients, according to The Journal. “The Northeast and the South saw sharp declines, while the West and Midwest, where weather was better, saw gains.


However, Inman news reported that only the west saw gains, while offering a different view as to what a decrease in new home sales means.


"The Northeast experienced the greatest dip in residential home sales (-33.3 percent), followed by the Midwest (-15.4 percent), South (-14.2 percent)," Inman News reported. "Only the West experienced an increase (1.0 percent)."


Realtor.com economist Dr. Joseph Kirchner stated that these decreases indicated that builders will be building less expensive homes. 


"Today’s report provides further evidence that builders are slowly shifting toward more moderately priced homes,” Kirshner stated in an email to Inman News.  “The drop in sales may be due to saturation in the upper price range of the market, which should compel builders to follow the market and build more moderately priced homes.”


The Journal stated that these sales stats are unreliable and often require revisions.  Inman News shed some light on the reason why in their report.


"The Census Bureau and HUD use sample surveys to collect data for their home sales, which means this data is subject to sampling variability as well as the typical statistical variance," the real estate industry news site reported. "The survey is based on a sample of houses pulled from building permits. “Sales” are defined as deposits taken or sales agreements signed, not necessarily closings."


Regardless, home builders and home sellers face challenges as mortgage rates are expected to rise faster in 2018.    Home builders could benefit from real estate agents who offer lower commission rates, a flexible commission structure, and even fee-for-service listing agencies.  Michael Seward Real Estate offers them all.   Home builders have left the business due to losses in profits in recent years, and a real estate sales commission of 5% or 6% is a big sub-contractor expense that eats into a home builder's profits.  Lower costs would help incentivize builders to get back to building homes.  Technology has reduced the price of marketing a home. It's time for home builders to take full advantage of it. 


Michael Seward is a Massachusetts licensed real estate broker and member of the REALTOR® Association of Pioneer Valley, Massachusetts Association of REALTORS®, and the National Association of REALTORS®.   He is also a Certified Residential Specialist, Certified GREEN, Certified Buyers Representative, Certified New Homes Specialist, and Loss Mitigation Specialist.  He has been a REALTOR® since 2003.  Mike also holds a Bachelor of Arts Degree in psychology and a Master of Arts Degree in anthropology. 

Enjoy these videos of great homes for sale in the Pioneer Valley.  Then call Michael Seward at 413-531-7129 to schedule a showing.




Photo credit: By Rishichhibber (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

 
 













 
 

The Pioneer Valley saw 136 fee-for-service listings sold in 2017, based on information provided to and compiled by MLS Property Information Network, Inc. (MLS PIN).  These are listings where a home seller paid a listing agent a fee to enter a listing in the MLS, also known as "entry-only listings".  Such sellers handle the sale of their own property, but they offer a buyers' agent a commission or nominal fee.  Although home sellers are not required to, it appears from MLS data that most homeowners will offer compensation to buyers' agents.  It is a way for home sellers to handle their own sale, while benefiting from the exposure of the multiple listing service.  


The U.S. Justice Department estimated that home sellers can potentially save over $6200 in sales commissions on a home priced at $184,334 in 2015 with fee-for-service real estate agents.


I ran the market reports for fee-for-service listings for single-family homes, condominiums, multi-family properties, and land listings in the three counties of the Pioneer Valley to determine the average days on market, average sales price, and median sales price.  Then the same market report was ran for all sold listings in the valley.   Both reports were ran using MLS PIN's market report tool and included here for the reader's consideration.   


Most fee-for-service listings that sold in 2017 were single-family homes.  A total of 112 such listings were sold at an average sales price of $259,462.  The average days on market was 85.91 days, which was just a week longer than the the overall average cited by the REALTOR® Association of Pioneer Valley's (RAPV) numbers.    Out of all the 5989 single-family homes that sold in the Pioneer Valley, the average sales price was $229,790, while the average days on market was 80.    The median price of sold fee-for-service single-family homes was $248,950.    RAPV reported that the 2017 median single-family sales price was $208,000.    (RAPV reported 5999 single-family homes sold.)


There were total of 13 condos that sold were fee-for-service listings in 2017.  Condos saw an average of 62.62 days on market with an average sales price of $198,100.   MLS PIN data shows that a total of 902 condos sold in the valley in 2017 with an average of 117 days on market with an average sales price of $189,511.   The median price for sold fee-for-service condos was $180,000, while it was $160,000 for all sold condos listed in the MLS.


Ten multi-family properties sold in the valley as a fee-for-service listing in 2017 with an average of  45.7 days on market.  The average sales price was $100,389.   There were a total of 744 multi-family listings sold in 2017, according to MLS PIN.  They had an average sales price of $184,540 with an average of 85 days on market.    The median price for sold fee-for-service multi-family properties was $75,519, while the same for all such properties was $170,000.  


Only one land fee-for-service listing was sold in the valley in 2017.  It consisted of 2.2 acres in Hatfield. It was on the market for 707 days, and it sold for $87,500.   Although it was on the market awhile, the original list price was $88,000.    There were a total of 285 land listings sold in 2017, according to MLS PIN.  The median sales price was $70,000, while the average sales price was $87,051.


Selling one's home with a fee-for-service real estate agency may not be for everyone.  It can be a lot of work, and there is a learning curve.  Nevertheless, it is a viable option for home sellers who want to keep as much of the equity in their home as possible.   Low inventory has been a chronic problem in the Pioneer Valley, in Massachusetts, and in the nation.  It is driving up home prices, thereby putting homeownership out of reach for many home buyers.  Mortgage rates continue to climb, which is reducing the buying power of home shoppers. And economic inequality has made it more important than ever for the middle-class to keep more of the equity in their homes when they sell.  It is important for real estate agents to offer solutions to make home buying and home selling help bridge the gap.  Michael Seward Real Estate offers different options to help home buyers and home sellers achieve their goals. Call Mike at 413-531-7129 today.


Michael Seward is a Massachusetts licensed real estate broker and member of the REALTOR® Association of Pioneer Valley, Massachusetts Association of REALTORS®, and the National Association of REALTORS®.   He is also a Certified Residential Specialist, Certified GREEN, Certified Buyers Representative, Certified New Homes Specialist, and Loss Mitigation Specialist.  He has been a REALTOR® since 2003.  Mike also holds a Bachelor of Arts Degree in psychology and a Master of Arts Degree in anthropology. 

Enjoy these videos of great homes for sale in the Pioneer Valley.  Then call Michael Seward at 413-531-7129 to schedule a showing.




 

Low inventory has been a chronic problem in the Pioneer Valley, in Massachusetts, and in the nation.  It is driving up home prices, thereby putting homeownership out of reach for many home buyers.  Mortgage rates continue to climb, which is reducing the buying power of home shoppers. And economic inequality has made it more important than ever for the middle-class to keep more of the equity in their homes when they sell.  It is important for real estate agents to offer solutions to make home buying and home selling help bridge the gap.  Michael Seward Real Estate offers different options to help home buyers and home sellers achieve their goals.  


Pioneer Valley home buyers and sellers can benefit from a dual-rate commission.   A dual-rate commission structure is when a real estate agent charges a seller a lower commission rate if that agent produces the buyer, rather than separate agents for the buyer and the seller being involved in a transaction, which is usually the case.  Dual-rate commissions can help bridge the gap between the seller and buyer in the negotiations.   Dual rate commissions should not be confused with dual agency, but dual agency may come into play.  


When a home seller signs a listing agreement with a REALTOR®--or a licensed real estate agent who is not a member of the local, state, and national chapter of the REALTOR® association--the home seller agrees to a commission rate that will be paid upon the consummation of a sale, also known as a closing.  There is no standard commission fee.  If there was a standard commission, that would be price-fixing, and that is an anti-trust violation and against the law.  Most listing contracts include a clause that stipulates how much of a listing agent's commission will be shared with a buyers agent. 


If a listing agent's commission is 6%, the listing contract may stipulate that half of that will be shared with a buyers' agent.  As is the case with real estate commissions, there is no standard as to how much of that commission is shared with a buyers' agent.  Again, that would be a violation of antitrust law.  


Therefore, if there is no buyers' agent involved, a sellers' agent makes more money on the sale of a house.  However, if a sellers agent agrees to offer a dual-rate commission, it could lead to cost savings for both the home seller and the home buyer.  It should be noted that dual-rate commission needs to be disclosed in the multiple listing service.  MLS Property Information Network will assess a fine if a listing agent fails to do so.   The fines are: "$250 for the first violation; $500 for the second violation; $1,000 for the third violation; and suspension for not less than ten (10) days for each violation thereafter."  There is a box to check in the MLS.  


In a dual-rate commission structure, a home seller pays a lower commission if there is no buyers' agent with whom the commission would otherwise be shared.  For example, a listing agent agrees to sell a home for 6% of the sales price if it is a co-broke transaction, a sale involving two agencies, while agreeing to accept a 5% commission rate if the listing agent brings the buyer.  Keep in mind most real estate agents work for a brokerage firm.  So there is a further split between the agents and their brokerages if it is a co-broke transaction.  However, when you are represented by the broker, rather than an agent who works for a broker, as is the case of all clients of Michael Seward Real Estate, there is even more room for savings.  


How does a buyer save? Well, if a seller saves money on a sales commission, there is more room for them to negotiate to put a deal together.   A 1% discount on sales commission on a $350K home is $3500, for example.   That's not chump change.   I've seen deals fail to come together for less.  


Dual agency may come into play if a buyer wishes to take advantage of a dual-rate commission agent, but it is not required.  This is a common mistake that real estate agents make when explaining agency to consumers.  When I took the class to get my broker's license in 2005, I even had to explain it to the attorney teaching the class.  He acknowledged that I was correct.  


A home buyer can still benefit from a dual rate commission structure if the seller doesn't agree to dual agency.   As long as a listing agent discloses to a prospective buyer at their first personal meeting that they represent the seller, the lower commission rate under a dual rate commission structure is still in effect per the agent's listing agreement with the seller.  The buyer(s) would just lack agency representation and the fiduciary duties that go with it, which is something a buyer would have to decide for themselves.


Whenever a real estate agent meets with a consumer in person to discuss a particular property, that agent is required by law to present a Massachusetts Mandatory Real Estate Licensee-Consumer Relationship Disclosure.  That form explains who that agent represents.   Before the days of buyers agency, all real estate agents, regardless of whether or not they brought a buyer to a particular home, were sellers agents.  The listing agent was a sellers agent, while the buyers agent was a sellers "sub-agent".     Both agents were obligated to the interests of the sellers.  This changed with the advent of buyers agency.  Buyers agents could represent the interests of the buyer.   


A dual agent is more of a neutral party.  Here is how the commonwealth defines dual agency:


"A real estate licensee may act as a dual agent representing both the seller and the buyer in a transaction but only with the express and informed written consent of both the seller and the buyer. A dual agent shall be neutral with regard to any conflicting interest of the seller and buyer. Consequently, a dual agent cannot satisfy fully the duties of loyalty, full disclosure, obedience to lawful instructions, which is required of a seller or buyer agent. A dual agent does, however, still owe a duty of confidentiality of material information and accounting for funds. Written consent for dual agency must be provided before a potential transaction is identified, but in any event, no later than prior to the execution of a written agreement for purchase or sale of residential property." 


Dual agency must be disclosed in writing in order for it to occur.  As required by law, I discuss dual agency with my seller clients and have them sign a "Consent to Dual Agency" form if they are comfortable with it.    If it does occur, a "Notice of Dual Agency" must be signed.  


Michael Seward is a Massachusetts licensed real estate broker and member of the REALTOR® Association of Pioneer Valley, Massachusetts Association of REALTORS®, and the National Association of REALTORS®.   He is also a Certified Residential Specialist, Certified GREEN, Certified Buyers Representative, Certified New Homes Specialist, and Loss Mitigation Specialist.  He has been a REALTOR® since 2003.  Mike also holds a Bachelor of Arts Degree in psychology and a Master of Arts Degree in anthropology. 

Enjoy these videos of great homes for sale in the Pioneer Valley.  Then call Michael Seward at 413-531-7129 to schedule a showing.




  






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