Archives for December 2013

20 Tips for Cleaning Out Your Parent’s Home and Preparing for Its Sale

by Michelle J. Lane

As a Realtor who is a Senior Real Estate specialist, my team specializes in helping families make sure the home is cleared out and ready to sell at the best price possible.  I have a long list of resources and good tips getting through this process.  For families that do not live near their parents’ home, we can even manage the whole process for you.  We take as much of this burden as possible off the family, knowing how difficult it is to make decisions during an emotional time.  Below are recommendations for those who want to and can take on these tasks on their own:

  1.  If at all possible, don’t wait until the last moment to clean things out.  I realize it can be difficult to go through your parent’s things with them while they are still living in the house.  They may resist.  But there is a lifetime of bank statements, insurance policies, and investment records l in that home, along with tons of paper that should have been tossed long ago.  At the time of their passing, your emotions will be raw and you will be overwhelmed with making arrangements, going through decades of paperwork will be the last thing you want to do.
  2. If it is too late to do it ahead of time, be thorough, you will need to have all their documents in hand to do the final tax return and to make sure no assets go undiscovered.  As tedious as it is to go through all their files, you never know what important documents you will uncover.
  3. Hire an estate attorney (if your parent’s didn’t already have one) who can help you transfer the assets to named beneficiaries.  You will also need to get a “license to sell” in order to put the home on the market.
  4. After talking to that attorney, consider hiring a shredding company or getting a good fire going with the paperwork you clearly do not need.  It is not a good idea to toss these papers in a dumpster as they may contain confidential information.
  5. Find out what everything is worth before you start giving it away or tossing it.  If you believe there are valuables in the home, hire an estate appraiser to value furniture, jewelry and antiques.  The appraiser will give you an estimate for each item, charging an hourly fee. The cost will depend on the type of appraisal you want.  You might pay $100 to $250 an hour for a general appraisal; $300 an hour for a fine arts appraisal or a fee per item for a written appraisal on high value pieces.   An appraiser can also tell you the best way to get top dollar for the property whether that is an estate sale, auction or having antique shop owners come and buy items.   If you are going to sell to the appraiser or an antique shop, be sure to speak to at least two so that you know you are getting a fair price.  The appraiser may also suggest a consignment shop, but my experience is that families just want to be done with it and not have to track items that are put up for sale in a consignment shop.
  6. Before dissolving the furniture and décor, let your Realtor walk through and tell you what should stay to stage the house for sale.  They may say nothing should stay if it is all dated and worn, but if the furniture has redeeming décor value, houses will typically show better with some furnishings than completely empty.
  7. To avoid any hard feelings, let family have the first choice of your parent’s belongings before selling them off or giving them away.  Have your siblings create a wish list of the items they’d like from the estate.  Do this as early in the process as possible so that siblings’ imaginations don’t run away with them thinking that the child taking the lead is walking out of the house with favorite items.  Balance out the requests by the value of the items, which you will know after having everything appraised.  This is a time of raw emotions. If items are given away that have sentimental value to a family member, it can cause hard feelings that could last a life time, sad to say.
  8. Hire physical labor or recruit younger family members.  If you are not local to your parent’s home, ask your Realtor to coordinate.  The job will be far more daunting than you think.  As you start pulling belongings out of closets, attics and basements, you will be stunned by the sheer volume of stuff.
  9. Be thorough!  In helping clients clear out their homes, my team has found jewelry in the pockets of coats, money inside books.  Older people tend to hide their valuables in the most creative places.  You will need to go through everything before you donate to charity or toss it out.  Look at the underside of drawers, backs of mirrors, in things that are tucked away at the back of closets.
  10. Unless your parents have designer clothes or vintage (before 1960) do not add to your workload by trying to sell them off.  Your time is worth more than used clothing could fetch.  Just donate to a worthy cause – but check all the pockets and inside pocket books first!!
  11. Sell furniture that is not valuable enough to interest an antique shop on Craigslist, via a Yard Sale, etc.  Be realistic.  Unless it is hundreds of years old, used furniture has very little value these days.  Same goes for China and stemware.  These have fallen out of fashion and it is very difficult to sell them in any forum.  Sometimes it is even difficult to give them away.  Some charities will only take it if it is modern enough to sell in their thrift shop.
  12. Consider asking the neighbors in to see if they want any of the stuff going to charity.  They may also have fond memories of your parent and may want to keep a memento.  And this way, you get some of the stuff carted away for you.  In some towns, you can even put items on the curb and people driving by will pick it up.
  13. I am a big believer in everything finding a home rather than winding up in a landfill.  If getting items to charities that can benefit from them is important to you, consider hiring high school or college kids with a driver’s license to drive the stuff to the charities for you.  Not all charities take everything.  And unfortunately, charities often don’t pick up.  Those that do can rarely accommodate the timeline you need to be on.  My team has driven books to the library (after checking with a book reseller for value), senior healthcare gear (walkers, etc.) to the senior center and clothes to the many charities that take them.
  14. Consider renting a dumpster.  This gives you the opportunity to look at each item you consider junk as you are tossing it.  It also helps you to clear out attics, basements and garages so you can see what remains that could potentially be valuable.  For about $500, you can typically keep a dumpster for a couple of weeks.
  15. Bring in a liquidator. This is someone who will clear out whatever’s left after you’ve decided what to keep, sell, give away or junk. Before hiring someone, however, you must comparison shop.  Some will charge you a fee, some will do it for free in exchange for keeping the stuff to sell what they can.
  16. Even liquidators may not take hazardous materials (fertilizer, chemicals, etc.) or may charge a high fee for doing so because they have to pay dumping fees.  Check with your local town hall to see if they have a drop off depot for these items. Do this early so you have time to properly dispose of these items.
  17. You will feel sentimental about many things as you are clearing out your parents’ possessions, but be wise and do not extend that sentimentality to giving the listing to a family friend who has never sold a house in the town your parents’ home is in.  I saw a listing (not mine, thank goodness) sell for $100,000 under market value because the family gave the listing to a family friend.  Not only did he not know the local market or have much selling experience, but when the family could not bear to make any changes to the house and left it just as it was when mom passed, he did not have the objectivity to tell them what they needed to hear – that the greeting cards she had decoupaged to the walls needed to come down, the carpeting needed to come up and the knick knacks had to go.   Ask yourself if the relationship with that family friend is worth tens of thousands to the family, because that is likely what you will be giving away.
  18. The same goes for selling to a family member or family friend.  My own mother, many years ago, sold my grandmother’s house to my cousin without checking with anyone, without consulting a Realtor (I was not a Realtor at the time) or an appraiser.  She sold that house at about half of its market value.  My mom was just too trusting and she wasn’t good at dealing with those big decisions during a time of stress.  More recently, I just sold a home in my market for $420,000 to a builder.  The house next door also sold to a builder who was a member of the seller’s family for $350,000 and that house was on a better lot.  Do my clients feel it was wise to hire a Realtor?  Yes they do.
  19. Take the advice of a Realtor experienced in estate sales before making any improvements to the home.  One of the biggest mistakes we see homeowners make is over-improving the home before putting it on the market.  While it makes the home show well, you are not likely to recoup all the money spent.   In some markets, builders are paying more for these homes than buyers who would occupy the home.  Since a builder will renovate or rebuild, any improvements would be a waste of money.   On the other hand, if your Realtor tells you reasonable improvements must be made to get top dollar, heed their advice.
  20. As much as you and the family may want to save money, I strongly suggest that you not try to do all the work yourself.  Your time is better spent taking care of your parent’s affairs.  There are plenty of resources available to cart out junk and charity items, to clean the house, to landscape the yard.  Odds are, you (and your siblings) have full-time jobs, families and your own houses to care for.  I have seen tensions rise when the children try to take all this work on themselves and all are not able to help equally because of distance or family obligations.

Contact Me if you are ready to talk about selling your parent’s home.

Me

Michelle J. Lane
Century 21 Commonwealth

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Buying Foreclosure Property

In this dowImagen economy, I often get asked if bargains can be had by buying foreclosures. First, let’s define foreclosure.  The act of auctioning off the property is the foreclosure.  Anything before that is pre-foreclosure.  If the home does not sell at auction and winds up being bought back by the bank, it is considered REO property.

Getting a deal on foreclosure property is not as easy as you would think.  The process goes roughly like this:

PRE-FORECLOSURE

  • Bank send a Right to Cure notice. This can happen as early as the first late payment. This letter states that the owner has 150 days to get caught up or be foreclosed on.
  • Owner attempts to catch up or get a loan modification.  The number of people who manage to catch up in the first 30-60 days is extremely high (80-90%).  Once someone is 90 days or more overdue, the number goes way down as the owner is typically too far behind at that point.
  •  An owner may be willing to sell at this point, but not for a price way under market value.  In strong markets, such as we have in the greater Boston area, they can put their home on the market and get a fair price.

LOSS MITIGATION

This is the owner’s attempt to prevent foreclosure.  It is worth trying as a person’s credit score can take a 100 point hit for defaulting on a mortgage.

  • Deed in Lieu
  • Short Sale
  • Loan Modification

Loan modification is the only one that is any chance to keep the home.

A loan modification involves asking the bank to change the terms of your loan (interest rate, length, etc) to bring the payment down to work with your lowered income.  You typically have to show a hardship in order to be able to do this.  And be able to make the new payment. If the owners do not have income to make even lowered payments, the foreclosure process continues.

If anyone you know is in this position and has questions on what to do, have them contact me.  I am glad to educate and connect them to resources that could help.  A useful resource for learning about modifications – www.makinghomeaffordable.com

Sadly, approximately 40% of people who get a loan modification still wind up in foreclosure as they are simply in over their heads, despite the modification.   These are tough times and we live in an area where a person’s mortgage payment (or rent) can wind up being close to half their take-home pay.  So it only takes one job setback or medical issue to put someone behind.

It is important to talk to a trusted Realtor and Attorney at the same time that you are talking to the bank.  If you will need to sell your home to avoid foreclosure, you should be proceeding down both paths in parallel.  It is possible to put your home on the market when you are behind in payments.  And getting the house under agreement will stop the pre-foreclosure process.

  • If successful in catching up or getting a modification, the owner keeps the home.
  • If not successful, the process continues with public announcements of the intent to foreclose.  THIS IS A POINT AT WHICH YOU CAN TRY TO BUY.  If you know the homeowner, you can approach them.  But you can imagine this has to be done delicately as this is a sensitive and embarrassing time for the owner.  There is no shame in falling behind on your debts, but knowing it is public information is upsetting.
  • At this point, if the owner has enough equity, they can and should sell the home.   An owner should never walk away from the equity in the home.
  • If the owner cannot sell because the are under water, they can try for a SHORT SALE.  But most owners would just assume walk away as a short sale is a stressful process.  And the number of short sales is greatly decreasing as property values are increasing.
  • The owner can do a DEED IN LIEU, which means you just willingly give up the deed and keys and walk away. This is preferable to going through the whole foreclosure process.  However, I have known owners who have tried to do this, but wound up walking away in disgust because the bank could not make this happen in an easy and timely manner.  The bank will make the owner show all their finances, agree to make some nominal payment and fill out all kinds of paperwork – possibly multiple times.  Owners rightfully think – “fine, just take the house the hard way then”.
  • Owner gives up and foreclosure process starts.   The bank goes to court to get permission to close.
  • Once the bank has successfully obtained the court’s permission to foreclose, they will start the eviction process if the owner has not yet left the premises.  In a total mystery to me, some of these go quickly, some take years.  I have no idea if that is because the now squatting owners have some rights I don’t know about or the banks are too overwhelmed and their systems are too broken to move the process along.  There are times when the bank will sell the home with the previous owner still in it and let the new owner evict, but this is happening less and less.
  •  The next step is auctioning off the property – this is the literal foreclosure – when the bank is selling the property to satisfy the debt.  THIS IS A POINT AT WHICH YOU CAN BUY. The property is usually given to an auction company to handle, so you would need to be following foreclosure announcements and auction websites to see when they will be auctioning.  Or ask your Realtor.  Savvy Realtors know how to find and follow these properties.   The foreclosure  literally will be an auction on either the front steps of the home or the registry.  You typically must bring a bank check for $5K-$10K with you – the instructions are provided by the auction house.  You must sign in and show the check.  If you win the bid, the check is turned over at the auction.  Often the bank will make no repairs or concessions.  So this is not for the inexperienced or for those who do not have the money to fix up the house.  Some buyers try to buy Foreclosure property with rehab loans so they can get money to fix them up.  This is not as easy as you would think and is a topic for a future blog.   But feel free to reach out if you have questions on that process.
  • If the home does not sell at auction, which happens about 80% of the time, the bank buys the property and it is then an REO (real estate owned).  It then goes on the MLS (Multiple Listing Service) via the bank’s REO agent and becomes much like any other sale.  THIS IS A POINT AT WHICH YOU CAN BUY.  The process is similar to buying any other house but be forewarned that the bank can take their time getting you a response and can often spend weeks collecting offers.  It is frustrating and there is not much you can do about it.  So this type of purchase is best for those who do not have a sense of urgency to get into a home. And better for people who will have the money to fix up the home after purchase.

If you have any more question on the process or want to know how you can find pre-foreclosure and foreclosure properties, please contact me

Search Homes for Sale in MA

Want to talk about selling your home? Feel free to contact me.

Michelle J. Lane

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904

Home sales and prices jump again in Massachusetts – October 2013

From Erin of the Boston Globe
By: Michelle J.Lane Realtor

This article is written for the entire Massachusetts market. My take on the greater Boston area specifically is that we saw the biggest boom in the spring and summer. It does appear to be leveling off now as the median price of condos on the market in Boston is actually down from $524,000 last year to $499,000 this year. Inventory is UP by 10%.

In Newton, where I live, inventory is down 10% from same time last year. Median price of homes on the market is up considerably. But that is more because there are more higher end homes on the market and none at the entry level price range. It is always important to look at what the market is doing in your part of Massachusetts so that you know how best to plan your purchase or sale. If you want to know what the market is doing in your town, contact me and I will fill you in.

The Article
The Massachusetts housing market continued to boom in October, as home sales and median prices jumped by double-digit rates from the same period last year, according to a report Tuesday by a Boston real estate tracking firm.

October Home Sales

Single-family home sales rose 18.5 percent last month, while the median price increased nearly 10 percent, to $313,050 — the highest price for October since 2007, according to Warren Group. It was the fourth consecutive month that sales increased by 10 percent or more from the previous year.

“The pace of the housing market has surpassed expectations this year,” said Warren Group CEO Timothy M. Warren Jr. “The past four months have really been booming.”

If the trend continues, Warren said, home prices by next year could return to their pre-recession peak of $355,000, reached in 2005. The median price for homes sold for the first 10 months of this year was $324,900.

A widely followed survey of metropolitan real estate markets, the S&P/Case-Shiller Home Price Indices, also found Boston area values on the rise. The index, which tracks repeat sales, showed that Boston area prices rose for the third consecutive month in September, gaining 7.5 percent from a year earlier.

Warren said the surging housing market is driven in large part by pent-up demand from Massachusetts residents who put off buying homes in the years following the housing bust and economic downturn. With the economy recovering and consumer confidence improving, buyers are now making their move.

That strong demand coincides with a tight supply of homes on the market. The result: rapidly rising prices. The inventory of single-family homes for sale this October decreased by nearly 20 percent from the same period last year, according the Massachusetts Association of Realtors.

The realtors group, which tracks a slightly smaller universe of sales than Warren Group, reported similar statistics Tuesday. Home sales rose 12.2 percent from a year earlier, and prices jumped 12.3 percent year-over-year to $320,000.

“If sellers continue to sit this market out and inventory continues to shrink, we’re going to see fewer qualified buyers able to keep up with increasing prices,” Kimberly Allard-Mocia, president of the realtors association, said in a statement. “Full recovery is close, but now it is up to the sellers to make it happen.”

Warren and Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University, said they expect housing inventory to increase this spring, as buyers continue to bid above asking prices for months and potential sellers realize they can recoup their investments — and more.

“We’re going to see a significant amount of single-family homes for sale, which will tend to moderate price increases,” Bluestone said. But for now, he added, “This is becoming a very good time to sell.”

Search Homes for Sale in MA

Want to talk about selling your home? Feel free to contact me.

Michelle J. Lane

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904