Are You in Danger of Losing Your Home?

The headlines are in the papers daily. It's impossible to open a paper or log onto a news website and not hear all the "doom and gloom" of the housing market. The reality is that thousands of people in this country are in danger of losing their homes because their ARMs are coming into the adjustment period and interest rates (and therefore mortgage payments) are rising--in some cases significantly.

This situation is forcing many people into foreclosure. Some try to sell at a bank-approved loss (a short sale or a deed in lieu) in order to avoid foreclosure. Keep in mind that any forgiveness of debt by a lender, even though you have experienced an economic loss, is treated as income by the IRS. The lender is obliged to complete a 1099 for the amount of the forgiveness, and that amount will be taxed at ordinary rates in the tax year in which the debt is forgiven. Please contact a tax professional or attorney if you have questions about how short sales, deed in lieu, foreclosures, or any similar situation may affect your taxes.

If you, or someone you know, is in danger of losing her home, then please contact me. I will e-mail you a copy of a brochure published by the National Association of Realtors (NAR) titled "Are You Having Problems Paying Your Mortage? Learn how to avoid foreclosure and keep your home." The brochure provides information on pending legislation sponsored by the NAR as well as contact information for government agencies and counseling services that can help you through this difficult period.

4th of July in RI!

The 4th of July is just around the corner and there are celebrations taking place all over the state. Find information about picnics, parades, and fireworks displays. I need to give the folks at Whofish credit for this outstanding list. If you have a favorite 4th of July event that isn't listed here, then please let me know and I'll add it. Have a safe and fun 4th!

Pawtucket -- 19th-Century Fourth of July, July 1, 2007
Historic fun for children and grownups will highlight the Old Tyme Mill Fourth, a 19th century celebration of Independence Day at Slater Mill. Beginning with the Salute to the Flag and recitation of the Pledge of Allegiance, the event gets quickly into high gear with three-legged races, sack races, and a hoop relay for kids plus an egg-and-spoon race and watermelon seed spitting contest for adults. Slater Mill interpreters will present a variety of Independence Day orations including portions of President Abraham Lincoln's 1863 Independence Day address, originally delivered to 67 commemorate the Battle of Vicksburg. Location: Slater Mill, 67 Roosevelt Ave. Time: Begins at 2 p.m. Cost: The Old Tyme Mill 4th is free with admission to Slater Mill (adults, $9; seniors, $8; children age 6-12, $7). Information: 401-725-8638 or visit www.SlaterMill.org

Block Island -- Fourth of July Fireworks, July 3, 2007
Bring your blanket and enjoy our display while relaxing on the beach. Location: Crescent Beach, along the island's east coast from Old Harbor to Clay Head. Time: 9 p.m. Cost: free.

Bristol -- Drum and Bugle Corps Competition, July 3, 2007
The Competition is one the highlights of the Bristol Fourth of July Celebration. It has grown to become one of the finest competitions, featuring top Drum and Bugle Corps from the United States and Canada. Location: Mount Hope High School, Chestnut Street. Time: 7 p.m. Cost: Bleacher seats, $20-$25; lawn seats, $10; family four-pack lawn seats, $35, Information: 401-253-0445.

Bristol -- Fireworks, July 3, 2007
The fireworks will be on display above Bristol Harbor. The best places to view the fireworks are south of Poppasquash Road near the water. Time: 9:45 p.m. Information: 401-253-0445.

Warwick – Fourth of July Fireworks, July 3, 2007
Location: Oakland Beach. Time: Begins at Dusk. Rain date - July 5

Block Island – Fourth of July Parade, July 4, 2007
A real homespun patriotic parade along The Block's main street. Theme of this year’s parade is Your Favorite Children’s Book. The Block Island Fire Department hosts its annual Steak Fry at 1 p.m., serving steak, corn on the cob, and beverages. Location: Spring Street. Time: 11 a.m. Information: 401-466-2474.

Bristol -- 222nd Fourth of July Parade, July 4, 2007
This gigantic parade includes everything a patriotic Fourth of July parade should have. No wonder: the town has been hosting the parade for 222 years, and it receives entries and viewers from all of Rhode Island and neighboring states. Many people arrive very early on parade day or even the night before to bivouac and set up picnics along the parade route. Visitors are advised to arrive before 8 a.m. – some streets adjacent to the parade route are closed to traffic beginning at 7 a.m. The parade will step off at the corner of Chestnut Street and Hope Street (Route 114) and end on High Street, between State Street and Bradford Street. Time: Parade begins at 10:30 a.m. Information: 401- 253-0445.

Bristol -- Linden Place Fourth of July Parade Picnic, July 4, 2007
Linden Place, an 1810 Federal mansion in the heart of Bristol, will host its annual Fourth of July Parade Picnic. Located directly on the historic Bristol Fourth of July Parade route, Linden Place will be offering bleacher-style seating, tables and chairs under the shade of the Linden trees, a continental breakfast and picnic lunch, restroom facilities and elbow room. Location: 500 Hope Street. Time: 8 a.m.-2 p.m. Cost: Adults, $50; children, $35, includes breakfast and lunch. Information: 401-253-0390.

Chepachet – Ancients and Horribles Parade, July 4, 2007
Parade of locally created floats and displays steps off at 4 p.m. at Routes 100 and 98, and travels along Putnam Pike. Information: 401-568-6206.

East Providence – Music and Fireworks, July 4, 2007
Location: Pierce Memorial Stadium, Mercer Street and Lyon Avenue. Band of Brothers performs, followed by fireworks display. Time: Gates open at 6:30 p.m., concert at 7 p.m. Rain date is July 5. Information: 401-435-7511.

Newport – Fireworks, July 4, 2007
Fireworks start at dusk. Information: 401-845-9123.

Pawtucket -- Post-Game Fireworks, July 2, 2007 to July 3, 2007
A fireworks spectacular will follow the 6:15 p.m. game between the Pawtucket Red Sox and the Knights. Location: McCoy Stadium, Ben Mondor Way. Information: 401-724-7300.

Snug Harbor – Parade, July 4, 2007
Parade begins on Sherman Road. Reviewing stand is at Snug Harbor Marina. Time: 6 p.m. Information: 401-789-0409.

Wakefield -- Fourth of July Celebration, July 4, 2007
Live bands, children's activities, barbecue, fireworks. Location: Old Mountain Field, Route 108. Time: 5-9 p.m. followed by fireworks. Information: 401-789-9301.

Westerly -- Fireworks on the Beach, July 9, 2007
Fireworks at Westerly town Beach. Time 8:45 p.m. Information: 401-322-1026



Photo of the Bristol 4th of July Parade copyright Richard Benjamin

Minor Repairs Can Yield Top Dollar

Imagine you are a buyer looking at your home. What do you think needs repair? The most common areas of concern are the roof, gutters, and downspouts. In addition, repair of missing or peeling exterior paint is often a condition of the loan.

Money spent on repairs can make a difference in the final sale price because buyers tend to overestimate the cost of performing repairs. Then they reduce their offer by an amount higher than necessary to compensate. If the lender requires the repairs to be performed before closing, the seller can, in effect, end up paying for repairs twice: first in a lower sale price and second in the out-of-pocket cost of the repairs themselves.

A better strategy is to perform the repairs before putting your house on the market. Simple repairs that make a huge difference in marketability and offer price are:

* Replace cracked windows and torn screens.
* Fix or replace any broken stairs or handrails.
* Fix plumbing fixtures, leaking faucets, and so on.
* Replace exterior lock sets and garage door openers if damaged.
* Repair worn or damaged flooring.
* Replace broken or leaking gutters and downspouts.
* Remove any soil or landscape mulch from contact with wood.
* Clean, repair, or replace the roof.
* Repair or replace any worn boards on decks or porches.
* Have your heater and air conditioning units serviced and filters replaced.

First impressions are key. Taking care of the necessary repairs before putting your home on the market is important to yielding top dollar and ensuring a quick, hassle-free sale. I'd be happy to come by and make some recommendations on how to create an inviting atmosphere. Homes that convey pride of ownership often receive the best offers.

Please call or email me if I can answer any questions or be of any assistance in helping you get top dollar when you are ready to sell.

Recent AIA Study Shows Boomers Want More Accessibility

I read a study a few days ago that I thought was very interesting and apropos given a recent open house I co-hosted in a beautiful Cranston ranch. While showing the home, many of the potential buyers explained that they liked the ease of one level living or that they had aging parents who could no longer navigate stairs.

Within days of that open house, I read the results of the 1st Quarter 2007 Home Designs Trends Survey published by the American Institute of Architects.

The survey results were interesting because they explained how boomers are planning as they approach retirement and their concerns over rising utility costs--something we can all relate to!

The findings show that home and lot sizes are stabilizing and more attention is being paid to the accessibility, flexibility, and ease of use of the interior spaces and increased investment in outdoor living spaces. Accessibility, according to the study, was a major concern of boomers and/or family members caring for an older parent or relative. Sounds a lot like the feedback from my open house!

Rising energy costs is cited as a reason for the decline in square footage of interior spaces. Instead home owners tend to want more open less formal interior spaces that give them the flexibility to use rooms in a variety of different ways. And more focus is being placed on outside spaces: swimming pools (not that that's a huge trend in New England), courtyards, patios, outdoor kitchens--a popular trend right now--gardens and outdoor gardening/storage facilities, etc are all ways of extending living spaces into the outdoors. And less interior living space means less space to heat in the winter and cool in the summer.

What can you take away from this? Well, kitchen and bath remodels continue to be the biggest way to increase the value of your home investment. But outside those remodels, maybe you could consider new landscaping or a new bluestone patio. Or perhaps a beautiful new deck and outdoor kitchen. Make your home inviting on the outside as well as on the inside.

If you'd like to learn more about this study, visit the AIA website, or give me a call. I'd be happy to email it to you.

Attention Allergy Sufferers

It's that time of year again. With trees and flowers in bloom, allergens like pollen and mold are wreaking havoc in the lives of allergy sufferers. Whether you're relocating to RI/Northeast US or moving out of the area, it's important to know the relative air conditions where you will be living. The American Academy of Allergy, Asthma, and Immunology has a great interactive map that will let you know the concentrations of known allergens in a geographic region. You can also download a guide for helpful tips for treatment and prevention of summertime allergies.

Home Sales Strong; Median Home Prices Experience Corrections

The number of existing homes (units) sold in the 1st Quarter of 2007 are up 1.25% over the same period in 2006 for the state of RI. In the Providence area, however, we saw a 17% decline in unit sales, and sales for the East Side of Providence are flat over last year.

Prices of existing homes in Providence have remained fairly constant over the last 12 months, with prices increasing only 1.21% from 2006 to a median price of $209,500. The average days on market (DOM) for Providence increased to 85 from 64 since the first quarter of 2006. On the East Side of Providence, home prices were more drastically reduced to a median of $422,500 from $575,000 a year ago--a drop of 26.52%. This probably contributed to the slight reduction in DOM from 86 in 2006 to 79 in 2007.

The data seems to suggest that once hot markets are experiencing a correction-not a sharp decline in activity. The majority of markets in RI with median home prices greater than $350,000, for instance, show the greatest decline in median sales prices, but still post increases in unit home sales over the same time last year.

The national data seems to echo this. According to the latest NAR data available, existing home sales are expected to be softer in the 1st half of the 2007 but gradually trend upward by the end of the year. On a national average, the NAR expects home prices to ease by 1.3% before rising again 1.7% in 2008. However, the NAR warns that comparing median sales prices for existing homes is skewed nationally because of a shift in sales volume from high-cost areas to more moderately priced markets.

The bottom line is that real estate, in general, is still a great long term investment. The market has not "bottomed out" and the situation is not as dire as the media would have you believe. Some very hot markets that saw bidding wars 2-3 years ago are now experiencing corrections that are bringing sales prices back down to what the market can truly bear. The graph, borrowed from AgentCEO, illustrates this point eloquently: There was a sharp increase in median home prices from the 1st Quarter of 2005 to the 2nd Quarter of 2005 (nationally). The market topped out in the 3rd Quarter of 2005, but has been more or less stable since then. As I've already mentioned, the NAR predicts median home prices to decline 1.3% to $219,100 by the end of 2007--virtually no change from 1 year ago.

What is a Buyer's Agent?

This is one of the most frequently asked questions I get. I decided it would be a good idea to explain what buyer's agency is, under the RI law, and to dispel any myths or misconceptions about the services buyer's agents provide.

What the law says.
According to the RI General Statute, an "agent" is a person licensed as a real estate broker or salesperson and who acts in a fiduciary capacity on behalf of another party in a real estate transaction. A "Buyer's Agent," then, is an agent who contracts to locate property for a buyer or who finds a buyer for a property for which no listing exists and presents an offer to purchase to the seller and negotiates on behalf of the buyer.

"Fiduciary" is a fancy legal term that basically describes a formal relationship between an agent and a client. COALD is an acronym that is routinely used to describe the parts of this relationship. Every agent acting in a fuduciary capacity on behalf of another owes that other party the following: Care; Obedience; Accountability; Loyalty; Disclosure. This is similar to the relationship between a lawyer and her client.

The bottomline: Buyer's Agents do what is in the best interest of the BUYER--Not the seller. Not the listing agent. Not the mortgage company.

Myth#1. I'll get a better deal if I go it alone.
The truth is you're less likely to get a better deal if you go it alone. A popular misconception is that if a buyer approaches a seller and negotiates on her own, then the seller will cut the buyer a deal. For instance, instead of paying the Buyer's Agent a 2% commission, the seller will credit the buyer 2% or reduce the selling price by 2%. First of all, this simply doesn't happen. Ask yourself, "Why would the seller pass this discount along to me?" "Why wouldn't she just keep the money for herself?" The only person who "saves" in this scenario is the seller--assuming this is a For Sale By Owner. If her property is listed with a brokerage, then she still owes the listing agent the pre-determined commission. And take it from a practicing real estate agent: If you come to closing with no buyer's agent, the listing agent is NOT going to split his/her commission with you! (The bottomline: You "save" nothing by going it alone.)

A Buyer's Agent will negotiate on the behalf of the buyer to make sure she gets the best possible price and terms. The Buyer's Agent will also notice tell-tale signs of problems that could exist with a property. The Buyer's Agent can also help you make sense of the mountains of paperwork that come with purchasing a home. How unfortunate would it be for you to lose your deposit because you missed a deadline by one day and the offer you submitted was void? Finally, a Buyer's Agent is an objective outsider who can keep you grounded when the emotions of the process get overwhelming.

Myth #2. I have to pay the Buyer's Agent a commission.
In a typical real estate transaction this simply is not true. Commissions are paid by the seller to the Listing Broker/Agent. The Listing Agent and the Buyer's Agent work out a split of this commission in advance. Most listing agents split their commission 50/50. For instance, let's say you're working with a Buyer's Agent and you settle on a house you like. The seller has already negotiated a commission with the Listing Agent prior to the home going on the market. Let's say that commission is 5%. When the home is sold and the transaction closes, the Listing Agent is compensated at 5% of the selling price by the seller. Your Buyer's Agent, in turn, gets 2.5% (or 50% of the total commission paid by the seller), for his/her part in the transaction. You, the buyer, never pay a commission to either the Listing Agent or the Buyer's Agent. There are no tricks or hidden fees. The fact is, a Buyer's Agent also makes the Listing Agent's job easier. The Listing Agent has one objective: Get his/her client's home sold. Buyer's Agents help make this goal easier to accomplish--and they are compensated for that help by the Listing Agent after the closing.

The only time a buyer pays a fee to a Buyer's Agent is by agreement.

Helpful Resources

Last night I added several categories of links to my blog. In the future I will likely add new categories to make finding information more easy for everyone. My intent is for my blog to become your first stop online for information related to RI neighborhoods and communities and the home buying and selling process.

If you have an idea for an organization that should be added to these lists, then please e-mail me at chris@chrissellsri.com

My Blog Debut

Welcome to my very first post. My intention for the "Chris Sells RI" Blog is to familiarize newcomers to Rhode Island, in general, and to the great city of Providence in particular.

Having moved to RI from the south in 2000, I can relate first-hand to what newcomers to the state go through. What are the different neighborhoods like? What are the area schools like? How do I get my new state driver's license? How do I register my car? These are all questions I had when I first moved here. I can remember looking through the Providence Journal looking for an apartment when I first came into town and sitting at local coffee shops asking anyone who would listen where X street was and what it was near.

Since then I've seen the majority of the state. I've done all of the tourist stuff and, through my network of close friends, I have also found some hidden gems.

But I don't want to leave out all the current residents of this great state. Maybe you're planning to move to a different city or town and you're looking for more information. Ya'll know none of us like to travel for more than 15 minutes! So maybe you'll find some great tips on restaurant openings, neighborhood events, new construction projects, etc. Maybe even for your own neighborhood!

So keep checking back regularly. I look forward to establishing some great relationships through this blog.

Photo copyright: Richard Benjamin