A buyer's hunt

By Elaine McArdle, Globe Correspondent | July 31, 2005

When Heather Carr was ready to buy a larger home, only one location
would do: a particular cul-de-sac in a suburb south of Boston.

With only six houses in the development, Carr became a woman on a
mission. For two years, she targeted the street. She asked around and
learned that one couple didn't use one of the homes she had her eye on
as their primary residence, while another homeowner had gotten a
divorce. Carr wrote letters to both but didn't hear back. She stayed
focused. Finally, she learned of a man who was getting his house
painted, which can signal a future sale.

''So I called him," recalls Carr. ''He said yes, the house was going on
the market in about six weeks."

Carr and her husband, Michael, immediately put their own house up for
sale. When their home was under agreement, Heather Carr called the man
again.


Jean Le Vaux (above) of Coldwell Banker Residential Brokerage in
Cambridge shows a client (who requested anonymity) a condo unit in the
city's Cornerstone Village co-housing complex (right), demand for
which is high. (GLOBE STAFF PHOTOS/PAT GREENHOUSE)

''I let him know there was no contingency on our offer," she says. The
day the freshly painted house in the perfect cul-de-sac went on the
market, the Carrs got their first look inside. Two hours later, they
made a full-price offer.

Motivated by soaring housing prices, a competitive market, high-quality
school systems, desirable locations, and the prestige of certain
addresses, more and more buyers are doing what the Carrs did, realtors
say: targeting a specific home and doing whatever it takes to seal the
deal.

For example, a buyer set on a particular neighborhood or condominium
complex writes letters to everyone who lives there -- or goes
door-to-door -- asking for first dibs on anything about to up for sale,
then watches, waits, and hopes. Or buyers will cruise through a
development over and over waiting to pounce on the first ''for sale"
sign they see.

''It's all a matter of timing, of catching somebody who isn't on the
market yet and trying to be a little more proactive on the part of the
buyer," says Charlene Frary of MetroWest Homes in Framingham. ''I tell
the seller this is an opportunity to not have to expose their house to
hundreds of strangers or prepare it for sale. I would call it reverse
prospecting, where you have a buyer and you're looking for a listing."

Some see it as a win-win. The buyer lands in the neighborhood he or she
wants by eliminating competition before it begins and may get a price
break because the seller doesn't pay a realtor's commission. The seller
doesn't have to prep the house for sale and avoid the hassle of
showings.

Re: A buyer's hunt

On 1 Aug 2005 10:10:21 -0700, "octogenerian" <> wrote:

>By Elaine McArdle, Globe Correspondent | July 31, 2005
>
>When Heather Carr was ready to buy a larger home, only one location
>would do: a particular cul-de-sac in a suburb south of Boston.
>
>With only six houses in the development, Carr became a woman on a
>mission. For two years, she targeted the street. She asked around and
>learned that one couple didn't use one of the homes she had her eye on
>as their primary residence, while another homeowner had gotten a
>divorce. Carr wrote letters to both but didn't hear back. She stayed
>focused. Finally, she learned of a man who was getting his house
>painted, which can signal a future sale.
>
>''So I called him," recalls Carr. ''He said yes, the house was going on
>the market in about six weeks."
>
>Carr and her husband, Michael, immediately put their own house up for
>sale. When their home was under agreement, Heather Carr called the man
>again.
>
>
>Jean Le Vaux (above) of Coldwell Banker Residential Brokerage in
>Cambridge shows a client (who requested anonymity) a condo unit in the
>city's Cornerstone Village co-housing complex (right), demand for
>which is high. (GLOBE STAFF PHOTOS/PAT GREENHOUSE)
>
>''I let him know there was no contingency on our offer," she says. The
>day the freshly painted house in the perfect cul-de-sac went on the
>market, the Carrs got their first look inside. Two hours later, they
>made a full-price offer.
>
>Motivated by soaring housing prices, a competitive market, high-quality
>school systems, desirable locations, and the prestige of certain
>addresses, more and more buyers are doing what the Carrs did, realtors
>say: targeting a specific home and doing whatever it takes to seal the
>deal.
>
>For example, a buyer set on a particular neighborhood or condominium
>complex writes letters to everyone who lives there -- or goes
>door-to-door -- asking for first dibs on anything about to up for sale,
>then watches, waits, and hopes. Or buyers will cruise through a
>development over and over waiting to pounce on the first ''for sale"
>sign they see.
>
>''It's all a matter of timing, of catching somebody who isn't on the
>market yet and trying to be a little more proactive on the part of the
>buyer," says Charlene Frary of MetroWest Homes in Framingham. ''I tell
>the seller this is an opportunity to not have to expose their house to
>hundreds of strangers or prepare it for sale. I would call it reverse
>prospecting, where you have a buyer and you're looking for a listing."
>
>Some see it as a win-win. The buyer lands in the neighborhood he or she
>wants by eliminating competition before it begins and may get a price
>break because the seller doesn't pay a realtor's commission. The seller
>doesn't have to prep the house for sale and avoid the hassle of
>showings.

Ever notice that the seller tends to ask a high price when they find
that a buyer is contacting them before it gets listed. Sellers tend to
think that the buyer is desperate to get into the neighborhoods and
will pay a premium for the house. Or even the seller thinks that the
person contacting them is actually an investor/flipper, and the seller
will just ask a high price so he doesn't feel he's getting screwed on
the deal.

Re: A buyer's hunt

The problem for the seller is that he/she could never know if the
"high" price was indeed high without the benefit of having multiple
buyers bidding for the property.

Re: A buyer's hunt

Heard about a property in a highly desirable location (personal
preference) and got the offer written up before it was listed.

I paid top dollar, about 5% over asking price, because I knew from hard
experience that if I waited a single day, someone else would have done
the same.
I got real tired of getting outbid. I know I paid top dollar in an
inflated market at the peak of some curve, but the beneficial impacts
to my stress level might outweigh the extra few bucks on the payment.

Here's something: I'm betting on 1% annual depreciation a pessimistic
model, representing the worst case that still keeps my equity position
ahead of renting.

I know I'm being a chump, but, I don't have the opportunity to buy some
farm in West Virginia for $10,000... And I was getting close to
literally becoming homeless, no good houses on the local market, and me
with a LOT of stuff and cats and dogs and so on, pretty much out of
rental options -- and starting to seriously consider trailers.

Other places have houses with good bones that sit on MLS for, oh, a
week or two. I got sick and tired of seeing 15 or 20 other agents on
the logs, the first or second day, everything with contracts open and
backup offers behind that, always well over asking price. I don't know
where all these people are coming from or where they got all this
money, but I'm very grateful that I'm able to keep up at this level.
NO higher. Any more and I'd be seriously screwed.

Re: A buyer's hunt

James Of Tucson wrote:

> Heard about a property in a highly desirable location (personal
> preference) and got the offer written up before it was listed.
>
> I paid top dollar, about 5% over asking price, because I knew from hard
> experience that if I waited a single day, someone else would have done
> the same.
> I got real tired of getting outbid. I know I paid top dollar in an
> inflated market at the peak of some curve, but the beneficial impacts
> to my stress level might outweigh the extra few bucks on the payment.
>
> Here's something: I'm betting on 1% annual depreciation a pessimistic
> model, representing the worst case that still keeps my equity position
> ahead of renting.
>
> I know I'm being a chump, but, I don't have the opportunity to buy some

[snip]

Doesn't seem very chump-like to me; especially
if you're planning to be there for a number of
years. Unlike most of the people around here,
you're buying a living space, not a short-term
investment vehicle.

Long-term, the odds are that it'll appreciate.
Factor in the enjoyment you get, and you're way
ahead of the game.

If you got what you wanted, the cost is
secondary...

Re: A buyer's hunt

"If you got what you wanted, the cost is
secondary... "

I compromised a bit, but, I'm satisfied with it.

What I need to educate myself on next, is purely in the finance domain.
I may be getting a lump sum from an unrelated deal, that I'd like to
put into the house with the idea of, I guess, re-financing just to
lower the monthly payments. There's a threshold value where I could
actually start thinking about semi-retirement, but I don't know how it
works.

Right now I'm just starting on a conventional loan, at 6.223%, which I
feel lucky to get. Payments are workable right now, with my current
employment situation and so on, but if I could bring that down by
throwing money at it, I'd have a lot of freedom for changing my current
employment situation, making it possible to live with less money
(intangible benefits, hopefully you understand where I'm coming from.)
Also, a hedge for a plan-B -- I don't take this job for granted.

Re: A buyer's hunt

James Of Tucson wrote:

> "If you got what you wanted, the cost is
> secondary... "
>
> I compromised a bit, but, I'm satisfied with it.
>
> What I need to educate myself on next, is purely in the finance domain.
> I may be getting a lump sum from an unrelated deal, that I'd like to
> put into the house with the idea of, I guess, re-financing just to
> lower the monthly payments. There's a threshold value where I could
> actually start thinking about semi-retirement, but I don't know how it
> works.
>
> Right now I'm just starting on a conventional loan, at 6.223%, which I
> feel lucky to get. Payments are workable right now, with my current
> employment situation and so on, but if I could bring that down by
> throwing money at it, I'd have a lot of freedom for changing my current
> employment situation, making it possible to live with less money
> (intangible benefits, hopefully you understand where I'm coming from.)

Absolutely. If you're confident your career won't
suffer any lengthy periods with no income, paying
down and refinancing can certainly be beneficial.

The other possibility (and I don't know if this
applies to you) is this: if your current loan
expires in a few years, and rates have increased
significantly, your payments could take a sharp
jump when you go to refinance. Having that lump
sum available in a fairly liquid investment would
give you a cushion to cover the increase.

I don't know the details of your situation, but
since you sound as if you're a bit stretched at
the moment, this may be something you want to
consider.

> Also, a hedge for a plan-B -- I don't take this job for granted.

Do you mean the job may disappear on you at some point?
If so, you might want to keep that lump sum handy (and
fairly liquid) to cover mortgage payments if you have
a spell of unemployment.

Decisions, decisions, eh? ;)