Category: Sellers

Our sellers are the home owners we buy real estate from, in many different ways, from lease-options to seller financing, subject to, wraparound, straight cash, lease-purchase, pure option,delayed purchase and so on…Even if we hear that a specific market is hot for sellers (a sellers market) where homes sell to many buyers who are very eager to buy, the reality is that many eventually find out that they can’t get a mortgage, even if preapproved or prequalified. After 2008 the rules for lenders have switched from very easy to very hard, and even those with great potential can easily not qualify. So deals fall through and homes go back on the market and then they sit forever, now with the stigma of a missed sale and high number of days on the market. It’s more complicated, but that should give you an idea that sellers with perfectly fine homes are left out of the market and we have a good and fair solution to be able to sell and move on, finally. Just contact us to tell us that you’re exactly in that situation and what an offer from us looks like!

Home Ownership after the Pandemic

April 10, 2020 mngr Buyers, Investors on Terms, Real Estate, Sellers

Home Ownership Dream

That’s also why many move away from home and come to America: Home Ownership

Many end up keeping their dreams tucked away in a drawer, to go to them when they need comfort and hope.
In the US, many actually pursue them and make them happen, that’s one of the main reasons to come to America.
To fulfill those dreams and convert them into reality!

In America

There are many dreams that you can chase in this country, but one that is a staple of the American Dream is the dream of home ownership.
Rest assured, that during these extremely challenging times, people are still dreaming. They may be forced to use that drawer, but dreams will come out of that drawer with a big bang!

After the CoronaVirus Outbreak

People are going to pursue that dream with the same or maybe more energy.
It’s true that it’s also going to be more challenging than ever, but that’s what America is also about: working hard through the challenges, finding solutions.
That’s very promising for the near future of the real estate market, as it was strong before and it will be strong after these crazy times.

The driving power

The drive that comes from people who dream about owning a home which is perfect for themselves and their families, is powerful and will make the market bounce back.
With low inventory and low mortgage rates, the market is springloaded. Only much tougher lending requirements will prevent the market from running as fast as it could, but in some cases, it could actually be a big thing.

The Lending Industry

The lending industry is separate from the housing market, but instrumental to the success of most real estate transactions, so that would probably be the biggest challenge that lies ahead and is already impacting the market.
Adjustments and creativity will be required to have the funding for real estate purchase & sales and that’s where we are so relevant.

By picking from a broad range of legal and financial instruments, we, @ Proxima Investors, can create the opportunity for buyers to be in the position to buy and fulfill their dream of home ownership.
Since there are no sales without buyers, sellers also will have the opportunity to sell at conditions which are not punishing as they could be in such a market.

Investors on Terms

We are investors on terms and deals on terms will be one of the most viable solutions for sellers and buyers in the present real estate market and in the near future.
The ability to use many tools and methods to achieve the same result, sales for sellers and ownership for buyers.
Buyers will be further motivated by escalating rental fees and the appeal of the brick as a way to build and store wealth, while the stock market is so volatile and proves to be too difficult too read.

Deals on Terms

Dream of home ownership through a deal on terms is what we, at Proxima Investors, are about.

Proxima Investors: Buying homes from sellers who want to sell, turning around selling the same homes to buyers who have that big American dream of home ownership…

The future of the residential Real Estate Market

Many keep their dreams tucked away in a drawer, go to them when they need comfort & hope. In the US many pursue them and make them happen, that’s one of the main reasons to come to America.

The dream of home ownership: very promising for the near future of the real estate market!

And remember to practice SOCIAL DISTANCING! Like we do! 🙂

Mortgage Denied: The New Norm?

April 2, 2020 mngr Agents, Buyers, General, Investors on Terms, Real Estate, Sellers

How CoronaVirus related Unemployment will impact Real Estate
and how are Proxima Investors going to offer solutions

Widespread unemployment applications are just the tip of the iceberg. Soon a large part of the workforce will not meet the requirements for a mortgage and it will get even worse as lenders tighten the rules. In this environment, we can help real estate transactions happen by using our everyday tools.

We’ve been helping homeowners sell, homebuyers buy and renters step on the property ladder and achieve the very american dream of home ownership for years. Agents and Brokers are going to be facing huge challenges getting listings that are going to sell and finding buyers who can secure the funds by obtaining a mortgage, to represent. Again, we have the tools to help brokers’ and agents’ clients sell their homes at great terms and assist buyers in becoming viable takers.

We don’t provide services, we cooperate with agents and brokers so they can help us get deals done. We guarantee the hard earned fees and establish a steady professional relationship that can bring more and more deals despite the challenging times.

We are Investors on Terms. We are not agents or brokers, we are not wholesalers or rehabbers, we are not landlords or buy & hold investors. We pay full fair market value and are transparent. We are A+ Better Business Bureau accredited and operating in real estate investments for decades.

Most are greatly surprised by the amount and type of options that we can present to overcome challenges that are not uncommon, like stale listings, quirky homes, failed inspections, high asking price, deferred maintenance and will soon be the new norm.

Buyers who won’t be able to buy because of the lending industry’s extremely tough requirements. They got tougher in 2008, and now, for a number of reasons including lack of capital and low interest rates, they will get tougher. Additionally, the job market is going to be impacted and revolutionized.

The bottomline is very few successful mortgage loan applications.

That’s why you should look into partnering with us to get real estate business done!

The first step is to contact us, schedule an introductory call or remote meeting. We can meet, get to know each other enough to then quickly find out if we can help.

If you’re in the minority who cannot be helped with our standard methods, we may still be able to help otherwise.

Our only limits are the prevailing laws of the moment at federal, state and local level, ethics, since we embrace the ethical purpose that we gave to our business model from the beginning, and of course, practical convenience, as all deals need to be put into the perspective of a business transaction.

Contact Us in a timely fashion to get on top of the real estate market of the near future.

Call or Text 617.921.9265 anytime to reach out.

We look forward to meeting new homeowners, renters, professionals and anybody involved in real estate and that we can assist to achieve their goals!

Job Losses and the CoronaVirus

March 21, 2020 mngr Agents, Buyers, Investors on Terms, Real Estate, Sellers

How will job and income loss affect the Real Estate Market

Job losses and income reduction are already happening in most of the economy

Job losses and loss of income in general are scary, but they’re real and they’re happening all across the board. In the meantime, there are companies which are hiring, rather than firing.
E-commerce, delivery, shipping and trucking, healthcare of course, grocery stores and those involved in producing and supplying essential goods and others.

Aftermath

When the dust settles, jobs are going to be coming back, surely shuffling around with many career restarts and change of positions. Most jobs will likely be absorbed by a resurgent economy.

The Residential Real Estate Market

Some businesses are hiring and may absorb some redundancies, in the short term and, in part, in the longer term

In Real Estate this means that many who want or need to buy a home, will have to figure out how to fund a purchase without qualifying for a traditional mortgage for insufficient employment history.
Additionally, if they had reserves and burned through them to get by during these tough times, mortgages requiring a significant downpayment may be out of reach.
Even the modest downpayment requirements of 3.5% of an FHA loan may be tough to meet, especially when it’s on top of all the other criteria of eligibility.

Impact on HomeBuyer Activity

Will this impact the ability to sell? Will the pool of buyers who not only want to buy, but also are able to buy, dry up significantly?
It’s always a matter of price, if the price is appealing enough, then there will always be a buyer.
There may be many more cash investors who are already setting cash aside and quickly liquidating assets, including on the stock market, but soon also bonds, to take advantage of a difficult situation for sellers.

Cash Buyers

Businesses are forced to layoff or furlough

They buy at a discount and never at a premium, so sellers who need to sell may have to take a hit. Not ideal. It may work in extreme circumstances where the property is in physical distress and/or the seller is under intense pressure to dispose of the home and the selling price is not the main priority.

Rental

However, there are other options that sellers can entertain, including renting. It could mean income that could cover carrying costs until the market restores to better values, but they would have to be landlords. For good reason, many don’t want to be involved in rentals, nor do we.
Alternatively, they can sell in one of the many more ways that the law and the market allow.
That’s when we come into play, as investors on terms.

Investors on Terms

We use any method which federal, state and local laws and regulations allow to achieve the sellers’ goals by buying the property at full or close to market value.
At the same time we sell the same property primarily on a lease-option or owner financing deal. We therefore allow time for the buyer to get in position to obtain a traditional mortgage or any other way of financing the formal purchase; or we may finance them.

Opportunity for Sellers

Sellers relinquish all responsibilities and headaches from carrying the property to us, they don’t have to sell at a discount and get it done with professionals like us involved. They can move on without any burdensome debt which hits hard month after month. They will have no more worries or miss out on market opportunities.

If sellers want a head start in this fluid market they should get in touch and find out about the details.

Real Estate Agents & Brokers

Agents are also encouraged to reach out and get accustomed to our model; our options would allow agents a powerful marketing tool for all sellers. We have homeselling solutions where there isn’t an easy one, as in a home in preforeclosure.

Listings hard to Sell

Get listings and get them sold no matter how hard the sale is

We can buy many of the homes that are hard to move. Agents would earn a commission, get credit for a sale, and with little or no work as we can handle the whole transaction.

Guaranteed Brokering Fee

If there’s any doubt that sellers may have issues paying the facilitating agent, we GUARANTEE any shortcoming or the full payment at the closing table. We understand that agents should get paid fairly and timely so we can get generate business and establish a steady relationship.

Sellers, Listing Agents, Buyers’ Agents

Any Real Estate Agent can assist us in completing deals on terms, buying and selling residential real estate

So sellers and sellers’ agents, CONTACT US to find out if and what solution we may have for you and your client; buyers’ agents also, if you have a buyers with any lending challenges, especially if they already failed to qualify upon application, ask us how we can make them successful home buyers.

All Over the USA

We team up with other investors on terms like us or agents and brokers when making deals outside of New England. We are therefore not restricted geographically and buy and sell all over the US.
We look forward to getting the ball rolling with anyone who needs to get a deal done!

Based in New England, we create deals in all states, albeit partnering with local investors and/or agents.

Investors on Terms: Definition

December 19, 2019 mngr Buyers, Investors on Terms, Law, Real Estate, Sellers

This entry is part 3 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Mansions in Sterling, Massachusetts. Right on golf courses, satisfying saltwater pools, luxurious wine cellars, comfortably large saunas, professionally equipped exercise rooms, multiple car garages, pristine level grounds, numerous and ubiquitous fireplaces, huge rooms and spaces, areas for all needs and purposes

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all parties involved in our deals, getting them DONE!

Meaning of Investors on Terms

There doesn’t appear to be ANY official definition of Investors on Terms or Deals on Terms (which are made by Investors on Terms) in general or in detail, nor are they specifically mentioned in public documents or recognized by public authorities or entities, as Purchase & Sales and Rental transactions are (“Subject To” deals are marginally acknowledged). The only deals that the general public may be aware of and can be included in Deals on Terms made by Investors on Terms, are Owner Financing and Rent to Own deals. However, these alone do not explain the concept that characterizes Investors on Terms.

Description as “Investors on Terms”

Hadley, MA: Home for sale on terms, lease-option or seller finance — Hadley, MA: Single Family Home for Sale on Lease-Option

“Investors on Terms” is a popular way of describing a certain type of real estate investors, albeit it’s mostly used in the industry and almost lingo of the defined community of professionals, investors and operators active in real estate. It’s a very broad and diverse category which includes many different investors with different, often unique, business models, practices, standards and so on.

Individual real estate investors

Sterling, MA: Home for sale on terms in lease-purchase, owner finance, or straight conventional sale — Sterling, MA: Single Family Home for Lease-Option

Each and every investor may attach a slightly different meaning to “Investors on Terms“. When dealing with investors, the claim should be taken with a grain of salt and the investors’ model examined to determine the exact type of approach to real estate investment.

Unlike other professionals, investors operate more on a smaller, individual scale and with different business models.

Proxima Investors

Real Estate is a solid investment with many ways to monetize and always on demand

For us, Proxima Investors, investing on terms means that we partner with sellers and buyers to find an effective solution to the challenges that they otherwise expect to overcome with a regular sale, with representation from an agent or by handling the deal by themselves.

That’s the core meaning of the term for most investors and their goal, no matter how they distinguish themselves from all the others in the details.

Achieving the goals

Deals on Terms represent an alternative to the mainstream method of buying and selling, especially when they allow to achieve and often overachieve the goals set by sellers and buyers.

In these deals, we don’t focus on the property and its price and/or market value as the only or primary deal point. When we look at a deal, the property is important, but we also dive deep into the whole situation; we dissect all the possible aspects and details of the situation. We look at the big picture and include the sellers or buyers, their personalities and their needs, desires and expectations. We can overdeliver in satisfying the priorities as they are set and expressed by sellers and buyers, if we can leverage effectively all the items of the deal. We create, design and provide a custom agreement which addresses and resolves all the issues of our partners specifically.

Goals and Tools

An “Investor on Terms” looks at the goals of sellers and buyers, proceeds to find the most effective method of achieving such goals by using all the tools that the law, federal, state and local, allow and support in real estate.’

“Investors on Terms” DEFINED:

DEFINITION: In residential Real Estate, “INVESTORS ON TERMS” study and analyze the homeowners’ goals situation, looking deep into the details of the property, and/or of buyers’. Then, they design a deal that leverages as much and as many deal points as possible to achieve the ultimate goal of the sellers and/or buyers.

REMEMBER investors on Terms do business by making Deals on Terms, but each investor has a different interpretation and implementation, style and approach, so no 2 deals are all different!

Conclusion

Hand people are paying the dollar with other hand holds the keys. — Many Buyers are caught out in these days of challenging lending conditions, making Deals on Terms an appealing alternative to get on the property ladder.

That’s the essential traits of “Investors on Terms” and most certainly of Proxima Investors.

Thanks to the tools that the law makes available today, we have much greater flexibility than other professionals in real estate; we can find solutions that work for all parties when a satisfactory solution wasn’t available by mainstream methods.

The downside is that these deals can be intricate and complex. They can prove to be a challenge too hard to face for many who are better off with a simpler, yet risky and/or expensive mainstream alternative.

For all the rest, these deals are not always simple, but indeed always WORTHWHILE!

For this reason, by far most of our deals, are on terms. Therefore, Proxima Investors are “Investors on Terms” indeed!

NEXT: Examples of Investors on Terms

Investors on Terms: Context

December 10, 2019 mngr Buyers, Investors on Terms, Real Estate, Sellers

This entry is part 2 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all parties involved in our deals, getting them DONE!

Real Estate Investors Today

In the real estate world, there are investors of all kinds; small and professional landlords, rehabbers and flippers, wholesalers, note investors and the list goes on. There are also “investors on terms“. We, at Proxima Investors, are exactly that, “investors on terms“.

Investors on Terms and Awareness

Rent to own in Sterling MA — Sterling, MA Rent-to-Own: “Contemporary Mansion”

While it’s a quick and easy way to describe what we do, it may be a little more complicated to give the right idea to those who have never heard of “investors or terms”, even within the industry.

Home owners who may buy and sell properties 2-3 times max in the course of their lifetime (pretty much American Homeowners‘ average), are probably the least likely to have done business or heard about an “investor on terms“.

Our actual Sellers and Buyers, now have a good idea. However, with so many different types of deals that we can make, they probably have only a partial understanding of our whole business of “buying and selling real estate on terms“.

Even professionals in real estate may have never heard of what a “deal on terms” and what it entails.

Real estate agents are generally busy listing homes in the ordinary way and closing only conventional deals.

Real estate attorneys may be trained and experienced in conventional closings only. Even many other investors like landlords are not aware of the concept of a residential real estate “terms deal“. They are all so ubiquitous and mainstream that anything different for them is difficult to comprehend as they have no experience with Investors on Terms.

Other sectors and times of Real Estate

Norwell, MA Rent-to-Own Homes: “Custom Cape”

If you look into other niches and fields of the vast real estate market, you may find many more instances of “Investments on Terms“. In the commercial sector, much more valuable real estate properties and complex transactions make it worthwhile to negotiate in detail and design sophisticated “deals on terms”.

You don’t have to look far to find “deals on terms“, you can just look at the real estate world in America in the 1970s. “Investments on terms” like Subject To purchases were common and very popular, in the context of interest rates that were very unstable and growing out of control from week to week.

The 2008 Downturn

More advanced and creative deals are needed today to purchase a home with mortgages that are so tough to get, especially for some categories

The 2008 downturn put an end to the easy loans and mortgages that inflated and destabilized the real estate market. The ever rising prices suddenly ended bursting and crashing down heavily, determining the need for tighter regulations. These are now seriously affecting a wide range of the population now needing alternative ways to finance the purchase of a home. This situation brought back some techniques from the past, as the mentioned Subject To deals, from other sectors of the market, just one example would be Lease-Options, or new and innovative, like some unexpected combination of techniques as in a Wrap-around Mortgage, or a classic Owner Finance deal which is pretty intuitive in concept, but a lot of work and expertise is necessary to define the details to make it a solid deal. Those are just a few types of deals that many Investors on Terms can create and manage.

Resistance to competing models

Real Estate Agents in the residential market: they specialize in straight Purchase & Sales and Rentals only. — There are around 2 million active real estate agents in the USA (source: ARELLO) with a population of 327 million, that’s 1 agent every 163 people. And that’s why everyone has an agent within easy reach, at all times.

These transactions are becoming more known and a more frequent choice as the industry, professionals and consumers, learn or relearn about them. The recent history of easy mortgages and refinancing lead to easy transactions with lots of equity. These easy deals shaped the industry into a predominantly intermediated one because the luxury of hiring an agent appeared very affordable while netting inflated prices. Despite the crash, the industry players still dominate, thanks to the stronghold position they acquired. They are able to dictate their only transaction models, supported by collective efforts organized by large bodies like the NRA. They are in control and mount a strong resistance to anything that may disrupt the present order and threaten their dominance. That’s why sometimes, not always, we find real estate agents uncooperative and failing in their fiduciary duties towards the sellers and buyers who hired them.

Increasing Awareness and Market Share

Despite all that, the percentage of deals on terms concluded is constantly growing and so is awareness. Mostly replacing For Sale By Owner transactions, as they typically involve a professional at no cost, they also represent a strong and threatening alternative to hiring real estate agents who charge Sellers a good amount of equity in fees.

When you hear that deals on terms are dangerous, illegal, immoral or anything along those lines, you're hearing the desperate voice of those who just stop short of admitting unawareness, lack of knowledge and no expertise in the field.

BEWARE of those who make derogatory remarks about their business competitors without any in depth knowledge or experience!

Investments on Terms For Buyers:

The need for alternative financing and the difficulty in getting it within established models, like the ordinary home purchase through real estate agents, make these deals a very viable option for Buyers. They need to buy in a transaction which needs to take their specific challenges into consideration. That’s what “Deals on Terms” do! That’s also why Buyers compete strongly for any deal available, as it’s often the only quick path to ownership and avoid renting, while housing market prices fly by to sometimes unreachable heights.

Investments on Terms For Sellers:

Many Sellers find themselves left out of the market for no fault of their own or their house. Just too few Buyers. We market the property to many more qualified Buyers.

They are effective for Sellers also because many times without fault of their own or of their home, they are stuck with a property sitting in the market with nothing in sight. The market itself is constantly described as a Sellers market, because there are so many Buyers who want to close on a home. However, many conventional deals fall through because of the way the lending industry processes applications, Deals on Terms restore confidence in home-selling by opening up the market to a much larger pool of strong, worthy and motivated Buyers. Not all applicants pass our Buyer-quality screening process, but the market offers so many better and faster opportunities. That’s what you can correctly call Deals on Terms a Sellers’ market.

NEXT: Definition of Investors on Terms

Investors on Terms: Introduction

November 30, 2019 mngr Buyers, Investors on Terms, Real Estate, Sellers

This entry is part 1 of 3 in the series Investors on Terms

PROXIMA INVESTORS are Investors on Terms!

Our primary objective in the course of our real estate investing business is to leverage deal terms to achieve a solution for Sellers, Buyers and all involved in our deals getting them done!

**Hadley MA: Rent to Own homes by Proxima Investors**

by Proxima Investors of Northborough, MA

Homes get sold and Sellers succeed. Buyers are able to Purchase. Everyone gets what they want and need, are paid and everyone is happy and able to move on.

Not many know exactly what a deal on terms is; it seems useful and maybe even necessary to clarify what we mean by being Investors on Terms.

A small series of articles as posts in this blog will attempt to explain how Investing on Terms works. Keep in mind that it may widely differ from what and how other investors use similar methods; they may be in different niches, states, deal with different properties and types of Sellers and Buyers.

This is just the INTRODUCTION so you know what it’s about.

We will start by describing the CONTEXT which is important to define the role and the activity of Investors on Terms.

Then we will go straight to our own DEFINITION of Investors on Terms with details about the meaning of the term.

Some EXAMPLES in the following blog post will be very useful to understand the concept of Investments on Terms in practical terms to see what it’s like in a realistic environment.

What do Investors on Terms mean for Sellers, Buyers and their properties and how they affect the situation of all investment PARTIES.

PROXIMA INVESTORS, Deals on Terms and how they fit in our business model of real estate investing in the residential niche.

Our FINAL THOUGHTS about Investors and Investments on Terms will follow to go back to the whole picture and conclude our explanations.

Finally, space for QUESTIONS and COMMENTS, which are a great way to get a better understanding of the idea of Investments on Terms and its applications in individual situations.

As a bonus, we will progressively compile a GLOSSARY of the Investors on Terms niche for quick reference with useful links to more info.

NEXT: Context of Investors on Terms

Pocket listings and new rules for Realtors!

November 27, 2019 mngr Law, News, Real Estate, Sellers

Realtors have to list a property on the MLS within 24h of any marketing effort!

Pocket listings limit the marketability of a property and may fetch the seller a lower price. Sellers should think twice about allowing the practice and do due diligence to find out if that’s in the cards for their listing. Alternatively, look elsewhere to sell!

The National Association of Realtors’ new rules about private listings

Mandatory listing on MLS

Homes are not always listed on the open market as often and quickly as they should, especially in a low inventory situations like in these days.

Very interesting news from the NAR (National Association of Realtors). Realtors will no longer be allowed to market a property privately for an extended period of time.
Within just 24h (one business day to be precise) of the start of any marketing efforts, they have to list the properties under contract on the MLS. Flyers, email blasts, phone calls, any online or offline marketing effort triggers the countdown to the requirement to open market the property.

Private listings/Pocket listings

These listings are called private listings (or even exclusive listings) because properties are marketed only to a limited number of buyers, generally controlled by the listing agent. They are also known as “pocket listings” to describe how the listing is hidden from the general public (kept in their pocket), and listed publicly only if no private buyers are found.

Opening up to the market

It’s pretty big news because it aims at opening some properties to a broader pool of buyers (and their agents) much to the benefit of many in the market, professionals and homeowners selling. Private listings have been used and abused by some realtors, despite having committed to the NAR code of ethics.

Why do pocket listings

There are multiple reasons for this practice; the one that stands out is the attempt of listing agents at collecting a full commission, instead of having to split with another agent representing a buyer who found the listing on the MLS. Thanks to buyers’ lists that agents build in many ways, including by setting up open houses for that primary purpose, listing agents can find a buyer quickly, which is sometimes one of the sellers’ goals.

More importantly, if they have the listing (representing the seller) AND find the buyer, they net the whole commission. The downside for agents is minimal, as the full commission easily exceeds the loss due to a likely lower price. However, that violates the fiduciary relationship between agent and their seller. It’s a poorly kept secret in the industry, but most sellers are completely unaware. It’s sellers who lose the most as for every dollar they lose in the sale due to the restricted number of buyers competing for the purchase of the property, the loss is split in 94% for the seller and only 6% for the agent, but there is no commission split with a buyers’ agent.

Example: Agents rather sell a property for $90 and get 6% by selling it to a buyer from their private list only and pocket $5.40 (6% of $90), than market on the MLS for $100 and sell to a buyer who is represented and is owed half the commission, therefore pocketing only $3 (6%/2=3% of $100). If the price is $900,000/$1,000,000 which is not that uncommon in states like Massachusetts.

We will have to wait and see if and how this is enforced because it breaks a fairly common practice.
It would also affect some showings that genuinely require private marketing, as in the case of celebrities.
For those realtors who complain by saying that it’s their clients who require such type of listing, they should be reminded that they advise their clients and if they informed them that they could be underselling the

Sellers need to be made aware of all the best options available in a professional and ethical way and timing.

property, many would probably prefer an open listing.
Sellers now have more and better opportunities to sell faster and for more.
Buyers have more listings to choose from, especially if they have a buyers’ agent representing them.
Listing Agents miss out on the opportunity to get paid the whole commission without having to split.
Buyers’ agents have more opportunities for their clients.
So to summarize, this is bad news for listing agents, who emerge as the losers, but only those who regularly used this technique. Everyone else wins, but only if the rule is effectively enforced.

This sounds like one of many attempts at disciplining industry practices like others in the past, often largely ineffective as workarounds are always found when the monetary incentive is often so high in real estate.

Winners and Losers:

Listing agents LOSE, because they lose control over the marketing for that listing and potentially the full commission.

Buyers agents WIN because they have more opportunities on the market to find their clients a home to purchase and therefore to earn a share of the commission.

Listing sellers WIN because their property opens up to a much larger pool of potentially bidding buyers.

Other sellers LOSE because more properties are released on the open market to compete with theirs.

Buyers WIN with more homes available to choose from and possibly lower prices thanks to the more competitive environment.

Buyers on listing agents lists LOSE because they may have to compete with more buyers.

For more and a point of view more focused on Sellers, read here!

Proxima Investors are not Realtors nor Real Estate Agents and do not charge listing fees to their Sellers providing the best return for their important asset, their home.

Selling haunted homes in Massachusetts

October 31, 2019 mngr Buyers, Law, Real Estate, Sellers

Disclose or not disclose?

Since it’s Halloween, let’s see what the law says about haunted homes, murder, suicide, paranormal activity, which happened or, allegedly, are happening in the building in Massachusetts.

Stigmatized properties for sale in Massachusetts and Sellers’ disclosures

When Selling a home, a Seller has to abide by many rules and guidelines. Some of these are pertinent to facts that may affect the building, and in turn the transaction, and that the law may or may not require a seller to disclose.

A stigmatized property is a property in which paranormal activity is reported or suspected, or where heinous events have occurred, such as murder, suicide or both. The law also considers an association of the property a certain illness, but that has lost much of its impact nowadays, so it’s more about the former occurrences.

Each individual, seller or buyer, has a different sensitivity to the issue of stigmatized homes and for many it’s not an issue at all. The issue of disclosure of these events and situations could add uncertainty in a transaction if not clear.

Scary ghostly figures in haunted building..

There are already so many hurdles, like inspections, appraisals, concessions, fees, assists, waivers, endless negotiations and other disclosures that having to reveal a “paranormal presence” in a house could jeopardize a done deal by spooking even very motivated buyers.

The creaky floors could be something easy to fix and not likely to hold up a Purchase & Sale, but should they be thought to be due to paranormal activity and not having been disclosed by the seller, it could create an insurmountable issue. If it emerges after signatures have been exchanged it could provide a solid reason for legal claims based on lack of disclosure.

MASSACHUSETTS LAW

Unlike California, where you can go back 3 years and more for psychologically impacting events on the property, it’s not the case in Massachusetts! The law clearly states that, as it doesn’t fall in the category of material facts which have to be disclosed, it’s unnecessary “to disclose the fact that the property was the site of “…felony, suicide or homicide” or “…that the real property has been the site of an alleged parapsychological or supernatural phenomenon.”

HOME SELLERS AND LANDLORDS

No disclosure of any stigma on a property for sale is legally necessary in Massachusetts for a Seller, but for a Landlord or Lessor also.

HOME BUYERS AND INVESTORS

The general “Caveat Emptor” (Buyer beware) rule applies here for home buyers and buying investors, who are expected to perform their due diligence in general, but especially with regards to this specific issue if they’re sensitive to such a property. If you’re a buyer, it would be advisable to talk to neighbors, research public records, and just ask clear and direct questions, especially if there’s a doubt, maybe rumors, maybe a feeling.

If home buyers ask clear questions about any stigma on the property, the seller cannot misrepresent or make false statement without giving cause of action, with half-truths also providing an opportunity for a successful lawsuit.

CHOICE TO DISCLOSE

What sellers can do, is to provide information voluntarily. If they so choose, it’s their prerogative, but NOT obligation and buyers can’t claim it as a right to have that information disclosed.

REAL ESTATE AGENTS

If the seller is represented by an agent, in the same way no disclosure is necessary. Due to the fiduciary nature of the relationship between agent and seller, the agent cannot provide the information voluntarily, unlike the sellers, and unless the sellers themselves authorize or instruct the agent to do so. The agent can always decline to represent the seller or terminate an agreement already in place if the information emerges after establishing the contractual relationship.

REAL ESTATE INVESTORS

If an investor, like us at Proxima Investors, is involved in the sale, depending on the type of underlying deal, the investor is subject to the same disclosure rules as the seller, holding equitable interest in the property.

PROXIMA INVESTORS

At Proxima Investors we have not come across a situation of stigmatized properties where it was a concern. However, since Massachusetts and New England in general, are old states with many antique and beautiful homes which have witnessed a lot. Homes can have a long and known history and the creaks and noises of old homes can be unsettling and inspire stories passed down over centuries, and sometimes made more “interesting”. Think about Salem in the 1600s when Massachusetts was a very populous state with lots going on. It’s only a matter of time that we will run into this issue. We already have invested in old and antique homes, which can be difficult to sell in this market, and we love them. Should the issue at some point arise, we believe that it should be dealt with on a case-by-case basis, as property stigmatizing events and situations have a different psychological impact depending on their uniqueness and the specific circumstances.

The bottomline for us is that we don’t have to disclose, but if there’s a particularly unsettling story linked to the house, we would probably not invest in it anyway…

Proxima Investors of Massachusetts are not attorneys and we do not provide legal advice and only state our opinions. Check with your attorney of choice before making any decision based on the content of this article. A useful resource can be found by clicking the link below to the relevant section of the state law: Real estate transactions; disclosure; psychologically impacted property.

Massachusetts Law Reference: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter93/Section114

Home exterior, front yard with spookie Halloween decorations in the front yard

Stuff happens…

October 4, 2019 mngr Real Estate, Sellers, Stories

Sometimes, when you’re heading home to grab your things and head out for an appointment to view a home to buy, this happens…

puncture before buying a house — Hurdles between Proxima Investors and a house to buy

A nice screw (washer included, maybe it’s a good thing) through a month old tire. Classic from tire kicking up the screw that was dropped in the middle of the road, then puncturing the rear which is less than two months old.

That forced us to rush to the nearest tire repair establishment before we had to be towed or had to take the wheel off.

Tireshop — Northborough Massachusetts Tire Shop

We brought it in for repair and luckily it was fixed so quickly that we were able to head out almost on schedule. Thanks to the New England Tire Care Car Center in Northborough, who plugged the tire from the inside, which apparently is great, and pleasantly for us, they did so ahead of schedule.They underpromised and overachieved, always a customers’ favorite! Good to have in Northborough!

Traffic on the interstate — Bumper to bumper traffic slowdown

Soon after getting on the way to Western Massachusetts, we inevitably hit this on the interstate…Big slowdown and stop and go traffic for no apparent reason, just a lot of stop and very little go, until it suddenly opened up. You’ve got to love electric cars in bumper to bumper situations!

Proxima Investors car in sunset — reaching destination on time

Again, luckily we still made it within 3-4 minutes of the agreed upon time.

The idea was to cause the least disruption possible, because kind tenants, who are moving out soon, were going to show us the property on behalf of the owners and we didn’t want to cause unnecessary inconvenience.

The home we’re interested in buying turned out to be really nice, with some amazing space, in a beautiful setting and a really pretty town which, as many other New England towns, looked picturesque in the light and colors of a late afternoon in the Fall with great weather…It certainly helped that we arrived in the late afternoon with the sun to the West and being able to see the warm light of sunset hitting the West side of the house, which is also where the main entrance and a long balcony is situated.

Maybe we will buy it, maybe not, the seller is very savvy and reasonable which is always a critical factor in making a deal that works for all, and what we really appreciate is also that the seller is responsive, available and easy to talk with. However, we’re early in the process and our deals are very detailed and thorough, so it may take a few days just to know for sure. I really want to thank the very nice couple who lives there taking time out of their day to show us around. Kudos to them also for an overall very well kept home. I know they bought another home and they are moving on to a place with an amount of space that they can handle efficiently, since the kids have or are moving out and this house is really spacious. Thanks again!

The bottom line and the whole point is that if you make an effort to create buffers between your commitments and what can get in the way, even very unexpectedly, you can still fulfill your obligations and not fall short of your promises like we do in all our deals.

Home Sales in Massachusetts and New England

We set up buffers to soften unintended problems, which inevitably occur, so it’s never too stressful having to find a solution

and the timeline is always preserved and kept within our windows.

As an example, if we foresee monthly carrying costs for $1,700, we budget $2,000, so if taxes go up, we’re not caught short and have to scramble to cover the payment out of the project budget; or if we think that a deal is going to be completely executed in 24 months, we factor in an extra 6 months, maybe in the form of an extension so we have a checkpoint to reorganize and get it done; or like in this case, if we commit to a 5 o’clock appointment, we aim for 4:00 so we can use the extra time to resolve any possible issues which often arise at the very last moment. There are many areas of different levels of importance where we do this.

Because caution when investing in real estate lets you stay in real estate successfully.

Things happen, it’s about preventing, controlling, minimizing and making up for them while moving forward to finally achieve the set targets, with our home sellers and buyers.

In the end it was a much nicer trip than it looked like even before we started out!

We buy the sellers problems, fix them and sell a dream come true to buyers