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Real Estate and Attorneys

By Paul Harsch
iBerkshires Columnist

Here in the Northeast, attorneys are an integral part of virtually every real estate transaction from the simplest to the more complex. In other regions of the nation, however, known as title states, attorneys are much less frequently involved in the normal residential transaction. Those are handled through the real estate licensees and title companies.

The primary reason we have attorneys engaged in the real estate transactions here in the Northeast is to handle the title searches, banking and the closing documents. Could title companies do those, yes, but it is not the present customary practice in the Northeast.

In the larger metropolitan areas like Boston, Hartford and New York City, real estate brokers most commonly prepare offers but then the process is turned over to the attorneys who draw up the purchase agreements. This is a widespread practice in much of New York State but none of these practices are required under the law, they have just evolved.

In Berkshire County and over the border in Vermont, most brokers still prepare the purchase and sales agreements using forms created by boards of realtors, although some of the newer younger agents appear to be leaning toward bringing lawyers into the transaction sooner.

A real estate transaction evolves out of negotiation and then transforms into a process of handling documents and this is where the attorneys spend the majority of their time, unless of course there is some controversy or problem that arises that is legal in nature in which case, by definition, the real estate licensee must step back and allow the lawyers to handle it.

Attorneys are by training advocates for their client, they are not negotiators per se but of course some lawyers will profess to be "deal makers and not deal breakers." Nevertheless, so much rides on the personality and style of the attorney or attorneys involved as to how things turn out, whereas with the real estate licensees, their training is to do all they can to put a deal together through give-and-take negotiation. I have seen significant terms in a previously negotiated agreement changed by an attorney for one side or the other that then kills the sale. It doesn't happen very often but it can.

Attorneys often step into a transaction very far into a listing and negotiation and as such they don't know the personalities of their client very well or the history of the listing process or negotiation and thus they may be tempted to make snap recommendations or assert a view or position that is out of sync with the entire process.

Of course, clients don't have to follow their attorney's advice when it comes to optional matters but they often do, thinking the attorney somehow knows best. Some attorneys will even act without the knowledge or consent of their client because they believe they know what is best. That may or may not be the case so consider carefully the style of the attorney you select and weigh your attorney's advice just as you should weigh the advice and input from everyone your hire whether it is the real estate agent, an inspector, bank lender, or contractor.

In brief, be a fully informed and engaged consumer of all professional services.

When is it the right time to hire your attorney? Whenever you feel the need for legal advice is the simple answer or whenever you don't understand any aspect of the transaction and particularly when it has legal implications. Keep in mind that every document you are asked to sign regarding a real estate transaction is potentially legally binding and as such you need to take full responsibility for fully comprehending the document or for seeking the advice of an attorney if you don't.

Safe is far better than sorry in matters as important as these.

Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years.

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High End Sales, Williamstown and Berkshire County

By Paul Harsch
iBerkshires Columnist

The first million-plus sale in the county was recorded in 1996 and three years later the first one in Williamstown. In the ensuing years there have been a total of 280 countywide, of which 21 have sold in Williamstown. Three each sold in 2002, 2007 and 2012 with none in 2013 and one so far in 2014. Countywide, the number of million-plus sales peaked in 2004 and 2006 at 31 each down to 21 in 2013.

Meanwhile the inventory of high-end real estate listings reached around 14 or 15 in recent years in Williamstown and 83 countywide. At the current rate that means 14 years of million-dollar inventory in Williamstown and four year's worth in the county as a whole.

What has happened in the high end of the market?

Million-dollar sales are here to stay and in fact the top-end selling prices will also tend to edge higher as well. Let's face it, we have some fabulous real estate in Berkshire County and people keep adding more as well so I foresee a continued market for high-end properties, as with all price ranges of course, but at a muted level in the near term as the economy works its way back out of the great recession of 2008-09.

Berkshire County has lost population over the years, everyone knows that is due to a combination of job shrinkage as well as retirements to sunnier climes. The Berkshires will never lose its most valuable assets, however, and those we consider to be our scenery, our cultural assets (which keep growing) and our more reasonable pace of life as compared to the major cities in the Northeast. No one can take these treasures from us and these are the attractions that will continue to draw second-home owners who will purchase our high-end real estate.

We are blessed with a relatively benign climate where hurricanes, tornadoes, earthquakes, and persistent deep snows and sub-zero temperatures are either non-existent or of a moderate level so as to produce little if any damage. We are typically spared the most severe effects of hurricanes, we manage our snow easily, and the region is not expecting any earthquake or volcanic activity, at least none that would cause damage or injury.

Thanks to our relatively sparse populations we don't have concerns for the urban problems of civil unrest, traffic snarls, municipal worker strikes, breakdowns in public transit, major utility failures and we are not likely to be a target we hope, for any sort of terror act. This is why, as an example, the Clarks built the world renowned Clark Art Institute here, because they wanted to house their collection far from any potential nuclear strike zone (this was during the height of the Cold War with Russia) and yet be within a reasonable distance from New York City and Boston.

In short, the Berkshires are a fabulous place to live or have a second home and these are among the many reasons our second-home market will remain strong in the years to come and we hope, return at some point to the level of activity it once reached. Perhaps we need to wait a few more years for a more complete economic recovery and perhaps there are some listings which are priced too ambitiously and which would do better to be under the million-dollar level but of one thing we can be certain, million-dollar sales are here to stay in the Berkshires.

Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years.

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Real Estate Inspections

By Paul Harsch
iBerkshires Columnist

Today it is routine to have various inspections performed when purchasing real estate. In Massachusetts, one inspection is mandatory and others may be a requirement to obtaining a mortgage. The types and extent of inspections vary with the type of real estate such as land, home, commercial property and the specific circumstances.

We'll focus primarily on a single family residential transaction and just touch on a few other types. These are typical but other inspections may be advised and they are not listed in any order suggesting priority.

Structural or whole house: these are performed by someone licensed by the state (no license required as of yet in Vermont) who will check all visible aspects of the structure, the systems (electrical, plumbing, heating, ventilation), both inside and outside, the foundation, drainage, insulation, in short, everything to do with the house other than cosmetic. Some inspectors will also inspect the appliances, water softeners, filters, AC and other components.

Water: If the property is served by a private source such as a well then it is advised a water test be taken to check for bacteria, contaminants and even the ph of the water.

Radon: This is available by the home inspector or by purchasing a simple kit to do it yourself for air testing however testing for radon in the water is also available if on a well.

Septic System: In Mass., this is referred to as a Title V inspection and must be conducted by a person with the approved state licensing credentials. This particular inspection and certification is required under state law whereas the above three areas of testing are not mandatory though highly recommended.

Percolation Testing: this testing is done when purchasing vacant land to determine the suitability of the site for a septic system. All states in our region require this to be performed in order to obtain a building permit.

Soil testing: in any case where contamination from a hazardous spill or leak is suspected then soil evaluations are done to determine the level of contamination, the type of contaminants and the necessary remediation procedure. It is routine to perform initial site history review on any commercial real estate but buyers should be cautious to consider the fuel type history of other properties such as agricultural or even homes to determine if there may have been spills or buried fuel tanks.

Asbestos: Asbestos may be present in a variety of building materials and as such if demolition or remodeling is under consideration testing should be conducted to determine if there is asbestos containing material present from shingles, to flooring to popcorn type paints and insulation and the process of removal.

Lead Paint: this is of particular concern in residential dwellings and it is illegal to have children under the age of six occupying full time a dwelling where this is known to be present. A licensed lead inspector is required to perform lead tests although there are very inexpensive self-test kits available at hardware stores. Keep in mind that even if you do the self-testing, if lead paint is discovered under the law de-leading would be mandatory if young children occupy the house or apartment, owned or rented.

UFFI: Ureaformaldehyde foam was a very popular form of insulation in the 1970s and very effective as an insulator but often the installations gave off excessive formaldehyde fumes which were a troublesome health hazard and thus the foam was banned. There are new foams on the market today that are highly effective insulation materials and non-hazardous. Existing older foams no longer pose a health risk from fumes but information should be obtained about any concerns there may be such as toxic fumes that can be given off when burned.

Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years.

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Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years. He has achieved personal career sales exceeding $131 million and company sales from 1979 will top $500 million in 2014. Harsch is a member of the Berkshire, Massachusetts, Southwestern Vermont and National associations of realtors, is a licensed Massachusetts real estate instructor and earned the CRB, CRS, GRI and CBI designations. Harsch is a 1969 graduate of Williams College.

To submit comments, questions or requests for future blog topics write him at paul@harschrealestate.com.

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