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Who Will Be Showing Your House or Property?

By Paul HarschiBerkshires Columnist

You listed with someone for a particular reason but then you discover that individual may frequently not even show your property and sometimes never. Hmmmmm. Make a difference? You bet it can.

If you chose your real estate sales person for a reason such as you trust them implicitly or you know they have a great many years of experience, or you learned from a trusted friend or business associate that the real estate person demonstrated unusual dedication, skill or problem-solving ability, then wouldn't it make sense that you'd want to know if they were going to be personally engaged in the process of selling your property, too?

How do you feel when you have planned on dealing with one individual, say your doctor, only to be shunted to someone else because your doctor was too busy that day? Or how about that lawn person who has done your lawn for years and knows all the quirks of the yard and how you like it done and then one day someone totally new shows up saying they replaced your regular person?

Anytime you place your trust and confidence — whether it's your health, property or car — in someone's hands you will feel uncertain if someone else steps in. And so you should, but in real estate it happens all the time.

Take for example a firm that hires new people. You listed with one person because of a strong preference but the company's policy is to allow anyone in the firm to show your property. Now you may have a perfectly good buyer looking at your property with someone brand new to the business, or someone who doesn't like your house for some reason, or someone who is unavailable much of the time dues to other interests. The point is that your property is now being "represented" by people you don't know or who don't have the skills or dedication you expected when you signed with the listing salesperson.

There are skills, dos and don'ts in showing, there is skill and sophistication when it comes to negotiating, there are levels of dedication and commitment that vary considerably among licensees. Make sure you understand what you're getting when you commit to an individual.

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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Who's Your Real Estate Agent?

By Paul HarschiBerkshires Columnist

After signing a listing agreement as a seller with a real estate agent or facilitator, do you know who your real estate agent is really going to be? You may think you do but chances are you could be mistaken. What do we mean by this?

Many people will list their home or property with an individual, someone they may know or who was referred to them, or maybe they just picked the phone or walked into a real estate firm and were assigned an individual. Is this your real estate agent or facilitator? Maybe in the end, they are not.

What this post is pointing out is that depending on the firm, their size, their office policies, your home may be shown in a variety of ways by a variety of people and you may not have any choice at all about this.

For example the practice in many areas of the country and many markets is for the listing agent/facilitator to place a lock box on the property so that any licensees in that MLS (Multiple Listing Service area) may access the house on their own, without even being accompanied by the listing person.

In other cases, say in an office with multiple sales persons, your property may be shown many more times by someone in the firm other than the individual you actually listed the property with in the first place.

It is therefore really important that you understand who can access and show your property and how they do so when deciding on where to place the listing on your property. Do you care? Does it matter or make a difference? You bet it does and can!

Future blogs will delve into these subjects in some detail.

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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What If: Engineer a New Use for North Adams Hospital

By Paul HarschiBerkshires Columnist

What if there was actually an exciting new use for the existing hospital building?

What if BMC and decisionmakers determine that the present North Adams Regional Hospital structure is simply too large for the present and declining population in North Adams and Northern Berkshire?

Besides the difficult road to recovery for all of the displaced employees for whom we as a community will need to do our very best to help become either re-employed elsewhere within the region or re-trained for new opportunities, there would then be the enormous task of re-utilizing the existing hospital structure.

What if we as a community and as a county were to re-imagine something radically new, something so fresh and different that, like Mass MoCA which was, let's face it, at the time, an extraordinary dream of seeming impossibility, it could actually work?

Quite a few years back Peter Fohlin, the town manager from Williamstown, shared with me an idea I always thought brilliant and have since shared in conversations with a number of leaders in our area, an idea whose time may really have arrived if indeed it is determined the hospital as it is can no longer be justified due to its size and the changes in health delivery today.

The idea is to establish an engineering college here in the Berkshires.

Until now, the idea didn't appear to be taken too seriously or was treated as too far-fetched. But with the looming possibility facing us that the hospital could end up empty and even emergency services might have to move due to the way in which the utilities are all tied in together with the entire building, now may be the time — just like when Sprague left.

What is needed when something as huge as the closure of the hospital is upon us is not to wring our hands and throw in the towel but instead to think new, bold and affirmative ideas. Out of every seeming problem is invariably an opportunity and quite possibly now is the time to seize upon this idea which has lain dormant and to run with it.

Boston has a state engineering school as does Worcester. North Adams has MCLA, Williamstown has Williams College and to build upon the educational and arts orientation of the northern area the  addition of a state engineering school could be the shot in the arm (pun intended) that is needed with the closure of the hospital.

Others may have alternative suggestions but I can't think of another possible use that could bring more high paying jobs, more general employment and more income to the area than an engineering college and the spinoffs would be equally impressive. Such a school would not only help stem the tide of population decline due to the aging of the baby boomer generation in general but would bring youth and revitalization to the area so badly needed.

One need only look over the mountain at Northampton as an example of how much vitality and prosperity is brought to an area from education. Mass MoCA for all its extraordinary qualities primarily brings temporary visitor traffic. An engineering school would bring permanent change and activity and help rebuild our communities and local economy.

The hospital building, if re-utilized for an engineering school, might also be able to accommodate the emergency services area without disrupting that from the present location. The two uses could be entirely compatible. In fact it could even be quite feasible to reconfigure the hospital down to a manageable size, a fraction of what it now is, so that the city could in fact maintain a small local hospital alongside this proposed engineering school.

Peter Fohlin's idea may well have found its right time and place in the form of an engineering school in place of the hospital. What could be more vital in today’s world than a place to educate the nation's future for the needs and world of the future.

I put this out therefore to the public and to leaders and decision makers to discuss, on the local, regional and state level. We cannot allow this extraordinary event and the opportunity it presents to slip through our hands. The time is now to focus not just on the loss but more importantly, too, on the opportunity to transform the loss into something even better.

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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Investors Taking Advantage of the Real Estate Market

By Paul HarschiBerkshires Columnist

I've been reading recently of the very significant volume of residential purchasing being done by hedge funds and investors in general and, while we live in a democratic capitalist society, it troubles me.

Here we are just four years out from the devastating effects of the derivatives scandals and excesses and once more big money is manipulating and disrupting another part of American life, purely for profit.

Housing was once just that, a house, a place of comfort and refuge but now it's treated like an entire market to be manipulated, used by big-money interests for their gains regardless of the impact on the average American.

What's worse is that the hedge-fund buying is gathering up thousands and thousands of low-end real estate that otherwise would have been available as starter homes for Americans looking to establish credit, build some equity, join in the "American Dream." Instead, they are now in many cases forced to rent from these investor funds the very homes they might otherwise have been able to purchase. Worse, they may be renting the houses they once owned but were foreclosed on due to the abusive lending practice of putting people in submarket rates that escalated rapidly to excessive levels.

Who cares and why should we?  Anytime a 400-pound gorilla enters the ring, it's clear who's going to win: The gorilla every time. In this case it's again the hedge funds that are intending to skim the profits — first from rental income and later from the theoretical appreciation that will occur with time that otherwise could have helped lift tens of thousands of Americans to a better living standard. Now these Americans will pay rent and get nothing for it.

A recent Goldman Sachs study estimates that 60 percent of all real estate transactions are now in cash. Apart from a small percentage of the very wealthy who may purchase real estate for their personal use with cash, the balance of all these cash transactions are by hedge funds that have bought up masses of foreclosures from lenders. The proof of this trend is starkly evident when only as recently as five years ago the level of cash purchases was 5 percent.

It is a cruel and perverse irony that the very firms and individuals who brought the house of cards they erected down in the great financial meltdown of 2008 are now the ones picking apart the leftovers again for their gain, at the expense of the common American.

So the next time you read a news article about the shortage of inventory of homes for sale or price increases you will now remember that the cause is hedge-fund buying and not necessarily a sign of a robust and rebounding market based on average Americans getting back into their dream home.  

It's also important to realize that the shortage of listings on the market is not spread evenly around the nation. Those markets that were at the epicenter of the bubble-up and then the crash, like cities in Nevada, Florida, California and Arizona for example, are also now where the hedge funds have focused and are impacting the markets the most by buying a high percentage of the formerly troubled real estate.

In our region, the Boston market is bucking the trends and demonstrating strength from conventional buying. The greater Boston area thrives and continues to witness strong real estate trends due to the education, medical and technology base of its economy. New York City benefits as the financial capital of the world and as a magnet for a very high degree of foreign wealth as purchasers of high-end real estate.

Berkshire County, I am happy to say, typically doesn't experience the extremes of highs and lows of racier markets around the country but we are not immune to the trends either. There is very little speculative buying for flipping any longer but there has been a slight uptick in purchasing lower-end real estate for renting as an investment. Those buyers hope to achieve a positive cash flow in the short term and expect appreciation to yield a nice payday when they cash out. Time will tell how that works out.

There is very little spec building at present but a few courageous builders are doing that as a way to keep their crews going and to make up for a drop in new contract building.

With vast sums of money sloshing around in the banks and investment houses it's no wonder they keep looking for places to put their cash to work. Quantitative easing has pumped billions into the hands of these powerful firms and, as always, it works to their benefit and not typically for the benefit of the common man, the 99 percent and certainly not the bottom 20 percent.

Here in Berkshire County the majority are enjoying their homes as homes and not trying to turn them into cash machines. That's another reason I enjoy the Berkshires so much!

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 and Attorneys

By Paul HarschiBerkshires 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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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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