90-day stats for Condo properties in PEMBROKE, MA as of October 7, 2011
Median List Price:	$266,173	Average List Price:	$278,933
Total Inventory:	14	Price per Square Foot:	$164
Average Home Size:	1,779	Median Lot Size:	n/a
Average # Beds:	2.06	Average # Baths:	2.25
Homes Absorbed:	1	Newly Listed:	1
Days on Market:	187	Average Age:	0

Talk Real Estate With Sharon McNamara
Relocation Services
Sue Bollinger, Boston Connect Real Estate
Special Co-host – Movetrek Mobility

Listen To This Week’s Show – February 4, 2012

Topic:  Home Insurance Policies
“Talk Real Estate With Sharon McNamara” &
Expert Co-Host, Sean Cunning of Sullivan, Garrity & Donnolly

Listen To This Week’s Show – 1.21.12
Topic – Home Insurance Policies
Expert Co-Host – Sean Cunning

Didn’t have a chance to call in but have some questions
regarding today’s show on Home Insurance Policies?
Contact Sharon McNamara, Broker|Owner|Realtor 781-826-7300

Announcer: Now 95.9 WATD presents Talk Real Estate with Sharon McNamara from Boston Connect Real Estate Services. Connect with Sharon now at 781-837-4900 and online at bostonconnect.com. Now, here’s Sharon McNamara.

Sharon: And good morning, Marshfield. This is Sharon McNamara, you are listening to Talk Real Estate with Sharon McNamara and my special co-host. I hope everyone’s always like sort of surprised to see who we’re going to have in the house with us today. But of course we have my favorite producer back there. We have Tim manning the phones and all the controls back there, so please remember this is an interactive talk show. Please call us at 781-837-4900. Today, we have Sean Cunning with us from Sullivan, Garrity and Donnelly. Did I do it?

Sean: Perfect.

Sharon: Perfect, yeah. Well, I have to tell you, you have no idea how many takes that took me when I was doing some of our promo stuff, so. I’m so excited to have you here with me. Sean is actually my personal insurance agent as well and we switched over, Mark and I switched everything over to you, gosh, how long ago was that?

Sean: I don’t know.

Sharon: It seems like just yesterday, but I think it was a lot longer than that. So, we do have Sean Cunning in the house with us today, and we are going to be talking about insurance. Obviously, home insurance that’s why you would be here today because we’re talking about real estate. But since this is your first time with us, would you mind just giving us a little introduction of you, your company and what you guys do over there?

Sean: Sure, absolutely. Again, the name of our company is Sullivan, Garrity and Donnelly insurance. Our main office is in Worcester, but I actually manage the coastal offices that we have in Cohasset and Chatham. We have about 50 employees now at all these locations. We’re a good sized agency. We’re still family owned, family run, fourth generation family business. And it’s great.

Sharon: Yeah, it’s awesome. Now, I know I obviously deal with you in Cohasset. And I have to tell you: your staff there is just so fabulous. I mean to call up, I mean I don’t want to offer this you know service to everybody but. One of your employees works near my house and she’s often has said, “Oh, when I drive by your house later, I’ll just put it in your mailbox.” I mean, that’s service.

Sean: Sure, that is. We try to give that personal touch. I know we’re starting to compete against some of these online carriers and things, and that’s some of the stuff that they can’t really provide.

Sharon: No, absolutely, positively not. I’m all for the… It’s not that your sort of, well you are sort of a boutique style in the grand scheme of things. And Boston Connect, obviously is boutique style. And I love that that you can have a little more individual time. Because I know when I call. I mean I know you’re super busy but you always take the time to take my phone calls and to get back to us. And when I got my new vanity plate, which you’ll be able to see out in the parking lot, boy, that was seamless.

Sean: Yeah, it goes pretty smooth, exactly.

Sharon: So what other types, what grand scope of insurances do you do?

Sean: I probably spend 50% of my time mostly on working on high end coastal homes up and down the coast. When I say coastal, it’s properties within a mile of the ocean. And it’s getting harder and harder to write these, and it’s become a special niche of ours and it’s been easy. I can’t tell you how many people come into our office with, you know they have an agent from Western Massachusetts that doesn’t understand the coastal market, and they automatically put them in a high risk pool. And that’s not always the case.

The other part of our business is we’re doing a lot of home, boat, automobile, a lot of businesses, too. And we actually, one of our other niches is golf courses. We do a lot of high end private golf courses.

Sharon: Really. Ah, interesting. You know it’s so funny because as you just named those things I was like, oh yeah, that’s right, he did insure our boat or yeah, that’s right, he did insure Boston Connect. Oh yeah, that’s. I have my… you helped me get everything. My bond, my E&O insurance. Everything is with you, boy!

Sean: Yeah, you’ve got to be an expert in everything.

Sharon: I guess I’m a really good client of yours. No, all kidding aside. I do get this a lot on the radio. I only bring on people that I trust, and I think that that’s one of the things that I really, really have a lot of pride in with my business and my company is the people that I refer to are just so fabulous. Obviously, if I wouldn’t use you myself, I would never refer you to one of my clients, so.

Sean: Sure, I appreciate that.

Sharon: Yeah, and I know there have been times. People have their own insurance people and everything, but I always give out your cards. I know that there have been many a times when you have been able to beat the prices of everybody. So I do appreciate all that.

You do bring up some good points and one of the things I wanted to talk about was condo insurance. But I would really love to talk about the coastal stuff, because you are an expert on that. And I think that you do bring up a good point, it’s very similar to the mortgage industry now when we have bank appraisers that come in. So, a bank appraiser that comes in from Worcester or Littleton or from one of those other Western towns, when they come in they don’t really know the differences between Duxbury on one side and Duxbury on another side. Or Cohasset is probably very similar. Since your one office is in Cohasset, and I know that you live locally, that you do really know the differences from everything. So, why don’t you give us a little bit of introduction to all of that type of insurance?

Sean: Sure.

Sharon: I know it has something to do with wind too, doesn’t it?

Sean: Exactly, yeah. Wind deductibles are important. A lot of people don’t understand how wind deductibles work. Almost everybody from a mile in has some sort of a wind deductible. And a wind deductible is typically either 2% or 5% of the value of the home. And a lot of people don’t realize that. A lot of people say, well it’s 2% of the value of the claim. That means if you have, say a hurricane comes through and tears the roof off your house. If you have a 2% wind deductible and your house is insured for $500,000, that means the first $10,000 is going to be out of your pocket.

Sharon: Oh.

Sean: I even have other clients with 5% wind deductibles.

Sharon: So that’s basically the cost of a roof probably, right? You know what I mean?

Sean: So, basically you have no coverage on some of these wind claims. And if a wind blows a tree into your house, and we had some high winds recently, same thing.

Sharon: And what about the actual flooding? Now I know in one area of Scituate, down near the numbered streets there like 2nd Ave and all those other streets. Remember there was that flooding and then the fires and all that. I mean how… I mean what is that, I forget what it’s called so I’m glad that you’re here. But the insurance that they have to get, and it’s all government stuff now, too, isn’t it?

Sean: Exactly, and the banks are really cracking down on it. It’s all related to FEMA. FEMA’s the only one that writes flood insurance. The most flood insurance you can buy these days is $250,000 in flood.

Sharon: Oh, really?

Sean: And it’s expensive. And the flood zones are changing all the time. I think Cohasset, the most recent one in our town was redone, the maps were redone in 1996. And a lot of people went from a medium risk zone to a high risk zone. If you’re in an A or a V zone, you can expect to pay a lot for your insurance. I’ve got small properties in Hull that have to pay $4,000 a year in these low lying areas. And again, when somebody is buying a house, they might not look at this until the very end of the process. And it’s typically not an exclusion to back out of a contract.

Sharon: Oh yeah, that actually is a very good point. Because I know myself when I am working as a buyer’s agent and we are looking at coastal properties, that is something that I’m always asking. But I don’t know why my memory is not serving me right, but there is a phrase that I always say. Like do they have to have special, I guess, it’s just flood insurance I guess is what I’m saying.

Sean: It’s really flood, yeah.

Sharon: But if they only cover 250, all right, let me back up. I’m so excited to have you. Can you tell I’m like stumbling? I didn’t have enough coffee and I almost had an insurance claim for you on my way in, sliding by the parking lot today. So, my question is. With the $250,000 and you said the flood part of it. What is a flood? Is it water coming up through the bottom, water coming down from the top, sides?

Sean: Great question.

Sharon: Thank you.

Sean: The definition of flood is when water moves across one lot to the next. So basically, it’s surface water only. It’s not ground water, it’s not seepage. Seepage would mean it comes up from underneath the house. That’s not considered flood. Flood is only moving water and if you have a finished… A lot of times, too, a way to save on flood insurance is to go out and get an elevation certificate. If your house is on stilts and it’s ten feet above the flood plain, well, your rate’s going to be a lot, lot less than somebody that might have a full basement, finished basement in the flood plain.

Sharon: Who do you get an elevation certificate from?

Sean: Any licensed surveyor.

Sharon: OK, a surveyor, OK. All right, so you said that water that is moving. So, let’s just take an instance where we had all that water last year. Was it like March or whatever when we had the rains and all that?

Sean: Sure, heavy, heavy rains.

Sharon: The heavy, heavy rains. And I know that people who never had water got water. So, what I also noticed, too, there was… I had actually a client call me one time and she’s like, I don’t even know what to do. She’s in her house, no water. She’s absolutely fine. The guy next door is flooded out, so he took a pump and he had the hose, and he put the hose over onto her, like under the fence, coming through to her property. So I mean that’s flowing water.

Sean: That’s flowing water. I mean what I would say in that case if she had damage to her property was to go to her agent, put in a claim rather than fighting with your neighbor on who’s paying for what, and let the insurance companies work it out between each other. It’s called subrogation. Your insurance will always take care of your problems, and then let them subrogate against if it’s somebody else’s fault. That way it doesn’t put neighbor against neighbor.

Sharon: Yeah, well, it sort of did put neighbor against neighbor. It’s like, can you move your hose, what are you thinking here? I can see it coming under the fence. So, but since that was ground water that was coming up through the bottom of his house, it was flowing into hers.

Sean: Exactly. It brings up a good point, too. If he has a sump pump and it’s pumping. A lot of policies like decent policies will have $5,000 in coverage for if your sump pump can’t keep up with the flow of the seepage.

Sharon: Really

Sean: And it’s a maybe a 15, 25 dollar endorsement to have on there. But if you have a sump pump, it’s actually a good thing. Because now you can pick up a little bit of that $5,000, maybe worth of coverage.

Sharon: It’s almost like having an alarm system I would imagine, right? It’s almost. And I say to people when I am working as a buyer’s agent, I do say to them, don’t be worried that you have a sump pump here. Actually, I would probably be happy because at some point there was water in this basement.

Sean: Exactly.

Sharon: There probably wouldn’t be one here if there wasn’t. So, at least, if there’s a problem, we know that it’s covered.

Sean: Exactly, yup.

Sharon: And not only that it’s covered, that it’s working anyways.

Sean: And keep in mind flood, too, does not cover much in the basement. It basically covers your furnace, washer and dryer, and believe it or not, a microwave oven. Other than that, everything’s excluded in the basement.

Sharon: It covers a microwave oven?

Sean: Don’t ask me why, that’s FEMA.

Sharon: That’s actually the strangest thing I’ve ever heard. Well, just in case you happen to have a microwave sitting on the floor. That’s ridiculous really, don’t you think?

Sean: Exactly.

Sharon: But look, we cover it, so they can say that. To our listeners, I just want to remind you I do have Sean Cunning here from Sullivan, Garrity and Donnelly Insurance Agency. He is the smartest of the smartest. Please call us with any of your questions, 781-837-4900. And as my listeners know, my 30 minutes go very, very fast. I assure you at the end of this show we will have all of his contact information so you can get in touch with him directly.

But right now, I went completely off topic from what I wanted to talk about, which happens. And we are talking about flood insurance. And I find it extremely interesting in regard to it only covering $250,000. I mean, in some of these houses they were burning down to the ground. And we actually have a caller. So, do you want to take the caller?

Sean: Let’s take the call.

Sharon: All right. We have Tom from Rockland. Good morning, Tom.

Tom: Good morning.

Sharon: I didn’t think that you listened to my show. I thought it was too early for you.

Tom: I can’t get a word in. I’m just listening to you go boom, boom, boom, boom, you’re so fast.

Sharon: Well, you know my 30 minutes it goes by really fast, so I try to get as much in as I possibly can.

Tom: You get 30 minutes in, in 11 minutes, in an 11 minute show.

Sharon: I know. Well, Tim will understand. If we have a lot of callers coming in today I’ll just cut my commercial out of the middle. So do you have a question for us, because I see we have another caller?

Tom: I do, I do. I have a question. When somebody has a home and it’s in a flood zone according to the government, do they, and if they feel they’re above the flood zone because of their elevation, can they put in for a waiver? And does it take much to get a waiver, if there’s even one available?

Sean: Great question. You can’t really put in a waiver because basically, if you don’t have a mortgage, you could do whatever you want. If you do have a mortgage you have to if you’re in an A or a V zone, you’re required to carry the coverage. Now again, if you get an elevation certificate and you’re up very high, you’re going to find the premiums to be extremely reasonable.

Tom: Who makes that decision?

Sean: Well, a licensed surveyor. If you went and got the elevation certificate and say the base flood elevation for your neighborhood might be ten feet, and your house is at 20 feet, well you’re plus 10.

Tom: OK.

Sean: So, you’re going to have a much, much better rate. But at the same time an elevation certificate can actually hurt you as well. Say the base elevation in your neighborhood is 10 feet and you’re at 5, well, now you’re negative 5 and you’ve got to pay a premium over the general neighborhood.

Tom: All people that are in a flood zone, are the rates the same for everybody? Or do they have insurance companies that can give better rates?

Sean: Those are all, good question there. It’s all the same, yeah. There are a lot of names you’ll see. There’s a company called Fidelity and Harleysville and a few other ones, but they’re really just a front for FEMA. They just handle the billing and the paperwork. But it all goes back to FEMA.

Tom: So, no matter who they go to they’re still going to be the same.

Sean: Yeah, it’s still the same, exactly. Now, you can play around with deduct. If you’re buying it just to satisfy the bank, a lot of people take a $5,000 deductible and that will keep the premium down. And waive it on contents since we know that not much is covered in the basement, anyways.

Tom: OK, good. Well, thank you very much.

Sharon: Well, thank you for calling, Tom.

Tom: All right. Sharon, talk to you later.

Sharon: All right, we’ll talk to you soon. Actually, I’ll talk to you later, Tom. Have a good one.

We also have Doc on the line. And I know that Tim is busy because we have another caller. So, see this is a hot topic for people. It’s extremely interesting and it’s extremely…And one of the things. I don’t know if you’ve heard me on my brother -in-law’s show, but it’s funny when we talk about finances. I really don’t think much about my finances because I know Mike McNamara is thinking about it for me. I have to tell you, like I sort of feel the same way with you. Like I don’t really think much about my insurance. I just sort of ask you the question and know that you’re doing the best for me. That’s actually, I’ve always felt good about it, but I feel really good about it right now.

Sean: Yep, yep.

Sharon: So, anyways, well, we do have Doc from Pembroke on the line with us. Good morning Doc. How are you?

Doc: Hey Sharon, hey Sean. You’re doing a great job. Maybe, you have to get a longer show because it goes by too fast.

Sharon: Well, Doc, do you want to pay for it for me, then we’re all in.

Doc: Question is, I just recently, as you know I run senior housing in Pembroke Foundation for Humanity. And I just recently learned something in the insurance field that some of the other landlords in this area are requiring the tenants to provide what’s called liability coverage. And I had never heard of that. What is the purpose of it and what does it cover?

Sean: Sure, good question there. Liability is one of your most important coverages. That means if, for instance, one of these tenants burned down the building, the landlord or the insurance company can go back to the tenant and have them pay for the damage. And if they don’t have that, they are going to end up paying it.

The key is subrogation. And that means like even if your insurance, say, you’re the landlord, your insurance would take care of the property. But they want to be able to subrogate and go after and collect the money back on the tenant’s liability insurance policy.

Sharon: So, this would be more than then having tenant insurance. Isn’t there like tenant insurance?

Sean: Well, most of the landlords don’t really care about the personal contents of a tenant, but they really want to make sure you carry minimal liability requirements. And that’s usually written into a lease.

Sharon: How much does something like that cost? I’m sorry to ask your questions here, Doc. But I’m sure you’re probably thinking the same thing.

Sean: No, great question, and it’s not expensive. Usually, the minimum you can buy it as a package where you get $20,000 in contents, $500,000 in liability, and the cost on that might be $150 to $300, depending on the carrier and how close to the coast.

Doc: That would be per year.

Sean: Per year, annually, yep.

Doc: Yeah, that sounds like a good idea for what I need for landlord/tenant relationship.

Sean: Absolutely yeah, it’s a must.

Sharon: Yeah, Doc. That was a good question, Doc, because, as you know, I have a two family in Pembroke myself, and I don’t know that we have that. I mean, you write the policy on that, too. Boy, I do give you a lot of business!

Sean: I know. I can buy you breakfast after this.

Doc: Sean, since it’s so reasonable, can the landlord actually purchase that for the tenant?

Sean: You know what it is? Insurance, the key to insurance is you have to have an insurable interest. Like I can’t insure your car or Sharon can’t insure my house. You can’t really do that. It has to be by the person with the insurable interest.

Doc: OK, all right. And does your company offer that?

Sean: Oh, absolutely.

Doc: OK. What’s the phone number for your company?

Sean: Sure, good point. 781-383-8505.

Sharon: Yeah, and I got to tell you Doc, and you know I’m not one to lie. I actually, I did have another insurance company, and I feel bad if that person is listening. But Sean was introduced to me through some networking that I was doing and I was like, you know what, I’m going to give him a shot and see what he does. And I slowly gave him one thing.

I have got to tell you, like, I was so impressed with this company and with Sean personally that we slowly moved, actually not slowly, quickly. We moved everything over. So you know my husband is McNamara Plumbing. I mean he does everything, liability insurance for that. Right, you do all of it. I mean, he’s doing everything for us.

I have to tell you, when McNamara Plumbing first gave Sean all of our stuff, you saved him like $2,000 or something ridiculous. I couldn’t believe it. It was like that much. Because our old insurance agent that we had had for 15 years never took the time to say, oh well, let’s readjust what’s going on here. But as soon as Sean took over all the policies, he really dissected everything, and he was able to give us some huge savings which helped us insure more things, which was great.

Sean: Exactly. And our key, too, is we’ve got the carriers. We represent over 30 carriers. And some other agents might have only one or two carriers. So, it’s like shopping for clothes, Sharon. You might go to the store and you say, do you only want to pick out one color, do you want to go to a store with only one color of coats? So, no, you’ve got to go to multi…

Sharon: Oh yeah, and I would never do that. I like to shop. Doc, did you have any other questions for Sean?

Doc: Yes. You say your husband is a plumber?

Sharon: Yes, he is. McNamara Plumbing right out of Pembroke, actually. We have a two family on Mattakeesett Street where he keeps all his stuff.

Doc: Can I give my phone number? I’d like to talk to your plumbing husband.

Sharon: How about if I give you McNamara Plumbing’s phone number. It’s 781-294-7100. It’s Mark McNamara, McNamara Plumbing.

Doc: Sharon, is it okay for me to give our phone number?

Sharon: If you want to, sure, go ahead.

Doc: Senior Housing in Pembroke is 781-826-8888.

Sharon: Yeah, great. And I know…

Doc: We’re going to be the next customer for Mark McNamara Plumbing.

Sharon: Perfect, and hopefully, for Sean Cunning as well because he is fabulous.

Doc: Thank you very much. Great show, Sharon, love it.

Sharon: Thank you, Doc. Have a wonderful weekend.

Sean: Thanks, Doc.

Sharon: Well, we’re actually coming to a break. I saw somebody else calling. Did they hang up?

Tim: No, but I figured we’d take the break first.

Sharon: OK, perfect. Well we’re going to take a quick break. And Tim, why don’t we just cut my commercial out and just do Sean’s if we could. Is that okay? All right, well we’re going to go to a break, we’ll be right back.

[commercial]

Sullivan, Garrity and Donnelly Insurance is a full service insurance agency offering a wide range of financial and insurance services. At SG&D we have access to the strongest and most respected insurance and financial markets available to meet our personal and commercial insurance needs. Since 1922 we take pride in our commitment to providing unparalleled service at competitive prices. With more than eight decades of experience and our ability to meet the complex insurance needs of today, we create the best solutions for our customers personally and professionally.

We have convenient offices throughout Massachusetts, including Cohasset, Chatham and Wooster. Please visit our website at sgdins.com. Or call 1-800-287-8501. Sullivan, Garrity and Donnelly Insurance is a proud member of the Assure Alliance Group.

Announcer: You’re listening to Talk Real Estate with Sharon McNamara on 95.9 WATD. Call in and be a part of the show at 781-837-4900. Now, back to Sharon McNamara.

Sharon: And we’re back and I’m going to talk really fast because the phones are ringing off the hook because everybody is probably in with the snow. But if you want to call, 837-4900.

And, Sean, this time goes by very fast, but I do want to let you know that February 4th, I believe it is, I’m actually going to be doing a two hour show after this on McNamara Financial. So, maybe we can talk about having you back so we can really… It seems like this is a really hot topic of interest to a lot of people. So, maybe we can talk about having you back with me on that day.

We have Tom from Rockland is back. Hey, Tom, what’s going on?

Tom: Hey, quickly. I have a friend that lives in Marshfield on flood lands. He owns a home that is about $500 and he owes about $200. Can he just insure the home for $200, or is it mandatory for the value of the home? And I’ll listen off the air.

Sharon: OK.

Sean: Good question. That’s a better question, I think, for the bank or the mortgagee. You know, mortgage company. You can definitely do. Usually they want to see it insured to the mortgaged value would be enough. But…

Sharon: And he’s off the air. He actually hung up. He knows how quick this eleven minutes goes. No, I’m only kidding. No, but that’s a really good question. So, it really does depend on whoever is holding the mortgage that they might decide that they want the full value of the house or, yeah, and I don’t know. Because let’s just say that there was. Not because of the flood thing but let’s just say you owe $200,000 on your $500,000 house. The market value of your home is $500,000, you owe $200,000. It burns down to ground. It’s not like you can build anything up for $200, right?

Sean: Exactly, yeah. And that brings up a good point. You got to insure to value. But again, with flood it’s hard to insure to value because the max is $250,000.

Sharon: Yeah. So what about all those houses last year in Scituate? Remember with the floods and then they burned down. I mean, not covered, huh?

Sean: Not covered, to $250.

Sharon: That is heartbreaking.

Sean: Isn’t it?

Sharon: So, I guess there’s a pro and con to living close to the water. That’s actually my doorbell, but do we have another caller, too? No, no caller, all right, great. Well, I had mentioned to you earlier this 30 minutes does go by fast.

I’m not going to list my open houses anymore, there’s just too many of them. But I just want everybody to know that you can go to… to find out what open houses are at Boston Connect Real Estate, just go to southshoreopenhouses.com or southofbostonopenhouses.com, nice and easy to remember. We also have a link on there so you can find all the open houses on the South Shore. So feel free to use that. Again it’s southshoreopenhouses.com.

I like to let people know if you go onto that website and there are some houses on there but you can’t make it to the open house because the Pats are playing I hear, maybe on Sunday? Feel free to give us a call at the office, 781-826-7300. We can get you into any of those homes that were on open house but you didn’t have the time to do that on a Sunday.

So, let’s get back into the insurance thing. Can we talk quickly because literally we only have three minutes left. Just about condo insurance. What are some of the things that we should be looking for in master insurance? Are the policies different if you’re purchasing a condo versus buying a single family?

Sean: Absolutely, yeah. For a condo, for a unit owner buying a condo it’s called an H06 policy. And what that covers is it covers some building coverage, it covers the association deductible. It covers your personal contents and your liability, so all three of those.

What I want to warn to listeners is if you are buying a condominium, understand what the association policy covers. A lot of the policies I’m seeing these days are as built. So, if you’re buying a 1975 condominium, you’re going to find out that there’s been improvements to that unit. And you might not be fully aware of what’s covered and what’s not. And also, too, the associations often have a 5 or 10,000 dollar deductible. So even though your unit might be covered by the association policy, you’re going to be on the hook for that first deductible.

Sharon: Oh. I never even thought of that. You know what’s interesting, too, one of the things I’m seeing more of now and I don’t ever recall this happening up until this year, is that we’re actually getting a request to see the master insurance policy.

Sean: Exactly.

Sharon: That has never happened before. Am I dreaming or is it just that people never really took the extra steps back when getting mortgages was easy?

Sean: Exactly. Well, now the mortgage companies are requiring that as well. So, when you go to a mortgage, they’re not necessarily worried about your personal contents. What they want to see is a copy of the master policy and what they are supposed to be covering.

Sharon: Yeah. Well, we only have two minutes left and I have to tell you I am thrilled that you are here and we had some really great questions. So thank you to Tom in Rockland and Doc in Pembroke for calling. And we’re definitely going to have Sean on, I think, you’re on sometime with me in March.

Sean: March, I think.

Sharon: Yep, you’re back with me in March. I’m going to talk to you this week about, maybe coming on with me in February. That would be, I think, a good topic because we can then spread it out and talk about more of these things in detail. And this is what I love about this show. It’s a little snidbit of all the great things that these people do, my co-hosts do, and they can definitely get in touch with you off the air. And how would they do that?

Sean: They would do that by calling our office at Cohasset directly is the best number. 781-383-8505, happy to answer any of your questions.

Sharon: And let me ask you. Should they ask for you or should they ask for anybody in the office can help them.

Sean: I think you could ask for me. Paula typically answers the phone. She’s excellent at personal lines. So, either one of us would be fine.

Sharon: All right, perfect. And the website for your company is very easy to find because I found it this morning when I Googled it. So why don’t you tell everybody what it is?

Sean: Sure, www.sgdins.com.

Sharon: All right, perfect. Well, thank you so much, Sean Cunning, from Sullivan, Garrity and Donnelly, I’m getting better at it.

Sean: Thank you, Sharon.

Sharon: And we will be back with Sean, like I said, in March and hopefully back in February. And thank you for listening.

I am Sharon McNamara, you are listening to Talk Real Estate with Sharon McNamara. I am from Boston Connect Real Estate. And if you need to get in touch with me, bostonconnect.com or you can call us at the office at 781-826-7300. Have a fabulous weekend. Go Pats.

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Is A Buyer’s Agent Necessary When Buying A Home
Sue Bollinger, Realtor :  Cell/Text 508-317-5729
SBollingher4@gmail.com

On a few occasions in my real estate career, I’ve come across some customers and clients who believe that they will be better off finding a new home without a Buyer’s Agent. They believe that if they go directly to the Seller’s Agent with an offer, they’ll get a much better deal, and will be able to negotiate a lower price than with a Buyer’s Agent.

In some cases, with the right background information, access to all sold homes in the area, the ability/experience to do a market analysis on a home, and negotiation training, a person might be successful with this theory. However, in most cases, this tactic could be quite costly. Most consumers, even the very intelligent, well educated, thorough buyer who enjoys doing the research themselves, can miss very important details that an experienced agent deals with on a daily and weekly basis.

To help sort out whether a Buyer’s Agent is right for you, I’ve outlined a few facts:

1. In MA, the seller always pays a commission to the Listing Agent, of which some or half (most of the time) is offered to a cooperating Buyer’s Agent. Having a Buyer’s Agent is free to you. This wasn’t always the case. However, in recent years, real estate agents have made it easier for the consumer, and Buyers now have the choice to be represented.
2. Sometimes, buyers think that the Seller’s Agent will reduce their commission if they don’t have to pay a Buyer’s Agent. However, this couldn’t be further from the truth. The seller and the Seller’s Agent have a signed contract for the agreed upon commission, regardless of whether the Buyer’s Agent is used. Often, the seller has already considered the commission when listing, and the Listing Agent expects to receive the entire amount. It’s somewhat of a bonus to receive both sides of the commission. However, it’s also twice the work. Occasionally, a listing agent will reduce their commission a small amount (a couple of thousand at best). In those cases, often it makes no difference if there’s a Buyer’s Agent involved. I’ve seen commission reduced with and without a Buyer’s Agent.
3. A Sellers Agent’s fiduciary responsibility is to the Seller only. They are under an obligation to get the highest possible price for the home. S/he works for the seller only, not the buyer.

So, let’s play out a scenario that often happens in these cases: A house is listed for $800,000. The listing agent does a market analysis for her client, and determines that the house is worth $750,000 or less. However, the seller is adamant that he list the home at $800k, believing that his brand new kitchen in which he spent $50k should clearly add more value to the home. A buyer comes to the open house, loves the home and new kitchen, and decides to put in an offer. The buyer logs onto one of those well known real estate sites that claims to do a market analysis for you, and gets an estimate of $775k (these sites are more often than not, inaccurate). He decides to offer $770k, knowing his top price is $775k, since he doesn’t want to overpay. After a few counter offers, the seller agrees to the price of $775k as long as the Seller’s Agent is willing to take $5k out of her commission.

In this case, the buyer believes he’s been a savvy consumer, receiving a great deal without the help of his own agent, and even convinced the listing agent to reduce her commission. In reality, the buyer has overpaid by $25k.

You might think that this is fictional, at best. But I can tell you that, as a strong seller’s agent, I’ve seen this happen, and been on the seller’s side of things to see it happen. Of course, the seller and his agent are celebrating.

Let’s go back to our scenario: The buyer now needs to get financing. His lender hires a professional bank appraiser to determine the value of the property. The buyer is planning to put down 20% of the purchase price (20% of $775,000 is $155,000 – a $620,000 mortgage), believing that this will prevent him from having to purchase mortgage insurance. However, the appraisal comes back, and the buyer learns that the property is only worth $750k. The bank then decides that, in order to do a conventional loan and avoid mortgage insurance, the purchaser would only be allowed to take out a loan of $600,000. Now, not only is the house no longer a great deal, but the buyer has to come up with an additional $20,000 in order to purchase the property. And to make matters worse, at this point, it’s too late to bring in a Buyer’s Agent!
4. So, this leads me to my next major point: only a Buyer’s Agent will do a Market Analysis for you to determine the home’s market value. A seller’s agent might provide other area ‘on market’ listings that appear to be comparable properties. However, remember that the Seller Agent’s fiduciary responsibility is to the seller only. So, the Seller’s Agent is going to only provide comparable that support the listing price. On the other hand, a good Buyer’s Agent will do a detailed analysis of the home to make sure you’re not overpaying, and will negotiate a fair price. In the previous example, had a Buyer’s Agent negotiated with the seller’s agent, the buyer would have known upfront that the house was only worth $750k. So, going into negotiations, the Buyer would be able to make an educated decision about the following: a. when to put in an offer b. how to present the offer so that it’s not offensive and c. if the seller wouldn’t budge on price, the buyer would have the option to walk away, knowing that they’d need an extra $20k to make it work with their financing!

5. Only a Buyer’s Agent will:

a. Recommend a home inspector.
b. Remind you when your home inspection deadline is about to be up.
c. Help you renegotiate should the home inspection reveal problems (structural or otherwise).
d. Keep your bank/lender up to date and on track for the loan commitment.
e. Know how to keep your deposit safe.
f. Research whether the home had permits for any work done.

This is one of the largest items you’ll purchase in your lifetime. Why would you take a chance of overpaying, especially in today’s Buyer’s market? Trying to do this yourself so that you can negotiate a lower price could actually do the opposite. Why would you take a chance?