When a buyer purchases a property in the Greater Hartford area, it’s supposed to be left in “broom clean condition” by the closing. That means the previous owners shouldn’t leave old paint cans, cleaning products or a host of other things behind.

Often you’ll see a seller ask a buyer if it’s okay to leave random “stuff” that they feel the buyer may find useful in the future. Leftover paint is the most common request because sellers believe buyers may want the paint to do touch ups once all of the wall hangings are removed. Some buyers will be okay with the old paint staying, while others will tell the sellers “no thanks” and ask that it be thrown away. Usually it depends on the color of the paint and whether or not the buyer plans on painting right away. Truthfully, most sellers want to leave the paint because it’s a pain in the butt to dispose of properly.

And what happens when you, the buyer, eventually become the seller of the house? Well, the next buyer is going to expect you to clean everything out. I’ve run out of fingers counting the number of times I’ve heard a seller client say “But the person I bought the house from left this for me, why can’t I just leave it for the new buyer…” The leftover mess from the previous seller now becomes your problem because you never dealt with it, or probably used any of it.

If you’re a buyer, think long and hard about the items if a seller asks you if they can leave some things with the home. You’re going to be responsible to remove it in the future, so if it really isn’t of any value to you and you don’t see yourself ever using it, make sure you have the seller take it away before the closing. Otherwise it will become your problem a few years down the line before the closing of your sale.

Most of the time the subject comes up as I’m touring around with a buyer and trying to cover various home buying subjects as we drive from one property to the next. My client will casually ask about taxes, expecting an answer along the lines of “They’re low/high compared to other towns.” In most towns I can give an answer like that, and then also talk about where that town is in the revaluation process.

When we’re touring Hartford, my answer is usually, “They’re complicated; would you like the short version or the long version?” To their credit, most buyers seem to ask for the long version. They want to know how it works, and what possibilities exist in the future. After all, they’re going to be on the hook for making the tax payments if they buy a house in the City. And as their agent, I feel it’s my responsibility to make sure my buyers have all the information they need to make an informed decision.

I’ve spent a considerable amount of time trying to understand exactly how the taxes work in Hartford.

I’ve talked to the City Assessor and various staff members to work through the details of the current system at different points of time. I’ve talked to our elected officials at both the City and State level to hear the arguments for why they have advocated for different implementations. I’ve sat in on presentations and negotiations between different constituency groups as they hash out a forward looking plan.

Despite all this effort, I still cannot neatly summarize property taxes in the City of Hartford for someone with basic municipal property tax knowledge. It’s just too complicated. I can’t even build a spreadsheet/model that will predict the coming year’s taxes based on an expected City budget. There are too many moving parts.

The best I can do is create a resource, so that those interested in learning about how property taxes work in the City of Hartford have a central place to go for information. I’ve made an effort to summarize as best I can, and I’ve also collected and sorted links to over 50 articles, presentations, and videos on the subject dating back to 2006.

The City of Hartford: Property Taxes page is a work in progress, and I definitely appreciate feedback and comments on how to make it more helpful, more accurate, and generally better.

The special offer bounty covers a wide spectrum. Some is relevant and useful though much is opportunism, “These buyers just shelled out hundreds of thousands for a house, so maybe we can convince them that a few hundred here and there is a prudent additional expense.”

Since there is no real difference between a mortgage closing via a purchase or a refinance, we’ve been the lucky recipients of much of this marketing over the past couple months. It’s been interesting to see what is offered, how it is presented, and how persistent the different companies are. Here’s a sampling of some of the exciting opportunities that we’ve received:

• Coupons from Big Box Home Improvement Centers: Of the haul, these seem most likely to be helpful. Just about all houses need a little something here and there, whether it is a small repair or just some personalization.
• Coupons from Home Design/Accessory Stores: These can also be helpful, but the ones we received are not all that scarce. They regularly send out the same 20% off coupons, so it’s not like this is truly a special deal for home buyers – the text is just different.
• Gutter, Windows, and Roofs: We received a surprising number of offers to help out with moderately sized/priced home improvement projects. Sometimes they came from manufacturers, but more often they seemed be sent by the local contractors who would actually do the work.
• Water Treatment System: This seemed really random to me. I know that water treatment systems are critically important in some areas, but I don’t really see all that many of them in our area. The MDC water is actually quite tasty!
• Credit Card from Mortgage Servicer that Pays Down Principal: I give extra credit for being creative; this is a sales angle that I hadn’t seen before. Unfortunately the rewards points are less generous than other cards available.
• Mortgage Insurance! Mortgage insurance must be a very profitable product to sell, because we’ve received more than 20 offers so far. The companies are so aggressive that it immediately raises my guard. And the numbers don’t sit well with me. The benefit decreases over time (because I’m paying down my principal each month) even though I’ve paid more premiums and am more likely to die? I must not understand the product properly…

If you’ve been through a purchase recently, have you received anything worthwhile? What’s been the most outrageous solicitation?

Some Observations

There was a wide range in the percent change in number of transactions for this October versus last October. Most towns were considerably less active, though there were some positive towns. Glastonbury had 25% more sales than last year (6 deals), while Rocky Hill saw 3 more deals close for a 50% gain. At the other end of the spectrum there were 7 towns in which the number of deals fell by more than 50%. Hartford County overall saw a 38% decrease in the number of transactions for October 2010 versus October 2009.

Part of the reason for the drop in activity was the Federal Home Buyer Tax Credit. Last fall there was a version of the credit scheduled to expire at the end of November, before the program was extended for the final time. Many buyers planning to take advantage of the credit scheduled their closings for October and early November, so the activity this year should be less.

Buyers should have some very good choices in the market, as inventory levels show a buyer’s market for nearly all the towns in the County. The standard benchmark for a buyer’s market is when there is 6 months or more of inventory available. Based on recent activity, only four towns are NOT in a buyer’s market. West Hartford has the least inventory, at 5.3 months, while the other three are each much closer to the 6 month dividing line.

Sellers need to be willing to price their homes attractively if they really want to sell – this isn’t the time to stretch for that extra few thousand dollars. Buyers do have a lot to choose from and seem comfortable taking their time to make a decision. Sellers need to give them a reason to pull the trigger. Make sure the property shows as well as possible and consider touching up any problem areas before putting it on the market.

The Fed’s big picture goal is to reduce unemployment, and hopes that injecting more money into the economy will encourage businesses to begin taking risks to expand their operations (hire more workers), which would hopefully also boost confidence and inspire consumers to increase their spending.

Analysts, economists, and investors have been debating the merits of the expected plan for weeks. Some feel it will be modestly helpful in supporting the business environment, while others are quite pessimistic. Ultimately this sort of indirect economic stimulus relies on a chain of events, with many types of participants, so it’s impossible to predict what will happen with any level of confidence.

Commentators do seem to agree that the Fed’s move will continue the very favorable refinance opportunity for homeowners. Because mortgage rates are generally based on the long-term US Treasury Bonds, and those are the exact securities the Fed plans to purchase, rates should be directly impacted by the program. Again, there are various opinions as to how much lower mortgage rates may go, but I have not seen any articles expecting them to rise.

The refinancing opportunity appears as though it will be extended again. Homeowners with strong credit and positive home equity may want to consider improving their interest rate and/or shorting the length of their loan. Just keep in mind that there is an up-front cash cost to refinancing, so in order for it to make sense homeowners should plan to be in their property for at least a few more years. We’re happy to share our experience with the process and suggest mortgage professionals – just call or email.

Friday is the most common day for real estate closings in Hartford County. In looking at data for over 30,000 single-family and condo closings since the beginning of 2007, there are more than twice as many closings on Friday as any other day of the week. The reason we often hear for a preferred Friday closing is so that people have time to move in over the weekend before returning back to work on Monday.

Are we the only agents with an aversion to Friday the 13? No, no we’re not.

In weeks that contain a Friday the 13th (red bars below), there is a noticeable decrease in the number of Friday closings. Clearly not everyone is afraid of the day, but there are others who would prefer not to risk it. The chart shows that many buyers choose to close on Thursday the 12th, while some push it out to Monday the 16th.

We expected there to be more of an aversion to Friday the 13th closings than the data shows. Especially since many of the agents we know are mildly superstitious (no sense putting clients at risk of bad karma/energy/whatever). Maybe people don’t realize that the closings they schedule on a 13th are also on a Friday. Or maybe they’re too embarrassed to admit their phobia. Or maybe we’re just a little too sensitive to this sort of thing.

Would you schedule a closing on Friday the 13th?

Single-Family Homes
Second quarter sales of single-family homes increased 23.8% compared to the year-earlier period. Although the total number of 2,047 sales improves on the results for the quarter in both 2008 and 2009, second quarter activity still trailed all of the years between 2000 and 2007 for which the CTMLS has data.

The median price for single-family homes in the County increased by 1.3% from $227,000 to $230,000. Sales price per square foot, another valuation metric, remained virtually unchanged at $147/sqft. Finally, the median time on market decreased from 40 days to 31 days.

Condominiums
Hartford County condominiums trended in the same directions as the single-family homes during the quarter. The number of sales was up 43.8% over the second quarter last year, with the 644 total sales running ahead of 2008 — 2009 and behind 2000 — 2007.

The median sales price rose 3.0% during the quarter, from $165,000 to $169,900, and the median price per square foot held steady at $134/sqft. Condominiums also experienced a decrease in sales time, with the median days on market falling from 51 to 45 days.

Residential Real Estate is More Than the Tax Credit
Local residential real estate markets continued to function even after buyers could no longer claim the Federal Tax Credit. As expected, there was a dramatic lull in the number of contracts written in May and June, which should be visible in the number of third quarter closings. However, buyers still made offers even after the credit expired.

Before diving into the details, here is a quick review of the current rules of the game:
1. First time buyer or existing owner (extra criteria).
2. Binding purchase contract by April 30, 2010.
3. Closing by June 30, 2010.

In a June 11th press release, NAR argues that 180,000 buyers met the first two rules but are at risk of missing out on the credit because their lenders will not be able to underwrite the mortgage in time. In fact, they state that “as many as one-third of qualified applicants have been notified by their lender that their mortgages will not close before June 30th.” NAR would like to protect these buyers by extending the deadline for closing to September 30th.

NAR’s main concern is that the surge in purchases at the end of April is overwhelming lenders. Others seem to believe that the tighter lending standards and the new appraisal rules that fall under the Home Valuation Code of Conduct (HVCC) are a big part of the delay. A number of articles, including Senator Reid’s press release on the issue, state that there is “growing concern” that short sales will be impacted.

We have heard about mortgage delays with some of the larger national lenders and with special programs (like CHFA) that require additional steps or approvals. However, buyers using standard mortgages with local and regional lenders are seeing their loans go through without much trouble. Appraisals can be an adventure when someone is assigned from outside of the area (like from Rhode Island!), but they have occurred in an expeditious manner. Short sales are a whole different animal, and the concerns identified seem to lead to a discussion about when the purchase contracts becomes binding – not a debate for today.

Buyers in Greater Hartford are seeing some of the same challenges that have been reported in the country overall, especially when they use national lenders. Hopefully we won’t see too many closing delays as the month of June comes to an end. And if the “closing by June 30th” rule is relaxed, that will help ensure everyone gets the incentive they were expecting.

Single-Family Homes
First quarter sales of single-family homes increased 16.4% compared to the year-earlier period. However, the 1,024 total sales for the quarter were still below Q1 2008 levels and the 1,596 average Q1 sales from 2001 — 2007.

The median price for single-family homes in the County increased by 6.4% from $206,700 to $220,000. Sales price per square foot, another valuation metric, increased 2.2% during the quarter from $137/sqft to $140/sqft. Finally, the median time on market decreased from 59 days to 45 days.

Condominiums
The condominium market trended in the same general directions as the single-family market. The number of sales was up 13.3% over the first quarter last year, though the total of 315 for the quarter was well below the average of 583 from 2001 through 2007.

The median sales price was flat during the quarter, increasing slightly from $172,500 to $173,000, and the median price per square foot fell 2.1% from $139/sqft to $136/sqft. Condominiums also experienced a decrease in sales time, with the median days on market falling from 67 to 55 days.

Trend Towards Faster Deals
The extended Federal Tax Buyer Credit has pulled much of the traditional spring activity forward. Buyers must have a property under contract by the end of April in order to capture the credit, which has motivated them to start looking sooner. Sellers have also gotten an early start by listing their properties in hopes of attracting the credit-seeking buyers. The decrease in days on market is the main result of the credit this quarter, while there will likely be a large spike in closings next quarter.

We always recommend that our buyers test for radon as part of their home inspection. If elevated levels are found, then our buyers have an opportunity to make sure they have addressed it to their satisfaction before proceeding with the purchase. Some become uncomfortable with the home and choose to walk away. Others require that the sellers install a radon mitigation system to lower the concentration to more acceptable levels.

Mitigation systems are very effective at reducing radon levels. Because radon is produced underground, and is heavier than most other components of air, it tends to enter through the foundation and pool in the lowest levels of a home. Mitigation systems are simple ventilation tubes (usually PVC piping) that blow air from under the home’s foundation to the outside of the structure. They are easy to install and relatively inexpensive compared to other mechanical systems in a home.

The EPA has a website devoted to radon and real estate that should be required reading for all home buyers and sellers. They also have more general pages that talk about the health risks of radon in addition to their overall radon portal. The EPA defines a concentration of 4.0 pCi/L as the point at which a mitigation system should be installed. As a point of comparison, the average indoor concentration level is 1.3 pCi/L and the average outdoor concentration is 0.4 pCi/L.

In September of 2009 the World Health Organization completed the International Radon Project, a comprehensive study of residential radon health risks. They recommended that countries adopt tighter standards regarding acceptable radon concentrations in residential environments. Their target action level is equivalent (they use different units to measure) to 2.7 pCi/L, and they suggest that the highest action level a country adopt is 8.0 pCi/L.

The EPA’s action level is comfortably within the suggested range, and in their reaction to the report they did not give any indications that they would change the standards in the United States. A different article pointed out that the EPA actually recommends that home owners “consider fixing their home” when concentration levels are 2.0 pCi/L, even though the accepted action level is 4.0 pCi/L.

Radon is an environmental issue that impacts everyone involved in residential real estate, whether or not they are actively pursuing a transaction.

Home Owners: Consider testing your property to make sure that radon concentrations are at safe levels in your home. We tested our home a couple of years ago. It’s a two day process for the continuous monitoring test (we recommend this over a canister test) and currently costs about $250 when done alone (versus as part of a home inspection).

Sellers: Be prepared for buyers to conduct a radon test during their home inspection period. Since elevated radon levels are considered a “Material Fact” in the state of Connecticut, you will be required to disclose the results to all potential buyers (even if the buyer that discovered the radon walks away from the deal). The practical implications are that sellers with high radon must have a mitigation system installed in order for their home to be marketable.

Buyers: Read up on radon so that you understand the potential risks and the effectiveness of mitigation systems. Conduct a radon test during the home inspection process, and insist that elevated levels are addressed by the seller either in the form of an installed mitigation system or a credit to cover the cost. Remember, you will be required to disclose the radon test results when you sell the house, so keep the paperwork.

All of us are exposed to radon on a daily basis, inside our homes and out – there is no way to eliminate it from our environment. The key is to understand the potential risks and to make sure that our homes contain safe concentration levels.