Category Archives: Uncategorized

The $8,000 First Time Home Buyer Credit–If Your Clients Have Already Closed on their Purchase, They Can Get the Credit Back from Uncle Sam Right Away

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For all of you who have clients who qualify for the First Time Home Buyer Credit, there is great news from the IRS. According to IRS Commissioner Doug Shulman, “this special tax feature can put money in their  (the “Buyers”) pockets right now rather than waiting another year to claim the tax credit. This important change gives qualifying homeowners cash they do not have to pay back.”

The amount of the credit will “phase out” to taxpayers whose adjusted gross income is more than $75,000 or $150,000 for joint filers. This still leaves a large universe of eligible people who can get cash back as soon as their amended 2008 return is processed.

For those readers of this post in Massachusetts, please be aware that I have located a reliable Massachusetts-based tax accountant who will prepare an amended 2008 Tax retrurn for eligible individuals on favorable payment terms. Contact me if you wish, and I will put you in touch.

This immediate opportunity for your Buyers to get cash right away seems like a great chance for you to re-connect and give your Buyers the good news. We always say we will do this, but this is a golden opportunity that should not be overlooked.

If you Can’t “Walk”, You Can’t Negotiate–Never Truer Than It is Today

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These are turbulent times in our industry. More attention than usual has been thrust on real estate because of the generous first-time owners tax credits and other incentives which are being offered to Buyers. A new HUD-1 Settlement procedure goes into effect on January 1, 2010. The thrust of this new procedure is to protect the “unwary”. Never in my long career in residential real estate have I seen a group of Buyers with a greater sense of “entitlement”. Couple that attitude with a general decline in home prices, and you can have a problem on your hands if you are selling property.

I am finding more and more that the only answer to this situation for my Sellers is to “walk”. In other words, while my client wants to make the deal, he or she needs to show that there are limits to what is reasonable. The only way to articulate this position is to say ” I have had enough”: ” I am putting the property back on the market.”

A recent example. A client of mine thought she had a deal to sell a beautiful piece of raw land in a scenic spot in southeastern Massachusetts. The price was agreed upon, and it looked like the deal was done. The Buyer was planning on putting a second home on the property. The attorney for the Buyer drafted a Purchase and Sale Agreement which was better suited to a multi-unit development than the purchase of a single lot piece of property. I told my client to “walk”. Turn the deal around. Tell the Buyer that this is not a game for his lawyer to show how accomplished he was at drafting. The strategy worked. The other lawyer was cut down a peg or two. We brought the deal back to reality.

It is not easy to tell your client that the best strategy is to walk away. Some Sellers are close to desperate. I truly believe that it is at these times that we, as real estate professionals, earn our stripes. You will be surprised at how quickly the tables turn when the Buyer finds out that his or her dream house is not going to be his or hers.

Finding the Perfect Fit–A Great Referral Will pay you back Many Times Over

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The wisdom I am about to impart did not come to me in a dream, or in a flash. I learned what I am about to inform you through experience and disappointment. Early in my career, I gave out referrals like popcorn if I knew the person and I knew he or she did what the person asking was looking for, I gave the referral. I did no check. I had no quality control. Once in a while I was lucky, and the referral worked out. More often than not, that was not the case. The great tennis partner, who happened to be a CPA, spent far too much time on his backhand. The next door neighbor who was also a Realtor was really a “play act” Realtor, who worked when she wanted to and returned phone calls when it was convenient for her.

What is the lesson here? Do not give referral sources until you have first-hand knowledge of the person’s likeliood to perform. Ask the person for references from satisfied customers or clients. Do as much “due diligence” on this person as if you were going to use the person, yourself.

The reality of a referral is simple. By giving a client or a customer a referral, you are giving that person a part of yourself. You are telling the client that you will stand behind the person you refer. You are assuring the customer that the person you are suggesting they use can do what is required. You are not giving a Tax Accountant an engagement in Auditing. You are not giving a trial lawyer a referral in real estate.

If you are careful, and niggardly (I might add), in your referrals, and you really believe in them, you will enhance your standing with the customer or client. If you are anything else, you stand an excellent chance of damaging your career. That is a huge risk.

Do the work before you give the name!!!!!

The Yellow Sheet in My Middle Drawer–You want to be on the “plus” side with me (and everyone else you deal with)

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I have been practicing real estate law in Massachusetts for more than 40 years. In that period, I have participated in probably 25,000 or so real estate transactions. Early in the game, I realized that some opposing counsel, realtors, appraisers, mortgage people and other real estate professionals were cooperative, honest and/or enterprising. Others were dishonest, obstreperous and/or downright lazy.

Since Boston is in many ways a small town, I started keep a yellow sheet (now there are about 200 of these) in the middle drawer of my desk. As I dealt with people on deals, I made a determination that they were either “plus” or “minus”. I then divided my yellow sheet with a line, and placed the “plus” people on the left side and the “minus” people on the right side, and then put my sheet back into the middle drawer.

It has been amazing to me how helpful my yellow sheets have been through the years. It is more amazing how many times I have had dealings with people from 5, 10 or 15 years ago on new transactions. I check my sheets to see if they are there, and if they are “plus” or “minus”.

If they are “plus”, I bend over backwards to make the deal work. I accommodate people with extensions for financing, closing and inspections. I travel far and wide to make their life easier. They have earned this type of treatment because they treated me similarly in the past.

If they are “minus”, they are probably going to have a harder time speaking with me, and when they do, they may not like what they hear, I will never be unprofessional, but I will certainly not walk the extra mile to help them out. Sometimes, I will have an advantage, and if the people are “minus”, I will use attempt to use it to their detriment.

The moral of this story is that the real estate community in almost every city is smaller than people think. You may have an edge in some transactions. In others, you will be coming from off the pace. Guide your behavior on the basis that you will probably be dealing with the people on the other side at another time, with another deal. Make yourself a “plus” and you will always have a chance to do a great job for the person you are representing. Don’t ever make a long-lasting enemy in our business. The price you may pay is just not worth it.

The Gospel According to Emmett D–“Corny” Statements to Live By

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My dad, Emmett D. Topkins,passed away on November 26, 1964, when I was 21 years of age. For the relatively short time which I was able to interact with my dad, we had a wonderful relationship. We played a lot of golf together, worked on crossword puzzles and camped out with other friends and their fathers. The only real objection I ever had to my dad was his constant use of “catch-phrases” to describe almost any situation. He was, after all, a small town country lawyer, and I thought some of these “saws” if you will, were corny and lacking meaning.

It is now almost fifty years after his death, and the irony of my life is I use these expressions all the time, and what is worse, so do my three sons and my daugter. I have three grandchlldren to date, and I have this sinking feeling that like iot or not, they will carry on the “emmettisms” for themselves and their children.

So, since I use these statements all the time, I thought I would share a few to see if I can get my readers “hooked” as badly as I and my family are. Perhaps, you have others, and you can share them with me in your comments.

     1. I Never got in trouble for something I didn’t say.

This one is self-evident but it is amazing how much truth there is here. Real estate professionals all have a tendency to “over-sell”.  The price of comparable homes is sometimes exaggerated; statements are made that there was “never” any water in the basement when there is no certainty of that fact; other bidders are described when we are trying to motivate our Buyer to increase his offer. It is part of our culture. How many times these kinds of statements come back to haunt us is difficult to compute. In almost all cases, we truly wish we had said nothing.

     2. If you tell the truth, you don’t have to have a good memory.

As I get older, my memory is not what it used to be. I have learned to rely on the truth as my sole salvation. I do not need to worry what I may have said to this person or that person. I tell them all the same thing–the truth. This simple necessary commitment has lowered my stress level and greatly enhanced my reputation. I just do not lie under any circumstances.

     3. You can’t make a dog walk down two streets at the same time.

This one is a great “catch-all” when you are dealing with a client who cannot make up his or her mind. No need to explain what you are saying. You just say it and move on. If you are lucky, the other person will grasp your meaning, and that will move the person to make a decision.

     4. A Pint’s a Pound the World Round.

This one may go over a few people’s heads, but the gist of the statement is that there are some ultimate truths out there which you cannot escape. Sometimes, I use this phrase just to confuse people and get them away from the subject they are discussing which is taking the negotiations nowhere.

     5. Don’t make an enemy for free.

I like this one and I use it often. It really means that if you have nothing really to gain either financially or otherwise, hold off on berating or belittling the other person. It is really an offshoot of “I never got in trouble for something I didn’t say”. Find other ways to assuage your ego. Don’t castigate or embarrass others for the sake of showing how superior you are. The real estate community in Boston, and I am sure other places as well, is very small. That person you showed up today is somebody you may need to deal with tomorrow, and you are better off letting that person survive without some long-lasting antipathy towards you.

There are other phrases which fit into the category. You probably use them on a regular basis without even realizing it I guess my continuing my dad’s wisdom, such as it is, is a way to pay tribute to a person I loved, and lost too soon. The fact that is appears that these phrases will continue with my dad’s grandchildren and great grandchildren is perhaps the way he, and all of us, are immortal.

Own to rent to Own–A frustrating Journey with a happy ending

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As a Massachusetts title attorney with more than 40 years of experience, I frequently run into situations in the real estate area which I find worthy of reporting.

There follows one such situation, which, fortunately, would appear to be coming to a positive conclusion for my client. My client lived with her Aunt and parents in a home in suburban Boston. The home was owned by her Aunt. About two years ago, her Aunt lost her job and was unable to pay her mortgage or her property taxes. She informed the Lender about her problem, and asked for a Loan Modification to lower her monthly payment, which my client and her parents would help pay. Despite frequest requests, no Loan Modification was agreed upon, and the Lender foreclosed on the property.

This is where the story gets interesting. My client, her parents and her Aunt remained living in the home. About six months after the foreclosure, the Lender instituted eviction proceedings to remove the occupants from the home. This is when my client retained my firm to assist her.

We ascertained from my client that she and her parents had been able to save up a substantial amount of money by living in the home rent free for the past two years. We made the decision to contact the Lender’s lawyers to determine if they would consider our purchasing the home for its now fair market value and stop the eviction proceeding. After some negotiation, we have now entered into a purchase and sale agreement to purchase the home for its current fair market value, using as a downpayment the money my client saved during the pendency of the foreclosure and the eviction.

While this represents a positive result for my client,it also highlights the absolute lack or direction which most Lenders have when a Borower gets behind in his or her payments. The Lender accomplished absolutely nothing by not working with my client’s Aunt. When will calmer heads prevail in situations like this? I would be interested in hearing similar stories from any of you. This one “takes the cake” as far as I am concerned.

The Words “Actually” and “Absolutely”–Overused and Lacking Meaning

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I don’t know about the rest of you, but I have become increasingly irritated by a person answering the phone and responding “Actually, he is away from his desk” or “She, is actually, on another phone call”. First of all, the term “actually” adds nothing to the response. If anything, it almost sounds like the person giving the response if making up a story on the fly. Our world would be better if people would do all they can to delete the word “actually” from their vocabulary.

Ditto the use of the word “Absolutely”. “Yes” will convey the same meaning with less bravado. If the response you receive is always “Absolutely” where a simple “yes” will do, what has been added? “Absolutely” is another word which could be comfortably deleted from most people’s vocabulary without any real loss of power to communicate.

As a 66 year old Massachusetts title attorney, I have lived through the lives of four adolescent children (now grown-ups) and their addictive use of the word “like”. Just when I thought it was safe to communicate with others using real English, I have been recently hit with a barrage of “Actuallys” and “Absolutelys”. Let’s all work hard to eliminate these terms from our everyday business communications. Their loss will be our gain!!!!!

Elliott Topkins   www.topkinsandbevans.com

Delinquent Common Area Fees–The Only Policy is ZERO TOLERANCE

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It was the late 1980’s. Condominiums in Massachusetts were literally going “broke” because unit owners were not paying their common area fees. That meant that water bills and common electricity bills were not being paid. The towns and utilities tried to work with the Trustees to the extent they could. In many situations, Condominiums went bankrupt because the amounts due and owing got “out of hand”.

But help was on the way. Condominium Trade groups organized in states across the country started drafting new, and effective, legislation which gave Condominiums some clout with the Unit Owners. Massachusetts adopted this statute in 1992. It should have proved a Godsend, but unfortunately, it has not. There are still condominiums in trouble because of delinquencies. The statute involved, which has become part of Section 6 of Chapter 183A, is not being used to its fullest capacity.

In effect the new statute gave the Trustees tremendous power to collect. Fall behind by 60 days or more, and the Trustees can commence an action against you, force you to pay penalties and legal fees, and if you do not get caught up, sell your Unit at foreclosure and wipe out all mortgagees.

The last sentence is the important one. Once this type of action is commenced, the only thing the Trustees need to do is notify the Mortgage Lender(s) for the Unit. It has been my experience that the Unit Common area fees get “caught up” in days. WHY, you ask? Because if the Lender does not pay, in full (including attorneys fees and penalties) the Lender will lose out on the collateral.

So, my advice to each and every person reading this post who owns a condominium is to question your Trustees to make sure they have an automatic procedure for collectionm once Common Area fees become 60 days deliquent. If they so not, they should, and there should be zero tolerance for not proceeding. The enforcement action costs the Condominium nothing!!!!

If any of you have further questions on enforcement procedures, please contact me at etopkins@topbev.com. This is an important Condominium right, and SHOULD NOT EVER BE IGNORED OR DELAYED.

The post set forth above was originally included in my blog, www.realtorsresourceblog.com, which is intended to assist the real estate profession with various topical issues. I am an experienced Massachusetts real estate and estate planning attorney. I hope you will find these materials useful.

Massachusetts Tenancy by the Entirety and Declaration of Homestead–A Basic Primer

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In Massachusetts, and possibly in other states as well, significant protection is given to the non-debtor spouse if the married couple elects to take title as “husband and wife, tenants by the entirety”. There are other advantages to tenancy by the entirety, such as avoiding probate, but the principal advantage is one of protection. The bottom line is this: IF YOUR PRINCIPAL RESIDENCE IS PROPERLY PUT IN YOUR NAME WITH YOUR SPOUSE, AS “HUSBAND AND WIFE, TENANTS BY THE ENTIRETY” A CREDITOR CANNOT ATTACH YOUR HOUSE, OR FORECLOSE ON YOUR HOUSE, FOR AN OBLIGATION INCURRED BY THE OTHER SPOUSE.

It is important to note that, in Massachusetts, you must be married at the time you take title, the property must be your principal residence, and the deed must include the “husband and wife, tenants by the entirety” language. A deed to only “husband and wife” creates a tenancy in common. A deed to “married persons” creates a joint tenancy without the protections described above. A deed to unmarried persons as “tenants by the entirety” also creates a severable joint tenancy.

Even though “tenancy by the entirety” creates important protection to a married couple, I still recommend that one of the married owners record a Declaration of Homestead. There is a $35 filing fee involved, and a small fee for producing the document, but that is the spouse’s only exposure. In exchange, a Massachusetts Homestead declarant receives insulation of up to $500,00 of equity in his or her home (subject to some “anti-fraud” provisions in the Federal Bankruptcy Law and a few other exclusions). This type of protection is especially helpful in the following situations:

     1. The obligations involved are “joint” so that tenancy by the entirety will not protect.

     2. There is a divorce or death, which has the effect of terminating a tenancy by the entirety.

     3. There are minor children in the home, who are protected by a Declaration of Homestead.

There may be circumstances, mainly for wealthy clients who need to establish individual assets for estate planning reason, where tenancy by the entirety is not the proper choice for ownership. In more than forty years of practicing real estate law, I have not identified ANY situation where filing a Declaration of Homestead is not advantageous. I would be more than happy to discuss any aspects of this post with potential Massachusetts property owners, or out of state individuals who are considering a purchase of real estate in Massachusetts. The consequences of the choices such as the ones described herein can be important, and you need to know what you are getting into before deciding which type of ownership is best for you.

Braintree, Massachusetts–A Great Place to Practice Real Estate Law

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While my principal office location is on Newbury Street in Boston, Massachusetts, I spend a considerable amount of time in my Braintree, Massachusetts office (150 Grossman Drive, Suite 405, Braintree, Massachusetts: 781-849-5906; Facsimile 781-848-3656). Real estate attorneys are finding out every day that their physical location is critical to garnering clients who buy and sell homes, and require real estate mortgage financing.

Braintree, Massachusetts is literally the “Gateway to the South Shore” of Massachusetts. Located approximately 14 miles south of Boston, Braintree offers convenience for South Shore real estate transactions to many thriving residential communities like Norwell, Hingham, Scituate, Cohasset and Milton.

I have enjoyed having an office in Braintree for more than 15 years. There are cultural advantages in Braintree; Thayer Academy is located there. There are wonderful restaurants and one of the most active shopping Malls in Massachusetts. The Public Library is well-run as are other municipal services.

Please do not hesitate to contact me for all of your South Shore real estate transactions. I am available at any time, at any place, to give you the kind of legal service which you deserve. For those of you in the Western suburbs, Topkins & Bevans also has a full-service office at 255 Bear Hill Road, Waltham, Massachusetts (781-890-6230; Facsimile: 781-466-6982).