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Selling Adirondack Real Estate? Having a Lock-box is Key!

Every real estate market has different common practices.  When an agent in Old Forge, Forestport or Inlet shows another agency’s listing we usually pick up a key at the listing agent’s office.  I can’t say that I hate this; it’s nice to take a moment to say Hi and chat for a minute about the property.  It serves a purpose, but it is not the most efficient practice.  It is also a flawed practice.  What happens if a Buyer wants to see your property and the listing office is closed?  What if the key is out with another agent?  What if your property is 45 minutes away from the listing office?  I know when I am with Buyers we drive by nearly everything in their price range.  Sometimes a drive-by leads to a sale, when the key is available.  Having a lock-box is very important, even if the lock-box has a good old fashion combination lock.

If you have ever looked at homes in a larger market, your agent has probably used an electronic key pad or a key fob to pop open a lock-box on every home.  Electronic lock-boxes are a wonderful convenience and a great way to keep track of which agents have entered a property.  We don’t use electronic lock-boxes here.  I’m not sure exactly why, probably because they are very expensive.  Every agent in town would have to join the Board of Realtors (MLS) to gain access to the key system and not every office has joined.

If you are selling a property please make sure your agent is using some form of lock-box, preferably a combination lock-box.  If the lock-box requires a key, Buyer agents will need to be able to get that key with ease.  If not, all of the other problems still apply.  When hiring a listing agent make sure your agent is one that shares his or her cell phone number in marketing information.  This is not a 9-5 job and certainly not the best career for someone that is anti-cell phone.  Your agent needs to be willing to answer the phone outside of business hours just encase a showing needs to be scheduled.

Buyers that look at properties in the Southern Adirondack Real Estate market are rarely local and have a small window of time to visit properties.  An easy to show property will be shown more often which will increase the probability for a sale.  Having a lock-box is key, no pun intended!

Why Your Property Should Be Shown After an Offer Has Been Received

When a Buyer and Seller agree to the terms of sale on a property, Sellers and Agents alike usually let out a sigh of relief.  Unfortunately, the signing of a purchase offer is usually a little early for celebration if the offer contains contingencies.  What’s a Contingency?  A contingency gives the Buyer the opportunity to reconsider or withdraw the purchase offer if a certain condition is not satisfied.  Property Inspections, Financing, Surveys, Appraisals, the sale of another property, Adirondack Park Agency approval of a project – these are all common contingencies.  When an offer has been accepted the property is referred to as being “Under Contract” or “Pending”, this status is often followed by “with Contingency”.  Until the contingencies have been removed, the Seller’s agent should continue to arrange showings and encourage back up offers.  This is even more important in the Old Forge real estate market, because our sales may be seasonal in nature.  Financing contingencies are the most common.  Obtaining financing for Adirondack properties may be challenging due to several factors unique to our market.  These may include seasonal property access, non-winterized buildings and difficulty finding comparable recent sales for appraisals.  Buyers will often opt out of looking at a property that is “Under Contract” or “Pending” even when they understand that there are multiple contingencies in place.  It is understandable that a Buyer may regard viewing a property that has received an offer as being an exercise in futility.  This is not necessarily the case.

There have been a few occasions when I have called a Listing Office to schedule a showing and received a response of “No, I’m sorry you can’t show that property because we are receiving (or have received) a purchase offer.”  Procuring multiple offers is always in the best interest of the Seller.  In fact, the Listing Agent should contact parties that have expressed a sincere interest in the property and let them know that it may be their last chance to make an offer.  Unfortunately, not every agent will do this.  At this very moment they should ask themselves “Who do I represent?”  When a Seller’s agent discourages a second or backup offer they are not fulfilling their obligation to the Seller.  The Seller’s best interest should be their top priority!  As a Seller, there is absolutely no harm in asking if other Buyers have been given the opportunity to submit an offer before signing.  Make sure you understand the contingencies and the impact they have on the possible sale.  Keep in mind you will want the contract to clearly define a deadline for when the contingencies will need to be resolved.  It is important to remember that it is not uncommon for the Buyer prospect in the second or third position to ultimately become the property’s new owner.

A Few Tips for Finding YOUR “Perfect” Waterfront Property

Recently, a property listed with Timm Associates went under contract the weekend it came on the market.  It was an updated 3 bedroom, 1.5 bath year-round home located on Fourth Lake, with views to boot.  It had a lot to offer and it was listed for $429,000.  We knew this home would sell to the first Buyer through the door and it did!  Over the past few weeks we’ve received a lot of calls from disappointed would be Buyers wondering how they missed the opportunity to purchase this home.  One frustrated buyer asked “How could this happen when the market is slow!?”.  He was particularly frustrated because he had heard about the property the day we received the listing but was not available to view it in the days following.  While there are segments of the local market that remain slow, waterfront is in rather high demand.  If you are looking for waterfront properties under $500,000 – you are not alone!

Here are a few tips for finding Your “Perfect” Waterfront Property.

  • Be on high alert! When a well priced property comes on the market you need to be the first Buyer to get in the car!
  • Come Armed. Looking at property this weekend?  Do you have a pre-qualification letter that can be submitted with your purchase offer?  A desirable waterfront property may receive more than one offer.  It takes 10-20 minutes to get pre-qualified and it is absolutely a worth-while effort.
  • Carefully consider if your expectations are in line with your price range.
  • Don’t overlook homes that have been on the market for a long-time. These homes are often offered at a reduced price.  Ask your Realtor why other Buyers haven’t been interested in each property and carefully consider how you feel about each perceived defect.  Buyers have different needs; one of these properties may work fine for you.
  • Keep an open mind- It is highly unlikely that every home you view will be finished or decorated to your specifications.  Take a moment to consider what modifications could be made to make the home suit you.  Are these issues mountains or mole hills?
  • Pick the right agent- Does your agent let you know about new listings right away?
  • Prioritize those “Must Haves” and consider dropping a few.

Most Waterfront Buyers are looking for the following:

  • 3+ Bedrooms And More Than One Bathroom
  • A Year-Round Home Instead Of A Summer Camp
  • A Location on First Through Fourth Lake of the Fulton Chain
  • A Terrific View
  • Swim-able Waterfront
  • A Place To Dock A Boat, Often A Boat House
  • Privacy
  • A Garage And/Or Close Proximity To The Snowmobile Trails
  • A Level Front Lawn For The Kids To Play On
  • A Successful Rental History
  • Adirondack Décor

Properties with many of the features listed above can sell very quickly and often for a premium price!  Unfortunately, the supply of waterfront properties in the Adirondacks is rather limited and it can take years to find one that is suitable.  If you find a property that offers 80% of your “Must Haves” you may have just found your “Perfect” Waterfront Property! 

Building a New Boathouse in the Adirondack Park

“I heard you can’t build a new boathouse in the Adirondack Park – is this true?”
This question comes up rather often while showing waterfront properties.  The answer – Yes you can still build a boathouse.  The confusion stems from a 2009 proposed change in the definition of a boathouse used by the Adirondack Park Agency (APA).  Many property owners were concerned that if the APA was successful in re-defining the term it would become nearly impossible to get a boathouse approved.

Traditionally, boathouses have been regulated by the towns that the boathouse is in; the new regulations supersede any local rules on boathouses.  There was speculation that the APA was trying to increase their oversight of the park by simply changing definitions. The APA argued that “Large structures and intensive use at the shoreline causes unnecessary erosion and adverse impacts to critical habitat and aesthetics and raises questions of fair treatment of
neighboring shoreline properties.”  The APA wasn’t trying to block waterfront structures used to cover boats or even these structures with a deck on top.  They were opposed to property owners building huge structures that weren’t really just boathouses.  In a 2002 change to the definition, the APA limited boathouses to a “single story” but the definition did not prohibit large attics (often used by property owners as guest or recreation rooms) and extensive rooftop decks.

On September 21, 2010 the APA once again changed their definition of a“boathouse”.

A Boathouse is defined as covered structure with direct access to a navigable body of water which

(1) is used only for the storage of boats and associated equipment;

(2) does not contain bathroom facilities, sanitary plumbing, or sanitary drains of any kind;

(3) does not contain kitchen facilities of any kind;

(4) does not contain a heating system of any kind;

(5) does not contain beds or sleeping quarters of any kind;

(6) does not exceed a single story in that the roof rafters rest on the top plate of the first floor wall, and all rigid roof surfaces have a minimum pitch of four on twelve, or, alternatively, one flat roof covers the entire structure; (Flat-roofed boathouses continue to be allowed even if the roof is used as a deck and includes safety railings. The deck covers the entire boathouse structure and cannot be constructed above a sloping roof.)

(7) has a footprint of 1200 square feet or less measured at the exterior walls (or in the absence of exterior walls, at the perimeter of the roof), and a height of fifteen feet or less. For the purpose of this definition, the height of a boathouse shall be measured from the surface of the floor serving the boat berths to the highest point of the structure.

Lawful existing boathouse structures may be repaired or replaced within the existing building envelop.  For those who wish to exceed the size parameters or expand a larger existing boathouse, a variance will be required.”  For more information visit http://apa.ny.gov/Documents/Flyers/boathouses.pdf

So what do you do first if you plan on building a new boathouse? The first step is to find out if the APA has jurisdiction over your property by submitting a “Jurisdictional Inquiry Form” including the property tax ID#, a copy of the current recorded deed, a description of the project in question and a sketch.  The form can be found here www.apa.state.ny.us/Forms/jiform.pdf. If you have questions the APA can be reached at 518-891-4050.

Next, contact local zoning and see what they have to say.   Although you will need a building permit, the Town of Webb (Old Forge, Eagle Bay, Big Moose Lake) will allow one boathouse and one dock per dwelling with not more than one dock per 100 feet of frontage; anything more requires Planning Board Approval.  Docks shall not extend further than forty feet or exceed a 6 foot depth of water, whichever comes first.  Docks can not interfere with waterflow, navigation or the access to adjoining lots.  Docks cannot be wider than 8 feet or exceed 300 feet in area.  Docks and Boathouses are subject to a 25′ setback for the sides of the lot.  The Town of Webb Zoning Office can be reached at (315) 369-3001.

Next you need to contact the Army Corps of Engineers and the New York State Department of Environment Conservation, they both have a say in this process.  You will have to fill out the following application http://www.lrb.usace.army.mil/regulatory/jointapp2008instructions.pdf

If you are in Herkimer, Lewis or Oneida County you can reach the Army Corps of Engineer Buffalo Office at (716) 879-4330; if you are in Hamilton or Fulton County call the Upstate NY Field Office (518) 266-6360.  You may also need a Protection of Waters Permit from the DEC.  If you are constructing, reconstructing or repairing a docking facility for five or fewer boats and encompassing within its perimeter an area less than 4,000 square feet your project is likely exempt from requiring the permit, however you need to call 518-402-9167 to be sure.  If you would like additional information please visit this site http://www.dec.ny.gov/permits/6550.html

While boathouses are still allowed there are many steps to the process and several organizations to deal with!  I hope that this information has been helpful.

Old Forge New York Commercial Building with Beautiful 3 Bedroom Living Space

Live and work in luxury in this beautifully renovated building located at 2942 State Route 28, Old Forge, NY. Nearly every inch of this 2800 SF building has been carefully renovated.  Includes Class A Professional office space that could be used in several different configurations to accommodate one tenant or several.  Approximately 1660 SF of this gorgeous building could be used as a separate 3 bedroom, 2.5 bath apartment or as additional Class A office space with a beautiful kitchen area for entertaining clients. Includes a new boiler, a security system, plenty of off street parking, and a dry basement for storage.

Old Forge NY Home For Sale With Dock On Fourth Lake – 136 Cherokee Road

Looking for an established rental or a great place for group get aways? This furnished, turn-key, open concept home could be perfect! Each of the four large bedrooms has it’s own bathroom and there is plenty of parking for your guests. This off-water year-round home is located minutes from the village of Eagle Bay, close to the trails and it includes a dock on 25 feet of Fourth Lake waterfront. This one is definitely worth a look! 

For more information visit TimmAssociates.com or call 315-369-5434

Does My Vacation Home Qualify for a 1031 Exchange?

It depends.

If you are not familiar with what a 1031 Exchange is here is a brief explanation: 1031 Exchanges allow property owners to defer capital gains taxes on the exchange of “like-kind” properties.  The term “like-kind” means two properties that have the same use (for example investment properties can only exchanged for investment properties not personal residences).  Capital Gains taxes are taxes that you must pay on the income you have earned on the sale of property (above and beyond the amount you invested in the property to begin with). The property that you will be purchasing needs to identified within 45 days of the sale of the original property.  Between the time of the sale and the purchase the funds must be held by a qualified intermediary, not in your personal bank account.  Within 180 days of the initial sale, the transaction must be fully completed.  Time limits are calculated in calendar days not business days.

Back in the day, a property owner could sell one property and buy another property using the proceeds from the sale provided that the properties were like-kind (Investment property for Investment Property, Residence for a Residence).  The property owner would not be taxed on the gains from the sale of the original property.  The rules have changed regarding residences.  These days, when you sell your primary residence, you can make up to $250,000 in profit if you’re single or $500,000 if you’re married, and not owe capital gains taxes.  To be eligible for the full exclusion, a taxpayer must have owned the home (and lived in it as a principal residence) for at least two of the five years prior to the sale.  This raises the question – what happens when I sell my vacation home?

A property that has been held for “investment purposes” can be exchanged for another property being held for “investment purposes”.   Here in the Adirondacks, it is rather common for the owners of vacation homes to end up renting out their camps more often then they use them.  The IRS has been kind enough to create a safe harbor for property owners like this.  If the owner uses the properties for personal purposes for 14 days a year or less (or less than 10%of the days that it is rented in a 365-day period) the IRS considers the home a rental property, not a personal-use residence, and the house may be eligible for like-kind exchange.  If you rent out the original property for 2 years before and the new property for 2 years after the exchange (and claim the income) both properties are “investment properties”.

Not willing to rent?  Do you use your property more then allowed by this rule?  Remember, you will only be taxed on the difference between the adjusted basis and the sale price of your home.  The adjusted basis is what you originally paid for the property, including debt, closing and settlement costs, plus any qualifying home improvements you’ve made.  I hope that you have kept receipts for your home improvements because they might just be your ticket out of paying Capital Gains Tax.  Those major improvements add up quickly!  The next question you should ask yourself is “Do I really need to make a profit on the sale of this property for it to have been worth while?”  You’ve used it, and hopefully enjoyed using it.  You may find that the current market value of the home does not exceed what you paid for it, a 1031 exchange may not be necessary.

Still have questions?  You may find this link interesting.  1031info

How To Sell Your Property Quickly In The Current Economy

Even though this economic rough patch started several years ago the real estate market continues to change.  Today, differences in market conditions are evident in rather close proximity.  The Old Forge real estate market varies greatly from the Raquette Lake, Kayuta Lake or Forestport markets.  The differences between these markets come down to the simple principles of supply and demand.  Those properties listed for sale in the slower markets have a two pronged problem.  Not only is there an over abundance of competitive selling properties, there is also a Buyer perception problem.  Possible Buyers are left wondering:

Why hasn’t someone else bought this house, is it a poor investment?  It has been listed for a while.  If I wait six months, the price will be lower. This place isn’t going anywhere.” 

These perception problems keep Realtors awake at night.  It doesn’t matter if we show a Buyer several properties that meet every one of their requirements.  It doesn’t matter if we show them the property of their dreams!  With unresolved concerns and so many options on the table, Buyers are simply not motivated to purchase.  How do they know that an
EVEN BETTER property won’t come on the market a month from now?   It sounds pretty hopeless doesn’t it?  Hang in there, the strategy is rather simple.  The one thing that will sell your property is the perception that your property is a reasonable value and that it might not be available tomorrow.  Perception is often reality.

Don’t overprice your property coming out of the gate.  Use that “new listing momentum” to your advantage in an effort to receive competing offers.

List your property at the price you would sell it for.  This is the most important piece of advice I can give you!  Everyone, I mean everyone, used to believe that you had to leave a gap for negotiations.  There is no reason to overprice your property; your price does not need to be negotiable.  When Sellers price high assuming that every Buyer is a ‘wheeler dealer’, they are just chasing off the Buyer that isn’t.

Nothing reinforces a Buyer’s belief that they have found the right property more than seeing another possible Buyer pull up the driveway!  The worst thing a Buyer can do is wait until they have to compete in a bidding war.  Buyers are cautious in this economy; they have a lot of options and they aren’t willing to overpay.  They are, however, still buying.  Most properties that sell in this economy have multiple interested parties because
somewhere along the line the property was priced appropriately.  Price your property competitively and use the stir to your advantage.

Current Comps don’t lie.  Before you list your property, ask your Realtor to review several comparable recent sales with you as well as the properties that will be your competition.  Whether you like what these numbers tell you or not, the recent sales are the best gauge you have of the offers you will receive.  Your property is only worth what a willing and able Buyer will pay.  The Buyer, their appraiser, and their bank are all going to look at this information – you can’t hide it.  If the comps don’t justify the sale price the Buyer won’t be able to obtain financing and the entire exercise has been a waste of time for everyone involved.  The tail doesn’t wag the dog.
If your property isn’t being shown during your peak season, your property is probably over priced.

Let go of the notion that your home or camp needs to turn a profit in order to have been a worthwhile venture.  Your home or camp has served a purpose and you’ve had the opportunity to enjoy it; don’t expect to get back every dollar you’ve put in to it.  Please keep in mind that your upgrades may not be appealing to a Buyer.  Not everyone has the same taste.  These upgrades have a value in use for you that may not result in an increase in the property’s value.  In addition to upgrades, you may have endured the expense of replacing the roof or furnace.  Unfortunately, maintenance and repairs rarely increase the value, they simply protect the investment.  It is unlikely that you will completely recoup these costs.

Hire the Real Estate Team that will give your property the best exposure!  Print advertisements are great but most buyers look for properties online these days. Hop on the internet and Google real estate for sale in your area.  What websites come up?  Does your agent have properties listed on these sites?  Is your Agent a Realtor and a member of the local Multiple Listing Services (MLS)?  This is a second home market, most Buyers are not local, the large websites like Realtor.com will give your property the biggest audience.

Last, but not least, don’t forget the reason why you want to sell in the first place!  Is your property keeping you from moving on to the next phase of your life?  Are you missing another opportunity because you need to unload this asset first?  You only get one shot at this life (as far as I know).  Are you putting your life on hold for a higher offer that you might not receive?