Christopher Bonta,Realtor/ Integrity and Honesty

I've written a lot about absorption rates for various Towns and it occurred to me that I've never explained fully what "absorption rate" is and why it is important. Absorption rate in it's simplest form is how long it will take the market you are looking in to absorb the current inventory that is for sale.

In almost all instances, Realtors agree that an absorption rate of 6 months or more is a Buyer's Market and if the rate is below 6 months you are in a Seller's Market. How do we determine what the rate is, the formula used is simple, but if used incorrectly can slant results greatly. The formula used takes the previous 12 months of closed sales (homes that have sold) in the price range you are looking at and divides this number by 12 (the number of months in the year). An example would be if I was looking for the absorption rate for properties between $100,000 to $300,000, I would look back at the past 12 months of homes that have sold in that range. Lets say July 1, 2008 to June 30, 2009 is my range and I found that 100 homes had sold, the per month sold total would be 8.3 houses sold per month.

Now that I know how many homes sold per month for the previous 12 months, I would then look up how many homes are currently for sale in the same price range. If there are 96 homes for sale in my price range of $100,000 to $300,000, I divide the number of homes on the market which is 96, by the past years per month sold number of 8.33. The formula would look like this :

96 (homes on the market) divided by 8.33 = 11.52 months

The amount of months it will take for the target market we are looking at ($100,000 to $300,000) is 11.52 months . This would indicate that this market range is solidly in a Buyer's Market, since it would take over 11 months for the market to absorb all the homes that are for sale in that range. A Realtor can narrow or expand the price range, depending on what data they are looking for. I tend to use broad price ranges, because I like to see a Towns overall absorption rate that way I can let my Client know where the Town stands.

An important part of any home purchase is the Home Inspection, so when interviewing home inspection companies ask them what type of report they use. There are many styles of reports used by property inspectors, the checklist, computer generated reports, and the narrative style.

Some reports are delivered on site and some may take several days to deliver, knowing when you will get your full inspection report is important since you probably have a time limit for obtaining an inspection in your Contract.

The most important issue with an inspection report is the descriptions given for each item or component. A report that indicates the condition as "Good", "Fair" or "Poor" without a detailed explanation is vague and can be easily misinterpreted. An example of a vague condition would be:

-Kitchen Sink: Condition- Good, Fair or Poor

None of the above descriptions gives the Buyer an idea of what is wrong, if fair or poor are circled what does that mean? Does the sink have a cosmetic problem? Does the home have a plumbing problem? A good report should supply you with descriptive information on the condition of the home, an example of a descriptive condition is:

- Kitchen Sink: Condition- Minor wear, heavy wear, damaged, rust stains, or chips in the enamel finish.

Reports without recommendations for repairing deficient items may be difficult to comprehend, should your knowledge of construction be limited.

At the end of the inspection your inspector may provide a summary with a question and answer period. Use this opportunity to ask questions regarding terms or conditions that you may not be familiar with, a good inspector should be able to explain the answers to your questions. If for some reason a question cannot be answered at the time of the inspection, the inspector should research the question and obtain the answer for you. For instance, if the inspector's report states that the concrete foundation has common cracks, be sure to ask, "Why are they common?" The answer you should receive will be along these lines: common cracks are usually due to normal concrete curing and or shrinkage. The inspector's knowledge and experience is how the size and characteristics of the cracking is determined. It is in your interest as the Buyer to accompany your inspector through the entire inspection if possible.

Read the report completely and understand the condition of the home you are about to purchase. After all, it is most likely one of the largest investments you will ever make. Lastly, most homeowners will not consider making repairs on anything that does not reveal significant defects which were not disclosed or previously known to the Buyer. This means if the inspector points out that the furnace is 20 years old and says it's past its normal life expectancy, a homeowner will not automatically replace the furnace for you if it is still in good condition for its age and working properly. Most home owners will not consider giving you money back for a furnace or roof replacement since the age and condition would have been disclosed on their Sellers Representation Report. Your property inspection is being done to verify that there are no significant defects to the property that were not disclosed by the Seller.

In my real estate career I bring over 10 years of experience to the table, I work to represent my Client giving 100% to them. My job is to give you my advise, experience and knowledge and to help you navigate the wonderful and frustrating world of real estate. My job does not end when you purchase your home, it just begins because I will be there even after the closing keeping in touch with you and reminding you that I am always just a phone call away.

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In every kind of market we have all Realtors and Consumers have to deal with the issue of what is a "Reasonable Offer". As a Buyer or Seller, do you know what your Realtor thinks is a reasonable offer? In most cases I would say Consumers and Realtors never discuss this issue prior to signing a Agency Contract and they probably don't even discuss it during the Contract time. In most cases what is a reasonable offer will only come up when either the Buyer is making an offer or the Seller is having to review an offer, it's at this point that this "sticky" issue can arise. This can not only put the Buyer and Seller at odds with each other, but can actually involve the Buyer/Seller Agent with their Client.

Everyone has their own definition of what is a reasonable offer to make or what is a reasonable offer to accept, and if your a Realtor (especially in this market) you should be discussing what your Client thinks is a reasonable offer. If you are not then when it's time to make an offer, you as the Buyer Agent may find that you have an unreasonable Buyer (in your opinion) and the same thing can happen on the Sellers side. So what do you do when things like this come up, the answer is to not allow them to happen.

Communication is key to a successful transaction and every Realtor should know what their Client considers as reasonable. If your a Buyer/Seller and your Realtor has not discussed this with you then now is the time to bring up the issue, so you know where they stand regarding this topic.

As far as what might be considered a resonable offer in this market, one needs to look at several factors like how many days the property has been on the market, how well priced it is compared to its competition and what is the absorption rate for the market you are Buying or Selling in. A Realtor should be able to help you with all three of the above factors as well as others, when it comes time to making or accepting an offer.

In my real estate career I bring over 10 years of experience to the table, I work to represent my Client giving 100% to them. My job is to give you my advise, experience and knowledge and to help you navigate the wonderful and frustrating world of real estate. My job does not end when you purchase your home, it just begins because I will be there even after the closing keeping in touch with you and reminding you that I am always just a phone call away.

The City of Manchester has weathered the 1st quarter of this year and the information regarding its absorption rate is in, before I give that information out I want to explain quickly what the definition is for absorption rate. In short the absorption rate for a Town/City is the length of time it will take for the current inventory on the market to be absorbed . The magic number looked at by Realtors is 6 months, meaning if the market has a rate above 6 months the market is considered to be a Buyers Market. If the absorption rate is below the 6 month mark, then it is considered to be a Seller's Market.

The City ended the 1st quarter of this year with an absorption rate of 6.76 months, which is good considering the market we are in and the rates for some of the Towns around Manchester. Londonderry for example has a rate of 7.68 months and Derry has a rate of 9.14. Although Manchester's rate is above the 6 month mark, the City is showing a surprisingly strong market position. Seller's should not be mislead though by the better showing of the City, since the rate would have to fall into the 5 month range before anyone would consider calling Manchester a "Seller's Market". So what do you do with your property if you are thinking of selling it? You make sure that you do not overprice your home, even by $5k. You make sure that the Realtor you choose is going to price it well and be able to market your property as it will need to be.

When marketing your property it is always important to be aware of current market trends, any changes and how it may effect you. I have over 10 years of experience in Real Estate and I consider myself someone who can bring my experiences to assist any Seller in Marketing their property. If you are considering selling your home, you need to have someone with the expertise and experience to help you navigate the ever changing waters of the Real Estate Market, so call me so that I can assist you with your largest financial dealing.