Martha's Vineyard Real Estate : Buying Real Estate on Martha's Vineyard
It is a buyer's market in residential real estate on Martha's Vineyard. Sellers - not all but many - have reduced their asking prices this autumn shopping season. If the panic on Wall Street and in financial markets worldwide has not threatened your dreams of relocation to the Island, or summer property ownership, or even retirement in a fondly regarded setting, now may be the time to buy.
Buy what?
Think about what your Martha's Vineyard house needs to do for you. For example, will you be raising children there, or will you need room for grandchildren to visit? Will you be living there year-round now (or ever)? Do you intend to retire in this house? Think about what the house needs to do for you, not only now but in the foreseeable future. As architects will tell you, with a clear idea of the function of the house you are ready to think about its form.
What can you afford? Even recently, in financially troubled times, many home purchases on Martha's Vineyard are cash deals. However, most buyers, especially those purchasing the less expensive homes, will use mortgage financing. Island banks report that they are ready and willing to lend, though because real estate values are so high, Island banks have provided only a modest share of financing for summer house purchases. Internet-based calculators will help you do the "affordability" math based on your income, how much debt you can assume, the current mortgage rate as well as how much of a down payment you have available.
Recent incentives created to re-energize the housing market may also assist in the financing of a primary or secondary home, as lenders here will explain in detail. Conventional mortgages (with 20 percent down required) or jumbo mortgages (with higher interest rates) are locally available. In fact, the mortgage ceiling on jumbo mortgages was recently increased to more than $700,000, and Island homes are eligible, according to local real estate brokers.
On-Island, but where?
Identify a couple of communities or towns on the Island that most appeal to you. If you have spent a lot of time visiting Martha's Vineyard, you probably already have a good idea of the communities or towns that most appeal to you. However, today there is a wealth of information available to you online as well. Use the Internet to review community websites (as well as property listings). Each community on the Island has a unique character and personality; each has advantages and disadvantages.
There are, for example, buyers who want to find a home in West Tisbury, because home ownership in that town comes with access to the Lambert's Cove Beach, one of the loveliest and most serene on the Island. Recent Massachusetts Comprehensive Assessment (MCA) scores will provide you with a wealth of information on local schools, etc.
The price range of homes is wide. According to the Link database (an Island research tool available to local real estate brokers) the median price of a home sold on the Island is $708,000 this year to date; the average price of a home sold in Vineyard Haven in August was $674,700 and in Oak Bluffs it was $487,000. Natalie Conroy, Conroy & Co. in Chilmark, says that the average price for a home there is $2.2 million.
Looking and buying
There are basically two ways to find and purchase a home: on your own or with the assistance of a licensed agent/broker who has the knowledge of the community or communities in which you are interested.
Real estate "agents" are licensed salespeople who work for licensed "brokers," "Realtors" are members of the National Association of Realtors. All Realtors are brokers or agents, but not all broker/agents are Realtors.
Buyer agents are a unique option. These firms, or individuals, have no listings of their own. You may regard this as a disadvantage. Some see it as an advantage.
Martha's Vineyard Buyer Agents' Fred Roven is a real estate broker who describes his firm as "never having an agenda for selling any property... all inspections, recommendations of contractors, you name it - are in the buyers' favor." Should you sign an agreement with a buyer agent firm, as with any other real estate firm, that firm will negotiate with the seller, or the seller's representative, a fee or the percentage of the commission they will earn.
"Most buyers want representation today," says Judy Federowicz, the principal/broker of Coldwell Banker/Landmarks Real Estate, with offices in Vineyard Haven and Oak Bluffs. "It used to be that everyone in real estate represented the sellers, but not today."
After selecting an agent or broker with whom you wish to work, as the buyer you will be asked to sign an agreement which defines your relationship with that firm. This agreement will disclose whether the firm also represents sellers and any fees that you may owe at the time of closing.
Another change in the marketplace, Ms. Federowicz noted, is that buyers "are taking longer to make a decision. They may visit the home several times. People are being more thoughtful, they do their due diligence before they make an offer."
Mrs. Conroy has the same view, "Buyers are very savvy, they come educated."
With a glut of available homes and far fewer prospective buyers than in years past, buyers today do not feel the competitive pressure of the marketplace forcing them to get an offer on the table.
With or without a broker/agent, you could also purchase a home that is being sold by its owner without a broker. There are true "for sale by owner" transactions and there are For Sale by Owner (as well as a number of other companies offering similar services) transactions in the flat-fee real estate niche. The goal with either is for the seller to avoid paying a five percent commission to a real estate broker. If you are assisted by a broker/agent, your representative will have negotiated with the seller the fee they will be paid, by the seller, should you make a successful offer.
According to the For Sale by Owner spokesperson, Eric Mangan, "approximately 20 percent of the real estate marketplace is comprised of `for-sale-by-owner' listings." A home buyer can, without cost, use the FSBO website. Currently there are two FSBO listings for homes on Martha's Vineyard: a Vineyard Haven home priced at $740,000 and an Edgartown home at $419,000.
Those sellers using a flat fee service provider will be able to "show" you (and/or your agent/broker) their home via the established website, complete with a virtual tour, glossy photographs, fact sheets, etc.
According to FSBO's Mangan, today "80 percent of home buyers start their search for a new home on the Internet."
Purchasing a home being sold by the owner without the help of a flat fee service provider may mean simply driving around to find such a home in the neighborhood, community or town that interests you. Unassisted "for sale by owner" sellers may not do any other advertising than a sign on the front lawn and "word of mouth."
"There is a tremendous inventory of homes on the market now," Mrs. Federowicz said. "We did not experience the downturn in the market until this year, and now both shoes have dropped."
