LIKE MANY PEOPLE LOOKING FOR A GOOD investment, Brendan and Jennifer MacDermott, both account executives in their early 30s, wanted to take advantage of the lower prices and relatively high inventory of today's real estate market. But they found themselves in a bit of a bind because they already owned a home. Still, the couple decided to look around and almost immediately found a property that spoke to them: a 2,020-square-foot contemporary home in the Squantum section of Quincy, with views of the Blue Hills, the city skyline, and the ocean. When they saw the place in April, it was listed at $520,000. "We didn't make an offer," says Jennifer, "because there had been no activity on our house yet" - a small one-bedroom in Hough's Neck, also part of Quincy, that the couple had bought in 2005 for $289,000 and had listed in March at $319,000. "We were getting really frustrated," she says.
Then, in June, just when the MacDermotts were about to give up on moving into the Squantum beauty, Jennifer says their realtor called to say the price had dropped dramatically, to $485,000. "That's when we knew we had to do something to get this house," Jennifer recalls.
The couple had discussed taking their Hough's Neck house off the market and renting it, and by then they had someone in mind. Friends of a friend who lived on the Cape wanted to move closer to the city for the five years preceding their impending retirement. "We called them," Jennifer says, "and put an offer on the house that same night."
The MacDermotts ended up paying $417,000 and thought they were getting a great deal at $103,000 off the original asking price. Little did they know just how good a deal it was. "When we moved in, I found a flier that listed it at $625,000," Jennifer says, "so at some point it had started at that."
They also got a great deal on their other house: responsible tenants with a five-year lease. "We'll wait five to 10 years for the market to bounce back," Jennifer says, "then try to sell the Hough's Neck place or keep it as an investment property."
Scratch the surface of the dire real estate news these days, and you'll find plenty of happy endings. Home sellers may be lamenting that prices are down and inventory is up, but that's not doom-and-gloom news for buyers. Qualified house hunters - whose ranks have been diminished by tightening mortgage requirements and general caution regarding the market - are finding deals of $10,000, $50,000, even $100,000 or more off the asking price on some properties.
Accountant Lucrecia Guerra, 37, and her husband, contractor Ervin Chavarria, 28, had been looking for about a year and a half for a place where they could live with Guerra's mother, son, and possibly extended family when they came across a 3,396-square-foot Victorian with a large attached barn in Merrimac. "It needed a lot of work, but we fell in love," says Guerra. Just a few minutes' drive from both the Merrimac River and Lake Attitash, the house had high ceilings, hardwood floors, original moldings, a widow's walk - and a bargain-basement price of $290,000.
"It was worth at least $400,000," says the family's realtor, Diego Osorno of Su Casa y Mas Realty in Chelsea. Because the house was bought at auction and there were problems with the title, "it took about six months to close the deal," he points out. "But in the end, everyone's happy."
"Extremely happy," Guerra adds.
BUYERS LIKE THE MACDERMOTTS AND the Guerra-Chavarria family are indeed finding good deals with serious sellers, but the good news for homeowners is that the market in general may not be as bad as some panicked news reports suggest. According to the Warren Group, a Boston-based provider of local real estate data, the median price for both single-family homes and condominiums fell in the third quarter of 2007 by only 0.9 percent, if foreclosures are excluded from the calculations. When foreclosures are included, prices fell 4.4 percent for single families and 3 percent for condos in September over the same month last year. According to Patrick Fortin, a co-owner of Century 21 Commonwealth, which has 16 offices in Eastern Massachusetts, those figures "hardly represent a fire sale."
"When you look at the numbers next year," Fortin says, "was '07 really a crash and burn? I think the answer will be no." He draws an analogy to fluctuations in any market - food, clothing, cars. "I'll buy strawberries now that I wouldn't touch in the middle of summer," he says. "They don't look good, but there aren't many choices. In housing, people have much more choice right now, so they're able to shop around and, for the same money, get a better product. If we hadn't had the boom, we would feel like we're in a fine market right now."
Those who really want or need to sell can usually find the right fit for their homes - often, depending on when they bought, at prices that still provide a nice, if not spectacular, return on their investments.
Jeffrey Gonyeau, 40, and Jack Dennerlein, 43, learned that a slight adjustment in expectations can sometimes lead to uncommon rewards when they stumbled on a pristine 1894 Colonial revival in Dorchester's Ashmont Hill neighborhood. "We weren't looking for a house," says Gonyeau, a senior program manager for Historic Boston Inc., "and weren't even living together at the time." They loved the home's spaciousness and original details and found the neighborhood "wonderful," but didn't know whether they could swing the $699,000 asking price.
"We weren't prepared," Gonyeau says. "We both owned our own places and wondered whether we'd be able to sell them in a market that was really sliding at that point." They made a contingency offer of $680,000 that was accepted - and by being "realistic" about the selling prices of their own homes, both men had them under agreement within about three weeks of putting them on the block in the fall of 2006. "A year earlier," Gonyeau says, "both properties could have gone for a lot more - especially mine, because the condo market slid more quickly in Dorchester. It was painful to price it the way I did, but I knew I had to, to make the sale happen."
Today, the couple are making a monthly mortgage payment that equals their combined former mortgages - and couldn't be happier. "It is an amazing house," says Dennerlein, an associate professor at Harvard School of Public Health. "It's our baby."
"PEOPLE PERCEIVE IT AS EVERYONE BUYING THESE days is a bottom-fisher looking for a short sale," says Fortin, the realtor. "That's absolutely not the truth. There are good, qualified buyers out there who want the right deal. You just need something that has an allure to buyers. It might not be price, necessarily. It might be a house in a neighborhood that rarely becomes available. It might be a certain style, such as Victorian, that's not usually available. It might be a house that's renovated to the point that it just drops your jaw."
Ryan and Kim Eckel's pondside Jamaica Plain Colonial is a case in point. The couple, both in their late 20s, paid $655,000 in February for the five-bedroom, 1 1/2-bath single family - just $20,000 less than the asking price - but feel they got a great deal because the house has so much going for it. "It has character, and the layout is perfect," says Ryan, a marketing manager. "There's a porch and detailing you wouldn't find in new construction, and we're just a five-minute walk from the Arboretum. It is the perfect place for us. Every day we're there we're happier."
"A single family in Jamaica Plain is very rare," says their realtor, Paula Callaghan of McCormack & Scanlan. "I think the seller was very motivated and didn't want to mess around. We put in an offer shortly after the first open house, but I don't think the house would have stayed on the market more than 25 days."
Still, getting a great deal sometimes calls for creativity.
When artist and interior decorator Dianne Murray, 63, saw her 900-square-foot Pawtuxet, Rhode Island, cottage, she was smitten. "I was always into owning an old, small house," she says, "very, very tiny. And this one just had a sense of balance. It was terribly cute." She was crushed when the owner rejected her initial lowball offer of $240,000 in June without so much as a response. Though the owner knew she had to sell - her circumstances had changed since she had bought the house - she didn't really want to and was reluctant to take less than her asking price of $319,000.
With little enthusiasm, Murray put a deposit on a house nearby. During the three-day rescission period, Murray changed her mind about the house, still starry-eyed about the adorable cottage. "She put the offer down," says her realtor, Robin Schubert of RE/Max Innovations in the Fenway, "but I could see that she was just considering the other place to buy something. She always kept driving by that home. I said, 'Look, if you really want it, let's just sit and wait.' "
The strategy paid off. By the end of the summer, the owner was getting a little anxious, and when Murray contacted her a second time, she accepted an offer of $275,000. Murray got the house in part because she was able to pay cash, Schubert says, and in part because "to the seller, she was a person." Murray had submitted a "lovely letter with the offer explaining how much she loved the house," says Schubert. "At the closing, she kept saying it was her dream home and she'd take excellent care of it."
Since moving in at the end of October, she has indeed taken excellent care of the house - but the house has also taken care of her. "Aesthetically," Murray says, "the whole house does something to me inside that calms me, and that's what a house should do. It should welcome you and embrace you and just make you feel comfortable. It's like living in a work of art."
The Deal Makers
Want to buy a good home at a great price? Follow these tips:
Be patient. It's risky, but if the sellers reject your initial offer, you may need to wait three to six months until they are willing to consider a lower price.
Let the sellers know how much you love the place. Write a letter with your offer telling them just how well you would care for it and what features especially charm you.
If you feel stuck because no offers have been made on your current place, consider lowering the price or renting it so you can move into the house you really want.