Archive for the 'Buyer Info' Category
If you’ve been checking out open houses recently or calling about properties you find online, you’ve probably realized that it’s a fast-moving real estate market this spring.
If you’re hoping to buy in Cambridge or nearby towns this spring you need to get your ducks in a row early on. Properties are typically selling the first weekend so you’ll want to be prepared in case you find something you love.
One of the first to-dos in the home buying process is to get a pre-approval from a lender. It’s a good idea to have a copy of that pre-approval with you when you head out to look at properties. You’ll also want to tuck a check or two in your wallet if you don’t carry a checkbook with you.
Thus armed, you’ll be able to jump into the fray if you find a house or condo that feels like home.
If you’d like to talk about strategies for success in this market, give me a call at 617-504-1737 – I’m happy to help. Liz Bolton, ReMax Destiny, Cambridge, MA
It’s a testament to the complexity of the real estate transaction that after twelve years selling real estate full-time I still learn new things and encounter various twists for the first time on a regular basis. Today at a closing I learned three things I didn’t know about MassHousing loans.
Mortgages from MassHousing have become more and more popular in the last few years with first time homebuyers. They allow for a low down payment and since nobody seems to be offering “blends” – second mortgages that make up for down payments under 20% – a Mass Housing loan without mortgage insurance is an attractive option for many buyers.
So what do I know now about Mass Housing loans that I didn’t know before?
- You have to be an owner occupant as long as you have a Mass Housing mortgage. Even years down the road, if you still have your MassHousing mortgage, you can’t opt to rent out your place. You can buy a multi-family with a MassHousing loan but it still has to be your primary residence.
- You may have to move into the place you just bought with a mortage from MassHousing within 30 days. Most lenders require you to move in within 60 days – giving you some time for renovations, etc. – but Mass Housing cuts that period in half. I’m not sure this applies to all MassHousing loans – I found info that varies on other sites but this was a requirement of the buyer’s loan today.
- There’s the potential for paying back some of the MassHousing benefit you received if you sell before nine years have passed. Talk to your lender to get the particulars – it has to do with your income going up beyond certain levels as well as the profit you make when you sell. Mass Housing may reimburse you if you’re subject to this ”recapture tax” - again, make sure you ask your lender to explain how this works.
A good lender who offers MassHousing loans can explain these provisions and more. If you’re interested in Mass Housing loans or other mortgage products that fit your particular circumstances give Kevin Greeley of NEMoves a call at 781-929-4147.
2012 has been a year of bidding wars in Cambridge. Just how often are they happening? I decided to take a look at the numbers of Cambridge houses selling for over asking price. How many houses in Cambridge sell for over asking?
As of yesterday, 117 houses had sold in Cambridge since January 1st. Of the 117:
48 sold for over asking
11 sold for full price
58 sold for less than asking price
So, slightly more than half of all Cambridge houses sold to date in 2012 sold for full price or more.
In fact, this is the first year that I recall seeing the MLS report I run with a Sale to List Price ratio for all sales at more than 100%. In other words, on average, Cambridge houses have sold for more than asking price in 2012. The sale to list price ratio for Cambridge houses sold in 2012 is 102%. That number is usually high – somewhere in the 90s – but this is the first time I recall seeing the total – not just one price band – exceed 100%.
Those numbers don’t tell the whole story. While almost half of the houses sold for less than full price often the discount was rather negligible – a few thousand on a house selling for hundreds of thousands. Just a handful sold for discounts of 7 to 11% off the asking price.
The premiums paid in multiple bids however was often much larger – $516,000 for a house priced at $399,000; $$450,000 for a house with an asking price of $369,000; $3,150,000 for a house priced at $2,400,000, etc. A number of sale prices were 20 to 30%+ over the asking price.
Let’s hope inventory builds in 2013 – we don’t need more bidding wars – we need more listings!
If you’re hoping to sell your Cambridge home for top dollar or if you’re hoping to buy and want some expert guidance in how to prevail in this market, give me a call – I’d be happy to help. Liz Bolton, ReMax Destiny, Cambridge. 617-504-1737.
Ok – your offer was accepted. Congratulations! Chances are the next step is to get a home inspection scheduled. Wondering what happens on a home inspection? Here’s an overview:
What Happens On A Home Inspection
Typically your home inspector starts on the exterior of the property. He’ll be looking at the siding, the trim, the foundation and the roof.
Then we’re off to the basement since as one home inspector says “that’s where the fun is!” A good home inspector will go through the cellar one system at a time and look at the plumbing, the heating, the electrical and the foundation. He’ll be looking for any evidence of current or past pest problems though if conditions warrant you may consider getting a separate pest inspection by a specialist.
An inspector typically is not checking for lead paint – that’s a separate inspection by another specialist. The inspector is also not looking at the smoke or carbon monoxide alarms since Massachusetts law requires that those will be inspected by the local Fire Department prior to the sale of the house.
Upstairs the inspector will go room to room with more time being spent in the kitchen and bath[s].
Your inspector will be taking notes and it helps if you take notes too. You’ll be getting a report that outlines the inspector’s findings. You may get the inspector’s report on the spot or it may be emailed to you afterwards. Ideally you want ask the inspector when you first call for an appointment how long it will take to get your report – particularly if you’re up against the agreed upon inspection deadline in your offer.
With a good inspector, by the time you’re done you should have an understanding of any issues to add to your to-do list, a grasp of how the mechanicals in your house work, and a good sense of what you need to do for ongoing maintenance and emergencies. You’ll be a homeowner soon!
The New York Times had an excellent article today about appraisal issues. Real estate appraisals are more often a challenge in today’s market. We’ve been experiencing it here in the Cambridge area but it’s happening all over the country according to the New York Times.
One thing I learned over the last few years is that appraisals aren’t an issue in a declining market – it was easy for a property to appraise when properties were selling for less than they had in the months before. Values may have been going down but appraisals were easy.
In an appreciating market appraisals are more apt to cause problems. Prices are going up so past sales may not support the prices buyers are willing to pay in the current market. Additionally, in areas without a lot of inventory it may be difficult to find enough comparable sales. Lack of inventory is often one reason why a property will sell for more than it might have in the past – buyers have been waiting for that property type to come on the market and are prepared to pay more to secure it.
New lending regulations for appraisals have also caused challenges. In the past local appraisers did the lions share of appraisals in the market. They knew the housing stock, they were more likely to have actually seen inside the properties they used as comparable sales, they understood the sublteties of neighborhood values and features buyers in this area were likely to appreciate, etc. A parking space for example may not have the same value in the suburbs as it does in the city.
As the New York Times reporter described, new regulations mean that many more appraisals are being done by out of town appraisers. My heart sunk recently when an appraiser pulled up in a car with Connecticut plates. That appraisal turned out ok but other times appraisers’ lack of familiarity with the area has caused problems.
The New York Times article also pointed out the value of cash sales in the appraisal process. Those sales will become the “comps” for the next appraiser and happily we’ve had many of them this year.
If your buyer is getting financing what can you do as a seller to ensure that your property appraises?
Make sure that your real estate agent is prepared for the appraisal. Your agent should bring printouts of comparable sales to the appraisal. I’ll highlight features on the sheets I want to call to the appraiser’s attention and make notations about similarities or differences – “only one bath,” “not a fancy renovation,” etc. Sometimes it can be tricky to get the right “comps”. When the comparable sales aren’t easy to come by I will make sure I bring sales sheets for similar properties that have sold nearby but over the line in an abutting town. I’m pulling together the comps that tell the story – that explain why a buyer would be willing to pay this price for this particular property.
On your end you’ll want to make sure that your property shows at its best. The appraiser is the final person that you need to impress during the sale of your home. Make sure your property sparkles, that it’s clean and picked up with lights on.
If you’re a buyer and the appraisal came in low what can you do? You may be able to renegotiate price with the seller. If not, you may have to put down more money since the bank is only going to lend X% of the value they’ve assigned to the property. You may be able to withdraw from the purchase if you’re unable to get your financing but that’s something to discuss with your lender and attorney.
If you’ve never bought real estate before of if you’ve owned elsewhere but never bought real estate in Massachusetts you’ve probably wondered – how long does it take to buy a house in Massachusetts?
While I can’t predict how long it will take for you to find the house or condo of your dreams, once you do find the perfect place and make an offer there is a typical time-frame for your home purchase.
The home buying process varies state by state. Here in Massachusetts the typical home buying purchase takes six to eight weeks. That’s from the day your offer is accepted until the day you close and get your keys.
It may be possible to speed up the process or to extend the time-frame. Perhaps you need to move more quickly or maybe the seller won’t be ready to move for several months. Buyer and seller will agree to a date that works for both parties.
I once had a sale close in just 12 days. That’s fast. Nowadays closing so quickly would be a much bigger challenge – the mortgage industry isn’t making things easy so it is better to work in the 6 – 8 week time-frame if you’re getting a mortgage.
Closings can also be extended. More often than not this happens when the seller needs a particular closing date beyond the standard period and the buyer agrees. However, you’ll want to consider the ramifications for your financing. Your lender will only be able to lock your mortgage rate for a certain period of time. An extended closing may very well mean that you won’t be able to pin down your mortgage rate until you get closer to the closing.
In general, you can expect it to take six to eight weeks to buy a house in Massachusetts. So if you’re in the real estate market, plot the weeks on the calendar and make your plans.
Open House Etiquette Tis the season for open houses with the Cambridge real estate market already in full swing.
When you’re at an open house you’re essentially a guest of the home owner. Here are some things to keep in mind:
Leave the coffee outside I’m not sure what’s happened to make everyone walk around holding a cup. I’m as big a coffee addict as the next person (ok – bigger) but it wouldn’t occur to me to bring my drink with me when I go into a store or an open house. It’s even more mystifying given the proliferation of cup holders in cars nowadays. Long and short – leave your drinks outside when you visit an open house.
Hold onto the kids If children are accompanying you to open houses you’ll want to keep a tight rein on them. Many houses and condos that you’ll visit won’t be child-proofed. There’s often expensive art and breakable objects at very turn - disasters waiting to happen. If your kids haven’t been taught to look-but-not-touch then you’ll really want to hold on to them tightly.
If you can’t say something nice … then don’t say anything at all. It’s simply bad form to dis the house or condo that you’re visiting – at least within earshot of other visitors. I know sometimes it’s tempting to make a negative remark as a strategy when you like a place – how better to dissuade your competition? More often than not, though, it’s just some negative nellies who loudly discuss what they perceive to be shortcomings. Best to save your critique for long after you leave.
Wear your good socks While I typically encourage homeowners to allow visitors to wear shoes there’s a good chance, particularly if the weather is bad, that you’ll be asked to remove your shoes. Good socks and easily removed shoes will make the process slightly less onerous. It’s a lesson real estate agents learn early in their careers – the socks with holes have to be weeded from the sock drawer.
Don’t be shy about signing in It’s some sort of reflex that many of us have (I admit it – I was prone to it too when I went to open houses as a hobby many years ago) – we don’t want to sign in on the guest register. But be brave. It’s a simple request and given that you’re a guest in someone’s home – an unknown guest at that – it’s only fair to the homeowner. If you’re working with an agent sign in with his or her name or add it to the sheet. That way if there’s info to be shared, offers coming in or whathaveyou, we can call your agent.
That’s it – my advice from the real estate trenches. See you out there on Sunday!
The pace of the Cambridge real estate market this spring is dizzying.
Newly listed properties are often selling before the open house. Many properties have received multiple bids.
Why is this happening? Low inventory seems to be the answer. There just aren’t enough properties on the market to satisfy demand. Here’s how Cambridge real estate listings today compare to the same time last year.
- Single familes for sale in Cambridge – 21 vs. 41 a year ago
- Condos for sale in Cambridge – 115 vs. 231 a year ago
- Multi-family houses – 11 vs. 16 a year ago
Wow! The numbers of houses and condos for sale in Cambridge are down 50% from last year. As always, multi-families are in short supply in Cambridge. Inventory is down in Somerville as well though not as dramatically as in Cambridge.
The availability of properties for sale is even more limited than the numbers above suggest, however. The increasingly common usage of what we agents call “red active” – the property status of Under Agreement But Will Show for Backup Offers – means that only 84 condos in Cambridge, not 115, are actually available for purchase as I write.
What does this mean for Cambridge real estate buyers and sellers?
For buyers: Your best bet is to get a buyer’s agent who can alert you early on to properties coming on the market. Make yourself available to see new listings as soon as possible. Make sure you get a pre-approval from a lender. Be prepared for there not to be a lot to see – there just isn’t large numbers of listings coming on the market at any particular price point. And when there is the properties may sell quickly.
For sellers: If you’ve been holding off putting your property on the market this may very well be the time to sell. Perhaps your friend in the ‘burbs can’t sell his house or your neighbor down the street’s house lingered on the market a few years ago. Don’t let their experience lead you to think that it’s “not a good time”. It’s a great time to sell right now in Cambridge. You’ll want the advice and assistance of an experienced Cambridge real estate agent – pricing, preparation and marketing continue to be critically important despite limited inventory.
Thinking of buying or selling in Cambridge or nearby this year? I’d love to help. Email me at [email protected] or give me a call at 617-504-1737. Elizabeth Bolton, ReMax Destiny, 171 Huron Ave. Cambridge MA