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Archive for the 'Buyer Info' Category
Flood Insurance Freeze
Seems like flooding’s been on everybody’s mind lately with all the rain we had in Massachusetts. Coincidentally, there’s a freeze in the flood insurance program right now.
Most flood insurance policies are issued through the National Flood Insurance program since private coverage is often exorbitant. The NFIP was up for renewal at the end of March but Congress went on recess on March 26th without renewing the program. The program is on hiatus and no new policies can be issued before Congress extends the program after reconvening on April 12th.
Real estate buyers who are closing on a home or refinancing a property that requires flood insurance won’t be able to obtain coverage until the program is reintated. No insurance – no closing.
The City of Cambridge website has more information about the recent redrawing of floodplain maps in Cambridge.
Massachusetts Home Sales Impacted by Flooding
Water bubbling up from the street in Arlington after the rain
Massachusetts Home Sales Impacted by Flooding Real estate agents and buyers have slogged through a lot of wet basements in Massachusetts in the last few weeks. It was the worst flooding in Eastern Massachusetts in decades. Even days after the rain ended you would still come across sump pumps dumping water out onto yards or sidewalks from flooded basements.
The flooding, and the fact that much of Massachusetts was declared a disaster area, is impacting real estate closings.
There’s a good chance in the next few weeks that your lender may require an additional visit from the bank’s appraiser if you’re closing on a property in Middlesex County or another county that was declared a disaster area. If your appraisal predated the storms the bank may require another inspection prior to closing.
In some cases you may be required to pay for the inspection. And it’s possible that your closing may be delayed by a few days. All of this is still unfolding so it’s hard to predict exactly how the inspections will work and what the impact will be – particularly if the property was severely flooded.
Boston Globe Article About the Current Real Estate Market
It may look like winter - but the spring real estate market has started in the Cambridge area.
We Cambridge real estate agents often grumble about the Boston Globe’s real estate reporting. Too often they’re behind the curve, not quite giving the real take on what’s happening in the real estate market around Boston and Cambridge.
A lot of that has to do with basing analysis and reporting on home sales. Since the home sale process in Massachusetts takes about six to eight weeks, from offer to closed sale, it’s easy to fall into the trap of thinking that sales reflect current reality – when they’re actually a reflection of what was happening two months ago.
But on Saturday, the Globe’s front page article about real estate activity, ”For Sale, But Not For Long” was right on the money. In many towns around Cambridge inventory is low and demand is up, spurred by the homebuyer credit which is set to expire before the end of the spring real estate market.
I just finished the latest round of monthly real estate reports for half a dozen towns. In several towns, the number of homes for sale is down substantially from this time a year ago. The difference is even more dramatic if you compare the numbers to the same time two years ago.
And yet, demand is up because of the homebuyer credit, not to mention continued low interest rates, and in many cases, lower prices.
What does this mean for prospective home sellers? If you’re thinking of putting your home on the market this spring it’s best to do so sooner rather than later. Many sellers think waiting until the lawn is green and the flowers and leaves are out is the way to go. Not this year! You don’t want to miss the surge in activity created by the impending expiration of the homebuyer credit.
A property must be under agreement by the end of April and close by the end of June for the buyer to qualify for the homebuyer credit. Times a wasting to get your property in the mix. Ideally you want to list your home for sale no later than the beginning of April if not sooner. There may very well be a lot of sellers thinking the same way so putting your home on the market sooner to get ahead of the crowd is not a bad idea.
What does this mean for home buyers? Home buyers who hope to qualify for the credit should be hitting the pavement, familiarizing themselves with what’s on the market in their price range. Once you’ve seen enough properties you’ll start to develop a sense of what price seems right and a better idea of what you like and what you don’t. When you find “the one” you’ll know it – because you’ve seen enough of the competition to know this is the right home for you.
You also want to get out and visit new listings as quickly as you can. It’s not uncommon right now for properties to sell the first weekend. We’re also seeing properties sell before the open house. Last week a single family came on the market in Cambridge on Wednesday. By Friday there were multiple offers and it was under agreement.
Want some answers to your real estate questions? I’d be happy to help! I can be reached by email or by phone at 617-504-1737.
Elizabeth Bolton is a real estate agent at the Huron Avenue office of Coldwell Banker in Cambridge. Let her put her ten years of real estate experience to work for you.
What Do Condo Fees Cover?
What Do Condo Fees Cover? Many first time real estate buyers tend to think of condo fees as an ”extra cost” of owning a condo. I know I did. Then I bought a house as my first home and quickly came to realize that home ownership inevitably had expenses associated with it. Condo fees started looking a lot more reasonable to me.
So what are the typical things that condo fees cover for condos in Cambridge and nearby towns?
The two expenses most often included in the fees:
Master insurance - this is the insurance policy that covers the building structure and common areas. Typically you’re responsible for insuring the interior of your unit and, if so, banks have started requiring you to purchase additional coverage, called HO-6 insurance, prior to your closing.
Water and sewer bills - Typically in Cambridge you’ll find just one water and sewer meter in the building. If that’s the case then those bills will be paid via the condo fees. Some condo docs will spell out a formula that prorates cost by number of residents per condo but more often, the bills are simply paid from the condo fees collected.
Other Expenses That May Be Paid Through Condo Fees
- Heat and / or hot water
- Snow removal
- Landscaping
- Exterior maintenance
- Professional management
- Elevator
- Concierge or security desk
- Swimming pool
- Common area cleaning
- Contribution to reserves
- Common utilities
Many of the expenses covered by condo fees are simply the cost of home ownership that’s shared by you and other members of the condo association. Some expenses may cover things that are less important to you – a pool, an elevator, a health club. Others are costs in lieu of doing it yourself – snow removal, professional management, etc. You have to decide if the benefits provided are worth the expense of higher fees.
High condo fees are not necessarily bad – they may be an indication that the condo association is budgeting with the long view in mind. Buildings cost money to maintain and an association that fails to budget for inevitable repairs and upgrades will suffer from deferred maintenance and the possibility of large assessments to cover overdue projects.
On the other hand, some associations prefer to keep fees on the low side while each association member banks their own money until such time the association decides to pay for a project by divvying up the cost among the members.
As a part of the homebuying process you’ll have the chance to review the condominium association’s financial documents. You’ll want to decide if you’re comfortable with the finances and the association’s financial style.
President Signs New Homebuyer Tax Credit
President Obama signed the bill that included the new Homebuyer Tax Credit yesterday, extending and expanding the First Time Home Buyer Credit that was set to expire on November 30, 2009. The new credit is no longer limited to first time homebuyers and now includes buyers who are selling or have recently sold their home.
The details of the credit are fairly complicated and you’ll need to factor in the dates of your purchase relative to the enactment of the legislation. Consult your accountant or tax practitioner to determine your eligibility for the credit.
Here are some highlights of the new bill:
Who Is Eligible For A Homebuyer Tax Credit?
- A buyer qualifies as a first time home buyer if he or she has not owned a home in the three years prior to the purchase
- Homeowners buying a home who have used their previous home as a primary residence consecutively for five of the previous eight years
How Much Is The New Credit?
- First-time buyers – $8000 or $4000 married filing separately
- Current homeowner – $6500 or $3250 married filing separately
When Does The New Homebuyer Credit Expire?
- Buyer must have a written binding contract to purchase in place by April 30, 2010
- The homebuyer has until July 1, 2010 to close
Is There A Home Purchase Price Limit For The Credit?
- Yes. The home purchase price is now capped at $800,000.
What Are the Income Limits For The Home Buyer Credit?
The income limits have been increased with the new credit. Previous income limits are in parentheses.
- $125,000 single ($75,000)
- $225,000 married ($150,000)
- Additional $20,000 phase out
Low interest rates, a tax credit, and lower prices – it’s good to be a buyer right now. Looks like the spring real estate market will start early this year!
Why Don’t They List The Taxes For The Condo?
Sometimes when you’re looking through the real estate listings of condos for sale you’ll come across condos where no amount for the property taxes is given. Or maybe there’s a bunch of nines – “99999″ is often used to fill in a required field when there’s no info to enter. So why don’t they list the taxes for the condo?
Typically a lack of property tax information means that this is a new condo – either a newly built condominium or an existing building – often a multi-family - that’s in the process of being split up and converted to condos.
In the case of an existing building sometimes the listing will show a number that seems too high - much more than you expect to see for annual taxes for a condo in this price range. That may be because the agent has put the tax bill for the entire building in the field. However, as a condo owner you’re only going to be responsible for taxes on your unit – not on the whole building.
When an existing multi-unit building is converted to condos there is typically some lag time before the town or city Assessor assesses the individual condos. Until then your tax bill will be your portion of the bill on the entire building. Your condo’s percentage of ownership is defined in the condo documents.
Let’s say you bought a condo in a triple-decker that’s just been converted to condos. If the units are all the same size your ownership percentage is probably 33.3% – so you would be responsible for one-third of the building’s tax bill until the city recalculates the taxes by unit.
You’ll want to talk to your new neighbors in your building to find out how the tax payment should be handled. Perhaps one person will collect everyone’s checks. Often your lender is collecting money from you each month in an escrow account that will cover your taxes. You want to make sure that your bank only pays your portion – not the whole building’s.
The City of Somerville website has a really good page about taxes for new condos. While much of the information is specific to Somerville, there’s also a good description of what happens tax-wise when new condos are created.
Wondering what your taxes are likely to run? To get a rough idea you can look at the taxes on condos that are assessed for amounts close to the purchase price of your condo. Or check the city or town’s property tax rates and multiply by the sales price of your condo to get an estimate.
Have more questions about your real estate search? Email me or call me at 617-504-1737 – I’m happy to help!
How To Make An Offer On A House Or Condo
Making an offer to buy a home
How To Make An Offer On A House Or Condo You’ve found the property you really like, the one that seems just about perfect, the one that feels like home when you open the door. What happens next?
How do I make an offer to buy real estate in Massachusetts?
We’ll want to meet in person, if at all possible, when you’re ready to make an offer. It is possible to put in an offer when you’re out of state or out of the country - using email or fax and phone we’ll be able to fill out the forms. However, if you’re local it’s definitely best to meet in person for about an hour or so – longer if we get to talking at length- or stressing! – about the many details.
You’ll need to bring two things to our meeting – a copy of your lender’s pre-approval and a check. The seller expects to see evidence that you qualify for a mortgage sufficient to purchase the property so a current pre-approval letter needs to be submitted. The offer is accompanied by an initial deposit, also called an earnest money check. In the Cambridge area a $1000 deposit is customary. In a multiple bid situation you may decide to increase that initial deposit. Your check cannot be cashed unless and until your offer is accepted. That $1000 will go towards your down payment on the property.
In Massachusetts, the home buying process has two steps – the initial offer and the Purchase and Sale contract or P & S, typically signed about 10 to 14 days after the initial offer. The P & S is drafted by your attorney and the seller’s attorney. When you sign the P & S you’ll be putting down an additional deposit, typically enough to equal a total deposit of 5% that goes towards your down payment. Sometimes that deposit amount will vary and we can talk about your situation and strategy when we meet.
In Massachusetts the Offer to Purchase real estate is typically a one-page form. Not that you’re going to get off that easy – there are a number of other required forms but the main details can be spelled out on one page. On that main page we’ll specify the amount you’re offering to pay for the home, the amounts of your deposits, the contingencies of the sale, and the dates for the transaction. When we meet we’ll talk about what’s customary, what if anything we know about the seller’s desires, and what works for your schedule and write the offer accordingly.
We’ll decide on a deadline for your offer. In Cambridge it’s customary to ask for a response within 24 hours, or sometimes even more quickly. Again, it’s a strategy and something we’ll talk about when we meet. It’s not uncommon to learn after we submit the offer that the seller needs more time to respond and you can opt to extend the deadline. Customarily the sellers will respond in a timely fashion – so you won’t be on the edge of your seat for too long!
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Have more questions? Feel free to email me or call me at 617-504-1737. And if I can help with your real estate search I’d be delighted. My coverage areas include Cambridge, Somerville, Arlington, Belmont, Medford, Watertown and nearby communities. If you’re moving out of the area I can refer you to a great agent who can help you find your next home.
Buying A House Or Condo In Cambridge – What To Bring To The Closing
Buying a House or Condo in Cambridge – What to Bring to the Closing The big day is almost here – you’re buying real estate in Cambridge – your first house, a new condo – congratulations!
What Do I Need To Bring To The Closing?
Cambridge Real Estate Closing
A limber wrist is probably the most important thing to bring to your real estate closing – there’s a reason the closing is often referred to as “passing papers”. Nowadays at a Massachusetts real estate closing there’s a large stack of papers getting passed around the table between buyers, sellers, and attorneys.
Seriously though, here are the things you need to remember to bring with you:
A bank check – also called a certified check or cashier’s check. The check for the amount of money you’re bringing to the closing can’t be a personal check – the bank requires cleared funds. The bank attorney’s office will let you know the amount of the check a day or two before the closing. If the figure for the check still hasn’t been determined sometimes they’ll give you an estimate and either you or the attorney will write a check for the difference at the closing. Typically, you’ll be instructed to have the check made out to yourself and then you’ll sign the check over at the table.
Don’t forget to arrange for access to your funds for the closing. If you need to move money around it’s best to do it well in advance of the day of your sale. You may choose to have your bank wire the money but this too needs to be arranged in advance. The bank attorney’s office will be able to give you wiring instructions.
Photo ID. You are required to present photo identification at the closing – a driver’s license or a passport is what people usually bring. It’s a good idea to have a second form of identification as well since every so often a bank asks for a second form of ID.
Your checkbook. It’s not uncommon for a personal check to be needed for some miscellaneous expense or recalculation. Nowadays more and more people don’t carry a checkbook but you should be sure to pop one in your bag just in case.
An hour or two at the table and you’ll be the happy owners of a new house or condo. Congratulations!
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Buying A House Or Condo In Cambridge – What To Bring To The Closing by Elizabeth Bolton, a Cambridge real estate agent at Coldwell Banker, 171 Huron Avenue, Cambridge MA.
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