Centers And Squares
Archive for the 'Buyer Info' Category
Last night I came across something in a book that suggested blog posts should be short. Mine usually aren’t but it seems this one probably will be.
Are There Foreclosures in Cambridge?
Not so many as it turns out. Here and there we notice one or two foreclosures listed for sale by the banks but they typically sell fairly quickly. There were also a couple in the big auctions that were held in Boston.
With a quick scan of all the Cambridge real estate listed for sale in the MLS I found only one bank owned condominium currently on the market. It’s a six room three-bedroom condo on Windsor Street, midway between Inman Square and East Cambridge. It sold in 2006 for $390,000 and is currently listed, post-foreclosure, for $238,900.
There haven’t been many foreclosures in Cambridge or in Arlington, Watertown or Belmont. There are more foreclosures and short sales in Somerville and Medford, however, so stay tuned for a longer post!
I read some survey results this afternoon that indicated over half of prospective first time home buyers didn’t know about the $8000 credit. Time to write a blog post!
The 2009 first time home buyer credit is limited to 10% of the home’s purchase price up to a maximum of $8,000. We don’t have any real estate in Cambridge or Somerville available for less than $80,000 so buyers who qualify for the credit will be eligible for the full amount (with restrictions by income as explained below).
Who Is Eligible For the First Time Home Buyer Credit?
- First time home buyers who purchase a principal residence between January 1, 2009 and November 30, 2009.
- The purchase date is defined as the date the closing occurs and title transfers to the buyer
Who Qualifies As a First Time Home Buyer?
- The definition of a first time home buyer eligible to receive the credit is a buyer who has not owned a principal residence during the three years preceding the purchase.
- Both spouses’ homeownership history is considered when determining eligibility. If either spouse has owned a home in the last three years neither will be eligible for the credit.
- If the homebuyers are not married the credit may be allocated to a qualifying partner even if other partner[s] do not qualify.
- Ownership of vacation or rental property not used as a principal residence does not disqualify a buyer.
What Kind of Property Qualifies for the Credit?
- A condominium, single family house, co-op, mobile home, or houseboat (!) used as a principal residence
- The home must be in the United States
- Vacation properties and rental properties are not eligible
What Are the Income Limits for the Tax Credit?
- Buyers with modified adjusted gross income (MAGI) of up to $75,000 for a single first time home buyer and $150,000 for a married couple filing a joint return are eligible for the full credit.
- The credit is reduced proportionally for MAGI between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for married buyers filing jointly.
- Single buyers with a MAGI over $95,000 and married buyers with a MAGI over $170,000 are not eligible for the credit.
Does the 2009 Credit Need to Be Repaid?
Unlike the credit available to buyers in 2008, the 2009 credit does not need to be repaid unless the home is sold before three years have passed.
Please consult your accountant or tax preparer for more information. The National Association of Realtors website has a number of articles and links about the 2009 first time home buyer credit.
Today’s Sunday Boston Globe was chock-a-block full of real estate related articles. If you didn’t get your copy there’s still time to hit the corner store. There’s loads to read for the real estate obsessed.
The Boston Globe Magazine was all about real estate with the cover article titled “Top Spots To Live: The Best Communities in 15 Categories”. The Globe polled realtors for their votes. I’m a realtor but I don’t remember voting. But even without my admittedly biased vote, I’m happy to report that Cambridge placed more times than any other Massachusetts city or town.
And the winners are….
Cambridge was anointed “Top for Singles-Friendly Activities and Night Life”
Cambridge also won Honorable Mentions for:
- Fitness Minded Folks
- Arts Lovers
- Public Transit Fans
Somerville was the winner in the “Top for Hipsters” category and won Honorable Mention in the Singles-Friendly Activities and Night Life category. I remember years ago when Utne Reader magazine called Somerville one of the hippest places in the US. At the time I thought it was a stretch but Somerville has been trending in that direction ever since. With a vibrant arts community, rejuvenated Davis Square (not to mention Ball Square and Union Square), and a forward-thinking local government, Somerville deserves the kudos.
Arlington received Honorable Mention in the Foodies category. Arlington has become a hot bed of restaurants since the blue laws regulating the serving of alcohol were relaxed.
Melrose received Honorable Mentions in both the Car Commuters and Public-Transit Fans categories due to its easy access to commuter routes and to the three train stations in town.
Brookline won in the category “Top for Great Schools and Kid-Friendly Activities” and received Honorable Mentions in the Retirement Lifestyle and Public-Transit Fans categories
I’d say we did alright – no wonder we love living here!
And if you’d like to live here too and want some help with your search – I’m just a phone call or email away!
A townhouse is a multi-level dwelling attached at one or both sides to one or more other units. In Cambridge, townhouses are either deeded as condominiums or have a fee simple deed. If you are thinking of buying a Cambridge townhouse you will want to understand the form of ownership – will you be getting a condo deed or will you own the townhouse by a fee simple deed.
Form of Ownership
The owner of a condo owns his or her individual unit and has a percentage share of the condominium building and grounds that are owned in common by fellow members of the condo association. The condominium documents – a master deed and declaration of trust – spell out the percentage interest, define the common areas, and gives the legal description of the individual units.
Owners of condos will share in the costs associated with maintaining the common elements. Costs are apportioned by owners’ percentage interests as defined in the condo docs.
Fee Simple Ownership
When you own a townhouse with a fee simple deed you own your townhouse building AND the land on which it sits.
Even though your townhouse may not be in condominium ownership there still may be association regulations and / or fees. Make sure you understand what if any regulations govern the development and whether there is a governing homeowners’ association.
Do you have questions about buying a townhouse in Cambridge? I would be happy to help and I’m just a phone call or email away!
I’m dismayed every time I find out that a homeowner – who’s usually a home seller at that point – hasn’t received the residential exemption that he or she was qualified to receive. If you’ve failed to apply for the exemption by the deadline you are not able to get that money back – no matter how many years you missed out. It’s a lot of money to let slip away.
What’s the Value of the Residential Exemption?
For Cambridge homeowners who qualify for the 2010 residential exemption, $198,423 is deducted from the property assessment. This amounts to a reduction in the 2010 tax bill of $1,531.83.
Here’s more information about the residential exemption in Cambridge.
For Watertown residents, for the 2009 tax year, the 2009 residential exemption reduces the assessed value of the homeowner’s property by $88,733, which translates to a savings of $1,086 for qualifying Watertown homeowners. The value of the exemption in 2008 was $1,063.
The Somerville residential exemption for 2010 reduces the assessed value of a qualifying homeowner’s residence by $138,011 resulting in a tax savings of $1,697.54. The application form for the exemption is online and questions should be directed to the Assessor’s office at 617-625-6600 ext. 3100.
Wondering what are the property tax rates in Cambridge and nearby towns?
The 2010 residential property taxes have been announced by most towns. I’ve decided to add them to last year’s post so you can see the rates from 2008 and 2009 as well.
Tax rates are expressed in dollars per $1,000 of assessed value. In other words, if your Cambridge property, for example, was assessed at $500,000 you would multiply the tax rate of $7.72 by 500 to calculate your property taxes.
2010 Residential Property Tax Rates
Cambridge Residential Property Tax Rate:
- For 2010: $7.72
- In 2009: $7.56
- In 2008: $7.36
Looking for the new real estate tax rates? Cambridge has announced the rates for 2011 real estate taxes.
Arlington Residential Property Tax Rate:
- For 2010: $12.11
- In 2009: $11.92
- In 2008: $11.45
Belmont Residential Property Tax Rate:
- For 2010: $12.16
- In 2009: $11.89
- In 2008: $11.27
Medford Residential Property Tax Rate:
- For 2009: $10.08
- In 2008: $9.12
Somerville Residential Property Tax Rate:
- For 2010: $12.30
- In 2009: $11.71
- In 2008: $10.95
Watertown Residential Property Tax Rate:
- For 2009: $12.24
- In 2008: $11.39
Wondering if a town has a residential exemption? Of the towns listed above three do – Cambridge, Somerville and Watertown. Read more about the residential exemption in Cambridge, Somerville and Watertown.
Home buyers new to the real estate search in Cambridge or Somerville and nearby towns are often perplexed by one of the terms they see in the MLS (the Multiple Listing Service). “What the heck is a 2/3 family?” they ask.
The MLS uses the “2/3 family” as a descriptor in the Style of Condominium field. No question about it – it looks odd.
The term refers to condominiums in multi-unit buildings with two or three units. Cambridge and Somerville have loads of multi-family buildings. These wood-framed houses are typically either two-family houses or three-family houses (also called three-deckers or triple-deckers). When these multi-families are converted to condos the “2/3 family” designation is used to denote the style of condominium building.
The term does not refer to two-thirds of a building but to a two-family or three-family building.
The condos in a triple-decker are typically the same size and layout since a three-decker customarily consists of three, identical stacked units.
A two-unit association often contains two very different units. While it’s true that some two-families consist of identical units – a sort of two-decker style – more often the two-family has a smaller first floor unit and a larger unit upstairs, with additional rooms on the third floor.
Are you searching for a condo? Search here – by map or by search criteria – and see all condos available for sale in the MLS. And if you have questions or would like to set up an appointment to see any condos that catch your eye remember – I’m only a phone call or email away!
Given the unrelenting doom and gloom in the media, it’s no wonder you feel like you’ve got the upper hand when you’re looking for a new home. Visions of lowball offers, grateful sellers, and bargain basement prices dance in your head.
So it can come as a surprise when you find yourself in a multiple bid situation. Who knew there wold be competition? Real estate is local and even today you may find yourself competing with other buyers for a house or condominium. There have been plenty of multiple bid sales in my market – Cambridge condominiums have received multiple bids, it’s not uncommon for Arlington single families to have multiple bidders, and a single family in Medford recently sold for well over the asking price after receiving 10 offers.
Here’s a game plan to take you through the crazy, stress-producing process of buying a home when you’ve got competition.
What’s a savvy buyer to do when there are multiple offers?
For starters, don’t be discouraged and don’t be afraid. It is possible to “win” and get the house of your dreams and it doesn’t necessarily mean you have to break the bank to do so. I’ve bought three of the four properties I’ve owned in multiple bid situations – including my first house. And I’ve been happy with every house – no regrets!
Work With A Buyers’ Agent
You need to be working with a buyer’s agent who will represent your interests in the transaction. Sometimes buyers think that going directly to the seller’s agent will give them a leg up. But the seller’s agent’s responsibility is to the seller, not to you as a buyer. And it’s quite likely that the seller will still owe the same commission to the listing office even though only one agent is involved in the transaction. And most important – in a multiple bid situation the listing agent’s responsibility is to get the best offer for the seller – regardless of whether you’ve submitted an offer directly to him or her. The sellers’ goal is to get more money in their pockets – not the agent’s.
You need somebody on your side. A buyers’ agent who’s familiar with the local real estate market will be able to:
- Pull comparable sales info to enable you to decide on a reasonable but competitive offer price
- Advise you about real estate activity in the neighborhood for similar houses
- Strategize about how to put together a compelling offer that has a strong chance of prevailing in a bidding war
How Does the Seller Decide Which Offer To Accept?
When the seller looks at several offers there are only so many points to compare. You want to shine on all points:
Price – Go over the comparable sales information with your agent. Don’t get stuck on the asking price – the house may be purposely priced low to generate excitement – and that strategy worked! Carefully go over the stats and decide on a price that makes sense and seems competitive. Your agent will have experience in the market and be able to offer advice but ultimately you’re deciding on an offer price that is comfortable for you and reflects just how much you want the house. Don’t assume that multiple bids means the offers will go sky high – sometimes all the offers can be under the asking price. Other times it does seem the sky is the limit – we’ve had at least two houses in Cambridge sell for $1,000,000 over the asking price. The comparable sales info and the amount of activity for the listing should give you some sense of how the offers might go.
Dates – Your agent will find out what dates work best for the seller – do your best to meet them. Maybe you’ll have to move in with your parents for a few weeks or move more quickly than you had hoped but remember – you’ll be moving into the house you love. The temporary inconvenience will be quickly forgotten.
Contingencies – The typical offer contingencies are financing, inspection, and in the case of condominiums, satisfactory review of the condominium documents. You should have a letter of preapproval from your lender at the ready. Be aware that some buyers may very well drop any and all of their contingencies. You have to decide if you are comfortable eliminating any contingencies. Perhaps you have cash on hand from a previous sale or your parents will back you up and you’re open to the idea of dropping a financing contingency. Or you had the chance to go through the property with an inspector prior to submitting your offer. Everyone’s situation will be different and everyone’s risk tolerance varies as well. Decide what if any contingencies you’re comfortable eliminating. And if you are including contingencies discuss with your agent how to minimize the impact – by tightening dates, increasing the dollar value of repairs you’re willing to take on, etc.
Deposits – In Massachusetts your offer is typically accompanied by a $1000 initial deposit check. You and your agent may want to discuss increasing the deposit. This comes at no cost to you since the deposit will go towards your down payment. From the sellers’ perspective, however, it shows evidence of the seriousness of your offer.
Respect The Emotions Involved In Selling A Home
Don’t forget that selling a home is often an emotional transaction. Honor that. The sellers want to feel good about passing on their home to its new caretakers.
Now is not the time for pointed questions or asking for repairs – though that time may come if you’ve allowed for an inspection. Remember – you’re being compared with other buyers. Don’t stand out as a pain in the neck – it’s not to your advantage if you want the house.
Keep extraneous issues out of the offer. You’re buying a house – not the furniture. Focus on the goal and talk about extras later outside of the home purchase agreement.
And one no-cost but often very effective tool is a letter to the sellers. Write about who you are, why you love the house, and how you’ll take good care of it. Mention any special things that stood out to you. If you can tell the sellers took good care of the house say so. If you like their decorating mention that. Sellers will often remember and remark about the letter weeks after receiving it.
Ultimately the seller wants the best price and the fewest hassles. And if they can feel good about the new caretakers of their family home all the better.
What Happens Next?
There aren’t any rules for how the seller chooses an offer. You may get an opportunity to better your offer and resubmit at an agreed upon time. Or the seller may choose one of the offers on the spot. It’s typically to your advantage to submit as strong an offer as possible in the first round. But it also might not a bad idea to have a small buffer so that you can increase your offer by a few thousand if given the chance. But remember – you might not get that chance. Plan accordingly and put your best foot forward.
Go For It!
Some buyers are tempted to walk away from a multiple offer situation without even making a bid. But if you’ve found the house you really want – give it your best shot. A multiple bid situation is not insurmountable. And you can’t assume that you’ll have to write a sky high offer to get your offer accepted. Every situation is different and some multiple bids don’t even generate an over-asking price. When I sold my first house, purchased in a bidding war during a down market, one of the first people at the open house was one of the other bidders from five years before. I never regretted buying that house and for him it was the one that got away. So – work with your agent, craft your bid, and know that you’ve done your best. And maybe, just maybe – you’ll be the happy new owners. Good luck!