3 Reasons to Use a Real Estate Pro

October 16, 2019/in Blog /by Samantha Jason

3 Reasons to Use a Real Estate Pro in a Complex Digital World

If you’re searching for a home online, you’re not alone; lots of people are doing it. The question is, are you using all of your available resources, and are you using them wisely? Here’s why the Internet is a great place to start the home-buying process, and the truth on why it should never be your only go-to resource when it comes to making such an important decision.

According to the National Association of Realtors (NAR), the three most popular information sources home buyers use in the home search are:

Online website (93%)
Real estate agent (86%)
Mobile/tablet website or app (73%)

Clearly, you’re not alone if you’re starting your search online; 93% of home buyers are right there with you. The even better news: 86% of buyers are also getting their information from a real estate agent at the same time.

Here are 3 top reasons why using a real estate professional in addition to a digital search is key:

1. There’s More to Real Estate Than Finding a Home Online. It’s a lonely and complicated trek around the web if you don’t have a real estate professional to also help you through the dozens of steps you’ll face as you navigate through a real estate transaction. That’s a pretty staggering number! Determining your price, submitting an offer, and successful negotiation are just a few of these key steps in the sequence. You’ll definitely want someone who has been there before to help you through it.

2. You Need a Skilled Negotiator. In today’s market, hiring a talented negotiator could save you thousands, maybe even tens of thousands of dollars. From the original offer to the appraisal and the inspection, many of the intricate steps can get complicated and confusing. You need someone who can keep the deal together until it closes.

3. It Is Crucial to Make a Competitive and Compelling Offer. There is so much information out there in the news and on the Internet about home sales, prices, and mortgage rates. How do you know what’s specifically going on in your area? How do you know what to offer on your dream home without paying too much or offending the seller with a lowball offer?

Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring a real estate professional who has his or her finger on the pulse of the market will make your buying experience an informed and educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

If you’re ready to start your search online, let’s get together. You’ll want someone who is educated and informed at your side who can answer your questions and guide you through a process that can be complex and confusing if you go at it with the Internet alone.

7 Things You Shouldn’t Do After Applying for a Mortgage!

March 13, 2019/in Blog /by Samantha Jason

Congratulations! You’ve found a home to buy and have applied for a mortgage! You are undoubtedly excited about the opportunity to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan.

Below is a list of 7 Things You Shouldn’t Do After Applying for a Mortgage! Some may seem obvious, but some may not!

1. Don’t change jobs or the way you are paid at your job! Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Don’t make any large purchases like a new car or new furniture for your new home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios… higher ratios make for riskier loans… and sometimes qualified borrowers no longer qualify.

4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.

5. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.

6. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. We are always happy to provide you with recommendations for trusted and experienced local lenders that can help guide you through the process.

Spring Forward THIS Sunday

March 7, 2019/in Blog /by Samantha Jason

Daylight savings is this Sunday, March 10th, 2019.

Don’t forget to change your clocks! The National safety council also ask everyone to take this time to check a few things around your house:

1. Check your smoke and carbon monoxide detectors. Did you know that each detector has an expiration date? If you didn’t purchase your home in the last few years it’s possible that you don’t have the proper amount or type of detectors in your home. Call your local fire department’s fire prevention bureau or visit their website for guidelines to help keep you and your family safe. At the very least, change your batteries and test each system!

2. The National Safety Council recommends every family have an emergency plan in place in the event of a natural disaster or other catastrophic event. Spring is a great time to review that plan with family members. Have a home and car emergency kit.

3. Dispose of unused, expired or unwanted medicines and prescriptions. You can take unwanted or expired medicines to a prescription drop box or take-back event near you. NSC offers free Stericycle Seal & Send envelopes, so you can send your unwanted medication to be safely destroyed.

4. Does your home have a fire extinguisher? Does everyone in your home know where the extinguishers are kept? Most extinguishers last between five and 15 years, according to manufacturers. Check the tag on your extinguisher for dates and manufacturer’s instructions. A fire extinguisher with a gauge should be checked every month to make sure it is properly charged.

It’s freezing in Boston and we have a few inches of snow on the ground, but spring is right around the corner!

Only 20 days til Opening Day at Fenway Park!

What Are Closing Costs For Sellers In Boston?

February 19, 2019/in Blog /by Samantha Jason

If you’re considering selling your home in Boston this year, you may be wondering what the fees are that you’ll be required

to pay at closing. In a real estate transaction, both buyer and seller are responsible for paying different closing costs.

So, what are closing costs?

Commissions – Commissions vary somewhat, but a typical commission is between 5-6% percent of the sales price of the home. This fee is split between the listing agent and the buyer’s agent.
Attorney fees – In Boston, we always recommend a seller hire a local real estate attorney. These fees also vary but are usually a flat fee. Most local real estate attorneys we work with will not charge you by the call, hour, email etc. Fees typically start around $750. We can happily refer you to some great local real estate attorneys.
Loan Payoff – The loan payoff will often be a little higher than the remaining balance on your loan because of pr
orated interest. Your attorney will work with you and the bank to obtain a payoff statement, In some cases, you may have to pay a prepayment penalty for paying off your loan before the end of the term. If you have a home equity loan or line of credit, this must be paid in full at settlement as well.
Transfer taxes – This is also referred to as a transfer tax, deed stamp or excise tax. Throughout Massachusetts, home sellers must pay a tax on the property they are selling and it varies by County. In Boston, Suffolk County, the tax is $4.56 per thousand of the purchase price on the deed. For example, if your sale price is $650,000, then you’re looking at a $2,964 tax bill.
Smoke Inspection – In Massachusetts, all homes are required to have a smoke inspection and certificate of compliance before closing. It’s the seller’s responsibility to make sure the home is up to Boston’s current standards. The
fee for Boston Fire to inspect a condo is $50. We can help to ensure your home is compliant and arrange for the inspection.
Misc fees –
1. 6D & Condo Questionnaire: If your condo is part of a professionally managed association, the management company may charge you fees to produce both the condo questionnaire (required by the buyer’s bank) and a 6D (required by the attorneys to close). The fee for each document varies by management company, it’s best to check with them directly. If your home is not professionally managed, then the trustee or another member of the building’s HOA will be asked to complete both prior to close. We’ll help guide you/them through the process/timeline. A seller cannot fill out the documents for their own sale.
2. Courier costs, recording fees, mailing costs, deed prep (if not already covered by the attorney). These can u
  sually add up to a few hundred dollars.
3. Final Water – In a recent condo transaction, a buyer’s attorney required that we obtain a final water/sewer bill from Boston Water & Sewer prior to closing. This is rare and almost unheard of in Boston, almost all HOA’s pay the water and sewer expenses out of the monthly HOA fee. The cost for this is $25.

Closing Costs –

Single Family homes – Title V: We almost never see a septic in the City of Boston because most homes are tied intoBoston Water & Sewer. However, they’re very common outside of Boston. A seller must produce a passing Title V for before closing. In many cases, it’s best to have this done prior to listing your home so that you can produce the report for the buyers and aren’t caught off guard if any part of the system fails. A buyer obtaining a loan cannot close on a home without a passing Title V.
Final Oil Bill: A final oil reading must be done prior to closing. You will be reimbursed for the remaining oil left in the tank.

This is only be meant as a guide, fees may change depending on the sale of your home. It’s important to keep an open dialogue with your agent and attorney throughout the process. Don’t be afraid to ask questions!

Boston Residents: Have you claimed your 2019 Residential Exemption?

January 4, 2019/in Blog /by Samantha Jason

We already know that living in Boston has many perks…too many to list here. But did you know that if you own and occupy your Boston home as your primary residence that you could qualify for Boston’s residential exemption?

Here are a few key facts:

For Fiscal Year 2019, you have until April 1, 2019, to file an application
This year, the residential exemption saves qualified Boston homeowners up to $2,719.09 on their tax bill! (up from $2,538 last year)
To qualify for any exemption, you need to show that you have an ownership interest in the property.
You need to have owned and lived in your home as your primary residence on January 1 before the current fiscal year.
The city will apply the exemption amount to your third-quarter tax bill that is issued in late December.
To make sure you are eligible, you will need to give the city your social security number. They only use the number to confirm your tax filing from your property’s address.

Aren’t sure if you’re currently receiving your Residential Exemption? You can easily check your property card with the City of Boston’s assessing office – it’s public record.

Just search for your property here: City of Boston Assessor

Want to file your application? Start here

What other towns offer a Residential Exemption? Cambridge and Brookline and Somerville

*Brookline’s residential exemption is actually calculated differently, it’s a percentage of the total assessed value of a home, not to exceed 20%

4 Reasons Why Summer Is a Great Time to Buy a Home!

June 4, 2018/in Blog /by Samantha Jason

Here are four great reasons to consider buying a home today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insights reports that home prices have appreciated by 7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have increased by half a percentage point already in 2018 to around 4.5%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again

May 3, 2018/in Blog /by Samantha Jason

4 Reasons Why Today’s Housing Market is NOT 2006 All Over Again

With home prices rising again this year, some are concerned that we may be repeating the 2006 housing bubble that caused families so much pain when it collapsed. Today’s market is quite different than the bubble market of twelve years ago. There are four key metrics that explain why:

Home Prices
Mortgage Standards
Mortgage Debt
Housing Affordability

1. HOME PRICES

There is no doubt that home prices have reached 2006 levels in many markets across the country. However, after more than a decade, home prices should be much higher based on inflation alone.

Frank Nothaft is the Chief Economist for CoreLogic (which compiles some of the best data on past, current, and future home prices). Nothaft recently explained:

“Even though CoreLogic’s national home price index got to the same level it was at the prior peak in April of 2006, once you account for inflation over the ensuing 11.5 years, values are still about 18% below where they were.” (emphasis added)

2. MORTGAGE STANDARDS

Some are concerned that banks are once again easing lending standards to a level similar to the one that helped create the last housing bubble. However, there is proof that today’s standards are nowhere near as lenient as they were leading up to the crash.

The Urban Institute’s Housing Finance Policy Center issues a Housing Credit Availability Index (HCAI).According to the Urban Institute:

“The HCAI measures the percentage of home purchase loans that are likely to default—that is, go unpaid for more than 90 days past their due date. A lower HCAI indicates that lenders are unwilling to tolerate defaults and are imposing tighter lending standards, making it harder to get a loan. A higher HCAI indicates that lenders are willing to tolerate defaults and are taking more risks, making it easier to get a loan.”

The graph below reveals that standards today are much tighter on a borrower’s credit situation and have all but eliminated the riskiest loan products.

3. MORTGAGE DEBT

Back in 2006, many homeowners mistakenly used their homes as ATMs by withdrawing their equity and spending it with no concern for the ramifications. They overloaded themselves with mortgage debt that they couldn’t (or wouldn’t) repay when prices crashed. That is not occurring today.

The best indicator of mortgage debt is the Federal Reserve Board’s household Debt Service Ratio for mortgages, which calculates mortgage debt as a percentage of disposable personal income.

At the height of the bubble market a decade ago, the ratio stood at 7.21%. That meant over 7% of disposable personal income was being spent on mortgage payments. Today, the ratio stands at 4.48% – the lowest level in 38 years!

4. HOUSING AFFORDABILITY

With both house prices and mortgage rates on the rise, there is concern that many buyers may no longer be able to afford a home. However, when we look at the Housing Affordability Index released by the National Association of Realtors, homes are more affordable now than at any other time since 1985 (except for when prices crashed after the bubble popped in 2008).

Bottom Line

After using four key housing metrics to compare today to 2006, we can see that the current market is not anything like the bubble market.

What is PMI?

April 16, 2018/in Blog /by Samantha Jason

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase homes with down payments below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.”

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 5%, while repeat buyers put down 14% (no doubt aided by the sale of their homes). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and help you make the best decision for you and your family.

12 questions to ask your contractor before you hire

February 28, 2018/in Blog /by Samantha Jason

Making updates to your home is a great way to add value and make your space work for you. I am constantly asked for contractor recommendations by my clients, unfortunately i’ve also been on the receiving end of a few horror stories. Here are some helpful tips and questions you should ask before hiring a contractor.

QUESTIONS

Are you licensed in Massachusetts?
How long have you been in the business?
Can I have the contact information for at least three references?
Will you be pulling permits and handling town inspections? Will you make sure the final permit is signed off on?
Do you have up to date liability insurance? Can you provide me with a copy.
Who will be my primary point of contact throughout the process?
What is the payment schedule?
What type of warranty do you offer for the work?
What time will they arrive each day? What time does the work day end?
Will you clean up at the end of each day? at the end of the job?
What is the timeline for the project?
How often are their projects completed on time and on budget?

A FEW TIPS

Ask for an itemized AND detailed estimate
What is/is not included (trash removal? a full clean up or broom clean? who will fix the accidental hole in the wall?)
Who is their supplier? Is it cheaper for you to purchase some of the materials direct or does he get a discount?
Ask the community! Many of us are part of an online community bulletin board (Facebook, NextDoor) ask for personal recommendations and feedback
Always collect and compare multiple estimates
Is your contractor the one actually pulling the permit for the work?
Unexpected costs are likely to arise when you’re remodeling an older home. Create a budget, and build in some room for these repairs (i’m not talking about upgrades!). Older homes can come with old wiring and plumbing that you might not have been aware of – no matter how good your home inspector. A buffer in your budget is always a good idea.
Read reviews on sites like Angie’s List, Home Advisor and Yelp

Want to check a contractors license? Visit the state’s guide to hiring a contractor.

Average Home Seller Profits at 10 Year High!

February 14, 2018/in Blog, Team /by Samantha Jason

Prices are rising and homeowners are staying put longer, and that means more homeowners can cash in when they go to sell. Home seller profits surged to a 10-year high in the fourth quarter of 2017. Sellers saw an average home price gain since purchase of $54,000, up from $47,133 a year ago. In Boston, Cambridge, Newton markets the average seller profit was $141,800, that’s an average Seller ROI or 54%.

“It’s the most profitable time to sell a home in more than 10 years, yet homeowners are staying put longer than we’ve ever seen,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”

That $54,000 national average seller profit represents an average 29.7 percent return on investment compared to the original purchase price. That is the highest average home seller return on investment since the third quarter of 2007, according to ATTOM Data Solutions’ Q4 2017 Home Sales Report, released this week.

In downtown Boston and the immediate suburbs each week we’re seeing only a few new homes hit the market in each neighborhood and in each price point. With such little competition they are quickly snapped up in bidding wars by Monday. At our own open houses in neighborhoods like South Boston, Jamaica Plain, Newton and Somerville we’re seeing buyers out actively looking each weekend. The rising interest rates and somewhat mild winter are certainly helping to get buyers out into the market.

Meanwhile, homeownership tenure set a new record high in the fourth quarter of 2017. Homeowners who sold in the quarter had owned their homes on average 8.18 years, up from 7.78 years in the fourth quarter of 2016. It is the longest average home seller tenure since ATTOM Data Solutions has tracked it starting in the first quarter of 2000.

Source: Realtor Mag and ATTOM Data Solutions