Gary Dwyer's Real Estate Blog

Often times, home buyers get "more home for their dollar" the further outside a city they live.  While this may be true at first glance, when you consider the cost of commuting to work and to services, it may be actually more expensive to live in a community further away than to live closer to a city.

I recently came across this study that looks at the costs associated with the constant need to commute to work and essential services:

For most families, transportation is the second largest household expense. The new analysis shows that for many families in "drive ‘til you qualify" zones, savings realized from lower cost housing are eliminated by unexpectedly high transportation costs. Yet it is difficult for consumers and policymakers to estimate the full costs of a location, including the cost of both housing and of transportation. This lack of information can lead families to unknowingly make housing decisions that cause them to live beyond their means as gas prices rise and commutes grow longer. A community's average transportation costs can range from 12% of household income in efficient neighborhoods with walkable streets, access to transit, and a wide variety of stores and services to 32% in locations where driving long distances is the only way to reach essential services.

"The Rockefeller Foundation is proud to have funded the H+T Index as part of our initiative to promote equitable and sustainable transportation," said Nick Turner, Managing Director at The Rockefeller Foundation. "This unique tool will give consumers the opportunity to make more informed decisions about where they can afford to live, and help provide policy makers with data to develop new policies and targeted investments that can reduce transportation costs. Transportation costs are often the second highest expense for working Americans-and the Rockefeller Foundation's initiative is committed to helping Americans re-think our transportation future as a critical way to expand economic opportunity."

The failure to provide Americans with affordable transportation and compact neighborhoods that support pedestrians and cyclists as well as drivers, increases the financial pressure on families, resulting in unstable household budgets, lack of savings, and even foreclosure, and places communities across the country, particularly those with inadequate transportation options, at greater risk.

Just another "something to think about" when you are buying a new home.

Gary Dwyer, Realtor
Exclusive Buyer Agent / Certified Residential Specialist
Buyer Agents of Boston

Time is quickly drawing to a close for qualified home buyers to take advantage of the tax credits set to expire on April 30, 2010.

Here are a few reminders to make sure you can claim the credit:

To qualify for the Home Buyer Tax Credit you must buy or enter into a binding contract to buy a principal residence on or before April 30, 2010 in the United States, and you must close on the home on or before June 30, 2010. According to the IRS the following steps must be taken to claim the credit:  

1. File a Paper Return. You cannot e-file but must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit with additional documents to verify the purchase. You can digitally prepare your taxes using tax websites or software but must print and mail your return to the IRS with all required documentation.

1. Deadlines and Documents. If you enter into a binding contract before May 1, 2010 to purchase a home before July 1, 2010 and are claiming the credit, attach a copy of the pages from the signed binding contract that show all parties' names and signatures, the purchase price, date of contract and the property address.

1. Settlement Documents. New homebuyers must attach a copy of a properly executed settlement statement, which will generally include property address, all parties' names and signatures, sales price and date of purchase. Forms can vary by location and may not include both buyer and seller signatures. If your form does not require signatures on the settlement document, the IRS encourages buyers to sign the settlement statement when filing their tax return even if the form does not include a signature line.

1. Newly Constructed Homes. If you purchased a newly constructed home, where a settlement statement is not available, you must attach a copy of the certificate of occupancy showing the owners' name(s), property address and date of the certificate.

1. Mobile Home Purchases. If you purchased a mobile home and are unable to obtain a settlement statement, attach a copy of the executed retail sales contract. The contract should have all parties' names and signature, date of purchase, property address and purchase price.

1. Long-time Residents. For long-time resident homebuyers claiming the tax credit, the IRS recommends attaching documentation that covers the five-consecutive-year period. This may include documents such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner insurance records.

  Homebuyers can find more information about the Home Buyer Tax credit on the IRS website at http://www.IRS.gov/recovery


Gary Dwyer, CRS, GRI, ABR, SRES, REALTOR
Exclusive Buyer Agent
Buyer Agents of Boston, LLC 

Offered by Gary Dwyer, Broker / Owner - Buyer Agents of Boston:

Massachusetts law requires sellers and their agents to disclose any known defects the property has and answer any questions that are asked of them honestly.

There are some characteristics of a property that may not be considered a defect, but could be considered "warts" that may make the property less desirable than others.  Sellers want to present their home in the best light possible, so when you are out looking at properties, you may want to think about these situations:
As a buyer agent, these are some situations that make me wonder:

• Music playing on a radio - are they trying to distract buyers from road noise or noise from a neighboring unit?
• Scented candles or incense - are they trying to cover up bad odors?
• Showings only on weekdays and not after 7:00 - is the building a noisy building when people are home?
• Undersized or "apartment sized" furniture in staged home (i.e. a twin bed instead of a full or queen in the master) can make a room feel bigger than it actually is. The contrary is often true also - overly large furniture may make a room feel smaller than it is. Remember you are not buying the furniture / decorating, you are buying the home
• Curtains or blinds slightly tilted in a window with a piece of furniture in front of it can help keep people away from a window with an unattractive view (buyers are shy about moving blinds or curtains)

Look at the basement (or if in a condo, the utility room) - all of the expensive items (i.e. HVAC, water heaters, laundry, plumbing, electrical, etc.) are there and how well kept it is provides a snapshot of how well the home or condo building is being maintained.

Happy hunting

As an exclusive buyer agent working in downtown Boston and throughout the Greater Boston area, a large percentage of my clients are interested in purchasing a condo.  They know that they are not only buying the condo that they are going to be living in, but also become part of the wonderful world of condo associations.

Some sellers and their agents are very good - they know answers to every question that is asked by buyers and their buyer agent not only about their unit, but also the condo association.  Other sellers let potential deals go through their fingers because they don't answers to key questions about the condo assn that impact not only the desirability of living in a condo assn, but also the ability to get financing.

Stringent guidelines for condo loans have been implemented and, depending upon the program that the buyer has been pre-approved for, the buyer may not be able to get financing for a condo because of the condo assn.

Therefore, sellers, it is even more important to have accurate and up-to-date answers for these questions to help get and keep deals together.  Here are a few of the most important ones:

• How many units are in the condo association? How many are owner-occupied?
• Does more than one person own more than 10% of the total units?
• Is there commerical space in the building? What percentage of the building
is commerical space? Are there any restrictions on what type of business is permitted
in the commercial space?
• Do you know of any active lawsuits between the condo assn / condo trustees and
other parties?
• How much money is in the condominium reserve account? Is it more than 10%
of the annual budget for the condo assn?
• Are there any projects planned for the building? If so, will they be
covered through reserve funds, special assessments or a combination?
• For newer developments - Is the condo assn still within developer control?
If not, has it been a year since the condo assn was handed over to the residents?

A good buyer agent will help their clients "pre-screen" properties that are not going to meet their needs or ability to get financing, but sellers should also inquire about the financing package when an offer is made to prevent a false-start that is not going to benefit anyone.

The Greater Boston real estate dynamics have changed over the past few years from a strong "sellers market" to a market that is much more on equal footing market between buyer and sellers.  In some areas, it has changed further to a "buyer's market".

As an exclusive buyer agent and broker / owner of Buyer Agents of Boston, the first step that every one of my clients takes is to get a pre-approval letter from a recognized bank. 

When a buyer takes the step of making an offer on a property, I want them to feel confident that they are going to be able to afford to live in the property taking into consideration all of the customary costs that are associated with living in a property such as monthly principal / interest / tax payments, insurance, water / sewer charges, utilities, condo fees, and a contingency for repairs / special assessments.  Sometimes, in the excitement of finding a property that a buyer likes, they forget to look beyond the monthly principal/ interest / tax estimate that the bank had originally given them to see the real cost of living in the home.

A good bank will help buyers look at these costs in relationship to various price points that they may be considering - for example how would numbers change if the price were $325K vs. $350K.

A solid pre-approval letter can also make the seller feel more confident in accepting an offer or choosing one offer over another in a bidding war (and yes, they still happen!).

Now that it is getting nice out, it's time to make the spring "punchlist".

Here are a few things - simple as they may be - that never seem to get done:

1 - Clean the gutters and downspouts!  So many water problems could be solved by having clean gutters and downspouts and making sure that the grading runs away from the building.

2 - Close the fireplace damper and clean out the old ashes.

3 - Change the HVAC / furnace filters and schedule the preventative maintenance inspection for the central air system.

4 - If you didn't change the batteries in the smoke / CO detectors in the fall, now is a good time to do it as well as check the fire extinguishers and emergency lights / flashlights.

5 - Scrape / caulk / paint any exposed wood that has deteriorated over the winter.

6 - Check the roof for any missing shingles or wear.

7 - If you are in a brick building, check the pointing for any gaps or loose mortar.

8 - Check your sump pump - they have had quite a workout lately.  If it is getting old, buy a spare in advance.  Consider a battery back-up system in case the power goes out in the middle of a storm and waters are rising.

First of all, I am not in the business of selling home inspections.  As Broker / Owner of Buyer Agents of Boston, an exclusive buyer agency real estate firm, most of my clients choose to have a home inspection done after their offer to purchase has been accepted. 

It provides a good opportunity for them to find out a bit more about their new home, tips on how to maintain it, and knowledge about any serious issues that may influence their desire to move forward with the deal or request repairs be made by the seller or adjustments made to the purchase price.

During the inspection, the buyer (often a first-time buyer who won't have a lot of extra money left over after the closing) can get very nervous about "what's wrong with the property" - sometimes there are major issues.  However, many times the number of items that the inspector identifies as needing attention, repair, near-term replacement, adjustment, etc. become so overwhelming that the buyer either wants to completely back out of the deal or envisions tens of thousands of dollars worth of repairs.

Sometimes the results of the inspection can initiate a conversation between buyer and seller about repairs required prior to closing or a seller credit or adjustment to the price. Other times, it just signals the end of the deal and the home search process resumes.

But the home inspection process is not just for buyers.  I think it can be a valuable tool for home sellers also.  It provides a good opportunity for the seller to know what is wrong with the house before it goes on the market and take action before a deal can fall apart.  Sellers can shop around for the best prices to get repairs made before it becomes a crisis situation. 

Simple repairs that are noted in an inspection report such as tightening up door knobs, light plates, railings, replacing defective GFIC receptacles, cleaning gutters and downspouts, repairing leaky faucets, caulking around tubs / sinks, servicing HVAC equipment can give a buyer a bit more confidence that the property they are buying has been maintained. 

It is also not just for single-family sellers.  If you are selling a condo in a building where many of the systems are owned by individual owners and not the condo assn (i.e. separate HVAC systems, water heaters, washer / dryers), it can provide you with the punch list of what needs to be done not only within the unit, but also common area issues that can kill the deal. 

Around a week ago, I wrote about how some sellers may be wondering why their homes are not getting as much traffic as they thought they would and how the pictures, or lack of thereof, may contribute to buyers not wanting to even view the property.

Once a client visits a house, I am often surprised (as are my clients) when answers to what are considered basic questions can not be answered by the listing agents or the seller.  Most listing agents will reply "I'll have to check" if they don't have the answer readily available and most will respond within a few hours after the showing. 

However, after a few "I don't know - I'll have to check", the buyer's interest in the property starts to wane and then they begin to question if there is something wrong with the property because the agent doesn't know (and appears to not want to know) anything about the property or the seller has not given any information about the property to the listing agent.  (Imagine going to a restaurant and asking some questions about the menu and the waitstaff not knowing anything about the ingredients, preparation, etc.)

As an exclusive buyer's agent, I work with my home buyer clients to help them identify and purchase homes that meet their needs.  In order to help my clients evaluate a home, there are some general pieces of information that are typically requested by home buyers that are of great help in determining if home is worth pursuing.

Here are a few of the questions that are consistently asked by home buyers and their buyer agent:

How old is the roof, heating system, hot water heater, windows?

How old are the appliances?  Are they staying?

Are the window treatments staying?  Are there any exclusions of fixtures that are not included in the purchase price?

Where are the lot lines?  Do you have a plot plan?

What are the average electrical / gas / water / oil bills?  What does the homeowner insurance typically run? (these are particularly important for first-time buyers that are on a tight budget)

Has there ever been water in the basement during the time the seller has owned the property?  If so, when and how much?  Is there a sump pump?

If there has been recent renovation work - were building permits pulled and have all the permits been signed off on?  Have all of the contractors / sub-contractors been paid-in-full?

If there is a pool - does the seller have a permit from the city / town for the pool?

If the home is on septic - do you have the Title V certificate?  When was the last time it was pumped?

Although these questions are very basic, you would be surprised at how difficult it can be to get them answered.  Having the information in advance and readily available to the listing agent and potential buyers can make the difference between a buyer feeling comfortable moving forward with an offer or moving onto the next house on the list.

Boston area housing costs can be some of the highest in the nation.  Many times, first-time buyer are pretty strapped for funds to do renovations / updates after they have scrapped together funds for the down payment, closing costs and beer for their friends for helping them move.

A program that a lot of home buyers are unaware of is the FHA 203K loan.  This program allows the costs of needed repairs and improvements to be included in the FHA federally-insured loan amount instead of having the buyer come up with cash or a separate loan to do the work.

The work has to be done within six months after escrow closes. Borrowers have the option of putting up to six months of mortgage payments on the end of the loan if they don't want to live in the house while the work is being done.

FHA home loans require certain health and safety standards be met and that needed repairs identified during the inspection process be completed before escrow closes. However, minor repairs and improvements costing between $5,000 and $15,000 can be done after escrow closes for borrowers who opt for a streamlined repair program.

The loans can also be used to pay for improvements such as new appliances, second-story additions, remodeled kitchens and bathrooms, and skylights, just to name a few examples.

It is important that home buyers utilizing the 203K program work with a lender that experienced with the program since there are a lot of nuances to making sure everything is processed correctly.

Just about ever property owner (or renter) in Boston has had an encounter with a green "Code Violation" ticket given by Boston's Inspectional Services Department (ISD) for improperly disposing of trash, failure to shovel snow on the sidewalk, etc.

Many people disregard them because there was no real consequence if it was not paid.  However, after years of effort, the City has been able to get some "teeth" into their ability to collect these fines from property owners and residents.

On February 10, 2010, the Governor signed into law a measure that would allow cities and towns to include the fine amount in the property owner's tax bill if it went unpaid and as a last resort, place a lien on the property.

For a full description of the law - just visit - http://www.mass.gov/legis/laws/seslaw10/sl100026.htm