Gary Dwyer's Real Estate Blog

As an exclusive buyer agent in the Greater Boston area my first and only allegiance is with my client, the home buyer.  My clients are serious, have their financing lined up and are looking for a property that is going to meet their needs.  After searching for a while, they have one or two properties in mind that they are seriously considering and the decision process begins to change from one of "will it meet my requirements" to "how confident am I with the property".

Home buyers today that are considering buying a condo have much more information at their disposal via the internet than even just a few years ago.  However, there are some pieces of information that are not public knowledge that the seller and the listing broker need to provide.  In many cases, this information is going to impact the ability to get financing or determine whether they are going to be interested in the property to begin with (e.g. the condo assn being pet friendly).

When these pieces of information are not readily available, the condfidence of the buyer quickly begins to erode and I have had many clients "pass" on a property that they liked very much just because the sellers and their agents have not been able to answer some basic information about their property.  I have been on many, many showings where my client and I leave and the client turns to me to say something like "If they have no idea about what they are selling, I'm not comfortable buying".

Here are a few basic questions that the listing broker and the seller should have readily available answers for before they start to market the property:

What is the owner-occupancy of the condo assn?

Does more than one person / entity own more than 10% of the units?

If there is commercial space as part of the association, what is it's percentage of the association?

Is the building pet-friendly?  If yes, are there any restrictions?

Are there any special assessments pending?  When was the last special assessment?  What is the amount of the reserves for the condo assn?

Is the building professionally managed?  If not, how are services such as trash removal, snow removal, common area cleaning / maintenance handled?

How old is the roof and boiler / heating system (if applicable)?

When was the last time the condo fees were increased? 

HOME SELLERS - Make sure your agent has the accurate answers to these questions readily available - it may mean the difference between a deal that comes together and stays together or many more days-on-market for your home.

If you own a home in Massachusetts (or are going to be buying a home) there are some new changes to the Massachusetts Homestead Law that are going to be taking effect in the near future.

Jennifer McKim at the Boston Globe just wrote a nice summary for some of the changes - http://www.boston.com/business/personalfinance/articles/2010/12/18/new_law_clarifies_mass_homestead_protections/

Of course, if you have any questions about your specific situation, I recommend that you speak with an attorney.

As an exclusive buyer agent working throughout the Greater Boston area, I have a number of clients that have asked about short-sale properties vs. bank owned vs. private sale. 

The Boston Globe had a nice overview of the challenges that many home buyers and sellers face when trying to pursuade a bank to authorize a short-sale - http://www.boston.com/realestate/news/articles/2010/12/20/wary_lenders_deny_short_sales_opt_to_foreclose/?p1=Well_RE_Center_links

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

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. 

With the spring real estate market in bloom, there are many first-time buyers in the market this year.  Some are driven by the first-time home buyer tax credits that are going to expire on April 30, 2010.  Others want to take advantage of low interest rates (some rates have been at 5.0% or even 4.875% depending upon credit) before they start to go up.  Other just think it is time to make the jump from being a renter to owning their own home and taking advantage of the long-term tax benefits that homeownership offers.

As an exclusive buyer agent (meaning that I do not take listings or represent sellers) I do a lot of work with first-time home buyers throughout the Greater Boston area.  There is a lot to learn about buying a home without falling into some pretty expensive pitfalls.

Here is a nice list of the 10 Things a First Time Home Buyer should know from HGTV's FrontDoor.com.   BTW - I am very fond of #8 - remember it won't cost you more to use a buyer agent!

=========================================================================

KNOXVILLE, Tenn., Mar 08, 2010 (BUSINESS WIRE) -- Buying a home for the first time can be complex. To avoid mistakes and make a smart purchase, do the homework and know what to expect. To help start the process, HGTV's FrontDoor.com identifies the top 10 important points every first-time buyer must know. (http://www.frontdoor.com/top10)

#1: Just because it's a buyer's market doesn't mean you should buy right now. Don't let the lucrative market dictate a buying decision if the time isn't absolutely right. Potential homebuyers need to ask themselves if they have a good credit score, if their job is secure and if they can stay in the home for a few years. If the answer to these questions is "no," it might make more sense to wait until life and finances are more stable.

#2: The cost of owning a home is more than just the purchase price. On top of a mortgage payment, there are several monthly fees and expenses any first-time buyer should consider when becoming a homeowner: insurance, property taxes, utilities and maintenance. Think about scaling back the home price in order to better budget for the entire package.

#3: Programs are out there to help first-time buyers. A sizeable down payment is great to have for a home purchase, but not everyone can afford to fork over 20 percent upfront. Fortunately, there are many federal, state and local programs geared toward helping first-time homebuyers with down payments, interest rates and loan terms sure to make the whole process and affordability a bit easier.

#4: Foreclosures and short sales present great deals, but proceed with caution. Buying a foreclosed or short sale home can be a risky proposition for a first-time buyer. Foreclosures are often sold "as-is," while a short sale transaction can be lengthier and more complicated than a typical home purchase. First-timers should consult an agent or attorney with specialization in these areas.

#5: Getting pre-approved for a loan gives you more buying power. Obtaining lender pre-approvals are important because it establishes a homebuyer's maximum purchase price, shows sellers that the buyer is serious about buying a home and lets the homebuyer compare interest rates and terms to find the best deal.

#6: Good school districts boost property value. One of the most important aspects of a home's value is the neighborhood where it's located. Even if the homebuyer does not have kids, buying a home near sought-after schools can help the resale value.

#7: You may be able to access your tax credit upfront. Buyers using FHA-insured mortgages can apply their tax credit toward their home purchase immediately, rather than waiting until they file their income taxes to receive a refund. Prospective buyers who believe they qualify for the credit are also allowed to reduce their income tax withholding, therefore increasing their take-home pay.

#8: Not all real estate agents represent buyers. There are three types of agents: listing agents, who represent sellers and help them get the best price; buyers' agents, who represent buyers and protect their interests; and agents who represent either (or both). Often, first-time buyers prefer to work exclusively with a buyer's agent so there are no possible conflicts of interest.

#9: Doing your homework can help you make a competitive offer. Before buying the home, determine the property's market value by having the realtor conduct a comparative market analysis. This report will show what buyers were willing to pay for similar homes in the area, giving a good idea of what will make a fair offer.

#10: It's important to have a back-out plan. Before signing on the dotted line, make sure to have a contingency plan in case things don't go as planned in the home inspection or appraisal. If the home has a major flaw or doesn't appraise for the purchase price, an escape plan allows the contract to be voided.