Gary Dwyer's Real Estate Blog

My Forecast For Wave 2

Gary Dwyer — Tue, 01 May 2012 09:47:23 -0700

It's May and time for the second wave of the home buying season.

Wave 1, from end of March through April 30, featured a lot of "fresh meat" on the market listings which went under agreement, and sometimes back on the market, within a few days of being listed. This wave had many situations of multiple-offer competitions and buyers bidding over asking price for a property. There were also many situations where the deal fell apart after being accepted based upon the home inspection, "buyer jitters" or the buyer getting beaten up by their friends and families' opinion that they paid too much for such-and-such a house. There were also buyers that thought they could finance a home purchase and realized that the needed to save more or fix their credit before they could get a pre-approval that would get them to the closing table.

What's in store for Wave 2? My experience has been that in Wave 2 the home buyers are going to be a bit more seasoned - they know that they are going to need to have a very strong pre-approval letter and put more money down if they are going to win in a competitive situation. They are also going to have to be working with a buyer agent that can write a "winning" offer for them since offer price is important, but there are a lot of other factors that sellers consider when accepting an offer.

Buyers are also versed in the experience of going through a home inspection and finding out what it feels like to have your dream home "picked apart" by the home inspector. They are also know that they need to be able to decide quickly if they like something.

In Wave 1 we saw a lot of "first-time buyer" homes listed - in Wave 2 we will see more "trade-up" homes listed as well as "kiddie condos", investment properties such as condos and more multi-family properties. Sellers are going to be a bit "cocky" about what they ask for since they have seen the demand from Wave 1, but they will realize that they also have to be realistic in the pricing if they really want to sell - today's buyer is very aware of value and pricing and if it is priced too high, the property will sit until the price-change death spiral begins.

Wave 2 will also see tremendous challenges for mortgage companies as they try to keep up with the volume of closings from Wave 1 and the processing for Wave 2 sales all combined with a very robust refinancing market. It will be more important than ever to work with a local mortgage company or bank to make sure the deal goes through on time.

... and that is what my crystal ball (and years of experience) is telling me

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Buying Vs. College Dorm

Gary Dwyer — Wed, 11 Apr 2012 18:55:15 -0700

Over the past few days, I have seen a number of condos hit the market that would be good for an investor that is looking to expand their portfolio, buy their first investment property, or for parents looking to buy a place for their children while they go to school in the Boston area. These condos are close to local colleges, universities, and medical / financial areas where there is typically an ample pool of potential renters.

Generally, condos like this require 20 - 25% downpayment in order to qualify for financing. However, they provide a nice opportunity to divest a portfolio outside of the stock market and can provide attractive tax benefits (consult your tax professional for advice specific to your individual circumstances).

Investment properties in condo buildings are often easier for first-time landlords or out-of-town investors to manage since condo fees / management companies handle the common area maintenance - all the landlord needs to actively maintain is the interior of the unit.

For more information on these types of properties, please let me know - I would be more than happy to discuss the many options available.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Buyer Agent Compensation

Gary Dwyer — Wed, 11 Apr 2012 18:52:09 -0700

A lot of home buyers ask - how do you get paid as a buyer agent? Does it cost me more? Are you working to get me the best deal possible on a new home?

There are a few ways in which a buyer agent is compensated for their time, effort, experience and knowledge in helping a buyer purchase a home.

The most common way is for the buyer agent to be compensated from the proceeds of the transaction which is a percentage of the final purchase price of the property. This is all spelled out when the property is listed by a listing agent as to what the buyer agent compensation will be at the time of sale. This means that there are no surprises for the buyer. Rest assured, even though I am compensated via a commission based upon the sale price, as your buyer agent, I am ethically and legally bound to represent your best interests in the transaction including getting the best possible deal on the purchase price.

Note - some buyers believe that that if they don't use a buyer agent they will get the buyer agent's portion of the commission taken off of the price of the home, this is incorrect. If a home buyer does not have a buyer agent, the agent / company that listed the property and represented the seller gets the entire commission and the buyer went through the entire process without assistance or professional representation (which they could have had at no additional cost).

Some buyer agents request that a buyer pay a "retainer" to them in advance to cover the buyer agent's expenses during the search. This amount is negotiable between buyer and the buyer agent, but I have seen some as much as $1000.00. If the buyer decides not to move forward with buying a new home, in some cases this retainer may not be refundable. Please note that Buyer Agents of Boston and their agents have not and will not request retainers from clients for assisting them in their home search.

In a few special instances, a buyer may hire a buyer agent for a "flat fee" to help them with a difficult purchase, such as a For Sale By Owner (FSBO).

It is important to know that in the past 7 years, no client of Buyer Agents of Boston has ever had to pay any additional out-of-pocket fees to have us by their side through the entire process. At the same time we have saved clients over $1,250,000.00 on the purchase of the new homes (not to mention the amount of stress that we have saved them).

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Bidding Wars

Gary Dwyer — Wed, 11 Apr 2012 18:50:32 -0700

In the past 2 weeks, I have been involved in 2 situations where there have been multiple bids on a property (a.k.a - bidding wars).

It's not uncommon to have an occasional bidding war on a property, particularly when there has been limited inventory in the neighborhood; the property is priced correctly for location, age, and condition; and there is a ticking clock for buyers (e.g. need to buy prior to start of school year for buyers with school age children).

Bidding wars are never an enjoyable experience for buyers, however there are a few things that buyers can do to help them get through the process:

1 - work with a buyer agent that is experienced in multiple bid situations. Experienced brokers know how to craft an offer (price is important but there are other considerations that can make a buyer's offer more attractive even if it wasn't the highest-price) to have the best chance of being selected.

2 - have a strong financing. The seller wants to make sure that if they select your offer, that the deal is going to go through and there are not going to be any surprises. A pre-approval letter from an unknown internet bank or even a large bank that has had many issues in closing loans on-time, can knock an offer which is offering more money to the back-of-the-pack.

3 - be prepared to move-on. No one likes to loose something that they want, but if you do loose out in bidding war, you need to be able to move-on to the next opportunity.

4- don't overbid. Unless you are paying cash, the mortgage company will want to do an appraisal of the property to make sure you are not going to be overpaying for the property. It is not unheard of to have a "winning" bid loose because they offered too much and the bank wouldn't commitment to the loan.

With the spring market just beginning to bloom, make sure that you have all your resources (buyer agent, financing, and budgets) lined up so you will be in a better position to "win the war".

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Is Bigger Better?

Gary Dwyer — Wed, 11 Apr 2012 18:48:33 -0700

This weekend I was reading the local real estate listing newspapers and virtually every real estate franchise was heralding in their full page advertisements how they were number one in listings, or unit's sold, or volume of sales, or some other metric where they had more than everyone else.

After reading this, I thought to myself, "why would a home buyer care how big the corporation or office that the agent they hire works for?" The fact is, they don't.

Through years of experience, I have learned that home buyers really don't care about what agent sold what or how much the agent sold last year - they just care about their home purchase. Buyers hire a buyer agent because they want a relationship with someone that is going to give them honest advice and feedback, negotiate the best deal, and help them navigate through the home buying process. They hire an agent that they are going to feel comfortable working with over the next 2-6 months of a typical home search.

I have also found that my clients hire me because I am not part of a large "Walmartesque" franchise or local real estate chain. My clients want an independent voice advising them when they are making the largest purchase of their life and since I only work with buyers, they like that I am helping people just like them.

I think home buyers value a conversation around "what can I do for you and your home search" much more than hearing about what I have done in the past.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Should I buy or rent in Boston

Gary Dwyer — Wed, 11 Apr 2012 18:47:01 -0700

There are a lot of factors that must be considered to answer the "should I buy or rent question".

The expected length of time in a property is important as is the costs of owning vs. the costs of renting (it is more complicated than just comparing the principle and interest payment of a mortgage to the rent payment). Also important is the ability to get financing and what interest rate a buyer would be eligible for (not all buyers get the lowest rates because of the buyer's credit score and other factors).

Another factor is how the real estate market in a locale is forecasted to perform in the near future. CNNMoney just published a story about where it makes sense to buy vs rent. Boston was identified as one of the top cities in the US to buy vs. rent due to high demand, lack of opportunity to build new housing, and increasing rents - http://money.cnn.com/2012/03/21/real_estate/homes-buy-rent/index.htm?source=cnn_bin

If you are on the fence about whether now is the time to buy (or sell and move to a larger unit), please let me know and I would be happy to have a conversation with you.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

There is a lot around here

Gary Dwyer — Wed, 11 Apr 2012 18:45:07 -0700

As a buyer agent I work with many clients that are relocating to a town or neighborhood that they may not be very familiar with. I have many approaches to helping them get a feel for different areas, but there is a new tool that I think can provide a quick online overview of not only what is in the area, but with the rising price of gas, how car dependent you may be in a particular area.

Walkscore is available online, free of charge and easy to use - http://www.walkscore.com/MA/Boston Just type in an address and in a few seconds you will know how far you are from local subway and bus lines as well as amenities such as grocery stores and restaurants.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

More Home Buyers Looking For RE Agent Help

Gary Dwyer — Mon, 23 Jan 2012 08:48:54 -0800

A recent study from the National Association of REALTORS (NAR) showed that 89 percent of homebuyers chose a real estate agent to help them with the purchase of their new home in 2010 vs. 69 percent in 2001.

Some of the key reasons cited for this increase include the complexity of the buying process today, the desire to work with a licensed and trained professional, the myriad of issues that can come up with regard to financing, condo associations and title issues.

Other reasons noted were the desire for buyers to have someone help them evaluate a property, coordinate showings, provide negotiation expertise and assist them in managing the process.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Good News For Small Landlords

Gary Dwyer — Thu, 28 Apr 2011 18:09:16 -0700

In an effort to close some large tax loopholes in 2010, a provision was created that would have required all persons who receive rental income in 2011 to track and send 1099 forms to everyone that they did business with and paid over $600.00 for goods and services.

For small landlords that may rent part of their home out, have a 2 or 3 unit home property, or even vacation home owners that rent out their property for a few weeks a year, this requirement would have been a onerous paperwork nightmare and would have required many to have to hire a professional accountant or tax preparer to deal with all of the required paperwork.

The National Association of REALTORS, along with other organizations and small-landlords, were able to convince Congress and the President that this level of paper-pushing was not going to have any demonstrable benefit and if anything, would be counter-productive to small, non-professional landlords. Thankfully, the law was repealed today and the requirement is no longer in effect.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Here Comes The Rain

Gary Dwyer — Wed, 16 Mar 2011 09:40:05 -0700

March brings a glimmer of hope to those of us in the Greater Boston area that the snows of the winter are (hopefully) past and warmer / brighter days are ahead. Unfortunately, March also ushers in the rainy period where every few years we seem to get a "100 year storm".

Nothing is more frustrating to home sellers and home owners than to deal with wet basements and water issues. Water issues are also frustrating for home buyers that love a house but it has a water issue because of the lack of maintenance of gutters / downspouts, grading and sump pumps.

Now is a great time to take a little time (and maybe a few dollars) to help get ready for the spring rains:

Check your roof for missing shingles, loose flashing, missing chimney mortar and other damage that can let water in.

Clean out your gutters and downspouts. The rain needs someplace to go when it hits the roof. If you live in a building with a flat roof, check to make sure the roof drains are free and clear of debris.

Check that downspouts are diverting water away from the foundation

Check that the grading along the foundation is sloping away from the house - many times snow plows can dig up debris which traps rainwater along the foundation

Check your sump pump to make sure it is working properly - if it is getting old, pick up a spare so you have it when you need it and consider getting a back up power source so if the power goes out, the pump can continue working

Check the storm drains in the street near your house - if they are clogged and full of debris, call your local city or town water / sewer department and have them send a crew out to clean them out

Talk to your insurance agent about obtaining flood insurance - in most cases a homeowners policy will not cover losses from a flood

Remember that an ounce of prevention is worth a pound of cure!

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

It May Be Time To Start Paying Back The Homebuyer Tax Credits

Gary Dwyer — Wed, 16 Feb 2011 09:33:25 -0800

If you are one of the millions of Americans that benefited from the home buyer tax credits over the past few years, you may have to start to repay them when you file your taxes this year.

The Internal Revenue Service is sending a letter to taxpayers who claimed the credit that explains if, when and how they have to repay it. There are different IRS letters for different situations, including a purchase of a home in 2008, 2009 or 2010; a sale of a main home; or a change in the use of the main home.

For example, a taxpayer who claimed the full $7,500 first-time home buyer credit on their 2008 tax return will repay $500 as an additional tax on their returns each year from 2010 to 2025, or until the home is sold or is no longer used as the owner's principal residence.

The credit for homes purchased in 2009 and 2010 does not have a repayment requirement unless the home ceases to be used as the taxpayer's principal residence within three years of the purchase.

If you have questions, the IRS website at www.irs.gov contains detailed information about repayment requirements for the federal home buyer tax credit or consult with your accountant or tax professional.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Death, Taxes and Tax Deductions

Gary Dwyer — Thu, 10 Feb 2011 18:19:16 -0800

Over the past few days I have been busy assembling my tax information in preparation my upcoming annual meeting with my tax accountant. He does a great job and is always asking me questions about "did you do this or that" or "you may want to do this over the next year" in attempt to find me every possible legal tax deduction I can take.

One of the major deduction that was available in 2010 to homeowners was the energy tax credit for investing in upgrades to properties (generally primary residences but in a few cases second homes were eligible) that would make them more energy efficient.

As you are preparing to file your 2010 taxes (and thinking about investments for 2011) here is a link with a summary of federal tax credits available for improving your home's energy efficiency - http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

The Perfect Valentines' Day Gift - A Lockbox

Gary Dwyer — Tue, 08 Feb 2011 17:46:46 -0800

Forget a fancy dinner, chocolates, flowers or expensive jewelry. Man or woman, homeowner or renter -everyone has the same item at the top of their Valentine's Day wish list - a lockbox.

As a buyer agent, I love lock boxes. It makes a property much more accessible for showings and, particularly when it is the first showing, it can save the listing brokers time if my client doesn't think the property will meet their needs. If the buyer likes the property, we can always schedule a second showing with the listing broker or follow-up with specific questions after the showing.

I also like lock boxes for after the sale and the buyer has the keys in their hands. It is not uncommon for a homeowner (or a tenant) to get locked out of their house, thinking that they had the keys in their pocket. Even worse, realizing that you have lost your keys on a Saturday evening out and it is now 1:30 a.m. and there is no one home to let you in. Even if someone may have a set of keys for an emergency, the thought (and process) of waking someone up in the middle of the night is not pleasant. In most cases, it requires the services of a locksmith which can be expensive and time consuming.

The simple solution is a lockbox which can be purchased at many hardware stores and home improvement centers such as Home Depot and Loews. There are a variety of styles available - from ones that connect to a fence or pole to ones that can be screwed into a wall or fence post. For $30.00 or so you can save yourself a lot of time, money and aggravation.

So this year, spread the love on Valentines Day with a lockbox - they may not love you for it that night, but at some point you will be the love of their life!

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

Selling Your Condo - Make Sure The 6D Certificate Is Good Through The End Of The Month

Gary Dwyer — Mon, 31 Jan 2011 13:03:31 -0800

As part of the condominium sale process in Massachustets, the seller must provide at closing a 6D certificate, signed by the Trustee(s) of the condominum association, that there are no past due condo fees or special assessments that are outstanding against the unit.

The certificate should be through the end of the month in which the closing occurs, not just to the closing date. The condo fees will be pro-rated by the closing attorney between the buyer and seller depending upon the date that the closing occurs.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax

How Do I Calculate How Much I Am Going To Save On Taxes?

Gary Dwyer — Thu, 27 Jan 2011 17:12:57 -0800

One of the most important financial benefits of owning a home is the ability to itemize and deduct mortgage interest and property taxes (as well as at least one more year for Private Mortgage Insurance (PMI)) when calculating your federal income taxes.

Many home buyers often ask what impact this will have to them and how to calculate the benefit. Here is a quick example:

Assume:

$ 20,000 = Mortgage interest paid (a loan of $400,000 for 30 years, at 5 percent, using year-one interest)
$ 5,280 = Property taxes (at 11 percent on $480,000 assessed value)
______

$25,280 = Total deduction

Then, multiply your total deduction by your tax rate.

For example, at a 28 percent tax rate: 25,280 x 0.28 = $7,078.40

$ 7,078.40 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level. Illustrative example only - check with your tax adviser for your specific situation.

Gary Dwyer, CRS, GRI, ABR, REALTOR

Buyer Agents of Boston, LLC - Exclusive Buyer Agents Serving Greater Boston

806 Tremont St, #2

Boston, MA 02118

617 997-5570 - Voice

617 507-8104 - Fax