What funding opportunities are available for homebuyers in Mass?

sold_out_smWherever you look in the real estate market we are told that this is the worst market and there are no opportunities; it does not make for a great bed time story. Last week on WATD, we spoke to Beth Murphy, from Eastern Bank, about the opportunities that are available to homebuyers in the South Shore. Beth’s take on this economy is that there are many opportunities but a lot of the opportunities on this market are with public agencies that cannot advertise. The house prices and rates are low and there are no more bad loans so consumers can feel protected but beyond that are the various loans and grant opportunities that homebuyers can take advantage of.

Loans and grants available for homebuyers in Massachusetts

Mass Housing: They allow you to put 3% down as a down payment and there are also local housing grants that will give you a grant to use as a down payment so you don’t have to put anything down. They help you with closing costs. Mass housing also works with homeowners so they can help you refinance if you need to.

Mass Housing has PMI (Private Mortgage Insurance which protects the lender any time someone puts less than 20% down on a house) which is less than FHA and the PMI has an insurance component to it that will cover a borrower if they become unemployed; they will pay the mortgage for 6 months. They also have a rehab program in place.

Mass Housing Partnership (MHP): this is for low income borrowers who make 80% or less of the area’s median income, they have a low down payment (3%), a low interest rate which is usually 0.25% or 0.5% below market rate and have no points or PMI and even have a subsidy available for qualified homebuyers.

FHA: The FHA is not particular to Massachusetts but it is still a great loan and worth considering because it is a little flexible about credit scores (anywhere from a 620 to a 640) and the amount of debt that you are carrying. It does require a 3% down payment but that can be a gift from a relative so it’s not that bad. If you are worried about your ability to make payments the FHA will allow you to have a co-signor, a characteristic that is unique to the FHA. They also have a 203k program which is a rehab loan for homeowners that are looking to fix their homes or for homebuyers that are looking to buy a home that needs some fixing up. There are guidelines in place but if you there are certain things that you need done to the house like painting a wall or replacing a septic system it can be very useful and you can get half the money upfront and half the money afterwards.

Housing  Grants: In addition to loans for homebuyers, there are grant opportunities available to homebuyers; for more information you can go to Chapa.org. For homebuyers in the South Shore there are various services such as Marshfield Housing, South Shore Housing and Quincy Neighborhood Housing Services that work with homebuyers looking for grant opportunities in the South Shore and they also help homeowners that are looking to refinance.

We would love to hear of any other great financing and funding opportunities that we may have forgotten or missed are available for homebuyers in the South Shore or Massachusetts. Please share your insights in the comment section below.

Image by Flickr user:  jspatchwork

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What should you know before doing a short sale?

On the WATD radio show we asked Mike a few questions about things that homesellers should know before doing a short sale and here are the answers he gave us:

What are the advantages of a short sale?

The major advantage of having a short sale versus a foreclosure (or just walking away) is that the seller can control the process and buy themselves time to figure out what they need to do next. When the property goes into foreclosure homeowners lose control of the process and can be subject to eviction. Most of the time homeowners are just frustrated and want out but giving yourself time to plan the future even during such a traumatic experience can make all the difference.

 

What are the disadvantages?

 

The major draw back in a short sale is that the lender has to approve the short sale and decide that you are eligible for a short sale. To do this you have to show pay stubs and prove that you are at risk of defaulting or filing for bankruptcy and this could take a while. The lender then decides how to price the property and there is no one answer for each lender when it comes to pricing – they will get appraisals done and they will also look at how sales in that particular area are going or they can look at the specific conditions of the property itself.

What can make the process smoother?

You should make sure that you have all the documentation for all the lenders when you decide to go ahead with the process. Having an attorney deal with a lender at the beginning of the process can speed up the process because they know what documents are important and can get them organized upfront and most attorneys’ fees will come out of the transaction.

 

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When should a homeseller and homebuyer be talking to an attorney?

Tapping a Pencil
So you are getting ready to buy a house or sell a house and you are wondering if you need an attorney? The simple answer is yes you need an attorney, but we decided to ask interview Mike Cook, on our radio show and ask him about short sales and when exactly homebuyers and homesellers should be talking to a real estate attorney.

When selling a home

The homeseller wants the contract to be as binding as possible because you want predictability. A seller should talk to an attorney very early in the process to discuss listing agreements; good real estate brokerage offices will encourage homesellers to talk lawyers about the timing of the listing and obligations to be fulfilled.

When buying a home

For a buyer the most important time to talk to an attorney is when you make an offer because you want that contract to be flexible in case you make an offer and something comes up. There was a time when buyers could make an offer and withdraw it or enforce it in a different way but in recent years the courts have ruled that an offer is a binding contract. So even if you have not executed the purchase and sales agreement, what you submit in writing is still valid in court; so unfortunately you cannot withdraw the offer unless there is a valid reason like the home inspector found that the basement get water every time it rains. A good lawyer will make sure that your acceptance offer takes into account the unpredictability of life such as home inspections.

The interview focused on short sales and REOs, you can listen to the rest of the interview below: http://www.podbean.com/home/podcast-directory-play.php?eid=3885102

Image by Flickr user Rennett Stowe

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Remax Connection Listing: 11 Deep Run, Cohasset

11 Deep Run is off Jerusalem Road and says private way which gives the feel of a gated community where everyone knows each other.  The house has the feel of a vacation home because every room has a view of the ocean and is within walking distance of Sandy Beach and Blackrock Beach, which is a great treat for dogs. The area is perfect for children or a young family that enjoys being outdoors in summer. As you enter the house on the right is a surround sound living, room on the left is an office and you can see the ocean from both these rooms. As you continue on you can go to the kitchen through the hallway or the living room; your first impression of the kitchen is beautiful granite countertops and stainless steel appliances and the smell of the ocean, if you want you can step enjoy dinner on the deck and observe the view of the ocean. The first floor also has a master suite and a children’s bedroom, the Master suite has beautiful cathedral ceilings and surround sound, with paintings on the ceiling and a beautiful view of the ocean. The second floor has a family room, which has high ceilings, skylights and has a balcony that overlooks the ocean, making it perfect for warm summer nights. When you leave the family room on the second floor you enter another bedroom which overlooks the ocean. This is a perfect house for a family that loves the ocean and walking on the beach but also wants to know their neighbors.

Contact: Will Charles: 781-696-0291

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What you need to know about working with home appraisers

Lenders will require an appraisal on a property so that they can make informed borrowing decisions when working with home buyers. A real estate agent strives to maximize the price of the property for the homeseller whereas a real estate appraiser gives an unbiased opinion of the value of the property on a specific date based on market sales.  The discrepancy comes because sometimes price and value are not always the same because price is not only based on housing it is also based on population increase, the growth rate of the neighborhood also have to be taken into place.

How do you choose an appraiser?

The laws have changed in the last few years so real estate agents, homebuyers and homesellers cannot choose an appraiser, they have to contact their lender who will then contact the AMC and they will choose an appraiser for you based on expertise and knowledge of the area. This also makes it very difficult to contest an approval if the lender agrees with it and thinks it is valid.

Appraisers undergo a very rigorous licensing procedure and you can always google them and find out more about them online.

What do I need to do before I get an appraisal done?

  • Make sure that the property is functional inside the house and outside of it and there should be no missing appliances in the kitchen and bathrooms
  • No repairs or home improvements such as painting should be underway
  • Recently peeling paint has been a problem in the FHA guidelines so as a homeseller you should make sure that is sorted
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What type of home improvements increase your home value?

Row HousesOn April 3rd 2011 Remax Connection started its Real Estate radio show and our first guest was Ardi Dana, a real estate appraiser. Compared to the rest of the USA Massachusetts home prices and home values are not doing that badly. The average home prices in Norfolk County was $511,756 (from April 3, 2010 – April 3, 2011) compared to $490,225 (from April 3, 2009 to april 3, 2010). Here are some of the important points we discussed on the show:

Ardi’s recommendations to home owners:

1) Focus on the space above grade – anything above the basement is what you want to focus on. Making upgrades and improvements to the basement does not add value to the house. Improving the attic is a better investment than improving the basement because the attic is above grade. A heated attic will be considered a part of the house a living space; the basement is not.

2) Improvements to the kitchens (stainless steel appliances) and the bathrooms are always a good investment.

3) Expansions are also a good idea because the increase the size of the home; appraisers always reward you for increasing the gross living area.

4) Site improvements: adding amenities such as porches, garages and pools etc will increase the value of the home as long as they are legally permitted (this is something that lenders require). So as  a home owner please make sure that you pull plumbing and other building permits.

Should people be making any home improvement projects in this economy?

This depends on the market – when the market is good then there are high returns when making improvements but when the market is bad the returns are not quite as high for improvements. You will have to take into account the usage value when making improvements: if you are looking to stay in your home for a while then the improvements will be beneficial to you and if you are an investor the improvements will lead to many options such as resale and rentals. Avoid going all out on the house. Make the necessary repairs to make the house functional and make improvements that add value to your home in the short and long term.

With REOs (bank owned properties), shortsales and foreclosures most of them are sold as is and have clauses stating that no repairs will be done and sometimes sellers don’t even want home inspections to be done, which means that as a homebuyer you should be prepared to make mandatory improvements after buying the house.

What are the disadvantages and advantages of home improvements in 2011?

In this economy home improvement tools and materials are very affordable at various DIY shops. There are many sales so it works out cheaper.

The disadvantage is that you do not see capitalization of value right away.

Image by Flckr user: woodleywonderworks

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How are Cohasset home prices doing compared to the City?

If you are thinking of buying a home in Massachusetts and are trying to decide between Boston and the South Shore, price is going to be a factor. So how are house prices in Cohasset different to house prices in the City and the rest of Cohasset?

Cohasset Median Sale Price


Massachusetts Median Sale Price

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11 Deep Run, Cohasset, MA

11 DEEP RUN, COHASSET, MA 02025

 

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How to unclutter your home

Day 3/366.....Fire, Wood & StoneI have learned that nothing affects the energy of a home more than clutter especially if you are thinking of selling your home. I have lived with pack rats and have come to the conclusion that hoarding is unhealthy and can lead to disorganization. I have seen flustered friends spend hours looking for things, large and small under piles of paper and in beautifully organized boxes that fill up attics and basements. Just to clarify – organization does not mean decluttered.

Clutter-free space can free up space (making your home look large),  help you focus and become more organized. If you are a hoarder how can you unclutter your home?

Just do it: Yes, Maybe or No piles

I believe that creating a uncluttered space is one of those things that require you to make snap decisions. If you spend time trying to decide if a coat will be back in season, or a piece of furniture will ever work in a particular spot; you will never get rid of anything. Create yes, no or maybe piles and just decide what stays and what goes. The maybe pile will have everything you are on the fence about.  Think of the Yes pile as your donation to charity, to people who could actually use what you are keeping.

Create 2 boxes for each room

Go through each room and create 2 boxes that you label “must go” and “maybe”.  Take everything in the Yes pile and put it into the must go box. These things are definitely going to Goodwill or some other charity organization.

Now the second time around go through the rooms and choose things you are not sure you want to give away and put them in the maybe box. These are things you are not going to give away but will keep for a month, if at any point during that month you need anything from the maybe box, you can take it out and it stays; everything else that is still in the box after a month has to go because clearly you do not need it.

Work on one room at a time

Rome was not built in a day and it probably took you years to accumulate the stuff you have in your house so accept that decluttering is a process. Give yourself a day or a week to unclutter one room or closet at a time.

Choose a day and make a ritual

I am a big believer in acknowledging the emotional process of transitioning and changing. Getting rid of possessions in our space can change the energy in our homes and this can sometimes be scary. Giving away certain things that were once dear to us also forces us to see that we are growing and evolving and this can be very emotional. I usually bless the things I give away and invite friends over to help me with the process so it doesn’t feel so sad.

Focus on the house you want to have

Goals are a motivating factor for everyone. If you know what kind of house and life you want to have you are more likely to be motivated to declutter. I suggest creating goals and even having a vision board of the space you want to create and how you want to feel in that space. The goals can be as simple as: I want to feel the breeze around my house in summer (clutter can make this hard).

Take 2 days before finalizing a purchase

If you are cluttering your home because you are an impulse shopper you have to find ways to stop and think. One trick I use is to force myself to take 2 days before making a purchase, if 2 days later I cannot stop thinking about what I wanted to buy, then I will go out and get it but if I cannot see how it fits into my space and it does not keep me awake at night, I choose to let it go.

For more tips on decluttering see: http://zenhabits.net/zen-mind-how-to-declutter/

I would love to hear any other suggestions on decluttering in the comment section below

Image by Flickr user  Denise Cross

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Should your Realtor be targeting international buyers?

International homebuyers

Are you having a hard time selling your home?

Maybe it is time to expand your horizons and find international buyers. According to the 2010 NAR profile of International Home Buying Activity international homebuyers make up 4.5% of the residential home buyers market and even though this does not sound like much it amounted to $40 billion dollars in 2010 for international buyers.

Should you consider international homebuyers when selling your home?

As the dollar depreciates against most major world currencies, houses in the USA become relatively cheaper for foreign homebuyers. But whether your plan to sell your home should incorporate international homebuyers depends on many factors such as where you are based. The NAR profile states that most international homebuyers tend to move to warmer places such as California, Arizona and Texas but most international homebuyers also mentioned desirable location (45%) and profitable investment (29%) as the main reason for purchasing. Boston is still an attractive area for many international students and employees in the Bio tech industries which make it a desirable location and most places in Massachusetts are perfect vacation places in the summer.

What price range are international buyers looking at?

When selling your property pricing is a large part of marketing, more so in the last few years. So what price range are international buyers looking at?

Source: http://realtorbenefitsprogram.org/research/research/reportsintl

From the above graph we can conclude that in 2010 45% of international homebuyers prefer properties priced below US$200,000 and 18% preferred property priced between $200,000 and $500,000. Most of the homebuyers in this price range are buying their primary residence.

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