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What funding opportunities are available for homebuyers in Mass?

April 25, 2011 By VangileMakwakwa Leave a Comment

Wherever 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

Filed Under: Home owners, Homebuyers Tagged With: FHA, home buyers, home loans, home owners, housing grants, mass housing, mass housing partnership

What should you know before doing a short sale?

April 22, 2011 By VangileMakwakwa Leave a Comment

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.

Filed Under: Home owners

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

April 20, 2011 By VangileMakwakwa Leave a Comment

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

Filed Under: Home owners, Homebuyers

What you need to know about working with home appraisers

April 15, 2011 By VangileMakwakwa Leave a Comment

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

Filed Under: Home owners Tagged With: appraisers, FHA guidlelines, homebuyes, homesellers

What type of home improvements increase your home value?

April 14, 2011 By VangileMakwakwa Leave a Comment

On April 3^rd 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

Filed Under: Home owners, Homebuyers Tagged With: foreclosures, home appraisers, home buyers, home improvements, home sellers, home value, REOs, shortsales

How to unclutter your home

March 14, 2011 By VangileMakwakwa 1 Comment

I 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

Filed Under: Home owners Tagged With: clutter-free, declutter, decluttering, unclutter

Should your Realtor be targeting international buyers?

March 10, 2011 By VangileMakwakwa Leave a Comment

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.

Filed Under: Home owners, Homebuyers Tagged With: homebuyers, international buyers, realtor, selling your home

Cohasset Housing Market sees improvement

March 2, 2011 By VangileMakwakwa 1 Comment

Total home sales up 18.75% in Cohasset, MA

According to statistics from the MLS PIN total property sales (single family, condominiums and multi family homes) in Cohasset increased from 80 homes sold in 2009 to 95 homes in 2010; representing an 18.75% year on year increase. Despite a slight drop in total properties listed on the market, total market volume increased by 15.66% to $77,424,425. Average days on the market have decreased significantly by 23.58% to 162 days, reflecting that homes are sold faster, whilst median price increased 9.92% to $720,000, suggesting that buyers are starting to feel comfortable purchasing higher priced properties. Although Cohasset’s real estate market did better last year; Hingham sold 280 homes with lower days on the market (115 days).

Learn more about the Cohasset market

Join us for our Spring Homesellers Seminar to learn more about how the market is doing and to speak to our panel of attorneys, appraisers and mortgage brokers

Date and Time: March 6, 2011 at 11 am – 12.30 pm

Location: Minot Lightkeepers’ Residence, 15 Lighthouse Lane, Cohasset, MA 02025

Image by Flickr user pdbreen

Filed Under: Home owners, Homebuyers

5 questions to ask your Realtor before selling your home

February 24, 2011 By VangileMakwakwa 1 Comment

As Spring draws nearer, many homesellers are thinking of selling their homes and this means that they will have to talk to realtors and determine if they are the right fit for them. Here are some questions to ask your realtor before listing:

1) Tell me about yourself and your background

You want to know about your Realtor – how long they have been in business or what they did before this and how well they know your neighborhood. But you also want to know about who they are as people, this is someone who will learn about some very personal things about you as they sell your home and you need to know the kind of person they are and what they stand for; you need to trust them and feel comfortable with them.

2) How will you determine the price of my home?

How much is the house? This is what many consumers are asking. Pricing is a big part of marketing – a house that is overpriced can scare away prospective buyers and may take longer to sell so pricing correctly from the start is critical. Your Realtor should work with you by looking at current market trends and doing a comparable market analysis.

3) How do you plan to sell my house?

Do not be afraid to ask your Realtor for a 2 page marketing plan. You want to know how someone plans to get information about your house out there. You need to have an offline and online marketing strategy with dates for each medium - newspapers, open houses, radio, Facebook advertising, national real estate sites etc. Remember people need to know about you to come see your house and buy it.

4) What brand exposure will your company give to me?

This is a similar question to the one on a marketing plan except you are asking about the company’s brand and what additional marketing support it can give you online where homebuyers from all over the world are constantly searching the internet for example Remax has an average of 2.6 million visitors monthly.

5) What are the average days on the market for homes in this neighborhood?

This question will give you a basic idea of what to expect on average from your real estate agent and will also help you plan for the future. If you home is well priced and well marketed it is safe to assume that you will sell within the average time period.

Image by Flickr user Andréia

Filed Under: Home owners Tagged With: before selling your home, how much is the house, questions to ask your Realtor

What’s stopping you from selling your home?

February 22, 2011 By VangileMakwakwa 1 Comment

The baby boomer generation is retiring and their children are moving out to go to college or get married and this makes the market very interesting. They no longer have the need for big homes and are looking for smaller space, to be in a tight knit community or to just go traveling (my perpetual fantasy).

But the baby boomer generation is faced with some unique problems when it comes to selling their homes:

1) The kids could come back home or are back home

Born between 1982 and 2000, they are known as generation Y but are also called the boomerang generation because they are moving back home to wait out the recession, build savings and pay off student debt. Whilst I have not moved back home I have a few friends whose parents are stuck from selling their homes because they are worried about what will happen to their kids. The world has changed; college fees average at $40,000 a year, multiplied by 4 that is $160,000. This is the debt that Gen Yers are looking at when graduating from college, and as can be understood not many of them are excited about adding a mortgage to the debt. Of course there are many other reasons why kids come back home – rising costs of unemployment, increase in living expenses and stringent mortgage rules that make it hard to buy a house.

At the end of the day homeowners and homesellers still need to consider the cost of maintaining a house and if you can afford it that’s great but if you cannot you can either:

Charge your kids rent and stipulate how long they can stay
Depending on the number of kids you can sell your current home and buy a smaller one or a condo
You can sell your current home and together with your kids rent the next one, this can free up some cash from your current property

2) The mortgage value of the house is more than the market value

Unfortunately in this market this is more common than we would like to admit – many people that bought houses when the market was “hot” during 2000 and 2006, are now facing this situation. My recommendation is to call real estate agents and ask for a comparative market analysis and if need be even asking about short sales. Also call your lender and determine exactly how much you need to pay off. Once you have a comparative market analysis and know exactly how much you owe you can determine when to sell and what your next step will be.

One thing to consider is that this economy is slowly changing but it will take a long time before it gets back to where it was before.

3) Not knowing what’s next

The truth is we are human and sometimes we have no clue what the next step for our lives are. We know we need to sell for a multitude of reasons but we do not know what next we need to do and where we will live. In this case do your homework: talk to real estate agents, put together a list of neighborhoods and ask your agents for a marketing plan of your home.

What are your concerns when it comes to selling your home? Please share in the comments section below.

Image by Flickr user milos milosevic

Filed Under: Home owners Tagged With: baby boomers, boomerang generation, generation Y, homeowners, homesellers, selling your home