Innovative Real Estate Blog

Tastefully Renovated!

• 1,566 sq. ft., 1 bath, 3 bdrm single story "Craftsman Style Bungalow" - MLS® $419,900 - Just Listed!

Hillside/Tufts, Medford  -  Sunsplashed Craftsman Style Bungalow located in Medford's desirable Hillside Neighborhood.Completely renovated ktchn w/a giant butcher-block brkfst island,SS applncs,expsd brick,recess lghting and formal DR w/built-in hutch.Other features include HW flrs throughout,dble sink corian vanity bath,new wndws,fenced in yard,updtd elctrcl,and stained-glass wndws.Bdrms are large incldng master w/walk-in closet.Just a short walk to new proposed Green Line stop.This is truly a beautiful home!

Property information

They are still working out the details but this is where they are at as of right now for Cambridge, Somerville, and Medford.

Any Agents out there  interested in buying a listing?  I'm not!!!!  When I go out on a listing presentation I gather as much information as possible before meeting with my potential clients.  I include all recent sales comparison in their neighborhood, including statistics comparing from when they bought to when they plan to sell.  I also take a drive by the house and neighborhood to get a better understanding of the subject property.  I try cover all my bases before I meet with them.  However, at times I go up against agents that have a different way of winning the listing, its called lying or as we call it in the industry, buying the listing!  It's also a violation of the REALTOR code of ethics.  The lie is that these agents give false hope the seller convincing them that there home is worth substantially more than the other agents are quoting them.  Automatically the seller wants to list with the broker that comes in with the highest number because the seller really wants to think their house is worth that much.  In reality, the agent is actually doing a disservice to seller  because we all know what happens to over priced listings, they sit and sit.........and sit!!  And the longer they sit the further away from the sellers price you will go.  Time is the enemy when selling a home.  Reports have proven that a home will actually net less in the end if its sits on the market for a long period of time than if it was priced correctly from the beginning and sold right away.  Not to mention the house will start to get this stigma about it and perspective buyers may start to think there is a problem with the house for not selling.

One way you may realize that your Realtor has done this is if they list you home and no one or very little traffic shows up after the first 2 weeks.  During the first 2 weeks you should get your most traffic because your the new house on the market.  Its a buyers market and they are definitely out there.  If no one is coming then there is a problem.  You may ask your Realtor what the think and usually the first thing out of their mouth will be "Lets try a price reduction".  The problem is a small price reduction on an over priced home is like bleeding to death by a paper cut!!

When I sit down with my sellers I am very aware that they are looking at other agents.  I am also aware that some of the competing agents may try to buy the listing.  So what I say to my clients is this, I am not in the business of listing over priced homes because I am not a magician and they simply will not sell on their own.  The other thing I tell them is that if the other agent is feels so strongly about listing at a higher price then he will not have any problem adding certain verbiage to the listing agreement.  Try something like

"It is fully understood between listing agent and seller that at no time during the listing contact will the listing agent approach the seller for a price reduction". 

Call their bluff!!  Watch as they squirm in their chairs and begin to sweat and stutter.

Has this happen to anyone out there?  Give me your thoughts!

What is an FHA Loan?

Who Can Get an FHA Loan?

Almost anybody can get an FHA loan. There are no income limits like you may find with other first-time buyer programs.  However, there are limits on how much you can borrow.  In general, you’re limited to relatively small mortgage loans relative to home prices in your area.  To find the limits in your region, visit HUD's Website.

To qualify for an FHA loan, you’ll need to have reasonable debt to income ratio.  In general, you have to be better than 29/41.  In addition, you have to have decent credit.  You don’t need wonderful credit to get an FHA loan, it just needs to be decent.

Why are FHA Loans so Great?

FHA loans are not for everybody.  Nevertheless, they are a great help to some borrowers.  FHA loans allow people to buy a home with a down payment as small as 3%.  Other loans might not allow such a low down payment.

FHA loans offer a few other bells and whistles:

• Easier to use gifts for down payment and closing costs
• No prepayment penalty (a big plus for subprime borrowers)
• An FHA loan may be assumable
• Possible leniency during financial hard times

How do FHA Loans Work?

The FHA promises to pay lenders if a borrower defaults on an FHA loan. To fund this obligation, the FHA charges borrowers a fee. Home buyers who use FHA loans pay an upfront mortgage insurance premium (MIP) of 1.5%. They also pay a small ongoing fee with each monthly payment.

If a borrower defaults on an FHA loan, the FHA uses collected insurance premiums to pay off the mortgage.

Why Not Use an FHA Loan?

You may find that FHA loans are not for you. An FHA loan may not offer enough money if you need a large mortgage. In addition, the upfront mortgage insurance premium (and ongoing premiums) can cost more than private mortgage insurance.

In many cases, you can still buy a house with a very little down using a standard loan (not an FHA loan). In particular, home buyers with good credit can find competitive offers that beat FHA loans.

For you to understand how much to offer for a home you’re interested in, it’s important for you to know how sellers price their homes. Here are 4 common strategies you’ll start to recognize when you begin to view homes:

1. Clearly Overpriced:

Every seller wants to realize the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for your listing, an easy way to win the battle is to over inflate the value of your home.  This is done far too often, with many homes that are priced 10- 20% over their true market value.
 
This is not in your best interest, because in most cases the market won't be fooled. As a result, your home could languish on the market for months, leaving you with a couple of important drawbacks:

• Your home is likely to be labeled as a "troubled" house by other agents, leading to a lower than fair market price when an offer is finally made.
• You have been greatly inconvenienced with having to constantly have your home in "showing" condition . . . for nothing.  These homes often expire off the market, forcing you to go through the listing process all over again.

2. Somewhat Overpriced:

About 3/4 of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than they should.  There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there's a lot of emotion caught up in this issue), OR you've left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received
 
3. Priced Correctly at Market Value

Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market.  These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.
 
4.  Priced Below the Fair Market Value
Some sellers are motivated by a quick sale.  These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind.

I'm in the middle of a transaction right now where the seller wants to switch out the stove after we already had the offer accepted.  That's not fair and as far as I'm concerned not going to happen.  If the seller discloses that they want to take the stove in the beginning that would be a different story.  However, to show your house with a brand new stove then switch it out before the buyer moves in is a bit shady.  Always make sure that you pay attention to the appliances.  Make sure when you and your Realtor do you final walk through that you make sure the same appliances are still there as when you made your offer.  The same hold true for any other fixtures like lighting, ceiling fans, sconces, and even chandeliers and fire place mantels.  If the seller doesn't exclude them on the MLS listing sheet and its attached to the house then it belongs to YOU!!

Buying a home is a major investment no matter which way you look at it. But for many home buyers, it's an even more expensive process than it needs to be because many fall prey to at least a few of many common and costly mistakes which trap them into either paying too much for the home they want, or losing their dream home to another buyer or, worse, buying the wrong home for their needs.

A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also buy the home that's best for you.  The following is a list that I hand out to all my buyers.  Please take a look and let me know if you think these are helpful:

1. Bidding Blind

What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home

What are you looking for in a home? A simple enough question, but the answer can be quite complex. More often than not, buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down.   Take the time upfront to clearly define your wants and needs.  Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Unclear  Title

Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed.  The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

4. Inaccurate Survey

As part of your offer to purchase, make sure you request an updated property survey which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor’s new fence which is extending a boundary line, etc.). Be very clear on these issues.

5. Undisclosed Fix-ups

Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

6. Not Getting Mortgage Pre-approval

Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

7. Contract Misses

If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Agree ahead of time on a dollar amount for an escrow fund to cover items that the seller fails to follow through on.  Prepare a list of agreed issues, walk through them, and check them off one by one.

8. Hidden Costs

Make sure you identify and uncover all costs - large and small - far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total  fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

9. Rushing the Closing