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first time homebuyer

3 Tips for First Time Home Buyers in 2016

2016 is going to be a great year to be a first time home buyer. Mortgage rates are very good right now, and you’re going to see plenty of inventory around the Boston Metro area. This means you’ll have lots of options to choose from which are likely to be comfortably within your price range.

That doesn’t mean you shouldn’t take some steps to help your home buying experience go as smoothly as possible. Here are the three steps that every first time home buyer should take.

  1. Get Pre-Approved

Deals fall apart and hearts get broken when home buyers wait until the last minute to try to secure their financing. Home buyers who haven’t gotten pre-approved also tend to over-estimate how much home they can afford. It can be pretty devastating to get your heart set on the space and amenities of a $400,000 home when the bank is only willing to give you $200,000 to work with.

So get pre-approval before you look at a single house…period.

Note that pre-approval is not the same as pre-qualification. Pre-qualification takes a 30-second online credit app which tells you the lender might be interested in selling you a mortgage. Pre-qualification is only based on your FICO score, which is not the only criteria for issuing a home loan. By contrast, pre-approval requires an intensive application and documentation of your finances. This produces a precise number. It locks in your rates and the loan amount. The actual loan isn’t signed until closing, but the terms don’t change once you’ve been pre-approved. Once you are pre-approved, all you have to do is find a home that’s in the right price range and that meets the bank’s inspection and appraisal conditions.

Furthermore, pre-approval helps you generate offers that sellers take seriously. Remember, buying a home isn’t like buying a shirt, or even a car. Sellers have to accept your offer before the sale can proceed. They won’t do that if they have any reason to believe the sale might not happen; accepting an offer takes the home off the market for a time and represents a risk on their part until the closing proceeds.

  1. Define the Lifestyle You Want

Choosing a home requires a series of tradeoffs. Do you want a large house and yard? You can have it, but it may mean accepting a longer commute. Do you want to be in the middle of it all, close to nightlife hotspots and the best restaurants? If that’s the case, you might want to think about scoring a trendy condo instead of locking yourself into a big single family home. If you’re trying to start a family, you might end up paying just a little bit more in order to secure your place in a better school district.

 

Of course, with Boston’s outstanding public transportation system you can get a taste of all sorts of lifestyles for the price of a 10-minute train ride. However, 90% of your time will be spent enjoying the neighborhood you live in. Since every neighborhood has its own personality, home style availability, strengths, and weaknesses, it is smart to know what’s important to you. You will want to make some side-by-side comparisons.

I have devoted a great many resources to gathering information on many different options so you have all the information you need to make an informed decision. Check out The Best Boston Suburbs for Young Professionals and The Best Boston Suburbs for Young Families to familiarize yourself with the options that are out there.

home buyer guide

  1. Hire a Great Buyer’s Agent

It is very important to evaluate various buyer’s agent and to make a conscious choice about the one you’ll ultimately work with.

A buyer’s agent is there to advise you, act in your best interests, and answer all of your questions. This is the easiest way to make sure the home buying process moves as smoothly as possible.

Don’t neglect this process because you’re afraid of the agent’s commission. You’ll hardly notice that at closing, and truthfully, 99% of home buyers end up writing their offers through a buyer’s agent anyway. You might as well find one you’re confident about using.

Interview buyer’s agents early. Evaluate your comfort level with each agent. Pay attention to how responsive the agent is to you. Note the level of knowledge he or she displays. Remember, the agent’s role is not just about showing homes. It’s about navigating you through a purchase process that can have plenty of pitfalls. Hiring a buyer’s agent is also about dealing with someone who understands current market conditions in order to ensure your needs are met.

Want to interview me? Just contact me. Want to learn more about the purchase process? Check out The Ultimate Buyer’s Guide, a 30-page e-book which has comprehensive answers to common home buyer questions and concerns.
RuthBio1

 

Buying Home Direct

Why Direct Deals Are Bad for the Seller?

Ooh, a direct deal. That’s when the home buyer is not represented by an agent so the listing agent works directly with the buyer. Every agent wants a direct deal so they can keep double the commission. And sellers like it because often, without a co-broke, the commission will be cut (say from 5% to 4%).

Buying Home DirectListing agent makes more money while seller pays less commission, so what is the problem?

I don’t like direct deals and I think they are a rotten situation for sellers!

This unconventional piece of wisdom comes from years of experience, and has recently been reenforced during a condo sale.

At an open house I hosted two weeks ago a buyer came to me and wanted to write the offer directly with me. The next day We met, sat down, wrote the offer….well, most of it.

First, by law, I had to disclose to the buyer that I work for the seller. With this in mind, we started the money conversation.

Buyer wanted to offer well under the asking price. As I discuss the price with her, she listens, she nods, and she says (I paraphrase), “You work for the seller, why should I listen to you?”

As someone representing the seller, I do not have the authority to represent any price but the full asking price. I am not free to negotiate money which is not mine. Which is besides the fact I thought the asking price was reasonable.

As I asked her to sign the offer, she hesitates, “You know, maybe I should have my own agent review this.”

I asked her if she knew anyone, she does, she calls and books an appointment with this other agent immediately.

Two hours later, I received an offer from this buyer through her buyer’s agent. It was a much higher, much better offer. It reflected a buyer who understood the market and the process.

Seems to defy logic, that a buyer’s agent will write a much better offer than the seller’s agent?

The fact is, as long as my ficuciary obligation is to the seller, nothing I say to a buyer carries much weight. I may be giving excellent and honest advice, but none of it can be contrary to my clients best interests, or what they tell me to represent.

A buyer knows there is a choice to be represented, and once she is aware of the fact she is not, hesitation sets in. Buying a condo is a bit complex and expensive.

By seeking reprentation, the buyer agent is there through the whole transaction to explain everyting, and ensure the buyer understands it. The buyer receives advice congruent with her interests, and thus she is a more informed and eager.

Financially my client is ahead because the home buyer trusted her agent’s advice – a trust I can’t instill as someone representing the seller.

An educated, well represented buyer will make stronger offers, take the transaction more seriously, and is much more likely to close.

Isn’t that the goal?

Houses in Boston

Home Prices in West Roxbury MA: 02132

Located in the South-Western most post of Boston, West Roxbury is sometimes believed to be a suburb.  As a local resident, I enjoy reminding people I am indeed a Bostonian!

It is easy to see why many think it is a suburb – tree lined streets, single family and two family houses dominate the neighborhood, and everyone has a little bit of lawn to enjoy.  The streets are tame and the traffic moves. Bellevue Hill and the Highlands are home to colorful Victorians and expansive Colonials.

West Roxbury has been an attractive choice for young families in need of an easy commute into the City by car or train.  And now this has put much pressure on home prices.

Below find a chart presenting the median prices of single family homes for sale in West Roxbury for the past three years.  Prices are clearly on the sharp rise.

Large Chart

The natural forces of supply and demand are at play.  Below you’ll find a chart of the inventory of houses for sale, in the past three years.  The lack of housing is obvious.  This puts further pressure on home sales as sellers feel comfortable asking for higher prices when they have no competition.

Large Chart

 

What to expect will happen to home prices in West Roxbury MA this Spring?  I expect the sharp rise will be tapered as more home owners sell their home this Spring.  Yet, I still don’t believe demand for housing will be fully satisfied by inventory, as this neighborhood will continue looking more and more attractive to young families.

Boston Condo with Parking

Brighton MA 8 Kinross Road Unit 8

Rarely available one bedroom condo a walk from Cleveland Circle. Beautiful and spacious, this condo comes parking, and a private deck. Eat-in kitchen and plenty of closets, hardwood floors and great light leave you wanting nothing more. Good building minutes to B, C, D lines.  Asking price $319,000.


Newton Real Estate Buyers

Do Home Buyers Pay A Commission in Newton MA?

Home buyers in Newton and the Greater Boston Area often ask me how do real estate agents get paid? It is a source of confusion and sometimes it prevents buyers from hiring an buyer’s agent.

Newton Real Estate Buyers

Here are answers to the most common questions around real estate commission home buyers often ask:

1. Do Home Buyers Pay a Real Estate Commission?
The price of the home reflects the full commission which will be paid to both the buyer’s and the seller’s agent. There is rarely commission to be paid to your agent above what is already included in the price of the home.

2. Are there exceptions?
There is an exception, though. If you have a buyer agency agreement with your broker, there are rare occassions when the commission paid through the price will not cover the full commission your broker charges. For example, your contract may have a 2.5% commission agreement, but the listing agent is only cooporating at a 2% commission.

How is this resolved?
When the commission included in the price does not cover the buyer agent’s commission, One of three things happen.
a. Your agent will demand the seller pays the full 2.5% out of the sale proceeds. This will be written into the offer which you sign.
b. Your agent may forgo the .5% commission.
c. You may have to pay the balance of the commission at closing.

Please note discount commissions are rare in Newton, MA. In my experience, I never sellers often agree to pay the full commission out of their proceeds.

3. If there is a chance I will pay additional commission, why sign a buyer agency agreement?
It is a rare occassion the buyer pays real estate commission beyond the purchase price. It usually happens when the sale is through a discount broker representing the seller or a for-sale-by-owner. Your buyer’s agent has much more work to do in either of these scenarios.

Furthermore, the buyer agency agreement is designed to protect the interest of the buyer. When hiring a excellent agent, the risk of possibly paying extra commission will be far outweighed by the risks of buying a home without representation in Newton MA.

Hiring a buyer’s agent will save you money, time, and a lot of energy. Having experienced representation will give you confidence in your decisions and guidance in your search. If you have hesitations and reservations about paying a commission, review your agency contract carefully and discuss with your agent. A highly qualified buyer’s broker will be well worth the commitment.

Do you have other questions about commission and how real estate agents get paid?  Contact me for a complete breakdown!

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West Roxbury Homes

West Roxbury House Prices: Steadily Rising

West Roxbury’s real estate market is not known to be “hot”, but prices have risen steadily.  The chart below shows median house prices for the past three years in West Roxbury.  You see the obvious dips during the slow winter months.  Compared year-over-year, this past week median listing price was $442,000, and $424,000 on the third week of November 2012.  Same time in 2011, median price was $389,000.  That’s a not-so-shabby 4.2% increase the past year alone.

Large Chart

 

Sure West Roxbury doesn’t have the frenzy of Brookline or Jamaica Plain, but I see a healthy and sustainable housing market.  As more young families are priced out of Newton and Needham, this little neighborhood will become more desirable.  Boston’s commitment to public school improvement will help.

Luxury condo with parking Boston

300 Allston Street Unit 514, Brighton

Built in 2002, 300 Allston Street in Brighton (aka The Monarch), is a 100% owner occupied building.  Situated on the Brookline line, next to Wholefoods, the Monarch condos come with  parking and in unit washer and dryer.

Unit 514 is now on market, priced at $399,900.  You’ll enjoy great light at this penthouse corner unit.  Watch a treetop view from the built-in extra-large window seat.  Architectural detail and decorated with flare, you won’t be disappointed!

[cetsEmbedGmap src=https://maps.google.com/maps?q=300+Allston+Street,+Boston,+MA&hl=en&sll=42.31435,-70.970284&sspn=0.337651,0.837021&oq=300+a&t=h&hnear=300+Allston+St,+Boston,+Massachusetts+02135&z=16 width=600 height=425 marginwidth=0 marginheight=0 frameborder=0 scrolling=no]

 

buying a home

Three Signs Your Buyer Agent is Not Very Good

Stop your home search, start your buyer agent search!  If you are not getting results, find a better agent.

In the seller’s market, working with a hard working competent buyers agent is necessary in order to buy a property at the right price.

buying a home

Is Your Real Estate Agent Asleep At The Wheel?

Yet many buyers are failing at securing a home, and buyers are getting caught up in the stressful and intense market.

Here are three signs your buyers agent may not be your ideal advocate, and perhaps it’s time to switch.

1. Your agent is waiting to see what comes up on MLS.  If this is the only strategy employed to find a home, that’s not enough in the hot real estate markets such as Brookline and Newton.  Whether working with property investors or home buyers, a buyer’s agent can do other things to look for the right property, including networking and sending mailings to neighborhoods.

2. Your agent is not asking hard questions.  Your agent should ask you questions that force you to examine your price range, timing and every possible angle of the home buying decisions.  An experienced agent knows buyers don’t always buy what they say they will.  Such an agent thinks outside the criteria you have, finding alternatives, and presenting options and possibilities.

3. Your agent does not prepare you for the market and set expectations.  You should know what to expect when you are ready to make an offer, and be prepared for rejections.  When you choose a home you like is NOT the time for your primary real estate education.  You must be ready to go.  Finding the right home is the last step of the home search process, not the first.

Don’t get stuck with a buyers agent who isn’t servicing you.  If buying a home is important, do it right or expect it will go terribly wrong.

Buying Home in Seller's Market

Top FIVE Considerations When Buying a Home in a Seller’s Market

Are you trying to buy a home and failing miserably? Is the housing marketed giving you a kick in the butt?  Thinking of obvious things in a new way may help.

Buying Home in Seller's Market

This summer I am hearing from many people who are desperately trying to buy a home, yet every new home on the market is grabbed by someone else.  Buyers are tired and frustrated, feeling defeated.

It’s a tough market out there for buyers, no doubt.  In home buying, as in every successful endeavor, you must have a goal, a plan and system to execute your plan.  If you don’t change the way you are doing things, you won’t change the outcome.  What system have you been using to secure your new home?

There are several considerations where you need to review your approach, and perhaps find a new way to go about things.  Examine each of the following variables.

Buyers Agent.  In a seller’s market, you need a buyers’ agent.  Hire a good buyer agent you like and trust.  Someone who will advocate on your behalf, who’ll help keep you sane, and who will give you sound advice.

If the best advice you’ve received so far has been to pay more money, you are getting short changed.  Perhaps it’s time to switch.   It is okay to move on!  The best agents lose clients sometimes.  We can’t all be experts on the same markets, in the same situations and the best choice for everyone.  Find the person who’s best suited for you.

Price Range.  Are you looking in the right price range?  There are two ways to look at this question.  If you are looking at properties that are priced in your range, but sell for more, then you are really looking at a higher range you can afford.  Adjust the search for a bit less, and offer a bit more.  Stop expecting the market to stop for you.

Alternatively, are you sure you are looking for as much as you can afford?  A good mortgage broker will show you options in how to pay for your home, and you may be able to stretch further.  Please note, I advocate buyers only BUY WHAT YOU CAN AFFORD.  My point is to speak with a great mortgage broker to get your financial house in order first, and to know your affordability.

Clean Offers.  When making an offer, remember it’s not only about the money.  You can find ways to please the seller with fewer conditions or working around her schedule. Be flexible, and put your best foot forward.  Knowing when you don’t have the upper hand is important, stop fighting it.

Recently my buyers made an offer on a house in Arlington with the sellers’ ideal timing.  It is not convenient for my buyers, but they are making it work, while the seller is happily cooperating on every other part of the sale.

Furthermore, the seller will want to work with someone who is easy and pleasant.  Keep your neurosis to yourself.  Neurosis can be apparent in buyer agent behavior, the conditions in the offer, and your endless list of questions.  I say this with the greatest respect to all the neurotics out there, as I am one of you!

Stop the Insanity! You don’t have to get caught up in the insanity of the market.  The right place will come at the right time, and believe it will happen.  As a Realtor, I witness a lot of nutty behavior: Offers which do not reflect value, and buyers getting themselves into risky situations.  I don’t like my buyers in these situations, and try to steer them in the direction of good sense.

One way to avoid some of the insanity is to focus on stale inventory.  Some properties which go on market do not sell, and it is mostly because they are overpriced.  Go take a look at properties sitting on market – maybe you can make it work?  Maybe you will have some leverage as the only buyer in the mix?  You may even get a good deal!!!

Tip: Go take a look at all the stale inventory which roughly meets your criteria, plus take a look in another community if you can.  Widen the horizons, you may be surprised.

Don’t Buy.  Maybe it’s not your year to buy.  If you are selling your home and buying, unless you must move, then you should be in no hurry.  If you are renting, even thought rents are up, you could be better off staying put. Sure, rates are low, prices will likely continue to climb, yada yada yada.  A real estate agent can always tell you why you should buy NOW.  But maybe next year will be a better.

Critically review the way in which you have been going about your home search.  Try changing some aspects of it.  Remember, you must change your method if you want to change the results.

How to Pick Your Mortgage Broker?

The next three scenarios are real evens which happened last fall during home buying transactions.

Imagine this.  You are buying your first home, you are full of excitement and anticipation.  Then you learn the mortgage company hasn’t approved your loan by the deadline.  Deadline is renegotiated with the seller, extended, you wait a few more days to learn if you can buy the home…and the deadline is extended again.  Then again, again and again.  Five extensions, five fights between attorneys, five disappointments, five more threats from the seller she’s putting the home back on market.  You are approved for the loan the evening before the closing.

Another scenario.  After searching for over a year, you find the perfect house.  You work with a mortgage broker in a big firm where your family has banked for many years.  You are told your mortgage rate is locked in at 3.5% only to find out later you were never locked in, and the best you can get now is 3.75%.  The appraisal is late, the paperwork is late, and only after attorney intervention and fighting are you finally able to have a bank commitment for a loan for which you easily qualify.

Last scenario.  As an American war vet you work with a national mortgage company catering especially to your needs.  The trouble is the national company is unaware of Massachusetts real estate law, in which closings are not flexible and rarely negotiable.  In the process of buying a home, your assigned case manager who doesn’t understand the urgent need to meet the deadlines as your 5% deposit is in danger of being lost.

mortgage brokerMortgage Contingency Deadlines

In a real estate transactions deadlines are important.  The most important deadline: Mortgage Contingency!  Once the mortgage contingency is behind you, you are all in.  You’ve put a deposit on the home of about 5%.  If you don’t show up for closing with the other 95%, you can lose the deposit.

Your mortgage broker knows this, or should know it.  All scenarios above are real stories from recent client transactions, and all came with a sizable dose of stress and anxiety for the client.  All scenarios were avoidable mistakes made by mortgage brokers.

Please Pick My Recommended Mortgage Broker

I am not a mortgage expert, but what I do know is that some mortgage companies get things done quickly and efficiently.  Some mortgage brokers always ask for an extension, some rarely ask for an extension.  Some are idiots.  Many do not understand the nuances of the financial piece and legal piece and how they fit together in a real estate transaction.

Recently I’ve been disappointed by many mortgage brokers.  But rules and regulations prevent me from pushing my list of excellent mortgage professionals on my clients.  So if I don’t passionately urge you to work with  one of the brokers on my list, do not take it as a vote of confidence for the other choices out there.

Home buyers should think very carefully about who they hire and why they hire them.  Mortgage  is the most complex part of the home buying process.  Don’t underestimate the quality of your real estate agent’s recommendation.