Straight talk about Real Estate from Judy Moses, queen of no nonsense, tell it like it is, advice that you will really use when making the biggest purchase of your life.
If you are applying for a mortgage to buy your new home, the lender, as your ‘partner’ in the purchase, wants to be absolutely certain that you don’t pay more than market value for the property. So, they will hire a licensed appraiser to value the property.
The appraiser will look for 3 properties that sold within the past 6 months, in the same community as the ‘subject’ property (the property you plan to buy), preferably within a mile, and as similar as possible in size, style and condition. Since in New England we are often hard pressed to find similar homes, they will use homes that differ and make ‘adjustments’ to compare them. For example, one home that sold may have a fireplace, yet the subject does not. As a result, the value of the subject property may be slightly less than the value of the comparable sale.
When the number of sales is low, the appraiser may not have the data he needs to do a proper analysis. If your appraisal comes in lower than the price you had offered to pay, the lender could refuse to make the loan. You do have options.
First, you could contact the appraiser and question the properties he/she used as comparables. Maybe the ‘comparable’ property had been rented by students reminiscent of those in ‘Animal House’ and the property was totally trashed. Or, maybe the subject has a brand, spanking new, granite and stainless kitchen. The appraiser may be able to make adjustments in your favor.
Second, you could ask for another appraiser to value the property. You would have to pay for this, or convince the seller to pay.
Third, you can share the appraisal information with the seller and ask for a reduction in sales price. After all, maybe another purchaser will end up with the same appraisal value.
Finally, if you love the property and have the financial ability, you can buy it anyway and make up the difference by putting more money down.
I thought I'd share the video of Judy's newest listing in Newton Highlands. It's a 2 bedroom condo in move-in condition. Lots of good stuff like central air and garage parking, plus it's just a stone's throw (I'm not exaggerating) to the Newton Highlands T, shops, restaurants. It's a truly great location.
Have you ever longed to own a home in one of your favorite getaway destinations?
Maybe now is a good time to make your dream a reality. The recent moderation in the real estate market has made prices more affordable, and interest rates are still historically low.
Indeed, more people than ever before are buying second homes or investment properties. However, before you take the plunge, let me give you some suggestions to guide your decisions.
Consider your hobbies. Do you enjoy skiing? Maybe a mountain resort is for you. Do you prefer boating or swimming? Maybe a home near a lake or the sea would be more appropriate.
Consider distance. How far are you willing to travel to your second home? An hour? Three hours? Do you want to be able to drive, or are you willing to fly?
Consider the expense of traveling to the property. This will increase the cost of ownership for you, and may limit your ability or desire to visit regularly.
How frequently would you like to use the property? Would you like to visit every weekend, monthly, quarterly, or spend an entire season?
Remember to factor in other costs of ownership: furnishings, maintenance, utilities, taxes and insurance.
Do you prefer the privacy of a single family residence, the income possibilities of a multi family, or the reduced maintenance of a condominium?
Be realistic about your current life style and commitments. Will you use the property often enough to benefit from the investment?
Would you consider renting the property to offset some of the expenses of ownership?
If you would consider renting the property, you may want to explore buying an 'investment' property rather than a second home. Tax codes permit you to spend a certain number of days per year enjoying the property during your 'inspection' of its condition. If the limited personal use is acceptable to you, I suggest you speak with your accountant. There are tax benefits from investment property, such as depreciation expenses, which you can write off against the income received. It may be an excellent way for you to diversify your financial portfolio.
If investment property appeals to you, you need to evaluate whether you will manage the rentals and upkeep yourself or hire a property management firm.
Of course, outsourcing increases your ownership costs and decreases your income.
However, the added peace of mind may far outweigh the expense.
For more information about investment properties, I recommend you read Rich Dad, Poor Dad by Robert Kiyosaki. Mr. Kiyosaki suggests that we cannot accumulate great wealth by work alone. Instead, we must save and make our money work for us. He suggests that investing in real estate is an excellent way to accumulate assets that create a stream of income for us into the future- our mail box money!
Whether it is a vacation or an investment property that intrigues you, a licensed Realtor can help you determine your priorities and evaluate the many opportunities available to you in today's market.
On Saturday, November 3rd, I will participate in the Boston walk for Lung Cancer at scenic Castle Island in South Boston. A former client of mine is a lung cancer survivor. She organized the Boston walk.
I am walking in memory of my friend, Myrna Scwartz, who suffered from the disease. She was a well known realtor in Brookline.
I would love your support for this cause. Did you know that lung cancer is the number one cancer killer in America?
Send us a picture of your kids or your pets in their Halloween costumes. Winners will receive prizes! Email JudyMoses@JudyMoses.com. Write Halloween Costume Contest in the subject line.
Entries are due by November 3rd. Winners will be chosen on November 7th.
You'll find Judy's shoot-from-the- hip, tell-it-like-it-is approach to real estate is refreshing. Plus, she's been in the business for 20 years and has been through the 'cycles' before. Her talk is backed up by years of experience.
When you make a decision to buy a property, whether it is a primary home, a vacation home, or an investment property…does the real estate agent represent you in the transaction?
Agents do not automatically represent consumers who call them to see property. The agents do, however, have an obligation by Federal and State Law to review the options of representation available to you at your first meeting to discuss a particular property.
If you visit an open house, you will see a sign prominently displayed to inform you that the agent represents the seller, not you. You are considered the 'customer'. The seller is the 'client'. The agent must be honest to you, and disclose any known, material defects of the property. However, the agent's fiduciary duties rest with the seller.
What are fiduciary duties? They are the same obligations that attorneys owe their clients. If you choose to have an agent represent you, that agent owes you the duties of obedience to lawful instruction, undivided loyalty, disclosure of material defects, confidentiality, full accounting for funds and reasonable care. Your interests become paramount to the agent. The fiduciary responsibility remains after the transaction ends - after you have found a property.
What does this mean to you, and how do you choose the form of representation that suits you? That will be clear as we discuss your agency options in MA real estate.
When you meet a real estate agent, the agent should give you a form that describes agency representation available to you. The agent should discuss the options so you can make an informed decision.
You can choose to be unrepresented. That means you are considered a customer, and the agent's only responsibility is to be honest and disclose any known defects of the property. If the agent is the listing agent, then the agent represents the seller. The agent can not help you negotiate against the seller, her client, so…keep your cards folded! Nothing is confidential. Actually, the agent has an obligation to tell the seller anything she knows that could help her client negotiate against you.
If the agent is 'showing you around' and does not represent a seller, the agent still does not represent you. The agent is simply considered a 'facilitator' -she represents neither party. She must present properties honestly and accurately but, she can't assist either party in the negotiations.
You can choose to have an agent represent you as a client. The agent will owe you the fiduciary responsibilities mentioned above. When you find a property, the agent will prepare a market analysis and provide you with information to help you determine a negotiating strategy. Since the agent represents you, the agent's purpose is to help negotiate the best price and terms for you.
If your buyer's agent works for the firm that holds the listing you are buying - that agents is your designated agent. This means that the firm has designated another agent to represent the seller. There are two clients in one firm - each represented by an agent in the firm.
If your buyer agent also holds the listing you want to buy, the agent becomes a dual agent - she represents both clients in the transaction. In this position, the agent cannot fully satisfy all fiduciary obligations. For example, the agent can't help the parties negotiate against each other.
If you are in a designated or dual agency situation, you will be informed in writing by the agent involved.
At Pathway Home Realty Group, Inc., we act as 'single' agents. We represent both buyers and sellers, but never in the same transaction. We never act as designated or dual agents. Our clients receive 100% representation, all the time. Instead of being represented by only one agent, all agents in the firm represent our clients.
We have chosen this path because it gives our clients the benefits of all our knowledge and it ensures confidentiality. An agent will never inadvertently disclose confidential information about a client that will later be used against her in a negotiation(for example, that a client has a job transfer or divorce and MUST sell her home.)
At Pathway Home Realty Group, we know it's your move. Call us to receive the representation you deserve!
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