10 Things Buyers Need to Know

The April 29, 2010 issue of the Boston Globe's G/Style Section included an excellent article setting out ten important things buyers of real estate should know when entering the marketplace. Read this informative piece here http://www.boston.com/yourtown/needham/articles/2010/04/29/10_things_to_know_if_youre_buying_a_home_now/

Unemployed? Mortgage Relief May Be Available

The Obama administration recently announced modifications to the Home Affordable Modification Program (HAMP) in an effort to promote stability for the housing market and offer further assistance to unemployed homeowners having difficulty making mortgage payments. Under these modifications, mortgage holders are required to offer forbearance plans to all qualified jobless borrowers for at least three and as long as six months. Under the plan, monthly payments can be reduced to 31% of income or less, or even suspended entirely. Borrowers must meet HAMP eligibility requirements as well as submit evidence that they are receiving unemployment benefits. They must also be in their first 90 days of delinquency. For details on the current program, click here: http://makinghomeaffordable.gov/docs/HAMP%20Improvements_Fact_%20Sheet_032510%20FINAL2.pdf.

Whole Life Insurance Or Term?

Whole life or term insurance? Syndicated columnist Scott Burns has an answer I agree with in today's Boston Globe. http://www.boston.com/business/personalfinance/articles/2010/04/21/whole_life_insurance_or_term_the_answer_depends_on_your_financial_needs/

To FSBO Or Not To FSBO?

You want to sell your home but you are concerned about the high cost of a broker’s commission on the sale. Should you try to sell it directly, without a broker?

In a good market, a For Sale By Owner transaction (FSBO), may not be very difficult, if you have the time and energy to invest in marketing the house properly. In a slower market, it is much more difficult to get the word out about your home, even with all of the internet resources available in the marketplace. Many who first attempt a FSBO do end up listing with a realtor.
If you are considering a FSBO listing, the following should be considered:

1. Price the home correctly. Regardless of what you think your house is worth, an overpriced property will not sell quickly. Look at recent comparable sales in the area, seek the opinion of experts, and be realistic. A new property on the market generates the most interest.

2. Put your home’s best face forward. Eliminate clutter, remove extraneous furniture, and stage the property to look its very best before showings. Repair any obvious defects, and consider improvements to maximize your property’s appeal.

3. Be willing to spend money on advertising, and use the advertising to get the word out to your target audience.

4. Hold one or more open houses. Advertise these widely, put up signs in the neighborhood, and make it easy for people to find your property. Make sure the house is well lit. Prepare a "fact sheet" showing all of the relevant factual data that a prospective buyer would want to know, and also provide written materials available about the school district, the city or town and other relevant topics. Resist providing any discretionary information about the property, however, as it will be the responsibility of the buyer to do a thorough property inspection.

5. Be flexible about scheduling showings with interested parties at other times.

6. Decide whether you are willing to pay a cooperating fee (generally 2.5 to 3 percent) to a buyer’s broker. If you are, you are likely to widen you potential market and receive inquiries by brokers working with buyer clients.

7. Have a good real estate attorney standing by to assist you when an offer is presented, and consult with that person before accepting a written offer.

If you do go FSBO, be prepared to work hard and invest a lot of time. The value of an experienced and professional realtor is often underappreciated, and once you take on the task of selling your home yourself, you may find that the services provided by a qualified realtor are worth their cost.

Caring for Aging Parents

Adult children of aging parents will inevitably face the difficult task of assessing when and whether their parents are able to continue to live independently, and what to do if and when they are no longer able to do so. This excellent article on the AARP website gives guidance on how to perform an assessment of your parents' mental, physical, environmental and financial conditions to determine their ability to remain safely independent. http://www.aarp.org/families/caregiving/caring_parents/a2003-10-27-caregiving-needhelp.html

Extended Deadline for Some Massachusetts Tax Return Filers

The April 15 deadline for filing federal and state tax returns has been extended until May 11 for many taxpayers in Massachusetts due to the severe rain and floods we experienced in March. The extension is granted to those counties in the state which were declared federal disaster areas as a result of the floods, including Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, and Worcester. There is no need to file anything to take advantage of this extension so long as you meet the extended deadline of May 11. Late filers, you just got more time to procrastinate!

First-Time Home Buyer Tax Credit

If you are thinking about buying a house in order to claim the first time home buyer credit, it’s time to act. First-time home buyers can get a credit of up to $8,000, but you must sign a purchase and sale agreement by April 30, and close on or before June 30. If you have not owned a home in the last three years, you are eligible to receive a tax credit of ten percent of the purchase price, up to a maximum of $8,000. Even if you have owned a home before, if you buy a new home having owned and lived in your current home for at least five consecutive years out of the last eight years, you will be eligible for a tax credit of up to $6,500. The credit is claimed by filing an additional IRS form with your federal tax return for the year of purchase. If you bought a new home in 2008 or 2009 and have already filed your return without claiming the credit, you may amend your return for that purpose. Now the catch: there are income limits to the availability of the full credit. For purchases after November 6, 2009, your adjusted gross income cannot exceed $125,000 for singles and $225,000 for marrieds filing jointly. For purchases before November 7, 2009, the limit is $75,000 for singles and $150,000 for marrieds filing jointly. So come on, first time buyers—get out there and help stimulate the real estate market AND get a tax credit at the same time.

New Laws Regarding Smoke Detectors in Massachusetts Residential Properties

Sellers of residential property have long been required to deliver their properties equipped with smoke detectors (and since 2005, carbon monoxide detectors) in compliance with Massachusetts law, to have the property inspected by the local fire department, and to obtain and deliver at closing a certificate evidencing the compliance of the property with those laws. A new law has just gone into effect which modifies the smoke detector requirement.

Effective yesterday, the smoke detectors in any home being sold which is built before 1975 and relies on the old battery operated version must be upgraded to contain photoelectric smoke detectors as well. Photoelectric smoke detectors use light rather than radiation to detect smoke, and are are most effective in detecting smoldering or slow moving fires. Photoelectric smoke detectors must be installed within 20 feet of kitchens or bathrooms containing showers. Areas beyond 20 feet require both photoelectric and ionization smoke detectors, either in the form of a single dual detector or two separate detectors.

If you are selling, or planning to sell, your home, you should be aware of this new requirement and ensure that your smoke detectors are in compliance before scheduling your fire department inspection.

Jumbo Mortgages

If you have been in the market for a jumbo residential mortgage loan (over $417,000, with some exceptions) in the past year, you know how difficult it is to get that type of financing, and the rates have been most unattractive. Good news-- the New York Times is reporting that the stranglehold on jumbo mortgages is loosening up, and those loans are becoming more available at more attractive rates. Read all about it at http://www.nytimes.com/2010/04/04/realestate/04mort.html?emc=tnt&tntemail1=y. The article focuses on the New York tri-state area, but if it's happening there, it's bound to be happening in Massachusetts as well.