Tips on Buying & Financing Your First Home

For many younger Americans, the dream of owning their first home is alive and well. But for others, it's still an elusive dream.

Only five years ago, it was relatively easy to finance a home, but the Great Recession and the mortgage market's meltdown have made it difficult for many people to qualify for home loans. The shifting state of home values and prices has complicated matters. In some markets, values have plunged by more than 40 percent. While that has created once-in-a-lifetime opportunities for younger people to enter the real estate market, others have taken a more cautious approach, waiting to see if prices will continue to fall.

Whether you're ready now or will be down the road, buying your first home takes preparation. Here are some tips from FindLaw.com, the nation's leading website for free legal information, on how to get started.

Save aggressively for your down payment. Many first-time homebuyers seek a mortgage insured by the Federal Housing Association, which insures loans made by lenders for qualifying homebuyers. The program allows buyers to put down as little as 3.5 percent of a home's cost. However, if the home you want to buy doesn't qualify for the program, you'll need to obtain a conventional loan, which will require you to put down anywhere from 10 to 20 percent of the purchase price as a down payment to qualify for a mortgage.

Get your finances in order. Lenders are now taking a closer look at debt-to-income ratio (percentage of monthly income that goes toward debt payments) and housing-to-income ratio (percentage of monthly income that goes toward housing payments). In general, responsible lenders follow the 28/36 percent rule - no more than 28 percent of your monthly income should go to housing costs, and no more than 36 percent of your monthly income should go to debt (including auto loans, credit cards and other loans).

Clean up your credit report. Your credit score is critical to a mortgage application. The higher your score, the more likely you can qualify for a mortgage and obtain favorable terms (a lower down payment and lower monthly payments). By law, you can request one free credit report per year through one of the three major credit bureaus, Experian, Equifax and TransUnion. You should request your report to review your score and correct any mistakes well before you apply for a mortgage.

Don't apply for credit. Keep in mind that a mortgage lender is determining your ability to pay back a mortgage up until the minute you sign the mortgage papers. In general, it's not a good idea to take on more debt such as an auto loan or a new credit card within a year of buying a home.

First-year expenses. First-time homebuyers can be so focused on trying to put together a down payment that they sometimes forget about the expenses that go into setting up a household. You should consider putting away an additional $5,000 to $10,000 for expenses such as a lawnmower, furniture and basic decorating, and for potential repairs involving your furnace, air conditioning, water heater and other appliances.

Shop around. It's important to shop around to get the best home possible for your dollar. And likewise, it's critical to shop around for a mortgage too. Get at least three to four proposals from different mortgage lenders before deciding on the best offer.

Don't expect your dream home. Many first-time homebuyers purchase what's called a "starter" home or a "fixer-upper." While these are often relatively small and need some repairs, they're also an opportunity to enter the real estate market and build sweat equity. To spot a starter home, look for one that needs some love and attention in a neighborhood with houses that are well maintained or being remodeled.

Hire an attorney. If you purchase a home directly from the seller without the assistance of a real estate agent, an experienced real estate attorney can help you write up a purchase agreement, according to FindLaw.com. Some sellers may be interested in this option, because it can save them thousands of dollars in commission fees. A real estate attorney also can counsel you on dealing with legal problems that can arise during the process of buying a home, such as during the title search.

Home inspection. Even if you've come across the deal of a lifetime, never buy a house without a home inspection. An inspection will alert you to potential problems that may not be obvious to a person buying his or her first home. It also may be useful if you need to sue the seller for concealing problems with the home.

To learn more about how to buy your first home, visit http://armstrongfield.com/homebuyer/index.html

Kids Becoming Home Owners?

I’m going to go out on a limb here and guess that when you were fourteen, you weren’t thinking about buying your first home. Well, believe it or not, there’s a young girl in Florida who has taken advantage of this incredible buyer’s market. 

14-Year Old Becomes Homeowner and Landlord

(http://blog.sfgate.com/ontheblock/2012/03/13/florida-14-year-old-becomes-a-homeowner-and-a-landlord/)

“Instead of using her $6,000 savings to buy an iPad, Willow Tufano bought herself a distressed property. And now she’s renting it out. Willow got help from her mother, who doubled her investment. Together, the two spent $12,000 to buy a 3-bedroom Florida short sale that, in better times, was valued at $100K. Now they are partners, since Florida requires a homeowner to be at least 18 years of age, but Willow plans to buy her mother out as soon as she can so she can own the home outright when she reaches the legal age.”

Admittedly, it’s a pretty incredible story, and certainly not the norm. But right now I’m seeing a lot of market activity which suggests that, despite what you read in the media, we may see see an uptick in sales and pricing on the North Shore. I think fear has been holding back a lot of people from seeing clear investment opportunities, and well, sometimes it takes the wisdom of a child to help us see the way!

March 2012 Home Prices Up 2.5% over 2011

March 2012 existing home prices were up 2.5% over the same period in 2011. The number of homes sold was also up 5.2% over last year, but down from February 2012.

 We have recently been seeing inventory levels of real estate for sale in Massachusetts lower than they have been in a long time, which can make it a little more difficult for home buyers to find exactly what they are looking for. When they do find it, chances are there are several other buyers looking for the same property. This creates competition, hence we are seeing slightly higher home prices. We are seeing more bidding wars going on and more properties being sold over asking price. Mind you, these are the properties that are priced correctly for the market in the first place.

With the number of home buyers out there, if you are selling your home and you do not receive an offer on your property within 30 days, then it is overpriced. In fact in most cases, if you do not receive an offer on your home within 2 weeks, chances are that your home is not priced correctly. Today's home buyers are very knowledgeable about where property prices should be. On the average, they will take 45-60 days doing research online before they even go out to look at their first home. If your property is not priced right, you lose that buyer, who will most likely buy something else before you adjust your price to the correct market value.

Most people don't realize that pricing is part of real estate marketing. In fact, it is the most important part. If you do not price your home correctly I don't care how much promotion & advertising you do - it is not going to sell. Look at any other product for sale. Pricing is critical to it's success. Of course pricing a home, especially in this market,  is a lot more difficult than setting a price for most products because every property is different. That's why I say that determining the value of a home, either through an appraisal or a market analysis, is 75% science and 25% art. A lot depends on the knowledge of the individual performing the valuation, and the market conditions.

Jim Armstrong

Question: Bank Owned Homes on Trulia.com

Question: I see homes on Trulia.com that appear to be for sale, but I can't find any information on the properties. They say the information is provided by RealyTrac, but I can't find any more info on their web site unless I pay for it. Where can I get the full information and address?

Answer: The properties that say "Provided by: RealtyTrac" are ALL pre-foreclosure or bank owned. They are not for sale or on the market - yet. If you want the full information on the property you will have to pay for membership with RealtyTrac.com. These listings are really just a form of advertising by RealtyTrac to get people to pay their for their service. If it is bank owned property you are looking for, then it is just a matter of time before it appears on the MLS (it might be several months). ALL bank owned properties are eventually listed on the MLS.

Trulia, Zillow and similar real estate listing sites are notoriously inaccurate and do not have timely information on them. I recommend to all my clients that they not use them because of that. It will just make them frustrated (like you).


Jim

Massachusetts Pending Home Sales Continued Positive Trend in March for 11th Straight Month

First month since June 2011 to go over 4,000 homes mark WALTHAM, Mass. – April 10, 2012 – The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes put under agreement in March went up again for the 11th straight month compared to the same time in 2011. Condominium pending sales were also up from the same time last year. Pending figures are a leading indicator of actual housing sales in Massachusetts for the following 2-3 months. “Activity in the market place continues to build as reflected in the number of homes that went under agreement in March,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “We are taking important steps towards market recovery with each successive month of increased pending sales.” The number of single-family homes put under agreement in March was up 38.8 percent compared to the same time last year (*3,256 homes in 2011 to 4,519 homes in 2012). This is the 11th straight month of year-over-year increases and the first month since June 2011 to go over the 4,000 homes under agreement mark. This month also had the most pending sales in March since MAR has been tracking the data. On a month-to-month basis, single-family homes put under agreement went up 34.2 percent from 3,368 homes in February. The number of condos put under agreement in March was up 30.4 percent compared to March 2011 (*1,422 units in 2011 to 1,854 units in 2012). On a month-to-month basis, condos put under agreement were up 45.2 percent from 1,277 units in February. About Pending Sales: The tracking of signed purchase and sales agreements (also called “pending sales”) provide reliable information about where the real estate market is heading in coming months. A pending sale or a sale “under agreement” is when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such. MAR is the only organization which compiles this statewide information from Multiple Listing Services each month. http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1786&news=31

Question: About A Listing Contract

Question: We are in a contract listing with an agent to short sell our property. There was an offer made and the listing agent did not even tell us about it. They rejected the offer and claimed they made a counter offer, but no counter offer was provided. There was nothing on the offer that they said they rejected it for except it was $2,000 less than the list price. What are our options? Can we cancel this and go with another broker (they have a fee for taking our listing off)? Would we still be able to work with the person that made the offer if we are relisted with someone else (90 days limit within contract unless we sign an exclusive listing with another broker)? Thank you.

State: GA

Category: Foreclosure / Short Sell

City: Alpharetta

Zip: 30005

Answer:  You would have to check with an attorney or another Realtor who is familiar with Georgia laws, but in Massachusetts all offers must be presented to the Seller in a timely manner. Unless it is stated in your listing contract, your agent has no legal authority to make counter offers without your input. This alone could be enough to claim a breach of contract and allow you to cancel your listing contract with your current agent. You should not have to pay any fee to do so. Typically, after cancelling your current contract you can sign a new exclusive contract with a different agent and the 90 day requirement to pay a fee to the old listing agent would not apply if buyer purchased your home that had seen it before. 

My Disclaimer: The above information is not to be construed as legal advice, but is merely my opinion. Please consult with with an attorney to verify any and all of the information I have given you.

Good luck.

Jim Armstrong

Read more: Ask a REALTOR Answer | REALTOR.com® Blogs 

Massachusetts Pending Home Sales Up for 10th Straight Month in February

WALTHAM, Mass. – March 13, 2012 – The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes put under agreement in February went up again for the 10th straight month compared to the same time in 2011. Condominium pending sales were also up from the same time last year. Pending figures are a leading indicator of actual housing sales in Massachusetts for the following 2-3 months.

“This was the largest year-over-year increase in pending sales since we’ve been tracking this data,” said 2012 MAR President Trisha McCarthy, broker at Keller Williams Realty in Newburyport. “Buyer confidence continues to grow and the numbers confirm what REALTOR®-members across the state have been reporting; they’re busy. If these pending sales hold together through closing, we have the potential for impressive increases in April and May closings.”

The number of single-family homes put under agreement in February was up 44.2 percent compared to the same time last year (*2,335 homes in 2011 to 3,368 homes in 2012). This is the 10th straight month of year-over-year increases. This was the largest year-over-year increase since MAR has been tracking this data. Prior to the previous record in January 2012 (39.4 percent increase), the largest increase year-over-year was 32.3 percent in April 2010. On a month-to-month basis, single-family homes put under agreement went up 18.3 percent from 2,846 homes in January.

The number of condos put under agreement in February was up 35.3 percent compared to February 2011 (*944 units in 2011 to 1,277 units in 2012). On a month-to-month basis, condos put under agreement were up 20 percent from 1064 units in January.

About Pending Sales:
The tracking of signed purchase and sales agreements (also called “pending sales”) provide reliable information about where the real estate market is heading in coming months.

A pending sale or a sale “under agreement” is when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such. MAR is the only organization which compiles this statewide information from Multiple Listing Services each month.

About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 18,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.

*Please note: As of January 2012, all 2011 pending home sales data has been updated to reflect new collection methods from the three REALTOR® affiliated Multiple Listing Services in Massachusetts via 10K Research and Marketing.

http://www.marealtor.com/content/NewsTicker.htm?view=38&news_id=1777&news=31 

Do I Have to Pay Taxes on my Short Sale Debt That Was Forgiven by my Lender?

Question: I did a short sale on my home in 2011, and I received an IRS form 1099 for the difference on what I sold my home for and how much I owed on the mortgage. That's almost $50,000 in extra income I now have to report on my tax return and pay taxes on - and I don't have the money. What can I do? Help!


Answer: Your former mortgage holder sent you a 1099 because the IRS requires any debt that is forgiven to be reported as income. They were required to send them out by February 2nd. The good news is that you won't have to pay taxes on it. Because of all the foreclosures and short sales, the IRS in their divine wisdom and ultimate compassion (yeah, sure) has decided through 2012 not to tax people on income derived from forgiving debt (that was really only received on paper). When you do you taxes you will need IRS form 982. Please consult your tax adviser for more information, and go to the IRS link below:

http://www.irs.gov/individuals/article/0,,id=179414,00.html 


There are still plenty of people out there that owe more than their home is worth in this current real estate market , and if they want to sell they will have to do a short sale (or come up with the difference in cash). Although we are hoping that the IRS will extend the exemption to pay taxes on debt forgiveness incurred during the sale of a home, you can't count on it. If you are considering doing a short sale, you should make sure it happens in 2012 or you could owe thousands in taxes. With the timeline needed to process a short sale, that means you need to get your home on the market by early summer at the latest.


Contact me directly if you want more information on selling your home when you owe more then its market value. 
Jim Armstrong - 978-394-6736
jarmstrong@armstrongfield.com


The information above should not be construed as tax advice, but is given just to make you aware of some important tax information. You should always consult your accountant or tax professional for advice.

Make Your Home Appealing to Buyers

As you start to gather up your belongings and pack them away for your move, many sellers question which items they should leave out for buyer appeal.

Often the wrong items are left on display; things like family photos, personal keepsakes, and treasured belongings. All of these items should be safely packed away which very often creates open space (a plus for buyers) on shelves, refrigerator doors, and desktops.

Buyers often make a decision within just seconds of seeing your home about whether or not they want to buy it. So picture your home through the eyes of your potential buyers. What do you see in about 10 seconds?

When you walk up do you see children's toys scattered across the front lawn? Do you see overgrown shrubs and weeds? Do you see chipped paint on the front door, a screen that's torn? Do you spot oil spills on the driveway?

Even answering yes to just one or two of those questions can be damaging, and that's before your potential buyer has entered your home. Sometimes, those seconds are all the buyers need to decide to simply do a "drive by" and not even stop to go inside.

Of course, the goal is to get the buyers inside. To get them to spend time, feel like your home could be their home. But even though that goal is so widespread and common among sellers, somehow the decisions some sellers make are almost completely polar to the goals.
Let's look at five tips that can make your home appealing to buyers.

Check all the screens and molding around your windows and doors. This isn't at the top of a seller's list but it ought to be. Even slightly torn screens send a careless message to buyers. It gives an unconscious uneasiness that there's been, at the very least, lack of care for this home.

Something simple like fixing a screen is often overlooked by a seller because it is so simple, yet, just seconds of seeing the ripped screen can cause a negative impact for buyers.
Add artwork to long hall ways. You don't have to buy artwork that costs thousands of dollars but, if your home has long hall ways, it's nice to break up the monotony with some tasteful artwork. Use contrasting shades and hues to coordinate with the flooring. When you're shopping for the artwork or borrowing it from a friend or your real estate agent or homestager, bring swatches of the carpet or flooring and wall paint to match the artwork colors.

Make the kitchen a focal point. Whether they cook or not, the kitchen is of primary interest to many buyers. Winning over buyers with an appealing kitchen can often convince them that they must have the home. Make sure your appliances are clean, sparkling, and working. Return on investment in the kitchen is usually high and worth every penny, and more, you put into it.

Put the "ah" in the bedroom. The bedroom needs to look like a bedroom. Sounds funny, but many people use their bedroom for other things such as an office or storage. Boxes or newspapers are scattered or stacked in a corner. There's no "ah" or sense of relaxation with that kind of room. So even if that's how you've been living, understand that's not how you should show a home.

If there isn't much space, clear the clutter out. Remove excess furniture. It doesn't matter if you use it. You can walk to another room to get what you need if it means you sell the home faster because it now looks more inviting and spacious.

Making your home more appealing is about seeing your home through the eyes of your potential buyers. When it comes time to go over the offers, you'll be glad you did. 

Home Affordability Climbs to its Highest Level Ever

The National Association of Home Builders/Wells Fargo Housing Opportunity Index came out with the latest figures for housing affordability. Housing affordability rose to a record high during the fourth quarter of 2011, which means a home buyer’s purchasing power is greater than it ever has been before.

The index showed that 75.9 percent of all new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200, according to the index. That marks the highest percentage recorded in the index’s 20-year history.

"While today's report indicates that home ownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting home buyers and builders remain significant obstacles to many potential homes sales, even with interest rates at historically low levels," says Barry Rutenberg, chairman of the National Association of Home Builders.

See more here: http://realtormag.realtor.org/daily-news/2012/02/17/housing-affordability-reaches-new-records

30-Year Rates Continue to Hold at Record Lows

30-Year Mortgages Rates Continue to Hold at Record Lows

Fixed-mortgage rates continue to hover at record lows, with the 30-year fixed-rate mortgage staying at the record low of 3.87 percent since the first week of February, Freddie Mac reports in its weekly mortgage market survey. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has been below 4 percent for the past 11 weeks.

See more details at the National Association of Realtors' web site:
http://realtormag.realtor.org/daily-news/2012/02/17/30-year-rates-continue-hold-record-lows

Pending Sales in Massachusetts is up 39.44% in January 2012

 The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes put under agreement in January went up again for the ninth straight month compared to the same time in 2011. Condominium pending sales were also up from the same time last year.
 
The fact that we have been experiencing a very mild wither with minimum snowfall has kept home buyers out there looking - and placing properties under agreement. Compare that with last year when we were buried with snow, which keeps the buyers from venturing out of their homes (or apartments).

By the weather isn't the only thing driving the real estate market. The continued improvement in the unemployment rate and more confidence in the economy in general reassures potential home buyers that they won't be losing their job anytime soon. The low mortgage interest rates combined with lower housing prices has made homes more affordable than any other year since the early 1970's.

The number of single-family homes put under agreement in January was up almost 40% percent compared to the same time last year (*2,041 homes in 2011 to 2,846 homes in 2012). That is a huge increase that can't just be contributed to a milder winter. This is the ninth straight month of year-over-year increases. On a month-to-month basis, single-family homes put under agreement went up almost 2 percent from 2,794 homes in December.

The number of condos put under agreement in January was up 25.77 percent compared to January 2011 (*846 units in 2011 to 1,064 units in 2012), another big increase.  On a month-to-month basis, condos put under agreement were up less than one percent at 0.66 percent from 1,057 units in December.

What does this mean to you? Well, if you are thing about placing your home on the market, this is a good time to do it. The inventory of homes is at a low point right now, which means less competition for your home. Less competition means you should be able to sell your home quicker and for more money.

About Pending Sales:
A pending sale or a sale “under agreement” is when the buyer and seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close and be recorded as such.  MAR is the only organization which compiles this statewide information from Multiple Listing Services each month.
 

Home Affordability Offering Up 40-Year Deals

   Home affordability is at 1971 levels, due to falling home prices and record low mortgage rates, pushing home ownership in reach to more families, according to the U.S. Department of Housing and Urban Development (HUD). Home owners are bringing in nearly double the median income they need to cover the cost of an average home, HousingPredictor reports.
 "With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. 
    However, some consumers are finding more stringent lending standards for getting a mortgage a roadblock to home ownership.
http://realtytimes.com/159/JimArmstrong

Questions About Market Value of a Home

Question: Hi Jim, Why is this house priced almost $20,000 than it's assessed for? I know they bought it on 2005 for $350,000, but at today's market it seems unrealistic. It has no garage which would have to be built! I know this is not your listing, but do you know anthing else about it? It's been on the market since November 2011 and already has been reduced, but I believe it is not enough of a reduction. Thanks so much. - Kathy
In reference to the follow property: http://www.afhomesearch.com/properties/Danvers/Wadsworth-St/2850427

 Answer: Kathy,

The assessed value of a home has no relationship to the market value of a homes. The way the town determines assessed value differs from the way a Realtor or an appraiser determines value because it is done for tax purposes. Plus, assessments are usually 2 years behind market value, and many times don't include any recent upgrades.

This particular home is actually under agreement, but they are continuing to show it for back up offers. It is a short sale, which means they are selling it for less than what the seller owes to the mortgage holder. According to public records, the seller still owes more than $300,000 to the lender. There no way of knowing what the current offer is on the property, but it is property close to the current list price.

No, it doesn't have a garage, but that doesn't matter to many people. It is in a nice neighborhood, has a good size lot, and has no neighbors in back of the property, so it is a desirable home. It is also in very good condition and shows very well, which many buyers are willing to pay a little more for. The inventory of available single family homes on the North Shore is actually quite low right now, partially due to the time of year, but also because the market is very busy. This is keeping home prices stable, and in some areas we are even seeing slight increases in value. Danvers, MA only saw a 1.45% drop in home prices in 2011, and most of that happened at the beginning of the year. Towards the end of the year the prices were starting to edge up.

I am always available to answer any questions you might have. It doesn't matter if I am the listing agent or not. Let me know if you would like to see any home on the market.

Thanks.

Jim Armstrong
Broker/President
Armstrong Field Real Estate
Mobile 978-394-6736

Boston among cities set for a real estate rebound

The New England hub has a low 5.7 percent unemployment rate thanks to the presence of more than 100 universities and colleges in the metro area and a variety of biotech and financial services companies. “Income is well above average. The housing boom was mild, with a 16 percent rise in prices followed by a 10 percent drop. The recession also was mild, with jobs down just 2 percent,” explains Winzer. Clear Capital and Trulia also have positive forecasts for Beantown this year

See the entire article at: San Jose, Boston among cities set for a real estate rebound

The North Shore Massachusetts Real Estate Market in 2012

Where is real estate going in 2012?

I know everyone gets confused by all the real estate news that you read about almost every day with each report contradicting the other. Each author usually has an ultimate agenda when writing an article. Those who make their living in real estate try to paint a good (or not so bad) picture of the market because they want to encourage people to buy or sell a home. On the other hand the typical reporter working for a newspaper wants to attract viewers to his/her article, and nothing does that better than doom and gloom - bubble bursting, rising foreclosures, etc. When reading these articles, if you are interested in what is happening with your north shore home's value, or want to know if now is a good time to buy in Massachusetts, then ignore all the national statistics. What is happening in Nevada, Michigan or Florida has almost no bearing on the local market here in Massachusetts.
Trulia.com, a leading internet real estate company, has come out with its top five places slated for a quicker recovery. They are Austin, Houston, San Jose, Boston, and Rochester, NY.  The Boston area is home to the technology belt with lots of smart, well-educated people.  Highly educated, tech-savvy cities tend to push through the recovery quicker than other parts of the country. 2011 brought a stabilization of prices on the north shore, with the average home selling for $386,251, statistically insignificant from the average of $390,794 in 2010. Even though I predict it will be a robust year, watch for stable prices in 2012 as more foreclosures coming on the market, holding down any valuation increases.

Right now we currently have 5.7 months supply of single family homes on the market. A normal market is considered to have 5 to 6 months worth of inventory, so we are approaching something close to "normality". The average days on market (DOM) for sold single family homes last year was 137 days. I would like to see the days on market below 125 before I feel we are back to a normal market. During the last few years the DOM has been between 125 and 140, while during the "Home Rush" of 2000-2005 it was just 71 to 93 days. Back 15 years ago in 1997, which was what could be could a "normal" year, the average DOM was 102 days.

The total number of homes sold, down slightly last year over 2010, will increase as interest rates stay at record lows, unemployment continues to drop and job security increases, and home affordability remains the highest in decades. Buyers will step off the sidelines and into home ownership as consumer confidence returns and realize that owning is now less expensive than renting on the north shore of Massachusetts. 

Jim Armstrong

Broker/President

Armstrong Field Real Estate

But MY House is Worth Much More Than That!

This weekend, on New Years eve, I place an offer on behalf of one of my buyer clients on a property in Lynn. This home is a 3 family in a nice area and has a good size double lot. It also has new heating systems, a newer (7 years old) roof and a garage. The kitchens and baths are outdated, however, and there is quite a bit of cosmetic work that needs to be done in all three units. The 2nd and 3rd floor units also share a heating system and a hot water heater.


 This home is listed in the low $300,000's. I looked up what sold within the last 6 months in Lynn for 3 family homes. There were only 3 sales in Lynn that went just above $300,000 - and those were properties that were completely rehabbed with new kitchens & baths. The average 3 family sold for just over $220,000. Now there are many factors that go into determining the market value of a home, so you can't just take the average price and think that this is what the property is worth. After looking at similar properties, I determined that $280,000 was a fair price to offer to the seller. In fact, there had been only 5 three family homes in Lynn that had sold for more. I submitted my buyers' offer along with an explanation to the seller of how we derived at that price, and a list of all three family homes that had sold showing that his asking price was too high.

The seller rejected the offer without even giving us a counter-offer. The listing agent said the the seller wanted to get a offer very close to his asking price. He didn't care what the reality of the market was, and that he had put a lot of work in the house and it was worth much more than what the statistics showed. Needless to say my buyers were put off by this, and didn't want to submit another offer.

Before this property was listed, the seller's agent showed him all the comparable properties, the market stats, and the properties that were currently listed that would be competing for the same buyers. He chose to ignore all that information and the advice of the professional that he hired, and came up with his own list price.

It will be interesting for me to watch this listing, because if it is follows the usual pattern of overpriced listings this property will have its list price drop until it reaches a point where it is in line with (or below) the market. The multifamily market is hot right now, and if a property is priced right it sells in a matter of days. If it is not priced right, it will just sit on the market for months. This particular property had just come on the market last week, and had it been priced right it would have had several showings. My buyers were the only ones to look at it, and that was because the property suited what they were looking for, even if it was overpriced.

I will probably receive a call from the listing agent in the near future asking me if my buyers are still interested in home because they hadn't received any other offers. Unfortunately for the seller, my buyers will probably have already purchased another home.

- Jim Armstrong
Here is a good article on overpricing a home:
http://www.forbes.com/2002/11/22/cx_bs_1122home.html

Barter Your Goods and Services For Marketing and Selling Your Home

Armstrong Field Real Estate is now a member of New England Trade - a business bartering group that serves New England with affiliations across the United States. What does that mean for you? If you own a business, and want to sell your home or business, we will represent you and market your Massachusetts home (or business) for no cash out of your pocket! You trade your services or goods for it. Now many of us already do some private bartering with other business owners. But if you are an electrician who does a $1,000 job for someone that owns a dog grooming business, well, you probably don't need $1,000 work of dog shampooing and styling. What happens with New England Trade is the $1000 gets credited to your account, which you can then spend with any of their other members - and there are literally thousands of different products and services available. See a sampling here: http://www.newenglandtrade.com/what-can-i-buy/goods-and-services.aspx

What are some the advantages of bartering through a trade group?

• You will receive new customers who would not normally do business with you. New England Trade members tend to travel longer distances then your regular customers because they would rather pay in trade credits.
• You can buy things that you need for your business - office equipment and service, printing, advertising, bookkeeping, web design, etc. on trade, and save your cash for the utility bills and rent.
• Increase your inventory turnover of billing hours.
• Fill up your slow times with business you normally wouldn't receive.
• Barter credits can be used regionally and nationally.
• Take a vacation on Trade (I've been on a cruise to Bermuda and a trip to Jamaica on trade with a previous business)

There are many more advantages. So if you own a business of any kind, and you want to sell your home, call me and I will explain how it works. If you don't want to sell your Massachusetts home or business (at least not now), but would like more information on joining this trade group, contact Tammy Penny at New England Trade at 781-388-9200.

Jim Armstrong
Broker/President
Armstrong Field Inc.

Cell 978-394-6736

Office 978-740-8700

Homes Sell Better in the Winter?

RedFin Corporation, a Seattle based real estate company, released some statistics on selling a home in the winter versus other times of the year. The data is from approximately 750,000 homes sold over a year across the country, and then analyzed by season. Here are the basics:

• Homes listed in the winter sell faster compared to the summer: 46 days versus 55 days.
• Homes listed in the winter are more likely to sell at all: 59.2% versus 53.1%
• Homes listed in the winter sell closer to their original list price: a drop of 2.7% in winter versus a 5.2% drop in the summer, which is more than $7,000 on a $300,000 home.

Surprised? Most people would be. But the fact is, there are less homes on the market, which means less competition for qualified home buyers. There are less home buyers in the winter, also, but the ones that are looking are the really serious buyers and not just the lookers and nosey neighbors, who we don't want anyway.

The time of year where a home sells the fastest is still the spring, spending 15% less time on the market than the median for the entire year. Winter takes second place in this category, though (over summer and fall), selling 6% faster than the median.

I'm not guaranteeing that your home will sell quicker and for more money than other times of the year... or even at all. There are too many other factors and variables that come into play to make an across-the-board statement like that. What I am saying is that in most cases, winter is NOT a bad time to list and sell your property, and if you want to sell - don't wait until spring!

- Jim Armstrong
Want to talk? Call me at 978-394-6736
Armstrong Field Real Estate

http://blog.redfin.com/boston/2011/12/should_i_wait_until_spring_to_list_my_home_-_boston_edition.html

Real Estate Facts & Figures

Below are some facts and figures about the current real estate market, and what people think about it.

• 81% of Americans view real estate as a good investment
• 78% of Americans feel that housing prices will hold steady or increase over the next 12 months.
• It is cheaper to buy/own a home than to rent in 80% of the major markets in the US.
• 25% of young Americans plan to buy a home in the next two years.
• 95% of homeowners are happy they decided to buy a home.
• First time home buyers comprise 35% of the total home sales.
• 67% of first-time home buyers said that the real estate market conditions gave them the opportunity to purchase a home sooner than expected.
• 50% of buyers found a home in a better neighborhood than expected.
• 61% purchased their home at a price better than expected.
• 43% received a mortgage interest rate better than expected.
• 69% of Americans say that now is the best time to buy a home
• 88% of people search for homes on the internet, and 40% found the home they eventually purchased on the internet.
• 87% used a real estate agent to buy a home.
• For Sale by Owner homes reach a record low, only accounting for 6% of total sales.
• The average home seller was in their home for 9 years, and had 16% increase in equity when they sold it.
• The median age of a first-time home buyer was 31. The median age of a home seller was 53
• 60% of first-time home buyers bought because they "just wanted a home of their own".
• The median down payment for first-time home buyers was 5%.

This information was compiled from two surveys, including one just released by the National Association of Realtors.