Helpful Buyer Info

If you had to choose would you pick a bigger backyard or a bigger house?

If you had to choose would you pick a bigger backyard or a bigger house?

Whenever anyone engages me a conversation about real estate (which is quite often) or when I’m at a party and need a little conversation starter I ask “If you had to choose would you pick a bigger backyard or a bigger house?” You’d be amazed at the answers I get. There is one consistent response. The answer I get the most is … “It depends on how you live your life”.

If you’re wrestling with this very question, I think the best thing you can do is make a personal list of pros and cons to help you with making the decision. Here are some of the responses I’ve gotten, I hope they might help you jump start your own list.

Reasons to go with a bigger yard:

  1. Having other houses close to you an issue
  2. Less house to keep clean and the kids can play outside
  3. Vegetable and flower gardens, picnics and campfires
  4. Active kids with any sport involving a ball and a stick
  5. Beautiful weather year-round makes the yard an extension of the house
  6. Large animal pets, barnyard animals, chickens
  7. Enjoy working outside
  8. Bigger house is just too expensive to maintain/clean/heat/keep cool/etc.
  9. You can always add on to your house but you won’t be able to add on to your lot size
  10. A larger yard tends to mean more privacy
  11. Hate house work and cleaning
  12. The amount of time, energy, and effort to maintain a big house is too much
  13. Bigger house means you have to own more stuff to fill it … just too much temptation to accumulate stuff.
  14. Yard is more environmentally friendly than house
  15. Like big kid toys like motorcycles, snowmobiles, boats, etc.

Reasons to go with a bigger house:

  1. Grew up in Cambridge, what’s a yard for?
  2. With unpredictable weather a bigger house gives you more inside space to spend your time
  3. Really love house cleaning (yes, some people really do)
  4. Large yards take lots of maintenance
  5. Into crafts and cooking and love to entertain
  6. More storage space
  7. Hate yard work and it’s just a burden
  8. If you can afford a housekeeper, a bigger house is all living space
  9. Additions are expensive if you need them later
  10. Public parks are everywhere and they’re free
  11. You’re in your house more than you’re outside in general
  12. We went from a small house and a bigger yard to a bigger house and smaller yard and I definitely like the bigger house
  13. A large home is the home of our dreams
  14. A large home stimulates more social interaction among the members of the family
  15. Really love to decorate

As I said before, your decision really depends on how you live your life. I personally don’t think there really is any one right answer for everyone, but the results of my totally unscientific research suggest that the majority of people tend to want a bigger yard.

7 top reasons people sell their homes

7 top reasons people sell their homes

Back in May the US Census Bureau started releasing information from the latest Census. One of the points that I found amazing is that between 2009 and 2010 more than 16.4 million people (four out of every ten) moved for housing-related reasons. Over the years I’ve been compiling my list of why people move  and thought I’d share it with you.

The number 1 reason people move is because of a job change. That may be because of a promotion, one or more of the family members getting the job of their dreams, to cut down on the daily commute (most people find anything over an hour okay for a year or so but much longer than that it becomes a total drag), or just that they’re moving to an area with better job prospects in their chosen career field than their current location.

The number 2 reason people move is because the size of the home no longer fits their needs. Sometimes their home is too small. Their “starter home” is cozy and they love it but their growing family is quickly running out of space. And on the other end of the spectrum often the home that was once appropriate is now just too big. This used to be primarily “empty-nesters” or retirees, but for many good reasons downsizing is being considered a sensible option for a much wider cross-section of our population.

Third is what I call “the upgrade”.  People get promotions and raises and have the opportunity to buy the home of their dreams. Sometimes they just want a bigger, grander, upscale home to impress other people.  Other times it’s because they love entertaining. And many times it’s because they consider it a great investment for the current stage of their life.

People also move because there are changes in their personal life:  they get married or divorced; their family size changes with the birth of a child or the death of a loved-one; their declining health makes it difficult for them to navigate their homes safely; or they need to be near to (or for that matter away from) family members.

Then there are what I call the “forced” moves – especially with the freakish weather we’ve been having lately, people can be displaced because of natural disasters. Not much to say about this one except that nature can change oceanfront property to a sandbar in about 24 hours.

It has also been my experience that people will move to “fix” a mistake they believe they made when the purchased their home.  Often it’s because the unconventional layout with the kitchen at the other end of the house from the garage or that sunken living room tripping hazard really doesn’t work for them. Other times it’s because contrary to what they thought, being under the flight path for the airport really does bother them.

And last, but not least, is what I call “moving because of the neighbors-from-hell“. In general terms, people move because they experience changes to their neighborhood that they find less desirable. These can be physical changes, e.g. a highway is built nearby. I have a friend who moved because her neighbors had their huge, extended family move in with them and they moved their dining table out on the front lawn and put up lighting. I also must confess that I moved once because of a hellish neighbor.

To wrap it up, in ancient times people moved in search of food, safety, appropriate space and a more hospitable environment.  Come to think of it… not much has changed, has it?

You Really Want to Buy a Short Sale?

You Really Want to Buy a Short Sale?

Mr. Seller goes to his mortgage company(s) and says, “I want to sell, but I don’t have any equity and the house is worth less than the amount I owe you. I need to sell anyway because based on my current circumstances, continuing to keep the home is a serious hardship and I can’t hold on, so what do I need to do to get out?”

What the Seller has just done is to ask his Mortgage Holders/lienholders to take a loss when his property is sold, this is called a SHORT SALE. Lienholders don’t like to take losses (an understatement) and they are going to be resistant to this request from Mr. Seller. However, the current “perfect storm” of poor market conditions has forced them into a position where they may agree to Mr. Seller’s short sale as long as it is going to be more favorable to them than going to foreclosure – in time, trouble or money lost.

But, (and there is a big, whopping BUT …) the mortgage companies reserve the right to approve EVERY term, condition and cost of the sale. So not only are we in a Buyer’s Market with lots of inventory to choose from, we have a seller who is virtually powerless in the transaction.

ARE THESE NOT THE PERFECT CONDITIONS FOR BEING A BUYER?!!!

There is another short-seller we should discuss, the reluctant seller. While Mr. Seller above is so very motivated, let’s take the case of the family that is forced to sell thanks to their loan being one of those adjustable rate or combination loans that has adjusted and is now beyond the point of their ability to pay. They have to sell, they are going through the short sale process, but they really aren’t motivated. Why? Because they have to move. And where are they going to move? Depending on their situation their credit may be less than stellar because of late payments and the short sale itself may show as a delinquency on their credit report. Who will rent to them?

Let’s say you get into a home to view it and you love it and want to put in an offer. You can do very well by buying a short sale house, but there are some things you need to know about this process. This is the point at which you need to put aside everything you have learned about the sequence of how a home is sold. Below are guidlines to going about it.

GET TO KNOW ALL YOU CAN ABOUT THE HOME

You are advised by your buyer’s agent that this home, typical of most short sales, is being sold “As Is” (see my blog post, “What does ‘As Is’ Mean?”, for more detailed information on this legal term)

The seller might provide you with a seller’s disclosure of property condition if you’re lucky, but that’s about all you’ll get. They may or may not have pulled permits for upgrades or work done on the house – you’ll need to investigate.

They definitely will not negotiate issues you uncover during a home/pest/lead paint/radon/mold/septic inspection.

Do you spend money to have inspections done or wait for the bank’s response? My advice, wait, but be prepared to move forward very quickly once you hear back from the bank.

Also if the property is a condominium or governed by a home owner’s association, your bank/mortgage company will most likely require a full set of condominium documents, meeting minutes, recorded deeds, occupancy rates, tenancy ratios, and more (what’s called a Full Review).

The condominium association can and will charge you money for this. Your mortgage is contingent upon receipt of this, but it’s going to cost you around $400 for copying charges.

What do you do? My advice is to ask your mortgage broker, and don’t do anything to jeopardize your pre-approval/commitment.

You have decided to submit your offer and now the wait is on…

PATIENCE IS A VIRTUE, GET READY TO HURRY UP AND WAIT

A short sale is the sale of a parcel of real estate that is short of the equity needed to sell it and pay off all liens. It is not short “time-wise”. You should plan on at least 120 days from your offer, but the amount of time can vary widely depending on the lenders, and if anyone says you will hear back in “x” number of days, you can’t believe them.

What happens during the wait? Well, besides Mr. Seller getting anxious waiting for his departure, the short sale file/package/request gets in line in the lender’s short sale department (also called the Loss Mitigation Department). This line is long, sometimes very long.

So, what happens during the wait is just that….the wait. Oh, the agent for the seller will be in contact as needed to re-fax lost documents, explain their research, answer questions about the local market, re-fax lost documents, etc. But you, the buyer…you just wait. It’s like the military … hurry up and wait. Or better yet it’s like the hospital … wake up and take this sleeping pill.

Many sellers’ agents do not give your buyer agent status updates on what’s happening while you wait…you just wait. When I represent the seller, I email the buyer agent every week to say what I know, even if it’s nothing, just to make sure that you, the buyer, are still there and somewhat paying attention. But as your buyer agent, there’s nothing I can do … if there were, rest assured, I’d be doing it.

Oh, as the buyer’s agent I know what’s going on….the paperwork is collected, the file is assigned to a “negotiator” who “negotiates” the short sale with the seller’s agent/attorney, and once the negotiator has the file’s required documents (exactly what that is varies by the lender) complete, it has to be signed off by their “team leader” or upper management, or a committee of managers. I check with the seller’s agent regularly to ask what is happening but again, often there is nothing happening, just waiting….

KNOW THAT YOU MAY GET “BUMPED”

Here’s the big elephant in the room: you have no guaranteed place “in line.”

If this short sale’s turn in the line comes up on the 120th day after submission, and someone else submits an offer slightly better than yours on day 119, you will be bumped! It is not impossible that a seller’s agent will work with offers one at a time until an acceptance is granted and you won’t get bumped, but this is a rare occasion, hasn’t ever happened to me yet.

It’s not fair, it’s not right, but it is reality. This is because the lienholders are losing money and need the most they can get, and it is the seller’s agent’s fiduciary responsibility to get the highest and best price for their sellers.

AFTER A LONG WAIT YOU MAY BE DISAPPOINTED

If you are willing to be patient, knowing that you could get bumped, and you’re convinced you want to purchase a home that is a short sale, I might advise you to submit multiple offers on multiple short sales. You may get the one you kind of like, and not the one you love, which might be a disappointment. You might not get any one at all, which can be very disappointing. The question then is, how well do you handle disappointment? Can you accept the lost short sale?

YOU JUST MIGHT GET A GREAT HOME AT AN EXCELLENT PRICE THAT MAY MAKE YOU SOME GOOD MONEY SOME DAY WHEN YOU SELL

So why would anyone consider buying a home that is subject to a short sale?

Quite simply – price!

If a seller is not going to make any money on the sale of their home anyway, you can imagine they are much more flexible on terms and price of the sale of their home. If you are the only person making an offer on the home (which it has been my experience you are), the bank will need to take your offer very seriously, even if you offer significantly less than the asking price for the house.

In many Metrowest Boston neighborhoods, short sales represent some of the best deals around.

There is no reason to be afraid of a home that will be subject to a short sale. In fact they may be some of the best values out there.

Just be prepared for a longer timeline, a little more hassle and be sure to use an attorney, mortgage company and if I may be so bold, real estate agent with some experience in short sales.

You may just find that incredible hidden gem at a bargain basement price.

Happy House Hunting!!!

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