Appraisal and assessment prices are frequently mistakened for each other. As a home buyer and home seller, it is important to remember the difference between these terms. A comparison of Burlington MA appraisal versus assessment prices can be found below.

What Are Assessment Prices

Municipalities levy a tax on homes. The calculation is based on a pre-established rate multiplied by an assessed value of a property. Assessments are created specifically for levying taxes and do not by any means relate to the current market price. Every city calculates assessed value using different formulas. They traditionally include land area, interior living area, and exterior components such as decks. Municipalities can re-assess real estate values and/or adjust the property tax rate on an annual basis.

What Are Appraisal Prices

An appraisal is a determination of the current value of a home by a authorized professional implementing specific techniques. Lenders employ appraisers to confirm that a loan is not being provided for more than the current market price of real estate. It is a part of their due diligence given that they hold most of the risk until you pay down the loan. Appraisers normally pull at least three similar-styled houses that recently sold within a certain vicinity. Since the market can vary several times, considering recent figures is important for an accurate appraisal.

A Comparison Of Burlington MA Appraisal Versus Assessment Prices

The actual price of a listing is defined by what a buyer is willing to pay, which can change constantly depending on circumstances such as the economy. Consumers should use caution when equating assessed values with the selling price of a home since they do not relate to one another. Some municipalities infrequently update assessed values and traditionally increase tax percentages instead. Only an appraisal can generate a true indication of present market price. This blog regarding a comparison of Burlington MA appraisal versus assessment prices was prepared by Peter DaMore at Law Offices of Peter T. DaMore Jr.. For additional resources on this and other related topics, contact Peter at 781-229-7900 or pdamore@ptdlaw.com.

A 1031 exchange is a method for postponing taxes when selling one property and purchasing another. It applies to business or investment real estate. When used properly, it can lead to significant savings. This blog details the benefits of tax deferred 1031 exchanges in MA.

Qualified Property

You must own qualified real estate before considering a tax deferred 1031 exchange. Qualified properties are ones used in a business/trade or for investment. They may be rental, land, residential, industrial, and commercial real estate. You must also intend to purchase new like-kind property that is also qualified.

Benefits Of Tax Deferred 1031 Exchanges In MA

Usually, when you sell an investment property, you pay capital gains taxes on the profits from the sale. This applies regardless of what the funds are used for afterwards. Taxes may be owed to the federal government and local state. Based on how many years you owned a property and the amount of equity, the taxes due can be quite large. A 1031 exchange enables you to put the equity from a property sale towards purchasing a new like-kind property and delay capital gains taxes until you sell that new property. Of course, another 1031 exchange may be an option on that future sale to delay taxes again.

Considering a 1031 Exchange

There are different elements to a 1031 exchange that you should be aware of prior to selling a qualified property. 1031 Exchanges are not something that you can take advantage of after the fact. You must intend to use an exchange when you list a qualified property for sale. Very exact guidelines must be adhered to to execute the exchange. This includes time frames for identifying and purchasing replacement property. A qualified intermediary must also be used to manage the exchange and funds. If a step or time frame is missed, all potential tax savings will be forfeited. Speak with an experienced attorney for detailed guidance on 1031 exchanges and to enjoy the full benefits of tax deferred 1031 exchanges in MA.

Buying luxury home is different from lesser priced properties. The offer, inspection, and mortgage process can be more time consuming and demand more diligence. On of your first steps should be hiring a real estate agent to guide you in the process. In this blog you will find some Burlington MA luxury home buying tips.

Selecting an Agent and Formulating Bids

Determining home values and negotiating luxury home prices require specialized understanding of the luxury real estate market. Luxury homes also feature amenities not normally available in lower priced homes, thus not all real estate professionals will be equipped with the experience and training to correctly advise you on pricing. Selecting a good Realtor who specializes in luxury homes is important for price negotiations as well as other primary phases in the luxury home buying process.

Luxury Home Inspections

Inspection of luxury real estate can demand special skills and lengthy time frames. Luxury homes often include unique features and systems that not all inspectors have experience with. If you do not know a luxury home inspector, ask your buyer agent for a recommendation. Also allow more time for the inspection to be completed, especially when purchasing large estates. Inspections are a means to better understand the condition of property you are investing in. Do not skip or rush through this informative step.

Loans for a Luxury Home

Most luxury real estate is acquired with some type of financing. Higher dollar values often lead to jumbo mortgages. This type of financing can take a little longer for approval. They sometimes also require additional financial paperwork or appraisals. Keeping sufficient personal financial records will help speed approval. Although this process can require more time than cash transactions, most buyers with mortgages can effectively compete with cash buyers when offering attractive terms. Your buyer agent can advise you on the best way to present your offer in bidding scenarios.

Additional Burlington MA Luxury Home Buying Tips

The Burlington MA luxury home buying tips above contain merely a few key items. A buyer agent can provide more comprehensive information and support. The right agent can also ensure a smooth experience for your luxury purchase.

An article regarding Massachusetts Home Sales Rose Sharply in April was written by Boston Globe on May 14, 2013. More encouraging housing news…..

Excerpt of “Massachusetts Homes Sale Rose Sharply In April”

There were 5,948 single-family Massachusetts homes put under agreement in April, up 32.8 percent on a year-to-year comparison basis, the Massachusetts Association of Realtors, or MAR, said Tuesday.

That was the most homes that have gone under agreement in any month since the association began tracking data in January 2004, the association said in a press release.

Click here to read the full article.

For questions on this topic, contact Peter DaMore, Attorney at Law Offices of Peter T. DaMore Jr. at 781-229-7900 or pdamore@ptdlaw.com.

Pricing is directly related to the time frame for selling a listing and whether it will sell at all. It is especially critical in a buyers market. The following is advice on marketing Burlington MA homes to sell in a declining market.

Recognize the Real Estate Market

Every real estate market varies. When you see information on television, those typically refer to national averages. Your particular neighborhood can be dramatically different. A local real estate broker can prepare a market analysis on your property which evaluates recent sales of comparable homes and renders an estimated price range for your property. This amount may be different regularly, so do not refer to outdated figures.

Be Practical

When reading the market report, remember that it is a range. Where your listing falls within that range depends on the competition and your desired time frame. As a home owner, it is common to be proud of your home and the time and effort that you have put in. Unfortunately, not all potential buyers will assign equal value to the amenities and upgrades. Anticipate that you may not receive back the full amount of repairs. Additionally, home prices may be impacted by foreclosed homes in the region, which are commonly sold at significant discounts and are still considered comparable properties. Market value is really the price that a potential buyer is willing to pay for a house at the present time. It may not necessarily match your estimates or resemble what you paid for the property.

Marketing Burlington MA Homes To Sell In A Declining Market

Marketing a property above market value can result in extended listing time frames. If the real estate market drops further during that time, the home will actually sell for much less than it could have if positioned correctly from the beginning. Additionally, home buyers generally have a negative perception of homes with lengthy market times. This is difficult to overcome even if a home drops in price eventually. Overpricing causes more damage than good.

Some Final Words for Sellers

If the market value of your property is dramatically different than what you are willing to sell for, it may be best to monitor the pricing trends and wait for sales to improve rather than pricing high and having little success for an extended period of time. If you must sell and need to do so in a defined window of time, choosing a price reflective of the real estate market and in line with other listings will be crucial to accomplishing your goals. Time is money and overpricing can be more expensive than you expect.

The assistance of a MA real estate attorneys is useful or even vital at certain stages of the home buying process. Although real estate professionals can provide you with general guidance on purchase and sales agreements, they are not permitted to practice law. There may be situations where you want an attorney to analyze specific legal terminology or create special terms for a contract. The following is guidance on finding MA real estate attorneys to represent your real estate purchase.

Different Specialties of MA Attorneys

There are a variety of attorneys, each experienced in an individual field. For a similar reason that you would not consult with a foot doctor for a heart problem, you should not use an attorney that focuses on a field other than real estate. MA real estate attorneyss stay informed on local laws and typical real estate contract terms, and will therefore be best skilled to advise you. Given that buying a home is a large investment, finding MA real estate attorneys to represent your real estate purchase would better promote your interests.

Finding MA Real Estate Attorneys To Represent Your Real Estate Purchase

Most lenders hire a real estate attorney (or title company) to complete your closing. It is common for the attorney to offer to review the purchase and sale for you, either at no cost or for a low charge. In most cases, these attorneys can provide a very good job assisting you. Know that even though they will help you, they do work for the mortgage company. If your real estate purchase is more complicated, then you should think about hiring a separate attorney. You may also be able to recommend an attorney that you or your real estate buyer broker knows and ask your loan officer to use that attorney for the closing. Discuss with your real estate broker and/or your mortgage company for guidance on finding MA real estate attorneys to represent your real estate purchase.

The qualified mortgage rule was issued by the Consumer Financial Protection Bureau in January 2013 as part of the Dodd-Frank Reform Act. It applies starting Jan. 10, 2014 and affects the way lenders must qualify and verify information from borrowers. A summary of the qualified mortgage rule for MA mortgages can be found in this article.

Summary Of The Qualified Mortgage Rule For MA Mortgages

The qualified mortgage rule requires mortgage companies to review financial paperwork of borrowers and to determine their capacity to make payments. First and foremost, the income and assets must be sufficient to repay the loan. Secondly, the ability to pay must be analyzed for the entire life of the loan and not strictly for a shorter length of time. This is a particularly critical rule for loans with lower initial interest rates.

Elements of the Qualified Mortgage Rule

The qualified mortgage rule provides guidelines for assessing the ability to repay, debt-to-income ratio meximums, and a cap on points and fees charged. Lenders will be required to analyze at least eight specific underwriting factors to assess the ability to repay a mortgage. They are:

• Salary and Assets
• Current Employment
• Credit Reports
• Mortgage Payments
• Monthly Payments on Additional Mortgages
• Additional Home Ownership Expenses (Real Estate Taxes, Condo Fees, etc.)
• Other Liabilities
• Debt-to-Income Ratios

Debt-to-income ratios are maxed at forty-three percent. This is actually more than the existing forty-one percent limit. Lastly, points and other charges must not be greater than 3 percent of the mortgage amount. All of these rules go into effect Jan 10., 2014.

Mortgages Being Eliminated

Due to the components of the new qualified mortgage rule, some loan programs will no longer be legal. Examples are ones requiring no documentation, interest-only loans, balloon loans, negative amortization, and those for payment terms longer than 30 years. Even though these categories of loans account for a small percentage of all loans, it will impact specific types of buyers such as those wanting jumbo products.

Intention of the Qualified Mortgage Rule

The real estate and financial crisis is blamed on specific financial practices such as offering home loans with risky terms or buyers receiving home loans that were obviously not within their ability to repay. The new qualified mortgage rule specifically targets toxic loan features. It also seeks to reduce fees charged by lenders. All of this is intended not only to protect borrowers but also to decrease the chances of a future crisis. The above summary of the qualified mortgage rule for MA mortgages is provided only as an introduction. To view full information on the qualified mortgage rule, visit the Consumer Financial Protection Bureau website

Massachusetts hazard insurance protects privately owned real estate. This type of insurance is typically required for properties with a mortgage, but even without one, it is important to maintain. Below is information on the importance of hazard insurance.

The Importance Of Hazard Insurance

Your home is one of the largest investments that you will make in your lifetime. As an owner, you also have the burden of certain liabilities. Damages may be extremely expensive and may significantly affect your living situation and finances. This is the importance of hazard insurance. Failure to do so may have extreme consequences.

Hazard Insurance Coverage

Hazard insurance can offer a wide range of protection. It can cover loss of the property itself, personal property within, accidents on the premises, incidents involving the homeowners, or weather related damages,..just to mention a few. Each of these have specific stipulations. Some come standard with a policy and others are additions or may not be offered at all. The property location, such as those in high-risk natural disaster areas, may sometimes limit the options. Homeowners should stay informed of what exactly is included in their policy.

For properties with mortgages, the covered amount must typically be equal to or exceed the home loan amount. Lenders require this insurance to secure the amount of money they have loaned to you. Thus, their name and address will usually appear on the policy.

Premiums For Hazard Insurance

The charge for hazard insurance is based on the situations covered, the amount of coverage, the individual insurance company, the features of the real estate, the region of the property, the dollar amount of the deductible, and other factors. Most companies extend discounts for features such as alarm systems and other safety features. Another way that homeowners may save money is to buy other policies, such as auto insurance, from the same company. Policy premiums are typically invoiced once a year and payable in advance. If you have a home loan, monthly installments may be put into an escrow account with the mortgage company. This is a way of making sure that your coverage does not lapse.

Picking Massachusetts Hazard Insurance Companies

Homeowners may select the specific insurance company and can price shop prior to making a decision. Additionally, they can switch companies as desired. As with any type of insurance, the one offering the best price is not necessarily the one you should select. Homeowners should assess the levels of coverage and other services provided by Massachusetts Hazard Insurance companies. When disasters happen, it will be a very difficult time. Using a provider that makes claim submission easy and provides quality customer service may be worth the additional expense.

An article about Consumer Spending in U.S. Climbs by Most in Five Months was published by Bloomberg on March 29, 2013. More good news on the economy!

Excerpt of “Consumer Spending In U.S. Climbs By Most In Five Months”

Consumer spending climbed in February by the most in five months and confidence unexpectedly improved in March, showing job-market gains are helping Americans overcome tax increases and concern about federal budget cuts.

Purchases, which account for about 70 percent of the economy, rose 0.7 percent after a 0.4 percent advance the prior month that was bigger than previously estimated, according to Commerce Department data today in Washington. Another report showed consumer sentiment advanced to a four-month high.

Record stock prices and rising home values combined with gains in wages are helping households repair finances left in shreds by the recession, making it easier to cope with a two percentage-point increase in the payroll tax. The pickup in spending at retailers including Macys Inc. (M) is giving the worlds largest economy a boost just as efforts to narrow the budget deficit prompt government cutbacks.

Click here to read the full article.

For questions on this topic, contact Peter DaMore, Attorney at Law Offices of Peter T. DaMore Jr. at 781-229-7900 or pdamore@ptdlaw.com.

There are several major distinct steps in the home purchase process, and several relate to obtaining a home loan. It can be complicated for both first time and experienced buyers. This blog provides important information about home loan process for buying Burlington MA properties and covers what you may want to know prior to beginning the process.

Home Loan Process For Buying Burlington MA Properties

Pre-approval

A pre-approval is a preliminary review of your financial information and credit rating to determine what you may be able to receive as a loan amount. It ensures that you meet the preliminary requirements for a loan. Pre-approvals do not guarantee that you will be able to obtain financing, but is a usual first step in the mortgage process.

Mortgage Application

An application takes place normally after you have an agreement to purchase a property. You may be required to provide additional financial paperwork and information. The specifics on the property are also submitted to the lender for review. They will request a copy of the Purchase and Sales agreement in order to proceed. Your contract will often require that you submit an application before a specific date.

Mortgage Appraisal

An appraisal is mandated by a lender (although you are typically charged the fee for it) to determine the current market value of the home. Appraisers will compare your property to others that recently sold in the area within the last several months. An exact dollar value is provided. Ultimately, the value of the home must justify the amount that the bank is loaning to you.

Commitment

After your financial information and the details on the property are reviewed, the mortgage company provides a commitment letter. This assures the parties that no major problems have been identified and that the lender is somewhat certain that the loan will result in full approval. There may be a few conditions included in the letter such as an employment verification and final credit check. Therefore, it is essential not to complete costly purchases or change your financial condition even after a commitment is issued as it may cause a loan to fall thru.

Clear to Close

A clear to close is basically the final approval of a loan. It indicates that all criteria have been completed and that the lender can send the file to the closing agent. This sometimes takes place within days or hours before the anticipated closing date.

The Closing

The settlement entails signing of documentation and filing of paperwork into public record. Always bring official identification and a money order or bank check for any amount due. Personal checks or cash are typically not acceptable. The exchange of money occurs at or shortly after and the home becomes officially yours!

A Few Final Notes

Deadlines are an important facet of any real estate transfer, so make sure that you know the deadlines and what you must provide to comply with each one. Working with a experienced mortgage professional and real estate professional is a big help. They can provide you with advice and assistance, monitor deadlines, and make it a more positive experience. Contact me, Peter DaMore (Law Offices of Peter T. DaMore Jr.) for additional information on this and similar topics. I may be reached at 781-229-7900 or pdamore@ptdlaw.com.