Home owners often evaluate selling a property on their own with the primary objective of making more money. Experience has proven that it can actually cost more than it saves,… for sale by owner may result in overpricing by MA sellers. Below are a few considerations for sellers before deciding sell by owner.

Proper Pricing

The real estate market is constantly moving. Pricing will determine how long it remains on the market, what amount it eventually sells for, and if it sells at all. Real estate agents have the knowledge and experience to assist sellers with marketing price based on their specific property, location, and desired time frame, and to adjust it as required for fluctuating market conditions.

Comparable Properties

It all begins with finding comparable listings. Homeowners usually make a few errors at this step.
1. Looking back to the value of properties in the area and what they sold for years ago.
2. Referring to the price of their home from a past mortgage refinance.
3. Selecting varying styles or types of homes (i.e. comparing a split-entry to a colonial).
4. Pulling up active listings that are incorrectly priced or not selling.

Using incorrect homes for pricing will result in incorrect values and typically overpricing.

Making Price Adjustments

Another aspect of pricing is making adjustments for differing amenities. It is rare to find two identical listings, so adjustments are generally made for interior space, acreage, and amenities such as parking spaces, bathrooms, fireplaces, condition, and updates. Homeowners naturally use the amount paid for upgrades. However, the market value of most items do not often match the cost for them. In fact, certain expenses may not add any value. Real estate professionals are familiar with what appraisers will calculate for adjustments and will apply those properly for pricing.

For Sale By Owner May Result In Overpricing By MA Sellers

Overpriced homes can cost homeowners valuable energy and money. Listings can sit on the market with little activity or with interest from buyers that are strictly wondering why the price is so high. additionally, buyers have a negative view on homes that have been on the market for a long time and are likely to offer less even if the price is reduced later. In a declining market, a listing can even be worth less by the time it sells. All of this leads a for sale by owner home to sell for significantly less than it may have with the proper guidance of a real estate professional. That difference could be more than what a seller thought he or she was saving by trying it alone. This For Sale By Owner May Result In Overpricing By MA Sellers topic was published by Peter DaMore at Law Offices of Peter T. DaMore Jr..

Condominium purchases can be different from single family home purchases. There are more factors to evaluate. This blog provides condominium purchasing tips for MA home buyers.

Definition of a Condo

Condos are buildings with two or more units with shared common areas such as land and hallways. Shared components belong to the association and every owner has a percentage interest. The exact share is normally based on total number of units. Condo owners must maintain the interior of their own unit but share the expense of common areas such as land. Due to the common elements and expenditures, it is important for MA buyers to review certain paperwork ahead of time.

Information You Need to Know

Using Different Loan Programs

Financing programs will restrict loans to units in qualified complexes or based on specific criteria. For example, FHA requires specific owner occupancy percentages, satisfactory reserves, and a variety of other items. Condo complexes that cannot obtain FHA approval will be more difficult to sell. Buyers intending to use FHA should find out whether a complex is approved prior to spending too much effort viewing units there.

Owner Occupied Units

Every complex has some rental units. High owner occupancy percentages are better from a mortgage standpoint. High rental rates also tend to be less desirable.

Recurring Fees and Reserves

Most condominium complexes have monthly fees. The fees are for common expenses. A certain portion is also placed into a reserve to prepare for upcoming maintenance. It is important for potential buyers to ask how much the condo fee is, what is covered, the history of changes, and expected changes in the future. Buyers should also ask about the current reserve. If a complex does not have enough to cover a significant repair, all unit owners will be billed for the shortage. This is called an assessment and can be a lot for owners to cover.

Know the Restrictions

The biggest difference between single family and condo homes relates to restrictions. It is necessary to obtain the rules and regulations in advance and determine whether they are acceptable. Rules can apply to both common spaces and interior spaces.

Condominium Purchasing Tips For MA Home Buyers

There are risks to buying any type of listing, but condo ownership has some additional components that buyers must understand. Carefully review all documentation and get help from a real estate attorney for help. Also think about the future market value of units based on the finances of the complex and mortgage qualification. Contact a real estate broker to furnish historical information on sales in the complex. All of this helps buyers develop an informed decision about a condo purchase. This article on condominium purchasing tips for MA home buyers was shared by Peter DaMore at Law Offices of Peter T. DaMore Jr.. Contact Peter at 781-229-7900 or pdamore@ptdlaw.com for facts on particular complexes in MA or for help with other real estate matters.

Mortgage insurance is generally included in a loan when a home buyer puts less than twenty percent down of the value of a home. It protects mortgage companies against financial loss should a homeowner fail to pay. Although it insures the lender, it is commonly the responsibility of the buyer as a closing cost and additional recurring amount. In certain cases, a lender will cover the expense of the mortgage insurance. This article important information on lender paid mortgage insurance for MA home loans.

Important Information On Lender Paid Mortgage Insurance

Some lenders will provide lender paid mortgage insurance loan programs in exchange for a higher interest rate. When a homeowner pays mortgage insurance directly, it stays in effect while the loan amount exceeds eighty percent of the original price or current market value. So at some point, the monthly payment decreases when mortgage insurance is no longer applicable. With lender paid mortgage insurance loans, this reduction in monthly payment will not occur since the higher interest rate continues for the life of the loan. The only means to alter it is to refinance.

Choosing Between Owner Paid and Lender Paid Mortgage Insurance

Even though the interest rate on lender paid mortgage insurance loans may be greater, it can still lead to a lower monthly payment for some buyers. Additionally, mortgage insurance may not be tax deductible for buyers whose annual income is higher than certain IRS guidelines whereas interest paid on a loan is normally tax deductible. Therefore, opting for an increased interest rate and lender paid mortgage insurance might also result in better tax savings for some homeowners.

Help with MA Home Loans

Lender paid mortgage insurance loans can be a good option for some buyers. It is important to analyze the advantages and understand the immediate and long-term benefits. The above is important information on lender paid mortgage insurance for MA home loans and is intended only as an introduction.

No closing cost mortgages are usually requested by buyers with few money to bring to closing. The phrase is a bit misleading as there is always a cost to lending money. The way those expenses are recouped by a mortgage company may be structured differently. The following is an explanation of MA no closing cost mortgages, what you should know, and how it compares to programs with closing costs.

What Are No Closing Cost Mortgages

Closing costs exist with all loans because mortgage companies have expenses related to processing mortgages, compensating brokers, etc. In a usual loan, the exact charges are outlined and listed as closing costs. This leads to more money due at closing, which may be a challenge for all home buyers. No closing cost mortgages were developed to minimize this situation.

There are two primary ways that mortgage companies are able to offer no closing cost mortgages. One method is to obtain a larger interest rate, allowing them to recoup the closing costs over time. The other is to roll the closing costs into the amount of the loan.

Pros And Cons

Whether to use no closing cost mortgages must be based on several considerations. If you plan to pay off your mortgage within a few years, then it can be a good option since the higher interest rate would be effective for only a short period of time. This can be true during times where interest rates are high but are expected to lower in the future or if you plan to own a property for only a few years. On the other hand, if you intend to hold a mortgage for the long term, then the expense of an increased interest rate over the years can be significantly higher than simply covering the closing costs now.

It is important to note that no closing costs does NOT mean that money will not be required at closing. Closing costs really only apply to only some items. Other items, such as escrows, are considered pre-paid expenses. They are not put in the closing costs classification and will therefore still be due at closing.

MA No Closing Cost Mortgages

MA no closing cost mortgages may or may not be the best solution for your mortgage needs. To make an educated decision about what financing program works best for you, compare both the interest rate and fees of each loan. Also consider how many years you expect to keep the mortgage and the the long-term cost. Most of this data may be reviewed by requesting a good faith estimate from your lender.

Having work completed on your house can be a stressful endeavor. In addition to the decision of hiring a contractor, there are other things you should consider regarding the actual contract to complete the work. It is essential for both you and your contractor to ensure that you are on the same page. Below is overview of written contracts for MA property renovations.

Preliminary Contract Provisions

Most agreements will have at least some basic provisions. This usually includes:

• Contractor Contact Information
• Customer Name, Address, and Phone Number
• Agreed Price
• Overview of the Tasks to Be Completed
• Payment Terms

When it comes to these terms, more details are generally an added a benefit. Instead of generic descriptions, request detailed ones. For instance, if you are having many tasks performed, list each one with its associated cost. This will be useful if you want to drop or change particular ones and will minimize mis-communication over pricing. Also mention the brands or type of products if applicable. Everything that you negotiated with the contractor can be mentioned in the written contracts.

Other Things to Consider

Scheduling

Scheduling are a common misunderstanding among homeowners and contractors. To reduce the likelihood of any confusion, document planned deadlines in the paperwork. If timing is a major factor, that should be prominently mentioned as well.

Responsibilities of Each Party

Written contracts can also summarize additional responsibilities of the contractor and the property owner. It can restrict how early workers may arrive or how late they may continue at the property, what areas of the property may be accessed, and any other similar instructions. As the customer, you may also be required to perform some tasks such as relocating personal property. The only way to ensure that everyone agrees to these conditions is to write it in the contract.

Written Contracts For MA Property Renovations

You may meet with several potential contractors prior to hiring one, have multiple conversations with the same one, or have more than one contractor completing separate things at the same time. There are many opportunities for mis-communication and expensive mistakes. Having a detailed agreement can help you stay organized and protect your interests. The overview of written contracts for MA property renovations in this blog are merely a some general tips and should not be considered legal advice. Speak to an attorney on questions relating to a specific contract or dispute.

Credit ratings are generated by three credit agencies (Experian, Equifax, and Transunion). They each use a differing methods to calculate a numerical credit score that reflects your credit history. The higher the score, the less risky you are as a borrower. Specific activities can have a adverse influence on your rating and could possibly cause you to get denied for a home loan. Below are advice for potential MA home buyers on credit activities to avoid before buying a home.

Credit Activities To Avoid Before Buying A Home

Delinquent Behavior

Missing payments demonstrate poor credit habits and consequently reduce your score. How many payments you have missed (30, 60, or 90+ days) and how many times you are late also play a role. Delinquencies remain on your credit report for a very long time.

Collection Accounts

If you are really behind on payments and a lender has given up on their own attempts to obtain anything from you, they may move your debt to a collection company. This appears on your credit report. The information will stay on your credit file even after you pay off the debt.

Lender Charge-off

If a creditor is unable to collect the complete balance that you owe to them, they may “charge-off” the uncollected amount. This may apply if you entirely neglect to pay or if you settle for a lower amount. Charge-offs appear on your credit file for 7 years. Future creditors will view this item and debate how likely you are to continue with that behavior.

Matters of Public Record

Bankruptcy, tax liens, judgments, foreclosures, and other similar matters are part public record. Regardless of whether you settle those accounts, the initial reporting stays on your credit score. Particular things appear for seven to ten years whereas others (such as liens) remain forever. Obviously, it is critical not to let issues get this far.

Advice For Potential MA Home Buyers

All of the credit activities to avoid before buying a home noted above make you a risky borrower and may cause higher mortgage rates or completely stop you from getting loans. Demonstrate responsible behavior and it will save time, money, and disappointment when it is time to buy real estate. These are the best advice for potential MA home buyers. this includes only a few common credit mistakes. Speak with a credit professional for information on your particular situation.

When looking for mortgages, you will come across information on interest rate and APR. These are usually misinterpreted as being synonymous, but they represent different things. It is helpful for borrowers to analyze both. Below are details on the difference between interest rate and APR for MA home loans.

Interest Rate and APR

Interest rates apply to monthly mortgage payments over the life of a loan. This is typically the figure promoted by mortgage companies. It does not include the initial cost of financing. Fees may vary between loan programs and financing companies. For example, there can be points for one loan but not another. Other costs that may be included are origination and services charges.. The APR combines the interest rate and certain closing costs, so it is a better estimation of overall expense.

How to Use APR Information

When assessing a range of loan programs from the same or different lenders, the APR offers an easy comparison. You can be presented with one loan with high fees and another with low fees and a separate interest rate for each. The actual expense includes both the up-front expenses plus what you pay over time. The APR may therefore assist with the analysis.

APR Disclaimer

There are some things that borrowers should keep in mind when it comes to APR figures. It is compiled based on the life of a mortgage. If you pay off your loan sooner, the actual APR may be more. Also, one mortgage that appears to have a lower APR than another may end up being higher if the number of years were adjusted. The best APR is not necessarily the better option. Because most home buyers do not retain their mortgage for its entire term, this can be important.

Additionally, some APR estimates are not exact. For instance, the interest rate on an adjustable rate mortgage will alter but the amount cannot be predicted. The APR on these loans are calculated using the beginning rate.

Help With The Difference Between Interest Rate And APR For MA Home Loans

To perform a good comparison of your APRs, it is essential to ask for quotes within a short time frame (on same day if feasible) as interest rates are continually changing. Also keep in mind that your actual rate is not determined unless you lock in. Always review the interest rate and APR together to better understand the mortgage and associated costs. An experienced loan officer can provide further guidance on the difference between interest rate and APR for MA home loans.

Once you have selected a listing broker for your home, you will be shown a listing agreement. Prior to signing this paperwork, it is important to understand what it is comprised of. The MA listing agreement provisions in this blog will make you a well informed seller.

Real Estate Compensation

Commission is usually specified as a percentage of the selling price. It is a violation of anti-trust laws for real estate brokers to state that a rate is set across the industry. Each company sets its own fees and, similar to everything else in real estate, it can be negotiable. It is important to assess the expertise and value provided by individual brokers and companies when comparing their fees. Simply selecting one with the lowest rate may not necessarily be in your best interest.

Listing brokers commonly split a certain portion of the fee with buyer agents. The fraction offered is displayed in the MLS system. Higher amounts can sometimes encourage buyer agents to promote your home and, likewise, low rates may discourage them. This is particularly true when the number of homes to select from is high. If the co-broke commission is not listed, you may ask for the figure.

Finally, the agreement also mentions when the listing commissions are actually earned. It is important to read this language carefully. Your contractual obligation to your listing agent is different from that to any buyers. Therefore, it is not necessarily based on a closing.

Listing Services

You must enable your broker to manage specific tasks. The most obvious one is to submit the details of your listing into the local MLS (multiple listing service). This service shares the listing to all real estate professionals and to a variety of authorized websites. By expanding the exposure of the information, you will increase the chances of it being sold and for a better amount. Adding signs, installing a lock box, and performing open houses are other services that you may be asked to authorize in the listing agreement.

Legal Duties

Real estate professionals are not strictly salespeople. They are in fact agents in the legal sense and have special obligations under the law. These are referred to as fiduciary duties and include care, lawful obedience, accounting, confidentiality, diligence, disclosure, and loyalty. Basically, your real estate broker must work for you and look out for your interests. There can be instances where a broker also represents an individual wanting to purchase your listing. The paperwork will specify how this shall be handled, such as required disclosures, and what services will be given to each party. Make sure that you completely understand the potential scenarios and agree with the terms.

MA Listing Agreement Provisions

The MA listing agreement provisions in this article include only the most common components of listing agreements but may not include all language in your specific agreement. As with any kind of agreement, review the complete document, ask questions about things that are confusing, and seek additional help if you require legal advice.

FHA is a mortgage where private mortgage insurance is subsidized by the Federal government. Most major mortgage companies offer the program. Although it is commonly used by first time buyers, it is not limited to them. This blog offers MA FHA Mortgage Overview and pre-approval guidance to help you decide whether it is a mortgage that you should consider.

Benefits Of FHA Loans

There are several important benefits of FHA loans. The minimum down payment for FHA mortgages is 3 percent, which aids buyers who do not have a lot of funds saved. They also allow borrowers to use gift money for the down payment and closing fees. An additional benefit is the simplified refinancing process. It allows a refinance to a lower payment without needing a new appraisal, which is helpful if loan rates and home values both drop. The mortgages may also be assumed, meaning that it may be transferred to a borrower (if they qualify). This can help if interest rates are high. Finally, FHA does not penalize buyers for FICO scores. Although home buyers must still have satisfactory credit, higher interest rates do not result from lower scores.

Disadvantages Of FHA Financing

There are disadvantages of FHA financing to note. FHA mortgage insurance (MI) is often more than a conventional loan. There is an up-front fee at closing and a repeating fee due each month until the loan reaches 80 percent of the purchase price or current appraised value (borrowers must request the removal of PMI or wait for the legally required lower threshold for it to be automatically removed). For condo purchases, the complex must satisfy specific criteria such as minimum reserve funds and sufficient owner occupancy percentages. Most converted duplexes may be difficult to get approved. Single family real estate must also meet certain requirements geared towards safety.

FHA Pre-approval Guidance

Prior to applying for a pre-approval, pull your credit score and correct any mistakes. Also gather important financial documentation such as bank accounts, tax forms from past years, recent pay stubs, and investment account statements. Underwtiters will routinely ask for a copy of these items. Consult with a loan officer to obtain potential monthly payments (based on a specific purchase price and your credit qualifications) and closing fees prior to advancing too far in the process.

MA FHA Mortgage Overview

FHA makes buying a home possible for certain buyers who may otherwise not qualify for financing. It may also make refinancing or listing a home less complicated if rates dramatically change. However, it does have higher fees and property requirements, so not every buyer is able to or may wish to select an FHA loan. Consult with an FHA loan professional to better evaluate this program.

When you are qualified for a home loan, it is based on a specific monthly payment. The interest rate is estimated (as well as other figures such as property taxes and homeowners insurance). Interest rate fluctuations affect MA home loan pre-approvals because it impacts the principal and interest portion of the total payment. It is useful for buyers to understand this because an increase or decrease in rates can affect purchase price limits.

Interest Rate Fluctuations

Interest rates may change on a daily basis. At certain times, they can even do so many times on the same day. As a buyer, you will not know what your particular interest rate is until you identify a home, have an estimated settlement date, and lock in the interest rate. Thus, there is some uncertainty, particularly for price sensitive borrowers. It is useful to find out what interest rate was originally used to determine the pre-approval and to keep your pre-approval up-to-date. During times when interest rates are constantly or dramatically moving, speak to your loan officer before preparing an offer on a property to verify that you still qualify to purchase it.

Interest Rate Fluctuations Affect MA Home Loan Pre-approvals

Mortgage payments normally include principal, interest, property taxes, hazard insurance, and mortgage insurance (if the down payment is less than 20%). For the purposes of this example, we will only cover the principal and interest component. Assume that a buyer qualifies for a $300,000 property based on a thirty year home loan, 3.5% down payment, and 5% interest rate. The principal and interest portion of the payment is roughly $1554. If the interest rate increases by half a percent, that same home buyer will then qualify for only $283,638. That is a reduction of over $16,000 in the purchase price, which will be a smaller home. On the other hand, if interest rates reduce by 0.5%, the price limit improves to $317,843. The figures below illustrate the impact of other increments for this same buyer using a monthly principal and interest payment of $1554:

Knowing Your True Price Limit

You should ask your lender regarding the maximum payment amount for which you qualify. Using this information, you can better determine the feasibility of properties before making an offer. Keep in mind that there are several calculations for the total figure: interest rate, property taxes, property insurance, and mortgage insurance. If you plan to purchase a home close to the qualification limit, then it is very important to watch interest rates. Your loan consultant and real estate broker can assist you with these calculations and provide other information on how interest rate fluctuations affect MA home loan pre-approvals.