Real Estate News & Trends

 

The New England Area real estate blog is a great source for local real estate market trends, useful information, and news about buying and selling real estate throughout the New England Area.

 

June 16, 2017

Buying A On a Lease-To-Own Home

Many people who don’t have down payments to buy a home will often consider doing a lease-to-own agreement to get the home of their dreams.


These are almost always a case of buyer beware because in most scenarios the leasing agreement is written to protect the seller and not the buyer of the home.


A lease-to-own agreement is one where generally a home seller will offer a buyer the ability to rent a house. A certain percentage of the rent is designed to be put aside, usually in escrow, to add up until the buyer has enough to have a substantial down payment. In theory this sounds like a win-win situation for both parties. The seller will be making money while helping someone out to buy their home, knowing that in the end the home will be sold for the current market rate. They’re basically going to continue to make money on the house and have a buyer in the end. The buyer is given the opportunity to slowly build up funds to use as a down payment for a home while they would normally just be paying rent on a house and struggling to put the extra cash aside. In a perfect world they would end up living in the house they will eventually own, have a substantial down payment and be able to build their credit up while preparing to get a loan. They’ll probably have a better chance of obtaining a loan with a larger down payment, which they’re going to have because the seller is setting aside a portion of their rent each month for a down payment. The truth of the matter is that most lease-to-own situations are not set up to benefit the buyer. While there are definitely cases where the program has worked out for both parties, generally speaking the terms of the contract are written so that the renter/buyer is under such strict rules. Usually the smallest break of terms can cause them to not only lose all the money they thought they were saving but end up without a place to live. The money they are putting towards rent is often fairly high and the justification to this is that it’s because a portion of it is going directly towards the purchase of the home. This all sounds solid and logical but the reality is that if you were to rent a cheaper place and take that extra amount and save it each month it would add up with interest a lot faster. Many contracts are also written so that while you are technically nothing more than a renter you become a renter that’s also responsible for the upkeep and maintenance of the house. You may say well it is going to be our house anyways so why would that matter? Yet the truth is there is a higher chance that you may never own this home yet end up spending thousands in repairs and updates under the assumption that this home is going to eventually be yours. For example, if you are renting and the furnace breaks down you call the landlord; in the terms of many contracts for rent to own situations you are typically responsible for repairs. Sounds great until the reality is that you’ve put a $2,000 furnace in to replace the ancient one that was in there and then when you are one day late on a payment only to get an eviction notice and breach of contract letter.

Posted in Buyers
May 4, 2017

Reverse Mortgages – Good for Bad?

The option of reverse mortgage is a very suitable option for certain people. However, one must carefully weigh the pros and cons of this type of mortgage before thye make a commitment either way.

Reverse mortgages are basically very specific financial vehicles that only a certain type of people can qualify for. Defining these mortgages is a hard task as they combine qualities of both a mortgage and an annuity. Essentially it is a contract in which the mortgage on a house is used for paying an annuity.


As the borrower, you and a mortgager sign a deal according to which the mortgage will pay you regularly during the remainder of your life. In return, the mortgager will become the owner of your property after your death. This option is offered as a way of giving seniors a steady source of income after their retirement. It’s also designed for helping seniors stay in their homes longer.

Some Limitations

A reverse mortgage can sometime turn out to be an undesirable option as it does not provide any flexibility. Restrictions have been placed by the federal government on who can use this financial instrument and how it can be used. Most importantly, you will have to be at least 62 in order to get a reverse mortgage. The option is only available for the home that is your main legal residence. It is not available for any other of your properties including a summer house or a rental apartment. If you are a renter or have other types of real estate, a reverse mortgage is not an available option. The money you will get under this type of agreement will depend on the equity in your house. Getting a reverse mortgage deal for the full value of your property is possible if you don’t have any home loans or mortgages to pay. If you have loans or mortgages on your home, then those loans/mortgages will be deducted from the mortgage amount. The full amount of the mortgage will be your liability if you rent or sell the property during your life. So, in order to make this option work, you will have to stay in your home and not make the home into a rental property at any time. There is however one exception to this rule for those who are forced to move into a nursing facility or enter into an assisted living agreement. There is also something else to consider – due to the reverse mortgage agreement, you won’t have the option of transferring the property to any of your heirs.

Alternate Options

Considering all the factors a reverse mortgage is a good option for people who own their property free and clear and don’t want to live anywhere else. For instance, John is 63 and has retired recently. He likes his neighborhood, loves his home and likes to be near his kids as well as grandkids who live close by. His lifetime savings are limited but he has recently made the final mortgage payment on his house. John is the ideal person to go into a reverse mortgage deal. Arthur is also 63 and very close to retirement. He has paid off the mortgage but doesn’t like the idea of mowing lawns and shoveling snow in his golden years. He’s thinking of moving to California. Arthur on the other hand is not a good reverse mortgage candidate because he's not certain about living in his home. He would be better off if he sold his property and utilized the money to purchase an immediate annuity. This way he would be able to get a regular income that he can use even while living in another state or country. So suffice it to say it is difficult to say whether or not a reverse mortgage is right for you. There are definitely plus and minuses for either person considering a reverse mortgage. As each person situation is uniquely different the best thing you could do is speak with a real estate agent who has experience with reverse mortgage lending to see if this option is right for you.

Posted in Mortgage
April 19, 2017

The Pros And Cons Of Buying An Older Home

Some people prefer the character that an older home provides while others prefer the newness of a newly constructed home.

Like most things in life, both have their pros and cons. It’s really a matter of preference or better yet you walking into a house and knowing that this is the house for you.


We’ll give you a little insight and some things to think about when buying an older home to help you decide; but ultimately it comes down to that one house that just calls to you.

The Pros Of Buying An Older Home

  • Character - Special things like beautiful woodwork, built-in, hide-away doors and ornate ceilings and fixtures all add character to the home. These special touches were definitely touches of craftsmanship that were all a part of building homes in the early years and most homes built today can’t even come close to these special touches.
  • Sturdy Construction - Older homes have been built with sturdier materials and craftsmanship that have withstood the trials of time and weathered the worse.
  • Location - Older homes are usually built in a city area or relatively nearby making them close to amenities and attractions and offers shorter commutes.
  • Mature Landscaping - Those big oak trees, fully grown bushes, and green grass that’s been around for ages are all something that only time can give you.
  • Stable Zoned Areas - These areas are not likely to be seeing many changes in the future as most neighborhoods with older homes are well established.

The Cons Of Buying An Older Home

  • Most older homes are not equipped for today’s technology – electrical wiring, built in dishwashers, ceiling fans, central air conditioning and other items that we’ve become used to simply weren’t around to build in to these homes so now we have the added cost and trouble of having to add these things ourselves.
  • Less storage space and smaller closets, or even lack of closets, is a big turn-off with many buyers looking at older homes. People simply didn’t used to live in times when they had huge wardrobes and tons of stuff to need storage space. Most storage was needed for things such as storing canned goods and cellar pantries or small fruit cellars were common in older homes. So if you have a lot of clothes and items you need to store, chances are you’ll be finding a different method of storage if you purchase an older home.
  • More costly maintenance and often more maintenance required on an older home as opposed to a newer home. Chances are if someone hasn’t already done updates you’re going to find issues with plumbing, electrical work, tree roots in sewer systems, and more.
  • The possibility of lead paint and asbestos in the construction of the home, simply because these items were not illegal to build with and not necessarily known as a health hazard.
  • Older homes can be more expensive to purchase in some cases because they’re in the city and properties in the city, especially large cities, tend to be scarce. However, they can also be less in price if they do need updates.
  • Broken up layouts – as opposed to big open living spaces in newer homes, older homes often are very cut up with doors and windows placed in places that create issues in fitting furniture into room and seeming less living space per say.

In Conclusion

In the end it’s simply a matter of preference and your own attraction to the home. If a home is brand new and just jumps out at you that it’s the one for you then you’re going to buy it. If a home is an older home and you instantly feel like you should own it then that’s the one for you. No matter what house you buy there are pros and cons and each house is different in its own way. What may be an issue in some older homes may not be an issue in the particular one you’re looking at. The best way to decide if the house is for you there’s really nothing better than a gut feeling to go by when making your decision.

Posted in Buyers
March 25, 2017

Quick Tips To Selling Your Home Sooner Rather Than Later

Looking to sell your home or property in the coming year? With the recent state of the economy, many individuals and families who are trying to sell their home are running into road blocks.

Many are starting to wonder if their home will actually attract a reliable buyer.

While the economy has taken a slight dip, analysts have reassured those in the housing market, that this will not necessarily result in a dip in home value. Despite this reassuring news, there’s nothing wrong with taking a few precautions, to ensure that your home makes a great first impression to potential buyers. Here are a few tips for sellers looking to sell a home or property. While remodeling can be expensive, it can also determine how fast your home sells, as well as it’s worth, if it sells at all. While remodeling may seem like a bit of a daunting task, you’ll be amazed at how a few simple touches can brighten and revamp a space dramatically. When it comes to ‘staging’ the home, there are two rooms you’ll want to focus on – the bathroom and the kitchen. The bathroom is something that can make or break a tour of the home for buyers, and surprisingly, this crucial first impression is often not determined by anything more than what the buyer sees right away. A lot of sellers and homeowners make the mistake of not even putting a lot of effort into tidying up before potential buyers come by for a tour, thinking they’ll be able to see the home or property for what it is. However, this is nearly impossible to do without a blank slate, somewhere the buyer can see themselves living. Cleaning and tidying up also makes your home look more spacious. Make sure you take the time to clean the bathroom, and the kitchen. These are both areas that buyers want to associate with cleanliness, and it’s crucial to see these rooms like this. You may also find it helpful to spruce up your bathroom a little by replacing your shower curtain. A $10 investment can go a long way. What else can sellers do to guarantee that their home is sold at a price they can get behind? The most crucial thing for anyone trying to sell his or her home, especially in a rocky economic climate, is to enlist the help of a trusted, reputable real estate agent. Real estate agents know exactly how to negotiate with buyers that try to bargain you and your home down for far less than it’s worth, and while the current market is more likely to be in the favor of buyers, a real estate agent can still guarantee that you’ll get a fair price. A real estate agent is the best way to make sure you can negotiate fairly and get what you deserve for the property. Plus, a real estate agent can provide you with other helpful insider tips and advice that will prepare you for tours of your home, as well as the sale. A real estate agent can also handle all of the inquiries and questions you have about the best way to sell your property in the current market. If you have been struggling to find buyers, you may not be marketing your home correctly. We are living in an age, where people depend on their mobile phones for emails and work documents, to get them through the day. If you are not paying attention to changes in marketing trends, this could hamper the sale of your home. Take a virtual tour of your home on camera. Take some extra pictures of the new addition, and put up your pictures on Facebook, Twitter, and other websites. You should consider posting advertisements on Craigslist or Google. Gone are the days of simply putting your home's ad in the property section of the Sunday paper. Virtual advertising has produced strong results, when it comes to selling homes.

Posted in Sellers