Claudette's Blog

It's pretty standard knowledge that all local real estate markets are different.  Why, then, would it make sense for appraisals to be conducted by out-of-the-area appraisers who lack any knowledge of the area that the property is in? 

Recent changes in the appraisal code have been making this practice become more commonplace. The Home Valuation Code of Conduct (HVCC) was developed by New York Attorney General, Andrew Cuomo in an effort to end corrupt practices in the business of appraising residential properties.  It may have achieved that goal to a certain extent but, in the process, has also caused some problems. 

During the real estate boom, pressure was placed on appraisers to make the value hit the loan amount; a practice which may have had a hand in causing prices and values to skyrocket.  

In an effort to instill tighter controls, new Fannie Mae and Freddie Mac regulations demand that lenders control the choice of appraiser, taking it out of the hands of mortgage brokers and real estate agents to insure that it is an arms-length transaction. 

The lenders' response to this has been to employ third-party Appraisal Management Companies (AMC) to select the appraiser.   

The primary complaint about the AMC appraiser selection is that too often appraisers are being given assignments in areas that they are totally unfamiliar with.  Since property values are highly influenced by location, the out-of-area appraisers are generating some questionable results - results that are sometimes undermining legitimate deals. 

Moreover, it is also becoming more difficult for real estate agents (who are more likely to know the neighborhood and relevant comparables) to provide helpful information to the appraiser.  While the code does not specifically prohibit agents and appraisers from talking, some have interpreted the new regulations to discourage such exchanges. 

In the past, listing brokers have been a valuable source of information to appraisers with data that they might otherwise have no access to.      

The National Association of Mortgage Brokers has been one of the most outspoken opponents of the HVCC.  

Its president, Marc Savitt stated, 

"In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market."

In a letter to Andrew Cuomo, NAR president, Charles McMillian, cited his concerns regarding the new code, including "delays of closings and canceled sales," among his many other grievances.  

As a result of the widespread complaints surrounding the HVCC, the new code of conduct for appraisers, Congress has sponsored a bill that would impose an 18 month moratorium on its use. 

More details can be read in an article at NYTimes.com.

  Subscribe to my blog

Copyright 2009 - Claudette Millette, President,TheBuyersCounsel -  800-392-1446, E-mail    

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

Pulte Homes is gambling on this possibility with its new marketing strategy.   

When I work with clients in Metrowest Massachusetts and the Greater Boston Area to help them search for new construction, the criteria is usually based on location, price, style and, of course, the builder must have a good reputation.   

Pulte Homes, which on Tuesday bought out Centex for 1.4 billion in stock to become the nation's largest home builder, is banking on a new marketing strategy to win over buyers.  After hiring a new chief marketing officer, their plan is to focus on value and monthly payments rather than location or school district.  The hope is that the name "Pulte" will be associated with the move-up buyer leaving their "Del Webb" moniker to target the 55 and older sector. 

The company plans to play up its quality and service in an attempt to become a household name in the building industry.  Many builders have tried this and failed, with Toll Brothers being one of the few exceptions.  

Given the current concerns that are running rampant these days about shoddy construction by questionable builders who cashed in during the boom, the company feels that there might be a place for name recognition that could soothe the home buying public with promises of a known quantity that will guaranty a certain standard of bankable quality. 

Their basic premise is that the consumer will be lulled into building their dream home based on a national brand name. 

In your search for a newly constructed home, could you see shopping by brand? 

  Subscribe to my blog

Copyright 2009 - Claudette Millette, President,TheBuyersCounsel -  800-392-1446, E-mail    

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough 

As first-time home buyers in Massachusetts race against the clock to take advantage of the current $8,000 tax incentive, some of our Senators are racing to get the bill renewed.  

Senate Majority Leader Harry Reid has been working on the bill and he says he expects Congress to extend it into the new year. 

The tax credit, which was approved as part of the federal stimulus package, is currently set to expire on December 1. 

So far, the program has encouraged around 2.5 million first-time home buyers to make their move toward the purchase a home.  And, according to the National Association of Realtors, existing home sales are likely to rise 7.0 percent to 5.51 million in 2009 from an expected total of 5.15 million this year. 

The National Association of Home Builders has estimated that the tax credit will stimulate 160,000 home sales throughout the rest of the year.  

Meanwhile, Realtors have been working hard to convince the government to keep the policy in place for as long as possible.  Jerry Giovaniello, a lobbyist for NAR, spoke at the Greater Las Vegas Association of Realtors last month and said that they were trying to garner support for an extension of the credit into 2010 and to increase the amount to $15,000.  They also want to make it available to all sectors of the public, not only first-time buyers.  

Senator Johnny Isakson, who successfully proposed the original $15,000 tax credit bill in February, has teamed up with Chris Dodd to try to breathe new life into the idea. 

Since there seems to be bi-partisan support for at least the extension of the current program, the chances are good that it will stay around until next year. 

Related Posts: 

Using the Tax Credit as a Down Payment on a Home

Taking Advantage of the $8000 First-time Home Buyer Tax Credit

Copyright 2009 - Claudette Millette, President,TheBuyersCounsel -  800-392-1446, E-mail    

Subscribe to my blog

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992   

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

Toll Brothers, best known for its super-sized homes, and available in a number of Massachusetts communities, surprised the market recently with a 44% surge in orders from its second quarter.  It was their first quarterly increase in signed contracts in four years. 

This is all happening at a time when builders have been working on plans to shrink and downsize homes based on their perception that the market has changed.  According to the Census Bureau, the average size of new detached single-family homes sold in the U.S. has declined over the past year.  

"Buyers are more conservative and careful than they were during the housing boom," says Doug Yearley, a regional president for Toll.  But many "still want the big house with all the upgrades."  

The company has cut their house prices considerably with a national average at around $535,000.  That's down about 8% from last year and has enabled more buyers to purchase with conforming loans rather than having to go the "jumbo route." 

A Toll spokesperson said that about 17% of their buyers paid cash for their homes with only 10% needing jumbo loans. 

It also helped that the company offered its own special financing program with an interest of 3% for the first year.  The rate climbs to 4% in the second year and then settles at 5% for the 30-year duration. 

For buyers of McMansions, that is a pretty good deal. 

Subscribe to my blog

 Copyright 2009 - Claudette Millette, President, The Buyers Counsel - 800-392-1446

Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

The idea of home ownership as "The American Dream" has been packaged and promoted by the government for as long as I can remember.   

In a major shift away from this thinking, the current administration has just announced plans to inject $4.25 billion of economic stimulus money into subsidized rental units throughout the country.   

Some are viewing this as a rejection of the government's previous emphasis on home ownership as a way to create wealth and provide upward mobility.  Perhaps, it is simply a recognition that not everyone can afford to purchase a home.  

In light of what has happened to our banking system along with the record-breaking foreclosure rate, this may be just a dose of reality. Whatever the message is, I don't think we should begin to minimize the benefits of home ownership against the tenuous nature of renting.    

As a renter, you live under the threat of being put out of your home at any time due to rent increases or a change in the landlord's situation.  While this may be an acceptable risk to a single person, it's not the best situation for a family.     

It is well-known that children of parents who own their own homes tend to do better in school and are more adjusted, and that neighborhoods with homeowners are more stable than those with rental units.  

It's great that the much-neglected area of affordable housing will be getting this funding since so many people have been displaced and are on waiting lists.  It will also put a lot of buildings that are currently vacant back to good use. 

That having been said, the government should not abandon its long-standing policy of promoting home ownership since there were very sound reasons behind it. Among them: stability, safety, pride of ownership and a sense of community.    

These reasons remain valid and the dream of home ownership is still very much alive.      

Subscribe to my blog

Copyright 2009 - Claudette Millette, President, The Buyers Counsel - 800-392-1446

Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

According to a recent report by the U. S. Census Bureau, homes are now 7% smaller or, equivalent to an average size room smaller.  The median square footage of new homes fell to 2,065 square feet in the first three months of this year.  

Are we losing our love-affair with McMansions?  

The numbers seem to be pointing in that direction in Massachusetts and the rest of the country.  For the first time since 1994 the size of the average home has seen a decline.  

In her book, "The Not So Big House" Sarah Susanka has stated, "A new ethic is arising right now that will become commonplace - as commonplace as is recycling today when just a few decades ago it was rarely if ever done." 

"As more and more people build or remodel homes that satisfy in quality rather than quantity, there will be a huge shift in what we perceive as desirable."

 Gopal Ahluwalia, vice president of research for the National Association of Home Builders, reports that nine out of ten builders surveyed by NAHB this year say they're building or planning smaller, lower-priced homes than in the past.  

"We don't need big homes," he says. "Family size has been declining for the past 35 years." 

Of course, this could simply be a symptom of the current recession. 

It's difficult to know whether this is the result of a change in attitudes or a change in buyers, according to Kira McCarron, the chief marketing officer for Toll Brothers, a luxury home builder.  

It could be a temporary halt to the number of young families who are buying homes in a market that is currently being dominated by an older buyer who wants a more controlled space and less maintenance.

It may turn out that when economy improves the demand for larger homes will come back in full force.

Only time will tell.

Subscribe to my blog

 Copyright 2009 - Claudette Millette, President, The Buyers Counsel - 800-392-1446

Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

In real estate there is a concept called "chain of title."  X sells to Y, Y to Z, and so on. 

By the time you arrive at your closing, a title examiner will have performed a title search which will include all documents involved in the chain-of-title.  This is also done to uncover any tax liens, judgments, mistakes in the record, undisclosed heirs or unknown easements. 

When the search has been completed, the examiner will write a letter of opinion expressing that the seller does indeed have good title.  This will satisfy the bank and will get you to your closing.  But, will it insure that you have no title problems in the future?  

According to the American Land Title Association (ALTA), about 25 percent of all residential real estate transactions have issues with the title.  Most are resolved prior to closing; however, some claims and challenges can crop up after you have become the new owner. 

Some of these include:

• Forgery and impersonation
• Lack of competency, capacity or legal authority of a part
• Improper recording of deeds
• Sudden appearance of someone claiming to have a prior interest in the property
• Mechanic's liens
• Undisclosed prior mortgage or lien
• Encumbrances or judgments
• Erroneous or inadequate legal descriptions

These are situations which could derail your ownership or cost you in legal fees to battle it out in court.

Unlike homeowner's insurance which is there to protect you against a possible future event, the purpose of title insurance is to protect you from an event which has already happened.  

There are two types of title insurance policies that you will be offered at your closing:

• The Lenders' Policy protects the bank against possible title problems and you will be required to purchase this policy if you are financing your home.   It does not, however, protect your interests. 
• For your protection you will need to buy an Owner's Policy.   

There are also policies that offer Extended Coverage which goes beyond the standard coverage. 

The cost of title insurance varies and correlates with your property's value.  The purchase is a one-time premium.  Once it is paid you never have to buy it again. 

Prior to your closing, talk with your attorney about title insurance, read the actual policy and make certain that you are doing enough to protect yourself and your home purchase.  

Related Posts:

Homeowners Insurance - Getting the Best Policy

Home Warranties, Are They Worthwhile?

Assessing the Value of a Home

What is Included in a Home Purchase?

The Importance of Being Pre-Approved

Claudette Millette, President, TheBuyersCounsel -  800-392-1446, E-mail    

Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

 Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

Despite some of the optimism that has been generated from an increase in home sales recently, in Massachusetts and nationally, an epidemic of upside down mortgages is casting a long shadow on the housing market.  

According to Zillow.com 25% of all mortgage holders are currently under water, owing more than their home is worth.  This figure could climb to 30% by the middle of next year if foreclosures continue to take their toll.

Existing-home sales in the Northeast jumped 15.0 percent during the second quarter which may have been fueled by historically low interest rates coupled with an $8,000 tax credit to first time buyers. While it may be instinctive to jump on this good news, the fact is that the climate for buying a home now is currently better than the climate for paying one off.  

In an attempt to ease this situation, the Obama administration's "Making Home Affordable" program was introduced in February.  It was designed to help troubled homeowners to obtain loan modifications from participating lenders.  These institutions would agree to allow those borrowers who are current on their mortgages the opportunity to refinance their loans, even if they owe more than their home's current value. 

The program is for borrowers with loans backed by Fannie Mae and Freddie Mac and was, initially, limited to anyone whose mortgage did not exceed 105 percent. However, it has now been expanded to include borrowers whose mortgages exceed 125 percent of value. 

So far, the plan has been stalled somewhat by lenders who have been slow to adjust their processing systems and who are understaffed to handle the large amount of borrowers seeking assistance.

Another glitch has been with Fannie Mae and Freddie Mac. When the government expanded financing eligibility to mortgages with a loan-to-value up to 125%, FNM and FRE announced that they would not be buying those until September 1 and October 1.    As a result, many lenders have been unwilling to write these loans yet.

There has been much criticism about the sluggish results from these anti-foreclosure programs and banking executives have complained about the "confusion and delay" with how the government has been setting the rules.

Along with these complaints is the frustration experienced by some troubled homeowners who are slipping through the cracks because they do not meet the eligibility requirements to receive any help.

Claudette Millette, President, TheBuyersCounsel.com, 800-392-1446, E-mail 

 Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

Closing day should be a day of joy.  You are about to become a homeowner in Masssachusetts.  To insure that you have a stress free closing, it is best to know what to be prepared for.  

On the morning of your closing, you should conduct a walk-through inspection of the property.  Most purchase and sale agreements state that the premises are to be delivered in "broom clean" condition and will allow you to conduct an inspection to insure that it is. 

The sellers should be completely moved out of the home when you arrive.  All furniture, possessions and debris should be out of the property and off of the grounds.  Any repairs that were agreed upon should be done.  If the purchase and sale agreement states that the refrigerator, washer, dryer, window treatments or any other items should be included make sure that these items have been left in place. 

During your walk-through you should check every room, open all closets and cupboards. Run the dishwasher; turn on the stove or any other appliances that is part of the deal.  Run the faucets, showers, flush the toilets and turn on the lights.  Turn on the air conditioning system to make sure it is functioning properly. 

A thorough property walk-through should take around an hour. 

Pre-Closing Check-List  

Closing Costs and Down Payment - Prior to arriving at your closing your attorney should have provided you with a settlement statement as well as a final dollar amount for your closing costs and remaining down payment. You will need to get a certified check for this figure to bring with you.  

Homeowner's Insurance - Since mortgage lenders require homeowner's insurance, which protects the buyer and the lender from loss in the event the house is damaged or destroyed, you will need to arrive at the closing with an insurance binder on the home you are purchasing.  Check with several companies to get the best rates. 

Title Insurance - Prior to your closing, a title search will have been done to ensure that you are receiving a clean title with no liens filed against it.  To further insure this, the lender will require the purchase of title insurance.  There is a policy for the lender as well as an owner's policy.  You will be able to purchase both policies at your closing. 

The Closing Table  

Most closings take place at an attorney's office or a place that is convenient for all parties.  In attendance will be your buyer broker, the sellers, the sellers' agent and, possibly, their attorney.  You should plan to be there for one to two hours.

Be sure to bring your driver's license with you. You will be asked for photo identification and a copy will be made for the file.  If you are not a U.S. citizen, bring your passport, visa and any other related documents.  It is also a good idea to bring your checkbook to pay for items such as a full tank of oil or other incidentals. 

The main activity of the closing consists of signing all of the papers associated with your loan.  The closing attorney will take each document, explain it to you and give it to you for your signature.  In the end, you will be provided with a copy of everything you have signed along with the deed and plot plan. 

Ownership is not official until the deed has been recorded at the registry of deeds and the closing attorney will send a courier to have this done.  

When all of the signatures are completed and money has been exchanged, you will be handed the keys to your new home.  

Related Posts:

Homeowners Insurance - Getting the Best Policy

Home Warranties, Are They Worthwhile?

Assessing the Value of a Home

What is Included in a Home Purchase?

The Importance of Being Pre-Approved

Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446, E-mail 

 Learn more about Massachusetts Home Buyer Representation in the Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough

One alternative to a dragging home market is to swap rather than sell your home.  With the help of some innovative real estate agents in Massachusetts, as well as numerous swapping websites -- trading up, down or laterally is becoming more in vogue.  

People who have been accustomed to buying a home first and then selling theirs are now afraid to end up with two house payments in this slower market.  Along with that is the fear of how much they will get for the property and how long it may take to sell.

Some realtors in high end areas have started putting together "swap options" on certain properties to cater to people who want to exchange one life style for another.  The empty-nester who is trying to scale down from a large home may now be able to trade that home for a high-end condo as is featured in the article "Home Swapping in a Slow Market."   

Along with the well-known website, Craigslist, which engages in home exchanges, a number of sites have become increasingly popular.  Currently, if you Google the phrase "house trade," thousands of websites will pop up.  

GoSwap.com - aids in house swapping as well as land, boats, businesses, timeshares, commercial buildings, cars, trucks and just about any item you can think of.

 MyHouseforTrade - features interior and exterior photos of homes that are available for trade.

 OnlineHouseTrading.com - boasts that it has been featured on CNN, The Today Show and Oprah Winfrey.

The basics of house trading involve two parties agreeing to exchange their homes.  They then create a contract with a contingency on the sale of the home to the other party and their closings must occur simultaneously.  

One of the keys to a successful swap lies in the valuation of the prospective properties.  As we all know, no two houses are equal and a qualified real estate agent or appraiser should be hired to assess the value of each home.  An appropriate deal must be arranged through negotiations and, usually, new financing must be obtained.  

As with any real estate transaction, the parties should have home inspections, hire attorneys to look over the contracts and be thorough in their due diligence about every aspect of the exchange.

Copyright 2009 - Claudette Millette, President,TheBuyersCounsel -  800-392-1446, E-mail    

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts - Serving Massachusetts Home Buyers Since 1992 

Serving Home Buyers in:  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough