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Draft Bill May Hike FHA Down Payments To 5%

by Jessica Hunt with Preservation Properties

Republicans on the House Financial Services Committee have drafted legislation that would raise the minimum down payment for FHA mortgages to 5 percent, cut FHA loan limits in most markets, and move the Agriculture Department's rural housing program to FHA's parent agency, HUD.

 


  

Though the draft bill has not been introduced, titled or assigned a number, it is expected to be the main subject of a hearing Wednesday before the Subcommittee on Insurance, Housing and Community Opportunity, chaired by Rep. Judy Biggert, R-Ill. After that, the bill is likely to be formally introduced and sped through subcommittee and committee votes and head for action by the full House.

  

By lowering maximum FHA loan limits in large numbers of local areas - well below even the limits that are already scheduled to kick in Oct. 1 - the bill would squeeze down FHA loan volume across the country, cutting a resource for some home purchasers who can't obtain a conventional mortgage. Most New England and mid-Atlantic states would end up with lower loan ceilings along with major markets in the Midwest and the Rocky Mountain states.

 

To read the full article from Inman News, click here

Water Legacy Greywater Recycling

by Jessica Hunt with Preservation Properties

 

google map to real pro systems

For most of us, setting up a grey water system— that is, setting up a system to recycle waste water that's only slightly contaminated to use for flushing a toilet or watering plants—is too complicated. Water Legacy aims to change that by bringing a mainstream grey-water recycling system into the home.

 

Water Legacy's residential graywater reclamation system conserves potable water by recycling spent water for safe usable purposes. Wastewater generated by homes is usually either black water, contaminated to levels that prohibit use, or graywater which can be treated and stored for non-potable reuse.


Water Legacy's system is a stand-alone system that collects used bathing greywater, filters and disinfects this water, and managgoogle map to real pro systemses the automatic supply to the toilet system. After it's installed, it requires no operator intervention.

Unlike the DIY solutions, Water Legacy uses a multi-barrier disinfection system to ensure that even the water in your toilet has been disinfected using hydrogen peroxide and UV. Unfortunately, this only supplies water to your toilet and is not designed to help you water your lawn or plants.

 

If you truly have equity and can't make the payments you want to sell as quickly as possible.  Contact 1 or 2 real estate agents who are familiar with your neighborhood and have a conversation with them about how much your home can sell for.  They should be able to tell you what your chances of success are, and that will be dependent upon how well homes are selling in your area and price range, condition of your home, specific location, and other criteria.  My point is that you want to hear from the agent the specific data that supports their estimate of your selling price.

Only after you have that probably price will you know how much equity you actually have.  Equity on paper isn't much help - you need to know how many dollars you can pull out.

If you can't sell you are going to be hard pressed to obtain the equity, if there is any.  Once you list the home for sale there is generally a 6 month waiting period AFTER you take the home back off the market before a lender will consider giving you cash out on a refinance loan.

If you have a lot of equity (say 40% or more) you may find a private investor to loan you the money but the cost would be prohibitive.  You need to focus on getting the home sold.

Make your yard a Certified Wildlife Habitat

by Jessica Hunt with Preservation Properties

 

When writing recently on native and drought-tolerant plants for California landscaping, I came across this little tidbit: The National Wildlife Federation (NWF) has a program, “that helps members turn their backyards into wildlife havens.” How spectacular!Bird

Being a national organization, this program applies all over the country, not just to California. And you can certify your garden to be one of 140,000 Certified Wildlife Habitats across the U.S.!

The cost is minimal ($20 dollars and is what you’d pay for a good plant, so consider it part of the landscaping budget), and you get certified. You also become a member of the NWF with a year subscription to its award-winning National Wildlife magazine, plus a subscription to the quarterly tip-filled newsletter which will help you run and maintain your habitat, and your name will be listed in the NWF national registry of certified habitats.

The best part is that it’s not as difficult as it might sound to get your yard up to snuff. You need some basic amenities for the critters that most yards probably already have to one degree or another, stated as per NFW’s site:

  • Food sources like native plants
  • Water sources like birdbaths or fountains
  • Places to take cover like birdhouses or thickets
  • Places to raise young like dense vegetation or shrubs or nesting boxes
  • Sustainable gardening like chemical-free fertilizers and compost

This program can be instigated just about anywhere: on your college campus, at your child’s school, or in any other community garden area. Check out The National Wildlife Federation’s website for details and more information on how easy it is to turn your outdoor space into a wildlife habitat!

--Jocelyn Broyles

Headline image by Howard Cheek from TheNationalWildlifeFederation.org

All information from National Wildlife Federation’s Certified Wildlife Habitat™ program.'


This article comes from Yahoo Green

5 Things Home Buyers Do That Turn Sellers Off (and Kill Deals)

by Jessica Hunt with Preservation Properties

On today’s market, every savvy seller wants to know what turns buyers off, so they can get their homes sold as quickly as possible, for as much as possible.  But buyers, take note – there is a minefield of seller turn-offs you can trigger that hold the potential to keep you from getting the home you want at the best price and terms, or to unnecessarily complicate dealings with your home’s seller.

Lest you think all of today’s sellers are under the gun and will just put up with whatever behavior buyers dish out, be aware that there are still many multiple offer situations in which buyers have to compete with each other to get a home – buyers who trigger these turnoffs tend to lose in those scenarios.  Also, avoiding these seller turnoffs can create a transactional environment of cooperation and avoid things turning adversarial.  That, in turn, can empower you to score a better price, get extra items you want thrown into the deal, and even negotiate more flexibility around your escrow and move-in timelines – all perks that can make your life easier and your budget go further.

For sellers, these turnoffs pose the potential of irritating you out of an otherwise good deal – maybe even the only deal you have!

Here’s a few of the most common buyer-perpetuated seller turnoffs, with tips for sellers on how to keep an emotional (and economic) even keel, even if your home’s buyer makes some of these waves:

1. Trash-talking. Trash-talkers are the home buyers who think they’re going to negotiate the list price down by slamming the house, telling the sellers how little it is really worth, how the house across the street sold for nothing, why the school on the corner should make them desperate to give the place away, etc. This strategy never works; in fact, when you attack a seller and their home, you only cause them to be defensive, and think up all the reasons that (a) their home is not what you say it is, and (b) they shouldn’t sell their home to you! 

Sometimes this happens with buyers who actually love a house and just walk around it fantasizing about all the ways they would customize it to their tastes while a seller is there. 

Sellers: avoid being at home while your home is being shown. 

Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.

2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested.  As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.

Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract.  It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. 

Buyers:  Get pre-approved.  Seriously.  And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.

3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of.  And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off.  Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.

Sellers:  Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving.

Buyers:  Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too.  Don’t be amazed if you make an offer far below asking, and don’t get a response.

4. Renegotiating mid-stream. Sellers plan their finances, moves and  - to some extent – their lives around the purchase price a buyer agrees to pay for their home.  If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair.  But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul.  And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.

Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home.

Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.

5. Misleading or setting the seller up.  Remember when we talked about buyer turn-offs?  Being misled by listing photos or very fluffy property descriptions was high on the list.  The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price?  #LAME  Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors?  Lame squared.

Sellers:
  If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. 

Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.

10 Pieces of Paper You Must Round Up to Buy (or Sell) a Home

by Jessica Hunt with Preservation Properties

Home buyers and -sellers alike often bristle with anticipatory irritation at the mere thought of all the paperwork they expect they’ll have to come up with to do their transaction, above and beyond the basic loan application, contract, disclosures and closing docs. And these worries start way in advance; it’s as though, before they even start visiting open houses, buyers begin to visualize - and dread - spending hours upon hours in the dank catacombs of the Vatican (à la Da Vinci Code) combing through ancient files, seeking some rare and precious artifact documenting their childhood dental history or genealogy.

In some respects, this vision of the experience of obtaining a home loan might not be far off - there are oodles of hoops through which to jump and, occasionally, the loan underwriter requests something sort of bizarre. But more commonly, there’s a pretty finite universe of documents you’ll really need to scrounge up to get your home bought - or sold. Here they are:

  1. ID (e.g., driver’s license, state-issued ID, passport).  Who must produce it?  Buyers and sellers.  Why?  Uh, hello!?!  Lender wants to know that you are who you say you are, buyers, and the title insurance company wants to make sure, sellers, that you actually have the right to sell the home.  Funny enough, this commonly goes unrequested until you get to the closing table, when the notary requests to see it before signing, but some mortgage brokers and even some real estate brokers and agents may ask to see it earlier on.
  2. Paycheck Stubs.  Who must produce it?  Any buyer financing their purchase with a mortgage.  Sellers, usually only in the case of a short sale.  Why? Buyers’ purchase price ranges are determined, in part, by their income. And short sellers have to prove an economic hardship.
  3. Two months’ bank account statements. Who must produce it?  Buyers getting financing; sellers selling short. Why? Buyers’ lenders now require proof of regular income and proof that the down payment money is your own.  Short sellers?  It’s all about the hardship.
  4. Two years’ W-2 forms or tax returns. Who must produce it?  Mortgage-seeking buyers and short selling sellers. Why? Banks want to see a stable, long-term income. They also limit you to claiming as income the amount on which you pay taxes (attn: all business owners!). And in short sales, again, they want documentation of every single facet of your finances.
  5. Updated everything. Who must produce it? Buyer/mortgage applicants. Why? Because things change, and because the time period between the first loan application and closing can be many months - even years! - on today’s market. During the time between contract and closing it’s not at all unusual for underwriters to demand buyers produce updated mortgage statements, checks stubs, and such - and its quite common for them to call your office the day before closing to request a last minute verification of employment!
  6. Quitclaim deed. Who must produce it?  Married buyers purchasing homes they plan to own as separate property.  Married sellers selling homes that they own separately, or joint owners selling their interests separately.  Why? With the Quitclaim Deed, the other spouse or owner signs any and all interests they even might have had in the property over the the selling owner, making it possible for the title insurer to guarantee clear, undisputed title is being transferred in the sale.
  7. Divorce decree.  Who must produce it? Buyers and sellers who need to document their solo status or the property-splitting terms of their divorce. Why? Again, to ensure that the seller has the right to sell.  Recently single buyers might need to prove that they shouldn’t be held to account for their ex’s separate debts or credit report dings.
  8. Gift letters.  Who must produce it? Buyers using gift money toward their down payment.  Why? The bank wants to be sure the gift came from a relative, and is their own money to give.  They also want the relative to confirm in writing that it’s a gift, not a loan - a loan would need to be factored into your debt load.
  9. Compliance certificates. Who must produce it? Usually sellers, but sometimes buyers, by contract. Why? Some local governments require various condition requirements be met before the property is transferred, like some cities which require a sewer line be video scoped and repaired, cities which require a checklist of items be met before a certificate of occupancy be issued (usually relevant to brand new and really old homes, the latter of which are often subject to lead paint concerns) and energy conservation ordinances which require low-flow toilets and shower heads to be installed. Ask your real estate pro for advice about which, if any, such ordinances apply in your area.
  10. Mortgage statements. Who must produce it?  Any seller with a mortgage. Why? the escrow holder or title company will need to use them to order payoff demands from any mortgage holder who has to get paid before the property’s title can be transferred.

By no means is this an exhaustive list.  Agents: what documents do you see buyers and sellers struggle to scrounge up during their home buying transactions?

A Budget Friendly Guide TO Greener Living

by Jessica Hunt with Preservation Properties

Good Homes Going Fast

by Jessica Hunt with Preservation Properties

I wanted to write an article today in dedication to all of the people that are looking at buying a home.

My fiance and I are currently in the market for a home and it is always difficult being a home buyer, I completely understand.  Just imagine how difficult it would be if you were the buyer as well as the agent.  Trying to take a step back, gauge what your partner is looking for in a home as well as yourself and view properties that match both of your criteria.  It is not easy, let me tell you... especially when your non real estate partner is not into looking at homes or is very picky (which my partner is both).

We have been finding homes lately that have sort of met our criteria, nothing that is a slam dunk.  Then last night, right before going to bed, I found this really neat property and showed it to my fiance.  He was always talking about how important the flow of the home is and how he wished every home had a floorplan available and this one had it - we were hooked.  We wanted to see this place, only catch was, he was headed out of town for the week for business and wouldn't be able to see it until the following weekend.

So I called up the agent to find that after only being on the market for a total of 4 days, and having 1 open house, this place already had 4 offers on it and was going to finalize the offer by this morning.

No way we would be able to get in to see it next week. 

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Lesson learned?  Good homes sell FAST!  I can not reiterate this enough.  Too many people think that because this market might be considered a buyers market, it isn't the case with a good quality, well priced home.  Those properties are priced to move, and yes they move.

When you find a home that you feel is "your" home, you may want to move on it before the competition swoops in.  Its hard enough to find the right home, its even more difficult when someone takes the home that you finally think is "it."

Home Sweet Tax Shelter

by Jessica Hunt with Preservation Properties

Tax Tips

by Jessica Hunt with Preservation Properties

As we enter the new year I wanted to remind you of how lenders are considering self employed income and rental income.  Please use this information as a rule of thumb not an underwriting decision – only income reported on tax returns can be considered – the days of “stated income” are over!
 
If you are self employed as a Sole Proprietor your income will be taken from your filed and signed federal tax return 1040 Schedule C net income after your business expenses have been deducted.  You must have been in the same industry for at least 2 years and normally your income from the last 2 years tax returns will be averaged.
 
If you are self employed as a S Corporation your income will be taken from your filed and signed tax return 1040’s with all Schedules.  W2’s will be matched to 1040 income.  K-1 forms will be matched to corporations listed on page 2 of Schedule E.  Income will be W2 income + non-passive  income less non-passive loss on Schedule E.  You must have been in the same industry for at least 2 years and normally your income from the last 2 years tax returns will be averaged.
 
If you are self employed as a Corporation your income will be taken from your filed and signed tax return 1040’s with all Schedules.  W2’s will be matched to 1040 income.  No K-1 pass through.  Corporate Tax Returns will likely be required.  Existence of the business will be verified via the Secretary of State’s Database.  You must have been in the same industry for at least 2 years and normally your income from the last 2 years tax returns will be averaged.
 
If you are self employed as a Partnership your income will be taken from your filed and signed tax return 1040’s with all Schedules.  K-1 forms will be matched to corporations listed on page 2 of Schedule E.  Income is reported on page 2 of Schedule E.  You must have been in the same industry for at least 2 years and normally your income from the last 2 years tax returns will be averaged.
 
Rental Income:  Income as reported on filed and signed  tax return 1040’s with all Schedules.  Income is reported on page 1 of Schedule E.  Income calculation is gross rent less gross expenses.  There may be a required time of owning the property.

Displaying blog entries 1-10 of 12

Contact Information

Preservation Properties
439 Newtonville Avenue
Newtonville MA 02460
Office: 617.527.3700
Fax: 617.527.2050