TWO NEW CONSTRUCTION HOMES FOR SALE!!

Stop previewing all of the old houses in Boston with their tiny closets, no or window air conditioning, and bathrooms or kitchens that need enlarging or updating?

Admittedly, there is not a lot of single-family new construction homes to choose from in Boston. Fortunately, however, you now have an opportunity to buy a brand-new home in a great location. 5

2 and 54 Birchwood enjoy Boston's low tax rate and are just minutes from all the great shopping available in Dedham and Westwood. The sooner you buy, the more custom touches you will be able to add! The homes will be available for occupancy in early fall.

Click on this link to follow the construction progress.

Buying and Selling Real Estate

starts off as a logical, thought process but more often ends up being run by emotions. You want to pick the best agent who knows the market and has lots of experience and references, but then rely upon your emotions when it comes time to make a choice. This is normal. After all, we are human. As such, we are doomed to repeat making decisions based upon "how you feel" versus based upon "what makes sense". When you are interviewing REALTORS to find the best one to represent you, your natural inclination will be to go with the one you like, the one with whom you "click". This kind of behavior might cost you thousands of dollars! Consequently, you must not let your need to "feel good" govern your decision making. Here is a real-life example of what you should avoid doing...

You interview two agents. The first one bounces into the room with excitement, oohing and aahing about your home. You talk some and are enthralled by the enthusiasm exhibited. The suggested list price is right where you think it should be. The next agent arrives. This one is quiet, contemplative. You have a sober chat about the market and go over a pricing strategy. Now, which broker would you choose?

Although the seller appreciated the sober approach and agreed with everything said, the seller felt as though the "click" was between the enthusiastic broker because the broker's excitement might translate into better marketing, such that buyers might be swept up in the same interest/excitement the broker has and buy the property. This makes sense, right? You get someone oozing enthusiasm for your property and who agrees with you on where to price it. 

Well, a thoughtful seller would have asked exactly how the brokers would go about marketing. Maybe even ask to see something that they have on the market or have recently sold to be able to compare marketing plans. As it turns out, I already had a passing acquaintance with this seller and chose a sober approach, focusing upon the real estate market and the economy instead of putting on airs. 

The end result: the home should have sold within two weeks. It didn't. It is a small condo and so there are only so many photos you can take of it. The enthusiastic broker took 7 interior shots and 3 exterior and one of the common area in the building. I would have taken 10-12 interior shots, 4-6 exterior shots, and 10-15 of the building and its amenities. I would also have created the unit's own web site to showcase the property in its best light versus confining my marketing to posting it in the MLS. The enthusiastic broker did not take the time to measure the unit or to provide a floor plan. Sadly, this "enthusiastic" broker is providing sub marketing for such a great property. We shall see just how long it takes and how many price adjustments will be required before it sells.

Congress has passed the "Blue Water Navy Vietnam Veterans Act."

The President is expected to sign H.R. 299, the "Blue Water Navy Vietnam Veterans Act." The positive side of this:

This legislation includes language which will eliminate the cap on the VA home loan guarantee. Veterans, under this legislation, will be able to purchase any home they qualify for using the VA home loan (with zero down payment). What does this mean for you, Vets? Prior to this legislation, the VA Guaranteed Loan Program set limits on how expensive a home you could buy with zero down payment. This might have been okay in cities and towns where housing was affordable; but when you are looking at the housing prices around Boston, that loan amount ceiling just didn't cut it. So, in prior years and areas you might have been able to buy a home as long as it didn't cost more than $485,000. But, as soon as the President signs the new bill, you can buy any house that you can afford with zero down payment!

There are two way in which you must qualify: 

1. Like buying with any other mortgage program, you must have enough income and good credit for the loan amount you need.
2. You must be an eligible Vet. VA eligibility is earned through service to our country. Active duty (Title 10) members can become eligible after 90 straight days during wartime or 181 days during peacetime. If not called to active duty, regular military members need to serve two continuous years, and Reservists and Guard members must serve six years. The VA loan benefits are available to most Veterans who served prior to the early 1980s as long as they have 90 total days of active military duty during WWII, Korea War or Vietnam War, or 181 continuous days of active duty between these conflicts. This is just a summary of the eligibility guidelines. Regardless of when you served, the VA has a rule regarding honorable discharge. To be eligible for VA home loans, a Veteran, if separated from the military, must have done so for reasons other than dishonorable discharge. Also, if your service was shortened due to an injury, illness, reduction in force or some other qualifying reason, the VA may still award home loan benefits in some cases even if you do not meet the minimum service duration requirements.

The negative side of this:

As introduced, the legislation would slightly increase some of the guarantee fees for all veterans using the VA loan program, in order to pay for the healthcare component.

3 Steps to Effective Decluttering

Spring cleaning is a ritual that most homeowners find themselves tasked with annually. While some people enjoy the activity, others find it tedious and difficult. When attempting to sell your home, you may be even more wary, as such daunting tasks can cause added anxiety and stress. Here are a few tips on how to help get rid of your stuff: 

1) Look for Support. Friends and family are often great motivators for getting rid of clutter. Think about asking other people's opinions on what should stay and what should go. If you're in the process of selling your home, your REALTOR could be a trusty resource. REALTORS have experience helping people just like you prepare their homes for prospective showings and eventual moves.

Sometimes I find myself face-to-face with a seller whose home is jam packed with stuff. The first thing I tell them is, "If you are planning on moving, start packing now!" This takes the stress off doing everything at once when the property sells and the sellers have 3 weeks to clear out! It also is a great means of decluttering and making the home feel more spacious.

2) Professional Help May Be Necessary. Sometimes the task at hand may be a bit too much for homeowners to handle. Years of clutter and storage build up quickly and figuring out where to even begin can be tough. So enlisting the help of a professional organizer can go a long way to speedily cleaning your home.

3) Consider Your Options. When you are actually ready to declutter, the question then becomes: Where should all the stuff go? There are a few options to consider when cleaning:

SELL. Some things you may want to sell include antiques or collectibles.

DONATE. Old clothes and furniture that you don't use anymore may be better suited for others in need.

STORE. Consider getting a storage unit off-site if you are unsure about getting rid of your possessions. If you are relocating, you can look into getting a POD or something similar.

TRASH. Can we et real? Some items you have stored have no value or are damaged. Throwing them away is a quick way to create much-needed space.

"It's a small world after all"

If inflation moves lower or is expected to move lower — rates must go lower as well. That's the situation right now.

The financial markets and interest rates also follow inflation on a global scale. Why is this important to you?

If disinflation or the rate of inflation moderates in places like Europe, interest rates in those countries move lower and tend to drag US interest rates lower as well.

This past week we watched home loan rates revisit one-year lows upon news that the European Central Bank or ECB downgraded their economic outlook and inflation expectations.

The ECB said they now expect 2019 economic growth to come in at a paltry 1.1%, down sharply from a previous forecast of 1.7%. Moreover, ECB officials said inflation, which is already very low, could move lower still.

Again, if inflation moves lower in large countries around the globe — we tend to see improvement in long-term US interest rates...that is the current trend.

Interest rates don't buy houses, jobs do!

The Bureau of Labor Statistics reported that just 20,000 jobs were created in February, well below expectations of 175,000. This was a disappointing number, but the unemployment rate fell to 3.8% and wages grew by 3.4% year over year...the highest level in a decade. Overall the labor market continues to expand and wages are rising — all good news for housing.

The standard guide to select a refrigerator size is to allow for 4 to 6 cubic feet per adult in the household. This is the first thing you should determine before buying a fridge. I suggest you consider the size of your family and allow for a little more extra room. Then, once you have determined the appropriate size, you can consider style options. The following are approximate measurements and prices for a variety of different refrigerator models.

Gain Storage Space with a Top Freezer

Size: 28–33 inches wide
Capacity: 23 cubic feet
Price: $479 to $2,199
Pros: Good amount of storage for small place
Cons: Doors swing wide, need to bend to access the refrigerator

Keep Fresh Food at Eye Level with a Bottom Freezer

Size: 24–36 inches wide
Capacity: 30 cubic feet
Price: $999 to $1,899
Pros: Fresh food is at eye-level and frozen food is down below
Cons: Must bend to reach freezer

Avoid Bending with a Side-by-Side Option

Size: 33–36 inches wide
Capacity: 28 cubic feet
Price: $1,149 to $3,099
Pros: Fridge on one side, freezer on the other—no bending; exterior ice and water dispenser; narrow doors fit a small kitchen
Cons: Too narrow to fit a pizza box into; not as energy efficient as other models

Save Energy with a French Door

Size: 28–36 inches
Capacity: 34 cubic feet
Price: $1,599 to $3,999 ($4,500 to $8,000 if you want a slimmer depth that looks built in)
Pros: Only open half the fridge when storing small items
Cons: Priciest option

Other Considerations

Most consumers do not buy a refrigerator on style alone. Here are some other factors that may be more important.
Energy efficiency: A refrigerator with the Energy Saver label means that it's in the top 25% of the market for efficiency, which means lower energy bills. Just be aware that buying a different style of fridge may also save you the same or more.

External water and ice dispensers: This is one of the most popular features; but be wary that fridges with this feature often require the most repairs.

Adjustable shelves and drawers: Space options ensure that you're always organized.

Air purifier: This feature can keep foods fresh for longer by eliminating bacteria.

Dual-cooling system: Dual cooling enables the fridge and freezer to keep cool air separate.

Control pad: Controls allow you to set the temperature and customize features.

Smart refrigerator: Optional features include energy monitoring, voice control, and displays for cooking timers, recipe, and family calendar, also can play music.

Prioritize the features that matter to you and identify the style you love and you will have found the perfect refrigerator. Refrigerators should last for 13 years, so make an investment that will pay off every day.

When you buy a home, do you know what will come with it?

Do you get to keep all the appliances, the art on the walls or the bird bath in the garden? Determining what will stay with the home and what will go with the seller will vary from transaction to transaction. Here’s how to determine what conveys with the home you’re considering, as well as tips to safeguard yourself when negotiating those extra items:

1. Check the listing information in the MLS. Ask your broker if the property has been on and off the market, and if it has, ask to see the original listing. Hopefully the seller specified the items included in their home’s asking price in one or the other of the printouts.
2. When in doubt, know the screwdriver rule. For the most part, if it takes a screwdriver to remove something, it’s considered real property - which is to say, a part of the property. This includes shelves, light fixtures and even curtain rods. But, if it’s hung on a nail and is removable, it's considered personal property and likely not included in the sale.
3. But, whether real or personal, all terms in a real estate transaction is negotiable. Negotiate with the seller if there’s something you’re interested in that isn’t declared part of the sale... or even if it is expressly excluded from the sale. Remember, the answer is always no until you ask! For example, when something is obviously personal property like a riding lawn mower or pool table, include it in your offer as the seller might not want to deal with moving/selling them.
4. Important Caveat - if the seller agrees to include big-ticket items, like a riding mower, you’ll want to discuss this up front with your mortgage lender. Depending on the type of loan you have, it could affect the appraisal or change the value of the property where you might have to pay cash for the item instead of being able to roll it into the mortgage. 

So, here are a few things you should know: unless the seller specifies that the washer, dryer and/or refrigerator convey, you should assume they’re not included. Same goes for the bird bath or anything else sitting on the ground, patio, or porch. You only get what is built in or fastened to the property. This said, I've seen sellers remove curtains/rods and even dig up plants/flowers. Both sellers and buyers need to be informed as to what is real and what is personal property!

“Governor Baker seeks big real estate sales tax hike to fund climate programs“

reads the headline in the Boston Globe. This is a totally bogus claim by Baker. What he is really saying is he wants more money to spend on infrastructure but he doesn’t want to come across as raising taxes on us because his recent re-election campaign opposed tax and fee increases. This latest tax hike is camouflaged as a “climate-change” necessity in order to make the tax hike more palatable to our climate-change sensitive citizenry. There is already so much waste in our state budget and now there’s going to be more; and this latest round of tax hikes is going to affect you more than others. If you have sold a property in Massachusetts, you know that sellers pay a sales tax from the proceeds of the sale.

Under current law, a home seller in most parts of the state pays $4.56 in transfer taxes per $1,000 of a purchase price. That means for a $500,000 home sale, a seller pays a $2,280 tax bill. If Baker’s proposal passes, the transfer tax rate would jump to $6.84 per $1,000, meaning for the same $500,000 sale, the tax bill balloons to $3,420. On Cape Cod, where the excise tax is lower than the rest of the state, the increase is actually more dramatic under Baker’s proposal. The $3.42 per $1,000 of a purchase price home sellers currently pay would jump by 67 percent to $5.70, or $5,700 on a $1,000,000 sale. Regardless of where you live, this is a problem that Charlie has not thought through.

Greedy Charlie has seen property values reach their highest levels and so now he thinks that this is a cash cow ripe for milking. Here’s why this is an unfair tax:

1. No one else is contributing to the cost of improving the things Baker says is needed "because of climate change" - not renters, not tourists, not anyone else besides property sellers.
2. If you bought your house 30 years ago for $150,000 and finally paid off your 30-year mortgage with a 5% interest rate, you will have paid $140,000 in interest on top of the $150,000 purchase price. Therefore, you won't really see a nickel of profit unless you are paid more than $320,000 for your property. It would appear that you can afford to pay $2,736 sales tax on a $400,000 sale price. However, what if you need every penny of the proceeds for medical care?
3. However, assume you buy this same house for $600,000 today. Assume the house appreciates 4% per year = $75,000. Assume you need to sell in 3 years. With a 5% interest rate, you will have paid $88,000 in interest after 3 years which means you will have invested $688,000 in your home. If you sell it for $675,000 less $37,000 cost of sale expenses, you only end up with $638,000 vs the $688,000 you would have already invested in home ownership - virtually a $50,000 loss. Thankfully, your mortgage balance would only be $572,000 so you wouldn't have to pay to sell your property. With Baker's new tax hike, that would increase your loss to $51,600.
4. BUT, short-sighted Charlie doesn't realize that market values are about to drop, or perhaps doesn't care if they do. There won't be a 4% appreciation rate to factor in over the next 3 years. In 3 years, values will be less than they are now and possibly dropping by 4% annually!! Your $600,000 property might only be worth $550,000 when you go to sell it. Assume the same mortgage figures and a sale price of $550,000. You will be UNDER WATER! You won't be able to afford to sell because you will have less than $520,000 to pay off your $572,000 mortgage... unless you can afford to write a check for $52,000 to sell. Oh, and don't forget Charlie's additional $1,600 climate change tax. You now have to write a check for $53,600. Your only reasonable option in this scenario is to rent your property out... hopefully for more than your mortgage payment.
5. Then you have ignoramuses who think that sellers will have to ask for more in order to cover the cost of the additional tax. WRONG!! Property values are not determined by what the seller wants or needs. Sellers can only get what buyers are willing to pay. 

I could go on and on but this post is already too long. Suffice to say, this is a bad tax and should not be passed even if it's dressed up as a desirable climate-change necessity.

If you should find yourself in a divorce situation or needing to divest the property of a deceased family member, it can be a bumpy ride, even though it shouldn't be. Here are a few points to consider if you find yourself in such a situation:

1. I had clients whose mother had passed and left the family her house. As with all transactions, my goal was to sell the house for the most the market would pay. To get to that point, the family had to agree upon a realistic listing price for the condition the house was in. This took some doing because several of the family members lived in other states and thought that they knew what the property should sell for. Although it might be best to have an appraisal done to determine value, you should know that appraisals determine value based upon past sales - going back as far as a year. Since the market is always changing, it is just as wise to have a REALTOR^®'s opinion of value.
2. Market value is usually stated as a gross figure and does not take into account sale's or transfer of ownership expenses. These should be taken into account before "splitting the proceeds" between the divorcing couple or among inheritors.
3. Prior to selling an estate, be sure you have a court-approved right to sell. Your estate attorney should procure this for you.
4. Prior to listing the property for sale, family members should already have decided upon how the proceeds are to be split and to whom paid. All parties should agree in advance as to what "costs of sale" are to be deducted from the total proceeds at closing or which might be paid separately by whomever. You should have a letter signed by all parties so stating and given to your attorney so funds can be distributed quickly and efficiently upon closing.
5. If there is a mortgage on the house, learn what its ramifications have on you. If there is a reverse home equity mortgage in place, they usually give you perhaps 6 months to pay the mortgage off. On the other hand, if it's a purchase-money mortgage with a due-on-sale clause, they will want to be paid right away. However, it takes time to foreclose which means you have time to re-finance or sell.
6. If multiple parties are concerned with different ideas, there's usually an amicable solution available. For example, if one wants to keep the home but the other wants to sell, options include an immediate buyout by the one wanting to retain the property (a short or long-term promissory note might be held by the party wishing to sell while the buying party gets finances in order to take out a new loan); or, perhaps renting the property short-term or long-term is wiser for both with everyone splitting the rental income each month. Worst case scenario, a court can order the sale of the property and the proceeds split among the parties.

Each option comes with certain costs, including:

• Selling - Listing, staging and closing costs
• Renting - Property management and maintenance costs
• Not Selling/Moving in - Maintenance and HOA fees

** Each option discussed also comes with potential state, federal and capital gains taxes. To this end, you might want to find a trusted estate planning attorney.

Just in from Greater Boston Real Estate Board

Meeting Tonight! 5:30 p.m., Cambridge City Council Meeting, Sullivan Chamber

The City of Cambridge is considering enacting a local by-law to establish a new sales tax on homes. The Cambridge City Council will hold a public hearing tonight! Monday January 7 at 5:30 pm, Cambridge City Hall, 2nd Floor, Sullivan Chamber, 795 Massachusetts Avenue.

Policy Order #10 on Monday's Cambridge City Council agenda will begin the process towards establishing a real estate transfer tax in Cambridge. The Policy Order will initiate a home rule petition from Cambridge asking the Massachusetts legislature to allow Cambridge to create the tax. The adverse economic impact and inequity inherent in real estate transfer taxes make them a bad tax policy for a number of reasons.

• Subverts Prop 2 1/2: The tax would subvert the voter approval process inherent in a Proposition 2½ override in which voters can decide for themselves whether to increase their own property taxes to fund affordable housing.
• Community Wide Responsibility: Community-wide responsibilities should be paid for by the entire community. The proposed tax scheme is inequitable and discriminatory as it would single out a small segment of the population, specifically home buyers and sellers, to pay for a community wide need/responsibility.
• Unstable Source of Revenue: The real estate market is highly sensitive to economic downturns; this tax would provide an unstable source of revenue for a current and ongoing community need.
• Exclusionary: The tax is exclusionary because it would in effect create an additional barrier to entry. It would establish an entrance and exit fee for each community that adopts it.
• Increased Cost: Additional taxes and fees are a major burden to buyers and sellers particularly at the time of closing. Taxes and fees have a negative impact on housing costs and economic development.
• Equity Stripping: It is important to remember that, unlike a home purchase which can be financed, payment of a sales tax cannot be financed. Such a tax would cost thousands of dollars due at closing from the buyer or taken from the seller’s proceeds. This transfer tax could be viewed as a municipal “equity stripping” of the value of one’s home.