Boston Real Estate Sales Market: Why Now is a Good Time to Sell

Boston’s population is the highest it’s been since the 1970s, up to over 625,000 people. With cranes as far as the eye can see, new developments are going up in areas considered in the past to be tired or rundown. However, buildings are not going up as fast as the demands call for it.

Buyers are chomping at the bit to enjoy the lifestyle that comes with city living offered in the downtown neighborhoods of Boston. Convenience of shops and restaurants, little to no need for cars, and the vibrant energy of the city are appealing to young professionals, empty nesters, and young families. More people prefer the location and lifestyle that comes with living in a condo over square footage and a yard that comes with a single family home. The demand is high, inventory remains low, and people are ready, willing, and able to pay what the market demands. The competition between investors and home buyers is stiff. Investors are fully aware rentals are in as much high demand as condos, so they are not concerned with the investment potential associated with rental property.

Boston city living is in high demandOver the weekend Matthew Gaskill and Alisa Peterson hosted an open house at their listing 41 Commonwealth Ave #3. A beautiful lofted one bed on the second block of Commonwealth Ave in Boston’s Back Bay neighborhood priced at $489,000. The open house was from 11:30am-1pm, in the hour and a half the door was open, over 50 groups came through. The buyers ranged from first-time homebuyers, empty nesters, and investors. And as a result the property was under agreement Monday evening after receiving multiple offers.

This is not a rare occurrence and it is fantastic for sellers. The high demand is driving up prices and lowering the days a property is on the market. More properties are coming on the sales market, however,  and well-priced properties are going under agreement after the first open house. Why wait until next year to sell? We know today’s buyers have the strongest buying power in years. Inventory remains low. Low inventory means low competition which equals the highest price possible.

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Should You Work With a Realtor to Buy Property?

There was a time when the only way a person could find a home for sale was searching for signs on lawns, scanning the paper, or going to a real estate office and having an agent flip through a binder of homes. Today, buyers can find what’s available while in their pajama’s at 3am. The internet makes it possible to learn just about everything regarding buying property. There is only one thing that the internet will not prepare you for, the emotions involved. The home you can see yourself raising a family and growing old in or rejuvenating your spirit of whimsy may have been the home the seller never thought they would ever leave and may still have a hard time parting with. The dream home may have another offer that you have to compete with. The perfect condo may be a short sale and you will have to wait months before you know if it is yours. Thousands of possible scenarios could come up and make you feel unprepared.

Buyers, the main reason you should work with a Realtor is unless you have bought many times before, you don’t know what you are doing. I am not saying this to be mean or to undermine anyone, I work with many seasoned Realtors that have been doing nothing but representing buyers and sellers for decades and even they say they learn something new at every deal. The real estate market is a volatile emotional animal and just when you think you have the reins, something changes.

Use a Realtor to Buy PropertyYou may be thinking that if you are not working with a Realtor, maybe you can pass the savings on to the seller and get a better deal. Nice idea, but wrong. If the seller already has a Realtor, the seller has already signed an agreement to pay the Realtor their commission. If you are not working with a Realtor, the seller’s agent keeps the full commission, without working to protect your interests. And without representation you are on uneven footing. The seller has a knowledgable professional working on their behalf with their interests in mind to get the the best possible deal. However, there is the opportunity for dual agency. Once the paperwork is signed, the agent becomes a neutral party. Even in this scenario, you will not get a better deal, the agent only passes information between you and the seller without analysis, while still receiving the commission agreed upon when the listing contract was signed.

If you are in a situation where you are not working with a Realtor and found a home that is for-sale-by-owner (FSBO) then you can potentially save the seller money and maybe get a lower price for the property. According to a survey by the National Association of Realtors of the latest trends of Buyers and Sellers, only 9% of homes on the market nationwide were FSBO properties. The majority of homes that are sold by owner were sold to a buyer that the seller knew beforehand. And with most FSBO sellers willing to work with a buyer’s agent and pay the agent’s commission, wouldn’t you prefer someone who does this every day preparing the paperwork and orchestrating the transaction to close?

Always remember Caveat Emptor or “let the buyer beware”. If you already know what the buying process entails and what to look for in a property, then you may not need an agent. But it is always better to have a professional with your best interests in mind when making a purchase in real estate and who is able to remove emotion from the process. Another agent once told me “the internet can give you information, but it can’t give you knowledge.” Even if you think you know what to expect, something can always come up that you never considered.

If you are interested in learning more about the home buying process and what we do to find you a home and protect your interests, contact the Realtors of the Matthew and Alisa Group.

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The Matthew and Alisa Group Home Buying Process Class was a Success!

This is a quick blog thanking everyone one for joining us at last night’s Home Buying Process Class!

We had a great turn out of buyers eager to learn about the home buying process. Matthew Gaskill and Alisa Peterson discussed the market conditions to give everyone an understanding of what to expect when searching to buy property this season. With properties going under-agreement as soon as they hit the market, we wanted to make sure that buyers understand how quickly they need to move to buy property.

Joe Smith, a knowledgeable lender from Guaranteed Rate explained what lenders look for when someone applies for a mortgage and the different types of loan programs available to homebuyers, both first-time home buyers and more seasoned  home buyers. He knows just as well as we do how competitive the market is right now and without proper financial backing (i.e. pre-approval letter), sellers won’t even consider the offer.

The wonderful David Datz, Esq., a real estate attorney, explained how important it is to assemble the right team to guide you through this process. This is one of the biggest purchases you can make and it is essential to have knowledgable professionals to explain what you are buying and what you are signing.

Thank you again to Stella Restaurant for providing delicious food and a great space for us to host our class. As you can see from the video, we had quite a few eager buyers ready to learn about the home buying process and I know there are more that were not able to make it.  We will be planning another class in month or two. If you are interested in attending, please subscribe to our newsletter and subscribe to our blog and we will keep you posted on our next class. These classes are meant for anyone interested in learning about the buying process in the current Boston real estate sales market. If you are a first-time home buyer, third-time home buyer, or an investor, you are welcome to join us and learn something new!

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Home Buying Process Class at Stella in Boston’s South End

Whether you are a first-time home buyer, a seventh-time home buyer, or an investor, this class is for you. Matthew Gaskill and Alisa Peterson, along with David Datz Esq., and Joe Smith from Guaranteed Rate will be hosting a class that will discuss the different aspects of buying property.

Matthew Gaskill and Alisa Peterson will be discussing the search and offer process, along with the current sales market. With the market being incredibly dynamic, we want to manage expectations, calm fears, and even help you decide if buying now is the right decision for you. Buying property now is not for everyone, but if it is for you, we want get you excited to get started on your search.

Joe Smith from Guaranteed Rate will be discussing the financing process. Financing is crucial in this market and Joe Smith will help you understand what is needed and what to expect.

David M. Datz, Esq. from David Marshall Datz P.C. law offices will explain everything from the legal standpoint of your real estate transaction and explain how we keep your interests protected.

Home Buying Process Class at StellaThe class will be at the restaurant Stella in the South End from 5:30-7pm on Tuesday January 29th 2013. We will have light refreshments and appetizers. We will have a Q&A session after our speeches, so please come with a pen, notebook, and any question you have about the home buying process. Please RSVP by January 24th by contacting Alisa Peterson at alisa.peterson@gibsonsir.com if you are interested in attending.

We are heading into another exciting real estate season and we want to get you as excited as we are!

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Exclusive New Listing: 141 Arlington Street #4 in Bay Village

Alisa Peterson and I are proud to announce our new listing at 141 Arlington Street #4, a condo in Bay Village, the neighborhood between the South End and Back Bay. This property and its ideal location would make a perfect fit for a first home, an investment property, or a pied-à-terre. The home is a turnkey possibility as the owner will consider selling as a furnished condo.

141 Arlington Street condo for saleThe sunny one bedroom condo in Bay Village was gut renovated in 2003 when the building was converted to condos. And 141 Arlington Street #4 was built to maximize space. The condo is west facing with unblocked afternoon light through three large windows. Hardwood floors are found throughout the condo and ample storage exists in both the closet and cabinetry. The building features professional management, common laundry, and extra storage private to the unit.

As far as an investment property the condo offers both a cap rate over 5% and a positive cash flow. Combined with an area with impressive historical appreciation rates, 141 Arlington Street #4 is positioned as a excellent investment property.

The Bay Village neighborhood is a convenient location with access to public transportation options such as the Green Line at Arlington Station and the Commuter and Orange Lines at Back Bay Station. Entrance and exit ramps to I-93 and the Mass Pike (I-90) are also nearby. And it is an easy walk to Back Bay, the South End, the Theater District, and Midtown, and Beacon Hill.

Contact us with any questions or to schedule a showing of the condo at 141 Arlington Street #4. Or click below to subscribe to our newsletter for email alerts of new listings.

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The Home Buying Process Simplified

Condo on Boston's Real Estate Sales MarketBuying a home can be the biggest purchase a person can make in their lifetime. For first-time home buyers this can be the most overwhelming and stressful experience they could go through. Here is a general breakdown of the steps you need to take to buy your home.

The first step is to figure out how much can you afford. The most common formula used to figure out how much to spend on your home purchase is equal 3x your annual income. Keep in mind, your mortgage payments together with your other monthly bills should not exceed more that 36% of you monthly income.

Next, you will want to save for a down payment. Depending on the loan you qualify for, you will need anywhere between 3%-30% for the down payment.

Once you have your price in mind and a down payment saved, get a pre-approval letter. This is incredibly important to have before you start your home search. You can get a pre-approval letter from any bank, but you are not locked into an agreement to get your mortgage from that bank. Having the letter can mean the difference between getting your dream home or getting lost in a pile of other offers.

Understand that not only will you need the down payment for your mortgage but closing costs and the other costs that come up in buying a home such as lawyer fees, inspection costs, etc.

Once you have the price and monies ready, begin a list of wants verses needs for you home. Do you really need walk-in closets? How important is a fireplace? Is size or location the top priority?

Now you will want to start talking to Realtors. Make it clear to your Realtor what your price range is and what you want and need in your new home. There are many different reasons to choose a Realtor: their experience, your past relationship with them, accessibility, etc. The most important factor is an understanding of what you want and for you to understand what your real estate agent will do for you.

Now that you have your priorities and a Realtor to help you navigate the real estate market, start seeing places in person that fit your criteria. Don’t feel discouraged if or when your lists of wants and needs change. You may go into this process with one idea of what you want and then you end up with something completely different.

Buying Property and signing PaperworkOnce you find the home for you, talk to your Realtor about making an offer. Your Realtor will explain what is the best price to offer based on a comparative market analysis. This will show you what comparable properties have recently sold for. Whether it is a buyer’s market or seller’s market, listen to your Realtor and make sure you understand the data they are presenting you. The comparative sales indicate market value for the given property which will dictate the best amount to offer. Your Realtor will help guide you through the contingency addendum. The contingency addendum protects the buyer’s interest and deposit money and allows the buyer to re-negotiate or withdrawal the offer based on the results of inspections preformed during the due diligence period. It’s important to do your due diligence about the house you are trying to buy but the more unnecessary contingencies you put in your offer, the less attractive your offer becomes to a seller. If you check off any contingency, you are not only costing yourself more money by having these tests done, but you are inadvertently telling the seller that you want as many ways out of buying the property as you can get. Many sellers would prefer to go with another buyer or even leave the property on the market instead of accepting an offer they think will fall through.

After your offer is accepted this is where the paperwork starts and lawyers become involved. This is when you actually preform your due diligence and have your potential home inspected and tested. If everything comes back to your satisfaction, time to sign the Purchase and Sale (P&S) agreement and to start choosing paint colors and furniture placement.

If you have any questions or are ready to start the process of buying a home, contact the Realtors of Matthew and Alisa Group Real Estate.

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Should I Rent or Should I Buy Now?

The real estate market has been dynamic over the last few years to say the least. The dramatic highs and lows have left many wondering if they should rent an apartment or buy a home. Each option has its own merits and drawbacks and it is important to figure out what is the best option for you right now. Consider these arguments during your internal rent vs buy debate.

 

Should I Rent?

 

Renting is a great option for those that are still trying to figure out what their plan is. Many cities have wonderful neighborhoods with distinct flavors and personalities. Renting gives someone the option to try out different neighborhoods and find which is the best fit for his or her lifestyle. Buying is an investment synonymous with putting down roots and many people want to know their surroundings before choosing where to settle.

Renting offers short-term commitment. The most common lease contract is for a year-long commitment and there are also short-term leases that can be from 3 months to 6 months and Tenancy-at-Will contracts which are just month-to-month commitments.

The ability to test out an area with little commitment makes renting seem ideal until you realize renting also means you are throwing your money away. Renting does not build credit or equity. In fact, by paying your rent, you are paying someone else’s mortgage and building someone else’s equity and credit.

The tax breaks for renters are limited. In Massachusetts, renters can only deduct 50% of the rent they paid in a calendar year with the maximum deduction for rent being $3000. Meaning if your rent is more than $500, you are not going to see any difference.

Another drawback is rent is always going up! Especially in high demand cities with low vacancy rates. What you could spend to get a one bed in the suburbs could maybe get you a closet in the city. Then there are also the upfront costs.  Unless you are moving into a rental complex that only wants first month’s rent, most owners want at least first and last month’s rent. Some will ask for a security deposit and if you are using a broker you will need to pay for a fee. To rent an apartment, you need to have 2-4 months rent saved at lease signing. Then there is the expense of actually moving: the boxes, the moving truck, movers, etc.

After you have an apartment, the landlord can be an issue. With thousands of landlords and even more tenants, each with a unique personality, it’s not possible for every tenant to get along with every landlord. Some will be great and others not so great and there is no way to tell which one you are going to get until after you are already in your lease. In the worst case scenario, this can make for a very long year.

 

Rent vs Buy: Which Best Fits My Lifestyle?

 

Should I Buy?

 

Buying a home can be scary at first. With all the horror stories throughout the nation (foreclosures, short sales, underwater mortgages, money pits, the inability to sell, etc.), it is easy to think that renting is safer than buying. Buying can be scary because it brings responsibility and commitment. Basically, it means becoming a grown-up.

Fortunately there are more reasons to buy than there are not to!

Sales prices have fallen and mortgage rates are at an all time low. The combination makes housing affordability as low as we have seen in a decade and possibly as low as we will see for the next decade.

There are more tax deductions for homeowners than renters. Homeowners can deduct their mortgage interest, property taxes, and certain home improvements also qualify for deductions.

When you are paying for your own property, you are putting your money toward building your own equity and credit. You are paying off your own mortgage rather than seeing your money go to someone else’s pocket.

If you buy your property as a long term investment, it is like putting money into the bank. The more equity you build, the more you can borrow for future purchases, such as renovations  to your home or your child’s college tuition.

If it is the responsibility and commitment that is scary, then buy a condo. The size won’t be overwhelming. Plenty of condos are located in professionally-managed buildings or buildings that have property managers to handle repairs and maintenance. In a few years, if you decide to move onto something bigger, you can sell the property but you could also rent it out and have someone else pay the mortgage and build your equity.

To learn more about buying or renting property, contact the Realtors of Matthew and Alisa Group Real Estate.

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Buying a Home: How Do You Know If You Are Ready?

If you have been searching for rentals in Boston in the last couple years, you may have noticed that it is tough. Inventory is limited and prices keep rising. There are three things renters can do. One: pay the rising rates. Two: look farther outside the city than originally planned. Three: stop renting and purchase. Many people today feel that investing in real estate is safer than investing in stocks and with good reason. Real estate in Boston has not been hurt as much as the rest of the country and rentals in the city are consistently in high demand. If you are on the fence on buying real estate, here are a couple signs you may be ready.

Buying real estate in Boston may be a better option than rentingOne: you know what you want. If you have a realistic idea of the size you need and the location where you want to live for the next few years and you  haven’t found it on the rental market, take a look at what is on the sales market. The rental market in Boston favors landlords. The inventory is limited and owners can get not only their asking price but also first month’s rent, last month’s rent, and security deposit (each equal to one month) and not have to pay a broker’s fee.

Two: you have the finances. The upfront costs of renting an apartment in Boston are higher than most cities around the nation. Many people looking for quality rentals in Boston  are surprised how little they get for the money. With many banks loosening restrictions on who can get mortgages, it is worth your time to speak with a mortgage broker about types of loans and available rates.

If you are weary of buying because you do not want to be locked into a mortgage on the chance your career moves you to another city, keep in mind that you could hold onto your home as an investment property. With a tenant paying rent, you can build equity while someone pays your mortgage for you.

Contact the Realtors of Matthew and Alisa Group Real Estate if you are interested in learning more about purchasing a home.

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A First-Time Home Buyer’s Emotions

Buying a home is one of the most stressful experiencesA dear friend of mine recently put in an offer on her first home. This could be the most emotional I have ever seen her and I was at her wedding. She was nervous, excited, and on edge waiting for the phone to ring with news from her real estate agent. She was buying her first home on the South Shore of Boston, an area beyond my expertise, so  my role was that of a friend, a friend who happens to be a Realtor.

The friend in me wanted to say something to help her feel better but the Realtor in me knew her situation was not traditional and somewhat intimidating for a first home purchase. The listing went on the market not long before she and her husband saw it. Because they were not pre-approved, the another offer was accepted before they could get their finances in order. Fortunately for them the offer fell through and they were able to put in their offer right away but so did another couple.

The house was listed using the uncommon method of value price range, meaning the owner would entertain offers between x and y. After they put in their offer, they learned the owner would not provoke a bidding war; he would look at each parties’ best and final offer before choosing the one he liked most. Talk about nerve racking! Of course the listing agent could not disclose what the other offer was so they had to blindly decide what the other couple’s best offer could be and make theirs a little better.

All I could say, as her hand was glued to her phone, was, “Worst case scenario, you don’t get the house. Best case scenario, you bought your first home. But either way, once you know, you will know what to do next.”

Buying a home can be stressful, emotional, and overwhelming whether it’s your first home or your fifth home. One source of comfort through this experience should be your Realtor. This was my friend’s first home buying experience and she was grateful to have an agent that she was completely comfortable with, felt confident in, and knew was in their corner.

We at Matthew and Alisa Group Real Estate understand the emotions that can go into buying a home. We are available to discuss the process of buying property and specialize in assisting first-time homebuyers.

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