Adam Geragosian Real Estate Blog

Real Estate Winter checklist:

1 – Service furnace/boiler.
2 – Clean gutters.
3 – Drain sprinklers/water spouts.
4 – Service wood burning chimney.
5 – Weather strip drafty windows & add door sweep.
6 – Change to programmable thermostat (if not done already).
7 – Change air filters.
8 – Clear soffit vents to prevent ice-damming.
9 – Purchase roof rake for areas prone to ice-damming.
10 – Trim back branches that overhang home.
11 – Have shovel and sand/salt for stairs, walkway, and driveway.
12 – Remove and store window screens.

The rules and regulations within a condo association can sometimes affect whether or not a property will sell. I recently ran into a situation where buyers (a couple) were set on purchasing a particular condo in Boston. This property was seemingly perfect for them. It had everything they were looking for… It was updated, hardwood throughout, top floor, high ceilings, fireplace; etc. The issue they ran in to was that the association did not allow pets. When I first took them to see this property it was no issue because they did not have a pet, nor did they plan to get one. However, during the course of our search that changed. Just like the pets, this property was now banned.

This situation got me thinking on two topics I have seen more of lately. Pet and Smoking restrictions/bans within condo associations. Now, I am a dog guy… So I could never live somewhere that did not allow pets. But on the other side of the coin, I do not smoke and would never live somewhere that smoking was allowed. Smoking bans have come to the forefront because of a recent lawsuit in Boston; leading more associations to ban the habit. I think this is a good idea because it only takes one smoker-unit within a building to make the other units unsalable. The trick to ban smoking is to have the condo docs changed BEFORE a smoker moves in.

Although some people put them under the same umbrella, I think Pets and Smoking should be entirely separate issues. I have had plenty of clients walk out of a building immediately because of the smell of cigarettes. To the contrary, I have never encountered a situation where buyers disqualified a unit because pets were allowed.

Keep the dogs, quit the cigarettes.

A heavy caution towards who you hire to sell your home or represent you through the purchase of a home has never been more important. There are many options as to who you can choose to represent you on either side of a transaction. You need to take time with this decision as it can be one that helps you earn, or potentially lose, a lot of money. Agents that are experts in their field are trustworthy, willing to go the extra mile, and can be real driving force behind a smooth and profitable transaction. Real Estate is a business with very little resistance to entry. Because of this, just about anyone can get their license and be a “real estate professional”. This idea alone should force you to be incredibly cautious in whom you choose. There are also many discount brokerages out there that offer money back at closing to a buyer. From my experience, many of these agents are not well versed in the locations they cover. This lack of local knowledge can cost you far more money than you will save by using such an agency. There is a reason why Mercedes does not discount their cars. If you have a good product, and believe in what you are selling, then you should be comfortable moving forward at your market value. With so many options in to choose from… be careful and make sure you do your homework!

Boston is one of the most unique metropolitan areas in the United States. We’re an older city with a great selection of condos. Whether you’re looking for upscale luxury properties, new developments, or older homes with antique charm our city has it. Wintston Churchhill once famously called Commonwealth Avenue in the Back Bay “the most beautiful street in the world,” speaking of course to the Parks, Trees, and Brownstones.

Like the rest of the country, Boston suffered during the recent real estate slump. Many potential sellers holding off on putting their homes on the market, for fear of low pricing. Many of these sellers opted to either wait until the market improved or opted to rent out their vacant condos.

Our outlook for the coming year in Boston condos? Very positive. If recent trends continue, we’re looking forward to a pretty good market…

In the Northeast, we know how harsh and long the winters can be… however, this has been one of the worst in recent memory. The record amount of snow we saw this winter had an affect on the real estate market. With sidewalks blocked, parking spaces marked, streets not plowed; etc. It made it difficult to show property. This weather kept a lot of buyers inside, and sellers off the market. As we head in to the final stages of winter, the spring market has begun to come alive. Over the last few weeks listing activity has picked up. Along with the new listings, there are many buyers who have awakened from their seasonal hibernation.

The sudden spike in interest rates over the last few weeks has helped drive (what was) a slow winter market in to a flurry of activity. Over the last 3-4 months the general buying public began taking for granted historically low rates (i.e. 4.275% for qualified buyers). There was a common mentality and clouded belief that rates would stay this low through the foreseeable future. No matter how much I preached to people that it is just a matter of time before they spike… only a few people listened! What was, just a couple months ago, a 4.275% rate is now a 4.875% rate. This may not seem like much, but on a $300,000 loan that equates to approximately $110 more each month over a 30 year mortgage; or a $39,600 increase in payments over the term of 30 years. Nonetheless, this sudden spike in rates has caused a lot of buyers to re-evaluate their situation. When I saw people becoming complacent with low rates, I knew it would only be a matter of time before they found out the hard way that the time to take advantage is now!

There has been a phenomenon going on in the market over the last few months. The historically low rates are having little to no impact on buyers any more. Buyers have become too comfortable with these rates and are taking them for granted. Most buyers in the market right now are people that are ready and able to buy, but their decision is not based on low rates… they are simply an added bonus. The buyer’s that should be taking advantage, are not. The reality is that there is no possible way the banks can sustain themselves with rates this low forever. The trend of low rates being undervalued by the general buying pool has been going on for about 4 months.

To throw an analogy at you…This trend reminds me of a relationship where you are taking the person you are with for granted. In most cases like this, change will only come if the one being taken for granted decides this is not what he/she wants anymore. When this happens, the person taking the other for granted will immediately change their ways and realize their mistakes. Well… The same goes for the relationship between buyers and low rates. I think it is about time banks (and the government) crack the whip and let rates creep up. This will give buyers a much needed reality check and help them realize that taking low rates for granted is a mistake.

It is important to note that raising your score is a bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time. See how much money you can save by just following these tips and raising your score.

Payment History Tips
- Pay your bills on time.
Delinquent payments and collections can have a major negative impact on your score.
- If you have missed payments, get current and stay current.
The longer you pay your bills on time, the better your score.
- Be aware that paying off a collection account will not remove it from your credit report.
It will stay on your report for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

Amounts Owed Tips
-Keep balances low on credit cards and other “revolving credit”.
High outstanding debt can affect a score.
- Pay off debt rather than moving it around.
The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
- Don’t close unused credit cards as a short-term strategy to raise your score.
- Don’t open a number of new credit cards that you don’t need, just to increase your available credit.
This approach could backfire and actually lower score.

Length of Credit History Tips
- If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly.
New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips
- Do your rate shopping for a given loan within a focused period of time.
FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
- Re-establish your credit history if you have had problems.
Opening new accounts responsibly and paying them off on time will raise your score in the long term.
- Note that it’s OK to request and check your own credit report.
This won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use Tips
- Apply for and open new credit accounts only as needed.
Don’t open accounts just to have a better credit mix – it probably won’t raise your score.
- Have credit cards – but manage them responsibly.
In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
- Note that closing an account doesn’t make it go away.
A closed account will still show up on your credit report, and may be considered by the score.

With the economic change over the last 2 years we have seen a steady decrease in personal home renovations. The norm used to be owner’s would invest money into their home (i.e. new kitchen, bath, finished basement; etc) and see an immediate return on their investment through resale. Those times have come and gone. The lion’s share of renovations taking place these days are by developers who purchase worn property, and renovate the entire building. The number of renovations has decreased because of a couple reasons: 1) The cost of renovating is much higher than it used to be. Labor & material have become so expensive that the profit margin is negligible. 2) It has become more cost efficient to buy a property that has already been renovated by someone else within the last 10 years. Buyer’s can now get a finished home for a discounted price, as opposed to paying a premium to renovate.

The more common work owner’s are doing these days is out of necessity, not desire. For example… If the windows are drafty, replace them. If the basement has a water problem, solve it. If the paint is chipping, paint it. If a roof is failing, replace it .

The Chief Economist for the National Association of Realtors sees this as a positive sign. “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market,” he said. These historically low rates continue to be the driving force behind the market. Such rates have given buyer’s the opportunity to purchase a home, in place of renting. The low rates have also openened the door for many home owner’s to refinance and save a significant amount of money on their monthly payments.

Although a lot people are taking advantage of the low rates, there are still many potential buyer’s out there that are taking them for granted. More experienced home owner’s have jumped at the opportunity to refinance because they have seen the other side of the spectrum and know how much a 1% rate decrease can save them.

For example:

On a $300,000 purchase with 10% down payment, and rate of 5.5%… your monthly payment is $1,533. At current rate of 4.5% your payment is $1,368… difference of $165/month. Savings for the year = $1,980. Savings over the life of the loan (30 years) = $59,400!!