Home buying chat with Rona Fischman
Rona Fischman: Hi, thank you for the chance to be live with Boston.com.
buyer: How is the house market right now? Is the house price really down much? Is the price equal to which year, 2006, 2005, 2004, so on?
Rona Fischman: It depends on where you are in the area. Some towns are down as much as 20% or more. Some are actually still going up.
Rona Fischman: Name a town or two, anyone...
mbabb: Hi Rona. We are renters looking to buy. How harshly do sellers look at buyers using FHA financing? We are choosing to use an FHA loan because we don't want to put a big downpayment down, not because we don't have the money. A family friend has told us that that is why a low bid we put in was rejected. Should we rethink our financing strategy?
Rona Fischman: Most sellers think badly of FHA because it used to be really slow and bureaucratic. Most brokers know that it has improved and will tell the sellers so. If you will benefit from that program, go for it.
Rona Fischman: I just looked though the Warren data and the biggest losers and gainers are in the somewhat rural areas like Williamsburg, Whately,Bernardston,Chesterfield.
Rona Fischman: Medford is down 6% this year, so far, that would bring it to 2006 levels.
JW: I have recently see places like Newton, Wellesley price are still firm there. How can I find deals in these areas? Is it workable
Rona Fischman: to find the best places in high-end towns, you either need to be right on the spot, ready to jump, or look for places that other people have turned down for the wrong reason.
Rona Fischman: Some of the wrong reasons?
Rona Fischman: Try to look beyond bad housekeeping, dirt and smells. Most of the time, those leave with the sellers.
Rona Fischman: Braintree is down 9% this year. That puts them back to 2005, combined with the drop last year.
sshore: Rona -- is the current mortgage climate bringing more sellers out of the woodwork? And are these sellers being realistic about prices?
Rona Fischman: Some sellers have not gotten the message that we are in a declining market, overall.
Rona Fischman: I have seen price drops over $150K on houses in the $600s and $700s.
Rona Fischman: It is clear that overpricing is a bad tactic, but the optimistic sellers are still in denial.
RealEstateCafe: Rona, Has the Globe published reader comments received on Sunday's aricle about bidding wars, or have you or Stacey blogged about the article?
Rona Fischman: I haven't blogged about bidding wars this week, Bill. But I have in the past.
Rona Fischman: I have been seeing competitive bid situations all year.
sd: Hi Rona, How is the market in Milton, and on average how much of a percentage lower than the appraised value could an offer be that would be considered on a house around 450k
Rona Fischman: Appraised value? Do you mean assessed value? Assessed value has no bearing on sale price. That is what the town used to divide up the tax burden.
Rona Fischman: You need to look at fair market value, which you get from looking at recent sales and doing an comparative market analysis.
Rona Fischman: Milton is about even this year, so it is at 2007 levels.
Rona Fischman: I don't have separate data on the South End.
livingwithMIL: Where is the best city to find houses with in law apts?? My mother in law is moving in with us, and we either need an inlaw or an extra bedroom. Any advice on towns? Our budget is 250K.
Rona Fischman: At $250K, you will need to be rather far from Metro Boston. I am not sure where you will find a place big enough for you all.
Rona Fischman: I would look at "split entry" style homes when you find your town.
The_man: Newton and Needham
Rona Fischman: Newton is about even with last year, Needham is only slightly up from there. I would call them both the same as 2007.
sshore: how possible is it to get a decent single-family home for 350k? Will I have to live in a garbage pail if it's in braintree, or will i have to move out to the boonies?
Rona Fischman: $350 is tough near Boston. In the area where I work (between Winchester and Natick, mostly north of Boston) there are homes off the beaten path that may do.
Rona Fischman: Look for places not so close to mass transit. They tend to be cheaper.
Rona Fischman: Consider an attached or townhome. They may work.
sshore: Rona -- I have no decent references for agents. I am looking in the south shore from braintree to weymouth to abington to rockland. How can I find a good agent who specializes in my area? How do I know which agents are good and bad?
Rona Fischman: Go to MassBuyerAgents.com that is the state association of buyer agents. Interview at least two agents. There are some guidelines in the "10 Mistakes" posting that just went up today.
Rona Fischman: The best agents have experience, good supervision, and know your area. Once you establish that, find one you like -- you will spend some hard hours with him or her.
RealEstateCafe: Rona, thanks for your response re bidding wars. How can buyers be sure there really are competitive buyers, and aren't being tricked into bidding against themselves?
Rona Fischman: It is illegal for an agent to pretend there are other offers. If an agent says they HAVE another offer, they must have it.
Rona Fischman: If an agent says they are "expecting" an offer, it isn't in hand. That is meant to excite the buyer into jumping.
Bos: I purchased a townhouse three years ago. I am interested in selling the townhome to buy a single family house. Is it better to keep the townhouse and continue to build equity, or sell at a loss and take advantage of lower housing prices?
Rona Fischman: It depends on whether you have funds to buy without selling, whether a fair rental will cover your costs and if you are willing to be a landlord.
Rona Fischman: Landlording is not too hard, if you have a nice place. If you are going to do it, take a class! There are some holes you can fall into.
Rona Fischman: Right now, in most places, the market favors trading up because what you may lose in equity on the first (smaller) place is less than the reduction in equity on your trade up.
Rona Fischman: This balance is hurting our elders who want to sell their big houses and simplify.
JW: I am thinking to rent our house while house hunting/buying. How is the rental market in metro west? framingham?
Rona Fischman: I don't know. Check the local papers to see what places like yours are going for.
bigmac: Are prices going to stabilize out or keep dipping
Rona Fischman: I wish I knew! Most of the economists that I read expect more decline before we stabilize.
d: As a seller in Newton, what advice can you give to make sure we have maximum exposure to buyers and buyer agents? We are working with an agent but I want to make sure we are doing everyting we can.
Rona Fischman: Your agent should have ideas beyond broker open houses, Sunday open houses, and the MLS. If that is all he or she is doing, push your agent.
Rona Fischman: You can also help yourself by making your house easy to show and pleasant when people get there. De-clutter it, keep it fresh and happy.
mbabb: Will prices continue to drop as we go into the winter? If you are in no hurry (again, we are renters) should we wait until January?
Rona Fischman: Most years, the priced drop in toward the end of the summer and again after Veteran's Day or Thanksgiving. I plan to blog on the autumn market next Monday. This week, I promised to talk about lending.
Andy: Are MA taxes so high (real estate, sales, investment income, etc.) that retirees considering a move to the state should rethink?
Rona Fischman: Several towns and cities have programs to defer tax payments for elders. The town collects the taxes when the family sells. Most elders live where they feel most supported. They make it work.
GN: Are there certain Metro-Boston towns that you'd suggest looking into based on current value and future potential?
Rona Fischman: Hard question. I like Somerville, though some will scoff. I also like Bedford, Concord, Needham.
sshore: Are you seeing a lot of new buyers in the market now with the rates where they are? I imagine there are a umber of people (like myself) who have been on the sidelines for a while and am now looking to enter the market.
Rona Fischman: I have not seen a slow-down in would-be buyers. There are some waiting for better rates and lower prices, but I am seeing more buyers than nice, fairly priced property.
Rona Fischman: Rates are such a moving target that many are not holding out for a change there.
bluedog: Is there an online database where I can see what other homes in my condo complex have sold for?
Rona Fischman: you can go to the registry of deeds for your county. Most are on line.
Rona Fischman: Your town assessor's records also have recent sale data.
RealEstateCafe: JW, I'd recommend checking these "best of breed" site for information on the rental market at http://rentometer.com and http://boston.cribq.com
Rona Fischman: Real estate Cafe just sent this great info for renters and landlords. Thanks, Bill
tycoon: are you seeing alot of deals lost due to financing for the buyer?
Rona Fischman: I am not seeing it because I get my buyers to secure financing before house hunting. However, other brokers are complaining about this.
Rona Fischman: It was happening more last year, when lenders where over-adjusting to the crisis. The rules were changing every day. Until the loan was committed, the borrowers could be ruled out at any time.
Rona Fischman: What I am seeing is buyers giving up on short sales because they take too long.
tycoon: seems like there are so many foreclosures for sale now, would you consider those at a nice, fairly price property?
Rona Fischman: When they are nice and fairly priced, and my buyer can wait for them, they are good deals.
Rona Fischman: That is not always the case. I blogged on this just this week.
kim: How about Wilmington and Reading? Reading used to feel so desired, but it doesn't look like it is. Is Reading going down while Wilmington goes up? What is up and coming in that general area?
Rona Fischman: Willmington is down 10% this year, North Reading up 6% and Reading down 3%
Rona Fischman: Willmington is not up, according to Warren.
kim: How do young people even have a chance at home buying anymore? It's ridiculous to have such big mortgages when you are starting out. Will home prices ever take a HUGE tumble? Or they at this level for good?
Rona Fischman: That is a huge question! Demand should have stopped when the prices went over income levels. However, there is a lot of wealth around from young people inheriting and getting gifts from their parents. So inflation continues.
Rona Fischman: As long as the cash is flowing, there will be people paying the high prices. I don't know where or how this could end.
Rona Fischman: There is also a lot of people with great incomes in this area and in most of the very high priced regions in America.
tycoon: Where do you think the best area is to buy a 3 family investment property? Somerville? Davis sq? Porter sq?
Rona Fischman: Investors need to look at the cost of the property and the eventual rental income. Places near transportation are the best. Some are investing in anticipation of the Green line, but I would hold off on that if I were investing. It is still to far off in the future.
JW: where should I start to get info. on short sales? will my agent take care of it?
Rona Fischman: Lots of short sales show up in MLS, so your agent will find them. Your agent should also subscribe to a database to ID some earlier in the process.
kim: I meant "up" as in up and coming. Reading doesn't look like such a cute town, just crowded.
Rona Fischman: Sorry...
Rona Fischman: Most towns are judged on their pleasantness as well as their municipal services. Any town that has good outdoor spaces and good school, fire and police should continue to be attractive to buyers.
liz: What are the minimum downpayment requirement these days?
Rona Fischman: Generally 10% will get a loan. It is pretty hard to do it below that, but it is possible.
tycoon: many people say short sales are just a waste of time
Rona Fischman: At this point, I sort of agree. Back in 1991, the bureaucracy get its act together and I did some pretty good deals. I hope the process will improve in the next year or so.
Bostondotcom: Chatters, we are just about out of time...
JW: what are pros and cons of short sale
Rona Fischman: the pros are you may save some money, maybe $10-30K. The cons are you lose time, maybe your up-front costs and it hangs you up for months. I blogged on this just this week.
prange: I was told by a freind that homes in the 400k range are a better deal right now than 350k range, because the 400k homes have come3 down from around 500k, and the 350k and only down from maybe 390-400k. The thinking is that when the market recovers, the current 400K home home will regain its value much faster than the 350K one. Thoughts?
Rona Fischman: It depends on the houses and the town. Asking prices are made up by the sellers and their agents, so they can be dead wrong, then come down $100K. Mostly, if there are a lot of buyers in the same price range, there will be price stability -- thus not so many great deals.
Bostondotcom: Thanks to Rona for taking the time, and thanks for all the great questions. Be sure to check out The Big Move in The Boston Globe this Sunday.
Bostondotcom: And of course, be sure to check out all the chat transcripts and online features at boston.com/bigmove