We’ve been hearing about the real estate market leveling off at the beginning of 2007, but I still think we have little further to go before we turn around.
Prior to what I believe was a media induced market decline, I was a firm supporter in the idea that Martha’s Vineyard was not a bubble market. The Vineyard is recession proof and could not be affected by what was happening in other parts of the country. Well, I was wrong (sort of) because the bubble news spread like a dirty bomb. At least for a brief period, it hit us all in one way or another, and some real estate speculators and buyers who were infected by grossly overextending themselves may not recover. However, for those who can hang in there for the long haul, you will be just fine.
Some economists are now talking about superstar places in the country, especially coastal areas where land is limited, zoning laws restrict development and the rich are drawn to for work and play. Could they be talking about Martha’s Vineyard and the Boston area?
I think this New York Times article speaks to this question and supports the notion that Martha’s Vineyard real estate is and will continue to be an excellent investment. (click here >) All Housing Markets Are Local, Except When They’re Not
Sunday, November 05, 2006
Will the price of heating oil go down for Martha’s Vineyard home owners?
New England home owners are scheduled to receive a break this winter due to a 25% reduction in global oil prices. However, some of us realizing how volatile the world situation is today have gone ahead and locked in the price we are going to pay this season. Last winter I came out ahead with that strategy, so it will be interesting to see what happens this winter. Here is the full story as reported in the Boston Globe: (click here >) Heating oil prices tumbling in N.E.
Friday, November 03, 2006
Are you trying to time your entry into the Real Estate Market?
If you’re considering getting into the market but trying to time your entry, now may be the right time. Interest rates are low, the economy is strong and inventories are high. According to a report issued by the National Association of REALTORS®, it appears we are experiencing a leveling trend in the market that may last beyond the first of next year. Read the full NAR story here.
Good News for recent Martha’s Vineyard home buyers with Adjustable Rate Mortgages.
With many adjustable rate mortgages approaching their first reset, this may be your window of opportunity to refinance and convert to a fixed mortgage. Fixed and adjustable mortgage rates are down and averaging at or below last year at this time. Fannie Mae VP, Frank Nothaft says, “With mortgage rates down this week, we may see a spurt of refinancing by those who want to get out of ARMs that are scheduled to reset in the next year while interest rates are still comparatively low.” Read the full CNNMoney story here.
Thursday, November 02, 2006
Blue may be the new green: What better color for a seaside home on Martha’s Vineyard.
For years we have been using the classic Calvin Kline inspired bleached white furnishings dark woodwork combination, but now it looks as though Cool Blue Is Hot.
Adjustable Rate Mortgage holders may find themselves “Upside Down” in the Massachusetts housing market.
As the real estate market struggles to regain its footing, 24% of home buyers who bought during the peak years of the market using Adjustable Rate Mortgages are finding themselves facing payments they will not be able afford. ARM's escalated more rapidly than fixed rate mortgages, and in many cases it was the first time home buyer who was foolishly beguiled into overextending themselves using ARM's to get into the home they wanted. They were able to afford more home than they really needed, instead of a comfortably affordable starter home that they could use as a stepping stone in the future. Many of these buyers will not be able to refinance and convert to fixed rate mortgages. Because they financed most if not all of their purchase, they remain blindly optimistic the market will turn around sooner rather than later if they can just hang on. However, they may find themselves in an “upside down” equity position with the value of their investment lower than their mortgage.
To learn more, read these two Boston Herald articles:
Poll: A third of adjustable-rate mortgage holders worried about payments if rates go up
Housing market ‘upside down’ : More homes selling below purchase price
To learn more, read these two Boston Herald articles:
Poll: A third of adjustable-rate mortgage holders worried about payments if rates go up
Housing market ‘upside down’ : More homes selling below purchase price
Monday, October 30, 2006
A Cautionary To Sellers: "Pride goeth before a fall"
Since the housing market topped out in Massachusetts in 2005, there’s been a stalemate between buyers and sellers, the result being inventories as well as time on market doubled in some areas. Buyers are confident they’re in control and sellers are still optimistic hoping to get their price, because their house is different, special and better than the one for sale down the street. By some estimates, one third of sellers in our market are not serious about pricing their properties to sell.
The market is stuck with buyers saying they’re not going to pay too much for that house, and sellers optimistic and insistent upon getting their price. According to Mark Zandi, chief economist for Moody’s Economy.com, “It could take a "Roto-Rooter" to finally flush stubborn sellers-and their market-clogging inventory-from real-estate listings.” Zandi concedes that the market could temporally stabilize as housing starts slow down and sellers remove their properties from the market during the winter with the idea of reintroducing them as fresh and new at a later date. "But it could very well be a dead-cat bounce," says Zandi, because if inflation pushes up mortgage rates, "it'll come right out of housing prices again."
The market is stuck with buyers saying they’re not going to pay too much for that house, and sellers optimistic and insistent upon getting their price. According to Mark Zandi, chief economist for Moody’s Economy.com, “It could take a "Roto-Rooter" to finally flush stubborn sellers-and their market-clogging inventory-from real-estate listings.” Zandi concedes that the market could temporally stabilize as housing starts slow down and sellers remove their properties from the market during the winter with the idea of reintroducing them as fresh and new at a later date. "But it could very well be a dead-cat bounce," says Zandi, because if inflation pushes up mortgage rates, "it'll come right out of housing prices again."
Sunday, October 29, 2006
WiFi service technology is coming to Martha's Vineyard --- we hope.
Martha’s Vineyard has wrestled with modern convention for years, saying no to fast food chains, stop lights and an over saturation of cell phone towers that would mar the scenic Island country side.
Intermittent service and dropped calls are commonplace and a constant frustration for those of us who rely on cell phones for immediate access to clients and colleagues. Anyone going “up-Island” knows it as the communications black hole. Visitors used to the uninterrupted service they take for granted in America are particularly impatient and consider it totally unacceptable. It’s not uncommon for them to ask prior to booking a vacation rental, “Will I have good cell coverage at the house?” Some people have to maintain two cell service accounts in order to ensure more reliable communications. Well, it appears that we’re getting a little closer to a solution, and may finally be entering the WiFi communication age on Martha’s Vineyard. (Click here to read) WiFi coverage without towers.
Incidentally, there is another technology, WiMax, that will eventually enhance or displace WiFi as well as attract subscribers from cable and DSL. However, it’s currently more expensive, geared more toward commercial use and not as developed as WiFi. The main benefit of WiMax will be range. WiFi’s range is about 100 feet, whereas WiMax will blanket a radius of 30 miles with wireless access.
Intermittent service and dropped calls are commonplace and a constant frustration for those of us who rely on cell phones for immediate access to clients and colleagues. Anyone going “up-Island” knows it as the communications black hole. Visitors used to the uninterrupted service they take for granted in America are particularly impatient and consider it totally unacceptable. It’s not uncommon for them to ask prior to booking a vacation rental, “Will I have good cell coverage at the house?” Some people have to maintain two cell service accounts in order to ensure more reliable communications. Well, it appears that we’re getting a little closer to a solution, and may finally be entering the WiFi communication age on Martha’s Vineyard. (Click here to read) WiFi coverage without towers.
Incidentally, there is another technology, WiMax, that will eventually enhance or displace WiFi as well as attract subscribers from cable and DSL. However, it’s currently more expensive, geared more toward commercial use and not as developed as WiFi. The main benefit of WiMax will be range. WiFi’s range is about 100 feet, whereas WiMax will blanket a radius of 30 miles with wireless access.
Saturday, October 28, 2006
Life is looking good in Massachusetts
According to the results of a recent study by Umass-Boston professor Alan Clayton-Matthews, the Massachusetts economy has grown at twice the US rate.
Friday, October 27, 2006
What do San Francisco, Los Angeles, Seattle, New York and Boston Have In Common?
They are all considered Bubble-Proof Markets. Boston is number four on the list.
Make sure you take a look at Where To Buy, Where Not To Buy, and the Top Ten Foreclosure Markets.
Make sure you take a look at Where To Buy, Where Not To Buy, and the Top Ten Foreclosure Markets.
How do you know you are from Martha’s Vineyard?
I found this parody of Jeff Foxworthy's "You know you're a Redneck" on a fun site called http://www.blogthings.com.
You Know You're From Martha's Vineyard When... |
You refer to everything besides the Vineyard as off-island. Walking through a pond to get to a beach party is normal. Driving on the highway is scary. Paying 2.16 a gallon is normal for gas. You've found out that you dated your cousin. You know everything about everyone on the island. You think Nantucket sucks. You think Circuit Ave. is the place to be in the summer. Giordano's opening means the beginning of summer. You've been pulled over at least once driving through Vineyard Haven at night. A tourist has asked you, "People really live here all year long?" Up-island is so far away. You've been pulled over by Trophey. You've seen Bill Clinton at least once. You've eaten at the famous Black Dog like twice in your whole life. You refuse to drive through Vineyard Haven during the summer. You know what Biga, Humphry's, Alley's and Dockstreet are. You know that South Beach is for the College Kids and Tourists. Oaks Bluff and Mihisma are not part of your vocabulary. Off-islanaders assume you are rich yet you don't seem to know a single person who is. You considered Oak Bluffs the ghetto of the Vineyard. Taking a boat to get anywhere is normal to you. You're out to dinner and Val Kilmer sits right next to you. You know that smoking weed is just part of the island tradition. You've been to at least 5 beach parties in the last year and 4 of them have been broken up by the cops. You still refer to Aquinnah as Gay Head. Your road rage is ten times as bad during June as it is in January. You still drive through the Blinking Light forgetting the stop signs. You've been to late night munchie stops at Cumbys because that is the only place open till midnight. You actually get these jokes and pass them on to other friends from Martha's Vineyard. |
Thursday, October 26, 2006
Timing Is Everything
An article in the Washington Post suggests, despite the fact that we are experiencing consecutive record price reductions in the market, we may be approaching the "trough in the market" according to Lawrence Yun, NAR's senior economist. Yun attributes the slump to what he calls "confidence issues. Read the entire article here. If you're a serious buyer sitting on the sideline waiting for the bottom to arrive, I'd like you to think about this: What is going to happen when that time comes? Will you be the only one entering the market to snap up the choice properties before prices go up again? I think not.
Tuesday, October 24, 2006
When Will Our Real Estate Market Turn Around?
If you’re following my Blog it’s probably because you have an interest in Martha’s Vineyard Island. I think we can all agree that Martha’s Vineyard is a special place and not for everyone. Clearly the higher price of real estate and practically everything else related to the standard of living here supports that notion. When the real estate market started to soften across the nation, our market remained strong, and in fact the market softening was not across the nation, it was for the most part in specific pockets like California, Arizona, Nevada, Washington DC Metro, New York, Florida and the Carolina's. However, the news media didn’t make that distinction in most of their inflammatory editorializing, so our Boston, Cape and Islands market came to a grinding halt except for the top of the market that’s impervious to most market fluctuations. Many experts have predicted that this downturn in the market, nationally, will not be long lasting because, nationally, the economy is strong. The Boston Globe just published an article that supports that belief and if their data is accurate, we are walking in the valley of the real estate market downturn. I say "we", because I believe as Boston goes, so goes the Cape and Islands. You can believe it, or not.
Thursday, October 19, 2006
Affordable Housing Comes To Edgartown
Back in 1998 the subject of an affordable housing project came before the town of Edgartown. As you can see from the pictures below, the project is very much under way. Construction is all modular. To get some of the back story on this project read the January 2006 MV Times article on the Pennywise Path Affordable Housing Project.
Wednesday, October 18, 2006
For Your Protection: Get a Home Inspection
It is my belief that all Martha's Vineyard homes being purchased should have a Home Inspection. I’m insistent that my Buyer Clients always have a Structural and Systems Inspection, no matter how old or new the house is. I even explain the procedure on my Website, as well as other Environmental Issues such as Radon and Mold. I have a list of Home Inspectors with related links along with other engineering services such as Radon testing on my Martha's Vineyard Island Service Providers page.
For your protection, please look at the revised HUD-92564-CN form, then read the Mortgagee Letter below from The Federal Housing Administration.
October 5, 2006
MORTGAGEE LETTER 2006-24
TO: ALL APPROVED MORTGAGEES
SUBJECT: Revision to form HUD–92564-CN, “For Your Protection: Get a Home
Inspection”
The Federal Housing Administration (FHA) has revised form HUD-92564-CN “For
Your Protection: Get a Home Inspection.” The purpose of this revision was to create a more conspicuous, easy-to-understand document that informs homebuyers of the availability and importance of getting an independent home inspection. The form also provides clarification of the differences between an appraisal and a home inspection and stresses the importance of radon testing.
Mortgagees are required to provide the document to prospective homebuyers at first contact, be it pre-qualification, pre-approval, or initial application. In any case, the mortgagee must provide the form to the prospective borrower no later than initial loan application. A copy of this revised form in a PDF file format is available online at http://www.hudclips.org/.
FHA has also eliminated the requirements that the form be signed by the purchaser and included in the case binder submitted to FHA with the mortgagee’s request for insurance endorsement. This Mortgagee Letter supercedes those portions of HUD Handbook 4165.1, Section 1-5, Table 1.1 Binder Assembly and Appendix XIX, Pre-Endorsement Review Checklist requiring the form to be included in the case binder. Additionally, this Mortgagee Letter rescinds, in their entirety, Mortgagee Letters 2004-04 and 2005-01. Mortgagees may use the revised form HUD-92564-CN immediately but must begin using the revised form for new loan applications taken after December 1, 2006. This Mortgagee Letter applies to FHA-insured forward mortgages only and not FHA-insured Home Equity Conversion Mortgages (HECM).
Color copies of this revised form will also be available free of charge through HUD’s Direct Distribution Center by telephone Monday through Friday from 8:00 AM to 5:15 PM ET via toll-free number 1-800-767-7468 by December 1, 2006. Online service orders can be placed 24 hours a day, seven days a week at HUD’s website http://www.hud.gov/offices/adm/dds/index.cfm. When ordering online, follow the instructions provided and enter the Item ID number only. To order hard copies of the document in black and white print, the Item ID number is 6535. To order red and white colored copies of the document, the Item ID number is 7094.
Information Collection Requirements
The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0538. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.
If you have any questions concerning this Mortgagee Letter, please contact the FHA Resource Center at (800) CALL-FHA or (800) 225-5342.
Sincerely,
Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner
For your protection, please look at the revised HUD-92564-CN form, then read the Mortgagee Letter below from The Federal Housing Administration.
October 5, 2006
MORTGAGEE LETTER 2006-24
TO: ALL APPROVED MORTGAGEES
SUBJECT: Revision to form HUD–92564-CN, “For Your Protection: Get a Home
Inspection”
The Federal Housing Administration (FHA) has revised form HUD-92564-CN “For
Your Protection: Get a Home Inspection.” The purpose of this revision was to create a more conspicuous, easy-to-understand document that informs homebuyers of the availability and importance of getting an independent home inspection. The form also provides clarification of the differences between an appraisal and a home inspection and stresses the importance of radon testing.
Mortgagees are required to provide the document to prospective homebuyers at first contact, be it pre-qualification, pre-approval, or initial application. In any case, the mortgagee must provide the form to the prospective borrower no later than initial loan application. A copy of this revised form in a PDF file format is available online at http://www.hudclips.org/.
FHA has also eliminated the requirements that the form be signed by the purchaser and included in the case binder submitted to FHA with the mortgagee’s request for insurance endorsement. This Mortgagee Letter supercedes those portions of HUD Handbook 4165.1, Section 1-5, Table 1.1 Binder Assembly and Appendix XIX, Pre-Endorsement Review Checklist requiring the form to be included in the case binder. Additionally, this Mortgagee Letter rescinds, in their entirety, Mortgagee Letters 2004-04 and 2005-01. Mortgagees may use the revised form HUD-92564-CN immediately but must begin using the revised form for new loan applications taken after December 1, 2006. This Mortgagee Letter applies to FHA-insured forward mortgages only and not FHA-insured Home Equity Conversion Mortgages (HECM).
Color copies of this revised form will also be available free of charge through HUD’s Direct Distribution Center by telephone Monday through Friday from 8:00 AM to 5:15 PM ET via toll-free number 1-800-767-7468 by December 1, 2006. Online service orders can be placed 24 hours a day, seven days a week at HUD’s website http://www.hud.gov/offices/adm/dds/index.cfm. When ordering online, follow the instructions provided and enter the Item ID number only. To order hard copies of the document in black and white print, the Item ID number is 6535. To order red and white colored copies of the document, the Item ID number is 7094.
Information Collection Requirements
The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0538. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.
If you have any questions concerning this Mortgagee Letter, please contact the FHA Resource Center at (800) CALL-FHA or (800) 225-5342.
Sincerely,
Brian D. Montgomery
Assistant Secretary for Housing-
Federal Housing Commissioner
Saturday, October 14, 2006
Five Costly Mistakes Made By Home Buyers
I think this article written by the renown real estate expert and syndicated columnist Robert J. Bruss, is very pertinent for my BUYER clients considering the real estate market we're in right now. Here it is:
Home buyers: 5 costly mistakes to avoid
Satisfaction ensured with own agent, key contingencies
By Robert J. Bruss October 13, 2006
Fall 2006 is proving to be a great time to be a home buyer (but not such a great time to sell your house or condo). In most cities, it's a very strong "buyer's market" for homes.
A buyer's market means there are more houses and condominiums listed for sale than there are prospective home buyers in the marketplace. "The buyer is king" is another way of saying home buyers can negotiate hard for price and terms in today's market.
The number of brand-new and resale homes available for sale nationally is at an all-time high. However, because home sales depend on local conditions, the situation in the town where you want to buy might be different.
But savvy home buyers still need to be cautious to avoid making home buyer pitfalls. Here are the five most costly mistakes home buyers make unless they plan carefully:
1. FAILURE TO GET PRE-APPROVED IN WRITING FOR A HOME MORTGAGE. Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home.
Although it's fun to "shop" for a house or condo on the Internet -- where more than 70 percent of today's home buyers begin their quest (according to the National Association of Realtors) -- the smartest home buyers get pre-approved in writing by an actual lender so they know the maximum mortgage amount available.
The first step to obtain a home mortgage is to check your credit reports from the three major credit bureaus, Equifax, Trans Union and Experian. You can get free copies of your credit report once a year at http://www.annualcreditreport.com/ or by phone at 877-322-8228.
However, those free credit reports are virtually worthless when shopping for a mortgage because they don't include your all-important FICO (Fair Isaac Corp.) credit score, which most lenders use to qualify borrowers.
The best place I've found to check all three credit reports is on the Internet at http://www.myfico.com/. For about $45 I obtained copies of all three credit reports, plus my FICO score. With a FICO score of 700 or above, you should have no problem obtaining a home loan at the best interest rate and terms.
If you find credit-report errors (reportedly, over one-third of credit reports contain wrong information), be sure to follow the procedure stated to correct those mistakes.
For example, several years ago one of my credit reports said I owed unpaid property taxes. That was incorrect. However, it hurt my FICO score. I followed the procedure to "verify" the error. Credit bureaus then have 30 days to do so. Because the mistake couldn't be verified, my credit report was corrected and my FICO score improved.
Armed with your corrected credit reports from all three credit bureaus and your FICO score, the second step to obtain a home mortgage is to shop among mortgage lenders for a written pre-approval. Most lenders don't charge for pre-approvals (because they know you probably won't shop further after you are pre-approved).
Be sure the lender gives you a pre-approval letter, not just a pre-qualification statement, which means only "We think you can probably get a mortgage based on your submitted information but we haven't really checked."
2. FORGET TO WORK WITH YOUR OWN BUYER'S AGENT. The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer.
Whether that listing agent acts as a "dual agent" representing both the home seller and buyer (an inherent conflict of interest) or the listing agent represents only the seller (and nobody represents the buyer), such a situation is not in the home buyer's best interest.
To find a reputable buyer's agent, home buyers should ask friends, relatives and business associates for recommendations of local agents.
It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO (fizz-bo) sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 3 percent.
However, home buyers should be careful not to sign an exclusive buyer's agent contract for longer than 30 days, just in case the recommended buyer's agent turns out to be ineffective.
3. BUY A HOME WITH AN INCURABLE DEFECT. In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky."
No home is perfect. Even brand-new houses and condos have their defects. Thankfully, most homes don't have major defects, such as being located next to a noisy railroad track or a freeway. Smart buyers think into the future and ask, "Will I have any trouble selling this home because of its problems?"
Serious incurable defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as adjacent to high-voltage power lines or the city dump), noisy street traffic, or lack of onsite parking.
4. FAIL TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER. Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense.
Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same form the listing agent prepared for the home seller.
It shows recent sales prices of comparable nearby homes, asking prices of similar neighborhood listed residences, and the asking prices of recently expired competitive listings (usually overpriced).
With the help of the buyer's agent, smart buyers then discuss the pros and cons of the homes on the CMA before arriving at a reasonable purchase offer price.
5. NEGLECT TO INCLUDE TWO KEY CONTINGENCY CLAUSES. Way back in the hot home seller's markets of 2005 and 2004, it was common for home buyers to make "all cash, no contingency" purchase offers. The current buyer's market in most cities has changed that foolishness.
Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.
Depending on local custom, additional inspection contingencies might include termite or pest control, building-code compliance, energy efficiency, and radon.
A controversial contingency makes the home purchase contingent on the buyer's sale of his/her current residence. Many home sellers refuse to accept such a contingency. Others will accept it but with a 48-hour release clause if a better purchase offer from another buyer materializes.
SUMMARY: Although home buyers are in control of today's residential sales market, they still need to be careful to avoid costly mistakes. Smart home buyers, with the help of their buyer's agents, can protect themselves when buying a house or condo to be enjoyed for many years.
Home buyers: 5 costly mistakes to avoid
Satisfaction ensured with own agent, key contingencies
By Robert J. Bruss October 13, 2006
Fall 2006 is proving to be a great time to be a home buyer (but not such a great time to sell your house or condo). In most cities, it's a very strong "buyer's market" for homes.
A buyer's market means there are more houses and condominiums listed for sale than there are prospective home buyers in the marketplace. "The buyer is king" is another way of saying home buyers can negotiate hard for price and terms in today's market.
The number of brand-new and resale homes available for sale nationally is at an all-time high. However, because home sales depend on local conditions, the situation in the town where you want to buy might be different.
But savvy home buyers still need to be cautious to avoid making home buyer pitfalls. Here are the five most costly mistakes home buyers make unless they plan carefully:
1. FAILURE TO GET PRE-APPROVED IN WRITING FOR A HOME MORTGAGE. Most home buyers need to obtain a home loan to purchase their house or condo. Smart buyers shop for a mortgage before searching for a home.
Although it's fun to "shop" for a house or condo on the Internet -- where more than 70 percent of today's home buyers begin their quest (according to the National Association of Realtors) -- the smartest home buyers get pre-approved in writing by an actual lender so they know the maximum mortgage amount available.
The first step to obtain a home mortgage is to check your credit reports from the three major credit bureaus, Equifax, Trans Union and Experian. You can get free copies of your credit report once a year at http://www.annualcreditreport.com/ or by phone at 877-322-8228.
However, those free credit reports are virtually worthless when shopping for a mortgage because they don't include your all-important FICO (Fair Isaac Corp.) credit score, which most lenders use to qualify borrowers.
The best place I've found to check all three credit reports is on the Internet at http://www.myfico.com/. For about $45 I obtained copies of all three credit reports, plus my FICO score. With a FICO score of 700 or above, you should have no problem obtaining a home loan at the best interest rate and terms.
If you find credit-report errors (reportedly, over one-third of credit reports contain wrong information), be sure to follow the procedure stated to correct those mistakes.
For example, several years ago one of my credit reports said I owed unpaid property taxes. That was incorrect. However, it hurt my FICO score. I followed the procedure to "verify" the error. Credit bureaus then have 30 days to do so. Because the mistake couldn't be verified, my credit report was corrected and my FICO score improved.
Armed with your corrected credit reports from all three credit bureaus and your FICO score, the second step to obtain a home mortgage is to shop among mortgage lenders for a written pre-approval. Most lenders don't charge for pre-approvals (because they know you probably won't shop further after you are pre-approved).
Be sure the lender gives you a pre-approval letter, not just a pre-qualification statement, which means only "We think you can probably get a mortgage based on your submitted information but we haven't really checked."
2. FORGET TO WORK WITH YOUR OWN BUYER'S AGENT. The second major mistake some home buyers make is they forget they need their own buyer's agent. It's very easy for prospective buyers visiting weekend open houses to let the listing agent they meet prepare the purchase offer.
Whether that listing agent acts as a "dual agent" representing both the home seller and buyer (an inherent conflict of interest) or the listing agent represents only the seller (and nobody represents the buyer), such a situation is not in the home buyer's best interest.
To find a reputable buyer's agent, home buyers should ask friends, relatives and business associates for recommendations of local agents.
It costs home buyers nothing extra to have their own buyer's agent. If the home is listed for sale, the listing agent will split the sales commission with the buyer's agent. In the rare situation of a "for sale by owner" home, most FSBO (fizz-bo) sellers are only too happy to pay the buyer's agent half of a customary sales commission, usually 3 percent.
However, home buyers should be careful not to sign an exclusive buyer's agent contract for longer than 30 days, just in case the recommended buyer's agent turns out to be ineffective.
3. BUY A HOME WITH AN INCURABLE DEFECT. In the current buyer's market in most communities, where there are more home sellers than qualified buyers, house and condo buyers can afford to take their time and be "picky."
No home is perfect. Even brand-new houses and condos have their defects. Thankfully, most homes don't have major defects, such as being located next to a noisy railroad track or a freeway. Smart buyers think into the future and ask, "Will I have any trouble selling this home because of its problems?"
Serious incurable defects are called "economic obsolescence" by appraisers. Examples include a bad floor plan, poor location (such as adjacent to high-voltage power lines or the city dump), noisy street traffic, or lack of onsite parking.
4. FAIL TO INSIST ON A COMPARATIVE MARKET ANALYSIS (CMA) BEFORE MAKING A PURCHASE OFFER. Amazingly, many home buyers still follow the old rule: "Offer 5 percent below the asking price." That makes no sense.
Instead, smart home buyers ask their buyer's agent to prepare a written comparative market analysis (CMA) before making a purchase offer. This CMA is the same form the listing agent prepared for the home seller.
It shows recent sales prices of comparable nearby homes, asking prices of similar neighborhood listed residences, and the asking prices of recently expired competitive listings (usually overpriced).
With the help of the buyer's agent, smart buyers then discuss the pros and cons of the homes on the CMA before arriving at a reasonable purchase offer price.
5. NEGLECT TO INCLUDE TWO KEY CONTINGENCY CLAUSES. Way back in the hot home seller's markets of 2005 and 2004, it was common for home buyers to make "all cash, no contingency" purchase offers. The current buyer's market in most cities has changed that foolishness.
Today's smart home buyers include at least two purchase-offer contingencies: (a) a satisfactory lender's professional appraisal of the home for at least the purchase price, and (b) the buyer's approval of a professional inspection report to be obtained at the buyer's expense.
Depending on local custom, additional inspection contingencies might include termite or pest control, building-code compliance, energy efficiency, and radon.
A controversial contingency makes the home purchase contingent on the buyer's sale of his/her current residence. Many home sellers refuse to accept such a contingency. Others will accept it but with a 48-hour release clause if a better purchase offer from another buyer materializes.
SUMMARY: Although home buyers are in control of today's residential sales market, they still need to be careful to avoid costly mistakes. Smart home buyers, with the help of their buyer's agents, can protect themselves when buying a house or condo to be enjoyed for many years.
Saturday, September 30, 2006
Did You Know ...
Martha's Vineyard is an island 80 miles from Boston, it’s 9 miles wide and 23 miles long at its furthest points; the total land area is approximately 100 square miles. Martha's Vineyard has a total of 124.6 miles of tidal shoreline. The winter population is 15,007, and it swells to 105,624 during the summer season.
Friday, September 29, 2006
So Much For Building Your Own Ritz Carlton On A 5,000sf Lot In Edgartown
The Edgartown Wastewater Department, which has nothing to do with the Board Of Health, has mandated a change in bedroom regulations as it pertains to those houses connected, or connecting to the sewer lines. Originally we understood if you were connected to the sewer line you could have as many bedrooms as you could fit on the lot. Not anymore. The Wastewater Department has a clear definition for what constitutes a bedroom and what is not a bedroom. They go on to say existing and future lots shall be allowed 4 bedrooms for the first 10,000sf of lot area. Existing lots shall be allowed 1 additional bedroom over and above the 4 bedrooms for each additional 5,000sf of lot area, up to a maximum of 7 bedrooms per lot. As you can imagine, this is a simplification of the regulation cutting out the legalese.
Thursday, September 28, 2006
Massachusetts Home Prices Fall 6.1% As Downturn Gathers Speed
For many months I've been defiantly denying that the market here on Martha’s Vineyard was a “bubble”, and that bubble was about to burst. I truly believed that we were somewhat bulletproof due to the nature of our market, that being a vacation and second home market. Now it seems experts everywhere are sheepishly recanting their position on the market forecast; just the other day one such expert had to eat crow on the TODAY show.
I must admit it upsets me to see what is happening, because it doesn’t have to be this way. Our appreciation rate on the Vineyard was not out of line and not the highest in the country, although that may have been true on the North Shore and around the Boston area. A good part of that run-up was due to the lower price range and condo market. I've been hearing for years from clients in Massachusetts who have looked at other prime Massachusetts luxury areas that the Vineyard was still one of the best deals. Have you ever shopped the market in Weston, Marblehead, Wellfleet or Truro? I know as a BUYER’S agent I should be thrilled that the market is now swinging past center to the buyer’s side, but buyers are not taking advantage of what could be an opportune situation. Think about it, the viral frenzy by investors to bail out has doubled the inventory and now we have 625 single family homes and vacant lots on the market, over 660 properties altogether. Sure there are a few ego listings, but most of the glut is due to investors who thought they could make a short term profit and are now thinking that’s no longer possible. If you couple that with the ill-advised marketing strategy that has created a frenzied volley among competing sellers for the lead position in attractive pricing, while hoping not to lose all of their gains, you have what is practically a static market.
The risk for people who are speculating on when the bottom will occur is the same as with those who speculated as to when the top of the market would arrive; they may end up staying at the dance too long. I think the opportunity for buyers is better now than it has ever been, but I still hold to my battle cry --- BOLD OFFERS! Maybe, just maybe, all this inflammatory press and manipulated statistics could work to a buyer’s advantage as sellers are hearing that we could be in for a L-O-N-G haul. Perhaps they are starting to think about how much it will cost them to weather the storm --- taxes, insurance, utilities, mortgage payments and interest, maintenance, etc. The experts are now advising sellers who don’t have to sell their properties to take them off the market, but for those who do need to sell, as I say at the bottom of my home page: ATTENTION SELLERS: A LOW OFFER TODAY, MAY BE A HIGH OFFER IN 60 DAYS.
The following Boston Globe editorial describes what is happening and what is forecasted to happen to the real estate market in Massachusetts. If you take this as a generalization, then you can believe Martha’s Vineyard is part of the scenario. However, is the Vineyard a 1st time home buyer market? No! Is the median home price here $352,000? No! However, the Vineyard is NOT a necessity.
-------------------------------
Massachusetts Home Prices Fall 6.1% As Downturn Gathers Speed
By Kimberly Blanton, Globe Staff September 26, 2006
The downturn in the Massachusetts housing market gained momentum in August, with the median price of a single-family home falling 6.1 percent, to $352,000, and the number of sales down 21.6 percent from last year, the Massachusetts Association of Realtors said yesterday.
The condominium market, which had remained steady for most of the year even as the single-family market slipped, also felt the effects of the slowdown. The median condo price fell 3.3 percent in August, to $278,000, and sales fell 18.5 percent.
While sales volume has been in a freefall for months, price declines began showing greater momentum during the summer and are expected to continue into the fall.
``Things are not over in terms of the price declines," said David Iaia, a senior principal for Global Insight, a Lexington economics consulting firm. He said sellers will feel more pressure this fall to drop their prices on homes that have been on the market for more than three months, on average.
Iaia said the state's price declines would continue in 2007 and possibly into 2008, though it is difficult to predict. ``I don't think you'll get a good sense of the impact until next spring," he said.
``Now you're at the end of the major selling season, and people who've had their house on the market all summer and haven't sold it are getting concerned, so there are probably more price declines coming this fall," he said.
The real estate market is slowing across the country, although not as dramatically as in Massachusetts. The National Association of Realtors said yesterday that existing homes -- including single-families, condos, and townhouses -- sold at a rate of 6.3 million units in August, 12.6 percent lower than last year. Prices for all types of homes fell 1.7 percent in August, to $225,000.
The interest rate on the conventional 30-year mortgage is 6.4 percent, said Freddie Mac, the federal agency that backs the mortgage market. Higher interest rates have contributed to the cooling real estate market nationwide.
Massachusetts experienced the most price appreciation of any state between 2000 and 2003, and the appreciation continued over the next two years and pushed sales and prices to record levels. The downturn is now in full swing, analysts and agents said.
The August price slide was confirmed in a second report yesterday by the Warren Group, a Boston real estate and publishing firm that compiles market data. Warren Group said the median single-family price declined 8 percent, to $331,000, as sales dropped almost 20 percent. Condo priced fell 5 percent, to $276,000, as sales declined 19.3 percent.
Both the Warren Group and the realtors base their monthly report on actual sales closings in August, but their data sources are different. The realtor association sales and price data are based on house-listings posted in the multiple listing service, an agents' database, while Warren's data is culled from court records on home-sale closings statewide.
David Wluka, president of the Massachusetts Association of Realtors, blamed soaring appreciation during the boom for making it difficult or impossible for many first-time buyers to afford a single-family house. Without them, homeowners are unable to sell when they want to trade up.
High prices are ``creating a clog in the system," he said. ``People trying to buy houses can't buy until they sell houses they own, and unless they price houses they own correctly they're not going to sell."
He said he has witnessed this at this phenomenon with some clients of his firm, Wluka Real Estate Corp. in Sharon. ``I also see buyers holding back and waiting for the bottom, but you can only see the bottom in the rear-view mirror," he said. Buyers ``need to bargain hard," because ``they're in a very powerful position."
Wluka predicted prices could stabilize this fall, if homeowners who aren't serious enough about selling to reduce their prices take their houses off the market.
Since February 2005, single-family sales, when compared with a year earlier, have declined all but one month, according to Warren Group. But price declines, which were delayed until the spring of 2006, have accelerated. In March, for example, the median house price fell 1.52 percent. By June, they were down 9.3 percent, followed by a 6.1 percent drop in July and 8.1 percent in August.
Condo prices boomed through 2005 and early this year, fueled by empty-nesters who downsized and by first-time homebuyers who had given up hopes of buying a single-family. While condo sales began declining earlier this year, significant price declines didn't hit until July, when the median condo price fell 4.2 percent compared with July 2005 prices. The August condo price fell 5 percent.
Steven Levine, an agent with Re/Max First Choice Realty in Northborough and Shrewsbury, said he sees a silver lining in the recent interest-rate and house-price declines: Buyers responded in September, the start of the fall selling season.
Levine predicted the market is ``at the bottom" because sellers, after months of resistance, realize that a lower asking price is necessary to spark sales.
``But the buyers are very picky, and they're not buying a house that needs work or has issues," he said. Buyers are ``looking for those cream-puff properties."
I must admit it upsets me to see what is happening, because it doesn’t have to be this way. Our appreciation rate on the Vineyard was not out of line and not the highest in the country, although that may have been true on the North Shore and around the Boston area. A good part of that run-up was due to the lower price range and condo market. I've been hearing for years from clients in Massachusetts who have looked at other prime Massachusetts luxury areas that the Vineyard was still one of the best deals. Have you ever shopped the market in Weston, Marblehead, Wellfleet or Truro? I know as a BUYER’S agent I should be thrilled that the market is now swinging past center to the buyer’s side, but buyers are not taking advantage of what could be an opportune situation. Think about it, the viral frenzy by investors to bail out has doubled the inventory and now we have 625 single family homes and vacant lots on the market, over 660 properties altogether. Sure there are a few ego listings, but most of the glut is due to investors who thought they could make a short term profit and are now thinking that’s no longer possible. If you couple that with the ill-advised marketing strategy that has created a frenzied volley among competing sellers for the lead position in attractive pricing, while hoping not to lose all of their gains, you have what is practically a static market.
The risk for people who are speculating on when the bottom will occur is the same as with those who speculated as to when the top of the market would arrive; they may end up staying at the dance too long. I think the opportunity for buyers is better now than it has ever been, but I still hold to my battle cry --- BOLD OFFERS! Maybe, just maybe, all this inflammatory press and manipulated statistics could work to a buyer’s advantage as sellers are hearing that we could be in for a L-O-N-G haul. Perhaps they are starting to think about how much it will cost them to weather the storm --- taxes, insurance, utilities, mortgage payments and interest, maintenance, etc. The experts are now advising sellers who don’t have to sell their properties to take them off the market, but for those who do need to sell, as I say at the bottom of my home page: ATTENTION SELLERS: A LOW OFFER TODAY, MAY BE A HIGH OFFER IN 60 DAYS.
The following Boston Globe editorial describes what is happening and what is forecasted to happen to the real estate market in Massachusetts. If you take this as a generalization, then you can believe Martha’s Vineyard is part of the scenario. However, is the Vineyard a 1st time home buyer market? No! Is the median home price here $352,000? No! However, the Vineyard is NOT a necessity.
-------------------------------
Massachusetts Home Prices Fall 6.1% As Downturn Gathers Speed
By Kimberly Blanton, Globe Staff September 26, 2006
The downturn in the Massachusetts housing market gained momentum in August, with the median price of a single-family home falling 6.1 percent, to $352,000, and the number of sales down 21.6 percent from last year, the Massachusetts Association of Realtors said yesterday.
The condominium market, which had remained steady for most of the year even as the single-family market slipped, also felt the effects of the slowdown. The median condo price fell 3.3 percent in August, to $278,000, and sales fell 18.5 percent.
While sales volume has been in a freefall for months, price declines began showing greater momentum during the summer and are expected to continue into the fall.
``Things are not over in terms of the price declines," said David Iaia, a senior principal for Global Insight, a Lexington economics consulting firm. He said sellers will feel more pressure this fall to drop their prices on homes that have been on the market for more than three months, on average.
Iaia said the state's price declines would continue in 2007 and possibly into 2008, though it is difficult to predict. ``I don't think you'll get a good sense of the impact until next spring," he said.
``Now you're at the end of the major selling season, and people who've had their house on the market all summer and haven't sold it are getting concerned, so there are probably more price declines coming this fall," he said.
The real estate market is slowing across the country, although not as dramatically as in Massachusetts. The National Association of Realtors said yesterday that existing homes -- including single-families, condos, and townhouses -- sold at a rate of 6.3 million units in August, 12.6 percent lower than last year. Prices for all types of homes fell 1.7 percent in August, to $225,000.
The interest rate on the conventional 30-year mortgage is 6.4 percent, said Freddie Mac, the federal agency that backs the mortgage market. Higher interest rates have contributed to the cooling real estate market nationwide.
Massachusetts experienced the most price appreciation of any state between 2000 and 2003, and the appreciation continued over the next two years and pushed sales and prices to record levels. The downturn is now in full swing, analysts and agents said.
The August price slide was confirmed in a second report yesterday by the Warren Group, a Boston real estate and publishing firm that compiles market data. Warren Group said the median single-family price declined 8 percent, to $331,000, as sales dropped almost 20 percent. Condo priced fell 5 percent, to $276,000, as sales declined 19.3 percent.
Both the Warren Group and the realtors base their monthly report on actual sales closings in August, but their data sources are different. The realtor association sales and price data are based on house-listings posted in the multiple listing service, an agents' database, while Warren's data is culled from court records on home-sale closings statewide.
David Wluka, president of the Massachusetts Association of Realtors, blamed soaring appreciation during the boom for making it difficult or impossible for many first-time buyers to afford a single-family house. Without them, homeowners are unable to sell when they want to trade up.
High prices are ``creating a clog in the system," he said. ``People trying to buy houses can't buy until they sell houses they own, and unless they price houses they own correctly they're not going to sell."
He said he has witnessed this at this phenomenon with some clients of his firm, Wluka Real Estate Corp. in Sharon. ``I also see buyers holding back and waiting for the bottom, but you can only see the bottom in the rear-view mirror," he said. Buyers ``need to bargain hard," because ``they're in a very powerful position."
Wluka predicted prices could stabilize this fall, if homeowners who aren't serious enough about selling to reduce their prices take their houses off the market.
Since February 2005, single-family sales, when compared with a year earlier, have declined all but one month, according to Warren Group. But price declines, which were delayed until the spring of 2006, have accelerated. In March, for example, the median house price fell 1.52 percent. By June, they were down 9.3 percent, followed by a 6.1 percent drop in July and 8.1 percent in August.
Condo prices boomed through 2005 and early this year, fueled by empty-nesters who downsized and by first-time homebuyers who had given up hopes of buying a single-family. While condo sales began declining earlier this year, significant price declines didn't hit until July, when the median condo price fell 4.2 percent compared with July 2005 prices. The August condo price fell 5 percent.
Steven Levine, an agent with Re/Max First Choice Realty in Northborough and Shrewsbury, said he sees a silver lining in the recent interest-rate and house-price declines: Buyers responded in September, the start of the fall selling season.
Levine predicted the market is ``at the bottom" because sellers, after months of resistance, realize that a lower asking price is necessary to spark sales.
``But the buyers are very picky, and they're not buying a house that needs work or has issues," he said. Buyers are ``looking for those cream-puff properties."
Thursday, September 14, 2006
Where Did Steven Spielberg Stay On Martha's Vineyard?
One of the events that put Martha’s Vineyard on the map was the movie JAWS. For decades visitors to the Island have searched out the locations shown in the movie. One of the last remaining vestiges of that exciting event was the log cabin where Steven Spielberg and Carl Gottlieb resided during the filming of JAWS. The ~1550sf log cabin was built in 1950 and sold in 2004 for $1,600,000. The Jaws Cabin Is No More
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