Home Ownership….It’s still an American Dream

Every so often I come across information from other sources that I feel is relevant to what is going on in the economy in our area.  Today I want to share a great resource: the KCM blog.  In my opinion, their blog post today reaffirms that now is a great time to buy a home!

Source:   KCM blog:  National Housing Survey 2012  by The KCM Crew on April 4, 2012

Each quarter, Fannie Mae releases their National Housing Survey. They survey the American public on a multitude of questions concerning today’s housing market. We like to pull out some of the findings we deem most interesting each time it is released. Here they are for the most recent report:

84% of the general population believes that owning a home makes more sense than renting.

The Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

  1. It means having a good place to raise children and provide them with a good education
  2. You have a physical structure where you and your family feel safe
  3. It allows you to have more space for your family
  4. It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

  • 63% of the general population believes that homeownership is a ‘safe’ investment.
  • 53% believe that homeownership has more potential as an investment than any other traditional asset class.

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

  • 64% of renters have aspirations to someday own their own home
  • 70% of renters think that owning is superior to renting

Bottom Line

Our belief in the value of homeownership grows each time this survey is released.

Do’s and Don’ts of Septic System Care

I recently wrote about Understanding Title V in my blog.  Today, let’s talk about caring for septic systemyour septic system.  Septic systems must be maintained regularly to stay working.  Any type of neglect or abuse can cause harm to you and others as well as to the environment.  Here are some simple maintenance guidelines to follow.

DO have your tank pumped out and system inspected every 3 to 5 years by a licensed septic contractor. If the tank fills up with an excess of solids, the wastewater will not have enough time to settle in the tank.  The excess solids can then pass into the leach field and clog you drain.  You can find one listed in the yellow pages under Septic Tanks & Systems-cleaning.

DO keep a record of pumping, inspections, and other maintenance. Use a file folder to hold all records and receipts of maintenance.

DO know the location of your septic system and drain field. Keep a sketch of it handy for service visits.

DO practice water conservation. Repair dripping faucets and leaking toilets, run washing machines and dishwashers only when full, avoid long showers, and use water-saving features in faucets, shower heads and toilets.

DO divert roof drains and surface water from driveways and hillsides away from the septic system. Keep sump pumps and house footing drains away from the septic system as well.

DO take leftover hazardous household chemicals to your approved hazardous waste collection center for disposal. Use bleach, disinfectants, and drain and toilet bowl cleaners sparingly and in accordance with product labels.

DO use only septic system additives that have been allowed for usage in Massachusetts by MassDEP.  http://www.mass.gov/dep/water/wastewater/addallwd.htm

DON’T perform excessive laundry loads with your washing machine. Doing load after load does not allow your septic tank time to adequately treat wastes and overwhelms the entire system with excess waste water.   Consult a tank professional to determine how many loads of laundry you can do in a row to keep your tank operating properly.

DON’T use a garbage grinder/disposal, which feeds into the septic tank.  By adding food waste, you decrease your system’s capacity and increase your need to have the tank pumped more often.  If you have a garbage disposal severely limit its use.

DON’T allow anyone to drive or park over any part of the system. The area over the drainfield should be left undisturbed with only a mowed grass cover

DON’T make or allow repairs to your septic system without obtaining the required health department permit. Use professional licensed contractors when needed.

DON’T use commercial septic tank additives. These products do not help and some may hurt your system in the long run.

DON’T use your toilet as a trash can by dumping non-biodegradables down your toilet or drains. Non-biodegradables can clog the pipes.  Grease can also thicken and clog the pipes. Store cooking oils, fats, and grease in a can for disposal in the garbage.

NON-BIODEGRADABLES include:  grease, disposable diapers, plastics, etc.

DON’T poison your septic system and the groundwater by pouring harmful chemicals down the drain. They can kill the beneficial bacteria that treat your wastewater. Keep the following materials out of your system:

POISONS include:  gasoline, oil, paint, paint thinner, pesticides, antifreeze, etc.

And be alert to these warning signs of a failing system:

  • sewage surfacing over the drainfield (especially after storms)
  • sewage back-ups in the house
  • lush, green growth over the drainfield
  • slow draining toilets or drains
  • sewage odors

Sources:  http://www.mass.gov/dep/water/wastewater/septicsy.htm#care, http://www.marealtor.com/content/title_5.htm

6 Mistakes Sellers Should Avoid

house for saleSpring is here!!  It’s a perfect time to make your move to downsize or upgrade.  If you’re considering selling your home, now is a great time to get your home on the market.  And with so many homes on the market for sale, the seller needs to make their home stand out above the rest.   Here are a few suggestions to get buyers interested in your home.

Turnoff mistake #1 – No listing photos

Many buyers browse listings online before deciding to view a home in person.  Great photos showing your home will draw more showings to your home.  Hire a professional photographer if possible.

Turnoff mistake #2 – Unrealistic Pricing

It’s very tempting to list your property at the highest price possible with the intention of lowering it if there’s no buyer interest in the home.  By pricing your home competitively from the start, you will get the most traffic and the quick sale close to your asking price.

Turnoff mistake #3 – Misleading Listing Info

Describing your home accurately allows the right type buyer to look at your home.  Say it’s a ready to move in home when in reality it’s a fixer up sends the message to home buyer that you aren’t trustworthy leading to loss of sale.

Turnoff mistake #4 – Botched Home Improvements

Think a fresh coat of paint will be great to sell your home? Before investing in pre-sale remodeling or painting, find out from your Realtor what type improvements/colors will give you a better chance at a sale.  The wrong choices could be a disaster to your hopes for a quick sale.

Turnoff mistake #5 – Dirty or Cluttered Interiors

Removing clutter and keeping the house clean sends the buyer a strong message; this home has regular necessary maintenance done to it. It also makes the home look more spacious, giving the buyer the chance to visualize the home with their own furnishings.

Turnoff mistake #6 – Hovering Homeowners

A fast way to send buyers running is for the homeowner to be present during a showing.  Buyers want to be left alone to view your home.  And the longer a buyer stays, the better chance of a sale.

10 Things to Remove Before Listing Your Home

Your home is your castle.  The furnishings, accessories, family photos, even the colors of your walls are all reflections of YOU!  When you decide to sell your home, you must take a step back and evaluate what your home will look like to potential buyers.  Most buyers can not see past the red walls, green carpet, personal items:  family photos, books, clutter….  There are some simple steps that you can take to make your home appear neutral…as in the buyer can visualize their belongings in your space.                                                             Please check out this post at Cathy’s Real Estate blog;

10 Things To Remove Before Listing Your Home

Septic Systems: Understanding Title V

outhouseIf you are not from New England, where it all began…you may not be familiar with Title V Regulation, Septic Tanks, Tight Tanks, Leaching Fields and so on.  ‘Homes that are not connected to a sewer system use septic systems or cesspools, both of which are regulated by the state Department of Environmental Protection (DEP) and local boards of health.’¹

Originating back to France this technology developed by John Mouras was brought to the new country as early as 1883 and used in many towns and cities. ² Most homes in New England that were built in the 1600 and 1700’s were farms, cabins, single family homes in the middle of nowhere and most people would have an outhouse of some form.  In Cities, homes were able to hook up to public sewer systems.  In the late 1800’s rural communities did not have the luxury of hooking up to public water and sewer because of their location  so they relied on a private well for water and some form of a private septic system for disposal of waste.  The most effective private system providing you have the acreage is the septic system that carries the waste away from the home in the form of a leaching field.  The waste comes from the home via a PVC pipe and is delivered to a Distribution Box/Tank (D-Box), from here, the solids will settle to the bottom of the tank and the scum and liquids float to the top.  The liquids are then channeled away from the D-Box into long perforated PVC pipes.  Depending upon the design,  a typical trench system can use drainage pipes as long as 100 feet.  The length of the pipes is a direct correlation of how fast the leaching field will drain as well as how many bedrooms the system can handle.  The liquid waste and lighter material is carried along these pipes and then dispersed along these holes to another drainage system of sand and rock.  As this is biodegradable material, it will continue to break down, some will go back into the ground water, feed vegetation such as  the plants or lawn.   In homes that have no land or are built on a ledge or near bodies of water, a “tight” Tank may be installed.  This is exactly that, a tank, everything from toothpaste, soaps and detergents as well as waste is contained.  Once this gets filled up, it must be emptied of all its contents.

In today’s housing market, before selling your home, you must have your septic system tested by a licensed Title V inspector (The Title 5 regulation, 310 CMR 15.00)³.  They will inspect the system to make sure it has proper drainage, all the parts in are intact and the soil in and around the system remains solid.  A good system can last 20 plus years and can be repaired and updated as anything else in your home.  To maintain your system and to have it pumped regularly will extend the life of the system.

Now, if for any reason your system fails this inspection, you may have a very costly project.  Typically they fail because the land and soil are no longer breaking down the waste and it will no longer drain.  A new system can be designed and built in some cases in the same location but in many will be moved to another location of the property.  An Engineer and Board of Health will determine where the system can go and must adhere to local and state guidelines.  A new system can be as little as $10,000 and up to $40,000.  In a traditional sale of a home where a buyer obtains a mortgage, you cannot convey title (sell your home) until this system has a passing grade.  However, there are mortgage solutions for this type issue that allow for holdbacks and special financing options to cover the costs of the repairs or new system.

 Please email Bill for more information.   bill@billnickerson.com

¹ Massachusetts Association of Realtors. Title 5. http://www.marealtor.com/content/title_5.htm

² http://www.newtechbio.com/articles/history_of_the_septic_system.htm

³ http://www.mass.gov/dep/water/wastewater/buysell.htm

15 Interior Painting Tips and Techniques

paint cansIt’s the spring market season.  A great time to spruce up your house before putting it on the market.  A fresh coat of paint is inexpensive and can transform a room from so-so to WOW!  I’ve painted many rooms and houses over the years; Here are a few tips that I have learned to help make your next painting project go quickly and easily!

1.  Use canvas drop clothes instead of cotton or plastic.  For an additional buffer to the canvas, you can put plastic under it.

2.  Clean dirty surfaces (walls, ceiling, and window sills) with a TSP spray solution so paint can form a strong bond.

3.  Fill any holes or imperfections with Spackle, wait for it to dry, and then lightly sand the patches.  Also scrape any peeling chipping paint.

4.  Stir your paint before you begin, and don’t paint straight from the can.  Mix several cans of paint together in a 5 gallon bucket for consistent paint color.

5.  Remove hardware, fixtures, closet doors.  Anything that might get in your way of painting.

6.  Taping is optional, especially if you have a reasonably steady hand. Using an angle brush, start slightly away from the edge and then curve in to meet it. This will help you avoid leaving a big blob of paint where you begin.

7.  Use a plastic grocery type bag (check for holes) to put your wet roller into for short term storage.  Wrap the bag around the roller (to create a seal) making sure all air is removed from inside the bag.

8.  Paint the ceiling first.  Whether you paint the walls or the trim next is up to you.  My preference is to paint the trim first because I find that I can get a cleaner line when I cut in to paint the walls. If you like to tape off your edges, you may find it easier to paint the trim last.

9. Use a good quality roller cover. Cheap ones leave a messy edge and can shed little fuzzies all over.  I use a fresh cover for each paint job versus cleaning it.  Cleaning a roller is time consuming and all that paint residue going into the water isn’t good for the environment.

10.  Use a good quality brush. I like a 2.5″ angle brush for most projects.  Any bigger and it’s too tough to have a good grip on the brush for painting.

11.  Only dip your brush about a half or quarter of an inch into the paint, then wipe off one side on the edge of the paint container. This will help you avoid paint runs (from using too much) and keep your brush in good condition.

12. Keep a wet edge, and always paint from dry to wet. This will minimize brush strokes and roller marks.

13.  Paint in long, continuous strokes. Not doing so is one of the most common mistakes.

14. When painting with a roller, aim for covering a three foot wide section at a time. Working from top to bottom.

15.  Put on a second coat. Your paint job may look OK after just one, but it will look better after two. If you’re using a dark or vivid color, you may even need three (or more) coats.

With a little prep and practice, painting a room is an easy, inexpensive DIY project and you can do it!

For more information about this topic or others, please email me at bill@billnickerson.com

What is Earnest Money?

Earnest money is a money deposit made by a buyer to a seller as a sign of good faith that you are seriously interested in buying a home.  This earnest money is credited to the down payment at closing.  It is held in a non-interest bearing trust account until the time of closing. Typically, the buyer submits $500 to $1000 with the offer.  Once the offer has been accepted, the transaction moves forward to Purchase and Sales where another deposit is required.  This amount combined with the offer deposit will come to 5% of the accepted transaction amount.

The Do’s: Home Buying Process Made Easier

Last month I talked about The Don’ts: Home buying deal killers, the things that can negatively affect your mortgage approval process.  There was a very extensive list of don’ts but as you can see from a quick glance below….The Do’s list is quite a bit smaller.  Although this list is smaller, the following are essential in having a smooth mortgage process.

THE DO’s:

Do Stay Current on your Existing Accounts:  Late payments on your existing mortgage, car payments, or anything else that can be reported to a Credit Reporting Agency can cost you.

Do Continue To Use Your Credit As You Normally Would:  Red flags are easily raised within the scoring system.  If it appears you are diverting from your normal spending patterns, it could cause your score to go down.  For example, if you’ve had a monthly service for internet access billed to the same credit card for the past three years, there is no reason to drop it now.  If you want to make your changes, do it after the loan funds.

Do Get Pre-Approved:  Having your credit reviewed, your financials analyzed and an official  pre-approval gets you prepared for what you can afford ahead of time.  This will also allow you time to fix any issues that come up during this process as opposed to being in the middle of the transaction.

Do Call Your Loan Consultant:  Start out on the right foot – call a professional today who can guide you through the process every step of the way.

Although the mortgage approval process is much more extensive than it was in recent years, it really hasn’t changed much.  The key is being prepared.  By practicing these tips and keeping yourself from getting caught up in the Don’ts, you will find the process flowing smoother.  And your return will be greater!  So, don’t wait…now is a great time to buy a new home or refinance your current one!

Send me an email today for more information bill@billnickerson.com

FHA to Increase Fees Once Again…

Effective April 1st…funny April Fool’s joke….NOT!  FHA announced this past Monday that the cost of government-insured mortgages will increase slightly for some new homebuyers.  The rise in up-front fees on mortgages was deemed necessary to build up dwindling capital.

FHA is increasing what is known as the Upfront Mortgage Insurance Premium “Upfront MIP” from 1.00% of the loan amount to 1.75% of the loan amount.  This fee is added directly to the total loan along with the monthly mortgage insurance premium.

So, on a $200,000 loan amount, based on today’s rate of 1.00%, you would pay $2,000 in MIP; with the new increase of 1.75% you would be paying $3,500 to the loan amount; an increase of $1500.  Then you add in a monthly mortgage insurance premium of 1.1% per thousand which costs $183 per month.

Although the FHA’s acting commissioner, Carole Galante, states this will raise the average homeowners payment by only $5 per month, FHA consumers are already paying about $183 more a month than those consumers that don’t pay any mortgage insurance.  Such programs as the Masshousing Loan that allows a 3% down payment with no mortgage insurance can save homeowners thousands of dollars over the course of the term of the mortgage.

The FHA fees which were just raised in the last year affected current FHA holders by preventing them from refinancing to lower rates.  The increased fees have become so high; it did not make sense for many homeowners to drop their rate a full percent.  This latest move will result in much higher costs to buyers.  A mortgage rate of 4.00% will be a net rate of 5.400% when you factor in the mortgage insurance. This is a difference in $170 per month higher payment for FHA clients compared to those who may obtain the Masshousing Loan with No Mortgage Insurance

Several economists when interviewed in regards to this latest increase agreed this would have a negative impact on the already struggling housing market.  First time home buyers represent a large percentage of the market and with these additional costs it will discourage many new buyers from entering the housing market in areas that need it most.

The FHA program was designed to be a very affordable alternative for those with a low down payment and credit that was considered less than perfect.  The FHA mortgage is still a very good option for those with credit scores under 680, but new alternatives are becoming available every day and consumers should look at all their options.

When shopping for a mortgage, make sure your lender offers Masshousing, FHA, USDA, Fannie Mae and Freddie Mac, this will allow to compare all the programs available to ensure you are getting the best possible option and the most cost effective mortgage.

Please contact me with any questions you may have regarding this article:  bill@billnickerson.com

Mortgage Rates Go Up?

So, you’ve probably heard in the news….rates are at historic lows and that the government extended the payroll tax cut.  Do you have idea how they relate to each other and how they ultimately affect you?  Check out the KCM Blog below to find out the details.

The KCM Blog: Two Things You May Have Missed

February 16, 2012


Before the end of the year, Congress and the President agreed to extend the payroll tax cut. In that bill, there were two items of interest for those involved in real estate.

1.) The hike in the Guarantee Fees charged by the GSEs Fannie Mae and Freddie Mac.

The 10 basis point increase in the fees has translated to a .375% to .5% increase in mortgage rates for conventional loans. Many customers who started their loans a couple of months ago are being “surprised” with higher than expected rates. Heck, everything you read in the papers says rates are at historic lows and will likely stay there through 2014. Many consumers feel as if their lender is being unscrupulous. However, your lender has fallen victim to the increase in Guarantee Fees and how the secondary market is passing on the cost. What looks like possible lender greed is just a passing on of the increased expense imposed by the government. Sadly, the increased revenue isn’t even being used to help aid an ailing Fannie Mae or Freddie Mac. It is being turned over to the US Treasury to cover the temporary extension of the payroll tax cut.

2.) Permission for HUD to increase the insurance premiums they charge on FHA loans.

If you remember, HUD charges two insurance premiums – a monthly one and an up-front one that is usually added into the loan. Most recently, they reduced the up-front mortgage insurance premium (UFMIP) and dramatically raised the monthly fee (MMIP). It is widely anticipated that, maybe as soon as April, we will see a hike in the UFMIP with no adjustment to the MMIP. While this will help shore up the reserves in the insurance fund, it will simultaneously make buying a home more expensive. No one knows the effective date or amount of the increase. Buyers should look to buy before the increase in fees.

We always hear how our government officials tuck away things in their bills. In this case, while the headlines during the holidays praised Washington for preserving the payroll tax cut, they may have hurt us more in the long run.

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