10 Tips for First Time Homebuyers

1.  Be picky, but don’t be unrealistic.  Your first home may need a little work, some paint, carpet and perhaps some other updates.  Remember, this is your first home and the first step in investing in your future. Don’t avoid a home because it has bright pink walls or ugly floors.  Do avoid a home that may have structural damage such as rotted sills.

2.  Do your homework before you start looking.  Look online, work with a Real Estate Agent and begin the process of what style homes you like, neighborhoods and most important, the price range.

3.  Get your finances in order. Organize your bank accounts by having all of your funds in one or two different accounts.  Review your credit to make sure any and all accounts are up to date.

4.  Don’t wait to get a loan; Get pre-approved.  Call me today, 978-273-3227, get approved ahead of time to make sure you are properly prepared and you are realistically looking in the right price range. This is a free service!

5.  Don’t ask too many people for opinions.  Just because your best friend bought and sold 3 houses, does not make them an expert.  Ask the professionals that do this everyday.

6.  Decide when you could move. Set realistic time frames of how quickly you could move into your new home.  In the case of home purchases, some transactions can happen in as little as 30 days and some can take up to 6 months, you need to be prepared.

7.  Think long-term. Where do you see yourself in 10 years? Are you buying to be in a good school system? Closer to work? Close to the City?  Figure out what is important to you today, will these wants/needs still be important in 10 years?  It’s ok to buy a starter home and then re-evaluate in 5 or so years.  This is an investment and it’s your future.

8.  Don’t let yourself be “House Poor”.  Don’t over buy, your first home does not have to be 5000 square feet. You want to make sure you can still live your life and afford to go out to dinner.

9.  Don’t be naive. If you have never swung a hammer, don’t by a fixer upper. Do your homework on what updates to a home cost before purchasing a home that may need TLC.

10.  Get help from a real estate agent. This is your best resource for your home purchase. To be properly “matched” up, call me as I work with real estate agents all over and can refer you to one that best suits your needs.

Bottom Line:  Being a first time home buyer can be a scary uncertain time in your life, seek help from trained professionals to get the best most up-to-date information.

At Merrimack Mortgage, our mortgage programs are designed to assist the many different needs of each unique individual’s needs.

Call or email me today to find out how I can assist you in financing a new home or refinancing your current one. 

Bill Nickerson NMLS#4194   179 Great Road, Acton MA 01720

Phone: 978-273-3227     Bill’s Email       Bill’s Website

National Open House Weekend April 20 and April 21, 2013

Did you know it is National Open House Weekend?  The National Association of Realtors is expecting to sell almost 10% of the current inventory. With lots of homes on the market and great low rates, this spring market is turning out to be fantastic!  This weekend real estate agents from around the area will be hosting open houses as part of the national Open House Weekend.  The Open House Weekend provides a great opportunity to visit some of the many homes in your local area while learning more about homeownership from a professional real estate agent.  Be sure to take advantage of this weekend and attend some of the open houses in your area!

Call me today to see the closing cost credits you are eligible for!!   

Need a realtor? Call me.  Need a real estate attorney?  Call me.  Need a mortgage or pre-approval?  Call me.  Have financing questions?  Call me.  Bill Nickerson 978-273-3227

Or send me an email at bill@billnickerson.com  If you need to apply online, visit my website at www.billnickerson.net

What is a Business Cycle?

The “Books” say an average business cycle is 44.4 months and we have lived through many of them. Some longer than that and some as short as a season in New England.  A business cycle is like the exhibit from our youth…“What makes an ocean wave, wave” at the New England Aquarium.  In the exhibit, you get to move the wave with a lever and if you move the lever too much you have to pull it back as the wave comes crashing down…and again, you go too far the other way and the wave crashes in the other direction.  It’s impossible to control an ocean wave.  So here we are now in the middle of a business cycle “The Ocean Wave”. 

As Americans we do the same thing.  When we feel confident and wealthy, we tend to spend a little too much; perhaps buy a car that has all the bells and whistles or buy the  house we all dreamed of or even dined at the newest expensive restaurant we’ve never been to… building up that ocean wave.  We did this as a nation and created a very large wave.  We are in the “Trough” of the business cycle which is like a dead calm in the sea.  Nothing moves.  We are paralyzed by our own actions and cannot find a direction to get back…there is just no wind for our sails.  As individuals, we are going through our own personal process of what will get us back on track.  In some cases, we cancel our vacations, limit the activities our children participate in at school or even bring lunch every day.  By drastically cutting our spending, we have moved the “wave” too far in the other direction thus hurting the economy even further.  Not only have we given up those fancy dinners…we are not even going to the local diner for the blue plate special.

Consumer confidence is measured at an all-time low today and we are letting our emotions and fear govern our decisions and actions.  The News Media has the ability to heighten this fear by focusing on the negative and over emphasizing the issues at hand.   As FDR said, “The only thing we have to fear is Fear itself”.  This speech was given in 1933 in the middle of one of the biggest bank panics of the century which followed the Stock Market Crash of 1929.  There was a “RUN” on the banks where consumers wanted to withdraw all of the cash they had in the banks for fear it would be gone.  The banks had lent this money out for loans, mortgages etc. and the banks quickly ran out of cash.  FDR implemented the Federal Deposit Insurance Corporation “FDIC” that to this day insures our deposits up to $250,000.  This speech did spark a generation as well as the economy, and it was backed by a plan of how to get us moving as a country.  Today, we do not look up to our leaders.   And as of this moment, we do not have a plan of how to get out of the economic turmoil we are in.  So as a strong country, we must take matters in our own hands and move ahead…full steam ahead.

We are in a very unique situation in the economy: Mortgage rates are creating new historical lows every day, house prices are nearing levels of value we have not seen since 2004.  As we always do, we will look back on this day and say, “I wish I had bought that home, or vacation house or even that investment property”.  Trust me; it happens every time we go through these business cycles.  As I mentioned earlier, we are letting our emotions govern our business decisions.  That is not allowed in business.  It’s business and there is no crying in business!!  Remember the saying “Buy Low and Sell High”.  This is not just some catch phrase.  It is a sound business decision that should be followed regardless of your emotional ties. 

So what do we do now? 

·         Keep spending but in a healthy way.  Make sound buying decisions based on needs versus wants.  By putting some money back into the economy, we will slowly recover.

·         Look to your advisers!!  Not your friends or family, but your financial advisers.  This would be the person that handles your investments, your banking, and your estate.  These are professionals that do this time and time again all day every day. 

·         Be patient.  Throughout history we have experienced turbulent times in the business cycle.  And we have pulled out of it.  In the words of Warren Buffett, “Americans are in a cycle of fear which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We’ll break out of it. It takes time.”

For information regarding home financing or the economy, please contact me at     Bill@billnickerson.com   or    978-273-3227

Do I Really Need Title Insurance?

Title insurance is one of the important and least understood aspects of a real estate transaction. There are two types of title insurance; lenders’ coverage and owners’ coverage. Title insurance protects the lender and the owner against all types of title defects and also covers issues such as zoning, access, and protects the lender and owner against frivolous claims against title by providing legal defense against such claims.

In Massachusetts, a real estate attorney examines title to a property and must certify title to the lender and owner. However, this certification is based only upon a fifty year title search and is based only on the documents that are recorded at the Registry of Deeds.  There are many situations where an attorney has done his or her job perfectly, and yet title issues could exist. For instance, if there is a forgery in the chain of title or if there is an heir who was erroneously omitted from a probate notification, title to a property could be defective.  Additionally, if a document is improperly indexed at the Registry of Deeds or if a signatory to a deed is a minor or is incompetent, this could also make the title defective. These defects are called hidden defects and this is what makes title insurance so important to protect one’s interests.

The lender’s title insurance is required in practically every closing.  It is a common misconception on the part of buyers that if there is a lender’s policy in place, the owner’s policy adds little value, particularly where the mortgage is a high loan to value mortgage.  In fact, the lender’s policy does not protect the owner at all, as it only comes into play if the property is foreclosed by the lender and the lender is then unable to resell the property due to a defect.   In recent years, owner’s policies have saved the day when documents such as mortgage discharges and mortgage assignments have not been properly recorded at the Registry of Deeds, and the title insurance companies have provided the necessary assurances and guarantees to allow the closing to take place.

Each buyer should consult with his or her attorney to learn more about the costs and benefits of title insurance.  All title insurers provide a substantial discount when the lender’s policy and the owner’s policy are purchases simultaneously.

Courtesy of: 

Mark L. Scheier Esq.

Scheier & Katin P.C., Acton MA

MScheier@skactonlaw.com

SELLERS: 5 Musts for Generating Multiple Offers

Selling your home?  Interested in getting multiple offers on your home?  Check out this article from Trulia blogger Tara.

As you might have heard by now, multiple offers are the new black. Well – kind of; if your own home is on the market or soon to be, it can seem like you break your back to prepare your home and it lags and lags on the market while all the cool kids houses and their sellers sit idly by, making champagne toasts while they are inundated with more offers than they can shake a stick at.

Let’s bust one myth: getting multiple offers rarely happens by luck alone. That’s good news for you, as it means that generating multiple offers is more of a science than an art. And that, in turn, means there’s a whole lot you can do to replicate these results with your own home’s listing.

Here are five elements I nearly always see in listings that get multiple offers:

#1. Listed low. As I alluded to last week, homes that get multiple offers are often sold in what industry insiders call an auction atmosphere. If you think back to the last auction you saw on TV or participated in online, you’ll remember this basic element of Auctions 101: the starting price is lower – sometimes quite a bit lower – than the final sale price.

In fact, it’s the low list or starting price that gets people excited about the possibility of scoring a great value, whether they’re bidding on an antique Chinese pug figurine on eBay or on your home.  And when it comes to your home, it’s that same, low-price-seeking excitement that will cause many more buyers to show up and view your home than would have come at a higher price point.

In real estate, more showings are an inescapable prerequisite to more offers.

Now – I’m not at all suggesting you give away the farm, just that you price your home from a retailer or auctioneer’s perspective, rather than the all-too-common backwards reasoning to which home sellers so often fall prey. Work with your agent through the comparable sales data – as recent and as comparable as possible – and then do your best to list your home as a slight discount, not at a slight premium, compared to the recent neighborhood sales.  That will get buyers’ attention.

#2.  Easy to show.  Walk a mile with me, if you will, in the shoes of the average home buyer or their agent. Let’s say there are 50 homes on the market which meet your rough specifications in terms of bedrooms, bathrooms, square footage, price range and location. You can narrow it down to your 30 top priorities to see. But you only have time to see 8 today. Now, of those 30 top priority properties, about 15 are short sales or foreclosures and you can get into them anytime you want. And the other 15 are split down the middle – half of them are available to be seen with nothing more than a single phone call.  The other half require you to hurdle an arcane obstacle course of phone calls, 24 hour notice requirements, strange hours of availability and more phone calls to get an appointment to see the place.

Which would you go see, and which would get ruled out?

I am not exaggerating one iota when I tell you that your home could be priced well and marketed well, but if you make it too difficult for buyers to get in to see it, the statistical probability is that they will (a) find and choose another home from those that are more easily accessible to view, and/or (b) assume you are not motivated to sell, get irritated and pass on your home as a result.

Want multiple offers?  Make sure your home is available to be shown on demand, or as close as possible to that. Inconvenient?  Yes.  Frustrating?  Sometimes.  A challenge to keep the place clean at all times? Assuredly.  But, my dear reader, no one ever promised you a rose garden; decide what your priorities are and, if you decide that getting top dollar for your home is at the top of that priority list, then also decide to be willing to deal with the inconvenience involved in churning up multiple offers and getting your home sold.

#3:  Immaculate look and function.  The homes that get multiple offers (outside of the foreclosure arena, anyway), are those with look, feel and function that can be described in one word: covetable. You’re not trying to create a situation in which your home barely edges out the listing down the street in the hearts and minds of your target buyer. If you want multiple offers, what needs to happen is for multiple buyers to fall deeply in love with your home – enough to brave the competition and put their best foot (and top dollar) forward.

Today’s buyers are no dummies. They’ve just lived through the worst real estate recession anyone can remember, and they’re much more frugal than buyers were at the last peak of the market. To boot, mortgage and appraisal guidelines and their own smart sense of frugality prevents them from just hurling dollars at any old place. Accordingly, they are not easily tricked into competing for a home by a slipshod paint job and a few pieces of Pottery Barn furniture.  

To generate multiple offers, prepare your home by ensuring it is:
*immaculate from the inside out – basements, garages and crawl spaces included
*de-cluttered and staged to the nines – including fresh paint, carpet and other things that need replacing
*in fine mettle – make sure things like doors, windows and systems buyers test (e.g., stoves, faucets, heating and air conditioning) are not creaky, wonky, leaky or otherwise dysfunctional – and if you’ve done any major home improvements or replaced any appliances or systems lately, market that fact to show off the move-in readiness of the place.

#4: Just enough market exposure.  If your home is so lucky as to get an offer the first day or so on the market, count your blessings. But also calculate your opportunity costs: many buyers can’t get out to see homes that quickly – some are unable to house hunt except on the weekends! In my local markets, I’ve seen time and time again that listing agents who are skilled in cultivating multiple offers often plan from the jump to allow the home to be exposed to the market long enough for all qualified and interested buyers to see it and get their offers on the table.

And what’s more, they expressly message the calendar for market exposure, Open Houses and even the offer date and review timeline in the listing, from the very beginning. Here, it’s very common to see a listing come on the market with a calendar of 1-2 Open Houses and an offer date sometime early in the week following the second one. Ask your agent to brief you on the standard practices for market exposure in your local area.

Allowing for ample market exposure – and including the timeline in the listing – lets buyers know that they will be able to get to the property and get their offers considered, and creates some urgency, as well.  Smart buyers interested in properties like this will take care to have their agents contact the listing agent as soon as they think they may want to submit an offer, though; this way, if someone makes a so-called ‘pre-emptive’ offer, you’ll get a call from the listing agent and a chance to compete.

#5:  Sellers who are willing to revise.  If you think most of the tips here are not for you because you’ve already blown your chance to sell for more than asking – think again! A number of times, I’ve witnessed what I call the Sweet Spot Phenomenon, where an overpriced home sits on the market for months with no bites, sometimes even through multiple price reductions. Finally, the seller lowers the price to the ‘sweet spot,’ and it generates multiple offers and sells for more than the final list price.

There are definitely homes whose sellers net more than they expected because they were willing to revise the list price downward in response to market feedback (i.e., no showings, no offers or lowball offers).  

If your home’s been lagging on the market, talk with your listing agent about what sort of price reduction strategy is likely to maximize your net sale price. Hint: many more buyers are attracted by chunky reductions or reductions below a common online search price point limit than by tiny, incremental reductions. For example, you might draw more flies buyers, and ultimately more money, with the honey of a price reduction from $499,000 to $474,000 than with a series of small reductions from $499,000 to $479,000, because there is a set of buyers who may be cutting their search off at $475,000 – so a price cut below that point will expose your home to a whole new group of prospects.

For information about financing or the economy, please contact me at Bill@billnickerson.com   or  978-273-3227

FHA Streamline Refinance

Do you currently have an FHA mortgage?  And has it not made sense to refinance because of the High Mortgage Insurance Premiums?  Well, FHA just announced that it is going to reduce the Mortgage Insurance fees for current FHA mortgage holders.  But before you get excited, there are some rules to follow.

You must have taken the mortgage out prior to May 31^st 2009 and of course be current on all payments.  The Up Front Mortgage Insurance Premium will be greatly reduced and the monthly mortgage insurance is only 55 cents per thousand borrowed.  This is huge news…for the last several months; homeowners have not been able to refinance their current homes due to insurance being so high!

THE BENEFITS:

Refinance at today’s historical low rates

Refinance with NO closing costs

NO APPRAISAL REQUIRED (the term can be the lesser of 30 years or remaining term plus 12 years)

NO income verification required (we simply verify you are currently employed but not the income amount)

Restrictions include the following:  You cannot have missed a mortgage payment for at least the last 12 months.  You have to be currently employed (income is not a factor).  You must still reside in the home as your primary residence.  Other restrictions may apply. 

Last month, the Obama Administration announced a broad package of actions and legislative proposals to help responsible homeowners save thousands of dollars through refinancing. This includes the changes announced today that will benefit current FHA borrowers – particularly those whose loan value may exceed the current value of their home.  By lowering monthly mortgage costs for homeowners, FHA hopes to help more borrowers stay in their homes, thereby decreasing the potential for future defaults and reducing losses to the Mutual Mortgage Insurance (MMI) Fund.

Currently, 3.4 million households with loans endorsed on or before May 31, 2009, pay more than a five percent annual interest rate on their FHA-insured mortgages.  By refinancing through this streamlined process, it’s estimated that the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month. FHA’s new discounted prices assume no greater risk to its Mutual Mortgage Insurance (MMI) Fund and will allow many of these borrowers to refinance into a lower cost FHA-insured mortgage without requiring additional underwriting.  FHA-insured homeowners should contact their existing lender to determine their eligibility.

June 11^th is just around the corner.  Contact me today to refinance into a lower interest rate.           

Bill Nickerson        Bill@billnickerson.com         978-399-1313

Mortgage Rates still Trending Down

Short Sale vs. Foreclosure

The KCM blog publishes news and information daily about the real estate market.  It’s a great source of what is the hot topic at the moment.  In their blog today, they talk about the Short Sale versus Foreclosure.  The information gives the consumer a better idea of what each of these processes entails.

KCM Blog:  Short Sale vs. Foreclosure – 10 Common Myths Busted

It’s likely you’ve heard the term “short sale” thrown around quite a bit. But what, exactly, is a short sale?

A short sale is when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property. This is not a new practice; banks have been doing short sales for years. Only recently, due to the current state of the housing market and economy, has this process become a part of the public consciousness.  Click here to read the full article:  Short Sale vs. Foreclosure – 10 Common Myths

Truth in Lending

The History:  The Consumer Credit Protection Act, more commonly known as the Truth-in-Lending Act, went into effect in 1968. The law is intended to protect borrowers from predatory lending by requiring lenders to fully disclose all costs associated with securing a mortgage loan.

Prior to the implementation of the act, borrowers routinely were paying considerably more than what had been initially advertised or agreed upon in the beginning stages of the loan process. Now, lenders must provide the potential borrower with an approximate cost, not only in dollars but percentage terms within a specified period of time prior to the application. Then, the exact costs and interest rate must be provided to the borrower, according to the law, at least, one full business day prior to the closing, in a document known as The Uniform Settlement Statement. This document provides relevant data clearly and consistently laid out, regarding finance charges, the total amount of each payment, the number of monthly payments over the life of the loan, as well as other pertinent financial information to help the borrower understand and manage the loan.

Also notable, a borrower who has applied for an equity loan, refinance of primary home, or a second mortgage has the option to back out of the loan agreement, if he or she does so within three days. However, the rescission option is not applicable for a single home loan, to initially purchase a home.¹

Truth in Lending Today:

The Truth in Lending/ TIL discloses information to address the following items; calculate the Annual Percentage Rate, show the prepaid charges, show the overall finance charge of the mortgage, the amount financed, total payments, a payment schedule, discloses if there is a prepayment penalty, and discusses how the late fee will work.

The Truth in Lending is to give a fair and accurate cost by taking the interest rate, loan term, mortgage insurance, if any, closing costs and producing the Annual Percentage Rate which is the rate to compare all other mortgages to. By taking all these items into consideration, this will produce an average rate assuming all of these factors; otherwise known as the Annual Percentage Rate or APR.  This rate will allow you to shop and compare to all other mortgage offers and programs.

There have been some recent minor changes in the law regarding Truth in Lending known as the Mortgage Disclosure Improvement Act (MDIA).  And these guidelines are continuing to change often.  To find out more details about what the law is saying today please go to this link  http://www.dfi.wa.gov/cs/pdf/mdia-notice.pdf   If you still have questions, please contact me at bill@billnickerson.com

¹ http://www.mortgage101.com/article/what-is-truth-in-lending-act

Featured Open House Recipe

Occasionally I am asked by a realtor to sponsor a luncheon for their open house.  I have found that by making something special for the luncheon, the realtors slow down and take a moment to truly enjoy the lunch which tends to promote more conversation about the home they are viewing.  I greatly enjoy these interactions that occur.  This last week for the luncheon I made Quiche.  Check out my recipe below…Hope you enjoy it!

Bill’s Quiche

Prep time: 30-45 minutes         Serves:  6-8

Ingredients:

1/3 lb. Prosciutto (from any deli ask for ¼ inch thick slice), diced

½ Onion(I prefer Vidalia), diced

5 Eggs, large

1 ½ C Whole milk (Healthy version)

2 ½ oz. Extra Sharp Cheddar, shredded

2 ½ oz. Mild cheddar, shredded

¼ C Parmesan cheese, grated

¼ C Marsala wine

½ C Butter, plus an extra ¼ inch slice

One 9-inch pie crust

In advance:                                                                                                                Preheat oven to 350 degrees.                                                                                        Have all ingredients ready on counter.  Shred cheeses, dice meat and onion.      Remove pie crust from package and drape the crust over a 9 inch pie plate.

In medium sized saute pan, melt butter over medium heat.  Add diced onions; turning occasionally.  Once onions begin to brown; add diced prosciutto and continue browning about 2 to 4 minutes.  Then add Marsala wine and ¼ inch slice butter.  Lower heat and simmer; slowly cook until all Marsala wine has been cooked off (so liquid is mostly gone).

While the onions and prosciutto are cooking, prepare the pie plate by shaping the crust to fit into the plate.  Cover the bottom of the pie plate with extra sharp cheese only.  In a separate dish, whisk 5 eggs until blended;  then pour into whole milk. (I use a large 4 cup measuring cup to save on dishes).

Drain prosciutto and onions in a colander; then spread evenly over the cheese in the pie crust. Pour the egg/milk mixture over prosciutto and onions.  Spread the mild shredded cheddar evenly over the egg/milk mixture.  Sprinkle Parmesan cheese over the top.

Place into oven and bake 30 minutes.  Using a thermometer, you want the pie to be at least 175 degrees and for the crust to be slightly brown.  When done remove from oven and allow to cool for about 15 minutes before serving.  Enjoy!