If you're presently in the market to buy a home, you already know that you're not alone. If you're planning on starting your home search now, you should be aware that the Massachusetts real estate market has dramatically turned around.
Who knows how long it will last, but home buyers are currently experiencing multiple offer situations and homes selling for more than list price. Of course, that's the situation for nice homes that are properly priced. The homes for sale that need extensive work are what is keeping downward pressure on home prices.
The following is a press real release from the not-for-profit Massachusetts Association of Buyer Agents about preparing for buying a home.
FOR IMMEDIATE RELEASE
COMING UP WITH A PLAN, LINING UP FINANCING KEY TO BUYING A HOME IN COMPETITIVE SPRING MARKET
‘As Market Shifts and Inventory Tightens, Importance of Working with a Savvy Agent Increases,’
says President of Massachusetts Association of Buyer Agents
Boston, MA – May 1, 2012 – Real estate agents today will tell you there’s change in the air and they’re not just referring to the warm weather we’ve recently enjoyed. The once-moribund housing market has come back to life – in fact, it’s been so good over the past couple months that some are now talking about 2012 being a turnaround year. Already there’s concern about a shortage of homes for sale.
According to Sam Schneiderman, president of the Massachusetts Association of Buyer Agents (MABA), buyer demand is up about five times over what it was last year at this time and is putting pressure on inventory. “We knew there was pent-up demand out there and starting in January the buyers came out – and the buyers are buying. Unfortunately, there aren’t a lot of quality homes out there.”
As a result, Schneiderman says MABA’s buyer agents are reporting bidding wars over the good properties on the market. He cites the recent experience of one Cambridgeport, MA seller. “They listed the house, put the ‘For Sale’ sign up and held Saturday and Sunday open houses. More than 100 prospective buyers went through the home. Fifteen made offers. The house sold in days – at significantly more than asking price.”
In short, says Schneiderman, MABA buyer agents are seeing increased competition this spring for homes their clients want to buy – and multiple offers for properly priced, presented, and marketed properties.
As the inventory of homes for sale tightens and this scenario repeats itself, the importance of working with a savvy agent increases, says Schneiderman. “Serious buyers have to have a plan. They need to be focused and ready to buy when the house of their dreams appears. The right buyer’s agent can give you the edge you need in a competitive market.”
Finding an agent who will take the time to understand the nuances of your particular situation and map out a plan with you is key, says Schneiderman. A good buyer’s agent will start by asking you some questions. What do you want to do? What are your commitments? What are your objectives? Why do you want to buy? Are you willing to buy a fixer-upper? That way, says Schneiderman, they’ll be able to pinpoint the kind of home, neighborhood, and price point that’s right for you and ensure you get the most for your money.
The next step is getting pre-approved for financing. “With limited inventory, properties are moving fast, so pre-approval is critical,” says Schneiderman. “Work with a bank, mortgage broker, or ‘hybrid’ lender – whatever makes the most sense for your situation – but get pre-approved. And, by the way, make sure that they show you what your total monthly payment will be, including estimated taxes and insurance.” Again, says Schneiderman, a good agent should be able to help you with this process.
When it comes to financing, look for a lender who’s reliable – meaning, they must be able to close the loan – competitive, and honest, says Schneiderman. His own preference is for a number of local lenders that offer both personal service and a variety of products. “Just make sure you don’t get boxed in by an agent who only works with one or two lenders and can’t provide a wide range of options. You’ll likely get financing but it may not be optimized for your situation.”
“For example, says Schneiderman, if you’re only going to be in the house for 7 to 10 years, you may not need a typical 30-year fixed mortgage. With rates so low, everyone thinks why not go with a 30-year fixed rate? The problem is there’s no significant amortization until the seventh year, so you won’t start building any equity until you’re about to move. That means that you’ll owe about what you paid for the property. For most folks – especially young people – that just doesn’t make sense.” On the other hand, says Schneiderman, if you’re planning on staying in the home for 30 years, lock in that 30-year fixed rate mortgage.
From finding the right agent to finding the right house to getting the right loan, it’s all about choosing – and choosing wisely, says Schneiderman. Good buyer’s agents – like MABA agents, he’s quick to add – are committed to helping you make the right choices. “Having a plan in this market and being confident you have someone working for your interests and your interests only can make a big difference,” says Schneiderman. “We’re committed to the client and not the transaction – that’s an important distinction.” For more information on MABA and MABA buyer’s agents, go to www.massbuyersagent.org.
About the Massachusetts Association of Buyer Agents (MABA)
Founded in 1990, the Massachusetts Association of Buyer Agents (MABA) is a non-profit organization of select real estate agents dedicated to the highest ethical standards of buyer agency. Less than one percent of the buyer agents in the state qualify for MABA membership. MABA agents advocate for buyers at each step of the process – from initial negotiations through closings – when purchasing a home or condominium. With their comprehensive knowledge, member agents are a critical resource to first-time buyers, those moving into the state through relocation, and repeat buyers seeking to streamline the purchase process. When working with home buyers, MABA agents’ allegiance is to the buyer only and their transaction – never to the seller, the seller’s agent or the listing brokerage company. For additional information on MABA and a free list of MABA buyer’s agents, go to www.massbuyeragents.org.