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December 2010 Archives

Housing Market Is Better In Boston Than Other Cities

Even with record-low mortgage rates and cheaper home prices, many potential Massachusetts homeowners have avoided purchasing homes in 2010 because of economic uncertainty and unemployment. The Warren Group found that 37,718 MA homes changed hands, or transferred ownership, since January 1 up until November 30, which is 1.3 percent drop from the same period in 2009.

Median sale prices for homes may reach close to $300,000 in 2010, according to the Boston Herald. This is more than the 2009 house-sale price of $285,000 but is far below the recorded high of $355,000 in 2005.

New Federal Tax Bill Reduces Energy Saving Tax Breaks

Boston homeowners interested in remodeling their homes to conserve energy will receive smaller tax break next year based on the provisions stated in the $858 billion federal tax bill. The measure, which was signed by President Barack Obama on December 17, has reduced the tax credits for energy-efficient remodeling to 10 percent instead of the original 30 percent.

The Boston Herald reported taxpayers will receive a maximum of $500 for remodeling expenses compared to the initial $1,500 provided to help pay for insulation materials or asphalt roofs that withstand heat gain. The bill has also placed new dollar-specific limits on major home improvements that were available for 30 percent credits, such as:

New Credit Score Alerts On Mortgage Loans Next Year

According to the Boston Herald, mortgage lenders will now be required to notify their applicants about how their credit scores may affect the rate quote and terms they receive from the lender. The credit score alert is meant to allow consumers to order copies of their credit report, look for errors or outdated information, and rethink their mortgage or loan decisions.

The credit score alerts aim to help make loan pricing more comprehensible for Boston and nationwide consumers. With the new disclosure on credit scores, mortgage shoppers will be alerted when negative credit information has initiated higher rates or unfavorable loan terms. The mandatory lender alerts expected to appear on home loan applications beginning January 1.

Property Taxes Increase 7.6 Percent In Boston

The budget cuts in state aid and struggling economy has led the city of Boston to increase its residential and property tax rates by the maximum amount permitted under the law. Mayor Thomas M. Menino's office stated that the decline in Boston's revenue sources, particularly in receiving state aid, has brought the city no other alternative but to raise the city's property taxes.

The Boston Herald reported residential tax rates will rise up to 7.6 percent or $12.79 for every thousand dollars of valuation. This comes out to an increase of $224 each year for the average Boston-area homeowner. Business property taxes will also go up 5.6 percent or $31.04 per thousand in the city.

Nancy Henry May Lose Home After Mortgage Scam

Boston real estate attorney Todd Kaplan said his client, 76-year-old Nancy Henry, was a victim of a mortgage scam that has now led to the foreclosure of her Cambridge home, according to the Boston Herald. Kaplan said Henry was swindled to "deed over her house" and faces losing the home her family has owned for over 50 years before the Christmas holiday.

"I'm supposed to be out by December 15, but I don't know where I would go," Nancy Henry said.

Things To Consider When Buying Or Selling A Home In Boston

Boston homeowners who are forced to buy or sell a house outside of the peak season often have to work harder on closing a sale, according to WCVB Boston News. Homebuyers or sellers in the Boston-area may want to consider the following tips when planning a purchase or sale.

First, pay close attention to other houses being sold in your neighborhood. If you're selling a home, lowering the price of your house will keep you ahead of the market. Foreclosed homes on your street, however, may decrease your home's overall market value.

Second, don't depend on a real estate agent to do all of the work. You can always clean, organize, and paint your home on your own to make it ready for sale. Utilize the internet and social media websites, like Craigslist or YouTube, to post photos or a video tour highlighting your home.

More People Renting Than Buying In Boston

Many people in the Boston-area are changing their outlook on homeownership during this uncertain economy and housing market. More homeowners are choosing to rent than purchase a home, expanding the pool of renters from just the average college student or mobile professional who often changes his or her job.

Hundreds of individuals who are able to buy a home decide otherwise, according to The Boston Globe. LeVar and Tamara Johnson, for instance, each have a six-figure income and good credit. Even though they appear like the ideal couple who would want to buy a home while interest rates on loans are at a current low, the couple prefers to pay their monthly $3,000 for their apartment above a ritzy Natick mall.

Proposal For Mandatory Court Approval In Foreclosures In MA

The Boston Globe reported that William Galvin, the Secretary of State, is planning to submit a bill where Massachusetts mortgage lenders will be required to get an approval from a court prior to foreclosing on a home. The bill is renewed version of a previous proposal state lawmakers denied two years ago because of issues on the legitimacy of titles for foreclosed homes and other properties.

According to William Galvin, the problems surrounding the foreclosure process are setting back the Bay State's housing market and keeping the economy from recovering. Many dilemmas have arisen with many banks and mortgage lenders regarding robo-signing, thoroughly checking foreclosure paperwork for proper and legal courses of action, and unfair lending and mortgages.

Many political critics and Boston real estate attorneys are worried that the country has gone "subprime" and has resorted to unfair lending tactics to boost the housing market. Subprime lending means that lenders are offering loans to families who fail to qualify for prime and traditional loans or have poor credit histories.

Subprime loans may have helped increase homeownership for many families in Boston, but they cost more than prime market loans and offer less beneficial terms. The Boston Globe reported that big mortgage lenders, like Freddie Mac, Fannie Mae, and the Federal Housing Administration, have offered many loans to suspect borrowers.

Foreclosed Home Sales Dropped 25 Percent This Year

RealtyTrac Inc., a foreclosure listing firm, reported that foreclosure sales nationwide plummeted 25 percent during the July-September quarter in comparison to the April-June period this year. The sales drop also revealed a huge 31 percent decrease from last year. According to the Boston Herald, the 2010 summer period has been the worst summer for home sales in the last ten years and has kept foreclosure sales even in Boston at a standstill.

Non-foreclosed property sales fell 29 percent this year and also revealed a 31 percent drop from last year's third quarter. The expiration of federal homebuyer tax credits in April may have affected the decline in sales for bank-owned properties and other homes.

Buying A Home: Maintaining Your Role as Decision-maker

According to the Boston Globe, some Boston homebuyers may take the "wake me up when it's over" approach when they hire a real estate agent to help them make a home purchase. Buyers might be more inclined to let the agent take care of all the details, but they may not realize the risk they take in relinquishing their role as the decision-maker.

Any Boston real estate attorney may tell you that the relationship you create with an agent is similar to the one you establish with a lawyer. Both have a fiduciary duty to make your needs a priority. Still, you should always maintain the role of being the decision-maker, because you are the one taking a risk to spend your money on buying a house that only you and your family will be living in-not the agent.