Buying a home can be a lot of fun! But too often, other emotions are included in the process too. Real Estate is more complex today than at any other time in history. To ensure that your interests are protected, you need to hire a buyer’s agent to represent your interests. Some see Real Estate agents as people who drive customers around and open doors for them. That is false, unfortunately that may be a common perception. Most of what we do is not seen by the public. Think of it as the “iceberg analogy”, you only see ten percent of the iceberg above the water, right?
Before I jump into the details, you might be asking what is Buyer’s Agency or why do I need to hire a Buyer’s Broker? Without putting you to sleep with the history of Real Estate Brokerage in Massachusetts, just know that things started to change around 2000. What changed was that the person/agent that is introducing you to properties used to always be working for the seller. Today you are able to hire an agent to represent your interests as a buyer. To do this the buyer will sign a contract with the Real Estate Broker. This contract explains the responsibilities of the agent and buyer. Terms of the agreement include location, style/type of home, price range and the term is typically three months. Here’s a link to help:
Protecting your interests is much more than making sure the purchase price of the property you are about to buy is fair, a lot more. At the start, I make sure your goals are realistic and attainable, that the financing and records/taxes/documents are in order and that the lender is happy with everything. I strongly recommend that a buyer have a lender already working with them and that the buyer is “preapproved” not just pre-qualified. By taking time with you before we set foot in that first open house is very important. Mapping (no pun intended) your needs and wants for your next home is critical to the success of the process. Making sure that what you have in mind is within reach. If not, are we able to work together to adjust the goal by price range, type, size or location in order to make it work? Educating you on past sales of the style, size, location and type is another part of the process. You will be able to enter a property on the market and see quickly if a property is fairly priced for what is offered, with regard to past sales.
This is a large (if not the largest) purchase you will be making in your life time. A home purchase does not happen overnight, it’s a long process taking on average sixty days. You need an expert to represent your real estate interests, and an agent that will work to make sure the process goes as smoothly as possible. If the process is not managed well, things can be delayed, you might overpay, or a property can be lost to another buyer. The worst outcome is buying the wrong property. Over the years, I have felt that I more often guide clients away from properties because I can see what beyond the granite & stainless kitchen, things that have been missed. You need an agent that is knowledgeable, connected and has problem solving skills to manage and smooth out the “bumps” in the road that lead to the closing on your home or investment.
Types of homes:
Condos or Condominiums are probably the most inexpensive to purchase out of these three types of property. The purchase price is typically lower and this makes the down payment lower too. However with that advantage there is a disadvantage in the monthly condo fees. Condo fees cover the upkeep & maintenance of the common areas within the condo association. These fees can range from a few hundred dollars a month to over a thousand in a full service building with a concierge, pool, fitness room etc. Here are some of the pros & cons of owning a condo:
- Lower entrance fee Monthly Condo fee
- Sense of Community Less Privacy
- Amenities, pool etc. Limiting Rules & Regulations
- No Landscaping etc. Limits to changes or renovations
A condo could be a great choice for someone who may travel a lot for their work. A few other things to keep in mind; financing a condo in recent years has been more difficult because some many lenders lost money in the crash of 2008. Some small studio condos or one bedrooms had to be sold to cash buyers because no lenders would offer a mortgage on them. Another part of the condo purchase to think about is the percentage of rented condos in an association. Some lender require a certain percentage to be owner occupied or else the interest rate is higher or the lender may choose not to lend on the property at all. Make sure your Real Estate attorney reviews the condo docs, history of special assessments and rules and regulations too. This should be stated in your offer to purchase. You don’t want to purchase anything with crazy rules and I seen a few!
As far as I’m concerned, a single family home is the greatest luxury anyone can have in their lifetime. Well, maybe that’s a little over the top, but there are so many benefits to a single family home. But those benefits come with a price. That’s the down side, the entry fee. A single family is the most expensive out of the three types of homes here. Several reasons for this include, resale, freedom to paint, remodel or renovate (within building codes and city limits) and you’re not sharing a wall or floor/ceiling with a neighbor. The other costs are maintaining the home, landscaping, snow removal, higher taxes and insurance rates. But, as they say, it’s the American dream.
For me, this is the best way to enter the market, if financially possible. Our market tends to be expensive anyway and the purchase of all of these types can be the similar. Some people say “I don’t want to be a landlord”. As a property manager, I can completely understand that feeling. However, when you consider the financial benefits to owning a multifamily vs. a condo or single family, a multifamily is by far the best option, financially. Because of the income from one or more rental units, a substantial amount of the monthly mortgage payment is covered. The way I see it, most of us are coming from some type of multifamily home before we purchase our first property anyway. So it’s an upward-lateral move. Now you control who is your neighbor because you’re making the decision on who rents out the other unit. You don’t have that option as a condo owner do you? And with a condo or single family, you don’t have income to help pay the mortgage.
A multifamily purchase is a little more complex than buying a condo or single family and I happen to excel in this area because I’m involved with this part of the business on a daily basis. I can advise you on expected rents, who would be attracted to the rented unit, how to market the rented unit to get a qualified tenant, what repairs or improvements to make to attract those quality tenants, when to have the leases begin and renew. And I offer property management if you’re not interested in being a landlord but want all of the financial rewards, minus the management fee.
When purchasing a multifamily property, here are a few items to be aware of:
- Are there existing leases?
- Are there separate heating/electric systems for each unit?
- Are the units legal under city zoning law?
- Require the units to be delivered vacant.
Certified Buyers Agent:
I’m proud to say that I have spent the time (3 days in class) and the money to have the professional credentials of CBA. Some agents just go through the motions to get the letters behind their name and others don’t do it at all because they think it’s a waste of time. The three days that I spent learning in detail how to better represent my clients has made a huge difference in the level of service that I am able to provide to you. Not only did I learn more in detail about the process but I found that I learned how to really organize the parts to the buying process. In addition to that I now have a better ability to explain and communicate those parts to my clients.
First Time Buyers:
Buying a home for the first time is extremely nerve racking. It’s a huge sum of money and it’s common to second guess your decisions: is the house in good condition? Can we really afford it? What about the neighbors? What will our family think about the purchase? All of these questions will hound you until and sometimes after the closing. Having worked with several clients on their first purchases I understand how you might feel through the process and take that into consideration. I explain and offer insight when my client has that look of “what if?” and “when do I?” or “if they don’t?”, on their faces. I’ll take the time that you need to feel comfortable to make the purchase.
First Time Investors:
Whether you’re interested in purchasing a multifamily home to live in and rent the other unit out or buy a ten unit apartment building, you’ll need guidance. This is an area of Real Estate that I thrive in and love to instruct my clients on. Many agents in Real Estate think they know this part of the business, well many landlords and the public in general think that they can manage or rent out an apartment easily. The fact is that there is nothing further from the truth. Owning residential investment property is very complex. If you are not consistently engaged in market, learning the newest and latest details of real estate, you will not be an effective landlord. I have clients that own both residential property and commercial/office/retail property. I choose not to list the commercial property because it is not an area that I’m active in on a regular basis. Too often Real Estate agents will list any type of property in any location. This is a mistake, in my opinion. I manage and rent residential property on a regular basis. I understand what potential renters are looking for in an apartment. I know the market well and will advise how to attract a quality tenant and at a realistic rent.
Below you will find some of the properties where we have represented the buyer:
52 Bourne St. Newton MA 02466
Single family home, again on large lot, fair to good condition, zoned MR1 (multifamily) Quiet street, but close to highways and public transportation. Seller had in-law apartment on the 3rd floor, better option would be to create a large studio on the 1st floor that would allow for 2 means of egress.
45 Margaret Rd. Newton MA 02464
Single Family home, $420,000
Single family home, very small lot, this put the house into my clients price range, good condition, Quiet street, but close to highways and public transportation. Competing offers, I believe that the combination of my clients offer, their preparation & the integrity/ reputation of the mortgage lender played a role in winning the bidding for the home.
43 Davis Ave. #1 Brookline MA 02446
Buyer client needed 3 bedrooms & 2 baths, I could see the potential here by eliminating a hallway and 2 closets to build out a new master bath, I managed the project after the purchase too. Great find because the condo association owns the side street parking spaces in addition to the unit spaces. So they have 7 parking spaces in Brookline Village!?
162 Cabot St. #1 Newton MA 02460
Former rental customer returns to become a sales client. New renovation, top to bottom, done well, 3 bedroom 2 baths, one garage space, 1/2 of the basement.
48 Loveland Road #1 Brookline MA 02467
International investor client, referred from another management client in Greece. Located & negotiated deal with clients blessing, client wired funds, flew in to close on the property. Amazing find, great appreciation & return. We continue to manage the property today.
27-29 Talbot Street Newton MA 02465
Former rental customer, at first we talked about condos & single family homes. After seeing the benefits of multifamily properties, she became a landlord! Solid buy, many updates, listing agent was nice-honest, but green. some of the property’s selling points were not showcased at all. One of my contractor clients asked me, “Mike, why didn’t you tell me about this one?”
7-9 Rumford St. Waltham MA 02454
Former rental customer-now landlord client! Very nice couple interested in buying a multifamily. This was an estate sale, very solid house, but needed cosmetic work and had a 3rd floor in-law apartment with fire escape already existing, great income potential. 2 car garage, close to the Charles River, public transportation and highways.