Boston Real Estate Blog

John Ford Realty
137 Charles Street, Boston
151 Tremont Street

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Okay, homes are expensive

Boston Condos For Sale

Buyers who want to move into the City of Boston often hear about the high prices of condos, and assume they can’t afford to buy.  Well, to a certain extent, it’s expensive to buy.  However, if you’re willing to compromise, you may in fact be able to purchase a nice new home.

Here’s the best I can offer to someone who has very little money/income but wants to live in the city.

Right now, there are 83 condos in the city of Boston for sale between $225,000 and $275,000. No, I’m not including the tiny 275 square foot studios for sale in the Back Bay. I narrowed the list down to include only one-bedroom (or larger) condos, greater than 500 square feet. I also narrowed the list down to only include those neighborhoods that most of my clients like to live in (I left out Roslindale and West Roxbury, for example, because I don’t focus on those areas). It turns out that there are plenty of condos available in South Boston, Dorchester, and Brighton. There are also some in the Fenway, Charlestown, and Jamaica Plain. Excellent neighborhoods.

Now, I know what you’re saying. You want to live in the South End or Back Bay. Yes, and I want to live in Wellesley. Unfortunately, that’s not realistic. The goal here is to find a nice, safe, clean, and fair-sized condo to call home, at least for a couple years, until either you settle down, move, or join the circus.

Let’s create a hypothetical situation. You make $800/week ($20/hour). That’s $41,600 per year. You work at Fidelity Investments – they’re great. Up until now you’ve been renting in South Boston with a couple of buddies, paying $800/month (plus utilities). That’s not bad – you pay 25% of your income in rent – lots of people pay more. It’d be better if it was only 20% of your rent, but…Boston’s expensive.

Now, you’re ready to buy your own home. You’re 28 years old and itching to settle down. Trouble is, you’re still single, so you only have one salary to draw upon to pay for things.

Here’s what you need to do. Worst case scenario, you have very little savings – perhaps you’ve been able to put aside $13,000 over the past six years, since college. Or, perhaps, your parents are going to give you the money. You’ll need this cash as a down payment – you could get a no-money-down loan, but the trouble is, your monthly mortgage payment would be higher. For the purposes of this example, let’s stick with the idea that you a little bit saved. That’s probably true for most young people. At least those not drawing on a trust fund.

Most important is, how much can you afford to spend and how much will the bank let you borrow.

Those are actually two separate questions, and you should consider them, separately. Banks love to lend these days. Trouble is, if you’re spending 60% of your take home pay on your mortgage, you won’t have any money left for luxuries such as a car payment, or cat food. I advise all my clients to decide how much they want to spend, first, not how much can they borrow.

This is my analysis of the situation.

Together, we find you a nice, 1000 square foot, 2-bedroom home on Montebello Road, in Jamaica Plain, within walking distance to the Orange Line, on the market for $274,900. No one pays full price for anything, so let’s figure we can talk them down to $269,000. At closing, you’ll put down $13,450 (5%). The bank will loan you 95% – one mortgage for $215,200 and a second one for $40,350. Your monthly payment for the two, combined (at 5.25% – 5 year adjustable rate) is $1,411.

Unfortunately, you will have pay for other things, such as homeowners insurance (say, $53/month), property taxes (say, $223/month), and condo association fees (say $170/month). Those are all practical numbers, and you may end up paying less (there’s a $1,000 annual deduction in property taxes, for example, for owner-occupied properties in the city).

Therefore, you are going to have to pay $1,862 per month for home expenses. If you make $800 per week at your job, then more than 1/2 of your income will go for housing. Guess what, you can actually get banks to loan you this much. It’ll be tough for the first year or so, but you might be able to pull this off.

Also, consider that you will actually pay less than $1,862 per month. You will get to deduct the interest you paid on your mortgage, as well as property taxes. Based on my calculations, your monthly payment will come out to about $1,487. That’s not bad.

So, it is possible for a single person five years out of college to afford to live comfortably in the city of Boston. It definitely can be tough, though.

Boston real estate springs to life: Market begins its busiest season

The Boston Herald ran a story today about the “spring market”.  Pretty much, most people look for condos in the city during the months of April and May.

However, the season started late, this year; I’m not sure why.  I think sellers were waiting before putting their places on the market, to decide if they wanted to move up and/or out.  This article is accurate, pretty much, except I disagree about it being a “buyer’s market”.  It very well may be, in the suburbs.  However, if you take a look at my activity report you’ll see there’s a real shortage of properties available.

Nancy Connolly and her husband figure that with lots of houses on the market and their son approaching his first birthday, now’s the perfect time to look for bigger digs.

“The spring market is kind of driving us to look,” said Connolly, 44, who hopes to sell her two-bedroom Cambridge condo and buy a four-bedroom Dorchester Victorian. “There’s lots of stuff out there, (which) is why we’re looking now.”

With temperatures rising, days getting longer and flowers pushing up through the soil, the Bay State’s traditional spring real estate market is starting to heat up.

The spring market – which typically begins in late March and ends around June 1 – represents less than 25 percent of the year, but generates about one-third of total annual home sales, according to the Massachusetts Association of Realtors.

Source: Real estate springs to life: Market begins its busiest season – The Boston Herald

What is Boston real estate buyer’s agency

Boston Real Estate and Boston Condos

I saw some cool Boston lofts today in downtown Boston, on Beach Street. The interiors were done quite nicely – the flooring is especially well-done (maple), and the kitchens were done with great maple cabinets, GE Profile appliances, and nice granite counter tops.

However, an issue came up which I think is important to address. It has to do with Boston Buyer’s Agency. You see, in the not-so-distant past, just about everyone in Boston real estate worked as either the listing agent (the “seller’s agent”) or as a “sub-agent”.

The sub-agent actually was working on behalf of the seller and the seller’s agent, NOT for the buyer. Pretty much any buyer in Massachusetts was being taken around and looking at houses by someone WHO DIDN’T WORK FOR THEM. In many cases, the buyers weren’t even aware of it, at least until they wanted to make an offer, at which point they found out that they were pretty much on their own.

Things are different these days, much to my relief. Boston Buyer agency means that an agent works on behalf of the buyer – pretty logical, huh? The seller has their agent, so isn’t it fair that the buyer has one, too? The buyer’s agent gets to do a bunch of stuff that the seller’s agent or the sub-agent CAN’T do. Like, the seller’s agent can’t tell you that the property is horribly overpriced (although it might seem obvious), and, while the seller’s agent will be honest, they might not be terribly forthcoming about information such as “what’s going up in that empty lot across the street?” or “why are fifteen units in this building suddenly on the market?” They are working on behalf of the seller, and their job is to get the best price possible for the seller, not the lowest price for the buyer.

Almost every sale involves two agents – the listing agent and the buyer’s agent. And, almost every sale involves a commission paid to both of those agents. The commission is almost always paid for out of the sales proceeds from the purchase – so, the seller pays any commission at closing, but in effect, the buyer is the one who plunks down the cash to buy the place. The seller’s agent and buyer’s agent usually split any commission 50/50, so if it’s 5% commission on the sale, then each gets 2.5% (which is then split between the agent and the company they work for).

Lately, there’s been a lot of major projects being built in Boston. These developments often are represented by in-house sales and marketing staffs.

These people may be on salary, or on a salary plus commission. Their goal is to make as many sales as possible directly between the developer and buyers. It’s logical – if they can make a sale directly, they don’t have to pay out any commission to another real estate agent.

HOWEVER, I don’t think any developer in the city is in any way assuming they will be able to sell ALL of the units in their building directly. It’s just not possible (not possible if they intend to sell the units quickly or in a timely manner, at least). They realize that the real estate agents in the city have access to a HUGE number of clients who are looking to buy. And, of course, those clients want to use a buyer’s agent, because they want to trust that someone is looking out for their (the buyers’) best interest.

Boston real estate buyers can certainly go directly to the sales office of any major development and take a look around and make an offer on their own. If they do so, they are putting themselves at risk of making a major mistake. There are only two ways for them to minimize this risk:

1) do all of the research themselves on the property as well as other properties on the market as well as
sales in the neighborhood over the past several months as well as research future developments and projects in the neighborhood as well as research public documents and newspapers to find out what if anything is going on in the neighborhood that may cause problems for them in the future; or, 2) use a buyer’s agent.

Some buyers might want to work directly with the sales office, because they are under the impression that they will be able to negotiate a better deal than their buyer’s agent. I disagree, but I can understand the logic. I say, your buyer’s agent can get you at least as good a deal, if not better. The buyer’s agent has relationships with most other agents and this can help. Plus, again, the buyer’s agent knows what else is out there, as well as how many of the units are under agreement plus the history of the sales process, etc. The buyer’s agent is in a much better position to negotiate than a buyer just walking in the door.

The only thing I think the buyer can do that might get them a better price is to negotiate with the developer by saying, “Look, I’m not using an agent, so you’re saving 2 – 2.5% right there, in commission. Lower the purchase price on my unit by that amount, and we’ve got a deal.”     That might work. The buyer has to realize that a buyer’s agent may have been able to negotiate that percentage reduction, as well, plus, if the buyer doesn’t have an agent, the buyer is missing out on all the other things that a buyer’s agent can do for them.

It’s obviously hard for me to be objective, since I make my living off commissions. Here’s how it is for me, though. I feel as though certain buyers can buy a home on their own, without using an agent. That’s goes for sellers, as well. The thing is, it’s not worth it to do so for most people. You lose so much time, effort, and possibly money by doing it yourself, plus there’s WAY more frustration. I mean, most people don’t even change their own oil these days.

But, they want to enter into a financial transaction for $500,000, on their own?

Use a Boston buyer’s agent. It’s worth it.

Your Home: Quickly

Is your credit rating wrong?  You can probably get it corrected much faster than you think, with a new service called “rapid scoring”, according to this article in the New York Times.  Mention it to your mortgage broker.

Link: href=””>The New York Times > Real Estate > Your Home: Quickly Improving A Credit Rating.

Home buyers in search of a mortgage know that their credit history will play a key role in the outcome. And anyone who has tried to improve a credit score is probably aware that doing so can take months or years.

But it is sometimes possible for a borrower to raise his credit score in just a few days, using a strategy known as rapid rescoring.

“I’ve had a fair amount of success using rapid rescoring for clients,” said Oded Ben-Ami, a senior loan officer for Sterling National Mortgage in Great Neck, N.Y. “And the couple of hundred dollars it costs is negligible compared with the benefits of getting a better interest rate, quicker approval and a higher maximum loan amount.”

First-time homebuyer seminar held by city agency, June 16

The city of Boston’s Home Center is hosting a first-time homebuyer seminar.

It will be held at the South Boston Branch Library on June 16, from 6:30 – 8:30 PM. The address is 646 East Broadway, Boston, MA 02127.

Topics include: how to find money for a down payment, how to find the best mortgage loans, and how to search and find the perfect home.

More information: Boston Home Center

Home-buyer tax credit: a terrible idea

This is a terrible idea.

A temporary tax credit would be the best incentive to move hesitant home buyers into the market, the NATIONAL ASSOCIATION OF REALTORS® told Congress on Thursday.

NAR said the tactic has been successful before; A 1975 temporary tax credit helped to “clear an over-supply of newly constructed homes during an economic downturn.”

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, NAR treasurer and a partner in RSR, REALTORS®, in Lemoyne, Penn. “Failure to act quickly could further stall the housing market, hurting many of our members, who are predominantly small businesses owners and self-employed individuals.”

Testifying for NAR before the House Committee on Small Business, Helsel said there are “three critical features for an optimal home buyer tax credit.”

* The credit should apply to all residential real estate — not solely foreclosed properties.
* It should be temporary and only apply for a short period of time.
* It should provide higher income limits than those the House has imposed, particularly for single individuals.

“If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but also it could expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

Yes, giving people money might encourage them to act.

I don’t care.

This year, over 4.8 million homes will be sold. This is on par with the level of activity in the late 1990’s. Only during the past few, frenzied years did home sales skyrocket. And, only as a result of “easy money”.

Now that everyone is being more rational, sales have dropped to a more reasonable level.

Let’s let the free market run its course.

Lower home prices will bring people back into the market.

Oh, and by the way, if the home loan interest deduction isn’t enough of an incentive to get someone to buy a new home, I don’t see what else will. Enough with the giveaways.

Source: Tax Credit Would Get Buyers Off Fence –

Definitions of different types of agency relationships

Courtesy, National Association of Realtors

(In Massachusetts, most agents will be working for you, the seller, as a “listing agent” and for you, the buyer, as a “buyer’s agent”. Make sure you know, beforehand. If your agent is a “subagent”, he or she is working on behalf of the seller, not you.)

Understanding Agency Relationships

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:

Seller’s representative (also known as a listing agent or seller’s agent)

A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Buyer’s representative (also known as a buyer’s agent)

A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.


A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

Disclosed dual agent

Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.

Designated agent (also called appointed agent)

This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.

Nonagency relationship (called, among other things, a transaction broker or facilitator)

Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

Learn all about buying a home (yes, people are buying)

MassHousing is holding a “home-buying” fair, May 30, in different towns across the Commonwealth.

Boston’s will be held at the Hynes.

The idea is, you go to the fair to learn more about taking out a loan. You can meet-up with some lenders.

Then, the next day, you go out to a bunch of open houses.

Many real estate agencies are scheduling a larger number of open houses than they would, otherwise, to take advantage of the opportunity.

(Only complaint I have is … they’re doing this after Memorial Day? That’s when the spring market ends, not begins …)

Source: Home fairs target working-class buyers – By Kimberly Blanton, The Boston Globe

Over-bids and multiple-bids back in vogue?

Anyone been involved in a situation where you competed with another buyer (or buyers) for the same property, and lost out either because you wouldn’t go as high as the competition, or the competition went above asking or removed all contingencies? Any sellers have to deal with this?

What happened, what did you think, and why is this happening, in a slower real estate market?

Housing is so cheap! (Part 2)

I read last week that, according to the Mass Association of Realtors, “affordability index” in the Greater Boston area is at the same level as 2001.

Meaning, based on average / median incomes and average / median home prices, the same number of people could afford to buy, in 2008, as could afford to buy, in 2001. (Or, something like that.)

I’m not saying it’s true or false (trust me, I have a problem with NAR/MAR etc., too), but what if it is? Does that mean anything to people? Do you feel housing is “cheaper” than it was one, two or three years ago? Will we ever feel housing is “cheap”?

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