Boston condos for sale: Costly mistakes Buyers make
If you’re thinking about buying a downtown Boston condo, you’ve probably heard mortgage rates are rising and have wondered what that means for you. Since mortgage rates have increased over two percentage points this year, it’s natural to think about how this will impact your homeownership plans.
Today, Boston condo buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher or they’re waiting it out in hopes rates will fall. Let’s look at some context that can help you understand why so many buyers are jumping off the fence and into action rather than waiting to buy.
One factor that could help you make your decision to buy a Boston condo now is how today’s mortgage rates compare to historical data. While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971 (see graph below):
Mark Fleming, Chief Economist at First American, explains it like this:
“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”
If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a rate that’s comparatively lower than decades past.
The Boston condo buyers who are springing into action now are also motivated to make their move because they know rates have risen steadily this year, and they’re eager to get ahead of any further increases.
Why? When mortgage rates climb, they impact the monthly mortgage payment you’ll have on the home you’re buying. Basically, it’ll likely cost you more to buy a home if you wait. Experts say mortgage rates will rise (although more moderately) in the months ahead. Odeta Kushi, Deputy Chief Economist at First American, explains:
“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”
So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later. As Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), says:
“With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”
At the end of the day, there is no perfect advice on when to buy a home. What you should do depends on your goals, your finances, and your personal situation. Use this information with the help of local real estate professionals to make an informed decision on what’s best for you. Bill McBride of Calculated Risk sums it up best:
“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”
For many buyers, rising mortgage rates are motivating them to act now and make a purchase before rates rise higher. To decide what move is best for you, let’s connect so you have expert advice on your side.
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The negotiations are over. Your mortgage is settled. The keys to your first home are in hand. Finally, you can install your dream patio.You can paint the walls without losing your security deposit .Heck, you could knock out a wall. You’re so ready to be a homeowner.So ready in fact, you’re about to make some costly mistakes.
#1 Going With the Lowest Bid
The sounds your HVAC system is making clearly require the knowledge of a professional (or perhaps an exorcist?).
But you’ve been smart and gotten three contractor bids, so why not go with the lowest price?
You might want to check out this story from a Michigan couple. Rather than going with a remodeler who’d delivered good work in the past, they hired a contractor offering to complete the work for less than half the cost, in less time.
A year later, their house was still a construction zone. You don’t want to be in the same spot.
What to do: Double-check that all bids include the same project scope — sometimes one is cheaper because it doesn’t include all the actual costs and details of the project. The contractor may lack the experience to know of additional steps and costs.
#2 Submitting Small Insurance Claims
Insurance is there to cover damage to your property, so why not use it?
Because the maddening reality is that filing a claim or two, especially in a relatively short period, can trigger an increase in your premium
Save your insurance for the catastrophic stuff.
Some insurance groups, like the Insurance Information Institute and National Association of Insurance Commissioners, say it’s hard to generalize about premium increases because states’ and providers’ rules differ. But this stat from a report by UP and the Rutgers Center for Risk and Responsibility at Rutgers Law School is pretty sobering: Only two states — Rhode Island and Texas — got top marks for protecting consumers “from improper rate increases and non-renewals” just for making:
- An inquiry about a claim
- A claim that isn’t paid because it was less than the deductible
- A single claim
Your best protection? Maintaining your home so small claims don’t even materialize.
#3 Making Improvements Without Checking the ROI
Brandon Hedges, a REALTOR® in Minneapolis-St. Paul, recalls a couple who, though only planning to stay in their home for a few years, quickly replaced all their windows. When the time came to sell, he had to deliver the crushing news that they wouldn’t get back their full investment — more than $30,000.
New windows can be a great investment if you’re sticking around for awhile, especially if windows are beyond repair, and you want to save on energy bills.
Just because you might personally value an upgrade doesn’t mean the market will. “It’s easy to build yourself out of your neighborhood” and invest more than you can recoup at resale, says Linda Sowell, a REALTOR® in Memphis, Tenn.
What to do: Before you pick up a sledgehammer, check with an agent or appraiser, who usually are happy to share their knowledge about how much moola an improvement will eventually deliver.
#4 Going on a Furnishing Spree
When you enter homeownership with an apartment’s worth of furnishings, entire rooms in your new home are depressingly sparse. You want to feel settled. You want guests at your housewarming party to be able to sit on real furniture.
But try to exercise some retailing willpower. Investing in high-quality furniture over time is just smarter than blowing your budget on a whole house worth of particleboard discount items all at once.
What to do: Live in your home for a while, and you’ll get to know your space. Your living room may really need two full couches, not the love seat and a recliner you pictured there.
#5 Throwing Away Receipts and Paperwork
Shortly after moving in, your sump pump dies. You begrudgingly pay for a new one and try to forget about the cash you just dropped. But don’t! When it comes time to sell, improvements as small as this are like a resume-builder for your home that can boost its price. And, if problems arise down the road, warranty information for something like a new furnace could save you hundreds.
What to do: Stow paperwork like receipts, contracts, and manuals in a three-ring binder with clear plastic sleeves, or photograph your documents and upload them to cloud storage.
#6 Ignoring Small Items on Your Inspection Report
Use your inspection report as your very first home to-do list — even before you start perusing paint colors. Minor issues that helped take a chunk of change off the sale price can cause cumulative (and sometimes hazardous) damage. Over time, loose gutters could yield thousands in foundation damage. Uninsulated pipes? You could pay hundreds to a plumber when they crack in freezing temperatures. And a single faulty electric outlet could indicate dangerous ungrounded electricity.
What to do: Get the opinion and estimate of a contractor (usually at no charge), and then you can make an informed decision. But remember #1 above.
#7 Remodeling Without Doing the Research
No one wants to be a Negative Nancy, but there’s a benefit to knowing the worst-case scenario.
Homeowner Kanter tells the time he hired roofers to remove box gutters from his 1880s home. Little did he know, more often than not aged box gutters come with more extensive rot damage, which his roofers weren’t qualified to handle.
“We had to have four different contractors come in and close stuff up for the winter,” he says. Had he researched the problem, he could have saved money and anxiety by hiring a specialist from the start, he says.
What to do: Before beginning a project, thoroughly research it. Ask neighbors. Ask detailed questions of contractors so you can get your timing, budget, and expectations in line.
#8 Buying Cheap Tools
You need some basic tools for your first home — a hammer, screwdriver set, a ladder, maybe a mower.
But if you pick up a “novelty” kit (like those cute pink ones) or inexpensive off-brand items, don’t be surprised if they break right away, or if components like batteries have to be replaced frequently.
What to do: For a budget-friendly start, buy used tools from known quality brands (check online auctions or local estate sales) that the pros themselves use.
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