Things aren’t going to get any easier for those looking to buy a home in 2011. But, with a fair amount of patience, you can still buy the home of your dreams.
Coming in 2011 is a new set of rules and regulations by mortgage giant Fannie Mae. With its goal of reducing the risk of guaranteeing loans made by member banks, Fannie Mae is hoping to increase incoming revenue at the same time. The new regulations will bring a whole nest of new fees with them, in line with what fellow investor Freddie Mac has already instituted.
According to Kenneth R Harney, quoted in The Real Deal:
Say you want to buy a house that requires a $300,000 first mortgage. You have impressive FICO scores — above 800 — and cash for a down payment just under 25 percent.
Purely on the basis of your credit score and loan-to-value (LTV) ratio, Fannie now plans to charge an extra quarter of a percentage point of the loan amount [an additional $750] to do the deal …
[But] say your FICO score is 679, and you have down-payment money just under 20 percent, Fannie will soon begin hitting you for 2 3/4 percent in add-on fees — a staggering $8,250 … up by $1,500.
Condo buyers will have additional fees to pay. Read the entire article to learn more.
In the scheme of things, costs such as these get lost in the minutia. When people buy a half-million dollar condo, that’s the number they focus on, not the money they have to put up in closing costs.
Well, at least that’s what it used to be like. If you’re going to be hit with $10,000 in fees, suddenly you might care a little more.
I’m not in the habit of writing about individual condo listings but I’ll make an exception on occasion to make you aware of some that I think are good values for the money.
Case in point is this new listing at the Penny Savings Bank at the corners of Union Park and Washington streets, in the South End.
Listed for $479,000, it’s a 814-square foot, 4th-floor condo with a separate bedroom area. (It can’t be considered a “real” bedroom since it doesn’t have a closet and no door, but there is a large closet in the main living room area.) There is rental parking available. (* The listing says condo fees may change, this year. Currently $238.98, my guess is this means it will go up.)
The Penny Savings Bank is a cute little condo-conversion project that came online in the mid-2000′s. They took an existing bank and added three stories of condos above the existing structure. There is street-level retail, previously the site of the “Ginger Park” restaurant. I’ve not heard of a replacement restaurant, yet. There’s also a citibank branch.
There are 23 units in the building. Several of them have weird layouts and some have limited light, so it’s best to see them in person to gauge whether or not it would work for you. For example, I think this unit, #405, only has windows in the bedroom. Big windows but you’ll still have limited light in the main living area. My advice: buy a lamp.
Dana Desimone and James Sousa of Hammond Residential RE have the listing. Please contact me for buyer’s agent representation.
How small can you go? What are the smallest condos listed for sale, right now, in Boston.
I did a search through the Multiple Listing Service Property Information Network, Inc.’s database for small condos. Turns out, two of the three smallest are in Boston Proper.
Up first, the absolutely-smallest condo currently on the market, at 88 Gordon Street, in Brighton. It has ~285 square feet, and is a basement-level studio. The listing says it’s on “Level 1″ which to me means first floor (street-level) but might mean basement.
The condo is listed for sale for $130,000. The upside is, it already has a tenant, at least until the end of this month, paying $1,050. So, this might actually be a nice little investment, if you can put a lot of money down. The condo fee is $187 per month and taxes are around $1,400.
There is a slightly (ever so slightly) larger apartment on Mass Ave in the South End, listed for $210,000. It is a ~289-square foot studio, located near to the Boston Medical Center. I’ve seen units in this building so I know that many are in very good shape, having been renovated (during a condo conversion) in 2004. According to the MLSPIN listing, it has hardwood floors, stainless appliances, custom cabinets, granite counters, new dishwasher/disposal, tile bath with pedestal sink, and common laundry.
The unit is currently rented for $1,300 per month. That’s because it’s in a good location. Many medical students as well as people who work in midtown would love that location (I bet it’s pretty loud, there, though). Taxes might run you $180 per month and the condo fee is $179. Add those all together and you still might be able to make it work as a landlord. As an owner, though, it might just be good enough to call home!
Final, small condo is on the second block of Commonwealth Ave. It’s ~290-square feet, also a studio. It’s listed for $269,000.
Description says: “Huge 13′ ceilings and huge windows. W/D in unit. built-in MURPHY BED. Marble bath. Porcelain and Hardwood floors. Huge Molding.”
Given the estimated ceiling height, my guess is it’s street level, although the listing says “1st level” which could be street, basement, or parlor. Best to check out in person.
I’ve seen several units in this building; it was converted into condos in mid-2000′s with nice finishes. Definitely qualifies as a “pied-a-terre”, you know?
The condo fee is just $187 but the monthly taxes might run you $250. As a rental, possibly, but perhaps with the price and the location and its appeal, a buyer just might love living here. Your monthly cost might be $2,000 or so, plus insurance, etc. That’s a lot for 290 square feet, no? But, to many, the pluses would outweigh the negatives.
Please let me know if you’d like more information.
All listings and descriptions collected from MLSPIN from third-party sources.
Above, 702 Massachusetts Ave, South End, Boston, Massachusetts. Richard Giglio of Keller Williams Realty Boston is the listing agent.
As I mentioned last week, condo prices rose in five of the downtown Boston neighborhoods during the 4th quarter 2010, including in the Back Bay, Beacon Hill, Midtown, Waterfront, and South End.
Take the Back Bay, for example. In 4th quarter 2010, the top Back Bay real estate brokerage sold 25 condos. Taking out the units they sold during a well-publicized auction, the total is lowered to thirteen.
Added all together, they sold three 2-bedrooms, two 1-bedrooms, and nine 3-bedrooms. Roughly, the average condo sold had 1,776 square feet of space. The average sales price was $1.727 million at an average of $995 per square foot.
In 4th-quarter 2009, as comparison, this brokerage sold 29 condos (4 more). Nineteen of these were a part of that same condo development that ended up at auction in 4th-quarter 2010, so remove them. That leaves ten condos sold.
Added all together, they sold four 1-bedrooms, four 2-bedrooms, and two 3-bedrooms. Roughly, the average condo sold had 1,550 square feet of space (roughly, 220 square feet less). The average sales price was $1.453 million at an average of $983 per square foot (almost the same).
So, average price jumped even though number of sales dropped.
This is just one small example of what was happening in Boston Proper during the fourth quarter. The return of the “high-end” buyer means, to me at least, renewed confidence in the market and the economy. It’s a small sign, but a significant one. Watch this in first quarter 2011.
Above, a unit for sale at 360 Newbury, a luxury condo building in Boston’s Back Bay neighborhood. It has ~852 square feet and is listed for $699,000.
In the old days, you’d look to buy or sell a home by going down to see your local real estate agent. He or she would take you around, show you a couple of office listings, then wait for you to decide. If you were lucky, you’d also be able to see some homes listed by other agencies. Only if you were paying close attention would you realize that your agent, regardless of which property you saw, was most-likely representing the seller, not you. Meaning, he or she was trying to make you buy whatever the owner was selling.
That was before the advent of “buyers’ agency”, which became en vogue in the early 2000′s, here in Massachusetts. Suddenly, buyers could find representation, could hire an agent who would have their interests at heart, not the sellers’.
Around the same time, Massachusetts’ real estate rules and regulations were modified to include the requirement that agents give buyers and sellers what’s known as a “Mandatory Agency Disclosure Form”. Simply, it informs the buyer or seller as to who the agent represents – the buyer or the seller. Or, neither, in the case of a facilitator (don’t ask).
You could decide it was okay if your agent was also representing the seller on a home purchase you were interested in. And/or, you could also decide it was okay that your agent represented you while someone else at his/her brokerage represented the seller. (Those are known as dual agency and designated agency, respectively.)
Why am I mentioning this? Well, for information’s sake. As well, New York City began requiring the issuance of agency disclosure forms in the new year.
They go one step further, though. In NY State, agents have to give you these forms if you’re renting, not just if you’re buying or selling. This isn’t true in Massachusetts (well, at least yet). It occurred to me after reading the New York Times article that it might make sense for renters to get the same forms as buyers and sellers. Having said that, I think most renters are clear that their agents are representing the landlords/owners, not them, the tenants. Still, having something in writing could clarify it so that there’s no confusion.
More: Commonwealth of Massachusetts Agency Disclosure information (warning, pdf)
Also: Sample Agency Disclosure form (warning, pdf)