0 Purchasing A Condo And The Loan Process

Posted on May 1, 2012 by All Access Boston

Guest Post – Jason Deeb is a Senior Loan Officer with MSA Mortgage and is specifically focused on guiding busy professionals through the loan process as smoothly as possible. We have over 20 years of experience financing condominium purchases in the Greater Boston area and have recently been named one of the top condominium lenders by Banker & Tradesman.

For a vast majority of mortgage loan applicants, purchasing a home is one of the most important transactions that they will ever make. As a result, they usually come armed with a laundry list of questions covering every aspect of the real estate and loan process. However, very rarely do prospective condo purchasers ask how this transaction is different from purchasing a single family home or if there are any areas for concerns that they are not considering. So, during a pre-approval meeting, I always explain that the condo associations must also go through its own an approval process. Even very strong borrowers, who would otherwise qualify, could be denied a loan if the condo they are buying into doesn’t meet Fannie Mae, Freddie Mac, or FHA guidelines. This can be a confusing concept but when one purchases a condominium, think of it as buying into a business partnership with every unit owner’s decisions adding or subtracting from the value of the units in the complex as a whole. While this is also true of a bad neighbor who lives in a single family house, the dynamic of unit owners in a condo association can cause major problems for maintaining the value of your property, which is a shared goal of the lender and borrower.

While there are many different questions asked about the project, I will highlight the three most common problem areas you should be aware so that you can ask informed questions.

Budget – The association must have a line item for a reserve account on the budget that is equivalent to 10% of the total budget and have sufficient reserves to meet current obligations. Although it cannot be applied to every situation, history has proven that condo associations with weak financials tend to cut back on the property maintenance and/or increase condo fees and issue a special assessment to all the owners.

Occupancy Rates – The association must be at least 51% owner occupied to be eligible for financing. This is more of a concern for lower priced condos and areas where there is a high concentration of renters but something that should be considered before making an offer. Lenders are concerned about these levels for obvious reasons – owners and tenants of rentals apartments do not take the same care as they would with a home which is owner occupied.

Concentration of Ownership – The association cannot have one owner that controls more than 10% of the units (adjusted for complexes with 10 or fewer units). This is more of a problem on new projects where the developer has turned a large portion of the units over to rentals because they did not sell. From the lenders point of view, this is an additional risk because any condo fees or assessments not paid by this individual may need to be made up the remaining tenants, causing financial strain or even forced sales.

These are just a few of the major items we review during the loan process and if these conditions are not met, the condo project may be deemed to be unwarrantable – unable to be sold to any government agency (and 90% of all mortgages are) – and may require higher down payments. Keep in mind, that every situation is not the same, so before beginning your search, I strongly suggest working with local lender who is well versed in condominium financing to help you avoid unnecessary time and expense on your part. For more information on condo eligibility guidelines in Great Boston, Massachusetts, Maine, Rhode Island or New Hampshire please contact me.

0 Encore Realty’s New And Improved Website

Posted on April 17, 2012 by All Access Boston

We hope you’ve had a chance to tour the newly updated AllAccessBoston.com. Encore Realty is proud to have our name on this industry leading website. Your ability to search apartments in Boston has never been more comprehensive than it is now. You can go from a simple apartment search to having a personal showing scheduled with an Encore Realty real estate agent in minutes. Whether you are looking for student housing in the Boston area or want to purchase a condo in one of Boston’s premier luxury buildings, it all starts with a click of your mouse at AllAccessBoston.com.

You will find that our database of Boston apartments is vastly improved. Not only have we been spending countless hours adding pictures unique to each Boston apartment, but the Encore Realty team has added a large and continuously growing library of exclusive listings that you will absolutely want to see. This isn’t the best of news for some other local Boston and Brookline real estate agencies that are forced to shrink as we grow, but hey, we’re hiring

You’ll still find all of the features that makes AllAccessBoston.com such a user-friendly website. Our popular University Search tool is still accessible from the homepage as well a tool to search apartments near MBTA lines, our extensive list of luxury apartments and condos for sale, and our now even easier to use Live Search tool. Get access to apartments all over the Boston and Greater Boston area with the most streamlined search engine on the internet.

If you’ve been a regular visitor to our site over the past few years, you’ll notice that we’ve now dedicated a large part of our website to Boston real estate sales instead of just rentals. The new Encore Realty team has partners that have been buying and selling real estate in Boston for over 30 years. We also have a property management and development team that allows our clients to invest in ways that other real estate companies just can’t offer. If you are interested in purchasing real estate in Boston, we want to show you the difference working with Encore Realty can make.

Take a few minutes to peruse our upgraded website and let us know what you think. If you have any questions about an apartment or a property for sale, we’ll be happy to assist you.

0 Retail Space on Newbury St Boston

Posted on April 10, 2012 by All Access Boston

At Encore Realty we handle much more than just residential rentals and sales. We also have a number of real estate agents dedicated to Boston commercial leasing that wanted to let you know about some great commercial space for rent on Newbury St. We’ve handled commercial transactions all over not only Boston, but all of Massachusetts as well. If there’s one thing our commercial leasing agents can tell you, it’s that retail space on Newbury St will bring your company instant clout and a TON of foot traffic.

Boston is obviously a walker’s paradise, but there is no other part of the city that has the retail claim to fame that Newbury has. While tourists always love to make their way up and down Newbury, seasoned Bostonians also frequent the area for upscale shopping and dining making it a seriously desirable area for retail space. If you place your business on Newbury St, people are going to know your name.

Whether your business is fashion, home design, dining, or even real estate, you can’t go wrong with commercial space on Newbury St. A coffee shop that might go undiscovered in a different part of town can become an overnight sensation on the Back Bay’s most well-known road. A real estate company which may not have made much of a name for itself can suddenly become the talk of the town with the right Newbury commercial address. It’s an investment in your company that can have immense impact.

If you are searching for commercial space on Newbury St, contact Encore Realty today at 617-981-6900 or online here. One of our seasoned commercial agents can help you find the perfect retail space on Newbury St to help your company take that next big step.

0 Buying vs Renting In Boston

Posted on March 11, 2012 by All Access Boston

If you’ve been on the hunt for a new apartment in Boston this year, you may have noticed something interesting…and by interesting I mean hair raising. The cost of renting an apartment has gone through the roof. We’ve seen apartments that were formally renting for $1400 suddenly renting for $1600 or more. These numbers can be staggering for the average renter. This brings up a serious topic to consider. Should you rent or buy in Boston if the cost of renting is equal to or higher then the cost of buying?

Let’s say you are considering renting a one bedroom apartment for $1500-$1600 in the Allston/Brighton area (seriously, those are the asking prices from some landlords). If you are going to be living in the area for more than a few years, you will be dropping a lot of money and walking away with nothing to show for it. If you buy instead of renting in Boston, you could purchase a two bedroom condo at that price in the same area. Now, instead of just lining a landlord’s pockets, you actually own the property you live in.

Of course, it’s not quite as easy as that. There are more factors and costs to consider. Of course the best way to decide whether to buy or rent in Boston is to talk things over with an Encore Realty real estate expert. We can touch on some of the topics here though without going to far in depth.

1. A Down Payment: Getting a mortgage isn’t as easy as it used to be. In some cases, you may need to put down as much as 20% for a down payment. However, based on certain factors, your down payment can be considerably less. Talk to your real estate agent about which properties qualify for a lower down payment if that’s what makes the difference between renting and buying in Boston for you.

2. Property Taxes: One of the extra costs you’ll have to take into consideration when deciding to buy over renting in Boston is property tax. When renting, the landlord pays the taxes on the building (even though the cost may be built into your monthly rent). When you purchase your own home, you’ll be responsible for your own property tax. This isn’t a huge cost, but it is important to bear in mind.

3. Condo (HOA) Fees: *Of course, this is only taken into account if you are purchasing a condo in Boston as opposed to a single or multi-family home. When you own a condo, you have to pay fees to your condo association. These fees cover a multitude of costs that may include trash disposal, sewer, snow removal and maybe even heat and hot water. The association also takes care of the common areas and keeps funds to cover any necessary repairs on the building.

Those are the three major financial factors to weigh when deciding between buying or renting in Boston. They may seem like a lot, but with the right real estate agent assisting you, you may find that you may be able to actually pay less to buy a home than to rent in the current market.

In our next blog we’ll talk about how purchasing a home in Boston can also be looked at as an investment. For more information, contact an Encore Realty real estate agent or visit our Boston real estate sales page to see what the market has to offer you.

0 Buying Property In Boston | Renovations

Posted on May 23, 2011 by All Access Boston

I spent the last week gutting and renovating a bathroom. I learned a lot about construction, plumbing, and being stuck in a small room full of drywall dust with another guy for 12 hours straight. Probably the most important thing I learned of all was that “new construction” and “renovated” properties may not be all they’re cracked up to be. If you are buying a property in Boston or even considering a rental for a number of years, you need to know every last nut and bolt of what you are getting.

Buying property in Boston (or anywhere else for that matter) is quite an investment. You don’t want to be laying out hundreds of thousands of dollars just to find out that your home is only a thin layer of nice and shiny covering up a bunch of fast and cheap. Let me tell you how I ran into just this very instance…

Drain in a sink

This is where your cash goes if you cut corners on construction.

When my friend and I were renovating this bathroom, we knew that there was some water damage from a leaky shower surround. Odds were that we were going to need to at least replace some of the plywood flooring…until we got some of the tile up and realized that the floor had a top layer of fiberboard. Seriously, fiberboard. As a result, the entire floor had to go since the water soaked through that stuff like a sponge. Obviously whoever had “renovated” the bathroom in the 90s had done do as inexpensively as possible.

Then we moved on to the removing the old tub and surround…which was glued directly to drywall instead of Hardibacker or Durarock. Again, this was a recipe for water damage disaster. We had to replace some of the ceiling in the kitchen below the bathroom because of this corner cutting approach.

There were plenty more hurdles to jump through along the way, but you get the idea. A room can look nice, but if the construction is shoddy, it is going to cost you. If you are looking into buying property in Boston because it is new construction or recently renovated, make sure you aren’t buying the property built by the cheapest sub-contractors. Also, if you are renovating your own home, remember, saving a few hundred dollars can cost you a few thousand in short order.