Buyer’s Choice Realty blog

Caveat Emptor - Buyer Beware! While this rule usually applies to buying a home in Massachusetts, it also can apply to applying for and obtaining a loan on your home purchase. Boston Business Journal recently reported on a temporary cease-and-desist order taken by the Massachusetts Division of Banks against a company based in New Hampshire that also operates in Mass.

Here are the details, as well as the company involved,

“The order against The Mortgage Specialists Inc. of New Hampshire was taken after examinations by the Division of Banks revealed it had knowingly inflated borrower income and falsified documents to secure loans. The regulatory move requires the company to place all remaining loans with a qualified lender or broker and forbids it from initiating any new mortgage loans pending a Division of Banks hearing on the firm’s practices.”

This is not a permanent order, and the company can appeal the decision. I took a look at their website, and found a message from company president Michael Gill. A highlight,

“We feel that because of the climate in this industry that this has been blown up. We feel confident that we will resolve this with the banking department quickly.”

Gill basically stated that this was a ‘compliance’ issue and defended his company’s integrity and track record. I have never had buyer clients work with this company so I don’t have an opinion, but be sure to do your homework when shopping around for a mortgage so that you can be confident the company that loans you money is reputable and honest. I will update this when more information is available, and a decision has been reached regarding the operations of The Mortgage Specialists Inc.

What is the team approach? All I need is a decent agent and I’ll find a good home and be all set, right? Only in rare cases.

When thinking about buying a home, consumers are often unaware of the complexities involved. Here are the players that should be on your team:

1. An exclusive buyer agent (EBA). This type of agent will work in an office that does not take listings. Why? No potential conflicts of interest. They will put your interests first. An EBA functions as the ‘quarterback’ of the team, helping to find other members of the team and keeping everyone on the same page with effective, timely communication.

2. A qualified, thorough, licensed home inspector. In Massachusetts, only buyer agents are legally allowed to recommend a home inspector. Knowlegeable exclusive buyer agents will often recommend only a select few inspectors, for numerous reasons. They will have worked with each inspector in the past and will know that they will put in the time necessary to find any previously unknown problems in the home, which will save buyers money. Many large firms only allow their ‘buyer agents’ (agents that are designated for that transaction only to work for a buyer) to give a lengthy list of home inspectors so as to avoid liability.

3. A real estate attorney. Agents that are also attorneys pose some problems for clients. Sure, you may get a discount on services, but being an agent and being an attorney are two full-time jobs. Will they get the job done to your expectations? Good agents will be able to tell you attorneys they have worked with in the past, much the same as finding an inspector.

4. A lender/loan originator. Again, firms that offer in-house financing may not be in your best interest. Will the agents in that firm push you to get a loan from the finance officer that they work next to? Of course. You, the consumer, should not be pressured. An agent with no connections like that will be able to tell you what to ask a potential lender or a loan originator, and will help you understand some of the complexities involved in finding a good loan. Again, they will have worked with honest, ethical lenders in the past and will know who offers the best rates and terms. Junk fees can be avoided.

5. A home insurer. The same applies to this person. Solid agents will know who is honest and efficient, as well as who sometimes is not as good. Insurance is so important, especially since most home buyers are making the biggest financial purchase of their lives, and they need and deserve to know that they and their purchase will be protected.

With these five teammates on your side, your home purchase is sure to become a little bit less overwhelming, and maybe even a little fun.

Check back soon at our website for a link to a great new tool you can subscribe to. Here’s the deal: you download the program to your cell phone, and then you can see all available MLS listings right on your phone!

This service will cost a little less than $5 a month, and should be worth every penny. Driving around on the weekend? You can search for current open houses near you - GPS technology lets the program know where you currently are and allows you to search within that zip code or within a specific radius. Come across a great place and want to know the price? Use the program and you don’t have to call the list agent and listen to a sales pitch.

Data that you want, when you want it, all in the convenience of a program on your cell phone. Try it out this summer! I tried a prototype and it works great.

Are you a first time buyer? Have you not bought in a long time? Do you have questions about how you can save money in this buyer’s market? Well my goodness do we have something special for you.

Join us at Countrywide’s Peabody branch on 202 Newbury St. on Route 1 south on May 20th. I promise you won’t be disappointed. The program starts at 7pm and will run until 9 or so. You can reserve a seat by calling 978-536-1313. This free program is sure to be valuable to you if you are thinking about buying a home in the next 6-12 months or just want some questions answered.

What will be covered? How to buy foreclosures, negotiating tips in this market, determining how much to offer, how to buy with little or no money down, problems to avoid when buying, home inspection tips, and information for veterans on VA loans. If you have any questions, feel free to attend and pick our brains.

A real estate attorney, a member of the buyer broker hall of fame, and loan consultants with experience in home repair/rehab loans, credit repair, and government loans will all be presenting. Hope to see you there!

Home sales are way down, that much we know. Sales closing in March of 2008 were down almost a third from the same time frame a year earlier. How come? Without knowing all the facts, one would first point to the struggling economy. Recession fears are all over the news right now. Is that the problem? No. Boston’s economy continues to improve, and although there have been some layoffs in the financial services industry, job growth in our area remains steady. Popular sectors still hiring and growing in the Boston area are high tech and biotech firms. In fact, the economy has grown 3% in the first quarter.

So what’s the deal? Unfortunately, it’s the credit crisis. Lenders are continuing to restrict their loans. They are having a harder time finding money to lend to buyers, and if you don’t have at least 5% saved to put towards a down payment, you will find it very hard to get a loan. I have spoken to quite a few potential buyers who are not able to get preapproved, and in most cases it is because they are looking to buy with little to no money down. Until lenders can access money more readily, this trend is bound to continue.

The majority of owners with homes on the market right now will be looking to turn around and buy again as soon as their current home sells, but with fewer qualified buyers looking at their home, time on the market will not go down until this credit crisis eases.

If you are a buyer with less than a 5% down payment, there are alternatives out there. FHA loans are becoming increasingly popular and may be a good alternative to traditional lenders and brokers. If you are thinking about entering this buyer’s market, ask for help in obtaining preapproval for a loan. Many good agents know about current loan standards, and we at Buyer’s Choice are knowledgeable in this area and can point you to available resources.

I recently heard about an unfortunate situation on Boston’s north shore, in Manchester. You can find more about it at the site of WCVB tv. Here’s what happened: some unfortunate homeowners purchased a house that was most likely built on an old landfill. They tried to sell their house and potential buyers balked at the last minute. After learning why, the owners had their soil tested. Chemicals galore were lurking in their back yard. Lead, arsenic, mercury. Not exactly healthy. The worst part? Mom was weeks away from giving birth.

Who’s responsible? Surely the builders knew what type of land they were building on, right? Maybe they had no idea - could have just been fulfilling a contract. Surely the town knew the history of the land that was to be built upon, right? It turns out they did, and sent lent a letter to the builder ordering them to stop construction. No one followed up, the house was built, and the rest is history.

The family moved out right after learning about what was present in their yard, and hopefully they will raise a healthy baby. What about the person that sold them the house? If they had done their due diligence about the property, they would have found out this information.

Maybe, maybe not, but if the buyers had used an exclusive buyer’s agent, they would have avoided this unfortunate situation. I can’t express enough how important it is to have someone working on your behalf, not someone just trying to sell you a house. Most consumers are still not aware that they could hire someone, for essentially no money, that would work in their best interest. Something to think about if you plan on ever buying a house.