Archive for the 'Useful Information' category

Owning residential investment property - property you do not occupy or a multi-family home where you occupy one of a number of units  - can be a rewarding and wealth building proposition.  However, as most things that have reward, it also has risks.

In 1971 Massachusetts passed a law regarding Lead Paint.  In 1994 it was significantly revised.  Shortly after, the U.S. Government adopted significant portions of the Massachusetts law as Federal Law.  This law (MA Lead Paint Law) places the responsibility on the landlord to have a licensed lead paint inspection performed on any residential property built before 1978 in which a child 6yrs or younger resides or will reside.  If the results of the test show levels of lead higher than the safe levels as set forth by the State on surfaces 5ft or below then actions are required to bring the property in compliance. The testing is performed on interior, common area and exterior spaces on the property.

The cost of bringing a property into compliance (often mistakenly called de-leading) can be significant.  However the cost of not taking action to bring a property into compliance may be far worse.  The failure to address this issue comes with great liability, should a child become sick.  If a child is found to have medical/neurological issues due to lead paint poisoning, the property owner is likely to be liable for the cost of care and damages.  

If you are a making the move towards being a landlord, please read the following two questions provided MA Health and Human Services:

Excerpt from from Health and Human Services:

Can a rental property owner be held liable for a lead poisoned child?
Yes. If a child is lead poisoned by lead hazards where the child lives, the owner is legally responsible. An owner cannot avoid liability by asking tenants to sign an agreement that they accept the presence of lead paint. Complying with the Lead Law is the best protection an owner has from liability.

Can an owner evict or refuse to rent to a family with children under six if there is lead paint in the home?
No. An owner cannot evict or refuse to rent to anyone because or lead paint. Discrimination is against the law and carries penalties.

The "Deleading" Process

There are several ways to address Lead Paint: encapsulation, enclosure, removal and replacement. The process may include replacing windows and woodwork, scraping or covering old paint or encapsulation.  

The average cost is approximately $10,000.00 per unit, but can go as high as 2-3 times that amount  depending upon such issues as the number of windows, wall degradation, trim, etc. This information was provided by HouseLogic.  

Click Here (English) or Here (Spanish) for more information on Lead Paint...

Lead Paint: Financial Assistance

In Massachusetts, property homeowners who receive a "Letter of Full Compliance" are eligible for State Tax Credit equal to the deleading expense, or $1,500.00, whichever is less for every residential unit they bring into compliance.

There are several programs available to assist 1-4 family homeowners for removing lead paint from their homes.  The loans under the "Get The Lead Out" program has maximum limitations on loan value, but has reasonable rates if you qualify:

The maximum loan amounts are:

• Single-family $20,000
• 2-family $25,000
• 3-family $30,000
• 4-family $35,000

There are other loans programs listed below, also with criteria specific to their programs, click here for more information on each program listed below:

The Home Improvement Loan Program (HILP)

HUD 203(K) Program

Local Public Programs

Programs Offered by Local Lenders

Massachusetts Homebuyer and Homeowner Programs

Arlington MA Home Improvement Program

Cambridge MA Home Improvement Program

As a Landlord there there are many issues you need to be aware of.  You're responsible for the rental property, its repairs, financial reporting, choosing qualified person(s) to rent your apartment and the Fair Housing laws, detailed with the Massachusetts Commission Against Discrimination or (M.C.A.D.).  As a land lord you must adhere to Fair Housing rules, this prevents a landlord from discriminating tenants based on Race, Color, Religious Creed, Sex, National Origin, Disability and Children.

By James C Trano, REALTOR®

Direct Line: 857.209.6060 or C21JTrano@gmail.com

Rehabilitation Loan - FHA 203K To The Rescue!

How many of you have been looking for the right home, the perfect home? Only to find challenges with each property.  It may be an older kitchen & bath(s), an unfinished basement, or in some cases, a complete renovation is needed to make the property habitable.

Through the FHA (Federal Housing Administration) you may be eligible to utilize the HUD 203K program.  This mortgage instrument allows home buyers to purchase their "dream home" (even though it may not look like it,  yet).

Consider this, you've found what appears to be an attractive home on a street that appeals to you.  It has almost all that you want in a home, as you gaze upon it from the street with your agent.  You then enter the home, only to realize, it requires serious updating; the electrical is older, kitchens & baths are dated and there's only two bedrooms (you need three).  If you could stay within your budget and make the necessary changes, would you consider purchasing it?

Example:  You received a pre-approval letter indicating $500,000 purchasing power and the property lists for $425,000.  You have a clever agent with good negotiation skills, you receive an accepted offer at $400,000.  By using an FHA 203K loan, you could borrow more than the purchase price, and apply the additional funds to improve the property, prior to moving in.

This incredible FHA program works well with buyers purchasing short sale,  distressed, foreclosure, fixer-uppers, etc., requiring updating or repair work prior to moving in. Home buyers must meet some requirements for this program.  The property must be owner occupied, a primary residence and have minimum 640 FICO score among other criteria.  The property being purchased can be almost completely removed, down to the foundation.  However the initial foot-print of the property must remain intact and built upon.

Examples of Home Improvements Allowed:

• Kitchen and Bath(s) remodeled
• Windows and Doors (Energy Efficient)
• Weather Stripping, Gutters and Roofs
• Basement remodeling
• Decks
• Room Additions

Meet with your mortgage professional for more information on this program; keep in mind that not all mortgage people are qualified to discuss this program.  Please be sure to speak with the appropriate person to determine if you qualify.  This program can make the difference for a home buyer not able to find the perfect home, but has the vision to improve upon an existing home, to meet one's needs.

There can be reasons not buy a home; however with the use of the FHA/HUD 203K loan, individuals are seeing the opportunities in fixer-uppers.

by James C. Trano, REALTOR® - Century 21 Adams - 857.209.6060

FHA 203K Program

According to this past Sunday’s New York Times (Jan.8) in their end of the year round-up of mutual funds, real estate funds topped the list of all sector funds with a 4th quarter return of  14.8%.  For the year, they returned 8%, which is second only to utility funds which returned 10% for the year.   Not bad for a sector (approx. 300 funds) that is constantly barraged with “the sky is falling” media news. 

What I find myself reminding people over and over again is that real estate is heavily influenced by the specific locale.  Some towns have weathered the recession quite well, currently are doing quite well, and are likely to continue to show good activity and price stability. 

In general, the towns closer to Boston have shown a robust housing market that is relatively stable.  Meanwhile, outside routes 128 and 495, it’s a different story; be aware that each market is different.

By Adam Rosenbaum, Realtor® 617.694.8553

 2011 was another good year for Single Family home sales in Arlington, MA where home sales in general outpaced the  previous YTD sales as of December 31, 2011.   Arlington remains steadfast in the ever-changing housing market.

After reviewing the year end numbers, there is one clear message, Single Family home sales are outpacing condos and multifamily sales.  Total number of homes sold has decreased from 2010, approximately down 5%.  That said the, median and average sales prices have increased, upwards of 4%, offsetting the total home sales.  Multi-Family and Condo markets experienced drops this past year, after a large increase in 2010 believed to be spurred on by the first time home buyer tax incentives from Spring 2010.  The incentive allowed many renters on the verge of buying to take the plunge into home ownership.  This past year could be considered a market correction.   

Click here for Sold Statistics in Arlington, MA

The Housing Market

The lower than average jobless rate in the Boston area and the impact of low interest rates continue to drive growth in this marketplace.  Other housing markets, Western Massachusetts & beyond are facing upside-down mortgages and a higher rate of bank owned properties. In a recent article from Bloomberg, Federal Reserve Chairman Ben Bernanke made comments about the weakness of the housing market and the importance of its recovery to bettering the overall economic recovery.  In the article he intimates the need for protection from foreclosure, more opportunity for home buyers and addresses the surplus of foreclosed properties.

In recent years market prices were effected by the sale of foreclosed and short sale properties.  Fortunately in the Boston housing market, there was very little impact.  According to an article by the National Association of Realtors® in March 2009, 49% of total market sales in the US were foreclosures and short sales, however as of October 2011 the numbers decreased to 28%.

Arlington remains a desirable community for home buyers with its diverse housing inventory, schools, parks, access to public transportation and the proximity to Boston and the 128 belt. As a result the Arlington real estate market is vibrant while other markets remain stagnant.

Click here for "2011 Sold Statistics" Vs. "Average of 2005-2010 Sold Statistics"

By James C. Trano, Realtor® 857.209.6060

Recently, two members of our office started a program airing on Arlington's public access channels, via Comcast, RCN & Verizon.

The "Under Agreement - Talk Real Estate" show is dedicated to bringing valuable real estate information to prospective Buyers and Sellers. We'll be speaking with Mortgage & Legal professionals regarding the transaction itself; informing consumers about various rules, regulations, financing & legal issues. 

In addition, we'll be speaking with Service Professionals; talking with Pest Inspectors, Home Inspectors, Electricians, Contractors, etc. It's important to get the most information available before you commit to a large financial obligation and/or the tax implications of selling your home.

We look forward to answering your questions online via email or during our show!

Cheers!

Adam & James 

*Click on the image below