BU Condo is offered at $325K
August 20, 2007 | Filed Under Boston Condos | Leave a Comment
We just listed a great 1 bedroom condo in up-and-coming Audubon Circle in the Fenway. This beautiful home is totally renovated and has a great layout, new kitchen, hight ceilings, original details, wood burning fireplace, walk-in closet with extra storage above it, common laundry and common roof-deck.
This home is in walking distance from BU, Longwood Medical Area, Landmark Center, parks, tennis courts and restaurants.
Property Address: 869 Beacon Street #5 Boston
Here are some photos:
Current State of Mortgage Financing…What’s Going On?
August 16, 2007 | Filed Under Mortgage and Finance | 2 Comments
Anyone watching or reading the financial news over the last few weeks has seen a lot of angst and consternation over the state of the mortgage industry. In fact, one of the larger lenders in the US, American Home Mortgage, was forced to shut down operations recently. But why? What is happening, what does all this mean to you and most importantly… what should you be doing do right now to make sure you are protected?
Here’s the scoop:
The end investor for Subprime or Alt-A loans will charge a premium for taking on a pool of these loans, because they know that traditionally, they might have a higher rate of default and delinquent payments within that risky pool. But lately, default and foreclosure has been on the rise - partly due to the fact that with credit tightening and a soft real estate market, many troubled homeowners are unable to refinance or sell in order to get out of trouble. So now, these end institutions are demanding a much higher “risk premium” for taking on these pools of loans, as they see the rates of default are climbing higher.
But since these institutions are purchasing these pools of loans sometimes months after the borrower has actually closed at a given rate, this increase to the risk premium means that instead of paying $101K for a $100K loan that will bear interest, they may only be willing to pay $95K for that $100K mortgage to account for the risk. Multiply that times thousands upon thousands of loans…and you have millions upon millions of dollars in loss for the company trying to sell the pool at a much lower price than they were expecting. This is called a “liquidity crisis”, and is exactly what happened to American Home Mortgage - there was no mismanagement, but they simply got caught holding too many “hot potato” loans, forced to sell them at massive losses…and eventually they had to make the decision to close the doors and stop the bleeding.
Further, even when a lender is able to take some losses, they may be subject to a “margin call”. This means that as their losses and risk premiums increase, the value of their loan portfolio decreases. As the value decreases, the credit lines that are secured by those portfolios begin to issue margin calls as the value of the asset that they are secured on is now diminished. This is exactly like margin calls in the Stock market. If you have a loan against a Stock that is losing value, you will get a “margin call” and need to pay down the loan, as the underlying Stock is losing too much value to be considered adequate collateral any longer. So for the big lenders, as their portfolio is losing value due to increased risk premiums and losses…the margin calls start coming in, and they are required to pay down their balances. In turn, this means that they have less availability to fund their new loans, which then exacerbates the problem.
In response to seeing this situation play out in the demise of American Home Mortgage, lenders of other non-conforming loan products increased their interest rates dramatically almost overnight to be better prepared - and likely over-prepared - for increased risk premiums down the road. Even though loans above $417K are not presently suffering from increased delinquencies like the Subprime and Alt-A loans are, these rates popped higher as well, because they are being purchased by smaller private entities that can’t afford to take on any margin of risk.
What happens next? The major damage is probably already done, and the present situation will likely settle out over the coming year. Lenders will stop pulling products off the shelf, and the rates on products that have moved so significantly higher now should trend lower down the road as delinquency rates stabilize.
But here are a few important things YOU should do right now:
ONE: Even if you are not presently in the market for a home loan of any type, make sure that your credit standing is as solid as possible. Many people in the market for a home loan didn’t expect they would have a need, and didn’t plan in advance to ensure their credit would qualify them for the best possible financing. With no immediate need for a home loan, time is on your side… why don’t we take a few minutes together and just make sure you are prepared, should a need arise down the road? Call or email me right away.
TWO: If you are in the market for a home loan, or know someone who is - understand that now is the time to be working with a real qualified professional who can keep you informed of changes in the market and get your loan funded quickly. Now is NOT the time to be playing the risky game of trying to scour the entire state or the internet to find someone who promises to save you a paltry amount on costs, or deliver a rate that seems too good to be true… it almost always is.
This is a great site to get more Real Estate Information.
The benefit of buying in bulk.
August 15, 2007 | Filed Under Real Estate Investment | 1 Comment
So you just bought a great condo in a new development. You think you got a great deal. You bought pre-construction when the prices were low (and yeah, non-negotiable) and you know that you would still make a decent profit if you sold today. You are feeling pretty good until you meet your new neighbors in the hall, who you soon discover, also bought at pre-construction prices, but somehow paid 5% less per square foot and got a year paid condo fees from the developer. All you can think about between small-talk tidbits about the weather is how fast you can call your Realtor to give him or her a mouthful.
As it turns out, your Realtor was right; the price for YOUR condo was non-negotiable. Pre-construction pricing is almost always non-negotiable, but it is also almost always far lower than the price once completed. Buyers get a bargain price because they accept a certain amount of risk that a post-construction buyers don’t. So how did your neighbor’s Realtor negotiate? By thinking big.
When you purchased your two-bedroom condo for say, a wee $650,000, you thought you were an important client for the developer. Well, you weren’t as important as your neighbor, who purchased five units in the building. He got the discounts because while you were a $650,000 deal, he was a $3.25 million deal. For the developer, a big freaking fish.
Don’t worry if you don’t have the cash to buy in bulk. A good Realtor has a list of clients interested in purchasing in pre-construction buildings. If four or five people from the list buy at the same time, chances are the developer will take notice.
If you are interested in joining The Bushari Team’s list of interested pre-construction buyers, please e-mail Elad at elad@bushari.com.
Get protected. Seriously, get a buyer’s agent.
August 10, 2007 | Filed Under Boston Condos | 3 Comments
Deciding to purchase a home is one of the biggest (and most expensive) decisions people make. I would say that the average home buyer purchases two or three homes in his or her lifetime, a total or three or four actual transactions. A good buyer’s agent, on the other hand, closes at least two or three real estate transactions every month. The discrepancy in experience is obvious. An experienced buyer’s agent has seen it all before, the good, the bad, and the indescribably ugly. A buyer’s agent will not only help you find the perfect home, but he or she will also negotiate in your best interests AND make sure you are protected throughout the transaction. The best part of all…it’s FREE.
Many people mistakenly assume that they will get a discount on a property if they don’t have a buyer’s agent. For all of you who think that you will get a better deal without an agent, I am here to tell you that you are dead wrong. The seller will pay the seller’s agent commission whether you have a buyer’s agent or not. If you choose to go it alone, you will be forgoing FREE representation and experienced negotiation. In fact, the seller’s agent will have to do the work of two agents in the transaction, and will be very unlikely to compromise….and you still won’t have anyone looking out for you. Seriously folks, finding the house is the easy part. Just look at the people who know. Experienced real estate developers, if you noticed, always have their trusted buyer’s agent by their side. They are smart enough to protect themselves, and you should be too.
Rent Control Rejected Again in Boston
August 9, 2007 | Filed Under Real Estate Trends and Statistics, Uncategorized | Leave a Comment
The Boston City Council voted to reject a new system of rent control in Boston. The bill would have given tenant activists the ability to collectively organize and negotiate while requiring owners to open their buildings to provide the activists with the ability to leaflet and solicit tenants in their own homes. It would have also required owners to meet with each tenant activist group at least twice a year for a maximum of six hours each meeting. If the owner would have failed to meet the activists, he or she may have been prohibited from obtaining any future permits from the city. The action was opposed by both the Boston Herald and the Boston Globe, as well as by the Greater Boston Real Estate Board.
My take: I can’t even believe rent control is still being discussed. Is there a problem of affordable housing in Boston? Absolutely. Is rent control EVER the answer? Absolutely not.
Real Estate is one of they only fields left where Joe Shmoe can use Adam Smith’s “invisible hand” to build wealth. When the free market is left to its own devices, neighborhoods flourish because owners care. Nicer units in nicer neighborhoods command higher rent, so owners invest in their assets rather than letting them decay. Rent control interferes with the natural ebb and flow of supply and demand…and that is just something that shouldn’t be messed with. It has failed so many times; at least it looks like some people are learning. Rent control is a good political sound-bite, but it is a long-term disaster.
The answer to the affordable housing problems in Boston is in affordable housing programs ordained by the city, such as the Leading the Way and Leading the Way II programs. New buildings must include affordable housing units, that must be re-sold or re-rented as affordable housing units. These programs should be expanded and new programs explored. We need to invest in something that works, not and economic time-bomb.
What is important to you?
August 7, 2007 | Filed Under Uncategorized | Leave a Comment
As I begin this first blog I already have a long list of real estate topics I would like to cover. For reasons I cannot fathom, God has not given me the power to read your minds…so please feel free to shoot me an e-mail or comment about a topic or question you would like me to discuss. I am also always available for more private discussions about specific properties in the Metro Boston area.
You can reach me at: mara@bushari.com
Welcome to the Bushari Team’s New Boston Real Estate Blog!
August 7, 2007 | Filed Under Uncategorized | Leave a Comment
Okay, here it goes…
Our mission is to provide the most reliable and up-to-date news about the Boston Real Estate market and to create a marketplace for home buyers, sellers and developers. We will be covering Boston’s luxury developments, Boston Condos, Boston Lofts and Real Estate Trends and Statistics.
As Boston Real Estate professionals, our mission is to provide you with the best home-buying or home-selling experience in Boston. Search MA properties through MLS on our website, www.bushari.com. We pride ourselves on exceptional customer service, and look forward to sharing that service with you.
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