Almost Prime Time

The stars are aligned and conditions are prime to buy real estate. It is beyond textbook perfect...almost. 

Here's what I mean. Listed prices for condominiums and single family homes are the lowest they have been in years. This is based on most sellers now pricing their homes realistically per the market performance. Low listed prices combined with the fact that interest rates for 30 year fixed mortgages may decrease to 5.5% this week, makes it very clear that something magical is occurring for those who want to buy real estate.

Rarely, have both the listing prices and mortgage rates been simultaneously low.
Historically, even in the early nineties this phenomenon did not occur. The market was only sluggish for two years before the extreme escalation in values started.

If the market starts to rebound one year from now, it will most likely take another three years to see the same levels of appreciation as we did before the recent correction.
Consumers would serve themselves well to pay attention to the signs. Low mortgage rates, low listing prices, multiple foreclosures and short sales. This is indeed the time to make that leap.

But here's the double edged sword. Keep in mind that obtaining a mortgage in today's market is not as easy as it once was and can be downright impossible. The recent mortgage meltdown has put stricter qualifications on potential homebuyers. Although there is tremendous opportunity out there reflected in low listing prices and foreclosures, not everyone can take advantage. Lenders are no longer giving away money. And if you plan on buying a foreclosed property keep in mind that you have to be pre qualified and bring a deposit of up to $5,000 the day of the auction.

So although it is a good time to buy, you have to have clean credit, strong income and a good eye for opportunity. 

Buying a B&B

This week a listener emailed the following question:

Q: My partner and I have had a long time dream of owning a Bed and Breakfast, and we are thinking more seriously about starting to look in Provincetown. Can you tell me about the process and how much we will have to put down as a deposit?

A: There are over 85 Guest Houses in Provincetown. There are 12 on the market offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.

It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Here are some questions to ask yourselves: Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have an outside source of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.

Once you have identified a property and a lender, you will work with your real estate agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.

The present climate is very favorable for commercial loans – interest rates are low and there are some great loan products for you. In addition, there is money available through the Small Business Association (SBA). 

Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of their special memories of Provincetown. 

The Market is Active!

Market Snapshot
Activity since January 1, 2008

For those of you who are wondering how the market is doing this year, here is a year-to-date account of what’s happening in the three towns on the Outer Cape!

Provincetown:
There are currently 317 properties for sale, including Single Family, Multi Family, Land, Commercial, Condominiums and Hotel/Motels.
33 properties are under agreement, and there have been 29 sales ( 24 condos, 3 single families, 1 hotel, and 1 Multi)

Truro:
There are currently 196 properties for sale, including Single Family, Multi Family, Land, Commercial, Condominiums and Hotel/Motels.
19 properties are under agreement, and there have been 7 sales (3 condos, 3 single families, 1 Piece of Land)

Wellfleet:
There are currently 131 properties for sale, including Single Family, Multi Family, Land, Commercial, and Condominiums.
12 properties are under agreement, and there have been 8 sales (6 single families, 2 Commercial Sales

The Grass is Always Greener

It's mid-March and soon the sun will shine brighter, days will get longer and spring will arrive.

If you have a lawn, here are some quick tips you may want to follow in order to make sure you have green and lush grass.

1. Rake the lawn to remove all dead leaves that the blustery winds of winter blew onto your lawn. If there are no leaves, rake the lawn thoroughly to remove dead grass. Raking removes thatch, a build up of dead leaves and grass which prevents the proper growth of individual blades of grass.
   
2. If you have mossy type plants growing in your lawn, you may want to apply lime to ensure the soil acidity is proper for grass. Not every lawn needs lime so exercise caution and read instructions.
   
3. Seed the lawn. If you have bare spots that need to be seeded or a part of the lawn is worn after being used as a walkway during the winter, get out the rake again. Pay special attention to these areas with the rake to make sure all thatch is removed. Then, use a garden rake to create grooves for the seed. Spread the grass seed. Ask your garden center expert about which seed is best for your location.
   
4. Once the lawn is raked and seed planted, buy a multi step fertilizer and weed killer. Spread this over the entire lawn. Follow the instructions and make sure you don’t over apply. If you use too much fertilizer, it will burn the grass causing more harm than good. Make sure your fertilizer is a cool season fertilizer depending on where you live.

A typical time to start spring lawn care is now if you have warm weather. You can wait as long as mid April providing the weather is cool. Temperature for sprig lawn care should be at least consistently in the 50’s.

Once you follow these simple steps, you too, can enjoy tall glasses of cool lemonade while standing barefoot in cool green grass.

Put it in Reverse

Reverse mortgages are becoming increasingly common as baby boomers reach retirement age and are seeking ways to supplement their income.

These mortgages can be a welcome gift for those homeowners who have a sizeable chunk of equity they can draw from. The interest rates on reverse mortgages can be quite competitive and can be the answer many retirees need for that extra cash.

However, using a skilled and reputable mortgage company or bank is strongly encouraged. There are sinister organizations popping up that are promising low closing costs and cheap financing. These mortgage vampires are preying on retirees and feeding off their equity.

On Sunday, The Boston Globe reported that a certain company has been providing reverse mortgages with an agenda to unsuspecting consumers. When the reverse mortgage closes, homeowners are finding that they unwillingly commit most of the proceeds of their mortgage to investment schemes created by this particular mortgage company.

We must always act with diligence and use trusted real estate professionals when refinancing, especially with reverse mortgages.

Keeping your home in which you live until the very end, is part of the American dream. The reverse mortgage, when calculated properly and used for its intended purpose can make this a reality.