Black and Buono Blog

Economists are predicting an uptick in growth in 2015, which may encourage more people to look at buying real estate versus renting. Realtors are advising not to wait any longer if you're considering buying a home.

"Because so many people put their homes on the market, buyers are able to negotiate a good deal again. That's been the case for the past six months. It looks like that's starting to taper off now, but it is still a good time to buy, if you act quick," said Mike Muren a Real Estate agent.

But where to start? If you are a first time home buyer, talk to your realtor or your real estate attorney to get your questions answered and to find out more about the process of buying your first home.

Some questions to ask: "When do you have your property inspections? How can the buyer make sure they're protected so that they're not buying a home that is in poor condition?"

With the spikes in rent, millennials are now more likely to enter the real estate market.

With all of the job growth, it is typically more expensive to rent than it is to buy right now.

Often rent is very comparable to what a mortgage payment will be, so it seems wasteful to throw the rent out the window when it's not an investment.

With financial assistance through programs that are offered with various qualifications, becoming a homeowner has gotten easier.

If you are interested in buying or selling a home, find out more about the process and more about the programs that are available. There are a lot of different options, assistance and low down payments that can help. For more information, contact Black and Buono.

your4state.com

About three years ago, when many analysts were forecasting continued gloom and doom in the housing market, the real estate analysis firm Metrostudy told readers that home prices would soon begin to rebound—and they did.

While most real estate analysts work from published statistics, Metrostudy pays hundreds of inspectors to visit subdivisions in key real estate markets across the country and report back. Back in 2011, those inspectors reported that new-home construction had fallen even further than was generally realized…and Metrostudy correctly saw this as a prelude to rising prices for the homes that did go on the market.

What are Metrostudy's inspectors and analysts seeing now? Here is what it expects for the real estate market in the months and years ahead.

Demand and Prices Rise

Home prices will appreciate by around 6% in 2014. That's well below the double-digit growth of 2013 but still a solid gain. Last year's sharp gains in median sales price—around 11.5%—were driven largely by buyers snapping up remaining real estate bargains, but those bargains now are mostly gone.

We appear to be headed back to normal real estate markets, and in normal markets, home prices tend to increase by perhaps 4% to 5% per year ¬(potentially more in times of steep inflation). This year might be a hair higher because we're still at the tail end of the rebound. Of course, these predictions are averages—some areas will do better, some worse.

What to do: The current market does not strongly favor buyers or sellers, so there's no need to rush to buy or sell…or to avoid doing so. Homes are once again something we live in, not a speculative or risky investment.

Construction of new houses will jump. The number of home starts could leap by 20% this year, expanding the supply for sale and creating new jobs in construction that will in turn reduce unemployment and help the economy continue its positive momentum. This jump in home starts will not lead to overbuilding or a housing glut. While a 20% increase in home starts is very significant—particularly on top of last year's 18% rise—new-home construction had fallen to such a low level after the real estate bubble burst that this construction can be easily absorbed by the market.

Demand for homes will increase as "household formation" slowly rebounds. In a normal year, more than a million new households are formed in the US as many young adults head out on their own. That figure fell to less than 400,000 in recent years as young adults continued to live with their parents or shared living quarters with roommates rather than renting or buying on their own. By some estimates, more than two million households are now "missing."

And while the economy and employment now are improving, new-¬household formation continues to lag. That has led some to speculate that combined households and low rates of formation of new households could be the new normal.

But history tells us that young adults will indeed start buying or renting their own homes and apartments as soon as they are economically able to do so. The constraining factor is that it is much tougher to get a mortgage now than it was before 2008, particularly for young adults.

Substantial down payments and solid credit scores now are required to get a mortgage. But these mortgage hurdles should only slow new-home formation, not stop it. Human nature hasn't changed—people still want their own homes.

As the economy and the job market continue to slowly improve, an ever-increasing percentage of would-be home buyers will save up the down payments and achieve the kinds of credit scores that are required.

The other major factor that was holding back demand for homes across the US between 2008 and 2012—a lack of faith in the future of home values—seems to be almost completely behind us.

Interest rates will remain below 5.5% in 2014. Fixed rates on 30-year mortgages might inch past 5.5% in 2015—but even that won't be enough to throw the brakes on the slow-but-steady housing recovery. History suggests that interest rates would need to be close to or above 6% to cause a significant percentage of buyers to seriously consider delaying a housing purchase. Mortgage rates in the ¬neighborhood of 5% might seem high, but that's just because of the exceptionally low rates we have had in recent years. Mortgages actually still are very ¬affordable.

Interest rates have remained low in part because of Federal Reserve policy and in part because of relatively low demand for borrowed money among corporations and other potential borrowers. Neither of those factors appears likely to change dramatically in the next year or two.

America's massive public debt could drive interest rates significantly higher in the longer term, but there really is no reason to believe that this will become a major factor within the next few years.

What to do: Avoid an adjustable-rate mortgage unless you are certain that you will sell the home before the loan's rate changes. Rates are likely to go up from current levels, not down, and could increase significantly over the life of a 30-year mortgage.

This will be a good year to buy a home but a poor one to invest in real estate. Home prices should climb in the years ahead, but not by enough to make homes a smart investment compared with stocks—especially when real estate taxes, insurance and upkeep costs are factored in.

What to do: Go ahead and buy a home for your own use—but don't rush out to buy an investment property, and don't let yourself get talked into buying a bigger home than you need just because you're told it's "an investment."

Where to Buy

Regions where new construction is constrained are most likely to see above-average home-price appreciation. On a national level, the rebound in new-home starts will help prevent home prices from increasing rapidly in 2014 and beyond. But in certain parts of the country, new construction is increasingly difficult to achieve on a large scale because of tight zoning laws and/or a lack of buildable lots. In these ¬areas, the demand for homes could outstrip the supply as household formation ¬rebounds, leading to above-average price increases.

What to do: If you expect to move to an area such as the southeast coast of Florida or San Francisco—both popular retirement destinations—consider buying a home and moving there sooner rather than later.

The former is hemmed in by the ocean and the Everglades, and the latter has tough zoning laws, limited remaining open land and a thriving technology industry whose employees are eager to buy homes, suggesting that home values might rise at above-average rates in the years ahead.

Many small-to-midsize cities will see lots of new homes built in the first half of 2014. Land prices already have rebounded very strongly in most of the major markets—even in places where real estate values plummeted when the real estate bubble burst. But as of early 2014, many builders still are finding affordable land in and around smaller cities.

What to do: Significant numbers of relatively affordable homes could be coming onto the market in many smaller cities in mid-to-late 2014, which could make that a good time to buy but potentially add substantial competition for sellers.

Need a consultation with a real estate attorney, contact Black and Buono.

Up! Again! It is refreshing to see home sales on the rise, consistently. Massachusetts single-family home sales were up in September for the third straight month when compared to the year-ago month.

Single-family home sales  jumped nearly 10% last month when compared to September 2010.

But on a month-to-month basis, sales dropped nearly 18% compared to home sales in August. Massachusetts Association of Realtors reported that it is typical to see a drop-off between August and September sales figures.

The Boston-based Warren Group, which tracks the state's real estate market, reported a 7% increase.

The boost was credited to historically low interest rates.

There was nearly a 2% increase in the median sales price to almost $295,000. Condominium prices were also up.

If this news give you the confidence and motivation to buy a new home or to sell your existing home, you need a real estate attorney to look out for your interests. Contact Black and Buono.

...by Kiley Black

When buying or selling property, it is important to have the expertise of a real estate attorney to help you through any obstacles that may come up along the way. The risk of not hiring a Real Estate Attorney can cost a buyer/seller thousands if not tens of thousands of dollars. Since the purchase or sale of your home may well be your most significant financial transaction, you want to take care when entering into a real estate transaction.

Most people don’t realize how complicated buying and selling a house can be. The procedure requires reading and drafting complicated legal documents and familiarity with real estate transactions. If you have bought or sold a home, or know anyone who has, than you understand that the amount of paperwork involved is legendary. Each step from negotiating terms to drafting and closing entails a significant amount of paperwork.

Most people buy or sell a home once or twice in their life. Real Estate Lawyers handle this transaction every day. And each transaction is different, with different obstacles and situations.

The process of buying or selling a home includes the following:

1. Negotiating the terms of the Sales Contract. Everyone wants the best deal and a lawyer can help you protect your interests.
2. Strict legal deadlines: Many transactions fall through because deadlines are not met.
3. You need financing: At closing the purchaser signs hundreds of loan papers that an attorney can best explain.
4. Home inspections: A real estate lawyer will conduct a title search to assure the seller is the owner of the property, has paid all the taxes, and there are no judgments existing against the property.
5. Property and mortgage insurance: Mortgage lenders require that the home is insured

...by Kiley Black

There are many reasons for you to hire a real estate attorney; however, we have chosen the most common scenarios here:

Mortgage issues - Real estate attorneys can review financial documents and provide advice about the risks and obligations of various types of mortgages, including seller-financed mortgages.

Peace of mind - Buying property is a huge investment. For the added support of a legal professional reviewing your documents and overseeing the transaction a real estate lawyer is essential.

Renting - If you are buying a property that is currently rented or leased, or if you plan to rent property, a real estate attorney can assist you in complying with landlord/ tenant law as well as understanding and/or developing a lease.

Disclosures - Sellers are required to disclose anything that affects the value of a property. Real estate attorneys protect buyers by reviewing disclosures. They also help buyers who discover an undisclosed issue with the property.

New Construction - Real estate attorneys can assist buyers when construction deadlines have not been met.

Zoning and Permits – We can help resolve disputes over zoning, land use and permits.

Taxes – Real estate attorneys can offer advice on minimizing tax issues. We can assist with like-kind exchange documents and  file tax documents with the IRS.

Title issues - Real estate lawyers can help resolve title disputes and land boundary disputes. We can also make recommendations about how the title should be held (e.g., husband and wife, living trust, corporation).

Condos - Real estate attorneys can review community bylaws and determine whether pending lawsuits against the homeowner’s association exist and if those suits are likely to result in increased HOA dues.

...by Anthony Buono

Addressing a group of 200 real estate agents, mortgage brokers, attorneys, home inspectors, and property managers today, Attorney General Martha Coakley highlighted her proposed legislation to address the ongoing mortgage foreclosure crisis that has gripped Massachusetts.

An Act to Prevent Unnecessary and Unreasonable Foreclosures, which is sponsored by Senator Spilka and Representative Walsh, requires that creditors take reasonable steps to avoid foreclosure and prohibits foreclosures without appropriate documentation.  The legislation will also prevent additional foreclosures by mandating loan modifications in certain circumstances.  AG Coakley discussed the legislation during her keynote address at the North Shore Association of Realtors’ Annual Membership Meeting and Business Expo in Peabody.

“Our communities have been devastated by the housing crisis,” said Coakley.  “The proposed legislation will help rebuild our communities by promoting a process in which creditors and borrowers work together.  Requiring creditors to take reasonable efforts to avoid unnecessary foreclosure is in everyone’s best interest.”

The legislation targets loans generally considered to have a higher risk of default, such as interest-only loans, adjustable rate mortgages, and loans with short-term introductory interest rates.  Under the bill, creditors are required to have appropriate documentation that supports their right to foreclose prior to beginning foreclosure proceedings and are prohibited from passing on certain fees and costs associated with foreclosure to homeowners. 
The legislation makes the failure to comply with the law a violation of the Massachusetts Consumer Protection Act.

During this economic crisis, Coakley’s office has brought predatory lending cases against two major subprime lenders, Fremont Investment & Loan/Fremont General and H&R Block/Option One Mortgage Corporation.  The Attorney General’s Office has also reached settlements with investment giants Goldman Sachs and Morgan Stanley for their role in securitizing subprime loans. 

Original article by Moe Bedard  

...by Kiley Black

The average person makes one or two major investments in their life. These are usually related to the purchase of properties. You will probably not pay a larger sum for anything than the one you pay for your home. Since this is a huge investment you need to make sure that everything will be fine with it. Unfortunately most buyers do not know much about the legal side of the deal. Thankfully a real estate lawyer can help. It is true that you will have to incur extra costs if you decide to enlist legal services, but it will definitely be worthwhile in the end. Here is why.

A real estate lawyer will do all the preliminary checks on the property you intend to buy. They will look at all the papers regarding the estate and will make sure that there is no unclear or fraudulent information that can cause problems in the future. Most importantly, the ownership of the property will be verified. This is essential; it would be terrible to pay money without actually getting any rights to the house.

Perhaps the main reason why you should use a real estate lawyer is that they will prepare, review and explain to you every paper that you need to sign. You can be certain that your interest is well protected when you have a professional checking every detail of the contract. This person can work in cooperation with your real estate agent to make sure the other party does not demand more from you now and in the future. Your lawyer will explain every detail of the contract and will make sure that you understand it. In this way you are protected.

A real estate attorney will make sure that you will not face lawsuits after the sale. Attorneys will check for unpaid taxes or any other liens related to the property you are buying. They also will ensure the settling of these issues prior to the contract being signed. 

If you are purchasing a home in the near future, it is in your interest to contact and enlist your own real estate attorney. 

Original article Published in Lawyers

Easements and encroachments affect your ownership of land. People may have been traveling across your land for years to gain access to adjacent property. Your neighbor may have placed a fence across part of your property line. What you received when you bought the property from the previous owner passes to you. The easements and encroachments, whether they are good or bad for your land, that existed at the time the land became yours continue while you own the land.

An easement is the right of a non owner to use your land for a designated purpose (e.g. accessing the beach). A right of way is a form of easement granted by the property owner which gives the right to travel over your land to others, as long as it is consistent with your use and enjoyment of the land.

An encroachment is an unauthorized entry upon your land of another; whether or not an obstruction, or fence, is placed upon the land. Traditional common law created the action of trespass for injury to your property when an unauthorized person interferes with your property and breaches the boundaries of your land. You can bring lawsuit for that intrusion in order to recover damages. These damages can range from a trampled flower bed to damage to a building on your property.

The converse is also true, when you trespass or encroach on someone else’s land, you can be held responsible for damages.

As Real Estate Attorneys, there are innumerable situation we see regarding easements, encroachments, property lines and rights of way.  The land you thought you bought may not be yours, or conversely, you may own more than you thought. Solicit the assistance of Black and Buono when you have issues with easements and encroachments.

...by Anthony Buono

A strategic default in terms of home ownership is the decision by a homeowner to stop making mortgage payments (to default) on their debt despite having the financial ability to make the payments.

This is particularly associated with residential mortgages.  It usually occurs after a substantial drop in the house's price when the debt owed is much greater than the value of the property, meaning negative equity or underwater, and is expected to remain so for the foreseeable future.

Homeowners who walk away in strategic defaults are not necessarily the ones most 'underwater.'

Credit scores are designed to predict the risk of default. But when it comes to strategic default -- which is when people who can afford to pay their mortgages don't, usually because their homes are worth less than their loans -- analysts have noticed a reverse phenomenon: Good credit scores can indicate a higher likelihood that a homeowner will voluntarily bail on a home loan.

Today, somewhere around one in three mortgage defaults is strategic.

"People who make the decision to strategically default tend to be more savvy," said Andrew Jennings, the chief analytics officer for Fair Isaac, the company that created the leading FICO credit score. "Most of the people who walk away from a mortgage are saying, 'This is not a contract that makes sense anymore.'"

FICO analysts looked at a population of borrowers who started out current on all their bills but wound up 90 days or more behind on their mortgages.

The people who stayed current on their other bills but stopped paying their mortgages had better initial credit scores and lower credit balances, and were less likely to have gone over their limits -- all signs of responsible money management.

Intriguingly, one factor that wasn't a strong predictor of strategic default was how far "underwater" these homeowners were. What mattered far more was the future trajectory of home prices.

Another point: research indicated that 40% of strategic defaulters lived in "recourse" states, where they could face lawsuits over debts that remained after foreclosure. It's not clear whether defaulters didn't understand the risks or whether they had bet that their lenders wouldn't come after them.

“We feel that people take this action without fully understanding the consequences," Jennings said. The message coming from them is that if enough people take this action, there is no way the banks are going to come after us, and even if they do, we can declare bankruptcy."

Strategic default dumps the traditional "payment hierarchy" on its head. In the past, lenders could count on people skipping other payments first before they reneged on their mortgages. And, the trend seems to be growing. A study at the University of Chicago found that 35% of mortgage defaults in the U.S. were strategic in September 2010, compared with 26% in March 2009.

If you're thinking about skipping out on your mortgage, here's what you need to keep in mind:

• The foreclosure process varies by state and by lender. Don't count on other people's experiences to predict your own.
• Your risk varies. Some states prohibit lenders from suing you for mortgage balances you owe on a primary residence. Massachusetts is NOT one of those states.  Massachusetts allows the lawsuits. Before you stop paying, talk to a bankruptcy attorney who is familiar with the credit and real-estate laws in your state as well as industry practices.
• Understand what a foreclosure does to your credit. The higher your credit scores, the longer they will take to heal.

By Anthony Buono

If you are in a position where you are underwater on your home, you are not alone in Massachusetts. Unfortunately, 17% of homeowners are underwater in Massachusetts. If you think you need to sell your home, and you believe you will have to sell at a loss, it is important to solicit the help of a real estate attorney. There may be ways to keep you in your home. But, if you think you are in financial trouble, the time to act is now.

Losses Rise as the Boston Housing Market Tumbles

Greater Boston’s housing market has tumbled back to 2002’s pricing levels, and one out of every three homes being sold is resulting in a loss.

The price declines have left approximately 17 percent of the Massachusetts homeowners underwater, that is, holding a mortgage balance that exceeds a home’s value. Greater Boston’s “underwater” rate — essentially one in six homeowners — is up from the 14 percent of Massachusetts homeowners who were underwater at the end of 2010 and is far ahead of the 11.7 percent mark set a year earlier. The national negative-equity rate is 28.4 percent.

The local housing data was included in a national report published Monday by Zillow.com.

According to the Zillow analysis, Boston-area home values were down 5.3 percent on a year-over-year basis as of March 31 and had tumbled 2.6 percent from the end of 2010. The region’s average single-family home value was $305,800 at the end of the quarter, versus the national average of $169,600. Pricing averages are derived from Zillow’s Home Value Index and include all homes, and “not just those that sold in a particular period.”

Boston-area prices have slipped 23.2 percent since their peak in July 2005 and are back to where they were nearly a decade ago in June 2002.

The trends appear to be forcing more homeowners to sell at a loss. According to Zillow, 33.9 percent of all first-quarter sales went for less than their prior purchase prices. That was up roughly 3 percent on both a year-over-year basis as well as a quarter-to-quarter basis. Nationally, 37.7 percent of all home sales were at a loss in the first quarter — a new record.

Original article-Boston Business Journal by Craig M. Douglas