How Buying New Construction Can Save Money

If you’re considering purchasing a new home, you might be wondering if it makes more sense financially to buy a newly built home or an older existing home (resale). Well, you’re not alone.

Here are some of the unique advantages to buying new:

1. New mechanical systems will have extended warranties and save you thousands of dollars in unexpected bills over the years.

2. New appliances and other items like windows and doors are more intuitive and energy efficient saving you a ton in the long run.

3. Newer neighborhoods oftentimes include nicer and newer amenities such as pools, walking paths, playgrounds, and even sidewalks.

4. No clipped nails in the carpet, wallpaper to peel, or paint to touch up. You can easily customize a new home to your taste and style.

5. Options galore. Often existing homes don’t have the design features that often come standard in newer homes, like walk-in closets, a pantry, and larger master bathrooms. You’ll also want to think about things like electrical outlets – 30 years ago, most kitchens had one. Now, the average kitchen has four. What electrical needs will you have for a media room? Will you have to have electrical work done in an older house?

6. Better house designs. According to a recent issue of Better Homes and Gardens, many new home buyers are looking for homes that are “kitchencentric;” that is, the kitchens allow room for more than one person at a time, and open enough that those in the home can be engaged in different activities, but still connected to the family. Think about the old downstairs recreational room of the past where the TV was and kids hung out. Families want to be together – and if you buy a house without flow, it might be hard for you to get rid of when you’re ready to sell.

3 Tips for Sellers to Fight the Boston Shadow Inventory Trend

Per CoreLogic, a property information and consulting firm out of California, Shadow Inventory rose 10% nationwide in the past year.

Yes, 2.1 million distressed houses are still not on the market through August. Mark Fleming, chief economist for CoreLogic said “The weak demand for housing is significantly increasing the risk of further price declines in the housing market. This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing.”

So how does Boston rank?

Boston has a 19.3 month supply of distressed homes – ranked 14th of the largest markets. Massachusetts has a 14.7 month supply of distressed homes – ranked 17th in the states.

Sellers, you can dwell on the stats or use the end of the year to re-evaluate your selling strategy. Here are a couple of questions to ask yourself as you prepare to sell your home in 2011.

1. Be honest and realistic – are you priced appropriatly? Check with your agent and get updated comps for the last 6 months – the only comps that matter. If you haven’t already, you must take distressed properties into consderation.

3. Does your house pop? I show a lot of properties and it amazes me how unprepared sellers continue to be. There are a million lists online about cleaning, de-cluttering, de-personalizing, painting, crub appeal etc. to prepare your home for sale. Doing those are just the start. Your house needs to WOW buyers! Take another look at those lists again, and ask for feedback.

3. Are you and your agent maximizing your marketing plan? Has your agent asked you to do something that you haven’t followed through on? Have you asked your agent to do something he promised and it hasn’t happened? Now is a great time to reevaluate your online and print marketing plan and get the first quarter action plan in writing.

There is no doubt the housing market is very difficult right now. Leave NO stone unturned to get your house sold.

Green Building Material Claims Not as Misleading as Other Consumer Products

According to an Ottawa marketing firm, 95% of goods are inaccurately marketed as “green” products. Many companies are making false claims about their products or misleading consumers.

According to a recent article in USA Today, the number of products marketed as “green” has increased by 73% in the last year. When in it comes down to it though, the biggest problem is that most companies are making claims without proof. According to the TerraChoice report, vague marketing claims are the second biggest problem.

The Federal Trade Commission recently proposed updating its guidelines for green advertising. The last time the guidelines were revised, marketers were warned to steer clear of broad claims like saying a product is “eco-friendly.” The FTC also advised against citing unqualified and unproven certifications.

Consumers should note, however, that green building materials and office goods were found to make fewer misleading claims, particularly when compared to baby and toy products. One of the reasons for this is that green building material producers have more experience navigating the waters of the green marketplace.

Green building material specifications:

Green building materials are made of renewable resources instead of non-renewable resources. Taking the environmental impact and expected life of the product into consideration, green materials are those that meet one or more of the following requirements:

  • Resource efficient – this refers to products that are recycled, naturally renewable, locally sourced, refurbished, reusable, and/or durable.
  • Indoor air quality – products in this category are non-toxic, moisture resistant, and/or emit low VOCs (volatile organic compounds), or require low VOCs to maintain.
  • Energy efficient – these products help reduce energy consumption.
  • Water conserving – these products limit water consumption inside buildings and landscaped areas.
  • Affordable – these products are considered green when prices are considered in terms of life-cycle cost of the building material.

Other Findings:

The TerraChoice report also found that some manufacturers are cleaning up their green act, making more truthful claims about their products. While the numbers are small at only 4.5%, the upward trend is a promising sign of things to come.

Interestingly, big box chains were more likely to offer products that made accurate green claims than small boutique shops. Experts believe this could be a result of big box stores having more influence over their suppliers.

While consumers should still be critical of green claims made by some manufacturers, they can be more confident in purchasing green building materials and supplies than in dealing with other product categories.

Battle Brewing Over Developer Transfer Fees

Developers and builders are joining forces in the face of a new Federal Housing Finance Agency (FHFA) proposal. The plan that could affect sales in many of the nation’s master planned communities could pit real estate agents and home builders against each other. The battle will be fought mostly in Washington, as lobbyists on both sides of the issue prepare for a fight.

So what’s in this plan that has everyone so worked up? The regulation would mean that Freddie Mac, Fannie Mae and the Federal Home Loan Banks would no longer be allowed to buy mortgages on residences located in communities that require private transfer fees. The fees are paid at the time a home is sold. Usually amounting to less than one percent of the sale price, the money collected sometimes goes to homeowner associations and other community groups.

However, in some cases, the fees are nothing more than a way to generate more money for developers on a perpetual basis. The spirit of the proposal on the table seems to be attempting to protect government sponsored entities, such as the previously mentioned lenders, from this practice. The problem is in the semantics. In its current form, the proposal doesn’t distinguish between fees used to generate income and fees that go to support homeowner associations and common infrastructure. That means some master planned communities could potentially see a hit in overall sales.

Experts worry that without the aid of government lenders Fannie Mae and Freddie Mac, the housing market will suffer a great deal. As it stands now, those two lenders along with the FHA account for approximately 90% of the market when it comes to secondary mortgages. From there it’s a domino effect. If these institutions don’t invest in mortgages of the homes with private transfer fees, primary lenders will balk when it’s time to underwrite those mortgages. That will make homes unmarketable and further take a chunk out of housing values.

There are arguments both for and against the proposed regulations. In the one corner you have arguments that private transfer fees do nothing more than inflate the cost of homeownership for consumers. In the other corner you have arguments that the fees actually help consumers by making housing more affordable, providing funding for amenities and maintenance that would benefit the community.

One of the main arguments behind the new regulation is that private transfer fees artificially raise the cost of homeownership. However, opponents of the regulations say the opposite is true. Private transfer fees help fund things such as environmental mitigation, affordable housing, infrastructure, and community amenities, maintenance, and services that otherwise would have to come directly out of homeowners’ pockets, keeping the cost of living in these communities down while maintaining the desirability of living in such communities.

Time will tell what comes of the FHFA proposal. In the meantime, interested parties can send their opinions to using the subject line, “Guidance on Private Transfer Fee Covenants (2010-N-11).”