Buying a House

Buying A House is a Big Deal

The purchase of a home will probably the largest transaction you will make in your life time. There are many legal and logistics steps to buying a home.

When it comes time to buy you will find knowledge is power.

I have compiled a list of my blog post's that cover many topics related to buying a house for home buyers looking for information on how to make the most of their home purchase.

Whether you are looking for information on choosing the right mortgage, working with a buyer's agent, viewing homes, how to negotiate, steps to a smooth closing, etc... can all be found here.

The great news is you don't have to go it alone. If you want to be represented by a Buyer's Agent in Massachusetts during your upcoming purchase contact me- Kevin Vitali at 978-360-0422 or text kevin@kevinvitali.com

How Big Is An Acre?

When it comes to land, there are many different sizes and variations of acreage. But what exactly is and how big is an acre of land?

While there are many different meanings of the word “acre” depending on the context, most people use the word when talking about a measurement of land. An acre is a unit of measurement that dates back to Anglo-Saxon England in the 7th century.

These units were often used when taxing landowners based on how much land they owned or how much land a tenant worked.

Acres are still used today as a way to measure land for farming, property value, and other real estate transactions. It is also commonly used when discussing or reporting on property or agricultural uses of land. In this blog post, we will explore the history and how big an acre is as we know them today.

Measurement Of Land

Commonly in the US as well as many other countries an acre is used as a standard land measurement. Other countries may use a hectare.

The hectare is the legal land measurement of the European Union. A hectare is 10,000 square yards which equal 2.471 acres or 40% of a hectare.

What Is An Acre?

As pointed out above, an acre is the common land measurement used in the United States. An acre is measured by square feet. 43,560 square feet make up an acre or it is equal to

4840 square yards
4,046.86 square meters
0.0015625 square miles or 1/640th
0.405 square hectares

Builder’s Acre

A builder’s acre is 40,000 square feet and is just a simplified version of an acre. It is rounded down to make the math simpler for marketing purposes.

Commercial Acre

A commercial acre is 36,000 square feet and is the remaining result after streets, curbs and sidewalks have been constructed in a commercially divided subdivision.

What Shape Is an Acre?

An acre can come in any shape as long as it is 43,560 square feet. It can be porkchop-shaped, wedge-shaped it could, square, curved or even star-shaped.

The shape of an acre is not important it is the area of land that makes up the shape that is.

History

Whenever you are dealing with real property there will always be a measurement assigned to the acreage the property sits on, either in square feet or fractions of an acre. And for most people, you just accept the term acre.

Acre comes from the Old English word aecer meaning an open field which came from the Latin word ager meaning field. Originally, the meaning came from what one man and a yoke of oxen could plow in one 12-hour day.

Does the meaning seem inaccurate? Yes!! But at the time, it was what they had to work with.

Eventually, it was more clearly defined by King Edward, around 1300AD, as being 40 rods by 4 rods.

The perfect acre at that time was 1 furlong (660 feet) by one chain (66 feet). A furlong was what an ox team could plow before needing a rest. It was also difficult to turn a plow so you would want to plow as far as you could before resting the oxen.

The theme here is the origin of an acre falls back to farming the land. It helped to standardize the measure of land for taxation and planning purposes.

How Big Is an Acre Visually?

Compared to Fenway Park

We have already determined the size of an acre is 43,560 square feet. That translates into a square that would be 208 feet by 208 feet.

Let’s give some context to the size visually.

Because I am a Massachusetts Real Estate Agent and we love our sports teams we will put some context to how big an acre is visually by using Gillette Stadium and Fenway Park.

The playing field of Fenway, home of the Boston Red Sox is roughly 2.35 acres with the entire stadium encompassing approximately 9 acres. The field itself is roughly 310 feet up the left foul line and 302 along the right foul line and center field 389 feet.

Compared To Gillette Stadium

Now let’s see how big an acre is compared to Gillette Stadium. A professional football field is 160 feet by 360 feet including the end zone.

Gillette Stadium, the home of the New England Patriots has a ball field that is about 1.32 acres. An Acre encompasses approximately 70% of the field.

An acre would encompass the entire field from left to right including an end zone to the opposite 20-yard line.

Overall Gillette Stadium is 17.3 acres.

Not A Sports Fan

So maybe you are not a sports fan. Let’s take a look at another two references.

In the graphic below see how many subcompact SUVs would fit in the space.

Or home many queen mattresses in a frame would fit in an acre? 1320 queen mattresses in a small frame would fit in 43,560 square feet or 1ac.

In this sample, we show a 28×40 2-story colonial (if this was a 2-story colonial the size would be a footprint of 1,120 square feet with a total of 2240 square feet). A 24×80 colonial would be a standard-sized colonial home of newer construction and you can see the relationship it would have to a one-acre lot.

How many queen mattresses would fit in an acre

There Is More To A Lot Than Just Size

Many home buyers can hyper-focus on the acreage that a home sits on. In the Massachusetts MLS, a home’s lot size will show up two ways, it will show the square footage and the acreage in a decimal point.

For example, a half-acre lot will be disclosed as 21,780 square feet or .50 acres.

Does More Acreage Mean My House Is Worth More Money?

The simple answer is maybe or maybe not.

In general, a building lot is a building lot. It doesn’t matter much if it is .5ac or 1.5ac you can still only get one house on the land. You can not say a home on one lot size that is double another is will be twice the value.

In areas with smaller lot sizes of 5000 to 7000 square feet, an additional 5,000 square feet or more could have an impact on your home’s overall value. But in areas where comparable homes sit on a half acre to an acre, 5000 square feet would have no impact.

Also, an agent will consider if the land is being used at its highest and best use. In my area, if large lots can be subdivided that certainly can significantly increase the value of your home.

One must also take into account other factors. The useability, privacy, easements running across the property, etc… can slightly affect the value of the lot with a home. The additional value is highly location specific and it is important to consult with a local REALTOR to see how your lot size impacts the price of your home.

Other Real Estate Real Estate Resources

Buying a house in cash has some distinct advantages. It certainly can get a seller’s attention. Paul Sian discusses the benefits of paying cash for a house. One point is you can pay cash for a house to take advantage of the benefits and then get a mortgage after the closing to maintain your cash reserves.
With inflation soaring you may be wondering if it is a good time to buy a house. Vicki Moore discusses the impact inflation is having on the market and whether now is a good time to buy.

How Big is an Arce? is provided by Kevin Vitali of EXIT Realty. If you would like to sell or buy a home, give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, Northshore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

Easements vs. Rights of Way: What’s The Difference

Last night I wrapped up a property showing with a buyer client of mine. During the showing, we discovered there was an easement with the property.

As a home buyer, it may be more common than you think to find an easement on a property.

It is also not uncommon for sellers to be completely unaware that they have easements or a rights of way.

As a seller, you can avoid some last-minute issues by disclosing any easements or rights of ways involving your property.

If you run into a property that has an easement or right of way it is important to understand what is the purpose. As well as understand the legal rights and or responsibilities that go with it.

Alternatively, a property could also have the benefit of an easement or right of way giving you access to another’s land. You will want to understand what your rights are in the use of that easement.

The Difference Between an Easement and a Right of Way

Easements are legal rights that allow someone else to use land without having to pay rent or other fees. They’re often used by public agencies to build roads, pipelines, and power lines.

In both cases, you may own the land but others might have use of that land for a particular purpose. Or you could be granted an easement or right of way where you don’t own the land but have a right for a specific use.

An easement or right of way does not grant any possessory interest or ownership rights to the land. Both are granted by one property owner to another by a will, a deed or a contract. They can be for a specific length of time or indefinite.

A Right of Way Is A Type Of Easement

A right of way is a type of easement. It gives a specific individual or a group of people a private right of way. Or, a public right of way grants the general public the right to cross the land and use it as a passageway.

Often a right of way is seen around waterfront property. Here in New England a right of way is used to give beach access to the public. Use of the property is restricted to the purpose of gaining access to another piece of property.

Easement

An easement is where a piece of land or portion of that land is granted for another’s use. Easement rights can be granted for a wide variety of reasons.

Typical examples of common easements that are found around here are utility easements. A utility company is granted permission to install and maintain utilities running across your land.

It could be an easement for an electric company that gives the legal right to run a power line or power lines above or below ground.

A utility easement could also apply to gas lines and underground water pipes and water lines or sewer lines, etc….

The town or state could also have a drainage easement for your property to install and maintain drainage to maintain runoff from a public road.

Driveway easements are also very common in condensed areas. The owner of a home without a driveway due to tight lot lines may ask for the use of land owned by a neighbor for an easement to build a driveway.

Types of Easements

There are two main types of easements: (1) an express easement and (2) an implied easement.

Express easements are written agreements between parties that grant one party the right to use land owned by another party.

Implied easements are not written; rather, they arise when a property owner uses his or her land in a certain manner for so long that it becomes customary for others to do the same thing.

Easement Terms

Appurtenant Easement- Appurtenant easements or an easement appurtenants are easements that apply even if a property ownership changes by a sale or transfer. It is considered to be “running with the land”

Gross Easement- An easement in gross allows an individual the right to use someone else’s land. The right is not transferred when a property is sold or transferred.

Affirmative Easement

An affirmative easement gives the easement holder the right of access or use to cross the land and requires the property owner to do something like allow the action to occur.

Negative Easement

A negative easement is a promise that a piece of property may not have a particular use. For example, it can’t be subdivided or have a building built on the premises. Sometimes large family estates are sold or passed on with the condition that the land will never be subdivided.

Prescriptive Easement

A prescriptive easement is when someone has used a piece of land, that is not theirs, for a period of time and seeks legal use of that land through an easement. While it sounds like adverse possession, it is a little different in the fact that that possession is not being sought, only the right to use the land.

Dominant Tenement

The Dominant Tenement or Dominant Estate is the real property or parcel of land that holds the right of use over another piece of property.

Servient Tenement

The Servient Tenement or Servient Estate is the parcel of land that is subject to the easement or use of the land by others.

How Do I Know If There Are Any Easement or Right of Way For Private Property

Start with the real estate agent listing the home. Hopefully, they have done some homework and have already disclosed any easements. As an agent who lists properties, I can tell you many sellers are shocked when they discover there are easements for their property. They either never knew or they forgot about them.

A quick check of the property’s deed, plot plan, land survey or subdivision plan may reveal any right of ways or easements on a piece of property.

Beyond that, a title search should uncover any easements and right of way. A title company or attorney would run a title search during the normal course of a closing. Often this is when easements are discovered.

Do Easements and Right of Ways Affect Property Values?

This would leave one asking, do easements affect property values? The quick answer is it depends.

If an encumbered property has an easement and that easement drastically reduces the ability for the owner to enjoy and improve their property, then yes an easement would affect the value.

On the other hand, an easement may not significantly alter an owner’s use of a piece of land and therefore it should not affect the value.

It boils down to how much does the easement control what an encumbered owner can and cannot do with the land. A simple right of way running across a small corner of the property probably would not impact the owner’s right to enjoy and improve his land. But a utility easement running across the lot 20 feet from the back door may have a significant impact to the use of land.

Real-World Example

As a real-world example, I was showing a home in Tewksbury MA today that had a utility easement running through the middle of the backyard. This is what actually prompted me to write this article The easement was 20 feet wide on a small lot. It ran smack dab across the middle of the lot that was only about 60 feet deep.

That 20-foot easement would prevent the new buyer from building a pool, a patio, etc…over that area. In the event that the town needs to access the sewer easement, any improvement would be dug up. It would be done so at the owner’s expense. The sewer easement is affecting the use of your property in a negative way. It is severely restricting the owner’s use of the land. Therefore I would say, it affects the property value.

If you become aware of an easement in the course of buying a Massachusetts home make sure you understand what ramifications that easement may have on your use of the property. Talk with your buyer’s agent and if it seems a little more complicated certainly seek the counsel of an attorney.

FAQ’s about Easements And Right of Ways

I am building a shed and patio over an easement is that a problem?

Yes, it can be. Most often you would be talking about a utility easement. If the utility company needs to access the easement for repair they would rip up your patio and shed. And on top of it, they could bill you for the cost of demolition. Before altering the property over an easement consult a real estate attorney to fully understand your rights and responsibilities.

I want to build an addition and remove the easement the addition will be built over. How do I go about it?

It’s not that simple, most easements run with the land, meaning they are indefinite. The only way you can terminate an agreement is to get both parties to agree in writing.

How Do I Terminate an Easement?

An easement can be terminated. But only if both parties involved agree. Or it is shown there is no longer a need for the easement.

My Neighbor Has an Easement To Use Part Of My Driveway and I Need to Replace It, Can I Apportion A Cost Of It To My Neighbor?

It really boils down to the language in the easement. If it just states they have a right to use it, it could be an uphill battle to have them pay for a portion of replacement. But if the agreement states that they have the right to use and must help maintain, that could be a different story. Seek counsel before making any decisions.

Summary Of Easements and Rights of Way

Easements and right of ways are probably more common than you think when you purchase a home. Align yourself with professionals that will help you discover if a home you are about to buy is encumbered by easements. Some easements may not be a big deal while others may significantly impact the way you enjoy a property.

This article Easements vs. Rights of Way: What’s The Difference, was written by Kevin Vitali a Massachusetts Real Estate Agent. To discuss an upcoming sale or purchase contact Kevin Vitali at 978-360-0422.

Is Rent to Own A Good Way to Purchase a Home?

Today we are going to discuss whether rent to own is a good way to purchase a house or not. You may hear other terms for rent to own like lease to own or lease option to buy.

While not terribly popular in New England because of the strong housing market, rent to own homes can still be found.

I probably get several calls a month from a hopeful home buyer looking for a home they can lease to own. The rent to own or lease option gives the hope to many to buy a home instead of renting forever.

You will find where the real estate market is languishing and houses are sitting on the market, lease or rent to own options will be much greater than where there is a stong real estate market like we are seeing in the greater Boston area.

When you buy a home as a rent to own, it allows the potential sale of a home while the landlord covers costs waiting for you to perform on the purchase.

As well, allowing the home buyer to accrue a down payment and improve their credit to allow them to get a conventional mortgage.

What is Rent To Own And How Rent To Own Works?

Rent to own is where a renter/buyer and a seller agree to a predetermined price where the buyer rents a house and has the option to purchase the house they are renting before the lease runs out. Typically it is a one, two or three year option to buy in the rent to own contract.

In return for the option to purchase the home, the renter pays an agreed upon option fee usually in the arena of 20% of the rent. So if the rent is $2000 a month you would be paying an additional $400 dollars a month in option fees.

The option fee will be converted towards a down payment should the renter exercise the option to buy.

Why Would A Seller Rent To Own?

Rent to own homes rise when the real estate market softens and it is harder for a seller to secure a buyer. In a tough buyer’s market a seller could opt to rent to own their house to open up to a larger pool of buyers, with the hopes of getting the home sold in the near future.

Why Rent To Own vs Getting a Mortgage?

More often than not a renter/buyer does not have the proper qualifications to secure a traditional mortgage. It could be a homebuyer has bad credit, their debt to income ratio is to high, they have not worked a job long enough, etc…

The rent to own the house option seems attractive. It allows the home buyer time to fix their credit or other situations that may prevent a borrower from getting approved for a mortgage.

Usually, the renter/buyer has a credit score that is too low to purchase a home or their credit may be fine but they need to pull a down payment and closing costs together.

It is also an option for people who may not be fully committed to buying but want to keep their options open. A renter can “test drive a home” before buying. Or, in case of a relocation, a renter is waiting to see if a job contract will convert to a full-time position.

Is Renting to Own House a Good Way to Purchase A Home?

For 98% of the folks looking to rent to own, I implore you to think carefully.

You are probably looking at rent to own homes for all the wrong reasons. The reason you can’t get a mortgage is exactly the reason you should not rent to own. Impulse! Control it.

Take the time to fix your fico score and purchase a home with a traditional mortgage product. Don’t put the cart before the horse.

I certainly do not want to discourage someone to purchase a home with an option to buy, but understand the road ahead of you.

Advantages and Disadvantages of Rent To Own

The Advantages Of Renting A Home With An Option To Buy

Secure A Purchase Price- Renting to own a home allows you to secure a purchase price. if prices rise, great! If prices fall then you have the option to back out.
Test Drive The Home: Buying a home through a rent to own contract allows you to test drive a home. Not only do you have time to see if the home is a good fit, but you also get a chance to find out if the neighborhood and the surrounding are right for your family. This can be a good option for relo’s who know nothing about the area.
Move less: A home that is rent to own is great for a buyer who is committed to purchase and want to set roots in a community. The rental period in a rent to own contract allows a buyer the time to pull the purchase together.
Build equity: Often there is a premium paid in a rent to own contract. The premium often goes toward the purchase price which creates automatic savings to go towards a downpayment.

The Disadvantages Of Renting A Home With An Option To Buy

Usually there are many downsides to getting into a rent to own contract. All of the rent to own contracts I have seen benefit the seller and puts the buyer at risk of losing a serious amount of money if they don’t perform on the option to buy.

Your Option Premium Is Wasted. Yep, if you decide not to close or can’t close your option fee is non-refundable. Your landlord received market rent and then some.
You’re Locked Into A Purchase Price. This can go either way for you, home prices in your area can go up or down. But, it is very hard to predict where home prices will be two or three years from now.
It May Benefit The Seller More Than You. Think about why the seller is willing to get into a lease to own contract. They could just sell it today and be done with it. In my experience, they can’t sell their home for what they want and they are leveraging your poor financial situation.
Rent to own contracts are very seller weighted Rent to own homes usually attract disadvantaged buyers that can’t secure a mortgage right now. It puts the seller in an advantageous position.
You will be responsible for all the maintenance Unlike a rental the thought is that you are the one that benefits from repairs in the future and you are responsible. And, if you don’t exercise your purchase options you leave all the repairs and upgrades for the landlord.
You still have the lease terms to abide by Until you purchase the property you have the terms of the lease to abide by. If you violate the terms of the rent to own lease then the option is considered null and void and you will be asked to leave or evicted.

The Devil Is In The Details Of The Rent To Own Contract

Everything in a rent own contract is negotiable. Do not get involved in a contract to purchase a rent to own house without the contract being a win-win for both buyer and seller. Here are a few points to consider when a contract on a lease to own option is drawn up.

Hire an attorney. Have an attorney review the rent to own contract so that he can spell out the downsides for you and possibly negotiate better terms. Local attorney Rick Carter of Carter Law points out there are many grey areas that can arise in a rent to own contract. There needs to be many specifics spelled out to protect the renter/buyer.
Do a Home Inspection. A home inspector will point out current deficiencies in the home as well as short term maintenance that could be around the corner. Negotiate any home repairs just like you do with a purchase. You expect a house to be delivered safe, healthy and with all systems and structures functioning and serviceable.
Get an appraisal. An appraisal will confirm that you are paying a fair market price for the house. Just like when a bank finances a mortgage they confirm the value with an appraisal. If the home does not appraise for the purchase price you should consider walking away. I would suggest two appraisals, one when you sign the rent to own contract and make the option contingent on the property appraising at or above the purchase price when you exercise the option.
Make sure that whatever is preventing you from buying today will be corrected when the option to buy comes around. Talk to your credit repair people or your mortgage broker. You will need to be diligent to correct the problem.
Understand the downside of the contract you are entering into. Unfortunately, there are going to be downsides for a buyer in a rent to own contract. Make sure you can live with those downsides.

Find Rent To Own Homes

Finding affordable homes for rent to own can be tough. Rent to own homes in Massachusetts are a little hard to find, but other parts of the country may have more rent to own homes available.

There are companies that may purchase a home and set you up with a rent to own contract with ahouse of your liking. Especially in hot markets like you find in the Greater Boston area of Massachusetts rent to own homes will be difficult to find. A seller can easily sell a home without the hassle of rent to own.

Network- Talk to friends and family about your desire to find a rent to own home. They may know a landlord/seller that may consider that option.
Have your agent reach out to other agents– A real estate agent can quickly blast out they are seeking a rent to own situation for a buyer. While most homes listed in the MLS are sellers that just want to sell, there might be a seller who has struggled to sell their home and would consider it as an option.
Hit Up For Sale By Owners- You may have a better chance of working with a home that is being sold as a for sale by owner.
Talk to landlords- A landlord that has been considering selling but isn’t fully committed might just consider a lease with an option to buy.
Do a google search and look use the term “rent to own homes near me” and see what comes up.

Is Buying A Rent To Own Home A Good Idea?

Rent-to-own homes have the potential to be terrible investments in my opinion.

It has both advantages and drawbacks. But the disadvantages, which can be many, may outweigh the benefits of purchasing a house in this manner.

Many contracts that are presented by the seller advantages the seller. The consequence is that you will spend a lot of money and not have anything to show for it at the end of the day. Make sure you negotiate the best possible terms and you fully understand how and why you could possibly lose all you money that you have paid towards the purchase and any maintenance costs.

Definitely consult an attorney when it comes time to review and sign a rent to own contract.

As far as saving for a down payment? Just take a savings account and add 20% of your rent into that account every month. That is what you are doing anyway with a rent to own! You can buy a house for as little as 3-5% down with very competitive interest rates. Also explore down payment assistance programs in your area.

A $300,000 home the downpayment can be as little as $9,000 to $15,000. There are still some No Money Down Loan Programs available but are not available to a large pool of buyers.

If you want to explore financing options or work on your credit give me a call, I will set you up with the right professionals to get you buying in no time.

Other Related Real Estate Resources:

Luke Skar- Buy a Home With 0% Financing
Teresa Cowart- Is a Purchase Option Right for Me
Bill Gassett- Fixing Credit Report Errors
Paul Sian- 7 Thing to do Before Purchasing a Home

This article about Is Rent to Own A good Way to Purchase a House? is written by Kevin Vitali of EXIT Realty a Massachusetts REALTOR. Need help buying or selling a home? Give me a call at 978-360-0422 or email me at kevin@kevinvitali.com

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

Self Storage Rental and What You Need to Know

You may be a first-time self storage rental customer and have many questions about how renting a storage unit works.

Your needs may be short-term or long-term. You could be involved in a move and need to temporarily store your belongings or you could be trying to free up valuable space in your home.

Storage facilities can be a great way to conveniently and cost effectively secure your belongings when you don’t have a spot to store items or just need extra storage.

While there is some commonality between storage rental facilities bear in mind they are independent businesses and rules, costs and sizes can vary from one to another.

What Is A Self Storage Rental?

“Self-storage” is exactly what it implies.

The difference between full-service storage and self-storage is full service will pack, move and store your items for you.

With self-storage you are responsible to pack, move and load your items yourself. Basically, you are just renting a storage unit, there are no other services provided.

Some Reasons Why You Might Want A Storage Unit

Seasonal Storage

A storage unit can be great for seasonal storage of outdoor equipment, sporting equipment or holiday decorations that have a limited shelf life every year but can tie up a lot of valuable space in your home or apartment.

New Home Not Ready

You may find, as a renter or homebuyer, there is a time-lapse where your new home might not be ready. Self storage units are the perfect solution to store your entire home temporarily.

Free Up Space In Your Home

There are a bunch of different scenarios where you may want to free up space in your home. A growing family, time to de-clutter your home, etc… But, for whatever reason, you may not be ready to part with your belongings. A storage unit will allow you to free up your space and access important items when needed.

Home Renovations

Often when it comes time to renovate your home, you need to empty the areas the contractors will be working. The question becomes where do you store your items?

Renting a storage unit would be a perfect solution to temporarily house the contents of rooms in your home until the work is complete.

College or Military Storage

College students may want to temporarily store their items near campus instead of lugging all their belongings home, or a serviceman can store their items while on deployment.

A self-storage rental unit would be perfect for either situation.

Item Specific Rental Units

There are self storage units that are specific to many vehicles…. motorcycles, cars, boats, RVs, etc… They are either in completely enclosed or just parking spots. These units can be a great way to store your extra vehicles or recreational vehicles.

Business

A self-storage unit can be perfect for many different business needs. You can store business records, overflow stock or tools that may seem to clutter up your main facility.

What To Know When Looking For A Self Storage Rental Unit

If you have never rented a self storage unit before, there are certain things you should consider before selecting a self storage facility. Make sure you call around and compare the different options available to you so you can find the right facility to suit your individual needs.

What Will You Be Storing?

Take a few minutes and gives some thought about what you will be storing. Of course, it doesn’t have to be written in stone, but take a moment and jot down a few thoughts on what you would like to move into a storage unit.

Knowing what you are storing and the value can determine what kind of self storage you need, the level of security and whether you may want to consider insurance on the contents or not. You could be storing high-value items, important sentimental items, or even household overflow that may have little financial value or sentimental value. Will you need a climate controlled unit? Will you need regular access to the items?

How Long Will You Need To Store Your Items?

Knowing how long you need to store your items will help you shop for the best facility and price, along with defining the items you want to store.

There are some people who just need the additional space and they are looking at long-term storage, while others just need storage temporarily.

If you only need storage for a month or two, maybe you can consider an on-site portable storage pod.

Accessibility

Some people just pack their storage units and don’t need regular access to their storage units. Others may want to get in and out of their storage locker on a regular basis or at least several times a year, to move items in and out.

Our local Cube Smart in Haverhill has extended access from 6am until 10pm daily. But other facilities may be open 24/7 with complete self-service access with a keypad. Other facilities can have limited hours like 10-4 or in some cases only be accessed by appointment.

Find a facility that provides you access to your storage unit when you need it.

Consider Location

If you will be frequently visiting your storage locker, make sure you rent a storage unit conveniently located to you you.

Units rented in a major city may be more expensive than in suburban locations. But it will be important to find a balance between cost and convenience. With all things being equal, rent a unit as close to you as possible for ease of access.

Security

In some facilities all the units are accessed from the outside, in others, some or all of the units are housed in a building.

Often most storage facilities are fenced and are the first line of defense in securing the property. Most facilities have a gate or door or even both that is accessed by a keypad and renters let themselves in and out. There can also be video recorded throughout the day or even a monitored video surveillance system. Onsite personell for some or all of the day can also increase security.

Compare security from one facility to the next and find a level of security you are comfportable with.

Climate Controlled or Non-Climate Controlled Self Storage

When looking for a self storage rental, you will come across the option of heated and cooled space or not climate-controlled space. The decision is entirely yours.

If you are storing furniture, antiques, collectibles, clothing or anything of value you will want to consider a climate controlled unit to prevent extreme temperature swings and the possibility of mold.

Any items will benefit from a climate-controlled storage unit, so make sure you compare prices. You may find climate-controlled unit will cost roughly the same as a non-climate-controlled unit.

Can I Pull Up To My Self Storage Rental Unit?

You will have to rent in a facility that has access to your storage unit accessed from the outside if you want to pull up and park directly in front of your unit to load and unload. Which is extremely convenient for frequent loading and unloading or extremely heavy items.

Is There Equipment To Move My Items?

If you can’t drive right to your unit, like a multi-level facility with an elevator, make sure they provide adequate equipment to load and unload your items and be able to move them easily to your locker.

Most facilities will have moving carts or other equipment available to move your belongings around, but make sure you ask before renting a unit.

What Can’t I Store In My Unit?

Rules will vary greatly from facility to facility. Make sure you understand the dos and don’ts of what you can store in your unit as well as what you can and can’t do with your self storage rental.

Here is a short list of what most storage units won’t allow you to store (for what I hope are obvious reasons). Firearms, food, fur, hazardous materials, living or dead things, money, priceless items, stolen property and tires.

Things You Probably Can’t Do In Your Storage Unit?

What you can do in your rented storage unit falls back to the rules of the storage facility you are renting from.

You can’t live in the unit as well as conduct business, work on cars short of getting it running, use it as a workshop, etc… Your storage rental is strictly for storing items, that’s it.

Of course, there are exceptions and you may find a facility that will allow you to do certain activities, like hold band practice. But, for anything outside storage of allowable items, make sure you check with management first.

Will I Need A Lock For My Self Storage Unit?

While your facility will have security measures to keep your items safe you will still need to provide a lock for your storage unit.

A padlock or combination lock will certainly do the trick but consider a disc lock for the best security.

Can I Rent A Storage Unit For A Week?

The minimum self storage rental will most likely be for a month.

Will I Need Insurance For A Self Storage Rental?

The answer is not so straightforward. Many homeowner insurance policies may cover a certain percentage of the cost of items in storage out of the house. If you want your items insured and you own a home, consult with your insurance agent first. You may already be covered.

In addition, the storage facility will offer insurance coverage if you don’t have a homeowners policy or if adequate coverage is not provided by your homeowner’s insurance.

What Size Rental Units Are Available And What Is The Cost?

Self storage unit sizes and self storage rental prices can vary greatly from facility to facility and region to region. The rental prices here seem to be on the higher side compared to others.

2×5	Climate Controlled, Elevator	$39 per month
5×5	Climate Controlled, Elevator	$72 per month
10×10	Climate Controlled, Elevator	$135 per month
10×15	Climate Controlled, Elevator	$222 per month
10×20	Climate Controlled, Elevator	$250 per month
10×20	Outside Access	$360 per month
8×26	Climate Controlled, Elevator	$250 per month
10×30	Climate Controlled, Elevator	$353 per month

Find Cheap Self Storage Rental Near Me?

Like anyone, you’re going to want to find the best deal you can on a unit. Google self-storage unit near me and start with the storage facilities closest to you.

Some sites provide prices and you can reserve a rental unit right online. Other facilities you may have to call to get a price quote. Start by having a rough idea of what size unit you need.

When doing my research, I found a few things to be true. Big national companies seemed to be more expensive, but you are probably paying for increased security and better access.

Outside access with no climate control seemed to be cheaper than inside climate-controlled units. The reason being the facility uses up space for traffic to get around the outside access units that could house more units.

If you don’t need to drive up to your unit, an inside climate-controlled unit will probably be cheaper.

Smaller, cheaper facilities often had more limited access or were only available by appointment only.

Make sure you not only shop for the best price but also for features that are important to you.

Tips For Packing A Self Storage Rental Unit

Now that you have a self storage rental you want to take the time and pack it properly for maximum efficiency.

Use Clear Covered Bins

Cardboard boxes can certainly get the job done. But clear bins are stronger will stack easier and last longer. Plus you can see inside a clear bin and know what is inside.

Keep Your Bins Uniform

Try to stay with the same tpe and size bin. Of course you will need several sizes but limit it to 3 or 4. By utilizing the same bins it makes packing and stacking much easier.

Maintain A Walkway

If you have a deep unit make sure you maintain a walkway to make sure you have access to all your items when you need them.

Map Your Unit

A little extra time while loading the unit will make your life easier down the road. Keep a map of your unit and where things are stored so you can put your hands on an item in a few short minutes in the future.

Utilize Dead Space

Think about utilizing dead space like drawers in a dresser or cabinets. Even an empty refrigerator can be utilized to store small boxes to maximize the space in your rental unit.

Summary

Self storage facilities can vary greatly in their offerings, security, accessibility and cost. Call around and find the balance that best fits your storage needs.

Other Real Estate Resources

Massachusetts and other states across the country allow agents to practice dual agency. Bill Gassett explains why dual agency may not be in your best interest as a buyer or seller.
Starting your home search should always start with a mortgage pre-approval. Eric Jeannette explains how having a pre-approval helps home buyers in many ways.
The real estate market across the country is changing. And, with that change, we are seeing more and more homes sit on the market unsold. Vicki Moore shares 6 reasons your house might not sell for reasons other than the house itself.
There are many different house styles you will see across the country. One beloved house design is the bungalow. Learn what a bungalow style house is and why it is a popular rresale home.

Self Storage Rental and What You Need to Know is provided by Kevin Vitali of EXIT Realty. If you would like to sell or buy a home, give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

What Does A Fed Rate Hike Mean For Home Mortgages?

First, let’s just get it out there….. The Federal Reserve does not set mortgage rates.

Yet, nothing puts fear in homebuyers fervently looking for homes and hearing about a pending Fed Hike Rate. Many hear about the Federal Reserve increasing rates and assume it is a 1:1 correlation to interest rates on home loans rising.

Meaning, if the Feds hike the rate by 3/4 of a point, interest rates for home mortgage will also rise 3/4 of a point.

Homebuyers already feeling the pinch of massive increases in mortgage rates cringed as they heard the Feds were raising interest rates again in July. The buyers have sat and watched their buying power get eaten up by earlier interest rate hikes in the beginning half of 2022.

But, as homebuyers heard the news of the rate hike, mortgage rates remained relatively unchanged.

While a Fed Hike Rate Hike does not directly affect interest rates on home mortgages, it definitely has a large impact on home loan interest rates, but not like you think.

What Does A Fed Rate Hike Mean?

The Federal Reserve Bank uses the Federal Interest Rate to control the supply of money. The Federal Interest Rate controls the commercial interest rate charged between banks for short term loans.

The Federal Reserve Uses Rate Hikes and Cuts To Control The Economy

In the case of a Fed Interest Rate Hike, the cost to borrow money is higher and the hope is people save money and not spend it. As consumers spends less, it lightens the burden on the supply and demand. Hopefully it will cause prices to stabilize or fall.

When the Feds cut rates, it is in hopes that in encourages the public to spend money and get the economy rolling.

Rate hikes and cuts are like a faucet to get more money flowing or restrict the flow. It is one of the few tools the Federal Bank has to control the economy.

The July 2022 rate hike was in hopes of slowing inflation and avoiding a recession.

How Does The Fed Rate Hike Affect Mortgage Interest Rates?

As I said in the beginning of this article, the Federal Reserve Banks don’t control mortgage interest rates directly.

Though indirectly, a Fed Rate Hike will affect interest rates for mortgages.

First, realize that the interest rate for home loans is controlled by mortgage backed securities. Similar to a bond, they are bundled home loans purchased by institutional investors. Mortgage backed securities are an independent market and rise and fall on their own.

Not to say, that the rise in the Federal interest rate isn’t one of the factors that impact mortgage backed securites.

Fed Hike Rates Have A Psychological Impact On Investors

The impact a rate hike (or cut) has from the Feds is more psychological than anything. When the Federal Bank raises the Federal Interest Rate, investors are looking for other signals about how the economy is doing.

A change in the Federal interest rate is just one of many factors investors use to determine how to invest their money. Investors try to look at the overall health of the economy. Monetary policy is just one factor.

What the Fed has to say after the hike or cut, is almost as important as the change itself. Investors are hoping to get a glimpse of the economic future.

When investors feel that the economy is doing poorly or predicts a failing economy is around the corner, then mortgage backed securities are a safe place to park their money. They get a decent return on a low risk investment.

As investors flood to mortgage backed securities, the interest rate drops because there is a greater demand than supply. But as investors see a flourishing economy, the rate for mortgage back securities rise to attract investors who feel they may have better options.

The Federal Bank May Purchase or Sell Assets To Control the Flow

The housing economy is certainly an important segment for the overall economy.

The Federal Reserve will also buy and sell mortgage backed securities to help control the economy. During the pandemic, the Fed started purchasing bonds and securities in hopes of spurring the economy.

The result from the purchases, during the beginning part of the pandemic, was a drop in mortgage interest rates.

The Federal Reserve’s rate hikes or cuts do not directly affect mortgage rates. Instead, the effect it has on the United States economy can cause mortgage interest rates to rise or fall as it pushes investor towards or away from mortgage backed securities.

July 2022’s Federal Reserves Announcement

July 2022 was the fourth interest rate hike since the beginning of the year. Each subsequent rate hike announcement has had a smaller and smaller impact on mortgage rates.

Overall, investors had already drastically reacted to the previous rate hikes and have already formed their decisions for the future.

The July interest rate hike by the Fed’s was a big one, .75 basis points. Yet, mortgage interest rates have remained relatively unchanged. As a matter of fact, interest rates on home loans dropped shortly after the announcement.

Many investors feel by definition we are in a recession, even though the administration has not called it yet. That has had investors turning towards mortgage backed securities as they wait out any volatility in the stock market.

And as I pointed out earlier, as a growing group of investors seeks out mortgage backed securities, interest rates on home loans will drop.

What Does The Latest Fed Rate Hike Mean For Homebuyers?

Homebuyers are already impacted by huge appreciation of houses over the past several years. Combine that with drastic increases in mortgage rates and you will see homebuyers buying power eaten up.

What do I mean? A homebuyer that was pre-approved for $600k back in January is probably looking at a $120k drop in their max pre-approval. That’s the difference of $660k to $480k.

Of course, no borrower is the same and there are other factors that go into qualifying for a mortgage, such as debt to income ratio and a borrowers credit score.

I always tell buyers the time to buy a home is when it’s time to buy a home. Don’t try to time the market. If the timing is right to buy now, then buy.

For some markets, across the US, you may see a drop in home prices. Others will see appreciations slow drastically or even flatten.

The remainder of 2022 and the beginning of 2023 will see the Massachusetts real estate market flatten out.

It will no longer be a market that favors the seller and will become a neutral market. This will get rid of of the chaos buyers have been experiencing the past couple of years.

Homebuyers should also consider that if you wait on the sidelines, homes may still appreciate, at a much slower rate and interest rates could go up. If you bought at the peak of the market in 2007, even though you saw some double-digit depreciation over the next few years, today you are sitting pretty with a ton of equity in your home.

Buy for the long haul.

How Will The Fed Rate Hike Effect Sellers?

Let’s face it. Sellers have had it pretty darn easy the past few years. Open house flooded with buyers, houses sold in a week, multiple offers over asking, etc…

But hyper appreciation of homes combined with much higher interest rates will make buyers hesitant and even push some out of the market.

In the whole scheme of things, this is only a small snippet of time driven by market conditions.

Today, in the Haverhill MA Real Estate market we are seeing days on market increase and home sitting on the market longer and more properties with price changes and much steeper price changes. But, the market is still very strong.

For Massachusetts home sellers, the market will slowly start to soften.

Adjust your expectations and realize you will have to go back to the basics of selling a home. This includes improving curb appeal, preparing your home, understanding pricing principles and more…

Summary

Federal Reserves rate hikes don’t impact mortgage rates directly, but can certainly influence how investors see the market and how they react as they go in and out of mortgage backed securities

There will definitely be some unpredictability coming up in interest rates for home mortgages, but don’t think it is solely because of the Fed rate hikes. Look towards the overall economy in general.

Other Massachusetts Real Estate Resources

Is the market turning towards a buyer’s market? Bill Gassett explains how to identify a buyer’s market. Signs to look for are increased days on market, price decreases on current inventory, and more.
During my real estate career as a Massachusetts real estate agent, I am constantly seeing buyers and sellers trying to time the real estate market. Paul Sian gives some great advice on trying to time the real estate market and why it could be a big mistake.
Sometimes it can be difficult to sell a house. And, it may have nothing to do with the house itself. Vicki Moore covers 6 reasons your house may not sell.

The 2022 Real Estate Market- What Should You Expect?

The housing market for 2022 started off strong, with the beginning of the year looking much like the real estate market of 2021.

Let’s take a quick look back at 2021.

2021 showed Massachusetts having an average home price of $515,000, up 12.6% from $450,000 in 2020.

Homes were selling for 103% of the asking price in 2021 versus 101% for 2020.

In 2021, the number of days it took to get an offer on a home was 22 whereas in 2020 it took an average of 34 days.

As of today, there are 5472 homes on the market versus 4132 homes on the same day in 2021.

Now, contrast 2018 which was a more balanced market, there were 12,572 homes for sale.

2021 was a very hot seller’s market. Meaning, the market heavily favored sellers over homebuyers.

But as we continue into 2022, we have seen a few converging forces that could slow the red-hot sellers market of 2021 and the beginning of 2022.

What Is Driving The Local Housing Market 2022?

Of course, no one has a crystal ball and can predict the future of the housing market for Massachusetts, 2022. But much of what has driven the past market is still in effect today.

Housing Shortage

Nationally, we are seeing a housing shortage. The country is about 5 million housing units shy of adequately housing our nation’s population.

The short fall is for a number of reasons. Builders can not keep up with the demand. Much can be blamed on restrictive zoning and recent supply chain issues.

As house prices increase, so do rental prices. Many renters are finding that they can buy a home with a mortgage payment that is roughly the same as their monthly rent. It makes financial sense to buy for many who are ready to purchase their first home.

It boils down to supply and demand. Currently, the demand is far greater than the supply, which will continue to drive up prices and create heavy buyer competition.

Interest Rates Were Extremely Low

Interest rates have been extremely low for most of 2021 and will continue into 2022. 2021 has seen interest rate hovering around the low 3 or high 2% range. This will continue into 2022.

While many believe interest rates will rise, we probably won’t see interest rates above 3.5% to 3.75% by the end of the year.

In reality, while house prices seem high, a $500,000 house today has roughly the same principal and interest payment of a $350,000 in 2007.

The unprecedentedly low interest rates make the rapidly appreciating house prices affordable.

Cost of Construction High

The high cost of construction plays into the cost of real estate overall.

The National Home Builders Association cites construction cost are up over 33% in one year.

It goes without saying, that as list prices on new homes rise, due to the rising construction costs, it makes similar resale homes more valuable as a substitution. Along with the rising cost of construction, that same resale home would cost more to build, dragging up the value.

Massachusetts Housing Forecast 2022- Moving Forward

Since the beginning of 2022, several factors converged all at once, that will alter the remaining course of the 2022 housing market.

Drastic Rise In Interest Rates

Since the beginning of the year, interest rates have almost doubled to around 6. This translates into the buying power of the buyers in the marketplace. A $550,000 buyer at the start of 2022 to maintain the same mortgage payment they were previously pre-approved for can now only afford $405,000.

For many home buyers, they don’t have much wiggle room to put down more money or raise their pre-approval amount.

Significant Inflation

Buyers only have so much money every month. And like everyone, they are feeling the pinch, not only at the gas pumps but at the grocery store and beyond.

There is only so much money buyers have to put towards a home mortgage every month. With rising interest rates and increased living expenses, it will put a damper on what a buyer can afford moving forward into 2022.

Prediction for 2022 Massachusetts Real Estate Market

Remember, real estate markets are local. Rural areas and less popular housing markets can see different results. Consult your local REALTOR to see what is happening in your area.

We are only seeing slight changes in the market. Market times are increasing…. slightly. Some of the craziness is going away.

The market will very slowly cool throughout the rest of the year.

Instead of double-digit appreciation, we will see homes fall back into a more balanced range. While many think we are in a housing bubble, circumstances are much different from the housing bubble of 2005-2007.

The underlying factor still driving the real estate market is a lack of housing inventory rising and rising costs of construction. While rents continue to rise and housing remains in a shortage, we will not see a bubble burst. Waiting on the side lines for the housing bubble to burst is not the way to go.

We can expect a pull back to very modest appreciation of 2 to 5% and a market that is more balanced. Meaning, neither buyers nor sellers have an advantage.

Massachusetts Home Sellers

2022 will still be a great time to sell a home in Massachusetts. But expectations should be different for home sellers. Cautiously optimistic is the way to go.

Don’t expect to be completely in the driver’s seat and demand everything you want. Prepare your homes and work with buyers. It will still be a great market to sell your home.

As a home seller your home will still sell quickly and there will still be plenty of buyers.

Massachusetts Home Buyers

Homebuyers can still expect some chaos to continue, though it should lighten up a bit. There will still be limited inventory, but the competition among buyers will lessen.

Should I Consider Buying A Home or Wait?

As a buyer you may be left with the thought of should I buy a home or wait?

The answer to that is highly personal. But, if you need a home, you need a home. Are you going to continue paying your landlords rent with exorbitant monthly rental rate? Throwing away rent money every month?

If you buy real estate as a primary residence for the intermediate to long term, you probably won’t be disappointed. Even buyers who bought in 2007 the peak of the last housing bubble have seen their homes appreciate 60% in the past 15 years.

Yes, if you bought in 2007 at the peak, you probably didn’t break even until owning your home for 6 or 7 years. But as you start owning for the intermediate or long term, it is a beneficial purchase.

Never mind, the principal that has been paid down over those years. Buying a home is not strictly about money. If you think about real estate in terms of 7+ years you will be able to weather most storms in the real estate market.

Massachusetts Housing Forecast Beyond 2022

Year over year appreciation will slow to a more modest pace of 3 to 5% a year.

The housing shortage and the cost to build will keep the housing market from any serious dip in prices. Instead we will see a far more balanced market where buyers have time to make informed decisions, yet sellers will still realize appreciation in their homes, just not the double-digit appreciation we have been seeing.

Summary of The Real Estate Market 2022

If I had to predict the future state of the real estate market in 2022 for Massachusetts, I would say we are still going to see much of the same with a slight cooling. The negative factors in play are mitigated by other forces like a housing shortage and high cost of construction.

Things will calm down slightly in certain market segments, but if you are buying around the median house price or under, things will stay pretty heated. There are more buyers than there are houses available. Supply and demand.

Other Real Estate Resources

Check out Paul Sian’s real estate round up for December 2021. Find the best articles on homeownership, home buying and home selling.
While it may be tempting to do work on your home without a building permit…. don’t!! Vicki Moore explains everything you need to know about building permits.
At this point, everyone knows it is a seller’s market and most sellers can expect multiple offers. Given sellers are in the driver seats, Scott Russell has expounded on some terms sellers should negotiate when there are multiple offers.

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The 2022 Real Estate Market- What Should You Expect? is provided by Kevin Vitali of EXIT Realty. If you would like to sell or buy a home, give me a call at 978-360-0422 and let’s get the process started.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

Encroachments In Real Estate: What You Need To Know

Every homebuyer and homeowner should be aware if there are encroachments on their property or, a potential property you will purchase. An encroachment in real estate is if a neighbor accesses your land for their benefit without your permission.

While most property encroachments are minor, some are not and can significantly affect the value of your home or impact your ability to get a mortgage.

At the very least, an encroachment can be a significant nuisance.

What is the Definition of Encroachments?

Simply put, encroachment is when one property owner violates the property rights of another.

This can include one unlawfully accessing land or building, adding a structure, or extending structures onto their neighbor’s land without permission.

Encroachment is basically where an unauthorized user accesses or takes advantage of the benefit of your land for their own use.

More often than not, encroachments are unintentional and caused by others not knowing where a property boundaries exist with certainty.

Examples Of Encroachment of Property

An encroachment of land can run either way. You, yourself, can be creating an encroachment on either a neighbor’s land or city property, or, your neighbor can be the violating

Your neighbor builds a shed with one corner over your property line. The shed is now encroaching on your property.
Your driveway that runs partially on your neighbor’s yard encroaches on your neighbor’s property.
A tree on your neighbor’s property that overhangs your house is encroaching on your property.
You create a path that crosses across the backside of your neighbor’s yard to access a lake.
A neighbor extends a deck across his property line onto yours.
Fencing was installed on the wrong side of a property line.
Plantings your neighbor has installed past your property line is an encroachment onto your land.

Anytime someone accesses your land for their own use, you are being encroached upon.

Types Of Encroachments in Real Estate

There are two types of encroachment when it comes to real estate.

Minor Encroachment

Minor encroachments are when the encroachment has not significant impact in value of a property. A garden or fence extending a few inches past a property line would be a minor encroachment.

A minor encroachment can usually be a simple resolve by communicating with each other.

Major Encroachment

A major encroachment is one that can have a more serious financial impact. It can be a permanent structure built on your land or a branch overhanging your house, creating a liability.

Major encroachments will have to often be resolved by legal action and a court decision, especially when parties are not in agreement.

What To Know About Encroachments When Buying A Home?

When buying a home, it is important to know about any encroachments on the property. Without knowing the exact boundaries through identifying boundary markers in conjunction with a survey, it may not always be obvious.

A large tree limb overhanging a roof that is on the abutting property is a clear that is encroaching on your property.

But there may be other things that encroach on a property that may not be so obvious like landscaping, fences etc…

Trying to get a rough look on Google Maps, a previous Mortgage Plot Plan or GIS Assessor Maps may indicate the property lines and if it is being encroached upon.

What’s The Big Deal About A Minor Encroachment?

There are several reasons that an encroachment can be a problem for you as a homebuyer.

Marketable Title

Marketable title means the home is free from any title defects that may pose litigation in the future and is free from all encumbrances.

If there is an encroachment on your property that is not resolved, it can affect your title to the home. Meaning, the bank will not finance the property.

Liability

Unfortunately, even if someone is on your property uninvited, if they get injured they could bring a lawsuit against you for damages.

A home and land that you purchase that have been encroached upon can lead to a future liability for you.

Affect Value

Encroachments can affect the value of a home by reducing the size of the lot or by changing the character of the property.

If you are purchasing a property that has been encroached upon, it is important to be aware of any encroachments and how they could affect your purchase and future value.

If you know about any encroachments prior to a purchase, it will be in your best interest to work with the seller to rectify the problem. It could be a matter of a shed being moved, a walkway being moved etc…

Can Become Litigious

As property changes hands, a minor encroachment issue can become litigious with every new owner.

When you buy a new home, you don’t want the hassle in the future dealing with an unreasonable neighbor.

Adverse Possession

Land that has been encroached upon for many years without a formal legal agreement or acknowledgement can be subject to adverse possession.

Adverse possession is where someone has open, uninterrupted use of the land that goes uncontested. After a period of time, they can claim the land as their own.

While rare, it is still a distinct possibility

If you have not purchased the home yet, try to get the seller to fix the problem before taking possession. If that is not possible, talk to your attorney to see what impact the encroachment may have in the future.

Difference Between Encroachments and Easements

It is easy to confuse encroachments with easements. Both can become an encumbrance for the property. Meaning, they can affect value.

Both are a matter of someone using your land. An encroachment is unauthorized use where an easement is authorized and memorialized with legal documentation.

A right of way is a type of easement, for example, the use of your land for a neighbor or the public to cross the property to access a lake. But a right of way, if properly done, is recorded on both deeds of the both the owner of the land and the abutter who has the right of way.

What To Do If You Are Encroached Upon?

If you find yourself the victim of an encroachment, the first step is to document the situation. You can do this with a sketch or photo documenting where the encroachment occurred and what was affected.

First, reach out to your neighbor and see if by simply communicating with them if the issue can be resolved. Often the offender does not even know that what they did was an issue, and they will be likely to want to rectify the situation.

If that fails, you can reach out to a land surveying company to get a legal opinion on the encroachment and how to rectify it.

If all else fails, then you may need to take legal action.

Other Real Estate Resources:

Are you thinking of selling your home? Are you just curious? Bill Gassett shares how to find out what your neighbor’s home sold for with some simple tips.
Waiving a home inspection can be risky. Yet, many homebuyers are foregoing their inspections to get their offers accepted. Sharon Paxson shares some top considerations when you are thinking of waiving your home inspection.
First impressions are important. Ask yourself, what are homebuyers going to think as they approach your house? Michelle Gibson shares 9 budget friendly project to increase your home’s appeal.

Encroachments In Real Estate: What You Need To Know is provided by Kevin Vitali of EXIT Realty. Are you thinking of selling your home? Call Kevin at 978-360-0422.

Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford

What Is Debt To Income Ratio?

Most home buyers need a mortgage to buy a home.

Getting a mortgage can be quite daunting. You will have a whole set of mortgage terms being thrown around. One of which is debt to income ratio. So you may be left wondering what is debt to income ratio.

The acronym for debt to earnings ratio is DTI. Lenders and real estate agents will throw that acronym around like everyone knows what it is.

Your debt to income ratio is one of the biggest qualifying factor in how much house you can afford. It is basically the percentage of your gross income that goes towards your debt.

Calculating Your Debt To Income Ratio

Your debt to income ratio is calculated by adding up your monthly expenses and dividing it by your gross income (income before taxes).

When we talk about monthly taxes in context of a mortgage we are talking about:

Rent or Mortgage Payments or in the case of mortgage application a proposed mortgage.
Car Payments
Student Loans
Alimony or Child Support if it is court mandated
Minimum Payment On All Credit Cards

Do not include groceries, utilities or other expenses when calculating your debt to income ratio.

Now you add up all of your monthly debt and divide by your income to get a percentage. That percentage is the amount of consumer debt takes up of your monthly income.

For example:

Consumer Debt/Expenses = $3300

Your Gross Income = $7800 dollars

3300 / 7800 = Debt to earnings Ratio of 42%

What Does Debt To Income Ratio Have To Do With A Mortgage?

Most loan programs allow a debt to earnings ratio of 41-43%. This is how a bank determines how much of a house a buyer can afford.

Take the scenario above. A buyer makes $900 in car payments, student loans and minimum payment on credit cards. Leaving $2400 a month to go to their monthly housing expense.

The housing expense will include:

Principal and Interest Payment
Monthly Tax Payment Into An Escrow Account
Monthly Insurance Payment Into An Escrow Account
Private Mortgage Insurance
HOA or Condo Fees

Let estimate that the buyer is buying a single family home and is putting 5% down leaving them with a PMI payment. We will use the following assumptions:

Taxes are $380 a month

PMI is $200 a month

Insurance is $110 a month

That leaves about $1710 left to go towards Principal and Interest on a mortgage.

At a maximum DTI of 43% and an interest rate of 3.75% the price of a home they buy could not exceed about $385,000.

Different programs have different DTI requirements. Some can go as high as 50% others below 40% but most loan programs will go up to 43%.

Breakdown of Debt To Income Ratio

In years past the bank break debt to earnings ratio down into two factions.

Front End Ratio- Your front end ratio is your housing expense alone. Principal and Interest, Taxes, Insurance and Condo Fees are your housing expense. In the previous example your front end ratio would be 31%.

Backend Ratio- Your back end ratios is your housing expense plus your consumer debt, which we calculated as 42% in the scenario above.

While today’s lenders still break down debt to earnings ration into front end and back end ratios, most do not differentiate between the two.

In years past the government recommended 28% as your front end ratio with a back end ratio being no more than 36%.

What Does DTI Tell The Bank and You?

Your debt to income ratio shows the lender how you handle money. While 43% is the maximum a bank will allow for a debt to earnings ratio, it is a guideline.

In some cases if you have a lower debt to earnings ratio, it will reflect in the interest rate you are offered. The bank may offer you a lower rate as they will view you as less of a credit risk

When it is all said and done, your debt to earnings ratios shows home much house the bank thinks you can afford based on your income and expenses.

But as the home buyer you need to be comfortable with payment regardless of whether the bank says they will loan you the money.

23 First-Time Home Buying Tips That Matter!

Buying a home as a first-time homebuyer is a big deal. There is so much you need to know as a first-time homebuyer to have a successful home purchase.

Like anything in life, the more you put into buying your first home the more you will get out of it.

Today we will discuss some first-time home buying tips and advice that will set you on the path to successfully buy your first home.

The first-time home buying tips will be broken down into:

Preparing to Buy
Financial
Viewing Homes
Making an Offer
Closing on a Home

Tips to Prepare To Buy

A have been a buyers agent helping first-time homebuyers in Massachusetts for almost 20 years. Often I will see buyers struggling on their own in frustration because they have not taken the time to understand the various aspects of buying a home.

#1 Deciding That Buying Your First Home Is Right For You

The decision to buy your first home should not be taken lightly. Buying your first home just because all of your friends are, doesn’t mean you should.

Double-check your motivations. Are you ready to plant roots in a community? Are your job and income stable? Can you comfortably afford to buy a home? Is owning a home a lifestyle you want to live right now?

Don’t get saddled with a home you don’t want. you could create a bad financial situation or just be unhappy.

#2 Start Preparing To Buy Your First Home Early

For most buyers, the thought of buying a home is in their head months or even a year or more before they jump into buying a home. Start preparing early to get a handle on the home buying process, the market, your finances and to set realistic expectations.

There are many things you can get in place prior to ever looking at homes that you can do at a leisurely pace rather than having to do it at the last minute in a panicked frenzied.

You can get a handle on the market by watching homes online, you can organize your finances, work on improving your credit and take the time to find the right professionals to help along the way.

#3 Get Your Hands On Your Credit Report

Get your hands on your credit report right away. It is not unusual for there to be mistakes that are dragging your credit down. You can get a free annual credit report on your own or by getting approved early by a mortgage officer.

Don’t let last-minute problems with your credit hold you up. If you are in the fray of buying you aren’t going to have time to correct some issues and you may end up with a less than desirable mortgage program.

#4 Know There Will Be Things You Don’t Know And Your Need Help

Real Estate Agents and Mortgage Professionals are immersed in their professions daily. One big mistake is first-time homebuyers don’t know what they don’t know!!

But these real estate professionals do. Find the right professionals to help you along your journey they can make all the difference in the world for you. Line up the right agent and mortgage officer before looking at homes.

Start assembling your home buying team now! Talk to real estate agents and mortgage brokers.

#4 Take the Time To Understand Agency

In Massachusetts and many other states, an agent can work with you in many different capacities. It can actually be darn right confusing. The only real estate agent that works on your behalf is a buyer’s agent.

A buyer’s agent has a fiduciary responsibility to work in a manner that promotes your best interest.

For example, a listing agent, who is the agent with the sign in the ground has a fiduciary responsibility to the seller and not the buyer. A listing agent can help you buy their seller’s home, but at every twist and turn, they have a legal obligation to benefit their seller and not you!!

When push comes to shove, you will be thrown under the bus. Take the time to understand real estate agency and what capacity different agents have in their dealings with you.

#5 Understand The Type of Real Estate Market You Will Be In

Often a first-time buyer will enter the real estate market with certain perceptions from friends and family buying in the past. But real estate markets can change on a dime. You need to understand how the real estate market is performing right now, not two years ago when your sister bought a house.

The type of real estate market you are in will play a heavy role in how you look for homes and how you structure and negotiate and offer. In a seller’s market, which we are in right now in November 2020, inventory is low and buyers are competing for good homes. Versus, November 2010 where it was a buyer’s market and sellers were competing for buyers attention!

#6 No Question Is Stupid

Once you start working with a buyer’s agent and mortgage professional, don’t be afraid to ask questions. There are no stupid questions. If it is on your mind ask.

You aren’t buying a $200 TV here, you are spending $100’s of thousands of dollars.

Often a buyer will say this may be a stupid question…. but when they ask it is a very valid question. A real estate transaction has many facets some with legal and financial ramifications. It’s your life, ask the questions no matter how silly you think it is.

Financial Tips When Buying Your First Home

The financial aspect of buying and owning a home is one of the more complicated pieces of the buying process. Get a handle on the financial aspect early so you are making good decisions, have a full understanding of the costs and aren’t running around like a mad man at the last minute.

#7 Get-Pre-approved

Your mortgage pre-approval is critical. Get pre-approved before looking at houses. First, no seller will take you seriously without a good pre-approval and an understanding of your financial ability to buy a home.

Secondly, without a good pre-approval, you can’t have a full understanding of your finances. If a mortgage professional takes the time to properly pre-approve you, it is only then you can have a full understanding of what your mortgage will cost you and what the closing costs are associated with buying a home.

Waiting to talk to a mortgage officer when you are trying to get a home under contract is a mistake. You are in a hurry and you often end up in a less than desirable mortgage program.

#8 Have An Understanding Of The Costs Associated With Being a First-time Homebuyer

Of course, you know you need a downpayment. But don’t forget about the closing costs which can run another 2-4% of the purchase price of a home.

But beyond closing on the home, there are other costs to homeownership you should be aware of. There are taxes, insurance and home maintenance, utility bills that may include water and sewer. Talk to family and friends as well as your @realtor to get a full understanding of what costs are associated with buying and owning a home.

Don’t put yourself in a position where every cent you make goes towards owning a house. You want to live a life after closing on a home.

#9 Work On Improving Your Credit

In the previous section of first-time homebuyer tips on preparing early, we suggested pulling your credit. But while you are in the pre-buying stage and looking at homes there often may be improvements to your credit that can make a difference.

First dispute any mistakes. Work with your mortgage officer. He may make some suggestions that could raise your credit score. Approximately, every 20 points in credit score can impact your interest rate and mortgage programs available to you. A difference between a 673 credit score and a 680 credit score could be significant for you as a homebuyer.

Often a buyer can improve their credit by a few to 20 points in a short period of time. I have also had a buyer increase their credit score by 112 points in less than 45 days!!

#10 Shopping For Your First Mortgage

Many consumers are under the impression that shopping for a mortgage means trying to get the best interest rate. But there is more to it than that. Of course, you want the best interest rate possible.

But for many first-time homebuyers, they are putting down a minimal downpayment. It is also important to discuss mortgage programs and the advantages for you.

The subtleties in mortgage programs can mean the difference between qualifying for a mortgage or not. Or, if put in the wrong program, it can costs you hundreds of dollars in your mortgage payment a month.

#11 A Word On Interest Rates

As I mentioned getting pre-approved early is important. Often I run into home buyers that have been out in the market place making assumptions based on advertised interest rates. They have avoided talking to a mortgage professional and are basing their budgets on the teaser rates often advertised by banks.

Read the fine print!!

The teaser rates are just that… they are based on putting down 20-40%, having a credit score of 720 or more and buying a single-family home. Often the criteria for the teaser rate is unattainable for many home buyers.

Tips On Looking At Homes

Once you have taken the steps to prepare yourself to buy and have taken to understand the financial commitment, it is time to seriously look at homes. Here are some first-time home buying tips for when you actually shopping for homes.

#12 Look Towards The Long Term

When buying a new home, think 5-7 years out. If you aren’t planning on owning a home for 5-7 years maybe you shouldn’t buy.

There is a substantial cost of selling your home. Real estate markets usually rise but in the short term markets have their highs and lows. 5-7 years will usually allow you to weather those ebbs and flows in the real estate market.

Don’t just think of your needs now. Make sure your home will suit you and your family for its future housing needs.

#13 Don’t Get Caught Into the Glitz and Glam Of A Home

Everyone loves shiny and new. But shiny and new is only good when the underlying quality of the home is good and the workmanship is of professional quality.

You can live with an outdated kitchen and bath, but issues like a leaking roof, insect damage, a failing heating system or electrical system can’t be ignored. Plus they are all costly repairs sometimes running into tens of thousands of dollars.

Pay attention to the basics first to make sure you are buying a solid home. Don’t get stuck buying a pig with lipstick!!

#14 Cheap Is Not Always Good

Like most things in life, you get what you pay for. This includes real estate. Houses are priced a certain way for a reason.

If you are buying a home that needs work, make sure you can financially handle the work as well as being capable of completing the work. Sometimes it is prudent to spend more money on your upfront purchase on a house that is updated and in good shape than it is to buy a fixer-upper that will cost more in the end to own.

#15 Pay Attention To More Than Just The House

When you are buying your first home you are also buying into a neighborhood and community. Pay attention to the neighborhood as you approach a home for your showing. Is this an area you can see yourself living in? Is it quiet, does it have nearby amenities?

Do a little research and make sure the community itself offers you what you need. Good school systems often top the list of what home buyers want out of a community.

For example, you may have a 2-year old that isn’t in school now but in several years the school system may be important to you. This also ties in with buying for the long term. Your community needs to serve you for the future as well as now.

#16 View The Houses In Person

There is only so much an online listing can tell you. But to truly get a sense of a home you need to visit it in person. Whether your agent schedules a personal showing, go to an open house or even do a quick driveby, it is important to get your feet on the ground.

If you have any interest in a home at all don’t discount it because of what you do or do not see online. Check it out. Especially if inventory is tight and you are struggling to find a home.

#17 Be Realistic

Every homebuyer starts out with certain wants and needs. But wanting or needing something does no mean you are going to find it. Your wants and needs may exceed your budget. Hopefully, you have spent some time looking at houses in your price range and have a realistic idea of what is available in your budget.

For example, many homebuyers in my market will want to purchase a single-family in the desirable town of North Andover. Say your budget is $350k. 6 houses sold under $350k in the past year. You may say, great! But when you are buying in the bottom 10% of a market you will find the home to be severely challenged by condition, layout, location or appeal. That translates to one new house coming on the market every two months.

Contrast that with a buyer that has a budget of $550k and 67 homes have sold in the same time period for about 6 new houses coming on the market a month. Or Haverhill having sold 138 homes under 350kin the same time period.

Make sure what you want actually exists or you will waste valuable time looking for that one unicorn. Remember in a seller’s market house can rise at a rate of .5 t0 1% a month pricing you out of the market.

#18 Be Flexible And Adjust

Being successful in finding your new home requires you to be flexible and adjust. If you are not finding what you want in 12-15 homes it may be time to adjust your wants and needs. Look a little to the right and left of what you think you want. Following is an excerpt from something one of my first-time homebuyers wrote and it sums it up nicely.

“I remember day one going in with a list of our “must-haves” and our “deal breakers”. I could not tell you what was on those lists, because well, I made about 50 lists. Lists are helpful, to some extent. The lists do change, those must-haves become maybes, and those maybes become deal breakers. Keeping an open mind and looking at the bigger picture was important. I remember giving Kevin 5 towns we wanted to stay within. Funny, we are not in any of those towns”

I can tell you what my buyer client went through is pretty typical.

Tips For Writing an Offer and Closing On Your New Home

You have taken the time to prepare to buy your first home, you have spent months looking and you have put a house you are ready to negotiate and offer. Here is some advice for first-time homebuyers while they are in escrow.

#19 Know Your Numbers

Before putting in an offer know your mortgage numbers and be comfortable with it. Don’t get caught with any financial surprises.

Also, know the market and what a house is worth. Have your agent run a CMA to give you a range of fair market value. Lowballing an offer usually leads to disappointment.

Talk about negotiating strategies that are effective for current market conditions with your agent. Negotiate to get the house you want and don’t lose it over a few dollars.

#19 Keep Your Offer Clean

Avoid complicating offers with a ton of contingencies and requests. Focus on getting a fair price and go for it. Asking for furniture, lawn equipment or asking for contingencies outside the standard mortgage and inspection contingencies just muddle the negotiations.

#20 Take Your Home Inspection Seriously

Your home inspection is your last line of defense. In competitive markets, buyers may give up their rights to a home inspection but don’t.

Make the most of your home inspection. Understand what it includes and doesn’t include. Show up and ask and be prepared to ask questions.

Work with your buyer’s agent and hire a great home inspection and review any issues with your agent. You should expect a home to be safe sound and all systems functioning unless otherwise specified.

Tips For Closing On Your New Home

A typical closing is between 30-60 days after submitting an offer. Here is some advice for first-time homebuyers that will make your time in escrow move smoothly.

#21 Time Moves Quick

Be prepared to act quickly. The bank will be requiring a lot of documents and want them quickly. It is a hurry up and wait game that can be frustrating.

Know what the bank is going to expect from you and be prepared to deliver in a timely manner. Don’t you be the reason why your closing is delayed.

#22 Keep Your Credit Status Quo

While waiting to close on your home keep your credit profile exactly as is. Don’t make any changes. Avoid changing jobs, don’t buy a boat or a car, don’t close credit cards and don’t open new ones.

In your excitement to own a new home, you might be tempted to open up a Home Depot credit card or one at Jordan’s furniture. This is actually a common home-buying mistake. But wait until after the closing before making changes to your credit. A new card could impact your ability to qualify for your mortgage.

And, as a last-minute tip banks will pull your credit and verify your job, once again just prior to closing.

#23 Don’t Skip Your Final Walkthrough

Your final walk-through is one of the final steps of the home buying process. It is your final chance to make sure the home you are about to purchase is in the same condition as you viewed it, there is no new damage to the house and that all the systems are functioning properly.

Once you close on your home, you are agreeing you are buying the house as-is and will have very little recourse after you move in. Don’t skip your final walkthrough and make sure you go through the home thoroughly

Final Advice For First-Time Homebuyers

There are so many other first-time home buyer tips I could pass along but I pulled out many of the more important pieces of buying your first home.

Get an advanced understanding of each step and rely on your professionals. A good mortgage professional, real estate agent and attorney are worth their weight in gold.

They know what you don’t know and it is automatic to them. They are immersed in real estate every day.

Be prepared to buy your first home and enjoy this exciting time.

23 First-Time Home Buying Tips That Matter! was written by Kevin Vitali- Your Massachusetts REALTOR. If you are looking to buy a home, I would love to partner with you to help you make the most out of your first home purchase. Call me at 978-360-0422 let’s chat!