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The North Shore Association of REALTORS® (NSAR) is a non-profit advocacy, support, and education resource for REALTORS® and the public.
Disclaimer: We hope that as consumers, you are able to use the information in our website to enhance your real estate knowledge. Please note that while our intent is to always provide the most updated and reliable information, we are not responsible for the veracity of the content on any of the third-party links below. Please exercise your best judgment and consult a REALTOR® or any of our Affiliated Real Estate Professionals if you need further clarification. If you require legal services, our only advice would be to contact a licensed attorney.
- West Newbury
- Community profiles - education
- Alphabetical List and Link to Towns
- MCAS results
- MA Statistics
- Pollution Scorecard
- Compare Crime Town to Town
- Home and Community Resources
- Predator Watch
- Ten Biggest Home-Buying Mistakes
- The Money Pit
- National Association of REALTORS® homebuyers and sellers information
- Glossary of Housing terms
- Industry terms for rookies
Dangers in the home
Many houses and apartments built before 1978 have paint that contains lead (called lead-based paint). Lead from paint, chips, and dust can pose serious health hazards, from behavioral problems and learning disabilities, to seizures and death, if not taken care of properly. Children six years old and under are most at risk.
Federal and State law require that:
- Sellers have to disclose known information on lead-based paint and lead-based paint hazards before selling a house. Sales contracts must include a disclosure form about lead-based paint. Buyers have up to ten days to check for lead hazards.
- Landlords have to disclose known information on lead-based paint and lead-based paint hazards before leases take effect. Leases must include a disclosure form about lead-based paint.
- Purchasers of a home built before 1978 in which a child under six will live or continue to live must have it either deleaded or brought under interim control within 90 days of taking title.
- Beginning in April 2010, federal law will require that contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination.
- US EPA’s lead paint site
- Massachusetts Department of Public Health & Environmental Health
- Childhood Lead Poisoning Prevention Program
- Property Transfer Lead Paint Notification form
According to the Massachusetts Office of Health & Human Services, radon is a naturally occurring radioactive gas that originates in the ground and can move into any air space, such as basements, crawl spaces, or other openings, where it can accumulate. As a result, radon concentrations tend to be greater in the lower levels of a home, such as the basement. Houses with little air exchange because of improvements to prevent heat loss will generally have higher indoor radon levels than draftier houses. Radon cannot be detected by human senses because it is colorless, odorless, and tasteless.
When radon undergoes radioactive breakdown, it decays into other radioactive elements called radon daughters. Radon daughters are solids, not gases, and stick to surfaces such as dust particles in the air. If contaminated dust is inhaled, these particles can adhere to the airways of the lung. As these radioactive dust particles break down further, they release small bursts of energy that can damage lung tissue and therefore increase the risk of developing lung cancer. In general, the risk increases as the level of radon and the length of exposure increases.
The Environmental Protection Agency (EPA) has recommended guidelines for maximum radon levels. Concentrations of radon gas are measured as "picocuries per liter" (pCi/l). The EPA suggests that if a radon test results in a reading greater than 4 pCi/l, remedial measures should be taken to lower the average annual exposure to radon. High levels of radon are reduced through a mitigation system installed into the home.
The Massachusetts Department of Public Health, Radiation Control Program in conjunction with the EPA did a study in 1988, and with the data obtained it is possible to estimate the potential of radon problems by county. The data shows that 1 out of 4 houses may have levels above the 4pCi/L action level. However, the only way to know if your home has a radon problem is to do a radon test.
- Mass.gov radon information
- EPA Indoor Air Quality Clearinghouse
- The Commonwealth of Massachusetts provides a great deal of environmental-related information.
Foreclosures & Short Sales
Foreclosure properties, a/k/a bank-owned or Real-Estate-Owned (REO) properties, are becoming more common since the collapse of subprime mortgages and the recent economic downturn. In a foreclosure, a homeowner is delinquent on their mortgage and the mortgagee [the bank(s) or lender(s)] files a pre-foreclosure notice and ultimately foreclosures on the property. Often, the mortgagee buys the property at auction for what is owed on the note and lists the property with a REALTOR® on the Multiple Listing Service. Additionally, HUD maintains a site with their foreclosure properties but many of these properties are also on the MLS. There are several distinctions to note when buying bank-owned properties so you should make sure that you are working with a REALTOR® who can guide you through the process.
A short sale is often compared to a foreclosure property but it is a different animal altogether. By definition, a short sale is a situation in which a homeowner is selling the property for less than what is owed [including mortgage(s), taxes, and/or other liens] and the seller is “short” of the amount needed to make up the difference. For example, if a homeowner owes $225,000 on a property and the property’s market value is worth $200,000, then this is a potential short sale.
Very often with a short sale, the homeowner is in arrears on their mortgage payments, and the mortgagee (the bank or lender that lent funding to the seller for the purchase or refinance) has filed a pre-foreclosure notice. The homeowner now has several options:
- Get current on their mortgage(s) and avoid foreclosure;
- Sell the property and pay off the difference at closing. If the seller is able to do this, then it is not a short sale, but often this is not an option as the seller does not have the funds to pay off the owed amounts plus the late fees and other associated costs;
- Walk away and allow the property to get foreclosed on. Unfortunately, many home owners decide that this is the best option for them, especially if they have done 100% financing or interest-only loans and have no equity to try and salvage; or
- Sell the property to avoid foreclosure and get the Bank to accept a short sale.
If the seller opts for the last option, the seller’s mortgagee (the bank or lender) is going to lose money with any potential sale. Therefore, in order for the seller to sell the property, get their mortgage(s) discharged, and grant marketable title to the buyer, the bank/lender has to approve the sale. If the bank/lender chooses to do so, then this is a short sale.
The most common type of auction for the sale of real estate is bank auctions, which can sometimes be a fantastic value for the savvy real estate investor. Very often, a property can be purchased at a bank auction for what is owned on the note, plus the costs associated with foreclosure and conducting the auction. Bank auctions can also potentially be a very good investment for the lay buyer, however it may not make sense for most buyers, particularly first-time homebuyers.
- Sometimes the auctioneer makes the subject property available for an inspection at a set day and time before the auction, but very often there is NO opportunity to inspect the property before hand and your must purchase the property AS-IS with NO HOME INSPECTION CONTINGENCY.
- Similarly, when you bid for a property at auction, you must put typically put down a substantial non-refundable deposit if you win the auction.
- There is almost never a mortgage-financing contingency allowed, so if you are unable to obtain financing for whatever reason, you risk losing your deposit.
- Banks and holders of auctioned properties usually require you to close within 30 days of accepting an offer on a foreclosed property, and the terms of the deal are absolutely NOT negotiable.
- There is no contingency allowed for delivering marketable title, so you must prepare to take the property with all encumbrances or title issues.
There are other types of auctions other than bank auctions. You should definitely check with your local REALTOR® for more details.
Tax Assessments & Abatements
Real estate property taxes are determined by the combination of the following:
- The city or town’s residential tax rate and
- That city/town’s most recent tax assessment of property value
For example, according to the Beverly Assessor’s Office, the residential tax rate is $10.40 per $1,000 of assessed value. (Some towns have a different tax rate for commercial properties). Each year, the Assessor’s Office assesses the town’s real estate to determine the “full and fair cash value” of the property so that the taxpayer may pay only his/her fair share of taxes. If the assessed value of 123 ABC Street in Beverly is $300,000, the annual property taxes would be $3,120.00 ($10.40 X $300). Assessed property values in Massachusetts are to be determined by fair market value.
Taxpayers have the right to file for an Abatement of their taxes if they believe the property has not been fairly assessed, i.e. their property is assessed for higher than fair market value. Information regarding applications and deadlines to file for Abatements is available at your local Assessor's Office. Applications for abatements are due on or before the due date for payment of the first actual bill. The Assessors Office has three months to take action on your abatement application. If you are not satisfied with the action taken by the local Board of Assessors office regarding your request for abatement and/or exemption, you have the right to appeal to the State Appellate Tax Board. If you have any questions or would like to request an application of appeal, you may also call the Appellate Tax Board.
Also, many communities allow for searches online for assessor's information and property records, such as square footage. http://publicrecords.onlinesearches.com/Massachusetts-Assessor-and-Property-Tax-Records.htm
Glossary of financial terms:
Since 2001, senior citizens have been able to claim a refundable credit on their income taxes for property taxes paid on residential property owned or rented in MA. Called the Senior "Circuit Breaker" Tax Credit, it is equal to the amount by which their property tax payments in the current tax year (excluding any exemptions and/or abatements), including water and debt sewer charges, exceed 10% of their "total income" for the same current year. To claim the credit, eligible taxpayers must submit a completed state Schedule CB, Circuit Breaker Credit, with their state income return. The form is available on the web at www.mass.gov/dor. Eligible taxpayers who do not normally file a state income tax return because they do not owe taxes will have to file a return with Schedule CB to claim the refund. For more information, please see the online brochure "Property Tax Exemptions and Deferrals" from the Secretary of State's Office at www.sec.state.ma.us/cis/cisptx/ptxidx.htm, or contact Citizen Information Service at 617-727-7030, 1-800-392-6090 (outside of metro Boston), or firstname.lastname@example.org, for a copy. For specific questions about this credit, please contact your local assessor, or the MA Department of Revenue at 1-800-392-6089.
Mortgage & Financial information from the National Association of REALTORS®:
1031 tax transfers
- Five Misconceptions of 1031 Exchanges
Neighborhood Assistance Corporation of America [NACA]
Ginnie Mae Buying vs. Renting calculator
Loan comparison mortgage calculator
Whether you are a first-time home buyer, a seasoned veteran, or a real estate investor, the home-buying process should be exciting, emotional and successful. There are many steps to the home-buying process; below is a general chronological timeline:
- Hire a REALTOR® that is knowledgeable in your area to represent you as a buyer agent. You should not assume that all real estate licensees are REALTORS®. A salesperson or broker is only a REALTOR® if he or she is a member of the National Association of REALTORS®.
- You should choose a licensed mortgage broker/loan officer to pre-approve you for a mortgage loan. This is an important step as the pre-approval process will determine how much you can afford to spend on your home based on your income and expenses, your credit score, and other factors. Here’s an example of a mortgage loan application. A mortgage professional should be knowledgeable on various types of mortgage financing, including FHA and VA loans, Renovation/Rehabilitation and construction loans, Fannie Mae & Freddie Mac guidelines, and MassHousing requirements. Ultimately, your mortgage professional’s job is to try and put you into a loan that best serves your financing needs. Keep in mind that the lower interest rates are not always the best loan product as there are many factors to consider, including the estimated closing costs and settlement charges, the terms of the mortgage and the type of loan, the amount of points (if any) or mortgage insurance, and many other factors.
- Discuss with your REALTOR® the search criteria that meets your wants and needs (e.g. communities, types of properties, minimum number of bedrooms/bathrooms/square footage, etc.)
- Familiarize yourself with the neighborhoods and drive by the homes that look attractive in your MLS account to make sure that the street and neighborhood meet your requirements.
- Contact your REALTOR® to schedule showings at a time that works for both of you. At or before your first showing, your REALTOR® should present to you a Real Estate Licensee Disclosure form that will explain who (s)he is working for – hopefully you!
- View homes and compare and contrast the properties that you are seeing with your initial wants and needs. Don’t be too surprised if your search criteria ends up adapting to the mark - that happens occasionally especially with first-time home-buyers and persons relocating to this area.
- When you find a property that you may want to purchase, ask your REALTOR® to do a market analysis on the home. Discuss a negotiation strategy with your REALTOR®
- Make an offer on the property. Your REALTOR® will likely use a Standard Form offer approved by a local or state Association of REALTORS®. Here is copy of our Standard Form offer. Good luck!
- Once there is an accepted offer and a signed contract, hire a licensed Inspector to inspect your home. The state has a home inspectors fact sheet for consumers. Also, attached is a sample home inspection report
- Most contracts have language for the parties to sign a Purchase and Sale Agreement (P&S), which replaces [and thus nullifies] the original contract. If you have not already by this point, hire a real estate attorney to negotiate the P&S. Here is a sample P&S from the Massachusetts Association of REALTOR®
- Obtain a mortgage loan commitment from your lender. Here’s a sample commitment letter. Also, your lender should provide you with a Good Faith Estimate (GSE), itemizing the estimated closing costs that you will have to bring to the Closing. Here’s a sample good faith estimate.
- If you are purchasing a single family or multifamily home, your lender is going to require that you purchase hazard insurance prior to the closing. Property insurance is substantially different than motor vehicle insurance in many ways, so you should definitely speak with a professional insurance agent. Some properties may require flood insurance – your insurance agent or REALTOR® will know if it is required. If you are purchasing a condominium, the condominium association will have a master insurance policy (which covers the building and common areas from fire and liability), but you should still purchase a condominium unit policy covering your personal property for theft and for any liabilities that occur in your unit or areas of exclusive use. Also, your lender will require you to purchase lenders title insurance, which insures the marketability of title to the property you are purchasing. At some point, you will be asked if you wish to purchase owner’s title insurance, which is optional. You should discuss this with your lawyer prior to the closing.
- Before the closing, perform a walk-through at the property to make sure the property is in the condition as contracted. Also, you should contact the utility companies and change the name of the accounts. It is usually financially beneficial for you to do this before the utilities get shut off.
- At the closing, in addition to the note, mortgage (assuming your are financing the transaction and are not a cash buyer), and other miscellaneous documents, you will receive and sign the Department of Housing and Development Settlement Statement – many real estate professionals will simply call this “the HUD.” Here is a sample HUD settlement statement; this 2-page document will illustrate every financial aspect of the purchase and sale. Your attorney and/or the bank’s settlement agent [the closing attorney] will be able to break it down and explain this in detail. Bottom line: you are going to need a bank check for any amounts owed at the closing, a driver’s license or passport and most attorneys are going to advise to bring a check book just in case.
- Enjoy… well, not that easy! Make sure to keep the closing documents, particularly the HUD for tax purposes. Now that you are a home-owner, call that trusty insurance agent and make sure that you have adequate motor vehicle insurance coverage and/or an umbrella insurance policy.
Homes that are built in communities or areas that are not on city/town sewers have private sewer systems – either cesspools or septic systems. A cesspool has a pipe carrying waste from the home to a pit that distributes liquid waste. A septic system has a tank, distribution box, and a soil absorption system often referred to as a "leaching field" or "leach field."
Private sewer systems are regulated both by local boards of health as the primary regulatory authorities and by the state Department of Environmental Protection (DEP), which has been governing these systems under Title 5 of the state environmental code since 1995. As you can imagine, improperly functioning cesspools and septic systems and are a major concern for the cleanliness and use of coastal waters, rivers, and water supplies.
Title 5 requires owners of private sewer systems to inspect the cesspool or septic system prior to a home being sold or expanded. This “Title 5” inspection also includes a soil evaluation test, which must be performed by a DEP-approved soil evaluator. Most often, if a private sewer system fails inspection, it must be repaired within 2 years.
Wherever possible, Title 5 requires the owner of a failed system to upgrade to full compliance with Title 5. If this is impossible, often the local Board of Health is authorized to approve a "Local Upgrade Approval" that brings the system as close to full compliance as possible in accordance with certain minimum criteria. When this happens, the homeowner must then apply to the local board of health for a variance from Title 5 regulations.
REALTOR® Code of Ethics
Commercial real estate
Declaration of Homestead
In the Commonwealth of Massachusetts, a property owner can file with the Registry of Deeds a “Declaration of Homestead”, which protects up to $500,000 of a household’s principle residence against attachment, levy on execution, or sale to satisfy debt (except for certain cases that are specifically excluded by the statue) – for a one-time $35 filing fee. For additional information on Homesteads see http://salemdeeds.com/homestead.asp. You can also download the Essex County South (Salem) Registry of Deeds Homestead form directly here: http://salemdeeds.com/html/DECLARATION%20OF%20HOMESTEAD.pdf
VA approved condos
FHA approved condos
Housing and Economic Recovery Act of 2008:
One of the programs included in the new housing bill signed by President Bush on July 30th is a $7,500 homebuyer tax credit. While this tax credit has the ability to make the cost of homeownership more manageable, it is important to understand that this “tax credit” is actually an interest-free loan that is repaid over 15 years.
Below is a Q&A that summarizes the program’s features that was put together by the National Association of REALTORS®.
- Q: What is the Amount of Credit?
- A: 10% of the cost of home, not to exceed $7,500
- Q: What properties are eligible?
- A: Any single-family residence (including condos, co-ops) that will be used as a principal residence.
- Q: Is the tax credit refundable?
- A: Yes. It reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.
- Q: Is there an income limit?
- A: Yes. The full amount of credit is available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). The benefit of the credit phases out above those caps ($95,000 and $170,000, respectively).
- Q: Is this program for first-time homebuyers only?
- A: Yes. A portion (6.67 % of credit) has to be repaid each year for 15 years. If the home sold before 15 years, then the remainder of credit recaptured on sale.
- Q: What is the effective date of the program?
- A: The credit is good on home purchases on or after April 9, 2008
- Q: When does the program conclude?
- A: July 1, 2009
- Q: What is the tax credit’s interaction with Alternative Minimum Tax?
- A: The credit can be used against AMT, so credit will not throw individual into AMT.
The recently-passed Housing and Economic Recovery Act of 2008 developed a refinance program for homebuyers with problematic subprime loans. Under the new law, lenders can write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008. This rescue plan is aimed at stabilizing the housing economy and preventing foreclosures.
According to National Association of REALTORS® estimates, the recently passed Housing and Economic Recovery Act of 2008 will increase Fannie Mae and Freddie Mac conforming loan limits by as much as $62,850 in Essex County, Massachusetts - from $419,000 to $481,850.
These reforms to GSE (Government Sponsored Enterprise) insured loans, which have REALTORS® have actively lobbied for in the past several years, should stabilize the housing market and help ensure for safe, reliable mortgages for home purchasers.
With the recently-passed Housing and Economic Recovery Act of 2008, Congress permanently increased FHA loan limits to up to 115% of local area median home prices – capped at $625,000. According to NAR estimates, in Essex County this will increase FHA-insured loans to up to $481,500 (same as the Fannie Mae/Freddie Mac conforming loan limit).
Additional FHA reform included streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. Also, the downpayment requirement on FHA loans will go up to 3.5% (from 3%). REALTOR® leadership strongly supports these reforms and feel that the new guidelines make FHA a stronger, more modern and flexible program.