A Teeny Tiny Little Bit of Good News for Investors

The FHA has extended it's flipping waiver through the end of the year to allow properties purchased within 90 days to be resold with FHA financing. This is good news since many buyers are using FHA loans and investors often want to close before the 90 day waiting period. However, in order to do so, the increase from the price at which the house was purchased to the price it sells at cannot exceed 20%, leaving investors very little room for profit after they pay for improvements, closing costs, carrying costs, and commissions. The regulations after 90 days are somewhat more lenient.

For the buyers of a flip to obtain conventional financing, the price increase cannot exceed 20% before 90 days, and after that it can only if the increase is supported by documentation (showing the value of improvements). There are many other requirements as well, depending on the lender and specifics of the situation.

One lender states in their flipping policy,
"Property flip transactions most often, but not always, involve distressed properties acquired at a
discounted price, then resold at an increased sales price to an uninformed buyer."

It is very unfortunate that some rare cases of fraud and dishonesty have caused flipping to be seen in such a negative way. Many distressed homes and other properties are in poor condition, and when an investor purchases one of these properties, they are creating jobs by paying contractors to improve the home, and supporting home values in the neighborhood by taking a property out of foreclosure. Buyers then pay a fair price (often slightly under market value since investors usually want a quick sale) for a property in good condition. Lots of people and the economy benefit here, and I think that this scenario is very common, and probably would be more so if the FHA and other lenders continue to relax regulations that discourage flipping.

House number 4

The next project.... a soon-to-be gorgeous colonial in Holliston

Let it Snow: Great Local Sledding Spots and Indoor Activities

With yet MORE snow coming tonight, it might be time to try out a new sledding spot. Here are a few in the Metrowest area:


Elm Hill Preservation off Route 16 at Wellesley/Natick border
Severance Hill at Wellesley College behind Davis Museum
Warren Park at Wellesley Rec Dept, Route 16 Washington St
Schofield Elementary School, Park at 27 Cedar St. in Wellesley
Kelly Memorial Field om Elmwood Road adjacent to Bates Elementary in Wellesley
Walnut Hill School in Natick
Weston Town Green
Oak Park in Millis


And if you're done freezing your toes off and carrying sleds and kids up and down hills, grab a latte and find a new INDOOR thing to try:


Jump Around in Framingham (www.jumparoundsite.com)
Natick Public Library events/activities (http://www.morseinstitute.org/natick/)
Wellesley Public Library events/activities (http://www.wellesleyfreelibrary.org/home/)
Play Town in Hopkinton (http://www.playtownexpress.com/)
Crazy Jayne's in Natick
Gym Fit (Natick) and YMCA (Framingham) open gym times

What's Happening to the Foreclosures?

According to Boston.com, in Framingham, there was a 4.9% decrease in foreclosures from 2009-2010. While other towns in the state saw an increase, cities and towns in the metrowest area seem to have fared better. After a recent ruling that put the titles of thousands of foreclosed properties into question, housing advocates are lobbying for bills to provide more protection to homeowners facing foreclosure and to require banks to negotiate with homeowners, provide more documentation, and have foreclosures reviewed by a judge. With so many legislative changes on the horizon and predictions of a more active spring market, it seems possible that, at least locally, the flood of foreclosures that the media keeps warning of, may not happen any time soon.

Natick Winter Farmer's Market

If you're missing summer farmer's markets, there is a winter one in Natick every Saturday! It's from 9:30-1 at the Johnson Elementary School (99 South Main St Natick)

Vendors include Tangerini Farm, Freitas Farm, Golden Girl, In Good Taste, Fisher Hill, Deborah's Jams, B&R Artisan Breads, Cocoapelli chocolate, Sassy Sauces, the Pastaman, Jan's Teaspot, Healthy Kitchen, the Natick Organic Farm and more,.

This year so far... a quick market update for Natick

In the first 17 days of the year (no, there is not particular reason I chose to do the first 17), 12 single family homes have sold in Natick for an average of $416,000. There are 59 homes on the market for an average of $676,000. 33 are currently under agreement, and these had an average list price of $540,000.

Buying Foreclosures

While I'm in the process of negotiating these for myself, I figured I'd share a few key pieces of advice for anyone else hoping to purchase a foreclosure.

1. Sign up for daily listings of REO (real estate owned) property through a licensed real estate agent so that you are among the first to see new listings. Foreclosures are usually priced well and often move very quickly, so if you see something you like, request a showing as soon as possible. 

2. If at all possible, bring a professional who can assess the property's condition with you to the first showing so you can avoid surprises if you have an inspection performed later in the process. Most foreclosures are offered in as-is condition, which usually means that in an inspection is done, it is informational rather than something that can be used to further negotiate or request repairs.

3. Do your homework (or have your agent do it for you) ahead of time - know the market value of the home before and after any necessary repairs or updates are completed and what you're willing to pay. Don't be afraid of making a low offer; unlike sellers of other homes on the market, the bank won't be offended. The worst that can happen is they say no!

3. Have a pre-approval letter to submit with your offer, or if you are paying cash, proof of funds. Generally, the fewer contingencies, the more attractive your offer will appear to the bank holding the property.

4. Always get advice from an attorney and have him/her look over all documents and perform a title search... which leads us to

5. Get title insurance and have a title search performed. If you are getting a mortgage, the bank will require this, but buyers and investors often pay cash for foreclosures. If this is the case, it still very important to get title insurance to protect yourself against any defects in the title to the property.

6. Don't get attached! Whether you are looking for a home for yourself or an investment, never get too excited about a property until it's yours. Banks can be unpredictable and even if they have accepted a verbal offer, don't celebrate until it's all in writing. And if it doesn't work out, another one will come along.

Snow Day!

Already got the call that school's canceled for tomorrow and it seems like that's the case with most towns, so I bet there are a lot of happy kids tonight! The last report for tomorrow was that Natick is in the 16-18" area for snowfall... time to get the shovels, snowblowers, and sleds back out!

Grasshopper

Maybe a little variation from the "metrowest" category, but so good I had to comment... besides, from Natick it's only about a 20 minute drive if you avoid traffic.

Anyway, the Grasshopper in Allston has some of the best food in the world. It's cold in the winter (maybe being a vegan restaurant and all they're trying to be environmentally conscious but I think eating with a jacket on might be taking things too far... and this from someone who refuses to use paper towel and keeps her house a toasty 64) and the atmosphere might not be the best, but like I said, possibly some of the best food in the world, so well worth it (and you can always get takeout).

They give you tea - hey, you need something to warm up - and the hot and sour soup, spicy bean cakes, and No Name (some sort of deliciously fried tofu thing) are musts. It's a HUGE menu with lots of typical (and totally different) Chinese dishes but they are all vegan and all amazing (some healthy but don't get the idea that because it's vegan it's all yucky tasting green stuff with no sauce - there's plenty of fried stuff here too). Excellent shakes, smoothies, and desserts also.

So next time you decide to head past Wellesley center or want to pick up take out on the way home from Boston (not that Natick and Wellesley lack good restaurants.... ummm, Lemon Thai, Yama, Dah Mee, Papa Razzi), give it a try!