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Minimizing Stress in Buying a New Home

18 Oct

MetroBoston Publication Date October 17, 2012
By Attorney George Warshaw

The real estate market has heated up. While prices are not what they once were, prices are moving upwards with many properties selling over the asking price.

With pent up buyer demand comes stress, especially if you are selling your home and buying a new one.

Avoid the two most common mistakes that buyers make.

First, if you are selling and buying a new home don’t try to do both on the same day. Sell on one day and buy the next. There is too much that can go wrong to risk it all on the same day.

Second, don’t choose the busiest day of the week to close on your purchase.


What would happen if the deed doesn’t get recorded that day? You might not be able to move into your new home for several days. If the sellers were counting on the money to buy a new place to live on the same day, what will they do?


All this can be avoided: never choose a Friday, the last day of any month or the day before a holiday for your closing. These are the busiest real estate days. Why take a chance?


Everything happens very quickly in real estate. Take your time – and a deep breath. © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

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Is Social Security a Better Investment than Real Estate?

16 Aug

MetroBoston, Publication Date August 15, 2012
By Attorney George Warshaw

The Associated Press reported a story that many missed: “Since 2010, Social Security has been paying out more in benefits than it collects in taxes.”

“The Social Security trustees project the [present $2.7 trillion dollar] surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction . . . . The projected shortfall in 2033 is $623 billion, according to the trustees’ latest report. It reaches $1 trillion in 2045”.

If Congress does nothing – which it has been inclined to do (after all, THEIR benefits aren’t affected) – they will have to raise your retirement age, cut your benefits, or raise your taxes. Likely, all three.

Is your condo or three-family house a better revenue source than Social Security? Well, you’ve likely refinanced it to the lowest possible interest rate imaginable.  It will be paid in 30 years.

Which do you think will be a better source of future retirement income: what you already own and can rent or social security?

I’m betting on rental income.

So, if there is any way you can keep or acquire future income generating property, it may be a better bet than social security.

More next week © 2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

Just When You Thought It Was Safe

14 Aug

MetroBoston, Publication Date August 8, 2012
By Attorney George Warshaw

By now most of you know that there exists a secret society of people cloistered far underground, never seeing the light of day, walking hunched over from computer to computer yelling “see that 30 day late, gotcha now!”, who control your credit score and hence your destiny.

It’s bad enough that three competing credit reporting agencies put their own spin on your creditworthiness and some gnome then “scores” your credit like a Vegas Bookmaker, but now there’s a new referee in town who will have even more to say.

On July 10th, the credit scoring gnome “FICO” joined with CoreLogic (a data mining firm) to design a wholly new score specifically for mortgage lenders and borrowers. The FICO Mortgage Score Powered by CoreLogic is based on information provided by CoreLogic in a detailed report called the CoreScore Credit Report.

The report grabs information that Experian, TransUnion and Equifax don’t consider. CoreLogic has access to information about you that others don’t.

Pay your rent late or miss an alimony or support payment (how would they know?) and you could have a problem getting a loan. Supposedly if you dispute an inaccurate item on the CoreScore report, the disputed item won’t be held against you.

Let’s see how that works out!

 © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

Starting At The Beginning

8 Aug

MetroBoston, Publication Date August 8, 2012
By Attorney George Warshaw

I received an email from a reader asking:

“If I want to buy a house what is the proper place to look for information and also a good price?”

Whether you’re a beginner or an experienced buyer, the place to start is with a mortgage lender, unless you’re lucky enough not to need one.

Almost every seller wants to know if you have been “pre-approved” for a loan; in other words, that a bank has checked out your income and credit and all that is needed to give you a loan is an appraisal of the property, verification of the information provided and a few routine details.

The pre-approval letter will list a loan amount that you qualify for based on your income and credit.

With that in hand, choose the area where you want to live and start shopping online for properties that that fit your price range – but avoid registering online with a broker if you can (you may get more solicitations than you can handle). You can usually get property details elsewhere if you search around.

Ultimately, you’ll want to find a good buyer’s broker who works in that location. Ask your lender, your lawyer or others for a recommendation.

More next week © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

It’s a Penalty. It’s a Tax. No, It’s a Penalty. Huh?

1 Aug

MetroBoston, Publication Date July 18, 2012
By Attorney George Warshaw

The legality of new federal health care law was upheld by the Supreme Court under the taxing authority of Congress.

Whether you view the law as imposing a penalty, as some claim, or a tax, as others claim, may depend on your political viewpoint, but when it comes to real estate it’s clearly a tax.

Beginning 2013, the new health care law imposes a tax on the sale of certain real estate to help pay for the new law. While the sales tax won’t hit everyone (technically it’s a tax on profits), it will hit many.

The good news. You will likely not have to pay a tax on the sale of your home if your adjusted gross income as an individual is under $200,000 ($250,000 if married filing jointly) or the profit from your sale was not enough to impose any capital gains tax.

The bad news. You may be subject to a 3.8% tax on any profit from the sale of a second home or rental property or, if you are a high income earner and are subject to capital gains taxes on the sale of your primary residence.

Check with your tax advisor to see if the new real estate tax applies to you. © 2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

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Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Is Your Condo Underinsured?

27 Jun

MetroBoston, Publication Date June 27, 2012
By Attorney George Warshaw

 

Even condos suffer fires. Lenders are now requiring “walls in” coverage for condos, but what does that mean?

Every condominium has a master fire and casualty insurance policy covering the bricks, mortar and common areas – but does the master policy cover the walls and cabinets inside each unit as well? Maybe.

There are three types of master condo policies: “all-in” (or all-inclusive), “single entity,” and “bare walls.”

“Take the apartment, turn it upside down and shake it,” one insurance agent told me. “If it doesn’t fall then it’s covered by the ‘all-in’ policy. This policy also covers any improvements made to the unit – new cabinets or renovations

The “single entity” master policy is the same as the “all-in” except that it doesn’t cover any improvements made since the condo was created.

“Bare walls” covers common areas only – and not any interior walls or the fixtures inside a unit.

Make sure your condominium documents require the right coverage – and that your agent is providing you with that coverage.

One last word on insurance. It’s sometimes worthwhile to get your personal unit owner’s policy from the same insurance carrier or agent that handles the building. You may be able to avoid finger-pointing by two different insurance companies in the event of a claim.

© 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

 

Do You Need A Lawyer to Buy A House?

18 Jun

MetroBoston, Publication Date June 18, 2012
By Attorney George Warshaw

If you are getting a mortgage the bank will hire an attorney to examine the title and conduct the closing. Do you really need to hire and pay for your own lawyer as well?

The role of the lender’s attorney is to implement the loan, not advise the buyer on legal matters or assist in the purchase and sale agreement.

If a title examination shows an easement giving someone the use of or the right to go across your property, as often occurs, the lender usually won’t care but the buyer might.

Or if an examination reveals a restriction on the color you can paint your house, the ability to add a deck, or a myriad of other common matters, the lender will likely not care.

Chances are you won’t even be told about any of a number of matters affecting the property. They’ll just be listed in a form that you might not even see at the closing.

Don’t count on the lender’s attorney to provide any advice if a problem arises. Their job is to collect the money, clear any liens, pay the seller, and get the lender’s papers signed.

So be a smart buyer: save the pennies on something else. Hire your own attorney and get personal legal advice.

©2012 George Warshaw

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.