Article 1 (Weatherproof Your Home For Winter) Article 2 (November Roundup: Home Values Keep Going Up) Article 3 (Does Your New Home Have Lead Paint?) Article 4 (Q&A with Michael Merrill) Article 5 (Never Pay Capital Gain Taxes Again!) Article 6 (The Best News in 2000 for Buyers of Real Estate!)

WEATHERPROOF YOUR HOME FOR WINTER By Davis Rowley, President of the Residential Association of Realtors It's time to prepare your home against winter's harsh weather. A few simple, precautionary steps can save money and add to the value of your home. Keep in mind the benefits of making the improvements and the risks involved in leaving some jobs unfinished. The following are winter weatherproofing tips: Heating systems: Heating systems vary, but in general, industry standards advise a professional check-up every year for oil-powered units and every three years for those powered by gas. However, do-it-yourself maintenance also is advisable. With the furnace off, you should replace air filters, and vacuum dust from the blower, fan blades grills and air intakes. Replace any cracked or frayed belts. If your furnace supplies heat using hot water in pipes or radiators, you may need to lubricate the motor that pushes water through the system. Remember: the efficiency of hot-water systems can be impaired if air gets caught within the systems, because air takes the place of hot water. Make sure the valve that lets air escape is working properly. Chimney flues: Checking your chimney is another important weatherproofing task. If you are uncertain about the condition of a furnace or chimney flue, it's best to hire a chimney sweep to clear out creosote, the flammable oily residue that accumulates when wood is burned. If left uncleaned, creosote could be re-ignited, causing a chimney fire. If you decide to clean out the furnace flue yourself, take apart exposed pipe sections and brush them outdoors. To clean a chimney flue, pull a sand-filled canvas bag back and forth through the opening, working from the roof. Make certain the flue is closed to keep soot from filtering inside the house. Smoke detectors: Although battery-powered smoke detectors should be tested year round, it is crucial to test them in the winter, because sources of fire, such as fireplaces, wood stoves and portable heaters are used. Testing battery-powered units is simple -- make sure the batteries work. A unit connected to the electrical system should also be tested, but probably does not need any maintenance except, perhaps, a light dusting. Air or water leaks: Look for air cracks around windows, doors, pipes, ducts and other openings. It is important to seal these leaks with flexible caulk. Seams where siding meets windows and doors should also be caulked. On brick siding, fill in eroded joints with mortar, to keep out air, water and snow. Insulation: Check the attic to see if insulation needs to be added or replaced. This is the most significant area of heat loss in many homes, so it is also important to see that it has proper ventilation. Inadequate ventilation could lead to premature deterioration of the insulation materials. It may be necessary to check insulation in exterior walls, crawl spaces and along foundation walls, as well. Gutter cleaning: Clean the leaves from all gutters. Then, make sure the drainage system works by running water through them. Preparing your home for winter is a smart way to cut energy costs and make sure your home is safe. It's a job that is well worth the time and effort.

November Roundup: Home Values Keep Going Up By Jay McHugh of RE/Max Affiliates No matter what the future holds for housing, no one can dispute the fact that the past few years have been great times to own a home. A new study by First American Real Estate Solutions shows that in the past year home values in metropolitan areas have increased an average of 7 percent nationwide. Denver, Minneapolis, Boston, Chicago and several California communities all have shown gains above10 percent. Even in areas where values have sagged somewhat in the past year - such as New York and Orange County, California - it is only after a decade worth of increases that already had moved values up by as much as 25 percent. According to First American, most of the 35 metropolitan areas included in the study have seen gains of between 4 to 8 percent, with the average increase coming in around 7 percent. U.S. home values are now, on average, almost 29 percent higher than in 1990, the study said. Interest rates matter less in home buying. At this point it?s becoming hard to tell what would turn around America's housing market. In the past year the Federal Reserve has raised interest rates three times, yet it still appears more than 5.25 million homes will change hands this year, a record number of transactions, and almost all economists are saying 2000 could also be a very strong year. In the past, the economic rule-of-thumb was that every rise in interest rates would eliminate roughly 750,000 potential homeowners from the market because they no longer would qualify for mortgages. Now, however, National Association of REALTORS® economic researchers are beginning to doubt the power of interest rates to curtail housing. Researchers point out that mortgage companies are so competitive and Fannie Mae and Freddie Mac have become so innovative in their underwriting, that almost any American with a steady job should be able to qualify for a home. Some researchers are beginning to feel that what's really behind the current decline in sales is that most housing needs have been met over the past two to three years. Now easier for immigrants to get homes sooner . Immigrants who have two years of residence and a solid work history will be able to achieve ownership more quickly than immigrants in the past through a new initiative being offered by Bank One Mortgage in cooperation with Fannie Mae. The $100 million program has five key features: Down payments as low as 3 percent for eligible, working non-permanent residents who have applied for a permanent resident card (known as a "green card"). More flexibility for borrowers with cash on hand. A borrower's most recent hourly wage rate can be used to determine qualifying income. Boarder income from relatives living in the same household is permitted. Part-time or multiple job income of a 12-month duration averaged over the most recent 24 months is permitted. To qualify, the property must be owner-occupied and the down payment must be from the borrower's own funds. The Immigration and Naturalization Service believes there are now more than 26 million immigrants in the United States, with most of that population arriving since 1980. By the year 2010, the total U.S. immigrant population is projected to be 31.6 million people, or 10.6 percent of the American population.

Does Your New Home Have Lead Paint? By John MacIsaac President, ASAP Lead Paint Inspections, Inc. John MacIsaac is a certified Lead Inspector and a lifelong resident of Boston. His firm, ASAP Lead Paint Inspections, Inc., has performed more than 7,000 inspections in Massachusetts and has 16 years of experience serving both residential and commercial property owners. To schedule a consultation or inspection, call ASAP at 1-800-349-7779 or visit ASAP on the Web at www.asapleadpaint.com You've finally found the house of your dreams: a stately grey and ornate Victorian mansion with white trim surrounded by 2.5 acres of sweeping lawns, towering elms, and English gardens. You can't believe this slice of historic grandeur is about to be your new home. And you can't wait to move in and start the interior renovations that will make it personally yours. But there's a hitch you hadn't counted on: Your dream house has lead paint. Don't worry -- you're not alone! Every year, thousands of home buyers and property investors face the same dilemma. The fact is, lead paint can be found in almost 75% of all housing built before 1978. It's not your fault, and there are plenty of resources for ensuring that a lead paint hazard doesn't get in the way of your goal of enjoying the property of your dreams! Start With An Inspection The first step to removing a potential lead hazard from your home is to find out if your home or investment property has lead paint. You'll need to hire a state certified lead inspector to do the job. The inspection itself is simple, straightforward, and safe. It's economical and won't damage furnishings or harm pets. Results are obtained in minutes. ASAP Lead Paint Inspections, Inc. uses XRF laser technology, the most advanced portable lead detection technology available. It scans woodwork, windows, baseboards, stairwells and other parts of your home. It even finds lead paint when the paint is several layers below the surface of newer paint. After the inspection, you receive a full report summarizing the results and specifying whether any lead paint in your home poses a hazard. And remember, never rely on do-it-yourself lead inspection kits you may see in stores or catalogs. Your inspection must be performed by a certified inspector to properly protect yourself and your children from a lead paint hazard, and to comply with the Massachusetts State Lead Law. Know The Law Lead paint poisoning is a serious health hazard, and you'll want to do everything you can to protect your own children and children living in property you own from inhaling or inadvertently ingesting lead paint dust or peelings! The law applies to all residential properties built before 1978, including single-family homes. If a child under the age of six lives in your home or in property you own, you must comply with the law by removing a lead hazard within 30 to 90 days. Under some circumstances, you may be permitted to postpone permanent removal of the lead paint hazard for up to 2 years. That could give you the time you need to finance a long-term solution to your lead problem. But to qualify, you must have a certified lead inspector perform a "risk assessment." Not all inspection firms are certified to perform risk assessment. ASAP Lead Paint Inspections, Inc. is qualified, and performs risk assessment for many of its clients. Financing For Lead Removal Home owners have a wealth of options for getting assistance with the removal of lead paint that poses a health hazard. In some cases, loans may be available at 0% financing. State and federal programs exist that can offer significant benefits and financing. To find out what programs you may be eligible for, call the Massachusetts Childhood Lead Poisoning Prevention Program at 1-800-532-9571.

Q&A By Michael Merrill of Merrill & McGeary, a real estate attorney. Q: I am purchasing a house and taking a mortgage. The mortgage broker had a number of different financing options to offer me. I decided to accept a slightly higher annual interest rate, but pay no points or closing costs. However, just prior to closing I received a settlement statement which detailed all of my costs, and surprisingly, I was responsible for some closing costs. Who determines what I pay for and what the mortgage company pays for? What can I do if I disagree with my mortgage representative? L.S. Watertown, MA A: Typically, in a ?no point, no closing cost? mortgage program, the borrower will pay interest in advance, insurance and real estate tax escrows and the owner?s portion of the title insurance premium. The mortgage company would pay the administrative, credit and appraisal fees, legal and title costs, recording fees, the mortgagee?s portion of the title insurance, plot plan, and courier?s fees. The distinction between the categories of costs are those which relate to the underwriting of the loan, the preparation of the loan documents, and closing the loan on the one hand and costs related to ownership of the home on the other. These are fairly standard categories, but in a particular transition some mortgage companies may attempt to negotiate with the borrower on the closing costs. At the time the mortgage application is made, the mortgage broker has an obligation to disclose in writing to the borrower the breakdown of costs. If you have a disagreement with you mortgage broker, review that disclosure statement. If the broker is not performing as agreed, tell your real estate attorney or make a complaint with the broker?s supervisor. Michael W. Merrill Q: I am a Trustee in a Condominium. The units in the condominium have fireplaces. Recently, several fireplaces, flues, and chimneys were inspected and it was determined the flues were not properly lined. The inspector advised the owners not to use the fireplaces until all the repairs were made. My suspicion is that all the fireplaces have the same problem. This is a serious safety issue for the Condominium. How do you think the Trustees should proceed? A: Initially, you should determine whether the repair and maintenance of fireplaces, flues and chimneys are the unit owner?s responsibility or the Trust?s responsibility. Read the section of the Master Deed which describes the unit boundaries. I expect the Master Deed will indicate the flues? responsibility for repair and maintenance. Then the Trustees should notify the unit owners that all fireplaces will be inspected by the Trustees at the expense of the Trust. If any fireplace, flue or chimney is determined not to be safe, the unit owner should be instructed not to use the fireplace until the repair can be made. The Trustees have the authority to enter units to make inspections and/or repairs in this situation. However, if a unit owner will not provide access, the Trustees should consult the Trust?s attorney before taking action. Michael W. Merrill

Never Pay Capital Gain Taxes Again! By Robert "HB" Buckner, New England Division Manager for Asset Preservation, Inc., a subsidiary of Stewart Title Company. Questions regarding exchanges can be directed to him at 877-845-1031. What if you could sell your investment property and instead of paying taxes, have the use of all your equity for a new investment? Well, you can. It?s part of the United State Tax Code, Section 1031. The concept of Section 1031 has been on the books since 1921 and is one of the last significant tax advantages remaining for real estate investors! The key advantage of a 1031 is the ability to sell a property without paying any capital gain tax at closing, allowing the earning power of the deferred taxes to work for the benefit of the investor instead of the government. Basic Requirements Although Section 1031 refers to a" tax deferred exchange" it does not require a swap. In 1991 the IRS described how to convert a sale and subsequent purchase of property into a tax deferred exchange by employing (what the IRS calls) a "Qualified Intermediary". The procedure simply converts a sale and subsequent purchase of investment real estate into a tax deferred exchange. Requirement #1: Both the sale property (relinquish) and the purchase property (replacement) must be held for investment or used in a business. This includes rental houses, commercial properties, land and the rental portion of an owner-occupied multi-family. Properties which are clearly not like-kind are an investor?s primary residence or property "held primarily for sale". For example: Stewart owns three rental houses in Jamaica Plain. He can sell them, and buy a small apartment building in Medford; Sarah owns five acres of developable land in western Massachusetts. She can sell it, buy a vacation rental in Florida. In fact, sometime in the future she may convert that rental property into a second home. Requirement #2: The IRS requires an investor to identify the replacement property(s) within 45 days from closing on the sale of a relinquished property. The 45-Day Identification Period begins on the closing date. Exchangers have a number of ways to properly identify properties. They may identify up to three replacement properties of any value (Three-Property Rule). Alternatively, they can identify an unlimited number of replacement properties, if the total fair market value of all the properties is not more than twice the value of the property sold (200% Rule). Requirement #3: Close on the purchase property by the earliest of either: 180 calendar days after closing on the sale of the relinquished property or the tax return due date for the year the property was sold (unless an automatic filing-extension has been obtained). Requirement #4: The most common exchange format, the delayed exchange, requires investors to work with an IRS-approved middleman called a "Qualified Intermediary." The Qualified Intermediary documents the exchange by preparing the necessary paperwork (Exchange Agreement), holding proceeds on behalf of the Exchanger, and creates the exchange between the investor and the Qualified Intermediary. It is recommended that an Exchanger work with an experienced and financially secure company. Note: To defer all capital gains taxes, an Exchanger must buy a property or properties of equal or greater value (net of closing costs), reinvesting all net proceeds from the sale of the relinquished property. Any funds not reinvested, or any reduction in debt liabilities not made up for with additional cash from the Exchanger, is considered "boot" and is taxable.

The Best News in 2000 for Buyers of Real Estate! By Sara Rosenfeld, Sr. Vice President and Co-manager of the Brookline office of Hunneman Coldwell Banker (617) 731-2447 If you have decided 2000 is the year you are going to be a homeowner or you are still thinking about it, here is some very valuable information. The best news in 2000 for buyers is that FNMA (Federal National Mortgage Association), the ?rule makers? of the mortgage industry, have made some very important changes to the guidelines for conventional mortgages. A conventional mortgage has limits for the amount of money you can borrow on a loan. If the mortgage amount exceeds this limit, the loan becomes a Jumbo mortgage. If you read the current mortgage rates and there is an interest rate quote, this rate usually reflects the conventional mortgage program. For instance, if the rate is advertised at 8% and 1 point, this is for a conventional mortgage. If the mortgage is a Jumbo loan, there is a higher interest rate charged and possibly more points. A point (1% of the mortgage amount) is the origination fee for placing the loan and is considered part of the closing costs. Prior to December 20, 1999, the upper limit for a conventional mortgage for a condominium or single family house was $240,000. This meant that if your mortgage amount was anything higher than $240,000, you would be charged the rate and points for a Jumbo mortgage. Starting December 20, 1999, this upper limit was raised to $252,700. Here is why this is good news for many buyers. For instance, if you purchased a home for $280,000 and put 10% down ($28,000 down payment), your mortgage amount would be $252,000. If the rates were 8% and 1 point for a conventional mortgage and 8-1/2% and 1-1/4 points for a Jumbo loan, there would be significant savings for a 30 year mortgage. The principal and interest for the conventional mortgage of $252,000 is $1,849.09 and $1,937.66 for the Jumbo mortgage. This is a savings of $88.57 per month, $1,062.86 per year, and $31,885.91 for the life of the 30 year loan. The difference in the point amount is 1/4 of a point, resulting in a $630 savings in the closing costs. The upper limit for a conventional mortgage was also raised for 2-family, 3-family, and 4-family houses. The upper limit for 2-family houses is now $323,400. The upper limit for a 3-family house is now $390,900 and $485,800 for a 4-family house. If you had met with a mortgage loan originator prior to December 20, 1999 to get pre-qualified or pre-approved for a mortgage, I strongly recommend that you call them to review your numbers. Interest rates have also changed, so you may be in for a nice surprise! You may be able to purchase that home at a better interest rate and reduced closing costs! It is very important that you review this information carefully and if you have any questions, contact a mortgage specialist. Good luck and remember that this is a great time to buy a home!