Article 1 (Considering a Career in Real Estate?) Article 2 ( Frequently Asked Questions When Obtaining a Mortgage.) Article 3 (Is it the right time to buy Real Estate?) Article 4 (The Misunderstood Coverages) Article 5 (Q&A with Michael Merrill) Article 6 (Thinking of purchasing Real Estate as an investment?) Article 7 (You Are Entitled to Know about Title 5)

Considering a Career in Real Estate? By Judy Moore Exploring new career options? There are certainly advantages to selling real estate. If youÕre thinking about real estate as a career, you should give serious thought to the special qualities required. ÒAs in other professions, not everyone is cut out to be a real estate broker or sales associate,Ó Judy Moore, president of the Greater Boston Real Estate BoardÕs Residential Association of Realtors¨ advises. ÒPersonÕs considering a real estate career should ponder their motivation and personal qualifications before making this important decision.Ó Ask yourself exactly why a real estate career appeals to you. Do any of the following reasons sound familiar? * I can make lots of money without working too hard. * I can be my own boss, working a few hours a day and spending the rest of the time at home. * ItÕs easy to get a real estate license. It takes little education and training compared with other fields and besides, itÕs inexpensive. * IÕm so bored at home. This will get me out of the house for a while. Besides, I enjoy looking at other peopleÕs homes. * WeÕll be selling our home in a year or two, and I can save the commission by listing and selling myself. The above statements are, of course, absolutely false. As a profession, real estate is demanding. Financial realities must also be faced before a commitment is made, or serious consequences could result. Answer the following questions as honestly as you can: * Are you able to live on your financial assets for three months or even longer, or are you dependent on a monthly paycheck tom make ends meet? * Are you sufficiently disciplined to refrain from spending a large commission check on the premise that you might not see another for several months. * What happens when your closing falls through and the check you counted on doesnÕt materialize? Are you flexible? For example: * Are you prepared to dash out of the house at 10:30 in a Sunday night to present a contact? * Will you forego a long awaited evening out or an important social event to obtain that sake or listing you have pursued for so long? * Will you burst into tears when the door is slammed in your face as you announce that your are the neighborhood real estate professional "just stopping by to get acquainted?" Real estate is an excellent profession, one of the best. But like others, it's not for everyone and it is definitely not for the person with low self-esteem, a need for security or constant reassurance. Who, then, is a good candidate for this demanding field? "The person who is independent, well organized, hard working and financially secure," Moore says. "The individual who is willing to work long house and enjoy making contacts with the public, who views rejection as a challenge rather than as a personal affront. Someone is willing to invest his or her time and money in education to improve personal knowledge and skills in the continuing quest to become more professional. The person who does not depend on such corporate benefits as paid vacations and holidays, medical and dental insurance, sick days and company paid social security and unemployment benefits." If this description fits you, then by all means pursue a real estate career. Interview real estate professionals and listen closely to what they have to say. Take a seminar on real estate at a local college. And then, if you are so inclined, study for your real estate license with the full knowledge that you are one who will succeed in this challenging field. Remember, a career in real estate is not a hobby or pastime for the faint of heart. "The real estate professional devotes the same hours and personal efforts to his or her calling as does a doctor, nurse, attorney, accountant, writer or any other of a thousand dedicated specialists. To do any less would be a disservice both yourself and the industry," Moore adds. The Greater Boston Real Estate BoardÕs Residential Association of Realtors¨ is one of more than 1,800 local boards and associations of Realtors nationwide that comprise the National Association of Realtors (NAR). As the nation's largest trade association, NAR is "The Voice for Real Estate," representing nearly 750,000 members involved in all aspects of the real estate industry.

Frequently Asked Questions When Obtaining a Mortgage By Rick Fedele So, you've finally decided to make the big leap. No more making your landlord rich, no more apartment-life - you're going to purchase your first home. And now your head is probably swimming with a number of questions about the whole process. But before you visit any open houses - and well before you're ready to sign - here are a few answers to help put your mind at ease.   Q: What is the difference between a mortgage lender and a broker?   A: Commercial banks, credit unions, mortgage brokers, and savings and loans actually lend the money. A lender pays cash to the seller of the property. You, the buyer, sign a written agreement to repay your lender the sales price of the property plus interest, closing costs and fees. The property itself is collateral against the loan. If you fail to make your payments as agreed, or fail to pay taxes, the lender has the legal right to take ownership of the property away from you.   Lenders usually have wholesale and retail departments. The wholesale department often offers interest rates and processing fees to brokers that are lower than the retail price, which is what you pay when you go directly to a lender. A broker is one who shops lenders in search of the best deal for you. With a broker, once their fees are built into your costs, you'll likely pay about the same amount of money for your loan. The advantage of using a broker, if he or she is a good one, is that all the shopping is done for you.   Q: How large a mortgage will I be able to get?   A: Generally, lenders prefer that your housing expenses (including mortgage payments, insurance and taxes) not exceed 25% to 28% of your gross monthly income. Lenders use "debt ratios" to determine your affordability (monthly debt divided by gross monthly income). Therefore, you'll usually qualify for a mortgage loan of two to two and one-half times your household's income. For example, if your family has an income of $40,000 a year, you can usually qualify for a mortgage of $80,000 to $100,000. But be advised, lenders use many different factors to determine how large of a mortgage you qualify for, based upon your compensating factors -the risk involved with granting you a mortgage. For example, a compensating factor might be, "I know that I've been late on credit card payments in the past, BUT I was putting down twice the minimum payment AND my student loans are paid off."   Q: What are closing costs?   A: "Closing" is the time and date set for the actual transfer of the property from the seller to the buyer. At closing, the buyers bring the balance of the down payment and necessary closing costs to the escrow company. The lender funds the loan in exchange for the title to the property. This is the point at which you finish the loan process and actually buy the house. Your escrow account is "closed" and you officially become a homeowner!   Q: How long do problems remain on my credit report?   A: If it happened within the past seven years, it's on there. Obtain a credit report from a credit bureau before applying for a mortgage so you're not surprised.   Q: What will I need at the time of application?   A: Your mortgage lender or broker will ask for one or all of the following: a copy of the signed P&S (purchase and sale agreement - unless you're seeking pre-approval), W-2 forms for the past two years, twelve months' rent or mortgage receipts or canceled checks, pay stubs for the last 30 days, the last three month's bank statements, names and account numbers of other creditors, such as student loans, auto loans, and credit cards as well as any alimony or child support documentation. If you own (or partially own) your own business, be prepared to have up-to-date P&L documentation   Q: Should I get pre-approved?   A: When you're pre-approved for a mortgage, you can enter into the buying process with one of the most difficult hurdles already surpassed. Pre-approval will give you excellent leveraging and bargaining power when making the offer; the seller will know that you've already passed a series of screenings. At the very least you should be pre-qualified to know what you can afford. Many lenders can pre-qualify you over the phone, ask your broker for specifics on how to pre-qualify.   Q: What are the basic types of mortgages?   There are basically three types: fixed-rate, adjustable rate, and balloon payment. With a fixed-rate mortgage, the interest rate remains constantthroughout the term of the mortgage - your monthly payments will always be the same. Fixed-rate mortgages usually come in 15- or 30-year terms. Adjustable-rate mortgages (ARMs) offer a low initial interest rate, but the rate is adjusted throughout the life of the loan, often every six months, based on a published index. An ARM is ideal for someone who is anticipating an increase in income, because you will be able to better afford the higher interest rate later on. The last type, balloon-payment mortgages offer rates even lower than the initial term of an ARM. You make monthly payments, usually just for interest. Then, at a specified time - usually in 5, 7 or 10 years - the principal of the loan is due as a single payment. This type of loan might be appropriate for someone expecting a windfall, such as an inheritance or the maturation of a trust fund, or someone looking to turn over the property quickly. A conversion to a fixed-rate mortgage for the balance of your amortization period may be available under certain conditions.   Q: What is the most important thing to compare among lenders?   A: When comparing loans from one lender to the next, pay particular attention to interest rates and points. You should shop around for the best interest rates available for the type of loan you're seeking, and the lowest percentage point possible. Annual Percentage Rates (APR) fluctuate from one day to the next, so be sure you're getting the rate you think you are on the day of signing. And if you're seeking an ARM, make sure you're aware of the cap or price ceiling - the highest a lender can raise the rate.   Points are fees charged by lenders to increase their profits. One point is 1 percent of the amount you want to borrow. If the mortgage is $100,000, one point equals $1,000 ($100,000 times .01). Points are charged for processing and servicing your loan. Lenders who advertise no-point loans are most likely charging higher interest rates.   Q: Are there any public assistance programs that can help me pay for a mortgage?   A: Yes, you should check with local agencies in your town or state - check with your local Housing Authority or in the yellow pages. There are also several federal programs offered by the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) and the Veterans Administration (VA). Call or write to these government agencies, or ask your lender for more details.   Familiarizing yourself with the jargon and timelines now - before you even pick up a pen - is a smart way to begin. Take the time now to learn and understand every step of the process so you're comfortable every step of the way. Settling down into your first house can be unsettling...but is sure to be one of the most exciting business transactions of your life!   Richard Fedele is President of Summit Funding, a Boston-based mortgage company with offices at 376 Boylston Street. Summit is an affiliate of Pacific Guarantee Mortgage Company (PGM), based in Greenbrae, California. PGM is the largest mortgage broker in the United States with a full line of loans and an annual volume of in excess of $1 billion. PGM has more than 40 offices and 135 loan originators throughout the country, and brokers its loans to a network of more than 200 nationwide lenders. For additional information, please call 617/859-0900.

Is it the right time to buy Real Estate? By Jay McHugh of RE/Max Affiliates   Many customers question whether or not today is the right time to buy real estate. The only way for one to answer this question correctly is to take a look at the particular situation. For instance, during the early 80's, many homes appreciated in value at an alarming rate. Then in the later years of the 80's, homes lost value just as quickly. Yet, historically real estate is an excellent return on an investment. Therein lies the question of whether or not it is favorable to buy real estate. The underlying factor, however, must consider your needs and your time frame. For many individuals the primary reason to own a home is for shelter. Most owners have one home and ownership is the alternative to renting. Moreover, a home is a place where families are born and raised. Also, a home is prudent for present considerations as well as future considerations. Then determining the time horizon for the family to stay in the home is a critical factor of whether real estate is for that family. If a family believes that they may move in a short period of time they should realize the implications of a financial loss if the market does not appreciate. In addition, tax incentives that are beneficial to the family may make buying a home an intelligent choice. A recommendation for home buyers is not to purchase a home that does not fit their needs presently. For example, buying a 4 bedroom home when only one needs a 3 bedroom home may create potential problems. One possible problem is the probability of becoming cash poor and insufficiently using you home space. Also, purchasing a home with the maximum mortgage amount one qualifies for may invite problems when house repairs and unforeseen events take place. When shopping for a home, buyers should plan carefully. Knowing your present needs and your future goals can eliminate problems. Decide whether or not you actually need that extra bath in the home. Know the time frame you will begin having children. This is necessary to prepare yourself for needed space. Further, identify your employment with respect to commuting and the possibility that your job site may change. By answering these questions one understands the need to carefully plan and not just jump in to a market that could possible set one back financially.

The Misunderstood Coverages By Richard Mazzarella   There are two coverages offered as part of your automobile policy that sound the same and are often misunderstood by the policy owner. These are the coverages of "uninsured auto" and "underinsured auto." The first thing that one should bear in mind is that these coverages are to pay you for your own injuries, pain and suffering, unlike the rest of the liability coverages offered as part of the auto policy, which are for the benefit of an injured third party. Uninsured auto coverage will pay bodily injury damages to you in those cases where you have been hit by an uninsured auto (it is estimated that over 10 percent of the vehicles on the road in Massachusetts at any given time are driving without insurance, as it has been canceled for non-payment or some other reason). This section will also pay you if you get hit by an unidentified hit-and-run driver. This coverage part will pay when you are in your car or as a pedestrian. In some instances this coverage will extend to pick up other injured household members, if they don't have auto coverage themselves. Bear in mind that in any case the other party must be legally liable, in other words the accident must not be your fault. The "uninsured auto" coverage is mandatory. You must carry limits of $20,000/person and $40,000/accident. The insurance companies must sell you limits of up to $35,000/person and $80,000/accident, but will usually sell you a higher limit if asked. As a general rule of thumb, we at Eastern National recommend that you carry the limits of $250,000/person and $500,000/accident in keeping with the higher limits commonly carried to protect others from bodily injury. The other misunderstood coverage is the Òunderinsured autoÓ insurance, which is an optional coverage. While this coverage is not mandatory, statistically it is more likely to occur. This coverage protects you when the person that hits you does not carry enough insurance to pay for your injuries, pain and suffering. The most common group of drivers that fall into this category are the young drivers with no personal assets, an older, low valued car, who purchases ÒminimumÓ insurance limits, which means that you have only $20,000 available under their coverages to pay for your injuries, pain and suffering. The determination as to whether you, as an injured person, is legally entitled to recover damages from the legally responsible owner or operator of the at-fault vehicle is by agreement between you and your insurance company. The amount of damages will also be determined by agreement between yourself, as the injured party, and your own insurance company. If an agreement cannot be reached, the arbitration, using independent third parties will be used, but this arbitration process will not be used until a voluntary settlement between you and your insurer has been attempted.

Q&A with Michael Merrill of Merrill & McGeary, a real estate attorney   Q: I understand it is a SellerÕs real estate market right now. However, the rents are fairly high and interest rates are low. Therefore, it is an attractive time to purchase property. The brokers tell me good property is sold almost immediately when listed. What can I do to maximize my ability to successfully purchase a good property? What will make any offer stand out and be more likely than other offers to be accepted by a Seller?   B.W., Brookline, MA   A: There is competition for good properties. First, you must find the properties. In order to do this you should have an aggressive, active real estate broker who can locate properties before they are listed. The broker must also know the values of the properties to advise you when a property is significantly over-valued.   When you are alerted to a property that may be in your price range, make arrangements to see the property as quickly as possible. Do not be lazy. If you like the property, make an offer on the spot. Your offer will be more attractive if you have a large down payments and are preapproved for financing, or even better, no financing contingency. Indicate to the broker you will close in accordance with the SellerÕs schedule. If possible,. inspect the property in advance and make your offer without a home inspection contingency. SellerÕs want willing, qualified Buyers and offers without contingencies. Good luck.   Michael W. Merrill   Q: I live in the Condominium. The owner above me is renovating her unit. The project has been going on for two months. The work seems to be sporadic, one or two days a week and always on Saturday. Workmen come and go. The noise is terrible, the hallways are filled with material and debris. There are cracks in my walls caused by the banging upstairs. When I call to complain the owner gives me the brush-off. What can I do to protect my rights?   L.A., Boston, MA   A: Unfortunately, this is not an annual situation. Many of the older buildings in Boston have been converted into Condominium units. New owners often engage in extensive renovation and remodeling before they move into the unit. The renovation process is quite disruptive and can be the source of conflict between neighbors. One would hope the owner renovating the unit would adhere to a set of reasonable rules and regulations established by the Condominium Association. Apparently, this particular situation has gotten out of hand.   My recommendation is that you express your concerns on the telephone and in writing not only to the owner performing the renovation, but also to the Trustees of the Condominium and to the Building Inspector. The Trustees have the authority to impose and enforce rules and regulations with regard to renovations which impact units and common areas including hours and days of work, noise and cleanliness. The building inspector has the right to impose conditions on the job which might bring it to a conclusion more quickly. If these tactics fail, I recommend you retain an attorney who will work on your behalf and if necessary bring suit to recover damages to your unit and in so doing make your neighbor more responsive and sensitive to your situation.

Thinking of purchasing Real Estate as an investment? By Sara Rosenfeld, Sr. Vice President, Co-Manager of Hunneman & Coldwell Banker   Many of us have heard over the years that Real Estate is a great investment. I agree that it is, but for the first time investor, looking to purchase residential real estate, I would make some very important suggestions to follow. First of all, understand your role and responsibilities as a landlord. You can start by getting information from the Greater Boston Real Estate Board Residential Association of Realtors Division by calling (617) 423-8700 x 340 for the RHA (Rental Housing Association). Please understand that you do not have to be a member of the Board to use their resources including purchasing their standard forms, books, and other items available from the store. You also need to speak with other landlords. Do you fell comfortable with being a landlord? It always amazes me how many individuals are motivated to purchase investment property due to the financial benefits and do not even think about their new role as the landlord. It is a major responsibility and is considered by most landlords I know (including myself) a real job! Your relationship with your tenant(s) is the critical ingredient in whether you will be able to manage your new role. How you respond to your tenantÕs needs, the time it takes to make any necessary repairs, and your involvement with making sure the work gets done right the first time are some of the items you need to consider in maintaining a good relationship with your tenants. Understanding all of the financial benefits and liabilities of owning investment real estate is also very important. I strongly believe you should be discussing your plans with an accountant or financial advisor before you decide on a purchase. Make sure you are aware of the tax benefits and whether you are eligible to take them all based on your current income level. Your accountant should be also be able to help you determine how you can calculate each of the potential propertyÕs benefits based on the mortgage interest, property taxes, and other expenses. If you plan on financing your purchase, please be aware that the mortgage interest rates and terms are different for non-owner occupied property than owner occupied property. The down payment required is a minimum of 20% and 30% for some lenders. Interest rates are higher for investment property. When you do your calculations to determine your cash flow, please keep this information in mind! The homeownerÕs insurance policy for an investment property is higher for a non-owner occupant. You can contact an insurance broker to get an idea about rates that vary based on the total number of units in the house, location, and the amount of liability insurance that you want. If I have not scared you from the idea of investment property, your next step is to find a professional real estate agent who knows the market, has experience in selling investment properties, and can give you all of the necessary information you need to make an educated decision. The agent should be able to talk to you and give you information about the local rental market including giving you a realistic range for the rents you would be able to obtain for the apartments. You will also need to find out about how local rental agents work with regard to who pays their fee. Many communities in the Boston area have rental agents who are able to collect their fee from the tenant, while there are some communities where the landlord is responsible for some or all of the fee. A professional real estate agent should be able to give you an idea about the trends in the market including the past appreciation of comparable rental properties and what affects their value. The demand for some of our rental property in Metro Boston is very high not only because the property may appeal to an investor, but also an owner occupant or someone interested in converting the property to condominiums. You need to be able to work with someone who understands and can explain how each of the properties you view may be impacted by certain trends. If you need to get a name of an agent who specializes in investment properties, please feel free to call me! Good luck with your decision!

You Are Entitled to Know about Title 5 By Paul Jenner   What is a Septic System? Septic systems are individual wastewater treatment systems that use the soil to treat small wastewater flows, usually from individual homes. They are typically used in rural or large lot settings where centralized wastewater treatment is impractical.   There are many types of septic systems in use today. While all septic systems are individually designed for each site, most septic systems are based on the same principles.   A septic system consists of a septic tank, a distribution box and a drainfield, all connected by pipes, called conveyance lines.   A septic system treats household wastewater by temporarily holding it in the septic tank where heavy solids and lighter scum are allowed to separate from the wastewater. This separation process is known as primary treatment. The solids stored in the tank are decomposed by bacteria and later removed, along with the lighter scum, by a professional septic tank pumper.   After the partially treated wastewater leaves the tank, it flows into a distribution box, which separates this flow evenly into a network of drainfield trenches. Drainage holes at the bottom of each line allow the wastewater to drain into gravel trenches for temporary storage. This effluent then slowly seeps into the subsurface soil where it is further treated and purified (secondary treatment). A properly functioning septic system does not pollute the groundwater.   Paul Jenner, company president and twenty-year veteran of the environmental consulting field, formed Paul G. Jenner Associates in 1995 as an independent source to assist residential and commercial property owners in complying with new Title 5 regulations. Unique to the industry, Jenner performs inspections and consulting only. Other Title 5 inspection companies have competing interests such as septic pumping, contracting, engineering or general home inspection. Jenner and associates consider themselves advocates of their clients and assist in the getting systems approved.   Paul G. Jenner Associates maintains offices at 31 Riley Avenue, East Weymouth, MA 02189. For additional information on Title 5 inspections, check the company's web site at http://www.title5inspections.com. Or contact Jenner at pjenner@ziplink.net, or by telephone at (781) 337-8617.