Article 1 (How Can You Compare Different School Systems?) Article 2 (The Point of Paying Points) Article 3 (Buy First or Sell First?) Article 4 (Q&A with Michael Merrill)

How Can You Compare Different School Systems? By Sara Rosenfeld, Sr. Vice President, Brookline Office of Hunneman & Coldwell Banker Whether you are purchasing a house locally or across the country, many of you will be researching various communities before deciding on an area to live in. Part of your research may include comparing these communities' school systems, whether you currently have children or not. How do you get all of the information together in a concise way to compare and contrast the similarities and the differences? The answer is The School Report produced by National School Reporting Services, Inc., and Education Information Company. The School Report is provided to the public through a nationwide network of real estate professionals who are dedicated to providing their customers and clients with the unbiased, comprehensive educational information they need to make an intelligent home buying decision. Hunneman & Co. Coldwell Banker's Brookline Office is proud to provide anyone who requests it a copy of the report which compares up to six different school systems. Each school district's information, in your personalized report, is provided along with a summary comparison page. The items that are reviewed include the size of the district, the earliest grade level available for study, interscholastic sports, upper school curriculum (9-12), extra-curricular programs (9-12), statistical overview, the personnel number and principal's name for each of the schools in the district. The size of the district includes valuable information such as the total student population, the total teacher population, the student/teacher ratio, the median years of teaching experience, the total number of Elementary Schools with their average school population, the number of Middle/Jr. High Schools with their average school population, plus the average class size in each of the categories. The earliest grade level available for study includes the formal study of a foreign language, the use of an equipped science lab, formal computer training, special gifted and talented programs, formal music instrument training, organized band, orchestra, and chorus training, voice, dance, and drama training, public speaking, industrial arts/technology, home economics, and formally coached team sports. The section on interscholastic sports includes the names of each of the sports along with whether they are offered through boys, girls, or co-ed teams. The section on upper school curriculum (9-12) includes which foreign language courses are offered, the number of advanced placement courses for college credit, and the number of fine arts courses. The extra-curricular programs (9-12) include school publications such as a school newspaper, literary magazine, and yearbook, academic clubs, fine arts programs, and other extra-curricular programs such as Amnesty International, ecology club, or driver's education. Having this information readily available helps your research, but you would still need to complete a thorough investigation on your own. Many careful shoppers include a meeting with a school principal, a tour of a school, and maybe a chance to sit in on a class. So you can start your search by calling (617) 731-2447 and have one of the sales associates in our office help you with getting a personalized copy of a school report just for you. All you need is up to six school districts to compare and we will do the rest!

The Point of Paying Points By Bob Watterson One of the more hair-pulling decisions facing a new homebuyer is whether or not to pay points on their mortgage. Points are an amount paid at the loan’s closing in a lump sum. Each point paid represents one percent of the total loan amount. For example, two points on a $100,000 loan would mean an initial payment of $2,000.This is would be paid in addition to closing costs, the fees charged by your lender for credit reports, appraisals, etc. and the attorney for their title services such as title insurance, surveys and recording. Closing costs, separate from any points paid, typically total in the range of $1,200 for a $100,000 mortgage. The advantage to paying points is that they have the effect of lowering your interest. Often times paying 2 points on a mortgage will make the rate the borrower pays 1/2% lower than if that same person paid no points. But are they worth it? One drawback is that paying points takes available cash out of the pockets of homebuyers when they need it most. A young couple starting out may find that the extra money is more than they can comfortably If the cash to pay points is available and affordable, the question becomes a somewhat simpler issue of "doing the math". Using the same example of a $100,000 mortgage, let’s assume an interest rate 7.50% paying no points versus a rate of 7.0% if two were paid. The payments on a 30 year mortgage would be $699.21 at 7.50% versus $665.30 at 7.0%, i.e. a difference of $33.91 per month. The two points it will cost to get that lower rate (and monthly payment) equals $2,000. So, "doing the math", you divide that $2,000 in points by the $33.91 in payment difference and get 60. This represents the number of months it would take to recover the cost of the 2 points. Simply put, if you believe you will stay in this home and not refinance for more than 5 years, paying points makes sense. If there is a reasonable chance you will not do keep the loan out, you are probably better off not paying points. Considering the future possibility of refinancing is important. You may see interest rates decrease or find the need to replace that mortgage with a larger one due to unforeseen cash needs. In a more complex analysis, taking the points you might consider paying and investing them in some form of low to moderate risk investment may earn you more in return than those same dollars will save you over time. Of course, there are no guarantees. The decision, of course, may be more involved for your personal situation. So, before making any decision consider the options, think about how long you keep the mortgage and, above all, make sure what you do let’s you sleep well at night. Ask your lender questions and, by using them as a resource for advice, not just money, you will be better prepared to make the decision that is right for you. Editor’s note: Bob Watterson is Chairman, Mass. Mortgage Bankers Association and President of First Financial, a mortgage company based in Wesley with branch offices in Boston, Beverly and Northboro, MA, Manchester, NH, and Greater Hartford, CT. For additional information or for a free brochures outlining the mortgage process and the many loan options, please call First Financial, call (800) 836-0768, or visit their home page (under construction) firstfinancial.com.

Buy First or Sell First? By Jay McHugh of RE/Max Affiliates Financially, move-up home buyers have a much easier time than first-timers, who are trying to scrape up enough cash to cover a 5% down payment and closing costs. But trade-up buyers face a whole new complication: Buy First or Sell First? The main risk here is that you could get stuck making payments on two houses if your old home doesn't sell fast enough. Plus, you will have to come up with the cash for a down payment. On top of that, you need a robust income to qualify for payments on three mortgages: the old mortgage, the bridge loan and the new home mortgage. The lender will probably turn you down if the payments on all three (plus your outstanding debt) total more than 45% of your gross income. The burden of all three mortgages could force you to jump at a low-ball offer, and you can expect such offers once buyers tour your empty house and realize you're under the gun to sell. If you end up renting out your old house, most lenders will consider up to 75% of the rent payments as income, as long as you have a signed lease. Keep the rental temporary, though, and keep trying to sell the house if the sale will produce a profit. You'll need to sell within three years of the time you move out in order to claim that profit tax-free. In a sluggish real estate market, move-up buyers may get away with making an offer to buy a new home contingent upon selling their old home. Seller's don't like such offers, which tie them up with a deal that is by no means a sure thing. You offer is more likely to be accepted if you have a buyer for your old home in the bag. Real Estate agents also prefer that you sell first and put off serious shopping until after you've accepted an offer on your current home. It's safer for the agent. There's more risk that an offer encumbered by a home sale will fall through and take the agent's paycheck with it. Trouble is, if you've already agreed to vacate your home in 60 days, you could feel tremendous pressure to settle for a home that falls short of your ideal. And, if the sellers of the house you want know you need to find a home quickly, it could be that much harder to negotiate a good price. If you sell first, you can take some of the heat off by negotiating better terms for your home sale. Aim for a longer period until closing, say 90 days instead of 60 days. Ask the buyer if they would consider a short-term rent back to you for another month of two after closing.

Q&A with Michael Merrill of Merrill & McGeary, a real estate attorney. Q: I am in the process of purchasing a single family house from a friend. I am fairly experienced in real estate having purchased three properties in the past ten years. My friend and I are in agreement on the terms of the transaction. My friend's lawyer prepared a purchase and sale agreement on a Greater Boston Real Estate Board form. The inapplicable provisions were deleted and the agreement looks fine to me. Should I sign it and pay the deposit? There is no broker involved. Who should I make the check to? J.S., MA A: The purchase and sale agreement is the most important document in a real estate transaction because it defines the rights and obligations of the parties. All aspects of a real estate transaction must be in writing to be enforceable. Sometimes, although not often, friends who are in agreement do not identify all of the potential issues that might surface. As a result, what had been an amicable agreement could become a nasty dispute. Therefore, although you are experienced I cannot recommend that you sign the agreement prepared by your friend's lawyer. You should have your lawyer review the agreement. I guarantee that your lawyer will identify issues which you were not familiar with and as a result make changes which will protect your interests. The mere fact that the agreement is a widely interests. The mere fact that the agreement is a widely accepted form agreement is not a reason for you to sign without further review by a real estate lawyer. Finally, in a transaction where there is no real estate broker, the deposit check is generally held by the Seller's lawyer and not the Seller. Michael W. Merrill Q: I am a Trustee in a Condominium. There are residential and commercial units in our Condominium. However, one of the owners is using what the Master Deed defines as a residential unit as office space. I think this is wrong because it diminishes the value of the residential units. Why does someone think they can violate the rules of the Condominium? What steps would you recommend the Trustees take to bring this owner into compliance with the Condominium documents? M.S., Boston, MA A: Unfortunately, these situations occur too frequently in Condominium Associations. My advice to people who will not voluntarily abide by the rules and regulations is to sell the unit and purchase a single family house. Then they can establish their own rules. Nonetheless, the Trustees should take the following steps as promptly as possible 1. Confirm that a violation has actually occurred by either obtaining credible statements from others or through first hand knowledge. 2. Inform the unit owner via a telephone call that the commercial use must cease and follow up the telephone call with a confirming letter. 3. In the letter establish a date by which the commercial use must cease. 4. Also, indicate that if the unit owner does not comply with the Trustee's requests, appropriate action will be taken including the implementation of fines. If the unit owner does not comply in a timely manner, consult with the Association's attorney as to the next step. Michael W. Merrill