Questions & Answers

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Questions & Answers

BUY, SELL, FINANCE, AND LIST RESIDENTIAL OR COMMERCIAL REAL ESTATE

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The primary objective of this web page is to assist you. This includes help with the purchase and exchange of real estate, as well as in educating and advising you on the current home buying and selling trends. Most of the answers will be based on real estate rules in Massachusetts. If at all possible I will attempt to provide information in your state, if not, you will received information on where you can find an answer(s) to your question(s).

From Jim: We will either be finishing our basement or doing an addition to another part of our current home. Someone informed me that finishing an underground basement may not increase the appraisal value of a home. Is this true? If we were to eventually sell would the finished basement be counted in for total living square footage? Would doing another type of addition for a similar cost be wiser for resale potential?

Hi Jim:

Finishing your basement can increase the value of your home. However, you should consider how much similar homes like yours sold for in the past 4 months. If these homes sold for the price range you are looking for without a finished basement, then you might not want to invest in finishing it or adding an addition.

The first step in making your decision on your sell price is determining why you are selling your home. If you are selling to make a profit then you must decide on how much of a profit. Do you want to get back more than you put in? Did you purchase the home some years ago and noticed that the value of home in your area has increased? Once you have answered these questions. You should have a Comparative Market Analysis done to help determine the current market value of your home. This will help you to decide if its worth adding additions or finishing your basement. Please keep in mind that if the average home in your area for example max out at $400,000 without a finished basement and you would like to sell at a higher price, you might not get what you are looking for. Finishing basement or adding on may add to the value of your home, but it may not give you the profit you want. If you owe very little or own your home outright and a market analysis shows that you can make a large profit my adding or finishing your basement, then do so. Also Jim, finishing the basement may not add to the living space in Massachusetts. It has to be a bedroom, living room or area where a great deal of time is spent. Massachusetts is very strict on what can be classified as a bedroom. You should contact you city's building inspector.

Some people are purchasing homes with no money down. Is this a good thing? We are currently renting and I would like to purchase a home. However we don't have the much money to put down.

This question has a two part answer. Yes, it is always good to keep money in your pocket when you can. However, the purpose of putting money down on a home is to lower your mortgage payments. Even as little as 5% down can make a difference of $200.00 a month, depending on the amount you are financing. Making a down payment on a home could also provide you with some equity from the date you move in. Equity is the difference between the amount you owe on the home and the Market or the appraised value of the home. Equity is an asset that increases your net worth.

No money down can be a good thing for a family that is really tired of paying rent, like to see their money work for them and want live the American dream of home ownership. If you are working with a mortgage company that is offering 100 % financing you might want to find out exactly what 100% finance covers. Most banks and mortgage companies charge points and/or closing cost. Points and closing cost can be more than 3 percent of the total cost of the home.

If you are working with an agent or a lawyer sometimes closing cost and points and can be negotiated with the seller. The seller might agree to pay some or all of the closing cost. If you are successful in getting the seller to pay closing cost you will still have to pay for structure and termite inspections. You might also be required to pay taxes and insurance for the first year. Bottom line, be prepared to pay something. Make sure you receive a statement of disclosure from your mortgage provider that explains what your out of pocket cost will be.

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