What I Learned as a First-time Home Buyer in the Boston Area

I have lived in the Greater Boston area for almost thirteen years, moving from apartment to apartment, both with and without roommates. Last spring, I decided to start the search for something more permanent.

I had an idea of where to start. A friend of mine from college had recently transitioned from working in the restaurant industry to working as a licensed Realtor, and I knew he was open to new clients.

Travers Peterson is as patient and professional as can be, and as both a friend and a client, I highly recommend him if you’re in the market for a new home. He’s a ton of fun to work with and always has some great stories to tell.

It was March 2017, and as many of us are aware, urban housing markets across the country have been booming in recent years. In Boston, prices have dramatically risen since I moved here just over a decade ago. A strong, diversified job market, struggling infrastructure, and limited housing stock only adds fuel to the fire, as buyers scramble and compete over a dearth of high-priced inventory.

As a single, first-time buyer with a small down payment, I knew I was in for a challenge and needed as much help as I could get.

I reached out to Travers and we set up a brief consultation in his office in Cambridge, MA.

Before we even got started, he put me in touch with Elisa Balboni at the Mortgage Network, and she quickly ran my financials to get a ballpark idea of my budget.

Once we had some numbers to work with, Travers and I had a brief conversation about what I was looking for and discussed some of the possible options. Having rented for years in Somerville, I knew I wanted to stay in the area but was unsure if I’d be able to afford it.

Travers gathered my input and set up a web portal with a feed to show listings that fit our search criteria. Listings would come in via the Multiple Listing Service (MLS) in a standardized format so that I could look at photos and see open house schedules and property statuses on a whim.

It was just the beginning of a year-long journey of ups-and-downs that would ultimately lead to me finding a perfect condo in Union Square, Somerville. While everyone’s search is unique and different, I thought I’d share some of my advice and experiences.

Start your process early and be aware of the seasonality (and frenzy) of the local market.

I began my search in early spring, which by many measures is peak season for home buyers. As the snow begins to melt and temperatures creep towards survivable ranges for New England, crowds form at nearly any and every open house.

At first, open houses seemed foreign to me. Before starting my search, I had envisioned a casual, personalized, almost HGTV-like affair with my agent whisking me from one private tour to the next. While Travers did manage to get us private viewings whenever he could, I quickly realized that open houses are the most popular and efficient way to churn through prospective properties, and you will probably need to go to several before you find the right property.

Because of the high demand, open houses can often attract dozens or even hundreds of buyers in a given weekend and a property can be sold in a matter of hours or days after listing.

If you are a lone, first-time buyer, you will enter these crowded homes and find yourself bumping shoulders with couples, families, investors, and developers, all of whom will likely have deeper pockets than you. You will likely have to compete against buyers with two or more sources of income, students with financial backing from their parents, and existing homeowners looking to make an upgrade.

Don’t let this discourage you though, as you will quickly find out that the process is a numbers game, and there’s always more than one perfect property.

Many buyers with school-age children scramble to find housing in the spring and plan their moves before the upcoming school year begins. By summer, you will find that some of these buyers will have settled down (or given up), and the market becomes slightly less hectic. By the fall and winter, listing volume gradually slows down and you may find yourself engaging in far fewer bidding wars. I was fortunate enough to find my home just before the end of the year.

Some tips for open houses:

You’ll likely have to tour a lot of properties before you find something you fancy enough to make a formal offer. Remember that your agent will have his or her own open houses to host, and these will sometimes conflict with your open house itinerary for the weekend. Travers made every effort to accompany me when possible, but even when he couldn’t be present, he was just a phone call away for advice and would be ready to put together an offer together at a moment’s notice. This is the sign of a good agent.

If your agent can’t make it, try to gather as much information about the property during the open house as you can. Bring a friend or trusted confidant for feedback. Speak to the listing agent and/or sellers if they are present, sign the guest book, and take any printed handouts about the property. After looking at a series of properties in a given day, you’d be surprised how quickly you might forget the details of each listing.

Try to go to more than one open house in a given weekend. You don’t want to overwhelm yourself, but this will give you some reference points and some backup options if other offers fall through. I found that open houses tend to be least busy towards the end of the viewing hours, and this gives you more time to carefully examine the property and talk to the agent and/or sellers.

Take a lot of photos/video and tour the basement and areas adjacent to the home. Also to keep in mind, have your financing in order and be prepared to make an offer that day or within a couple of days. Time is of the essence.

Even if you make an offer, expect stiff competition in and around the city center. Desirable Boston-area properties sell like wildfire, and a pattern I quickly noticed is as such:

  1. A property will be put on the MLS and posted for sale mid-week or end-of-week.
  2. Open houses will be scheduled for Friday, Saturday, and Sunday.
  3. In some cases, properties will be purposely priced below market value to attract the most buyers (and offers).
  4. The listing agent will set an offer deadline for the following Monday or Tuesday so that sellers can review and choose the best offer.
  5. In some cases, open houses might even get canceled if a buyer makes a strong enough offer before people even get a chance to view the property.

Homes can sometimes fetch dozens of offers, and the highest offer price isn’t always the best deal. Sellers want the quickest and most reliable transactions, which are often accomplished via all-cash offers or large down payments with minimal contingencies.

Have a target property in mind but be open-minded about what’s out there.

I began my search envisioning myself in a single-family home in a nearby suburb, like Quincy, Malden, or Medford. I toured quite a few homes, made a handful of offers, and struck out, sometimes only by a few thousand dollars below the highest offer.

On one occasion, I had an offer accepted on a newly renovated single-family in Melrose. I was excited, and Travers and I scheduled the home inspection. Ultimately, I decided to back out of the deal after the inspection revealed some ongoing water issues in the basement. It was discouraging to have to start over that far into the process, but my gut told me that the basement issues would have been a headache.

In hindsight, I was glad to have missed out or passed up on those houses, because by the summer, I was re-orienting my search towards smaller city condos within Somerville, Cambridge, and Jamaica Plain. While the thought of having a yard and additional outdoor space was appealing, I was, and still am, very much drawn to the energy and convenience of the city.

If your offers are getting shut down, don’t give up! It’s easy to fall in love with a property, but it’s also easy to forget and move on to the next one. New listings pop up almost every week.

Know the pros and cons of a condo versus a single-family house.

In the Boston area, most condos are simply multifamily houses converted into condominium units. In my price range, there wasn’t much in terms of high-rises or condo complexes within the city. Condos in three-deckers and duplex buildings are commonplace, and many of these century-old buildings are being snatched up by developers, renovated, and placed back on the market for premium prices.

You will want to have a look at the homeowner association (HOA) documents, if available, and get a rudimentary understanding of the HOA’s financials. Find out about the monthly HOA fee, the condo reserves (money left over to help pay for unexpected repairs or upgrades), and if there are any current or pending special assessments on the property (a roof that needs to be replaced ASAP, for example).

Owners are responsible for their respective floors or units within the building, and only some of these buildings are professionally managed. Expect newer buildings with amenities to fetch higher HOA fees, but also have an understanding of what expenses, amenities, and utilities the HOA fee covers, if any.

In my HOA, which consists of four units, our master insurance policy, water/sewer, trash, landscaping, and snow removal costs are covered by HOA fees. We are also building a reserve to help cover repairs/maintenance to the common areas.

The Winning Offer

I finally struck gold when I least expected it, halfway through December 2017. By this point, I had toured dozens of homes, made numerous failed offers, and I was feeling very unmotivated and weary of the whole process.

I had pared-down my search, only visiting an open house here and there. Thankfully, Travers continued to be patient and supportive of my endeavor and he would check-in with me periodically and point out his best-bet recommendations in my MLS feed.

We shifted strategies a bit; instead of competing against buyers during the first weekend of an open house, we waited until after the initial offer deadline of new listings to see what shook out

In some cases, new listings failed to garner offers due to issues with the home, poor location, etc. In other cases, they were simply priced a little bit too high or the homes were more suited towards particular buyers. We decided to hone-in on the latter.

One week that month, three new listings showed up on my MLS feed, all in the same building in Union Square, Somerville. I was curious, as I knew this was a hot (pricey) area, but the list prices for two of the units seemed reasonable and within my budget. I waited until week two, and two of the units had still not sold. I decided to check them out.

I was skeptical. It was a cold, snowy Saturday the day before Christmas Eve, and I walked up the front steps to the open house. It was fairly empty inside, and I was greeted by the listing agent, who was talking to another buyer. I was pleasantly surprised by the space, which was fully renovated and had a unique design and everything I was looking for.

I wandered around the unit for a bit and talked to the listing agent. I asked if there were any offers on the home, and he said there was just one from the prior week, but that buyer had left the country for an indefinite amount of time, so it was still up in the air.

It didn’t take long for me to make a decision, so I called Travers on the drive back from the open house. The listing was priced at market value, and because the listing was over a week old, we decided to make an offer just below asking price.

In a matter of hours, the seller got back to us with a reasonable counter offer, and we accepted! I was thrilled, but also knew that there was some work ahead of us…

Things to note when buying from a builder/developer:

My building is over one hundred years old and appears to be constructed in three separate phases throughout its lifetime. About two years ago, a well-known Boston developer bought the property and performed gut-level renovations on all of the units.

After my offer was accepted, Travers and I scheduled a home inspection and, for the most part, things checked-out and the inspector deemed the property to be in fairly sound condition. Because the seller was a property developer, we negotiated a number of punch list items to be completed before closing, such as adding a washer/dryer hookup, replacing a couple of windows, and some other minor tweaks.

After the inspection was completed, I signed the Purchase and Sale Agreement, we finalized the punch list items into the contract, and both parties agreed to a set closing date in February 2018. All was in order, or so I thought!

Working with developers is sometimes a slow and unpredictable process.

While I now realize that there was no intentional foul play from the seller’s side, my patience was tested on a number of occasions. About a week before my closing date, Travers and I toured the property only to realize that most of the punch list items were yet to be delivered. We revisited the day before closing, and it was mostly the same story.

The closing was inevitably delayed, and to make matters worse, we discovered that the builder had yet to obtain a Certificate of Occupancy (CO) from the city. Because this was a major renovation project, the builder needed to pass a series of inspections from the City of Somerville in order to obtain the certificate, and this was much more troublesome than anticipated.

It seemed that the inspectors worked around their own schedules and were sometimes very unreliable. Often times, with each visit, they would point out new items that would prevent us from obtaining the CO, so there was a lot of back-and-forth, which was frustrating from both the buyer and seller side.

My closing date was delayed at least a couple more times, and by March, I was getting a bit anxious.

I had told my landlord that I would be out of my apartment by the middle of March, as I had originally anticipated closing in February. When the deadline finally arrived, the seller agreed to let me move into the unit early, before the close, so that I wouldn’t be left stranded.

I was uneasy with the thought of moving all of my personal belongings into a home that I technically didn’t own yet, especially if the deal went south and I needed to move again. Thankfully, everything eventually panned out. In two weeks’ time, the property finally passed its last inspection and the city issued the CO. I could close!

We set a final closing date for March 27th, 2018, and I breathed a huge sigh of relief after meeting with Travers, Elisa, and my real estate attorney Stephen Silveri at the Registry of Deeds in Cambridge. The papers were signed, and we took a few congratulatory photos:

Three months in, I’m very happy with my purchase and glad to be part of the vibrant and growing Union Square neighborhood.

This past week, I met my new neighbors and we had our first unofficial HOA meeting at the new Remnant Brewery in Bow Market. I’ve had a chance to explore the neighborhood and surrounding areas and am excited about the planned Green Line Extension station arriving in Union Square in 2021 and some of the major construction projects that will accompany the expansion.

Some Final Remarks

I’m thankful and grateful for Travers for sticking with me for the year or so it took to find the right home. In the end, I’m glad that I was patient, and it was a great learning experience along the way. If I decide to purchase another home in the future, I’ll know what to look for.

If you’re a first-time home buyer on the hunt in the Boston metro this year, here are some takeaways:

  • If you really like a property, even if it’s the first one you look at, don’t be afraid to consider making an offer. Good places sell quickly!
  • With that said, don’t worry about falling in love with a property. There were a couple of houses and condos that I toured and really liked, but I couldn’t be happier with the one I ended up with.
  • If you don’t have a huge down payment, try to make your offers attractive in other ways:
    • Listen to your agent and trust his/her recommendations on an offer price. Boston is not a conventional housing market by any means, and sellers have a lot of leverage these days. Offers well above asking price are the norm.
    • Have a flexible closing date to give sellers some breathing room, especially if they’re looking to buy and move as well. Remember that they will face the same tough buying market that you do.
    • Try to have all of your financing in line with a trusted lender and include preapproval (not prequalification) letters with your offers.
    • If you’re looking at a hot listing, include as few contingencies as possible (try to retain an inspection contingency though, unless you’re willing to take the risk).

If you’re looking for more tips or would like to share your own experience, feel free to comment below, and thanks for reading!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s