Today I took buyers through three different houses, and the houses were interesting for three different reasons.

The first one was a little row house that was in foreclosure. We had already been in five other nearly identical row houses in this same neighborhood. This one was the second-lowest priced, and had been on the market the longest.

And here’s the interesting thing: this little row house would be pretty inexpensive to fix up, and was the only one with a nice, open view from the kitchen/dining area. But it had been sitting on the market for almost a year.

Why? It badly needed painting, and it needed new appliances in the kitchen. So it looked shabby and unappealing when we walked through.

Then we saw a little house that backed up to a restaurant–not a great location. But the owners had lovingly fixed it up. The children’s rooms were filled with color: balloons painted on the walls, doll-house shaped bookcases–they were charming. The kitchen was immaculate, and smelled of freshly baked apple pie.

It was a house with no potential (terrible location, small, in need of much work) but was so bright and pretty that it was hard not to be seduced by it.

Finally we saw a large house in a very expensive town—a town with an excellent school system only twenty minutes from Boston. The house was really cheap–over fifty thousand less than any other house in that town. It had large rooms, and a big front porch.

But it was crammed with stuff, had awful wall-to-wall carpeting throughout, and badly needed painting. I could see why it had been sitting on the market for almost half a year.

Over and over again I’m surprised at how important initial appearances of a house are. A seller assumes that a buyer will realize that the house just needs a coat of paint, or refinished floors, or new kitchen appliances–but the buyer never gets passed her initial poor impression.

The whole situation reminds me of the mothers of my time telling their daughters to marry the nice, solid, dull bankers. . . but the daughters wanted to fall in love.

Sellers need to present their homes so a buyer falls in love.

I’ve just found the best site for mortgage information: mortgagefit.com. The link is on the left, the Mortgage News link under Blogroll.

I’ve spent the last few days just roaming over the site, fascinated with all of the information. There are multiple discussion boards, on everything from first time homebuyers to short sells and foreclosures. These are some of the the latest discussions:

How can I get rid of a home with more loans on it than it is worth?
How can I get a mortgage on a second home?
Buying a house from parents
REFI - PRE Pay Penalty
How do I relieve myself of a mortgage debt after doing a Quit Claim Deed?
Where can I find state specific disclosures?
Should I use a quit claim deed or a warranty deed?

My favorite thing about the site is that all questions are treated respectfully and answered fully. And the discussions are really fascinating. Did you know that a two family house with three kitchens will have trouble getting a mortgage? What can you do if there is a tax lien on your house, and you want to try to get the bank to do a short sale?

Many of the posters on the discussions boards are financial professionals, so the advice is just way above the usual advice found on discussion boards.

A really wonderful site. Five stars!

Should a buyer’s agent spend time researching the property her buyer is interested in? I vote yes.

The first thing I do is print out the public record on the property for my buyer. Then we can see what it sold for the last time, and get an idea of the mortgage that was taken out.

If it’s a short sale or foreclosure, I’ll usually go to Massachusetts Land Records, which is a searchable data base online. Then we can see if the house has been refinanced, and what the current mortgage situation is. We can also see if a foreclosure notice has been filed.

After that, I’ll go to the town hall of the town where the property is. I check the building permits taken out on that the house, because if the owner is saying the work has been done, there should be permits filed that prove that. Permits also mean that any repair that was done was inspected by the town, and so is a code repair.

Then I check zoning, to make sure that the house is zoned as the listing sheet describes, and that there are no zoning surprises in the land surrounding the house. Once I found that land behind a house that was described in the listing sheet as conservation land was actually land owned by the convenience store next door, and was grandfathered in as commercial land.

I check the Board of Health to make sure there are no outstanding health issues. If the property is on a septic system instead of a sewer, I’ll check the last time the system was inspected. In Massachusetts, it has to pass an inspection called a Title V inspection.

I find that buyers really appreciate this thoroughness, and makes the whole process of buying a house a little less daunting.

Since I was a Navy wife for years, I moved frequently. I think in our first six years of marriage we lived in seven different apartments or houses. What that taught me was that I needed a place to live that had a sunny room for me to hang out it. It could be a kitchen, a living room, a sewing room . . .somewhere I could spend time that was bright and sunny.

Once we bought a house–and stayed in it for ten years–that only had a little bit of afternoon sun in the kitchen. From the day we moved into that house, until the day I happily greeted the movers ten years later, I was figuring out how and where to move. And I knew from then on that a sunny room for me was a non-negotiable requirement.

When you go house hunting, be clear what is non-negotiable for you. Lots of closets? An eat-in kitchen? Room for a garden? Walking distance to shops?

Don’t let other people try to tell you that other things are more important. Another house might be bigger, in a better neighborhood, have a bigger garage. If it lacks your most important thing, my advice is to keep looking, because you’ll never be happy in it.

And if you’re buying a house with someone else–like a spouse–be sensitive to their non-negotiable wishes. My husband, it turns out, needs lots of room for all of his collections–trains, pictures, trading cards . . .

So I take the sunny front rooms, and he spreads out in the back rooms, in the cellar, in the garage . . . and we’re very happy.

The other day I was showing a buyer through a multi-family, and the owner/broker told us that he was going to apply for a short sale if we offered anything under 400,000 He owed that amount on the building; his wife had bought it as an investment a few years ago.

“Yeah, I’ll just stop paying the mortgage, and then you can offer whatever you want. It will be up to the bank. If you offer 405,000, I’ll take it. If you offer 300,000 that’s okay too; I’ll just send the offer along to the bank.”

What the buyer didn’t realize is that–if the bank accepts 300,000 as an offer–he will probably be liable for regular income taxes on that 100,000 difference, since it’s looked at as a gain for him.

There is a new bill, just signed at the end of 2007, that addresses this issue, although it won’t help this investor. The bill is called the Mortgage Forgiveness Debt Relief Act of 2007, and the best, clearest description I found of it is at the Las Vegas Review-Journal: http://www.lvrj.com/real_estate/13729317.html

Briefly, keeping in mind that I’m not a lawyer, and this isn’t legal advice, the bill forgives the tax liability of unpaid debt to homeowners who go through a short sale or a foreclosure. There are some important exceptions in the bill, however,

Investors are not protected–the home has to be your residence. And if part of the mortgage debt is money you took out to pay for college or a vacation–or anything but home improvement–that part of the debt is still money you have to pay taxes on.

The bill is much more complicated, so if you’re interested check the above link.

I took a buyer through a number of multi-families the other day. Most were very dreary–needed paint, ancient appliances, tenants belongings strewn around. It was a sad tour.

But then we went to a three family, and the first two floors had section 8 tenants. These are tenants whose income is so low that they can’t afford market rents, so the government subsidizes their rent. In these cases, their rent was almost completely paid for them.

But here’s the thing: the apartments were clean, in fairly good shape, and neatly kept. And it’s not like they cleaned up for us; one tenant complained that the landlord never gave advance notice of possible buyers coming through. This tenant’s kitchen was as neat as a pin, and she had just taken a tray of barbecued chicken from the oven.

When I checked the rents that the landlord was getting I was shocked: almost double the rents in a similar building we had just visited, that admittedly was in much worse shape. Section 8 landlords get market rate, or, in this case, a bit better than market rate.

To be a section 8 landlord you have to delead, keep smoke alarms, etc. up do date, and keep the building in good repair. But that’s what a good landlord does anyway.

So if you’re looking for good tenants: check out section 8 tenants.

Allow me to rant a minute about short sales. One of my buyer’s has been trying to buy a house that is a short sale, i.e. the owner owes more on the mortgage than the house is now worth. Banks will sometimes accept less than the mortgage to get out of having to foreclose–which is expensive and time-consuming for banks.

But the whole process is very frustrating for a buyer (and her agent!) It takes a long time to get a response to a bid, since the selling agent has to get the bank to approve. And then you find out that the bank won’t actually aprove–won’t approve in writing anyway–until your buyer goes to Purchase and Sale, which involves putting down about five percent of the final price. Only THEN will the bank deign to negotiate.

This means that before the bank will give a definite answer for a price, the buyer has to spend money for an inspection, and money for a lawyer to go over the Purchase and Sale agreement.

Buyers go through this to get a lower price on a house but really, with prices dropping anyway, I think buyers are better off finding properties that have been owned for long enough that the seller doesn’t have a huge mortgage, and can just accept a reasonable price without getting bank approval.

A few years ago I was writing a book about the students at my school who scored the highest on the SAT exams (Keeping Kids Reading, Crown, 1998). So I did lengthy interviews with these students, to try to find out if there was anything similar in their backgrounds.

Of course, the huge similarity was that they all loved reading, and had a history of reading anything and everything. But what surprised me was that a large number of them lived in West Concord, within walking or biking distance to the West Concord Library.

Now Concord has two libraries: the little West Concord one, and a large, wonderful main library. And some of the students reported going regularly to the main library. But a greater number reported spending hours and hours hanging out at the little library in West Concord.

The library in West Concord is friendly and accessible. Lots of paperbacks, novels, and magazines. In many of my wonderful readers, it seemed to play a large part in developing their love of reading.

So when you’re house hunting, check the school systems, and the parks, and the other quality of life attributes of a neighborhood. But don’t forget to look for a local library. Education-wise, it can be the most important amenity of all.

In Massachusetts, and I think in most of the country, if you want to live in a good school district, you have to pay more for your house.  So, how important is it to live in a good school district?

Since I’ve been a teacher for the last thirty years–and I’ve taught in an inner-city Catholic school, a military school, a private boarding school, and a wealthy suburban public school–I do feel  qualified to give an opinion.

Up until high school, I think parents can, to a large extent, overcome the academic effects of a weak school system.  If you can turn your kids into avid readers (and I’ve written books on how to do this;  check Amazon.com) then, no matter where they go to grade school, they should be ready for serious, academic high school work.

A good school becomes very important for high school, for two reasons.  A rigorous high school program will prepare kids to succeed in college’   And most teenagers need to be in a culture that supports working hard in school.  A few very independent kids can be in a weak high school and ignore the cultural messages to fool around, and still do well.  But they are a small minority.

So my opinion is that a good school district is critical by high school age.   Buy a smaller house in a good school district.   You can always sell it after your kids graduate–to pay the   huge college bills of the good colleges they can now get into!

Apparently we’ve had more snow this December in Concord that we’ve had in years. It’s very pretty and . . . very cold. All of this has gotten me thinking that this is really the perfect time to buy a house.

For one thing, you can check out how well the town you’re looking at does with snow plowing. For you lucky, tanned people who have never lived in the North, I can’t stress enough how important this is. There are towns close by, that I could name, that still have slush and ice in the streets days after a storm. I would never buy a house in a town like that. Not only is it inconvenient, but I think it shows a general lack of good management skills, and caring about citizens.

The other good thing about house shopping in winter is that you get a good look at your neighborhood without the softening influence of leaves on trees. You can see it at its worst, and you can see through the trees to get a really good look at the landscape around the house you’re interested in.

But no one else thinks like this. Ho hum. I’m making a really pretty shirt while the snow is blowing outside. So peaceful . . . sewing, watching the snow.