Monthly Archives: July 2013

No one can deny that we are in an awkward stage in real estate right now.  With homes selling well above asking price due to low inventory and high demand, it is impossible to know the true value of a home at the inception of the listing.  Unfortunately, those days of relying on previous comparable sales are out the window and such homes are only used as a mere gauge when listing a property.  As a result of such pricing flux, appraisals are often and frequently conflicting.   This can sometimes pose a problem for both parties in the transaction.

In a typical transaction where the Buyer is seeking financing from an institutional lender,  the Buyer’s lender sends an appraiser out to the property in order to set a value to the home.  Said value is based on several factors including but not limited to: the home’s physical makeup (square footage, number of bedrooms/bathrooms, amenities, etc.), where it is located, and most importantly, what other comparable homes in the area sold for in the last few months.  The last factor poses the biggest problem when determining a home’s value.  Because homes have only recently been selling higher than their actual values, there are not enough, if any, comparable homes that have sold within the past few months that reflect such pricing increase.  The end result…the home appraises for lower than the agreed upon price.

From a Buyer’s standpoint, this means that the lender will probably deny financing because the lender will not loan money for a property that is worth less than the agreed upon price.  If the Buyer’s lender will allow the Buyer to borrow money, it will usually require the Buyer putting more money down if they choose.   This result would usually allow the Buyer to contractually get out of the agreement and receive a full refund on all their deposits. From a Seller’s perspective, a decision must be made: either drop the purchase price to the appraised value, or find another Buyer.  Either situation is not ideal to a Seller.

Other scenarios however, can pose more complex situations and results.  In the case where a Buyer is paying cash and they opt to do an independent appraisal, the appraisal could come in lower than the agreed upon purchase price, which would alarm the Buyer that they may be overpaying for a home.  In another case where the Buyer is only financing a small amount of money where there is plenty of equity for the lender to finance the desired amount, it could be seen that the Buyer is overpaying for the home as well.  In these situations, it is always best to put a separate contingency in the Contract to Purchase and the Purchase and Sales Agreement which states something to the effect of “This Agreement is subject to the property appraising at or exceeding the purchase price, failing which all deposits given by Buyer shall be forthwith refunded and this agreement shall be null and void without any recourse to the Parties hereto.” This will allow the Buyer the option of either backing out of the contract if the property does not appraise for the contract price or purchasing the property despite  the appraised value being lower, hoping that the home’s appraised value will eventually increase. On the Seller’s end, a way to ensure that a Buyer will purchase the property despite a low appraisal is to insert a clause in the Contract to Purchase and the Purchase and Sales Agreement which states something like “In the event the appraisal is lower than the agreed upon purchase price, Buyer agrees that it shall not be the cause of termination of this agreement and shall be obligated to purchase the subject property subject to the terms of this agreement.”      

Because of what is going on in the market, it is vital to always seek guidance from a knowledgeable and reputable real estate agent and attorney.  The days of cookie cutter transactions are no longer with us and it is vital to have people in your corner during these times.


Jim - October 2010James A. Juliano is one of the founding partners of Scafidi Juliano & Hurd, LLP, managing the Woburn office location in Downtown Woburn Center.  He currently serves on the Woburn Conservation Commission.  Mr. Juliano is currently an active member in the Woburn Residents Environmental Network (WREN) and is a Director of the Friends of the Tri-Community Greenway, Inc. which is a non-profit corporation responsible for the formation and organization of the 6.63 mile bike path and park that will stretch through Stoneham, Woburn, and Winchester.  Mr. Juliano is also very active with the Eastern Middlesex Association of Realtors (EMAR) and serves on the Board of Directors for the Women’s Council of Realtors – Northern Region Massachusetts Chapter.

Mr. Juliano’s present areas of practice include residential and commercial real estate transactions, residential and commercial lending, land use and zoning, and Landlord/Tenant law.  Mr. Juliano can be reached at or by phone at 781-210-4710, Ext. 102.


lifeisshort                       Life is too short!!
Mark your calendars with valuable days.

July 28th is national parent’s day.  Honor your parents; also give yourself and your husband a tap on the back for being great parents.

Celebrate family structure and values. July 28th is not a gift day; keep the gifts for mother’s and father’s day. The best way to mark this day is spending time together. It is important to let your parents know how much you care.

Life is too short, let us express our love to our family. Don’t let a day go by not expressing the love you have to your family and relatives. Mark your calendar and celebrate each one of these special days.

  • Brothers and Sisters Day Always on May 2nd.
  • Mother’s day when: Second Sunday in May.
  • Father’s day when: Third Sunday in June.
  • National Parents day when: Fourth Sunday in July
  • Aunt and Uncles day when: July 26th.
  • Father-In-Law day when: Always July 30th.
  • Sister’s day celebrates First Sunday in August (day varies depending on websites but still tell your sister you care.
  • Son and Daughter Day when: Always August 11th.

JanineAbout the Author: Janine Elkhoury is a Realtor at RE/MAX Legacy. You can learn more about her on her website 

Category: Events, Family, Holidays

Anyone who has been around the real estate business for 20 or more years has experienced the cycles that are part of real estate growth.  But one thing that we have all come to realize is that over the long haul, real estate increases in value and will almost always be a good investment.

In 2005/2006, our local values hit a peak, and began a descent or correction over the next several years.  Before 2005, we had experienced many years of single to double digit annual appreciation and then the “bubble burst”.  Over the next few years we experienced mostly downs with an occasional hiccup including the influence of the government sponsored “first time buyer credit”.  Interest rates remained low and went even lower and this provided some stimulus once the economic climate improved.  Watching the trends, we learn that we can never predict the bottom until we have turned around and begun heading back up.  As a buyer, I would not be as concerned with “nailing” the bottom, but would want to buy on either side of it.

The recent increase in sales, multiple offers and over asking offers all suggest that we have turned the corner.  The market has changed in favor of the most sellers and as a result it has become a difficult place to be a buyer.  But because we have not returned to the peak values of 2005, there are some homeowners who bought near or at the peak and would not benefit from selling at this time.

With my engineering background, statistics and trends are a favorite tool for me.  I can get a sense of where the market is going by looking at the indicators.  I’ve created trend charts reporting an annual statistic – average sale price for the 12 months of that year.  For the final data point as the current year progresses, I look at the last 12 months.

Although I have created charts for many individual towns, my favorite chart, which is included with this blog, is of the local 128/93 towns compared to each other.  These include Reading, Burlington, Wakefield, Stoneham, Melrose, Wilmington and Woburn. (click on the chart to enlarge)


Here is a table for the local towns that captures the trend data:


Average   Sale Price

Last   12 Months

%   Change

Last   12 Months

%   Change

from   2005 High






























In spite of the recent upswing and gains in average sale price, you can see that we have not come back to the highs of 2005.   However, let’s hope we continue in that direction.

About the author: Roland Spadafora is one of the broker owners of RE/MAX Legacy and is known around the office as the expert in market trends and stats. You can learn more about him on his website

The month of June has not been kind to mortgage interest rates.  In fact, rates experienced the most rapid climb in 26 years.  It’s unlikely that rates will be that low ever again.  So why did this happen?  According to CNN there are 3 basic reasons for the sharp increase in mortgage rates:


  1.  The Fed announced that they are going to stop bolstering the housing market.  The Fed has kept rates at rock-bottom levels by buying up $85 billion a month of Treasury bonds and mortgage-backed securities.
  2. McMansions are making a comeback.  As the Fed stops their purchase of securities, private investors will have to pick up the slack.  Guess what?  Private investors demand a better payoff which means raising rates for borrowers.
  3. The economy is no longer reeling.  During the recession, the Fed lowered its short-term interest rate to near zero to stimulate the economy.  Economic conditions have considerably improved over the past 4 years.  Therefore, we are seeing rate increases.

Low mortgage rates happen when the economy is in distress or in the case of the late 1990s when the Chinese bought Treasury bonds.  Any return to normal economic conditions translates into higher mortgage interest rates.

Don’t jump off the cliff yet.  Is a rate of 4.5% on the 30 year fixed mortgage really so bad?  Most of us remember when a rate of 10 – 15% was actually good!

What can you do to lower your mortgage interest rate?  First of all be sure you have an excellent credit score.  Your target should be a credit score of at least 740.  Anything lower and you may have to pay a higher rate.  An excellent credit score means that you pay your bills on time, you do not owe more than 40% of your credit limit on credit cards,  you have just 3 major credit cards (there’s no need to have 10 store credit cards) and you actually have a credit history.  Paying cash for everything does not increase your credit score.

Save for your down payment.  Some mortgage programs require a minimal down payment but a larger down payment may help to avoid or reduce monthly private mortgage insurance.

In the foreseeable future, we are headed for a very painful adjustment period in terms of mortgage rates thanks to the Federal Reserve.

cathy dylAbout the author:
Cathy Dyl is a Senior loan officer at Stoneham Bank

(NMLS Originator ID # 49343) and has been working in the mortgage industry for over 17 years.You can contact her directly at
or learn more about her here