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Buying a house

Buyers, sellers and industry experts offer advice on how to win.

Margaret and Brian Kelley have found their home in Worcester, thanks to extensive research, many networks, an old high school lab partner and a bit of luck.

Interest rates are in the six. The housing stock is perpetually low. But all is not lost. Take it from these three housing warriors, who have bought or sold homes in the past six months – and from two real estate experts who have found silver linings in this cloudscape.

Lesson 1: Network

Stomach ache. High blood pressure. Anxiety. No, it’s not a Prilosec ad: It’s the litany of symptoms Margaret Kelley of Worcester endured as she searched for a central Massachusetts single-family home under $400,000 last summer.

“Everything from Framingham to Boston is untouchable,” said Kelley, who was prompted to move when her landlord planned to sell the rental she shared with her Worcester-area husband, Brian. The couple had pledged to stay in the neighborhood, and not just for financial reasons.

“The architecture is amazing, the culture amazing, and some of the best restaurants I know of in the world are in Worcester,” she said.

So Kelley, a former marketer, assembled a team of real estate professionals she loved because she knew the ride would be bumpy. She networked her way to a savvy local realtor through her wedding officiant. But at first, she didn’t think Mary Surette of Coldwell Banker was her soulmate.

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“Half my head is shaved. I have tattoos. I’m not a traditional house-hunting type person, and [our agent] looked like a perfect New England woman wearing Lilly Pulitzer in the summer. I thought, “She won’t get me,” Kelley said.

As with homes, first impressions can be deceiving. Kelley trusted her friend’s recommendation, and the duo quickly became friends.

“I was more in touch with Mary than anyone else in my life. I would say it was on par with the communication with my husband,” Kelley said.

Meanwhile, his mortgage agent was once his high school biology lab partner. He came to the rescue when the couple had to make a counter offer on a 1916 craftsman’s dream with a two-car garage in a hurry.

Someone had outbid her by $380,000. Did they want to bid again, and soon? They had already lost two other houses. This one was perfect and interest rates were rising. When Kelley’s husband walked in the door from work late on a Friday night, she burst into tears.

“I was losing my mind. I asked, ‘Could we just put 382?’ My husband [uttered an expletive and] said, ‘Let’s just make $382,500,'” she recalled.

His lab partner approved the number. On Monday, their offer was accepted. Why?

“We had outbid the other buyer – by $500,” Kelley said. “We couldn’t have bought this house even two months later.”

Lesson 2: Don’t use scare tactics

Neil and Elly Cullen received 10 bids for their 1,900-square-foot mid-entrance Colonial in Lexington in April, but they didn’t choose the highest bidder.

Instead, they had to be strategic: the couple had just purchased a spacious Victorian closer to the center of Lexington that could accommodate their snarling pre-teens. They didn’t want to carry two mortgages and they needed someone who wouldn’t back down.

The house meant a lot to them. They had bought it in 2013, when their children were small, after selling another property. At the time, the young family had already experienced two failed offers on other homes, and they were about to have to move somewhere, anywhere.

“We ended up getting the best house we tried, on the last possible weekend, to avoid having to move twice,” she said.

Fast forward a decade: They picked a buyer who offered a little less, but still a competitive amount, and who also agreed to a 45-day closing allowing the family to complete the electrical work on their new home.

“I was losing my mind.”

Margaret Kelly, looking for a house

“A realtor told my realtor that her clients had submitted three offers that day, but ours was their favorite. No way were we going with them,” Cullen said. “She was trying to force us to make a decision, but that’s the worst tactic you could have taken. We didn’t trust them to follow through,” money be damned.

Lesson 3: Refinance

Tom and Kate Hurley bought a character-filled Victorian repairman in Arlington in October as interest rates soared. However, the price was right, the house needed work but had a lot of potential, and the family planned to stay there for the long term. It was time to pounce.

It helps that Tom is an electrician who can do rewiring work on the property, and Kate is willing to remove wallpaper and do updates herself. The previous owner was elderly; when he died, his extended family was on the verge of selling. The Hurleys offered to buy the house as is, so the heirs wouldn’t have to get rid of excessive furniture or belongings. They viewed the purchase as a victory.

“I would rather pay a higher interest rate and get a [better] house price. Interest rates will go down, and then you can refinance,” Hurley said. “[Fluctuating] housing prices don’t bother me. I’m not buying the house as an investment; I am buying this to be the house I will live in for the rest of my life.

Melony Swasey, realtor at Good Boston Living in Jamaica Plain, agreed with Hurley’s approach. Higher interest rates have embittered some potential buyers as their purchasing power has diminished, she said. On the other hand, it is easier to find a house without feverish competition.

“If you can’t afford to compete, this is your chance,” Swasey said. “You can refinance if rates go down. Don’t waste the opportunity.

Swasey said interest rates could fall, possibly into the 5% range at the start of 2023, which could heat up the market again.

Lesson 4: Blame the real culprit

What really afflicts local buyers, she says, isn’t really interest rates. It’s low inventory, something that hasn’t changed in years. Molly Goodman agreed. Goodman is executive director of Midas Collaborative, a nonprofit organization that works to improve the financial security of low- and middle-income Massachusetts residents, and chairman of the board of Abundant Housing Massachusetts.

“Massachusetts’ current housing landscape is driven by our severe housing shortage. We were in deep trouble even before the rate hikes started,” Goodman said. “Some of the things that drive our housing production absurdly low [are] exclusionary/single-family zoning, a cumbersome community process to get housing built, [and] opposition to housing by local elected officials. All of these factors prevent the construction of needed housing or increase the cost of the housing that is built. »

All is not lost. Goodman said, “Massachusetts has the best loan products for first-time home buyers.” She recommended buyers look at county income limits for ONE mortgage. In southern Middlesex County, a family of four earning less than $140,200 can qualify for the scheme, which offers low, fixed rates with as little as 3% down payment.

MassHousing also offers programs for first-time home buyers, with up to $30,000 down payment and closing cost assistance for the purchase of a primary residence anywhere in Massachusetts and up to $50,000 in some communities. She also recommends ONE+ Boston, which helps lower the interest rate for Boston buyers. MassDREAMS, meanwhile, is offering down payment assistance using funds from the American Rescue Plan Act of 2021.

If you can buy and don’t have the stomach for a multi-bid situation with dozens of buyers waiving contingencies? Seize the day.

“You can refinance as soon as interest rates go down. Banks will be all over you. Power and control come from ownership,” Swasey said.

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