The Monitor has a new book editor, Ron Charles, formerly of St. Louis, and he mentioned that he had used a recent Work & Money series on how to buy a home, to buy his new home in Boston.
His story offers a case-in-point for how to make any financial decision: lots of research and use of the Internet to gather information.
Here's his account:
When shopping for a home in today's tight real estate market, remember two sage bits of advice: 1. Look before you leap. 2. He who hesitates is lost.
My job change required my family to move from St. Louis, one of the country's most reasonable home markets, to Boston, where The Wall Street Journal recently found America's most expensive "starter homes."
The key was learning as much as possible before we arrived - about what we needed, what we could afford, and what was available. Fortunately, the Internet made it possible for us to collect information in ways we never could have before.
First, we bought a map of Eastern Massachusetts and taped it to the kitchen wall. Almost every day for two months we used the Internet to study towns in and around Boston.
Most cities have official Web pages, and Boston provides volumes of information, including town histories, average incomes, and tax rates. The data allowed us to identify towns with low crime rates, good class sizes, and rising property values. The site allowed us, for example, to eliminate a place called Weston, where the median home price is half a million dollars.
Gradually, we worked a daunting list of 130 towns down to a manageable dozen.
Moving on to the real estate Web pages, we browsed through pictures and descriptions of specific homes. Many real estate companies have helpful Web sites, but the National Association of Realtors site, www.realtor.com, let us search for homes from many companies in several towns simultaneously. We could even get lists of homes tailored to our needs: flat yard, two stories, bedroom on first floor.
Unfortunately, even the best real estate Web sites can't stay up with current activity, and in Boston's enthusiastic market, the Web pages often displayed properties that had already been sold. Even so, they helped us gauge the market. We reluctantly moved our spending range from $170,000 to $235,000 and began to realize that certain amenities, such as a two-car garage, are rare in Boston.
Financial magazines recommended against it, but when we saw how quickly Boston property was moving, we decided to sell our house in St. Louis before coming to buy a new one.
Then we got preapproved for a mortgage, which required a full application and credit check - far more stringent than prequalification.
We hoped that by arriving preapproved for a loan with down payment money in hand, a seller would give our bid preference over others.
A couple weeks before coming to Boston, we prioritized our six favorite towns and contacted an agent in each one. Several offered to show us homes all over the metro area, but it was important to us to work with someone who knew each town personally.
Most said there was no use sending us current listings, because they'd be gone before we arrived.
We heard sobering stories about houses selling the day they were listed and competing bids rising far beyond asking prices.
Two days before we arrived for our week-long house-hunting trip, each agent sent faxes about available homes. We set up appointments for the weekend, and flew in on a Friday.
Saturday morning we met Lisa, our first agent, and looked at four homes in Milton, an ancient bedroom community on the southern edge of Boston. She had planned to show us more, but some had sold while we were en route.
The second one we saw was a lovely three story Victorian for $215,000. It had just gone on the market, and the listing agent was waiting till the next day to hold an open house. After seeing the other two houses in Milton, we offered, on the spot, the full asking price for the Victorian. Sold!
That might seem reckless - buying a house in a distant city after just two hours. But we had actually been looking for months, albeit from a distance, and we knew the market. The next day we attended the open house for our new home, and seven people put their names on a list to bid if our contract fell through. Later, in the real estate office, we heard agents calling our experience typical in this crazy market.
A lot of looking ahead helped us leap at the right moment.