April 5, 2012

Is it Cheaper to Buy than to Rent?

Now more than ever may be a better time to buy instead of rent. According to the online real estate company Trulia, buying a home is more affordable than renting in 98 of the top 100 housing markets.

Home prices are falling, and mortgage interest rates are at all-times lows. Also, rent is on the rise.

 

Of course, it’s not as easy to get a home today as it was a few years ago, which causes many to not be in a position to buy right now. However, if you are in a position to buy a home, now may be a better time than ever.

 

Ken H. Johnson, a professor of real estate at Florida International believes home prices across the U.S. have bottomed. He said, “Markets should slowly start to recover. Housing will return to its traditional role of a safety investment.”

 

If you are looking to purchase a home, contact us to discuss your options today.

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March 29, 2012

National Association of Realtors Predicts Home Sales will Jump in 2012

If the National Association of Realtors (NAR) is right in its predictions, existing-home sales will rise from 7 to 10 percent in 2012. This increase would mark the highest level of existing-home sales in the past five years. The NAR based their prediction on an “uneven but higher sales pattern” they’ve seen so far this year.

 

The NAR said in releasing its latest Pending Homes Sales Index that pending homes sales fell a seasonally adjusted 0.5 percent from January to February, which was up 9.2 percent from the same time a year ago.

 

NAR Chief Economist Lawrence Yun said, “The spring home buying season looks bright because of an elevated level of contract offers so far this year. If activity is sustained near present levels, existing-home sales will see their best performance in five years. Based on all of the factors in the current market, that’s what we’re expecting with sales rising 7 to 10 percent in 2012.”

 

In its latest economic forecast, NAR predicts existing-home sales will total 4.65 million in 2012, up 9.1 percent from last year. The forecast also assumes that the U.S. economy will grow at a 2.3 percent annual rate and add 2.7 million jobs in 2012.

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March 22, 2012

Should You Buy a Distressed Property?

Many houses on the market right now are distressed properties. Distressed properties include those whose owners have defaulted or are about to default on their mortgages. In many cases, distressed properties can be less expensive that comparable homes for sale.

 

There are a number of different types of distressed properties:

 

  • Short Sale. In a short sale, the homeowner can’t afford to maintain the mortgage. Rather than foreclosing on the home, the lender agrees to the sale of the property for less than the balance of the loan. Short sales give both lenders and homeowners an option other than foreclosure.

 

  • Foreclosure Auction. Banks and other lenders will auction off properties that have been repossessed from homeowners who have defaulted on their mortgage loans. Foreclosure auctions are usually held at public facilities such as courthouses. The auctions are generally best left to investors with cash available to spend. All bids have to be backed up with the money for the entire sale price up front. Also, houses usually purchased at an auction are purchased site unseen.

 

  • REO (real estate owned) Foreclosure. When people describe a distressed property as a “foreclosure,” they are usually referring to an REO foreclosure. These are bank or lender owned properties that you purchase directly from the lender in a process that is similar to a typical home sale.

 

The advantages of purchasing a distressed property:

 

A distressed home will sometimes be priced significantly lower than it would be sold for if it were not a distressed property. That doesn’t mean all distressed homes will be cheaper than all other homes that aren’t distressed, however. If there are a lot of foreclosures in an area, prices of non-distressed homes tend to be lower, too. In some cases of distressed properties, you can offer to purchase the home for less than the asking price. There is little to no emotion involved with a seller on distressed properties since you’ll be dealing with the lender instead.

 

The disadvantages of purchasing a distressed property:

 

Distressed homes take more time and effort to purchase. They require a lot of paperwork, and you might end up waiting a long time just to have your offer rejected. Depending on the property, it may need many major repairs. Many distressed properties have been vacant for a while with no continuous maintenance. Lenders generally sell distressed homes as-is. There is often a lot of competition when purchasing distressed properties with other buyers and investors. More competition leads to higher prices.

 

If you have any questions about purchasing a distressed property, contact us today. We can guide you through the home buying process and help you determine if buying a distressed property is right for you.

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March 15, 2012

Homeownership and Taxes

Tax season is upon us. Many people have questions when it comes to homeownership and the tax considerations that come with it. Your accountant can help you answer these questions, but here is some basic information about homeownership and taxes.

 

Property Taxes

 

Property taxes are paid by most homeowners in the US for the privilege of owning a home. Property taxes are determined by county or city authorities to help pay for public services and are calculated using a variety of formulas.

 

Property taxes are fully deductible against current income taxes.

 

Mortgage Interest Deduction

 

The mortgage interest deduction is one of the most important tax benefits homeowners have. Homeowners can deduct the interest paid on mortgage loans to help buy, build, or improve a primary residence and/or second home.

 

The mortgage interest deduction entitles you to deduct the interest on your home loan for the year in which you paid for it. While mortgage interest reduces your taxable income, it is not a dollar-for-dollar tax cut.

 

The amount of interest on your mortgage decreases each year, so making principle reductions every year can help you pay off your loan early.

 

When buying a new home, the borrower is generally required to pay interest from the closing date until the first of the following month. Verify whether or not that charge is included in the year-end statement.

 

To use this deduction, you need to itemize, and your total deductions need to exceed the IRS’s standard deduction.

 

Capital Gains

 

When you sell your home, you can keep, tax free, capital gains up to $500,000 for a married couple or up to $250,000 for individuals in profit from the sale. To qualify, you must have lived in the home as your primary residence for at least two of the prior five years. This is not a one-time tax exclusion. It can be used as often as you meet the qualifications. Some exceptions do apply.

 

Homeowners should always keep all receipts of permanent home improvements and information on all mortgage closing costs. If you end up in a situation where you have to pay capital gains taxes, these costs can be added to your adjusted cost basis. Cost basis is a tax term for the dollar amount assigned to a property at the time it is acquired, for the purpose of determining gain or loss when it is sold.

 

Any money spent on permanent home improvements can be added into the home’s cost basis, which reduces capital gains when the home is sold.

 

Home Acquisition Costs

 

Points paid by the buyer or seller to purchase a home are deductible for that year. Closing costs aren’t immediately tax deductible, but they can be figured into the adjusted cost basis when you sell your home. These fees include title insurance, loan application fees, credit report fees, appraisal fees, services fees, closing costs, document preparation costs, and recording fees.

 

If you have questions regarding homeownership and taxes, feel free to contact us. You can also contact the IRS by calling 1-800-TAX-1040.

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March 1, 2012

Say Goodbye to Your Filing Cabinet and Go Paperless

In today’s society, everyone is embracing the digital age. First, “snail mail” became email. Now, everything from buying movies and musical albums to groceries can be done online. At RE/MAX Premier Group, we’ve joined the movement and taken our transactions online too. A few years ago, we kept our transactions – and everything associated with them – in a big file that got stuffed inside our even bigger filing cabinet. From time to time, we missed important paperwork and signatures simply because the system was elaborate and confusing. And we weren’t alone, even the best offices had trouble staying organized! But now that we store our real estate transactions online, we always have the documents we need. And now our agents wouldn’t want to do transactions without it. Here’s why:

They’re Better Prepared

Our agents can access their transaction-related information anytime – and from anywhere they have an Internet connection. Instead of making an extra trip back to the office for forgotten paperwork or digging through boxes of old files to find what they’re looking for, our agents have everything they need with a couple clicks of the mouse. Now they have more time to focus on what matters the most – our clients.

Everything Is Where They Need It

Our paperless system has opened our eyes to a brand-new world of organization. Instead of wondering about the progress of their transactions, they can easily track everything – documents, required signatures, and more – without worrying about forgetting something important.

They’re More Efficient

Having all our transaction files online means improved efficiency and cost savings for our entire office. We no longer stress about copying and storage costs because everything is stored online.

And that’s just the beginning. Every time one of our agents saves a trip to the office or doesn’t have to deal with an organizational mess, that’s time that can be spent with our clients instead.

Our agents and office staff have been very pleased with our new paperless system. If you’re a home buyer or seller, we think you’ll love it too. Instead of spending time sorting through large files of paperwork, our agents can focus on helping you buy or sell your home. If you’re an agent looking for a change, contact us at RE/MAX Premier Group – we’d love to tell you all about it.

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February 16, 2012

Choosing Between Two Houses

When house hunting, many homebuyers become torn between two houses they love. Sometimes you and your spouse have different favorites. Or perhaps you genuinely love two houses equally.

Buying a home is one of the biggest financial decisions you will make, so there is a lot to consider when trying to choose between two houses. Once you determine that both houses are within your budget and meet your family’s needs, take the following steps to help you make your decision.

  • Create a “Pros and Cons” list. Do this right away. Start jotting down everything you can think of about each home and its surrounding areas. Consider the size of the rooms you will use most often. If you entertain a lot, will one home have a bigger dining area than the other? If you use the family room a lot, is one bigger than the other? Does one have a better yard? Do you want a big yard? Ask yourself all the questions you can think of and start comparing all the features of each home.
  • Compare neighborhoods. Sometimes the homes might be in the same neighborhood, but if not, evaluate the individual neighborhoods. Are there nearby parks? Are the other homes well maintained? Are the streets maintained?
  • Consider commute time. Will you save on gas prices if you choose one house over the other? If you like to ride your bike, is there one home that will accommodate a bicycle commute better?
  • Research appreciation. If the two homes you’re choosing between are in different areas, have your real estate agent retrieve sales of homes in those areas for the past few years. If one neighborhood sees an annual percentage increase that is much higher than the other, it’s likely your home will also appreciate at a higher rate.
  • Visit each home at least twice. Sometimes you might notice something about a house the second or third time you visit that you didn’t notice the first. Do your own inspection of each home and take detailed notes. If one home requires more maintenance than the other, that might help you make your decision.
  • Look into HOA fees. Does one home have an HOA and the other doesn’t? How much will the HOA fees be? Will they be raised? Do you like HOA guidelines or would you rather not have restrictions?
  • Research the surrounding schools. If you have school-aged children, then look into the reputation of the schools your child may attend. Most public school district information and standardized test results can be found online. You may even want to visit the school and talk to the teachers and other parents.
  • Ask about crime. Visit the local police department and ask about the crime rate in the prospective neighborhood. Talk to your potential neighbors and ask them about any signs of burglary, drugs, or vandalism.

Your real estate agent can give you their objective professional opinion about each property, but don’t ask them to make the decision for you or to pick one house over the other. This is ultimately your decision, so take the proper steps to carefully consider which house will be best for you.

Please do not hesitate to contact us if you would like to start the home buying proccess. We are here to help!

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February 9, 2012

Avoid a Money Pit

While they make for some funny movies, real-life money pits can cause great distress and financial burdens.

 

Here are some tips to avoid buying a money pit:

 

  • Check the foundation. Some of the biggest problems in a house can be a result of a poor foundation. To check the foundation yourself, look at the size of the trees near the home and how close they are to the home. Large trees may have roots that cause the foundation to crack over time. On the inside of the home, check hard flooring for cracks and gaps. Looks for cracks in the drywall in corners and around windows.

 

  • Look for water damage. Some of the biggest repair bills on a home come from water-related hazards. Mold and rot can also result from unattended water issues. Places like the bathroom, kitchen, and laundry area are the best places to look for water damage. Inspect the caulking in sinks and tubs and seals around windows. If you find any mildew and/or cracks, you could be headed into a money pit.

 

  • Attend inspections. Even though you will outsource most or all of your inspections, you should still attend them. When you are there with the inspector, you can get a better idea of the items that may need repair. The inspector can give you their professional opinion, in person, of how serious the repairs could be. That kind of information can be better to receive in person rather than read on a written report.

 

  • Thoroughly read the inspection reports and disclosures. Read not just the inspection reports but any reports and disclosures provided by the seller. Some of those disclosures might include: repairs the seller completed themselves, water issues, non-functioning systems, and recommendations to have a specialist look at something.

 

  • Obtain multiple repair bids. Sometimes you buy a home knowing that it will take a little work. If there is anything that might need to be fixed, obtain multiple repair bids from reputable contractors while still within the inspection contingency time frame of your contract. These repair estimates may provide the basis for any renegotiation that may occur with the seller.

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January 26, 2012

15 Gifts for the Home Under $100

Water Faucet Light: $14.95

A Name in Unique, Framed Print: $59.99

Customized 3D Crystal: Starting at $70

Universal Remote Control Pillow: $39.99

Donut Maker: $19.99

 

Gaming Chair: $43.39

Stainless Steel Ice Cubes: $14.99

 Recycled Vinyl Record Bowls: $26.99

Personalized Key Rack: $29.99

Glow in the Dark Night Light Decals: $48.00

Herb Growing Kit: $69.95

Cute Music Speakers: $99.95

Wireless Grilling Thermometer: $69.95

Photoclip Mobile: $17.00

Tall Tyrian Vase: $38.00

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December 8, 2011

It’s the Most Wonderful Time of the Year to Buy a Home

‘Tis the season to be with family, brave the crowds, enjoy those winter sports . . . and buy a home. That’s right. Although most homes are sold during the spring and summer months, many homebuyers choose to take advantage of winter real estate savings. Here’s why:

 

  • Less competition. The wintertime sees fewer buyers on the market, so for you, that means less competition. People are less likely to move in the winter because of weather, the holidays, etc., so many people put off looking for a home until the spring. Many families may not want to move their children in the middle of the school year, keeping them from house hunting. Less competition for you means a better chance of getting a great home at a lower price.
  • Sellers need to go. When people are selling their home in the winter, it can often mean they have to get out quickly because of a job transfer or other pressing matter. Because many sellers may need to get out fast, they are more likely to bend on negotiations with the buyer.
  • Smoother process. Because lenders have a lot less paperwork in the wintertime, transactions generally go through more quickly and with a lot less hassle.
  • Lower taxes. Property taxes are usually determined by how much you paid for your home. Therefore, if you snag a great deal on a home during the winter, your property taxes will also be lower. Also, it may be a good idea to purchase a home before December 31. Homebuyers may be able to deduct mortgage interest, property taxes, and some of the costs associated with a new home purchase from their income taxes.
  • Lower interest rates. Mortgage rates don’t generally follow a seasonal trend; however, right now, mortgage rates are still near record lows. Most likely, interest rates will remain low throughout the holiday season.

Happy Holidays!

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November 10, 2011

New HARP Refinance Program

The new Home Affordable Refinance Program (HARP) that will allow many
underwater homeowners to refinance their homes is being modified. HARP was first
introduced in 2009; however, not many homeowners utilized its benefits. The new
HARP program will allow more underwater homeowners to qualify and take advantage
of the program.

What are the qualifications?

  • Borrowers must be current on the mortgage at the time of the refinance, with
    no late payments in the past six months and no more than one late payment in the
    past 12 months;
  • Fannie Mae or Freddie Mac must back your loan;
  • You must be currently employed and have a steady income;
  • The mortgage must have been transferred to Fannie Mae or Freddie Mac no
    later than May 31, 2009; and
  • The mortgage must be on a one-to four unit dwelling that serves as your
    primary residence.

You are not eligible for HARP if your mortgage is FHA, USDA, or a jumbo
mortgage.

It’s important to remember that HARP will not delay or stop foreclosure on
your home. HARP is meant to give homeowners who are currently employed, current
on their mortgages, and have lost home equity a chance to refinance at the
current low mortgage rates.

Borrowers will be able to take advantage of HARP even if they owe more than
what their house is worth. The previous version of HARP only allowed borrowers
to refinance up to 125 percent of the home’s appraised value. Millions of
borrowers couldn’t benefit from HARP when it was first introduced because of
that cap.

HARP has been extended through Dec. 31, 2013. Fannie Mae and Freddie Mac will
send instructions to lenders by November 15, 2011. Some lenders may start
offering refinances under the improved HARP by December 1, but the timing may
vary, according to the FHFA.

If you’re an underwater homeowner, this new version of HARP could finally
allow you to refinance your mortgage at an all-time low interest rate you’ve
heard about but couldn’t qualify for.

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