Author: adminrealtor

A Virginia Realtor specializing in the Western Fairfax County Region of Northern Virginia.

It’s April 15th – If you don’t own a home, get one!

No Comments

It’s April 15th! Tax Day!

Most people dread this day with a passion.

The collection of receipts and other financial documents needed to file your tax return can be a daunting task. Ugggh!! Paperwork!

But it’s not all that bad. In some cases, it can be a good thing! (I know you know what I’m getting at, so I’ll just get to the point.)

Real Estate And Taxes 101

Homeowners paying a mortgage undoubtedly know the benefits of homeownership when tax time comes around. For those of you considering homeownership, this post is for you.

When you buy a home, your buying into one of the largest single investments of your life. Although the real estate market these days is down, the national average cost of a median-priced home is still in the $200,000 range. It might not seem like a lot for a house, but for most people, $200,000 is a lot of money! Because home prices are quite large, most buyers opt to get a home loan or a mortgage to buy their house. This type of loan consists of monthly installment payments over a given period of time. Soon after the buyer closes on the property, the monthly mortgage payments begin.

So let’s look at a simple break-down of your monthly mortgage payment:

  • A portion of your payment goes towards paying down the principal balance of the loan.
  • A portion goes towards paying for the interest assessed on the loan.
  • A portion may go towards an escrow account, which some lenders require in order to pay for things like local real estate taxes and home insurance.

Uncle Sam knows that buying a house is a big expense, so as a perk for buying a house (and stimulating the economy), Uncle Sam let’s homeowners deduct some expenses for buying and owning a home from your taxable income amount each year you own the property. Now buy “some expenses”, I don’t mean the cans of paint you purchased to update the living room or the garden gnome you bought to greet guests walking up to your front door. I’m talking about expenses like “points” you paid to buy down the interest rate on your loan and the interest amount you paid for the year.

Your home loan lender is supposed to send you a tax form (IRS form 1098) indicating the total amount of interest you paid for the year, and any points you may have paid on the loan. The amount of interest you paid can be included in your itemized deductions on your federal tax return! Yay!

Investors, not only can you deduct interest and points on your investment properties, you can deduct expenses associated with renting your house: marketing, repairs, etc.

So you see, homeownership can be the silver lining on a cloudy day when it comes to April 15th. Now if only you could find the time to file your tax returns early each year!

(This information is considered general information and you should consult a tax professional for details regarding tax deductions or other real estate tax concerns.)

Categories: Buying Investing

Tags: , ,

Flipping For The Green

No Comments

When most people think of real estate investing, one of the first things that comes to mind is flipping houses. Flipping houses means you buy an investment property and immediately sell it for quick cash. The process has worked successfully for many, especially when various improvements have been made to the property prior to selling. But the ‘green’ I’m talking about isn’t referring to the money from the profit of the sale, the “green” I’m referring to is the Earth-friendly way of renovating a home.

The trend to being “green” these days is increasing dramatically. You see so many Earth-friendly changes popping up almost everywhere you look: hybrid cars, organic foods, and recycling, just to name a few.

So what does this have to do with flipping houses?

Well, if you think about it, buying older homes to renovate and flip is, in a way, recycling. I just saw a news bit on television earlier this evening which talked about how a 1.5 brand new homes are being constructed every day in the United States alone. With the life longevity increasing, the demand for housing is always constant, if not increasing. So, buying an old, run-down fixer-upper, renovating it and then reselling it is a good thing.

An investor can go even further than that, and move towards a more Earth-friendly way of renovating property as well. In fact, here are a few “green” renovations that could be done, although, the possibilities are endless:

  • using cork flooring instead of traditional hardwood flooring
  • using recycled building materials, like reclaimed wood or insulation from recycled denim jeans
  • installing energy efficient fixtures, like shower heads and toilets
  • buying florescent light bulbs in place of incandescent ones
  • installing recycled glass counter tops or other recycled material

It may seem like some Earth-friendly options are pricey, but factor the expenses into your budget (you savvy investor, you!) and your reward will not only be a unique and extremely attractive selling point for your flip, but you’ll feel better about yourself for doing your part to save the planet too!

Go Green!!

Categories: Investing Selling

Tags: , ,

Is The Flipping Fad Over?

No Comments

If you are like most people interested in real estate investing, you must have seen one of those reality shows on house flipping on cable television at least once: “Property Ladder”, “Flip That House”, “Flip This House”, etc.

The concept of flipping, as I’m sure you know, didn’t start with these informative shows, but has been around for at least 30 years. It wasn’t until a few years ago, with the onset of reality television programming and the real estate boom, did flipping become more popular. More and more people began to see the potential earnings from buying a run-down house, fixing it up and flipping it as a quick sale. House values were rising, mortgage rates were low, and it seemed as if (thanks to many sub-prime lenders) you could get a loan at the drop of a hat.

Fast forward to 2008.

Things sure have changed in the real estate and mortgage lending industries! Lenders are more strict now than they ever have been and real estate market values have gone down tremendously. And even if you were able to get a loan with an incredible rate, is the house even worth it anymore? The answer is: YES…. and NO.

Let’s start with the ‘NO’ answer.

In recent years, when the real estate market was on the rise, you could have bought a fixer-upper, renovated, and flipped it with a net profit of $50k or more, all within a couple of months. Heck! You could have bought any house and it’s value would have gone up in a few months without even doing anything to it at all! But it doesn’t work like that any more. First, with the market values the way they are today, you would really have to get an exceptional deal on a property. Lenders are looking to minimize their risks, and so, for investment properties, you’re now going to have to cough up a hefty down payment. Factor in the rising cost of oil, which is passed onto consumers who indirectly pay for it in the rising cost of materials and lumber, those “little” renovations begin to add up quickly. Before you know it, your expenses in acquiring and renovating that property have become pretty big, and a quick flip won’t give you the return on investment you thought it would.

BUT WAIT! THERE’S MORE!

On the other hand, short sales are on the rise these days, and property values are at record lows so now IS a great time to find a bargain property. Yes, you’ll have to pony up a hefty down payment, and yes, inflation is creeping up on us, but if you have the cash, and more importantly, the patience, you can easily find a steal of a deal on a decent home that may not even need too many renovations. Play like farmer Joe and wait for harvesting time on your crops– it may take a couple years or more, but I promise, you’ll get nice return on your investment. In the meantime, practice your skills at property management on the investment, maybe even cash-flow from it, and quicker than you can say “You’re Fired!”, you could be the next Donald Trump!

So, is the fad to flipping over? I say no. It may have slowed down somewhat, and it may not be as glamorous or as exciting as television makes it appear sometimes, but flipping is definitely here to stay.

[phpbay]flipping real estate, 5[/phpbay]

Categories: Buying Investing

Tags: ,

Little Known Pool Of Potential Renters

No Comments

For those of you who are proud, new owners of rental properties, your now in a situation where your paying for multiple mortgages. You’ve got you primary residence mortgage(s), and now your rental mortgage(s). The sooner you can get your property ready to rent, the better off you’ll be financially. But even if you’re ready to be a landlord, you may not be getting the amount of response you thought you would from those advertisements in the local papers. What are you going to do? The clock is ticking and soon, the next mortgage payment will be due on your rental.

Enter the Federal Government.

There are numerous families in dire need of affordable housing in the United States, and our government recognizes this. The U.S. Department of Housing and Urban Development has created various housing vouchers that assist low-income families with the ability to afford safe, decent and sanitary housing in private-sector neighborhoods. Where does the government get these homes? From people like you!

It becomes a win-win situation for all when you realize the big picture: the government helps lower-income families, lower-income families get financial assistance to live in decent housing, landlords get paid. In a nutshell:

  1. You provide your home as a rental unit in the housing program — adhering to the standards for sanitary, safe and decent housing.
  2. A low-income family chooses to rent your home.
  3. The family pays you a portion of the rent and the government pays the rest.

There’s no guarantee that you’ll get a tenant (after all, the families still get to pick and choose), but you will have greater exposure to more potential renters, and if your house is chosen, you’re almost guaranteed that you’ll get paid each month.

Your house must comply with living standards outlined in the voucher program: running water, heat, air conditioning, etc. More details and information about the various voucher programs can be found by clicking HERE.

Categories: Investing Property Management

Tags: , ,

Home Buying On eBay???

No Comments

I was watching a home improvement show on television the other day where a couple was planning to renovate their home with the help of a designer and a carpenter. Although I love watching ‘before-and-after’s of home improvement, the most significant detail that I ended with wasn’t what they did to the home, but HOW the couple acquired the home to begin with. They “saw” and bought their home on eBay! Now I know, this isn’t a new concept, but for the typical home buyer or home seller, a home on eBay seems like a daunting way of going about a real estate transaction.

From a seller’s perspective, I know it opens the doors to a larger crowd of potential buyers, and from a buyer’s perspective, it opens up a new way for negotiating a bargain on their next home, but what is really involved and what are things to keep in mind if you’re planning on buying or selling real estate on eBay?

Just like other auction items available, you might find that some of the homes have a reserve amount so you may not necessarily get the house, even if your bid was the highest. You also have to read the details in the description for other information such as the terms of the transaction, including any fees or deposits that you have to pony up. Pretty basic so far, right? But purchasing a house, in general, is one of the largest purchases you can make, and in fact, when you’re involved in any real estate transaction, you are dealing with major contractual law.

If you’re thinking about buying a home through eBay or other internet venue, take these points into consideration:

  • Who is selling the property? If the property is listed by a local auctioneer, do your due diligence and research the company’s history and transaction processes. If the property is listed by an individual, you might want to establish an escrow account if one hasn’t already been set up.
  • Will you be able to see the house in person? Auctions have time limits, so keep that in mind if you have a time limit to purchasing a house too. Although the house may be listed “as-is”, you may still want to get a good look at what you’re going to be bidding on.
  • Is the bid amount you’re willing to pay comparable to the home prices in the neighborhood? This is where knowing the area, or hiring a real estate agent knowledgeable in the the area, is a good thing. You don’t want to end up finding out that you overpaid for the property.
  • Whose title company will you be using? If it’s theirs, check them out ahead of time with the local business bureau. It’s important to make sure the house has a clean title — you don’t want to end up losing the house due to a bad or false title search.
  • You can still use a real estate agent when purchasing a home through eBay or any other auctioneer, just be sure that everyone is in agreement with the terms when using representation.

Buying a home on eBay is similar to buying any home at auction, and while legally possible, it’s highly advisable to hire a real estate professional to ensure a smooth and less risky transaction.

[phpbay]3 bedroom house, 5[/phpbay]

Categories: Buying

Tags: ,

Important Showing Tips For FSBO’s

No Comments

If you plan to sell your house as a FSBO (FSBO = For Sale By Owner), here are some important safety considerations to follow:

  • For your own safety, never set an appointment with anyone to see your home unless they have given

    you their name and number and you have called back to verify that number. An easy way to do this

    is to say. “Let me check with my husband/wife for the best time and I will call you back.” Use this

    method even if you are not married.

  • Never let potential buyers know your schedule. Don’t ever tell them when you won’t be at home,

    when your spouse won’t be home, when you pick up the kids, when you work, when you will be on

    vacation, etc.

  • Never give a caller information about your home’s security such as deadlock bolts, security systems,

    and so forth.

  • Always have a back-up plan when you allow strangers into your home, especially if you have

    children. Have a neighbor look out for you until the lookers have gone.

  • Never let a stranger into your home without seeing some identification. If the person says he/she is a

    real estate agent, ask for a card, then call his/her office to verify the information if you don’t

    recognize the person.

  • Keep a log of everyone who has looked at your house. Get their name, telephone number, address,

    car description, tag number, and any additional information that could be helpful in the event of a

    future burglary. All of these people would be suspects.

  • If you make a flyer to advertise your home, don’t include any information that might breech security.
  • Remove from sight all valuables, including guns, jewelry, silverware, and collections. Recently,

    there was an incident in South Florida where a couple was going around with a real estate agent and

    stealing things from houses they visited. The couple actually stole over $150,000 worth of valuables.

    If possible, screen all potential buyers via a thorough pre-qualification process before you let anyone

    into your home.

  • Never leave strangers alone, and watch their every move while they’re in your home. One of the

    latest scams, according to Real Estate Today magazine, involves prescription drugs. A nice-looking,

    clean-cut couple will make an appointment to view your house. Once inside, one of them will ask to

    use the bathroom and will search for prescription drugs while inside. There is a huge market for such

    drugs. So make certain your prescription drugs are well-hidden before anyone looks at your home.

Categories: Selling

Tags: ,

Does Your Home Have Lead?

No Comments

Surprisingly, I often come across clients who have heard about lead poisoning, but aren’t really sure how it can affect them or their family, or what they should do if they suspect their home may have lead. The following is an excerpt from a publication provided by the EPA that real estate agents are to provide customers who plan to buy or sell a home built before 1978. Landlords also should know that it is your duty to provide similar information to potential tenants prior to ratifying the lease.

If you would like a copy of the full publication, email me and I’ll send you one.

Many houses and apartments built before 1978 have paint that contains high levels of lead (called leadbased paint). Lead from paint, chips, and dust can pose serious health hazards if not taken care of properly.

It is important to know that even exposure to low levels of lead can severely harm children.

In children, lead can cause:

  • Nervous system and kidney damage.
  • Learning disabilities, attention deficit disorder, and decreased intelligence.
  • Speech, language, and behavior problems.
  • Poor muscle coordination.
  • Decreased muscle and bone growth.
  • Hearing damage.

While low-lead exposure is most common, exposure to high levels of lead can have devastating effects on children, including seizures, unconsciousness, and, in some cases, death. Although children are especially susceptible to lead exposure, lead can be dangerous for adults too.

In adults, lead can cause:

  • Increased chance of illness during pregnancy.
  • Harm to a fetus, including brain damage or death.
  • Fertility problems (in men and women).
  • High blood pressure.
  • Digestive problems.
  • Nerve disorders.
  • Memory and concentration problems.
  • Muscle and joint pain.

You can get your home tested for lead in several different ways:

  • A paint inspection tells you whether your home has lead-based paint and where it is located. It won’t tell you whether or not your home currently has lead hazards.
  • A risk assessment tells you if your home currently has any lead hazards from leadin paint, dust, or soil. It also tells you what actions to take to address any hazards.
  • A combination risk assessment and inspection tells you if your home has any lead hazards and if your home has any lead-based paint, and where the lead-based paint is located.
  • Hire a trained and certified testing professional who will use a range of reliable methods when testing your home.
  • Visual inspection of paint condition and location.
  • A portable x-ray fluorescence (XRF) machine.
  • Lab tests of paint, dust, and soil samples.
  • Home test kits for lead are available, but may not always be accurate. Consumers should not rely on these kits before doing renovations or to assure safety.

There are state and federal programs in place to ensure that testing is done safely, reliably, and effectively. Contact your state or local agency for more information, or call 1-800-424-LEAD (5323) for a list of contacts in your area.

Categories: Buying Investing Property Management Selling

Tags: , , ,

New Home Construction

No Comments

Whether to buy an existing home or have one built is yet another decision to make during the home-buying process. If you decide to go with new construction, a real estate agent can be a powerful advocate in your corner as you negotiate upgrades, a move-in date and other terms with the home builder.

Below are some basic pointers to prepare you for the journey ahead.

Selecting a builder

Shopping for a large production or custom home builder can be a daunting task. Start by defining what architectural styles appeal to you and then seek out the builders in your area who offer those styles. Due diligence is essential. Ask friends for referrals to get firsthand accounts; verify the builder’s state license status, if applicable; and check whether they’re certified by the National Association of Home Builders.

The builder representative and your real estate agent

A builder representative’s ultimate goal is to sell you a home. His or her role is to provide a wide range of information to help you in your decision-making, from building restrictions, roads and easements to inspections, warranties, rebates and upgrades. A real estate agent knowledgeable in new-home construction will be able to help you wade through all the data and point out the downsides and upsides of each line item. Your agent also can look out for your interests in reviewing the builder’s contract, which often contains more legal jargon than consumer-friendly language.

It’s all about timing

Market conditions greatly dictate a builder’s incentive to make a deal you cannot refuse. When a builder has inventory on his hands, his carrying costs start adding up. When this happens, a builder might be more amenable to strike a favorable deal, whether it’s throwing in upgrades or taking a bit off the asking price. A real estate agent can help you know when market conditions are right for these benefits. Also, watch for builder close-out sales. Builders promote these special events when a new subdivision is near completion but empty inventory still remains.

A word about paying up

While there are always exceptions, most builders require a deposit when a purchase agreement is signed. They also require that the buyer pay for any upgrades prior to closing. If you back out prior to closing, unless the agreement states otherwise, you will lose that money. Make sure you understand every detail in the builder’s contract before signing it.

[phpbay]new home building, 3[/phpbay]

Categories: Buying

Tags:

Steps To Buying A Home

No Comments
  1. Define your needs.

    Congratulations on your decision to purchase a new home! Before you go house hunting, it’s a good idea to define what kind of home and neighborhood would best suit your desires and needs and make a wish list. Share this list with your real estate agent. The finer the details, the more effective your home search will be. To further define your needs, you may want to divide your lists into negotiable and non-negotiable items, so your agent can operate with some flexibility when scouting for homes on your behalf.

  2. Get prequalified or preapproved.

    Now that you know what you want in a home and neighborhood, you need to find out what you can afford. There are two ways to go about this: prequalification or preapproval for a home loan. Your real estate agent can refer you to a mortgage broker to begin the process. In most markets, preapproved buyers are preferred by sellers over those who are pre-qualified.

    Your preapproved status lets the seller know:

    * You have gone through an extensive financial background check. * A lender is willing to do business with you. * The likelihood of unexpected obstacles regarding financing is minimal.

  3. Let the house hunting begin!

    Now you are ready to embark on your home search – an endeavor that can prove overwhelming if not approached with some forethought. The most efficient route is to allow your real estate agent do the initial scouting for you. Using your wish list as a guide, he or she will alert you of new and existing listings that have strong potential. If these listings pique your interest, your agent will arrange home tours at your convenience. Many agents send alerts via email – sometimes as often as daily, depending on the available inventory in your market. Let your agent know how you’d like to receive these alerts, whether by phone, email or fax.

    You also can do some research on your own. Read local real estate publications, contact your local neighborhood associations, visit the local chamber of commerce, surf the Internet, or drive around your favorite neighborhoods. While these methods certainly can lead to your dream home, it’s important to note that 82 percent of home sales are the result of agent connections.* That means it’s more likely your agent will find your dream home through being in the real estate business than you driving around on the weekends.

    * National Association of REALTORS(r)

  4. Make an offer.

    When you’re ready to make an offer on a home, your real estate agent will help you determine the offer price by reviewing recent sales of homes similar in size, quality and amenities. With your input, your agent will draft a written contract that outlines what needs to be done by both parties to execute the transaction. If the seller accepts the offer, the document becomes a binding agreement, so it is imperative that you carefully review it with your agent and speak up if anything is not clear to you. It’s important to note that if the seller changes any aspect of the offer, it is not a binding agreement until the buyer agrees to the seller’s changes.

  5. Strike a deal.

    Sometimes, you get lucky and the seller accepts your offer as is. However, in most instances, the seller will make a counteroffer. This is where your real estate agent’s experience in negotiations will be invaluable. Keep in mind almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process – that is, if you have adequate information and you use it in an appropriate manner. Some items you may negotiate:

    * Price

    * Financing

    * Closing costs

    * Move-in date

    * Repairs

    * Appliances and fixtures

    * Landscaping

    * Painting

    Remain in close contact with your real estate agent so you can quickly review any changes from the seller. Remember: Bargaining is not a winner-take-all deal. It is a business process that involves compromise and mutual respect.

  6. Prepare for the closing.

    When an offer becomes a binding agreement, your real estate agent will help you tackle the checklist of action items that you, as the buyer, have agreed to perform prior to closing. Depending on how the responsibilities are divvied up in the agreement, this is typically when you will:

    * Conduct a home inspection.

    * Get an appraisal and finalize your financing.

    * Secure title insurance.

    * Shop for a home warranty.

    Having these procedures done in a timely and professional manner is a must, as any delays could threaten a successful closing. A first-rate real estate agent should be able to serve as your “one-stop shopping” referral source for service providers. Your agent also should serve as your advocate, helping to coordinate activities and making sure the vendors have access to the property to perform their jobs.

  7. Close the deal.

    Congratulations! The moment you’ve been anticipating has arrived. The closing is where home ownership is legally transferred from the seller to the buyer. It is a formal meeting that most parties involved in the transaction will attend. Closing procedures usually are held at the title company’s or lawyer’s office. The closing officer will coordinate all the document-signing and the collection and disbursement of funds. A few days before your closing date, your lender will send a final closing statement that outlines your closing costs, if applicable. Your real estate agent will review this document with you to ensure its accuracy, as well as help you gather any necessary documentation that you’ll need to bring to closing.

Categories: Buying

Tags:

Home Selling Etiquette

No Comments

Let’s face it: When your house goes on the market, you’re not only opening the door to prospective buyers, but also sometimes to unknown vendors and naïve or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem.

The Aggressive Agent

When your agent puts your house on the market, typically all promotional materials state clearly that your agent is the primary contact for buyers and buyers’ agents. However, sometimes a buyer’s agent will contact a seller directly to try to either win over their business or cut the seller’s agent out of the deal. This is not reputable behavior and you should report it to your agent immediately if it happens to you.

The Unscrupulous Vendor

Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS organizations enforce rules on how posted information is used, some companies have found ways to cull information from various sources to produce mass mailing lists. If you find yourself regularly emptying your mailbox of junk, let your agent know. He or she can tap the appropriate sources to prompt an investigation into the matter.

The Naïve Buyer

Yard signs, Internet listings and other advertisements can generate a lot of buzz for your home. Some prospective buyers – particularly first-timers – will be so buzzed to see your home that they’ll simply drop by. If this happens, no matter how nice these unexpected visitors are, it’s best not to humor their enthusiasm by discussing your home or giving an impromptu tour. Instead, politely let them know that your real estate agent is in charge of scheduling tours and provide them with the agent’s contact information. If you attempt to handle these surprise visits on your own, you might inadvertently disclose information that could hurt you during negotiations down the road.

Categories: Selling

Tags: