Tips and information about buying a home.
An article I read today that I just HAD to post!
Could this be yet another sign of housing market on the mend?
http://www.bizjournals.com/washington/blog/2013/04/navy-federal-feeds-the-bubble-with-no.html?page=all
You’ve got it all at your fingertips. Computers, smart phones, the iPads, and of course, the internet which is chock-full of resources on all sorts of topics. You’re surrounded by technology that brings an unimaginable amount of data in an instant.
So who needs a Realtor when you have sites like Zillow or Homes.com for all your research when you go to price your home to sell or when you go to buy your next home?
It’s true, there is a wealth of information out there — some good, some bad, but think about this one question:
Well, it’s probably safe to say that the average person isn’t buying or selling a house every month, let alone every year or every couple of years. That being said, it’s definitely not IMpossible to buy or sell a house without a Realtor, but why would you want to do such a thing? I mean we’re talking about transactions involving huge sums of money and in most jurisdictions, there are also a lot of legal aspects to consider.
Look at it this way: I play golf every so often. I love the game. Whenever I feel like it, I can go to the internet and find several articles that offer golf tips or advice — sometimes from pros who have worked with golf celebrities. All this information at the click of a few buttons, but would that prepare me for a tournament against the likes of Tiger Woods? I highly doubt it.
You see, just like everything we do in life, practice makes perfect. Repetition makes us better at what we do, and the same rule applies to buying and selling real estate. It’s highly likely that a good Realtor has bought or sold several houses in a year. They’re dealing with all aspects of real estate on a daily basis. They’re constantly keeping up-to-date with the ever-changing laws in the jurisdictions they serve. They’re forming long-lasting relationships with business entities that are part of real estate transactions. The bottom line is that their repetitious activities make them the experts when it comes to real estate.
There are plenty of sites that can be very informative and can provide a lot of insight when buying or selling a home, but please, please, please, leave the real work to the experts. Hire a Realtor!
Happy 2011!!
It’s been a crazy year again, and I didn’t even get a chance to blog these past couple of years!
Hopefully, with me new wireless devices, it will be easier for me to post more often!
So, are there any 2011 real ester resolutions out there? Any home projects planned? If so, I hope my posts can provide insights and inspiration for you!
[phpbay]calendars, 10[/phpbay]
Are wedding bells in your future?
Weddings are big business no matter where you live. The price couples spend on that special day can range from a few thousand dollars to tens of thousands! Not to mention the cost of the honeymoon! But after the adreneline of the event dies down and couples return to “the real world” with hopes of starting a new life together, thoughts of buying a first home together is usually one of the first things that come to mind.
With tighter lending restrictions and fewer lending products in today’s market, having great credit is not enough anymore. Lenders want to make sure they’re lending money on property with equity, so downpayments are becoming the norm once again, and that’s a big hurdle for that a lot of newly weds have to face.
Even a 3% down payment on a $200k home can be a hefty burden, so what’s a couple to do?
[drum roll]
Introducing the Housing and Urban Development’s Bridal Registry Account!
[ta-da! sound]
What a great idea! Instead of, or in addition to, a traditional wedding registry, brides and grooms can now open up a Bridal Registry Account!
Similar to traditional savings account, brides and grooms can have monetary gifts placed in a gift account — which most likely will be the institute with whom they plan on obtaining a home loan.
Okay, okay, so the concept isn’t brand new. Actually, it’s been around since the mid 1990’s, but still isn’t widely known. So, I’m doing my part to share the knowledge…. now do your part and pass it on!
Interested blushing brides and bashful grooms can get more information and find participating lenders by calling 1-800-CALLFHA (225-5342).
[phpbay]wedding, bridal, 10[/phpbay]
It’s bad enough that the mortgage crisis continues to linger, causing a negative impact on real estate market conditions. But now more than ever, the rising cost of oil is also contributing it’s share of the damage too.
Everyone knows that gas comes from refined oil, so the rising cost of oil causes rising gas prices as well. So what kind of impact is this making on real estate these days? Let’s take a look:
For Home Buyers:
For Home Sellers:
For Real Estate Investors:
Take your time and make smart decisions. The high price of oil doesn’t have to have such a big impact on your home transaction, if you play your cards right. And remember to use your real estate agent’s knowledge and experience as much as possible. They’ll be able to help you make choices that benefit you.
Economic Recovery Already Underway
By Donald Luskin
April 18, 2008
(Reposted by www.free-realestate-tips.com)
WHAT A DIFFERENCE a month makes!
Just a month ago yesterday, markets opened to the news that the firm Bear Stearns (BSC1) had been vaporized — and for no better reason than that investors had arbitrarily lost confidence in the venerable brokerage firm and all withdrawn their money from it at the same time. It was only the Federal Reserve stepping in with $30 billion in risk capital that prevented the Bear collapse from taking down world capital markets.
Everyone was already saying that the U.S. economy had fallen into recession. The Bear catastrophe could only make matters far worse.
And yet now, a month later, the economy has not gotten worse. Compared to the bleak expectations then, even just hanging in there would have been an upside surprise. But it’s more than that. Things actually are getting better.
Consider the key earnings reports coming out this earnings season. General Electric’s (GE2) miss was a shocker. But should it have been? Everyone knows its results are dominated by its capital markets subsidiary, so why the surprise when it — like every other bank and broker — took a big hit? The only true surprise was that GE’s management let it be a surprise — they should have warned.
Other than that, the news has been terrific. Look at what’s come out of the technology sector the last couple days. Intel (INTC3), IBM (IBM4) and Google (GOOG5) all surprised big time on the upside. No falloff in world-wide technology demand at Intel and IBM. And no falloff in the consumer sector for Google.
How about this week’s macroeconomic statistics? The Philadelphia Fed’s survey of regional manufacturing activity reported lower yesterday. But the day before, the New York Fed’s comparable survey defied bearish expectations and came in with a neutral reading.
Industrial production was reported as rising 0.3% last month, when it was expected to have declined. That’s a key recession indicator — and it’s just not indicating. The high-tech component of industrial production has been especially strong, currently at all-time highs.
And then there are the markets themselves. Since the panic bottom a month ago yesterday, the S&P 500 has returned 7.1%. The best-performing sectors have been financials, energy and materials, indicating that the credit crisis is mending and that fundamental forces of growth are strong.
The credit crisis is indeed mending. If you invested in safety-first Treasury bonds a month ago, you’ve lost 2.9%. But if you bought risky high-yield corporate bonds — also known disparagingly as “junk bonds” — you’d be up 3.8%. If you were really daring, and bought the supposedly toxic waste that’s been at the heart of the credit crisis — collateralized debt obligations (CDOs) based on subprime mortgages — you’d have done even better, making 6.7%.
The bears hang onto every little scrap of evidence coming out of the financial and housing sectors to bolster their case that we’re already in a recession and headed for a depression. Doesn’t any of this good news count for anything?
The worst is over. It’s more than over. Consider what’s happened in the banking sector. With Merrill Lynch’s big write-off yesterday, and Citigroup’s (C6) this morning, cumulative bank and broker losses from subprime lending and related credit craziness has come to something like $250 billion. That’s quite a trick. According to data reported by the New York Fed, the value of all the subprime and Alt-A mortgages currently in default is only $116 billion. What’s likely happened here is that the banks have taken mark-to-market losses on securities that anticipate much higher foreclosure rates which haven’t happened yet, and may in fact never happen.
And don’t tell me it’s all because the markets expect the Federal Reserve to lower interest rates to zero and keep them there forever, propping up the economy. That’s what markets were expecting a month ago, but not now.
We know precisely what markets are expecting the Fed to do, because we can observe the prices of futures contracts on the Fed funds rate. A month ago, roughly speaking, those futures were priced to expect the Fed to lower interest rates another 75 basis points, to 1.5%, at the FOMC meeting at the end of April — and leave them there for at least a year. Today those same futures are expecting only a 25-basis-point cut at the April FOMC. A year from now, they’re expecting that last cut to have been taken back — and another 25-basis-point rate hike added on for good measure.
When general sentiment is as bad as it is now, the good news kind of sneaks up on you. When it pops out, you tend to ignore it. You get used to the constant drum-beat of doom and gloom. But that’s a huge mistake.
The worst version of it is the kind of economic defeatism that seems to be permeating the primary election campaigns for the presidency. All the candidates are trying to outdo each other in painting a horrible picture of the economy — probably to scare you into voting for them, so they can supposedly fix it.
They’d like you to believe that America has no economic future, that our best years are behind us, that we’ve run out of tricks. But it’s not true. And Google’s big earnings report yesterday proves it.
Look at the billions of dollars being earned by a company that didn’t even exist 10 years ago. I see that money tangibly because I live in Silicon Valley, where Google is headquartered. To me, it’s not just an earnings report. It’s thousands of high-paying jobs. It’s dozens of new buildings being erected all over the landscape here, to house their headlong growth.
There’s no real estate crisis here in Silicon Valley. We’re not depending on subprime mortgages for our homes. We’re dependent on jobs, and salaries, and bonuses and stock options from companies like Google. In other words, we’re betting on good old-fashioned hard work, innovation and growth.
So what if there was some excess home building and home buying? So what if some stupid banks made some stupid loans, and some stupid home buyers took those stupid loans and now can’t pay them back? It’s a problem, I suppose. But in the end it’s a side show. The economy marches on.
And the stock market is going to keep marching right along with it.
Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors. You may contact him at don@trendmacro.com.
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:
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.)
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]
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:
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]
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:
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:
You can get your home tested for lead in several different ways:
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.