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Category Archives: home-ownership - Page 2

How Much Does My Agent Need to Know About My Finances?

Money is a delicate issue. How much we earn and how much we owe is information many of us prefer to keep close to the vest.

If you’re concerned about detailing your finances to your real estate agent, rest assured that there’s plenty of privacy in the client/agent relationship.

In their wheelhouse
Real estate agents don’t need, or expect, you to disclose everything about your money. That said, they must understand your overall situation to help guide you to a home that’s within your budget.

An agent’s job is to negotiate a home purchase or sale on your behalf, keep the transaction on track and help you navigate real estate paperwork. His or her strength lies in understanding home values, and property and neighborhood features. Home financing is an altogether separate story from a home search or sale; therefore, agents usually don’t delve into your finances to crunch the numbers.

Leave it to the lender
Agents are happy to let your mortgage lender handle the financial questioning. A loan officer at a bank or mortgage company calculates your maximum purchasing power and your monthly payments based on your loan application, financial documentation and debt-to-income ratio.

Be prepared to supply your lender with your last two years of tax returns, recent pay stubs, bank statements and investment accounts. Agents then present a lender-generated preapproval letter to listing agents, indicating the amount you’re able to borrow.

Contact your local RE/MAX All Pro agent if you have questions about buying a house or selling one. Our real estate professionals can guide you – with discretion – toward your next home.

9 Signs You’re in Love With Your House

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How deep do your feelings go for the place you call home? Here are some indicators you’re completely head over heels.

You know you’re in love with your house when:

1. You can’t wait to see it at the end of the day. In fact, you catch yourself daydreaming about being there.

2. You have trouble sleeping when you’re away too long, and your own bed is the only place you want to be by the time you return.

3. You sometimes put its needs ahead of your own – like cleaning the gutters instead of watching the game.

4. You manage to return from most shopping trips with at least one item just for the house. “Those outdoor lights would look great on the garage.” Sound familiar?

5. You seem to have more photos of all the great projects you’ve completed than you do of the people who live there.

6. You lose track of time on the weekends and sometimes stay there for days at a time.

7. You do everything you can to protect it because you would be devastated if anything bad ever happened to it.

8. You appreciate every one of its quirks. The creaking floors might bother someone else, but they make you feel like the house is happy you’re there.

9. You feel the chemistry, but you can’t explain it. It just feels like home – plain and simple.

Perhaps your current place is not so lovable and you’re ready for something new. It is a good idea to sit down and clarify your motivations and draw up a basic time frame for the selling and property search process. Do you intend to simply find a larger property, or do you plan on moving to another neighborhood, school district, city or state?  You might think your reasons are obvious, but it would do well to consider the implications of each option for your lifestyle, opportunities, and finances.  Being clear about your intentions for selling will make it easier to determine the most appropriate option for your specified financial, lifestyle, and real estate goals.

Find a RE/MAX All Pro agent who can guide you every step of the way.

4 Ways to Get Involved in Your Neighborhood

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What can you do if you want to get involved in your new neighborhood? Here are four ideas to help you connect and get acquainted with your neighbors. If you have more ideas, let us know!

1. Join a group. Most neighborhoods have public forums, such as city or town council and citizen advisory group meetings, that address specific community issues. Groups like these allow you to get involved in the issues directly affecting your neighborhood. They’re also an excellent way to meet like-minded people. An online search should give you some ideas of where to begin. If your neighborhood has a homeowners association, talk with the officers about the kind of support they need. Check NextDoor.com for online communities in your city.

2. Volunteer. Identify a cause you feel passionate about, and think about donating your time and skills to a local organization. They’ll appreciate any amount of time you can give. Volunteering offers an opportunity to make meaningful friendships with people who also live and volunteer in the community. Start by visiting neighborhood hospitals, animal shelters and community arts groups or schools, to inquire about volunteering opportunities. Youth sports teams are also an excellent way to get involved. If you’re having trouble locating a volunteer organization that fits you, visit the local public library and ask for suggestions.

3. Organize an Event. Donation drives, block parties and other group activities can be efficient and fun ways to meet neighbors and establish yourself as someone who’s invested in the community. Share your idea by dropping off fliers. Include an email address and ask neighbors to contact you if they’re interested. You can schedule a meeting for everyone who replies to generate more ideas and make plans for an event.

4. Fill a Need. If you feel your neighborhood is underserved in any regard, get the ball rolling yourself. For example, start a neighborhood association if your community doesn’t have one, or institute an adopt-a-block program to keep your neighborhood clean. Similarly, your neighborhood might benefit from a volunteer Neighborhood Watch group. ​

 

New Buyers: 4 Ways to Set Yourself Up for Success

2015-01-4waystosetforsuccessAs one of the largest financial decisions in a person’s life, buying a home requires discretion, sensibility and budgeting. The following tips will keep you on the right path as you look to purchase your first place.

1. Keep score
The better your credit score is, the better your mortgage terms will be. A good credit score can save you tens of thousands of dollars over the life of your loan. Start reviewing your credit a few months before you apply for a home loan. If you have a score in the 600s or lower, start paying down credit balances to 30 percent or less of your balance. Also make bill and debt payments on time – no later than 30 days after the due date. If you have a score in the 700s or 800s, be sure to maintain and protect your good credit. The slightest credit misstep can cause a strong credit score to plunge more sharply than a weak score.

2. Consider all costs
The cost of a home is just the start, and smart buyers tighten their belts before buying to meet the monthly and yearly financial demands of homeownership. When you buy a home, you’re responsible for paying principal and interest, taxes and insurance. Additionally, you’ll need to cover expenses such as utilities and possibly homeowner association dues. You’ll also need cash on hand for the upkeep and repair costs that come with any home. The average homeowner spends 1 percent to 4 percent of a home’s value on property maintenance each year, according to U.S. News & World Report. Expect to pay for repairs or maintenance even within the first year of owning your home.

3. Be flexible in your search
Homebuyers who distinguish between wants and needs make the most sensible decisions. A list of must-haves should include items that affect your quality of life, such as a home’s location, its price, number of bedrooms and square footage. You should be prepared to concede nonessential items, such as views and extra rooms, if you find a house meets your must-haves and is within your budget. Being flexible also involves adjusting your criteria as the home search progresses. For example, your budget may require looking at a town house rather than a detached home, or buying a fixer-upper in order to live in a better neighborhood.

4. Keep your cool
Don’t get overly excited in your search, especially in markets where homes are selling quickly. A bit of self-restraint prevents you from overspending or choosing a home that doesn’t fully fit your needs. Be prepared to walk away if a home inspection reveals more defects in a home than you’re able to deal with. Also, keep calm if you find yourself in a bidding war. Your agent can help you make the most competitive offer, and if it doesn’t get accepted then your agent can help you find the next great option. Finding the right home that fits your lifestyle and budget can take weeks or months. By starting early and being patient, you’ll avoid the sense of urgency that often drives homebuyers to make hasty decisions.

Don’t go it alone. Find a RE/MAX All Pro agent who can guide you every step of the way.

8 Tools Every Homeowner Should Own

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Every home at some point requires maintenance. Some of that maintenance doesn’t have to cost you a lot of money if you keep some basic tools around the house. Here are some helpful tools you can keep on hand.

Screwdrivers
Make sure you have both flathead and Phillips-head screwdrivers of various sizes. A complete set is even better, letting you do everything from tightening loose fixtures to putting together furniture. For light projects, you could opt for a single, multi-bit screwdriver that stores detachable heads in the handle and doubles as a nut driver.

Hammer
A good hammer is an absolute staple for everything from hanging photos to repairing fence pickets. The most common size weighs 16 ounces. Consider investing in a good hammer with a claw head and an anti-vibration rubber grip.

Utility knife
A trusty utility knife or box cutter can come in handy, especially if you’re just moving into your home and need to unpack those well-taped-up boxes. And as long as we’re on the subject of knives, consider getting a putty knife. You’ll be surprised how often you’ll reach for it.

Wall level
It only takes a few millimeters for a shelf or artwork to look off-kilter; a wall level takes the guesswork away. Unless you have an experienced eye, a level will help you hang items on the wall evenly the first time.

Measuring tape
You’ll save yourself a lot of frustration if you measure appliances and furniture before trying to fit them into your new place. A long, 35-foot tape measure will do the job in big and small projects. A more modest, 12-foot measuring tape also is a good alternative, particularly for jobs like hanging artwork.

Flashlight
Power outages can happen anytime, so be ready with at least one durable flashlight and batteries. They also come in handy when you’re working on repairs in those darker and tighter spaces. Look for hybrid versions, which use solar power and contain a back-up battery. If your new place has electricity upon move-in, you also can purchase a rechargeable work light.

Wrench and pliers
Start with an adjustable wrench that can handle many different jobs. Six-, eight- or 10-inch long wrenches are the most popular. Pliers also are indispensible; look for ones with serrated jaws that grip objects firmly.

Toolbox
Store your most commonly used tools in a single place, such as an easy-to-carry toolbox, and you’ll always know where to find these tools when you need them.

Do you have a favorite go-to tool? Share it below!

Are you thinking about buying a house? You’ll need a lot of information – and not just about tools! Contact your local RE/MAX All Pro agent to help you find the right home for you.

5 Advantages of Buying a Fixer-Upper

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We all have fantasy images of our dream house. These images may be hard to let go of when buying a home, especially when all you can afford are homes that, well, let’s just say need some TLC.

That’s when it’s important to keep in mind that the fixer-upper you’re looking at could have the potential to someday become your dream house. It’s just one advantage fixer-uppers can offer. Here are a few others:

1. Lower price
A home that needs work likely will be less expensive. Such properties rarely list at full market price.

2. Fewer competitors
Many buyers are unwilling or unable to put a lot of work into a house. This creates the perfect opportunity to snatch a bargain, a major advantage welcomed in particular by first-time homebuyers or house hunters competing for homes in areas with low inventory.

3. A blank canvas
With a fixer-upper, you call the shots as to how the house will eventually look. You don’t have to settle for a home that reflects someone else’s taste. Plus, if you do some of the work yourself, you’re automatically awarded bragging rights.

4. Quicker equity
If you renovate the home shortly after you buy it, you may increase its value quickly. Equity provides many financial benefits, from raising your personal net worth to giving you an opportunity to refinance sooner, if needed.

5. The possibility of renovation loans
Ask your lender about the Federal Housing Administration’s 203k loans that provide homeowners with funds specifically for fixer-upper projects. The loans, the 203k Streamlined Mortgage and the full 203k Mortgage, are available for homes with needs ranging from cosmetic improvements to extensive structural work.

Whether you’re looking for the home of your dreams or a starter house that may need some work, a RE/MAX All Pro Agent can guide you there.

National Housing Report : Home Sales & Prices Rise Slower

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As has been true throughout 2014, August home sales remained below the pace set in 2013. However, last month’s sales were 10.2% above the number of sales seen in August 2012, and were 17.8% higher than August 2008 sales, when the RE/MAX Housing Report began.

See the full report here : http://remaxallpro.com/pdfs/REMAX-National-Housing-Report_Sept-2014.pdf

May 2014 RE/MAX National Housing Report

Home Sales Rise, Market Finds Stability

For the 2nd month in a row, April home sales rose higher than sales in the previous month. While April sales were 10.9% higher than March, they remained below the same period last year by 7.8%. Only two of the 52 metro areas included in the April report experienced lower sales than the previous month. Year-over-year home prices continued to push higher in April, with a 5.8% increase, which is lower than the 10.7% increase seen in April 2013. While both credit availability and inventory remain tight, April became the 13th consecutive month with fewer inventory losses than the previous month. At the rate of home sales in April, the Months Supply of inventory fell to 3.9, where a supply of 6.0 indicates a market balanced equally between buyers and sellers.

See the full report here : http://remaxallpro.com/pdfs/REMAX-National-Housing-Report_May-2014.pdf

5 THINGS TO WATCH IN HOUSING IN 2014

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It looks as though 2013, had two parts… At the beginning of the year, low housing inventory and interest rates promoted bidding wars. That in turn, escalated prices quickly. Then, mid year the bidding wars slowed down due to raised interest rates.

There are many speculations about the housing market in 2014 here are 5 things to watch for…

1. WILL INVENTORY RISE?

Prices go up when there is low inventory. Foreclosures are slowing and New construction hasn’t picked up. Traditional buyers aren’t listing as many homes. The consensus view is that price growth continues at a somewhat slower pace, but that consensus view could be wrong—for the third year in a row—if there aren’t more homes for sale.

2. WHERE IS THE HOME-CONSTRUCTION RECOVERY?

Some economists say new-home demand could remain muted because many move-up buyers don’t have enough equity to “trade up” to that new home. Key issues to watch here: What happens to household formation, and do builders begin to throttle back price gains in favor of selling more homes in 2014?

3. WHAT HAPPENS TO MORTGAGE CREDIT?

Even if it gets easier to get a loan—by no means a given—borrowing costs and fees could rise. Banks also face new mortgage regulations that could keep most of them cautious. Borrowers with more volatile or harder-to-document incomes, including the self-employed or those who make a lot of money on commissions, bonuses, or tips, could continue to face tough sledding.

4.  WHAT WILL INVESTORS DO WITH THEIR HOMES?

A handful of institutional investors have purchased tens of thousands of homes that are being rented out. Can owners perfect the expense management associated with maintaining and leasing tens of thousands of individual homes?

5.  WHEN DOES HOUSING HIT A TIPPING POINT ON AFFORDABILITY

On the one hand, rising prices are giving many homeowners equity in their homes again—an extremely positive development to the extent it means these borrowers are less at risk of foreclosure.
But price inflation is making housing less affordable. This will be a bigger problem if cash buyers retreat from the market in 2014 and/or if interest rates rise in a meaningful way.

Read full article BY NICK TIMIRAOS:  http://blogs.wsj.com/five-things/2014/01/07/5-things-to-watch-in-housing-in-2014/

Things to keep in mind when buying a home

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The benefits of home ownership

Plain and simple, owning a home can improve your quality of life, provide stability and give you a sense of control you just can’t get from renting. You have a place to live when you rent, but buying is something much deeper – and better.

The intangibles are tough to measure, but there are other benefits you can quantify:

Financial investment:
Your monthly mortgage payment creates equity for you, not your landlord.

The interest on your mortgage is a tax deduction:
While this isn’t a reason in itself to buy a home, it’s nice to get a break at tax time.

Fixed monthly housing payment:
If you opt for a fixed-rate mortgage, the monthly rate of your mortgage won’t change for the length of the term.

Look for a house you can stay in long-term; one that will “grow” with your family and needs. The financial benefits of owning increase over time.

Look for an agent who understands your lifestyle. Make sure the agent knows the neighborhoods you’re interested in, and can answer questions you’ll have about the location.

Tax-free gain:

When it’s time to sell your home, you don’t pay taxes on the proceeds of the sale that are above what you paid (with some restrictions – see information on capital gains).

The importance of a buyers agent

A real estate transaction is a complex process involving stacks of paperwork and a number of outside service providers and contractors.

An experienced buyer’s agent can guide you through the process, answering your questions and serving as your advocate (see the Anatomy of a Home Purchase). Your agent will help you find the property that fits your needs, submit offers and counteroffers, suggest a good property inspector and other professionals, and provide all sorts of relevant advice.

With a buyer’s agent, you’ll have someone on your side, looking out for your interests every step of the way.

When seeking out a buyer’s agent, look for factors such as productivity, education and experience.

Look for an agent who understands your lifestyle. Make sure the agent knows the neighborhoods you’re interested in, and can answer questions you’ll have about the location.

What are the costs involved in hiring a buyer’s agent?

As a buyer, you don’t pay your agent directly. Instead, the agent receives an agreed-upon portion of the listing agent’s sales commission (usually about half), which is paid by the seller.

If you’re thinking this structure works against you by giving your buyer’s agent an incentive to let you pay more than you need to, consider this:

The increase in a buyer’s agent commission on, say, a $5,000 to $10,000 jump in price would be only $125 to $250. Good buyer’s agents – those who are productive and engaged in the business full time – aren’t going to risk their reputations. Your satisfaction – which can generate referrals to your friends and family – is the lifeblood of their careers.

Deciding where to live

If you’re unfamiliar with the area where you’re moving, your buyer’s agent is an invaluable resource. He or she can offer insider knowledge on neighborhoods, schools, access to recreation and shopping districts, and the many other details on local neighborhoods and subdivisions.

It’s important to have a clear picture on the features that matter most to you in a home or location. Creating a list of “must haves” and flexible “nice-to-haves” from the start will make things a lot easier for you.

Factors to consider:

1. Size of home – square footage, number of bathrooms, rooms, etc.

2. Home features – updated fixtures/appliances, property size, garage, storage, etc.

3. Location – proximity to schools, open space, entertainment, work, etc.

4. Neighborhood – older or newer homes? Families, retirees or singles?

5. Room to grow – planning to have more children?

6. Condition – move-in ready or a less expensive home in need of improvements?

Your buyer’s agent can offer advice on the countless items you should consider according to your lifestyle, budget and particulars.

Anatomy of a home purchase

For most people, finding the right home begins with a house-hunting strategy combining personal preferences, guidance from others (including an agent) and a mix of neighborhood exploring and online search.

For some, the search takes a while; others find what they want right away. In either case, your real estate agent can be a huge resource of insight and guidance, working through issues or complications that arise along the way.

Here’s a general outline of what to expect during a home purchase, from the buyer’s perspective.

Buyers make a purchase offer.
This is it! You’ve found the home of your dreams, looked over disclosure documents, reviewed comparable sales data, talked it over with your agent and submitted an offer. The sellers may accept your first offer, but more often will return a counteroffer. In fact, additional negotiations are common, and your agent will help you through this generally stressful stage.

Check out our interactive HUD-1 and GFE (Good Faith Estimate) documents so you’ll know what to expect when these appear lap during the transaction.

The sellers accept.

Once everyone is happy with the terms, the parties have reached what is known as mutual acceptance and enter into a purchase and sale agreement.

Buyers put up earnest money.
To solidify your intent to buy, you’ll place a deposit, or earnest money, on the property. The amount varies, but is generally at least 1 percent of the purchase price. You’ll write the check to the escrow company, not the seller. Note: This money counts toward your down payment later.

Escrow opens.
The earnest money deposit goes into an escrow account, where all funds will be held until closing, when they are then distributed to the right people (lender, mortgage broker, title insurer, real estate agents, etc.).

Buyers apply for a mortgage.
This step is streamlined if you’ve already been preapproved for a loan (which is a smart thing to do). If not, you’ll begin the loan application process now.

The lender inspects title history and orders a property appraisal.
The lender needs key information about the property before granting a loan. This is when potential problems can come to light. For example, the appraisal could show a lower value than the purchase price, or the lender could have trouble finding comparable homes. Also, the title search could turn up liens or other problems.

A home inspection takes place.
You’ll hire an inspector – generally, your agent will suggest one, or provide several options – to check the home and point out minor and major problems that should be fixed before closing. At this point, you still have the option of backing out of the deal. Through your agent, you’ll submit a list of requested work, and the sellers have the option to complete the tasks, do some of them but not others, or reject the request. The sides will negotiate until reaching an agreement.

Removing contingencies.
If the house passes inspection, appraisal and title search, and everything is good to go, then all contingencies can be removed, paving the way to a closing.

Closing time arrives.
Once contingencies are removed and financing is set, all parties sign a seemingly endless stack of documents, and the transaction closes.

Packing begins!
When the final signatures are in place, it’s time to put down the pens, shake hands, exchange smiles and start packing for the move!

How much house can you afford

Knowing how much you can afford to pay is a crucial step in your search. Nailing down your budget early will make the overall process more focused and less stressful.

Here’s a good way to figure out how much you can afford:

The 28/36 Rule

The 28/36 rule is an established benchmark used by many lenders to determine how much credit to offer you. Here’s how it works:

Get preapproved for a mortgage. Your lender can approve you for a certain to loan amount prior to your home search. This gives you a solid number against which you can assess the affordability of the houses you visit.

The “28” refers to the notion that no more than 28 percent of your gross monthly household income should go toward housing costs, which include mortgage principal, interest, taxes and insurance.

To calculate, simply multiply your gross monthly income (amount before taxes) by .28. Use this amount as a guide for how much house you can afford.

Example: You earn an annual salary of $70,000. Divide 70,000 by 12, giving you a monthly gross income of $5,833. Multiply that by .28, and you’ll find you should spend no more than $1,633 each month on total housing costs.

The “36” part of the 28/36 rule refers to your overall debt, which shouldn’t exceed 36 percent of your income. This is important to consider because other high monthly debt loads – such as car and credit card payments – impact the amount you can afford to spend on housing.

For first-time home buyers, the tricky part is knowing how much to budget for taxes and insurance. An experienced real estate professional can assist you with this.