5 Benefits of Using A Real Estate Agent When Buying Or Selling A Home

5 Benefits of Using A Real Estate Agent When Buying Or Selling A HomeIt may come as a surprise for some people to learn that not everyone uses a real estate agent when buying or selling a home. Whenever someone is looking to move, it is critical to rely on the experience of a real estate agent. There are a few benefits that everyone should keep in mind.

Tips For Price Guidance

The price is one of the most challenging aspects of either buying or selling a home. A trained real estate agent spends his or her days looking at the prices of homes that are bought and sold in the local area.

Therefore, real estate agents can help someone sell a home both quickly and at the right price. If homes are left on the market for too long, prospective buyers might think that something is wrong with the house. This may make the home harder to sell.

Networking In The Real Estate Industry

Next, hiring professional real estate agent is important for accessing the professional network. Real estate agents typically have access to appraisers and inspectors who will be able to do a quick, easy, and cost-effective evaluation of the home. This will help the homeowner determine whether or not any repairs are necessary to get the house ready to sell.

Appropriate Financing Options

A real estate agent can also guide a prospective buyer through the financing options. There are lots of options when it comes to purchasing a home. A real estate agent can help someone review his or her options, helping a client find the right financing option for them.

Exposure For A Home Sale

One of the major benefits of working with a real estate agent is access to something called the Multiple Listing Service. This is a service where the vast majority of real estate agents list homes that are for sale. This will help any house being sold gain more exposure. The more exposure, the more potential offers, helping a house sell for a higher price.

Handling The Paperwork

One of the most often overlooked benefits of working with a real estate agent is help with the paperwork. The paperwork required to buy or sell a home can be significant. A real estate agent knows how to get through this paperwork quickly, efficiently, and accurately.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

How to Buy An Investment Property

How to Buy An Investment PropertyIt is important for everyone to take steps to diversify their assets. While many people take this to mean holding multiple stocks, bonds, and mutual funds in the market, this also includes branching out into the real estate industry. The real estate industry is far more stable than the stock market and provides a fantastic opportunity to generate reliable returns. At the same time, there are lots of options to choose from when it comes to investment properties.

Here are a few tips everyone should keep in mind.

Buying And Renting

One option is to purchase a single-family home as a second building and then rent it out. On the other hand, it is also possible to purchase a multi-unit property and rent out each individual unit. One of the biggest factors to keep in mind is that the owner is going to be responsible for collecting deposits, checking the backgrounds of potential tenants, conducting repairs, and completing maintenance tasks.

If the property is located in a desirable area, it is possible for someone to collect enough rent to cover the cost of the mortgage and more. At the same time, it is also possible that someone might end up spending a considerable amount of time managing the property. It might be a solid idea to hire a property management company; however, this will eat away at the revenue. These are a few of the key factors to think about.

Flipping Houses

Another option real estate investors can consider is flipping houses. In this process, someone buys a home (which is often in a state of disrepair and inexpensive), repairs it, and then sells the home for a profit. It is also possible that someone might end up spending a significant amount of time and money renovating the home, which might eat away at any financial gains. Be sure to know exactly what repairs and renovations the home is going to need before buying.

A Real Estate Investment Trust

Sometimes, it might be too much for someone to buy individual properties. One possible option is called a real estate investment trust (REIT). This is a company that owns numerous big properties that generate incomes. Therefore, these trusts are often compared to mutual funds in the stock market but for real estate. Different REITs specialize in different areas, so there are lots to choose from.

If you are interested in buying a new home or refinancing your current property, be sure to consult with your trusted home mortgage professional.

How To Find Places To Buy Rental Investment Properties

How To Find Places To Buy Rental Investment PropertiesReal estate, which is a rental property, has the unique characteristic under the tax code of being able to depreciate it and pretend the asset is going down in value, while, if you are a clever investor, you will acquire property that actually increases in value. Additionally, there are other tax advantages for owning a rental property that can help shelter income.

Positive Cash Flow

The key to success with a real estate investment portfolio of rental properties is to build value while it is self-sustainable. Have the goal of creating positive cash flow from every owned property. Making $100 per month positive cash flow from a single property may not sound like much until you multiply that by 25 properties. A portfolio with those characteristics makes a nice passive income of $2,500 per month or $30,000 per year.

Leverage

Using leverage increases the return on investment (ROI) as long as you choose properties that are cash-positive enough to cover their carrying costs and do not lose value over time. The lower the amount of your money that you invest, the greater the leverage you have and the higher your ROI will be.

Finding Rental Income Property

Commercial rental income property is more challenging so it is best to focus on residential rental properties, especially when starting to build up a real estate portfolio. The things you want to look for when hunting for residential rental properties are a manageable median price for the area, an area that is showing steady annual appreciation in home values, and an area that is stable with no severe negative challenges now or in the foreseeable future.

City Opportunities

It is possible to find properties that are excellent investments in many parts of the United States. Here are some examples of cities that currently have investment opportunities so you can consider them and compare them to your location.

Here are the top ten residential rental markets as ranked by TurboTenant for 2020:

1. Reading, PA

Median Sales Price $140,000 — Annual Increase 11.1% — Average Rent $957

2. District Heights, MD

Median Sales Price $252,000 — Annual Increase 0.4% — Average Rent $1,408

3. Allentown, PA

Median Sales Price $145,000 — Annual Increase 19.0% — Average Rent $1,063

4. East Orange, NJ

Median Sales Price $273,000 — Annual Increase 10.0% — Average Rent $1,534

5. Nashua, NH

Median Sales Price $283,000 — Annual Increase 4.5% — Average Rent $1,524

6. Cincinnati, OH

Median Sales Price $163,000 — Annual Increase 3.1% — Average Rent $1,048

7. Paterson, N.J

Median Sales Price $268,000 — Annual Increase 11.9% — Average Rent $1,614

8. New Castle, DE

Median Sales Price $188,000 — Annual Increase 8% — Average Rent $1,884

9. Rochester, NY

Median Sales Price $136,000 — Annual Increase 5.6% — Average Rent $1,126

10. Hyattsville, MD

Median Sales Price $279,000 — Annual Increase 0.4% — Average Rent $1,982

Summary

It is possible to find cash-flow positive properties in all of these markets, so they are all excellent examples of what to look for when you are hunting for a residential rental property to acquire. Be sure to work with a qualified local REALTOR® who knows the market well that you are considering as well as your trusted home mortgage professional.

Common Problems Faced By New Homeowners

Common Problems Faced By New HomeownersBuying a new home is a big step for individuals and families. This is a time for celebration as the new furniture gets moved in, everyone gets adjusted, and the honeymoon phase starts with the new home. On the other hand, buying a home also means that all of the responsibilities rest with the owners.

Here are a few common problems that new homeowners face.

Taking Care Of The Outside

Many homeowners are quick to realize that there is a tremendous amount of maintenance on the outside of the home. Now, the exterior is their responsibility and doesn’t fall on a landlord. Sure, it can be helpful to hire someone; however, this can be expensive.

Some of the common questions that homeowners have include how frequently they should water the lawn. There might also be questions regarding which type of fertilizer and when they should use this. Also, the issues caused by weeds can be substantial. When in doubt about these issues, simply reach out to a professional and ask for help. Someone is always willing to lend a helping hand.

Plumbing Issues Are Common

It is important to do a home inspection before buying a home. This will let the potential buyer know about any repairs they might be inheriting. Some of the common issues have to do with the plumbing system.

One of the most common issues has to do with clogs. Sometimes, the clog takes place in the sink when someone tries to force food down the drain. In other situations, toilets might get clogged if something other than toilet paper gets flushed down the toilet. While a basic plunger is a great place to start, it is also prudent to invest in some drain cleaner and a snake.

The Lights Go Out

Sometimes, people are shocked to see the power go out during a storm. In some cases, the power company may need to come out and handle the repairs. In other situations, it might be a tripped circuit breaker. When the power goes out, head to the circuit breaker and take a look at any fuses that might be turned off. Unplug some of the appliances and then turn the circuit breaker back on! This might do the trick, but if it goes out again, call an electrician.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

Home Improvements That May Improve Resale Value

Home Improvements That May Improve Resale ValueDid you know that some home improvements lower the resale value of a home and decrease the number of potential buyers? If you are going to repaint the exterior of your home bright, traffic-cone orange and try to sell it for a high price, think again! Maybe, if the artist Pablo Picasso once lived there that might work, but probably not under any other circumstances.

Some things are counter-intuitive. A swimming pool is an example. Swimming pools are great and highly desirable for many people. However, others do not necessarily think so and only see them as adding unnecessary expenses for maintenance and upkeep.

There are general guidelines to follow, which give you a better chance to increase the resale value of a home by making certain improvements. If possible, work with your REALTOR® who understands the local real estate market conditions before making decisions about investing in renovations to increase a home’s resale value.

Be aware that the industry averages show a percentage of recoupment of the investment and no renovations make back what they cost, in terms of increased resale value. This means you should only consider renovations that you like for other reasons as well as the potential financial impact on the home’s value. The only way to profit from renovations is to do some work yourself.

Renovations — Partial Recoupment In Resale Value

Here are the top ten things to consider with their average installation cost, average increased resale amount, and the average recoupment percentage as ranked by Remodeling in the 2020 Cost vs. Value Report:

1. Manufactured Stone Veneer (applied to the front of the home)

Installation Cost $9,357 — Increased Resale Amount $8,943 — Recoupment 96%

2. Garage Door Replacement

Installation Cost $3,695 — Increased Resale Amount $3,491 — Recoupment 94%

3. Fiber Cement Siding (applied to the exterior of the home)

Installation Cost $17,008 — Increased Resale Amount $13,195 — Recoupment 78%

4. Vinyl Siding (applied to the exterior of the home)

Installation Cost $14,359 — Increased Resale Amount $10,731 — Recoupment 75%

5. Vinyl Windows (double-pane)

Installation Cost $17,461 — Increased Resale Amount $12,761 — Recoupment 72%

6. Wooden Deck

Installation Cost $14,360 — Increased Resale Amount $10,355 — Recoupment 72%

7. Wood Windows (double-pane)

Installation Cost $21,495 — Increased Resale Amount $14,804 — Recoupment 69%

8. Steel Entry Door

Installation Cost $1,881 — Increased Resale Amount $1,294 — Recoupment 69%

9. Composite Deck

Installation Cost $19,856 — Increased Resale Amount $13,257 — Recoupment 67%

10. Asphalt-Shingled Roof

Installation Cost $24,700 — Increased Resale Amount $16,287 — Recoupment 66%

The runner-ups, with their recoupment percentages, are remodeling the bathroom (62%), metal roofing (61%), a kitchen remodel (59%), a bedroom addition (59%), and a bathroom addition (55%).

Summary

Notice that the top ten items that make the most positive impact on the resale price are all exterior projects and most of them are visible from the front of the home. The wise adage of “curb appeal sells” seems to be true when it comes to renovations that generally improve resale value.

If you are in the market for a new home or interested in refinancing your current property, be sure to consult with your trusted home mortgage professional.

The Most Commonly Searched Household How-To Remedies

The Most Commonly Searched Household How-To RemediesOwning a home comes with a lot of responsibility. Many of the responsibilities that people think about involve home maintenance. There are few things that frustrate a homeowner more than having repair and maintenance bills come up. At the same time, it is important to address these properly.

For this reason, it is important for everyone to understand the most common how-tos people search for. This will give someone a glimpse into some of the responsibilities he or she might face when owning a home. Those who can handle these how-tos can save money on maintenance costs and repair bills.

How To Unclog A Drain

One of the most commonly searched how-tos is how to unclog a drain. Some of the drains that might get clogged include kitchen drains, sink drains, and bathtub drains. When these drains are clogged, water can back up and make the equipment unusable.

In order to unclog a drain, it is important to consider the various options available. Some people use a “snake” to unclog a drain. Other people use a liquid, such as Drano.

How To Stop A Leaky Faucet

Another how-to that people frequently have to handle is a leaky faucet. A dripping faucet can lead to significant increases in someone’s water bills. Furthermore, the dripping noise can also keep people up at night.

Sometimes, the handles on the faucet simply need to be tightened to stop the leaky faucet. In other cases, there might be a loose washer underneath the sink somewhere. These are some of the common causes of a leaky faucet.

How To Patch And Repair Drywall

Another common house issue that people sometimes need to handle involves drywall. Patching drywall can be a complicated process depending on the location and size of the drywall.

Everyone who is thinking about patching drywall should understand the steps involved. This includes how to make the drywall smooth in addition to the various adhesives and tools involved.

Understanding Household How-Tos

These are a few of the various how-tos that people might have to face during homeownership. Homeowners that can handle these how-tos will be able to save money on maintenance and repair bills down the road, provided they are handled properly.

If you are in the market for a new home or if you are interested in refinancing your current property, be sure to contact your trusted home mortgage professional.

Tips On How To Get The Home You Want In A ‘Seller’s Market’

Tips On How To Get The Home You Want In A 'Seller's Market'A “seller’s market” happens when there are more potential buyers than homes for sale. In a seller’s market, people looking for a home may feel frustration and not easily find the home that they want. When they find a home for sale that they like, the seller of the home may receive multiple competitive offers at the same moment.

The seller is in an excellent position when this happens. Sellers can pick from the purchase offers to choose the one they like the most. Even if an offer is the same as another one, sometimes it is not the offer chosen by a seller.

Causes Of A Seller’s Market

Seller’s markets arise because a particular area is very desirable. There can also be limitations that do not allow any further development of residential properties in an area. Well-established neighborhoods in up-scale market areas are typically likely candidates for becoming a seller’s market. Easy credit financing is another contributing factor.

Check the median sales price as a percentage of the listing price for an area. If it is greater than 100%, this is a seller’s market.

Buying A Home In A Seller’s Market

If you must live in a certain area, and there are extremely compelling reasons for buying a home in a seller’s market, then expect to pay more and work harder to get the type of home that you want. Here are some tips about how to buy a home in a seller’s market:

1. Work With A Top Real Estate Professional: You want to go into this challenge along with the best professional help that you can find. You want to choose a top real estate agent that specializes in the market area that you desire. They should know the neighborhood intimately and represented both buyers and sellers in that market.

2. Pre-Approved Credit Commitment: Apply for mortgage approval before looking for a home to buy. Request more than the amounted needed and pay for a written loan commitment that guarantees the financing is both approved and legally-committed for the time, plus a little more, that you need to find a home to buy.

3. Move Fast: Make a purchase offer as quickly as possible when a new home listing comes up that meets your criteria.

4. Cash Earn Money Deposit: Offer the seller earnest money in cash that is a significant amount to accept the purchase price you offer. By cash, we mean physical dollar bills of around $5,000 or more. Cash makes people sign a deal.

5. Offer More Money: If you want a specific home, make your purchase offer 1% or more than the asking price. Also, offer in writing to match any other competing offers plus a bit more. You may get into a bidding war and have to pay much more to get the home.

6. Off-Market Properties: Seek to buy a property that is not yet for sale. Ask your agent to call people who they sold a home to before. Ask everyone in the local area if they know of one that is like the one you want. Knock on doors of homes that are one you might like to buy and ask the owner if they will sell the home.

Summary

To get the home you want, try to be flexible with the basic criteria of what type of home it is. Work with a great real estate agent. Move fast and use our tips to be competitive with other potential homebuyers.

If you are interested in purchasing a new home or in refinancing your current property, be sure to consult with your trusted home mortgage professional.

5 Excellent Pathways To Home Ownership For Millennials

5 Excellent Pathways To Home Ownership For MillennialsMillennials are a huge socio-demographic group of over 83 million people. Many of them want to buy a home but face challenges that their parents did not necessarily have. Homes are more expensive. In most places, home prices rebounded to exceed the pre-2008 economic collapse values. Moreover, home prices continue to go up.

The encouraging news is that there is home financing readily available and mortgage interest rates are still reasonable. Even if it is more challenging, the greatest investment that most Americans can make is buying a home. Paying rent is only helping the landlord get rich. Homeownership is still highly desirable and a part of a wise long-term investment strategy.

Here are some tips that millennials can use to become homeowners.

Save For The Down Payment And Build An Excellent Credit History

The best rates for home loans are for those with an excellent credit history who can put down 20%. It is possible to borrow the down payment. The problem with this strategy is that the cost of the loan is higher. The mortgage rate may be higher and the lender may require private mortgage insurance (PMI). PMI pays off the loan balance to the lender if the homeowner defaults on the loan; however, it does not protect the homeowner’s equity in the home or any down payment. PMI just adds another monthly expense.

Create Non-Location Dependent Income

Home prices are somewhat dependent on the local economy and the employment available in the local area. By creating non-location dependent income through the “gig” economy. Work as a freelancer or a person who telecommutes by working from home. With this income, you will be freer to look for a home in a rural area or an area where the home prices are lower.

Take Advantage Of First-Time Homebuyer Programs

Many first-time homebuyer programs are offered by programs of the federal government through the Housing and Urban Development (HUD) and other agencies. Be sure to investigate those possibilities when considering buying a home.

Hunt For A Home In Low-Cost Areas

Use the online systems when searching for a home to compare two things, 1) the median price of homes for each area and 2) the cost of living for each area. The areas with low median prices and that have a lower cost of living are usually easier places to buy a home.

Partner With Others

A home-buying partnership is something many are using to make owning a home more affordable. Multigenerational ownership is used by many families to buy a large home together and share it. Other partnerships can be made among individuals, who are not relatives, to share ownership. Choose ownership partners very carefully and be sure to have competent legal counsel when creating a written ownership agreement.

Summary

Millennials are challenged with new obstacles when seeking to buy a home. The strongest challenge is the cost of homeownership. However, there are many clever ways to improve the chances of enjoying an affordable ownership situation. Be patient and do not give up. Work with a REALTOR® who understands the challenges and is an expert in the area where you are thinking about buying and with a trusted home mortgage professional to find the best financing options for your situation.

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise Strategy

Why Buying A Home In An Adjacent Area To The Best Neighborhood Is A Wise StrategyHave you ever seen a scientific experiment with things growing in a Petri dish? This is a metaphor for how neighborhoods grow as well. Things in a Petri dish grow towards the areas that have more nutrition to attract them and repel from areas that have bad things that they do not want.

A popular neighborhood does a similar thing. It may have boundaries that are certain street or other physical barriers. Nevertheless, if the area builds its popularity, it tends to grow and might also cause an improvement in the surrounding areas.

Homes In Adjacent Neighborhoods

An adjacent neighborhood is one that is right next to another one. For example, in the Los Angeles Metro Area, just to the west of Beverly Hills is Century City. Century City is a fine area so it is usually called by its name. However, properties in Century City are also “Beverly Hills – Adjacent.”

This nomenclature is a bit like identifying a “used car” as a “pre-owned vehicle.” It is a marketing technique to say a home is located in a neighborhood adjacent to a popular one. However, those homes are indeed special. If the popular area appreciates significantly, this may have a positive impact on the neighborhoods surrounding it.

Mapping Adjacent Neighborhoods

It is a terrific strategy to look at the opportunities for buying a home in an adjacent area near the best neighborhood in town.

Use Google maps to find the map that includes the best area of town and what is around it. Then, research the listing prices for homes that are within the best neighborhood and those that are in the adjacent areas. For comparison, look for homes of the same style, type, and size

Zoom in on the satellite view of the streets to get a close look at the places just inside and just outside the official boundaries of a great neighborhood. It may be surprising to find areas that have a significant pricing differential, even just for a few blocks on a few streets. Those particular areas are worth further exploration.

Barriers To Progress

Be aware that physical barriers are stronger than psychological ones. A river, a very wide street, a public park or another major physical barrier can permanently separate a neighborhood from another adjacent one. These may block a growth opportunity.

What to look for are adjacent areas where the barrier between the neighborhoods is psychological and there is nothing at all very different between the great neighborhood and two blocks down the street. These few blocks in the adjacent neighborhood are where one might discover a treasure. It is possible to find a home that has a slightly better price. It might appreciate at the same rate as the best neighborhood next door or faster to catch up with other similar homes.

Summary

Using the adjacent neighborhood strategy may help avoid buying a home only in the most expensive areas that may be over-priced. Many find that the adjacent areas are just as nice and a home there may be a better value.

Work with a real estate agent that knows the area well. Your agent should be able to help you discover the up-and-coming adjacent areas and properties that might offer an enhanced investment opportunity. As always, your trusted home mortgage professional is the best resource for current financing options.

How Much Money To Budget For Home Maintenance

How Much Money To Budget For Home Maintenance1Owning a home comes with a lot of responsibilities. One of these involves home maintenance. Sometimes, people are surprised by the size and frequency of home maintenance costs.

In order to reduce the stress that comes with home maintenance, it is important to plan ahead of time. This means budgeting for the inevitable costs that come with home maintenance. There are a few systems that people can use to estimate their home maintenance costs.

The Percentage System

One of the most common systems that people use is the percentage system. In general, the amount of money that people spend on maintenance is directly related to the size of their home. The larger the home, the more money someone is going to spend on maintenance.

Most people will spend between 1 percent and 4 percent of their home’s value every year in maintenance costs. Older homes are going to have more maintenance costs than younger homes. For example, if a home is worth $300,000, someone is going to be spending between $3,000 and $12,000 per year on upkeep.

The Square Footage System

The range above might be too large for someone to budget accurately. Therefore, a lot of people also use the square footage system. Again, the larger the home, the more someone will spend on upkeep.

In general, someone should allocate $1 dollar per year per square foot of home. For example, if someone’s home is 2,500 square feet, they should allocate about $2,500 per year in home maintenance.

Some of the downsides of this method are that it does not take into account the location or age of the home. Keep these factors in mind as well.

Home Maintenance Is Different Than Home Repairs

Home maintenance costs are very different than major repairs. The idea of maintenance is to prevent repairs from arising. If someone has to replace their HVAC unit or take out faulty wiring, this does not count as home maintenance costs.

With this in mind, it is important for everyone to budget accurately for home maintenance and to make sure these tasks are completed on-time. Proper home maintenance can save money on homeownership by preventing major repair bills from coming up down the road.

And any time you have home maintenance questions, remember to ask your real estate professional. They have a lot of experience dealing with every type of home repair and a list of local referral maintenance providers.

If you are in the market for a new home or interested in refinancing your current property, be sure to contact your trusted home mortgage professional to discuss financing options.