Fix It Anyway

by plano 27. February 2012 07:56

"If it isn't broke, don't fix it" is certainly popular advice, but if you've ever had a serious plumbing leak, you certainly wished you had taken care of the problem earlier.

Washing machines, like all appliances, are supposed to work and when they don't, it's time to have them fixed or replaced. However, there is a critical connection from your water supply that may even be older than your washing machine itself.

Ask someone whose hose broke while they were asleep or out of town and you'll hear stories of how quickly the water can damage walls, flooring and furniture. Almost anyone can replace the hoses with a pair of pliers for under $30.00 to avoid this potential catastrophe.

As you're shopping for the replacement hoses, consider the braided stainless steel connectors. The advantage is that the stainless steel offers additional protection should a soft spot develop in the hose beneath. They'll cost a little more but offer considerably more protection for a nominal price.

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The IDEAL Investment

by plano 21. February 2012 07:13

Rental homes can be the IDEAL investment in today's market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.

IDEAL serves as an acronym to identify the advantages of rental properties:

  • Income from the monthly rent contributes to paying the expenses and a return on the investment
  • Depreciation is a non-cash deduction that contributes a tax shelter
  • Equity grows monthly as the mortgage amortizes due to some of each payment being applied to the principal
  • Appreciation is achieved as the value of the property goes up
  • Leverage can increase the return on investment by using borrowed funds to control a larger asset
The combination of these characteristics working together makes rental real estate a very good investment for today's economy and years to come. Increased rents, high rental demand, good values and low non-owner-occupied mortgage rates contribute to positive cash flows and very favorable rates of return.
Contact me for more information about actual opportunities in our local market.

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Great investment

by plano 13. February 2012 19:41

If you invest in a savings account, you'll make less than 1% and will have to pay income tax on the earnings. On the other hand, contribute something extra to your house payment on a regular basis and you'll essentially, earn at the mortgage interest rate which is certain to be more than you're earning in the bank.

Making additional principal contributions on your mortgage will save interest, retire debt and build equity. An extra $100 a month in the example shown will save thousands in interest and short the term of the mortgage as well.

Reducing your cost of housing is another way to improve the investment in your home. Becoming debt-free is a worthy goal that is achieved with discipline and good decisions. Suggestions like this are part of my commitment to help people be better homeowners when they buy, sell and all the years in between.

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The Best Way Home

by plano 6. February 2012 16:09

"It's not far, if you know the way." Maybe it is an obvious statement but there are some definite steps that will improve your success in buying a home in today's market.

  1. Know you credit score- the best mortgage rates are available to borrowers with the highest scores. Unless you know what your credit score is at all three major bureaus, you don't really know what rate you'll have to pay.
  2. Clean up your credit - it is estimated that about 90% of credit reports have errors. Some are not serious but others could affect a borrower from getting the best loan terms. It is your responsibility to know what is on your different reports and correct them if possible. You're entitled to a free copy of your credit reporteach year from Experian, Trans Union and Equifax.
  3. Get pre-approved- Taking the time to make a loan application with a qualified lender even before you start looking at homes will provide peace of mind, make sure that you are looking at the "right" homes and may help you negotiate the best price on the home you select.
  4. Do your homework - when you find the home that meets your needs and desires, research the tax assessments, school ratings, crime activity, possible zoning changes and comparable sales in the area.
As your real estate professional I can definitely help you with these important strategies to invest in a home to call your own, raise your family, feel safe and secure and share with your friends. Call for a recommendation of a trusted mortgage professional; there really is a difference.

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Why Pay Full Price?

by plano 6. February 2012 16:07

No one wants to pay more than its value regardless of the product. When you buy bananas for 49 cents a pound at one store and see them for 39 cents a pound at another store, it's not the ten cent difference as much as it is about overpaying.

It seems like the natural way to start the negotiation process is to offer less than the asking price for the home. However, instead of the price, a buyer could negotiate condition, timing or terms. A few thousand dollars off the price may not make much difference in the monthly payments but it might make a big difference if it was negotiated in one of the other areas.

A buyer who only has enough available funds for down payment and closing costs will have to live in a home exactly the way it is for some time. They may not be able to make the changes that would really make it feel like home until they've saved more money.

Let's say you found a home that needed $5,000 worth of improvements and the seller would lower the price by that amount. Financing those improvements with a separate bank loan will result in higher payments due to a higher interest rate and shorter term than your mortgage.

Offering full price and asking the seller to make the improvements will result in lower monthly payments based on today's low mortgage rates and 30 year term. Another alternative is to negotiate with the seller to pay your closing costs so you'd have the cash to make the improvements.

Paying full price may cause the seller to consider concessions regarding condition or terms which can be balanced to affect the value of the property. Buyers can and should negotiate to acquire the home that meets their needs at the lowest possible cost of housing.

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Finding the Best Deal

by plano 6. February 2012 16:05

 

Consumers are vigilant about buying opportunities like Black Friday, Small Business Saturday and Cyber Monday along with sales, coupons and rebates.  Some cautious buyers will even risk shopping early to find exactly what they want to waiting until the last moment for potentially lower prices.

In retail, the hype is more obvious and the signs may be easier to read than that of the home market.  Certainly, volumes have been written about the record low mortgage rates and that home prices have adjusted considerably lower in the last four years.

A more subtle indication of a home buying bargain is that statistics indicate that year-after-year, the average home prices fall in the fourth quarter.  The holidays beginning with Thanksgiving, winter weather and the distractions of gift purchases certainly contribute to lower home sales.  

Regardless of what is causing the reduced volume, the smart buyer can take advantage of the end of the year to get their best possible deal on a home purchase.  The buyers willing to buck the trend could easily benefit from lower prices and less competition from other buyers.

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"This Year I'm Going To..."

by plano 6. February 2012 16:00

Every year, it seems like the same things are on the list but this could be the year you really do invest in a rental home.

Rents are climbing, home prices are cheap and mortgage rates are low for even non-owner occupied properties. A $125,000 home with 20% down payment can easily have a $300 to $500 monthly cash flow after paying all of the expenses.

There are lots of investment strategies that work but one that is easy to understand and execute is to stay with below average price range homes in predominantly owner-occupied neighborhoods. These properties will appeal to the broadest range of tenants while you hold them and buyers when you're ready to sell.

Single family homes offer an opportunity to borrow high loan-to-value mortgages at fixed rates for long terms on appreciating assess with tax advantages and reasonable control

This is the year to make some real progress on your resolutions. First, invest some time learning about rental properties by attending a FREE webinar on January 4th at 7:00 PM Central time by national real estate speaker Pat Zaby. Click here to register.

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The "Right Size" Home

by plano 6. February 2012 15:59

Work hard, buy a home, start a family and continue to upgrade your home until everyone has enough room. This has been the blueprint for lots of homeowners for the last fifty years but there is certainly a shift in thinking that could change all of that.

Interestingly, Americans live in much larger homes than most people in other countries throughout the world. The U.S. Census reported in 2006 that the average single family home completed had 2,469 square feet which was 769 feet more than in 1976.

Once the children are grown and have moved out, homeowners are finding they have too much room. Even if their home is paid for, they have higher property taxes, insurance, utilities and maintenance on the larger home than they'd have if they were living in the "right size" home.

Some homeowners state thaty they're keeping their larger home because it has luxury features that smaller homes don't have. There's a movement that seems to have started in the United States to find the "right size" home with the amenities and convenience that homeowners want.

This philosophy has been expressed by Sarah Susanka in her book Creating the Not So Big House. It proposes a house that "values quality over quantity with an emphasis on comfort and beauty, a high level of detail, and a floor plan designed for today's informal lifestyle."

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Choose Your Deduction

by plano 6. February 2012 15:58

One third of all U.S. households, 75% of households with more than $75,000 income and most homeowners itemize their deduction on their federal income tax returns. It makes sense because the interest paid on their mortgage and their property taxes probably exceeds the allowable standard deduction.

However, with interest rates as low as they have been in the last two years and the price of homes having come down considerably, it is possible that the standard deduction may be the better choice.

Each year, the taxpayer can compare the total of the itemized deductions to the standard deduction to select which method will result in the most benefits. The 2011 standard deduction is $11,600 for married couple filing jointly and $5,800 for single filers.

The Housing and Economic Recovery Act of 2008 allows homeowners to take the standard deduction and the lesser of their actual property taxes of $1,000 if filing their return married jointly. For more information, see Schedule L found on www.IRS.gov and consult your tax advisor.

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In search of an honest man

by plano 6. February 2012 15:56

Similar to Diogenes’ search for an honest man, homeowners want someone to do quality repairs at a fair price.  The task appears reasonably easy but if you’ve ever tried to locate someone to fix something, you know just how difficult it is.

Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad.  Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repairman or company who will pay a referral fee.

There are consumer organizations like Angie’s list who rate repairmen and contractors but they usually require an annual membership fee to be able to access the information.  There are also services like Renovation Experts or Service Magic that are registries for contractors but they may not be the most competitively priced.  

Your best recommendations are going to come from friends, family and neighbors you trust who have actually used the repairmen before and would use them again.  The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.

Repairs are a normal part of selling homes and we certainly come in contact with lots of contractors.  This experience leads us to understand who is reputable and reasonable as well as who to avoid.  As part of our commitment to helping you be a better homeowner from the time you buy your home until you sell it, we’re more than happy to make a recommendation of good repairmen or other professionals you might need.  Give us a call…we want to help.

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