Feb 8, 2019 | Real Estate
Savvy home buyers often get great deals on new home constructions by asking for deals and discounts and doing some up-front research.
Home builders often dislike offering steep discounts in sales prices because they want everyone in the community to feel like they bought their property at a fair price. Maintaining sales prices also helps with future home appraisal values. It helps all of the buyers in a neighborhood to keep sales prices consistent and growing.
Fortunately, you can still get great discounts that can reduce the cost of your new home.
Ask the builder if they can do the following:
Settle Closing Costs
Closing costs vary depending on your state. On average, the costs can be as high as $10,000. In Colorado, for example, a standard closing is about 3 percent of the selling price.
It’s important to note that closing costs vary widely and can be structured in many ways. Make sure to consult a trusted mortgage finance professional to get the best information on your situation. But if the builder pays the bill, that money remains in your pocket. Isn’t that a great discount?
Buy Down Your Interest Rate
Although interest rates are low, if a builder is willing to buy down your rate further as part of the closing, it would reduce the amount you pay monthly in interest on your mortgage payment. That makes it manageable in the long run. Once again, your mortgage professional can give you the best details on this idea.
Offer Free Upgrades
Most homes have standard built in appliances. To get high-end appliances, home buyers normally have to pay for upgrades. Ask your builder if you can get the upgraded home appliances or other upgrades without paying extra. It’s a great strategy to move into an improved new home.
Additional Discounts
To sweeten the deal, home builders can throw in additional discounts such as automated garage doors, landscaping, finished basements and window coverings. These discounts are worth asking about.
Although these strategies are great, there are some situations that make it more difficult to get sales concessions. Therefore, as you negotiate, keep the following in mind:
- If business is going great, deals become more unlikely as builders have little motivation to give discounts.
- You may not end up with the perfect home you want since you may be buying a home that’s near completion or already built.
- The best home locations may be taken because properties in prime lots are usually the first to sell.
Knowledgeable buyers are most capable to cut great deals. Therefore, research new construction homes in your preferred neighborhood, visit some homes and compare what deals you can get. Above all, don’t hesitate to ask questions of your trusted real estate and mortgage professionals.
Feb 7, 2019 | Real Estate
The Tax Cuts and Jobs Act of 2017 instituted some of the most dramatic changes to the financial landscape in the United States in over 30 years. These adjustments to the IRS code have an effect on everyone who earns and spends money in this country.
What changes can real estate investors expect to see from the new legal standards?
Higher Standard Deduction, Less Itemized Deductions
Before the reforms, single tax filers were allowed a standard deduction of $6,350. Married couples filing jointly were given $12,700. The standard deduction is the amount of income you can earn before any income taxes are applied. If a married couple made $50,000 in one year, they would only pay taxes on $37,300. With the new laws, single filers receive a $12,000 deduction and married couples get $24,000.
However, with the increased standard deduction comes significant decreases in itemized deductions. Many smaller real estate investors depend on tax credits for homebuyers to make their purchases more profitable. Those have been removed from the list of approved deductions.
Real estate investors need to adjust their strategy to take full advantage of new tax trends. Rather than focusing on flipping homes for profit, investors may consider holding on to properties and leasing them as rental units.
Mortgage Tax Deduction Changes
Homeowners who live in their primary property are still allowed to deduct a portion of the interest paid on their monthly mortgage. However, those who have taken out home equity lines of credit are no longer able to claim a deduction for those interest payments.
This is a big change for some real estate investors. It’s a common strategy to use home equity lines of credit to finance other projects. Without the extra deduction, these loans are still a great option for quick cash. However, investors will take more time to realize profits with this strategy.
Decrease In State And Local Tax Deductions
Investors use state and local tax deductions to increase their return on investment. Under the new rules, property owners are limited to a $10,000 maximum deduction. Real estate investors who operate in high-income areas will see a significant increase in their yearly tax bill. The $10,000 limit is unlikely to offset the high price of property taxes in places like California and New Jersey.
Newer investors who don’t hold a lot of properties can consider buying in markets with lower state and local tax rates. Those who are currently invested could sell some of their lower-producing properties to lighten the burden on their tax bills.
The new tax laws are a challenge for real estate investors. But with some planning and the right information, your business can still produce a generous profit.
If you are interested in investing in a new property, be sure to partner with a trusted real estate agent.
Feb 1, 2019 | Real Estate
With the right combination of strategy, knowledge, and luck, flipping houses can create big profits for short-term investors. However, your path to success starts at your first auction.
For first-timers who are intimidated by their lack of experience at public auctions, follow these steps to ease the confusion of your first property purchase.
Locate Auctions In Your Area
Finding live auctions is as simple as an internet search. Websites run by government agencies list homes that have been seized due to tax liens or foreclosures. Try searching databases maintained by:
- Fannie Mae
- The FDIC
- The US Department of Housing and Urban Development
Another option is your local newspaper. Banks publish foreclosure notices in the public notice section. You can also find advertisements from auction companies and information from the sheriff’s or county tax collector’s office that helps you hunt down low-cost properties.
For busy investors who plan to use real estate as an extra income, be certain to enlist the help of a professional real estate agent. They often keep lists of homes in foreclosure in the surrounding area.
Assess Available Properties
All properties are not created equal. To find the right fit for your project, find the following information for each potential listing.
- Current bid price
- Previous purchase price
- Length of time property has been unoccupied
- Property condition
- Number of bedrooms and bathrooms
- Sales history of homes in the surrounding neighborhood
This information isn’t always readily available. You may be able to find more information via an MLS search, public lands records, or various real estate websites that publish property data. Of course, if you’re working with a real estate agent, they will provide all the data you need to make the right decision.
Some auction sites include pictures and map data. At other auctions, bidders may be allowed to visit the property or hold open houses before the sale occurs.
Perform A Title Search
When you’ve found a few properties that you like, take some time to do a thorough title search. This process ensures your property doesn’t come with some unfortunate surprises.
During your search, you’ll need to:
- Obtain records from the tax assessor to verify the tax status of the property.
- Locate the property’s deed either physically or online.
- Investigate the property’s sales history to ensure no one else can claim ownership.
- Check for liens, unpaid mortgage commitments, and legal judgments against the property.
Once a property has cleared these steps, you’ll be ready to start placing bids on your first investment property.
Trying new things can be daunting as well as exciting. Don’t forget to rely on your trusted and reliable real estate professional to guide you along your home buying venture.
Jan 31, 2019 | Real Estate
Home price growth continued to struggle in November, with Case-Shiller’s 20-City Home Price Index moving from October’s reading of 5.30 percent annual growth to 5.20 percent growth in November. This was the lowest reading since January 2015.
Las Vegas, Nevada remained first in home price growth rate with a year-over-year home prices growth of 12 percent. Phoenix, Arizona’s year-over-year home price growth rate was 8.10 percent and Seattle, Washington held third place with a year-over-year home price growth rate of 6.30 percent.
Las Vegas’ large year-over-year growth in home prices was attributed to the city’s ongoing recovery from the recession when home prices tanked in southern Nevada. Cities including Denver, Colorado, San Francisco California and Seattle, Washington saw steep declines in home price growth rates as compared to past peak home price growth fueled by post-recession recovery.
Challenges to home price appreciation were no surprise as slim supplies of available homes and high buyer demand created buyer competition and fewer choices of available homes. Affordability continued to discourage first-time and moderate income buyers.
David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices said, “The pace of price increases is being dampened by declining sales of existing homes and weaker affordability. Sales peaked in November 2017 and have drifted down through 2018. Affordability reflects higher prices and increased mortgage rates through much of last year.”
Affordable Homes Hard To Find Amid Slim Supply
First-time home buyers accounted for about 32 percent of home sales in November; their market share has not increased in recent months. First-time buyers typically look for pre-owned homes that cost less than brand new homes.
Healthy job growth and record unemployment rates could encourage potential buyers, but buyers were sidelined by short supplies of available homes and concerns about mortgage rates and overall economic trends. Analysts said that recently falling mortgage rates may not have been enough to encourage buyers who continued to face high demand for fewer homes and strict criteria for mortgage approval.
Positive indicators for housing markets included stable inflation and the Fed’s decision not to rise its target interest rate range; this was expected to help slow rate increases on consumer credit including mortgage loans.
If you are in the market for a new home, please be sure to consult with your trusted real estate agent and your trusted home mortgage professional.
Jan 30, 2019 | Real Estate
These days, people want energy-efficient homes that look great. To answer the call of passionate environmentalists, developer are rising to the occasion and designing home features that minimize waste, save energy and reuse reclaimed materials. The results are gorgeous, green homes that help move the sustainable living trend forward.
Hidden Solar Panels
Solar panels are a great way to save energy, but not everyone loves the optics. A series of solar panels on the roof may save you money on your utilities, but it can detract from the natural shape of your home. As an alternative, innovative in-roof solar panels are installed level with the roof line.
This is accomplished by designing a deeper roof so the solar panels are flush with your shingles or other roof material. Of course, this requires some forethought, but it’s not impossible to retrofit your existing home to take advantage of the clever development.
Reclaimed Materials
Deconstruction involves the “un-building” of a house. Specifically, when buyers or developers tear down a structure before building a new one, they attempt to reuse, salvage or donate as many materials as possible. Otherwise, all this material ends up in a landfill.
Reclaimed brick brings a rustic character to a new home. It also adds a historic appeal and interest to an interior or exterior space. Wood siding and beams reduce further deforestation and often give you beautiful hardwoods and rugged lumber that has stood the test of time. Reclaimed flooring often nets you thicker wood slabs that you can refinish for a powerful visual effect.
Bamboo is the ultimate sustainable building material. This fast-growing wood results in light-colored, unique wood floors. Although its’s softer than traditional hardwoods, it’s a great wood substitute that can regenerate in three years with minimal pesticides or fertilizers.
Large Windows That Conserve Energy
In the past 20 years ago, windows have gotten larger – and more energy-efficient than ever. High-performance glazing and innovative frames hold in heat in winter and cool air in summer.
Steel windows now open up and require fewer mullions to support larger glass panes, which reduces construction materials and air leakage. This means that green-minded homeowners can enjoy floor-to-ceiling views of the ocean or mountains without paying a huge utility bill or expending vast amounts of energy.
Be sure to let your trusted real estate agent know if green living is on your priority list for your future property.
Jan 29, 2019 | Real Estate
One thing to think about when purchasing a home or parcel of land is to have an updated land survey conducted. While property deeds generally include detailed information, many are outdated for a variety of reasons that include nature, weather conditions, and adjustments in floodplain maps among others.
Even when the information about the property is spot-on at the closing, human perception of where your property begins and ends can lead to some unenviable outcomes. Given that buying real estate ranks among the largest personal investments for most people, these are three things you may want consider about land surveys.
Good Fences Make Good Neighbors
The old Robert Frost poem “Mending Wall” ponders the reasons that people erect property line fences and why they fix them each spring. The reason is a simple one, setting boundaries avoids unnecessary disagreements and allows people to get along.
Land disputes can turn otherwise friendly neighbors into hostile abutters because there is a pervasive sense that someone is stealing from you. Good fences are the product of clearly identified boundary markers and professional surveyors are the people who measure and certify them. If you plan on buying or recently purchased a parcel of land, updating the land survey may be in you and your neighbor’s best interest.
Squatters Can Take Your Land Through Adverse Possession
Many states continue to allow the practice of adverse possession. In some places, it’s known as “squatters rights.” If someone who does not rightfully own a piece of land can maintain or utilize it for a period of time, they may be able to put in a claim.
Although many people consider this an outdated and unfair practice, it remains too common in rural and suburban areas. Misplaced fences are often the basis of such claims. When abutters work your land or use it to access their own, that can be the basis of a claim to get a permanent easement or take it from you.
Land Surveys Can Be Used For Insurance Purposes
The severe weather storms that struck communities across the country have prompted organizations to update their floodplain maps. Property owners who were not previously required to purchase flood insurance may now find themselves considered “at risk.”
But that designation can be considerably more complex than just owning a home or residential property inside the flood zone. These updated maps do not necessarily consider the elevation of each and every property. In order to be properly listed, you may need to have an elevation certificate to petition FEMA and others that your property is not at risk. That means having a professional land survey conducted.
There are numerous reasons why current land surveys can prove valuable to real estate buyers and sellers. Without one, you are operating without critical information about a significant investment. Your trusted real estate agent and home mortgage professionals can refer you to appraisers and land surveyors in your area. Be sure to rely on these valuable resources during your new home purchase.
