Today's real estate market provides an excellent opportunity for renters to turn their monthly payments into equity. Interest rates are still lower than in the past ten to twenty years. Home prices in many areas are adjusting back down to reflect reasonable levels of appreciation.
Money paid for rent goes into the pocket of the landlord, but money paid for a mortgage goes toward equity in the home. You keep the money you pay for your home, as its investment value increases with every payment.
If you could put $10,000 down on a $210,000 home today and pay $1,100 per month, your equity would total $138,521 over a ten-year period. This calculation assumes a 30-year fixed rate loan at 6.5% and an annual appreciation of 4.5%. Of course your income and credit rating determine whether or not you qualify for a loan.
So do the math, and then contact a local real estate agent or a lender to discuss your eligibility for home ownership. It’s never too late to start building your future!
For more information about living in central Virginia please visit my website at
www.MadisonVARealEstate.com
Sunday, January 28, 2007
Thursday, January 25, 2007
Sellers/Buyers Market
Are we currently in a “buyers market” or a “sellers market”?
The basic concept behind a "buyers market" is that there are more residential properties for sale in an area than there are qualified buyers. This creates increased competition among the sellers for those fewer buyers, putting the buyers in the “driver’s seat” when it comes to negotiation.
A "sellers market" occurs when there are more prospective buyers than there are homes for sale. Buyers then compete against each other for available properties, often to the benefit of the seller.
Many areas across the country have enjoyed a sellers market for the last few years. Mostly because interest rates have been so low that many more buyers qualified for financing. We are currently experiencing more of a “buyers” market, since interest rates are slowly creeping up and there are more houses for sale.
Regardless of which hat you’re wearing, consult a professional for advice on getting the most out of your real estate experience.
The basic concept behind a "buyers market" is that there are more residential properties for sale in an area than there are qualified buyers. This creates increased competition among the sellers for those fewer buyers, putting the buyers in the “driver’s seat” when it comes to negotiation.
A "sellers market" occurs when there are more prospective buyers than there are homes for sale. Buyers then compete against each other for available properties, often to the benefit of the seller.
Many areas across the country have enjoyed a sellers market for the last few years. Mostly because interest rates have been so low that many more buyers qualified for financing. We are currently experiencing more of a “buyers” market, since interest rates are slowly creeping up and there are more houses for sale.
Regardless of which hat you’re wearing, consult a professional for advice on getting the most out of your real estate experience.
Monday, January 22, 2007
Sunday, January 21, 2007
Pricing Your Home
As most markets experience an "adjustment" period, buyers are fewer and farther between. Sellers usually ask their listing agent for a Comparative Market Analysis (CMA) to properly gauge their asking price in these dynamic conditions.
But as a buyer, how can you be sure that your offer is a reasonable one? Some sellers simply ignore current market conditions, expecting to fetch the same prices as a year ago. You may need some assurance. Particularly, you need to know how many homes are on the market now vs. a year ago, and how the average sales times compare. Ask a real estate pro to provide you with the very same CMA that the sellers request!
Once you've located a home you're excited about, a CMA report will compare it with similar properties, and give you a very good indication of whether the asking price truly reflects its value. Such a report costs you nothing, yet gives you the peace of mind that your offer is a solid one, and you're not risking one penny more than you should!
But as a buyer, how can you be sure that your offer is a reasonable one? Some sellers simply ignore current market conditions, expecting to fetch the same prices as a year ago. You may need some assurance. Particularly, you need to know how many homes are on the market now vs. a year ago, and how the average sales times compare. Ask a real estate pro to provide you with the very same CMA that the sellers request!
Once you've located a home you're excited about, a CMA report will compare it with similar properties, and give you a very good indication of whether the asking price truly reflects its value. Such a report costs you nothing, yet gives you the peace of mind that your offer is a solid one, and you're not risking one penny more than you should!
Tax Incentives
Millions of people each year move from one state to another. The financial and personal impact of buying and/or selling a home can be enormous. You should fully understand the tax implications before moving. You should legally change your state of residence and determine how that affects taxes on income, property, and your estate.
Once you’re a legal resident of your new home state, you can apply for incentives like homestead exemptions (if available). Make sure you’ve updated the address on your credit report. Investigate how the enforcement of certain legal documents like wills and powers of attorney might be affected.
Making your move early in the year may minimize the impact. Tax returns can be confusing when you’re claiming part-time residency in two different states during the year you move. Trust a real estate professional to help with selling, buying and moving, and seek advice from a tax consultant about the financial implications.
Once you’re a legal resident of your new home state, you can apply for incentives like homestead exemptions (if available). Make sure you’ve updated the address on your credit report. Investigate how the enforcement of certain legal documents like wills and powers of attorney might be affected.
Making your move early in the year may minimize the impact. Tax returns can be confusing when you’re claiming part-time residency in two different states during the year you move. Trust a real estate professional to help with selling, buying and moving, and seek advice from a tax consultant about the financial implications.
Reverse Mortgages
Reverse mortgages have existed for years now, but are often misunderstood.
A reverse mortgage is still a loan, but is not paid back until the last owner/co-owner dies, or the home is sold or left unoccupied for one year. You may receive an equity line of credit, borrowing money as needed, or receive monthly checks for the rest of your life, like an annuity.
While the loan amount is based on your age(62 and over) and your home’s value, lenders don’t loan the full value of your home. A reverse mortgage provides a low-risk option that allows seniors to remain in their home for the rest of their lives, however, other investments should be depleted before giving it consideration. Your home’s equity should be tapped as a last resource.
When the loan becomes due, the home is sold and you (or your heirs) would receive any money left over. If the house sells for less than the loan amount, the lender eats the loss. Again, this is a great option for many, but not all qualified borrowers. Give it thorough investigation.
A reverse mortgage is still a loan, but is not paid back until the last owner/co-owner dies, or the home is sold or left unoccupied for one year. You may receive an equity line of credit, borrowing money as needed, or receive monthly checks for the rest of your life, like an annuity.
While the loan amount is based on your age(62 and over) and your home’s value, lenders don’t loan the full value of your home. A reverse mortgage provides a low-risk option that allows seniors to remain in their home for the rest of their lives, however, other investments should be depleted before giving it consideration. Your home’s equity should be tapped as a last resource.
When the loan becomes due, the home is sold and you (or your heirs) would receive any money left over. If the house sells for less than the loan amount, the lender eats the loss. Again, this is a great option for many, but not all qualified borrowers. Give it thorough investigation.
Information Overload
The growth of information technology in real estate has provided benefits to both agents and consumers. Buyers and sellers are better informed and real estate agents are able to offer a higher level of service. Access to all that information can not replace the need for representation in the sales transaction. In the real estate industry, the number of agents, the use of technology, and economic growth have all increased together over the years.
Now consumers can view listings online, research neighborhood demographics, and even find a lender after shopping around for the best rates. All of this creates a more educated homeowner or buyer, who understands the benefits of representation.
The consumer can experience “information overload”. A real estate agent’s roll is to translate all the input, as well as assist with complicated matters like title insurance, inspections, legal documents, and contract negotiations. Technology can never replace good customer service that an agent can provide.
Now consumers can view listings online, research neighborhood demographics, and even find a lender after shopping around for the best rates. All of this creates a more educated homeowner or buyer, who understands the benefits of representation.
The consumer can experience “information overload”. A real estate agent’s roll is to translate all the input, as well as assist with complicated matters like title insurance, inspections, legal documents, and contract negotiations. Technology can never replace good customer service that an agent can provide.
Make Your Home Stand Out
In today’s market where houses for sale are plentiful, there is a lot of competition for buyers. If you’re getting ready to sell your home, there are steps you can take to make it stand out from the others.
Make your home look more spacious by using neutral colors on the walls and carpeting. Far from appearing boring, the neutral scheme will actually allow buyers to better visualize their own decorating plans. Along those same lines, get organized and reduce the clutter around the home.
This also means rearranging furniture, or even putting some furniture into storage, if it will help your rooms “breathe.” After all, you want buyers to be able to picture their own furniture and belongings in your home. It will be easier for them to imagine moving in if you’ve already taken steps to clear the space a bit.
Details like door handles, cabinet hardware, and faucets can be inexpensively updated to show pride of ownership in your home. Now you’re ready to successfully compete for those buyers!
Make your home look more spacious by using neutral colors on the walls and carpeting. Far from appearing boring, the neutral scheme will actually allow buyers to better visualize their own decorating plans. Along those same lines, get organized and reduce the clutter around the home.
This also means rearranging furniture, or even putting some furniture into storage, if it will help your rooms “breathe.” After all, you want buyers to be able to picture their own furniture and belongings in your home. It will be easier for them to imagine moving in if you’ve already taken steps to clear the space a bit.
Details like door handles, cabinet hardware, and faucets can be inexpensively updated to show pride of ownership in your home. Now you’re ready to successfully compete for those buyers!
Wednesday, January 17, 2007
The Home Inspection
When buying or selling a home, you will probably encounter “the inspection”. Disclosure and awareness are the most important issues. A recent survey of the National Association of Home Inspectors suggest that sellers need to address any problems before listing their home. Buyers should be aware of the following survey results.
The four most common major problems are as follows: Improper drainage around the house can allow water to penetrate the foundation. Roofing can reflect damage in the form of worn materials or improper flashing.
In older homes, particular attention should be paid to the electrical system, which might have inadequate overload protection, “suspicious” wiring, or insufficient power. Also inspect the heating and air conditioning systems, especially if managed with an older thermostat or other controls.
Even though most homes will not have major problems, these are the most common. Trust your agent to prepare you for anything, whether selling or buying.
The four most common major problems are as follows: Improper drainage around the house can allow water to penetrate the foundation. Roofing can reflect damage in the form of worn materials or improper flashing.
In older homes, particular attention should be paid to the electrical system, which might have inadequate overload protection, “suspicious” wiring, or insufficient power. Also inspect the heating and air conditioning systems, especially if managed with an older thermostat or other controls.
Even though most homes will not have major problems, these are the most common. Trust your agent to prepare you for anything, whether selling or buying.
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