Road to Homeownership home-buying

Tax breaks real estate you should be prepared to do without in 2014

Dozens of tax laws are set to expire at the end of 2013. Many of these provisions are quite popular and likely will be extended by Congress. Exactly when or how lawmakers will get around to doing this is unclear.

The situation is complicated by the fact that both the White House and Congress want to enact serious tax reform in 2014. Key members of Congress and the Obama administration have proposed that extending or making permanent some of these expiring provisions be made part of the overall tax reform process instead of being done piecemeal though special tax extension legislation.

The expiring provisions of most importance to the real estate industry include:

Mortgage insurance premiums deduction: Since 2007, qualifying homeowners have been able to deduct premiums for mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, the Rural Housing Service, and private mortgage insurance. Homeowners whose incomes are not too high can treat such payments the same as mortgage interest payments. (IRC Sec. 163(h)(3)(E).) Unless the law is extended, no deduction will allowed for amounts paid or accrued after Dec. 31, 2013.

Discharge of indebtedness on principal residence exclusion: Since 2008, homeowners have been allowed to exclude from their taxable income up to $2 million of debt forgiven on their principal residence by a lender in a short sale, mortgage restructuring, or forgiven in a foreclosure. (IRC Sec. 108(a)(1)(E).) Full Article

All-in-One Guide to Packing Your Kitchen

When it comes to packing for a move, most people dread the kitchen, with all the dishes, appliances, and odds and ends crammed onto shelves. And it’s not a job you can rush through, because if you’re not careful in your packing, you risk finding broken dishes and shattered wine glasses when you open the boxes in your new place.

But, believe it or not, you can avoid the common mistakes and get your kitchen packed in a weekend.

Appliances

If you still have your appliances’ original boxes and packaging, use them. If not, you’ll need medium-sized packing boxes and a little ingenuity. Before packing, make sure each appliance is clean and dry. Remove smaller parts and fragile items, such as glass bowls.  Next, locate the owners manual and tape it to the front of the appliance for easier assembly later. Finally, wrap the fragile pieces in bubble wrap and use a double layer of newspaper or packing paper to wrap the metal or plastic pieces. Put the appliance in the box first and stack the lighter, smaller pieces on top.

Dinnerware

Start by placing two layers of bubble wrap or packing paper on the bottom of the box. Wrap each piece of dinnerware with a thin layer of packing paper and stack them one at a time in the box, adding an extra layer of bubble wrap or paper in between every three dishes. For extremely fragile items such as wine glasses and coffee mugs, wrap them individually in T-shirts or tank tops and save the expense of extra bubble wrap.

Silverware

Loose silverware is a pain to sort out during unpacking and can damage fragile items in shared boxes. To save yourself the headache, start by sorting your silverware according to type. Wrap each type with a rubber band or piece of string. Finally, place all of the silverware in a shoebox and tape the box closed with packing tape.

Pots and Pans

To find the right box for your pots and pans, grab your biggest pan and place it into a box both horizontally and diagonally. If you can close the lid securely, the box will work. If not, try a larger box. Once you find the right size, stack your pots and place them in the box. Once the boxes are in, wrap glass lids with thin packing paper and place them underneath the handles of the pans.

Food

Packing is a great time to unclutter your pantry. Sort through the items there and toss out anything past the expiration date. Any food that’s useable but that you don’t want can be donated to a local food bank. For the food you want to keep, use tote bags to carry it to your new place.

Odds and Ends

To save on boxes, wrap your kitchen utensils and other odds and ends with a single layer of packing paper. Once wrapped, tuck the pieces into your other boxes to fill up the last bit of unused space. For heavier items, use a small packing box. Full Article

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Be Prepared for Mortgage Rules Changes in 2014

The world of mortgage lending has changed significantly since the housing bubble burst. Mortgage lenders have returned to traditional loan standards that require extensive documentation of income and assets for a loan approval.

Government regulatory agencies also continue to react to the housing crisis, with more adjustments to mortgage requirements set to go into effect in 2014:

Qualified Mortgage Rules

Whether you’re thinking of buying a home or mulling over refinancing your mortgage, Jan. 10, 2014, could be an important date for you to remember. The Consumer Financial Protection Bureau is in the process of implementing regulations to meet goals set forth by the Dodd-Frank Act in Congress, which was meant to correct the errors that led to the housing crisis. The CFPB’s “Qualified Mortgage,” or QM, rules go into effect in January. Essentially, these rules require lenders to prove borrowers’ ability to repay a loan by meeting several guidelines, including a maximum debt-to-income ratio of 43 percent. While many lenders already limit borrowers to a similar maximum debt-to-income ratio, the new rules won’t allow for any compensating circumstances such as significant cash reserves or a large down payment to be considered in order to offset a higher debt ratio.

If you have credit problems or a high debt-to-income ratio, you may want to push through your loan application for a refinance or home purchase to make sure you close your loan before the new rules go into effect. However, many lenders are already using QM standards in order to make sure they’re in compliance with the regulation. Mortgages that don’t meet QM standards will have to be held by the lender rather than sold to Fannie Mae and Freddie Mac, so most lenders are careful to meet the new standards.

The 3 Percent Rule

The new QM requirements also limit fees for originating a loan to no more than 3 percent of the loan amount. If you’re financing a more costly home, such as a $400,000 home or more, the lender can easily keep fees under 3 percent, which in this case would be $12,000. However, if you’re refinancing a smaller loan balance or purchasing a less expensive home — for example, for $80,000 — the lender might find it more difficult to keep all fees under $2,400. Mortgage lenders are less likely to offer loans for smaller amounts since they won’t always recoup their costs and make enough profit to pay their staff. If you need a small loan, you may want to push to get it closed before Jan. 10, 2014.

Self-Employed Borrowers

One particular group of borrowers will most likely be impacted by the QM rules: self-employed borrowers. These borrowers already are heavily scrutinized and find it more difficult to obtain a mortgage because they must prove their income based on tax returns and profit-and-loss statements, rather than standard paystubs and W2 forms. The “ability-to-repay” feature of QM rules requires all borrowers to prove they have the cash flow to make payments on their mortgage. Self-employed borrowers often have fluctuating income and rely on cash reserves to pay bills in-between payments, but the emphasis on cash flow can make it harder for lenders to approve a loan even for someone with significant funds in the bank.

Potential Lower Loan Limits

The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced in October that plans to reduce the maximum loan limits for conventional conforming loans will be delayed until later in 2014. Typically, loan limits are adjusted on Jan. 1 of each year, but the agency decided to wait to see the impact of the introduction of QM rules before making changes. Currently, the limits are $417,000 in most housing markets and rise to $625,500 in high cost areas. If you need a mortgage near these limits, it would be wise to close your loan earlier in 2014 rather than later in case limits are lowered. Full Article

Weekly Round Up

Happy Friday! This week has been a great one, almost everyday we helped sellers look over offers, had an offer accepted or closed in escrow! Below are the new listings of the week.

 Give us a call if you have any questions on our services or would like to take a look at one of our listings. 

16659 SE 69th Way Bellevue WA 98006

MLS# 567559

$1,258,888

515 Bonnie CRT NW Salem OR 97034

MLS# 13179901

$499,000

8910 161st St E Puyallup WA 98375

MLS# 565085

$219,999

3525 278th PL NE Redmond WA 98053

MLS# 564382

$289,900

1563 N 5th St McCleary WA 98557

MLS# 566075

$179,000

What You Need to Know About Buying a Home During the Holiday Season

If you’re house hunting over the holidays, you’re likely a serious buyer with an immediate need.  Perhaps you have to relocate for a new job opportunity, or there’s been a change in your personal life? Regardless, while you may assume it’s not an ideal time to be looking — namely because there isn’t much to look at — there aresome advantages to buying this time of year.

Less competition

Let’s start with the obvious one: less competition. This lowers the chances of multiple offers and bidding wars (something we saw a lot of last spring/summer), and should translate into a bigger discount for you. Know your market! This is where sites like Zillow come in handy. Start your research here for comps in your area and to see what homes are selling for.

Serious home sellers

Why would sellers pick such an inconvenient time — while everyone is busy entertaining family and friends and enjoying the spirit of the holidays  — to list their properties? Probably because they need to sell and may feel compelled to do so before the end of the year for tax purposes. What this means for you: less hassle when it comes to negotiating; a greater willingness, on the part of the seller, to agree to concessions; less chance of the seller waffling; and greater respect for your offer, even if it’s a little lower than the seller was perhaps expecting.

Faster mortgage approval

Lenders aren’t as busy this time of year, and less volume could mean faster approval. Some lenders might even be willing to reduce fees during the off-peak season in hopes of gaining your business. Regardless, don’t just go with the first lender who comes along. It pays to shop around. Get multiple quotes and check out lender reviews on Zillow Mortgage Marketplace.

Greater affordability

Sure, home prices have been rising, but they’re typically lower in December than during any other month (so you don’t have to be as aggressive with your initial first offer, compared with buying during peak to high season). Zillow’s third quarter Real Estate Market Reports showed home value appreciation slowing. As we enter the slower home shopping season many overheated markets are moving away from bubble brink and ultimately becoming more affordable than they have been historically. If you want to take advantage of low interest rates, the time to act is now. Full Article

Home Selling Tip: Look Past the Home Staging

One of the great pleasures of house hunting is visiting homes on the market and fantasizing about living in them.

Many of today’s Realtors are expert at home staging, or they will hire a professional home stager to make their listings as attractive as possible to the widest range of buyers. Sellers are taught to present their home as if it’s a hotel room or a model home rather than showing it to buyers the way most people truly live.

While buyers can enjoy the view at a staged home, they should be careful to peek behind the curtains to make sure they’re seeing the reality and not the sparkle.

Try the House on for Size

Staging techniques are used to help buyers visualize what will fit in a room or the function of the room, but they can also mask a too-small or a too-large space. Before you go house shopping take a few measurements of your furniture and the rooms you live in now. Home stagers often remove extra furniture and sometimes take off interior doors to make rooms seem more spacious, so make sure you’ve checked that your king-size bed or your king-size sectional sofa will fit.

One of the costliest things to change in a home is structure, so instead of admiring the shiny granite kitchen counter or enjoying the fluffy new towels in the bathroom, check to see if the kitchen is located where you want it and whether the bathroom will need a major remodel.

Stagers often have sellers empty their closets so that the home seems to have an abundance of storage space, but you should think about what you own and where you’ll put it, rather than assume all those closets will stay empty.

Use Your Senses

A home that smells like cinnamon or citrus appeals to your nose, but if the sellers are using air fresheners in every room, they could be masking a musty smell from a damp basement or pet odors that are permanently part of the carpet.

Use your eyes to check out the lighting. Home stagers sometimes bring in extra lamps, add brighter bulbs and strip away all the window treatments; but since you may want a little privacy and don’t want your home to look like a lighting store you should look for overhead light fixtures and how much natural light the home receives. If you love a particular light fixture, find out if it stays or if it’s part of the staging package.

Think Like a Home Inspector

Freshly painted walls are nice to look at and so are fresh flowers, but you should dig deeper if you’re serious about a home and check under sinks for leaks and look for damp spots in the basement. Test the windows to make sure they work, look at the foundation, and see if you can evaluate the quality of the cabinets and flooring.

Make a checklist of places that you want a home inspector to evaluate carefully.

There’s nothing wrong with enjoying an attractively staged home and even picking up ideas for rearranging or redecorating with your own furniture, but taking your time to thoroughly check out a home before making an offer will increase the chances that you’ll buy a home you love. Full Article

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End-of-Year Market Trends

The U.S. housing market has made some great strides in 2013, but it’s facing a slowdown at the end of the year due to government dysfunction, a sputtering economy and imminent volatility over the next debt-ceiling debate, according to Freddie Mac’s latest U.S. Economic and Housing Market Outlook.

Although, getting a mortgage shouldn’t be affected by any potential market decline, the report stated.

If you’re looking to buy a home, now may be the best time in terms of mortgage rates. Freddie Mac estimates that 30-year-fixed loans will “hover around 4.3 percent” through the end of the year, and then begin heading higher in early 2014. Full Article

6 Simple Moves to Sell Your Home Faster

Between staging your home and having to leave every weekend for several hours for open houses, it’s no surprise that people dread selling their homes – even when the market is strong and homes are selling relatively quickly. If you’re looking to sell your house and want some quick moves to improve it that won’t ruin your budget, start with these six easy things you can do to freshen up the sight, smell and overall feeling of your home. For example: it’s crucial to deep clean your carpets. The smells you are used to, especially if you have pets, will be very obvious to visitors and are potential turnoffs. And we all have little things around the house that we’ve been meaning to fix, like a leaking faucet or some cracked grout. When buyers see something small that’s broken, they immediately start to think about other things they can’t see that might be broken as well. If you can’t be troubled to fix a leaky faucet, will you have fixed a leaky roof? Full Article

Home prices post strongest annual gain in nearly 8 years

Home prices in most metropolitan areas grew significantly in the third quarter, with the national median price rising at its fastest annual clip in nearly eight years, according to the National Association of Realtors (NAR).

During the same period, existing homes sold at the fastest annual rate recorded in more than six years, according to NAR’s latest quarterly report on metro area median prices and affordability.

Despite the robust price growth, NAR estimated that potential buyers still had adequate income in most areas to purchase a home in the third quarter. Nonetheless, market momentum is changing, according to Lawrence Yun, chief economist at NAR.

“Rising prices and higher interest rates have taken a bite out of housing affordability,” Yun said. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”

The national median existing single-family home price increased by 12.5 percent year over year to $207,300 in the third quarter, the strongest year-over-year gain since the fourth quarter of 2005 when it shot up 13.6 percent, according to the trade group.

In the second quarter, the median price reportedly rose 12.2 percent year over year. Read Full Article

Activity from Homebuyers Picks Up in Aftermath of Shutdown

Homebuyers shook off their fears and returned to the market in force following the re-opening of the government in October, according to data presented by Redfin’s Research Center.

The Seattle-based online brokerage reported a 58 percent annual increase in the number of interested buyers reaching out to its agents in the week immediately following the resolution of the partial federal government shutdown, up from a 41 percent year-over-year increase recorded the prior week.

“In the aftermath of the shutdown and debt ceiling debacle, a storm of news media and economists tallied the damage done to consumer confidence and predicted that anxious Americans would spend less through the New Year. In the housing market, however, these predictions aren’t panning out,” said Redfin analyst Ellen Haberle.

Meanwhile, year-over-year growth in the number of clients touring homes increased from an average of 21 percent to 33 percent, with growth in clients making offers increasing from 15 percent to 24 percent.

Despite reports of consumer confidence waning, Redfin customers seemed relatively unfazed by Washington’s affairs.

“My clients think the ugly showdown we saw in October is unlikely to happen again,” reported Philip Gvinter, a Redfin agent based in Washington, D.C. “After putting their home search on hold during the shutdown, they are ready to get back out there.”

Of course, with the government funded only through mid-January and the debt ceiling lifted until the first week of February, it remains to be seen whether the nation will have to sit through a rerun of October’s political drama. Full Article 

Selling Tip: 3 Simple Ways to Add Curb Appeal

Are you looking to add curb appeal to your outdoor home? If you were asked to describe curb appeal, what would your answer be? Wouldn’t you be lost for words? No doubt about it, curb appeal can be hard to describe. However, it is an easy thing to spot when a home has it. Houses with curb appeal have a nice finished look and an engaging personality. If you’re looking to sell, curb appeal can help you to make a great first impression. There are lots of inexpensive ways to add curb appeal to your home. Full Article

1. Update Your Front Door: The focal point of your home’s curb appeal is the front door. Make a style statement by installing a custom wood door or painting your current door a bright color. When choosing paint, get one that contrasts with your home’s façade. Use metal polish on the door’s fixtures and remove any dirty spots around the knob. Your entry should coordinate with the rest of your home so choose a wreath or swag that reflects your personal style. 

2. Replace Old Items: If you have an old wall-mounted mailbox, entry door lockset, house number, or overhead light fixture, it might be reflecting negatively on your curb appeal. When correctly used, these elements can add interest and style to your home’s exterior. Instead of choosing mix-and-match pieces, go for those that function collectively and give your home unmatched style. If you have a traditional home, choose oil bronzed finishes but go for brushed nickel suits if you have a modern home.

3. Install Exterior Lights: With just a few lights, you can create a big impact. Low-voltage landscape lights can perform two key functions: provide security and enhance your home’s curb appeal. Lights can illuminate a walking path or add accent lighting to trees updating the style of your entire exterior.

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30-year mortgage rate falls to 4.5%

Average rates on fixed mortgages declined this week amid signs the economic recovery is slowing.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.5% from 4.57% last week.

The average on the 15-year fixed mortgage dipped to 3.54% from 3.59% last week.

The retreat in the average rate of a 30-year mortgage comes just a couple of weeks after the rate reached a two-year high of 4.58% on Aug. 22. The average rate on a 15-year mortgage also hit a two-year high — 3.6% — that day. Overall, mortgage rates remain low by historical standards. Full Article

New Housing Crisis: Not Enough to Buy

Sales of existing homes declined in May, according to a new report from the National Association of Realtors, not just because the overall housing market is struggling, but because there are simply not enough homes to buy.

There are currently 2.49 million for sale, a drop of 20 percent from a year ago. To make matters worse, supply is lowest on the low end, where so much of the investor activity has been over the past several years.

This lack of supply has seriously skewed the readings on home prices for the second straight month.

The median price of an existing home, as reported by the Realtors, rose 7.9 percent in May annually, but NAR chief economist Lawrence Yun was quick to point out that this does not mean the average home owner gained that much equity; it is simply a big shift in the type of home that is selling. Sales of homes priced under $100,000 dropped two percent from a year ago, while sales of homes priced between $250,000 and $500,000 shot up nearly 29 percent (though still at low volumes historically). Again, this is due to lack of supply on the low end, specifically distressed homes. Full Article

Top 5 Mistakes Home Buyers Make — And How to Avoid Them

From the beginning of your home search through closing escrow, there’s an awful lot to think about and do. It’s not unusual to make a mistake along the way. But with the financial stakes so high, a false move can end up costing you a lot of money. Full Article

Here are five common home buyer mistakes, with tips on how to avoid them.

• You Expect to get the price down After Making an Offer
• You wait until the eleventh hour to ask for credits
• You chase a deal at all costs
• You think you can do it all yourself
• You don’t think like a seller

We Will Never Forget 9/11

Alternative Ways to Come Up With the Down Payment on a Home

To successfully purchase a home today, you will need a down payment of at least 3.5 percent of the purchase price. Gone are the days of no down payment alternatives, down payment assistance and seller-offered programs to come up with the money needed to buy a home. Instead, let's look at the five ways you can come up with a down payment to seal the deal. Full Article

1. Gift Money: Gift money is simply that -- a gift from family or documented close relationship. The giftor needs to provide a gift letter and paper trail for the monies they are gifting for the benefit of the buyer. In other words, they'll have to provide a bank account showing that they had the ability to gift the money. In short, gift monies cannot be funds sitting at home in a safe.

2. 401(k)/Retirement Loan: Typically, borrowed funds for a down payment are a no-go, but the exception is a 401(k) or equivalent retirement account (or current home equity line). If you can borrow money from your 401(k) for your down payment, this is accepted for obtaining a purchase mortgage loan. Note: Depending on the terms of your loan, this could be counted as a liability andfactored into your debt-to-income ratio.

3. Sale of a Good: Believe it or not, you can sell your recreational vehicle and use the net proceeds from the transaction as your down payment. Let's say that you decide to sell your motorcycle for $10,000. You'll need to provide the full bill of sale -- as well as the bank statement depositing those funds, matching the bill of sale -- to your mortgage lender. Same goes for any other recreational vehicle, or other item that "makes sense." The key is as long as it's plausible and passes the litmus test and you can paper trail the monies from start to finish, you should have no problem using those monies for the house purchase.

4. Trust Funds, Settlement Awards, etc.: If you come into a chunk of change via an inheritance, settlement, lottery winning, trust fund disbursement, family buyout, even a gambling victory, all of these monies can be used for the down payment as long as the sourcing of the monies is fully documented from A to Z with no stone left unturned. Matching of the amounts of monies used to the original deposits will be required when it comes time to secure the loan.

5. Line of Credit: Where a down payment lacks, enter strength in income. You can take out a line of credit or a personal loan, deposit the full funds into your bank account and after two months, the funds will be eligible for use in the transaction.

While a down payment is needed to purchase in the current real estate market, a prudent homebuyer should also have plans for having available funds for closing costs. The same out-of-the-box strategies listed above can also be used to procure funds for closing costs.

Closing costs run at about 3 percent of the purchase price, on average. So the total funds to close would be 3 percent of purchase price plus 3.5 percent down.

Do your homework. If you don't have a down payment for a house, or your down payment is coming from more than one source, make sure that you talk to a lender upfront so they can help you navigate the best way to properly support and document your monies used. Doing this on the front end will save you from wasting time creating and gathering unnecessary paperwork.

Are Dining Rooms Dead? 5 Better Ways To Use That Space

How many times did your family use your dining room last year? If you can count the meals at the table on one hand, then you may want to consider repurposing that room. It can be hard to let go of the dining-room dream, but let’s be realistic. A room that only gets used during holidays isn’t worth keeping. If you’re willing to break out of the traditional dining-room mold, the possibilities can go a lot further than three-course meals and dress shoes. Here are five ways to get more from your dining room. For example, if you spend a lot of time in the kitchen and love the idea of your kids playing close by, then turn your dining room into their playroom. Ditch the fancy table and replace it with a craft table and add toy bins or book shelves. Full Article 

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30-Year Fixed Mortgage Rates Fall for First Time in Five Weeks

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.37 percent, down from 4.52 percent at this same time last week.

The 30-year fixed mortgage rate hovered between 4.56 and 4.48 percent for the majority of the week before steadily declining near the current rate during the weekend.

“Mortgage rates retreated late last week on a significant drop in new home sales and weaker-than-expected manufacturing data,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This week, if scheduled economic reports reveal additional downbeat economic data, rates could drift even lower heading into the Labor Day weekend.”

Additionally, the 15-year fixed mortgage rate this morning was 3.34 percent and for 5/1 ARMs, the rate was 3.12 percent. Full Article

Landscape Your Home To Sell

When selling your home, landscaping determines whether your home feels inviting from the outside. Curb appeal is important to 71 percent of homebuyers when choosing their abode, according to a 2013 National Association of Realtors survey. Landscaping is a large part of that curb appeal, says Frank J. Lucco, managing director of IRR-Residential Appraisers & Consultants in Houston. “That first impression is important,” says Lucco. “If they don’t like the looks of the front of the house, which is mostly landscaping,” often they won’t even go inside. A landscaping investment could potentially pay a 215 percent return in home value, says Margaret Woda, a Realtor with Long & Foster Real Estate in Crofton, Md. While you may only recoup 68 percent of kitchen renovation fees, Woda says landscaping is money well-spent. Here are five things to consider with your landscaping. Full Article

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Selling Your Home: Should You Build A Fence So Buyers Won’t Worry About Privacy?

“It’s never great to be able to look into someone else’s window,” said Lyn Stevens, a real estate broker at Sotheby’s International Realty in Greenwich, Conn. And it’s worse still when they can look into yours. But before trying to solve the problem, she said, “think about return on investment, and salability.” A thoughtfully designed fence may improve the look of your yard and resolve privacy issues, she said, which could make the property more salable. But that doesn’t necessarily mean a higher sale price. “These things end up costing a lot of money, and you won’t necessarily get the value out of them,” she said. “If you had two homes side by side, and one had a fence in the backyard and the other one didn’t, I don’t see the one with the fence selling at a higher number.”  Full Article

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Mortgage Rates Are On The Rise But It’s No Big Deal

For the first time in a long time, the nation is buzzing over mortgage rates - and it’s not because they’re dropping to new lows. On the contrary, mortgage rates shot up well over 4 percent. Mortgage rates have been kept artificially low for a long time, and we all knew they had to go up at some point. The truth is rising mortgage rates are no big deal, and home financing is still incredibly affordable at today’s rates. So before you toss aside your dream of becoming a homeowner, just because rates aren’t the lowest they’ve been in the history of mortgage rates, remember that previous generations of homebuyers financed property at double-digit rates and did just fine. Today’s homebuyers are still poised to achieve the American Dream at a price we may never see again. As long as you’re realistic about your ability to buy and what you can afford, rising rates should have little impact on your decision to go through with a purchase. Full Article 

Homes For Sale Are Spending Less And Less Time On The Market

The median time that homes spent on the market was down to 37 days in June, from 41 days in May. This is 47% faster than a year ago. The housing market has clearly been moving fast. Redfin’s Fastest Markets Report showed that 32% of homes went under contract within two weeks, and 20% in one week or less. While this was less that 33.2% in May, this was still one of the fastest markets in years, according to Redfin. Earlier this year Business Insider reported on flash sales in parts of the country, where homes sold with 24 hours of hitting the market as supply remained tight. “The spike in mortgage rates led buyers that were already in the market for a new home to rush to lock in low rates while they could,” according to Ellen Haberle, economist at Redfin. Full Article

Sellers calling the shots on home deals

In a dramatic about-face for the housing market, sellers are now calling the shots.

A survey of more than 2,000 Americans found that 33% of the 365 who were searching for a home have been on the hunt for more than a year and many were willing to make compromises on where they live or the type of home they would buy in order to close the deal, Century 21 Real Estate reported Wednesday.

"The recovery has transformed the mindset of many buyers and sellers who grew accustomed to the buyers' market we saw for years," said Rick Davidson, CEO of Century 21. "Buyer confidence is building back up and demand is strong... sellers are now in a more favorable position."   Full Article

3 Things That Make the Best Real Estate Investment

In general you probably want to earn wealth on real estate based on risk you are taking, while minimizing the amount of time you need to spend attending to the property. In order to accomplish this, you need to make some smart choices upfront when buying investment property. Your goal should be to strive to get as close as possible on as many of these optimal scenarios as possible:

Pays a Fair Cash-on-Cash Return

When you buy property you are taking money out of your liquid financial assets – stocks, bonds, CDs – and investing it into a very illiquid asset – real estate. You were earning a rate of return on your financial assets, such as 4 percent or 6 percent, and you should strive to earn a fair cash-on-cash rate of return on your real estate. To do this, you need to pro forma your deals and buy cash flow-positive properties that earn you decent returns – not those prize properties that are negative, negative, negative. For more guidance on this, see Smart Investing – A Tale of Two Townhomes.

Isn’t Too Risky an Investment

All real estate is extremely high risk. Development of real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In many of those investments, you will never see a dime of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision.

Doesn’t Require a Lot of Time or Managing

Some properties just require way too much time and management to make them smart investments. Examples include vacation rentals, low quality properties in bad areas, college rentals, etc. Nice boring properties rented for as long as possible to decent credit profile tenants seem to take the least time to manage. In addition, treating your tenants fairly and with respect goes a long way towards keeping good relations with them; and reducing your hassles when there is an issue you need to address. And believe me — there will be issues!

It’s the nice, boring, wholly owned, in good shape, cash flow-positive properties that are the best investments. They are out there for your picking, but it’s not as simple as finding a property on the MLS and buying it.

You need to do some hard work, research, read up, and make smart, educated decisions to acquire the best real estate investments! Full Article

How to Negotiate a Home Offer

Here are some simple steps to remember when negotiating an offer. Full Article 

1. Study your competition. Do your homework ahead of time so you have hard facts as to why your home is worth what you have it listed at. Negotiating an offer will not go back and forth so it is important to set a reasonable listing price. 

2. Understand the Market. Understanding whether you live in a buyers' or sellers' market comes down to knowing how fast homes in your area sell and whether the sellers were inundated with home offers or simply settled on the one they got. Before you sell your house, ask your agent for information on home sales in your area and talk to your former neighbors about their home sale experience if possible.

3.  Negotiate, negotiate, negotiate. By thinking of the home sale as a transaction with several different pieces, many of which can be tweaked to help the buyer and seller come to an agreement that both can live with, the seller gains significantly more negotiating power. On top of compromising on repairs and upgrades, Melle says that the seller can also throw in or remove home warranties and negotiate their move-out date.