themarycoxteam.wordpress.com - Real Estate

Getting to Value

Fair market value is the price that real estate would sell for on the open market without any unusual forces being involved. The definition is relatively simple but there certainly different methods of determining what it is.

A homeowner could order an appraisal before they put their home on the market but would incur the expense of an appraisal and more likely than not, it won’t or can’t be used by the buyer or their lender. The advantage is that an appraisal is a professional approach by a disinterested party to establish value.

Licensed appraisers use three approaches to value: the market data, the replacement cost and the income approach. The appraiser can put more weight on one approach than another based on his/her assessment of what would be…

1221 Views, 0 Comments

Opportunity Can Disappear

In the last few years, some people who were unable to sell their homes, rented them instead. The market has improved in most places and the home may easily sell now and possibly, for a higher price.

Even though the opportunity to sell in the near future might not change, there could be another opportunity that could quickly disappear for some homeowners.

Most homeowners are aware that there is a capital gain exclusion on the profits of a principal residence of up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly. The rule requires that you must own and use the home as your principal residence for two out of the last five years.

A homeowner can rent their home for up to three years and still be eligible for the…

1343 Views, 0 Comments

Your home may be worth a lot more than you think

Real estate lost a lot of value during the recession but most areas have rebounded considerably.  In some cases, the homes are worth more than they were before the housing bubble burst.

The dynamics are classic for this type of market: inventories are low, mortgage rates are low and demand is high.  All price ranges are on the rise with some at an even higher rate because the short supply is causing competition among buyers.

Another reason many homeowners’ may have more equity is simply not staying current with what is going on in the market.  In a recent FNMA study, it indicates that 23% of owners believe they have negative equity in their home when actually, it is 9%.  37% believe they have greater than 20% equity in their home when actually 69%…

1290 Views, 0 Comments

Tips for Buying Rentals

Buying rental property can be an excellent decision and the better informed you are, the more likely you’ll have favorable results.  The following suggestions can help you with your decisions.

Real estate is a long term investment affected by supply, demand and the economy.  It isn’t an investment that is easily converted to cash.  The costs to acquire and dispose of real estate are sizable and need to be spread over years to minimize their effects on the rate of return.

Invest in average price homes or slightly below average price to appeal to the broadest market not only when you are renting but later on when you sell it.  The average price is relative to the market you are in and those specific prices.

Lower-priced homes will rent for more…

1314 Views, 0 Comments

Postponing a Purchase

You might be surprised how many people contact real estate offices because they want to buy a home but they don’t have the down payment or the credit to qualify. Occasionally, an agent will be working with someone who does have the down payment and credit but for whatever reason, decides to postpone the decision to purchase now for some point in the future.

It’s not uncommon that once they’re out of the market, the money starts burning a hole in their pocket and they end up buying a boat or a motorcycle or some other thing that cannot positively affect their lives and security the way a home does.

If the money had been put away somewhere safe like a certificate of deposit, it wouldn’t earn a lot but it would be there when they decided the time was…

1399 Views, 0 Comments

6 Reasons for Rentals

Rental homes have several distinct advantages compared to alternative investments. These advantages coupled with the opportunity for a higher yield make it a clear choice for some investors.

1. Most investments must be paid for in cash. Stocks can be purchased with 50% cash but if the value goes down, more cash has to be used to keep the margin at 50%. Rentals can readily be financed with only 20-25% down payment.
2. Most loans made for business or investment purposes are at a floating interest rate compared to the prevalent fixed-rate mortgage on non-owner occupied real estate.
3. Terms for investment loans if possible are generally six months to a year with a possible renewal but real estate commonly has long term loans up to 30 years.
4. Real estate…

1506 Views, 0 Comments

More Home for a Lower Cost of Housing

What if you could live in a larger and possibly newer home for less than you are currently? Would you consider moving? Do you want to hear more?

Interest rates, while they’re expected to go up, actually took a small dip and are still hovering at the 4% or below mark for a 30 year mortgage and almost one percent less for a 15 year term.

Let’s assume that you have a $225,000 mortgage currently at 6% which has a principal and interest payment of $1,348.99. With a 4% rate, you could have a $282,561 mortgage with the same payment. A $57,000 more expensive home could help you get what you need most such as more square footage or a different location or a newer home.

If you’re going to be making that payment for years to come, why not allow lower…

1500 Views, 0 Comments

Who is Your Champion?

The Super Bowl and World Series determine the football & baseball champions. Since there can only be 1 champion, the other team loses. In feudal times, a knight might champion for the king or romantic or religious cause.

Fierce competition can occur when buying or selling a home. Each party wants to get the “best deal” possible. When the buyer &seller aren’t equally matched, and they rarely are, it’s important to have a champion on your side to fight for your cause.

The price of the home, type of financing and concessions, personal property, closing dates and possession are just a few things that can be negotiated in a contract. Since the seller wants to get the most for their house and the buyer wants to pay the least, their causes are…

1612 Views, 0 Comments

Where Are the Sellers?

Low inventories resulting in multiple offers are contributing to what experienced agents are calling the most challenging market they’ve ever worked. While buyers with resources may find the market difficult, purchasers with minimum cash and credit are struggling to find and get into a home. 

First-time buyers feel the impetus to purchase because they’re renting and are concerned about being priced out of the market with rapidly appreciating prices and rising interest rates.

Sellers may not feel the same urgency because they already own a home. While they might find it appealing to change homes, they may not feel a pressing motivation causing them to act.

In some cases, sellers are so attached to their low interest rate mortgage that instead of…

1615 Views, 0 Comments

Letter From the Heart...

Well we returned from visiting family in Salt Lake City to find a nice, thin veneer of the white stuff on the lawn and driveway. So the termination dust has made its way down to terminate what was a really great summer. The weather cooperated nicely for all outside activities. I hope you feel the same.

Just a note: We remembered to take our mowers in for a tune up around April, but sometimes that snow blower gets left for years without any similar attention. That is the case around here as Dave checked the oil in the little red beast before we left and it is coal black and the consistency of his coffee. It weighs about twice what the mower does, he will have to wait for our son Chris to help him get it into the Jeep but it IS going to the shop! Last…

1529 Views, 0 Comments