Renting vs. Buying

This is an age-old debate. Nearly every article I come across (usually written by the Real Estate Sales community), the argument is swayed in the direction of buying. Let’s attempt an objective outline of pros of each:

Pros in Renting:
1. Lower risk associated with decline in Real Estate markets- when Real Estate values dropped drastically between 2008 and 2011, Homeowners and Real Estate Investors took the hardest hit. Tenants, although affected in other ways, didn’t (directly) feel the brunt of the decline.
2. Greater mobility- once the term of your lease has run its course, you are able to relocate easily. Whereas, if you have a home to sell, it may take months and if the market is stagnant, sometimes even more than a year to make it happen.
3. Smaller time commitment- Usually your agreement on a lease lasts for 6 to 12 months, as opposed to 15 to 30 years relating to a mortgage.
4. Little or no maintenance- For example, when the hot water heater goes on the blink, a simple phone call and/or completion of a simple work order is all it takes. No money out of pocket, no hassles.

Pros in Buying:
1. Lower risk/greater opportunity associated with rising Real Estate Values- When the market is moving upwards, rental prices have a tendency to increase while Homeowners typically have a level payment. Also, Homeowners benefit from the capital gains associated with increases in market value, turning their home into a nice investment. During those times, Tenancy really feels like throwing money away.
2. End of payments in sight- Since the loan is amortized over a certain period of time, eventually you’ll own your home outright and your monthly payment commutes to a big ZERO (excluding taxes and insurance of course).
3. Pride of ownership- for those who enjoy upgrading and improving their home, the financial benefit goes directly back to them. Tenancy makes it quite difficult to do this, unless your Landlord allows it and is willing to invest in those improvements– finding such a Landlord is a rarity.
4. Less money out of pocket- I know this seems counterintuitive, however today there are loan programs in which a Buyer will have to pull fewer dollars out of pocket than a Tenant. After calculating only first month’s rent plus a Security Deposit, the Tenant has more into a property than it takes to execute a purchase. All it takes to do this is work with a Real Estate Professional who is aware of these programs and that knows how to structure the offer to make this occur.

So, since we’ve ended up with a 4-4 tie, we can expect the debate to continue! Actually, the best answer to the question, “Is it better to buy or rent(?)”, is “it depends”! It depends on which of the above are most important to you. There you will find your (own personal) answer.

How to Choose a Property to Renovate

It is never risk free to renovate a home or investment property. In fact, you might tear down an old ceiling and find things like termites or plumbing leaks. This is hard on your budget and home equity. Here are a few things you can do to reduce risk:

Consider the location of the property

Rarity, scarceness and low supply add or subtract the value of a home. It will can maintain or increase when demand is more than the supply too. You’ll want to chose a property to renovate that is in a place everyone wants.

Everyone wants to feel unique

Unlike stocks and shares, houses each have unique quirks, qualities and features from other homes. Even with the same floor plan, people want to feel unique.

Unique qualities can make a buyer is be willing to pay that little bit more for a house than one that is like everyone else’s home.

Surroundings

Not all suburbs are the same. The surrounding including: streetscape, facilities, transport, shops and school qualities will be different. If you’re choosing a home to renovate, pick one with all of the above to maintain the home’s value.

Being close to good schools, quality medical care, good shopping, etc. will always be worth more than those miles from the nearest shop a long drive to a good school.

Selecting one to renovate in an area of the suburbs close to those things that isn’t built but planned will improve in value around the time of the announcement. Buying a home then, renovating, and selling when the planned project is finished, will allow you a profit, because value will increase even more.

Make sure to renovate correctly

A falling housing market is seldom the right time to renovate to add value. Most experts say to hold on to your renovation money unless you really need to create more space and the building costs are cheaper.  Improving to “go green” and lower home’s energy usage is a good move. Federal Government is encouraging us all to do it.

Highly personal renovations like “dream” kitchens, swimming pools or home theatres may sometimes detract from a home’s price. Not all buyers share your tastes. A new owner may see your huge kitchen is a waste of space if they don’t cook.

Buy and sell in market cycles

The top end of the property market is suffering now more than the lower end. This is due to low interest rates and first home buyer grants.

Some real estate predictions see the price falls of up to 40 % that have occurred in the United States or Britain. Other experts say that some capital cities could have stagnant property prices. This means they value decreases in real terms.

Every property will respond differently to market cycles. You can’t do much once you own your home and the cycles change. Wait until the cycle swings back to stability and any value drop shouldn’t matter to do your renovation. Renovating a new home and selling the old one in the same market cycle should deliver the same bottom.

For more information and to get access to our free video series on finding, renovating and selling check out: http://www.FindRenovateSell.com.au

Article Source: http://EzineArticles.com/?expert=Chelle_F

Simple Low-Cost Tips to Sell Your Home By Sheila Boaz

Expert Author Sheila Boaz

Selling your home can be a daunting task, but it doesn’t have to be.

Here are some simple tips on how you can get your home to stand out from the crowd and get buyers motivated without breaking the bank.

Curb appeal: First impressions are the key to getting potential buyers excited about coming inside to take a look. Make sure the front of your home looks welcoming and well-cared for by using these simple tips:

Have a clean, well-manicured garden. Make sure to cut overgrown shrubs that may be blocking the view of your home from the street.

Pressure wash the exterior of your home to give it that ‘just- painted look’, without actually having to spend the time and money painting.

Put flower boxes outside the main entryway to make your home feel more inviting.

Entry: Make sure when people enter your home, they find it welcoming, light and bright. Pleasant aromas, such as freshly baked bread or chocolate chip cookies (who doesn’t like chocolate chip cookies?), are always a great way to make visitors/potential buyers feel at home.

Kitchen: The heart of the home is the kitchen, and the kitchen is what sells the home. Make it look fresh, polished, and modern using these easy ideas:

Make sure countertops are clean and not cluttered with multiple small appliances, such as toasters and blenders.

Remove all magnets from the front of the refrigerator to give it a clean look.

Replace any worn cabinet pulls or hardware that may make a kitchen look dated.

Make sure cupboards are neat and well-organized (people do snoop!)

Living-room: Potential buyers are most likely looking for a home for their family, so don’t confuse them with your personal items, such as family portraits and knickknacks. You want them to imagine their family living there, with their personal photos on the wall.

Bathrooms: Make sure bathrooms are spotlessly clean and up to date. Here are some bathroom staging tips:

Replace old worn-out bathroom fixtures, such as faucets and towel bars.

Hang fresh new towels on towel racks.

Add accessories such as candles and sweetly scented soaps in clean new glass containers.

Bedrooms: A bedroom should convey a tone of relaxation and comfort. It’s the place we want to retreat to after a long and stressful day. Here are some ways you can give your bedroom that cozy feeling:

Paint with a warm neutral color.

Remove any extra furniture leaving only the bed and dresser (especially that old exercise machine).

Remove a large portion of your wardrobe making the closets appear larger.

Spruce up the bed by changing the comforter and adding a few new throw- pillows.

The housing market can be either hot or cold, but taking these few extra steps will make it easier for buyers to see the home’s full potential, and it will pay off in the long run.

Home Buyer’s First Step

Watch video here!

We are frequently asked the question, especially from first-time homebuyers, ‘what exactly should we do when beginning our house-hunt? Should we simply open up a browser and begin surfing the net?  Or, should we start our search with a Lender, get pre-qualified and start the loan process?  Or perhaps begin the process with a Real Estate Professional, so they can start the house-hunt for us?’  Well, actually the answer is YES!  I realize this is a bit humorous, however all work is good work! 

Regardless of where a Buyer begins the process, each of the ‘starting points’ have their advantages and disadvantages. 

Beginning the process by surfing the net is non-destructive to be sure.  There is really nothing you can do here that will harm yourself in the purchase process.  Then by driving by the homes, you’ll get a feel for market values and also possible neighborhood(s) you’d like to live in, along with amenities (such as schools, parks, churches, shopping, etc.) that are nearby these neighborhoods. Of course, the disadvantage of beginning the process in this manner is that you may locate a home you absolutely fall in love with, rush over to a Lender to get pre-approved for a loan, only to discover that you’re unable to purchase that home!  So perhaps you should have initiated the process by first going to a Lender?

There are great advantages with starting the house-hunt with a lending institution.  The first advantage is that once you’re pre-approved, you know exactly what price range to look in!  Also, your overall confidence increases since you know that you can purchase the home, whether you’re driving by or viewing it on the net.  Additionally, I must admit that it’s every Real Estate Agent’s dream to work with a Buyer that has already taken the time to get pre-approved!  The disadvantage of beginning the process with a Lender, is that in the event you can’t get approved for a loan, you give up the hunt.  A lot of times that’s a mistake, since not all Lenders are created equal.  I’ve seen many instances where we can get such Buyers approved to purchase, simply by suggesting Lenders who will better work with them. I’ve been in the Grays Harbor County real estate market for over 20 years and have, at some point or another, worked with every lending institution in the county—I know who will make what loans!

So, perhaps the home-hunt should have begun with a Real Estate Professional?  Again, that’s not a bad idea at all.  After just a short interview with you, I can suggest Lenders who will be a good fit for you.  Of course, getting pre-approved at some point early in the process is something we highly recommend.  In fact, I personally don’t suggest ever placing an offer on a home without having a pre-approval letter attached to the offer (unless you are paying cash).  It not only strengthens your offer, but also increases your ability to negotiate, which can save you thousands of dollars.  Your offer will also shine brighter whenever there are any competing offers, especially over those offers that have no pre-approval letter.  You see, having this letter virtually makes you a cash buyer—at least in the eyes of the Seller.  Always get a pre-approval letter prior to making an offer!

Additionally, understand the difference between a pre-qualification letter and a pre-approval letter.  A pre-qualification letter basically states that ‘according to what the Clients have told me, it would seem they can purchase up to $________.”  A pre-approval letter on the other hand, goes much further.  First off, the Lender actually pulls the credit report for the Client, which in today’s credit-driven lending environment, is essential. Sometimes they even go as far as verifying the Client’s employment status, employment history, income, deposits (i.e. available cash) among other things.  These verifications, together with the credit-approval, are key elements needed for final loan approval.  With these, the Buyers approval letter is as good as gold!

The home purchase process can be one of the most enjoyable and memorable events you’ll ever undertake, however it can also cause anxiety and stress.  Working with a good Agent and good Lender will be sure to minimize the negative elements associated with this wonderful event!

Getting Home Loans With Bad Credit: by Joycelyn Crawford

It is only logical to believe that securing a home loan with bad credit is going to be anything but easy. Lenders tend to be more cautious when considering applications from bad credit borrowers, and the size of the debt in question is extremely high.

But the fact remains that securing mortgage approval is not an impossibility for bad credit borrowers, principally because the factors that matter in any loan application are not the credit ratings applicants may have.

With that in mind, what is needed to ensure home loan approval? Can a bad credit borrower match the typical criteria and conditions that mortgage providers lay down? And what measures can be taken to improve the chances of getting the green light?

What Mortgage Lenders Are Looking For

Knowing what the lender wants to see in an application is the best way to compile an application strong enough to be approved. When it comes to seeking home loans with bad credit, the key concerns are still affordability and repayment ability. Credit scores, however, have a very minimal impact on approval chances.

Establishing affordability comes down to two factors: the excess income available and the amount of debt that already exists. Securing mortgage approval is dependent on proving an ability to make the repayments, and this is only possible if it is established that a sufficient excess income in available.

The debt-to-income ratio is the clearest indication of affordability. It maintains that only 40% of the available income can be used to make loan repayments. If repayments on the home loan are more than that limit, then the application will be rejected.

Improving Your Approval Chances

There are several things that will improve your approval chances. One of the more effective is to address your debt-to-income ratio, and this can be done by reducing the amount of debt that is being faced. Once the amount of income going to existing debts is reduced, getting a home loan with bad credit becomes much more likely.

The best way to clear debts is to take out a consolidation loan and pay them off in full in one go. Having 4 or 5 individual loans with individual interest rates can be a financial drain, but replacing them with a single debt at more manageable terms frees up more excess income. This means a better debt-to-income ratio, which in turn improves the chances of securing mortgage approval.

Another move is to increase the size of the down payment made on the property in question. Usually, 10% of the purchase price is expected, but increasing it to 20%, for example, reduces the size of the required home loan greatly and helps to make the debt more affordable.

Finding the Best Lender

The final factor that should be considered is where to apply for a home loan with bad credit. There are plenty of mortgage providers out there, but not all are willing to offer terms that are very good. Even if the credit score and debt-to-income ratio are improved, they still charge higher interest rates.

Securing mortgage approval is more likely from subprime lenders, who are usually found online. The subprime choice is usually very expensive, with higher interest rates charged, but what makes them a plausible option is the fact that the mortgage term is longer, ensuring the monthly repayments are affordable.

Remember, however, that taking out a home loan is dependent on the debt being affordable in the long run. So, if the term is 40 years instead of 30, the lender needs to feel sure that income levels are assured for that period.

Joycelyn Crawford is an expert in Easy Loans for Bad Credit and Easy Home Loans. Visit her site at EasyLoanForYou.com
You may contact Premier Realty at 360-533-1900 or visit our website http://www.prgraysharbor.com

A Home Inspection is a “Must” when purchasing a Property!

We are many times asked whether a professional inspection is recommended when purchasing a home– our answer is always a resounding “Absolutely”!  A professional home inspection protects a home buyer against disappointment and unexpected expense after a home has been purchased. A pre-purchase inspection tells what major and minor flaws exist in a home, what difficulties are apt to occur later (the replacement of equipment, etc.), and what it will cost to eliminate problems. In general, an inspection covers:

  • Basic home structure, inside and out (testing for soundness and durability)
  • Plumbing, heating and electrical systems and equipment (including costs of operation)
  • Kitchen equipment (including life expectancy of appliances)
  • Insulation and other energy features
  • Detection of water problems and moisture-related flaws

To locate an inspector, consult the Yellow Pages, under “Building Inspection Services,” or call us. We have worked with highly reliable home inspectors and will be happy to recommend someone.

Your Paycheck Gets Bigger When You Buy a Home!

Amazing, but true. Buying a home adds to your “take home” income – possibly by several hundred dollars or more – simply by increasing the number of federal income tax withholding allowances on Form W-4.

Here’s how it works.
New home buyers generally find that their pre-purchase withholding rate will result in overpayment of taxes, if they don’t adjust their withholding allowances. That’s because they haven’t reduced their withholding to compensate for reduced taxes caused by deductions for mortgage interest and property taxes – items that are currently deductible at income tax filing time.
See for yourself.
A first-year homeowner who paid $9,000 in interest and real estate taxes, and who itemized deductions in a 28% tax bracket, would have overwithheld and would get a large refund next year. In this case, $2,520.
Enjoy your bigger paycheck.
Increasing the number of withholding allowances, on the other hand, reduces the amount withheld to pay future taxes – which puts your tax refund in your paycheck today, not at the end of the year. With the additional cash in your hands instead of in the government’s, you’ll have more cash to meet payments and live on.
Be sure to check the tax rules.
The rules for claiming allowances are simple. Working couples filing jointly figure withholding allowances on combined wage income and may allocate them between employers. On separate returns, the allowances must be figured separately. And if you work for two or more employers at the same time, you may claim withholding allowances from only one employer.
Please e-mail or call us with questions about your specific real estate situation.