Real Estate Information

Buying a foreclosure property can have many benefits for the buyer. Prices are typically 5% to 15% below what the normal market price would have been. There is a lot more information about properties with our internet-rich ability research. Inventory is tighter than in normal years, making foreclosures attractive. However, you should be aware of potential potholes along the road.

The process is impersonal at best:

When buying a foreclosure you are dealing with an institution rather than the typical owner/occupant. The institution, a bank or other lender, doesn’t have much of a personality, and it doesn’t see the property as a place to live. To the institution, the property is simply an asset for sale. The lender’s agent is only interested in the bottom line of the sale. It’s just a numbers game. It requires the buyer to have patience and perseverance.

A buyer can’t expect accurate disclosures:

When buying a foreclosure property there is very little likelihood that you will be able to get any input from the previous owner. You will most likely be dealing with a REO, “real estate owned,” property where the owner is an institution. In a typical REO sale there are no disclosures. The buyers must accomplish their own due diligence beyond the normal process.

Don’t expect the bank to give credits or to fix things:

Again, when buying a foreclosure the buyer is dealing with an institution. There simply will not be much information available. Therefore, after you have done your due diligence, your offer price must take into account all costs that you will have after the sale. The institution’s goal is to make the sale as quickly as possible and with no contingencies surviving closing. The contract for sale must be simple.

The bank will have its own process:

In addition to all of the normal real estate transaction requirements, the institutional owner of an REO property will have its own process. Some of that process can seem like overkill or frivolous. However, it is very rare that a buyer will convince the institution to make exceptions to their process. The key for the buyer is, again, patience and perseverance.

The reward for having patience and perseverance is the very good chance you will end up with a bargain!

According to a DexOne Corporation survey, as reported by CT Power Team, “42% of Americans say that their mortgage is the debt they most want to eliminate.” That is a completely understandable goal when you consider the savings. The important question is "How can I do it?” Here are some examples…

• Increase your monthly mortgage payments simply by adding a fixed amount to your required payments. The easiest way to do this is to use an increase in your income from time to time to increase the amount of your mortgage payment. Doing that does two things for you...
  1.  It decreases the amount of principal owed by a larger amount each month.
  2. The following month, after making an increased payment, you pay less interest because of the larger decrease in the principle.

The combination of the above two changes results in paying off the mortgage in less time than originally scheduled and you will pay significantly less total interest.

• Make additional payments on the principle at any time if you can’t increase your regular monthly payment. You can do this anytime you have a little left over at the end of the month, or you get a bonus at the end of the year, or you receive a gift. No matter how much, or how little, you pay extra it will decrease the time it takes to pay off the mortgage. That means you will save interest.
   
• Refinance with a shorter-term mortgage if you see the interest rates come down. Just keep in mind that refinancing means spending money on loan closing costs. Only consider this if the interest rates are lowered enough to justify paying closing costs. Otherwise, you can always choose to keep your original mortgage, but increase the monthly payment as outlined above.

Here’s just one example of how paying off early works…

Let’s assume you are paying on a 30-year mortgage for $200,000 at a 5% interest rate. If you pay off the mortgage in 30 years, you will pay $186,512 in interest. If you pay off that same mortgage with even payments over 20 years, you will pay as little as $116,779 in interest. That’s $70,000 that stays in you pocket!

Visit bankrate.com for more in-depth information. Also, use their online mortgage calculator. You will never regret paying off your mortgage sooner then planned.

You’ve officially joined the ranks of the empty-nesters. One of the first questions that usually comes to mind is should we downsize our home. The kids are gone and we probably don’t need this big house. But is buying a smaller home right for you? Obviously, there are pros and cons to consider about both your finances and lifestyle before making a decision.

Reasons not to downsize:

• The family is spread all across the country and you want to have a place for everyone to gather for the holidays and vacations.
• You’ve been in your current home for many years and have filled it with mementos you don’t want to part with.
• You’re not emotionally ready to pack up and leave a lifestyle you worked hard to create. Leaving family, friends and familiar surroundings is more than you can bear.
• You enjoy the feelings that go along with your larger home. A smaller home will not feel right for your current lifestyle.

Reasons to downsize:

• The lower (or zero) mortgage payment that comes with a smaller home would give you more discretionary funds to travel and enjoy other recreational activities.
• A smaller home means less to maintain and more time to play.
• You and/or your spouse are not able to navigate the stairs like you use. A single level home is more desirable.
• A smaller, newer home is more efficient and cost effective.
• You need to be closer to a family member who needs assistance and your attention.

If you decide to downsize, make sure the new home fits both your lifestyle and pocketbook. Talk with a real estate professional about how much money you will net from the sale of your current home, as well as the costs of buying another one. Look into how much it would cost to move and to maintain the smaller home. Make sure it really is cheaper to live there. Downsize only once you’re satisfied that the finances make sense.

Buy into your new lifestyle:

A smaller house in your current neighborhood could be the right decision if your priority is maintaining close ties to neighbors. Just make sure there are amenities like public transportation and stores nearby if your health begins to deteriorate.

A retirement community could be perfect if you never want to move again and you want to focus on travel, hobbies and perfecting your golf stroke instead of mowing the lawn. Talk to current residents to see whether they’re happy with the rules and the way things are run. Another option you may prefer is a condominium to eliminate the maintenance but not be locked in for life like many life care communities.

It is a big decision to downsize. So, make it carefully, do not rush, and get professional advice about the real estate and financial aspects of moving.
 

With the summer season upon us, we need to tend to a few maintenance tasks before we can settle down in a hammock without a care in the world.  Keeping in mind the adage, “A stitch in time…”, we need to test the garage door opener in our Chester County home, check the air conditioning system, and service the lawn mower to ensure a breakdown-free summer.

• When was the last time you thought about your garage door or its automatic opener?  Like any mechanical system, the door and opener need some periodic, preventative maintenance. If you live in an area of frequent thunderstorms, a tight, well maintained garage door can also help prevent expensive results of a storm-ruptured door. The Door & Access Systems Manufacturers Association International has a good guide to help you inspect and test your complete garage door system. It's a good idea to make monthly inspection and testing a part of your regular routine.
   
• Sweltering temperatures may be just around the corner, and your best defense is a central air-conditioning system. If you have one at your Chester County home, there are a few things you can do to make sure that it's tuned up and ready to go when the summer heat arrives.  Before you start tinkering with the system, however, it's important to have a basic understanding of: the condenser, the blower unit, and the ductwork of your system.   Visit the DASMA website for a complete explanation and instructions on how to fine tune it.
   
• Many small tasks are involved with getting your lawn mower ready for reliable summer use. Check, belts, blades, all bolts and fasteners, tires, and wheels. If you have fuel older than 30 days stored in containers, not use it.  Any idea when you last changed the oil?  Drain it and replace it with oil the manufacturer recommends. Consider, too, replacing the sparkplug—if you do, add a couple drops of engine oil into the hole, and then replace the plug. Check your air and fuel filters and replace if they are dirty or clogged.  Follow the recommendations found at LawnCare.com.

Once you’ve completed these chores, feel free to visit yet another website for more suggestions—simple ones-- on how to maintain your Chester County home during the summer months.  So much for hammock time!

Results from the annual REAL Trends 500 once again display the difference between RE/MAX Associates in the U.S. and their competitors: RE/MAX agents, on average, sell more homes.

Within the brokerages participating in the 2014 REAL Trends 500, RE/MAX agents averaged 17.8 closed transaction sides in 2013, a figure more than double the average (8.4 sides) of all other agents. The RE/MAX average easily topped the average of major competitors such as Coldwell Banker/NRT (9.1), Century 21 (8.4), Berkshire Hathaway HomeServices (7.9) and Keller Williams (7.2).
 
RE/MAX agents also averaged $3.9 million in sales volume, 60 percent higher than the $2.5 million average of all other agents in the survey.

In perhaps the most telling result, when you rank the brokerages by Transaction Sides Per Agent, 91 of the top 100 firms are with RE/MAX. Associates in those offices averaged a staggering 32 transaction sides each.

Ready to buy or sell a home. Contact me today and let's get started!

Military home buyers have benefits, legal protections and financing available that are complex, convoluted and often ignored. The ins and outs of Veteran Administration financing can be difficult and mind boggling to understand. It takes a knowledgeable and experienced real estate agent to help veterans navigate the real estate landscape.

Because the these complexities, a new designation for real estate professionals has been developed with the goal of helping military families understand and utilize the benefits they have so deservedly been given. The name of this designation is Military Residential Specialist (MilRES).

I have proudly earned the new MilRES in order to provide the best possible council and guidance to my military clients. Currently, there are only 2 other designees in the state of Pennsylvania.

MilRES has developed relationships with the Department of Defense, Veteran’s Administration, key Congressional leaders and others who share our goal to help the “military” community without any additional cost to them. Working together, we hope to make a difference in the lives of our veterans, our active duty personnel and their families.

Are you a veteran, reservist or active duty military and looking to buy or sell a home? If so, please contact me at your convenience. I am proud to assist you and your family reach your real estate goals.

Buying is 38% cheaper than renting! This statement reflects Trulia’s latest Winter 2014 Rent vs. Buy Report. “Although the gap between renting and buying is narrowing across the U.S., homeownership is still 38% cheaper than renting.”

When evaluating buying a Chester County home vs. renting you need to understand the local math. Although the national average is 38% cheaper for buying vs. renting, the range across the country is from 5% cheaper to 66% cheaper.

The Trulia report concludes that there is nowhere in the US that buying a home is not cheaper than renting. However, the percentage of difference does vary widely. That is because there are variables that depend on local circumstances such as:

• Local home values
• Local rents
• Mortgage interest rates
• Rates of value appreciation

If you really want to understand the detailed numbers go to the full report.

You can also go to Trulia’s Rent vs. Buy Calculator that allows you to plug in your local variables.

Borrower’s credit score is another factor you need to take into account when evaluating your situation. Mortgage interest rates are perhaps the most important variable in the buy vs. rent calculation. One of the factors that affects interest rates the most is the borrower’s credit score. The lower your credit score the higher the interest rate you will pay.

The monthly payment on a $200,000 loan for 30 years increases by $60.27 for every 0.5% added to the interest rate. That means the decision about whether to borrower using a variable interest rate (such as an ARM) or a fixed interest rate over the life of the loan is very important.

The Trulia report also evaluates the “tipping point” for interest rates that will cause renting to be cheaper than buying. For the national average that leads to the 38% figure the mortgage interest rate would have to rise to over 10%. However, you should look at local factors involved for a Chester County home using the Rent vs. Buy Calculator.

You can follow this link for the current Forbes.com interest rate forecast. You can also find current mortgage interest rates at bankrate.com.

Current indicators are that both home prices and interest rates are going to rise steadily over the next five years. That is good news for potential buyers, and means now is a good time to buy. However, if you’re hoping to become a homeowner anytime soon use these tools to do some research.

If you moved to your Chester County PA home in 2013 now is the time to anticipate itemizing deductions on your tax return. Take yourself to a quiet corner of your home and begin to plan for tax time in April. Here’s a partial checklist of some often overlooked deductions:

• Mortgage Points: Most homeowners know that mortgage interest is deductible, but often forget that points are, too?  Points are actually prepaid interest and may be deductible as mortgage interest if you itemize deductions on Form 1040, Schedule A.
• Moving expenses: If you moved more than 50 miles for a new job, expenses such as movers, renting a truck, storing and insuring furniture, connecting/disconnecting utilities, and the cost of lodging while moving can be claimed as deductible expenses. Refer to IRS Pub. 521.
• Job hunting costs: When looking for a position in the same line of work you held previously, you can deduct expenses associated with trying to land a new position including out-of-town lodging, transportation, employment agency fees, business cards, and resume printing costs.
• The standard deduction:  If you turned 65 last year remember you are now eligible for a larger deduction.
• Medicare insurance and long-term care premiums: Medical expenses over 10% of Adjusted Gross Income are deductible. Remember to include the cost of Medicare Parts B, C, D, and supplemental insurance.
• State sales tax: You still have a choice between deducting state income taxes paid or state sales taxes paid. Since you will choose whichever gives you the largest deduction, keep in mind the purchase of unusually large items like home building materials.
• U.S. Armed Forces members, especially those serving in combat zones, face some special tax situations and are entitled to special tax benefits.  Click here for specific details. Moving expenses listed above also apply to the military.
• Early withdrawal penalty:Did you cash in a CD last year? If you were charged an early withdrawal fee, you can deduct it directly on your 1040. Financial Planning and Management Expenses, Schedule A. Be sure the fee is itemized on the Form 1099 from your bank.
• Investment Advice: The costs of investment newsletters, paid financial advisors, or other fees spent to manage your money can be deducted.

Remember the above is a partial checklist for your convenience. For more details concerning deductions related to moving to your home refer to www.irs.gov and/or consult a tax advisor.

According to the report, home owners are investing in their homes once again and will see higher gains from some of these remodeling projects at resale. So, which remodeling projects offer the potential for some of the biggest paybacks at resale? The following mid-range remodeling projects offer the highest return in the Philadelphia area:

• Attic Bedroom - 72.4% ROI on resale
• Deck Addition (Wood) - 68.7% ROI on resale
• Deck Addition (Composite) - 62.8% ROI on resale
• Bathroom Remodel - 64.1% ROI on resale