Dec. 18, 2016

Broker's Blog December

5 New Year’s Resolutions
Every Homeowner Should Make for 2017


2016 is coming to a close, and with the new year just around the corner, people across the world are gearing up to set their intentions for the upcoming year in the form of New Year’s Resolutions. And while you’re bound to make at least one standard resolution (like “finally get in shape” or “eat more vegetables”), as a homeowner, there are some home-specific resolutions you’ll want to think about to get the most out of your property and the experience of owning a home this upcoming year.

Here are 5 New Year’s Resolutions every homeowner should make for 2017:

1. Bump Up Your Mortgage Payments

If you have any sort of expendable income in 2017, you might want to think about putting it towards your mortgage. Making extra payments on your mortgage can have a huge impact on the total you end up paying out over the course of the loan. It can also shorten the amount of time you’ll be saddled with payments and can have you owning your house free and clear sooner than you expected.

The more you can contribute, the better. But even if you can only make a few extra payments per year – do it. Those extra dollars will add up and end up saving you serious dollars in interest over the course of your mortgage.

Create a 2017 budget and look for any areas where you can shave a few dollars, like your daily trip to the coffeehouse or an expensive gym membership. Then, re-purpose that cash and put it towards paying down your mortgage faster.

2. Explore Refinancing

2016 saw near record low interest rates on mortgages, and while they’ve slowly crept up towards the end of the year (current rates are around 4%), they’re still HALF of the average interest rates over the past 40 years (which averaged at 8.45%).

If you haven’t refinanced your mortgage recently, now is the time to do it. With a new president taking office, the economy may shift, and interest rates may rise.

Talk to your loan officer about refinancing and getting a lower interest rate. And if you’re in a variable rate mortgage, shift over to a fixed rate mortgage and lock in the low interest rates while you can.

3. Review and Renew Your Homeowners Insurance

A lot of homeowners roll over their insurance year to year, but if you haven’t reviewed your policy in a while, you might be missing out on some money-saving opportunities.

Shop around and get quotes to see what rates are competitive in the current market and if you’re paying more, see if your current company will match the lowest quote. If you have a stand-alone policy, think about bundling your auto and homeowners insurance with one company. Insurance companies will often offer discounts for customers who hold multiple policies. If you’ve made any major improvements to your home that could impact the insurability of your house (like clearing trees, installing a high tech security system or adding storm reinforcements), let your agent know. Improvements can often lower your premiums.

4. Declutter, Declutter, Declutter

While spring is traditionally the time for organizing (in the form of “spring cleaning”), there’s no better time for a fresh start – and a more organized home – than the New Year.

Cleaning out closets, getting rid of things you no longer want or need and taking a more minimalist approach to life can have huge benefits. Not only will your home look better, but you’ll also FEEL better as a result. Messy, cluttered homes can cause increased stress and anxiety, making it much harder to relax and enjoy your space. Clutter has also been shown to decrease creativity, productivity and focus, so if you want to have a happy and productive 2017, it’s time for the stuff to go.

Plan a day to go through all of your closets, cabinets and storage space. If you’re not actively using something, get rid of it. The benefits you’ll reap from decluttering will far outweigh the value of the things you get rid of.

5. Get Up To Speed On Safety

The new year is the perfect time to review the current state of your property and take any precautions necessary to ensure that you’re safe in the upcoming year.

Test your smoke and carbon monoxide detectors and replace them if necessary. Check your house for radon, a common, carcinogenic gas that can increase your chance of lung cancer (you can pick up a radon testing kit at the hardware store for less than $10). Meet with your family to review emergency evacuation plans in case of a fire, flood or other emergencies.

With these 5 resolutions, you’ll get the most out of your property – and of owning your home – in 2017 and beyond.

 

From: TheBestRealEstateBlog with Jodi Rand
Posted in Broker's Blog
Nov. 17, 2014

Broker's Blog November - Water is your enemy!

This weekend I was reminded once again how water can be our enemy in housing. In life it is a vital component, however it is the the enemy of your home. My story begins like this....

A few weeks ago we noticed a toilet in the basement that was running constantly - not too unusual of a problem, and it was easily cured by changing out the valve assembly, a $7 fix. The toilet itself was not that old, perhaps 7 years, and I just figured its time had come.

Then, on Saturday morning we found water running into the garage from the ceiling (thank goodness it was the garage!) - as I flew up the stairs to find another toilet running - this one from a clog that was overflowing. The fix again (once the water was dried up) was of course another valve. This toilet had its original valve in it - and again I thought age was the culprit. Once again, a $7 fix.

Sunday we decided to go view property about an hour north of our home - I was backing the car out of the garage when the wife appeared and yelled and screamed that there was water flooding in the basement. I again flew to the downstairs bath and found water pouring out of the vanity... After sprinting to the main shutoff for the house, we sopped up the water (thank goodness for tile flooring in that area and that it had not had time to spread) and ran fans to help evaporate what was left.

At this point, I know something is amiss - and to confirm my suspicions I put a pressure gauge on an outdoor hose bib (aka spigot), and lo and behold: 140 pounds per square inch (psi) pressure. Now, interior house pressure should be 50-60 psi, so clearly I have a problem, and that problem is the main pressure regulatorWater Pressure Regulator Valve,1 In. for the home. It had failed. All water comes from our city lines to our home at about 150 psi, so it has to be reduced to the 50-60psi rating of interior water lines. In my case the increased pressure may have caused my toilet valves to fail - and the basement issue was a feeder line that literally popped off of its fitting and started spraying hot water inside the vanity.

In the end now, all is well - after I changed out the failed regulator with a new one ($42 at the local big box home store), and I thought I'd share this experience and my learning with all of you.

So here goes:

  1. Any water running where it's not supposed to be is BAD. VERY BAD. All family members should know this and should not hesitate to quickly inform others so that item 2 below can be utilized.
  2. All members of your family should know where the main water shutoff valve is and how to reach and use it. Clockwise = OFF, or Righty Tighty if you prefer that mnemonic.
  3. All houses will have a plumbing leak at some point. If it is the on the pressurized side, it will be messy and more that likely very costly - which is directly related to how long before the leak is noticed. I was very lucky in the story above. Had we been gone for a few hours the entire basement would have been ruined. Remember, Murphy lives.
  4. Minor problems could indicate something more. Purchase an $8 pressure gauge from the plumbing department of the local home store and keep it on hand. Just screw it to a hose spigot and read the dial. Easy. Probably once a year would probably be sufficient. I don't know how quickly the pressure regulators fail, but if the pressure keeps going up over time, you know bad things could happen to your home.
  5. All family members should be taught how to turn off the water to sinks and toilets. What if you have a faucet that's drip-drip-dripping. It might be a worn out seal - or it might indicate that the pressure is too high for the seal and it's leaking due to that. Turn it off and check the house pressure (No. 4 above).
  6. Plumbers are wonderfully helpful and expensive people. I prefer to do the work myself. But finding a problem before you need to call a plumber is the way to go. My house was talking to me... but I didn't know how to listen. Now I do. At least for this type of problem.

In the end, the home is ok, and I'm satisfied that this won't happen again. However, I do have a 10 year old water heater in the basement that will go bad and leak - the only question is when... I guess I should take my own advice and mitigate the problem before it ruins the basement. Now the question is - new standing water heater or a tankless ($$) type?

More next month on how to prevent water damage to other parts of your home.

At Rand Realty, we know more than just how to help sell your home, we can help with maintenance questions and answers - before or long after the sale. We pledge to keep informing you to help you protect your most expense asset, your home.

Posted in Broker's Blog
Oct. 22, 2014

Broker's Blog October - Down Payment Mistakes to Avoid

Don't make these Down Payment Mistakes!

Image result for pictures of moneyBuying a home? What’s the best amount for a down payment on a home? Avoiding the most common down payment errors can be money in the bank for you – in the long run. One of the most crucial steps in the mortgage acquisition process is deciding how much of a down payment to make on your new home. The amount you pay up-front, which is a decision that could affect you for many years, is a major factor in determining how much your monthly payments will be. Be smart - avoid the most common down payment mistakes home buyers make.

Big Mistake No. 1 - Not knowing how much debt you can comfortably afford

Some people finance the majority of amount needed to purchase the home, others finance as little as possible by putting up a significant down-payment. You will know best how much debt you wish to handle. In many cases, it’s better to be a little cash-rich and house-poor than the other way around. The lenders base the amount that they will loan you on your debt-to-income ratio. The less debt and higher income the better. However, you should have a feeling as to the actual amount you’re willing to spend each month on a mortgage – no matter what the bank says you’re “able” to borrow. The worst thing to do would be to bind yourself to a 30 year mortgage that squeezes your monthly funds to the point you cannot have extra money for vacations or even necessities.

Big Mistake No. 2 - Making a down payment that’s nearly $0

There are some lending programs that allow $0 down - such as assistance for down-payment loans to police, fire fighters, teachers etc.  These are extra loans (sometimes forgiven after 4 or 5 years) that allow low-income earners to qualify for a home. Paying little or no money down will put you in the position of having little significant equity in the home. Equity is the real money difference between what the home is worth and what you owe on it. Should the value of your home fall, there is the risk that you could end up owing more to the lender than the house is worth. This situation could also make it difficult to sell or refinance in the future. However, at the end of the day these programs promote home ownership and the financial and personal benefits that go with it. Be aware that these programs also may have higher interest rates for the loan.

Conventional loans require at least 5% down payment. Government backed (insured) loans require 3.5% or less (VA may be $0) as down payment. The lenders for these loans will charge you Private Mortgage Insurance (PMI) if the equity in the home is less than 20%. This will also increase the monthly cost of owning the home.

Big Mistake No. 3 - Making your down payment too small
While lenders do offer mortgages with down payments of less than 20 percent of a home's sale price, these loans require you to pay private mortgage insurance (PMI) -- an additional fee tacked on to your monthly payment to help protect the lender in case you should default on your loan.

In addition, low- and no-down-payment loans frequently carry higher interest rates and so can end up costing you considerably more over the life of your loan. Conversely, a down payment greater than 20 percent may earn you a more favorable interest rate if you have a less-than-stellar credit rating.

Don't end up with a large total monthly house payment and have to use credit cards to buy life's essential - that's a downward spiral that ends badly.

Big Mistake No. 4 - Making your down payment too large
Common sense dictates that the more you pay up front, the better off you'll be, that's not always the case. Don’t make the mistake some first-time homebuyers sometimes make - using so much of their savings for their down that they end up not having enough left over to cover closing costs, and more importantly the expenditures for the new home that come after closing (insurance, furniture, lawn care equipment, etc).

Big Mistake No. 5 - Paying with unseasoned funds
Coming up with a down payment can be a daunting task, as the funds needed can be a fairly substantial amount of money. It may take a long time to save for this amount, and many people will need a lot of time to save for it.  You can receive a gift from a friend or family member, but don't think that just because you've come up with the full amount that you're necessarily in the clear.

All funds -- whether they're your savings, gifts from relatives, investments or other loans, must be in your account for longer than two months to be referred to as "seasoned," i.e. they are to be considered your money. Your lender will scrutinize your bank statements and want a full explanation for all significant deposits less than two months old. They will want to know whether they're gifts or loans. You’ll need a letter from the gifting party indicating that they are the source of the gift and can financially do so. Post-mortgage-meltdown lenders now require details about your financial situation that border on the extreme. New government regulations require much of this, and remembering that the bank is giving a very large sum of money to you to purchase the home will help to understand their attitude toward this.

Big Mistake No. 6 – Thinking you can write a personal check at closing
To close your home purchase deal, an attorney will handle the transfer of title and of funds between buyer and seller. Today, many lenders (and their attorneys) will require a wire transfer of funds from your bank to their account as the method of funding the down payment. In some cases, if the amount is less than $5000, the closing attorney or title agent will allow a cashier’s check. However, even this is becoming more rare – wire transfers are becoming the standard method.

You should ask your real estate agent or the attorney directly to procure a Preliminary Closing Statement (also known as a HUD) – this will show you exactly how much you will be required to pay at closing.

Not a Mistake - Calling us!

At Rand Realty, we advise all of our clients as to the in’s and out’s of procuring a great mortgage for their situation. The mortgage consultants we align with are the best we’ve found over the years, and they also will inform you as you go through this sometimes difficult process. In the end, it is our goal to help you get the best home, the best loan and the best deal for your money. Call us today to get started!

Posted in Broker's Blog
Aug. 27, 2014

Broker's Blog September - Tip the Deal Your Way

If you're currently selling your home or just thinking about it, consider a few ways to sweeten the pot for your potential buyers. Whether selling or buying, here are some ideas you should be aware of, and often your agent will not tell you these.

Wise home sellers know that incentives can be the things that tip the deal to their favor. By giving buyers something a little out of the ordinary, or something that allows them  to feel like they've "won", you may significantly improve your chances of selling your home quickly and for the price you want.

We suggest the following to our clients, who will end up selling their homes faster and, in the end, for more money. One thing we've seen with sellers - they often can't see the forest for the trees - they get stuck on not giving up small dollar items that could yield them big dollars returned.

Picture of dollar signPay at least a portion of the buyer's closing costs

Many buyers are worried about saving enough cash for their down payment and overlook their closing costs. These may add up to between 3 and 6 percent of the sale price, and can amount to thousands of unanticipated dollars. Many buyers (and their agents) overlook asking for help with these fees, which is a negotiable item on the deal. Offering to pay a bit may tip the deal in your favor. Sometimes you can also negotiate raising the purchase price and adding more closing costs to cover their mortgage fees completely. Be careful here to not go above what an appraiser will value your home for, however this technique works in many cases and the net to you is the same.

Picture of percent signHelp the buyer get a better mortgage rate

Offer to purchase discount points on the buyer's mortgage. These are a financial mechanism the lending institution uses to bring in cash up front, and will result in a slightly lower interest rate on a mortgage. They are attractive to a buyer because not only because they reduce the monthly payment, but they reduce the overall total cost of the mortgage, which could potentially save them thousands. Usually, one point is the same as 1% of the loan amount and will reduce the interest rate by one quarter percent (0.25%). Ideally you would then advertise "below market financing" to help to bring additional prospects to your home. As savvy real estate professionals know, selling is a numbers game - the more traffic you have, the better your odds of finding the right buyer.

Picture of shouting personOvercome immediate objections

A simple and effective tactic to help close a sale is to quickly offer to address any concerns a potential buyer may have with your property. Your goal is to move the buyer off the fence and commit to the deal. If painting the front porch or a room or two will make your buyer commit, a few hundred dollars for a painter can be well worth it. Perhaps you could even do it yourself. You could also offer an allowance for improving the lawn, landscaping, carpet or anything else that the buyer raises objections to. Buyers typically will purchase the home that has the least amount of work to do - the one that is most move-in ready.

Picture of refrigeratorAdd value to your freebies

Planning on buying some new furniture, upgrade appliances, installing new light fixtures for the new home that you're buying? If the ones at your current home are in good condition you can sweeten the pot by including them as items of value in a counter offer, or advertise them up front as part of the deal. First-time home buyers will love this, as they usually don't have much of their own furniture, appliances or money. It has the added benefit of reducing what you have to move to your next home. Don't just add them to your Seller's Disclosure - a smart real estate agent will advise you to advertise them!

Picture of warrantyThe Home Owner's Warranty

We almost always advise our clients to consider offering a home warranty to the buyer. This low-cost insurance is available for around $350-400 for basic coverage. By adding a layer of formal insurance on the deal, your buyers will feel secure in knowing that should any item go wrong with the home, they may be covered. Note we say may - there are different levels of coverage - which can be added to the policy after closing at the buyers expense. Simply having insurance that covers electrical, plumbing, major appliances and possibly heating/cooling systems can help seal the deal. This small investment could be worth thousands.

  Other Ideas

Incentives lure buyers - it's what advertising is all about. Your real estate agent is in the advertising & marketing business, and a good one should let you know that you can offer other goodies as well, some of which may cost you nothing. Perhaps you could redeem credit card points to offer a substantial home store gift certificate to your buyer. We've seen other items such as TVs, airline tickets, club memberships, and even cars being used as incentives. Your smart agent will suggest using all ammunition when advertising your home to the millions of potential internet prospects.

Your agent as your secret weapon

Your agent should be your home sale advocate, and should review these techniques with you prior to any offer. If they are just looking for a listing and simply want your signature on a contract, or do not give you the personal service you deserve, consider looking further for a better agency.

-Peter Rand

Broker/Owner
Rand Realty LLC
See our Rand Realty LLC Facebook page and visit our website at www.randrealtyLLC.com

 

 

 

Posted in Broker's Blog