AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on July 9, 2016 by tominvestor

Here are three serious considerations to evaluate before you determine whether to pursue a home purchase.

The old real estate cliché doesn’t name this quality as tops for nothing. Unless you plan to take a unique or historic home off its foundation, you cant change location. If a home is on a busy intersection, across from a shopping plaza, or within earshot of the freeway, take major note. That home will always be valued at significantly less than a similar home nearby. Unless you’re willing to sacrifice to get into the school district or neighborhood of your dreams, keep looking. Once you snag a good location, nobody can ever take that away from you.

home with a tiny kitchen closed off from the rest of the house is much less desirable today than a large one that opens up to the family room or great room. Think you can just transition that closed-off kitchen into an open plan that allows people to spill over into the adjacent room while still being connected to the action at entertainment central? Think again.

Making this change, while not impossible, would likely require lots of resources and a major construction budget. Modifying the layout of a home requires architectural drawings, knocking down walls, and installing beams to carry wider loads. This type of major renovation isn’t for the faint of heart, and an undesirable layout will always reduce the value of the home. If youve fallen in love with certain aspects of the home, but a particular part of the floor plan is flawed, you’d better move on.

Antique homes built centuries ago are known for being sited right by the road, and typically on busier roads. Why? Because back in the day most people walked or took a horse-drawn carriage, so it was easier to be closer to the street than at the back of the lot. Fast forward 300 years and some buyers, while in love with the unique history and charm of an old home, prefer the privacy and quiet of a home set at the back of the property.

Homes on corner lots, or a flag-shaped lot where you need to drive past your neighbors house to get to yours, can also feel a little too exposed for many home buyers. As exceptional as the interior of the house may be, if the lot or the siting of the house is flawed, it affects the homes value, and may not be a purchase you want to pursue.

Most real estate agents look at 10 to 20 houses per week, and after working with many buyers and sellers, they get schooled on things like floor plans, locations, layouts, and neighborhoods. Over time, we can spot and flag potential trouble spots instantly. Home buyers who are just starting their search cant possibly know what to look for or even what to expect. Ask your agent to be on the lookout for things you shouldn’t ignore.

*GOD Speed*

 

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on July 2, 2016 by tominvestor

Home staging doesn’t have to be expensive, yet many home sellers – and real estate agents, for that matter – don’t opt to put the property’s best foot forward before going to market. According to the 2015 Profile of Home Staging by the National Association of Realtors, 34 percent of seller’s agents stage all homes, but 44 percent of agents surveyed suggest to only de-clutter and fix property faults.

This suggests there’s a real disconnect between what agents believe home staging actually is, because those suggestions are only a part of the entire home staging process. Home staging is the act of preparing and showing a property for sale. While some staging projects may be pricey – like fixing decades-old repairs that have been neglected or furnishing an entire vacant space – most homes can benefit from simple, cost-effective solutions that transform key rooms to attract buyers. Most buyers want move-in ready spaces, which can be easily accomplished with these five tips.

1. Clean amp; De-Clutter

Both cleaning and organizing require more time than money for a seller to complete, but are worth scheduling because these two tasks will make a huge impact on the overall look of the home. Keeping a clean and clutter-free home daily shows buyers you care about the appearance of the space and boosts the belief that the home is well-maintained. A cleaner home with less in the way can look brand new and maximizes on space – which, let’s face it, is what buyers are buying.

2. Rearrange Furniture

Another way to increase square footage is by rearranging your furnishings to open up traffic flow and avoid closing off a room. Many times, homeowners buy oversized pieces or too many pieces because the furniture came in a crazy, awesome, package deal of a lifetime. Now, it’s just taking up valuable space.

Consider these tips when rearranging furniture:

–Try breaking up furniture sets to add more space and personality.

–Arrange furniture to create a conversation area.

–You must be able to easily walk around the furniture.

–Remove furniture that doesn’t fit, or is taking up room in a corner.

3. Add Natural Touches

One way to create a warm and welcoming feel for buyers during an open house is adding a bit of Mother Nature. Take a cue from the geography of the home and use natural elements that reflect that region. Live by the beach? Add shells, sea-grass, driftwood and tropical flowers, for example, to showcase that lifestyle.

Regardless of where you live, you want to add plants and flowers in the key areas of the home to soften up the space and subliminally remind buyers that life grows here.

4. Direct the Buyer’s Eye

Home staging strategically directs the buyer’s eye to get them to notice the positive features of the home, rather than the negative. Every room has a focal point – which can be determined by the function of the room. A bed, for instance, is the main focal point of a bedroom.

It must be made every day, be highlighted in the space with lighting and artwork and should be center stage on the main wall in the room. Everything else in the space is secondary and should follow the color, pattern and style of the bed to direct the buyer’s eye back to the focal point.

*GOD Speed*

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on June 17, 2016 by tominvestor

The real estate market fluctuates often, making it tough to predict whether the market will favor buyers or sellers when it’s your turn to buy. Especially if you’re shopping for real estate in San Francisco, CA, or another market that currently favors sellers, you need to know some tricks of the trade to help ensure you don’t make any mistakes. Buyers in a seller’s market can get what they want, but they need to bring their “A” game — buying a house in a hot market isn’t for the indecisive. Here are six common mistakes many buyers make — mistakes that you can learn to avoid — when shopping in a seller’s market. 

1.Not making your best offer:The drive to buy what we want for as little money as possible is practically in our DNA. So when most people see the listing price of a home, they naturally wonder what they can really get the house for. Offering lower than asking price is a perfectly reasonable strategy in some instances, such as if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best idea. In a seller’s market, many buyers do not step up with a strong enough offer. There is usually a shortage of inventory, and the competition is usually fierce. I always encourage a buyer to come in with a strong opening offer.

2.Waiting too long to put in an offer:Just as impulse-buying a home is risky, analyzing a home purchase to death in a seller’s market is inadvisable too. When you wait too long, you are at high risk of losing [the home] you have fallen in love with. Once you’ve determined the type of home you want, the location you desire, and your price range, and finally find a home that meets your qualifications, make an offer. To give yourself more leverage, be prepared to make a quick offer by having your finances in order — get a preapproval if you can. Know how much you can truly afford, repair any credit issues, have your down payment in hand, and delay [other] major purchases.

3.Not working with a seasoned agent:In a seller’s market, it benefits buyers to get all the help they can. If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want. Plus, in most cases, buyers don’t pay real estate agents; sellers do. When you are competing against other buyers in a fast-paced market, it is vital to be ‘offer-ready. Working with a real estate professional saves tons of time and stress, as they know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory.

4.Not being prequalified (or better yet, preapproved) for a loan.

You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score — but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender. Prequalification is absolutely paramount. A buyer has zero advantage if they do not have the cash to purchase without a mortgage and haven’t taken the time to speak with a lender. Not getting prequalified sends a message to the seller that the buyer will lag on getting their ducks in order and aren’t taking their house hunting seriously.

Preapproval is a step above prequalification (where you simply tell your lender your financial story). The preapproval process involves submitting a mortgage application, complete with supplying verifying documents. Preapproval from a reputable lender is key. Presenting this shows the seller that the buyer has already set the wheels in motion and is serious about making [the deal] a reality.

5.Not being prepared for a bidding war.If there is ever a time when a bidding war could be imminent, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. But, if you set your search below your max budget, you leave room in case of an over-asking bidding war occurs.

6.Not learning from your mistakes.There’s no shame in learning that your offer has been declined, but it’s easy to get frustrated if your offers are declined over and over again. Learn from your last transaction(s) so you can get what you want. Buying a house, particularly for the first-time buyers, is a lot like dating. You probably have to let a few keepers slip through your fingers, have a couple sleepless nights over it, and then come back with serious intent to lock up the next greatest opportunity in front of you.

*GOD Speed*

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on June 15, 2016 by tominvestor

Shopping for a mortgage became easier in early October when the Consumer Financial Protection Bureau began mandating that lenders provide a new, simplified disclosure form to help consumers compare home loans. This disclosure (see below) is most useful after youve found the home you want and need a solid estimate of borrowing costs from a variety of lenders. But before you get to that stage, youll need to prove to a seller that a bank will lend you what you need to close on the deal. To avoid miscommunication snarls, you have to understand the difference among lender guarantees.

The Prequalification

A prequalification is really just to get you started, so you have a ballpark idea of how big a mortgage you can afford. When a bank prequalifies you, its giving you a preliminary statement of how much you could borrow, based on income and asset information youve provided. It is not based on any hard evidence, because at this point, you havent given your bank statements or had bank officers request your credit report. (For more information about the prequalification process, watch this Chase Bank video.)

The Preapproval

When the bank tells you youre prequalified, it may ask for your employers name and your Social Security number to verify your income and creditworthiness, as indicated by your credit reports. Thats to start the mortgage preapproval process.

A bank will issue a mortgage preapproval once it has all your documents in hand. These could include income verification from employers, recent tax returns, bank and brokerage statements, and credit reports. The bank will then have a specialist call an underwriter to determine how much youre capable of paying and how big a mortgage loan you can afford. That assessment will result in a preapproval letter from the lender that you can present when you bid for a home.

Having a preapproval in hand gives you a jump on other potential buyers. It lets the seller know youre a good candidate, and that the bank is likely to award you a loan. Itll also make you feel more prepared to buy.   

However, complicating matters, banks dont always define the terms in the same way, according to the Consumer Financial Protection Bureau. EverBank, the online lender, for instance, doesnt use the word, prequalification. Instead, it uses the term preapproval for what other banks define as prequalification. And what most banks call a preapproval Everbank terms a credit only approval, which means it has verified your income and creditworthiness. 

Keep in mind that youre not required to borrow from the bank that issues your prequalification or preapproval.

*GOD Speed*

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on May 29, 2016 by tominvestor

If your house could talk, it would tell you that spending a little money now on small repairs could save you big bucks down the road. We’ve put together 15 of the best small updates for keeping your home happy and your wallet full.

Stop Talking and Start Caulking

Exterior caulking loses its integrity over time. When it begins to crumble and pull away, it can allow rain to seep through windows, where it can potentially cause the wood to rot. To prevent the problem, remove old caulking and replace it with a new paint-grade formula around windows and doors to seal out moisture.

Perk Up the Paint

It might not be your favorite to-do, but painting your house at the first sign of peeling will protect the siding and structure from weather and water damage. While a DIY paint project can set you back a few hundred dollars, youll be paying thousands if you have to replace rotted siding.

Make the Grade

Use topsoil to bring your yard up to the proper level around the foundation. Ensuring that the yard slopes away from the foundation at no less than a 2 percent grade will prevent water from pooling next to the house, where it can lead to leaking and foundation-damaging soil heave during freeze-thaw cycles.

Filter Your Furnace

Dirty return-air filters restrict airflow to your HVAC unit, forcing its motor to work harder and ultimately costing you more cash. Replace filters (theyre cheap) twice a year, once at the start of summer and again when winter kicks in. This simple maintenance task will help the unit operate more efficiently and last longer.

Stop Sewer Problems

Few household mishaps are more disgusting than backed-up sewage in a tub or shower. Try flushing a main-line sewer cleaner down the drain every couple of months to keep the lines free from damaging clogs that could otherwise lead to expensive (and unpleasant) plumbing repairs.

Flip the Breakers

Over time, corrosion can develop on circuit breaker contacts; if ignored, this can cause irreparable damage. Every two or three months, simply flip each breaker off and back on. This simple step costs nothing but can increase the circuits lifespan enormously.

Insulate the Attic

One of the greatest sources of heat loss in a home is inadequate insulation in an unfinished attic. By bringing your attics value up to at least R-30, you’ll save big on your energy bill. Lay new insulation batts on top of old ones, or rent a blower unit and blow in noncellulose fiber insulation to a depth of 8.5 inches.

Help the Water Heater

Hard water deposits and sediment can shorten the life of any hot water heater. Fortunately, you can protect your model by simply flushing it out once a year. Every fall, follow the instructions printed on the heater or in the owner’s manual to keep your unit in tip-top shape.

Seal the Shower

A leaky shower can result in perpetually damp drywall, which can in turn lead to mold, rot, and water damage. The cheapest way to ensure that you won’t soon be tearing out drywall or calling a mold remediation expert is to repair small leaks before they create larger problems.

Get Some Air

Without sufficient ventilation, the temperature in an attic can become excessively hot, which can reduce shingle life and, in some circumstances, cause rafters to bow. Install intake vents in the eaves and exhaust vents in the gables, on the roof, or at the roof ridge to encourage airflow.

Service the Sump

It’s easy to overlook your sump pump—until the unit malfunctions and you’re stuck with a flooded basement. You can avoid costly water damage by removing the pump from its bucket once a year and thoroughly cleaning off any debris that has accumulated on the intake screen. Follow the instructions in the owner’s manual, or look up the manufacturer and model number on the Internet for more info.

Dim the Lights

You might want a bright overhead light when you’re cooking or cleaning, but it’s just sucking energy if you’re watching TV or lounging. By replacing your old light switches with dimmers, you can amp up a room’s ambience and lower your electric bill. While you’re at it, switch to CFL bulbs to save even more money.

Clean the Gutters

Fallen leaves clog and break gutters, causing water to run over the trough and fall along the foundation line, which can lead to some mighty expensive problems. Clear your gutters of debris in autumn, after the trees have finished losing their leaves. For extra foundation protection, install downspout extensions to direct rainwater away from the house.

Glaze Old Windows

Those vintage windows may make for charming details, but the glazing compound that seals their single panes can shrink and pull away over time, letting both drafts and rain into your home. Scraping off and replacing old glazing is a cheap fix, and you need to do it only once every five or six years.

Pick Up a Programmable Thermostat

With soaring utility costs, it pays to conserve energy. Why pay to heat or cool your home while you’re at work all day or gone for the weekend? By installing a programmable thermostat, you make your homes temperature automatically conform to your familys habits and needs, and keep your utility bill at a reasonable level.

*GOD Speed*

 

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on May 21, 2016 by tominvestor

Renting is convenient in your early years, as youre just getting a job and getting your life in order, perhaps even moving around for jobs, relationships and adventure. But as you get older, you may start thinking about buying a house, whether because youre partnered with someone or you are in a long-term career and want to settle down somewhere.

After all, when you rent, your money is spent on a temporary place to live; but when you own a house, your money is spent on paying down the mortgage of a permanent asset that you own.

The Homebuying Process

Buying a house is a lot of work — you need to figure out what you want in a house, get pre-approved for a mortgage, find a real estate agent who can help you, go house-hunting and ultimately make an offer. And the work doesnt stop there. Most people who have bought houses say that the real work begins once your offer is accepted and you move into your home.

Maybe youre not in the homebuying process yet; maybe youre still dreaming of what you want in a house, or which neighborhood or city youd like to live in. Maybe No matter what stage youre at, even if buying a house isnt something youre actively working on at the moment, you can take action today to help prepare by doing one simple thing: having a good credit score. Youre simply visualizing your future kids playing in the backyard or having the neighbors over for a barbecue on a warm summer evening.

Work on Credit Now, Benefit Later

When you go to a bank to get pre-approved for a mortgage, the bank will check your credit and use that to help decide if theyll lend you money and, if they do, what your interest rate will be. If youre approved, the bank will likely give you a preliminary loan amount number that you can use to help you start your house-hunting. When you make an offer on a home, youll go back to the bank and, as long as your credit is still in good shape, you should be able to get that pre-approved mortgage.

In other words, your future homeownership really hinges on your credit. Therefore, if you plan to buy a house in the future (even if its a couple of years away in your minds timeline), you are already taking action today on that house purchase.

When you use your credit card, when you pay your credit card off, when you borrow money for a car loan, when you decide to apply for another credit card, when you lend your credit card to a friend — everything you do that impacts your credit is ultimately impacting your eventual homeownership, from how much money youll get for your mortgage to how much interest youll pay.

So if homeownership is a dream that you hope will turn into a reality someday, consider the decisions youre making now and how theyll influence your homeownership.

*GOD Speed*

 

 

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AZ Real Estate

Posted in buyers, flips, home loans, investments, investors, mortgages, Real Estate, sellers, whole seller's with tags , on May 18, 2016 by tominvestor

Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many common reasons why homeowners refinance: The opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a homes equity in order to finance a large purchase; and the desire to consolidate debt.

Some of these motivations have benefits and pitfalls. And because refinancing can cost between 3 and 6 of the loans principal and – like taking out the original mortgage – requires appraisal, title search and application fees, its important for a homeowner to determine whether his or her reason for refinancing offers true benefit.

Securing a Lower Interest Rate

One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2. Today, many lenders say 1 savings is enough of an incentive to refinance. Reducing your interest rate not only helps you save money, but it increases the rate at which you build equity in your home,and it can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 9 on a $100,000 home has a principal and interest payment of $804.62. That same loan at 6 reduces your payment to $599.55.an decrease the size of your monthly payment.

Shortening the Loans Term

When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another loan that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9 to $5.5 cuts the term in half to 15 years, with only a slight change in the monthly payment from $804.62 to $817.08.

Converting Between Adjustable-Rate and Fixed-Rate Mortgages 

While ARMs start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate as well as eliminates concern over future interest rate hikes.

Conversely, converting from a fixed-rate loan to an ARM can also be a sound financial strategy, particularly in a falling interest rate environment. If rates continue to fall, the periodic rate adjustments on an ARM result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop.

Converting to an ARM may be a good idea especially for homeowners who dont plan to stay in their home for more than a few years. If interest rates are falling, these homeowners can reduce their loans interest rate and monthly payment, but they wont have to worry about interest rates rising in the future.

Tapping Equity and Consolidating Debt

While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt. Its important to keep this in mind when considering refinancing for the purpose of tapping into home equity or consolidating debt.

Homeowners often access the equity in their homes to cover big expenses, such as the costs of home remodeling or a childs college education. These homeowners may justify such refinancing by pointing out that remodeling adds value to the home or that the interest rate on the mortgage loan is less than the rate on money borrowed from another source. Another justification is that the interest on mortgages is tax deductible.

While these arguments may be true, increasing the number of years that you owe on your mortgage is rarely a smart financial decision, nor is spending a dollar on interest to get a 30-cent tax deduction.  Many homeowners refinance in order to consolidate their debt. At face value, replacing high-interest debt with a low-interest mortgage is a good idea. Unfortunately, refinancing does not bring with it an automatic dose of financial prudence.

In reality, a large percentage of people who once generated high-interest debt on credit cards, cars and other purchases will simply do it again after the mortgage refinancing gives them the available credit to do so. This creates an instant quadruple loss composed of wasted fees on the refinancing, lost equity in the house, additional years of increased interest payments on the new mortgage and the return of high-interest debt once the credit cards are maxed out again – the possible result is an endless perpetuation of the debt cycle and eventual bankruptcy.

The Bottom Line

Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control. Before you refinance take a careful look at your financial situation, and ask yourself: How long do I plan to continue living in the house? And how much money will I save by refinancing?

Again, keep in mind that refinancing generally costs between 3 and 6 of the loans principal. It takes years to recoup that cost with the savings generated by a lower interest rate or a shorter term.

So, if you are not planning to stay in the home for more than a few years, the cost of refinancing may negate any of the potential savings. It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money and eliminate that mortgage payment. Taking cash out of your equity when you refinance doesnt help you achieve any of those goals.

*GOD Speed*

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