Real Estate Information Archive

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!

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.

Zillow has published their latest report, Four Housing Predictions, Plus 10 Hottest Local Markets in 2014 which includes:

• U.S. Home Values
• Mortgage Rates
• Home Loans
• Homeownership

Plus...The 10 Hottest Local Markets for 2014.

Download your report here!

First-time home buyers owe themselves a lot of research about the finances of buying a home. Here are four common first-time home buyer mistakes to avoid.

1. Don’t spend the maximum amount on a mortgage a lender will loan.

Lenders often qualify buyers based on incomes and debt-to-income ratios without considering how much the borrowers spend on other budget items.

Financial experts recommend that consumers decide how much they want to spend each month on housing before meeting with a lender. It’s up to you to know your budget and to not just jump at a mortgage amount that a lender says you can afford.

2. Not getting pre-qualified.

This should be the first step toward homeownership. Many first-time homebuyers wait until they are ready to start house hunting before contacting a lender.

Buyers need to get pre-qualified early enough in the process so that they can make changes if they need to or correct errors on their credit report. Some first-time buyers may need to spend up to a year saving more money, increasing their incomes or cleaning up their credit before making an offer on a Chester County home.

3. Don’t underestimate the importance your credit score.

While most consumers know it's important to have a high credit score, not everyone understands how costly a low score can be. Mortgage lending is done with a tier of interest rates and terms based on consumer credit scores. Learn about credit scores the minute you start working. Many websites provide information about how to improve your credit score.

And remember, even after a mortgage approval, you must avoid applying for new credit or taking on new debt, because a second credit check is now often required before settlement.

4. Choosing the wrong mortgage product

Many first-time home buyers opt for a 30-year fixed-rate mortgage only because it is an industry standard. Alternatives to a 30-year-fixed sometimes make more sense. For example, buyers certain they will be relocated by their companies within five years may find a 5/1 ARM could be a much better mortgage.

Home buyers eager to build equity in their homes or who are older and want to live mortgage-free in retirement should consider a 15-year fixed-rate loan or even a 10-year mortgage to reach their goals.

Do your homework and don’t jump at a mortgage because it will buy you a bigger Chester County home.

The news this year has been filled with reports of hurricanes, tornadoes, floods, and fires, each of which has resulted in untold loss of lives, homes, and possessions.  As we watch with horror the impact these disasters have on those affected, it is only natural that we ask ourselves,” Would I be able to sustain such losses?  Would my insurance policy cover the costs of rebuilding my Chester County PA real estate?

The National Association of Insurance Commissioners (NAIC)) recommends that you use your annual renewal notice or any improvements to your home as a reminder to touch base with your agent or insurer to recheck how much insurance you really need.  Do you have sufficient coverage for rebuilding and replacement? Amy Bach, executive director of United Policyholders, a consumer advocacy group, urges homeowners not to blindly trust that their home insurer has all the bases covered.

With fluctuations in the Chester County PA real estate market, coverage equal to the current replacement cost (excluding land), is advisable.  The first step in getting adequate coverage is to establish your policy’s dwelling limit. Your target number is the full-replacement cost of your home and its possessions. The dwelling limit bears no relation to your property’s market value, its appraised value, or its assessed tax value. And don’t mistake the cost of new construction for the cost to rebuild, which is more expensive because of factors such as debris removal and higher demand for materials and labor after a catastrophe,

(You can get a pretty good idea of what it would cost to rebuild your home by using an online calculator, available at sites such as HMFacts.com ($7) and AccuCoverage.com ($8).

It’s a good idea to purchase guaranteed replacement coverage, meaning the insurer will pay whatever it costs to rebuild your home with materials of like kind and quality, without deducting for wear and tear. Avoid actual cash value coverage, which pays only the depreciated value of your Chester County PA real estate.

Check also on your need for flood insurance, even if you don’t live near a body of water, since policies vary in their coverage of many types of water damage.

And lastly, it goes without saying that you need to update the inventory of your possessions at least annually since it is not only a record of the contents of your house and their value, but also a good indicator of whether you have enough coverage.

Each year around 65% of all household moves take place between May and September, so obviously you need to plan ahead if you’re moving to a new Chester County PA home this summer.

While the act of relocating a new place can certainly be exciting, there are, of course, challenges to be met, especially during a hot, busy summer season.  Although there are no foolproof ways to make the experience totally stress-free, there are, thankfully, actions you can take to make your “adventure” a more positive one.

Sage advice to heed includes:

• Plan ahead!  Contact moving companies or truck rental firms at least six weeks in advance if possible. Try to schedule your move for a weekday and at a time when traffic is less heavy.  . Make prior arrangements for the care of young children and pets on moving day—for their sake and yours!  Line up commitments from friends and family if you’ll need their assistance for the move.
   
• Be strategic about packing.  Gather necessary supplies and start packing early.  Whether it’s one room, one cabinet, or a drawer at a time, weed through what may be years of accumulation.  Decide what to donate to charity, give to a friend, recycle, trash, pack now, or keep handy until moving day.  Label boxes as to contents and intended room in the new Chester County PA home.
   
• Take care of logistics in advance.  Ideally, you should contact your future utilities provider at least two weeks before you move regarding turning on your electricity, gas, phone, cable, and internet before your arrival, if possible.  Contact any new school for a list of documents needed for registration.  Do not pack these materials away it’s better to hand carry them for easy retrieval.  If you’re going to need to spend a night in a hotel, make those arrangements early.
   
• Make life simple.  Keep all small parts labeled, in plastic bags, and all together in one box.  Likewise, take pictures of electronic hook-ups for future use.
   
• Consider the heat.  Dress appropriately, stay hydrated, and refrain from placing certain items in a hot truck—candles or wine, e.g.  Click here for tips on packing cleaning products and toxins.
   
• Stay calm.  Relax, whistle, smile, and anticipate the pleasure of living in your new Chester County PA home.