Real Estate Information

If you watch home-and-garden cable channels, it looks like everyone is flipping houses. i.e. buying a piece of real estate, making minor repairs, and quickly selling it at a substantially higher price.  Basic investing 101: Buy low, sell high.

Certainly sounds appealing--and you may be tempted to join the ranks of those who have been successful in this field.  Be forewarned, however, that like most money-making endeavors, real estate flipping requires time, money, patience and skill.

For tips on how to begin, steps to follow, and advice on how to avoid pitfalls, read on…

Do your research and be knowledgeable well in advance:

• Talk to (and learn from) successful flippers, read up on the subject, follow real estate deals in the newspaper, use the Internet as a teaching resource, attend open houses and auctions.
• Identify possible house locations, size, and style.  Educate yourself on how to recognize promising properties and how to spot a lemon.
• Familiarize yourself with current prices, taxes, utility rates, HOA fees, municipal and restrictions in each area you are considering.   Study your market. Get to know it as well as you possibly can. Understand the trends, the kinds of houses, the neighborhoods, the streets
• Visit the potential homes and neighborhoods in person.  Talk to residents, Realtors, and repair companies who are familiar with the area.

Set up a budget, a time line, and financing:

• Figure out how much money you have (or can put your hands on using investors) without borrowing
• Calculate the cost of repairs, taxes, utilities, materials, contractor/labor expenses, and the like.  Professional contractors advise flippers to add an extra 10% to their repair estimate.  Also, to be on the safe side, make sure that you’ll be able to hold on to the home as a rental property for a while, if need be.
• Experts suggest factoring in the flip time into your budget and your potential profit before you purchase the home. According to investors, a successful flip is one that makes you around a 15% profit.

Be prepared:

• When you find the right house, you must act quickly to buy it.
• Have appraisers, agents, contractors, skilled laborers lined up so they can start work immediately upon your purchase.  Remember, in flipping, time is money!
• Be ready to make quick decisions, devote a great deal of time (and possibly sweat equity) to this project, and face unexpected expenses.

Information courtesy of Chester County Real Estate Expert Scott Darling.

A new year has begun and it seems to me that time goes faster and faster each day. The economy is predicted to grow around 3% in 2015 and as you can guess that is good news for the real estate business!  The real estate market holds a few more predictions for 2015…

• Interest rates are still low compared to what they have been in years passed but Freddie Mac is predicting that interest rates will rise above the low 4% they had dipped to in 2014 to up to 5% by the end of 2015.  Still these interest rates are extremely low so if you are in the market for a new house you should go ahead and plan on making a purchase sometime in the year of 2015. 
• Prices for houses by the end of 2015 are predicted to be a little higher than in years passed but not so high that they won’t still be affordable.  Home appreciation will likely move to 4.5 percent instead of 9.3 percent as in 2014.  It may be that home appreciation will drop to 3 percent by the end of 2015.
• If building a home is in your plans then you are apparently on target with a lot of other folks. The building of new homes is expected to rise 20 percent from 2014.  If you don’t find the house that fits your every need this coming year on the market, it will be a great year to build it to your own specifications. 
• Not as many folks will be refinancing in 2015.  As a matter of fact refinances will drop to make up only about 23 percent of single family orientations this coming year.  In 2014 refinances made up roughly more than half of single family orientations. 
• It will be a bit easier to get a loan for your new home purchase in 2015 as some of the restrictions that were once placed on new home buyers will be eased.  Funding sources will grow for new home buyers in 2015 as well. 

As you can see there is a lot of good news for the real estate market in 2015.  If you are considering buying a home, don’t wait another day longer…get on the phone and give me a call today to get you started in the right direction. 

Information courtesy of Chester County PA Realtor Scott Darling.

Be sure to read the article below from Realty Times author Blanche Evans discussing why sellers overprice their homes. She doesn't mince words!

Why would sellers deliberately sabotage their chances of selling their homes? It doesn't make any sense, yet it happens all the time.

Sellers arrogantly slap the highest price on their homes that they think they can get away with. Then they're surprised when the market slaps them right back with insultingly low offers or none at all.

If you're a seller getting ready to list your home with a real estate professional, and you're even thinking of testing the market with a high price tag, it's time to slap you and get your attention.

Here are four really bad reasons to overprice your home.

You think you're smarter than everyone else.

If you're truly smarter than everyone else, then your agent, the buyer's agent, the buyer's lender, the county appraiser, all the other sellers who have sold or who currently have their homes listed in the market and every buyer on the market is stupid compared to you.

Maybe you'll get lucky and some state lottery winner will write you a check. Oh, yeah, that'll happen.

You want control.

You're the seller who hires a real estate professional, but then doesn't listen to a word she says. Or you politely listen, smile smugly, and then inform your agent that you're in no hurry, you can afford to wait for the right price, you can always decide to drop the price later, blah, blah, blah.

But you're not in control. The market is in control. Buyers don't have to buy homes, and they certainly don't choose to buy overpriced homes.

You're dishonest.

Like keeping an ace up your sleeve, you see nothing wrong with hiding information from your agent or the buyer. Maybe you want to put such a high price on your home because you owe more on your home than it's worth. What if you can't get your price and you have to ask the lender to take less money. That's a big risk. It takes more time, the lender could say no, and your buyer could get righteously angry and walk away.

You're entitled.

You feel you deserve nothing but the best, but you're really the client from hell. You really think it's your hapless agent's job to meet your unrealistic expectations. You expect your agent to hire Josh Whelan to video your home, put a full-page ad in the New York Times, hold an open house every week, stand in your front yard with a bullhorn and get buyers to step right up -- all for a discounted commission.

Overpricing is a risk. Buyers aren't stupid. Agents don't work for free. Lenders don't ignore lending guidelines. So don't be stupid. Don't overprice your home.

Information courtesy of Chester County PA Realtor Scott Darling!

If you have been wanting to purchase a new home but have counted yourself out of the equation due to the fact that you cannot come up with the down payments needed, don’t count yourself out just yet!  3% down payments are still out there for the taking, so get out there and start looking for your new home today! These low down payments are being offered by Fannie Mae and Freddie Mac.  Fannie began backing the loans on December 13, while Freddie will start offering them March 23, 2015.

The 3% down payment loans are only going to be offered to you if you have a credit score of at least 620.  Also you may want to know that if you want to take part in the great down payments as low as 3% you are going to need to buy private mortgage insurance. 

• If you are expecting to get a 3% down payment loan without home ownership counseling then you are mistaken.  I still think it is worth it no matter how many hoops you may have to jump through to take advantage of the low down payment.  Some folks may find that without the low down payment plan they are just not able to purchase a home, so the hoops are well worth it in the end. 
• You will have to offer a total and complete documentation of your job status, income and all of your assets in order to possibly qualify for one of the 3% down payment plans. 
• Those who want to refinance or who are first time home buyers will be the candidates that qualify for this program. 

If you think that you may qualify for these new low down payment plans from Fannie Mae or Freddie Mac you should give your Realtor a call as soon as possible to get the ball rolling in your favor.  These kinds of deals don’t come around all the time so be sure to take advantage of them.  You will save thousands of dollars in the long run once making your home purchase if you are just willing to take a little extra time gathering all of your documents that will be needed to qualify. 

Information provided by Chester County PA Realtor Scott Darling.

This holiday season, will you be one of the 197 million Americans to shop online, according to eMarketer? Holiday shoppers will go online to buy everything from gift cards to cars, flat screen TVs to smartphones. And at least some of them will have their holiday spirit dampened by scammers who use a variety of schemes to convince victims to send money for a bogus purchase.

"The holiday shopping season is an opportunity for scammers," says Dan Marostica, vice president of fraud risk management of Western Union, a leading money transfer company. "In the hustle and bustle of the holidays, con artists are counting on Americans' desire for a good deal to help them cheat holiday shoppers out of their hard-earned money."

Scammers attempt to contact consumers on a variety of online venues, from popular auction and free-ad websites to social media and even pop-up ads. Some scenarios hinge on one tactic - convincing the buyer to send money to the scammer via money transfer.

"Criminals may purport to be selling an item privately and claim they can only accept a money transfer," Marostica says. "Or they may be offering something for 'free' like a puppy, simply asking the buyer to send a money transfer to pay for shipping. These cheats know that once a money transfer is paid it is difficult for the victims to get their money back from the seller.

As the holidays approach, follow these tips to avoid becoming a victim of an online purchase scam:

• Never pay for an online purchase by sending a money transfer to an individual.
• When shopping online, stick to established, reputable retail sites or auction sites that have clearly defined policies for how they will help settle a dispute between buyers and sellers.
• Look for visual cues that a website is secure, such as a URL address that begins with "https" or a lock symbol on the lower part of the page. These signs indicate a website has taken security measures.
• If you can't find a company's physical address and customer service phone number on its website, consider doing business elsewhere.
• Be wary of private sellers offering goods at extremely low prices, or those who require you to pay by money transfer. Don't believe a seller who claims your money transfer will be held in escrow - Western Union does not offer an escrow service - or one who suggests you put the money transfer in a friend's name for security purposes changing it after you receive the goods. Once the criminal has your friend's name, he or she may be able to pick up the money transfer.

"Money transfer is a great way to send money to family and friends for the holidays, but you should never use it when dealing with someone you haven't met in person," Marostica says. "And you should never send a money transfer to pay for goods or services from an individual on the Internet.

To learn more about fraud prevention, visit www.westernunion.com/stopfraud. (BPT)

Information courtesy of Chester County PA Realtor Scott Darling.

Designers are often drawn to a simple, modern look - however, layering unique patterns and textures in the home is a quickly growing trend. Keep your space harmonized, yet distinct, with the tips outlined below.

Fancy frames.

An empty wall holds endless potential. If the room is small, expand your space with a mirror collage featuring a variety of shapes and varnishes. Is your heart set on a colorful patterned wallpaper? Showcase your favorite print in a large frame for a beautiful living room backdrop to avoid feeling overwhelmed. Art fans should collect a variety of frames in different finishes and styles to create a "living room gallery" featuring a beautiful art display.

Transitional design.

For a distinct kitchen environment, combine the artisan feel of the early 20th Century with sophisticated technology. The kitchen is the perfect setting to feature products that tout high-design and innovative technology.

Pillow patterns.

Choosing pillows isn't always easy. While it's fun to mix and match, certain textures complement each other better than others. For example, linens and wool tend to look better with woven fabrics while shiny and matte fabrics are best kept separate. Mixing contrasting textures such as silk and corduroy calls for a strong sense of design confidence - but it can be done.

Rugs on rugs.

Layering is a design tactic that fashion and interior designers use to make a statement. Start with a flat, neutral rug as your foundation and add a smaller, accent rug on top. Investing in a large rug with a subdued color is smart, but have fun with the accent rug. Whether cowhide or a geometric print - choose a similar color scheme and play with the positioning by placing the top rug at a purposeful angle.

Old, renewed. When thinking about your space, it's important to remember that design inspiration can be found anywhere. Look for antique candle holders or paperweights. Check out antique shops or thrift stores for hidden treasures. When traveling, visit flea markets and local art fairs. Transform an old object like a rustic slab of wood into a glossy countertop for your kitchen island. No matter where you travel, keep an eye out for timeworn treasures for your home.

Layering textures and patterns, combining modern with rustic - blending home design can result in a truly transformative space that captures your individual style. (BPT)

Information courtesy of Chester County Realtor Scott Darling.

There are many factors that go into the decision to buy a home. One of those factors is how long you expect to stay in the home. This applies whether you are a first time homebuyer or stepping up to a larger home. The length of time you stay in a home affects the financial outcome of that ownership.

Here’s a summary of some thoughts from moneyning.com and the 5-year rule for buying a home. There is a tendency for younger buyers to go through 3-year upgrade cycles. Why? Newer and younger buyers typically experience significant increases in income in their younger years.

As income increases their ability to afford a larger mortgage increases and the desire for a larger house sets in. There seems to be an assumption that buying is more cost effective than renting. Click here for a perspective on ownership costs vs. rent. That thought process occurs, on average, every three years.

The 5-year rule states that generally you should plan to stay in a home you’re buying for at least five years. That is for two primary reasons…

• The first reason is closing costs. Every time a home changes hands both the buyers and the sellers put money on the table just to make the transaction happen. These costs can easily add up to thousands of dollars. Those dollars provide no real financial benefit to the buyers or sellers except to allow the transaction to happen.
• The second reason is the payment of interest on the mortgage. A mortgage payment has two components – payback of the principal of the loan borrowed and interest on the amount borrowed. Because typical mortgage payments remain the same during the life of the loan the proportion paid on the two components changes. In the early years the payment is almost all going to pay interest and very little to principal. As the principal is gradually paid down the portion going to interest diminishes and the portion going to the principal increases.

According to author Thursday Bram “it isn’t until you’re about five years into paying down your mortgage that you’ve made enough progress on the principal to make it a better deal than paying rent each month.”

Here’s how to beat that average…don’t buy the biggest house you can just because a lender tells you what you can afford. Instead, consider buying smaller and then adding extra money to your monthly payments. That extra money will go entirely to paying down the principal loan – that means you will pay less interest over the life of the loan and you will create more equity because you are diminishing the principal balance faster.

However, if you’re not going to stay in your home five years you should probably consider renting.

Military families are going to like what the Obama Administration has been up to lately.  A new agreement was made on August 29, 2014 to lower the mortgage payments of those who fight for our country.  The agreement was made with five of the nation's largest mortgage lenders; Wells Fargo, Ocwen Loan Servicing, CitiMortgage, Bank of America and Quicken Loans. 

These new lower mortgage payments are going to help military families in the following ways:

• Give military families a little wiggle room when it comes to paying their bills
• Aid military families in being able to fight for our country while providing for their families back home
• Make military families aware that this type of help does exist and is available to them

Some military families are not aware that help from the government to lower their mortgage  has been in place for some time.  This new service will help every military family to know that it is available to them and will also make it much less of a hassle for them to receive. The big banks and financial institutions will now be notifying service men and women who qualify for lower rates.  These institutions will also make it very easy to enroll in the program.   

It is expected that thousands of military families will benefit from this new program.   It will be so nice for those who are serving us in such an honorable way to receive back a little from the government and for more military families to be able to own their own home.  Not only that, but many of these military families who take advantage of the governments help to lower their monthly mortgage payment will also be able to send their children to college or even be able to put some back to retire on. 

I personally give the government two thumbs up for this new assistance to military families.  It is a perfect time to show those who fight for our freedom just how much they are appreciated.