Archive | July, 2016

How Will It Feel?

26 Jul

It has been said that change is the only constant. Most of the financial experts have been expecting interest rates to increase along with home prices. While homes, in most markets, have definitely seen increases over the past five years, the mortgage rates today are actually lower than they were a year ago. FreddieMac PMMS 072816 rev.jpg

If the interest rates were to increase by 1% over the next year while homes appreciated at 6% during the same time frame, a $250,000 home would go up by $15,000 and the payment would be $211.53 more each month for as long as the owner had the mortgage. The increased payments alone would amount to $17,769 for the next seven years.

When facing a decision to postpone a purchase for a year, a legitimate question to ask oneself would be: “how will it feel to have to pay more to live in basically the same home a year from now?”

It is easy to understand that if the price of a $250,000 home goes up by 6%, it increases the price by $15,000. A slightly more difficult concept to realize is that if the interest rate were to go up by ½%, it is approximately equal to a 5% increase in price. A 1% increase in mortgage rates would approximately equal a 10% change in price. This means that if a home goes up in price by 6% and the interest rate goes up by 1%, it is equivalent to the price of the home going up by a little more than 16%.

Use the Cost of Waiting to Buy calculator to estimate what it might cost to wait to purchase based on your own estimates of what interest rates and prices will do in the next year.

Increase the Chance of Being Accepted

21 Jul

While all contracts must have certain required elements, mutual assent, consideration, capacity and legality, there are some things that increase its chance of being accepted.

19269905-250.jpgThe seller generally wants the highest possible price with the fewest inconveniences in the shortest period of time. In the same way, the buyer generally wants the lowest possible price with the fewest inconveniences in the shortest period of time.

The perspective of the principal can change depending on how these different parts of an agreement are structured.

  • Offer Price – While the price of the home seems to be the major point of contention in a home negotiation, the seller’s net proceeds and the buyer’s mortgage payment may actually be more critical.
  • Financing – 86% of buyers financed their recent home purchase as opposed to the 14% who paid cash. Some financing has higher fees than other types of financing and in some instances, sellers must pay the additional charges on behalf of the buyer.
  • Concessions
    • Seller-paid closing costs – paying all or part of a buyer’s closing cost requires less cash outlay for the purchaser and makes it easier or more appealing for them to buy the home.
    • Seller-paid buydown – prepaying interest to the lender on behalf of the buyer gives them lower payments for the first one, two or three years even though they must qualify at the note rate of the fixed-rate mortgage.
    • Personal property – seller may agree to include existing or new personal property like washer, dryer or refrigerator.
    • Improvements – seller may agree to make modifications to the existing condition of the home like floor covering, countertops, appliances, painting or other things.
  • Earnest Money – more money gives the seller a sense that the transaction is more likely to close while putting the least amount at risk is generally, more appealing to the buyer.
  • Timing – depending on which party is more flexible, sometimes an earlier or later closing or a position on occupancy can be an offsetting consideration that can balance the differing terms.
  • Contingencies or lack thereof – requirements that must be satisfied before the contract can be closed.

The training and experience of a skilled negotiator can benefit both buyers and sellers to save time, avoid difficulties and bring all parties to an agreement. Your real estate professional should be able to help you structure a good offer and negotiate a win-win situation.

The Right Questions are Key

12 Jul

Asking the right questions will lead to the answers that help you determine which agent to use for one of the largest investments that most people make…the purchase or sale of their home. 13481441-250.jpg

Rudyard Kipling wrote the verse “I keep six serving men, they taught me all I knew; their names were what and why and when and how and where and who.” Prefacing your questions with one of these words can help you get the information you need to make a good decision about the REALTOR® you use.

  • How long have you been selling homes and is this your full-time job?
  • What designations or other credentials do you have?
  • How many homes did you and your company sell last year?
  • What is your average market time compared to MLS and your top competitors?
  • What is your sales price to list price ratio?
  • When will you report to me on the progress of my transaction?
  • Who can you recommend for service providers like mortgage, inspections, repairs and maintenance?
  • Why do you want to work with me?
  • Where are the biggest opportunities to expose my home to the largest market?

Finding the right person to represent you is a little like the person who ordered a lobster dinner at a restaurant. When the waiter brought out the meal, the lobster only had one claw. The customer asked why it only had one claw and the waiter said: “I don’t know; I guess it was in a fight.” The customer looked at him and said: “then, bring me the lobster who won.”

Opportunity Can Disappear

5 Jul

In the last few years, some people who were unable to sell their homes, rented them instead. The market has improved in most places and the home may easily sell now and possibly, for a higher price.53848691-250.jpg

Even though the opportunity to sell in the near future might not change, there could be another opportunity that could quickly disappear for some homeowners.

Most homeowners are aware that there is a capital gain exclusion on the profits of a principal residence of up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly. The rule requires that you must own and use the home as your principal residence for two out of the last five years.

A homeowner can rent their home for up to three years and still be eligible for the exclusion. As an example, if they had owned and lived in it for two years and then rented it for two and a half years, they would need to sell and close the transaction before the remaining six months expired.

If there was a $200,000 profit in the home that didn’t qualify for the exclusion, a 15% long-term capital gain tax of $30,000 could become due depending on the tax bracket of the owner. With some careful planning, the tax could be avoided. Awareness of the time frames and the right team of tax and real estate professionals could save a considerable amount of the homeowner’s equity.

Beautifully Upgraded Home On The Creek!

2 Jul

0070

15039 Mountain View Road, Frisco

5 Bedroom / 4 Bath / Media / Game / Creek

This stunning Highland home is nestled on one of the very best creek lots in Hunters Creek, offers an expansive floorplan with 5 bedrooms & 4 full baths, has all the upgrades and is within walking distance to the pools and three of Frisco’s finest schools!  Upgrades & features are…..

A beautiful flagstone elevation, a large aggregate drive perfect for basketball leading to an over-sized front-entry 3-car garage just adjacent to scenic Taychas Trail & upon entry….elegant formals with a wall of built-in bookcase shelving and library ladder, as well as rich hand-scraped hardwood floors & crown moldings.

The Texas-sized family room has an upgraded floor-to-ceiling stone gas FP, an entertainment niche, surround sound,  handscraped hardwoods, a wonderful view to the backyard and patio area and is open to a kitchen that would delight any chef with its abundant 42” cabinetry with dentil moldings, granite breakfast bar, gas cooktop, huge walk-in pantry, granite butler’s pantry, tumbled stone backsplash, stainless-double convection oven, double-crown molding & sunny breakfast area.

The private master retreat enjoys a backyard view, has room for a sitting area, boasts hardwoods, double crown moldings & has a luxurious bath with granite counters, dual stain-grade vanities, upgraded lighting, faux finishes, jetted tub, double crown molding and a large walk-in closet.

Upstairs is perfect for entertaining with a nice gameroom with a balcony overlooking the creek & just adjacent is a media room with surround sound & just down the hall are 3 spacious bedrooms with two full baths (one is a large jack & jill) & at 13 x 20…the 3rd bedroom would make an excellent playroom, hobby room, or larger bedroom for two.

The backyard is an outdoor oasis with an expansive aggregate patio and covering, upgraded and lush landscaping and an iron fence to enjoy the creek and scenery. Other upgrades and features are…20’ ceilings upon entry, solid-core doors down, 6” baseboards, iron spindles, roof replaced (2014), Bosch dishwasher (2009), condensing units replaced (2013 & 2014), media room projector & screen included, abundant storage, large utility room, garage plumbed for sink & incredible Hunters Creek amenities to include two pools, numerous parks, neighborhood events and more!

You don’t want to miss this opportunity!  MLS 13410473

Please contact Jeff Jacobs at 972-943-7302 for more information or click HERE.

For more information and other homes for sale in this area, check out www.myrealtytown.com 

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