Archive | April, 2019

iBuyers – Convenient at a Price

30 Apr

There are an increasing number of real estate companies, termed iBuyers, like Open Door, Offerpad, Zillow, Knock and others that market a service that has an appeal to homeowners. The pitch for these quick cash offer companies will include some variation of “let us buy your home in days without the normal hassles of listing.”

This approach attempts to provide an alternative to selling a home in a normal manner at the expense of not realizing the full equity a homeowner is entitled. There is no fiduciary relationship requiring the broker to put a seller’s best interest above their own interest. An iBuyer does not represent a seller and does not owe client-level services like loyalty, obedience disclosure among other things required by most state license laws.

The offer is based on an automated valuation model, many times, without a physical inspection of the home. In some cases, a contract is written but there are provisions that allow iBuyers time to possibly “flip” the property to an investor or use an “out” in the contract to void the sale.

The reality is that a company cannot stay in business if they pay too much for the property. The iBuyer becomes the Seller who now must be concerned with pricing the home properly to cover the normal selling expenses as well as repairs, improvements, and holding costs that will be incurred until the property sells.

There could be circumstances that make it necessary for a homeowner to sell their home at a discount. The seller could be in a distressed situation needing immediate cash. They might need a quick sale and don’t want to be bothered with repairs or marketing efforts. Or possibly, they may have found their next home and need to act quickly. The instant liquidity comes at a cost to the seller in lower proceeds from the sale.

To realize the maximum possible equity, a real estate professional in your area can advise you about the fair market value of your home, a reasonably expected sales price, the costs involved and how long it will take. Before accepting a price to sell your home to a wholesaler, you owe it to yourself and your family to find out what you can expect if you take a conventional sales route.

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One Loan for Purchase & Renovations

23 Apr

The FNMA HomeStyle conventional mortgage allows a buyer to purchase a home that needs renovations and include them in the financing. This facilitates the purchase of the home and the renovations in one loan rather than getting a separate second mortgage or home equity line of credit.

The combination of these loans should save closing costs as well as interest rates which would typically be higher on a home improvement loan.

The borrower will need to have an itemized, written bid from a contractor covering the scope of the improvements. Any type of renovation or repair is eligible if it is a permanent part of the property. Improvements must be completed within 12 months from the date the mortgage loan is delivered.

  • 15 and 30-year fixed rate and eligible adjustable rate loans are available.
  • Typical FNMA down payments are available starting as low as 3% for a one-unit principal residence to 25% for three and four-unit principal residence and one-unit investment properties.
  • Borrower must choose his or her own contractor to perform the renovation.
  • Lender must review the contractor hired by the borrower to determine if they are adequately qualified and experienced for the work being performed. The Contractor Profile Report (Form 1202) can be used to assist the lender in making this determination.
  • Borrowers must have a construction contract with their contractor. Fannie Mae has a model Construction Contract (Form 3734) that may be used to document the construction contract between the borrower and the contractor.
  • Plans and specifications must be prepared by a registered, licensed, or certified general contractor, renovation consultant, or architect. The plans and specifications should fully describe all work to be done and provide an indication of when various jobs or stages of completion will be scheduled (including both the start and job completion dates)

Up to 50% of the renovation funds may be advanced for the cost of materials after the closing of the loan.

This mortgage does have a provision for the borrower to do a portion of the work themselves if it doesn’t exceed 10% of the total project and it must pass inspection on completion just as the contractor’s work.

It is recommended that borrowers thoroughly research this program before they commit to a loan. For detailed information, see FNMA HomeStyle Renovation Mortgage and Selling Guide Announcement SEL-2017-02. It is important to work with a mortgage officer who is familiar with these loans who can guide you through the process.

Get Rid of Things You Don’t Need

16 Apr

Periodically, you need to rid yourself of things that are taking up you time and space to make room for more of what you like and want.

There’s a frequently quoted suggestion that if you haven’t used something for two years, maybe it isn’t essential in your life.

If you have books you’ll never read again, give them to someone who will. If you have a deviled egg plate that hasn’t been used since the year your Aunt Phoebe gave it to you, it’s out of there. Periodically, go through every closet, drawer, cabinet, room and storage area to get rid of the things that are just taking up space in your home and your life.

Every item receives the decision to keep or get rid of. Consider these questions as you judge each item:

  • When was the last time you used it?
  • Do you believe you’ll use it again?
  • Is there a sentimental reason to keep it?

You have four options for the things that you’re not going to keep.

  1. Give it to someone who needs it or will appreciate it
  2. Sell it in a garage sale or on Craig’s List.
  3. Donate it to a charity and receive a tax deduction
  4. Discard it to the trash.

Start with your closet. If you haven’t worn something in five years, get rid of it. Then, go through the things again and if you haven’t worn it in two years, ask yourself the real probability that you’ll wear it again.

Another way to do it is to move it from your active closet to another closet. If a year goes by in the other closet, the next time you go through this exercise, those clothes are on their way out.

If the items taking up space are financial records and receipts, the solution may be to scan them and store them in the cloud. There are plenty of sites that will offer you several gigabytes of free space and it may cost as little as $10 a month for 100 GB at Dropbox, to get the additional space you need. It will certainly be cheaper than the mini-storage building.

BEAUTIFUL UPDATED HOME WITH STUDY!

13 Apr

5009 Dunster Drive, McKinney

3 Bedroom / 2.5 Bath / 2 Car / Study

2610 sq ft / Built 2006 / McKinney ISD

CLICK HERE TO VIEW HD TOUR OF THIS HOME!

LIKE NEW WITHOUT THE WAIT!

FABULOUS 3 bedroom 3 Bath home with beautiful handscraped wood floors and light bright windows. Open floor plan perfect for entertaining. Beautiful kitchen with recently updated cabinets, island, granite, stainless steel appliances, and large eat-in area. Great butlers pantry perfect for coffee bar or serving area. Spacious master down with LARGE walk-in closet. Two large secondary bedrooms with lots of closet space. Large private office with French doors. Lots of storage space throughout home. Smart home features include Nest thermostat, motion sensing lights, more!!! New roof, gutters, gates in progress.

DON’T MISS THIS GREAT HOME!

Please contact Elyse Guthrie at  (512) 217-1412 for more information or click HERE.

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

BEAUTIFUL HOME ON CORNER LOT WITH GAME ROOM!

13 Apr

5561 Glenview Drive, The Colony

3 Bedroom / 3.5 Bath / 2 Car / Game

3505 sq ft / Built 2001 / Lewisville ISD

CLICK HERE TO VIEW HD TOUR OF THIS HOME!

~GREAT Quality, TERRIFIC Living Design!~

Large backyard on a great oversized corner lot! Open floor plan, soaring ceilings, crown molding & oversized baseboards, large Home Office with French doors, Bonus Retreat, hard wood floors, carpet recently installed, freshly painted with light bright colors.

Great neighborhood located close to the schools, parks and neighborhood amenities near 121 and Dallas North Tollway with easy access to shopping, and more!

Please contact Elyse Guthrie at  (512) 217-1412 for more information or click HERE.

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

UPGRADED HOME WITH 5 BEDROOMS, GAME & MEDIA ROOMS!

13 Apr

3210 White Spruce Drive, Frisco

5 Bedroom / 3.5 Bath / 2 Car / Media
4087 sq ft / Built 2000 / Frisco ISD

CLICK HERE TO VIEW HD TOUR OF THIS HOME!

~Too many updates to count!~

Gorgeous Home in Frisco’s Heather Ridge Estates close to parks, walking distance to FISD schools, neighborhood amenities! Delightful drive-up to perfect landscaping,
beautiful brick & welcoming front porch! Terrific living design with handscraped hardwoods, bronze fixtures, crown molding, updated bath & upgrades galore! Kitchen with recently painted cabinets, added designer island, beautiful granite, backsplash with mosaic & stylish light fixtures. Split floorplan with 5 bedrooms, a huge game room and media for family fun and entertaining.

A Must See!

Please contact Elyse Guthrie at  (512) 217-1412 for more information or click HERE.

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

STUNNING AND UPGRADED BALLANTRAE CUSTOM ON GOLF COURSE!

13 Apr

7403 Saint Armond Court, McKinney

3 Bedroom / 3 Bath / Study / Golf Course Lot

CLICK HERE TO VIEW HD TOUR OF THIS HOME!

This beautifully upgraded one-story custom home built in 2014 has it all with rich quality, a rare & expansive floorplan and is in sought after-Ballantrae in Stonebridge Ranch nestled in a cul-de-sac. The upgraded elevation provides excellent curb appeal with stone accents, cedar garage doors, upgraded brick & mortar, stone landscaping borders and impressive iron & glass front door. Upon entry, your guests will be greeted by rich nail-down hardwoods, 6-inch baseboards, crown moldings, a private and executive study with coffered ceilings, built-ins, French doors with beveled glass, plantation shutters and also an elegant open formal dining area with a coffered ceiling and upgraded lighting.  The Texas-sized family room boasts 18-foot beamed ceilings, has a floor to ceiling stone fireplace with a cedar mantle,  plantation shutters and is open to the gourmet kitchen which would delight any chef with its level 4 granite, decorative tile, stainless steel Thermador appliances to include a 6-burner commercial-style free-standing range with pot filler, upgraded cabinetry, a large walk-in pantry and a spacious breakfast area with a beautiful golf course view.

The split and master retreat leads with true luxury with Plantation shutters, upgraded casement windows, course view, double crown & trayed ceiling & a spa bath with an oversized jetted Jacuzzi tub, travertine flooring, split granite ball & claw vanities, framed mirrors, an oversized shower with frameless glass & deco tile, skylight & spacious walk-in closet. The other two bedrooms are a generous size, are split for privacy and also offer custom cabinetry, upgraded granite vanities and framed mirrors.  Other outstanding features and upgrades are….Ballantrae maintenance of the front yard, solid core doors throughout, a large covered patio for relaxing & upgraded landscaping in the backyard, recently added Plantation shutters, radiant barrier, iron fence, elevation lighting, large utility room with granite & room for freezer & storage, rubbed-oil bronze hardware & more.  Quality abounds in this home and this is a rare opportunity to own a one-story custom backing to the course while enjoying all the amenities Stonebridge Ranch has to offer.  Priced to sell and move-in ready!

Please contact Jeff Jacobs at  (972) 978-6539 for more information or click HERE.

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

Qualified Charitable Contribution

9 Apr

If you’re at an age where you need to be taking Required Minimum Distributions (age 70.5) from your IRA, a qualified charitable contribution and some planning may allow you to lower your overall tax liability.

Let’s say that a couple’s 2019 itemized deductions include $8,000 in property taxes, $4,400 in interest and $20,000 in charitable contributions. That would total $32,400 which exceeds the 2019 $25,300 standard deduction for married couples, 65 years of age or older, filing jointly.

Their required minimum distribution from their IRA is $40,000 which will be taxed at ordinary income. If this couple is in the 24% tax bracket, the tax liability would be $9,600.

Alternatively, if they made the $20,000 in charitable contributions from their IRA as a Qualified Charitable Contribution, it would not be taxable in the withdrawal. The balance of the RMD of $20,000 would be taxable at 24% which would have a tax liability of $4,800.

Their $32,400 worth of itemized deductions would be reduced by the $20,000 because it was paid from the IRA which makes their itemized deductions $12,400. The $25,300 standard deduction would benefit them more by an amount of $12,900 increased deductions. At 24%, this would reduce their liability by $3,096.

In the first instance, they would owe $9,600 in taxes due to the $40,000 RMD from their IRA. In the second example, because of the increased amount by taking the standard deduction, the net tax liability would be $1,704 ($9,600 – $4,800 – $3,096 = $1,704).

This example shows how shifting contributions to a Qualified Charitable Contribution will get the same amount to the charity but lower the Required Minimum Distribution that must be recognized as ordinary income. The shifting also gives the taxpayers the advantage of a higher amount of the standard deduction than the itemized deduction.

As always, before taking action, you should get advice from your tax professional on how this strategy may impact you. There is information available on www.IRS.com for IRS Required Minimum Distribution FAQs and Qualified Charitable Distributions.

Auto Pay Your Mortgage Payment

3 Apr

In the time that it takes to write one check, you can set it up with your bank and never have to do it again. You won’t have to write checks, envelopes or buy stamps anymore. You’ll save time, money and benefit in other ways too.

  1. Never be late … avoid late fees and protect your credit
  2. Schedule additional principal contributions monthly to save interest, build equity and shorten the mortgage term.
    An extra $200 a month applied to the principal on a $200,000 mortgage at 4.5% for 30 years will result in shortening the loan by 8.5 years. If the loan was paid to term, it would save $52,977 in interest. Use the Equity Accelerator to see how much you can save.
  3. It’s convenient … by doing it online with your bank, you’ll have a centralized history of the payments.
  4. Protect your credit … your payment history is the single biggest component of your credit score and accounts for over 1/3 of your credit score.

Establishing the practice of auto bill pay could run the risk of overdrawing an account and incurring overdraft charges. Monitor your bank account to be sure that you have enough cash to cover your automatic payments.

Schedule the Auto Pay to allow for processing and the time it takes to reach the lender so that you don’t incur late fees.

And even though, you set up the Auto Pay, it is still your responsibility to monitor your bank account to see that they are executing it properly. If you are making additional principal contributions, you must see that the extra amount was indeed applied to principal reduction and not somewhere else like in the escrow account.

Some banks offer email or text reminders to let you know when checks are about to be written or if your balance is low.

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