Home Mortgage: 14 Factors That Can Stall The Closing Process

Mortgage Closing Process

Once you find your dream house and your purchase offer is accepted, you need to get through one more step before you move in: Mortgage Closing. 

The time it takes to close on a home will vary from one person to the next. When everything goes right, loan closings can be completed in as little as 21 to 28 days, says Atlanta-based real estate agent Bruce Ailion. Currently, Ellie Mae reports that the average closing time for home loans is 44 days.

“Factors like the type of home loan or last-minute changes and requests will affect the amount of time it takes before a house becomes yours. But typically, a lender can close on a mortgage in about a month,” states Andrina Valdes, the division president at Cornerstone Home Lending, Inc. in San Antonio, TX.

However, not everything always goes according to plan. Issues can arise that can keep you from settling into your new place for weeks and sometimes months longer than you expected. Here are some of the most common snafus that can delay the mortgage closing process.

1. Expensive purchases for your new home
A word of advice: Don’t make any pricey purchases with your credit card before closing on your house. “This could actually put buyers out of qualifying for their new home,” says Texas real estate agent Jeff Peterson.

After an offer on a house is accepted, some people may be tempted to buy a new sofa, dining set, or another expensive piece of furniture. But real estate experts warn that this could be disastrous. Right before closing, the mortgage lender will pull the buyer’s credit to make sure nothing has changed. A big purchase will show up, which could become an issue, because it means that the buyer is taking on more debt.

2. Death of the original homeowner
If there has been a death associated with the desired property, the home may need to go through probate court first to authenticate the former owner’s last will and testament. “If that’s the case, your closing will be delayed, and there’s not much you can do about it,” says Jim Lorio, a Florida real estate investor. In some states, probate can take anywhere from a few months to a few years.

3. Homeowners association issues
If the previous homeowner has outstanding homeowner association (HOA) fees or fines, this could cause delays. In some cases, you may be able to negotiate those fees with the seller; otherwise, you will be responsible for paying them.

4. Verification issues
In some instances, the borrower’s landlord, mortgage company, employer, or source of down payment may not be willing to provide verification in a timely manner. Their failure to move quickly can slow you down.

5. Down payment issues
There are times when the lender may require the home buyer to put more money down; this may take time, especially if the buyer lacks the extra funding.

6. Lender may need additional information
In some cases, additional info may be requested late in the process. Other times, the lender may lose a document that will need to be obtained again.

7. Scheduling problems
One party—whether the closing agent, attorney, title company representative, lender, buyer, or seller—may not be available to meet on the closing day, which can push timelines back.

8. Buyer delays
If a buyer is self-employed, sometimes additional documents are required. If the buyer has multiple sources of income, this may need to be documented and verified as well. If the buyer is getting a down payment from an unconventional source or a gift, this could also slow down the process.

9. Flood insurance requirement
If your new home is in a flood zone, you may need to get flood insurance, which may require a benchmark survey. In some markets, this might take three weeks. Then, it must be reviewed by the mortgage underwriter—aka the person who approves your loan. Flood insurance, and even homeowner’s insurance, can also sometimes be tough to get, depending on your past history with claims, credit, and location.

10. Appraisal disparities
Before a mortgage is ever approved, the bank must first appraise the home. If the appraisal comes in low, it may take some time to renegotiate the asking price of the home.

11. Title issues
In some cases, there may be a tax lien against the property that needs to be resolved first, in order to move forward with the closing process. Other times, the title may have the incorrect signature or attestation.

12. Property damage
If there is any type of damage to the property, the lender may require repairs prior to closing.

13. Contract disagreements
Sometimes the seller may not agree to the buyer’s contract requests (like agreeing to include the entire contents of the home in the deal). This can kill the transaction or require further negotiation between the agents and other parties involved.

14. Foreclosure
If a homeowner is in foreclosure, it can take up to 10 days to get a payoff from the mortgage company, which often includes legal fees.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Real Estate Purchase Agreements: 7 Things Home Buyers Must Check

real estate purchase agreements

Every home sale starts with a real estate purchase agreement—a legally binding contract signed by home buyers and sellers that confirms that they agree upon a certain purchase price, closing date, and other terms.

While the forms and wording vary across the country (LawDepot.comoffers free purchase agreements for each state), there are certain words common to all that you’ll want to have down, cold. Why? Because they spell out crucial info such as how much money you’re paying, when you pay it, under what conditions you can back out of the deal, and more. Here are seven terms you are likely to come across in a real estate purchase agreement, and why you need to check these provisions carefully before you sign on the dotted line.

1- Earnest money
What it is: Checking the home’s purchase price on your contract is par for the course, but you also have to cough up some money immediately, in the form of an earnest money deposit, or EMD. That’s the cash buyers commit to completing the sale to show sellers they’re serious. The amount of the deposit is negotiable between both parties, but is usually about 1% to 2% of the purchase price. Once an offer is accepted, the money is typically held by the seller’s broker or a title company, to be used as a credit toward the buyer’s down payment and closing costs.

Why it matters: In an aggressive seller’s market, many homes receive multiple offers. One way to make your bid stand out is to offer a slightly higher EMD (think 4% to 5%) to catch the seller’s attention, says Washington, D.C., metro real estate agent Robyn Porter. That being said, “Many buyers want to make the smallest deposit possible, to limit their risk of loss,” says Bruce Ailion of Re/Max Town and Country in Atlanta.

The caveat: If you back out of the transaction for any reason or contingency outlined in the purchase agreement, you get your earnest money back (more on contingencies next). However, if you decide not to buy the house for any what-if that is not included in the agreement, the seller can keep the earnest money.

2- Contingency
What it is: “A contingency in a deal means there’s something the buyer has to do for the process to go forward, like selling a property they already own,” says Jimmy Branham, a real estate agent at the Keyes Company in South Florida. Contingencies can also include a home appraisal, home inspection and mortgage approval.

Why it matters: Contingencies protect you by giving you the ability to back out of the sale if something goes wrong, typically without losing your earnest money deposit, says Kathleen Marks, a real estate agent with United Real Estate in Asheville, NC. But all contingencies have deadlines that must be met in order for the transaction to chug along.

3- Settlement date
What it is: The settlement date, or “closing,” is the day when all involved parties meet to make the sale official. Buyers and sellers typically negotiate a settlement date that is mutually agreeable.

Why it matters: When choosing a settlement date, make sure you’re giving yourself ample time to fulfill the home inspection, appraisal, and any other contingencies. If you don’t meet your obligations to the purchase agreement by the settlement date, you could be considered “in default” and potentially lose your deposit, says Washington, D.C.-based real estate agent Katie Wethman.

4- Possession date
What it is: The possession date is the day when buyers can move into their new home. Sometimes home buyers take possession of the home on the day of closing, and sometimes they agree to wait days or weeks after closing. Generally though, 30 to 45 days is the most common time frame.

Why it matters: The possession date is negotiable, and it can affect the strength of your offer. For instance, if the seller needs a few extra months to find a new place to live, offering a 60-day possession date could make your bid more attractive. Alternatively, some sellers allow the buyers to move in before settlement; this may occur if the house is already vacant.

5- Escrow
What it is: Escrow is a secure holding area where important items (like the earnest money check and contracts) are kept safe until the deal is closed and the house officially changes hands. Although customs vary by state, the escrow holder is usually someone from the closing company, an attorney, or a title company agent.

Why it matters: The purchase agreement states whether the buyer or seller (or both) pays escrow—with the fee for this service typically totaling about 1% to 2% of the cost of the home. If you try to back out of the deal without a legitimate reason, you will forfeit your portion of the escrow money to the seller.

6- Delivery
What it is: When buyers and sellers sign a purchase agreement, they must agree to an accepted form of communication during the transaction as defined by the terms under “delivery,” says Marks. In today’s day and age, email is generally an acceptable method of communication, but some people (say, older buyers or sellers) still prefer snail mail when receiving important documents, like the release of a home inspection contingency.

Why it matters: Your buyer’s agent must abide by the terms of the delivery when communicating with the listing agent or seller. If documents aren’t delivered properly, it could delay or even void the contract.

7- Home warranty
What it is: In a nutshell, a home warranty is a policy that covers the cost of repairing many of a home’s appliances if they break down. Basic coverage starts at about $300 and goes up to $600 for more comprehensive plans.

Why it matters: Many home sellers will offer to pay for the first year of a buyer’s home warranty to entice buyers to bite, especially if the appliances in the house are old and/or it’s a buyer’s market. However, this must be written into the purchase agreement.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

8 Times In Which Bargain Hunting For A Home Can Backfire

Bargain Hunting Backfires

Everybody loves a bargain. But getting one handed to you, gift-wrapped, in this housing market? Fat chance.

Limited inventory has boosted prices, and in many cities, sellers have the big end of the stick. It’s rare to see buyers scoring a fabulous house in a desirable neighborhood for thousands of dollars under asking price.

So to save some cash, you might feel compelled to make some compromises, try to negotiate, and look for the hidden bargains.

But beware of taking your thriftiness too far—because you just might regret it. Read on for eight times bargain hunting can actually backfire.

1. Working alone instead of with an agent
Thinking of just doing this thing on your own? Don’t.

“When we talk to clients about the deadly mistakes home buyers make when purchasing a home, No. 1 is buying a home without representation,” says Brian Cournoyer, a Realtor® with DeSelms Real Estate in Franklin, TN.

First, it’s important to know that you won’t save anything by skipping the buyer’s agent, because that cost isn’t on you. Typically the seller pays the commission for both the seller’s agent and the buyer’s agent.

And if you consider yourself a master negotiator, or think you can search for homes just as well as the next guy, know this: Agents have a host of training and tools designed to find the right properties and get you the best deal.

“Everyone thinks they can go online and pull up comps, but they don’t have access to all the real-time information that agents do,” Cournoyer says.

2. Assuming you can get a deal on a short sale
OK, so most sellers are in the driver’s seat. But what about sellers who need to offload their home fast? There’s gotta be some of those out there, right?

Jen Birmingham, a Realtor® with Coldwell Banker in Petaluma, CA, says one of the biggest mistakes she sees is people counting on short sales to snag a bargain.

“Because home values are way above where they were when a lot of people were underwater, short sales are few and far between right now,” she says. “Buyers need to know that what was working six years ago is no longer applicable.”

3. Making big compromises just to score a deal
Buying a home that doesn’t have enough bedrooms, is located two hours from your work, or needs a mountain of money to make it livable is no bargain, even if its list price is far below your budget.

The trouble is, in a hot market, buyers often ignore these blazing-red flags, Birmingham says.

“What I see is a lot of people wanting so desperately to get into the market that they’re willing to make compromises that may have originally been deal breakers,” she says.

Think carefully about your must-haves, and do your best to stick to the list.

4. Hiring the cheapest inspector, or none at all
While it might seem economical to skip a professional home inspection, be aware that what you save now you’ll probably pay for later, Cournoyer says.

In older homes, an inspector can discover problems such as termite infestations or crumbling foundations. Even for new builds, it’s wise to hire a pro who can spot material defects or unfinished work in out-of-the-way areas such as crawl spaces or roofs.

“For instance, we have some pictures taken by an inspector that we show clients, where builders left a sheet of 4-by-8 plywood over the top of the chimney,” Cournoyer explains. “If we hadn’t had that inspected, this house may have burned down when they built their first fire.”

And there’s a double whammy: Forgoing an inspection also means you lose the ability to renegotiate if, say, you notice evidence of a leaky roof during the final walk-through.

5. Requesting an endless list of inclusions
Back when buyers held court, sellers routinely ended up including major appliances and other household goods in the contract. Anything to seal the deal, right? Well, those days are long gone, Cournoyer warns.

“Buyers tend to lose touch with reason a little bit, and think they should get everything,” he says.

Want to win that house? Make your asks equal to the price you’re offering.

“If you want to offer up a whole ton of money, you can be a little more high-maintenance,” Cournoyer says. “But when you’re out there searching for a bottom-of-the-barrel deal, you’d better just be asking for the house and that’s it.”

6. Insisting on unreasonable repairs
Certainly, if the home inspection turns up a major issue requiring immediate attention, buyers should ask that a repair be done prior to closing. But don’t assume a seller needs to revamp the entire property or make cosmetic changes.

“I had an experience recently where the buyers wrote out a huge laundry list of requests for the seller,” Birmingham recalls. “It was a really nicely flipped property, yet the buyers were still asking for more customization. The seller had put on a new roof, and they wanted two skylights installed.”

When Birmingham suggested this could anger the seller and limit their chances of getting the home, the buyers wouldn’t budge. Guess what? They didn’t get the house.

“The seller had three other offers, and didn’t want to deal with my buyers because their demands were so off the wall and unrealistic,” she says.

7. Making a lowball offer on a home that’s been languishing on the market
Some buyers figure that any listing that’s been up for more than a couple of weeks must have a desperate seller behind it. But, Birmingham notes, a low offer will not only cost you credibility in the seller’s eyes, but could also spark a bidding war.

“Usually when a house is on somebody’s radar as a bargain, there’s somebody else that has the same feeling at the same moment,” she explains. “So you’ll usually still be in competition in a multiple-offer situation.”

Speaking of which…

8. Employing the wrong strategy in a multiple-offer situation
When you’re one of many offers on the table, it’s important to stand out in a positive way, Cournoyer says.

“Agents have a few tricks we can put in the offers that help us rise to the top of the pile,” he says. “Yet we see buyers who don’t submit clean offers—making (contingencies) on a home sale, for example—which clutters up a contract.”

Birmingham agrees that ignoring your agent usually means missing out on a house.

“In most situations, if the house is priced properly, a good Realtor is communicating with the listing agent about how many offers are coming in,” she explains.

“Buyers really have to be ready to step up with an above-asking offer if they want the house,” she adds. “Sometimes, it takes a few losses for buyers to understand that process.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Self-Directed IRA: 7 Types of Real Estate Allowed For Investors

Self-Directed IRA for Real Estate

A Self-directed IRA is the only retirement account that allows investors to pursue alternative investments. Among those alternatives, the most popular is real estate: a broad asset class that includes many different investment opportunities. Self-directed IRA investing offers great tax advantages to real estate investors, though the exact benefit will depend on the type of account used.

When investing through a self-directed IRA, your real estate investment options are nearly endless. Choose between rental properties (both residential and commercial), undeveloped land, fix-and-flip opportunities, and more. In this article, we will describe some of those opportunities by exploring seven types of real estate that can be held in a self-directed IRA:

1- Single-Family Homes
Single-family homes are the most common type of residential property, and the most common type of real estate found in self-directed IRAs. These properties can be the key to both short-term and long-term retirement strategies, with tenants bringing in regular rental payments to help boost savings.

2- Multi-Family Units
Multi-family units, such as apartments or condo complexes, are similar to single-family homes in that they can bring in regular rental income; however, because multi-family units are larger and bring in more tenants, they have greater potential to boost your savings. They can also require more maintenance, on the other hand, so be sure to consider all the angles before choosing an investment opportunity.

3- Commercial Property
From retail to office buildings, it’s all possible. If your self-directed IRA doesn’t have enough cash for these types of investments, your IRA can even apply for a non-recourse loan or partner with other funding sources. Commercial property is a broad category of real estate investments which includes anything from a grocery store or an office building to even a baseball field. This type of investment is another way to generate rental income over the long term.

4- Mortgage Notes
An indirect way to invest in real estate with a self-directed IRA is by funding mortgage notes. You could use your savings to be a real estate lender and help others purchase homes while also bringing in a profit for yourself. You set the terms of the loan, including time frames and interest rates. The payments will go directly to your retirement account.

5- Undeveloped Land
Undeveloped land offers great potential, acting as a blank canvas for investors to build their dreams. While this may not be a great choice for generating immediate rental income, these properties can be developed to produce a profit, sold to developers at a profit, or even sold to the government for use by the state.

6- Offshore Real Estate Investments
There are many benefits to investing offshore with an IRA. There are also things to consider, such as performing the proper due diligence and educating yourself not only on the tax laws in the United States, but the tax implications and transaction process in the country where you are investing. The U.S. government has created laws regarding offshore investing. For more information, consult a financial professional or tax advisor about real estate transactions and banking outside of the U.S.

7- Real Estate-Owned Properties
If a property has been foreclosed and taken back by the bank, it is referred to as real estate owned, or REO. In today’s real estate market, your Real Estate IRA can take advantage of purchasing distressed properties. Some real estate investors buy at foreclosure auctions; others buy REO properties directly from the bank. Have the property inspected by a professional to determine condition, as many REOs are sold “as-is.” You want to avoid any surprises.

A self-directed IRA provides the opportunity to save money for the future on a tax-deferred or tax-free basis. They also allow you to benefit from a variety of alternative investments not available through traditional retirement accounts.

Are you ready to grow your business by giving your clients more investment opportunities? Would your clients jump at the opportunity to invest in real estate tax free? Learn more about how self-directed IRAs can help you grow your business.

Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor. Entrust does not endorse or recommend any of these investments. Proper due diligence by you, the IRA holder, is recommended before entering into any transaction.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: 6 Things You Must Do Before Becoming A Homeowner

Home buying tips

Buying a home is a huge investment—probably the most significant purchase of your life. It’s not something you should do without preparation.

Before you start on the road to homeownership, make sure you are ready. Do these 6 things:

1-Improve your credit score.
A high credit score snags you the best deals. “Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment,” says Barry Zigas, director of Housing Policy for the Consumer Federation of America.

A score of 700 to 720 can get you a good deal, and 750 and above can garner the best rates on the market.

Pull your credit reports and make sure you’re not penalized for old, paid or settled debts.

Stop applying for new credit a year before you apply for a mortgage. Keep the moratorium in place until after you close on your home.

2-Figure out what you can afford.
There are various ways to determine how much house you can afford. If you’re using an FHA loan, your monthly payment can’t exceed 31 percent of your monthly income. The FHA will let you go higher under some circumstances.

For conventional loans, home expenses should not exceed 28 percent of your gross monthly income, says Susan Tiffany, retired director of Personal Finance Publications for adults for the Credit Union National Association, or CUNA.

Use Bankrate’s calculator to figure out how much house you can afford. Add to that other housing expenses, such as taxes, insurance, and utilities. Then, bank the difference between that total and what you’re paying now.

3-Save for a down payment and closing costs.
You’ll need to save between 3 percent and 20 percent of the house price for a down payment. Your credit history and loan terms help determine how much you’ll need to come up with.

For example, with an FHA loan, the down payment requirement can be as low as 3.5 percent. You’ll need a credit score of at least 580. Home loans backed by the Department of Veterans Affairs, or VA, require no down payment.

Another cash expense will be closing costs. The national average for closing costs for a $200,000 mortgage is $2,084, according to Bankrate’s latest survey.

If a big down payment is a hardship, look for down payment assistance. Search online using the city name, the county name and keyword combinations such as “down payment assistance,” “first-time homebuyers” or “homebuyer’s assistance.”

Down payment assistance often is based on location or reserved for particular buyers, such as first-time buyers. In a buyer’s market, you can negotiate to have the seller pay a portion of the closing costs.

4-Build a healthy savings account.
Building up your savings—not just for a home—is very important. Your lender wants to know that you’re not living paycheck to paycheck. If you have three to five months’ worth of mortgage payments set aside, you’re a much better loan candidate. Some lenders and backers, like the FHA, will give you more latitude on other criteria if they see that you have a cash cushion.

That money will also help pay for maintenance and repairs of the home. Most repairs are sporadic, but big-ticket fixes such as a new roof or water heater can come up suddenly and drain your budget.

A good rule of thumb is to assume that you’ll spend 2.5 to 3 percent of your home’s value each year on upkeep and repairs. If you buy a $250,000 home, aim to save $520 to $625 per month.

5-Get preapproved for a mortgage.
Before you start house shopping, you should get your financing in place.

“The No. 1 thing is (homebuyers) better have everything in order,” says Dick Gaylord, of RE/MAX Real Estate Specialists in Long Beach, Calif., and a former president of the National Association of REALTORS®.

Gaylord says you should get a mortgage preapproval “before you walk through the first house.” Otherwise, “How do you know how much you can afford?”

6-Buy a house you like.
Short-term homeownership can be expensive, depending on how much you put down and what it cost you to sell your old house and move.

To get a home that will make you happy, don’t count on a quick purchase. Step back and make certain the house you’re considering is one that will fit the needs of you and your family.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

5 Common Reasons Why Property Taxes Rise, No Matter Where You Live

Property Taxes

Homeownership is one of life’s great highlights, but ask homeowners about paying property taxes and they will tell you it’s one of their least favorite responsibilities. But as much of a downer as they are, property taxes are vital for funding schools, libraries, police departments, fire departments, and public works like roads and parks.

Savvy homeowners and prudent buyers are probably aware of the property tax rates in their area, but they may not understand the factors that can drive their property tax rates up. We’re here to help! (With the understanding part, that is.)

So when tax season rolls around, if you find yourself having to shell out more than you did last year, one of these five reasons might be to blame.

1. Home improvements
Renovating a bathroom or kitchen can revitalize a home and add to its worth, but it’s also the most common reason why your property taxes rise, says David Rae, a certified financial planner and president and founder of DRM Wealth Management in Los Angeles. Why? Improving your home makes it more valuable. That, in turn, increases your property taxes.

Converting a walk-up attic or basement into a livable space is also likely to trigger an automatic reassessment, says Rita Patriarca, a Realtor® with Re/Max Encore in Wilmington, MA.

Rae suggests that homeowners run the numbers first. Calculate how much the work will cost you, how much the renovation can add to your property’s value, and whether you can afford a higher tax bill. If you find that the cost of the work is likely to leave you with too little money to pay your higher taxes, Rae recommends holding off and saving more money before you do the work.

Although your tax bill will go up when you renovate, the good news is that you will directly benefit from the update in the form of a brand-new amenity in your home. That’s not the case in some of the scenarios that we describe below.

2. Revaluation
Communities and counties periodically reevaluate properties. During these revaluations, government officials or hired appraisers review all real property to figure out its current assessed value. Revaluations are needed to make sure that the tax burden is spread equitably and accurately among the area’s homeowners.

Lorrie Beaumont, appraiser and owner of LB Appraisal Associates in Westwood, MA, says revaluations are the second most common reason that property tax bills increase.

During the evaluation, an expert will take into account a home’s location, size, and type, and any changes since the last evaluation. The expert will also review home sales and valuations in the neighborhood, changes in the economy and housing market, and any changes in the area that may have improved or reduced a home’s value. Even if the assessor doesn’t enter your home, he or she will review permits to see whether you have undertaken any improvements. So, if you’ve renovated or expanded your kitchen, you can expect higher taxes.

A revaluation doesn’t automatically mean that your taxes will go up, though. For instance, let’s say there’s been a lot of building in your community lately. Having more taxpayers in your community may help offset a tax bill increase.

3. Nearby home sales
If your neighbors sell their homes for more than the asking price, your property taxes may rise. That’s the unfortunate fact, but it’s out of your hands.

Home sales affect what other houses in a neighborhood are worth. While that’s great for your property’s value when you decide to sell, it means a higher tax bill in the meantime.

Rae points out that, for you, this is the least advantageous way your tax bill can increase, because you’re not actually benefiting from living in a nicer home. Instead, you will be paying higher taxes because your neighbors made out like bandits!

4. New schools
Building a new school is great for students and teachers, and for the community overall. However, it will come with a hefty price tag that is likely to entail higher property taxes.

There are two reasons why property taxes can increase after the construction of new schools:

Communities and counties often increase taxes to help pay for school projects.
A new school will bring new families to town, which will make your community a more desirable location. The hotter market and the greater competition for homes are likely to lead to bidding wars and higher property values. And, of course, higher property values mean higher taxes.

5. Higher government budgets
One of the main reserves on which cities and counties draw to fund their budgets is the property tax. If government employees are owed a raise, or other budgetary needs increase, the residents’ taxes may need to be increased to help foot the bill.

But rest assured that a community can’t raise taxes at whim: There are limits that require voters’ approval. For instance, Proposition 13 in California and Proposition 2½ in Massachusetts limit how much property taxes can increase.

Still, that doesn’t mean your property taxes won’t go up each year. These limits just put a cap on the increases unless the community votes to raise taxes even higher that year.

Ways to protect yourself against property tax increases
So how can you, as a homeowner, push back and lower your rates (or, at the very least, make sure they don’t reach stratospheric heights)?

One way is to appeal your home’s property assessment, Rae says. Research home sales around you and look for similar homes that are selling for less. “Most municipalities have a process to contest your property tax bill,” says Rae. “I’ve contested the value of my home in the past, and the assessor shaved $150,000 off the taxable value of the home. Definitely worth the effort.”

You should also make sure your property records reflect the property’s amenities accurately, Beaumont notes. “I have seen many instances where records say you have more bedrooms or bathrooms than you actually have, or additional living area that doesn’t exist,” she says. If you do find mistakes, notify the assessor’s office and have the record corrected.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Buying A Home: Prepare For A Competitive Spring Home-Buying Season

home buying in the spring

With housing inventory far lower than demand and mortgage rates poised to rise, it’s going to be a competitive market for home buyers this spring.

If you’re looking to buy a home this season, here’s how to prepare yourself to enter the fray:

1-Get your financial house in order.
Unless you plan on paying for the home in cash, you’ll need to apply for a mortgage. No matter how streamlined the process is, you’ll still need to gather a significant amount of documentation to give an accurate financial picture to the lender.

Before you even begin home shopping, look at your credit report to make sure there are no errors that could affect your score. Also, pay off any delinquent bills and reduce any other debts you owe so that your debt-to-income ratio (DTI) is favorable. Use a calculator to figure out your DTI and see if you need to make changes. Your goal is to look as attractive to lenders as possible so that you are you approved and can get the best rate on a loan.

2-Make sure you’ll qualify for a mortgage.
In order to get a mortgage, lenders want to know you’ll be able to meet your monthly obligations no matter what. This means they’ll ask to see your entire financial situation including employment history, salary, savings, investments, debts and anything else that makes up your net worth. Use a prequalifying mortgage calculator to get an idea of what size loan is right for your needs.

Even if you think you’re a strong candidate, never assume you’ll automatically qualify with the first lender you contact. Lenders’ guidelines have become stricter since the housing crisis of 2008, and you could lose out on the home you want if you can’t close on a loan. “Sometimes one deficiency can be offset by another strength. For example, if you have a higher DTI ratio, saving up enough to put a bigger down payment can help,” says Bill Banfield, executive vice president of Capital Markets for Quicken Loans.

3-Choose the right REALTOR®.
Unless you’re a seasoned pro, having a REALTOR® on your side can make a big difference.

“An experienced agent will know what could happen that might make a deal fall apart and how to keep that from happening,” says Dori Summer, a real estate agent with Keller Williams Realty in Coral Springs, Fla.

Making an offer on a home in a competitive market can require more than just a willingness to pay the price. If a seller has to choose between multiple buyers, they’re likely to choose the one that’s coming to them with the best overall package. A good agent will present your offer along with other information, including your ability to get a loan, how much you’re able to put down and anything else that might make you more appealing than someone else vying for the same property.

4-Be prepared to pay the price.
Home prices in close to two-thirds of the housing market are at an all-time high, according to a February 2018 report by the National Association of REALTORS®.

“Sellers in this current market get at least 95 percent of their asking price,” says Samona Rosenberg, a licensed real estate agent with Stein Posner Real Estate Services in Boca Raton, Fla.

If you see the house you want and you know it’s in your budget, it may not make sense to hold out to see if the price will drop.

“The best properties all have multiple offers,” says Erik Williams, a REALTOR® with Keller Williams Realty in Cambridge, Mass. “If it’s a desirable property, it’s desirable to buyers. The people that I see get places under agreement are the most prepared people and the most aggressive.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Baby Boomers: What Do They Really Want in Their Next Homes?

Baby Boomers

What about the Baby Boomers?

It’s all about millennials these days. Everything seems to center around these special snowflakes. But what about the original “me” generation? We’re talking about baby boomers, of course. What do these roughly 76 million Americans want when it comes to housing?

Well, they want multicar garages, for one thing. According to a recent survey by national homebuilder PulteGroup, they were the top feature boomers were looking for in a new home, followed by open decks or patios; eat-in kitchens; and a private yard.

About 38% of boomers plan to buy a home within the next three years, according to the report. About 11% expect to purchase a residence within the year.

The survey was of 1,043 folks between the ages of 50 and 65 who plan to buy a home in the next decade.

“Retirement marks a new phase in a baby boomer’s life, and it only seems natural to relocate or move to a new home when transitioning away from their primary career, or from the day-to-day rearing of school-aged children,” Jay Mason, vice president of market intelligence for PulteGroup, said in a statement. “It’s not surprising that the 55+ buyer wants a variety of options and choices in their homes.”

According to the survey, 39% of respondents said the main reason they’re moving is because they want to retire, 33% want to downsize, and 30% want to move to a more desirable location.

“One thing we know about boomers is they are not done yet,” says Amy Lynch, president of Generational Edge, a Nashville, TN–based company that consults with companies on generational differences in employees.”

As a group, they are starting encore careers and also going back to school. And they often move to be near their millennial kids, who are having kids.” They also start new families of their own, through divorce or remarriage.

All of these situations may require a move. About 26% of boomers plan to stay in their current cities, but just move to a different home, while 34% want to remain in the state, but in a different city or town. Also, 38% hope to cross state lines.

Their top retirement destination? You guessed it: Florida. It seems you just can’t beat all of that year-round sunshine. The state was followed by fellow warm-weather states Arizona, North Carolina, and South Carolina. The cost of living is lower in these states than on the pricier West Coast or in the Northeast.

About 82% of boomers wanted to be someplace affordable, and 74% want to be close to their preferred health care programs.

But boomers don’t want to just pack up and leave their grandchildren. Being close to kids was their top consideration when choosing a new community. They also want to be near the water and park or other green space.

“We are in a period in this country where family life and family connections are very strong,” says Lynch. “There’s a lot of regret among boomers because they worked so many long hours when their kids were young. With grandkids there’s a chance to make up for that.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Home Prices Continue To Surge On Strong Buying Season

Home prices surge

Home prices continue on at a clip, surging 6.2 percent in the second quarter of 2017, according to the latest quarterly report by the National Association of REALTORS® (NAR). The pace outdoes the previous peak observed in the third quarter of 2016.

“The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season,” says Lawrence Yun, chief economist at NAR. “Listings typically flew off the market in under a month—and even quicker in the affordable price range—in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets.”

Single-family home prices went up in 87 percent of the markets assessed in the report, or 154 of 178 metropolitan statistical areas (MSAs). Thirteen percent of, or 23, metro areas saw prices up by double digits. At the national level, the median existing single-family home price was $255,600, and the median existing condominium price was $239,500.

Home prices in the West grew at the highest year-over-year rate, 7.5 percent to a median existing single-family value of $372,400, according to the report. Prices in the South followed at 6.7 percent to a median $229,400, while prices in the Midwest were up 6.6 percent to a median $204,000. Prices in the Northeast grew at the lowest year-over-year rate, 3.2 percent to a median $282,300.

Affordability, again, shrunk in the second quarter. A homebuyer with a 5 percent down payment would need an income of $56,169 to afford a single-family home priced at the national median. A homebuyer with a 10 percent down payment would need an income of $53,213, and a homebuyer with a 20 percent down payment would need an income of $47,300.

“The glaring need for more new-home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments,” Yun says. “An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth-building benefits of homeownership.”

The most expensive metro areas by median existing single-family price in the second quarter were San Jose, Calif. ($1,183,400); San Francisco, Calif. ($950,000); Anaheim-Santa Ana, Calif. ($788,000); Honolulu, Hawaii ($760,600); and San Diego, Calif. ($605,000). The least expensive metro areas were Youngstown-Warren-Boardman, Ohio ($87,000); Cumberland, Md. ($98,200); Decatur, Ill. ($107,400); Binghamton, N.Y. ($109,000); and Elmira, N.Y. ($111,600).

Existing-home sales, including condos, fell 0.9 percent to 5.57 million in the second quarter, according to the report. Existing homes available for sale were down 7.1 percent year-over-year to 1.96 million at the end of the quarter, with an average supply of 4.6 months.

“Mortgage rates have subsided in recent months, which has only somewhat helped take away some of the sting prospective buyers are experiencing with the deteriorating affordability conditions in many areas,” says Yun. “Household incomes may be rising and giving consumers assurance that now is a good time to buy, but these severe inventory shortages will likely continue to be a drag on sales potential the second half of the year.”

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com

Homeowners’ Insurance: What Don’t You Know About Your Policy?

insurance for home

Know Your Homeowners’ Insurance Coverage

Protecting your home, property, and possessions is extremely important—so understanding things like coverage available for earthquakes and floods, liability coverage and how to shop for homeowners’ insurance are important, too. You don’t want to spend too much, but you want to be sure you have the right amount of coverage to fit your needs.

Many of these concerns are analyzed in the latest Insurance Information Institute (I.I.I.) research publication “Homeowners Insurance: Understanding Attitudes and Shopping Practices.”

A review of that study at PropertyCasualty360.com points out that a majority of homeowners are aware their policy provides coverage for damage caused by fire, hail and wind. Most also know that items stolen from their house are covered.

However, many homeowners were found to be unaware of a variety of perils that are covered by standard policies, and incorrectly think that certain events are covered when they’re not.

Jayleen Heft, who related some of this analysis for the website, found only 44 percent of consumers comparison-shop for homeowners’ insurance (by any method) when their policy comes up for renewal. Sixty-nine percent indicated they comparison-shopped for auto insurance at renewal time.

A few of the other key stats Heft discovered were:

  • The most popular method for homeowner insurance comparison-shopping is by speaking with an insurance agent in person (29 percent).
  • Only 31 percent of Americans consider homeowners’ insurance to be a financial burden—a significant drop from the 49 percent ratio in 2009.
  • A startling 43 percent of homeowners incorrectly believe damage from heavy rain and flooding is covered under their standard insurance policy. The percentage of homeowners who purchase flood insurance has averaged 10 percent to 14 percent since 2010, according to the I.I.I.
  • Twenty-eight percent of homeowners incorrectly think hurricane storm surge flood damage is covered by a standard homeowners’ policy, and 29 percent incorrectly think that their policy covers earthquake damage.
  • Fifty-five percent of homeowners think they have coverage for a sewer backup. Some homeowners’ policies may provide coverage for sewer backups under certain circumstances, but, generally, sewage backups are not covered without a rider or separate policy.

Original Source

BONNIE ROTUNDO
Realtor/Broker NC-SC
ABR, SRES, SFR, RRS, CRSP, CBPIS
Coldwell Banker Sloane Realty
16 Causeway Drive
Ocean Isle Beach, NC 28469
Direct: 910.443.0398
Toll-Free: 800.237.4609 X206
Fax: 910.579.5877

*Search Coastal Carolina Real Estate in real time on your own. No obligation. FREE sign-up below:
http://coastalrealestateproperty.com