Real Estate Information Archive

Blog

Displaying blog entries 1-9 of 9

Why Are You Waiting???

by Pat Argo

 

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.

For a summary of specific real estate provisions in the "Fiscal Cliff" billclick here.

Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.

Reasons to buy now:

  1. The house payment with taxes and insurance is probably cheaper than the rent.
  2. Rents will continue to rise making the difference even greater in the future.
  3. Lock-in the principal & interest payment with a fixed-rate mortgage.
  4. 30 year mortgage terms are available to most borrowers.
  5. The mortgage interest deduction is intact for the majority of taxpayers.
  6. The capital gain exclusion for principal residences up to $500,000 remains in place.
  7. Prices are going up due to lower inventories and several years of low housing starts.
Contact me about any specific questions you have or information you need. 321-537-4721

What Color Will Brighten Your Spring?

by Pat Argo

 

Will adding new color in your home put a smile on your face? Have you ever picked a color from the myriad of paint samples available, put it on the wall and decided that it was all wrong? It shouldn't have to be that difficult... but trying to pick the perfect color from those little swatches is just not that easy!

Painters and decorators suggest you buy a small amount of the colors you're considering. Your paint store should be able to mix them in any brand and any color. Once it's on the wall, it will be easy to determine if it needs to be lighter or darker or if it's completely wrong.

Take them home and paint a 2' x 2' area on the wall. If you're concerned about testing the colors on your wall, you can paint some sample boards that can be easily moved around to see how they'll look with the furniture, floors and other items in the room.

Instead of guessing what it's going to look like, you'll actually see how it looks during different times of the day, in natural and artificial light.

While $30 to $40 a gallon for paint may seem like a lot of money, the cost in time and labor to put it on the wall is even more. It's worth taking the time to test the color on the wall before you buy all the paint needed.

And if you are considering selling your nest this year, be sure the colors you select will also appeal to today's buyers, before you make a major change!

Time Flys! Grab Your Best Buy Today!

by Pat Argo

 

As the market shifts from a buyer's market, it's good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

  • Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.
  • Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
  • More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
  • Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
  • Shorten inspection period - as your agent, I can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
  • Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.
A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

Single Family Homes As Investments

by Pat Argo

Single-family homes used for rental property have distinct advantages over other types                         of investments.

An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.

Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.

Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.

The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities. 321-537-4721

  

Transferring Title Can Be a Taxing Event!

by Pat Argo

Transferring the title of a home from one person to another may seem simple but it could have a significant tax implication.

When a person inherits property, the basis is "stepped-up" to fair market value at the time of the decedent's death. On the other hand, a gift has a carry-over basis which means that the recipient receives the unrealized gain also.

As an example, let's say an elderly parent, in an attempt to get their affairs in order, gives their home to their adult child. The rationale might be that they are the sole beneficiary and will get the property eventually. In an effort to settle things early, unnecessary income tax may be incurred.

If the home was purchased for $20,000 and worth $100,000 at the time of transfer, there is a possible gain of $80,000. However, if the adult child inherited the property at the time of the parent's death, their new basis would be $100,000 or the fair market value at the time of death and the possible gain would be zero.

This is meant to be an example and many other variables could be involved. If you're concerned about a situation, you should definitely seek specific advice from a tax professional. As always, I'm here to help you and those you care about as your real estate professional.

A Point of Difference...

by Pat Argo

Just a thought

Whether you're refinancing your current home or buying a new one, something worth considering      is a 15 year loan rather than a 30 year term. The payments will be a little higher but you'll get a   lower interest rate and you'll build equity much faster.

Let's look at an example of a $200,000 mortgage with the choice of a               30 year term with a 3.75% rate compared to a 15 year term with a              2.875% rate. The payments would be $442.94 higher on the shorter              term but the equity would be considerably higher even after you                    adjust for the higher payments.

Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you'd like a recommendation of a trusted lender.

 

Making Your Home Affordable

by Pat Argo

     Earlier this year I attended the National SFR Course which deals with helping people who are in distress with their properties/home and/or loans. I have completed all the course work requirements for this designation. It was a great course that was extremely informative! This course was sponsored by the Florida Chapter of CRS (Certified Residential Specialist) a pprofessional group of Realtors devoted to education and professionalism, of which I am a former Florida State President as well as current District 2 Vice-President. They did a fantastic job of explaining some of the important facts.  

       I wanted to include a few of the links and sites, including my own, that we learned about an with anyone you know that may be getting into or currently are in distress with their home or loansto encourage them to not just ignore the situation. It will not just go away! It does not cost anything to explore their options. The materials there as well are really dynamic and the easy to understand videos are extremely helpful.

     Many times people do reach out for help but run into schemes that just consume their money and waste their time. Don't let your family and friends become a victim. 

Visit the Making Home Affordable Website at http://www.makinghomeaffordable.gov/.

It is a wealth of info for anyone you know that may be eligible for loan modification programs and Alternative programs.

 And how about a link to some of their great videos that can walk anyone that is in distress through the important steps and answer most questions!

 There are 9 YouTube videos that are extremely helpful.

My favorites are Your Graceful Exit”, (Watch this one FIRST!),  

 “Your TO DO List for Permanent Loan Modification.”

 And “Avoid Foreclosure: Know your Options”

After you see one of them, it is easy to just click on the drop down link at the top to review any or all 9 of these links sponsored by the Making Home Affordable site including one in Spanish if needed.

http://www.youtube.com/watch?v=XbPaLHFHL7A

 http://www.youtube.com/watch?v=IQ0aCq6kaYg

 http://www.youtube.com/watch?v=-pqBtoh0Q6A&feature=channel

     I hope you find this information helpful. Feel free to tell anyone you would like to share it with! And I can offered my years of experience in helping anyone sell whether it is a normal sale, short sale or foreclosure, or even finding a good tenant while they are working in another area, or for investments they own or buy.

     I've been able to help 2 families purchase their first homes in the last 2 months for a bit under $100,000. One was told he could not buy over $50,000 and them waited many, many months for an agent to get back to him about a short sale offer he'd placed, before he called me from one of my ads.  (He still hasn't heard from that agent!)

     Where there is a will, there may be a way. It takes a bit of work and commitment on the part of all that are involved. But I rarely take "No" for an answer, until I have tried and tried again. My years of experience in all kinds of markets has taught me many times that we just may not have seen the right path! Many only see the easy, well marked trail to a successful purchase or sale. Please keep me in mind when you hear of someone with real estste problems or concerns. My best clients are sent to me by those who have used me before and their friends and families. 

Can I Afford to Buy Now?

by Pat Argo

Can I Find A Home I would Live In

& Still Afford The Payments + Closing Costs?

     The one constant in real estate is financing questions... affordability! The standard still is "How much down and how much per month?" Many times people do not ask until it is too late and they may have missed out on some great opportunities!

     Let me share an example. For several months this nice couple and I would look at homes in Merritt Island. Most were built in 1950's, with small rooms and would not qualify for FHA financing without extensive repairs. When there was a great one, there were multiple offers almost before we could even get in to see it. I enjoyed meeting with them but we were all feeling frustrated at what was available.

     We decided to expand the areas we were looking in and moved to the mainland. After a couple of weeks we discovered a foreclosed home that was just  "Back on the Market". I check them daily with my real estate Tool Box! The prior contract did not close so they also reduced the asking price which was now in our price range!

     This was the one! Another agent came by to show it while we were still inside. Professional courtesy suggests the agent should have waited...but didn't.

     We closed on their new home in Cocoa this week. They bought a great home at a terrific price in a nice area: 3 Bedrooms, 2 baths, a BIG 2 car garage, utilityroom, workshop & screen porch on a lovely wooded acre.

     Here are the  money facts:We entered into a contract on a foreclosed property for $95,900. in mid-February. We were able to get locked in at 5% 30 year FHA with a deposit of $1000. (Great lender, by the way!)

     They brought a check to closing for $1824. Total Settlement charges were $6848. with Seller paying appx. $5000 of this. The Buyers paid for their Home Inspection, Septic Inspection & WDO Report out of closing. Their total payment with Insurance and Taxes (without homestead) is $810. per month! With less than $4000 total invested! Now they will be able to take advantage of the Tax Credit which will reduce their out of pocket even more. They rented for more than their new payment! The payment may go down with homestead exemption!

     Affordable? I think so! They got an excellent buy! What do you think? Smile

 

Mid-Year Market Report

by Pat Argo, CRS

Pat’s Mid-Year Residential Report for North Brevard

Everywhere I go, people are always asking me “Pat, How’s the real estate market doing around here now?”  I decided it’s time for a real report vs. my humble opinion, but of course I will share some of that with you as well!  These stats are gathered from the Brevard MLS system. areas 101-210.  Private & builder non-mls sales are.excluded.

 

In 2008: 1st 6 months: 411 closings with average of 125 Days on Market

High $899.000.         Low $32,000.         Average: $150,000    Median: $135,000.

In 2009: 1st 6 months: 533 closings with  average 119 Days on Market

High: $745,000.        Low:$10,500.         Average: $108,000    Median: $92,000.

 

So what everyone is saying IS partly right. It is taking longer to sell… the ones that closed and the final prices are even lower. To put this into perspective, I did the numbers by price range as well for the same 6 months.

Under $100K      $100K>     $150K>     200K>     300K>      $400K>     $500K>

2008:     109         142           80             56            14              3                 3

2009:     260         155           56             38              9              1                 1

 

Inventory today is 902 residences priced from $9,900. to $2.5million, average 193 DOM  

Actually we have 5 Million $+ Listings, all but 1 were on in 2008!

Important in the 2009 numbers is that there were less than 50 closed sales priced at $150,000. or more, about a 50% drop! And those closed under $100,000 were more than doubled!  (2.38 times).

 

Here’s what that could mean for you! 

If you are able to buy, especially if you qualify for the Tax Incentives, you really need to get serious about looking for the right home while the selection is good.

If you are considering selling vs leasing, weigh your options carefully. It may take longer than you are thinking for market recovery.

If you are an Investor, even a first timer, the choices could be outstanding. Figure out your financing options before you make the offer. Cash talks, particularly in condos and lender owned properties. And be prepared to be a bit more liberal with your new tenant prospects because their credit may be bruised.

If you really want or have to sell now, for whatever reason... remember that curb appeal is still important, but pricing right is absolutely King! Be sure to use "internet price points" to your advantage when you enter the market. Be prepared to help the first time buyers with closing costs since they are prime buyers now.

If you or a family member/friend is a Snowbird, empty nester, or retiring soon, now could be an excellent time to find the next nest before the best ones get picked over. You can even use a reverse mortgage to BUY!

Regardless of all of the above, there is an important fact I learned back in 1973 when I first started in real estate. “UNDER ALL IS THE LAND.”  Buying, selling or leasing, the one thing you cannot change is a property’s location. That’s in Gods hands. You are better off with a smaller place in a nicer area than the best place in a less desirable one. The only thing that “fixes” a poor location is dropped price and owner terms!

 

If there is anything I’ve said that you would like to discuss, please fel free to contact me. I am always pleased to be able to share my knowledge and experiences as well to help you understand the market or explore your next move.  

 Pat Argo, CRS, SRES  321-537-4721

Displaying blog entries 1-9 of 9

Contact Information

Photo of Pat Argo, Broker Assoc, CRS, GRI, RECS, SFR, S Real Estate
Pat Argo, Broker Assoc, CRS, GRI, RECS, SFR, S
Keller Williams Realty of Brevard
6905 N Wickham Road #405
Melbourne FL 32940
Cell/Text: 321-537-4721
Office: 321-259-1170
Fax: 321-435-3124