Author: Shannon

What you need to know before you buy a vacation home

A vacation is in order right about now, don’t you agree? And wouldn’t it be amazing to have your own little place, tucked away at the lake, by the sea or in the mountains to get away from the rest of the world and the craziness we’ve been enduring?

If you’re thinking of buying a vacation home, there are a few things you should know and maybe even run by your financial planner.

Can your budget handle two mortgages?

Unless you are fortunate enough to be considered wealthy, making two mortgage payments every month may be challenging.

Before letting the dream of a vacation home carry you away, keep this in mind. Ensure that you can make those two payments and still live comfortably.

PNC Investments senior vice president, Jay Mastilak, suggests that “The basic rule of thumb is that your housing costs – including those for your primary home – should be a third of your overall income.”

Housing costs, as we all know, include more than a mortgage payment. Take a look at the following costs to consider when thinking about buying a vacation home.

Upfront costs

Remember when you bought your current home? You paid a lot of lender fees, which are probably a blur at this point. Here’s a short list of the most common:

·         recording fees

·         loan origination fees

·         credit report fee

·         title insurance premium

·         private mortgage insurance

·         points

·         homeowner’s insurance

·         escrow deposits

·         miscellaneous fees

Naturally, if you pay cash for your vacation home, you’ll avoid all the aforementioned fees.

Ongoing Expenses

In addition to your mortgage payment, consider these additional ongoing fees:

  • Insurance coverage for anything not included in your homeowners insurance. Flood coverage is just one example.
  • HOA fees if the home is located in a managed community.
  • The cost of maintaining the home
  • Utilities
  • Security if you won’t be renting out the home in the off-season.
  • The cost of travel to the home.

Remember that older homes and those that are larger than normal, will most likely have higher maintenance fees than newer, smaller homes.

Will you rent it out?

One way to help pay for all of this is to rent the home out while you’re not using it.

A part of the rental income may be subject to federal and state income tax, so you’ll want to run this by your accountant before making a decision.

You’ll also want to take into account that the home will experience more wear and tear if it’s lived in for a good portion of the year. And, if you’ll be hiring a management company to help locate tenants and collect the rent, there will be a fee involved for that as well.

Your accountant can help you calculate how long you’ll need to rent out the home to cover the costs of owning it.

“If your monthly mortgage payment is less than or equal to one peak week rental, and you rent approximately 17 weeks per year, you should have break-even cash flow on your vacation home,” according to Christine Hrib Karpinski, author of “How to Rent Vacation Properties by Owner.”

Again, we aren’t accountants or financial professionals, so run this by yours when making the decision as to whether or not you can swing buying a vacation home.

 

3 Tips for buying a new toilet

Your bathroom is the workhorse of your home. It’s designed to be useful and durable. But, at some point, fixtures will need to be replaced.

Thankfully, when you replace an old toilet, the chances are quite good that you’ll be choosing a more efficient model which will pay for itself over time. This is especially true if the current toilet was manufactured before 1980, according to the U.S. Environmental Protection Agency.

Those toilets use up to six gallons of water during each flush. In fact, toilets are the water hogs of the entire home, “… accounting for nearly 30 percent of an average home’s indoor water consumption,” according to the experts at EPA.gov.

When you replace the old model with a new, more efficient one, you’ll save water and money. Go for a WaterSense-labeled toilet and you can save “… more than $110 per year in water costs, and $2,200 over the lifetime of the toilet,” according to the EPA.

The sheer volume of different brands and models of toilets you’ll find at the local home improvement store can make shopping for one a bit challenging. We’ve rounded up some tips that will help.

One piece or two?

Depending on model, a toilet can be one piece or constructed of two pieces (the more traditional design).

A one-piece toilet, because it lacks gaps between the tank and the bowl, is easier to keep clean and recommended for families with children.

The two-piece, or traditional-style toilet may cost less and it is easier to install, especially if you’ll be doing the install solo.

Get the right size

The hole over which the toilet will be mounted and the distance from the wall to the center of the hole is called the “rough-in.” This distance is 10, 12 or 14 inches.

Take the rough-in measurement before you head out to buy a new toilet to ensure it will fit.

How much water does it use?

Different toilet models come with different flush options. All modern toilets (those manufactured since the mid-1990s) use a maximum of 1.6 gallons per flush. That’s the standard toilet.

Low flush toilets, on the other hand, may use as little as 1.28 gallons. “While low-flow toilets are often more expensive to install and maintain than traditional toilet fixtures, they can also save you a significant amount of money over time,” according to the experts at home warranty company, American Home Shield.

Since the bathroom is the most-frequently used room in the home, and the toilet the biggest water user, choosing a new toilet with care will pay off in the long run.

Sick of renting? Take these Easy Steps to Homeownership

So, are you tired of paying your landlord’s mortgage payment yet? If you answered yes, and you’d much prefer to be building your own wealth instead of your landlord’s, it’s time to start saving for a home of your own.

Yes, it seems daunting. It seems like it will take forever. But there are some very simple changes you can make that will have your savings account bulging in no time.

It requires discipline, but we know you can do it.

Sell what you no longer need or use

We have a friend who went through her home, every room, every cupboard and drawer and even the garage, to find items the family no longer used or wanted.

She put them up for sale on Facebook Marketplace and in one month she’d made more than $500. And, she hadn’t even sold everything. That $500 gave her down payment savings account a huge boost.

Next, she’s going to tackle their storage unit and hopes to make twice what she made selling things around the home.

Facebook Marketplace is but one online arena on which to sell things. Try posting to these sites as well:

Having trouble finding Facebook Marketplace? Check out the reasons why and how to fix them at BusinessInsider.com.

The key to making online sales is in your description of what you’re selling and, most importantly, your photos. Get tips at CNET.com.

If selling online isn’t something you want to do, hold a garage sale. Get success tips online at DaveRamsey.com, HGTV.com and ConsumerReports.org.

 Take in a roommate

If you have a spare room, consider renting it out. It’s one of the best ways to accumulate a lot of money quickly.

Not only will you make money by charging rent, but you can also charge the tenant for a portion of the utility bills.

Need some tips on how to go about renting out a room in your home? Check out LandlordStudio.com, MoneyCrashers.com and Realtor.com.

Consider a side hustle

  • Drive for Lyft or Uber
  • Deliver food for Instacart, Uber Eats, Postmates, GrubHub, DoorDash
  • Babysit
  • Clean houses
  • Mow lawns
  • Walk dogs
  • Offer handyman or woman services
  • If you sew, create coronavirus masks and sell them online
  • Grocery shop for the self-quarantined
  • Offer errand running services

Advertise your services on Facebook Marketplace and Nextdoor.com.

Go hunting for down payment/closing cost assistance programs

Did you know that there are several mortgage programs that have no down payment requirement? If you or your spouse served in the military, check out the VA-backed mortgage.

If you don’t mind living in a rural area, the United States Department of Agriculture (USDA) offers several programs that require no money down. Explore the options for the Single Family Housing Direct Home Loan or the USDA Single Family Housing Guaranteed Loan.

If you don’t qualify for a zero-down program, consider other avenues that include down payment and/or closing cost assistance.

Federal programs include assistance for first responders and teachers. There are also down payment assistance programs for Native Alaskans, Americans and Hawaiians.

Then there are the low-down payment mortgage programs, such as FHA, Freddie Mac and Fannie Mae.

We’re happy to help in your hunt, so feel free to reach out to us.

Cut out the money wasters 

  • Have your coffee at home
  • Stop eating out or calling food delivery
  • Shop for cheaper ISP and cell phone service
  • Workout at home (cancel the gym membership)
  • Give up cable (buy a streaming stick)
  • Brown bag it at lunchtime
  • Walk or ride your bike for errands, etc.

Even if you only use one or two of these tips, you’ll have a good chunk of money to put toward your dream of homeownership.

Again, don’t hesitate to contact us – we are happy to help!

What is home equity?

You’ve heard of home equity loans, home equity lines of credit and maybe you’ve read the studies on how home equity is the pathway to wealth.

It’s one of those real estate terms that nobody bothers to explain, just assuming everyone knows what it means.

Today, we take care of that.

What is equity?

Equity is a term used in several industries. It may refer to stock, or shareholder’s equity. In real estate, equity is “… the difference between the property’s current fair market value and the amount the owner still owes on the mortgage,” according to the experts at Investopedia.com.

“It is the amount that the owner would receive after selling a property and paying any liens.”

The simple equation for equity looks like this:

Total Assets − Total Liabilities = Equity

If your home (the asset) has a current market value of $250,000 and you still owe $200,000 on the mortgage (the liability), your equity is $50,000.

Equity, by the way, isn’t fixed; it can fluctuate according to market conditions. Building equity, however, is far more common than losing it.

Building equity

On a new loan each payment you make goes primarily to pay the interest. As the loan ages, however, more of the payment goes to whittle away at the principal. Every house payment, however, builds equity.

Making a large down payment when you buy the home provides what some refer to as “instant equity.” Not only do you build instant equity with that large down payment, but your monthly payments will be smaller than they would be had you made a smaller down payment.

Another way to build equity quickly is to make larger house payments every month. “Making additional principal payments will shorten the length of your mortgage term and allow you to build equity faster,” according to the pros at AmericanFinancing.net.

They go on to offer an example: “Consider your loan amount is $300,000 with an interest rate of 4% and a 30-year loan term. If you pay $150 additional toward the principal each month, you can expect to save $40,282 and pay off your mortgage almost 5 years earlier.”

There are pros and cons to this strategy, however, so consult with your financial adviser before taking action.

Getting your hands on that equity without having to sell the home

The most obvious way to use your equity is for a down payment on a new home when you sell the current home.

But you don’t need to sell to get access to your home equity; there are numerous ways to borrow against that equity.

The home equity loan is a second mortgage. The amount of equity you borrow against creates a new loan. Each month, you’ll not only have a mortgage payment, but a second loan payment as well.

The maximum amount you can borrow with a home equity loan is typically 85 percent of the equity in your home, according to the Federal Trade Commission (FTC). Learn more about the home equity loan on their website, at FTC.gov.

A HELOC, short for home equity line of credit, is a more flexible type of loan that acts more like “… a revolving line of credit, much like a credit card,” according to the FTC’s website.

Borrow on as as-needed basis, using either a credit card (that the lender supplies) or by writing a check. “… you make payments only on the amount you actually spend, not the full amount available,” according to the FTC.

HELOCs offer tax advantages that the home equity loan doesn’t, so talk to your financial adviser to get the details.

Refinance: Refinancing is a bit like selling the home in that you’ll take out a new first mortgage, minus your equity in cash. For instance, if the market value of your home is $200,000 and you have $100,000 in equity, you can refinance the home for what you owe on the mortgage and get your equity in cash.

Remember that your home is the security for each of these solutions, so always speak with your financial advisor before making a move.

You may also want to get to know the various “Harmful Home Equity Practices” by visiting consumer.ftc.gov and learn about the Three-Day Cancellation Rule, here.

 

 

Why is Professional Photography Essential for Real Estate Listings?

We know you’ve seen them – those MLS listing photos that look like they were taken by the homeowner’s 6-year-old. Photos of messy rooms, blurry and/or dark photos and even exterior shots snatched from Google Earth.

We have clients who have refused to look at homes, based solely on the MLS photos when, in fact, we’ve seen them and they aren’t as bad as the photos make them appear.

First, it’s not the homeowner’s job to take photographs of the home – it’s the listing agent’s. Sadly, many agents will snap these photos with their smart phones or a cheap camera they bought on sale at Amazon.

We’ve read the statistics, however, and long ago we adjusted our marketing plan to include professional photography.  And, here’s why:

  • Studies show that, by and large, homebuyers looking at online listings of homes for sale won’t look at a home in person if the listing lacks photos.
  • If the listing does include photos, homebuyers decide within 20 seconds whether or not they like the property.
  • Ocular studies (following eye movements of website viewers) have found that the photo of the home is almost always the first thing viewed in a listing.

If these statistics don’t prove that a home’s presentation is paramount in getting buyers through the door, nothing does.

Another big reason to insist on professional photography comes from another study we reviewed. This one found that listings with photos taken by a pro are viewed 61 percent more than those with photos taken by an amateur.

Better yet, these homes can sell for up to about $19,000 more than the homes photographed by a novice.

Ask yourself this: If all it takes is any old photo to sell something, why doesn’t Nike use its receptionist to snap their advertising photos? Because they, like us, know better.

Professional photos speak

Professionally-shot photos create inspiration, according to Jay Groccia, a real estate photographer in Massachusetts. His interior photos, like those of our photographer’s, show not only the room, but his eye-view of the lifestyle the home offers.

So, why don’t all real estate agents use professional photographers?

In all honesty, many real estate agents (no, not all, but a lot of them) don’t take the time to keep up with real estate industry studies and think that iPhone photos or other amateur tactics are “good enough.”

Also, marketing a home requires a robust marketing budget, something most agents lack. Yes, we could go into how they are short-changing their clients by not offering the service, but that one will wait for another day.

The bottom line is, we understand that to be effective in listing and selling homes, we can’t possibly wear all the hats in our real estate practice. And, we want only the best for our clients and we aren’t willing to compromise on quality when it comes to a home’s presentation.

A home of their own is the dream of many, and we want yours to be perceived as the realization of that dream from the minute someone eyes it online. Reach out to us to learn more about our marketing services.

How to maintain healthy air quality in the home

For the past few months, we’ve been admonished to “stay home” or “shelter in place” to keep ourselves and families safe from COVID-19.

In the process of doing so, however, we’re exposing ourselves to common indoor pollutants that may be of a concentration that is comparable to a “polluted major city,” according to University of Colorado Boulder researchers.

“Even the simple act of making toast raised particle levels far higher than expected,” claims Marina Vance, assistant professor of mechanical engineering, who led the study.

Indoor pollutants are sneaky; many we can’t smell or see but may cause allergy-like symptoms, nausea, headaches and even cancer.

Thankfully, there are steps you can take to mitigate the level of pollutants in the air in your home.

First, let’s take a look at that elephant in the room

Decades ago, NASA and The Associated Landscape Contractors of America (now known as The National Association of Landscape Professionals) collaborated on a study of how plants may clean indoor air.

The results, that plants were “a promising, economical solution to indoor air pollution,” was gleefully picked up by the media and distorted into the myth that we live with today.

Yes, plants may clean the air of volatile organic compounds (VOC) such as those emitted by paint, carpeting, drywall and more.

But, only in a hermetically sealed environment, such as a space station or laboratory.

Since our homes are not hermetically sealed, houseplants offer aesthetics, not clean air.

Regardless of what they tell you on your favorite online plant store’s blog, rubber plants do not “filter formaldehyde” from indoor air and pothos won’t get rid of the benzene from the air in your home.

You can read more about this debunked study at NationalGeographic.com, Newsweek.com and ScienceDaily.com.

How does this stuff get into our homes?

Indoor pollutants have a number of ways of entering our homes. “Some are carried in on the breeze; some are carried in, unwittingly, by you,” according to Mary H.J. Farrell at ConsumerReports.org.

Carpet, furniture and other upholstered items emit pollutants. Even the paint on the walls may be a contributor. The list also includes:

  • Cleaning and personal care products
  • Central heating and cooling systems
  • Smoking in the home
  • Cabinetry or furniture made of “certain pressed wood products” (EPA)
  • Carbon monoxide fumes from an attached garage

For a more complete list, visit the U.S. Environmental Protection Agency online at EPA.gov.

Improve your indoor air

Knowing that the air inside your home is polluted is frightening, but, as mentioned earlier, there are steps you can take to improve your air quality. These include:

  • Keeping dust to a minimum.
  • Using a vacuum cleaner with a HEPA filter.
  • Mopping floors with non-toxic cleaners.
  • Have everyone remove their shoes before entering the home.
  • Routinely replace the HVAC filters in the home.
  • Maintain the air conditioning unit to help lower the amount of pollen that enters the home.
  • Ensure the home is well ventilated while cooking, cleaning with chemicals and using hobby or personal products.

The EPA’s website offers additional, in-depth information on how to lessen the negative health impacts of polluted air in the home (información disponible en español).

How to survive a multiple offer situation

We’re hearing from our clients and they’re confused; especially those who took their homes off the market or decided to put off buying a home during the shutdown.

Many are ready to jump back in but the housing market news has them confused. “The media says the market is changing but we don’t know if that is good or bad news for us,” is a common complaint.

We did a quick survey of housing market news this morning and found the following headlines:

  • High demand, low interest rates make for perfect housing market
  • Housing market looking to rebound from pandemic
  • Higher May numbers indicate recovering housing market
  • The Housing Market Will Lead the Post-COVID Economic Recovery

Overall, the market seems to have bounced back to where it was prior to the shutdown, with another competitive summer market on the way.

Still not enough homes on the market

It’s not that homeowners aren’t listing their homes for sale. In fact, in May of 2019, more than 12 million homeowners said they plan on selling their homes within the next 18 months, according to a Harris Poll.

A recent survey by a national real estate company found that 25% of homeowners who had planned on selling in 2020 have decided to put off selling their home for the foreseeable future.

More than half, however, either adjusted their listing price, took the home off the market until restrictions were lifted or haven’t changed their selling plans at all.

This is good news for inventory-hungry homebuyers who, pre-pandemic, were snatching up listings as soon as they hit the market. Many experts expect a rerun this summer.

Multiple offers – they’re baaaaack!

This is mainly due to the lack of homes for sale. Same old story, right?

Will there be multiple offer situations? There already are, in pockets, across the nation. According to yet another real estate company’s survey more than 40% of the company’s buyers faced bidding wars through early May.

Boston turned out to be the city with the most multiple offers, with San Francisco, CA and Fort Worth, TX slightly behind.

So, yes, multiple offers are becoming more common in the post-pandemic real estate market. If inventory remains low and the number of homebuyers in the market increases, as it does each summer, there is a very real possibility that you’ll meet with competition for homes in good condition.

Homebuyers need to be fully prepared to buy. This means seeing a lender and getting pre-approved for a mortgage. Lending standards have tightened, so even if you were pre-approved before the pandemic’s outbreak, you should check in with your lender to ensure that you can still qualify for a mortgage.

It also means not making any large purchases on credit or applying for new credit from the moment you obtain that pre-approval letter until you close escrow.

Here are a few other tips to put you in a more competitive position as a homebuyer:

  • Choose your real estate agent carefully. The inexperienced or part-time agent may not have the negotiating chops to help you beat other bidders to win the home you want.
  • Consider that you may need to increase your offer above asking price. Can you afford to do this? If not, vow to look only at homes at a price point that allows you to be competitive in a multiple offer situation.

We’ve helped numerous homebuyers successfully win heated bidding wars. Our techniques and strategies are proven to make your offer the most attractive to home sellers.

Spring is here, summer is right around the corner and the market is heating up. It is so important that you work with an expert team to help you navigate the process and negotiate on your behalf.

Tips to protect your dog when it’s hot outside

Baby, it’s HOT outside! Sadly, no matter how hard the media and public officials try to get the word out about how our heat kills, people either don’t get the message or don’t heed it.

I recently watched a video of a dog with heatstroke. The owner kept it in the backyard in Arizona and, as hard as they tried to cool it down, it eventually died.

Do you know how to recognize heat stroke in your dog and what to do to combat it?

The experts at PetMD claim that heatstroke in dogs is typically associated with air temperatures of 106 degrees Fahrenheit and higher.

​​It doesn’t take long for the heat to affect our pets. If you leave them outdoors, shade isn’t enough. They need lots of water too. But, really, bring them indoors. It’s the only sure way to protect them.

Look for these symptoms of heatstroke:

  • Check your dog’s tongue. If it’s deep purple or red, get help.
  • Dizziness
  • Excessive thirst
  • Fever
  • Glazed eyes
  • Heavy or difficult breathing
  • Lack of coordination
  • Lethargy
  • Profuse salivation
  • Rapid heartbeat
  • Seizure
  • Unconsciousness

How to treat a dog suffering from heatstroke

  • Move the dog to an air-conditioned area.
  • Apply cold, wet towels to the head, neck and chest or pour cool (not cold) water over the dog.
  • Use a syringe or eye dropper to give the dog tiny amounts of water.
  • See a veterinarian a.s.a.p.

How to prevent heatstroke in your dog

If you don’t think the sidewalk is hot when the weather is, bend down and touch it. Better yet, check out this chart from the National Weather Service:

  • Walk the dog early in the morning before the ground has a chance to heat up
  • Consider buying shoes for your dog (Check out the 5-star rated RoyalCare Dog Boots Paw Protectors and the summer-weight HiPaw Summer Breathable Mesh boots, both at Amazon).
  • Provide lots of shade and water when outdoors
  • Use a body vest meant to keep dogs cool (the Expawlorer Cooling Vest gets good reviews at Amazon.com as does the BINGPET Dog Cooling Jacket).
  • Use a dog cooling pad for the outdoor dog. Amazon offers the isYoung Pet Cooling Mat, which requires no electricity.
  • If you must leave the dog in your backyard, consider buying a pet pool (they’re sturdier than kiddie pools and won’t be as easily punctured by the dog’s nails) and placing it in a shady area. Introduce the dog to it so that it knows it can find relief from the heat by jumping in.

Two pools at Amazon are particularly popular PUPTECK Foldable Dog Swimming Pool AND Midlee Dog Pool.

Of course, you know to NEVER, EVER leave your dog in a car on a hot day, right? No, not even with the windows cracked.

Finally, create or buy a dog first aid kit. You never know when your dog may need help.

 

Going FSBO? Here are 3 things you must think about

If you’re a DIY type of person, the thought of selling your home without the help and expense of a real estate broker may be attractive to you.

Although selling a home isn’t exactly rocket science, there is a lot that goes on during the transaction that the layperson knows nothing about. If you insist on doing it yourself, take some time to consider some of the most challenging aspects of the process.

1. How much will you ask for the home?

Knowing the current market value of your home is the most important part of selling it.

Pricing a home too low is like taking a torch to a stack of your equity dollars and lighting them on fire.

Pricing a home too high is dangerous as well. Overpriced homes tend to sit on the market, languishing, until the price is lowered.

By that time, however, your listing is stale and real estate agents and homebuyers will assume there is something wrong with the home.

Despite being absolutely sure you want to sell the home without the aid of a real estate agent, that agent is your best bet when it comes to setting a listing price for the home.

Real estate agents compile a research report known as a comparative market analysis (CMA) for potential listing clients. It is free and there is no obligation to use the agent’s services.

Since there is always the chance that you may change your mind during the process and decide to hire an agent, interview three of them before putting the house on the market.

Use their suggested list price (they should all be roughly the same), or an average of the three as the price for your home and save the CMA from your favorite of the three agents.

This way, if you do change your mind (and the chances are good that you will, according to studies), you’ll have his or her contact information.

2. Marketing is what gets homes sold

Now that you know how much you’ll ask for the home, it’s time to determine your marketing plan: How will you get the word out to buyers that your home is for sale?

The most important step to take when compiling your marketing plan is to determine who will be your most likely buyer. Since they market homes for a living, this is something real estate agents can easily determine. For the layperson, however, it may be challenging.

Everything you do to market the home, from preparing it for the market to advertising, should be laser-focused to that group of homebuyers.

3. All that paperwork 

The National Association of REALTORS study finds that the most challenging aspect of the for-sale-by-owner process is dealing with the paperwork.

Not only will you need to locate the forms and contracts, but you’ll need to know how to fill them out correctly. Even one small mistake can be disastrous.

The wisest thing you can do, other than to hire a real estate agent, is to secure the services of a real estate attorney. Yes, it can be costly, but you absolutely need help when it comes to the legalities of the sale.

Deciding to go it alone in a real estate transaction comes with risks. If at any time you feel you’re in over your head, reach out to us – we’re happy to help.