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IS NOW THE BEST TIME EVER TO BUY YOUR FIRST HOME?

If you’ve been thinking about buying your first home, talk of rising mortgage rates may have you worried. But, the reality is that this may be one of the best opportunities for first-time buyers in recent memory. Conditions were already good for first-timers with new, super-low down payment loans. But the FHA’s announcement that they would be cutting mortgage-insurance premiums makes buying even more advantageous.

“The annual fees the Federal Housing Administration charges to guarantee mortgages it backs are being cut by a quarter of a percentage point,” said Bloomberg of a statement released by the Department of Housing and Urban Development (HUD). “With the reduction, the annual cost for most borrowers will be 0.60 percent of the loan balance.”

According to HUD, “The fee cut would save new FHA-insured homeowners an average of $500 this year. The cut would take effect on Jan. 27.”

What other factors should you be paying attention to if you’re looking to buy your first home?

Mortgage rates

Yes, rates are up from their lowest point. But the average 30-year fixed-mortgage rate right now is 4 percent, down a bit this week and waaaaaay down from decades ago when they were in the teens. You’ll pay a few bucks more per month now than you would have at this time last year, but, if you’re getting an FHA loan, those new mortgage interest cuts will help.

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More than anything, it’s important to be realistic. We’re not anywhere near gloom-and-doom time, despite some of the more hysterical talk out there. In fact, today’s rates are still near historic lows, which make buying a home more affordable than rent in many cities.

But, if you need to find a way to lower your monthly payment on your future home, and you’re not eager to search for less expensive homes, remember that your credit helps determine your mortgage-worthiness, and the better it is, the better your interest rate. If you’re not being offered the best rate out there, it’s time to…

Get your credit in order

Have great credit? Great! Your lender will be pleased and, presumably, you will be, too. But many of us need some help in this area, and even a small bump in your score can make a big difference not just to the rate you get but also whether you will qualify for a loan at all.

“The homebuyer’s credit score is among the most important factors when it comes to qualifying for a loan these days,” said Bankrate. Your lender will be able to give you tips for improving your score, which can range from checking your report for errors to paying off old delinquent accounts.

It’s also important to keep in mind that what you consider to be responsible credit management may not necessarily be seen as a positive when you go to qualify for a loan. “Just because you pay everything on time every month doesn’t mean your credit is stellar,” they said. “The amount of credit you’re using relative to your available credit limit, or your credit utilization ratio, can sink a credit score. The lower the utilization rate, the higher your score will be. Ideally, first-time homebuyers would have a lot of credit available, with less than a third of it used.”

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Low down payment loans

Please visit the mortgage section of our web site for a list of low down payment loan programs.

Investigate situation-specific loans

Are you a veteran, a police officer, or a firefighter? There may be a special loan for you with conditions that can make purchasing a home easier and more affordable. There are also specific loans for those who are buying a home that has (or needs) energy-efficient features, one that can be bundled with home improvement funds, and another from the USDA that can save those who are moving to a rural area money.

“This one may surprise you,” said nerdwallet. “The U.S. Department of Agriculture has a homebuyers assistance program. And no, you don’t have to live on a farm. The program targets rural areas and allows 100% financing by offering lenders mortgage guarantees. There are income limitations, which vary by region.”

SELLING YOUR HOME THIS YEAR? 6 REASONS TO RENOVATE NOW!

Face it. Your home’s not perfect. You may keep up with general maintenance, and perhaps you’re meticulously clean. But how old is your kitchen? Do your paint colors reflect current trends? Could your living room use some updating?

When it comes to selling your home today, it’s got to be perfect, or buyers will simply move on to the next option. Doing some renovations, whether that means overhauling areas that are long overdue for a facelift or making some simple changes that freshen up the place, is typical. But if you’re thinking they can wait until you’re ready to list your home, these 6 reasons may make you rethink that plan.

1. You get to enjoy the new stuff

“A worthy update can either serve to reduce your cost of living while you remain in the home or add significant value to the home’s sale price when you decide to put it on the market,” said Scott McGillivray, a real estate investor and host of the HGTV show Income Property to US News.

But if you’re going to spend some cash on updating and renovating your place, you should at least be able to get some enjoyment out of the updates before turning the house over to someone else, right? If you’ve been waiting for 10 years for new appliances, it would be a shame to not have the opportunity to at least cook a few meals and throw a dinner party or two.

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2. They always take longer than expected

It’s a fact of renovation. If your timeline is six weeks, it’ll take 12. At least. Giving yourself plenty of time before you’re ready to list your home will help you avoid a stressful scramble at the end when you’re trying to get it on the market.

3. There may be issues you’re unaware of

Your Realtor will point out areas that need to be addressed and recommend changes to make your home more saleable. But, getting your home ready to sell might be harder than you expect if problems like mold or termites are uncovered. Getting a jump on any big issues or anything that goes beyond the cosmetic will give you the time you need to fix the problems and hold onto your sanity.

4. They don’t have to be huge

No one said you have to take your home down to the studs. Sometimes, a light touch is all that is needed. “Start by thinking small,” said Realtor.com. “Minor cosmetic upgrades go a long way in getting more buyers through the door for a quicker sale – and time on market is key to determining what you’ll net at closing.”

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5. You’re going to need them

You may not love the idea of having to do anything to – or spend any money on – your home, especially if you already have your eyes on a new one. But, most every home needs a little upgrading, updating, or, at least staging. You don’t want to have the one place in the neighborhood that won’t sell because potential homebuyers see a project house, without the project price.

6. You’ll get a return on your investment…if you renovate smart

Speaking of price…updated homes typically sell faster and for more money, if the updates have been done well and they’re the ones buyers are looking for. If you’re not sure which renovations to consider, take your cues from the Cost vs. Value Report, which tracks the “average cost for 29 popular remodeling projects with the value those projects retain at resale in 99 U.S. markets.” It’s a great way to look at national trends but also break down what’s trending in individual areas. “How much work you’ll need depends on your home’s value, your market, and the comps in your neighborhood,” said Realtor.com.

US News also has a great list of “popular updates that are worth the money,” including adding a backsplash in the kitchen and updating bathroom vanities.

Position Realty
Office: 480-213-5251

THE NEW TECH PRODUCTS TO ADD TO YOUR HOME NOW

Every year at the Consumer Electronic Show (CES), we marvel at all the new tech, gaze at the new cars, and generally dream about an unlimited bank account to deck our houses out with all the newest gadgets. But, the reality is that some of the things we see never come to market, some look thrilling but way over promise on a functionality scale, and some are just plain head-scratching.

So, this year we took a look at CES from the viewpoint of what’s most wanted and perhaps even most practical, for today’s consumers. Here’s the stuff we saw at CES this year that can add a little something (or a whole lot) to your house.

Appliances

When it comes to appliances showcased at CES, there are typically some big wins, and then some curious other stuff. Eater called this year’s show “a Jetsons-esque carnival of futuristic electronics, homewares, and appliances,” which would be a hilarious description if it didn’t also ring true. “For every item that shows innovation or promise, there’s at least one more that appears to be the product of a failed brainstorming session where somebody suggests, “why not make this appliance connect to the internet?”

While some experts were generally unimpressed with appliances that did little to best last year’s reveals, there were a few that shined, including the Panasonic Countertop Induction Oven. “It quickly grills, bakes, re-heats and requires little or no preheating, resulting in perfectly cooked meals,” said Panasonic. The appliance was selected as one of CES’ 2017 Innovation Award Honorees and is available now for $599.95.

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Whirlpool emerged as one of the biggest winners are CES, with several exciting advancements and enhancements that people should love. They “unveiled a new Alexa skill that’ll let you control its web-connected appliances using voice commands. That includes the new smart all-in-one washer-dryer hybrid that Whirlpool also announced this week,” said cnet (more on Alexa later). “We also got a preview of Whirlpool’s new Scan-to-Cook feature, which lets you use your phone to scan the barcode on the packaging of whatever you’re cooking. From there, you can send ingredient-specific cooking instructions straight to your connected Whirlpool appliances. All of it added up to a busy show for Whirlpool, and signaled that the venerable brand is determined not to get outsmarted.”

TVs

CES is the favorite place to roll out the biggest, fanciest, thinnest, most drool-worthy TVs of the year, and the 2017 show was no different.

The Sharp 85″ 8K TV has a picture – and a size – that people went nuts for. COOL MATERIAL called it “mind-blowing,” saying that, “No picture will do it justice, unfortunately. You could get an inch from the screen and still not believe you were looking at a picture. Due to the insane crowd around it at all times, a heist would have been extremely difficult.”

Not big enough? How about the Hisense 100 Inch Laser TV, which “uses a short throw projector underneath it to achieve that maximum size” and project a clear 4K HDR picture. “The $13,000(!) package even comes with a nice pair of speakers (and subwoofer),” said Paste Magazine.

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LG’s objective this year was to continue to showcase their ultra-thin TVs, and this year’s version, The LG Wallpaper OLED TV, was a huge hit. “This new television from LG was by far the most impressive new piece of technology at CES this year,” said Paste. Essentially, the display is as thin as a credit card and sticks to your wall without any cords or anything. It’s like shooting a projection on your wall, except that it’s bright and beautiful like any modern OLED TV. The brains and port access to the TV are all stuffed in the large Soundbar, which sits at the bottom of your setup.”

Random cool stuff

Sometimes, the smallest stuff makes the biggest difference. Stick-N-Find is a bunch of Bluetooth-enabled buttons that you can stick to anything you fear losing – your car keys, your remote control, even your dog. You then use your app to find your missing stuff. A former Indiegogo project that raised more than 1000% of its goal, Stick-N-Find is available now.

It wasn’t the slickest thing we saw at CVS this year. In fact, cnet said it looks “like Roku mated with Fisher Price.” But AirTV Play might just be the most life-changing. From Sling’s parent company Dish, AirTV Play allows enhanced live TV streaming that just may make you cut the cord this year.

Alexa everything

Alexa was absolutely everywhere at CES, and the domination has only begun. “There was hardly a smart-home product, let alone any product, at CES this year that wasn’t advertising its compatibility with Amazon’s Alexa ecosystem,” said The Wire Cutter. “Now that Amazon (as well as Apple and Google, to a lesser extent) has convinced millions of people of the usefulness of voice control in their homes, manufacturers are in a mad rush to add the feature to their own products.”

If you’re looking for a place to start integrating the smart home stuff into your world, look to the Lenovo’s Smart Assistant, “which launched its own Echo-like speaker using the Alexa natural-language processing system,” they said. “To differentiate the Smart Assistant from the original Echo, Lenovo is making its model available in three colors (gray, green, or orange); the unit comes in a budget $130 version and an upgrade $180 version that replaces the standard speaker with a Harman Kardon system for better sound.”

In addition, “First Alert is working on an Alexa version of its Onelink smart smoke alarm, though that won’t be out until late 2017 or even 2018. Even lamps are coming out with Alexa support. Dish announced that its Hopper super DVR will soon work with Alexa; so too will the ADT Pulse security platform, plus a few Whirlpool appliances that let you preheat your oven or check how much time is left on your dryer’s cycle, and a Samsung robo vacuum.”

Position Realty
Office: 480-213-5251

7 IMPORTANT STEPS TO HELP YOU BUY YOUR FIRST HOME IN 2017

Thinking about buying your first home? What an exciting time this is bound to be. And, also, what a (potentially) overwhelming, confusing, and stress-filled time. It can easily veer into scary territory if you’re not prepared and not surrounding yourself with professionals who can help guide you in the right direction.

These seven tips can help you make that dream of homeownership come true in 2017.

1. Work with the right real estate agent

The guy next door or your brother’s girlfriend’s cousin who just got his real estate license may be hungry to get your business, but that doesn’t mean he’s your best bet. An experienced agent quite simply knows things that someone who is brand new probably doesn’t. An experienced agent will also have important relationships in place that may be able to help buyers in every facet of the home purchase, including:

  • Finding houses that aren’t even listed yet
  • Finding homes that may be slightly outside of a buyer’s criteria but that are worthy of consideration
  • Leveraging industry relationships to get you great deals or better terms
  • Managing appraisals and inspections
  • Working through every step of the purchase process and handling any issues that pop up along the way
  • Negotiating a deal that works for both sides

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2. Don’t be afraid to talk to multiple lenders

Your Realtor will most likely have several lenders they have worked with and can refer you to. You may also want to speak to loved ones and get a referral or two from someone they’ve worked with successfully. Each lender may have a different recommendation and/or knowledge of a special loan that works for you, so it makes sense to look at a few different options.

3. Mind your credit

Many people have no idea what their credit score is, but if you’re thinking about buying a home, knowledge is power. Different loans have different minimum credit score requirements, and it could be that your score doesn’t measure up for the best loan rates, or maybe you need to do some work to qualify for even the most lenient loan.

A good mortgage lender can advise you on your best options to raise your score, from removing any errors on your credit report, to paying any delinquent accounts, to exploring credit repair options. The earlier you learn your score and delve into the details with a qualified lender, the more time you have to address any issues you find.

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4. Save, save, save

For many people, getting the down payment together is the hardest part of buying a home. And the closing costs can be an unwelcome surprise for those who weren’t expecting to have to come up with even more cash. When you first set out to buy a home, make sure you know how much you have to save. Your lender should be able to give you a pretty good ballpark based on a certain home price. Housing experts recommend adding 5% to that number just to be safe.

Even if you’ve never been a great saver in the past, there are strategies you can use that will help you build the nest egg you need for your down payment and closing costs, including these tips from nerdwallet:

  • Automatic transfers from your checking account to your savings can help to make the process mandatory – and maybe a little less painful.
  • Save raises and bonuses rather than spending them.
  • Set aside tax refunds.
  • Keep the change. At least a couple of banks have variations on this theme. For example, Bank of America allows debit card users to sign up for a service that rounds up purchases to the nearest dollar and puts the change into a linked savings account.
  • Visualize your goal. Slap big, beautiful photos of your dream house on the refrigerator, near your office workspace – and wrap a small one around the primary credit card in your wallet. You might charge less and save more.”

As for where to put that money while you watch it grow, experts recommend that “If the plan is to become a homeowner in the next 12 months, the money should be kept completely liquid. That means you can easily access it at any time,” said CNN Money. “The best way to do that is in a good old-fashioned savings account, Schulte said. Look for one with a higher yield. In today’s low rate environment, that probably means an online-only account like Ally or Synchrony Bank, which currently pay around 1% annually.”

5. Lock in your rate

Rates can be unpredictable. Locking in a rate when you get close to buying, which your lender will undoubtedly recommend, can protect you if rates rise. Many lenders also offer a one-time adjustment in case rates go down.

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6. Stay at your job

Not happy at work and thinking about making a change? If you’re looking to buy a home, you may have to delay that plan. Part of your qualification for a mortgage will be based on your job history. Making a big change just before you buy or during the escrow process will be problematic. Lenders advise buyers to stay the course until after the home closes escrow.

7. Don’t open new credit cards or buy a new car

Your lender will spell out the do’s and don’ts of how to protect your credit when trying to buy a house, but if you haven’t yet talked to anyone and you think you’re getting close to be purchase-ready, that Kohl’s card you take out to save 20% on your $100 bill could cost you. Before you take out any new debt, check with a lender.

Position Realty
Office: 480-213-5251

Phoenix Real Estate Market Report ~ December 2016

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The current real time market profile shows there were approximately 6,152 new listings (down 1,962 listings from last month) on the market in December 2016 and 7,157 sold transactions. The overall inventory of homes on the market in December 2016 is 22,520 which is down -13.3% as compared to the number of home on the marker in August 2014. In December 2015 there were 23,353 homes, in December 2014 there were 26,270 homes and in December 2013 there were 26,463 homes for sale on the market. This declining number of homes for sale on the market is a good for sellers if 2017 brings added buyer demand due to changes planned to be enacted by our new president.

In July 2016, the average sold price took a steep dive south to $272,845 but the average sales price has recovered to price levels seen in the beginning of the summer at $282,054 for an overall appreciation rate for the year at +4.2%. Since 2014 this appreciation rate is typical for the Phoenix market since the appreciation rate in 2015 was +5.5% and in 2014 the appreciation rate was +4.5%. Another interesting factor to consider is how our new president and the Fed’s plans to raise interest rates in 2017 will affect real estate prices in the near future. Since January 2016 (12 months ago), the average days on market has decreased approximately -3.8%% (up from last month) and the number of sold transactions has increased approximately +37.8% (up from last month).

The volume of foreclosure purchases since January 2016 (12 months ago) has decreased approximately -24.3% and the volume of short sales decreased of approximately -9.0%. Since August 2013 the number of foreclosures have decreased -301.3% and the current percentage of foreclosure sales is only 2% of the market which indicates a healthy market. Also, since August 2013 the number of short sale transactions have decreased -516.2% and the current percentage of short sales sold is only 2% of the market. Unfortunately, some homeowners who bought between 2005 and 2007 are still up-side-down as shown in the annual average sold price chart above.

Since January 2016 (12 months ago), the number of homes for sale on the market have decreased approximately -5.0% or 23,699 homes for sale on the market to a gradual decrease of 22,520 homes (Down 610 homes from last month). The total number of listings is low as compared to 26,076 listings in August 2014. This decrease in the number of homes for sale indicates we are currently in a seller’s market (low supply and increased demand).

Real estate prices are still relatively low (near 2008 prices), interest rates are planned to increase in 2017 and the macroeconomic market is improving both in terms of prices and the overall economy. Give us a call to discuss your best buying or selling strategy, TODAY!!

Position Realty
Office: 480-213-5251

Investing In Commercial Real Estate Isn’t That Difficult

Most real estate investors start off investing in single family homes which is a comfort everyone is familiar with since we all live in a home and not a commercial property. With a residential home investment your return on investment diminishes when bought at a higher price because the rental income (your return) is too low to justify the price. Here is Phoenix the the cut off is approximately $200,000. Also, if your tenant moves out then you are stuck with a few months of paying the mortgage before you locate a new tenant.

With a commercial property investment your return on investment is higher because you have multiple units rented that justifies the price paid. Also, since you have multiple units a tenant moving out will not effect you financing because the other units are still generating income to pay the mortgage.

A lot of investors shy away from commercial investments simply because they don’t understand the terminology and how to properly analysis a property to know if it’s a good investment or not. The follow are some terms a beginning commercial investor should understand:

1) Rate of Return = The percentage return on each dollar invested. Also known as yield. Calculated by taking cash investment divided by total purchase price.

2) Net Operating Income = The rental income minus total expense.

3) Annual Debt Service = Expense of a mortgage including principal and interest.

4) Initial Investment = The sales price plus acquisition costs less the amount of the mortgage loan is the down payment.

5) Cash Flow Before Taxes (CFBT) = The net operating income (NOI) less the annual debt service equals cash flow before taxes.

6) Equity = The value of one’s interest in the property consisting of fair market value less any outstanding debt or other encumbrances.

7) Cash-on-Cash Return = Calculated as cash flow before taxes (CFBT) divided by the initial investment or down payment.

8) Cap Rate = The cap rate is basically the return on investment from the property without considering financing. It’s the net operating income divided by the purchase price.

These are basic terms any investor should understand before purchasing a commercial property. The professionals at Position Realty can help you with determining which properties offer the best return on investment. We have development proprietary spreadsheets used to successfully analysis commercial investment opportunities.

If you are thinking about purchasing a commercial investment property give us a call since we will give you honest and accurate feedback regarding which property to buy. We specialize in helping small to medium size investors reach their investment goals.

Position Realty
Office: 480-213-5251

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