You Don’t Need 20% Down and Seven Other Myths That Are Getting in the Way of Homeownership

Think you need to come up with 20% for a down payment in order to buy a house? It might surprise you to know that the median down payment for first-time buyers last year was just 7%, per the National Association of Realtors®. And there are plenty of loan programs out there that require far less. The 20% myth is just one of the things that’s keeping homeownership out of reach. We’re digging in to seven others.

You need to be well-established in your forever career
There has been a lot of discussion about how millennials are waiting longer and longer to purchase homes. “As a result of their consequent struggle to save, millennials are delaying major life milestones like getting married and buying a home,” said Business Insider.

Nonetheless, there are still millennials jumping into the market because, even know their name isn’t yet on the door, they’re excited to have a home in their name. Having a stable job, a comfortable salary, and the desire to own a home may just be enough.

Sure, you might not be ready to buy the house of your dreams or move to the neighborhood where you can imagine raising kids and, someday, retiring, but that doesn’t mean you’re completely out of the game. A smaller place closer to work or an attached property can, quite literally, get your foot in the homeownership door and allow you to start earning equity.

You have to be completely out of debt
Recent data shows that nearly half of all undergraduates are delaying homeownership because of student loans. “According to a recent Federal Reserve study, a $1,000 increase in student loan debt lowers the homeownership rate by about 1.5%, equivalent to an average delay of about 2.5 months in attaining homeownership,” said Clever Real Estate. “For the average college debt holder with $37,000 in debt, that ends up being about a 7.7-year delay in their path homeownership.”

Regardless of your debt, whether it’s from student loans or credit cards, it may still be possible to qualify for a mortgage and afford the payments, especially because rents are often comparable to mortgage payments. Mortgage underwriters don’t expect homebuyers to be debt-free; In fact, having no debt might actually work against you. They like to see responsible credit use and management.

You need to have a family
Yes, many would-be homebuyers hold off until parenthood is looming, because they’re not ready to move to the suburbs, get married, and have kids. But, a third of today’s new homeowners are unmarried, according to CITYLAB. “The shift is detailed in a new working paper from Harvard University’s Joint Center for Housing Studies, in which researchers crunched demographic data from HUD and from American Housing Surveys taken every other year between 1997 and 2017. Perhaps the most notable departure from 20 years ago is the marital status of new homeowners. According to the paper, the share of married buyers declined from 61 percent in 1997 to just over half by 2017. Meanwhile, 35 percent of first-time homebuyers in 2017 had never been married.”

You need a 30-year conventional loan
There are tons of different loans that can help you purchase your first home, make payments more affordable and/or give you the flexibility you need to make homebuying affordable. FHA loans are among the most well-known and most popular loans for first-time buyers because they require just 3.5% down and have low credit score requirements. Other loans worth looking into depending on your circumstances include: government VA loans for veterans; USDA loans for properties in rural areas; and loans like Fannie Mae’s HomeStyle Renovation loan, which gives buyers bundled funds to purchase and make improvements to their home.

You need to have great credit
If your score isn’t in the 800s, or even the 700s, it doesn’t mean you’re going to be living that apartment life forever. You might be surprised to see the credit score minimums for some loans. “While there is no official minimum credit score for a home loan approval, the minimum FICO credit score for conventional loan approval tends to be around 620,” said Credit.com.

It has to be your primary home
“Some rich urban millennials are choosing to rent in the city and buy a vacation home instead of a primary residence,” said Business Insider. Meanwhile, some other savvy investors are continuing to rent and plunking down money to purchase homes in tourist-friendly locations so they can take advantage of the AirBNB craze. “According to Priceonomics, hosts on Airbnb are earning more than anyone else in the gig economy and are raking in an average of $924 a month,” said Travel & Leisure. “Airbnb hosts make nearly three times as much as other workers…with some hosts making more than $10,000 per month.”

Position Realty
Office: 480-213-5251

Because It’s Ugly, and 3 Other Big Reasons Your Home Isn’t Selling

Ever wonder why some homes sell and others don’t? There is no magical fairy dust that can turn a loser of a house into a palace. And, in fact, if there were such a think as magical fairy dust, sprinkling it in your home would make a big mess, and that’s a big no-no if you want to sell.

Getting your home sold is not all that hard if you stick to the basics. But if you’ve got some of the problems below, you may just be sitting on that unsellable home for a while.

Problem No. 1: Because your home is ugly
Yes, your home is ugly. If your Realtor didn’t tell you that, let us go ahead and say what he should have. And just so we’re clear, “ugly” can also stand in for:

• Cluttered
• Outdated
• Dirty
• Messy
• Tacky

Very few people – investors looking for a deal aside – can walk into an untidy mess of a house and see the potential. If you’re not willing to clean it up, clean it out, and maybe make a few overdue updates, you may not get it sold. That goes double for over-personalization that is so in your face buyers can’t see past it.

“Everybody’s taste is different, so less is more when it comes to decor at sale time. Loud patterns and bold colors can be big distractions,” said MSN.

Solution:

You need to de-ugly-fy that house but quick. Pretty places around you are selling. If you have similar plans, similar features, similar lots and they’re selling while you’re sitting, it’s not hard to figure out why.

Take a good long look. If you don’t see anything wrong, bring in a few friends for their opinions. But only the ones who might actually tell you the truth.

Problem No. 2. Because your price is unrealistic
This is the No. 1 most common problem with homes that are not selling, says MSN. “If you’re guilty of having “a ‘what the heck are they thinking?’ price tag,” they say, you can expect to sit on the market for a while.

“Price is usually the overriding factor in any home that doesn’t sell. Whatever its problem, it can usually be rectified by adjusting the price.”

Adds U.S. News: “Without question, the No. 1 reason a home doesn’t sell is price. Sellers have an emotional attachment to their homes and tend not to be objective about the true value.”

Solution:

If it is an emotional attachment that’s getting in the way, take the emotion out of the equation and think of it simply as a business transaction. Many times the issue is a seller owes more than the home is worth or simply wants a higher price. But it’s the market that sets the price. And if it’s telling you your price is too high, it’s probably best to listen.

When all else fails, listen to your agent, who should have provided you with comparables that spell out recent sales and market trends. (Also See: It’s The Price That Sells a Home)

Problem No. 3: Because it’s a ‘project’ house
Maybe you’ve made the decision to sell and you just don’t want to put any money into a house that’s no longer going to be yours. But a house that looks like it’s going to take too much work – or too much money – to fix up is a turnoff.

“If a home looks as if it’s going to cost half as much to repair or renovate as it does to purchase, it’s going to take a long time to move,” said MSN. “Today’s buyer is a lot more reluctant to take on a ‘project,’ especially if there are houses around it that don’t need as much work. Ditto for homes that have strong pet or mold smells.”

The Solution:

“Fix it, or prepare to lop a large amount off the price,” said MSN.

Problem No. 4: Because you’re not cooperating
This is also the No. 1 reason houses end up overpriced. Uncooperative sellers also tend to ignore other advice from their agent, about keeping the home tidy (see No. 1), being available when needed, being open to price reductions, being able to make the house available for open houses, and agreeing to terms when there is a contract discussion.

“No offense, but maybe you aren’t showing your house off enough? If you aren’t using a real estate agent and work away from your home, your time might be limited, of course. But you should try to make your house as accessible and available as possible for a Realtor and a potential homebuyer to easily drop by and take a tour (which means having the place clean, too),” said U.S. News. “Having your home be shown only by appointment or only at designated times will severely cut down on the number of showings you get, and if the house isn’t getting shown, it isn’t going to get sold.”

The Solution:

Get in or get out. Or get in to get out. You have to commit yourself to a process that, quite frankly, can be inconvenient and a hassle in order to get your home sold, especially in more competitive markets. Being agreeable and available, however painful, for this finite amount of time, will pay off in the end.

Position Realty
Office: 480-213-5251

How Lenders Set Mortgage Rates

Ever wonder how mortgage lenders set interest rates for their loan programs each and every business day? Wonder why some lenders quote the exact same rate for the exact same program? Maybe why one lender is lower than others? Here’s some insight on how mortgage lenders set their rates each day.

First, note that mortgage lenders set their rates on the same basic set of indices. There are some exceptions, primarily mortgage lenders who issue their own loan programs that intend to keep the loans internally and collect interest on the loan rather than selling the note.

Adjustable rate mortgages and fixed rate mortgages are priced a bit differently. An adjustable rate mortgage, or ARM, is tied to a specific, universally tradeable index, such as the 1-Year Constant Maturity Treasury. Each morning, the “secondary” departments of these mortgage companies look up the current price of an ARM index and then add a margin to it. If, for example, the index came in at 1.75% and the margin was set at 2.00%, the new rate for that specific program would come in at 3.75% and stay there until the next adjustment.

Fixed rate mortgages, at least for most of them, are set in another manner but also use a specific index. Currently, the index used for most fixed rate conforming loans is the Universal Mortgage Backed Security, or UMBS. This is the index lenders use when setting fixed mortgage rates scheduled to be sold to either Fannie Mae or Freddie Mac.

Okay, so if most lenders use the same index when setting fixed rates, why are they sometimes different? That can depend upon different factors. Lenders compete for mortgage business in different ways, but they all want to compete based upon a competitive rate. The rate doesn’t always have to be the lowest rate but should be in the ballpark.

Maybe a customer has a long-lasting banking relationship with a bank and also has quite of bit of cash sitting in different checking and savings accounts. That customer might be offered an extremely competitive rate based upon loyalty of the customer as well as the amount of assets the bank holds. The rate in this instance doesn’t have to be the lowest because the borrower is focused more on trust and relationships than the rock-bottom rate.

On the flip side, for mortgage companies that don’t have such an established relationship, rates take on a more serious note. A mortgage company with less media exposure compared to established banks might need to entice a potential borrower with some very competitive mortgage rates. But again, they set their prices on the same set of indices.

Sometimes a mortgage lender has taken an aggressive approach and priced their loans very low and suddenly their pipeline is full. They’re overbooked and overworked. Their marketing campaign is working but now their loan processing times have slowed to a crawl. It’s not unheard of for a mortgage company to raise rates temporarily to turn off the spigot. It happens. Lenders certainly want to make a profit, otherwise the mortgage market would dry up, but they want to be smart about it.

Position Realty
Office: 480-213-5251

How to Screen a Tenant Who Does Not Have a Social Security Number

Landlords to Take a Different Tact with Tenant Screening Without a Social Security Number

Some states, such as California, prohibit a landlord from inquiring about a tenant’s or prospective tenant’s immigration status or citizenship and requiring proof of legal residency or citizenship as a prerequisite to renting.

A SOCIAL SECURITY NUMBER IS NOT REQUIRED TO RUN A TENANT SCREENING REPORT. With Position Realty we don’t only pull a credit report but we also run a tenant screening report. Call us Today!

The law does not prohibit a landlord from requiring documentation necessary to verify a prospective tenant’s identity or financial qualifications to rent, it may be necessary for a landlord to find other ways to screen a prospect who has no credit.You may want to decide to screen using personal references, and independent income verification.

According to a spokesperson for a national screening company, a social security number is not mandatory for a credit check. You can order a credit report with a name and address. However, when the prospect does not have a social security number, you are highly likely to get a “no hit” or “no report available” response. Before a person is noted by the credit bureaus, a file has to be created. The landlord’s act of requesting a report may be the very thing that initiates this person’s credit history. Still, ordering a tenant credit check may be worth a try to see what information might have been reported earlier.

Other Reports Available

A tenant background checks does not require a social security number. A full name and date of birth are crucial for determining if you have the right information.
Eviction reports are available without a social security number.

Unfortunately, you cannot receive a PATH report, the address history, which could create a hardship when cross-checking criminal and eviction reports. There is no doubt that a social security number is an important identifier when weeding out duplicate names.

Position Realty
Office: 480-213-5251

Tenant Rights to Smoke Cigarettes or Marijuana in Rental Units

There Is No Absolute Right to Smoke

Tenants don’t have a universal right to smoke in their rentals. There is no law, either state or federal, that provides people with the freedom to smoke when and where they want. Nor are bans on smoking discriminatory: State and federal laws prohibit discrimination on the basis of certain attributes (such as age and national origin), but being a smoker isn’t one of them.

In fact, states, cities, and the federal government can place restrictions on all types of smoking. However, the laws regarding how, what, and where people can smoke vary.

Federal Smoking Laws

The federal government has the power to regulate almost any substance you might consider smoking, including tobacco and controlled substances such as marijuana.

Tobacco. Smoking tobacco is legal under federal law. The federal government doesn’t restrict its use in private rentals but does restrict it in public housing. The U.S. Department of Housing and Urban Development (HUD) requires all public housing agencies (PHAs) to prohibit certain tobacco products:

in all indoor areas (including individual units) and
all outdoor areas within 25 feet of a building.

HUD makes all PHAs ban the use of cigarettes, cigars, pipes, and water pipes but allows PHAs to decide whether to prohibit e-cigarettes. Each PHA can also decide to be entirely smoke free or create stricter anti-smoking rules than HUD’s. No matter what, if you live in public housing, you won’t be able to smoke in your unit.

Marijuana. Using and possessing marijuana for any purpose (including medical reasons) is illegal under federal law. Because it is a banned substance, using it anywhere—even in the privacy of your rental unit—exposes you to the possibility (even if remote) of being charged with a federal crime.

State and Local Smoking Laws

States and cities have the power to pass laws and ordinances that protect the health and safety of the public. This power includes the ability to restrict or ban smoking in rental properties.

Many states and cities have laws that prohibit or limit smoking in or around multiunit buildings due to the fact that smoke migrates so easily across shared spaces. In some areas, even buildings with as few as two units are considered multiunit for these purposes. Often, if the law doesn’t ban smoking altogether, it prohibits it in a certain percentage of units or in shared spaces such as common areas and parking lots. It’s also possible for a state or city to pass a law banning smoking in all rental properties—even single-family homes.

Most state and local anti-smoking laws clearly define what activities are considered smoking. For instance, a law might prohibit the use of pipes, cigars, and cigarettes. When a law is unclear about the definition of smoking, though, it’s probably safe to assume that it applies to anything that involves lighting or heating and inhaling the substance. Many anti-smoking laws also apply to vaping and using electronic smoking devices such as e-cigarettes.

Marijuana. If marijuana is illegal in your state, state and local anti-smoking laws definitely apply to it. If, on the other hand, marijuana for medical or recreational purposes is legal in your state, you’ll need to look at the relevant statute or ordinance for guidance. Some anti-smoking laws carve out an exception for smoking medical marijuana. Others define “smoking” as involving, or even define “tobacco” itself as, any plant matter that can be smoked. Many others are silent on the matter. To find out what the law is in your area, do an Internet search for “anti-smoking laws” or “smoking ban” where you live, or contact your city manager’s office.

Although landlords who manage properties subject to laws that limit or prohibit smoking should attempt to inform tenants of the rules, it’s the tenant’s responsibility to be aware of and comply with the law.

Landlords Have the Right to Restrict Smoking

Even when there’s no applicable anti-smoking law, landlords can limit or prohibit smoking anywhere on the rental premises, including individual units. Health concerns about secondhand smoke aside, landlords often prohibit smoking in an effort to limit fire hazards on the property, reduce fire insurance premiums, and avoid stains and odors. Landlords might also prohibit smoking to avoid lawsuits—tenants have sued landlords who allow smoking on various legal grounds, such as:

nuisance (for example, odors from smoking annoy other tenants) and
breach of the duty to keep the rental habitable (for example, units subject to secondhand smoke being uninhabitable because of health concerns).

Landlords typically inform tenants of a no-smoking policy or smoking restrictions through a clause in their lease or rental agreement. Most likely, such a clause applies to smoking of any sort, not just tobacco, but if you’re not sure, ask your landlord—preferably before you sign anything. However, even if your lease or rental agreement doesn’t mention smoking, you should familiarize yourself with any state and local smoking laws, as they might apply regardless of what’s in your lease.

Can a Landlord Evict a Tenant for Smoking?

A clear no-smoking policy prohibits all forms of smoking, including smoking marijuana for medical reasons. A landlord who has included a no-smoking policy in a lease or rental agreement can terminate the tenancy of or evict a tenant who smokes. When the no-smoking policy is part of the rental’s rules and regulations (but not incorporated into the lease or rental agreement), the landlord might only be able to terminate the tenancy or evict if the tenant repeatedly violates the rules.

Landlords might also be able to end a tenancy or evict based on a lease’s or rental agreement’s “illegal activity” clause. Again, under federal law, possessing and using marijuana is a crime. Whether a landlord will be able to evict a tenant for smoking marijuana based solely on the illegal activity clause depends on the circumstances. Many judges won’t evict when the tenant doesn’t have a history of breaking the law and the illegal act is relatively minor (especially if marijuana is legal under state law).

If you plan to smoke in your unit, it’s best to find out the smoking policies before you sign a lease or rental agreement. If a landlord tells you that you’ll be able to smoke in your unit, make sure you get that statement in writing. Otherwise, don’t enter into a lease or rental agreement knowing that you’re going to violate the no-smoking rule. Hold out for a rental that meets your needs—the risk of legal hassles or even eviction just isn’t worth it.

In the last election in Arizona, it was approved for adults 21 and over to possess up to one ounce of marijuana and for adults 21 and over to grow up to six plants per household.

Position Realty
Office: 480-213-5251

Landlords’ Guide to Navigating The Extended CDC Eviction Ban

Congress just passed a COVID-19 stimulus package that extends the federal eviction ban until Jan. 31, 2021, and provides rental assistance. The president signed it into law Dec. 28. The Centers for Disease Control and Prevention (CDC) halted residential evictions in September in an effort to stop the spread of COVID-19. The order was set to expire at the end of the year.

What do landlords need to know about the CDC’s order?

Landlords cannot evict “covered persons” from residential properties in any jurisdiction to which this order applies through Jan. 31, 2021.
It doesn’t apply in any state, local, territorial or tribal area with a residential eviction ban that provides the same or greater level of public health protection.
It does not relieve a tenant’s obligations to pay rent, make housing payments or comply with other obligations the tenant may have under contract.
It does not bar landlords from charging or collecting fees, penalties or interest based on the tenant’s failure to make timely payments.
Landlords can still file evictions for reasons other than non-payment of rent.
Violations of the CDC order can result in criminal penalties.

How can tenants get the order’s protections?

To invoke the protections of the order, tenants must provide an executed copy of a declaration that meets certain requirements. Each adult on the lease must complete a declaration that states under penalty of perjury that:

The tenant has used best efforts to obtain all available government assistance for rent or housing.
The tenant either:

Expects to earn no more than $99,000 in annual income for 2020 (or $198,000 if filing jointly)

Was not required to report any income in 2019 to the IRS

Coronavirus Aid, Relief and Economic Security Act

The tenant is unable to pay the full rent due to substantial loss of household income, loss of compensable hours of work or wages, a layoff or extraordinary out-of-pocket medical expenses.
Eviction would likely render the tenant homeless or force the tenant to live in close quarters in a new shared living setting because the tenant has no other housing options.
The tenant is using best efforts to make timely partial payments that are as close to the full payment as the tenant’s circumstances permit.

If tenants don’t meet these conditions, are they still protected from eviction?

Landlords should note that tenants who do not meet the criteria for protection under the federal ban might still be protected under state or local orders.

Landlords should also stay up to date with other federal tenant protections:

The Federal Housing Administration (FHA) extended its ban on evictions from properties secured by FHA-insured single-family mortgages through Feb. 28, 2021.
Government-backed mortgage buyers Freddie Mac and Fannie Mae have barred landlords of single-family properties with Freddie Mac- and Fannie Mae-backed mortgages from evicting tenants until at least Jan. 31, 2021.
Certain owners of multifamily properties backed by Freddie Mac and Fannie Mae can extend their loan forbearance. If they do so, they cannot evict tenants during the term of the forbearance.

Position Realty
Office: 480-213-5251

The Five Biggest Turn-Offs For Homebuyers

A lot of sellers don’t listen to their real estate agents, so we’ll tell you what your agent wants to say, but can’t say to you and this is it – your agent can’t get you the price you want unless your home is in pristine move-in condition.

That means no sticking drawers in the kitchen. No leaning fences. No rust-stained plumbing fixtures. We could go on, but maybe we need to make it clear. If you have even one of following “turn-offs,” your home won’t sell.

Buyers can get instantly turned off. Here are their five biggest turn-offs:

1. Overpricing for the market

2. Smells

3. Clutter

4. Deferred maintenance

5. Dark, dated décor

Overpricing your home
Overpricing your home is like trying to crash the country club without a membership. You’ll be found out and escorted out.

If you ignored your agent’s advice and listed at a higher price than recommended, you’re going to get some negative feedback from buyers. The worst feedback, of course, is silence. That could include no showings and no offers.

The problem with overpricing your home is that the buyers who are qualified to buy your home won’t see it because they’re shopping in a lower price range. The buyers who do it will quickly realize that there are other homes in the same price range that offer more value.

Smells
Smells can come from a number of sources – pets, lack of cleanliness, stale air, water damage, and much more. You may not even notice it, but your real estate agent may have hinted to you that something needs to be done.

There’s not a buyer in the world that will buy a home that smells unless they’re investors looking for a bargain. Even so, they’ll get a forensic inspection to find out the source of the smells. If they find anything like undisclosed water damage, or pet urine under the “new” carpet, then they will either severely discount their offer or walk away.

Clutter
If your tables are full to the edges with photos, figurines, mail, and drinking glasses, buyers’ attention is going to more focused on running the gauntlet of your living room without breaking any Hummels than in considering your home for purchase.

Too much furniture confuses the eye – it makes it really difficult for buyers to see the proportions of rooms. If they can’t see what they need to know, they move on to the next home.

Deferred maintenance
Deferred maintenance is a polite euphemism for letting your home fall apart. Just like people age due to the effects of the sun, wind and gravity, so do structures like your home. Things wear out, break and weather, and it’s your job as a homeowner to keep your home repaired.

Your buyers really want a home that’s been well-maintained. They don’t want to wonder what needs to fixed next or how much it will cost.

Dated décor
The reason people are looking at your home instead of buying brand new is because of cost and location. They want your neighborhood, but that doesn’t mean they want a dated-looking home. Just like they want a home in good repair, they want a home that looks updated, even if it’s from a different era.

Harvest gold and avocado green from the seventies; soft blues and mauves from the eighties, jewel tones from the nineties, and onyx and pewter from the oughts are all colorways that can date your home. Textures like popcorn ceilings, shag or berber carpet, and flocked wallpaper can also date your home.

When you’re behind the times, buyers don’t want to join you. They want to be perceived as savvy and cool.

In conclusion, the market is a brutal mirror. if you’re guilty of not putting money into your home because you believe it’s an investment that others should pay you to profit, you’re in for a rude awakening. You’ll be stuck with an asset that isn’t selling.

Position Realty
Office:480-213-5251

Can You Negotiate a Real Estate Commission?

In a real estate transaction, there are typically three main parties involved. There are the real estate agent, the buyer and the seller. The takeaway for the agent is a commission, but many people experience confusion about things like how much it is and how it’s paid. They also wonder if they can negotiate a commission.

What is a Typical Commission?
Most people think there’s a standard percentage across real estate for commissions. There isn’t a fixed price. There is an average prevailing fee in most states that’s around 6% of the final sales price of a home, however. If an agent sells land, they may get a higher commission of anywhere from 10 to 20% because it takes more time and a larger marketing budget to sell land.

The seller of a property is typically the one who pays a commission. It goes to the listing agent, and then the listing agent gives a portion to the agent representing the buyer. The home buyer doesn’t pay anything.

Most real estate agents only work on commission and don’t earn a base salary.

So what it might look like if you were to sell a $200,000 home is that the listing agent would charge a $12,000 fee. That would be a 6% commission. Then, they would split that with the buyer’s agent, so the agent representing the buyer gets $6,000, and the listing agent gets $6,000.

Then the agent has to share part of that 3% with their brokerage office. Sometimes that amount could be as high as 40% of the 3%.

Agents also pay for a lot out of the fee, including their marketing and insurance costs. Commissions are paid at the time the title transfers for the home.

Can a Seller Negotiate?
Legally, a commission is negotiable. However, sellers have to be careful here. While an agent might be willing to negotiate in certain circumstances—for example, the property is high-end or it may help them break into a great neighborhood, in many cases, they wouldn’t be.

If a real estate agent is too willing to settle for a lower commission for seemingly no reason, you have to think about how their negotiation skills will look later on when they’re working on a deal for you.

The entire goal of hiring a real estate agent is to get the best price for your home, along with the best terms. A real estate agent who quickly agrees to take a lower commission may not achieve those goals. Also, the marketing costs will come from that commission, so in taking a lower fee, will the agent be cutting corners on their efforts to advertise your home?

It’s not unusual for an agent to be unwilling to negotiate their commission simply because they don’t have to. They may be so busy that there’s no reason for them to take a lower commission. They can simply move onto other sellers.

What if the Same Agent is Handling Selling and Buying?
If you’re going to sell your home and then the same agent will help you buy another one, they earn both commissions. It’s possible that you could get a discount in this situation, but again, maybe not. Both transactions are separate from one another, and both require their own work. It doesn’t matter to the agent if the seller and buyer are the same people because the workload would be the same as if they were different people.

What if the same agent represents you and the buyer?

This is a situation known as dual agency, but not all states allow this.

In this case, if it’s legal, an agent could earn the listing and selling fees. You might ask a listing agent if they will lower their commission fees, although again, there’s no obligation on the part of the agent.

While negotiating is possible for real estate commissions, it’s not always the best idea nor will it always result in a discount for you as a seller.

Position Realty
Office: 480-213-5251

3 Things to Know About Investing In Real Estate During A Pandemic

Covid-19 has ambushed economies all over the world, with leaders and businesses desperately trying to find a healthy balance between protecting people and protecting the economy. So many industries have been left in an unpredictable state, including the real estate market. Let’s have a look at 3 important things you should know before taking the leap and investing in real estate.

1. Compared To Other Industries, Real Estate Is a Relatively Safe Investment
Historically, real estate has been a reliable investment. Whilst the pandemic has created a sense of instability, residential real estate continues to function in a relatively normal manner. In the worst case scenario that the value of the property you invest in depreciates, you still have a physical asset to your name. If you’re looking to get into commercial property, that’s a whole other story. The market has been shaken dramatically with people working from home and e-commerce developing exponentially, leaving many commercial real estate owners in a difficult position. Of course there are exceptions, for example companies who have benefitted from the pandemic as they were hit with a huge demand for their products. Many of these companies are now looking for industrial space to stabilise their supply chain. This would be an option for investment and you can get great value for money through commercial property auctions, yet overall, it seems residential real estate is the safest investment in the industry.

2. Select The Best Possible Location
When investing in a property, whether that be to renovate and sell or to rent out, choosing a location with sustainable demand is essential in order to make a reasonable return on your investment. With the financial uncertainty that comes with a pandemic of this scale, people are looking for the best possible value for money and they want to be sure that if they are taking a substantial financial risk, it will fulfil all of their needs. If you’re looking at investing in a flat, the younger generation are looking for amenities when they are renting, so there are a few things you should look out for. Local bars and restaurants, gyms and proximity to public transport, to name a few. If you’re looking for a suburban property with the hopes of targeting a family, aim for areas close to large parks, countryside public footpaths, good schools and supermarkets. Consider who you are wanting to target and what they will be looking for before making the important decision of where to invest.

3. Prepare For Substantial Upfront Costs
For the first time in a long time, many mortgage lenders are demanding 15-20% deposits as a result of Covid-19. If you are a cash buyer, this won’t be a concern, but if you are relying on taking out a mortgage for your investment, then this could be important. The economic fallout that has loomed as a result of the pandemic led low-deposit mortgage deals to crumble, leaving people who had saved a 10% deposit extremely disgruntled. The current financial uncertainty in the UK also led lenders to be even more selective on who they offer mortgages to. If you are in a position to offer a high deposit straight away, then you will be in a strong position. These substantial upfront costs could be a deal breaker for some investors, so this is something to consider before starting the process, and definitely something to research in depth.

Summary
To summarise, residential real estate seems to be the safest investment at the minute. With the financial difficulties facing many potential buyers and renters, make sure you select a property in a great location that people can’t refuse. Finally, if you’re relying on a mortgage for your investment, consider the substantial upfront costs involved.

Position Realty
Office: 480-213-5251

9 Ways Becoming A Homeowner Can Change Your Life

Homeownership. It shifts so many things. If you’re coming from an apartment, you may experience conveniences like direct-access garages and walls that aren’t shared for the first time. If you’ve been renting a home, you will probably feel a new sense of security and peace of mind once the mortgage is in our name. Not to mention the itch to repaint, re-imagine, and redo at least a few dozen things.

Want to know just how becoming a homeowner can change your life? Read on.

1. Financial Security
“The largest measurable financial benefit to homeownership is price appreciation,” said Investopedia. “Price appreciation helps build home equity.” Added Real Estate ABC: “The principle you pay on the mortgage is like putting money in the bank, in the form of equity.”

2. Peace of mind
If you worry every time your lease comes up for renewal, those days are gladly over. Unless you refinance or take cash out once you have enough equity, your house payment is your house payment.

3. Pride of ownership
The feeling you get when you come home to your place – the place you scrimped and saved for and the place that represents a lifelong dream – well, there’s just no substitute.

4. Stake in your neighborhood
Pride of ownership extends to the homes and area around your house as well. Whether or not you move to a neighborhood with a homeowner’s association, buying a house will undoubtedly make you more invested in what’s going on around you. And that can mean increased property values if neighbors band together for common improvements.

5. Increased interest in HGTV. And DIY channel. And weekends at Home Depot.
Don’t be surprised if you start quoting Drew and Jonathan Scott or using terms like “mitered corners” and “refaced cabinets.” Which is good news, because the changes you make to your home won’t just mean greater enjoyment while you live there, but also potentially greater profit when you go to sell.

“Home ownership means you have free rein in the aesthetics of the home. When renting, you do not have the advantage of changing your environment to please you,” said Real Estate ABC. “You may be able to paint a room, but need to repaint back to the original color scheme when you move. Owning your own home means you can do whatever you please to make your environment both personalized and, in the process, add value to the home.”

6. Your honey do list may increase
But so will your satisfaction.

7. Tax breaks
“The second largest financial benefit of owning a home is tax savings,” said Investopedia. “The biggest of these is the ability to deduct the annual interest paid on a mortgage from income. Private mortgage insurance may also be a write off, on addition to fees paid at closing. If you have paid points, either discount or origination, you can deduct these as well.”

8. Expert knowledge of interest rates, neighborhood home prices, and area sales trends
When you’re in the process of buying and after you close escrow, you’re more likely to be tuned into what’s going on in the market and in your neighborhood. This can help you to make smart decisions about updates, upgrades, and refinancing, and can also make you a trusted resource among your friends who want to buy.

9. More financial responsibility in other parts of your life
With a home to take care of, you may be more clued in to other long-term investments and less wiling to spend frivolously.

Position Realty
Office: 480-213-5251