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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

What Should You Know About Virtual Home Tours?

Starting in March, life as we knew it started shifting for most of us because of the coronavirus pandemic. Non-essential businesses were shuttered, schools were closed, and we started spending a lot more time at home.

The pandemic is still going on, despite most states being in some phase of their reopening plan, and people are doing more things virtually than ever before.

For example, some employers are saying they’ll keep their employees working remotely for the foreseeable future.

A Changing Real Estate Market?
Inevitably, these changes have impacted the real estate market. The market has been surprisingly strong through this, with mortgage rates historically low, but that doesn’t mean buyers and sellers aren’t doing things differently.

The virtual tour is one example. Increasingly homebuyers are going through the entire process online, meaning realtors are showing them homes virtually.

A survey that came out in January, before the pandemic affected America, found that prospective homebuyers preferred to work with agents offering virtual tours. The National Association of Realtors’ 2019 report called “Home Buyer and Seller Generational Trends,” found that 48% of buyers between the ages of 39 and 63 said they found virtual tours very useful as they searched for homes.

The following are things buyers, sellers, and real estate agents should know about virtual home tours.

Agents Can Go in the Home to Do the Tour
The term virtual tour is somewhat generalized, and it can refer to a few different scenarios.

In one scenario, there’s a virtual tour that’s prerecorded, and then anyone can look at it on demand.

There are also instances, particularly now, where real estate agents representing buyers will go into the home and then walk them through it live, but still virtually using something like Zoom or FaceTime.

For some buyers, this represents a better option because their agent can help them understand the nuanced details of the home that they wouldn’t have access to otherwise. If you have a real estate agent who’s doing a tour for you, it’s a much more dynamic experience.

You can ask your agent to show you closets, or provide different angles. You can also ask them to look in the backyard or to examine certain components of the house like the foundation.

What are the Pros of Virtual Tours?
Since we’re still dealing with the effects of the pandemic, one of the perks of virtual tours for buyers is that it provides them with inherent social distancing.

Some people who might be planning a move far from their current location may not even have the option to travel right now, so virtual tours are the only way for them to conduct their search.

It’s also convenient, and there’s a lot to be said for that.

When you take a virtual tour, you don’t want to spend time traveling to the property if it’s something you’re not interested in.

Even if you don’t buy your home completely sight unseen, virtual tours can save you time in the overall process.

Virtual tours can help you get a handle on what you like and don’t like as well.

What Are the Cons of Virtual Tours?
There are downsides to virtual tours. First, you don’t get the full sensory experience of a home. It sounds silly, but homes have a “vibe” and you may feel one way or another about a space when you’re there in person. You don’t feel what the ceiling heights are as an example, or what the finishes feel like.

You’re also not getting a feel for the location if you buy a home without seeing it first. You can ask your real estate agent to provide you with information and perhaps even a virtual tour of the neighborhood, but still, it’s not the same as seeing it for yourself.

Tips for Virtual Tours
If you’re a buyer, there are some things to know going into virtual tours.

First, know what to ask your real estate agent if you’re doing a live tour. For example, remember to ask about the fundamentals like the laundry room, the garage, and the storage spaces. Have your agent show you the roof and the foundation, as well as the less glamorous parts of the house like the water heater and the furnace.

If possible, even if you aren’t going to go to the home, but you live relatively close by, try to drive around and see what you think about the neighborhood.

Finally if at all possible think of virtual tours as one part of your home buying process rather than a complete replacement. They can supplement your experience and save you time, but if you have the chance to go into the home it can help you visualize yourself there.

Preparing Your Home for Sale During the Pandemic

Despite the ongoing coronavirus pandemic, the real estate market must go on. Homeowners still need to sell, house-hunters still need to buy, and real estate agents still need to make a living. But the typical home selling process involves frequent contact with strangers—which is not recommended during this time of social distancing.

By now, you’re probably getting pretty good at making adjustments in your everyday life to protect the health and safety of yourself and those around you. Along the same lines, there are steps you can take to show your home to potential buyers without risking your health or hurting your chances of a sale. Here are some tips to prepare your home for sale in the coronavirus era!

Get Help with Staging
According to The Mortgage Reports, staged homes sell an average of 73% faster than non-staged homes. Staging involves eliminating clutter, incorporating decorative elements, and adjusting the layout of your furniture to improve the flow of your home. The overall goal is to make your home appear bigger, brighter, and more inviting to potential buyers. Fortunately, some staging steps are easy to tackle on your own, such as cleaning, decluttering, and depersonalizing. These steps will help buyers picture themselves living in your home instead of feeling like intruders in someone else’s space.

When it comes to décor, however, it’s best to hire a professional. An interior designer can help you stage your home to effectively show off key aesthetic elements as well as the features that make your space functional. You can easily find freelance interior designers on job boards like Upwork. To keep yourself and your designer safe, make sure they have adopted special procedures to conform with CDC recommendations for COVID-19.

Don’t Neglect Your Curb Appeal
Don’t let your home preparations stop at your front door! Even if buyers aren’t visiting your home in person, they will still want to see your home exterior. In fact, a picture of your home exterior will likely serve as the bait that draws potential buyers to your online listing. Don’t neglect your curb appeal!

Tool Review Lab recommends several ways to boost your curb appeal—even if you’re on a tight budget. For example, you could power wash your front porch and siding, install a new mailbox, hang modern house numbers, and do some basic lawn maintenance.

When it comes to your front yard, make sure your lawn is lush, freshly mowed, and free of weeds and dead spots. Consider planting new flowers and remember to weed and mulch the beds to keep everything looking neat. You may even want to hire a professional to give the trees and shrubs around your yard a good trim.

Consider Safer Showing Alternatives
While it’s clear that hosting an open house is off the table, you may also want to limit in-person showings. Offer your buyers no-contact alternatives! Shoot a video walkthrough of your home and upload it to your online listing so buyers can tour your home virtually. You could even schedule live video-chat showings with interested buyers so they can ask questions about your home or request specific shots of rooms or features.

Since buyers will form a first impression of your home based on your listing, make sure it does your home justice. Write a strong listing title, include a detailed and exciting description, and post plenty of high-quality photos. A great real estate agent can help you craft your listing so that it properly showcases your home’s best features. Your real estate agent can also help you navigate virtual showings! Take the time to find a professional who is well-versed in using online tools to connect with buyers.

Selling a home in the age of the coronavirus is bound to be a bit of a challenge. Thankfully, the real estate industry has been quick to adopt virtual alternatives to open houses and buyers are happy to continue their housing hunt online. With some special attention to staging and a solid virtual presence, you’ll have no problem closing a sale during the pandemic!

Homebuyers Are Rethinking Densely Populated Areas!

The coronavirus pandemic and, especially the lockdown that has had people around the world sheltering in place, may have forever changed how we perceive “home” and what we are looking for when it comes to our little place in the world.

“The coronavirus pandemic has many Americans rethinking the kind of lifestyle they want,” said MANSION GLOBAL. “Apartment living in central, densely populated urban areas is losing its appeal as residents are subject to building restrictions and risk coming into contact with people infected by the virus.”

Real estate agents and companies across the country are reporting a heightened interest in buying homes in the suburbs. In many cases, buyers are even accelerating their purchases to get out of the city and into a suburban home now.

“The pandemic has altered how residential property is bought and sold, changes that aren’t likely to disappear any time soon and that could reshape the American dream long after the current crisis has passed,” said USA Today. “A growing number of Americans are considering fleeing cities for the suburbs, to put more distance between themselves and their neighbors.”

USA Today reports that searches for real estate in small towns is up exponentially over major metro areas. Also driving this trend: An increase in work-from-home flexibility. “Remote work will become more prevalent,’’ said Lawrence Yun, chief economist for the National Association of Realtors (NAR). “That means there is less need to be close to the job centers. Suburbs and exurbs (areas situated beyond the suburbs and in, or adjacent to, rural areas) will get a greater interest. In addition, a larger single-family home with extra elbow room will be desired, such as dedicated office space and a personal gym.”

A new Harris Poll backs up that assertion. It found that “almost a third of Americans are thinking about moving to less densely populated areas,” said USA Today. “And 43% of city dwellers had recently checked a real estate site for a house or apartment to rent or buy as compared to 26% of those in the suburbs, and 21% of those in rural areas.”

In places like New York City, known for its density and also for being one of the world’s coronavirus hotspots, “There’s a sudden rush on real estate in the suburbs,” Alison Farn-Leigh, a sales agent with Berkshire Hathaway, told CBS Local. “I would describe it as nothing short of a frenzy. I get a lot of, ‘In one to two years, we knew we were going to do this, but now, we have to do it now.’”

Despite waning activity in many places, suburban areas around New York are on fire, and it’s especially prevalent among high-end buyers. “New York’s wealthy are moving their money—and often their families—into surrounding suburbs and exurbs as they look to escape a crowded lifestyle and reduce their risk of contracting coronavirus,” said CNBC.

The numbers are astounding. According to FlatRate.com, “Compared to March 15 through May 10 of last year, requests for moves within New York City dropped 30%,” said CBS Local. “Meanwhile, moves from the city to Connecticut are up 80%, to Long Island up nearly 60%, to New Jersey up nearly 43%, and to Westchester up 33%.”

Real estate advisor Owen Berkowitz of the Berkowitz Marrone Team at Douglas Elliman told CNBC that he “can’t remember the last time we were this busy,” while “Eighteen people are waiting to see a home in Greenwich, Connecticut, that is renting for $65,000 a month,” another broker said.

If you’re considering a move to the suburbs, here are a few things to consider:

The commute— If you’re within close proximity to work now, you’re probably not excited about having to spend an hour or two—or more—in the car every day. Then again, more flexibility might mean living farther away won’t be an issue. If you will be commuting, it’s recommended that you do the drive a few times during rush hour so you can make sure you can endure it on a regular basis.

The yard— If you’re coming from an urban area, especially if you live in apartment or a condo, you might not have any outdoor space at all. And while you may be envisioning a great big yard, many single-family homes today—at least in a moderate price range—are rather short on outdoor space. Still, having a yard of any size will require upkeep. Don’t forget to factor in the cost of landscaping and ongoing maintenance when you’re creating your homebuying budget.

The amenities— The suburbs are loaded with newer construction and master planned communities, many of which have amenities like pools, trails, and clubhouses. Of course, purchasing in one of these communities typically means you’ll be paying Homeowner’s Association (HOA dues) as well as additional fees in some areas. Be sure you know about all the additional costs of specific neighborhoods when house hunting.

The stuff to do— It’s an exaggeration and a generalization to say there’s nothing to do in the suburbs. You might be surprised at how good the local restaurants are and how many entertainment and cultural options are nearby, not to mention abundant recreational opportunities. But if you live in the city and, especially, if you’re in an area where you can currently walk to your favorite café, the theater, and museums and galleries, you might be in for a rude awakening. While some suburban communities are veering toward greater walkability, many will require you to drive to your new favorite spots. While you’re considering suburban areas, you might also want to take a look at the nightlife, if that’s your thing. Eateries and bars might be more likely to close at a “decent hour” instead of staying open until early morning.

Forbearance: Homeowners Need To Tread Lightly

Unemployment numbers keep climbing with the latest figures showing another weekly uptick this time by nearly 3 million. The consequences are many and the real estate and mortgage industries are no stranger. At the same time, the term “forbearance” has entered the stage. If someone is unemployed and they’re looking at how they’re going to make the mortgage payments down the road, the ol’ savings account will take a big hit as homeowners look for ways to satisfy the mortgage company without losing the home. One of these ways to take a mortgage payment pause is with a forbearance agreement. But homeowners need to be fully aware of the impact of such an agreement.

A forbearance is a formal agreement between the lender and the borrower. Borrowers can’t decide to take a mortgage payment holiday on their own. Doing so would start the foreclosure clock ticking. And lenders are loathe to foreclose. It’s the very last thing on their list when trying to work with struggling homeowners. Lenders have employees whose sole job is to provide workout solutions for those having problems making the mortgage payment.

A forbearance agreement can be arranged if the borrowers meet certain standards such as documenting their situation as well as the lender seeing there is light at the end of the financial tunnel. If both can be met, a forbearance may be an option. Such an agreement will allow the borrowers to suspend the monthly mortgage payment for a specific period. Yet with a forbearance, the payments don’t go away, they payments accrue during the forbearance period. If the mortgage payment is $2,500 and the agreed upon period is for six months, that means at the end of six months, not only will payments resume but there’s a $15,000 bill that comes due. That’s the tough part. If someone is having difficulty paying $2,500 where will the $15,000 come from? There are other options such as a Loan Modification that can help and recent changes to agency guidelines may arrange for the past due amounts be added back to the existing mortgage.

Another major consideration with a forbearance agreement is the hit credit reports and credit scores take. On the credit report, late payments will be listed. Late payments on a mortgage does most of the damage to credit scores. Further, if a forbearance agreement is executed, that too will be listed on the credit report. While the borrowers get a breather on making the monthly payment, the credit report will list the forbearance filing. And, at the same time, many lenders who see a forbearance listed on a credit report won’t approve a new loan, be it for a purchase or a refinance for up to a year. Or even longer, it’s entirely up to the lender.

Deciding whether or not to ask for a forbearance agreement should be made alongside your loan officer or financial professional. There are consequences of such a filing that many may not know about. Yes, there is a payment reprieve and foreclosure is avoided, but the filing will negatively impact a credit report. There can be other options available for struggling homeowners. This isn’t something to do on your own volition. There’s a lot more help out there than you might think.

Mortgage Scams Are On The Rise! Watch Before It’s Too Late!!

Closing on a new home can be one of your most memorable life moments. It’s the final and one of the most critical stages in the home-buying journey, but with the exchange of key paperwork and a sizable down payment, it can also be a stressful experience, especially for first-time homebuyers.

The FBI has reported that scammers are increasingly taking advantage of homebuyers during the closing process. Through a sophisticated phishing scam, they attempt to divert your closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to your wiring instructions. In fact, reports of these attempts have risen 1,100 percent between 2015 and 2017, and in 2017 alone, there was an estimated loss of nearly $1 billion in real estate transaction costs.

While it’s easy to think you may not fall for this kind of scam, these schemes are complex and often appear as legitimate conversations with your real estate or settlement agent. The ultimate cost to victims could be the loss of their life savings.

Here’s what you should know and how to avoid it happening to you.

How it works

Scammers are increasingly targeting real estate professionals, seeking to comprise their email in order to monitor email correspondences with clients and identify upcoming real estate transactions. During the closing process, scammers send spoofed emails to homebuyers – posing as the real estate agent, settlement agent, legal representative or another trusted individuals – with false instructions for wiring closing funds.

How to avoid a mortgage phishing scam

  • Identify two trusted individuals to confirm the closing process and payment instructions. Ahead of your mortgage closing, discuss in person, or by phone, the closing process and money transfer protocols with these trusted individuals (realtor, settlement agent, etc.). Be cautious about exchanging any details about your closing over email. You may want to use this opportunity to also create a code phrase, known only by these trusted parties, if you need a secure way to confirm their identities in the future.
  • Write down their names and contact information. Use the Bureau’s Mortgage Closing Checklist to list these individuals and their primary phone numbers.
  • Before wiring money, always confirm instructions with your trusted representatives. Never follow instructions contained in an email. Verify the closing instructions, including the account name and number, with your trusted representatives either in person or by using the phone number you previously agreed to.
  • Avoid using phone numbers or links in an email. Again, scammers can closely replicate the email address, phone number and format of an exchange from your agents. Avoid clicking on any links or downloading attachments without first confirming with your trusted representatives.
  • Do NOT email financial information. Email is never a secure way to send financial information.
  • Be mindful of phone conversations. It may be difficult to identify whether a phone call is fraudulent or legitimate. Scammers may call and ask you to verify your personal or financial information. When in doubt, always refer back to your trusted professionals to confirm whether it’s legitimate.

What to do if it happens to you

  • Contact your bank or wire-transfer company immediately. Ask for a wire recall. Reporting the error as soon as possible can increase the likelihood that you’ll be able to recover your money.
  • File a complaint with the FBI. Contact the FBI’s Internet Crime Complaint Center at www.ic3.gov .

While it can be easy to think you’ll never fall for a scam of this nature, the reality is that it’s becoming more and more common, and the results can be disastrous for eager homeowners. By being mindful and taking a few important steps ahead of your closing, you can protect yourself and your loved ones.

To learn more about the closing process, including how to prepare for your closing and common pitfalls to avoid, check out our Mortgage Closing Checklist . For information and resources for the each stage of the home-buying journey, visit the Bureau’s Buying a House tool.

Here Is What A Presidential Election Means For Home Sales And Prices

Campaign ads are already airing. Debates and town halls are being held. Democratic primaries and caucuses are underway. Some eight months away from voting day, the 2020 election cycle is ramping up. However, while some presidential hopefuls are laying out their housing policies, the impact of the electoral process on residential real estate is yet to fully unfold.

Across the nation, the market still seems set on its normal trajectory. In January, nationwide inventory continued to decline, while median listing price climbed to nearly $300,000. According to realtor.com, last month marked a re-acceleration in price gains, as an increasing number of cities posted yearly growth of over 10%.

Still, research and industry experts agree that the closer the election gets, the more likely its effects on housing, regardless of who the candidates are. In general, presidential races breed uncertainty in the housing market, which alters attitudes among home shoppers, sellers and investors and, thus, sways sale volumes and values.

“Why [presidential elections] affects the market more than any other elections is simply because people fear change,” says Matt Laricy, managing broker of The Matt Laricy Group in Chicago. “Whenever people get nervous, they don’t make rational decisions. They make emotional decisions.”

On a large scale, though, that behavior tends to mature with the progression of the election year and intensifies in the second half of that year.

How predictable the outcome of a presidential election appears to be can also influence real estate sentiments. When an incumbent arises as a likely winner, cementing the continuation of familiar policies, the housing market may experience less jitters, said Arlene Reed, a real estate agent with Warburg Realty in New York City.

When the election result evades easy forecasts, “people get a little tentative,” Reed says. “There’s some uncertainty how the new president’s policies will affect the economy, the stock market, taxes.”

Sales slide down, but prices may not budge

In a recent study that analyzed the last 13 presidential election years, which stretch back to the 1980s, Meyers Research, a housing consultancy firm, found out that new home sales record a drop in median sale activity of 15% from October to November, when the nation chooses its president. In the year following the election, the traditional seasonal decline in the sales of new construction abodes is only 8%.

Appraiser Jonathan Miller, owner of Miller Samuel, made a similar observation for Manhattan’s co-op sales in a data crunch he originally conducted for the real estate publication The Real Deal. Between 2008 and 2019, co-op sales began to dip in July of federal election years (both midterms and presidential elections), leading to a nearly 13% weaker market in September.

“Even though the election is at federal level and we’re looking at the local market, it’s still very visceral to consumers,” Miller says.

In most markets, though, the rebound is quick, if not instantaneous as pent-up demand gushes out after clarity dawns in the Oval Office.

“In December [following an election], and in the following year, the sales that are lost during November are recovered,” says Ali Wolf, director of economic research for Meyers Research. “It isn’t that consumers say, ‘I’m nervous, and I never want to buy.’ They say, ‘I’m nervous. Let’s just wait to see how things play out.’”

The impact of presidential elections on prices seems less clear-cut. Because any fluctuation in sale volumes occurs for only a limited number of months, prices may not have enough time to reflect that change. In New York City, Miller says, “it really takes anywhere from one to two years in sales pattern to have a permanent change or a significant change in price direction.”

This year, Daryl Fairweather, chief economist at online brokerage Redfin, says prices may not budge much, buoyed by a consistently tight inventory. Fairweather said that “prices are pretty stable.”

Lawrence Yun, chief economist at the National Association of Realtors and fellow Forbes.com contributor, echos that assertion, saying that he “hope[s] the price increase in 2020 is more moderate at 3% or 4%,” compared to past years.

If prices do post smaller gains in 2020, however, the presidential election might be one factor for that. In 2012, analyzing data by the California Association of Realtors, Movoto, a real estate technology company, concluded that in presidential election years price appreciation falls about 1.5% behind the gains made in the year preceding and the one following the vote.

Potential winners and losers

The effects of presidential elections on residential real estate usually reverberate louder in the upper echelons of the market. Yun says, “Upper-income people will probably wait until after the election compared to more middle-class, everyday people just because any changes to a new tax law or new regulations could have a bigger impact for them.”

During a presidential election, many foreigners also choose to postpone purchasing property in the U.S. as the rules that govern the tax and residency implications of such an action could change with the arrival of a new administration. Laricy says he has several international clients who have already decided to wait out the outcome of the November vote.

However, with today’s favorable economic outlook when it comes to mortgage rates, unemployment and consumer confidence, the upcoming presidential election might do little to impede first-time buyers or those shopping for lower-to-median values homes.

“They’re really more concerned about, ‘Do I have a job? Is the economy going to continue to grow?’” Wolf says. “Who gets elected can impact that but as long as there’s not some wild policy, those groups will generally continue to fare well in an election year or not.”

Position Realty
Office: 480-213-5251

If You Have the Option of Putting More Money Down, Should You?

With the exception of the VA and USDA programs, along with certain down payment assistance programs, most every residential loan program does indeed require some sort of a down payment. Many borrowers want to come to the closing table with as little cash as possible and as the down payment amount is the largest chunk of change needed, the lowest down payment is often the request. A conventional loan can ask for a down payment of just 5.0 percent with certain first time buyers loans asking for a 3.0 percent down payment. FHA loans need a minimum down payment of just 3.5 percent of the sales price. But if you have more money to put into the transaction, should you?

Many times, this additional cash comes from the sale of a previous residence but of course it doesn’t have to. While conventional loans do have low down payment options, with a down payment of less than 20 percent of the sales price, private mortgage insurance will be required. Making a down payment of 20 percent or more eliminates the need for PMI. A larger down payment obviously results in a lower monthly payment which is another factor to consider.

Making a large down payment will also affect liquidity. A down payment is instant equity in a real estate transaction, the only way to get the money back is either through the sale of the property or an equity loan of some sort. Putting more money down often means tapping into a retirement account such as an IRA or pulling funds from any investment or savings account. When those funds are removed, interest is lost. A larger than required down payment could also mean the funds would be put to use in a better way such as paying down consumer debt or paying off student loans, for example.

Considering an existing mortgage, loan programs today allow you to pay the loan down. Perhaps retirement is soon coming into the picture and paying down a mortgage is a solid financial plan. One thing to note however is that with a loan carrying a fixed interest rate, the payment will not change, just the loan amount will be lowered. With an adjustable rate loan however, the monthly payments will change as the loan amounts are reduced.

Coming in with a large down payment is a personal financial decision and for most that means it’s time for a talk with a financial planner and your loan officer. There are multiple considerations when paying extra on a mortgage or coming to the settlement table with a larger-then-required down payment which means seeking advice from a professional.

Position Realty
Office: 480-213-5251

Scary Issues That Can Kill Your New Home Joy

Be afraid. Be very afraid. That new home you’re thinking of buying might not be as perfect as you think. Danger lurks behind every wall. Or maybe just one. Either way, it’s probably something you should know about.

Buying a home is full of challenges, and the one that might be the most frustrating of all is finding out there’s something wrong after you’ve already closed escrow. In many cases, you may have recourse against the seller if there is an issue that wasn’t disclosed, or against the home inspector if he or she missed something serious. But even recompense, you’re still left with a problem you have to deal with when all you want is to be enjoying your new home.

Here are eight things to look for before signing on the dotted line.

It smells moist
If you tour a home on a rainy day, don’t automatically think that the moist smell is because of the weather. If it smells moist inside, you’ll definitely want to make a return trip when the rain has passed to make sure there’s no moisture issue in the house.

There’s a telltale pet odor
That could mean damage to carpet or floors. It might be something you can work out while negotiating, but you definitely want to be aware of what you’re dealing with so that there are no surprises later on, like pet urine that has seeped down through the wood floors into your sub floor, costing you thousands.

The neighborhood is iffy
Maybe there’s more crime than you’re comfortable with or too much of a commercial presence. It’s all about what’s acceptable to you.

Neighbors’ homes are unkempt
If you’re not looking in an area that has a homeowners’ association, pay special attention to what the neighbors’ homes look like. If you’re seeing curious paint choices, cars on the lawn, and grass that’s waist-high, you might want to think hard about whether this is the neighborhood for you. Some buyers appreciate the character of a neighborhood but doesn’t have the strict rules governing what they can and can’t do. But a neighborhood without an HOA can also have issues when neighbors don’t take care of their homes, and this can affect your property values.

It took you a long time to get there
Have a serious conversation with yourself about how much is too much when it comes to the commute. If it took you an hour and a half to get there from work, is this something you can live with every day?

It’s dirty
There are times when a home goes in the market and it’s clear the seller didn’t make the effort to get it in shape prior to listing. It’s not just about a lack of updates but a lack of upkeep, as well. While you may not know the circumstances behind the home, and while it may seem like a great deal if you can get it for a good price, be cautious. A home that is in bad shape on the surface may have a bunch of issues you can’t see.

It’s dark in the house
Sellers will typically open up all shades and blinds and turn on all the lights for showings, but nothing is stopping you from flipping those light switches off to see what the natural light situation is really like. If the place is dark even with all the blinds open and lights on and natural light is really important to you, it might not be the house for you.

It’s too perfect
A home that’s really well staged can look super appealing. But buyers have to train themselves to look at the home, not the furniture and furnishings. What will the house look like without that staged furniture? Does the floorplan work for you? Are the pieces scaled for the room or for real families? Are there any curious configurations like a chair blocking access to a fireplace. Getting past the stager’s tricks to see the house for what it is will help you to decide if it’s really for you.

Position Realty
Office: 480-213-5251

New Appraisal Rule: What Does It Mean for You?

A new home appraisal rule just went into effect—the first time in 25 years that “federal regulators have increased the property value limit of the homes that require an appraisal as part of the selling process,” said REALTOR® Magazine. The rule exempts some home sales priced at $400,000 and below from requiring an appraisal. That figure was previously capped at $250,000. “The new rules likely apply to about 40% of home sales, regulators estimate.”

So how will this affect home buyers and sellers? First, it should be noted that those homes that do receive the exemption still have to be evaluated “to provide an estimate of the market value of real estate collateral,” said Housingwire. “The agencies state that the evaluation must be ‘consistent with safe and sound banking practices.’ To that point, the rule establishes that an evaluation “should contain sufficient information and analysis to support the regulated institution’s decision to engage in the transaction.”

Also, the new exemption is not applicable for homes using FHA, HUD, VA, Fannie Mae, or Freddie Mac financing, which eliminates a huge percentage of homes right off the top.

If you are in a position to buy or sell a home that no longer needs an appraisal, should you still proceed with one? Here’s why you may want to consider it.

What is an appraisal?
“A home appraisal is an unbiased determination of the fair market value of the home by a professionally-trained third party,” said Forbes. “While that may sound complicated, all it means is that it’s a chance for someone who’s not personally involved in the sale of the home to give a true representation of the home’s worth. It’s worth noting that an appraisal is entirely separate from a home inspection. The former deals with the financial value of your new home. The latter is an inspection of the functional quality of your home’s systems, like HVAC and plumbing.”

There are a number of factors that contribute to that fair market value. “In a purchase-and-sale transaction, an appraisal is used to determine whether the home’s contract price is appropriate given the home’s condition, location, and features,” said Investopedia. While the evaluation process is intended to provide guidance when it comes to pricing, it is unknown at this point how those evaluations will compare to appraisals, if they will carry the same weight in terms of establishing home value, if they will disproportionately favor the lender, etc.

Value protection
Buyers and sellers each have a vested interest (literally) in knowing how much the home they are buying or selling is worth. For sellers, an appraisal can help inform the listing price, and may also be able to help a seller justify a higher listing price because of improvements they have made to the home.

On the other hand, if a home appraises for less than the sales price, buyers have a negotiating tool. “An appraisal is important because it protects your investment,” said Forbes. “It’s there to ensure that, as the buyer, you don’t pay more than the home is actually worth. It’s also important for securing financing. In today’s mortgage industry a bank will only give you a loan up to the fair market value of the home. Therefore, if an appraisal comes back lower than the purchase price, the lender may only issue you a loan for the appraised amount.”

Position Realty
Office: 480-213-5251

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