The Pre-Approval Process

Hey, guys! I wanted to follow up with the next step in purchasing your dream home!

That next step is pre-approval. Pre-approval is different than pre-qualification. During the pre-approval process a lender may ask you for the following:

1.    Social Security Numbers: If both you and your spouse are applying for the loan, the lender will require both social security numbers to run an accurate credit report.

2.    Copies of your past checking and savings account statements.

3.    Documentation of other assets such as stocks and bonds.

4.    Documentation of your recent earnings and contact information of someone who can verify.

5.    A list of all credit card accounts and their current balances.

6.    Copies of your past tax returns.

Each lender is different and they may ask for more documentation. If you have any questions, please give us a call. We’d love to help!

More Homeowners Today Are Making the Choice to Stop Paying Someone Else's Mortgage

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It’s a part of the American Dream; get a good job, buy a nice house, build a family and enjoy life. But as the past six or seven years have demonstrated, not always do the forces that be make it possible for everyone to achieve that American Dream.

Today, as we move into the summer of 2013, things have changed drastically when it comes to owning a home. Where just a few short years ago people were unable to hold on to their homes, many were forced to move into rental homes or apartments. Today, it’s a new day in the housing industry.

Interest rates are low. Houses are still affordable. Mortgages are easier to obtain than they were during the past few years. All these signs point to a great time in real estate.

There are numerous advantages to owning your own home, ranging from tax breaks to autonomy, better amenities and more. Consider this: for the cost of what you might be able to rent an average-sized single-family home you could easily buy the same or more, depending on the loan product you choose to go with. Before interest rates begin their expected climb back upward, now is a great time to buy a home.

There are several lending options available for buyers these days; some allow financing with no money down, others have a minimum of 3.5% down and yet others are designed for buyers with more up-front cash. Regardless of which option best suits you, one thing is certain; if you can do it – buying a home is by far the best option and it certainly helps to build your future as your strengthen the equity in your home.

If you’d like to start looking for homes to find your dream house, contact us today! We’ve helped countless buyers realize their American Dream!

Why Working With a Real Estate Team Benefits You

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How can you be sure you’re getting the most value for your business when working with a real estate agent? The truth is that when you’re working with a team, you get the maximum amount of support possible without sacrificing customer service or quality of service.

When you buy a home with the Tania Ivey Group, you will enjoy the special privilege of having access to listings not even on the market yet. And when one member of the team is away or unavailable to manage your transaction, another is right there to make sure everything continues without a hiccup.

Another benefit of working with the Tania Ivey Group comes with the strategies we have in place to help you get the home of your dreams. In today’s very competitive marketplace, you need someone that will go to bat for you so that other buyers vying for the same home do not outbid you. Our strong negotiation techniques are proven to get our clients the homes they need at a price they want. And we do it in a way so as not to compromise in important aspects of your transactions such as home inspections, appraisals or other vital components of a successful real estate deal.

We invite you to browse through our blog and take a look at just some of the testimonials from very happy clients that were able to save money when buying a house. When you’re ready to buy (or sell), call us – we look forward to helping you!

703 564 4026

www.Help2ownaHome.com

What is a 1031 Tax Deferred Exchange?

 

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There are three types of 1031 tax deferred exchanges that can take place:

1.) Straight exchanges—two parties trade properties of equal or approximate value. This is the simplest exchange.

2.) Multi-party exchanges—this involves three or more parties buying, selling, or exchanging properties. Don't attempt these exchanges without the aid of a tax professional; they tend to be very complex.

3.) Delayed exchanges—this exchange allows the sale of the relinquished property and the buying of the replacement property to occur at different times as long as stringent rules are followed.This is the exchange most often used.

What's the Advantage of the 1031 in Terms of Taxes?

As the law's title indicates, the capital gains tax is deferred, but not eliminated. However deferral is a great way to leverage small real estate holdings into larger ones! Since you can postpone gains, you're able to use a tax-deferred exchange strategy to transfer equity to a larger property, all without paying taxes!

Another advantage is that there’s no limit on exchanges. This means you can make as many exchanges as you want! So, over the course of your lifetime, you can keep growing income and appreciation by adding new properties without having to pay the capital gains tax!

If you specialize in buying and renovating properties and want to keep reinvesting your profits into larger properties, then this strategy is especially attractive.

Note: If you don’t keep reinvesting, you risk being classified as a real estate dealer by the IRS and will not be able to participate in exchanges.

What Are the Basic 1031 Qualification Rules?

There are some basic rules that must be followed in order to qualify for a 1031 exchange. These include the following:

1.) The properties to be exchanged must be located in the United States. Note: You can exchange foreign property for foreign property and domestic for domestic. However, you can’t mix these exchanges together.

2.) You must trade only like-kind real estate.

3.) An exchange must be made that’s equal to or greater in both value and equity. Any cash or debt relief received above this amount is considered “boot” and is taxable.

4.) The like-kind property must be identified within 45 days of the closing on the initial property.

5.) All proceeds from the initial sale must be turned over to a"qualified intermediary" (also called a QI, facilitator, exchanger, etc.) who is the person or company playing the role of middleman.

6.) Any of the proceeds not under the control of the middleman are subject to taxation.

7.) The middleman holds the funds from the initial property in escrow until such time as the closing on the second property occurs.

8.) The middleman also assists the owner with the preparation of paperwork and other services to ensure the transaction progresses in a smooth manner.

9.) The closing on the second property must take place within 180 days following the close on the first property.

Wow, as you can tell, this is pretty complex subject and can't completely covered here! But if you're an investor or plan to be one, I hope I whetted your appetite for this subject.

And please, if you have any further questions, feel free to call me! I'd love to tell you more!

Who Determines the Value of Your Home?

 
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It's the job of the real estate appraiser. His or her job is to evaluate a property and tell you, the buyer, what condition it is in and the value. Of course, as a seller, you can also have your home appraised so you get an objective "third party" view of your property.

Real estate appraisers are licensed by the state. Regulations vary, however, so I recommend you contact either me or a bank for information on qualified and ethical appraisers (more on this later). Often, they are independent contractors associated with appraisal firms headed by a Certified Appraiser or the equivalent.

What are the Benefits of Using an Appraiser's Services?

When you are a buyer, appraisers can provide you with two great benefits:

First of all, they can uncover hidden problems that could end up costing you a lot of money down the line. Their appraisal can help you to either avoid the property all together or negotiate a lower price to compensate for future costs.

Second, appraisers can do the opposite -- uncover hidden opportunities for you! For example, you might be considering a home that doesn't look all that wonderful on the outside, but is actually in solid shape as far as its structure is concerned. So, through an appraiser's efforts, you may end up with an outstanding bargain.

From the seller's viewpoint... an appraisal can uncover items that need to be fixed before you put your home on the market. This ensures that your property is in the best shape possible before prospective buyers ever look at it.

What Kind of Report Will I Receive from an Appraiser?

A certified appraiser should provide you with a written report. These reports generally consist of the following nine items:

1. A description of the property and its location based on a visit to the property by the appraiser. The appraiser evaluates the condition, overall livability based on design, layout, and appeal to the market, and other external factors).

2. An evaluation of the “highest and best use” of the land; that is, the use for a piece of land, or property in general, that maximizes its net present value.

3. An evaluation of sales of comparable properties (usually three) as similar to the appraised property as possible.

4. Information regarding current real estate activity and/or market area trends.

5. An evaluation of the overall real estate market in the area.

6. Statements about items the appraiser feels are detrimental to the property's value, such as poor access to the property.

7. Notations about seriously flawed items, such as a crumbling foundation, leaking roof, etc.

8. An estimate of the average sales time for the property.

9. What type of area the home is in (a development, stand alone acreage, etc.).

How Do I Find a Certified Real Estate Appraiser?

I can direct you to very qualified appraisers, or you can find one through your bank, as it too should have a list of approved appraisers. If you decide to find an appraiser on your own, check his or her background carefully. As with any profession, there are always a few scam artists who inflate appraisal amounts in order to make more money.

Check with the Better Business Bureau (Insert state link) and the Insert State Name State Appraisal Board. You can also check with your bank to make sure an appraiser is not blacklisted.

How Much Does An Appraisal Cost?

Generally speaking, an appraisal runs from $300 to $500. However, fees do vary with location.

If you need more information on real estate appraisers or any other real estate topic, be sure to call me.  I would love to discuss these matters with you!

Staging the Perfect Home

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If you are in the market to buy or sell a home, chances are you spend some time watching HGTV reruns of House Hunters.  Ever notice the look on prospective buyers’ faces as they walk through the really dumpy properties?  The fact is that so many people neglect to prepare their properties before showing it to potential buyers.  Overstuffed closets, stained carpets, dirty bathrooms, dull kitchens and family rooms with so much junk scattered all over the place that the buyers can barely see the space – all these things are a huge hindrance to selling successfully.

This week we just listed a home for one of our clients and the way they set up their space is perfect.  As you can see in the video, the homeowners have taken the time to arrange furniture in a way that highlights the home’s gorgeous features and open floor plan.  Plenty of tasteful accessories have been used to dot the space with color, interest and life.  There are even some touches of their personal life, though not overdone by any means. 

The key to preparing a show-ready home is to put yourself in the buyers’ eyes.  Going back to House Hunters episodes – how many times did buyers’ eyes light up when they walked into an open, well-lit home that was obviously cared for by its owners?  And if you pay attention, you’ll notice that more often than not, the homes that don’t seem to cared for by their owners are usually the ones that get passed up.

Tips on How to Make Sure Your Property Shows Well

MAKE SURE THE HOME IS CLEAN

Nothing turns off buyers more than a home that is dirty.  As they walk through the house they are imagining living there but dirty bathrooms, unclean windows, or unkempt rooms are unattractive.  Rather than risk buyers only remember that aspect of your home, make sure you clean the space, have carpets professionally steam cleaned, power wash windows, clear up driveways and make the home presentable.

REMOVE ALL CLUTTER

Clutter acts as an obstacle that does not allow buyers to see the actual features of your home.  If possible, box up things like extra shoes, overflowing closets, unkempt toys or messy areas in the home.  Keeping the space clear of clutter will not only make the space inviting, it will also allow the prospective owners to imagine their own things in the space.  A common turnoff that many sellers neglect to take care of before showing their home is a fridge filled with personal notes, pictures, schedules and other traces of the current family’s life. 

EMPHASIZE POSITIVE ASPECTS

If your home’s best feature is the great room, be sure to emphasize it by lighting it well and clearing all to and from areas for easy flow through access.  If the large backyard is a favorite selling feature, remove all leaves and landscaping clutter.  It is important not to ignore maintenance details such as mowing the lawn or tidying up the hedges.

DEMONSTRATE PRACTICAL USE OF SPACE

How you set up your home will have a major impact on how it is received.  By setting up the furniture and arranging other items in a way that highlights the desirable aspects of your home while working with the space encompassing the area, buyers will want to see more.

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Imagine your home is going to be photographed for a magazine.  What would you do to prepare before the photographer arrived?

FHA Expected to Charge Private Mortgage Insurance for the Life of the Loan

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The Federal Housing Administration, a division of the US Department of Housing and Urban Development, is soon to be implementing some major changes. At least that’s what this Wall Street Journal blog post says. The news is not good. At a time when many homeowners or hopeful homeowners need the government’s help in owning a home, the FHA seems to be turning its back on those that need it the most.

Until now, and at least through the next several months, FHA financing has helped countless borrowers with such features of the program as low down payment (just 3.5%), ability to use gift monies toward the purchase of a home and facilitating home ownership for people with less-than-perfect credit.

But now, if the proposed changes take place come next quarter then we will definitely see a huge shift in the housing market. Right now, as always has been the case with FHA loans, borrowers are charged a PMI premium through the first five years of the loan and until there is at least 22% equity in the property. The changes however will dictate that PMI be charged for the life of the loan.

How does this impact you as a homebuyer? As a seller?

Buyers’ Purchasing Power Will Take a Hit

The single biggest thing that will happen with this change is how much money each month will go toward additional costs of owning a home versus going toward the principal. That means that unlike now when a homeowner can expect to be paying off their home at a reasonable pace, particularly once PMI drops off, they will have to endure these costs till the home is paid off.

Refinances Will Be a Thing of the Past

With the cost of FHA financing going up in this significant manner, no homeowner will ever want to engage in a refinance, particularly if they only have one or two more years of PMI due on the property. That means continued high interest rates would be paid on existing mortgages with no hope to refinance without taking a serious hit. Of course, all this steers our economy in the wrong direction.

Sellers Can Expect Challenges in the Market

From a seller’s standpoint, the likelihood of a depressed market to ensue following this colossal change is high. The current number of borrowers that are using FHA products is high and with a huge decline in the number of FHA mortgagors there will be as many fewer buyers on the market.

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If you have any questions about this or would like to explore your options before this seemingly historic change is implemented, I invite you to come visit me or call. I’m happy to help!