April 11, 2016

The Main Reason To Use A Real Estate Professional When Selling Your House

Reason to use real estate agent when selling your home

Every homeowner hopes to accomplish five goals when selling their home:

  1. Sell it for the best price
  2. Sell it within a predetermined time
  3. Sell it with the least amount of hassles
  4. Close on the sale the same day they move into their new home

The fifth reason is the most obvious and the most important:

  1. They want to make sure it sells.

In order to dramatically increase the chances that the house sells, a homeowner should list with a real estate professional in their market. Why? Because agents have access to the vast majority of the available buyers!! According to the National Association of Realtors(NAR) recently released 2016 Home Buyer and Seller Generational Trends Report, 87% of all buyers purchased their home through a real estate agent or broker. And more that 8 out of 10 buyers in every age group used an agent (see chart below).

Percentage of Home Buyers

So…

If you want your home sold, the best way is to go where the buyers are. The NAR study revealed that the vast majority of purchasers will use an agent when they buy. Meet with a local real estate professional today if you want the best chance of selling.

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April 11, 2016

Yes, Homes Prices Are Rising …

Real Estate Properties in Charlotte

No, there isn’t a new housing bubble forming either.

We recently reported that home prices are continuing to rise across most of the nation. This has created concern in some pundits that a housing bubble, like we saw ten years ago, is forming again. We want to explain why these concerns are unfounded. The current increase in home values can be easily explained by the theory of supply and demand. Right now, the number of families looking to purchase a home is greater than the supply of homes on the market. Here is a chart that explains how the months’ supply of housing inventory impacts home values:

The Impact of Monthly Housing Inventory

According to the latest Existing Home Sales Report from the National Association of Realtors, there is currently a four-month supply of inventory. That puts us in the blue section of the above graphic. Home prices should be appreciating.

THE DIFFERENCE IN 2006…

A decade ago, the demand for housing was artificially boosted by lending standards that were far too lenient. Today, the strength of the demand for housing is legitimate, as lending standards are nowhere near what they were a decade ago. For proof of this, let’s look at a graph of the Mortgage Bankers’ Association’s Mortgage Credit Availability Index:

Historic Data for the Mortgage Credit

The higher the number, the easier it was to get a mortgage. We can see that from June 2005 to June 2007, mortgage standards were much more lenient than they have been over the last nine years.

BOTTOM LINE

Today’s price increases, unlike those a decade ago, are the result of qualified buyer demand exceeding the current inventory of homes available for sale. Once the supply increases, prices will level out.

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Housing Market to Spring Forward This Year

housing market

Just like our clocks this weekend in the majority of the country, the housing market will soon “spring forward!” Similar to tension in a spring, the lack of inventory available for sale in the market right now is what is holding back the market. Many potential sellers believe that waiting until Spring is in their best interest, and traditionally they would have been right. Buyer demand has seasonality to it, which usually falls off in the winter months, especially in areas of the country impacted by arctic temperatures and conditions.

THAT HASN’T HAPPENED THIS YEAR.

Demand for housing has remained strong as mortgage rates have remained near historic lows. The National Association of REALTORS (NAR) recently reported that the top 10 dates sellers listed their homes in 2015 all fell in April, May or June. Those who act quickly and list now could benefit greatly from additional exposure to buyers prior to a flood of more competition coming to market in the next few months.

BOTTOM LINE

If you are planning on selling your home in 2016, meet with a local real estate professional to evaluate the opportunities in your market.

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Tax Season: What to Expect When Selling Your Home

TAX SEASON, WHAT TO EXPECT WHEN SELLING YOUR HOME

Tax season is upon us and if you have a pending or recent home sale, you’ll surely want to know: what income taxes will you have to pay on the sale?

The amount of taxes you’ll be responsible for depends on the length of time you’ve spent in the home. If your family resided in the home for two of the last five years, single homeowners can earn $250,000 tax-free! For couples filing jointly, that number grows to $500,000. If your home sale exceeds your allotment, you’ll have to pay capital gains taxes.

For homes owned less than a year, the regular tax rate applies.

Want to calculate your gain? Time suggests the following:

“First subtract selling expenses, such as agent commissions and other closing costs, from the sale price. Then you need to calculate your “basis.” This is what you paid for your home, plus some of the closing expenses from the purchase, such as title insurance and recording fees (but not loan points or lender fees), and the costs of any permanent improvements, like a swimming pool or new addition. See IRS Publication 523 for complete details.”

Exceptions to the two-year rule do exist, however. For those disabled, relocating for work more than 50 miles away, or for those needing to seek medical treatment for themselves or a relative, taxes on the profit can be pro-rated. It’s tricky territory though, so always be sure to consult a tax advisor.

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February 15, 2016

Homeowner’s Net Worth is 45x Greater Than a Renter’s

Homeowner's Net Worth is 45x Greater Than a Renter's

Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.

The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:

Net Worth STM, Increasing Gap in Family Wealth

Put Your Housing Cost to Work For You

Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.

The latest National Housing Pulse Survey from NAR reveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:

“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”


Bottom Line

If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, let’s schedule an appointment to guide you through the process.

To see more articles that may help explain the home buying process, check out

Real Estate with Nancy Braun

Lovely, Brick Waterfront Home for Sale!

102 Wyndham Cove 64, Brick Waterfront Home for Sale

 

Beautiful waterfront gem on Moss Lake! Miraculous open floor plan feat. wood & travertine tile floors. Fabulous features includ. upgrades such as stainless steel, granite, crown molding, Jacuzzi tub, maple stained kitchen cabinets, chandelier, built in book shelves. Screened rear porch w/speakers and pier w/the luxury of docking your boat/watching the sunset. The lake offers beautiful views, water sports, fishing&boating. Located on a private cove, country escape w/in 20 min to downtown Shelby!

Price: $399,000
Bedrooms: 4
Bathrooms: 3 Full | 2 Half

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January 30, 2016

Quick HVAC Maintenance Tips And Tricks for Winter

Your HVAC system works overtime during the winter, so it’s important to take preventative maintenance measures to keep it running smoothly. Here are some tips to help you prevent outages and keep your HVAC system in top shape for the season:

How to Maintain Your HVAC

Avoid wasting money on various HVAC repairs and take these preventative steps to keep your system in order:

Check vents and ducts for any debris or dust that may prevent hot air from moving into your rooms.

Have a heating professional perform routine maintenance on a schedule.

See how your thermostat is performing and increase efficiency by turning it down to 55 degrees at night.

Inspect air filters to ensure they aren’t clogged and interfering with regular airflow.

Potential Issues to Look For

Keep an eye out for potential issues when inspecting your HVAC system:

Unexpectedly high energy bills. If you’re spending a lot of money on heating bills despite regular maintenance, you may need to address air leaks within your home.

Unusually dirty or dusty air filters. If your air filters are getting dirty after only one month of use, look for holes in vents and the ducts, as well as any external issues that may be affecting the system.

Low levels of airflow from your ducts and vents. If you’re seeing low airflow after cleaning your ducts and vents, you may have a bigger problem on your hands. Check for holes and breaks.

A particularly cold room in your well heated home. With the heat on, every room in your house should be warm. If one room is cold, there may be leaks or holes in your insulation.

Dented or collapsed ducts. These can cause many of the problems mentioned above. Make sure you fix them immediately to avoid more issues.

Benefits of HVAC Maintenance

When you invest in maintenance, you reap many financial and other long-term benefits, including:

Ensuring a safe and comfortable home

Keeping your warranty intact

Reducing your energy bills in the winter

Conclusion

Don’t delay regular maintenance on your HVAC system. If you don’t perform maintenance in the fall, it’s imperative that you do it before the next big winter storm. Do it yourself or hire a heating technician to do it for you. Just make sure that it’s done regularly and effectively to ensure that you and your family will remain safe and warm through the winter.

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January 29, 2016

Renting Vs. Flipping : What Is The Smart Investment Choice?

flipping house or renting

 

Every home purchase is an investment. This holds true if you plan to live on the property or find a way to create a revenue stream from it. With the real estate market making a comeback, investors are stepping back in to find ways to put their money to work through acquiring property. The two options are renting it out or flipping it. Both have advantages and drawbacks. Which is the smart choice for you? Here are a few important considerations.

The Flipping Discount

Most properties that are targeted for flipping are offered at a discounted price because they’re considered distressed properties. On paper, that looks like a good deal. Then the home inspection report comes in and you discover you’ve got a lot of work to do to get it back on the market. The realty TV flippers make it look easy. Depending on the circumstances, it could be an easy process if you understand what you’re getting into. With the right contractor and a good location, flipping a property could be end up putting a decent size profit into your bank account.

Renting for Equity

Buying a property to rent might not mean you’ll score a discount deal as with a distressed property. However, the monthly rental fees you charge should cover your mortgage payments on the property. As that mortgage is paid off, you’ll be gaining equity in the property. When a sizeable amount of that loan is reduced and market forces prevail, the property can be sold for a nice profit.

Landlord vs. Construction

If you want to make a career out of flipping properties, you should be constantly be on the hunt. This means looking for new homes, setting up cash deals and keeping the construction crews working. Once a property is secured, there’s a lot of waiting and spending. You have to be comfortable with your money being tied up in the project while waiting for the sale.

With a rental property, you’ll be entering into a longtime relationship with your tenants as their landlord. There are property management companies who can handle many of the landlord responsibilities, but they will charge fees, which could cut into your profitability. Think about what it takes to keep your own household up and running. Now multiply that by one or two other properties. That is what’s in store for you.

The Revenue Stream

A rental property can provide a steady revenue stream. Suppose your mortgage is $1,500 per month and you can rent the property for $2,000. That will put an extra $500 in your pocket — a decent but slow revenue stream.

With the right flip, you could have several thousand dollars coming your way above what you invested in the property. The question becomes this: Do you want a steady stream or the big bonus? Of course, in either scenario, there are no guarantees. Both the rental property and the renovated house could sit empty for quite some time, which means you’ll be picking up the expenses. Are you prepared for that kind of financial burden?

In either scenario, you’ll have to take a proactive role with your investment. Clearly, there are other potential investments such as oil and gas production that let you be a passive investor. You put money in and wait for the returns, but you won’t be working on an oil rig. No matter which investment path you pursue, make sure you consider all of your options.

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