The Advantages of Owning vs. Renting

If you’re currently renting your home and have always dreamed of buying, this might be the right time for you to make the choice to swap over to home ownership. Many people are worried about this step in life. They fear they are not ready yet, that they won’t get approved or that they won’t be able to afford buying a home. However, in many cases, buying your home can be more affordable than renting. Let’s take a look at some of the other advantages.

Here are some of the advantages of owning vs. renting your home:

  • Your monthly mortgage might be less than the rent you are already paying so buying could save you money and you’re building equity at the same time.
  • You have control of the creativity and flow of your home more when you own than most renters. You can redecorate, renovate and otherwise personalize your home. You usually cannot do this when you rent.
  • There are also tax deductions that come with owning your own home. You can deduct your mortgage interest as well as your property taxes and these are not benefits you get as a renter. There are also tax breaks on the sale of your home.
  • Your housing payments are also stable when you own vs. renting, where rent can go up. If you choose a fixed-rate mortgage, your principal and interest payments will be the same for the duration of the loan.
  • Your home is an investment. You will own it and whether you decide to live in it forever, resell it or rent it out, you are investing into something that you will own. This gives you more leverage with whatever you do decide to do with it in the future. You don’t have this power when you rent.

Of course there are also disadvantages to buying. You will be responsible for all of your maintenance fees, you could lose value in the home over time, you have to pay property taxes which could be very high depending on where you live, and it requires a cash investment.

Now that you know the advantages of owning vs. renting your home, you can make this decision for yourself. Only you can truly know if this is the right decision for you at this point in your life but there are people who can help you with the process. A credit counselor and your real estate agent or broker can help you determine if home ownership vs. renting is right for you.

House Flipping: Is It for You?

Maybe you’ve heard of house flipping or seen it on TV. It’s really grown as a method of making money and there are even reality TV shows about it. So how do you know if house flipping is for you? Really, no one else can make that decision except for you. You’re the only person who knows if you can afford it, if you can risk it, and if you will enjoy it.

Here are some situations where house flipping may not be right for you:

  • You don’t have the money – It takes money to invest in real estate and if you can’t afford it, you don’t want to risk it right now. Flipping houses can pay off big but you might also lose in some of your investments and if you don’t have the money to take the risk, you shouldn’t do it.
  • You don’t have the time – Flipping houses is going to take time. To really do this successfully, you’re going to need to invest time. You need to research houses, watch the market for quick sales and auctions and good deals, invest time in doing appraisals and also in putting time and money into fixing up the home. Then, you’re also going to need to invest time in reselling it. So if you don’t have the time, this is not for you.
  • You don’t have the knowledge – If you don’t know anything about real estate, the value of properties and the current market, this might not be right for you. If you don’t have the industry knowledge, you’re not going to know how to find good deals and make profits.

Here are some things that may make house flipping good for you:

  • Have a support network – If you have a good network of friends, family members and associates that can help you, this puts you in a good position for doing something like house flipping.
  • Have a feel for DIY and handyman stuff – If you enjoy DIY and other handyman work, you might enjoy house flipping because you can do a lot of this work hands-on for yourself. If you’re interested in it and passionate about it, then this could be a great choice for you.
  • Experience in real estate – If you already have experience in real estate, you’re going to have the upper hand in the world of house flipping.

With these ideas in mind, you can decide if house flipping is the right choice for you. If you have the money to invest and the time and you enjoy it, this can be a great part-time job or even a full time career for you.

How to Deal with Buyer’s Remorse in Real Estate

How to Deal with Buyer’s Remorse in Real Estate


Buyer’s remorse is not uncommon at all. Buying a house is a major decision and every person who has the mindset of an adult is going to question major decisions they make. They have fears concerning their finances and future, and that’s actually healthy. It prevents them from making decisions on the fly and considering all of the angles rather than making decisions based on things that aren’t really important. As a realtor, it’s your job to let them know how common this is and walk them through a few steps that will help them make the right decision in the end.


Explain Commonalities


Sometimes people need to know they aren’t alone. You can explain to the buyer that many people experience this same feeling. You might even relate this situation to a decision about getting married, though you might want to avoid this route if they are recently divorced. Explain that any life decision this big is bound to cause a bit of anxiety. That doesn’t mean that they are making a bad decision.


Go Back in Time


Talk about why they chose this house to begin with. Point out that those things still exist. If there are elements about the house that they don’t like, address how those might be dealt with. For example, if they don’t like the fact that there are stairs in a house, you can discuss how this is a commitment and a great buy, but that in the future, when the kids are grown and moved out, they might actually make a profit off the house when they sell it and buy something smaller with only one floor. Just be sure to return the focus to the things that they loved about the house and which caused them to claim it as their own.


Discuss Options


The buyer might still have the option of backing out. Talk with them about what might happen if they do back out and what they would look for in the next house. If possible, reveal some of the ways they might incorporate those elements into the house they are set to buy right now.


Sometimes it helps to write things out, so you might sit down with the client and list the pros and cons as they see it. Make a special note in any areas where the cons are going to be the same in any house they choose. Encourage them to take the list home and consider it before making any kind of decision to back out of their existing real estate transaction. Sometimes they just need a bit of time to calm themselves down and see all the potential that their new house has.


What Does the Chinese Market Mean to US Real Estate?

What Does the Chinese Market Mean to US Real Estate?

The global market has huge reach. A piece of political turmoil in one country, especially when it includes finance or banking, can have a ripple effect that spans the globe – shaking confidence, making people nervous about investments, altering interest rates, and more.

More recently, the world has had its eye on the Chinese stock market based in Shanghai. As the turbulent Chinese market changes and leaves investors feeling less secure about local real estate, Chinese investors are looking to the United States instead. In terms of real estate, a slump in the Chinese market means a boom in US real estate sales.

Go figure.

According to CNBC, “Chinese buyers have poured $28.6 billion into US real estate in the past year…” This is a huge number, and forecasters expect to see further increase. While California has always been a favorite for foreign investors, Florida and Texas are also favored because of educational and work opportunities.

Why real estate? The Chinese yuan and the US dollar have a very close relationship, so turmoil doesn’t necessarily mean a huge change in exchange rates, though some devaluation has been seen very recently. Real estate is considered a safe asset to have as part of an investment portfolio. The risk is considered low to moderate and the returns are generally pretty high, especially in the past several weeks.

The surge in Chinese purchases in the US started before August’s major stock exchange crash, but the impact of the crash has had a significant impact. According to Inman, “The Chinese stock market has lost 30 percent of its value and continues to see major swings,” and “More than half of Chinese citizens are considering buying foreign real estate.”

There are some analysts who wonder if the stock market crash will scare investors away from all avenues of investment, startling them into saving instead of making purchases anywhere – in China or overseas. Most seem to think that investors will continue spending in other countries, particularly in the West.

What does it mean right now? As a real estate agent, it means you need to embrace the opportunity to work with new clients. Focus on today and on your ability to appeal to a new, growing audience. We’ll keep an eye on the stock market and continue to be aware of day-to-day changes and their impacts on the global economy.

How to Entice Buyers to Look at a Vacant Home

How to Entice Buyers to Look at a Vacant Home

You had to move to your new home before your old one sold. No matter what the circumstances that forced your early move, the truth is that you now have a unique selling situation. You have a vacant home to show and sell. While that may seem like an ideal situation, it does present a number of challenges.

An Empty Home is a Boring Home

One of the first problems you’ll encounter is that the home is completely empty. Believe it or not, this actually makes it more difficult for a buyer to visualize himself living in the home. There is no frame of reference for how the rooms might look with furniture or décor. The upside is that this can be remedied in a few different ways.

The first is virtual staging, where an artist uses technology to add furniture and décor to the images of the home that will appear online. The images can be used as a supplement to the home showing. More ideal would be to rent furniture or buy someone on consignment to leave behind. The home will look a little more lived in, without the clutter of an actual family running in and out.

Regular Home Maintenance

A vacant home is an unmaintained home. Make sure you have someone doing outside yardwork on a routine basis to keep the outside looking well maintained and cared for. Depending on how long you’re out of the house, and how far away you are, you may want to hire a cleaning service to make sure the inside isn’t too dusty, that the windows are washed, and that there are no odors in the home.

Utilities Need to Be On

You need to make sure that there are utilities on within the home. While you may fear the cost, you’ll be spending significantly less than if someone was living in the house. Your real estate agent needs to be able to turn on lights, adjust the heat or air conditioning, show that the gas range works (if applicable) and show that the plumbing systems work. If the home sells, an inspector will need to be able to do the same. No one will want to tour a home they can’t see, or that feels awful compared to the outside temperature.

Don’t panic if you need to leave your home before it has sold. Your real estate agent is here to help and will guide you through the process, ensuring everything runs smoothly in your absence.

How Much is Too Much When Determining Your Maximum Buying Price?

How Much is Too Much When Determining Your Maximum Buying Price?

A lot of thought and planning goes into determining the price range a person should look in when buying a home. A lot of people set a range with a minimum and maximum – the minimum being a base for expectations and the maximum capping him financially. Even still, having a maximum buying price does not mean you have to push it to the limit.

Assessing Your Income

The general rule of thumb is to follow the industry-wide standard for payment-to-income ratio. The amount you spend on your home each month is the total sum of the actual mortgage payment, property taxes, homeowners insurance, and any other applicable fees like mortgage insurance or homeowner’s association fees. That total should not equal more than 25 – 33% of your total household income.

Your income isn’t the only thing you need to take into consideration, too. You need to seriously assess your outstanding debts as well. Outstanding debt will make it more difficult for you to qualify for a mortgage, and that’s even more reason to lean more towards the 25% (or less) than the 33%. You’ll want to make sure you have enough money for your housing and your debts, no matter what emergency situations may arise. A good mortgage lender will apply a debt-to-income ratio and will not allow you to have a housing payment that is higher than your debt obligations.

Assessing Stability

The highest possible limit for a mortgage represents what you can afford in the best of times. Life isn’t perfect, though, and surprises do come along. Think about whether or not you’d be able to make your mortgage payments if you were in an accident or if you lost your job. What if your mortgage and bills had to be paid on one income instead of two (if you’re married and sharing debts with a spouse)?

Use a Mortgage Calculator

There are dozens of great mortgage calculators online. Take advantage of one – or even more than one – to assess your financial situation. Use this information before, during, and after the loan approval process.

At the end of the day, everyone wants to see you in the nicest home you can afford – realistically afford, that is. Take your time, have a real conversation with your real estate agent about your wants and needs, and remain realistic about your ability to pay for your dream home.

That’s Not Fair! How to Determine a Realistic Asking Price for Your Home

That’s Not Fair! How to Determine a Realistic Asking Price for Your Home

Determining the asking price for a home has to be one of the most difficult parts of the selling process. You’ve spent weeks, maybe months, preparing your home for sale – making repairs and upgrades – and you want to get the best price possible. The asking price of any home is influenced by a number of factors, though, and many are completely out of your control.

Do Your Homework

There are a lot of websites you can use to estimate what your home’s sale price may be. Zestimate (from Zillow) and dozens of others will assess the neighborhood, age of the home, size, and other factors to give you a figure to start with. A lot of these tools won’t take upgrades you have made to the home into account, so you may need to make some adjustments.

Make Necessary Adjustments

Don’t get your hopes up if you think the price you’ve come up with is really good compared to the homes that have sold recently in your area. You really want to be within 10% of the most recent sales nearby to be considered in the correct ballpark; and that’s still not necessarily going to be the best price for your home.

A few things you’re going to need to consider include supply and demand, or how many homes are available for sale in your area. The more there is to see, the more competitive your price will need to be. If interest rates are trending high, you may find a smaller pool of potential buyers, so you’ll need to appeal to them. The season even makes a difference. People love to move in the spring, so you may get a higher asking price; but in the winter? Forget it. You’ll either find a buyer who is desperate or wait until spring rolls around again unless you adjust your price.

Talk to Your Real Estate Agent

One of your agent’s primary jobs is to help you set a realistic price point for your home. The financial market, the housing market, and the mindset of the buyer are all things that need to be taken into consideration. Your real estate agent will do her best to help you to set a fair asking price that will move you quickly towards a final sale.

Mortgage Rates Expected to Rise Slightly Going Into 2015

Mortgage rates expected to rise slightly going into 2015

While mortgage rates will reflect an individual’s credit history, income and current debt/income ratios, Freddie Mac predicts average mortgage rates will go from 4.3% to 5.0%. This is widely thought to be the result of an improving U.S. economy. Competition for borrowers and declining credit score requirements may continue to keep mortgage rates low for certain individuals with good credit but overall rates are expected to increase slightly in 2015.

Freddie Mac is a government mortgage brokerage. For many years the company has been taking weekly surveys related to home loans and refinance packages being offered around the United States. As of November 26, 2014 the average interest rate was 3.97%. The survey is based on 30 year fixed-rate mortgages. The same loan would have been at 4.71% at the same time in 2010.

What you can do to keep your mortgage rates low

While rates may go up and down there are a few things you can do to keep your rates as low as possible. Rates may vary based on location, the home you are purchasing and your credit history. Before buying or refinancing there are a few things you do to insure you get the lowest possible rate.

1. Understand the total cost of the loan including any fees or ‘points’.
2. Make sure you don’t have any errors on your credit report. These can usually be disputed easily online.
3. Keep your debt to income low. If you have some debt you can pay off then do so.
4. Remember that a few percentage points can make a big difference. It’s worth shopping around.