How Occupations Shape Homeownership Rates

How Occupations Shape Homeownership Rates

House Hacking Shifts to Long-Term Affordability

House Hacking Shifts to Long-Term Affordability

Boost Your Credit Score: Tips for 2025 Loans

Boost Your Credit Score: Tips for 2025 Loans

Buyers Among Those Anxiously Awaiting Rate Cuts

Buyers Among Those Anxiously Awaiting Rate Cuts

Better, Not Bigger, Homes Among 2024 Design Trends

Better, Not Bigger, Homes Among 2024 Design Trends: NAHB: Buyers say they want smaller homes now and are looking for homes around 2,070 sq. ft., compared to 2,260 sq. ft. 20 years ago.

Is an Assumable Mortgage Right for You?

Is an Assumable Mortgage Right for You?

Fed Meeting Could Open Door to March Rate Cuts

Fed Meeting Could Open Door to March Rate Cuts

Important Terms to Understand Homebuying

Important Terms to Understand Homebuying

Homebuyers Should Understand Private Mortgage Insurance

Homebuyers Should Understand Private Mortgage Insurance

Fannie Mae Sees Positive Home Price Growth Through 2025

Fannie Mae Sees Positive Home Price Growth Through 2025

‘Buy Now, Refinance Later’ Mortgage Deals Luring New Homebuyers

‘Buy Now, Refinance Later’ Mortgage Deals Luring New Homebuyers

RE Investing: Retirement Life Raft or Sinking Ship?

RE Investing: Retirement Life Raft or Sinking Ship?

Mortgage Buydowns: How Do They Work?

Mortgage Buydowns: How Do They Work?

First-Timers’ Need 13% More Income this Year

First-Timers’ Need 13% More Income this Year: Nationally it’s 13%, but in Fort Lauderdale it’s 28% – the highest in the U.S. In Miami, a first-time buyer needs to earn 25% more than they did a year ago.

Simple Trick Saves Buyers Thousands of Dollars

Simple Trick Saves Buyers Thousands of Dollars

Accept It: Higher Mortgage Rates Here to Stay

Accept It: Higher Mortgage Rates Here to Stay

How Does First-Time Homebuyer Assistance Work?

How Does First-Time Homebuyer Assistance Work?

Making an Offer: 5 Mistakes to Avoid

DAILY REAL ESTATE NEWS | WEDNESDAY, MAY 10, 2017

In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.

Delaying

“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.

Making an offer for their preapproved amount

Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.

“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”

Submitting a lowball offer

Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn't backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.

Waiving inspection contingencies

“I don't care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.

Not presenting yourself well enough

In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.

“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.

Source: “In It to Win It: Land Your Dream Home By Avoiding These 7 Mistakes on Your Offer,” realtor.com® (May 10, 2017)

If Buyers Want to Save Money: Tell Them to Shop

DAILY REAL ESTATE NEWS | FRIDAY, APRIL 28, 2017

Home buyers who don’t gather more than one quote when shopping for a mortgage may be losing out on some savings to their monthly payments.

Read more: Consumers Turn to Non-Banks for Mortgages

Lenders can offer a wide dispersion of rates, up to 50 basis points or 0.5 percent, after controlling for factors like the borrower’s down payment and credit score. That could be the difference between a 3.5 percent versus a 4 percent mortgage rate, according to a recent study by two economists at the Consumer Financial Protection Bureau, who culled mortgage data from 2014.

The authors offer up a scenario of what would happen if consumers had done an additional search for rate offers. Just one extra search could potentially reduce a borrower’s monthly payment by $8.63, on average. Adding five more searches could help them reduce their payments by $17.03 per month (that’s about $204 over just one year in savings). That said, the borrower’s initial offer may end up being the strongest in some cases, despite additional searches, the authors also note.

But in general, the researchers say that borrowers’ shopping around forces lenders to compete and likely will reduce the costs the borrower will end up paying.

“Tell your clients, especially first-time buyers, to shop more,” notes the National Association of REALTORS® Economists’ Outlook blog, interpreting the study’s results. “It may save them money. They should use websites that quote multiple lenders and get multiple offers on their own from large retail lenders, smaller banks or credit unions, and mortgage banks. But always consider the total cost, which includes the lenders’ fees and other services.”

Source: “Sometimes, Shopping Will Save Your Clients Money!” National Association of REALTORS® Economists’ Outlook blog (April 25, 2017)

When does an investment become a second home?

 

Feb. 20, 2017 – Question: My primary residence is in Florida. I have owned and rented a condo in Hawaii since 2004. If I stopped renting the condo and lived in it for half the year, would my condo be considered a second home? Would there be tax consequences? – Name not provided

Answer: If you lived in the condo half the year and no longer rented it, it would be a second home. You could deduct any mortgage interest and real estate taxes paid on the condo as part of your itemized deductions. You should maintain the depreciation schedule for your records because when you sell the property, depreciation factors can reduce your cost basis.

When you sell a rental property at a loss, you can deduct the loss. When you sell a second home, the loss is considered personal and is not deductible. In both cases, a gain on the sale would be taxable. – Paula Taylor

© 2017 The Orlando Sentinel (Orlando, Fla.); Paula Taylor, CFP, contributes to the Orlando Sentinel's Ask an Expert series. Distributed by Tribune Content Agency, LLC.