Posted by ashgarner under Uncategorized
Posted by ashgarner under Uncategorized
You can too!
If you have read articles written by me in the past you know I am a vocal advocate for owning a home versus renting. Yes, it is true I am a real estate broker and I make my living by selling homes and by selling people homes however my support for homeownership is not for selfish reasons. On average, home owners have a median net worth of nearly $200,000, while renters have only $4,000 in net worth (according to Lawrence Yun the chief economist of the National Association of Realtors). The problem now is that the number of households that rent is growing, up 6 million homes from 10 years ago. You could then make the argument that the net worth of the population of people that are of normal home ownership age is dwindling because of this statistic. There are many reasons a person would want to rent instead of own – some of these reasons are very good reason that make renting the best course. Some of these reasons include a job or profession that requires frequent moves, desire not to have any repair or maintenance responsibilities, etc. (not a very long list). The other reasons people typically chose to rent are the ones that we need to address. These include a general lack of understanding of the process involved in buying a home, fear that your credit score is too low, fear that you don’t have enough for a down payment, fear that you can’t afford to own a home, fear that the economy is so bad you will lose money on the home, etc. Let’s talk about why these perceived obstacles will rarely keep you from owning a home. Fear is a common theme and like most fears the more you know the less fear you have, in other words fear of the unknown is the real fear. Educate yourself and you will be less afraid. Then you too can own a home!
Don’t Know How?
Guess what, very few people understand the process involved in buying or selling a home. Even the ones that think they know quickly realize that there is much more to it than sticking a sign in the yard or writing someone a check. The good news for everyone is there are people like me who have dedicated their life’s work to understanding all they can about real estate. In other words, you don’t need to know it all because you can hire an expert to do it for you. All day everyday my team and I (and many other REALTORS) work to make home ownership a reality for our clients. All you have to do is make a phone call. We will walk you through the rest. Obstacle #1 – Eliminated
The median credit score in the US is 723 for FICO (median means half of the scores are higher than 723 and half are lower than 723). The average appears to be somewhere in the high 600’s to low 700’s depending on state. 18 to 24 year olds have lower credit scores and 55+ year olds have the highest. This is the important part, lenders will loan you money to buy a house with a credit score as low as 620! Most people, even the ones with credit problems have at least a 620 score or higher. Now you know! Plus there are ways to improve your credit score faster than you think, but you need to know the rules. If you are interested in repairing your credit you should talk to a mortgage lender or banker and ask them to tell you how. Not as hard as you think. Obstacle #2 – Eliminated.
Many people think 20% of the purchase price is the required down payment to own a home. This is certainly an option but is definitely NOT the only option. In fact it is still possible (and happens every day) to buy a home with NO MONEY DOWN. These are legitimate loans and not the sub-prime mortgages that helped cause the crash several years ago. The mortgage business is one that has so many moving parts and so many available products (loans) that it is mandatory you contact a reputable bank and/or mortgage broker to help you. If you don’t know one you can ask someone like me for a recommedation. This is something you need to do early on in the process of buying a home. Obstacle #3 – Eliminated
Can’t Afford to Own a Home
If you can afford to pay your rent you can afford to own a home! In fact in today’s economy with more people renting homes landlords are able to charge higher rents. Because the mortgage interest rates are so low right now the payment on your mortgage will also be relatively low. Then you add to your mortgage payment the taxes and insurance and that total is your cost of owning a home. There are many, many opportunities to buy homes (even brand new homes) and own cheaper that you can rent. Believe it because it is true! Obstacle #4 Eliminated
The moral of this story is that real estate owned (with the intent of a long term investment – not flipping it next month) is the best way to grow your net worth. Almost everyone can qualify for a mortgage to own a home. You don’t need to know how; you just need to know someone who does. Talk to a trusted professional and start down the road to home ownership…part of the American Dream
Posted by ashgarner under Uncategorized
Why do you own your home? Why do you want to buy a home? According to Fannie Mae the top five reasons people buy a home or aspire to buy a home are: To have a better place to raise their children; A place where their family can feel safe; To have more space; Freedom to renovate to their own taste; Owning is a better investment. Does this hold true for you? How about for a friend or family member you are close to? I know that all 5 reasons were a factor in my personal decision to own a home rather than rent. While I do think that sometimes for some people it is better to rent than own (or possibly it is the only option), the vast majority of the time there is no question it is better to own than rent.
The reasons we buy a home are so important that the recovery of our real estate market is already under way and is strengthening all the while. People have to live somewhere and at least in the United States, people want to own where they live. It has a lot to do with freedom. We are a free nation with citizens who strive for financial freedom, enjoy their religious freedom, freedom to say what we want, etc. Something about owning your home gives you freedom. Every day I work with people who are buying a home and they all have their own unique set of circumstances. Some are newly married and are ready to start their life together. Some need more space. Some have the means to buy a home in a special location to enjoy the beauty of the oceans or mountains. Either way the drive to own is strong. Let’s face it, we have been through tough economic times in the past several years. Many of us have been caught in the midst of short sales, foreclosures and even bankruptcies. The first question I’m asked by someone who has been through a tough time is “how long do I have to wait before I can buy another house?”
In 1931 the phrase “The American Dream” was defined by James Truslow Adams, historian and author, in his book Epic of America- “…life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement”. Home ownership is a very strong part of the American Dream. We have all read books, seen movies and heard stories about immigrants who have come to America in pursuit of a better life in a society that allowed them to better themselves based on their own ability and achievement. Most of these people were coming to America from a society that was without opportunity because the class structure did not allow for significant achievement…you pretty much stayed in the class in which you were born. In America that is not the case, every day we have the freedom to make better choices, work smarter, work harder, take risks, etc. all in pursuit getting to a better place than we came from. Owning a home is one of the best ways to better yourself as judged in financial AND non- financial terms. For example, according to the Federal Reserve (2012), on average, Homeowners have a total net worth over thirty times greater than those who rent their home. For most of us the equity in our home is the biggest asset on our balance sheet. Some of the non-financial ways we are better off owning a home versus renting include having more room for our growing family by way of buying a bigger house or adding on to our current house… if you rent, your landlord is not likely to allow you to knock down walls and add on to your apartment. Another way we are better is by having the ability to choose where we want to live. Location is the single most important variable that affects the value of real estate, there is good reason for this…if the location is unsafe, polluted, noisy, high-traffic, prone to flooding, etc then it less valuable than a location which is safe, quiet, convenient, dry, etc.
Achieving the American Dream is a noble pursuit. I would argue that owning your own home is one of the very best ways to live that Dream. It isn’t the only way but it is so important psychologically and financially that it helped make the USA the wonderfully free and prosperous nation it is and will be.
Why do you own your home? Why do you want to buy a home? Go out and achieve the American Dream!
Posted by ashgarner under Uncategorized
The real estate market is a place where most people will make their largest investment ever. It is a place where fortunes can be, and often are, made. It is not a place, however, for you to “wing it”.
While the myriad TV shows about real estate make the process look so simple – it’s not really that simple… they make it seem like all you need to do is slap a for sale by owner sign in the yard, have one open house with fresh flowers and fresh baked cookies and bam! SOLD! in one day. Well I can tell you that in New Hanover County, North Carolina it takes an average of 121 days to sell a home. An average means that some houses take much longer to sell and some much less than 121 days to sell.
You need a professional, full time, well educated, ethical and trustworthy REALTOR to represent you whether buying or selling real estate.
1 – Paperwork
Currently in North Carolina there are over 24 pages of contracts involved with buying or selling most homes. The state law requires much of this paperwork regardless or whether or not you hire a REALTOR. REALTORS are trained and educated on the contracts, which are constantly changing, so they can advise you during the process. They can also refer you to a real estate attorney to represent you on all legal matters involved in the process.
2 – Process
There are about 180 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. (Based on a report prepared by the Orlando Regional REALTORS Association). So this means that if you choose to go it on your own, you are going to have to do all 180 things yourself… or they don’t get done… which probably means your transaction doesn’t end in a successful purchase/sale.
3 – Negotiation
While there will always be that one guy (or gal) who thinks he (she) is the all-time greatest negotiator, the vast majority of folks do not like confrontational interactions. A negotiation for the purchase/sale of an asset as large as a piece of real estate can be a very confrontational interaction. The role of the REALTOR is to act as a buffer between the two parties who are in the midst of a very emotional and high-level financial transaction, both wanting to get the best they can get often at the detriment of the other party. A real estate professional is experienced in all aspects of the negotiation and is bound legally to do only what is in the best interest of his/her client.
4 – Values
Perhaps the single most important aspect of the transaction is the value of the piece of property.
If you are a seller you want to know how much you can expect to get for the sales price and how much of that you will walk away with in your pocket. You want to advertise the property for sale at the right price so you sell for as much as possible but you don’t want to price it so high that no buyers make you an offer (and YES if you price it too high MOST buyers will not want to offend you by making a low offer…thus you don’t get any offers).
If you are the buyer, you want to know how much to offer. Now multiple offer situations are happening more frequently and if a buyer offers too low, they can either be rejected completely by the seller or they can cause the negotiation to take too long thus allowing time for a competing bid to come in… allowing the seller to be in the driver’s seat.
5 – Teacher
Any good professional, whether a real estate professional, doctor, lawyer, CPA, etc., will have the heart of a teacher. Real estate brokerage is a service business. The professional REALTOR is there to educate you about the conditions impacting today’s real estate market. It is as easy as picking up the newspaper or searching the Internet for real estate news to see conflicting headline after conflicting headline. “Prices are up 20%”, “Among worst markets in nation”, “Best year since the crash”…well which is it? All real estate is local and your real estate professional will know the local market conditions and will lead you through the process, like any good teacher would, making sure you understand all that is going on around you.
A real estate professional is a crucial member of your team when buying or selling real estate. You could be buying your first home or your tenth home, an investment property or a vacation home, commercial or residential…whichever it is you are best served in the care of a full time, well educated, ethical, trustworthy real estate professional.
Posted by ashgarner under Uncategorized
1. How long does it take to buy a home?
If you are getting a mortgage to buy a home then you can expect it to take 30-45 days one you have executed a contract on the home you will be buying. The loan process is the part that takes the most time so it is very important to have a credible/ reliable lender linked up before you identify the home.
2. What steps are involved in buying a home?
Pre-Approval- Identify and meet with a lender. Make an application for a loan- at this point the lender will run your credit, analyze your income and expenses and tell you how much you can borrow and what your monthly payments will likely be. This will help you determine what price house you can/ want to buy.
Find a home- Contact a professional Real Estate Broker who will help you find a house and help you understand the process of buying a home.
Make an offer- When you identify the home you want to buy your broker will prepare an Offer to Purchase and Contract and will present your offer to the seller. The seller may accept or reject your offer or make a counteroffer, which would begin the negotiation process. Once an agreement is reached between the buyer and seller and is signed off on by all parties you will be “under contract.”
Prepare for closing- This is the part of the process when your broker will lead you through your inspections, appraisal and due diligence. Once all items are satisfied and completed the lender will be ready to fund the money and the sale will close.
3. What is an appraisal?
An appraisal is done by a licensed professional to determine the market value of a piece of real estate at a given time. Appraisers will inspect the real estate and locate similar comparable properties (called “comps”) that have recently sold. The appraiser will determine the market value based on how the subject property compares to the comps.
And appraisal will be required by the lender anytime a loan is used to buy property. Buyers and sellers can also hire an appraiser on their own to help them determine “market value.”
4. What is the difference between “appraised value” and “assessed value”?
Appraised value is a value given by an appraiser and is specific to a particular piece of property at a specific point in time.
Assessed value is the value used by the county or city to levy taxes on real estate. Typically assessed values are updated infrequently (i.e. every 7 years) and thus do not reflect changes in the market value. Thus assessed values are rarely an accurate indicator of actual market value and should not be relied on for purposes of buying or selling real estate.
5. I’m Buying a house… how much will it cost me to use a Realtor?
Nothing. In North Carolina it is customary for the seller to pay commission. For example, if the commission is 6% of the sales price, 3% would be paid to the company representing the seller and 3% would be paid to the company representing the buyer. The actual individual broker would be paid by his/her company based on whatever compensation agreement they have. (This is just a common example)
6. What is the Due Diligence Period?
In North Carolina the language in the Offer to Purchase and Contract has changed recently. One of the main changes is the addition of the Due Diligence Period and removal of the specific contingencies. The Due Diligence Period is a period of time from the effective date of the contract until 5:00pm on the day the Due Diligence Period Expires. This day is proposed by the buyer in the offer and is agreed upon when the contract is executed. The purpose of the Due Diligence Period is to allow the buyer to perform any inspections and obtain financing. The Due Diligence Period only benefits the buyer and it is a period of risk for the seller since the buyer may terminate the contract at anytime and for any reason before the expiration of the Due Diligence Period. For this benefit the buyer should pay a Due Diligence Fee to the seller which is non refundable at anytime. The Due Diligence Fee is an amount agreed on by the buyer and seller during the negotiation of the contract. Once the contract is executed, the buyer will write two checks- the Due Diligence Fee payable directly to the seller and the earnest money deposit to the escrow agent (which is normally the company representing the seller or a real estate attorney). The earnest money deposit is refundable to the buyer is the buyer terminates the contract during the due diligence period but not if they terminate after the due diligence period expires.
In a nutshell, the Due Diligence Fee is normally a smaller amount that the earnest money deposit. The Due Diligence Fee is never refundable. The earnest money is refundable to the buyer if termination occurs during the Due Diligence Period. Buyers want longer due diligence periods and lower fees. Sellers want a shorter due diligence period and higher due diligence fees.
Posted by ashgarner under Uncategorized
1. Going Overboard for the Area
The Mistake: Improving your home “too much” for the neighborhood. If your in a very nice neighborhood, it will be hard to over improve your home. However, it you put $50,000 of upgrades into a $60,000 house, it could turn your house into the pricey outlier. This will ultimately take away from the value you put into it.
The Mistake: Putting in a $40,000 kitchen and then leaving the vinyl flooring or old carpeting. Consistency is key to improve or maintain value. Upgrade the inconsistent elements of the house to at least whatever the baseline is in the neighborhood.
3. Too Much ‘You’ in Your Home
The Mistake: Remodeling your home with too much of your personal touch. To improve the value, the home needs to be functional to all buyers and cannot be “too” personalized that another person couldn’t see themselves living in it.
4. Screwing Up the Floor Plan
The Mistake: Pay attention to the floor plan when adding additions to the house. Don’t add a bedroom that can only be accessed through the laundry room or that isn’t close to any bathrooms in the house. Additions that aren’t functional are not going to give you the return on the investment that you are looking for.
5. Closing off the Porch
The Mistake: Many see a porch as an opportunity to easily add an addition to home. This is a mistake when living a neighborhood with a strong sense of community. Closing yourself off from the community with a closed in porch or high fences can hurt the value of your home if community is one of the assets of your neighborhood.
6. Keeping the above-ground pool
The Mistake: In general, above-ground pools are usually eyesores that owners will often clean inadequately or leave them covered. Most buyers will see them as an inconvenience to remove more than anything.
7. Tackling Big Projects Yourself
The Mistake: In most cases, your not going to be as successful with that DIY project as you intended to be, and your inexperience will show. Unless you have some contracting know-how, its best to leave the big projects to the professionals
8. Getting too trendy
The Mistake: Being too fashionable with your renovations. Unfortunately, something that is popular today, will be dated in a few years. Focus on more timeless looks for the home that wont fall victim to changing trends.
9. Overstuffing the Remodel
The Mistake: Often times, homeowners will put in bigger items than their should be in newly remodeled rooms. Filling a room with furniture that is too large will make the space feel cramped and the house feel smaller.
10. Converting the Garage
The Mistake: Removing the garage creates “functional Obsolescence” because now you no longer have covered parking. If all of the other houses in the neighborhood have parking, buyers will see it as a negative that your home does not. Also, appraisers might not see the $10,000 you’ve spent converting the garage into living space, but rather see it as a $10,000 loss because of not having covered parking.
11. Not Getting a Permit
The Mistake: Too many people are adding additions to their homes without first getting the proper permits to do so. Without acquiring the proper permits, lenders and appraisers may not include the value of your new addition. Endure the hassles of permit acquisition in order to avoid any issues down the road.
12. Not Updating the Hardware
The Mistake:Leaving dated hardware like brass, is very noticeable to home buyers. If you cant afford to update all of your cabinets, even changing the hardware and add value.
13. Being too Colorful
The Mistake: Color is very much a personal taste issue when it comes to decorating a home. Painting your walls bright and overdramatic colors is a real problem when trying to sell a home. Buyers don’t want to buy a house painted like the rainbow even if you love it. Avoid turning off buyers by painting the walls back to a neutral color when ready to list.
14. Ignoring Flaws
The Mistake: A lot of homeowners think their home is flawless, unwilling to make the necessary repairs to get the most value. By ignoring the problems you allow them to build up and it could end up making it worse than if you fixed them early. Get an inspection done before listing your home so you are not surprised by any problems.