Real Estate Q&A August 2013

Dear Gloria,

I am planning to move to Florida within the next year and would like to purchase a new construction home in the Wesley Chapel area. I have heard that a buyer can incur additional charges during construction. I would hate to purchase a new construction property and pay much more than I originally planned. Have you ever experienced a similar situation with a past buyer?

Jenny F., Boston, Virginia

Jenny,

I have never experienced this situation with any of my new construction buyers. Typically the process is similar among many builders. After a buyer has viewed the model and has made the decision to move forward with the builder, they sit down with the sales consultant to discuss floor plan, home site, and designs. An initial estimate is provided at that time. The buyer further discusses the interior design material details at the design center.

After all of the fixings have been secured, the final price of the property is provided. After the design, home site and floor plan have been finalized for the new construction home, there should be little to no price changes. Should the buyer decide to change or alter the originally discussed design elements listed within the contract then the buyer can expect a price change. For example, let’s say a buyer decides to have a new construction home built with all of the design upgrades that were shown in the $245,000 model. Let’s say one night the buyer had a change of heart and decided they wanted to change the kitchen floors from tile floors to hard wood. This material change to the property may require a change in the original agreed price.

Thanks for your email Jenny and I look forward to helping you further with this process.

4 Down Payment Assistance Ideas

 

 

Are you wasting thousands of dollars on rent and dreaming of becoming a homeowner? You can already make a monthly house payment (you’re already paying rent), but the problem is coming up with money for a down payment.  It’s not as difficult as you might think. Here are ways to get a down payment with little out of your own pocket.

1. Look Into Local or Federal Government Programs.  You may qualify for special government programs, such as those for first-time homebuyers and members of the military.  You also may have access to aid from Fannie Mae and Freddie Mac (government-sponsored mortgage programs).  Additional resources are non-profit and community groups and state agencies.  There are too many programs to list here and they expire or change frequently. 

2. Have the Seller Finance You. Some sellers may be willing to help you buy their homes. In a “seller take-back,” the seller holds a second mortgage for you and becomes your lender.  You would make your monthly mortgage payments to the seller.

3. Use A Tax Refund. There are options for you to borrow money for certain investments to a specific level and use those investments to generate a significant tax refund.  Obviously, the timing has to be right to so you can use it as a down payment on a home.

4. Ask A Relative or Friend. Tax law allows gifts of up to $13,000 a year to be given without tax consequences to the giver or recipient. This gift-exclusion amount is adjusted annually to reflect inflation (see IRS publication 950 for the current amount).  You can even get a gift from each of your parents or two friends without them having to pay a gift-tax, which bring it up to $26,000.   

This is a great way to get a down payment for a home. In fact, one out of four first-time homebuyers use a gift to make the down payment.  Even if this isn’t your first home purchase you can still use a gift so you don’t drain your savings.  Usually lenders require you to have some money still left in your bank account after closing so they know you’ll make the mortgage payment each month.

Also, using a gift for a down payment allows you to buy the home you want even if it’s not Federal Housing Administration (FHA)-approved.  Some buyers are able to get FHA mortgages that have down payments as low as 3.5% of the purchase price, but others will have to put more down.  With a gift, you can put the typical 10% to 20% down that most lenders require. For example, if you had to put down 10% on a $150,000 home, that’s $15,000. Or, 20% would be $30,000. A gift from relatives and friends can get you there but some of the rules differ depending on the lender you choose. Contact me at 813-419-7009 for a buyer consultation. Together, we can make your goal of owning your first home a reality.

7 Reasons to Own Your Home

Buying a home is one of the biggest and most rewarding ventures of your life. Whether it be purchasing an investment property or your first home, it takes much consideration and planning. In today's market, I always recommend buying vs. renting. In many cases I see renter's paying almost $200 more to rent a smaller space, than it would be if they purchased. There are many reasons to own a home. Here are a few to consider.

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage,your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.

Later Marriage Trends Don’t Postpone Homeownership

 

 

A study conducted by Harris Interactive for Coldwell Banker Real Estate looked a changing marriage trends in America and how they impact the purchase of a first home.

According to the study, the timing of a first-home purchase hasn’t changed a lot over the years, but an upswing in later marriages means more couples are buying a home before they walk down the aisle – if they ever do – or making a purchase earlier in the marriage.

About one in four married couples between the ages of 18 to 34 purchased their first home together before their wedding date, compared to 14 percent of those ages 45 and older. According to the survey, 35 percent of all married couples purchased their first home together by their second wedding anniversary; 80 percent of these married homeowners said it strengthened their relationship more than any other purchase.

“What we’re seeing is that young couples are switching up the order and purchasing their first home regardless of whether or not they have set a wedding date,” says Dr. Robi Ludwig, a psychotherapist and Coldwell Banker lifestyle correspondent.

“This is a huge movement within the American culture,” Ludwig adds. “While younger generations may be focusing more on their career, and in turn waiting longer to get married and have children, they are not delaying their dream of homeownership.”

Other survey trends
• 17 percent of all married couples surveyed purchased a home together before their wedding day.
• 72 percent of married Americans in the South waited until after they were married to purchase a home, compared to 60 percent of Americans in the Northeast.
• Only 16 percent of married U.S. adults have not purchased a home together with their current spouse.
Ludwig says the tasks involved with a home purchase can strengthen a marriage. “(Married couples) not only learn about each other’s wishes and dreams during this process, but they also learn how to be practical with each other and compromise,” he says. “Buying a home has more of an impact on a couple’s relationship than any other purchase they will ever make.”

Impact of home buying on a marriage
• 93 percent of homeowners who purchased their first home while married always planned on owning a home after marrying.
• 80 percent said purchasing a home with their spouse did more to strengthen their relationship as a couple and family than any other purchase they have made together.
• Over one-third of married homeowners (35 percent) wish they had taken the plunge (into homeownership) sooner than they actually did.
Ludwig offers the following tips for couples buying their first home together:

1. Decide “needs” vs. “wants,” and be willing to compromise. Ludwig says it’s common for a couple to uncover conflicting values, interests, likes, dislikes and tastes to come that create tension. But no one gets everything on their checklist, so it’s important to compromise to get a home that pleases both people. Patience, understanding, compassion and compromise are key.

2. Work together to prioritize what’s important in a home. Make an independent list and compare notes. Even the closest couples are still two people with separate ideas and agendas. Searching for a home can bring up a couple’s different priorities and ideas about life. Working together to decide what is best for a combined future strengthens the bond between individuals and prepares couples to effectively deal with future disagreements.

3. Be open, honest and organized with finances. This includes the ability to talk about personal savings, debts, budgets, and credit ratings. Money is one of the leading causes of marital discord.

4. Think about the future for three, five and even 10 years down the road. Before buying a home, talk about plans for careers, having a family, and what that means in terms of neighborhood and space. For some people, talking about their future needs creates anxiety. Support each other if it does.

© 2013 Florida Realtors®

March 10, 2013, Daylight Savings Spring Forward

Daylight saving begins, March 10, 2013. This is just a friendly reminder to turn your clock one hour forward at mid-night, March 10th. Enjoy the extra daylight to get all of your work done. Personally, I look forward to daylight savings because it allows me to show homes later in the evening. Quick note from your Tampa Realtor, Gloria Walters,www.gloriawalters.com.

USDA Still Offers No-Down Payment Mortgages

 

Thanks to funding from federal programs to boost the housing market, the U.S. Department of Agriculture (USDA) still has $11.2 billion in its coffers earmarked for mortgage loans. The USDA’s Rural Development Service’s Section 502 loan is one of the few mortgage programs that requires no down payment.

In earlier years, the program ran out of money by late summer, leaving homebuyers in limbo as they waited for the new budget year to begin. In Florida, most low-income and middle-income buyers qualify if they live in rural areas, smaller towns or some outlying suburbs to larger cities.

The program will change slightly after Oct. 1, when buyers will be required to pay a 0.3 percent premium for mortgage insurance monthly; however, the cost of upfront mortgage insurance will be reduced to 2 percent from its current 3.5 percent.

 

Click here to see which areas of town are USDA eligible.

 

Gloria Walters | REALTOR
Bridging the Gap Between Buyers and Sellers

772-359-7543 (direct)
813-200-8708 (fax)
gwalters83@gmail.com

The Hacienda Restaurant, Bartow, Florida

I recently made a business trip to Bartow. When lunch time came around, I wanted to dine at a new place. I was uninterested in the fast food chains along Broadway Avenue and I have been to Curly Tails to many times before. So I took a short drive down Main Street. I had a coupon for Main Street Wraps, but learned they had gone out of business. Already convinced that I wanted a wrap for lunch, I had to make the disappointing shift to something else. I stumbled upon the Hacienda Restaurant, a quaint Mexican restaurant with a lot of charm. The hostess was very welcoming and answered all of my questions. I ordered the Chicken Quesadilla Ansada, served with rice and black beans. I was surprised the quesadilla was covered in a creamy white sauce. I thought this was truly a different experience. I expected the traditional dry quesadilla pressed to perfection. As different as it was, it tasted even better. I enjoyed my time dining at the Hacienda Restaurant, I look forward to my next trip to try another of their great meals.

I truly love experiencing new places, food and people.

Gloria Walters | REALTOR
Bridging the Gap Between Buyers and Sellers

772-359-7543 (direct)
813-200-8708 (fax)
gwalters83@gmail.com

5 Questions to Ask Your Inspector

 

Most home buyers feel like they are bona fide real estate experts after all the studying up on loans and neighborhoods, online house hunting and open house visiting it takes just to get into contract on a home these days. But for all but the most handy of house hunters, getting into contract and starting the home inspection process only surfaces how little you actually know about the nuts and bolts and brick and mortar of the massive investment you’re about to make: a home!

So, you hire a home inspector, but it seems like they’re speaking an entirely different language - riddled with terms like “serviceable condition” and “conducive to deterioration” - about your dream home! Here are 5 questions you can use to decode your home inspector’s findings into knowledge you can use to make smart decisions as a homebuyer - and homeowner.

1. How bad is it - really? The best home inspectors are pretty even keeled, emotionally speaking. They’re not alarmists that blow little things up into big ones, nor do they try to play down the importance of things. They’re all about the facts. But sometimes, that straightforwardness makes it hard for you, the home’s buyer, to understand what’s a big deal and what isn’t so much - the information you need to know whether to move forward with the deal, whether to renegotiate and what to plan ahead for.

I’ve seen things categorized in home inspection reports under “Health and Safety Hazards” that cost less than $100 to fix, like replacing a faucet that has hot and cold reversed. And I’ve seen one-liners in inspection reports, like “extensive earth-to-wood contact” result, after further inspection, in foundation repair bids pricier than the whole cost of the home! In many states, home inspectors are not legally able to provide you with a repair bid, but if you attend the inspection and simply ask them whether or not something they say needs fixing is a big deal, nine times out of ten they will verbally give you the information you need to understand the degree to which the issue is a serious problem (or not).

2. Who should I have fix that? I always ask this question of home inspectors, with dual motives. First, very often, the inspector’s response is - “What do you mean? You don’t need to pay someone to fix that. Go down to Home Depot, pick up a ___fill in the blank__, and here’s how you pop it in. Should cost you $15 - tops.” And that’s useful information to know - it eliminates the horror of a laundry list of repairs and maintenance items at the end of an inspection report to know that a number of them are really DIY-type maintenance items. Even buyers who are really uncomfortable doing these things themselves then feel empowered to either (a) watch a few YouTube vids that show them how it’s done, or (b) hire a handyperson to do these small fixes, knowing they shouldn’t be too terribly costly.

And even on the larger repairs, your home inspector might be able to give you a few referrals to the plumbers, electricians or roofers you’ll need to get bids from during your contingency period, which you may be able to use to negotiate with your home’s seller, and to get the work done after you own the place. Dropping the inspector’s name might get you an appointment booked with the urgency you need it in order to get your repair bids and estimates in hand before your contingency or objection period expires.

And same goes for any further inspections they recommend - if neither you nor your agent knows a specialist, as the general home inspector for a few referrals.

3. If this was your house, what would you fix, and when? Your home inspector’s job is to point out everything, within the scope of the inspection, that might need repair, replacement, maintenance or further inspection - or seems like it might be on it’s last leg. But they also tend to be experienced enough with homes to know that no home is perfect. Many times, I’ve asked this question about an item the inspector described as “at the end of its serviceable lifetime” and had them say, “I wouldn’t do a thing to it. Just know that it could break in the next 5 months, or in the next 5 years. And keep your home warranty in effect, because that should cover it when it does break.”

This question positions your home inspector to help you:

• understand what does and doesn’t need to be repaired,
• prioritize the work you plan to do to your home (and budget or negotiate with the seller accordingly),
• get used to the constant maintenance that is part and parcel of homeownership, and
• understand the importance of having a home warranty plan.

4. Can you point that out to me? Often, when you attend the home inspection, you’ll be multi-tasking, taking pictures of the interior, measuring for drapes or furniture, even meeting the neighbors, or fielding several inspectors at a time. Worst case scenario is to get home, open up the inspector’s report and have no clue whatsoever what he or she was referring to when they called out the wax ring that needs replacement or the temperature-pressure release valve that is improperly installed.

Your best bet is to, at the end of the inspection, while you’re all still in the property, just ask the inspector to take 10 or 15 minutes and walk you through the place, pointing out all the items they’ve noted need repair, maintenance or further inspection. When you get the report, then, you’ll know what and where the various items belong. (One more best practice is to choose an inspector who takes digital pictures and inserts them into their reports!)

5. Can you show me how to work that? Many home inspectors are delighted to show you how to operate various mechanical or other systems in your home, and will walk you through the steps of operating everything from your thermostat, to your water heater, to your stove and dishwasher - and especially the emergency shutoffs for your gas, water and electrical utilities. This one single item is such a time and stress saver it alone is worth the lost income of missing a day of work to attend your inspections.

(Source: Trulia | Tara-Nicholle Nelson)

The Eager Buyer

A buyer recently came to me through one of my listings. They wanted to buy a home cash and own free and clear from any monthly mortgage obligations. Great, I thought. In this market there are so many low-priced homes, cash sales are becoming a popular trend.

Well this buyer was very unique. When I attempted to secure a meeting time with him, I offered time slots to meet and he would say, “I can’t” or “I’ll call you and let you know when.” Most of these meeting times were tentative. He mentioned that he had appointments that would come up at the last-minute and he could not secure a definite time with me. “Well what about weekends”, I asked? There has to be some time that you can allot to other parts of your life, like buying a house.

What made the situation more complicated, was when the buyer finally had time to meet, it was at that moment. He would call and say. “I’m in front of a house now and I want to see it, can you show it to me?” The first time, I was in the middle of a showing myself and couldn’t make it. I asked if we can meet later and I received the same response, “call me and I’ll see if I’m available.” So I called and he wasn’t.

The next time he called requesting an immediate showing, I took about 30 minutes to thoroughly explain the complete process and secure a committed day/time for showings. I successfully got a noon meeting where I had the opportunity to review some homes that fit his criteria. It took a while for me to reel this buyer in and just explain the entire home purchasing process, my working process and for us to develop effective communication. Needless to say we are working like a well oiled machine, and he should be closing on his first home shortly.

Lesson to Buyer: Your Real Estate Agent navigates you through all the real estate challenges, jargons, paperwork, contracts, etc. You need to work with your agent, and develop a cohesive and effective working rhythm in order to meet your real estate goals.

Lesson to Agent: In a market where there are so many variables, be willing to go that extra mile to educate your buyers and make them comfortable with not only the home buyer process but working with you as well.