How to service and maintain a pool system
Buying or Selling a home is a complex process. I am prepared to do whatever it takes to see you through this process. Work with a professional Realtor who is willing to Go The Distance For You. My goal is to be the best real estate agent you have ever worked with.
Call or text me with any questions you may have at 918-313-0408.
John Cantero
Real Estate Specialist
Ways to Improve your Credit Score
1. Dispute errors on your Report. Mistakes happen.
2. Negotiate. You can’t deny that you stopped paying a credit card bill when you were unemployed last year. But you can ask creditors to “erase” that debt or any account that went to collection. Write a letter offering to pay the remaining balance if the creditor will then report the account as “paid as agreed” or maybe even remove it altogether. (Note: Get the creditor to agree in writing before you make the payment.)
You might also be able to ask for a “good-will adjustment.” Suppose you were a pretty good Visa V -0.34% customer until that period of unemployment, when you made a late payment or two – which now show up on your credit report. Write a letter to Visa emphasizing your previous good history and ask that the oopsies be removed from the credit report. It could happen. And as long as you’re reading the report, you need to…
3. Check your limits. Make sure your reported credit limits are current vs. lower than they actually are. You don’t want it to look as though you’re maxing out the plastic each month. If the card issuer forgot to mention your newly bumped-up credit limit, request that this be done.
4. Get a credit card. Having one or two pieces of plastic will do good things to your score – if you don’t charge too much and if you pay your bills on time. In other words, be a responsible user of credit.
Can’t get a traditional card? Try for a secured card taking care to choose one that reports to all three major credit bureaus.
5. Become an authorized user. This means convincing a relative or friend to be added to his or her existing credit card account. If you’ve had a checkered financial history, don’t be surprised if you hear the word “no” a lot. But you might luck out, especially if you’re a young person who has no history of poor credit use.
6. Under-use your cards. Yes, we did just tell you to get credit by any means possible. But don’t whip out the plastic to pay for everything. The “credit utilization ratio” should be no more than 30% and ideally even less. Harzog says that a 10% credit utilization ratio will “maximize this part of your FICO score.”
For example, suppose your Mastercard has a $1,500 limit and you routinely charge a grand a month. It doesn’t matter if you pay it all off before it’s due. What matters is the credit bureaus think “Curtis is using two-thirds of his credit! What a spendthrift!” And if you’re a cash-free kind of guy? Then try to…
7. Raise your credit limit. Ask your creditors to increase your limit, i.e. making that Mastercard good for up to $3,000. Be careful with this one, though: It works only if you can trust yourself not to increase your spending habits accordingly. Otherwise you’ll be right back to using 66% of your credit each month and how will that look?
8. Don’t close any cards. Canceling a credit card will cause your available credit to drop, which doesn’t look good to a bureau. One way to keep a card active is to use it for a recurring charge such as a utility bill. There’s room for that in your budget, right?
9. Mix it up. Using a different kind of credit can make for a modest boost to your score. For example, you might take out a small personal loan from the credit union or buy a piece of furniture or appliance on installment (but only if you’re 100% sure you can and will meet the payment schedule).
10. Pay your bills on time. Seriously. Your payment history – including the ones you pay late or skip altogether – makes up a whopping 35% of your FICO score. If you’re absent-minded or merely overwhelmed (Hi there, parents of young children!), then for heaven’s sake, automate your payments. Even better than paying on time is to…
11. Pay your bills twice a month. Using too much of your credit limit at any given moment doesn’t look good. Suppose your limit is $3,000 and a month’s worth of havoc (car repair, doctor bills, plane ticket for kid to get to college) means you’ve charged up $2,9000. Sure, you plan to pay in full by the 18th of the month – but until then it looks like you’re maxing out yet another card.
Instead, make one payment just before the statement closing date and second one right before the due date. The first will likely reduce the balance that the credit bureaus see and the second makes sure you won’t pay interest or a late fee.
Homeowners Insurance: What’s Covered? What’s Not?
Homeowners Insurance: What’s Covered? What’s Not?
Homeowners insurance can be a life saver in many instances and obviously it is a must have, but not many homeowners think twice about the insurance that protects their investment. What does the standard homeowners insurance policy really cover? While policies may vary, it’s important to know what is covered and what’s not.
HO3 – Special Form Homeowner Policy is the typical, most comprehensive form used for single-family homes. The policy provides “all risk” coverage on the home with some perils excluded. Contents are covered on a named peril basis. (Note: “All Risk” is poorly termed as it is essentially named exclusions (i.e., if it is not specifically excluded, it is covered)) – Source: Wikipedia
What’s Covered:
Insurance covers both structural and personal property after the following circumstances of damage or theft and this can include anything from structural repairs, plumbing and wiring to personal items such as your computer, TV and even clothes.
•Fire and/or lightning damage
•Windstorms including hurricanes, tornadoes and hail damage
•Damage from vehicles or flying objects
•Theft
•Vandalism
What’s Not Covered:
There are many natural disasters and unfortunate circumstances that can happen that are ironically not covered. In these circumstances, it’s generally something that is widespread across the U.S. with higher risks. There are supplemental insurance policies that will cover some of these incidents, but generally, they are not covered under a standard homeowners insurance policy.
•Earthquakes, sinkholes and other earth movement
•Flooding
•Pest Damage: Termites and insect damage, rodent damage and overall wear and tear.
•High Valued Personal Property: Standard policies generally have a cap on the amount they will pay for personal property, more high dollar items such as jewelry, firearms and silverware may need to be covered separately.
•War: Nuclear war, civil war or any war in general
All the above information is based on the HO-3 “Standard” Homeowners Insurance policy as defined by Insurance Service Office. Policies may vary from location to location, and it is best to consult with your local insurance professional about what is and is not covered in your area.
Search thousands homes in your area… http://www.homesintulsaokforsale.com/idx/search/
Key Steps to Get Ahead When Buying a Home
Steps to Buying a Home
Homeownership is a marathon, but homebuying is a sprint. Maybe you came up short in previous attempts. Maybe you “just weren’t ready.” But if you’ve decided that now is the time, here are key ways to get ahead right off the starting block. Of course, working with a real estate agent like myself will offer the support you need, but it never hurts to arm yourself with your own insights as well.
Gather financial information
Too many potential buyers find the house and only then worry about financials. That might be why they’re only potential buyers. Instead, first take an X-ray of your financial life.
Put exact numbers on the figures you’ve probably been estimating up to now…
— What do you make every month?
— How much do you spend every month?
— How much do you have in your down payment account?
— What are your assets and liabilities?
— How much are you carrying in debt — credit card and otherwise?
— What big expenses or windfalls (like a raise or bonus) do you expect in the next six months or year?
— What’s your ideal monthly house payment?
While you’re at it, this is the time to assemble information that potential mortgage lenders will need. Get a ring binder and include two years of tax returns, three months’ pay stubs, and three months’ statements for all of your checking, savings, investment and retirement accounts.
Get preapproved for a mortgage
In most cases, you can’t get the actual mortgage until you have a house to plug into the equation. But you can get the next best thing: Preapproval, which “carries more weight with the prospective seller” than a prequalification. Preapproval means the bank has pulled your credit, looked at your financial records and is likely to offer you a loan of up to a specific sum.
Shop around and get preapprovals from several banks. If you make those applications within a 45-day period, your credit score will count them as one application. You will want to decide how much you want to spend on a home. It might be a lower number than the amount the bank is willing to lend.
Line up your helpers
When you find the right home, you want to be able to act quickly. One key move: Research and line up pros you’ll need to speed that sale — like home inspectors, pest inspectors, insurance providers and real estate agents — in advance. You can do the same with services you’ll need, like moving companies, cleaning services, locksmiths, handymen and contractors.
Learn your local market
As a buyer you should now be educating yourself about the market. And as you learn more about your target market, narrow that focus to a few towns, zip codes or neighborhoods – a small radius – to get familiar with the market in the area you want to buy in. You will know you’re ready when you can walk into a house in your target market, look at what it offers and know how much it should cost.
I would be happy to provide you with a list of available homes in your target area and price range to help you prepare for one of the largest purchases you will ever make. Please feel free to contact me if you have any questions about buying a home.
As a premier real estate agent in this area, I look forward to serving you and will be happy to provide all the information you need on homes for sale in Tulsa, Broken Arrow, Bixby, Jenks, Owasso and surrounding areas. Buying or selling a home is a complex process and I am prepared to do whatever it takes to make your next real estate transaction a stress-free process. Whether you are a first time home-buyer, selling your home or a veteran property investor, get the results you want and deserve and work with a professional Realtor who will Go The Distance For You.
John Cantero
918-313-0408
johncantero@yahoo.com
6 Reasons to Buy a Home in 2016
Is it really 2016 already? For those of you who happen to be planning on buying a home in the new year—or even just trying to—there’s a whole lot to celebrate. Why? A variety of financial vectors have dovetailed to make this the perfect storm for home buyers to get out there and make an (winning) offer. Here are six home-buying reasons to be thankful while ringing in the new year:
Reason No. 1: Interest rates are still at record lows
Even though they may creep up at any moment, it’s nonetheless a fact that interest rates on home loans are at historic lows, with a 30-year fixed-rate home loan still hovering around 4%.
“Remember 18.5% in the ’80s?” It is likely that we’ll never see interest rates this low again. So while prices are high in some markets, the savings in interest payments could easily amount to hundreds of thousands of dollars over the life of the mortgage.”
Reason No. 2: Rents have skyrocketed
Another reason home buyers are lucky is that rents are going up, up, up! (This, on the other hand, is a reason not to be thankful if you’re a renter.) In fact, rents outpaced home values in 20 of the 35 biggest housing markets in 2015. What’s more, according to the 2015 Rent.com Rental Market Report, 88% of property managers raised their rent in the past 12 months, and an 8% hike is predicted for 2016.
In most metropolitan cities, monthly rent is comparable to that of a monthly mortgage payment, sometimes more. Doesn’t it make more sense to put those monthly chunks of money into your own appreciating asset rather than handing it over to your landlord and saying goodbye to it forever?
Reason No. 3: Home prices are stabilizing
For the first time in years, prices that have been climbing steadily upward are stabilizing, restoring a level playing field that helps buyers drive a harder bargain with sellers, even in heated markets.
Local markets vary, but generally we are experiencing a cooling period, at this moment, buyers have the opportunity to capitalize on this.
Reason No. 4: Down payments don’t need to break the bank
Probably the biggest obstacle that prevents renters from becoming homeowners is pulling together a down payment. But today, that chunk of change can be smaller, thanks to a variety of programs to help home buyers. For instance, the new Fannie Mae and Freddie Mac Home Possible Advantage Program allows for a 3% down payment for credit scores as low as 620.
Reason No. 5: Mortgage insurance is a deal, too
If you do decide to put less than 20% down on a home, you are then required to have mortgage insurance (basically in case you default). A workaround to handle this, however, is to take out a loan from the Federal Housing Administration—a government mortgage insurer that backs loans with down payments as low as 3.5% and credit scores as low as 580. The fees are way down from 1.35% to 0.85% of the mortgage balance, meaning your monthly mortgage total will be significantly lower if you fund it this way. In fact, the FHA predicts this 37% annual premium cut will bring 250,000 first-time buyers into the market. Why not be one of them?
Reason No. 6: You’ll reap major tax breaks
Tax laws continue to favor homeowners, so you’re not just buying a place to live—you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.
I would love to help you find the perfect home. Call or text me at 918-313-0408 and let’s get started.
John Cantero
Real Estate Specialist
You Can Buy Real Estate in Your IRA, 401k or Other Qualified Retirement Plan
You Can Buy Real Estate in Your IRA, 401k or Other Qualified Retirement Plan
You Can Buy Real Estate in Your IRA, 401(k) or
Other Qualified Retirement Plan
When Congress created the Employee Retirement Income Security Act of 1974 (ERISA) in 1974, launching tax-sheltered individual retirement accounts (IRAs), they did not write the law to favor stocks. Wall Street, however, recognized a good thing when it saw one and it rushed to tell America that all their retirement money should be in mutual funds.
Baloney.
Your IRA can be a self-directed retirement plan. That means you can buy businesses with your retirement funds, lend money, and do many other things to provide for your retirement that have nothing to do with stocks.
Chief among these is the ability to buy real estate through your IRA. And that means you can get higher returns and lower risk than you get from stocks—as long as you follow the principles we’ve been hammering home in MSM.
How much higher?
Well, stocks have returned about 10% a year over the last 100 years. Not bad. But even if you’re just a fair to middlin’ investor—and even if you don’t use a lot of leverage—you should be able to compound your investments over the long term in the 15% range easily.
For instance, a $100,000 property that appreciates at the long-term average of 6% a year doubles in value after 12 years. If you put $25,000 down to buy it and borrowed the rest at 7%, your $75,000 mortgage has amortized to about $60,000 in that time. So your equity has mushroomed from $25,000 to $140,000 ($200,000 market value minus $60,000 outstanding mortgage).
That’s a little better than a 15% compounded average annual return—without a great deal of leverage and getting appreciation in the range of the long-term historical average.
But if you buy a little better, you’ll do substantially better. If you buy under market and in an area that is rapidly appreciating, you might end up averaging 8% compounded returns per year. This would make the property worth double your purchase price in nine years.
At that time, your $75,000 mortgage would have amortized to approximately $66,000. Now your $25,000 down payment turns into $134,000 in equity in nine years. That’s nearly a 21% compounded average annual return. Far better than the long-term average of the stock market.
And that doesn’t even include steadily increasing net rents… which could push your compounded average annual returns up another few percent.
So why is your IRA, 401(k) or other qualified retirement plan stuffed to the gills only with stocks or mutual funds? And in many cases with stocks and mutual funds that are below their prices of five or six years ago when you first bought them?
It’s because Wall Street wants you to believe that buying stocks is the
What Your Stockbroker Doesn’t Want You to Know:
It’s Perfectly Legal to Buy Real Estate in Your IRA
Thought you didn’t have the down payment for your next investment property? Well, it may be
sitting right in your IRA, 401(k) or other retirement plan.
Contrary to what you may have assumed, you can legally purchase real estate in an IRA or
Qualified Pension Plan. And your IRA can borrow to help you make that purchase.
For years many investors have been told they were not allowed to make these kinds of
investments. In some cases they have been told it makes no sense. In the meantime those in the
know have been quietly taking advantage of this wonderful opportunity.
First let’s dispel the myths. There is so much more flexibility to your IRA than you may have ever
thought possible.
The IRS Doesn’t Forbid It…
So Why Should You Overlook the Opportunity?
Section 590 of the Internal Revenue Code is the bible when it comes to what you can and cannot
do as it relates to investing your IRA. IRC 590 specifically details what are called “prohibited
transactions” and “disqualified entities.”
If you are like most people you have never read the Internal Revenue Code. That’s a good thing
(unless you’re an accountant). It is long, convoluted and often contradictory. Even most experts
have a hard time understanding all of the nuances of the code. It’s why many people end up in
tax court.
The funny thing about most of the code—and specifically section 590—is most of it is written to
tell you what you cannot do and not to tell you what you can do. Fortunately for us, it’s very clear
from the code—and from precedent—that you can legally purchase real estate.
Wall Street’s Misappropriation of the IRA
To hammer home the point that IRAs are not just for stocks, let’s take a moment to look at the
history of IRAs.
Traditional IRAs were created in 1974. Congress wanted to encourage individuals to begin saving
and investing for their own future retirement. There have been many changes to these rules over
the years but the basic premise remains the same. An IRA is designed to be a Self-directed
retirement plan that provides tax-deferred growth and—for those who qualify-tax-deductible
contributions.
Somewhere along the way one of the most important components of owning an IRA has been at
best obscured and at worst lost. That is the whole concept of Self Direction.
Wall Street and the Financial Industry recognized the incredible opportunity to capture assets and
create commissions for themselves by providing IRA accounts for eligible investors. What they
did not tell those investors is they artificially imposed their own restrictions on IRAs to promote
products and services that line their own pockets and do not necessarily benefit the IRA
beneficiary.
IRAs were never created to force investors into owning stocks bonds and mutual funds. In fact,
when you look at the rules that govern what you can and cannot own (IRS 590) you will be
shocked to see just how liberal and un-constraining the rules actually are. Congress fully intended
for you to be able to invest your IRA in almost any asset that makes sense. This includes, real
estate, private investments, businesses, and almost anything else you can imagine.
Wall Street’s Wall of Silence
Why have most investors never heard they are allowed to invest their retirement funds outside of
stocks and bonds? Very simply it’s all about the money.
A significant number of investors have their IRA funds with custodians who also happen to be in the business of “providing” investments or investment advice. So even though most investors have a self directed IRA they end up with custodians who put restrictions on what they can and cannot invest in.
These custodians have chosen to do this for their own financial benefit and not the benefit of the underlying IRA participant. If you are using one of the major Wall Street firms, they are in the business of selling you investments on which they make commissions or fees, things like stocks, bonds, and mutual funds.
I am not saying you should not own these investments, But these shouldn’t be the only investments you own in your IRA—especially if you’re a knowledgeable real estate investor.
What’s more, there are times when the market offers horrendous value and has lousy prospects (as from 2000 through 2002), so it’s nice to have alternatives. And real estate is traditionally not correlated to the stock market.
The 1st Step to Freeing Your IRA
From Wall Street’s Control:
Find the Right Custodian
There are a number of custodians out there who will allow you to purchase real estate. They are far and few between but they are out there. The good ones have been doing it for a long time, have this process down to a science and know exactly what it takes to make it happen in a legal and compliant fashion.
“An IRA is designed to be a Self-directed retirement plan that provides tax-deferred growth and—for those who
qualify-tax-deductible contributions. It doesn’t say or imply in any way that you can only buy mutual funds.”
Certainly, they charge their own fees for this service. But they do not tell you what you can and cannot do with your money; beyond ensuring what you are doing is permissible. (More about that later.) These types of custodians are not in the business of selling you investments. They make their money from the fees they charge to act as the custodian and/or administrator of your account.
Your IRA Can Buy Virtually Any
Kind of Real Estate
One of the more exciting aspects of purchasing real estate in your retirement plan is that you can buy virtually any type of property. That includes…
Raw Land
Single Family Home
Multiple-unit dwellings
Apartment Buildings
Condominiums
Office Buildings
Foreign Real Estate
That’s right, you can even buy foreign real estate through your IRA! Maybe you have found a little piece of beachfront property in Mexico you would like to build on for your future retirement home. You can legally do this through your IRA.
In fact, your IRA can even purchase an option on any of these types of properties. It can also makeother real estate related investments. For instance,you can buy mortgages or other notes through your IRA. You can buy tax lien certificates and defaulted notes.
For the purposes of this lesson, however, we’re going to stick with real property.
Know What You Can’t Do
So You Can Make the Most Out of What You Can
There are some restrictions on any investment you make with your IRA. These restrictions apply to real estate investments as well. One of the primary restrictions is this regard is that any investments your IRA makes cannot be for your benefit today. They must be for the future benefit of you, your heirs or both. This means if you purchase real estate in your IRA, you cannot use it in any fashion until you retire… well almost any fashion.
What You Need Is a Good
Administrator
Most of the companies that can help you set up a self-directed IRA are IRAadministrators, not custodians. They are the front end of the process. Administrators take care of all of the paperwork and required reporting. They usually place your funds with qualified custodians, usually insurance companies or federally insured banks. These custodians typically are glad to give upthe paperwork aspect of the transaction and are glad simply to hold the funds. The original rules that established and still govern IRAs and other individual retirement plans (Treas Reg. 1.408- 2(e)(2)) automatically granted permission to Insurance Companies and Banks to act as a qualified custodians, should they choose to do so. Any other entities must apply for and receive from the IRS a determination letter stating they qualify to act as a custodian. There are significant capital requirements and other qualifications which make the entry barrier to achieve this status quite high. For this reason, there are really only a limited number of companies with the financial resources to act as custodians. But all you need is the right administrator who will help you with the necessary paperwork. They will work with a qualified custodian.
Most rules have an exception and this rule is, well, no exception.
Say you buy a beachfront property as an investment through your IRA. You rent it out most of the time and perhaps you’re anticipating retiring to it one day. But you may also want to use it occasionally now. There are certain circumstances by which you can do just that.
The code is actually a little more flexible than you might think. It allows your friends and some of your relatives to use your property prior to retirement. So even though you are specifically prohibited from using your property, many of your relatives are allowed to use it. And anyone not related to you is allowed.
Who is a “related” party that would be prohibited from using the property? The IRS Publication
590 defines these “disqualified persons” as…
Your spouse
Lineal members of your family (ancestor, lineal descendant, and any spouse of a lineal descendant)
Your investment advisor or manager
Any entity in which you hold a 50% or higher ownership
What relatives are not prohibited from using the property? Your siblings and cousins.
So if you didn’t alienate all of your brothers and sisters when you were growing up, it may be time to cash in. You can allow your siblings to use your beautiful beachfront property and they can invite you as their guest!
However, if your property is repeatedly and only used by friends and relatives who always invite
you as their guest and never pay any rent to use the property, the IRS would infer you really used it for your own benefit. So some common sense is warranted.
When it comes to the use of the property, it is an honor system. Your IRA administrator or custodian is not going to keep track of who uses your property. And the IRS certainly does not have the manpower to keep track. So it is very unlikely that anyone is going to be checking up on you. It is up to you to abide by the rules.
I suggest keeping a record of when the property is used and by whom in case you ever have to document the use of the property for the IRS.
You Can’t Use Your IRA Real Estate Investments
For Current Business Use
But There Are Some Notable Exceptions
Besides personal use, it is also against the rules to use any property for your personal business either. Yet there are some useful exceptions to this rule too.
In my research of this topic I turned up some amazing examples of individuals who had seemingly broken all of the rules. Yet they were in compliance. It was as if the section on prohibited transactions and related parties had never been written.
“Your IRA can even purchase an
option on properties. It can also
make other, non-physical, real
estate related investments. For
instance, you can buy mortgages or
other notes through your IRA. You
can buy tax lien certificates and
defaulted notes.”
One of my favorite examples is a group of doctors whose retirement plans own the land and the building out of which their medical clinic operates. In another case, an individual was able to purchase 176 acres of unimproved land from his own IRA and then use that land for himself, personally.
These fall squarely into the list of prohibited transactions. They cannot even be called a gray area. So how did they get away with it? It turns out the Department of Labor has granted a number of blanket exemptions to the prohibited transaction rules. And as long as you follow their exemption application procedures and meet their criteria, you can receive approval for a similar transaction under one of these blanket exemptions.
The subject of exemptions is highly complex and technical. So if you want more information on this subject, go directly to the DOL’s web site, where they list these blanket exemptions and have all of the necessary information required to apply for your own exemption.
The general website is http://www.dol.gov/. A specific link for this section is http://www.efast.dol.gov/ You can also contact Ekaterina A. Uzlyan of the Department of Labor at (202) 219-8883.
Turning Your IRA into a Real Estate Investment
In describing the different possibilities and flexible nature of your IRA, I’ve gotten a little ahead of myself. So let’s get back to basics and talk about how this all works, step by step.
Chances are your IRA or retirement plan is not currently with a custodian who is going to allow you to buy real estate through it. So your first step is to find a custodian that allows for truly selfdirected IRAs. The simplest way to do this is to do an Internet search for “self-directed” IRAs and check out their websites or call them to find out if they handle real estate purchases for the IRAs they administer.
Ask about their level of experience with IRA-based real estate transactions and inquire about their fees. Request references.
Once you have picked your new custodian, you need to transfer your existing account to them. They will have all of the paperwork needed to do this. It can either be done by a wire transfer from your existing custodian or by check. If you own other securities you are going to keep, it can be done through a direct account transfer, frequently knows as an ACAT transfer.
The new custodian has all of the paperwork needed for you to buy real estate. So the next thing they are going to ask you for is a “buy direction letter”. This simply tells the custodian what you plan on purchasing.
I suggest you also give them all of the contact information for any other parties involved in the transaction, such as the seller, any attorneys who might be involved and any title agents. This will speed up the process if any questions arise along the way.
Your custodian will take care of all closing documents and the property will actually be purchased in the name of your IRA or retirement plan.
The Nitty Gritty
“the Department of Labor has granted a number of blanket exemptions to the prohibited transaction rules.”
Some of the common questions that arise concerning buying real estate through your IRA are…
How is the property titled?
Can my retirement plan borrow part of the money?
Can I own the property in any other entities (e.g., trusts, LLCs)?
What if I want to purchase it with a partner?
In normal real estate transactions, you can buy properties individually in personal name, with partners or as a business entity. This same flexibility applies to owning real estate in your retirement plan.
For instance, property owned by a retirement plan can be owned partially or fully by the plan. This opens up a universe of opportunities.
Let’s say you have found a piece of property you are interested in purchasing but you do not have enough money to buy it outright with either personal or retirement assets. You can legally own it with both and in any fractional combination.
In fact you can own property with your IRA with as many other entities as you want. There are virtually no restrictions. However, if you own property fractionally with your retirement plan, all income and expenses must also be accounted for fractionally.
Let’s look at a couple of simple examples.
You purchase a piece of property for $200,000. To keep it simple, let’s ignore leverage for the moment and assume you purchase it for 100% cash. You pay for half of it with personal assets and half with assets from your IRA.
Your custodian will now ensure when the transaction closes that you own it 50% personally and 50% by your IRA. Going forward, you must pay for any expenses or improvements in the property in the same manner, 50% personally and 50% with your retirement plan. So if you need to put a new roof on your rental home for $15,000. $7,500 must come from your IRA and the other $7,500 from personal assets.
Similarly, if it is income-producing property, the same principle applies to the income it generates. Half would be earned by you, and hence half would be taxable. The other half would be earned by your retirement plan and be tax-deferred (if in a traditional IRA) or tax-free (if in a Roth IRA).
There is virtually no limit on the numbers of partners with whom you can own the property. And your partners can use personal assets or retirement assets for their investment funds too.
You Can Own Property through Your IRA
And Title It in a Business Entity
For privacy or asset-protection purposes, you may prefer to own your properties in a corporate entity such as a Limited Liability Company. Your IRA or retirement plan can also own property in this manner, with some minor exceptions.
Once again the IRS wants to make sure you use your retirement plan as an investment for the future and not for today. So they make it clear you cannot enter into any transaction that might be considered self-dealing. And most custodians want to ensure you do not accidentally or purposefully enter into a transaction that might trigger any self-dealing. So most of them put some minor restrictions on the form of corporate ownership you can be involved in.
You can establish a new corporation that would be 100% owned by your IRA. However, if you want to own the corporation personally (rather than own the corporation through your IRA), most custodians will only allow you to own it with up to a 49% share. The remaining 51% must be owned by an unrelated party.
This is done to keep you from selling a corporation you already own personally to your IRA. This is considered self-dealing and is a prohibited transaction.
This may become particularly important when buying non-US property in certain jurisdictions. That’s because some foreign jurisdictions may not allow you or your retirement plan to own the property directly. Instead, they may require you to own it in the name of a foreign corporation
You Can Use Leverage in Your IRA
One of the most common questions that arises is how do I pay for the property? More specifically, can my retirement plan take out a mortgage? The answer is yes!
Your IRA can borrow to make a real estate purchase. However there are several important things to point out. You may not pledge the assets of your IRA as the collateral for the loan.
A loan may only be in the form of a non-recourse promissory note and the IRA holder is not allowed to personally guarantee the non-recourse note. The underlying property itself must be the only collateral for the loan.
Many lending institutions simply will not loan money under these conditions. Others may only grant loans up to 70% or 75% of the purchase price, requiring a 25% or 30% down payment from your IRA. Other, non traditional lenders, however, may be willing to make a higher loan-to-purchase-price to your IRA— if you’ve bought it at a good enough price that the loan to appraised value is low enough.
So let’s say you’ve bought a property in foreclosure for $100,000, and the property has a market value of $130,000. Even though you have all that extra equity in the property from buying below market, a traditional bank may only be willing to lend your IRA 70% or so of your purchase price… or $70,000 in this case. However, a non-traditional lender may be willing to lend you 70% of the appraised value ($130,000 in this example). That would mean you’d get a loan of $91,000 for this purchase, instead of the $70,000 offered by the bank.
“You can establish a new
corporation that would be
100% owned by your IRA.
And you can then own
investment property in that
corporate name.”
The Key Steps of Buying Real Estate through Your Ira
Find a custodian for truly self-directed IRAs Arrange for transfer of funds Fill out “buy direction” letter Execute sales contract with help of administrator Apply for loan in the name of the IRA Close on transaction and reap tax sheltered benefits Option to pay yourself an asset management fee (not a direct property management fee)
It is also important to note when you have debt-financed real estate in a retirement plan the mortgage payments must come from either income from the property, existing plan assets, new contributions to the plan, or some combination of these. But you’ve already learned in MSM to make sure all your rental properties pay for themselves and that you always should have a margin of safety. So if you follow those guidelines, your carrying costs should all be covered by the property itself. And this requirement won’t be difficult to meet.
There Are Limitations on Tax-Sheltered Income
When Your IRA Borrows to Buy Real Estate
The use of borrowing in your IRA may trigger an event called UBTI, Unrelated Business Taxable Income. Let’s say you purchase a piece of income-producing property with your IRA.
You pay $30,000 in cash from your IRA and you finance the other $70,000 for a total purchase of $100,000. During the year this property generates $10,000 in income.
Seventy percent, or $7,000 of this income, would not be sheltered since this relates to the amount that was financed by your IRA. Thirty percent, or $3,000 of this income, would be sheltered since this was the amount that was not financed You would be responsible for reporting this UBTI on IRS Form 990-T each and every year the property produced a taxable income stream.
The Pros and Cons of Using Your IRA to Buy Real Estate
Some commentators say it is not a good idea to buy real estate with your retirement plan while others have whole-heartedly embraced the idea. Like anything, there are pro’s and con’s. Among the key positives…
You get to access capital in your IRA for real estate purchases, and this can provide a very valuable alternative to stocks, especially when the stock market is overvalued and weak. You also get the tax-deferral benefits of IRAs while investing in real estate.
With a traditional IRA, capital gains from property sales and any income grow tax deferred while remaining under the retirement plan umbrella. But they are taxed at ordinary income rates when withdrawn. (However most participants are in a lower tax bracket at this point in their lives.) With a Roth IRA, your contributions are with after-tax dollars. So capital gains and income grow tax-free.
Among the drawbacks is the fact that you lose some of the write-offs and depreciation you normally enjoy when owning real estate outside of a retirement plan. Yet, at the same time, you also avoid the depreciation recapture upon sale if the property is held under the plan umbrella.
Last but not least
Find the best real estate agent to help you find the properties for you to invest in. I would be more than happy to be your agent and help you find the perfect property to invest in. Feel free to contact me for a consultation anytime.
Real Estate Specialist
John Cantero
918-313-0408
johncantero@yahoo.com
Search 100’s of home instantly at
http://www.HomesInTulsaOkForSale.com
Spotting Contractor Scams
While the vast majority of contractors are on the up-and-up, it’s worth your while to be on the lookout for potential scams.
While the vast majority of contractors are on the up-and-up, it’s worth your while to be on the lookout for potential scams. There’s a lot of money to be made, and lost, on sub-par work. And worst-case scenario, you’re left with a home or project that is not only low-quality, but potentially dangerous to your family.
The Motley Fool, always one of our favorite websites for its no-nonsense language and jaunty tone, has a list of 10 super practical warning signs that can give you a heads up on a shady contractor before the job starts. Demanding up-front payments and pressure tactics are more obvious signs of someone you may not want to do business with, but beware the worker who was just “in the neighborhood” and offers to do work for an upfront fee (these types of scams are common for yard or tree work, and often targeted at older home owners).
“I’ve just resurfaced your neighbor’s driveway and I’ve got materials left over to do yours. Looks like it needs work soon. I’ll give you a really good deal.”
This and other “we’re in the neighborhood” lines are a warning. First, a legitimate contractor does not overbuy materials for a job and expect to unload them on the job site’s neighbor. Second, a legitimate contractor will not take on a job from the perspective of getting rid of excess materials. He or she will assess each job based upon its individual needs.
It may be legitimate for the contractor to contact you “since we’re in the neighborhood.” If that is the case, then you’ll want to speak to your neighbors to find out the quality of the work. You’ll likely not want to plunge in at that very moment, in any event.
The whole Motley Fool article is worth a read.
None other than the National Association of Home Builders has a good list of things to look for on the contractor front as well. Among the better bits here include a contractor not being able to produce a list of referrals, asking you to do the legwork on permits or licenses, not carrying sufficient licensing and insurance.
Also: Underbidding.
They may have the best price, but that doesn’t guarantee the best work. Such contractors may cut costs on quality, which can end up costing you more when you have to have the substandard work redone.
Finally, HouseLogic.com offers a list of common scams specifically related to remodels.
It’s worth a read if you have a big project, or live in an older, revitalizing neighborhood where remodels are common.
Zero Down Payment Home Loan
Zero Down Payment Home Loan
Does a home loan with no down payment and decent rates sound too good to be true? It isn’t.
No money down, better rates than an FHA loan, and the ability to finance closing costs. It may sound too good to be true, but in fact it’s a U.S. Department of Agriculture guaranteed rural development loan, and now is your best chance to get one.
Before we get into the details, a bit of background. The USDA provides extremely attractive loans to people in certain rural locations, as an enticement to settle down and develop new areas of the country. The Department of Agriculture uses population data from the US Census and other factors to determine which areas of the country count as “rural,” and then allows buyers in these areas (who meet a few other requirements) to get a USDA-backed loan from an approved lender.
If you’re a candidate for one of these loans, there’s no time like the present to apply. Here’s what you need to know.
What Makes USDA Loans Special?
Ag Department-backed financing is so attractive because it requires no money down but still has rates competitive with other government mortgage products. FHA loans, the most common type of government loan, require a 3.5% down payment at minimum, and saddle low-credit buyers with costly mortgage insurance premiums. USDA mortgages only require a small annual fee (a fraction of the FHA’s rates) and an upfront premium of 2% of the loan amount. However, that premium can be rolled into the mortgage, giving buyers the option of getting financed with a 0% down payment.
What’s The Catch?
The catch is the Department of Agriculture limits who can get one of these loans. If you make more than 115% of your area’s median income or already have “adequate housing,” you’re not eligible for USDA financing. You’re also required to purchase housing that is “modest in size, design, and cost” and meets various building codes.
Then there’s the matter of credit. Technically, the USDA doesn’t have a strict credit minimum, but most lenders are reluctant to sign off on anyone with a score south of 620. That’s more than 100 points higher than credit limits for FHA loans, which require a minimum FICO score of 500 for buyers willing to put down 10% up front. The good news is buyers can offset poor credit by showing mitigating factors like a healthy bank balance or a monthly rent bill higher than the home’s future mortgage payments. You can read the details of buyer and property requirements on the USDA’s website.
Most important, you must live in a specific area defined by the USDA as rural. The department provides a map showing which regions are eligible here.
Why Is Now The Best Time To Get One?
Remember how the USDA decides which areas are eligible for these loans based on census data? Many areas that were previously considered rural, and therefore eligible for USDA financing, have become regular suburbs. According to a 2011 study by Housing Assistance Council, 97% of the country’s land mass, an area that includes 109 million people, is eligible for a USDA loan. That means about one in three people lived in regions that were USDA eligible when the report was published.
Unfortunately, the ride is almost over. The USDA plans to update the eligibility map with 2010 census figures this October. The Housing Assistance Council estimated that the new information will make 7.8 million people ineligible for USDA financing unless they move to areas within the new eligibility zone.
In reality, the change is going to effect significantly fewer people than that, thanks to congressional action that grandfathered in many areas. However, the USDA told Money.com they don’t yet have exact numbers on how many Americans will no longer live in rural areas after the update, so if you’re eligible now and looking for a loan, it’s better to be safe than sorry. At least some at the department anticipate a rush to get financing before the old rules expire. “We’re going to get inundated,” predicts Neal Hayes, Housing Programs Director for the New Jersey USDA state office.
What If I Already Have a USDA Loan? Can I Still Refinance If My Area Loses Eligibility?
Don’t worry. If you’ve already got a USDA mortgage, you’re done worrying about regional eligibility requirements. As long as you still meet other requirements, you should be able to refinance.
How to Boost Your Credit Before You Buy a Home
The process of buying a home doesn’t just begin when you make an offer – it starts long before that. One of the first stops on the road to home ownership is figuring out your finances, and that includes understanding your credit, a critical piece of the buying puzzle.
Whether your credit is in need of an overhaul or you’re looking to preserve your stellar score, now is the time to address your creditworthiness so you can position yourself to get the best mortgage at the best rate. Here are 8 steps to take to strengthen and solidify your credit score.
1. Get Your Hands On Your Credit Report – If you don’t have a current one, get your credit report now. You need to be aware that problems exist before you can solve them – and serious issues, and sometimes even minor ones, can take months to repair. There are a variety of ways to get your report, and you’re entitled to a free one from each of the three credit bureaus once a year under the FACT Act; just go to Annual Credit Report website to retrieve it.
2. Stay Current – Pay your bills on time – It sounds like a no-brainer, but if you’re looking to increase those scores over time in a clear and steady upward climb, never miss a payment. Ever!
3. Pay Over The Bottom Line – Another credit building tip is to always make more than the minimum payments on your revolving credits each month. A history of minimum-only payments is not a positive indicator for anyone reviewing your credit report. Always pay more – even if it’s just a little bit. Not only will you be chipping away at your balances faster, but you’ll save money on the total amount of interest handed over to your bank.
4. Maintain Low Balances – Some say the best way to keep you score afloat is to avoid carrying a balance that’s over 30% of your limit on each card, so pay those debts down below that halfway mark as soon as possible.
5. Don’t Move It, Lose It – Pay off the debt on your existing card, don’t just move it to a new one. The credit card companies have caught on to consumers who try to reduce balances by shifting them back and forth between cards,
and while they’ll still let you do it, they’ll charge you hefty fees. Incurring the extra cost is simply not worth the benefit. You’ll pay off debt quicker (and you’ll have less of it) if you just work hard to pay off what’s on the card you already have.
6. Cutting Cards – As with juggling debt, there’s a lot of controversy regarding whether you should close paid-off accounts. I say it’s better to play it safe than sorry: pay off all your credit cards, but don’t close any of them prior to applying for a mortgage.
7. Buying A Car Can Put A Dent In Your Credit Score – It’s best to avoid any big changes your finances right before a home purchase. That means no big purchases on credit, like buying a car or charging an expensive vacation. Any significant buys can alter your financial picture, and banks don’t like to see sudden changes just before approving a loan.
8. Plan Waaay Ahead – If you think you can get your credit spruced up and ready to go in a matter of days, think again. Even without any dings on your report, you’ll want to make sure all your credit cards are paid up prior to qualifying for a loan, and that requires planning. Get ahead of the game by paying down your debt, then try and lock up your credit cards until your credit score has been checked and you have been approved for your mortgage.
Once you have your financing ready then it’s time to get ahold of me so I can put together a list of available homes that fit your needs. Please feel free to call or text me at 918-313-0408 with any question you may have. I look forward to hearing from you and helping you find the perfect home.
Your Local Real Estate Specialist,
John Cantero
(918) 313-0408
johncantero@yahoo.com
Search Thousands of Homes…
http://www.homesintulsaokforsale.com/
5 Must-Haves for a Smarter Home
5 must-haves for a smarter home…
5 Must-Haves for a Smarter Home
Excitement about the smart home has reached epic heights with hundreds of new devices on the market that monitor, notify, control and secure the home. According to Parks Associates, mobile ubiquity, technology innovation and industry standards and partnerships have contributed to more than 13 million U.S. households now owning a connected device. Based on CNET observations, this number is set to increase threefold over the next three years to an estimated 45 million smart homes by 2018.
With connected products available to even the least tech-savvy consumers for as little as $50, there’s no better time than now to create a smarter home. Here are five ways to do it.
Automate your light switches. One of the easiest and most affordable places to start automating your home is with the lights. Chamberlain and other companies let you appear home when you’re not by setting schedules that turn lights on and off at select or random times. These products are sold at most home improvement and electronics stores such as Home Depot, Lowe’s, Best Buy and online for about $49.99.
Control the garage door. According to the Door & Access Systems Manufacturers Association, an estimated 71 percent of U.S. households use their garage as the main entry point to their homes. Automating the garage door allows homeowners to monitor and control the most active door of the house from anywhere in the world. Smartphone alerts let you know when the garage is in use or left open, and gives you access to opening it anytime for guests, deliveries or workers.
Install smart locks. With connected door locks, a touch of your finger locks or unlocks the front door, providing alerts every step of the way. You can also allow access to others through their smartphones and turn off access at any time. Smart locks begin at about $200 and are available at Amazon, Best Buy, Home Depot, Lowe’s and other stores.
View your home with video. A connected home video camera can help by streaming live video to your smartphone once movement is detected in or around the home. These products start at about $150.
Save money and energy through temperature control. Installing a connected thermostat can save you up to 20 percent on your heating bill throughout the year. Smart thermostats allow you to adjust the temperature based on your comings and goings from anywhere. Turn up the heat in your house just before returning from a trip or switch your setting to vacation mode if you forgot to do it before leaving. These devices sell for about $250 from various online electronics and home improvement retailers.
Things to Avoid When Purchasing a Foreclosed Home
Purchasing a Foreclosed Home
Buying a foreclosure can be a great way to save money on a new home, but you need to exercise a certain amount of caution. Although foreclosure discounts can significantly lower the cost of a home, you can also end up in over your head financially if you’re not careful.
Avoid making these common mistakes when buying a foreclosure:
•Not hiring a realtor: Foreclosure transactions are much more complicated than the traditional home buying process. You’ll need the help of a professional agent who specializes in foreclosed homes.
•Not checking on state and local laws: To avoid legal issues, it’s important to know the laws on buying foreclosures. The contract has to adhere to these laws or it could be invalid.
•Not thinking long-term: Make sure the foreclosed home you buy will be a good investment ten years down the road. If you don’t think that far ahead, you could be investing in property that will decline in value.
•Not saving for repairs: Set aside at least 10 percent of the home’s cost for repairs. Don’t just look at the cost of the home when determining your budget. Repairs are commonly needed in foreclosed homes, especially ones that have been vacant for awhile.
•Not narrowing down your search: It’s easy to find foreclosed properties in any part of the country, but it’s best to focus on a specific area to avoid being overwhelmed. Work with a real estate agent in that area to find a home that suits your needs.
•Expecting significant foreclosure discounts: Don’t assume that the bank will take a big chunk off the price of a foreclosed home. You’ll still need to negotiate for that.
Need help buying a foreclosed home? Contact me and I will show you the way home. John Cantero (918) 313-0408
Here are a list of links below to my “Guide to buying foreclosures”
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Complete Guide To Buying Foreclosed Properties
How To Buy Foreclosed Properties
This guide introduces you to concepts for understanding the foreclosure landscape, and some interesting facts and figures to help you on your way to be successful foreclosure investor.
Why invest in foreclosures or distressed real estate? We go over some of the major benefits and points that make a strong argument towards getting started with real estate foreclosures.
We cover some of the standard and often misunderstood definitions related to distressed real estate and the foreclosure process. Like what is a ‘judicial foreclosure’, ‘lis pendens’, or ‘trustee sale’? You’ll find out here. Learn how to best take advantage of the fantastic opportunities you have to purchase truly affordable housing at bargain-basement prices and how to avoid cheap homes that may not perform as well others for return on investment. Also covered are tips for approaching and negotiation with the distressed homeowner about purchasing his/her property before a formal real estate auction is announced, and advice on ‘closing the deal.’
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 1 – Introduction
Foreclosure Tutorial – Part 1
The purpose of this foreclosure tutorial is to provide an overview of the foreclosure process and to help you get started in achieving your real estate dreams. Whether you are a first time buyer or a seasoned real estate professional, there is tremendous opportunity in learning how to buy foreclosure property and then using your knowledge to purchase undervalued distressed real estate.
The national foreclosure rate has continued to increase over the last several years. New mortgage loans are entering the foreclosure process daily. There are plenty of foreclosed or financially distressed properties available for purchase, typically at prices listed significantly below market median prices. On average, most markets price foreclosures at between 10%-30% below market median prices depending on the condition.
What causes foreclosures? The use of exotic loans, combined with higher consumer debt, changing bankruptcy laws and changes in employment levels all contribute to the foreclosure rate and are all likely to contribute to the continued flow of foreclosures to market. Due to these market conditions, I believe great opportunities still exist today to acquire homes at a discount, establish a preferred home lifestyle and/or make money and build wealth through foreclosures.
Unless you are already an experienced foreclosure investor, I recommend that you take advantage of the information presented in this tutorial. While it will not make you a leading expert on the subject matter, it does provide an easy to understand overview of the foreclosure process and how to purchase these properties.
There are few opportunities today that can be as lucrative and exciting as the hidden housing market of real estate foreclosures. We wish you the best of luck and hope to see you accomplish extraordinary success in your journey into distressed real estate. Remember the harder you work the luckier you will get.
If you would like a list of foreclosure properties or you have already found some homes you would like to go visit, please let me know and I would be more than happy to arrange it for you.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 2 – Why Invest in the Housing Market?
The Many Benefits of Real Estate Investment
With so many different investment options available today, what is it that attracts so many investors and ordinary homebuyers to real estate, whether the real estate market is UP or DOWN? One of the primary reasons is that real estate investing is relatively easy to understand. Real estate investing, like any business that resells a durable good, is essentially in the business of buying low and selling high. The simplicity of this concept and the amount of wealth that can be created is what attracts so many individuals to realty. While buying low and selling high is the guiding principal to building real estate wealth, there are many other important benefits. Let’s take a look at these benefits below, and keep in mind that investing in home foreclosures and other distressed real estate can actually multiply some of these benefits.
Price Appreciation: This is the most widely understood benefit of purchasing real estate. Price appreciation is generally the result of the basic principles of supply and demand. When the demand for housing increases faster than the supply of housing, home prices naturally increase. While housing prices regularly fluctuate from market to market there is one very interesting fact to remember. Since 1969, the first year the nation’s average home sale prices were tracked by HUD, there has been a net increase in the nation’s average sales price. As the US population continues to grow, combined with the inherent limitations on land development, housing prices as a whole should continue to rise. Buying cheap houses found in foreclosure listings can provide instant price appreciation in the form of purchased equity.
Tax Savings: If you purchase a home as a primary residence there are significant tax advantages. One of the biggest incentives to owning a home is that the interest you pay on your mortgage is tax-deductible, up to a very high limit. Additionally, you can claim property taxes you pay as an income tax deduction. Another major advantage of home ownership is that, in most cases, you don’t have to pay taxes on any profit you make when you sell your home.
There are also tax benefits with purchasing investment property. The key tax benefit with investment property is called depreciation. The property can actually be appreciating in value while you are depreciating the asset on your tax return. The result is a reduction in your current taxable income while not reducing actual income.
Rental Income: Receiving positive cash flow from investment property is every entrepreneur’s dream. To have positive cash flow, the rent derived from your tenants must cover all expenses including your mortgage, insurance and taxes. While there are any number of investments that may offer this benefit, few can produce as much income relative to the cash invested as real estate. By negotiating a great low purchase price on a bank foreclosure or a government repossessed homes, your ability to generate positive cash flow as a landlord is greatly enhanced.
Leverage: Simply stated, leverage is the use of borrowed funds to increase buying power. The most common example in real estate investing is a mortgage. Investors use a small percentage of cash as a down payment and finance the rest through a lender. As long as the interest rate at which they borrow is less than the rate of return on the investment, there is positive leverage.
Now that you understand the key benefits of purchasing real estate, let’s turn our attention to the foreclosure housing market, which presents some of the greatest buying opportunities available.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 3 – Examining the Foreclosure Process
Examining the Foreclosure Process
Examining the Foreclosure Process
Foreclosure process review
While most consumers are familiar with the term foreclosure, very few have a solid understanding of how the process works. The purpose of this chapter is to provide an easy to follow overview of the foreclosure process. Whether you are a first time homebuyer or a real estate investor, it is important that you have a complete understanding of the foreclosure process before you invest your money in this unique market. While different states require different foreclosure procedures, the basic process is the same for all states.
Foreclosure: Foreclosure is the legal procedure that a lender initiates to reclaim ownership of property after the borrower fails to make payments according to the terms of a loan. The foreclosure procedure essentially terminates the rights that the borrower was granted through a mortgage or deed of trust. This process gives the lender the legal right to take the property title away from the borrower so the property can be sold and the lender can recapture its loan proceeds.
Judicial Foreclosure and Non-Judicial Foreclosure: Depending on the specific state of the defaulted loan, the process will be either a judicial foreclosure or a non-judicial foreclosure. The key difference between these procedures is the length of time it takes a lender to foreclose on a defaulted loan. In a judicial procedure, it takes the lender approximately 12 – 18 months to foreclosure compared to only 4 – 12 weeks in a non-judicial procedure.
States supporting judicial foreclosure issue legal instruments called mortgages while states with non-judicial foreclosure issue deeds of trust. The mortgage process takes longer since a lender must initiate a judicial procedure through the courts to obtain a judgment allowing the foreclosure and sale.
By contrast, a default on a trust deed does not require lengthy court action since the title remains with the lender until the loan is paid in full. Additionally, the lender has the power of sale which allows the trustee to sell the property more quickly and thus recover the lender’s collateral in a timely manner.
The procedural difference in mortgage and trust deed foreclosures is provided below.
Trust Deed Foreclosure: There are three principal parties involved in a trust deed foreclosure. The three parties are (1) The lender (2) The borrower (3) The trustee who is an independent third party holding title to the property until the loan is repaid in full. When the borrower fails to make the required payments on the loan, the trustee simply records a Notice of Default, sends a copy to the borrower, and after a specified holding period, a Notice of Trustee Sale is posted on the property.
When searching for properties through Realtystore.com, properties with a Notice of Default are categorized as Preforeclosures; and properties with a Notice of Trustee Sale are categorized as Foreclosure Auctions properties.
The Notice of Trustee Sale is advertised to the public for a required period and if the borrower does not bring the loan current, the property is auctioned to the public.
Mortgage Foreclosure: A mortgage is a legal contract in which the borrower secures a loan by using the property as collateral. When the borrower fails to make payments, the lender is forced to take legal action to collect the amount due. The lender will typically send multiple notices to the borrower requesting information about the missed payments in an attempt to work with the borrower to bring the loan current. When these efforts fail, the lender will hire an attorney to initiate foreclosure.
At this stage, the attorney will file several legal documents including a lis pendens, which is a public notice indicating legal action is pending on the property. If the borrower fails to respond to the complaint, the attorney submits a report to the court with the facts of the case. The judge will then issue a Judgment of Foreclosure and Sale in favor of the lender. At this stage, an auction sale is advertised according to the local statutes.
Opportunities to Purchase Foreclosures: You should now understand how a property ends up at auction through the foreclosure process. We will now turn our attention to purchasing foreclosures during the three different stages of the process. The three stages are as follows:
(1) Before Foreclosure Auctions (Preforeclosures or Notice of Default properties)
At this stage the owner has defaulted on his loan and in many cases would like to find alternatives to avoid foreclosure and the resulting damage to his credit history.
(2) At Foreclosure Auctions (Auction or Notice of Trustee Sale properties)
The property owner has defaulted on his loan and has been unable to bring the loan current. Unfortunately, at this stage the owner is out of time and the property will be sold at a public real estate auction to the highest bidder.
(3) After Foreclosure Auctions (REO Properties, Bank Foreclosures or Government Repossessed Homes)
If the minimum bid at an auction is not met, the ownership rights of the property are transferred to the lending institution that provided the loan. In general, banks are eager to sell these properties so they can get the money back on the defaulted loan and issue a new loan. When ownership transfers to a government service enterprise, for example if the properties become HUD homes or VA foreclosures, the government will also be an eager seller so they can recoup their investment.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 4 – Pre Foreclosures – the First Stage of Foreclosures
Pre Foreclosures – the First Stage of Foreclosures
In this chapter we will review pre foreclosures, which represent the first stage in the foreclosure process. In this phase, the homeowner has missed at least one payment and is now considered delinquent on the loan. A pre-foreclosure can also be referred to as a Notice of Default or Lis Pendens, which is a formal warning sent to the borrower on a loan regarding the delinquent payment(s). A Notice of Default or Lis Pendens are essentially the same thing but just signify whether the loan is secured through a mortgage or deed of trust. Once the trustee files a Notice of Default it immediately becomes public record.
Understanding Distressed Homeowners: To effectively help a homeowner in distress, it is important that you understand the psychology of the owner. In most cases, the owner is dealing with a negative event in his life that has caused him to fall behind in his mortgage payments. Often times it can be the result of divorce, illness, job loss or other monetary obligations that have grown unmanageable. Making matters worse, owners often fall into denial or procrastination, which undoubtedly makes the situation worse. Only once you understand the problem the homeowner is facing can you effectively help. Remember , you may very well be the last alternative for a homeowner who is facing inevitable foreclosure.
Preventing further credit damage: While it is unlikely that a distressed homeowner has great credit, adding foreclosure to their credit history will have long-term consequences. Specifically, it will make buying another home or establishing other types of credit very challenging for a long period of time.
Saving some equity: If you are able to pay the owner some amount above their mortgage balance, it may well be more than they would receive through a trustee sale or real estate auction. The reason being that the owners’ equity is often times completely offset by the expenses and fees incurred leading up to the auction.
Deficiency Judgment: If the proceeds from the foreclosure sale are not enough to pay off the lender, then the borrower is liable for any deficiency. Depending on the particular state laws, a deficiency judgment that is not resolved can result in the previous homeowner experiencing garnished wages, seized assets and potentially even federal income tax levies.
Negotiating With the Owner: The biggest challenge of buying real estate preforeclosures is getting the attention of the homeowner. Since a Notice of Default is public record, other astute investors have probably contacted the owner as well. Many investors will simply write a letter or send a postcard indicating their interest in the property. Since there will always be competition for a good deal, we do not recommend this passive approach. Rather, we have found it more effective to speak directly with the owner either over the phone or in person. This is the best way to gain the confidence and trust of the owner who is the ultimate decision maker.
In many cases, the best option for an owner in default is to sell the home and get relief from the pressures of financial distress. Unfortunately, many property owners make every effort to hang on to their property for as long as they can. However, with the real estate auction date rapidly approaching the homeowner will likely be motivated to close a sale prior to the auction. As the owner continues to explore his options in the pre-foreclosure period, we recommend you keep in regular contact with him. Make sure he knows you will immediately buy the house as long as he is willing to accept your price.
When speaking with a distressed homeowner, be courteous and demonstrate an understanding of the owner’s dilemma. Further, we recommend taking a consultative approach with an objective of reaching a mutually beneficial agreement. By taking a consultative approach, you may ultimately help the owner through the problem while deriving no immediate benefit for yourself. While this may seem discouraging, you may still benefit from the relationship. It is not uncommon for a distressed homeowner to solve his problem only temporarily and ultimately to default on their mortgage again. Having helped the owner the first time, it is quite likely he will seek your counsel a second time. As more deals come your way, you will undoubtedly find yourself in front of several good investment opportunities.
Property Analysis: Before you can make an offer on any type of distressed real estate, you must do your homework. This includes a thorough analysis of the property including a detailed title search to ensure a clear title. Next, you should evaluate the loan-to-value ratio of the property. This ratio compares the balance of the mortgage to the value of the property. The difference between these two variables is the owner’s equity or the potential gross profit in the deal. If there is little or no owner’s equity in the property, we recommend you go no further. If there is little or no equity in the deal, it will be very difficult to create a true win-win situation with the owner.
If you are buying the property to flip (quickly resell at a profit) rather than keep as a primary residence, you must calculate all the costs to buy, carry, repair and sell the property. If there is still a reasonable amount of owner’s equity after subtracting all necessary expenses, you have identified a good investment. So how much should you offer the homeowner? While every deal is different, a very reasonable approach is to split the remaining equity with the owner. This way both parties end up in positive positions.
Closing the Deal: Before you sign any agreement with the owner, double check to ensure the title of the property is clear. Never release any money until your real estate attorney has assured you of a clean title. If everything checks out, you will both need to sign a Real Estate Purchase and Sale Agreement. At this point, you will want to arrange your financing (you may even consider alternative financing or hard money loans) and ensure that the foreclosure process has been stopped. Assuming all goes well, it looks like you just bought some real estate at below market value.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 5 – The Second Stage of Foreclosures: Home Auctions
The Second Stage of Foreclosures: Home Auctions
The auction is the stage of the foreclosure process in which the default preforeclosure phase of the property has ended. The lender is now seeking to recapture its losses by auctioning the property in a public sale to the highest bidder. This event may also be known as a trustee sale.
The proceeds from the real estate auction will be disbursed to the lender who initiated the foreclosure action, which in most cases is the lender holding the first mortgage. Once the first mortgage holder’s position has been satisfied, any additional funds will be used to settle any other remaining obligations. If all encumbrances against the property are resolved, any additional funds will be disbursed to the homeowner.
Purchasing at foreclosure auctions is a fantastic opportunity to buy houses at bargain-basement prices, but you must be prepared. This section will provide an overview of home auctions and the land auction process to ensure you are knowledgeable and well prepared for your first auction.
Preparing for the Home Auctions: Before you bid on any auction property it is paramount that you do a title search on the property. The goal is to determine whether there are any liens or judgments against the property. These can include unpaid personal property taxes, civil lawsuit judgments and state and federal tax liens. If you present the winning bid, you will be granted title to the property subject to all liens and encumbrances. This can have a significant effect on the value of the property you purchase. The last thing you want is to be the winning bidder on a property with unexpected liens filed against it.
You will also need to be prepared with financing in order to bid at the auctions. Cash or cash equivalent will be required at the auction. If you are the winning bidder on a property, a 5 to 10 percent deposit is required at the conclusion of the auction with the balance of the purchase price due within a few days.
We highly recommend that you attend at least two real estate auctions prior to making your first official bid. This will help you get comfortable with the trustee sale process and provide the confidence you will need to be successful. You must be careful at an auction, as it is very easy to get caught up in the excitement of the bidding process and make a poor decision. Composure and discipline are essential to buying discounted property at an auction.
The Opening Bid: Prior to the auction, the trustee establishes the opening bid. The opening bid is determined by totaling the remaining loan balance, court costs, interest and back taxes, legal fees and liens and judgments. The winning bidder will normally satisfy all these expenses at closing. If no one bids above the opening bid, the lender will take back the property at which point it is added to the list of Bank Foreclosures, also called REO Properties. Depending on how the original mortgage was guaranteed by the lender, the property title may instead transfer to a government service enterprise. In this case it will join the inventory of government repossessed homes and and join the list of HUD homes and VA foreclosures.
How to Bid: You will approach the auctioneer one at a time and give your name and discreetly show him the amount of your cashiers check or cash. The auctioneer will note your name and the limit of your bidding ability as evidenced by the cash or cashiers check you showed him. Bids over this recorded amount will not be accepted from you unless you show an additional check or cash during the bidding.
Prior to the opening bid, the trustee will read aloud the legal description and terms of sale for each property. The legal description of each property is technical; so don’t expect the trustee to provide insight into the quality or the distinctive characteristics of these properties coming from the pre foreclosure lists.
The Winning Bid: If you submit the highest bid at an auction and the hammer strikes the third time, you now own the property. At this point, you will be expected to make a deposit of 5 – 10% of the purchase price. The remainder of the purchase price will be required sometime between 24 hours and 30 days after the auction. Remember, the deposit is non-refundable and all sales are as-is and final.
While you are now the owner of the property, in some cases it may be possible for the owner to buy back the property. The period is called the Redemption Period which essentially gives the original owner the opportunity to redeem himself. In most cases, this is unlikely to happen since if the owner was in a financial position to buy back the property he probably would not have defaulted in the first place. However, it is important to be aware of this issue whenever bidding at an auction. The redemption period varies from state to state and in some states there is no redemption period at all.
Conclusion: There is no doubt that foreclosure auctions can present some of the most attractive real estate buying opportunities available. This is due to the fact that the opening bid is based primarily on the mortgage balance and not on the market value. Where else can you find an asset being offered for less than market price? The key is to find home auctions with limited competition. Often times, this can be the case when there is poor weather and few people want to venture outside. We wish you the best of luck at your next trustee sale or land auction!
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 6 – Bank Foreclosures
Bank Foreclosures
Another great opportunity to purchase foreclosures is after the real estate auction, when the lender is either the successful bidder or there are no bids at all. In either case, the bank becomes the legal property owner and the property is considered a non-performing asset of the bank. When ownership is transferred to the bank as a result of foreclosure, these homes are classified as Bank Foreclosures or REO Foreclosure Properties. They are added to the lender’s REO list of homes to sell. At this stage, the key point to remember is that banks typically are not in the business of managing real estate, nor do they want to be. This can create a solid opportunity to buy property at a great price. This section will provide an overview on the REO process and why banks are so eager to sell their bank foreclosure inventory.
Where is the Opportunity?
There are several reasons why banks want to quickly sell their bank owned properties. The top three reasons are discussed below:
(1) Non-Performing Assets: Banks are primarily in the business of lending money and have little interest in diverting their resources toward managing the disposition of real property. Consequently, banks are anxious to dispose of their REO bank owned foreclosures. However, this does not mean that banks want to lose money in the sale process. The banks’ goal is to quickly recoup the capital tied up in these non-performing loans and re-deploy it in the form of a new profitable loan.
(2) Carrying Costs: As soon as ownership of the property reverts back to the bank, the expenses of holding the foreclosed houses quickly begin to add up. These costs include property taxes, maintenance expenses and insurance premiums. These costs continue to mount until the property is sold which puts added pressure on the bank to quickly dispose of the asset. In most cases, the longer a bank holds a property the more unprofitable it becomes.
(3) Property Damage: Since most bank foreclosures are vacant, there is always risk of property damage from vandals and/or bad weather. The problem grows with every additional home that is added to bank’s REO list. Again, this creates additional incentive for a bank to quickly move the home foreclosures out of its possession.
While banks are clearly motivated to sell their REO bank foreclosures quickly, there are both pros and cons to buying bank owned properties.
Pros and Cons of Buying Foreclosures from Banks?
Buying REO properties directly from the lender has both advantages and disadvantages. Let’s start with the key benefits of buying directly from the lender. First of all, most bank foreclosures are sold with a clean title, meaning that all junior liens or encumbrances on the property are resolved. The means you can buy the property without worrying about the redemption period or any unexpected judgments against the property which can significantly impact the value of your investment.
The second benefit is that there is typically an abundance of bank foreclosures nationwide, creating significant opportunity to identify good deals. However, this does not mean it is easy to find them at below market, but it does mean that with hard work and persistence you will be able to identify properties that meet your investment criteria.
The last key benefit to bank foreclosures is that banks may be flexible with the terms and conditions when selling foreclosed property from their non-performing asset pool. While banks will always attempt to get the best deal possible, the fact that they are experts in financing real estate gives them the flexibility to be creative and negotiate the terms and conditions of the loan. They often have a variety of alternative financing options available to suit a buyer’s unique needs.
Now let’s take a look at the key disadvantage of buying bank foreclosures. The key disadvantage is that the purchase process is quite simple with most REO properties having clear title. While this sounds like a benefit, it ultimately has the effect of attracting more buyers creating added competition for a given property. As the competition increases, the selling price can be driven up resulting in lower profitability in the deal.
Closing the Deal
Inevitably you will encounter some competition in your quest to find a great deal on an REO foreclosure. As such, we have provided some useful tips to give you an edge on the competition. First of all, we recommend establishing personal relationships with the lenders in your area. A strong personal relationship with the lender can provide just the edge you need against another qualified buyer. Second, if you have established an outstanding credit rating, make sure the banks know about it. While lenders are eager to sell a REO foreclosure, they also want to ensure that the property does not return to their inventory any time soon. By highlighting your strong credit history, the banks will naturally gravitate toward your offer.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 7 – HUD Homes and Government Property
HUD Homes and Government Property
Government Repossessed Homes are Sold to the Public
HUD and government foreclosure basics.
HUD Homes and Government property are quite similar to Bank Owned properties. Like bank foreclosures, HUD homes and government repossessed homes had their title transferred to the government as a result of a foreclosure. This inventory of hard assets produces no tax payer return unless it is liquidated. So, like banks, the government is equally motivated to sell its distressed real estate. However, there are enough differences between bank owned and government owned homes that we decided to create a separate chapter. Government repossessed homes include residential and commercial property from the federal, state and local governments. The primary government agencies that sell home foreclosures or distressed assets to the public are discussed below:
Where do Government Repossessed Homes come from?
HUD: The largest number of government foreclosures can be found through HUD. HUD is a federal agency that implements housing policy and was created to increase home ownership across the US. HUD accomplishes this by insuring loans for people with low down payments or that don’t meet standard credit requirements. The bottom line is that HUD loans are higher risk loans and therefore have a higher default rate.
When HUD homes are foreclosed, the properties are sold to the public. Since the foreclosure is insured by HUD, the government is required to pay the lender the amount due on the loan. Once the loan is paid off, HUD takes possession of the property and can dispose of it in any reasonable manner. In order to bid on a HUD foreclosure, you must submit the bid through a designated HUD broker. Normally, HUD homes are sold during an Offer Period. At the end of the Offer Period, all offers are opened and, basically, the highest reasonable bid is accepted. If your bid is accepted by HUD, your local agent will be notified, usually within 48 hours.
VA Foreclosures (Veterans Administration Loan Guaranty Service): The objective of the VA Loan Guaranty Service is to help veterans and active duty personnel purchase and retain homes in recognition of their service to the United States. Similar to HUD, the VA guarantees the home loans allowing veterans to purchase on more favorable terms. The VA acquires properties as a result of foreclosure on VA guaranteed loans. Unlike the VA loan program, you are not required to be service personnel to purchase VA foreclosures. In fact, you are not even required to be an owner-occupant, which is beneficial to investors. Once you have found a home that you are interested in purchasing and want to make an offer, you will need to have an agent prepare the “Offer to Purchase and Contract of Sale” VA form, together with all necessary documentation. In turn, your agent will submit your offer through the listing broker for approval.
Fannie Mae Foreclosure (Federal National Mortgage Association): Fannie Mae’s public mission is to help more families achieve the American Dream of home ownership. It does this by providing financial products and services that make it possible for low, moderate, and middle-income families to buy homes of their own. A Fannie Mae foreclosure is a home that originally had a conventional mortgage, which was sold to Fannie Mae and then resulted in foreclosure. At that point, Fannie Mae owns the property and will attempt to sell it to recoup the original mortgage. All Fannie Mae-owned homes are sold through local brokers, so your qualified real estate broker can assist you in submitting a bid.
Freddie Mac (Federal Home Loan Mortgage): Freddie Mac is a publicly traded corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Freddie Mac provides special financing services through a select group of lenders who are skilled at helping buyers find the right financing to meet their needs. The special financing includes low down payment programs as well as reduced closing costs.
FDIC (Federal Deposit Insurance Corp.): The FDIC preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for up to $100,000. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a bank failure. When a financial institution does fail, the FDIC steps in as a receiver to service the existing loans of the bank. When a borrower refuses to pay or to provide the necessary financial information, the FDIC has no choice but to seek recovery through foreclosure. All FDIC properties are sold in “As is” condition. All FDIC property will include the appropriate contact information for submitting a bid on distressed real estate.
GSA (Government Services Administration): The GSA is responsible for promoting effective use of federal real property assets, as well as the disposal of real property that is no longer mission-critical to federal agencies. This property can include single and multi-family residences, undeveloped land and even commercial and industrial facilities. GSA can dispose of surplus property via a competitive sale to the public, generally through a sealed bid or auction. Since 1987, GSA has sold over $3 billion worth of property across the United States.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 8 – Tax Sales
Tax Sales
Dealing on Tax Defaulted Properties
Tax Sales and Tax Liens.
When a homeowner is delinquent on property taxes owed to the local taxing jurisdiction, the agency will enforce its right to collect the amounts due through a tax sale. Tax sales are a mechanism used to collect delinquent property taxes, so the local government can deliver the services and benefits it has promised to the citizens. This is generally accomplished through a public auction, where the local government sells either a Tax Deed or a Tax Lien.
The first process is called a Tax Deed Sale, where after legal requirements are met, the property is offered for sale at a public auction. Generally, minimum bids will be set at the sum of accumulated back taxes plus interest plus transaction costs associated with selling the tax defaulted properties.
Those states that offer a tax deed sale generally wait a number of years before they sell the property. However, when the property is ultimately sold at auction, the sale is usually final and the owner has no right of redemption. However, there are exceptions to this rule, so it is important to perform proper due diligence in each jurisdiction. For example, the state of Texas provides a 6-month redemption period where the former home owner can reclaim the property by fulfilling certain requirements. Additionally, the state of Tennessee allows a full year of redemption. Here in Oklahoma there is a 2 year redemption period.
Over half of the states in the U.S. use a form of tax deed sale. Those jurisdictions that have tax deed sales will sell fewer properties at the tax deed sale than jurisdictions with tax lien sales. This is due to the fact that tax deed states usually require a much higher price for the property than you would end up paying for the same property in a tax lien state.
Tax deed sales are ideal for investors who want to own real estate. Contrary to a tax lien auction, the winning bidder at a tax deed auction purchases the deed to a piece of property, becoming the new owner and obtaining all rights to the property, clear of any mortgages, liens or deeds of trust. For most people investing in tax properties for sale, the key objective is to buy low and sell high. As with any real estate purchase, it is critical that you research the property and understand the value of the property before submitting a bid. Without the proper analysis, you risk paying more for the property than it is worth.
Those states that have Tax Liens Sales (sales with a redemption period for the owner) take a different approach. Rather than waiting several years to collect delinquent taxes via tax deed sale, tax liens states sell tax lien certificates that are investment documents which are transferable to third party investors.
Similar to tax deed sales, tax liens sales are performed through a public auction. The buyer of a tax lien is buying the rights of the taxing jurisdiction to receive interest, penalties and costs. The security for this investment is that the buyer holds the right to acquire the property if he is not paid before the expiration of the redemption period. This makes the potential upside of tax liens a very attractive investment. However, it is important to note that the national tax lien redemption rate is approximately 95%. This means that investors will usually not end up with the property, but will make a return on their investment that is quite attractive. The returns vary from state to state but can be as high as 30% and often exceed 12%.
To summarize the opportunity with tax liens sales, there are generally two ways to profit. The first opportunity being when the property owner redeems the lien and you are compensated with interest and penalties. Again, this can be very lucrative interest rate depending on the jurisdiction. The second opportunity being when the property owner does not redeem and you receive title to the property and become the new owner. The opportunity to receive title to the property can make investing in tax lien property for sale a very exciting and lucrative opportunity.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 9 – Short Sales
Short Sales
Securing a Short Sale Package
Short Sale Homes Available
What is a Short Sale?
A short sale refers to a transaction when a buyer can purchase a home for less than the remaining loan amount. The advantage is the short sale buyer can save a significant amount on the purchase price, as long as the buyer is willing to take part in a more complicated transaction. The transaction is more complicated because it requires both the lender and the home owner to agree to the purchase price, as opposed to a “normal” sale when the homeowner can make that decision on their own. This is because the lender will receive less money from a short sale than they would have received if the homeowner paid the full amount of the loan.
Who benefits from Short Sales?
All parties involved in the transaction benefit. The lender benefits by avoiding the costs of foreclosing on the property, which are often higher than taking the loss on the loan. The homeowner benefits by avoiding a foreclosure, which can damage their credit history and raise the costs of borrowing money in the future. The buyer benefits by purchasing the distressed real estate at a discounted price, since the homeowner and lender are both highly motivated sellers.
Where does a Short Sale Buyer begin?
There are two things to keep in mind when thinking about doing a short sale. As the buyer, you need to approach the homeowner to start the short sale process. This is because the majority of banks will agree to a short sale only after the homeowner has received a formal offer. Also, make sure that there is a pre-workout agreement, or short sale package, between the lender and the homeowner. This agreement helps make sure the short sale negotiations will go smoothly.
Creating a Short Sale House
First, locate a property where the debt of the homeowner is more than the amount the property can be sold for. Approach the homeowner and make a formal offer on the property. Keep in mind a short sale can take anywhere between 1-6 months to complete. You’ll need to line a set of documentation to submit before a short sale can be approved. These documents generally include: a short sale application, tax returns, pay stubs, a hardship letter, a purchase agreement from the buyer, financial statements, and payoff letters from all lenders involved. After submitting the documentation, it generally takes 2-6 weeks to receive lender feedback on the application. Don’t be discouraged by the wait. Remember, the goal of the short sale buyer is to obtain property at an amazingly low price. It’s worth the wait.
Pre-Workout Agreements
Most lenders require a pre-workout agreement prior to starting workout negotiations. Pre-workout agreements can take a variety of forms that range from a brief letter to a detailed contract that lays the foundation for future negotiations between the defaulting borrower and the lender. A well-written agreement establishes the history of the loan and the procedure for negotiating the short sale. It protects the borrower by preventing the lender from pursuing foreclosure on the property during the workout and allows the lender to avoid potential lender liability claims and defenses against their right to foreclose.
Tips for the Short Sale Buyer
•Do your homework before making an offer. Check public records. Find out who is on the title, how much is owed to the lender (to figure out how much to offer for the property) and if a foreclosure notice has already been filed (a short sale can only happen at the pre-foreclosure stage).
•Make sure you know how many loans are on the property. Avoid properties with more than one loan.
•Search for properties where the price is too low for the neighborhood, the property may already be in the short sale process.
•Make sure both the lender and the seller agree to your purchase offer. Both parties must agree in order for the short sale to go through. Have your agent submit the required documentation for approval.
•Get the appropriate contact for the lender and give them a deadline to respond to make sure your paperwork is processed in a timely manner.
•Once you find the home you desire, partner with an agent with short sale expertise.
•Ask your agent to waive the difference in commission between the buyer’s broker agreement and the lender negotiated commission.
•Make sure the lender allows you to conduct the necessary home inspections before you purchase the property.
Short Sales and Today’s Mortgage Crisis
Today’s mortgage crisis is leading to an increase in the number of short sales and presenting wonderful buying opportunities for the willing buyer. Declining home values are causing a huge drop off in home equity (the property’s market value minus the loan amount) and homeowners are struggling to meet their monthly payments due to mortgage interest rate hikes. Distressed homeowners are no longer able to refinance their way out of unmanageable loans. We are seeing historically high foreclosure rates across the country due to eroding home values and problems in the credit markets.
The Mortgage Forgiveness Debt Relief Act was recently passed by the federal government to help address this growing problem. Prior to its passage, the amount forgiven in a short sale was reported as taxable income. Now, distressed homeowners don’t need to worry about income tax liabilities when considering short sales. This legislation is leading more people to take the short sale route and as a result, providing the buyer with a larger pool of discounted properties to choose from.
Conclusion
“There is no sign that we’re near the bottom in the housing market,” states Douglas Elmendorf, a senior fellow at Brookings Institution and a Former Fed economist. Housing prices are predicted to fall in the next few years and short sales will continue to play a significant role in the real estate market. This is a great opportunity for a buyer to purchase discounted property and at the same time help a distressed homeowner save their credit history.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 10 – For Sale By Owner
For Sale By Owner
For Sale By Owner (FSBO) – An Alternative to Foreclosures
FSBO for sale by owner real estate.
In this chapter, we will discuss For Sale By Owner real estate or FSBO properties. FSBO home sellers act as the selling agent and handle the sales process directly with the buyer or buyer’s agent. In this situation, the seller does not pay a listing commission. We have included homes for sale by owner on our website because they offer an opportunity to save on the purchase price of a home. The specific reasons why are discussed below.
The FSBO market accounts for approximately 10 – 15% of the national residential real estate market. The primary reason homeowners are attracted to selling their property themselves is to eliminate the sales commissions charged by Real Estate Agents. When a homeowner sells a property without an agent, he will immediately save up to 3% of the transaction price by representing himself (assuming the sales price is the same without using an agent). Due to the reduced transaction costs, FSBO home sellers are often willing to pass on part of the savings in the form of a lower sales price. This can be a true win-win situation for both the owner and the homebuyer.
While selling a home without an agent can be a great way to save money, there are potential challenges to this approach for the seller. The good news is that these challenges can result in an excellent opportunity for you, the buyer. Although many FSBO sellers are able to accurately assess the value of their property, some are undoubtedly unaware of the true value. In fact, according to the National Association of Realtors, 24% of for sale by owner sellers thought that getting the price right was the most difficult task when selling a home. The bottom line is that by patiently sifting through for sale by owner real estate listings, you have a good chance of finding an under-priced property.
Another challenge FSBO home sellers face is ensuring that their listing is reaching the widest audience possible. This is the number one benefit that a real estate agent is able to provide with traditional homes for sale. They are able to include a listing in the Multiple Listing System (MLS), which provides worldwide exposure to the listing including being displayed on the national Realtor website. According to the National Association of Realtors, over 70% of prospective homebuyers begin their quest online. Unfortunately, because FSBO home sellers don’t use agents, their property is unlikely to reach all prospective homebuyers in the market. As a result, a FSBO price is unlikely to reach the maximum selling price. Again, this is a great opportunity for the prudent homebuyer to save when purchasing a home.
While it is difficult to measure the exact savings of purchasing houses for sale by owner, we believe you should always include these listings in your search to find a great deal on a home. According to the National Association of Realtors, FSBOs sold for approximately 20% less than the median agent-assisted transactions. Although the data for the agent-assisted prices is skewed a little high because it includes a greater mix of more expensive properties, the data indicates that buyers can save money by purchasing FSBO properties.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 11 – Mortgages and Financing
Mortgages and Financing
Considerations and Options for Financing Real Estate
Financing Real Estate
Whether you are purchasing your first home or an investment property, securing the appropriate financing is imperative. The goal of this chapter is to provide an overview of the financing process and to discuss conventional financing for the purchase of real estate. The next chapter will explore creative alternatives for financing real estate.
Generally speaking, buyers want to obtain the maximum loan possible from a bank. This is true for both first-time buyers and investors. Many first-time buyers simply don’t have much for a down payment, while investors hope to get a better return by minimizing their cash investment. Borrowing money is called leverage, which has a very powerful effect when prices increase or decrease rapidly. Ideally, we would like to finance 100% of the purchase price, but in most cases it is not that easy. The reason lenders want a down payment is so they have adequate coverage for their loan. This means that you, as the buyer, will be required to have an equity exposure in the form of a down payment.
Before you can determine the type of financing that is most appropriate for your situation, you must have a clear objective for what you are trying to accomplish. The following questions will help guide you toward finding the most appropriate financing package.
Are you purchasing an Investment Property or as an Owner-Occupant? If you are purchasing investment property, you will typically be required to have a larger down payment and assume a higher interest rate. The reason banks charge more to finance investment property is due to the higher risk. When a property is owner-occupied, it is reasonably simple for a bank to assess the risk of the owner based on their credit history and income. As a result, the banks pass off more favorable financing terms to owner-occupiers. With investment property, the banks are not involved in evaluating the credit profile of the tenants. As a result, the principals of the investment property will be required to pay higher financing rates to offset the higher risk.
How long will you own the property? Having a good idea of how long you will own a particular piece of property will be very helpful in guiding the type of loan you select. For example, if you are buying an investment property to quickly flip, an interest-only loan may be the most appealing. The reason being that the carrying costs of an interest only loan will be the cheapest as you will not be paying any principle. However, if you were looking for a home to live in for the next 30 years, you would probably want a 30-year fixed loan where you would have a guaranteed fixed payment for the next 30 years.
Would you qualify for a government-backed loan? Government loans can be a great option, particularly if you do not have perfect credit or have little for a down payment. For example, the Department of Housing and Urban Development insures loans that allow down payments as low as 3%. Also, with these loans you can wrap your closing costs and fees into the mortgage.
Is the home you are purchasing a fixer-upper? There are great loans available for fixer-uppers but you need to be careful to find the right loan. For example, make sure your loan is not conditional on the condition of the property, as this can significantly delay the closing of your financing in the event your property does not qualify. A very good loan for fixer-uppers is FHA’s Section 203(k) mortgage, which combines the cost of renovation and the purchase of the house within one loan. However, the downside to a 203(k) mortgage is that the maximum loan amount is typically under $230,000, which will not buy very much in states like California or New York.
Once you have answered the questions above, you will have a much easier time identifying the right loan for your needs. Now let’s take a look at the different types of mortgages.
Types of Mortgage Loans:
Fixed Rate Mortgages: The most traditional loan available is the standard 30-year fixed rate mortgage. The appeal of a 30-year fixed mortgage is that you lock in your interest rate on the loan for its entire 30-year term. The means your monthly payment will remain unchanged for the life of the loan. Fixed rate mortgages are great loans for people who intend to hold the particular property for the long run. A fixed rate loan appeals to many people since there is security in knowing your mortgage payment will remain the same even if interest rates skyrocket during the term of your loan.
Adjustable Rate Mortgages: Adjustable rate mortgages typically have an initial fixed rate period lower than the rate of a comparable long-term fixed rate mortgage. The initial fixed rate period is followed by annual rate adjustments based on market conditions. For example, a “3/1 ARM” is fixed at an initial low rate for the first 3 years, and then adjusts every year based on an index. Adjustable mortgages have increased in popularity over the last several years as home prices have escalated. People are naturally attracted to the lower initial rates when compared to a fixed rate mortgage. Be cautious of how high your adjusted rate could go and ensure you can adequately cover increased payments. Otherwise, you may be setting yourself up for default and potential foreclosure.
Interest-Only Mortgages: Interest-only payment options were initially offered as a way to borrow more money while not increasing the monthly payment. Since there is no principal paid during the interest only period, your payments are smaller when compared to a conventional mortgage. Of course, sophisticated investors understand that with increased leverage comes increased risk. In this case, borrowers who leverage themselves into a more expensive home, with a larger mortgage, gamble not only that their income will rise in the years ahead, but that the home will appreciate as well. Since the principal balance is not being reduced, the owners are not building any equity in their home. Instead, they are counting on the market to do that for them. That’s not so much of a gamble when homes are appreciating, but it could spell big trouble in a down real estate market. In the wrong situations, interest-only mortgages can backfire and cause you to find your investment has become distressed real estate. Have a solid strategy in place before engaging on interest-only loan.
Balloon Loans: These tend to be short-term loans. You borrow money for, say, three or seven years, and the loan is amortizedas though it were a 30-year loan. At the end of the three- or seven-year period, you owe the bank the entire remaining principal, in one lump sum — like a big balloon. Again, these loans tend to have lower interest rates than the standard 30-year mortgage. If you’re not planning to stay too long in your house, you might be interested in such a loan. The reasoning goes like this: You pay less in interest over the course of the loan than you would with a 30-year fixed loan — saving potentially thousands of dollars. So, you’re less out-of-pocket when it comes time to sell.
The key risk is if you ultimately decide to stay in your house. At that point, you will be required to secure a new loan to pay off the original balloon loan. With a new loan there will be the standard mortgage closing costs and depending on market conditions, your new interest rate could be substantially higher.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Foreclosure Tutorial Part 12 – Alternative Financing
Alternative Financing
Creative and Alternative Financing Strategies
Alternative Financing for cheap homes,
Now that we’ve discussed a standard overview for financing real estate, let’s take a look at other ways to creatively finance a deal. There are several alternative financing scenarios that can suit your needs. Let’s begin by looking at lease options, otherwise known as rent to own:
Lease Options: Lease with option to buy homes offer a combination between a rental agreement and a purchase option. Essentially, it allows you to rent to own a property over a fixed period of time. You’ll maintain the right to purchase the property at an agreed option price during the term of the lease. The benefit of this approach is that it gives you the right, but not the obligation to purchase the property. For example, if property prices escalate rapidly during the option term, chances are that you will be able to purchase the property for below market value. Another benefit is that the cost to secure a lease option is usually much less than a down payment, effectively giving you control of the property for very little cash.
Use Equity in Your Home: If you currently own a home, there is a very good chance you can borrow against the equity in your home. This is probably the fastest and easiest way to finance investment property. Home equity is determined by the fair market value (or appraised value) of your home, less the balances of mortgages or liens against it. If your home is worth $200,000 and you owe $120,000 secured by a lien against your home, then you may have $80,000 of available equity, which you can use however you wish. And remember that the interest you pay on a home equity loan may be tax deductible.
Hard Money Loans: This type of loan gives the applicant access to funds without the red tape required for conventional loans. Pre-qualifying for a hard money loan is usually faster and less tedious. However, hard money lenders charge interest rates and fees that are substantially higher than conventional borrowers. Interest rates can range from 12 – 18% annually and typically require 4 – 8 points on singing. Hard money loans fill a niche in mortgage lending, helping consumers who have specialized needs or too many credit problems to get conventional financing. Real estate investors frequently use hard money loans. These buyers purchase properties on the cheap, fix them up and sell them for profit. They use private loans because the loans come with less red tape and restrictions than bank loans.
Owner Financed Mortgage: In some cases, the property seller may be interested in financing your home purchase directly. These homeowners may be interested in earning long-term interest from you on your payments. In most cases, you will be paying a slightly higher interest rate versus standard investment interest returns. But, overall the rate you pay may still be below standard mortgage rates. In addition, if you prefer to use a standard mortgage for part of your purchase amount, an owner financed mortgage may be a way to cover the balance. This is called a partial owner financed mortgage.
Find Partners: By partnering with others, you will no longer be limited to only those properties meeting your individual budget. This provides greater flexibility in identifying the right investment property. Other benefits of partnering include the pooling of expertise and financial backing while enjoying the support of partners who have the same objectives. Completing a successful real estate transaction with partners can be a very exciting and fulfilling experience. The primary downside is that you lose some control and must make decisions jointly. Bottom line , pick your partners very carefully.
Equity Sharing: For a first-time buyer with limited cash for a down payment, equity sharing can be a great opportunity. The common equity sharing agreement involves one party living in the property and the other partner financing the purchase. Both the occupant and the investor enjoy tax benefits and share the profit. First-time homebuyers make great resident partners while family members or real estate investors fill the non-resident partner role.
While there are many benefits to equity sharing, joint ownership can have its challenges. For example, what happens if the resident does not maintain the property or make the mortgage, insurance or property taxes payments? Furthermore, the property may not go up in value, so the investor who put up his credit or cash may not realize any profits. Like any real estate investment, the shared equity arrangement should be approached with profit, not just financing, in mind.
Ch. 2 – Why Invest in Real Estate?
Ch. 7 – HUD Homes and Government Property
Things to do in Tulsa in December 2014 and January 2015
Things to do in Tulsa
Winterfest
Nov 28, 2014 – Jan 18, 2015
Downtown, Tulsa, OK 74103
Downtown Tulsa is transformed into a festive wonderland during Winterfest, an annual holiday tradition.
Type:
Winter Holiday Event
Holiday Lights on the Hill
Nov 28, 2014 – Dec 28, 2014
Chandler Park, Tulsa, OK 74107
Take a drive “on the hill” at Chandler Park, through thousands of bright lights and whimsical displays.
Type:
Winter Holiday Event
River Lights
Dec 06, 2014 – Jan 02, 2015
41st St Plaza, Tulsa, OK 74105
Celebrate the holidays on the banks of the Arkansas River in Tulsa at River Lights.
Type:
Winter Holiday Event
Tulsa Oilers vs Allen Americans
Dec 28, 2014
BOK Center, Tulsa, OK 74103
The Tulsa Oilers take on the Allen Americans at the BOK Center in downtown Tulsa.
Tulsa Oilers vs Rapid City Rush
Dec 30, 2014
BOK Center, Tulsa, OK 74103
The Tulsa Oilers take on the Rapid City Rush at the BOK Center in downtown Tulsa.
Type:
Sporting/Recreation Event
World’s Richest Calf Roping
Dec 31, 2014
Tulsa Expo Square, Tulsa, OK 74114
Come see some fast paced, high action barrel racing and calf roping during Mike Johnson’s World’s Richest Calf Roping.
Type:
Equestrian Event, Sporting/Recreation Event
Tulsa Shootout
Dec 31, 2014 – Jan 03, 2015
Tulsa Expo Square, Tulsa, OK 74114
The Tulsa Shootout is the largest micro sprint racing event in the country.
Type:
Sporting/Recreation Event
New Year’s Eve Powwow
Dec 31, 2014
Tulsa Convention Center, Tulsa, OK 74103
Witness traditional Native American dancing at the New Year’s Eve Powwow in Tulsa.
Type:
American Indian Event
Tulsa Oilers vs Brampton Beast
Jan 02, 2015
BOK Center, Tulsa, OK 74103
The Tulsa Oilers take on the Brampton Beast at the BOK Center in downtown Tulsa.
Tulsa Oilers vs Rapid City Rush
Jan 03, 2015
BOK Center, Tulsa, OK 74103
The Tulsa Oilers take on the Rapid City Rush at the BOK Center in downtown Tulsa.
Type:
Sporting/Recreation Event
Theatre Pops presents: “August: Osage County”
Jan 08, 2015 – Jan 18, 2015
Tulsa Performing Arts Center, Tulsa, OK 74103
Theatre Pops presents: “August: Osage County” tells the story of a vanished father, pill-popping mother and three sisters harboring shady secrets.
Type:
Performing Arts Event
Clutch in Concert
Jan 09, 2015
Cain’s Ballroom, Tulsa, OK 74103
American rock band Clutch makes a stop in Tulsa to play the historic Cain’s Ballroom in the city’s downtown area.
Type:
Music Event
Garth Brooks in Concert
Jan 09, 2015 – Jan 17, 2015
BOK Center, Tulsa, OK 74103
Garth Brooks is returning to his home state for a very special concert series at Tulsa’s BOK Center.
Type:
Music Event
Runway Run
Jan 10, 2015
Tulsa International Airport, Tulsa, OK 74115
Compete in the Runway Run, and you’ll be among the first group to ever run along on the Tulsa International Airport runway.
Type:
Aviation Event, Sporting/Recreation Event
Second Saturday Walking Tour
Jan 10, 2015
115 W 5th St, Tulsa, OK 74103
Take a fun and educational walking tour through downtown Tulsa the second Saturday of each month with the Tulsa Foundation for Architecture. The Second Saturday Walking tour is a one-hour tour that gives an insightful look into the exciting architecture that abounds in downtown Tulsa.
Type:
Tour Event
Chili Bowl
Jan 13, 2015 – Jan 17, 2015
Tulsa Expo Square, Tulsa, OK 74112
The Lucas Oil Chili Bowl Nationals at Tulsa Expo Square’s River Spirit Expo is an annual competition for Midget Sprint Car Racing.
Type:
Sporting/Recreation Event
Tulsa Symphony presents: Simply Classical
Jan 17, 2015
Tulsa Performing Arts Center, Tulsa, OK 74103
Tulsa Symphony presents: Simply Classical features Beethoven’s Symphony No. 8 in F major and Mozart’s Requiem Mass in D minor. Located in the beautiful Chapman Music Hall at the Tulsa Performing Arts Center, this performance will feature Guest Conductor James Bagwell, as well as the Tulsa Oratorio Chorus.
Type:
Music Event
Tulsa Martin Luther King, Jr. Parade
Jan 19, 2015
Detroit & John Hope Franklin Blvd, Tulsa, OK 74106
Head to the annual Martin Luther King, Jr. Parade through Tulsa to honor a legend and celebrate freedom.
Type:
Ethnic Event
Cirque Du Soleil: Varekai
Jan 21, 2015 – Jan 25, 2015
BOK Center, Tulsa, OK 74103
Get ready for a thrilling performance that will have you on the edge of your seat. This one-of-a-kind show fuses acrobatic arts with the top-notch variety for which Cirque Du Soleil is known. Visitors to Cirque Du Soleil: Varekai in Tulsa will be transported to a land complete with dormant volcano, mystical forest and an ancient prophecy as a young man parachutes into this new world and takes the adventure of a lifetime.
Type:
Performing Arts Event
Green Country Home & Garden Show
Jan 23, 2015 – Jan 25, 2015
Tulsa Fairgrounds, Tulsa, OK 74112
Head to the largest free home and garden show in Northeast Oklahoma and have fun looking through over 150 vendors at the Green Country Home & Garden Show at the Expo Square in Tulsa. Find your inspiration for your next project and get decorating ideas from the professionals. Look at products and services ranging from roofing and cookware to spas and windows all in one place.
Type:
Expo/Trade Show
Emergency and Disaster Preparedness of U.S. Households
A disaster can occur at any time and without much warning. To gain a better understanding of the emergency preparedness of U.S. households, HUD and the Census Bureau for the first time included a special set of questions on the topic in the 2013 American Housing Survey (AHS). The special set of questions broadly covered topics that explored household readiness to shelter in the aftermath of a disaster and readiness to evacuate.
In the case of sheltering in the aftermath of a disaster, access to food and water are important considerations for households. NAHB tabulations of the survey found that 86.2% of owner-occupied households reported having enough non-perishable food to sustain everyone in the household for three days. Additionally, a majority of owner-occupied households (57.7%) had access to emergency water supply of at least three gallons or 24 bottles of water for each person in the house.
The readiness to evacuate is another important consideration for households. NAHB tabulations of the special set of questions found 39.2% had an emergency meeting location and about one-third (33.7%) had a communication plan. An effective communication plan includes a contingency for the disruption of cell service.
The overwhelming majority of owner-occupied households (95.7%) had access to a vehicle that could take everyone in the household to a safe place at least 50 miles away. Once 50 miles away, 68.2% of owner-occupied households could count on staying with relatives or friends for a 2-week evacuation. Just over one in five households (21%) would stay in a hotel or motel while 2.9% would stay in public shelters.
The special set of questions included in the 2013 AHS provides a snapshot of the emergency preparedness of U.S. households. Although a majority of owner-occupied households indicate a preparedness to shelter or evacuate if required, the unpredictable nature of disasters and emergencies suggest caution is in order when analyzing the survey results.
By Josh Miller on December 19, 2014 in Eye On Housing
20 Questions To Ask Before You Pick a Home Loan
20 Questions To Ask Before You Pick a Home Loan
These 20 questions can help determine if a loan is right for you…
Home loans can be complicated. But choosing one that meets your needs can be much easier if you gather enough information before you make a decision. Here are 20 questions that might apply to your situation.
Rate, term and payment
The most fundamental questions about any loan concern how long you’ll have to repay the amount you borrowed, how much interest you’ll be charged and whether the interest rate and payments are fixed for the entire term or subject to periodic adjustments as market interest rates fluctuate.
Here are four questions you should ask:
1. What is the term of this loan?
2. What is the initial interest rate?
3. Is that rate fixed or adjustable?
4. How much would my initial monthly payments be?
Adjustment periods, caps and negative amortization
If the interest rate on the loan is adjustable, your monthly payment likely will change in the future and could be much higher than your initial payment.
Here are some questions to ask on this topic:
5. When can the interest rate be adjusted?
6. How will the interest rate be calculated?
7. What is the maximum interest rate increase for each adjustment period?
8. What is the maximum interest rate increase over the lifetime of the loan?
9. How much would my payment be today if the interest rate were calculated as it will be at the first adjustment period?
10. How much would my payment be at the maximum interest rate?
11. Could the amount I owe increase over time?
Costs and fees
Along with the interest rate and payment, you’ll want to consider the upfront and ongoing fees and costs you’ll be charged in connection with the loan.
Here are some questions to ask regarding costs and fees:
12. Can I see a Good Faith Estimate (GFE) for this loan?
13. Which of the costs on the GFE might change and by how much?
14. Are there any other costs that aren’t on the GFE?
15. Does this loan have a prepayment penalty?
16. Would this loan require an escrow account for homeowner’s insurance and property taxes?
17. Would I need to pay for mortgage insurance on this loan?
Needs and qualifications
Not all loan products are available to all borrowers, so you’ll want to explore all of your options before you decide which loan would be right for you.
Here are three questions that may help:
18. What are the qualifications for this loan?
19. Why would you recommend this loan for my needs?
20. Which other loans might also meet my needs?
These 20 questions can help determine if a loan is right for you. Don’t be afraid to ask your lender these and any other questions you may have. The more you know, the better equipped you’ll be to choose your loan.
Buying a home is a complex process. I am prepared to do whatever it takes to see you through this process. The first step is picking the right real estate agent that will get the results you want and that you deserve. Work with a professional Realtor who is willing to Go The Distance For You. My goal is to be the best real estate agent you have ever worked with.
Ready to get started on the home buying process? Contact John Cantero at 918-313-0408. I’ll show you the way home!
Smart Appliances
What if your dishwasher knew how dirty your dishes are? What if your oven actually made you a better cook? Can your refrigerator help you surf the web, play music, or make a phone call for you? What if your cooktop regulated the heat under your pan for even cooking?
Whether you’re selling a home as a consumer or real estate professional, kitchen appliances are a big deal. According to ratings collected by CNET, here are the top five kitchen appliances in high demand right now:
1. Dishwasher:
Whirlpool WDL785SAAM – Want a dishwasher that knows how dirty your dishes are? This unit is included in Whirlpool’s line of 6th Sense Live smart appliances and includes a “sensor wash cycle” which uses Whirlpool’s Auto Soil sensor and the water clarity to determine how dirty the dishes are. Depending on the reading, it may automatically add more water and adjust the temperature accordingly. The WDL785SAAM is a tall tub, built-in dishwasher with two removable racks and a stainless steel tub, which holds heat better and is more energy efficient when compared to other dishwashers.
2. Microwave:
Panasonic NN-SD997S – For a solid, good looking microwave, this high wattage, mid-price range stainless steel unit with blue LED display gets good reviews and has a large capacity. The sensor functions are reported to do their job well and best of all, it’s a good deal.
Looking for more in a microwave? Check this Microwave Buying Guide. Newer options include a microwave in a drawer, super convection types for browning and new inverter technology so you can finally poach salmon and make fluffy omelets in your microwave.
3. Oven:
ovenDacor Renaissance 30″ Double Wall Oven – Can your oven make your a better cook? CNET’s taste testers unanimously preferred the food cooked this oven over all other ovens they tested! On the high end price-wise, this double oven is a critic’s fave. They say you’ll have a hard time finding one with a better and more powerful cooking performance.
4. Refrigerator:
Samsung 4-Door Refrigerator with 8″ Wi-Fi Enabled LCD – This refrigerator syncs with the Galaxy S5 and Note 3, your television or your wifi connection so you can browse morning headlines, search recipe sites, stream music, or watch TV. It will also keep your milk cold and your ice frozen with a 28 cu. ft. capacity, adjustable shelving, Twin Cooling
SamsungPlus” system, FlexZone” drawer with variable temperature control settings, along with the 8-inch LCD touchscreen.
5. Cooktops:
Bosch Benchmark induction and gas cooktops. The newest innovation to stovetop cooking, induction stovetops from Bosch feature “FlexInduction” cooking with two separate cooking zones that can be combined to fit larger pots and pans. The AutoChef temperature control supposedly holds a steady cooking temperature without fluctuating so food cooks more evenly. Plus, it’s a pretty good looking cooktop.
Whether you’re a master chef – or need all the help you can get, these hot appliances will add value to your kitchen and your home.
Watch Out for Some Red Flags When Buying a Home
When buying a home, keep your eyes peeled as you consider the potential of your new house, and hopefully you can avoid the costly mistake of buying a place that needs a lot of pricey repairs soon after closing.
Or at least, gain some leverage in negotiating costs and/or required fixes, so you aren’t stuck with a new mortgage—and new repairs.
Here are some tell-tale signs to look for when buying a home:
Signs of Deferred Maintenance
How do you discover the true condition of a sale home? Use all your senses.
Look at the walls: cracks can indicate a shifting foundation. Signs of water damage, like peeling ceilings, can indicate the need for roof repairs. New paint on a single wall could hiding mildew, mold or water damage.
Smell the basement. Do you detect a hint of mustiness? This could signify mold. Touch the electrical faceplates—are they warm? Is that an odd shadow on a wall? Or a bump that means a shoddy repair?
Ask yourself these questions, too:
◾Does the masonry have visible cracks or crumbles?
◾Are there broken fixtures?
◾Are there any barricaded spaces in attics, basements or corners of rooms?
◾How do the electrical outlets and vents look?
◾Do the doors and windows open and close as they should—with no sticking, uneven corners or drafts?
Get Help From a Home Inspector When Buying a Home
Thankfully, you’re not alone in determining the conditions of prospective homes.
Home inspections become crucial here, as they locate red flags. A qualified home inspector is trained to spot structural and system problems that layman won’t notice. They can advise on potential repairs. They’ll check the reliability of your heating and ventilation system, and they also can spot foundation problems your untrained eye may skip.
Your reliance upon the expertise of the home inspector allows you to mount a little offensive when buying a home. You can use the defects described in an inspection report as an effective negotiating tool to get a better price with the seller.
The lender’s appraiser may also have some thoughts. While they are tasked with ensuring the lender is making a good investment, they may also spot some issues. A new rule gives buyers the right to see the appraisal, which could note issues with the house.
Look Closely at the Neighborhood When Buying a Home
You are buying into a neighborhood as well as into a home. Check red flags in the area, too. Abandoned and boarded-up buildings or excessive amounts of garbage and graffiti are obviously not good signs.
Is there local industry in the form of factories or business parks? Do neighbors park on the streets or in garages? Are cars and debris filling adjacent yards? In other words, do people take pride and care in their community? And are there signs of stability and growth?
Of course, you may also see the good signs: senior citizens walking, children playing, clean school yards, parks, convenient shopping, places of worship and a public library. You know what you want in a neighborhood. Make sure you see it.
Resolving Repair Issues When Buying a Home
If you do find red flags, they may not tank the deal, as long as you bring them up. A good REALTOR® can help you with this.
Major issues—like plumbing, electrical wiring problems or structural concerns—could push a motivated seller to agree to fix the problems or lower the price of the home. Because if one buyers spots them, another one might, too.
If the neighborhood, the home layout and the price all seem right, it might be worth trying to push the seller to mitigate those flags. And once they’ve finished, you’ll have the home you’ve always dreamed about right in front of you.
What’s the Difference in Homeowner’s Insurance and PMI?
Just as you’re required to have auto insurance when you purchase a vehicle, you’re also required to have insurance when you buy a home. Homeowners insurance and PMI insurance are two different types of insurance for homeowners, but you might not need both.
Here’s some basic information to help you better understand homeowners insurance and PMI differences:
•Homeowners insurance is the type that every homeowner needs to have. This insurance covers damage to your home’s structural features and your personal property due to several unpreventable causes, such as fires, theft or wind damage. Most policies don’t cover damage from floods or earthquakes, so you’ll need to purchase additional insurance for these natural disasters separately, depending on where you live. Homeowners insurance also provides liability coverage, in case someone is injured on your property.
•PMI insurance, or private mortgage insurance, is only required if you make a down payment of less than 20 percent on your loan. This type of insurance protects the lender in case you end up defaulting on your loan. The fees for this type of insurance depend on how much of a down payment you made and what your loan amount is. Keep in mind that when you hit 80 percent on the loan-to-value ratio, you no longer need to pay PMI premiums.
Knowing more about homeowners insurance and PMI differences is just one part of the home buying process. You’ll also need to know how to choose a mortgage, how much of a home you can afford and where to look for a home. Having a reliable real estate agent at your side can make this process much easier.
Ready to get started on the home buying process? Contact John Cantero at 918-313-0408. I’ll show you the way home!
Rolling Your Closing Costs Into Your Financing
Closing costs are a considerable expense when you’re buying a house. You can pay these costs upfront or include them in your mortgage.
Mortgaging your closing costs can be done in a number of ways, including the following:
•Having the seller help out. This is known as a “seller credit” and involves having a percentage of the selling price go toward the closing costs. This means that the seller doesn’t get as much money for the home, since roughly 2.5 percent or so of the price will cover the closing costs.
•Getting a bigger loan. This method involves paying a portion of the closing costs and having the rest covered in the loan amount.
•Paying a higher purchase price. You can include the closing costs in the home loan by offering to pay a higher sales price. This price would cover the closing costs, and the seller wouldn’t have to give up any money like they would with a seller credit.
•Paying a higher interest rate. With this method, you pay a higher interest rate while the lender helps out with the closing costs. Lenders can sometimes take as much as $4,000 off the closing costs, but keep in mind that you might end up paying more money in the long run with the higher interest rate.
There are advantages and disadvantages to mortgaging your closing costs. The best way to decide whether you should do this or pay the costs upfront is to discuss the issue with your real estate agent. If you’re having a hard time coming up with the closing cost money upfront, your agent can help you determine how to cover these costs.
Are you ready to talk to an experienced real estate agent about closing costs? Call or text me at 918-313-0408 I’ll show you the way home!
Things to Avoid When Purchasing a Foreclosed Home
Buying a foreclosure can be a great way to save money on a new home, but you need to exercise a certain amount of caution. Although foreclosure discounts can significantly lower the cost of a home, you can also end up in over your head financially if you’re not careful.
Avoid making these common mistakes when buying a foreclosure:
•Not hiring a realtor: Foreclosure transactions are much more complicated than the traditional home buying process. You’ll need the help of a professional agent who specializes in foreclosed homes.
•Not checking on state and local laws: To avoid legal issues, it’s important to know the laws on buying foreclosures. The contract has to adhere to these laws or it could be invalid.
•Not thinking long-term: Make sure the foreclosed home you buy will be a good investment ten years down the road. If you don’t think that far ahead, you could be investing in property that will decline in value.
•Not saving for repairs: Set aside at least 10 percent of the home’s cost for repairs. Don’t just look at the cost of the home when determining your budget. Repairs are commonly needed in foreclosed homes, especially ones that have been vacant for awhile.
•Not narrowing down your search: It’s easy to find foreclosed properties in any part of the country, but it’s best to focus on a specific area to avoid being overwhelmed. Work with a real estate agent in that area to find a home that suits your needs.
•Expecting significant foreclosure discounts: Don’t assume that the bank will take a big chunk off the price of a foreclosed home. You’ll still need to negotiate for that.
Need help buying a foreclosed home? Contact me and I will show you the way home. John Cantero (918) 313-0408
10 Things Today’s Buyers Look for in a Home
The following list includes in no particular order 10 things that are important to buyers today, especially Millennials who represent a significant buyer niche in today’s market.
1.Quality of the neighborhood – The National Association of Realtor’s 2012 Profile of Buyers and Sellers revealed that neighborhoods are really important to buyers, but that neighborhood choice varies by household composition.
2.Convenience to job – Commuting is a necessary evil, but homes that are close to work enhance work-life balance, a growing priority for many Americans, especially Millennials.
3.Overall affordability of homes – With job markets tight and retirement funds depleted or eroded thanks to the great Recession, it has never been more important to keep housing related costs as low as possible, ideally no more than one third of your pre-tax income.
4.Quality of schools – A recent survey by realtor.com revealed that nearly 45 percent of today’s buyers are willing to pay a premium for quality schools
5.Homes suited for the next 15 years – Just five years ago, buyers were looking to stay in their home about 10 years. Today, buyers expect to stay closer to 15, so it’s important to find a home that can support lifestyles as they evolve through that time period.
6.A mortgage – In today’s tight credit environment, getting a mortgage can be a challenge. Buyers should be willing to consider homes below what they may quality for in order to bump up the loan to value ratio.
7.Energy efficiency – The National Association of Homebuilders surveyed buyers to see what was most important to them in new home construction and energy efficiency topped the list. Four of the top most wanted features involve saving energy: 94 percent of home buyers want energy-star rated appliances, 91 percent want an energy-star rating for the whole home, 89 percent want energy-star rated windows, and 88 percent want ceiling fans.
8.Open floor plans – Spaces that are great for entertaining mean quality time with friends and family, something especially important to Gen Y.
9.High ceilings – Taller ceilings are not only aesthetically pleasing in that they impart a grandness to the home, they also promote greater air circulation and more natural light than lower ceilings.
10.Technology – Can you run your home from a cell phone? Then market to a Millennial, who prizes a homes’ technological amenities prized over curb appeal.
What are YOU looking for in a home? Let me know and I am sure I can help you find it.
What is Mortgage Insurance and Mortgage Insurance Premium (MIP)
Mortgage Insurance – A contract that insures the lender against loss caused by a borrower’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan.
Mortgage Insurance Premium (MIP) – The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.
These costs can be avoided with a 20% downpayment.
What is a HUD-1 Settlement Statement
HUD-1 Settlement Statement – A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The blank form for the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the “closing statement” or “settlement sheet.”
What are closing costs
Closing costs are various expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include items such as broker’s commissions, discount points, origination fees, attorney’s fees, taxes, title insurance premiums, escrow agent fees, and charges for obtaining appraisals, inspections and surveys. Closing costs will vary according to the area of the country. Lenders or real estate professionals often provide estimates of closing costs to prospective home buyers even before the HUD-1 settlement statement is delivered.
Haikey Creek flood-mitigation project to affect traffic on 131st Street
Motorists driving 131st Street east of Mingo Road should prepare for a few months of delays.
Traffic along 131st Street between Mingo and Garnett roads in Bixby will be interrupted for the next few months as the city begins Phase 1 of its Haikey Creek flood-mitigation project.
The project includes construction and replacement of bridges on 131st Street and along a flood plain relief channel running south from 131st Street to the Arkansas River, construction of levees west of Haikey Creek, the widening of Haikey Creek, and construction of the flood plain relief channel west of the creek.
Currently, the relief channel is little more than a ditch. The bridges will be expanded to accommodate the widening of the channel.
Construction of the two bridges between Mingo and Garnett is scheduled to be complete by mid-July. A third bridge west of Mingo Road on 131st Street will be worked on from mid-July to mid-August.
“What we are trying to do is get 131st Street entirely done before school starts,” said Bixby City Engineer Jared Cottle.
The $12.2 million flood-mitigation project is being funded with Vision 2025 funds.
Cottle said the primary benefit of the project is that it will take property out of the flood plain.
“This project will bring over 900 acres of land for development out of the flood plain,” he said.
All phases of the project are expected to be completed within two years.
Kirby Crowe with Program Management Group, which oversees the Vision program for the county, said the project has been funded for a while but has been waiting for the city to acquire needed rights of way and to complete and obtain regulatory approval.
By KEVIN CANFIELD World Staff Writer
Free Summer Fun in Tulsa Area
Summer in Oklahoma isn’t for the faint of heart. Between the heat, the never-ending hours of sunshine, and the kids climbing the walls at home, it’s easy to start filling your calendar with trips to the nearest lake and evenings alone with your air conditioner. Not that there’s anything wrong with that. But between road trip ideas, activities the kids will love, and opportunities for some adults-only fun, there’s just too much to do in Oklahoma this summer to fall into an entertainment rut. Whether it’s Bigfoot, dinosaurs, the stars, or even just some popcorn and a good movie that you seek, you’ll find the trail that leads to some of the best things to do in Oklahoma this summer right here. Free Summer Fun in the Tulsa area.
1. 5.2 million kids can’t be wrong. Like them, you can get bowled over—for free—at Andy B’s in Tulsa and Broken Arrow Lanes in Broken Arrow. Register at kidsbowlfree.com for two free games of bowling every day all summer long, a value of over $500 per child.
2. Indulge in a range of silver-screen classics, from King of Comedy to Clueless, shown free as part of the Movie in the Park series at Guthrie Green.
3. Meet some 500-year-old trees on a hike at the Keystone Ancient Forest Preserve, a section of the cross timbers open west of Sand Springs on the second Saturday of each month.
4. Listen to Tulsa’s Starlight Band as they play out the stars. All of the Concerts on the River are free to attend, with a new theme for each: the Greatest Hits of the Big-Band Era, Americana Night, A West Coast Jazz Evening, and more.
5. Scope out the various foo-foo pups and designer lawn blankets at the Summer’s Fifth Night free concerts series in Tulsa’s Utica Square. Featuring on stage every Thursday night are local mainstays from Mid-Life Crisis to Grady Nichols.
6. Trade the tennis courts and the running trail for The Gardens at LaFortune Park in Tulsa, the venue for the free First Friday Concerts. May through September, 7-9 p.m.
7. Take nature up on her offer for a summer stroll at Redbud Valley Nature Preserve, where admission is always free.
8. Tulsa is cut through with bike trails, and not a one of them is a toll road. Get a map of Tulsa trails. No wheels? Bikes rent free as part of the RiverParks Trails system.
9. Parking is scarce in the Brady Arts District on the first Friday night of the month—that’s because the monthly First Friday Art Crawl event blows open the doors of every museum, art gallery, and music venue in the district—but why would you care? You’ve got your sneaks.
10. Tell some stories and hear some new ones in return at the open-mic night at Gypsy Coffeehouse and Cyber Café in downtown Tulsa, probably the state’s longest-running weekly open-mic event.
11. Visit the grave of Bob Wills, the king of Western Swing, the man credited for putting Tulsa’s Cain’s Ballroom on the map. Find it in Memorial Cemetery Park.
12. Take a long lunch and hike the Turkey Mountain Urban Wilderness Area, where the trailhead is just seven miles from downtown Tulsa.
13. Sing the National Anthem before the first post time at the horse races at Fair Meadows in Tulsa. Your back-up singer will be Whitney Houston, whose cassette-tape recording crackles from the loud speakers just as the sun begins to set. Make Oklahoma better. Subscribe to This Land and support local journalism in your community.
14. Make sure the acoustics of the Center of the Universe, in downtown Tulsa just north of the BOK Tower, are in good working order. Be sure to visit the Artificial Cloud, too.
15. Eat too much popcorn with the kids at the free KIDS FIRST! Film Festival, held at Circle Cinema in conjunction with the Kendall Whittier Library Summer Reading Program.
16. Find a whole herd of flowers at the Tulsa Rose Garden and the neighboring Linnaeus Teaching Garden, home of the largest collection of roses in the state and a sprawling heirloom vegetable garden. Free Summer Fun in Oklahoma City
17. Second Friday Circuit of Art is a monthly, citywide celebration of art in Norman. Whether it’s dance, painting, photography, or music that’s your thing, it’s free at this monthly art crawl.
18. Drinks, music, shopping, and sometimes a Bigfoot-call contest. LIVE on the Plaza, a celebration of the revitalized Plaza District in OKC, serves it up once a month, free and open to the public.
19. Lend your ears as the Sunday Twilight Concert Series, held every Sunday, plays the sun to sleep. Bring blankets, chairs, picnic baskets, and the kids along.
20. Art is wherever you are. And thanks to the Art Moves series of daily art stops in OKC, it’s also free.
21. Whispers come in a world’s worth of accents at the Oklahoma City National Memorial. Add yours.
22. Hum with the 8,000 bees who make their work and their home in Oklahoma City’s first observation beehive, at Martin Park Nature Center in northwest OKC. It’s said that, when content, they buzz in the key of A.
23. Petunia No. 1 is plugged, but what’s perhaps the state’s most famous drilling rig is still accepting visitors from her spot on the front lawn of the Oklahoma State Capitol building. 2300 N. Lincoln Boulevard is still the only state capitol boasting active oil rigs.
24. Stand under the flags of each of the 36 tribal governments with headquarters in Oklahoma, flying above Tribal Flag Plaza on the grounds of the Oklahoma State Capitol. The bare flagpole represents the Kickapoo tribe, whose tradition prohibits the use of flags.
25. Admission is free on the first Monday of each month at the Sam Noble Oklahoma Museum of Natural History, home of the largest Apatosaurus skeleton, a bison skull that’s the oldest painted object in North America, and the skull of a Pentaceratops, the largest-known skull of a land vertebrate.
26. Ask to swim in the Oklahoma-shaped pool at the Governor’s mansion (hey, it never costs anything to ask).
27. Ogle a Van Gogh (and a Pissarro, a Renoir, a Monet, and a Giordano) at the Fred Jones Jr. Museum of Art, where admission is always free. 28. Admission and events are always free at the 45th Infantry Museum, home of artifacts from what General George S. Patton called “one of the best, if not the best division in the history of American arms.”
29. Ride on a real passenger train at the Oklahoma City Railway Museum. Rides are available the first and third Saturday starting in April and ending in August.
30. Go fish. Oklahoma anglers are invited to wet their lines free, without requirement of a fishing license, during Free Fishing Days.
31. Picnic under the monkey tree and swim in the waterfalls (there’s one called Little Niagra) at the Chickasaw National Recreation Area, a national park which is actually two—the Platt Historic District and the Lake of the Arbuckles—in one.
32. Dip your toes or get wet as a lake at one of the 17 spraygrounds in OKC (they open Memorial Day weekend or one of the 29 splash pads and water playgrounds in Tulsa.
33. Walk the moonscape that is the Great Salt Plains State Park in Jet, the evaporated remains of an ancient ocean that once covered the state. It’s now a prime spot for birding and crystal digging.
34. See Kenton before it’s gone.
35. Retrace Oklahoma’s stretch of Route 66, where you’ll be able to drive more of the original road than in any other state. Make sure the Blue Whale, the Blue Hippo, and the Round Barn are on your list.
36. Make like Jesse James and Belle Starr and find the perfect hiding place at Robbers Cave in Wilburton, just off the Talimena National Scenic Byway.
37. See where one of northeast Oklahoma’s major natural wonders spreads and folds under the horizon around you. A drive through the Tallgrass Prairie Preserve doesn’t cost a thing. The buffalo sightings are free, too.
38. The Oklahoma Department of Wildlife Conservation offers free summer fishing clinics. Kids and adults alike can learn how to catch, clean, and cook fish at the Jenks Casting Pond, the Arcadia Conservation Education Area Kids Pond near Edmond, and beyond. Be sure to pre-register.
39. Embark on a Saturday family-friendly hike through part of the 15 miles of trails at the Wichita Mountain Wildlife Refuge, where chances are good that you’ll see bison, elk, prairie dogs, or the endangered black-capped vireo.
40. Visit a waterfall. Oklahoma is home to several, but the ones at Natural Falls State Park near West Siloam Springs and Turner Falls Park in Davis are the largest, both measuring 77 feet.
41. It’s always free to argue. Debate the facts at Heavener Runestone Park, where the result of either a clever trick or a long-lost visit from the Vikings is carved into a cave.
42. Witness the birth of fresh ice cream, cookies, and milk on a free tour of the Processing Plant and Bakery on Braum’s Family Farm in Tuttle. Be sure to make reservations.
43. Settle your gaze on where the corners of four states meet, viewable from the state’s highest point at Black Mesa State Park. Black Mesa is also home of the best stargazing around.
44. Float the 60-mile Illinois River, a time-honored rite of passage for the youth of Oklahoma. The kayak is on your.
45. Visit the home of the inventor of the Cherokee syllabary. Find Sequoyah’s Cabin in Sallisaw.
46. See 10,000 guns daily at the J.M. Davis Gun Museum in Claremore, home of the largest private gun collection in the world.
47. Hike the trails at Ouachita National Forest.
48. Wet your toes in one of the three natural springs at Roman Nose State Park in Watonga, one of the original seven Oklahoma state parks. If you’re staying overnight, forego the cabins and rent a teepee for your lodging.
49. Touch the robe of Jesus, a larger-than-life statue of whom is perched over the Holy City of the Wichitas in the oldest mountains in North America.
50. See how many of the 600 miles along the shore of Lake Eufaula you can hike without having to scale a cliff, snorkel, or change shoes.
51. Sample Oklahoma’s largest (and the nation’s third-largest) collection of barbed wire at the Hinton Historical Museum & Parker House, which doubles as the home of the largest buggy collection.
52. Dorothy is now accepting visitors at Twister: The Movie Museum in Wakita. Dorothy was the star prop in the 1995 film, and the museum building itself served as the film’s production company on-location office, set dressing, and art department.
53. After scuba diving in the crystal-clear Broken Bow Lake, dry off under the canopy of oaks and 100-foot pines at Beavers Bend State Park.
Our Bixby High School robotics team headed to world championship
The robotics team at Bixby High School headed to the Oklahoma Regional FIRST Robotics Competition last month with the goal of cracking the list of Top 25 teams.
They left as the champions.
The club’s 22 student members, along with their sponsors, are now headed to the world championship April 23-26 in St. Louis.
“It was amazing,” Alec Schalo, the team’s co-captain, said of their win. “We all lost our voices.”
Nic George, the team’s other co-captain, said the win was unexpected.
The team, which they’ve named the “Bixby Robot Mafia,” was ranked 24th out of about 60 teams before the finals. Then they were chosen by one of the top 8 teams as part of their “alliance” and went on to win the tournament.
George said he thinks part of the reason the team was chosen by one of the finalists was because it had been able to problem-solve well and practically redesigned its robot on the spot between rounds.
The challenge this year, called “aerial assist,” involved teams working together to get their robots to score in a game resembling basketball. A robot has to be programmed to play autonomously on its own for the first 30 seconds of each match. Then, for the remaining two minutes, the team can use controls.
The Bixby club has worked on its robot which is about 50 inches tall, 112 inches in perimeter and about 80 pounds since January, when the challenge was announced.
George joined the club in his sophomore year. When the seniors on the team graduated that year, he was one of three members remaining.
In the two years since then, George has recruited more members, and the team now has 22 students. He and Schalo, who are both graduating this year, intend to come back next year as mentors.
“I just like making things, coming up with the designs, building the robots,” he said.
Ryan Harris, a sophomore in the club, said he was drawn to it because of the opportunity to design and build robots and “how cool it is to make something from nothing.”
Many of the students in the club are interested in entering the engineering field and say the club either helped spark or solidify their interest.
Jordan Fox, a senior, said she joined the club because she likes math and robotics is a way to apply math concepts.
“I like using my skills to create real-world experiences,” she said.
Fox said the competition itself is a big part of the club’s appeal. “Competition is amazing,” she said. “It’s so different then anything I’ve ever done.”
Fox, who also plays soccer, said being a part of the competition is “kind of like watching sports.”
Thor Gunnarsson, a junior on the team, said the club is a great place to learn a variety of skills, such as budgeting and teamwork.
Way to go Bixby!
By NOUR HABIB World Staff Writer
The Five Biggest Turn-offs For Homebuyers
A lot of sellers don’t listen to their real estate agents, so I’ll tell you what your agent wants to say, but can’t say to you and this is it – your agent can’t get you the price you want unless your home is in pristine move-in condition.
That means no sticking drawers in the kitchen. No leaning fences. No rust-stained plumbing fixtures. I could go on, but maybe I need to make it clear. If you have even one of following “turn-offs,” your home will be difficult to sell at full market value.
Buyers can get instantly turned off. Here are their five biggest turn-offs:
1. Overpricing for the market
2. Smells
3. Clutter
4. Deferred maintenance
5. Dark, dated décor
Overpricing your home
Overpricing your home is like trying to crash the country club without a membership. You’ll be found out and escorted out.
If you ignored your agent’s advice and listed at a higher price than recommended, you’re going to get some negative feedback from buyers. The worst feedback, of course, is silence. That could include no showings and no offers.
The problem with overpricing your home is that the buyers who are qualified to buy your home won’t see it because they’re shopping in a lower price range. The buyers who do it will quickly realize that there are other homes in the same price range that offer more value.
Smells
Smells can come from a number of sources – pets, lack of cleanliness, stale air, water damage, and much more. You may not even notice it, but your real estate agent may have hinted to you that something needs to be done.
There’s not a buyer in the world that will buy a home that smells unless they’re investors looking for a bargain. Even so, they’ll get a forensic inspection to find out the source of the smells. If they find anything like undisclosed water damage, or pet urine under the “new” carpet, then they will either severely discount their offer or walk away.
Clutter
If your tables are full to the edges with photos, figurines, mail, and drinking glasses, buyers’ attention is going to more focused on running the gauntlet of your living room without breaking anything than in considering your home for purchase.
Too much furniture confuses the eye – it makes it really difficult for buyers to see the proportions of rooms. If they can’t see what they need to know, they move on to the next home.
Deferred maintenance
Deferred maintenance is a polite euphemism for letting your home fall apart. Just like people age due to the effects of the sun, wind and gravity, so do structures like your home. Things wear out, break and weather, and it’s your job as a homeowner to keep your home repaired.
Your buyers really want a home that’s been well-maintained. They don’t want to wonder what needs to fixed next or how much it will cost.
Dated décor
The reason people are looking at your home instead of buying brand new is because of cost and location. They want your neighborhood, but that doesn’t mean they want a dated-looking home. Just like they want a home in good repair, they want a home that looks updated, even if it’s from a different era.
Harvest gold and avocado green from the seventies; soft blues and mauves from the eighties, jewel tones from the nineties, and onyx and pewter from the oughts are all colorways that can date your home. Textures like popcorn ceilings, shag or berber carpet, and flocked wallpaper can also date your home.
When you’re behind the times, buyers don’t want to join you. They want to be perceived as savvy and cool.
In conclusion, the market is a brutal mirror. If you’re guilty of not putting money into your home because you believe it’s an investment that others should pay you to profit, you’re in for a rude awakening. You’ll be stuck with an asset that isn’t selling.
How to Calculate a Home’s Square Footage (Tulsa Real Estate Information)
Question: Is there a standard formula to calculate a home’s square footage? I have seen different publications with different square footage for the same house. For example, the county land records will say a house has 3,000 square feet, but a sales brochure will say the same house has 3,500 square feet. Are finished basements allowed in a calculation? What about hallways? I don’t know what or who to believe. It seems misleading.
Answer: I doubt if anyone is purposely trying to mislead the public, but it’s true that not everyone in the real estate business calculates square footage the same way. In fact, it may be different from one geographic area to the next.
The square footage listed in the city and county records for condominium units are typically not questioned. These numbers are taken from the original condominium documents and are generally accurate. Unlike detached homes, square footage is less likely to change on a condominium as a result of additions and improvements.
For attached and detached single family homes, there are different ways you can calculate square footage.
Most real estate appraisers measure the exterior of the home to calculate the gross living area. For example, a two-story home that measures 25 feet by 25 feet would have 625 square feet on each floor, so the appraiser would say the house contains 1,250 square feet. Since he is measuring from the exterior, the calculation includes hallways, stairwells, closets and wall space.
The appraiser will also consider the size of the basement and determine how much of the basement has been finished as living area. Instead of totaling the square footage of a basement’s living area, he will make value adjustments based on other comparable homes. For example, a home with a full finished basement that includes a den, bathroom and bedroom might be credited $15,000 or $20,000 in value compared to a similar house with an unfinished basement.
In some cases, even if the lowest level is completely above grade, an appraiser may treat it as a basement. Consider an attached townhouse that has a lower level used as a garage and a den or mud room. An appraiser might consider such a room as a basement.
It gets more complicated. What if the house in our example has a vaulted ceiling in the family room with a second story balcony? This would clearly result in the second floor having less than 625 square feet of actual floor area. Most appraisers won’t subtract the space left out of the second floor to make room for the vaulted ceilings. Why? Because such a floor plan often enhances the market value of the home because it’s a popular feature to have. Remember that an appraiser’s job is to determine the market value of the home. The total size of the living area is only part of the equation. Imagine a 3,000 square foot house that contains 20 small rooms each consisting of 150 square feet. Such a build out would not be very popular for a typical family.
Many real estate agents and builders will include all finished “walkable” areas when totaling the square feet of a house. It’s certainly not misleading. A lot of prospective home buyers would want to know the total living area, regardless of whether some of it is below grade.
Other real estate agents will use the square footage that’s listed in the county tax records in their marketing materials. Unfortunately, this information is often incorrect, especially with older homes. Over time, basements get finished and additions are constructed, increasing the chances that tax records will be outdated and inaccurate. It’s for this reason that some agents simply choose to omit the square footage in the listing report. You’ve probably seen a disclaimer similar to this on a house listing: “Information deemed reliable but not guaranteed. Buyer to verify square footage.”
The bottom line? Calculating the square footage of a home is more of opinion than exact science. If you’re interested in buying a particular house and want to know the size expressed in square feet, my advice would be to make an appointment to visit the home and bring your tape measure, pen, paper and calculator.
Why You Should Work With a Real Estate Agent That is a REALTOR®
Not all real estate agents are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a real estate agent that is a REALTOR®.
1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.
2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.
4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.
7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.
9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.
Top 10 mortgage tips for 2014
These 10 mortgage tips can help you with your mortgage decisions in 2014.
1. Document your finances
Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.
Keep good records of your finances, including bank statements, tax returns, W-2s, investment accounts and any other assets you own. Be ready to explain any unusual deposits to your accounts. Yes, the $500 that Grandma deposited in your account for Christmas could delay your loan closing if you can’t prove where the money came from.
2. Lock a rate as soon as you can
Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low. If you are planning to get a mortgage, lock in a rate as soon as you are comfortable with the numbers.
3. Refinance now — if you still can
Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity. If you think you may be able to save with a refinance, but you are not sure, it doesn’t hurt to try. Speak to a loan officer and take a look at the numbers to see if refinancing still makes financial sense for you after you consider how long it will take to break even with the closing costs.
4. Buyers, use your bargaining power
As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition. Shop around for the best deal and look beyond the interest rate on the loan.
5. Learn your rights as a borrower
Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014. If you run into issues with your mortgage servicer in 2014 or fall behind on your payments, make sure you are aware of your rights and put them to use.
6. Take good care of your credit
It’s nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.
7. Don’t overspend
Lenders don’t want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans. If that becomes the case, the lender will tell you that your DTI (debt-to-income ratio) is too high and you don’t qualify for a loan. Try to keep your monthly debt obligations, including your mortgage and property taxes, below 43 percent of your income.
8. Consider alternative mortgage options such as ARMs
Mortgage rates are rising, but there are alternatives to grab a lower rate, depending on your plans.
A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
If you are not sure about how long you plan to keep the house, a fixed-rate loan is probably the better choice.
9. Considering an FHA loan? Reconsider
FHA loans have long been popular among first-time homebuyers because they require low down payments and have somewhat less strict underwriting standards than conventional loans. But they come at a price. Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage
10. Don’t panic
Yes, mortgage rates will likely climb in 2014. But don’t panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.
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Design Tips for Any Home (Tulsa, Ok Homes For Sale)
Here are some tips for you to get you started on incorporating universal design features in your home.
One of the basic principles of universal design, also called ageless design, is that it makes homes more practical and safer for everyone — not just the elderly or people with limited mobility.
These days, universal design features are an everyday fact of life for many households, with architects and other professional designers adding universal design ideas as a matter of course.
You don’t have to be a pro designer to incorporate this smart thinking into your own home. If you’re remodeling or simply adding a few upgrades, be sure to keep universal design features in mind. There are lots of resources that’ll give you some great starting points.
1. Switch out doorknobs for lever-style handles. Doorknobs require lots of dexterity and torque to open; with levers you simply press and go.
Makes sense for folks with arthritis, of course, but think about an emergency situation when everyone, including small kids, needs to exit fast: A lever handle is a safe, foolproof way to open a door.
A big plus: Levers are good-looking and can contribute to the value of your home. A standard interior passage door lever in a satin nickel finish costs about $20; you’ll pay $25 to $30 for a lockable lever set for your bath or bedroom. Replacing door hardware is an easy DIY job.
2. Replace toggle light switches with rocker-style switches. Rocker switches feature a big on/off plate that you can operate with a finger, a knuckle, or even your elbow when you’re laden with bags of groceries.
Rocker switches are sleek and good-looking, too. Ever notice how conventional toggle switches get dirt and grime embedded in them after a couple of years? No more! You’ll pay $2 for a single-pole rocker switch, up to $10 for multiple switch sets.
3. Anti-scald devices for the bathroom will prevent water from reaching unsafe temps. An anti-scald shower head ($15-$20) reduces water flow to a trickle if the water gets too hot. An anti-scald faucet device ($40-$50) replaces your faucet aerator and also reduces hot water flow.
Anti-scald valves — also known as pressure-balancing valves — prevent changes in water pressure from creating sudden bursts of hot or cold water. An anti-scald valve ($100) installs on plumbing pipes inside your walls. If you don’t have #DIY skills, you’ll pay a plumber approximatly $100 to $200 for installation.
4. Motion sensor light controls add light when you need it. They come in a variety of styles and simple technologies for indoor and outdoor lights to provide added security. I like the plug-in sensors ($10 to $15). You simply stick them into existing receptacles, then plug your table or floor lamps into them. When the sensor detects motion, it turns on the light.
They’re great for 2 a.m. snacking, or if your young kids are at that age when they migrate into your bed in the middle of the night. The lights turn off after about 10 minutes if no more motion is detected.
Got an easy, low-cost universal design tip? Let’s hear about it!
#designtips #remodeling #homeimprovements
What You Should Know About Home Appraisals ( Homes For Sale in Broken Arrow )
Understanding how appraisals work will help you achieve a quick and profitable refinance or sale.
1. An appraisal isn’t an exact science
When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features stack up against those of similar homes recently sold nearby. One appraiser may factor in a recent sale, but another may consider that sale too long ago, or the home too different, or too far away to be a fair comparison. The result can be differences in the values two separate appraisers set for your home.
2. Appraisals have different purposes
An appraisal being used to figure out how much to insure your home for or to determine your property taxes may rely on other factors and arrive at different values. For example, though an appraisal for a home loan evaluates today’s market value, an appraisal for insurance purposes calculates what it would cost to rebuild your home at today’s building material and labor rates, which can result in two different numbers.
Appraisals are also different from CMAs, or competitive market analyses. In a CMA, a real estate agent relies on market expertise to estimate how much your home will sell for in a specific time period. The price your home will sell for in 30 days may be different than the price your home will sell for in 120 days. Because real estate agents don’t follow the rules appraisers do, there can be variations between CMAs and appraisals on the same home.
3. An appraisal is a snapshot
Home prices shift, and appraised values will shift with those market changes. Your home may be appraised at $150,000 today, but in two months when you refinance or list it for sale, the appraised value could be lower or higher depending on how your market has performed.
4. Appraisals don’t factor in your personal issues
You may have a reason you must sell immediately, such as a job loss or transfer, which can affect the amount of money you’ll accept to complete the transaction in your time frame. An appraisal doesn’t consider those personal factors.
5. You can ask for a second opinion
If your home appraisal comes back at a value you believe is too low, you can request that a second appraisal be performed by a different appraiser. You, or potential buyers, if they’ve requested the appraisal, will have to pay for the second appraisal. But it may be worth it to keep the sale from collapsing from a faulty appraisal. On the other hand, the appraisal may be accurate, and it may be a sign that you need to adjust your pricing or the size of the loan you’re refinancing.
Don’t-Miss Home Tax Breaks ( Homes For Sale in Tulsa )
From the mortgage interest deduction to energy tax credits, here are the tax tips you need to get a jump on your returns.
Mortgage interest deduction
One of the neatest deductions itemizing home owners can take advantage of is the mortgage interest deduction, which you claim on Schedule A. To get the mortgage interest deduction, your mortgage must be secured by your home — and your home can even be a house trailer or boat, as long as you can sleep in it, cook in it, and it has a toilet.
Interest you pay on a mortgage of up to $1 million — or $500,000 if you’re married filing separately — is deductible when you use the loan to buy, build, or improve your home.
If you take on another mortgage (including a second mortgage, home equity loan, or home equity line of credit) to improve your home or to buy or build a second home, that counts towards the $1 million limit.
If you use loans secured by your home for other things — like sending your kid to college — you can still deduct the interest on loans up $100,000 ($50,000 for married filing separately) because your home secures the loan.
PMI and FHA mortgage insurance premiums
The government extended the mortgage insurance premium deduction through 2013. You can deduct the cost of private mortgage insurance as mortgage interest on Schedule A — meaning you must itemize your return. The change only applies to loans taken out in 2007 or later.
What’s PMI? If you have a mortgage but didn’t put down a fairly good-sized down payment (usually 20%), the lender requires the mortgage be insured. The premium on that insurance can be deducted, so long as your income is less than $100,000 (or $50,000 for married filing separately).
If your adjusted gross income is more than $100,000, your deduction is reduced by 10% for each $1,000 ($500 in the case of a married individual filing a separate return) that your adjusted gross income exceeds $100,000 ($50,000 in the case of a married individual filing a separate return). So, if you make $110,000 or more, you lose 100% of this deduction (10% x 10 = 100%).
Besides private mortgage insurance, there’s government insurance from FHA, VA, and the Rural Housing Service. Some of those premiums are paid at closing and deducting them is complicated. A tax adviser or tax software program can help you calculate this deduction. Also, the rules vary between the agencies.
Prepaid interest deduction
Prepaid interest (or points) you paid when you took out your mortgage is 100% deductible in the year you paid them along with other mortgage interest.
If you refinance your mortgage and use that money for home improvements, any points you pay are also deductible in the same year.
But if you refinance to get a better rate and term or to use the money for something other than home improvements, such as college tuition, you’ll need to deduct the points over the term of the loan. Say you refi for a 10-year term and pay $3,000 in points. You can deduct $300 per year for 10 years.
So what happens if you refi again down the road?
Example: Three years after your first refi, you refinance again. Using the $3,000 in points scenario above, you’ll have deducted $900 ($300 x 3 years) so far. That leaves $2,400, which you can deduct in full the year you complete your second refi. If you paid points for the new loan, the process starts again; you can deduct the points over the term of the loan.
Home mortgage interest and points are reported on IRS Form 1098. You enter the combined amount on line 10 of Schedule A. If your 1098 form doesn’t indicate the points you paid, you should be able to confirm the amount by consulting your HUD-1 settement sheet. Then you record that amount on line 12 of Schedule A.
Energy tax credits
The energy tax credit of up to a lifetime $500 had expired in 2011. But the Feds extended it for 2012 and 2013. If you upgraded one of the following systems this year, it’s an opportunity for a dollar-for-dollar reduction in your tax liability: If you get the $500 credit, you pay $500 less in taxes.
- Biomass stoves
- Heating, ventilation, air conditioning
- Insulation
- Roofs (metal and asphalt)
- Water heaters (non-solar)
- Windows, doors, and skylights
- Storm windows and doors
Varying maximums
Some of the eligible products and systems are capped even lower than $500. New windows are capped at $200 — and not per window, but overall. Read about the fine print in order to claim your energy tax credit.
- Determine if the system is eligible. Go to Energy Star’s website for detailed descriptions of what’s covered. And talk to your vendor.
- The product or system must have been installed, not just contracted for, in the tax year you’ll be claiming it.
- Save system receipts and manufacturer certifications. You’ll need them if the IRS asks for proof.
- File IRS Form 5695 with the rest of your tax forms.
Vacation home tax deductions
The rules on tax deductions for vacation homes are complicated. Do yourself a favor and keep good records about how and when you use your vacation home.
- If you’re the only one using your vacation home (you don’t rent it out for more than 14 days a year), you can deduct mortgage interest and real estate taxes on Schedule A.
- Rent your vacation home out for more than 14 days and use it yourself fewer than 15 days (or 10% of total rental days, whichever is greater), and it’s treated like a rental property. Those expenses get deducted using Schedule E.
- Rent your home for part of the year and use it yourself for more than 14 days and you have to keep track of income, expenses, and divide them proportionate to how often you used and how often you rented the house.
Home buyer tax credit
There were federal first-time home buyer tax credits in 2008, 2009, and 2010.
- If you claimed the home buyer tax credit for a purchase made after April 8, 2008, and before Jan. 1, 2009, you must repay 1/15th of the credit over 15 years, with no interest.
- If you used the tax credit in 2009 or 2010 and then sold your house or stopped using it as your primary residence, within 36 months of the purchase date, you also have to pay back the credit. Example: If you bought a home in 2010 and sold in 2012, you pay it back with your 2012 taxes.
- That repayment rules are less rigorous for uniformed service members, Foreign Service workers, and intelligence community workers who get sent on extended duty at least 50 miles from their principal residence.
Members of the armed forces who served overseas got an extra year to use the first-time home buyer tax credit. If you were abroad for at least 90 days between Jan. 1, 2009, and April 30, 2010, and you bought your home by April 30, 2011, and closed the deal by June 30, 2011, you can claim your first-time home buyer tax credit.
The IRS has a tool you can use to help figure out what you owe.
Property tax deduction
You can deduct on Schedule A the real estate property taxes you pay. If you have a mortgage with an escrow account, the amount of real estate property taxes you paid shows up on your annual escrow statement.
If you bought a house in 2012, check your HUD-1 Settlement statement to see if you paid any property taxes when you closed the purchase of your house. Those taxes are deductible on Schedule A, too.
This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.
How to Use Comparable Sales to Price Your Home (Tulsa Homes For Sale)
Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps), sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.
What makes a good comparable sale?
Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:
Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.
Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.
Amenities and upgrades: Is the kitchen new? Does the comparable sale house have full A/C? Is there crown molding, a deck, or a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowners association fees?
Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.
Sales sweeteners: Did the comparable-sale sellers give the buyers downpayment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.
Agents can help adjust price based on insider insights
Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or a basement office—is one of the ways real estate agents add value.
An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.
More ways to pick a home listing price
If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen without taking the criticism personally).
Next, put your comparable sales into two piles: more expensive and less expensive. What makes your home more valuable than the cheaper comparable sales and less valuable than the pricier comparable sales?
Are foreclosures and short sales comparables?
If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.
A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.
Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell for less than they owe because they’re upside down, divorcing, or their employer is moving them out of town.
So you have to rely on your REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.
For a free comparative market analysis (CMA) please feel free to contact me.
John Cantero
Real Estate Specialist
918-313-0408
www.johncantero.com
Home Financial Plan (Home Buyers Tips)
Your home is most likely your biggest investment. To manage it, create a financial plan that takes into account repairs, upgrades, mortgages, insurance, and taxes.
Use this home financial plan budget worksheet, and start by writing a list of expenses, such as:
- Mortgage
- Taxes
- Home insurance, including liability
- Repairs and maintenance, such as new furnace, roof, painting
- Voluntary upgrades, such as a swimming pool, a premium range, a new powder room
What will you learn from this home financial plan weekend exercise?
- How much you have to spend
- How much you need to allot in the short- and long-term for necessary maintenance and voluntary improvements
With this newfound grip on your home’s expenses, you can create a home financial plan that’ll help you there for years with maximum enjoyment and minimum anxiety.
Here’s how to manage other aspects of your home finances:
The mortgage: Pay it — and then some Insurance: Protect your property Repairs and renovations: By choice or necessity Taxes: (Almost) no way around them
The mortgage: Pay it—and then some
Yup, you already shell out a lot for your mortgage, but can you pay more? Even a little extra each month can add up to an earlier payoff. Let’s say you have $200,000 in outstanding principal and a 20-year fixed-rate mortgage at 5%. Your monthly payment is $1,319.91. But if you can manage to pay another $100 a month, you’ll save $14,887 in interest.
Run the numbers yourself for your home financial plan.
Advantages of an early payoff, says Alan D. Kahn, a financial planner in Syosset, N.Y.:
- Less debt means more money to spend later.
- It feels darn good to own your house outright as soon as possible.
- Minimal tax loss. Toward the tail end of the life of a loan most of your payment goes to the principal, not the interest, so you’re getting only a small tax break anyway.
Of course, if you’re still saving for retirement, put the 100 bucks elsewhere:
- A retirement plan
- An account for the inevitable home repairs
- An account for discretionary improvements, which can raise your home’s value
Insurance: Protect your property
Your vegetable garden is pointless without a fence to keep out rabbits; likewise, your home financial plan will come to nothing without an insurance “fence”:
Homeowner’s insurance. Basic coverage for your home and everything in it. The average cost is $636 per year but this varies widely by state.
Liability coverage. Protects you from a lawsuit if someone gets hurt on your property, for example. Your best bet: An umbrella policy. For about $300 a year you can by a typical $1 million policy.
Various disaster insurance policies. Optional policies cover flood, earthquake, and hurricane damage. As part of your home financial plan, you have to research to see what disaster coverage, if any, you need in your area, and what your standard policy already covers. For $540 a year you can buy flood insurance, for example.
Don’t under- or overbuy insurance
For your basic policy, get homeowners insurance with full replacement coverage in case your house burns to the ground.
That sounds simple, but heads up on calculation. Remember that you own a house as well as the land on which it sits. So even though you bought your home for $300,000, it may cost only $100,000 to rebuild it. Your policy limits should reflect this. This difference will vary widely by region.
Another heads up: Don’t make the common and potentially disastrous mistake of thinking that because your home has fallen in value you need less insurance. If you bought a $1.2 million townhouse in Florida during the boom, it’s true it now may only sell for $600,000. But the replacement cost of the townhouse hasn’t changed much, so you can’t improve your home financial plan by cutting insurance costs that way.
Other ways to cut your insurance budget:
- If you make structural improvements, such as adding storm shutters, your insurer may give you a break.
- If you belong to certain groups, such as AARP or veterans’ organizations, your premiums may be lower.
Repairs and renovations: By choice or necessity
You own a home, so you’ll be spending money on everything from a new faucet to — surprise! — a new roof. Freddie Mac and other authorities say as part of your home financial plan, you should be prepared to spend 1% to 3% of the market value of the home annually on maintenance. To be extra-prudent, open a savings account and make regular payments until your account reaches 1% to 3% of your home’s current value.
To help you budget:
Start with the inspection report you received when you bought the house. Did the inspector indicate that you would need a new roof in five years? A new furnace in 10?
Keep a log of your major appliances’ age so you can estimate when they’ll need replacing. Some estimated life spans:
- Roof: 20-25 years
- Heating systems: 15-20 years
- Range/ovens: 11-15 years
- Water heaters: 8-13 years
Then get estimates on what replacements will cost and start saving.
Consider ongoing non-emergency maintenance, too. Do you live in New England? Price a snow blower and get bids from plow services.
Resist the siren call of the home equity loan to take care of everything. That just defeats your efforts to pay off the mortgage early.
Separate out what you want from what you need. Does it make more sense to do a $50,000 to $60,000 kitchen remodel, which recoups about 69%, or a minor remodel, which recoups about 75%, according to Remodeling magazine’s 2013 Cost vs. Value Report?
If you can afford to redo, go for it. Just don’t confuse your necessary repairs (new oil furnace — about $4,000) with your discretionary upgrades (Viking range — $6,000 and up).
Taxes: (Almost) no way around them
Even if your lender handles your property taxes from an escrow account, you need to budget for them in your home financial plan. They creep up almost every year, it seems. Take responsibility for tracking the changes in your area: Look over past tax bills to get a sense of how quickly they’ve risen in the past.
Or if your lender handles escrow and you haven’t saved your bills, ask for an accounting. The median annual property tax payment is $1,812, but that hides the enormous range in medians from state to state.
You can generally deduct property taxes on your federal return. A tax pro can tell you how much of a tax break you’ll get, to help you fine tune your home financial plan.
You may be able to reduce your tax burden by getting a reassessment. Do your homework first: Are comparable houses taxed less than yours? Ask the local assessor what formula is used to set tax rates. You can challenge the assessed value and get yourself a rollback.
If you’re in a special group, you might get some help from state or local programs. Check around to see what’s available in your area. New York State, for example, has its Star Program for giving senior citizens some relief from school-related property taxes.
Homes For Sale in Broken Arrow, Ok (How to Get Kids to Save Energy)
Kids have more important things to think about than turning off the lights. But discovering the lights blazing in an empty room for the umpteenth time is enough to make any parent scream, especially when the power bill arrives.
The good news is, you can train your kids about the importance of saving energy right from the start. Here’s great advice from some of our favorite bloggers who know a thing or three about kids.
1. Let them take charge.
Jenn Savedge, who blogs at The Green Parent, practices a little reverse psychology — she urges her kids to remind her to turn off the lights.
“They get such a kick out of ‘telling Mommy what to do’ that it’s first and foremost on their minds,” Savedge said. “If I walk out of a room without doing it, they’re happy to point it out and then dash back and do it for me.
“Works like a charm and keeps the whole thing from becoming just one more thing that Mommy nags them about.”
The key to getting children to do anything is to make it “theirs,” says Monica Fraser, a mother of two who blogs at Healthy Green Moms.
“I get them to police me because they get inspired to turn off the lights ‘better than me,’” she said.
2. Find their motivation.
For Sommer Poquette’s 8-year-old son, it’s money.
“If I have to ask more than three times for my son to do anything in particular, he loses $1 out of his piggy bank,” says Poquette, who blogs at Green and Clean Mom.
“I do this so he learns that leaving the lights on costs me money, but also because he’s very motivated to earn money and spend money, so I hit him where it hurts the most: the wallet! Amazingly, he listens very well and never lets me get to the fourth ask!”
Fraser’s kids are motivated by the idea of helping out friends and neighbors.
“Because my children are quite young, I have said that we must remember to turn lights off and shut water off when brushing so that our neighbors have enough,” she says. “They know their neighbors, and certainly wouldn’t want to use all the water.”
3. Incorporate non-verbal reminders.
Gentle reminders, such as stickers on the light switches, help kids remember to turn off the lights when they leave a room.
“They’re each in charge of shutting off their bedroom lights each morning and during the day,” Poquette says. “We have stickers above the light switches to remind them. As a family, we all offer each other friendly reminders.”
Sticky notes don’t just apply to light switches, either. Tiffany Washko, who blogs at NatureMoms, places Post-It Notes labeled “Turn Me Off” and “Unplug Me” all around the house as reminders.
“Putting them by the light switch, on the side of the TV, on the wall next to the power bar that controls game consoles, etcetera, is a great visual reminder,” Washko says.
“We also require each child to do a walk-through each morning before they leave for school and turn off anything that may have been left on. Once they consistently remember, we stop requiring it … that is, until they have a few lapses, then we rinse and repeat.”
4. Explain to them why it’s important.
The full implications of saving energy may not immediately be clear to kids, but they’ll be more likely to remember to turn off the lights if they understand why it’s important.
“To teach them about the importance of turning off the lights and saving energy, we’ve read them several children’s books,” says Poquette. “My son understands the value of a dollar, so I’ve shown him our energy bill and explained to him what this means and how energy is produced.
“I think being up front with your kids, and explaining things to them in simple ways they can understand, is the best policy.”
Homes For Sale in Broken Arrow, Ok (Save 20% to 40% on Your Kitchen Remodel)
Below are 7 great recommendations for ways to shave costs off your kitchen remodel. Each recommendation includes a percentage of the savings you can expect to trim off the overall cost of your kitchen remodeling. Because of variables, such as the price of materials in your area, the percentages are given as a range.
If you do all the recommendations, you’ll knock 20% to 40% off the cost of your project.
1. Skip the custom cabinet shop. All of the major cabinet manufacturers offer a range of styles and finishes in their stock product lines. The only compromise you’ll make is that you can’t get cabinet widths sized to the exact fraction of an inch.
“Stock cabinets come in 3-inch increments, so you may need to get something slightly smaller than the space you have to fill,” says Cambridge, Mass., kitchen designer Jean Courtney. But nobody will ever notice. “Your contractor will use matching filler pieces and moldings to hide any gaps and make everything look custom fitted.”
Your savings: 5% to 12%
2. Keep the sink and appliances in their current locations. That avoids having to run new electrical wiring, natural gas lines, plumbing pipes, and hood-vent lines, knocking thousands off your construction costs.
Your savings: 5% to 10%
3. Select a simple cabinet door design. A classic shaker door, which is plain and elegant, comes at about half the cost of something more complex, such as an arch-top panel with intricate moldings. And you’ll get a more timeless, never-go-out-of-style look.
Your savings: 2% to 4%
4. Choose a stock stain or paint finish on the cabinets instead of a trendy two-tone glazed finish. Most cabinet manufacturers offer an array of good-looking, durable stock finishes.
Your savings: 3% to 4%
5. Keep the existing window locations. Using the current openings — and resisting the temptation to increase window size — reduces construction costs considerably because the contractor won’t have to frame out new openings.
Your savings: 3% to 6%
6. Simplify the edge profile of your countertops. A waterfall, ogee, or other fancy edge choice can add hundreds to the fabrication costs of your countertops. Trim that cost by opting for a square or simple round-over treatment.
Your savings: 1% to 2%
7. Shop for discontinued hardwood flooring and backsplash tiles. “When a particular line of subway tile or oak flooring is going out of production, stores slash the prices to move the merchandise — but it’s perfectly good stuff,” says Courtney.
Another option: Look for salvaged building materials, such as sinks, faucets, and lighting fixtures.
Your savings: 1% to 2%
Homes For Sale in Tulsa, Ok (Design Tips for Any Home)
Here are some desighn tips to get you started on incorporating universal design features in your home.
One of the basic principles of universal design, also called ageless design, is that it makes homes more practical and safer for everyone — not just the elderly or people with limited mobility.
These days, universal design features are an everyday fact of life for many households, with architects and other professional designers adding universal design ideas as a matter of course.
You don’t have to be a pro designer to incorporate this smart thinking into your own home. If you’re remodeling or simply adding a few upgrades, be sure to keep universal design features in mind. There are lots of resources that’ll give you some great starting points.
1. Switch out doorknobs for lever-style handles. Doorknobs require lots of dexterity and torque to open; with levers you simply press and go.
Makes sense for folks with arthritis, of course, but think about an emergency situation when everyone, including small kids, needs to exit fast: A lever handle is a safe, foolproof way to open a door.
A big plus: Levers are good-looking and can contribute to the value of your home. A standard interior passage door lever in a satin nickel finish costs about $20; you’ll pay $25 to $30 for a lockable lever set for your bath or bedroom. Replacing door hardware is an easy DIY job.
2. Replace toggle light switches with rocker-style switches. Rocker switches feature a big on/off plate that you can operate with a finger, a knuckle, or even your elbow when you’re laden with bags of groceries.
Rocker switches are sleek and good-looking, too. Ever notice how conventional toggle switches get dirt and grime embedded in them after a couple of years? No more! You’ll pay $2 for a single-pole rocker switch, up to $10 for multiple switch sets.
3. Anti-scald devices for your bathroom prevent water from reaching unsafe temps. An anti-scald shower head ($15) reduces water flow to a trickle if the water gets too hot. An anti-scald faucet device ($40) replaces your faucet aerator and also reduces hot water flow.
Anti-scald valves — also known as pressure-balancing valves — prevent changes in water pressure from creating sudden bursts of hot or cold water. An anti-scald valve ($100) installs on plumbing pipes inside your walls. If you don’t have DIY skills, you’ll pay a plumber $100 to $200 for installation.
4. Motion sensor light controls add light when you need it. They come in a variety of styles and simple technologies. I like the plug-in sensors ($10 to $15). You simply stick them into existing receptacles, then plug your table or floor lamps into them. When the sensor detects motion, it turns on the light.
They’re great for 2 a.m. snacking, or if your young kids are at that age when they migrate into your bed in the middle of the night. The lights turn off after about 10 minutes if no more motion is detected.
Got an easy, low-cost universal design tip? Let’s hear about it!
Holiday Fire Safety Tips
Holiday Fire Safety Tips
To keep your household from becoming a holiday fire statistic, here are some safety tips to follow.
Cooking
Cooking is the top cause of holiday fires, according to the USFA. The most common culprit is food that’s left unattended. It’s easy to get distracted; take a pot holder with you when you leave the kitchen as a reminder that you have something on the stove. Make sure to keep a kitchen fire extinguisher that’s rated for all types of fires, and check that smoke detectors are working.
If you’re planning to deep-fry your holiday turkey, do it outside, on a flat, level surface at least 10 feet from the house.
Candles
The incidence of candle fires is four times higher during December than during other months. According to the National Fire Protection Association, four of the five most dangerous days of the year for residential candle fires are Christmas/Christmas Eve and New Year’s/New Year’s Eve. (The fifth is Halloween.)
To reduce the danger, maintain about a foot of space between the candle and anything that can burn. Set candles on sturdy bases or cover with hurricane globes. Never leave flames unattended. Before bed, walk through each room to make sure candles are blown out. For atmosphere without worry, consider flameless LED candles.
Christmas trees
It takes less than 30 seconds for a dry tree to engulf a room in flames, according to the Building and Fire Research Laboratory of the National Institute for Standards and Technology. “They make turpentine out of pine trees,” notes Tom Olshanski, spokesman for the U.S. Fire Administration. “A Christmas tree is almost explosive when it goes.”
To minimize risk, buy a fresh tree with intact needles, get a fresh cut on the trunk, and water it every day. A well-watered tree is almost impossible to ignite. Keep the tree away from heat sources, such as a fireplace or radiator, and out of traffic patterns. If you’re using live garlands and other greenery, keep them at least three feet away from heating sources.
No matter how well the tree is watered, it will start to dry out after about four weeks, Olshanski says, so take it down after the holidays. Artificial trees don’t pose much of a fire hazard; just make sure yours is flame-retardant.
Decorative lights
Inspect light strings, and throw out any with frayed or cracked wires or broken sockets. When decorating, don’t run more than three strings of lights end to end. “Stacking the plugs is much safer when you’re using a large quantity of lights,” explains Brian L. Vogt, director of education for holiday lighting firm Christmas Décor. Extension cords should be in good condition and UL-rated for indoor or outdoor use. Check outdoor receptacles to make sure the ground fault interrupters don’t trip. If they trip repeatedly, Vogt says, that’s a sign that they need to be replaced.
When hanging lights outside, avoid using nails or staples, which can damage the wiring and increase the risk of a fire. Instead, use UL-rated clips or hangers. And take lights down within 90 days, says John Drengenberg, director of consumer safety for Underwriters Laboratories. “If you leave them up all year round, squirrels chew on them and they get damaged by weather.”
Kids playing with matches
The number of blazes–and, tragically, the number of deaths–caused by children playing with fire goes up significantly during the holidays. From January through March, 13% of fire deaths are the result of children playing with fire, the USFA reports; in December, that percentage doubles. So keep matches and lighters out of kids’ reach. “We tend to underestimate the power of these tools,” says Meri-K Appy, president of the nonprofit Home Safety Council. “A match or lighter could be more deadly than a loaded gun in the hands of a small child.”
Fireplaces
Soot can harden on chimney walls as flammable creosote, so before the fireplace season begins, have your chimney inspected to see if it needs cleaning. Screen the fireplace to prevent embers from popping out onto the floor or carpet, and never use flammable liquids to start a fire in the fireplace. Only burn seasoned wood–no wrapping paper.
When cleaning out the fireplace, put embers in a metal container and set them outside to cool for 24 hours before disposal.
Tulsa Ok Homes For Sale
Things To Do In December If You Want to Buy or Sell in 2013
1. Handle your credit horrors. Maybe you don’t have any credit horrors – kudos to you! But let’s get real, this year will be a year in which many post-foreclosure, post-bankruptcy, post-layoff Americans will find themselves sufficiently recovered, post-recession, to get back into the real estate market and buy a home. If you count yourself among the number of 2013 wanna-be buyers who experienced a financial glitch of any degree during the recession, December is the right time to start pulling your credit reports and doing a damage assessement and control campaign.
- Visit AnnualCreditReport.com (the only website through which you can access your government-mandated free reports) and order your own credit reports from all three reporting bureaus.
- Review them all, line-by-line, checking for errors and discrepancies. It is extremely common for paid-off accounts to still be reporting as delinquent, for foreclosed mortgages to still be listed as open and past-due and for bills that were settled in collection to be reported as behind. Follow the instructions to dispute any such errors you see.
- When you talk with your mortgage broker (see #4), go over the reports with them again, getting a read on precisely when your foreclosure, bankruptcy, delinquencies, gaps in employment or other credit woes will be sufficiently “seasoned” (i.e., long ago) to allow you to qualify for another loan, and get their advice on any action items, like paying a particular debt or set of credit cards down to $X amount will be important for you to complete before you try for a legitimate pre-approval next year.
In fact, this last point applies to everyone – whether or not you think you have any dings on your credit report. It’s essential to get clear on any of the work you’ll need to do to optimize your credit standing now, as the payoffs, disputes and other credit work that can move the needle on your score may take some time.
2. Purge. It’s time. Time to get rid of all that things you know qualify as clutter – all of the stuff you know buyers won’t want to see when they tour your home, and all the stuff that you won’t want to move to your next place. If you donate your junk before the end of the year, you might be able to get a receipt and deduction for the taxes you file in 2013. And tax break or not, getting all that stuff out of your attic, your closets, your shelves and your rooms will clear up loads of mental space and energy, minimize some of the overwhelm latent in the prospect of moving – and might even surface a few things you can sell to boost your down payment savings or your home staging budget. Clutter clearing gets overwhelming when you simply lack the time, in the face of everyday urgencies, to invest a few hours or days to go deep, pull out all the minutae and memory-laden How better to spend those wintry days between Christmas and New Year’s than to clear out the clutter in your home – and your mind?
3. Plan your prep. If you’re thinking of selling your home in 2013, now is a great time to start organizing your list (or spreadsheet, or Evernote file) of home preparation tasks that need to get done before you put the place on the market. Things like painting, carpeting, landscaping and other preparation tasks can be less taxing and less disruptive to your life if you have plenty of time to collect bids, sock away the cash to cover the costs and arrange projects at your family’s convenience or during off-seasons, when contractors might be wiling to charge a bit less. Talk with your agent before you put a plan in place; they can help you make good decisions which projects to do (and which to forego), as well as choosing finish materials and colors that will appeal to the broadest segment of buyers – to boot, they often can refer you to the most cost-effective contractors in your area for these sorts of pre-listing projects.
3. Save. More. There’s no such thing as saving too much cash up for your down payment. If you have a home to sell, you have no idea how much you’ll take away from that transaction until it closes. And even if you’re currently renting, having maximum savings set aside allows you maximum flexibility in terms of selecting homes, competing with other buyers, covering closing costs (which can run as high as 3-4% on average for an FHA loan) and even handling post-closing repairs, appliances and property personalization.
4. Collect your gift money. Buyers who get gift money from a relative to apply toward their down payments are often subject to seemingly strange and definitely invasive documentation requirements – the most onerous of which is to produce copies of the gift GIVER’s bank accounts proving the source of the funds. If you know Mom, Dad, Granny or Aunt Bernie is going to chip in some cash toward your down payment in the Spring, consider asking them to go ahead and give it to you now, so you can put it in your own accounts and begin “seasoning” it as yours, which will help you avoid all those documentation demands. Your benefactor should check with their financial and tax advisors to be sure the gift is structured so as to avoid any tax implications, before they give it.
5. This is where I can help. Connect with an agent and a mortgage broker – stat. Don’t wait until the month before you want to buy or sell to ring up your trusty agent and initiate the conversation. Ask around for referrals or you can find agent recommendations on Trulia, you can read all of my clients reviews about me here… http://www.trulia.com/profile/johncantero/recommendation/
Also you should get a mortgage broker (or 3) on the phone, and ask them to help brief you on topics like:
- Whether your market is a buyer’s market or seller’s market, and how that translates into what you can and should expect when you plan to buy or sell next year
- Whether there are any area-specific timing issues you should factor in as you map out your timeline
- What – given the specifics of your financials, your savings, any past credit or other issues you have – you should be doing now in terms of paying bills down, settting savings targets, and such
- What changes, if any, you should plan on making to your property before listing it
- What sort of property you can get for your money in the areas you’re targeting as a buyer, and what kind of money you can expect to command for your property in your local market (this, obviously, will change over time – even over the few months or so between now and the time you list your home, but it still helps to have a general ides of the current market values).
6. Go Open House hunting. If you’re selling next year, it’s essential to get a real-life read on what the competition’s like, everything from what sorts of houses in your area are listed at various price points to what your target buyers are going to be seeing on their way into or out of your house. There’s no reality check on your own home’s preparation and staging – its overall readiness for listing – like putting on a buyer’s shoes and taking a tour through similar homes in your area. And there’s no time for this reality check like right now: when Open Houses are still a-plenty, you have more time to attend them, and you still have plenty of time to process your takeaways and incorporate them into your own property preparations. Open House hunting is also helpful for those who have home buying on their 2013 to-do lists. It’s the only way you can start understanding how to decipher the listings you see online into a reality-based set of expectations about a property. It’s also the best way to get indoctrinated deeply into the realities of what you get on your local market at various price points, and it’s the most impactful strategy for starting the process of negotiating compromises with your co-buyers. Feel free to give me a call.
7. Think hard about your deductions, if you’re self-employed. In the wake of the recession, most mortgage guidelines for self-employed borrowers changed, so that your income for purposes of qualifying is assumed to be the average of your last two years’ Adjusted Gross Income, as reported on your federal income tax returns. That means lenders calculate your income after all your business-related and other deductions, not before. So, yes, this does mean that maximizing your deductions may impact your ability to qualify for a home loan in 2013. But them’s the breaks – better to know this before you file your tax return, in the event it might change something about how you file. Loop your tax advisor, business bookkeeper and mortgage broker into your decision-making process about your 2012 taxes before filing, if you’re self-employed and plan to buy or refinance your home next year.
I look forward to hearing from you and helping you find the perfect property.
Recently Listed Homes For Sale in Broken Arrow
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$280,000 : 705 E Seattle Street, Broken Arrow4 beds, 3 full baths
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$109,000 : 6605 S Ash Place, Broken Arrow3 beds, 2 full, 1 half baths
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$199,500 : 11231 S 251st East Avenue, Broken Arrow3 beds, 2 full baths
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$235,000 : 3972 N Pine Avenue, Broken Arrow4 beds, 2 full baths
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$238,500 : 4408 W Iola Street, Broken Arrow4 beds, 2 full, 1 half baths
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$187,900 : 19606 E 48th Street S, Broken Arrow3 beds, 2 full baths
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$344,900 : 7301 S 301st East Avenue, Broken Arrow5 beds, 3 full, 1 half baths
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$225,900 : 1406 N 18th Place, Broken Arrow4 beds, 2 full, 1 half baths
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$124,900 : 3009 S Ash Court, Broken Arrow3 beds, 2 full baths
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$335,000 : 7300 E Ft Worth Street, Broken Arrow4 beds, 2 full, 1 half baths
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$192,900 : 5039 S 203rd East Avenue, Broken Arrow3 beds, 2 full baths
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$289,900 : 600 S 75th Street, Broken Arrow4 beds, 3 full, 1 half baths
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$150,000 : 7402 S Oak Place, Broken Arrow3 beds, 2 full baths
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$220,000 : 1008 E Uniontown Street, Broken Arrow3 beds, 2 full baths
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$170,000 : 3209 E Fairmont Street, Broken Arrow3 beds, 2 full baths
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$209,900 : 4809 E Dallas Street, Broken Arrow3 beds, 2 full baths
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$205,900 : 1411 E Concord Place, Broken Arrow4 beds, 3 full baths
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$204,000 : 2613 S Dogwood Avenue, Broken Arrow3 beds, 2 full, 1 half baths
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$189,000 : 2800 W Charlotte Street, Broken Arrow3 beds, 2 full baths
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$185,500 : 1823 S Gardenia Place, Broken Arrow3 beds, 2 full, 1 half baths
See all Real estate in the city of Broken Arrow.
(all data current as of
8/17/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
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