Can You See the Savings?

If you’ve considered changing your light bulbs to energy-saving LED bulbs but decided not to make the investment because the prices were too high, you might want to investigate again.  The prices have come down considerably.
An initial investment now will generate immediate returns through energy costs and because they last longer, you won’t need to replace them for years.
The life of LED bulbs is projected to be from 35,000 to 50,000 hours compared to an incandescent bulb at 750 to 2,000 hours.  For normal home use, a LED bulb could last more than 20 years.
80-90% of the energy used by fluorescent and incandescent bulbs is wasted by the heat generated.  In contrast, cool LED bulbs converts 80% of the electrical energy to light energy.

• The color of LED lights is bright white, more like daylight, instead of the warm yellow of incandescent or the greenish tint of fluorescent bulbs.

• LEDs light up instantly instead of building to their intensity like some of the fluorescent bulbs.

• LEDs are more durable because they don’t have filaments or thin-glass bulbs like incandescent and fluorescent bulbs.

Shop around to find the best price on LEDs. If the LED only lasted 20,000 hours, you might have to purchase 20 incandescent bulbs during that same period of time.  Using the chart below, you can see that the LED uses about 10% of the wattage without compromising on the brightness.

The Perfect Last Minute Gift

It’s part of holiday tradition to celebrate with family and friends and to share gifts with our loved ones.  There’s no measuring how much is spent on the combined effort and money to find the perfect gift.
The challenge is to identify the right gift in the right color and size; something they really want and need; and something that won’t break the budget.
“Eight Gifts That Do Not Cost a Cent” are suggestions that have been offered on numerous Internet sites attributed to an anonymous writer.  They may be just what you need to find the perfect gift.

• THE GIFT OF LISTENING...but you must really listen. No interrupting; no daydreaming; no planning your response; just listening.

• THE GIFT OF AFFECTION...be generous with appropriate hugs, kisses, pats on the back and handholds.  Let these small actions demonstrate the love you have for family and friends.

• THE GIFT OF LAUGHTER...clip cartoons and share articles and funny stories.  Your gift will say “I love to laugh with you."

• THE GIFT OF A WRITTEN NOTE...it can be a simple "thanks for the help" note or a full letter.  A brief, handwritten note may be remembered for a lifetime and may even change a life.

• THE GIFT OF A COMPLIMENT...a simple and sincere, "you look great in red" or "you did a super job" or "that was a wonderful meal" can make someone's day.

• THE GIFT OF A FAVOR... go out of your way every day to do something kind.

• THE GIFT OF SOLITUDE...there are times when a person wants nothing more than to be left alone.  Be sensitive to those times and give the gift of solitude to others.

• THE GIFT OF A CHEERFUL DISPOSITION...the easiest way to feel good is to extend a kind word to someone.  It’s really not that hard to say, Hello or Thank You. 

#lastminutegifts     #freegifts

Up to $500 for Doing Home "Work"

The energy-efficient home upgrades tax credit is scheduled to expire on December 31st this year.  If you need to make improvements to your home, this could be an incentive to do it before the end of the year.  If you have already made qualifying improvements without realizing the tax credit is available, it may seem like a holiday gift you weren't expecting.
The equipment must be installed to qualify for the credit which can put you under a time crunch.  Heating and cooling systems, insulation, windows, doors, skylights, water heaters and home weatherization may qualify.
The Residential Energy Efficiency Tax Credit has been available for purchases since January 1, 2011.  The tax credit is 10% of up to $5,000 of qualifying improvements which would make a maximum of $500 tax credit.
The cumulative maximum amount of tax credit that can be claimed by a taxpayer in the different years this law has been in effect is $500.  If it has been claimed in previous years, the taxpayer is not eligible for this credit for additional new purchases.
For more information, see energy.gov or talk to your tax professional.

#TaxCredit     #HomeOwnership  

Winter Maintenance

With a 2,000+ mile long winter storm affecting much of the country, there are plenty of home owners who wish they were better prepared.  Even when you live in warm climates, some of these things are important to check periodically.
Preparing for the change of seasons can make your home more comfortable and protect your investment.  Regular maintenance extends the various components of a home and can generate savings in operating costs while avoiding expensive replacements.

• Weather strips around doors and windows should be checked for possible air leaks.
• Caulking around windows and doors should seal out moisture and air leaks.
• HVAC should be inspected and serviced by a professional annually.
• Smoke and carbon monoxide detectors should be tested regularly.
• Ductwork and supply lines from water heaters should be insulated.
• Fireplace chimneys should be cleaned regularly and fireplaces should be inspected for cracks in mortar and to see if the damper closes properly.
• Gutters should be free of leaves and debris to prevent rainwater build-up.
• Tree branches touching or hanging over your roof should be trimmed.

Please contact us if you need a service provider recommendation.

Motivated Sellers, Better Prices and Less Competition

The Winter Home Buyer Report conducted in the second week of November by REALTOR.com^® revealed the sentiments of current home buyers expecting to buy a house during the winter months.  It appears that there is pent-up demand with buyers who were unable to purchase a home recently.
Most cited as an impediment to purchase was the challenge of low inventory.  Strong demand coupled with short supply explains why home prices have been increasing.
"This summer and spring home buying season was particularly challenging for buyers, especially first-time home buyers trying to compete with all-cash offers and bidding wars because of reduced inventory.  In fact, a quarter of the winter home buyers revealed they are in the market now because they were unable to find a home during this last home buying season," said Alison Schwartz, vice president of corporate communications at REALTOR.com^®.  "While buyers are still experiencing challenges with inventory and approximately one in five buyers plan to put down all cash, there are advantages to looking for a home in the winter. Motivated sellers, better prices and less competition between buyers are some of the top reasons winter home buyers are interested in purchasing a home during the colder months of the year."
Some interesting statistics taken from the report are:

Biggest challenges when searching for a home during winter:

• 34 percent shared that there is not enough inventory on the market
• 29 percent believe that winter weather makes house hunting unpleasant 

Traditionally, the industry has found that the fourth quarter of the year has a lower sales volume and is generally attributed to distractions from the holidays and not wanting to make a move during consistently inclement weather.  Even in areas that are not affected by extreme winter weather, there seems to be a mindset about moving in the winter.
Indications are that it may be advantageous for sellers to put their home on the market now rather than wait until after the first of the year.

Thanksgiving is Always in Season

Most school children would probably say that Thanksgiving dates back to the Pilgrims at Plymouth as early as 1621. By the late 1660’s, it had become traditional to hold a harvest festival in New England.
President George Washington declared the first nation-wide thanksgiving in 1789 “as a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many and signal favours of Almighty God.”
One hundred fifty years ago during the Civil War, in October, 1863, President Abraham Lincoln proclaimed the first national day of Thanksgiving.
William Seward, Lincoln’s secretary of state, drafted the proclamation: “No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God…they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American People.”
Even though the country was in the middle of the costly Civil War, the people of America started an enduring tradition to give thanks. In 1941, Congress determined that Thanksgiving will be celebrated on the fourth Thursday in November.

Refinance to Remove a Person

Most people are familiar with the various reasons a homeowner refinances their home which generally result in two major benefits: saving interest and building equity. 
There is however another reason to refinance which may not be as common which is to remove a person from the loan. In the case of a divorce, when one party wants to keep the home and the other party wants their equity out of the home, it is possible for the remaining party to refinance the home. If the equity is sufficient to justify it and the remaining owner can qualify for the new loan, the refinance can provide the proceeds to buy out the other spouse.
Refinancing to remove a person from the loan could also involve a situation where two or more heirs jointly own a property and have differing opinions on when to sell. The same situation could apply to a rental property with multiple owners and the refinance would provide a way to buy out a partner.
Sometimes, it’s not about taking cash out of the home to buy out the other party. If a person’s name is on the mortgage, they’re responsible if it goes to default. One party may be willing to deed the home to the other party but it doesn’t necessarily relieve them of the liability of the mortgage they originated.
Many times, once a person has made their mind to move on, they’ll take the fastest and easiest way out. Removing a person from the deed or a mortgage is a reason to consider obtaining legal advice to protect your interests. Refinance Analysis calculator.
Reasons to Refinance

1. Lower the rate
2. Shorten the term
3. Take cash out of the equity
4. Combine loans
5. Remove a person from a loan

Who's Paying Your Mortgage?

As a homeowner, you obviously pay for your mortgage but as an investor, your tenant does.  Equity build-up is a significant benefit of mortgaged rental property.  As the investor collects rent and pays expenses, the principal amount of the loan is reduced which increases the equity in the property.  Over time, the tenant pays for the property to the benefit of the investor.
Equity build-up occurs with normal amortization as the loan is paid down.  It can be accelerated by making additional contributions to the principal each month along with the normal payment.  Some investors consider this a good use of the cash flows because interest rates on savings accounts and certificates of deposits are much lower than their mortgage rate.
In the example below, is a hypothetical rental with a purchase price of $125,000 with 80% loan-to-value mortgage at 4.5% for 30 years compared to a 3.5% for 15 years.  The acquisition costs were estimated at $3,000, the monthly rent is estimated at $1,250 and $4,800 for operating expenses.

Notice that both properties have a positive cash flow before tax.  The cash on cash return is the revenue less expenses including debt service divided by the initial investment to acquire the property.  The 15 year mortgage will obviously have a smaller cash flow and lower cash on cash but the equity build-up is significantly higher.
If the goal of the investor is to pay off the property to provide the highest possible cash flow at a later date, a shorter term mortgage with a lower interest rate will help them achieve that.  A simple definition of an investment is to put away today so you’ll have more tomorrow.  Sacrificing cash flow now, during an investor’s earning years, is a reasonable expectation to provide more cash flow in the future when it might be needed more.
Contact me if you’d like to explore rental property opportunities.

Sea Coast I 4155 S Atlantic Ave #416 New Smyrna Beach, FL

All you need is your clothes! Enjoy your morning coffee on the balcony as you watch dolphins frolic in the surf! This cozy, furnished condo is the perfect spot to catch the sun in the summer, or hide from the snow in the winter. The beautiful ocean views from the balcony and the Master en-suite are fantastic year round. Keep all of your beach gear in the extra storage spot at the end of the hall, and still have your super sized owners closet inside for storage.

Puppy Trick or Treat

We did a little puppy "Trick or Treat" at our house today. Eeyore's real name is Dobe...and the Fairy is Tinkerbelle. I call them my "fuzzy kids." They enjoyed all of the "ghosts, goblins, and witches" that stopped!

Real Estate 411

When you’re buying or selling, the obvious source to get your real estate question answered is your agent but where do you go the rest of the time?  As a homeowner for many years to come, you’ll need reliable help and solid suggestions.
Our business goal is to have a select group of our friends and past customers who consider us their lifelong real estate professional. We want to earn that trusted position so they’ll enthusiastically refer their friends to us.  Our plan to achieve this is simply to help these people with all of their real estate needs not just when they buy or sell but for all the years in between.
Throughout the year, we offer reminders and suggestions by email and social media that benefit your homeowner experience.  When we find good articles to help you be a better homeowner, we’ll pass them along.  You’ll discover new ways to maintain your property, minimize expenses and manage debt and risk.
We want to be your “Go-To” person for everything to do with real estate.  If we don’t have the answer you need, we’ll point you in the right direction to find it.
We’re here for you and your friends…now and in the future.  Please let us know how we can help you.

Why Borrowers Pay Different Rates

Lenders, like any business, have to make a profit.  The cost of acquiring the funds, the operating costs to service and the expected profit margin are easily identified.  The variable in pricing is the type of mortgage and the credit worthiness of the borrower.
A loan with a 3.5% down payment is riskier than a loan with 20% down payment.  If the lender has to take the property back to recover their expense, the margin is greater between what is owed and what the property is worth on an 80% mortgage.
Credit scoring is a risk-based pricing method that allows a lender to be competitive in the market for the best loans from different borrower groups.  Individual lenders set their own levels for what they consider “A” credit which is reserved for the best rates.  If good credit is approximately 710 to 740, scores below that are considered higher risk and will have higher rates.
Risk must be assessed for both the borrower and the property that collateralizes the loan.  The borrower’s credit history and income stability are strongly evaluated by the lender but if a default should occur, the property must secure the loan to avoid a loss to the lender.

The challenge for some buyers is they are unaware of what their credit score is and how it will affect the interest rate offered by the lender.  It is to the buyer’s advantage to be pre-approved by a reputable lender prior to starting the process of looking for a home.  In some cases, the lender can actually improve the borrower’s credit score to help them qualify for a lower interest rate.
Contact me for a recommendation of a trusted mortgage professional - Paige@RealEstatePaige.com

Lower Anxieties/Improve Marketability

One of the anxiety highpoints during the sale of a home is waiting for the buyer’s home inspection report.  Most sellers willingly disclose what they know about their home to any potential buyers.  The concern stems from the inspector finding something that they’re totally unaware of and that it will either cost them a lot of money to correct or the buyer will simply use it to void the contract.
If the inspection does reveal some unknown problem with the home, it’s probably as big a surprise to the buyer who is not as emotionally or financially invested as the seller.  It is human nature to fear what you don’t understand and when a report identifies defects, they may simply opt-out of the home.
The solution to the situation may be for the seller to have the home inspected prior to putting it on the market.  There is still a risk of becoming surprised by an unknown defect which at that point, would have to be disclosed to potential buyers or repaired by the seller.  The advantage is that it creates a baseline to compare discrepancies that may arise when a future buyer has the home inspected.
If the seller’s inspection report is made available during the marketing process, it could give buyers a sense of confidence about the home even though they may still choose to have the home checked by their own inspector.
The cost of the inspection, possibly $500, keeps some sellers from taking this initiative when selling their home.  In an effort to minimize their expenses, they forego getting valuable, disinterested 3rd party advice that could help sell their home.  On a $175,000 home, the fee for the inspection will probably be less than 3/10 of one percent of the sales price.
Another option to the seller to increase marketability of the property and bolster buyer confidence in the home would be to offer a home protection plan.  Generally, the seller doesn’t incur cost for this coverage until the home is sold and there may even be some coverage for the seller during the listing period.  The benefit to the buyer is avoiding unanticipated expenses for specific items that are covered during their first year of ownership.
Contact me for recommendations of home inspectors or home protection plans.

#Homeinspection #sellingahome

Rating Your Best Friend

Man’s best friend enjoys many of the benefits of his master’s home besides food and shelter and a comfortable place to live and play.  In return, dog owners expect companionship and possibly, protection; after all, even a small dog can bark to signal intruders.

Few people doubt that most dog owners love their pets and treat them well.  The costs associated with having a dog can include medical and dental that rivals human expenses, premium food, toys, grooming and license fees.  However, one of the expenses not anticipated by pet owners is a higher homeowner’s insurance premium.

There are almost five million dog bites a year with children being the main victims.

“Dog bites accounted for more than one-third of all homeowner’s insurance liability claim dollars paid out in 2012, which amounted to more than $489 million,” said Peter Robertson, representing the Property Casualty Insurers Association of America, testifying against the bill at a hearing of the Committee on Financial Services.  He said, “The total cost of dog bite claims increased by more than 51 percent between 2003 and 2012.”  It is now estimated that dog bites cause losses of over one billion dollars a year.

Some insurance underwriters have denied or canceled coverage or increased the premium of the owner’s liability insurance based on the homeowners’ specific breed of dog such as Pit Bulls, Dobermans, Akitas, Mastiffs, Malamutes and even German Shepherds.  The aggressive nature of certain types of dogs combined with specific training or lack of training, abuse or neglect are identified by insurer’s refusal to provide liability coverage.

If you are considering what insurers identify as a high-risk pet, you might want to visit with your insurance agent prior to acquiring your new best friend to see if it affects your rates.

Underwater Homeowners May Qualify...

Underwater Homeowners May Qualify for a Mortgage Sooner Than Expected with HUD’s Back to Work Extenuating Circumstances Program

On August 15, 2013, FHA launched the FHA Back to Work - Extenuating Circumstances program, also known as the FHA's "second chance" for mortgage applicants who have experienced financial hardship as a result of unemployment or severe reduction in income.

This program aims to help people who experienced a foreclosure, short sale, or bankruptcy due to what they consider a “negative credit event.”

In order to be eligible for this program, applicants are going to need to prove four things.

• First, they’ll need to prove that your income declined by 20 percent or more for a six month period and that those circumstances were the result of a negative credit event.
• Second, they’ll need to be able to provide documentation if the negative credit event qualifies under the “Job lost beyond applicant’s control” category. This might include publicly available information on a reduction in workforce or that a company closed. Applicants can also look to see if they had unemployment compensation.
• Next, applicants have to prove that, over the course of the last twelve months, they haven’t had any credit hiccups like a late installment or any new collections or judgments. Applicants also have to have a clean credit record for the last 12 months. So, they’ll need to show that they’ve had a positive rental history or that, if they’re living with their parents, they haven’t had any other credit issues.
• The last criteria is that applicants will have to go through Housing Counseling with an approved counselor no later than six months from the application date and no sooner than 30 days from the application date.

If you or someone you know experienced a foreclosure, short sale, or bankruptcy, they may be in a position to buy again through this new program. You can learn more by watching this video: http://www.youtube.com/watch?v=ldoWQSykQos.
 

Don't Do It!

You’ve seen lists telling buyers what to do to find the right home but knowing what not to do can be just as important.  After finding the right home, negotiating a contract, making a loan application and inspections, buyers, understandably, start making plans to move and put their personal touches on the home.
In today’s tenuous lending environment, little things can derail the process which isn’t over until the papers are signed at settlement and funds distributed to the seller. Verifications are made by a lender at the beginning of the loan process to determine if the buyer qualifies for the mortgage. The verifications are usually done again just prior to the closing to determine if there have been any material changes to the borrower’s credit or income that might disqualify them.
Simply stated:

1. Don’t make any new major purchases that could affect your debt-to-income ratio
2. Don’t apply, co-sign or add any new credit
3. Don’t quit your job or change jobs
4. Don’t change banks
5. Don’t open new credit accounts
6. Don’t close or consolidate credit card accounts without advice from your lender
7. Don’t buy things for your new home until after you close
8. Don’t talk to the seller without your agent

Your real estate professional and lender are working together to get you into your new home. It’s understandable to be excited about one of the biggest decisions you’ll make and that you feel you need to be getting ready for the move.
Planning is smart but don’t do anything that would affect your credit or income while you’re waiting to sign the final papers at settlement.

Tips for a WILDLY Successful Yard Sale

Carrie MakingLemonadeBlogger Blue Bell, PA

Thanks to our frenzied summer to declutter, we needed to get rid of all our extra stuff– and there’s no better way to do so than having a yard sale that will leave you with room to breathe AND loads of cash in your pocket!  We had a garage sale this past weekend and counted up almost $900 buckaroos at the end of the day– WAY more that we expected, especially since we only sold one big ticket item.  There were several tricks and tips that I believe led to our success so I wanted to share them with you– and hear your tips as well!

Your Stuff:  One thing that helped was to systematically declutter each nook of our home this summer.  Each time I found items for the sale I place them in a pile in our basement.  That pile was OUT OF CONTROL, yo.  Like, ready to invade our home at a moment’s notice.  It was either have a yard sale or star-on-an-episode-of-Hoarders type pile.  Even if you don’t have time to totally declutter, hit the major areas: kitchen cabinets, clothing, bookshelves, garage, basement.  Do you have extra furniture hanging out?  Toys that are outgrown?  Now’s the time to let them go.

Know your Goal:  Why are you having a yard sale?  To get rid of stuff or make money? A little of both?  Knowing your objective will help when you are pricing, negotiating, and packing up the leftovers.  On the fence with a price and just want to get rid of stuff?  Go lower.  Are you a serial yard saler and will have another sale next year?  Price what you’d like to get and hope to get it.  Our goal was to get rid of stuff, so when negotiating we knew to let it go rather that haggle too much.

Advertising: These days, your best (and FREE) advertising will probably be Craigslist.  I also paid $5 to advertise online in my local newspaper (print ads are outrageously priced here).  Here’s my tips for the perfect online Craigslist ad:

• Upload photos of some of your items for sale, put don’t have them look creepy or disgusting.  Seriously, you want people to be attracted to your sale and not report you to the authorities.  If you need to crop or style it then do so, but make sure the photos look inviting!
• Make it snappy.  Put some personality into the ad.  People commented on how much they enjoyed reading our ad because I attempted some lame humor in there.  As always.
• Include a list of some of the types of items you’ll have.  Got kids clothes that are higher end?  List that!  And if you have great prices on stuff, list that too.  It’s one thing to know a seller has Ann Taylor clothing, another to know it’s only $3 a piece.

I put this photo in my ad and by 8:30am had sold $150 worth of kids clothes.

Signage: Perhaps the best thing you can do for yourself is have excellent signage.  Great signs will easily lead people who read your ads to your sale, AND attract people driving by.  Make sure the letters are neat and BIG.  Put them on each major corner in your area, especially on main streets.  You only need three things on your sign:

• the words Yard Sale or Garage Sale
• date and time
• a big arrow in the direction to drive
• address is optional; if it’s not easy to read while you drive by quickly, don’t add it!  Just be sure to have signs that lead to your home.

Here’s three options for lawn signs if you don’t have a pole to hang one.  Tape a sign to the side of a cardboard box, drop a brick or large stone inside, and you have a great sign that won’t blow away.  If you have yard signs from work you’ve had done, keep them!  Tape signs to each side and you have an attention getter for sure.  The Dollar Store often has Garage Sale lawn signs for only $1, when you see them stock up.

Be a good neighbor.  Collect your signs that night.  Littering is for dorks.

Pricing:  Whew, this is a toughie.  Conventional wisdom says to price at 1/3 the retail value, and that could hold true.  But times are tight, so people won’t always pay that amount.  For example, I priced my clothes at $3 each and trust me they didn’t cost $9 retail.  Pricing it right allowed me to let it go AND make some money for a new fall wardrobe.     It was helpful toask my buds on Instagram about what to price things, especially furniture– they were very honest!

Put price tags on everything.  It’s extra work but people really don’t want to ask how much something costs every few minutes.  For grouped items like books, hang a sign with the prices.

Here’s what I priced the most common items, with some wiggle room:

• Books: hardcovers $1, paperbacks .50, children’s paperbacks .25
• Kids Clothes (mostly Gymboree, GAP, & Carters) $2 a piece
• Kids Shoes (mostly Stride Rite and Keens) $3 a pair
• Women’s Clothing (mostly Ann Taylor, Loft, Banana Republic, J. Crew) $3 a piece– I could do way better on eBay but I wanted to get rid of it!
• Toys $1-$3
• Planters $2 each, Gift Bags .25 each

Group Like Items:  This will really help your sale!  Put like items together.  I like to have a table of books, one of home decor, toys on a tarp on the ground, sports equipment, etc. Here’s a few examples of other things to group together:

• box of extra fabric pieces: price it around .50 a piece and watch them sell
• toys: group all those small annoying things in a bag, price the bag for a buck, sold!
• jewelry: jewelry is HUGE.  Have outdated pieces or costume jewelry?  Price it at .50 up to a few dollars, KEEP IT AT THE CASHIER’S TABLE, and you’ll have a goldmine.  I bagged each piece and laid it in a shallow tray, everyone took a look and it sold so quickly.
• kids clothes: if you have a lot of clothing in various sizes, it works well to have it folded in boxes labeled by gender and size.  This was a very popular item!

Display:  Make it look inviting.  Tables are important, ask friends to borrow some if you don’t have enough.  Place your for-sale throw pillows on your for-sale chairs.  One mistake we made was using our furniture for sale to hold boxes of stuff.  In hindsight, I wish I’d borrowed a few utility tables for the book and clothing boxes and kept the furniture looking it’s best– perhaps with a lamp for some plates on top instead of being covered by boxes.  That being said, they looked neat all lined up on tables and it was a great height for browsing.

We have an IKEA wardrobe rack that I use year round in the basement, so it really comes in handy for the occasional yard sale.  I needed an extra one so I made it from two ladders and a pole held together strongly with duct tape!

Free Pile:  Each time we have a yard sale, we have a pile of free things that we place by the curb.  Carpet remnants, old plastic chairs, paint cans, even my old teaching worksheets– it attracts drive-bys and everyone loves something for free.  Be sure to announce your free pile in your online ad!

After the Sale:  If your goal was to get rid of clutter (like mine!), then this is one of the most important steps.  Load your leftovers IMMEDIATELY into your car, and drive them to a thrift store.  When you get home you’ll have your yard sale cash in your pocket, a decluttered home, and probably be totally exhausted yet fulfilled!  I’ll admit that we kept the furniture we didn’t sell so we could sell it on Craigslist, and my leftover kids’ books are going straight to a Philly school.

On that note, if anyone in the Philly area is looking for a deal on a coffee table / end table set, glider with ottoman, or a counter height kitchen set I’m your girl.  HA!

There you have it, a few tips that will help you have a ROCKSTAR garage sale.  CASH MONEY in your pocket and a clutter free home– what do you have to lose? {Clutter! You’ll lose your clutter!}  What are your killer yard sale tips?  Share ‘em in the comments!  And be sure to pin it for next summer if you’re not ready to have a yard sale this fall.  You’ll have all winter to declutter, you lucky peep!

To See More: http://makinglemonadeblog.com/tips-for-a-wildly-successful-yard-sale/

Equity Dynamics

Equity is the difference in what your home is worth and what you owe. Ideally, as the value goes up and the unpaid balance goes down with each amortized payment made, the equity grows from two directions.
This dynamic leads to increasing a person’s net worth much faster than many other investments.
A homeowner has minimal control over value. It is necessary to maintain the property to avoid depreciation and make good decisions on capital improvements. After that, appreciation is generally controlled by supply and demand and the economy.
Mortgage management is something that the homeowner does have control. Making the decision to select a shorter term mortgage at a lower interest rate can have an impact on equity build-up. Lower interest rates amortize faster than higher interest rates which will also affect equity growth. Currently, it is possible to get a 1% lower rate on a 15 year mortgage than a 30 year mortgage.
Compare two alternatives of a 30-year and a 15-year mortgage. The payments will definitely be higher on the shorter term because it pays off quicker. However, if a person can afford the higher payments of $362.53 more per month in this example, the equity will be greater. Even after you take into consideration the higher payments, the increased equity is $17,236 at the end of the seven year holding period.

Another decision that can affect equity build-up is making additional principal contributions along with the regular payments. Whether you’re making an occasional lump sum payment toward principal or regular monthly contributions, it will save interest, build equity and shorten the term on a fixed rate mortgage. Estimate your personal savings with this Equity Accelerator.

Who is my agent?

More often than you’d expect, homeowners refer to the person they bought their insurance from as their agent. It sounds reasonable but it’s definitely not accurate. That person is the agent of the insurance company and they legally represent the company, not the customer. Even an independent agent who can place a policy with different companies is still an agent of the company.
A mortgage officer, in most cases is an employee and represents the company. And the same is true for a title or escrow officer. It’s important to understand the actual relationship to know what you can expect from them.
Any business person who wants to stay in business must treat their customers fairly and with a high degree of service. As a customer, you should be able to reasonably expect honesty and accountability. The difference is that employees owe their loyalty to their employer and agents owe their loyalty to their principal.
An agent owes more than just honesty and accountability. The principal can expect complete disclosure, obedience, loyalty, reasonable skill and care and confidentiality from their agent.
This advocacy is very beneficial during the buying or selling process to coordinate all aspects of the transaction. The agent can bring valuable experience to your side of the transaction to provide confidence that your best interests are being represented from start to finish.
Most states have a recognized procedure for the real estate professional to create a formal relationship between themselves and a buyer or seller. This requires a fiduciary/statutory responsibility that places the principals’ interests above the agent’s own personal interests.

Mortgage Interest Deduction

Originally, in 1913 with the Sixteenth Amendment, Income Tax allowed a deduction on any interest paid by a taxpayer. Prior to World War I, most interest was paid for business purposes and very little paid by individuals. Credit cards, revolving credit, student loans and home equity loans that would charge interest would not become popular for decades.
However, by the 1930’s, the Federal Housing Authority was created to help people to finance homes. Later, other quasi-governmental agencies like FNMA, FHLMC and GNMA were created to help facilitate mortgage lending.
Even though, Congress never intended to use this deduction to encourage homeownership, it has certainly benefitted millions of people who couldn’t pay cash for their home. This deduction has made owning a home more affordable for tens of millions of people.
The Tax Reform Act of 1986 eliminated the deduction of interest on most personal debt with the exception of qualified mortgage interest debt. Two new terms were introduced to specify what was qualified.
Acquisition Debt is the amount of debt incurred, up to a maximum of $1,000,000, to buy, build or improve a principal residence or second home. It must be a recorded lien and the amount cannot be increased by refinancing. In other words, the acquisition debt is a dynamic amount that decreases as the loan amortizes.
Home Equity Debt is any amount up to a total of $100,000 over Acquisition Debt. It must also be a recorded lien against either the first or second home. It can be used for any purpose and is no longer restricted to medical or educational purposes.
In the example below, a person borrowed money to buy a home and the entire first mortgage was acquisition debt. The unpaid balance was reduced by the payments made and the acquisition debt followed accordingly. At some point in the future, after the home had gone up in value considerably, the owner refinanced a much larger amount.
The existing acquisition debt was transferred into the new mortgage. Any borrowed funds that were used for capital improvements could be added to the existing acquisition basis. The interest on those funds would be deductible.
The owner/borrower could also deduct the interest on up to a maximum of $100,000 of home equity debt. If there was still debt above the acquisition and home equity debt, it would be classified as personal debt and the interest on it would not be deductible. 












Lenders are not concerned if they are making a tax deductible mortgage on a home. They want to make sure there is sufficient equity in the property to secure the mortgage should it have to be foreclosed. A homeowner should consult with their tax professional if there is a question about deducting the interest on their mortgage.
Click Here to use a Refinancing Analysis.

The Rules

The profit potential in single family homes for investment has been a consistently good long-term investment. They offer investors the opportunity of high loan-to-value mortgages at fixed interest rates for 30 years on appreciating assets, tax advantages and reasonable control that other investments don’t offer.
Last year, Warren Buffett said that if he had a way of buying a couple hundred thousand single-family homes, he would load up on them. Blackstone group L.P. (BX) has now purchased over 30,000 homes and American Homes 4 Rent (AMH) has more than 19,000 for rental purposes.
Individual investors actually have an advantage over the institutional investor but if they are not familiar with rental real estate, some basic rules could be very helpful.

1. Invest now to get more in the future.
   Whether it is time, effort or money, the prudent investor is willing to forego immediate gratification for something more at a later date.
2. Real estate is an IDEAL investment.
   IDEAL is an acronym that stands for income, depreciation, equity build-up, appreciation and leverage. 
3. Invest in single family homes in predominantly owner-occupied neighborhoods at or below average price range.
   This strategy should involve homes that will increase in value, rent well and appeal to an owner-occupant in the future who will pay a higher price than an investor.
4. Location, location, location.
   The same homes in different areas will not behave the same. You can improve the condition, modify the terms or adjust the price but the location can’t be changed.
5. Understand your strategy – buy and sell, buy and hold or buy, rent and hold.
   These three distinct strategies involve big differences in acquisition, management and taxation.
6. Know where your profit is coming from before you invest.
   The four contributors to profit are cash flow, appreciation, amortization and tax savings. They don’t contribute equally or the same in all investments.
7. Profit starts with purchase.
   Buying the property below market value builds profit into the investment initially.
8. Risk is directly proportionate to the reward involved.
   An investment that has a high degree of upside also will have considerable downside possible.
9. Avoid functional obsolescence unless you have a plan before you buy.
   The lack of usefulness or desirability of a home that exists when you buy it will still be there when you sell it. Unless it can be cured, it will affect future profit.
10. Good property + good tenant + good management = great investment.
    These are three solid components for a successful investment.
11. Problems left unresolved have a tendency to get worse.
    It is generally cheaper in time or money to fix a problem earlier rather than later.

If you’d like more information about the opportunities in our market, contact me.

We Believe

July Market Statistics for the Daytona Beach Area Single Family Homes Real Estate Market

July Single Family Homes Report Daytona Beach real estate market by Paige Brewer

Find Your Dream Home at www.RealEstatePaige.com

Top 10 Reasons to Hire a Real Estate Agent

Courtesy of: Park City Real Estate - JensenandCompany.com

Find the "Right" Agent Before the "Right" Home

It’s a common practice for buyers to make a list of what they want in a home during the search process and to explain it to their agent. However, maybe the first list they should make would have the skills they want their agent to have.

The Profile of Home Buyers and Sellers identifies what buyers want most from their agents and as you’d expect, help with finding the right home was ranked highest most often. While it is important, it may not be the most unique of the desired area of expertise.

Equally essential to the success of the transaction are the combination of help with price and terms negotiations and assistance with the paperwork, comparable sales, qualifying and financing.

To summarize the responses in the survey, Buyers want help from their agents with two things: to find the right home and to get it at the right price and terms. Some agents are actually better equipped with tools and acquired knowledge to assist buyers with financial advice and negotiations.

Since an owner’s cost of housing is dependent on the price paid for the home and financing, a real estate professional skilled in these specialized areas can be invaluable in finding the “right” home. An agent’s experience and connections to allied professionals and service providers is irreplaceable.

Ask the agent representing you to specifically list the tools and talent they have to address these areas.

A Home is More Than an Address

A home is a place to call your own, raise your family, share with your friends and feel safe and secure. It is also one of the largest investments most people have.
Leverage is the ability to control a larger asset with a smaller amount of cash through the use of borrowed funds. It has been described as using other people’s money to increase your yield and it applies to homeowners and investors alike. Positive leverage causes the yield to increase as the loan-to-value increases. 
Even a modest amount of appreciation combined with the amortization of a loan can cause a substantial rate of return on the down payment and closing costs.
Homes build equity as the price goes up due to appreciation and the unpaid balance goes down due to amortization.







The example above indicates the yield on a home considering 3% acquisition costs on the home with a 4.5% mortgage rate and the resulting equity at the end of five years. The different down payments will affect the yield based on the leverage effect. 
Whether you rent or buy the home you live in, you pay for what you occupy. The question a person is faced with is whether they are going to buy it for themselves or their landlord. Take a look at the cost of Renting vs. Owning.

Where Is It Invested?

You’ve saved for a rainy day or retirement. Congratulations but don’t get too comfortable yet; where is it invested? It’s estimated that over 25% of Americans have their long-term savings in cash instead of investments like stocks, bonds or real estate.
The memories of the financial crisis of 2008 are recent enough to understand why some people may want to avoid the stock market and real estate. Even though Wall Street and housing have rebounded considerably, uncertain investors are sitting on their cash. However, trying to avoid a bad decision can have serious costs too.
If your money is not earning at least the current inflation rate, you’re losing the purchasing power of your dollars. Bankrate.com estimates the average money-market deposit yields 0.11% and the average five-year certificate of deposit currently yields 0.78%.
Rents are continuing to rise and there is a shortage of good, affordable housing. Single family homes have a significant advantage over many other types of investments. They have high loan-to-value mortgages available at fixed interest rates for long-terms on appreciating assets with distinct tax advantages.
The cash flows are considered to be one of the most attractive features of rental properties. Some investors think of it as a growth stock that pays substantial dividends. In the example shown below, a $125,000 rental with an 80% loan-to-value mortgage at 5% that rents for $1,250 per month, has a positive cash flow before taxes of $3,000 a year.
The rate of return on rental property can be substantially higher than other investments while allowing the investor control that isn’t available in alternatives.