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Displaying blog entries 131-140 of 145

Man's Best Friend

by Stone Realty Services®

dog.jpgMan’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.

BALANCE SHEETS ARE IMPROVING FOR MANY HOMEOWNERS

by Stone Realty Services®
 

Topic Summary: A report released this week by the Federal Reserve indicated rising home values are improving the overall net worth of many Americans. (See below on how to get a snapshot of your home's value)

The Federal Reserve is out with their 2ndquarter analysis of household net worth. The Reserve states that as home values rise, many groups in the economy are doing better than previous quarters, including Homeowners. U.S. households' net worth - the value of homes, stocks and other investments minus debts and other liabilities - rose 1.8% to $74.82 trillion in 2ndquarter of this year, according to the report. That is the highest level since records began in 1945.

Caution is advised here for those that do not feel this "increased wealth". A large percentage of the growth is in the form of investments as the stock market has been doing well in recent quarters.

For most, the home represents their largest social and economic investment. A high tide, however, does not help all homeowners. In the 2nd quarter of this year, the value of residential real estate owned by households increased about $525 billion. There are approximately 12.2 million homeowners who still owe more than their homes are currently worth. The tone of the report, FOUND HERE, appears to be that things are getting better for homeowners because higher home values mean more home equity. The national median existing single-family home price was $203,500 in the second quarter, up 12.2 percent from $181,300 in the second quarter of 2012. (Source Nat. Association of Realtors)

 


How to arrive at a rough estimate of your Home Equity.

 Even though Home Values have risen in most all parts of the country, they are still not back to the levels found in 2006 and 2007 before the housing crash. There are only two values you need to arrive at your home equity: What your home is worth and what you owe on it. Your recent mortgage statement will tell you what you owe as a first mortgage, then add in any home equity loans or 2ndmortgages. Subtract this figure from what the fair market value for your home is. You can get a quick analysis done by the real estate professional that enrolled you in HomeActions. On the left you can click their email link or call your Realtor.

 

When it comes to households that are underwater, Core Logic's latest Equity Report indicated that 2.5 million homes have "returned to positive equity". This is good news for the real estate market because it means more homeowners may be willing to sell their home for a profit and fewer homes will get foreclosed on.

Negative equity is when the value of your home is less than the outstanding balance of the mortgage. The amount of homes that remain in negative equity is only 14.5% for the second quarter of the year. This fairs very well when compared to CoreLogic's  last report showing 19.8% underwater households in the first quarter of 2013. In the last year, the number of negative equity households dropped 33%.

Equity Dynamics

by Stone Realty Services®

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.

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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.

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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.

Mayor Cancels 2013 DC Tax Lien Sales

by Stone Realty Services®

Mayor Vincent Gray has initiated a few more actions in response to the Washington Post’s recent exposé which revealed a predatory tax lien sale system that resulted in city homeowners losing their houses over minor tax debts.

Late Friday, Gray ordered the cancellation of this year’s tax lien sales for owner-occupied homes that were not in foreclosure proceedings, and will be establishing a Real Property Tax Ombudsman to counsel residents who need assistance paying their debts and navigating the system.

Additionally, some city staffers have been directed to take a close look at all the pending foreclosures that are resulting from tax debts, and the mayor will be introducing legislation to make the process more fair. Among other things, the legislation will cap the legal fees that tax sale purchasers can collect at $2,200 and mandate greater outreach and introduce programs like payment plans to those whose properties are at risk of foreclosure due to unpaid tax bills.

From the press release:

“Last Sunday, when I first learned from a Washington Post article about the problem of vulnerable District homeowners losing their homes through tax-lien sales, I was appalled by the injustices cited and immediately began pursuing potential remedies,” Mayor Gray said. “The actions that Dr. Gandhi and I have taken today will ensure that, from this point forward, no District residents whose property has been sold at a tax-lien sale will be at risk of losing their homes through this process if they have extraordinary circumstances that warrant a re-examination of their cases.”

Canceling the sales will mean that the city will pay certain fees to the tax lien buyers,reported the Post, and the homeowners will still be required to pay their debts.

The Mayor’s office is now searching for an Ombudsman, and will introduce legislation when the Council session begins on Tuesday.

Who is my agent?

by Stone Realty Services®

Secret agent 150.jpgMore 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.

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

by Stone Realty Services®

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

 

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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

by Stone Realty Services®

A Home is More Than an Address

 

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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. 

 

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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.

Get Regular Check-ups

by Stone Realty Services®

Get Regular Check-ups

Following his heart surgery last week, after an issue was discovered during his annual physical, President George W. Bush encouraged everyone to get regular check-ups. 

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Another important checkup that should be done on a regular basis and can be just as beneficial for your finances is an annual homeowner advisory. Why would you treat your investment in your home with less care than you treat your car or even your HVAC system?

Consider investigating the following:

• Know the value of your home by obtaining a list of comparable sales in your immediate area as well as what is currently on the market for sale.

• Have you compared your assessed value for tax purposes to the fair market value in order to possibly reduce your property taxes?

• Even if you’ve refinanced in the last two years, can you save money and recapture the cost of refinancing in the time you plan to remain in your home?

• Have you considered reducing your mortgage debt with low-earning cash reserves that will not be needed in the near future?

• Have you considered investing in rental homes in good neighborhoods to increase your yields and avoid the volatility of the stock market?

• Recommendations of repairmen and other service providers from a trusted source who deals with them more frequently than you do.

Our goal is to create a lifelong relationship to help you be better homeowners. We want to be your “go to” person whenever you have a real estate question. We want to help you not only when you buy and sell but all of the years in between.

We want to provide good, consumer-based information about homeownership on a regular basis through email and social networking. If it benefits you by helping you be a better homeowner, hopefully, you’ll consider us your real estate professional for life.

Anytime you or your friends need help, please call. Knowing where to get the answer is just as important as knowing the answer. If you’d like information on any of the items we suggested, please let us know.

How to Shift Debt to a Tax Deduction

by Stone Realty Services®

The Mortgage Interest Deduction is available to homeowners for up to $1,000,000 of acquisition debt on the combination of their first and second home. They can also deduct interest on up to an additional $100,000 of Home Equity debt.

While Acquisition Debt is used to buy, build or improve a principal residence, the Home Equity Debt can be used for any purpose. It can be used for educational or medical expenses, to purchase a personal car or boat, consolidate debts or pay off credit cards.

A homeowner with $15,000 of credit card debt at 19% and sufficient equity in their home could replace it with a home equity loan at much lower interest rate. Not only would the interest rate on the home equity loan be about 1/3 of the rate paid on the credit card, it’s would now be tax deductible.

If the taxpayer was in the 28% bracket, the net interest on a 6.5% loan would be 4.68% after tax benefits are considered.

Shifting personal debt to Home Equity debt can result in an interest deduction and probably, a lower interest rate. For more information see www.irs.gov/pub/irs-pdf/p936.pdf and go to page 10.  Remember to consult your tax professional before proceeding to ensure this is the best course of action for your specific financial situation.

How To Get Your Offer Accepted!

by Stone Realty Services®

I thought that I'd share Pat Zaby's post as it is especially relevant in today's market. We are seeing multiple offers, escalation clauses and buyers are removing contingencies and appraisals, like they were in 2005.

A great agent will guide you through the process but it is critical to keep calm and rational during the offering phase. When there are multiple offers, it is a highly emotional, fast paced, demanding environment. It is easy to get caught up in the frenzy. Remember that these contingencies are put in place to protect YOU, the buyer. Before removing them from your offer to strengthen the chance to 'win' the right to buy that property, consider if that is the wisest course of action. You could be stuck with a home that you paid too much for, had to use your cash reserves to cover the delta between the appraised and ratified value as well as overwhelmed with the repairs that you were not aware of until you moved-in since the home inspection was waived or you bought the home 'as-is'.

If you have any questions, I am always available to answer questions and assist buyers getting the information that they need to make well informed and rational decisions.

From Pat Zaby:
As the market shifts from a buyer's market, it's good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.

  • Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
  • More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
  • Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
  • Shorten inspection period - your agent can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
  • Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.
A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

Displaying blog entries 131-140 of 145

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Stone Wood Team
EXP Realty
2165 Jamieson Avenue
Alexandria VA 22314
Office: (703) 739-4663
Office: (703) 739-HOME
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