Diana Walton Home Buyer's Blog

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CHAMPIONS REAL ESTATE GROUP
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AUG
9

New Down Payment Programs What You Need to Know

 When: Saturday, August 23rd

Where: Kendall Neighborhood Library

609 N Eldridge Pkwy, Houston, TX 77077

Time: 10:30 am.  - Noon

 

Step by step home buying process

Types of down payment programs

How to qualify

Which Program is Right for You?

What you need to know about Escrow & closing cost

Getting pre-approved

Free Credit Analysis

Move into your new home before the end of the year

When preparing to go on a listing appointment do you take the time to screen the seller to make sure he/she is really serious about selling their home? Yesterday I went on what I though was a listing appointment. It turned out to be anything but. I called the seller from my expired list and after briefly discussing my reason for calling, I ask for the appointment and received it.

 I thought I had taken all the necessary steps by providing the seller with a prelisting package before our schedule appointment. I went over my pricing strategy to make sure the home would be priced fair and effective.  I took the necessary steps to preview other homes within the area and within his price range.

 In addition, I had all the necessary documents, including tax records, past sales, and comps, as part of my presentation on my Ipad. I also had a fully prepared market analysis to give to the seller. I arrived eight minutes early, ready to sell myself and my services. I knocked on the door, the owner came out, I introduce myself and was invited in. It was a stunning home, one of which the owner, it turned out had no intension of allowing anyone to sell.

 The owner was very upset with the first agent that listed his home because it did not sell.  I was not aware of this. For the six months the home was on the market, he said only two people came to view the home. The comps I did show the home was overpriced by $80,000.

 He wanted to sell the house himself, and decided that he would interview as many agents as possible within a given time, to collect data on how each would market the home, then used what he thought was the best marketing ideas to market and sell the home himself. Of course he did not share this information with me voluntarily.

 Something did not seem right based on the type of questions he was asking. I asked him if he had met with any other agents, he said yes, 15 of them.  I then ask what was it that he was looking for in an agent that none of the 15 had, that’s when he told me what he was doing.  I smiled, thanked him for his time, retrieved all my data, including the prelisting packet and walked out.

 Were there any way I could have avoided being number 16?  Once I got home I spend the rest of the evening making modification to my phone screening process. While I may not be able to eliminate all, I am pretty sure I can make it less likely to go on another appointment like that again.

FEB
17

The average annual increase of 3.9% is outpacing inflation and income growth. Will renters be priced out of many cities?  It's no secret renters have been feeling the crunch of a competitive rental market for a few years now. If it seems like rent increases have been unusually high this year, though, that's because they have been.

 In June, the real-estate data firm Trulia analyzed the rent prices in 25 of the largest rental markets in the United States. What Trulia found is an average annual increase of 3.9%. This is a huge increase when compared with inflation. And, generally speaking, incomes are not keeping pace with rent increases, putting renters in an even tighter position.

 According to Trulia, the five least-affordable rental markets in the country are New York City, Miami, Los Angeles, San Francisco and Boston. In these cities, rents often make up half or more of a renter's average monthly wage.

 The cities that experienced the highest rent hikes for 2012-13 were Houston, Miami, Boston, Tampa-St. Petersburg, Fla., and San Diego. Some cities, such as Houston, already had lower rents than the national average for major cities, whereas in others the increases came on top of already higher-than-average rates. For instance, Boston — already one of the most expensive cities in the country — saw a 5.5% increase in rents this year.

 It would seem the recent rent increases are an enduring ripple effect of the foreclosure epidemic that catalyzed the Great Recession, flooding the market with prospective renters. At the same time, the gradual economic recovery has resulted in rising employment rates. With a shortage of available rentals, landlords are in the enviable position of being able to name their price and have their pick among tenants willing to pay it.

 In their most recent survey, the apartment-research firm RealFacts found not only that rents are up nationwide in 39 of the 41 markets analyzed but that these increases also occurred even in cities that are building rental units at a precipitous pace.

In particular, Seattle experienced a large rent increase this past year despite a projection that 12,000 rental units will be added to the market by the end of the year. Portland, which also experienced an impressive increase in average annual rents, did so even as 4,000 units were added in the city. In fact, Portland saw its occupancy rate jump a full percent this past year. San Francisco, which has also added thousands of units recently, saw an occupancy rate increase of 1.2%.

 "So far, it appears aggressive rent hikes and new construction hasn't had a negative impact on occupancy rates," according to the RealFacts report.

 Though there seem to be no signs of rent increases slowing down, the report warned that the market will soon become oversupplied: The increased availability of new rentals, coupled with the rise in interest rates, will eventually lead to a downturn in the rental market.

 Additionally, more people will turn to buying as an affordable alternative. That's because even though home prices rose 7% in the past year, outpacing rent increases, the gap between buying and renting is still quite large.

 Forbes reported this year that buying is much more affordable than renting in all of the 100 largest metro areas in the nation. According to mortgage lender Freddie Mac, buying is an average of 41% cheaper than renting nationwide.

 But buying is only slightly cheaper in some cities and drastically cheaper in others. For example, buying is 19% cheaper than renting in San Francisco but 70% cheaper in Detroit. In New York, buying has remained 26% cheaper for the past couple of years.

 Despite the regional fluctuations in price, though, it looks as though buying will be the cheaper option for some time to come no matter where you live. That is because 30-year fixed rates on home purchases would need to reach 10.5% to become the more expensive option. The rate is at 4.4%, as of the week of Aug. 14.

  RealFacts predicts that in 2014 or 2015, rent rates will begin to stall as the rate of homeowners rise and renters decline.

 Until then, renters will have to grit their teeth and wait it out — or start shopping around for their own home.

 source:mainst

JAN
28

Trap #1: Line 6 - real estate taxes

 Your monthly mortgage payment often includes money for a tax escrow, from which the lender pays your local real estate taxes. The money you send the bank may be more than what the bank pays for your taxes, says Julian Block, a tax attorney and author of Julian Block’s Home Seller’s Guide to Tax Savings. That will lead you to putting the wrong number on Schedule A.

 Example:

Your monthly payment to the lender: $2,000 for mortgage + $500 escrow for taxes

Your annual property tax bill: $5,500

 Now do the math:

Your bank received $6,000 for real estate taxes, but only paid $5,500. It may keep the extra $500 to apply to the next tax bill or refund it to you at some point, but meanwhile, you’re making a mistake if you enter $6,000 on Schedule A.

Instead, take the number from Form 1098—which your bank sends you each year—that shows the actual taxes paid.

 Trap #2: Line 6 - tax calculations for recent buyers and sellers

 If you bought or sold a home in the middle of 2012, figuring out what to put on line 6 of your Schedule A Form is tricky.

 Don’t simply enter the number from your property tax bill on line 6 as you would if you owned the house the whole year. If you bought or sold a house in midyear, you should instead use the property tax amount listed on your HUD-1 closing statement, says Phil Marti, a retired IRS official.

 Here’s why: Generally, depending on the local tax cycle, either the seller gives the buyer money to pay the taxes when they come due or, if the seller has already paid taxes, the buyer reimburses the seller at closing. Those taxes are deductible that year, but won’t be reflected on your property tax bill

 Trap #3: Line 10 - properly deducting points

 You can deduct points paid on a refinance, but not all at once, says David Sands, a CPA with Buchbinder Tunick & Co LLP. Rather, you deduct them over the life of your loan. So if you paid $1,000 in points for a 10-year refinance, you’re entitled to deduct only $100 per year on your Schedule A Form

 Trap #4: Line 10 - HELOC limits

 If you took out a home equity line of credit (HELOC), you can generally deduct the interest on it only up to $100,000 of debt each year, says Matthew Lender, a CPA with EisnerLubin LLP.

 For example, if you have a HELOC for $200,000, the bank will send you Form 1098 for interest paid on $200,000. But you can deduct only the interest paid on $100,000. If you just pull the number off Form 1098, you’ll deduct more than you’re entitled to

 Trap #5: line 13 - Private mortgage insurance

 You can deduct PMI on your Schedule A Form, as long as you started paying the insurance after Dec. 31, 2006. Congress renewed the PMI deduction for 2012 and 2013 for people making less than $110,000.

 Since you’re thinking about it, this is also a good time to review your PMI: You might be able to cancel your PMI altogether because you’ve had a change in loan-to-value status.

 Trap #6: line 20 - casualty and theft losses

 You can deduct part or all of losses caused by theft, vandalism, fire, or similar causes, as well as corrosive drywall, but the process isn’t always obvious or simple:

Only deduct losses that are greater than 10% of your adjusted gross income (line 38 of Form 1040).

Fill out Form 4684, which involves complex calculations for the cost basis and fair market value.  This form gives you the number you need for line 20.

 Bottom line on line 20: If you’ve got extensive losses, it’s best to consult a tax pro. “I wouldn’t do it myself, and I’ve been dealing with taxes for 40 years,” says former IRS official Marti.

 

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

source:houselogic

Diana Walton

Diana Walton Properties

Champion Real Estate Group

First Time Home Buyer & VA Specialist

www.dianawaltonproperties.com

281.923.1118

Last month your credit score was 735. You checked it again this morning, and it’s 20 points lower. What’s up?

 It could be any combination of factors. There are different credit scoring models used, and they can weigh factors differently to determine your score. But these are five of the most common reasons you could experience a dip in your score:

 Late credit card or loan payment

 Your payment history has a significant impact on your credit score, accounting for about 31 percent of your total rating. If your make a credit card or loan payment more than 30 past its due date, this information will likely show up on your credit report, which could cause your credit score to drop. Anything 30 days or more late matters, and 60 or 90 days late matters even more.

 Larger than normal credit purchases

 Another key factor in calculating your credit score is your credit utilization ratio. In simpler terms: How much of your credit are you using in relation to your total available credit? In general, the lower this ratio, the better your credit score will be. If you’ve been using more of your available credit lately, you may see a drop in your credit score. If a creditor lowers your credit limit, it may also change your credit utilization ratio and impact your score.

 An unpaid account goes to collection

 In order to maintain a good credit score, you need to pay all your accounts — not just credit cards and loans — in a timely manner. Late payments to medical facilities, student loans and utilities can be sent to a collection agency, which could in turn show up in your credit report.

 You applied for a credit card

 When you apply for credit, you give lenders the OK to ask, or “inquire,” for a copy of your credit report. This is known as a hard inquiry on your credit. When the information on your credit report indicates that you’ve applied for multiple new credit lines over a short period of time, your credit score may be lowered as a result.

 You closed a credit card account

 Canceling a credit card could be a good idea if it eliminates the temptation to charge more than you should. But by closing an old or unused account, you are wiping away some of your available credit, thus increasing your credit utilization ratio. As a result, your credit score may drop. Also, the length of time you’ve had accounts open shows that you have a solid payment history, so that could be another reason to keep that card you’ve had awhile open (as long as you’re paying it on time).

source:experian consumer service

Diana Walton

Diana Walton Properties

Champion Real Estate Group

First Time Home Buyer & VA Specialist

www.dianawaltonproperties.com

281.923.1118

JAN
7

Children do better at school when their family moves from renting to home ownership.

 Becoming a homeowner makes families smarter, happier, healthier, and richer, according to a survey of Habitat for Humanity Canada homeowners by the Canada Mortgage and Housing Corp.

 Habitat homeowners contribute 500 hours of sweat equity toward the purchase of their home and in exchange receive interest-free mortgages with no downpayment. CMHC surveyed more than 300 Habitat homeowners and found, across the board, the homeowners reported improvement in their children’s well-being and school performance including:

Higher grades

Increased enjoyment of school

Better attendance

Higher participation rates in sports, music and arts, and volunteering

 The respondents also reported other gains:

89% said their family life improved.

78% said their own health and their family’s health was better.

58% reported they were better off financially.

25% had spouses who entered the workforce.

17% returned to school, and 21.5% did something else to upgrade their skills.

source:houselogic

Diana Walton

Diana Walton Properties

Champion Real Estate Group

First Time Home Buyer Specialist

www.dianawaltonproperties.com

281.923.1118

 As 2013 comes to a close and real estate experts predict where the housing market is headed in 2014, a look back reveals several trends.

 "In 2012 we saw the housing market recover and, going into 2013, we expected continuing recovery," said Lawrence Yun, chief economist of the National Association of Realtors. "Instead, the recovery accelerated a lot faster than we anticipated, which was great for sellers and for the 75 million homeowners who saw their home values appreciate."

 1. Housing Prices Rose Faster Than Expected

 The national median listing price was $179,900 in January 2012 and rose to $180,000 by December 2012, according to realtor.com research. The pace of price appreciation accelerated quickly over the year to reach a median list price of $199,500 by September 2013.

 2. Mortgage Rates Rose but Remained Low

 "We expected mortgage rates to rise in 2013, and they started to increase in the late spring, but they're still very affordable when you look at rates on a historical basis," Yun said. "They just aren't at the super-low point we saw earlier." According to Freddie Mac, 30-year fixed-rate loans were as low as 3.45 percent in December 2012 and rose to 4.49 in September 2013. Barry Habib, co-owner and chief market strategist for Residential Finance Corp., said mortgage rates are likely to stay low and perhaps even drop between now and March 2014.

3. Bidding Wars Returned

 The combination of rising prices, low mortgage rates and low inventory led to a sense of urgency among buyers and the return of bidding wars, said Don Frommeyer, president of the National Association of Mortgage Brokers. According to realtor.com research, inventory in 2012 reached a high of 2,083,710 homes on the market, then steadily declined to a low of 1,583,497 homes in February 2013. At the end of September 2013, 2,210,000 homes were for sale, approximately a five-month supply.

 4. Housing Affordability Remained High

 "Housing affordability has come down a little this year because of double-digit home value appreciation and the fact that income isn't rising in comparable amounts," Yun said. "Rising mortgage rates, even though they're still low, also have an impact. While affordability right now is at a five-year low, it's still the fifth highest for the past 30 years."

 5. All-Cash Buyers Continued to Be a Strong Market Segment

 Yun said a continuing surprise is that about one-third of all home purchases were made with cash, a market share that has been consistent for the past three years. While some of these cash buyers are from overseas and some are institutional investors, others are "mom and pop" investors who have had trouble getting financing. "Even some owner-occupant buyers are cash buyers because of the excessively tight underwriting standards for loans," Yun said. "Some people are getting help from relatives to buy, and then they plan to take out a home equity loan later to repay them."

 6. Mobile Apps Accelerated Connections Between Buyers, Sellers and REALTORS

 Nearly every realtor and brokerage in the country introduced a mobile app this year to make it easier for buyers and sellers to access information from their smartphones and tablets. "Everyone realizes that it's inconvenient to be tied to a desktop when you're looking for housing-market information and homes," Yun said. A recent study by Google and the National Association of Realtors found that 68 percent of homebuyers used a mobile app during their home search and 89 percent used a mobile search engine at the onset of the home-buying process and throughout their research

 7. Rising Rents and Pent-Up Demand Pulled More First-Time Buyers Into the Market

 "Right now we're seeing replenishment of renters who want to buy homes," Habib said. "At the peak in 2002, nearly 70 percent of people owned homes and 30 percent were renters; now 65 percent of people are homeowners and 35 percent rent. Not only are rents rising faster than home prices in many markets, but there's pent-up demand from people who don't want to live at home with their parents and who want to buy a home."

source:realtor.com

Diana Walton

Diana Walton Properties

Champion Real Estate Group

First Time Home Buyer Specialist

www.dianawaltonproperties.com

281.923.1118