l o v e w h e r e y o u l i v e
Right now our local real estate market is hot and most good homes sell in a multiple offer situation. Preparing an exciting offer is crucial to getting the seller to accept your offer. If you give the seller any reason to question your offer or drag their feet on accepting your offer and we will likely end up in a multiple offer situation which will end up costing you thousands of dollars more to buy the same home.
Attached is a copy of The Real Estate Purchase Contract (the REPC) that we will use when we submit an offer on a home. Page 1 and page 6 are the most important with lots of details in between. Here are the important contract terms that separate one offer from another:
In summary, there is a lot of pyscology, money and emotions that go into an offer. We need to have a well-organized solid offer and present the offer in a tactful and sincere way.
Convincing a bank to lend money is not easy. Mortgage investors are very conservative and there are unique challenges with every loan. We need an amazing loan officer on your side to prepare the loan application, orchestrate the borrowing process and get the loan closed!
Because I’ve been selling homes since 2000 I know a lot of loan officers. Jon Chamberlain with Security Home Mortgage is the best one I’ve ever worked with! He is smart experienced and honest. Jon will give you the best interest rate and terms possible and he consistently closes loans faster than anyone one out there!
Security Home Mortgage is an actual LENDER! Not a broker. They have in house processing, in house underwriting, in house document prep and in house funding! Jon co-owns Security Home Mortgage so if we need a rush, a favor or if your loan is on the border line of qualifying, if your loan makes sense, Jon can still do the loan where most loan officers can’t.
Jon will ask for all sorts of documentation and there will likely be challenges during the process but he and his team are the best out there. Please call Jon to schedule a time to analyze your situation, figure out which loan program is best for you, get you pre-qualified for a loan and to help determine what price range you want to look in.
Governors Herbert, Huntsman, Walker, Leavitt have been very pro-business and have been
successful attracting new business to Utah.
Unemployment rate in Utah is 3.2% which is one of the best in the country and under the
national average of 4.1%
Utah’s Birth Rate: In 2016, there were 50,242 live births to Utah residents. Utah’s birth rate
continues to be the highest in the nation with 16.5 live births per 1,000 total populations.
Normal Housing Needs from young adults moving out of their parent’s homes including college
students, single adults and newlyweds.
Net Migration: To make housing even more difficult last year 25,000 new families moved into
New Construction: Collectively Builders were only able to build 20,000 new homes. This
includes all housing units from new apartments to estate homes. This means in Utah we’re
5,000 homes short to keep up with net in-migration not to mention normal housing needs.
Bottle Neck: A lack of construction workers is limiting the ability of builders to build new homes
2.6% Rental Vacancy: Along the Wasatch front rental vacancy is very low at 2.6%. People
looking for rentals, especially affordable rentals, are having extreme difficulty finding suitable
housing to rent.
Supply is very Low: Currently there about 11,000 homes for sale in the entire state. To slow the
rapid appreciation, we’d like to see the housing supply double but because of the construction
labor shortage builders cannot keep up with the demand.
Demand is very High: We’re selling about 4,000 homes per month. We would sell more homes
per month if there were more homes for sale. Finding homes in buyer’s geographical area and
price range is extremely difficult. Most good homes sale with multiple offers.
Result: 10% average appreciation over the last two years. Experts forecast we’ll experience an
additional 30% average appreciation over the next 5 years.
SUMMARY: Business is good, companies are hiring, unemployment is low, people are moving
to Utah. Demand is high and inventory is low. Largely in part to the labor shortage, builders
can’t build homes fast enough.
Approximately two-thirds of all Americans own their own home. The other one-third rent. Be it ever so humble, there’s no place like your own home!
With planning, the dream of home ownership is within reach of every motivated individual. By getting off the rental cycle you will make an investment for the future, put money into your pocket instead of your landlord’s, gain a valuable tax deduction, and most importantly, have a home of your own. First-time home buyers John and Cynthia Bates are a good example to follow as they prepare for their first home purchase. Here is their story:
Ever since John and Cynthia got married, they have dreamed of owning a gracious, white, center-hall colonial with French d
oors and a fireplace. “I can really picture it in my mind,” says Cynthia. “I can even imagine the kind of lawn there will be around it. I just know that we’re going to find exactly what we want when the time is right.”
Together John and Cynthia’s income is $60,000 a year, with Cynthia working part-time. “We’ve managed to save $7,000 towards a down payment”, says John “but with only a small savings and our credit card debt, we’re not sure how much mortgage we will be able to qualify for.”
IS BUYING THE RIGHT DECISION?
There are two very powerful incentives for owning a home: tax savings and equity build-up. In the United States, homeowners are allowed to deduct their mortgage interest and property tax payments from their taxable income. This can result in a considerable savings.
Secondly, payments applied toward your mortgage principal help build equity in your home. And it is also likely that your house will appreciate in value over the years you own it.
PREPARING FOR THE HOME PURCHASE
When John and Cynthia start investigating a home purchase, they will find that as a very general rule of thumb, they will qualify to buy a home that costs as much as three to 4 times their combined annual income, or about $200,000.
John and Cynthia have taken the first step of preparing for home ownership by starting to save for their down payment. Demonstrating the ability to save and having extra funds on hand helps enormously in the loan approval process.
UNDERSTANDING THE HOME BUYING PROCESS
To understand the home buying process you should meet with a smart, experienced Real Estate Agent and ask for their help. Ideally, you will want an agent who comes highly recommended and has a strong track record. As a buyer, hiring a professional Realtor normally doesn’t cost you anything and they will look out for your best interest throughout the entire home buying process. They can introduce you to a fantastic loan officer to be pre-qualified for a home loan.
Loan pre-qualification determines the loan amount you are likely to be approved for. A good loan officer will discuss with you your employment, income, assets, liabilities, tax returns and request a copy of your credit report. Getting pre-qualified for a loan is essential and should be one of your first steps. When you have received a copy of your credit report make sure it is accurate. Often times there are errors on credit reports and some errors take a long time to correct. If there are errors or things that need to be done to qualify for a loan, a good loan officer will tell you what you need to do to raise your credit score or what needs to be done so you will qualify for a loan.
FINANCING AND DOWN PAYMENT ASSISTANCE
The amount needed for a down payment and closing costs has always been the primary barrier to home ownership. There are many loan products to choose from. In many areas there are $0 down payment loans available. Often times the seller is willing to pay your closing costs. There are other loan options that allow the buyer to include the closing costs with the loan or interest rate so the buyer does not need to pay for the closing costs upfront.
If you are considering buying a home along the Wasatch Front, call me and I’ll be happy to do a no cost no obligation consultation to help you understand the home buying process and start you on the path of home ownership. If you are looking to buy a home elsewhere I can still help. I know what makes a good agent and will interview agents in your area for you. I’ve done this for others all around the country and they’ve been very grateful for my help.
A recent survey of home buyers and sellers has revealed that 76% of homeowners think their home is worth more than the price recommended by their real estate agent. Realtors and home buyers tend to have a better grasp of current market values in the area where they’re looking to buy than do the sellers who live there. Buyers research lots of new listings, make offers, watch the market for what sells, how quick it sells and for how much it sells.
Your home is only worth what a ready, willing and able buyer will pay for it. This price may not reflect your opinion or what you hope it’s worth. You have to rely on logic and current and relevant data rather than emotion when choosing a list price. Put yourself in the shoes of a buyer: sincerely ask yourself which home is the best home for the money? If your home is the BEST HOME FOR THE MONEY then it will sell. If your home is not the best home for the money then it will not sell. The most important part of listing your home is accurate pricing.
The best time to sell your home is when it is fresh on the market. Buyers wait daily for new listings. This is the time when the home is most marketable and gets the most showings. The first couple of weeks are crucial. After being on the market for a month or so it is no longer the hot new listing. Buyers may perceive the home as “shop worn” or “stale” and start to ask themselves, “What’s wrong with it?” When that happens buyers are less likely to offer the asking price.
To help you select a list price, your real estate agent researches the comparable homes that have sold recently. These recent sales are the best indication of the home’s current market value. Realtors will analyze the comparable properties and add more value to your home for items your home has, and subtract value for features it lacks. Trust their knowledge, experience and data. Assuming you are working with a competent Realtor, it will benefit you to take their advice when it comes to pricing your home.
You have to detach yourself from your home. Something about your home may have sentimental value to you, but may not to a potential buyer. Try not to place too much weight on rumors going around the neighborhood about the prices other homes have sold for. Prices tend to get embellished. Choose your price based on the facts. Focus on the SOLD prices and not the asking prices.
If you are thinking of selling your home or just wondering what your home is worth call me for a free CMA (Comparative Market Analysis) on your home.
It’s important to note that repairing bad credit is a bit like losing weight: It takes time and there is no quick way to fix a credit score. In fact, out of all of the ways to improve a credit score, quick-fix efforts are the most likely to backfire, so beware of any advice that claims to improve your credit score fast. The best advice for rebuilding credit is to manage it responsibly over time. If you haven’t done that, then you need to repair your credit history before you see credit score improvement. The tips below will help you do that. They are divided up into categories based on the data used to calculate your credit score.
Contributing 35% to your score calculation, this category has the greatest effect on improving your score, but past problems like missed or late payments are not easily fixed.
This category contributes 30% to your score’s calculation and can be easier to clean up than payment history, but that requires financial discipline and understanding the tips below.
To summarize, “fixing” a credit score is more about fixing errors in your credit history (if they exist) and then following the guidelines above to maintain consistent, good credit history. Raising your score after a poor mark on your report or building credit for the first time will take patience and discipline.
By Ken Holman
Recently, I read a book written by Chris Farrell entitled “Unretirement.” Chris is a senior economics contributor at Marketplace and an award-winning journalist. The main premise of his book is that aging boomers, those born during the Post-World War II era between the years 1946 and 1964, won’t overwhelm the government’s safety net of Social Security and Medicare because baby-boomers are not retiring at age 65. Instead, they are working well into their seventy’s which means they are continuing to pay into the system rather than take from it.
Farrell writes, “Debt! Deficit! Aging! Retirement crisis! Economic stagnation! Intergenerational warfare! Talk about a bad curve. Taken altogether, it appears an aging America is hurtling toward the dismal end of Shakespeare’s Seven Ages of Man—‘Sans teeth, sans eyes, sans taste, sans everything.’ No wonder people are fearful about retirement.
“Well, don’t be depressed. The dire jeremiads aimed at an aging America are wrong and deeply misplaced. The graying of America is terrific news. Living longer is good. Embrace the realization that boomers on average are healthier and better educated than previous generations. An aging population presents an enormous opportunity for society and for aging individuals to seize and exploit.”
The fact that Americans are living longer and are healthier is all good news but you can’t simply brush aside the fact that both the Social Security System and Medicare are in deep financial trouble. And since you have no control over either safety net, the thing you need to focus on is building your own safety net, which is a strong retirement nest egg.
Fortunately, there are some benefits to projecting a later retirement. “Social Security benefits are at their maximum at age seventy. . . . Claiming benefits at age sixty-two instead of seventy cuts the monthly benefit almost in half, notes Alicia Munnell, director of the Center for Retirement Research at Boston College, in ‘Social Security’s Real Retirement Age Is 70,’ She calculates that the net replacement rate of income for the median earner—taking into account Medicare, taxes, and full retirement age of sixty-seven in 2030—is 24 percent at age sixty-two and 43 percent at age seventy—almost double.”
I guess it’s encouraging to know that if you wait to retire until age seventy, instead of sixty-two, that the government will pay you 43 percent of your replacement income instead of 24 percent. Either way, that doesn’t do much to resolve where you’re going to find the income to replace the other 57 percent that government won’t fund.
The best way I know to fund the 57 percent income deficiency at retirement is by investing in income-producing real estate. Most retirement models suggest a heavy concentration in equities (stocks and mutual funds) in the early years and then, as you approach retirement, to shift from equities to cash, bonds and annuities. Little emphasis is given to the importance income-producing real estate can play in a retirement program. Investing in income-producing real estate is by far the most important investment you can make for future retirement. Nothing will give you more security or safety than real estate when it comes to a sound retirement program. It has the advantages of cash flow, leverage, equity buildup, appreciation and tax benefits. No other investment offers all of these combined benefits.
In his book, “How to Retire Happy,” Stan Hinden, former syndicated Washington Post “Retirement Journal” columnist, he wrote, “The fact is that when you face the question, ‘Am I ready to retire?’ your answer may have little to do with your fantasies and a lot more to do with your age, your health, your family, the nature of your job, your financial situation, and your outlook on life.”
Until the 2008-2009 market crash and recession significantly eroded the retirement savings of the 77 million baby boomers, many of this generation were set to retire. Now they find themselves still working because they can’t afford to retire. An AARP study in May 2008 reported that 27 percent of all workers 45 and older had postponed their plans to retire. That survey was taken before the U.S. unemployment rate hit 10 percent. The unemployment rate has come down to 5.8 percent, but that is due in part because of the reduction in workforce.
If you want to be happy when your retire, you need to develop an investment strategy that incorporates income-producing real estate. I advocate that as much as fifty-percent of your retirement savings should be invested in real estate. To many stockbrokers and financial planners that percentage seems ludicrous. Most financial pundits advocate less than fifteen-percent. Even then, the fifteen-percent is not really invested in real estate, but is invested in Real Estate Investment Trusts (REITs), which is really a type of stock investment rather than real estate.
Income-producing real estate is a great hedge against inflation. For every dollar you invest, you can buy four dollars of real estate assets. Not only does your dollar appreciate in value over time, but the four dollars of real estate assets you purchased increases in value over time.
If you’re thinking about making some changes to your investment portfolio that would permit you to begin investing in income-producing real estate, you might check into setting up a self-directed one-participant, solo or individual 401(k). If you do it before the end of the year, you can set aside as much as $23,000 in the account, if you are 50 years old or older and do it before December 31. Then, next year, you can transfer money out of your existing 401(k) into your solo 401(k) and begin investing in income-producing real estate. If you need help, I can show you how. Just send me an email or give me a call and I’ll help you get set up with a reliable custodian.
There’s no need to fret about retirement. If you’re part of the “Unretirement” generation, then embrace the fact, enjoy your work, and begin investing in income-producing real estate. I have clients who are well into their seventies who have found that real estate is the best way to go. So you have enough money to live on during retirement, having a steady stream of retirement income sure beats having to liquidate a stock portfolio. If you want to retire happy, start investing in income-producing real estate. It doesn’t need to be liquidated at retirement. If you’ve decided to postpone retirement, now you have more time to make the adjustments necessary to retire happy.