Date Archives: May 2014

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Congratulations! You are ready to buy a home. Purchasing a home is an exciting life milestone and is a huge decision with so many factors to consider. Finding the right property can be a challenge for growing families. What may seem like a good fit now may not be the best choice for your family in the long run. Here are our 5 best tips when buying a home for your growing family:
  • Neighborhood - Do your research before looking at homes in neighborhoods that aren't convenient for young families. Look into school districts, local parks, neighbors and proximity to doctors and hospitals. Consider the length of your commute to work so that you can maximize the amount of time you have to spend with your family.
  • Space – How many kids do you want to have? Simple things like sharing a bathroom or closet space can become a hassle in the long run. Families with small children might want to look into an open-concept floor plan for safety reasons. A designated playroom might be a smart idea for your family, or maybe you'd prefer two levels instead of three. List out what your priorities before making the move.
  • Affordability - Now that you know what you're looking for, the next step is figuring out what type of home you can afford. A review of your income, savings, monthly expenses and debt will be necessary. Use our Affordability Calculator!
  • Offer - Once you've found your ideal house, it's time to get started with the financial and contractual side of the purchase. Let your Century 21 American Homes real estate professional guide you through this process. Purchase contracts vary in length and terms from state to state, and sometimes within a state. Multiple offers on the same home are not uncommon, so you may only get one chance to make an offer that the seller will consider. That's why it's important to think carefully about your strategy. In most cases it is better to have your real estate professional present the offer.
  • Inspection – Once you've made an offer, hire a professional home inspector to give the house a standard inspection and make sure that it is a safe home for your family.
    Agents affiliated with the CENTURY 21 American Homes System are ready to make a commitment to help you capitalize on current market opportunities and assist you in making an informed decision. A CENTURY 21 American Homes Agent can help ensure you make the right choice for the long term, get a better understanding of different neighborhoods, schools, and market conditions, find a mortgage specialist, and more. Find an agent today!

Choosing the Mortgage That's Right for YouIn early April, Freddie Mac reported that the average rate for a 15-year mortgage increased to 3.39 percent from 3.33 percent the previous month, which is still about a point lower than a 30-year mortgage. While these rates are still historically low, some industry experts predict these low rates won't last long. If you're thinking of going for (or refinancing) a 15-year mortgage, now's the time to do it.   The main benefit, of course, is that a 15-year mortgage allows you to pay off your mortgage twice as fast as a 30-year term, while saving a significant amount of money on interest in the process.   A 15-year fixed-rate mortgage has proved popular with young homebuyers as it enables those with sufficient income to meet the higher monthly payments to pay off the house before their children start college. It also appeals to those already established in their careers who may want to have their mortgage finished before they retire.   These mortgages also provide additional financing options thanks to the equity built up in a house. For example, one can easily take out a second mortgage by banking on the equity already in their home.   One negative to the 15-year mortgage is that tax benefits are less. The amortization schedule of a 30-year fixed is back heavy, with early-term payments big on interest and light in principal. Meanwhile, a 15-year fixed-rate mortgage is always light on interest, so deductions are not as large.   It's also important to take into consideration that the monthly payments for this type of loan are higher than those for a 30-year mortgage by about 10-15 percent.   When it's time to make a decision, your personal financial situation will determine the right mortgage term for you. If you can afford the higher payment, have a substantial emergency fund and can meet all savings goals, a 15-year mortgage is a great way to own your home faster and pay less money in the process.   To learn more about the 15-year mortgage, contact our office today. Published with permission from RISMedia.

(BPT) - When the weather warms up, so does the real estate market. Spring and summer are traditionally the seasons when both home buyers and sellers are most active across the country. If you'll be putting your home on the market this year, simple, cost-effective upgrades can help ensure a speedy sale at a good price. 'In the world of real estate, it's often necessary for sellers to spend a little on upgrades in order to achieve a satisfying home sale,' says Bethany Richmond, communications director for the Carpet & Rug Institute. 'Fortunately, some of the most impressive upgrades, such as new carpeting, are also affordable. Such upgrades ensure that you don't have to spend a lot to achieve a better selling price.' Here are six easy-to-do upgrades that are both cost-effective and high-impact: 1. Replace carpet It's easy to see the impact of worn or dated carpeting. 'If you don't like looking at it, buyers won't either,' Richmond says. 'Replacing old or damaged carpet delivers impressive appeal for a modest investment.' New carpet is one upgrade that has a high ratio of value to cost. It substantially increases perceived value for homebuyers without requiring home sellers to spend a bundle. 'Even less expensive carpet styles will freshen the look of a room and prepare it for sale,' Richmond notes. 'You can get a lot more quality for just a little more money, she says, 'and if you take advantage of spring carpet sales, installing new carpeting can cost even less.' 2. Clean flooring If your carpet is still in great shape, then simply having it professionally cleaned can make it look even better. A deep professional cleaning helps lift tough soils and provides a cleaner, fresher look to rooms. You can find an expert in your area. Not only is carpet a good value, it's healthy, too. People with allergies or other sensitivities are installing carpet to improve indoor air quality. Recent studies support previous findings that carpet, when effectively cleaned, traps allergens and other particles, resulting in less dust, dander and airborne contaminants escaping into the air. Don't forget to clean all other flooring, including hardwood, laminates and tile. Buyers will appreciate a sparkling clean appearance throughout the house. 3. Repaint in neutral shades Fresh paint is another smart and cost-effective upgrade for sellers. Buyers expect it, yet many sellers hesitate to repaint. Perhaps they like the existing colors or balk at the cost of professional painting services. Yet repainting in neutral colors makes a room look fresher and brighter, and gives buyers a visual 'blank slate' against which to imagine their own decor. Do the work yourself and you can reduce the cost of repainting even further. 4. Update or upgrade lighting You may find that disco-ball style globe light charming in your kitchen, but the average buyer doesn't want dated or unusual lighting. Replacing dated or worn fixtures, especially in bathrooms and kitchens, is a cost-effective way to give a room a more up-to-date, contemporary look. If you already have newer fixtures, consider replacing incandescent bulbs with high-efficiency options such as CFLs or LEDs. Although they're a bit more expensive to purchase, these bulbs last years longer - a selling point for buyers who will reap the value of not having to replace bulbs any time in the near future. 5. Install new faucets A high-end faucet can completely change the look and usability of a kitchen or bathroom. In terms of cost versus value, an upgraded faucet, such as pull-out or even touch-free styles, can dramatically increase perceived value for a relatively modest investment. An upgraded faucet is a thoughtful touch that will set your home apart in buyers' minds. 6. Replace hardware throughout the home You may have already thought of upgrading kitchen cabinet knobs and drawer pulls, but have you also upgraded hardware in your bathroom or on the front door? These seemingly small items have a major impact on the overall visual effect of a home. In desirable rooms such as kitchens and baths, designer hardware can elevate the entire look of the room. And upgraded door hardware will ensure buyers have a positive first impression from the moment they enter your home.

Housing Affordability Edges Higher in First QuarterSlightly lower median home prices along with steady mortgage rates contributed to higher housing affordability in the first quarter, according to the recently released National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).   In all, 65.5 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $63,900. This is slightly higher from the 64.7 percent of homes sold that were affordable to median-income earners in the fourth quarter.   Meanwhile, the national median home price dipped from $205,000 in the fourth quarter to $195,000 in the first quarter while average mortgage interest rates were virtually unchanged, moving from 4.54 percent to 4.57 percent in the same period.   "Housing affordability remains strong and this is an encouraging sign as the spring home building season moves into high gear," says NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.   "As home prices and mortgage interest rates are unlikely to go down, the first quarter HOI is another indicator that this is an opportune time to buy," says NAHB Chief Economist David Crowe.   Syracuse, N.Y., was the nation's most affordable major housing market, as 93.7 percent of all new and existing homes sold in this year's first quarter were affordable to families earning the area's median income of $67,700. Meanwhile, Cumberland, Md.-W.Va., claimed the title of most affordable smaller market, with 96.3 percent of homes sold in the first quarter being affordable to those earning the median income of $54,100.   Other major U.S. housing markets at the top of the affordability chart in the first quarter included Buffalo-Niagara Falls, N.Y.; Youngstown-Warren-Boardman, Ohio-Pa.; Harrisburg-Carlisle, Pa.; and Dayton, Ohio; in descending order. Smaller markets joining Cumberland at the top of the affordability chart included Springfield, Ohio; Kokomo, Ind.; Mansfield, Ohio; and Lima, Ohio.   For a sixth consecutive quarter, San Francisco-San Mateo-Redwood City, Calif., held the lowest spot among major markets on the affordability chart. There, just 13.3 percent of homes sold in the first quarter were affordable to families earning the area's median income of $100,400.   Other major metros at the bottom of the affordability chart included Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and San Jose-Sunnyvale-Santa Clara, Calif.; in descending order.   All of the five least affordable small housing markets were in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, where 21.1 percent of all new and existing homes sold were affordable to families earning the area's median income of $77,900. Other small markets at the lowest end of the affordability scale included Napa, Salinas, San Luis Obispo-Paso Robles, and Santa Rosa-Petaluma, respectively.   For more information, visit Published with permission from RISMedia.

20094139_web[1](BPT) - More and more homeowners are embarking upon home improvement projects, spending nearly $200 billion a year on home renovations, according to the National Association of Home Builders. If you're looking to make some home improvements without breaking the bank, spend smartly and invest time and money now into the projects that will pay back later. Curb appeal When it comes to first impressions, house hunters first notice curb appeal, or lack thereof. In fact, according to the National Association of Realtors, curb appeal is important to 71 percent of homebuyers. So beautify the outdoor space to attract possible buyers by focusing on small exterior improvements that'll pay off big like planting seasonal shrubs, painting the front door, refreshing a rusty mailbox or replacing old porch lighting with updated fixtures. These minor details will make a major and lasting statement. At the very least, you should clean the yard of any debris, trim trees and spread mulch in planting beds. Take outdoor renovations to the next level by transforming the look of your home completely with a fresh coat of paint. Be mindful of your home's location when selecting paint colors. Bold or bright colors might be the norm in Florida but wouldn't look right in a region like the Pacific Northwest where neutral earth tones are popular. You can also increase the value of your home by giving your siding material an overhaul. Remodeling magazine suggests replacing aluminum and vinyl siding with a durable fiber-cement mixture, which will recoup about 88 percent of its cost upon resale. It resists fire, rotting, moisture and termites - all potential hazards that could otherwise end up costing thousands. 'Let your insurance agent know whenever you complete a renovation project to make sure any new upgrades to your home are properly covered under your existing policy. If not, your agent can work with you to make sure you get the coverage you need,' says Erie Insurance Vice President and Product Manager Joe Vahey. 'In addition, some home improvement upgrades may entitle you to discounts, especially if renovations make the home safer or more secure.' For example, Erie Insurance offers discounts for installing smoke alarms or a central station alarm. Erie also provides a discount for installing sprinkler systems in your home. Bed, bath and beyond As house hunters head indoors, there are a few things that are likely to increase a sale. Most tend to look at kitchens and baths first. Experts recommend timeless fixtures instead of trendy ones since they hold their own over time and appeal to buyers who favor both contemporary and classic looks. Don't waste your money on fancy fixtures and features - they rarely make or break a sale. Most people seem to think that a huge kitchen overhaul is necessary to snag interested buyers. However, Remodeling Magazine reports that you'll actually recoup 8.5 percent more of the costs of a minor kitchen renovation compared to a major kitchen renovation. So instead of redoing the kitchen completely, accomplish a few minor DIY kitchen updates like changing out faucets and lighting fixtures, painting cabinets, adding new hardware to drawers and cabinets, and replacing old appliances with newer (and often more energy-efficient) models. Experts also say that adding an attic bedroom and finishing the basement are two of the largest renovations that give you the best return on your investment, allowing you to recoup more than 84 percent and nearly 78 percent of the cost, respectively. Before jumping into complicated or expensive DIY projects, take a moment to assess which ones are worth your time and money. Test your knowledge of which home improvement projects give you the most bang for your buck at No matter what updates you end up doing, it's always a good idea to regularly assess the value of your home. This will assure you're asking for an appropriate return on investment when you finally decide to put it on the market.

Real Estate Is a Better Investment than GoldAlmost every day, I hear advertisements about buying gold because it is such a great investment. As I have heard these claims, I have wondered how real estate stacks up to gold as an investment.   Surprisingly, some correlations exist between buying gold and buying real estate. Both investments are considered a good hedge against inflation and fluctuations that occur when the government overspends and the Federal Reserve weakens the value of the dollar. Both have intrinsic value, meaning their price never goes to zero like some stock investments have done. Both are considered long-term buy-and-hold investments. Both require insurance to protect against risk of loss. Both claim to offer price stability, meaning their prices are less volatile than stocks.   Admittedly, over the past 40 years, gold has performed extremely well. From 1974 through 2013, gold increased in value from $158.93 an ounce to $1,356.30, an average annual increase of 5.51 percent. From 2006 through 2011, when real estate was experiencing its worst performance of the past 40 years with an average annual decline in value of -2.19 percent, gold was soaring at an average annual increase of 17.30 percent. During that period, gold increased in value 260.42 percent. Gold seems to perform better during periods of economic decline when stocks are experiencing a bear market.   However, from an appreciation perspective, over the past 40 years, real estate has more than held its own, increasing an average annual rate of 5.43 percent, which includes the great recession years of 2006 through 2011. From a pure appreciation standpoint, gold beat real estate over the period from 1974 through 2013 by an average annual appreciation of 0.08 percent, a virtual dead heat between average gold prices and average prices of new home sales.   Unlike gold, however, appreciation in value is not the end of the story for real estate; it's only the beginning. Real estate far outperforms gold in all of the following metrics: cash flow, leverage, equity buildup, tax benefits, stability and control. Although income-producing real estate requires more intense management, most projects generate annual cash flows of 5 to 10 percent of the equity invested. Gold offers no annual cash flow on the equity invested.   Leverage, Just One of the Benefits of Real Estate Investing Real estate has the ability to leverage an investor's capital, meaning an investor who buys real estate does not have to pay all cash to purchase the asset. Investors in gold have to pay all cash when buying gold.   Banks will lend at least 75 percent of the money required to purchase a real estate investment. In using the bank's money, an investor leverages his investment by putting down a small down payment and borrowing the rest of the money to acquire the property. With positive leverage, an investor can actually supercharge his or her return because the entire property appreciates in value not just the cash invested.   Equity and Cash Flow from Real Estate From 1994 through 2013, gold had an annual appreciation rate of 6.51 percent. During the same time period, a real estate investor who bought an average-price new home for $154,500 put down 25 percent equity of $38,625 and paid interest of 5 percent on a 30-year amortized loan would have had an annual return on the appreciation of his capital investment in the home of 7.64 percent.   Another benefit of income-producing real estate is that while the tenant is paying rent, which goes to pay the monthly mortgage payments, the debt on the property is reducing. An average new home that cost $154,500 in 1994, based on a 75 percent loan-to-value ratio, would have a mortgage of $115,875. Over the next 20 years, the principal loan balance would be paid down to $58,647. The tenant, by paying rent, would have paid down the mortgage balance by $57,228. The increase in equity from the reduction in the principal balance of the loan was paid by the tenant's rental payments. When combining a 5 percent cash flow with equity buildup and appreciation over 20 years, the overall return on this modest real estate investment would be 10.79 percent; a whopping 4.28 percent higher return than an investment in gold!   Tax Benefits of Real Estate Besides cash flow, leverage, equity buildup and appreciation, a real estate investor also experiences favorable tax benefits while owning real estate. Although real estate actually appreciates in value, for tax purposes, the government permits an investor to depreciate the asset over either 27 ½ years or 39 years, depending on whether the property is residential or commercial. This tax break enables the investor to shelter most of his cash flow without having to recognize it as income. Additionally, when a real estate investment is sold, the gain on the sale is taxed at a 15 percent rate, depending on the investor's adjusted gross income.   Gold is taxed at 28 percent. Gain from the sale of gold is considered collectibles gain and is taxed at a higher rate than conventional long-term capital gains. The maximum tax rate on collectibles gain is 28 percent.   Real Estate is More Stable Although gold is more stable than stocks, it is still more volatile than real estate. Over the past 40 years, gold experienced a decline in value in 15 of the past 40 years. Those declines ranged from a low of -0.05 percent to a high of 25.2 percent in one year. During several years, gold declined more than 10 percent in value. Real estate, on the other hand, experienced declines in value in only five of the last 40 years. Those declines ranged from a low of 1.74 percent to a high of 7.42 percent. Real estate is unquestionably less volatile than gold.   You Have the Control Finally, an investor in gold or real estate has control over the asset, as long as the gold acquired is not part of an Exchange-Traded Fund (ETF) and the real estate is not part of a Real Estate Investment Trust (REIT). However, the type of control is much different. An investor in real estate can control the performance of the asset by raising or lowering the rents when economic times are good or bad. He or she can also provide sweat equity to improve the asset's value. Even location can enhance the value of a real estate investment.   This type of control is not available to an investor of gold. When gold is purchased, whether it's in the form of gold bullion bars or coins, one of the most important considerations is where to store the gold. If it is stored in a custodial vault, the investor has to worry about whether or not the custodian will go out of business. If that occurs, the investor is left with an unsecured claim against a bankrupt custodian. If the investor purchases a safe and stores the gold at home, then there is the concern of a robber stealing the gold and possibly harming the investor or their family in the process.   A few years ago, I had a client who owned $100,000 in gold. He stored the gold in a safe at his home. He wanted to invest in a commercial income-producing real estate investment with me and was required to be a co-signer on the mortgage loan. He submitted his financial statement to the bank showing that he had $100,000 in gold. The banker wanted to see the gold. The investor did not want to take the gold to the bank nor did he want the banker coming into his home to see the location of the safe. They finally compromised by having the investor take his gold to a coin dealer for verification of its value and providing certification that he was indeed the true owner of the gold. The whole process was a hassle.   In summary, gold has performed well over the past 40 years, but it does not have the same performance capability as an income-producing real estate investment. Gold may provide positive appreciation in value similar to real estate, but it can't provide cash flow, leverage and equity buildup. Nor can it compete with real estate when it comes to tax benefits, stability or control. In short, when all the additional advantages of a real estate investment are considered, gold just doesn't stack up.   Source: Published with permission from RISMedia.

7 Carpet Cleaning Tips from the ProsNo matter how hard you try to keep your carpet clean, a certain number of spills, spots and stains will invariably find their way to it. Country Living Magazine interviewed carpet cleaning experts in San Antonio, Texas to come up with some top carpet cleaning secrets:   Blot stains, don't rub – Rubbing any cleaning solution into the carpet will grind it into the fibers. Dabbing a bit of cleaner onto the stain and blotting gently from the outside inward will best soak up the stain.   Use club soda – For fresh wine stains, pour a little club soda over the stain and blot gently. If that doesn't do it, spray on a mix of half water and half white vinegar. Let it sit for 15-20 minutes, then blot.   Try shaving cream – For most stains, apply the cream directly on and let it set for 30 minutes. Blot it away with a dry white cloth. Apply a half and half vinegar-water mix and blot it up with another dry cloth. Freeze away dried gum – If you've tracked gum onto the carpet, freeze it off by applying ice cubes to it for 30 seconds. Once the gum is frozen, use a spoon to lift up the glob and cut a few strands of carpet as close to the gum as possible.   Heat up wax stains – Candle wax drip on the carpet? Place a white cloth over your iron, then put the iron on top of the wax for no more than 30 seconds. Scrape off the wax with a butter knife. Finally, lay a paper towel over the surface and iron the paper for a few seconds. The last of the wax should bind to the paper, though it may take a couple more applications.   Clean pet stains organically – Use an organic cleaner, like Eco-Spot (available for about $10 in a spray bottle). Spray the pet stain and scrub gently. Then wipe up with a cloth or towel. These cleaners can also help remove coffee stains. Remove crushed candy with a knife - Scrape the candy with a stiff brush or butter knife. Using a sponge, apply water mixed with a mild soap to get the sugar out. Once the candy is removed, dry the spot by blotting it with a cloth or towels.   Published with permission from RISMedia.

Buying Beats Renting after Only Two YearsIn half of U.S. metros, buying a home is a better financial decision than renting for home buyers who plan to stay in their home for at least two years, according to the first quarter Zillow® breakeven horizon analysis.   Among the 35 largest metro areas analyzed by Zillow in the first quarter, those with the shortest breakeven horizon were Riverside (less than 1 year), Orlando (1 year), Tampa (1.1 years) and Miami- Fort Lauderdale (1.2 years). Large metros with the longest breakeven horizon included New York, NY (2.6 years), Boston (4 years), Phoenix (3.3 years), San Diego (3.2 years), Minneapolis and Baltimore (both 3.1 years).   "Rents keep rising, and mortgage interest rates remain very low, which is helping to skew the rent vs. buy decision toward buying for those who can afford it. Many renters may ask themselves why renew a lease, when you can break even on the same home in less time in many areas," says Zillow Chief Economist Dr. Stan Humphries. "However, some renters still have to overcome significant hurdles before they can pull the trigger on homeownership. For those renters who can't qualify for a mortgage or aren't able to save enough for a down payment on a house, renting can be a more flexible, and often far less frustrating option for many people."   Zillow's breakeven horizon takes into account all possible costs associated with buying and renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, insurance, taxes, utilities and maintenance costs. It then factors in historic and anticipated home value appreciation rates, rental prices and rental appreciation rates to help calculate the point, in years, at which buying becomes less expensive than renting.   Published with permission from RISMedia.

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