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Friday, April 25, 2014

Pitfalls to Selling Your Home | Top Reasons Why Your House Won't Sell

In today's market, every step is crucial.  One wrong move can be the difference between making money from your home, losing money on your home or not even selling it at all… and the latter two options would SUCK!!… Trust me I've been there.  But this doesn't have to be for you.  There is a great deal of appreciation in home prices taking place across Alachua County and here are some  helpful tips on pitfalls to avoid in selling yours!!!

PITFALLS TO AVOID IN SELLING YOUR HOME

1) INEFFECTIVELY PRICING YOUR HOME FOR SALE

This can be a very difficult task for some.  Home prices, like the stock market, change frequently and regularly.  On one hand, you can price it too high: trying to be overly ambitious with visions of "making it rain" in your head and price yourself out of the market.  Or, you can price it at a discount to deep to where you don't realize your full profit potential.  A good real estate agent can help you with this process and also put together a CMA (comparative market analysis) which can aid you with pricing your home effectively.  Real estate agents live in the world of buying and selling homes all day, every day.. TRUST THEM!! Besides, they don't get paid until you do :)

2) HE WHO MARKETS BEST, SELLS THE HOUSE

"If a tree falls in the woods and no one is there to hear it, does it make a sound?"… "If a house is for sale and there's no one there to see it, will it sell?".  Well you can debate the first question all you want, but i'm here to tell you that the answer to the second question is an emphatic, "NO!!!" Marketing a house effectively is as essential to selling a home as any other of these steps.  And, with the invent of so many social media tools, you have the opportunity to bring the world to your doorstep.  After all, you never know who is moving to your area… and in Gainesville, that changes every year (See the University of Florida.)  Make sure your agent takes as many pictures as allowed by law! Pictures truly do say a thousand words and will paint a picture of your home to those who are searching.  Either your agent or you should invest in purchasing or renting a high resolution camera which can take hi-def pics of your palace… Even if you can not afford one, you'd be surprised at the great resolution you can get in pictures taken from your phone or tablet these days.  But if you're going to do this, make sure your home is IMMACULATELY clean and all fixtures are up-to-date with their repairs…. just sayin'.

3) DON'T LEAVE YOUR HOUSE BUSTED AND DISGUSTED

Have you ever looked at somebody's teeth or clothes in a dirty or tattered condition and immediately "judged that book by it's cover?" .. Not even knowing that the person behind those imperfections could be a Phd, a millionaire, or even an angel in disguise.  We all know this is wrong, but it's human nature to develop a perception at first glance.  And whether right or wrong, their perception is their reality.  This is what potential homebuyers will do with your home as well.  If there are broken fixtures, dirty carpets or junky rooms, prospective buyers will, generally, automatically assume that the sellers do not/have not taken care of the home and the buyer's mind will wonder, "what else is wrong with the house that I can not see if they can't take care of what I can see??" Fix up and tidy up before you consider listing and, DEFINITELY, before taking pics.
4) TREAT YOUR BUYERS RIGHT!
Your buyer must be able to feel at home! In other words, they must be able to "make themselves at home" and have a vision of themselves living in your house.  Soft music, snacks, appropriate lighting: these are some subtle touches that can appeal to the senses of prospective buyers in wanting your home versus another.  And please, do not follow the buyers around as they peruse the home… as a matter of fact, stay out while they're there.  The buyers will become uncomfortable and may think you have something to hide… and it's just darn creepy. So, DON'T DO IT!  Give them some space to assess for themselves and wait for feedback from your agent.

Above all, BE PATIENT.  Not every home will sell overnight.  And sorry to burst your bubble, but most homes may take months to sell.  Keep calm! As long as you take heed to this advice and not fall into these pitfalls, you will be just fine and your house will sell in due time!
Contact me if you have further questions or need anymore information.  I also love to hear your feedback if this information has been helpful to you.  Peace and increase!!


Monday, April 21, 2014

What You Don't Know Can Hurt You | Get into a New Home Sooner, Rather Than Later!

There's an age-old adage that states that, "people are destroyed for a lack of knowledge." At first glance, the connotation of that statement suggests that negative things can happen to you if you're not aware.  However, suppose having a lack of knowledge could also detract you from taking advantage of opportunities before you. This is the angle by which I want to set up shop for this week's blog post.  

The real estate market in Alachua county has gradually recovered from its 2008 recessionary levels and, based on recent figures released by the Florida Realtors Association, we are poised for an even bigger recovery.  According to the February 2014 report that they released, examining year-over-year performance from February 2013 to February 2014, there are some strong indicators of a continued recovery. Here they are:


  • New Listings: up 3.9%
  • Median Sales Price: up 6.6%
  • Average Sales Price: up 7.4%
  • Median Days on the Market: down 28.9%
  • Average Percent of Original List Price Received: up 1% to 90%
These are very promising figures for our local real estate market especially considering that a harsh winter (by Florida standards at least) hampered a lot of peoples' efforts.  Up until now, you may have been asking why buy or sale your home… So now, I'm asking WHY NOT?!  Oh, and just for a little extra sauce on your spaghetti, rates are still at historic lows; but as a word of warning, there has been much speculation that the economy is recovering and those rates will begin creeping back up in the near future.

Now, I'm sure you're probably saying to yourself, "Jason, I get it… the market is favorable, rates are low, it all sounds compelling, but who on God's green earth will be able to qualify me for a mortgage given my situation?"  Well, I'm glad you asked!!  I have taken the liberty of compiling some very locally-specific, potentially credit-friendly, mortgage loan programs that may insight hope and reinvigorate your goals and dreams of owning or refinancing your home!! Here they are:



USDA LOAN PROGRAM

What is This?
USDA home loan comes from the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program.  It is a mortgage loan offered to rural property owners by the United States Department of Agriculture.

What are the Benefits?

Applicants for home loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories. Additionally, the property must be located within the USDA Home Loan "footprint."

Who is Eligible?
  1. To be eligible, you must be purchasing a property in a rural area as defined by the USDA.
  2. The home or property that you are looking to purchase must be "owner-occupied"; investment properties are not eligible for USDA loans.
  3. USDA Loans require 2% of the purchase price in up front funding fee, and a monthly mortgage insurance premium based on .40% of balance annually. The annual premium is divided by 12 to arrive at the premium charge per month.

THE SHIP PROGRAM




What is this?
Florida Housing administers the State Housing Initiatives Partnership program (SHIP), which provides funds to local governments as an incentive to create partnerships that produce and preserve affordable homeownership and multifamily housing. The program was designed to serve very low, low, and moderate income families.
What are the Benefits?
SHIP dollars may be used to fund emergency repairs, new construction, rehabilitation, down payment and closing cost assistance, impact fees, construction and gap financing, mortgage buy-downs, acquisition of property for affordable housing, matching dollars for federal housing grants and programs, and homeownership counseling.
Who is Eligible?
SHIP funds are distributed on an entitlement basis to all 67 counties and 53 Community Development Block Grant entitlement cities in Florida. The minimum allocation is $350,000 and the maximum allocation is over $8.8 million. In order to participate, local governments must establish a local housing assistance program by ordinance; develop a local housing assistance plan and housing incentive strategy; amend land development regulations or establish local policies to implement the incentive strategies; form partnerships and combine resources in order to reduce housing costs; and ensure that rent or mortgage payments within the targeted areas do not exceed 30 percent of the area median income limits, unless authorized by the mortgage lender. Click here for a full SHIP Program Checklist

VA LOAN PROGRAM
What is This?
The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment. 
What are the Benefits?
The VA loan allows veterans 103.3 percent financing without private mortgage insurance or a 20 per cent second mortgage and up to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA; this fee may also be financed. In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less.
Who is Eligible?
The Veteran Loan program is designed for Veteran's who meet the minimum number of days of completed service. The program does allow for benefits to Surviving Spouses.
The VA does not have a minimum credit score used for pre-qualifying for a mortgage loan, however, most Lenders require a minimum credit score of at least 620.
A Veteran who has used their entitlement to previously purchase a home, may have entitlement left to purchase another one. If you previously purchased a home using your VA Benefits then you might still have some of that “Entitlement” available to you for the purchase a new home! For a full list of VA Loan eligibility requirements, click here.

FHA LOAN PROGRAM
What is This?

This is a US Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. 
What are the Benefits?
FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for PMI.
Who is Eligible?
1.  The potential lender assesses the prospective home buyer for risk. FHA loans for buyers who don't meet a minimum 640 FICO score may be subject to higher mortgage rates, but can very likely still qualify.
2. The FHA makes provisions for home buyers who have recovered from "economic events". Via the Back To Work - Extenuating Circumstances program, the FHA reduces its standard, mandatory three-year application waiting period for buyers with a history of foreclosure, short sale or deed-in-lieu; and two-year application waiting period after a Chapter 7 or Chapter 13 bankruptcy. The Back To Work program lasts through September 30, 2016.
So archive this post, book mark it, copy and paste it to a word doc, whatever you have to do because this is valuable stuff! And, other than the conventional mortgage loans, you may be able to take advantage of one of these unique programs NOW!!  I have built a network of individuals who can help you get started with one of these programs and get on the road to homeownership so e-mail me with your questions and  I'll get you hooked up with the right person. Until next time, when it comes to Real Estate…. Think Hurst First!!

Monday, April 14, 2014

April 15th: Uncle Sam Wants Your Dough | Homeowners Fight Back!


Tomorrow is Uncle Sam's favorite day of the year! For some it's a time to rejoice over a much needed refund; but for others, it's a time to check between the couch to scrounge up some change to pay a detestable tax bill.. that, or change your identity completely and play a game of catch me if you can.  Let's be honest, we all can use a few extra bucks to do home improvements, fix that nagging check engine light problem, or pay off our bets for our busted March Madness brackets (UCONN?!? Really??) I've spoken with many people who are, currently, renting in order to enlighten them about the benefits of homeownership if, for nothing else, the tax benefits they can take advantage of around this time of year.  You'd be surprised how many of them have NO CLUE about this arena.  But similarly, there's a number of current homeowners that have no clue about these as well. If this is you, and you have a CPA who hasn't introduced you to these, fire them immediately after reading this post.  And if you're part of the educated bunch, which I'm sure you are, feel free to pass this information along.

The following can be eligible for a deduction as it pertains to your home:
  • Your property taxes. Just when you thought that you were the personal financier of the University of Florida and other municipalities in Gainesville, DON'T FRET!! Uncle Sam allows you to deduct these. Don’t forget to include any taxes you may have reimbursed the seller for.  These are taxes the seller had already paid before you took ownership. You won't get a 1098 report listing these taxes. Instead, that amount will be shown on the settlement sheet.
  • The mortgage interest on your primary residence, as well as on a second residence. Now don't go get super, crazy excited and "making it rain" because there are limits; but, nevertheless, this is deductible.
  • The interest on up to $100,000 borrowed on a home equity loan or home equity line of credit, regardless of the reason for the loan.
  • Points that you paid when you purchased the house (or those that you convinced the seller to pay for you).
  • The premiums paid for Private Mortgage Insurance (PMI), but only for policies issued after 2006. Newsflash: this deduction is scheduled to disappear after this tax season! (The right to this deduction disappears as your Adjusted Gross Income rises from $100,000 to $109,000 (or $50,000 to $54,500 for those who use married filing separately status.)
  • Home improvements required for medical care.
Now, you may ask, how much can I save on my taxes?? Well, I'm glad you asked. It depends! I know, your favorite answer right? Here are the factors it depends on:
  • Your filing status (whether you filed single, head of household, married filing jointly, married filing separately)
  • Your standard deduction amount
  • Your other itemized deductions
  • Your taxable income
Your home-related itemized deductions, plus your other itemized deductions must add up to more than the standard deduction or they won't save you any money. 

Conversely, these items are not deductable... Sorry to burst your bubble:
  • Dues to a homeowners association
  • Insurance on your home
  • Appraisal fees for your home
  • The cost of improvements to your home: except in the relatively rare case where they qualify as a medical expense. But it's very important that you keep those receipts. They may help reduce your taxes when you sell your home.)
So, I hope this helped. Don't wait until the last minute. Use a qualified CPA that you have interviewed and trust. There are tons of great ones in Gainesville, but they're probably tied up at this time of year so call NOW! Or there are some great do-it-yourself softwares like TurboTax and H&R Block that will thoroughly guide you through the process of filing for your home and/or business and maximize your deductions. I've been a TurboTaxer for years and have been immensely satisfied (shameless plug.)

If you have any questions or want any more information, please feel free to contact me at anytime!! Peace and Increase!

Thursday, April 10, 2014

"Defeating the Credit Monster!! - Building A+ Credit" - By Jason J Hurst

One of the main hurdles that buyers face to prepare for the home buying process is getting their credit in order for purchase.  Thanks to the Great Recession of 2008, many people have taken hits to their credit profiles that may take years to over come.  BUT THEY DON'T HAVE TO!!  Now, I know the banks haven't made it much easier by tightening their policies toward lending, but with a plan and a little bit of faith, you are more than able to overcome the DEBT MONSTER (muah-ahahahaha!!).

I, too, was a victim of the real estate collapse and job losses of 2008; leaving me to battle two foreclosures and a, seemingly, insurmountable amount of close to $30,000 of debt to pay off.  But here we are in 2014, and I am now a homeowner once again, in the market for a second home, and that $30,000 debt figure….. Blowing in the wind!!  Now, I didn't say it was easy and it may not happen overnight like you want it to, but diligence, mixed with faith, and a lot of patience, and you'll be in the position to walk the path of homeownership in NO TIME!!  Here's some simple steps to help:

1. Get a credit card if you don't have one
Now I recommend this with EXTREME caution.  You have to know yourself and your
propensity to spend and make impulse decisions.  If you are irrationally exuberant then STAY AWAY!!  In my young and impulsive days, I had the mentality that the money would always be there, but life always finds away to make the music stop and you have to be prepared for those seasons. Now, having said that, having and using a credit card or two can really build your scores.  If you can't qualify for a regular credit card, consider a secured credit card, where the issuing bank gives you a credit line equal to the deposit you make. Look for a card that reports to all three credit bureaus. My wife and I used Capital One, which has some good options, especially for the "credit-challenged".

2. Add an installment loan to the mix
So, the name of the game is "RESPONSIBILITY".  Potentially lenders need to know they're going to get piz-AID!! So they are looking at your ability to honor your word that you will repay what you owe.  You'll see rapid benefits if you've proven you are consistently repaying these types of credits: revolving (credit cards) and installment (personal loans, auto, mortgages and student loans).

Again, be sure that the loan of choice reports to all three credit bureaus.

3. Pay down your credit cards
Paying off your installment loans (mortgage, auto, student, etc.) can help your scores but typically not as dramatically as paying down -- or paying off -- revolving accounts such as credit cards.

Lenders like to see a big gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help; getting balances below 10% is even better.

Though most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits.

4. Use your cards lightly
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. What's typically reported to the credit bureaus, and thus calculated into your scores, are the balances reported on your last statements.

You often can increase your scores by limiting your charges to 30% or less of a card's limit; 10% is even better. If you're having trouble keeping track, you can set up email or text alerts with your credit card companies to let you know when you're approaching a limit you've set. If you're going to practice the use of credit, I HIGHLY RECOMMEND… let me say that again.. HIGHLY RECOMMEND that you ONLY use it for purchases that are considered "normal course of life purchases". What do I mean by that? Purchases that you would have normally bought with cash, according to your budget (You do have a budget right???) Have the mentality that the card is same as cash.  And pay those charges off, IMMEDIATELY at the end of the month, if not when you get home for the day, if you have to.  (Do you notice a theme here with all of the bolded words?)

5. Check your limits
Your scores might be artificially depressed if your lender is showing a lower limit than you actually have. Most credit card issuers will quickly update this information if you ask.

If your issuer makes it a policy not to report consumers' limits, however -- as is sometimes the case with "no preset spending limit" cards -- the bureaus may use your highest balance as a proxy for your credit limit.

You may see the problem here: If you consistently charge the same amount each month -- say, $2,000 to $2,500 -- it may look to the credit-scoring formula like you're regularly maxing out that card.

If you have an American Express charge card -- the kind that must be paid in full every month, rather than the kind on which you carry a balance -- you probably don't have to worry, because charge cards typically aren't included in the credit utilization portion of the FICO formula.

If, however, the card is categorized on your credit reports not as a charge card but as a revolving credit card, and either a credit limit or high balance is reported to the bureaus, your balances on the card could be a problem.

You could go on a wild spending spree to raise the high balance reported to the credit bureaus, but a more sober solution would simply be to pay your balance down or off before your statement period closes.

6. Dust off an old card
The older your credit history, the better. But if you stop using your oldest cards, the issuers may decide to close the accounts or stop updating them to the credit bureaus. If you're like me, you have probably made a bonfire of your old cards and destroyed them completely, so this may or may not be for you. But, nevertheless, it may help.

7. Get some goodwill
If you've been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a "goodwill adjustment" improve the better your record with the company (and the better your credit in general). But it can't hurt to ask. I'm the type of person with the type of boldness to ask for anything.  If they say "no", well shoot, I'm in the same place as where I started.  But if they say yes, IT'S ON, BABY!!


8. Dispute old negatives
Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't bother to verify it when the credit bureau investigates your dispute.

Some consumers also have had success disputing old items with a lender that has merged with another company, which can leave lender records a real mess.

9. Blitz significant errors
Your credit scores are calculated based on the information in your credit reports, so certain errors there can really cost you. But not everything that's reported in your files matters to your scores.

Here's the stuff that's usually worth the effort of correcting with the bureaus:


  • Late payments, charge-offs, collections or other negative items that aren't yours.
  • Credit limits reported as lower than they actually are.
  • Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full.
  • Accounts that are still listed as unpaid that were included in a bankruptcy.
  • Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your reports.
Again, this is not "conquering Rome in a day". Although for some who have never checked their credit reports, it just could be.  But for the rest of us, it is a process and you are, in large part, the main, determining factor of how long that process will take.  With diligence and persistence, I am a living witness that it can be done! I even got audacious enough in my belief that I created a daily affirmation and took my credit bills and marked them the balances down to "$0" just so I could begin to visualize myself debt-free. And sure enough, IT HAPPENED!! And you can do it too!

If you have any questions, or need any other resources, I'm here to help. Contact me at any time!