What in the World is Your Home Worth?? | July is Home Valuation Month

So I read a recent article stating that pending home sales surged 6.1% in May which represents the largest such gain since 2010. This remarkable note prompted me to make July The Month of Home Valuation. All month long I'm offering my time (for $FREE.99 of course) to put together a Comparative Market Analysis report for anyone who's interested in finding out how much your home is worth in today's market. You may find that now is a good time to cash in on your current home use your sudden cash flow to upgrade, downsize, place some money in a college fund or IRA, or use your new found wealth to meet some other financial goal.

For those not necessarily selling, but still interested in pricing a home, here are the BIG 3 components:

Price
This is the dollar value that the seller should be reasonably asking for given current market conditions.  Things that should be taken into consideration include factors such as recently sold properties.  These should, preferably, be within the last 6-12 months.  This way, you're taking advantage of the most recent market trends.  These comparative sales should also be be similar in size (land, home square footage, number of rooms, etc.) and amenities (i.e., fences, pools, etc.)  There are certain intangible factors that have to be considered as well such as location, surroundings, view from the property and more.  One of the single, biggest factors, of course, is the location.

Value
The value of the market is subject to the prospective buyer and can differ from transaction to transaction. Locational amenities such as highly-rated schools nearby, access to public transportation, or distance to a certain employer, can place a higher or lower premium on certain properties to prospective buyers.  Value can also be determined by a certain area's inventory.  Low supply of homes, with high demand for  them, will drive the market price up.  The inverse of this relationship is also true: high supply of homes available, with low demand, will drive price downward.

Cost
The cost basis is determined by the land, materials and improvements that have been purchased and utilized.  In a lot of cases, there is an inelastic value created when the cost of improvements is incurred.  Thus, value is not necessarily a direct derivative of cost.  More value can be created by spending money to make certain improvements.  The value is a subjective property that is usually determined by the buyer's preferences and interests.

Now, sites like Zillow and Trulia have made superior attempts to value homes all over the nation, which are pretty decent.. But how can you fully trust a company based in Arizona with a computer algorithm against an agent in your local market who lives, works and studies in your locale?  That's why I'm offering this service all month long… and thereafter I'm sure lol.  Feel free to e-mail me to take advantage of this offer.

Thank you so very much for you continued support.  Please feel free to contact me with any questions pertaining to this or any other real estate related topics at (352) 246-8706 or at jhurst@mmparrish.com.  You can also visit my website at www.jasonjhurst.com and be sure to 'LIKE' my Facebook page today. And remember, when it comes to real estate, THINK HURST 1ST!

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?
A 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!!

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!