Secaucus Real Estate Today

SECAUCUS JAN/FEB 2016

REAL ESTATE TODAY

6 RIGHT CONDO FOR YOU PRINCIPLES OF BUYING THE

HOW TO RECEIVE

AN OFFER ON

YOUR HOME

IN 5 STEPS

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QUESTIONS AND

ABOUT

TOWN

CONDOMINIUMS

BEGINNER’S

GUIDE TO

CHOOSING THE

RIGHT or tgag

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HOMES AND

AN 8-PART

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ANSWERS

SEC AUCUS REAL ESTATE TODAY | JAN/FEB 2016 6 TIPS ON HOW TO SURVIVE WITHOUT A REAL ESTATE AGENT1

contents

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Publishers and the Editors Letter

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How To Receive An Offer On Your Home In 5 Steps

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6 Questions And Answers About Town Homes And Condominiums There’s a lot of information about condominiums and town houses that most people won’t find out about until they start living in one.

Here’s how to find out if a town home or condo is right for you.

6 Tips On How To Survive Without A Real Estate Agent Most people will tell you to hire a real estate agent if you want to sell your house, but there are alternatives. If you’re looking to save the money you would have spent on a commission, look no further.

If you’re looking to receive an offer on your home, you may be going about it wrong. Here’s what you should do to expedite the process.

6 Principles Of Buying The Right Condo For You Are you wondering if a condo is right for you? If so, you need to do due diligence before you sign anything or you may end up stuck with a deal that is no good at all.

An 8-Part Beginner’s Guide To Choosing The Right Mortgage Selecting a mortgage can be a complicated process. Educate yourself about the types of mortgages and what to look for in a mortgage. It will make the process much easier.

8 Tips On How To Find The Right Loan Officer For The Job Finding an experienced and professional loan officer can make a very big difference. Learn how to sift through the options to find the right loan officer to work with.

8 Tips To Help You Survive Refinancing If you have been giving serious thought to refinancing your home loan, how can you decide? Here’s how you can determine whether it is time for you to refinance your home.

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

contents Your Beginner’s Guide To Liability Insurance Property insurance and liability insurance are both tremendously important for all homeowners. Learn whether or not your home has been properly insured starting today.

Your 6-Part Beginner’s Guide For Negotiating Your House Sale Negotiating the sale of your home can be a challenge in today’s economic uncertainty. These tips will show you how to get max proceeds from your home.

Your 10-Part Checklist For Successfully Selling Rental Property Are you thinking about selling your rental property? The following is a list of important considerations that you should take into account before selling your property.

9 Frequently Asked Questions On Credit And Obtaining A Mortgage Are you currently preparing to apply for a mortgage for your new home? If so, you need to know that your credit score plays an extremely important part in the process .

8 Tips On Purchasing Your First Home - A General Overview Buying a home can be a highly intimidating prospect for a first time buyer. But it doesn’t have to be! Learn more about the process by reading this helpful information.

9 Golden Rules For Home Maintenance If you are a home owner, you should know that home maintenance is very important. Proper maintenance keeps your home livable and helps to protect the value of your home.

9 Common Mistakes When Applying For Mortgages Online Applying for home financing online is a choice that many people are choosing today. Learn how you can make the process work better for you by using the following advice.

7 Tips For How To Survive Your Hunt For The Right Home Are you currently on a hunt for the home of your dreams? If so, learn the best ways to go about searching for your dream home so that you can find it quickly and easily!

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WHO’S LISTING WHAT According To NJMLS.com

AGENT NAME

RHODA P. TRAUM

SONIA ANDRIANI

IRENE SZEGLIN

MARIANA MUZZILLO

MICHAEL GONNELLI

JOHN BUCCO

JANET WILKINS

SIMONE SHAW-DISLA

TRACEY WATERS

GUSTAVO SANTACRUZ

# OF SECAUCUS LISTINGS

9 3 2 2 2 1 1 1 1 1

COMPANY

REMAX INFINITY

REMAX INFINITY

REMAX INFINITY

REMAX INFINITY

REMAX INFINITY

LIBERTY REALTY

WEICHERT REALTORS

REMAX INFINITY

COCCIA REALTY, BETTER HOEMES

ACCESS HOME REALTY

SECAUCUS REAL ESTATE TODAY JANUARY 2016

Editor

Sandra O’Connor Writer

Daniel Pratt Head of Creatives Nyvia Ross

Graphic Designer Kerwin Wepee

Digital Property Managers Maharlika Matutinao Layla Anaya

Digital Property Assistants Krystine Sitjar Warren Nietes

Online Presence: Facebook Google+ Twitter Tumblr Pinterest

For advertising concerns please contact KJ Ross at kjross@authoritativecontentllc.com Secaucus Real Estate Today’s magazine content cannot be copied or reproduced in any form without the written permission of the publishers.

Secaucus Real Estate Today’s editors and publishers shall not be held liable for any unsolicited materials. All prices and specifications published in this magazine are subject to change by manufacturers, agency and retailers.

Greetings, and welcome to Secaucus Real Estate Today! I hope the holidays have blessed everyone and their loved ones, and that this blessing extends through Secaucus Real Estate Today’s first, January/February issue of their magazine.

2016 is sure to be an exciting year, as election season quickly draws to its vital stage. The outcome of the presidential election, as well as local elections, may have an effect on real estate laws in our country over the coming years.

Secaucus, New Jersey is a great place to live, and boasts a market full of gorgeous properties no matter what time of year you’re looking to do business. One of the goals of Secaucus Real Estate Today is to put people in the know as far as laws and regulations that affect buyers and sellers, as well as to help consumers make great decisions within the real estate market.

Secaucus Real Estate Today will connect you with the best real estate agents: the experienced,

dedicated veterans who know the lay of the land and understand how important it is for clients to get their money’s worth, whether it be buying or selling. From negotiating sales prices to mortgages and insurance, the knowledge is all here. We provide you with the keys to make your next big step a successful one, and to avoid making mistakes that could end up costing you thousands of dollars in the long run.

With that I hand it off to Sandra O’Connor, editor of Secaucus Real Estate Today. Best of luck to you with finding the home of your dreams, or prospering in the selling process!

Best regards,

Kenan Ross KENAN ROSS CEO Authoritative Content

LETTER FROM THE EDITOR Hi there, and welcome to Secaucus Real Estate Today! I’m very excited to bring you this first issue, aimed at setting the precedent for a magazine full of quality information on buying and selling homes in Secaucus, New Jersey. 2016 could be the year you make an amazing sale for your home, or find the property you’ve been dreaming of!

For sellers, the principles of selling property and receiving an offer on your home are here and in great detail. Most of all, you’ll learn about how things work in the world of real estate - a complex industry that can shake the confidence of even the most competent consumer. We want you to succeed in your ventures, whatever they may be. You’ve got our full support!

All my best,

Secaucus Real Estate Today is the right place to be for learning all manner of real estate jargon and customs. If you’re a first-time buyer, the prospect may be intimidating for you. That’s where our wisdom comes in. We explain how to go about buying your first home, financing, knowing what you want in a home, the pros and cons of town homes and condominiums, and much more. The tips in the January/February issue of Secaucus Real Estate Today will advise you on how to choose the right mortgage, and even keep up with your home maintenance.

Sandra O’Connor

SANDRA O’CONNOR Editor Secaucus Real Estate Today Magazine

SEC AUCUS REAL ESTATE TODAY | JAN/FEB 2016

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6 Questions And Answers About Town Homes And Condominiums by Sandra O’Connor

There’s a lot of information about condominiums and town houses that most people won’t find out about until they start living in one. Here’s how to find out if a town home or condo is right for you.

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residents, there will be an interest charge applied to all owners through the homeowners association. The association uses these fees to maintain those areas, as well as make repairs on the entire development.

WHAT IS A TOWN HOUSE? A town house, or town home, was actually called a row house in decades previous. Town houses are located in a small lot, and are connected to other similar-looking units by a wall. If you are buying rather than renting, the title to the land the unit is on belongs to you. If there are common areas shared amongst

WHAT ARE THE FEATURES OF A TOWN HOME? Compared to your average singlefamily home, town houses are actually not too far away, although they are a definite step up.

They are almost always at least two floors, as a single-floor townhouse is typically known as a villa. Town houses come with their own parking spaces directly in front of their unit, as well as amenities like tennis courts, community pools, and exercise areas. Because the association handles maintenance and repairs, owners of

ith the advent of construction, no longer are properties simply either commercial buildings or singlefamily homes. While apartments are a classic renter ’s option, what about multifamily housing options for buyers? The following will answer your questions as to two common multifamily housing styles: the town house and the condominium.

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Property insurance and liability insurance are both tremendously important for all homeowners. Learn if your home has been properly insured starting today.

CLICK HERE TO LEARN MORE.

town homes often are able to go without the typical worries of single-family home owners.

Town homes are known for their particularly low-maintenance needs, as there is no grass to mow, fence to repair, or yard to take care of in general. And of course, one of the factors that tends to draw buyers in are town home prices: in spite of the local amenities that they often come with, town homes are frequently more affordable than the average single-family home.

WHAT ARE POTENTIAL TOWN HOUSE ISSUES? One thing to keep in mind if you’re considering purchasing a town house is that you’ll be part of the homeowners association

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whether you like it or not, and the association will require that all members pay a due that is either annual, biannual, quarterly, or even monthly.

You pay for the common areas regardless of if you are actually going to use them.

When buying a town home, you’ll need to ask yourself whether the unit leaves you with room to grow, particularly if you have a family. And most importantly, find out for sure if the unit you’re considering actually is a town house. Your purchase should bring you ownership of the land the unit is on, but if not, it’s more than likely a two-story version of our next multifamily housing option: the condominium.

WHAT IS A CONDOMINIUM? A condominium, often called a condo for short, is a housing option that has risen in popularity over the years, thanks to the increasing prices of land and single-family homes. When you buy a condo, in order to take possession of the deed you’ll need a mortgage and money to pay the property tax, charge for access to the common areas, and the maintenance fee the association will be collecting each month.

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More often than not, condos are layered on top of one another, although there are two-floored versions that even have accompanying parking space, just like a town home. It’s hard to tell the difference between condos and apartments,

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and that’s because the main distinction is ownership: an apartment is only ever for rent.

WHAT ARE CONDOMINIUM AMENITIES AND RESTRICTIONS? When you buy a condo, everything within the boundaries of your contract comes into your possession. (This does not, however, mean that you may arrive and begin knocking down walls, as there are specific restrictions that apply to what you may and may not do to or within your p ro p e r t y. ) T h e re s t o f t h e development is shared with the remaining owners. The space shared amongst condo owners is commonly the pool, spa, roof, sidewalk, exercise room, etc.

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All of the condominiums are governed by a board of directors, and you automatically get a vote in all of their major decisions. The homeowners

a s s o c i a t i o n t a ke s c a re o f re p a i r s , m a i n t e n a n c e , a n d cleaning, but the operating and maintenance charges are split among all of the owners in the building. These fees are scaled to the size of the unit you own.

owners will leave you with less privacy than you would normally have in a home for a single family, and on top of that, condos typically take longer to re-sell than a standard home would.

ARE THERE CONDOMINIUM DISADVANTAGES? While the main appeal of c o n d o m i n i u m s i s t h e l ow a m o u n t o f ex t e r i o r maintenance, as well as local amenities l i ke t e n n i s c o u r t s , p o o l s , playgrounds and more, there are definite disadvantages to condominium ownership that should be considered prior to purchase. You will be obligated to pay association fees each month. You can also expect there to be restrictions on what you can and can’t do with your property, and you will share a wall, ceiling, and floor with your neighbors. The proximity you have to your fellow condo

When it comes to buying a new home, whether you are on your own, have a significant other, or an entire family, there are a variety of options before you as far as housing styles go. If you would like to avoid handling the maintenance that comes along with a standard singlefamily home, consider a town home or a condominium. While both have pros and cons, no housing situation is perfect. By getting informed and keeping a realistic outlook, you should be able to decide on a housing option that’s right for you.

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6 TIPS ON HOW TO SURVIVE WITHOUT A REAL ESTATE AGENT Most people will tell you to hire a real estate agent if you want to sell your house, but there are alternatives. If you’re looking to save the money you would have spent on a commission, look no further. by Daniel Pratt 10

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ost people will suggest that you use a real estate agent to help you get your home sold. A competent agent is going to be in a far better position to sell your home than you are, from interacting with potential buyers, to merchandising your property, and dealing with paperwork. But in a market where buyers are scarce, it might be a better idea to try selling your home on your own. The following will cover how you can save the money you would have spent on a real estate agent’s commission, as well as increase your luck when it comes to finding a buyer in a difficult market.

THE PERKS OF USING AN AGENT Generally, the most trusted way to get a home sold is to go through a real estate agent. More often than not, your agent will have access to the Multiple Listing Service, which will vastly increase the amount of exposure your property gets. Another benefit of listing with an agent is that they will often work with others in the area, further increasing your home’s exposure. But not all agents are experienced enough, or even interested, in getting their peers interested in your home. Regardless, working alongside an agent is still the most reliable method.

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KNOWING WHEN TO SELL BY YOURSELF A suggestion would be to attempt to sell your

If you are a home owner, you should know that home maintenance is important. Maintenance keeps your home livable and also protects the value of your home.

CLICK HERE TO LEARN MORE.

home on your own for a month, and if that doesn’t work, list with an agent. A normal listing period with a real estate agent is three months, but what happens if no buyer takes interest in your property during that period? There have been sellers who listed their home for six months to a year, and were never approached by anyone. What’s a homeowner to do when that happens? Do you cross your fingers and keep listing?

Is it time to take matters into your own hands? Or is there another option?

USING A LOW COMMISSION AGENT Before you give up on using a real estate agent entirely, try a low commission agent.

One of these will allow you to take advantage of getting your home in the Multiple Listing Service (MLS) database, but you’re still working on your own for the most part, and won’t have to pay a commission to the agent whenever you sell. A low commission agent will help you with the paperwork you need to complete, perform open houses and tours, help you with financing and advertising, and of course, list your home on MLS.

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BEWARE CURRENT SCAMS

The tech scam involves an unnamed person calling from tech support at Google, Windows, AOL or some other company.

They claim their system has detected unusual activity on your computer and need you to turn on the computer and follow some simple steps. They are the intruder and giving them access will give them control of your device for their purposes, like draining your bank account.

Free coupons from major companies. This scam asks you to click and provide information to obtain discount coupons for products. Do not provide any personal data and do not respond. The scam allows the company to place malware on your computer for their use.

Chip credit cards are now in vogue. A caller claims to be from a major credit card firm and asks you to verify their records so they can send you a new chip card.

This is a con, hang up.

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THE DISADVANTAGE OF LOW COMMISSION AGENTS While it may seem that a low commission agent does just about everything a regular agent does, that’s actually not the case. When it comes to advertising, you’re actually going to have to pay for any work that is done, such as newspaper ads. And while the agent will provide the sign that goes in your front yard, during open houses you’re going to be on your own, the same way you will be with financing (most agents will simply give you a list of lenders and wish you well). And while you’ll get a listing on MLS, don’t expect much effort more than that to be put into spreading the word about your house. Essentially, when you hire a low commission agent, you are getting exactly what you pay for.

When it comes to getting your home sold, while it is traditional to use a standard real estate agent, you may find yourself having trouble discovering a buyer that way. Before you decide to completely forgo the help of a professional, consider the options of a low commission or fixed fee agent. Worse comes to worst, however, there are plenty of people who have successfully sold their homes on their own, and there is nothing to say that you can’t also be one of them.

LOW COMMISSION COSTS The amount of money you will pay for a low commission agent is situational. Traditionally, a regular agent will receive 6 to 7 percent of your home’s proceeds, but a low commission agent could only charge 2 to 3. However, while you may only pay 3 percent to them upon the sale of your home, if you want to be listed on MLS, you could end up having to pay another 3 percent to the broker. While many commissions are flexible, there are some that will refuse to work for anything other than their set rate.

In such instances, your two options are to pay the fee or pick another agent.

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FIXED FEE AGENTS Another option for sellers is to hire a fixed fee agent, who will put a sign in your front yard and list your home on the agreement of receiving a set fixed rate. Typically, this fee doesn’t amount to more than $500. There is also an Exclusive Agency agreement for you to sign, which means that in the case that you sell your home on your own, you don’t pay the commission. If you find a buyer on your own, the agent will help you figure out a sales agreement, and if they are approached by someone interested in your home, they will give the prospective buyer a tour.

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HOW TO RECEIVE AN OFFER ON YOUR HOME IN 5 STEPS by Sandra O’Connor

If you’re looking to receive an offer on your home, you may be going about it wrong. Here’s what you should do to expedite the process.

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fter you, and possibly the real estate agent you are working with, have gotten your home up on the market, the next part of the home selling process is to receive an offer from a potential buyer. There are no standard real estate contracts used during purchases, and there are terms that differ from state to state and region to region. The contract you are offered will depend on the real estate agent or lawyer employed by your buyer.

AVOIDING BAD OFFERS Offers that haven’t had much thought put into them can worsen negotiations. Rather than the two of you putting your heads together to come up with a way to compromise, you and your buyer can end up distracted by issues that it’s still too early to solve because of a poorly-worded contract. Worse still are situations where hurt feelings come into play, whether on the part of the seller or the buyer. This is why good offers make use of facts. Facts build up a negotiation; emotions can make the situation tense and inefficient.

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RECOGNIZING THE GOOD OFFERS There are characteristics that a good offer will have that will allow you to recognize whether the potential buyer has good intentions. A smart buyer is going to use the price range of all of the other houses that have recently sold that were comparable to yours in order to come up with their offer. They’ll use your home’s size, age, location, and condition. Your ideal buyer will also already have been preapproved for a mortgage, meaning they are already in a financial position to buy your home. And unless your home has obvious issues, or you have already had an inspection on your property, neither you nor your buyer will know if any corrective work needs to be done. This means that your buyer shouldn’t be asking for funds for corrective work until after the inspection.

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Are you currently looking for the home of your dreams?

If so, learn the best way to go about searching for your dream home so that you can find it quickly!

CLICK HERE TO LEARN MORE.

ACCEPTING AN OFFER If you don’t have any issues with the offer that your buyer has made, all that’s left for you to do then is sign the contract. Once you’ve signed, the contract becomes ratified, or accepted. Just because the offer has been signed, however, does not mean that you are handing over your house. Even when a contract has been ratified, there are so many conditional clauses, known as contingencies, that the deal could still fall apart later down the road.

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UNDERSTANDING CONTINGENCIES Buyers will typically have clauses in their contract known as contingencies. These are a kind of built-in escape hatch, so that if the buyer runs into a mishap later on, they aren’t still forced to purchase your home. Two common contingencies are related to property inspections and financing. A buyer is more than likely going to want to know the precise condition your home is in before purchasing, and if issues are discovered within it, such as termites in the woodwork, they’re more than likely going to back out of the transaction. With financing, that contingency usually is built in to give the owner an out if they are unable to obtain a mortgage.

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ACCEPTING CONTINGENCIES The more contingencies there are, the more ways a buyer has to potentially wriggle their way out of a sale. While this generates a kind of security for them, it leaves a lot of uncertainty in the transaction for you. But allowing for a contingency-filled contract boosts the morale of your buyer. While they are having your home inspected, they’ll know that you don’t intend to run off and sell the property to someone else. And if your buyer makes an earnest money deposit (money to prove that they’re serious about buying the property), and then pays to have inspections made, you’ll know that they’re serious, and won’t have to worry as much about the contingencies.

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Once you’ve signed the contract and inspections have been made, things get easier. Prior to accepting a deal, however, make sure that it is the absolute best thing for you, and that you aren’t caving to the other buyer’s wishes. If the offer price isn’t to your taste, don’t be afraid to attempt a counter offer.

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6 PRINCIPLES OF BUYING

THE RIGHT CONDO FOR YOU by Daniel Pratt

Are you wondering if a condo is right for you? If so, you need to do due diligence before you sign anything or you may end up stuck with a deal that is no good at all.

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f you are considering whether a move to a condo may be the right move for you at this point in your life, there are many things that you should consider. There are some red flags to look out for like extremely high prices and repair costs. The more you know up front the better you will able to decide exactly what comprises a good deal. The following principles will help you to make the right decision regarding any condo you are considering purchasing.

DEVELOPMENT COMPARISON Before you decide on the condominium that’s right for you, it’s likely that you will end up with a few different developments that you’ll need to compare. To do that, you’ll need to compare and contrast four different things: the operating costs of each association, the amount of money each group reserves, the regulatory documents for each development, and the fine print in everything you will have to sign. These four things will allow you to

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catch any red flags, like unexpected pricing hikes.

Should you discover something that doesn’t seem right to you, don’t be afraid to ask questions.

COST ALLOCATIONS Be on the lookout for extraordinary costs in areas for repairs, such as electrical, plumbing, water damage, roof repairs, etc. If last year a development allocated $5,000 for minor plumbing repairs within the building, but actually

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The truth is, you don’t have to have a real estate agent to sell your house. There are alternatives that can save you quite a bit of money.

CLICK HERE TO LEARN MORE.

ended up spending $25,000, that is indicative of a huge problem.

While it could have been a onetime thing, it could be a sign that there is something wrong with the entire development, particularly if the building is aged.

BUDGET PROJECTIONS When you discover records of an association making a projection for a certain amount of money to go to a specific cause (for example, roof repair), but spending several times that amount, a red flag should definitely go up. This could mean that the board is actually creating their budget under unrealistic terms, or that something within the building is failing, regardless of how it looks to be functioning.

A good example of this is paint

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that appears to be fine, but is no longer preventing against water damage. You should also consider whether the association is made up of people who are adequate for their positions, as many members might simply be volunteers with no experience working with building system, which could spell disaster for condo owners within the development.

THE AMOUNT OF FUNDING Once you have examined the operating costs of an association, you should then check out the current level of funding.

All of the condo owners in the development will be splitting the costs of maintenance, repairs, and any replacements that need to be made. The board is required

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to report on these funds. Most states have specific requirements regarding these reserves, and some governing documents can be very particular. Roof repair, siding, and paint jobs are common tasks that need to be performed in condos, but it’s not uncommon for termites, dry rot, or any other issues to be discovered. If these issues, which are not visible to the naked eye, are not taken into consideration, reserves within the association could end up falling short.

THE FINE PRINT Yo u m a y r e c e i v e paperwork that announces that repair work will be needed on the building soon.

Since all owners split the cost of maintenance, this more than

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likely means that a special assessment is on the way, meaning that the next assessment (or several) will be at a higher rate than normal. If the information isn’t clear, don’t be afraid to ask questions.

It’s important that you read the fine print, as there are often hidden key phrases stashed away in the “comments” section of the document. Read these documents closely. If there is no mention of a reserve, or one is mentioned but there is no money in it, be wary.

DOCUMENT COMPARISON You should compare the governing documents to determine what is fixed by whom. If you have any questions, or the information is unclear, seek out an association member. Different associations vary in how they perform their business: in some developments, the cost of water might be split, while in others, all owners might have their own meter.

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Some associations might designate specific owners as responsible for maintaining and/or replacing doors, winters, heaters, air conditioners, and so on.

There should be sections in the governing documents pertaining to maintenance, assessments, and uses.

Not being able to find them doesn’t bode well; it means the information is probably slipped in somewhere else, leaving you with the possibility of having to hire a lawyer just to find them.

As you can see, there truly are many considerations that you should take into account if you are attempting to determine whether a particular condominium is the right place for you. Be sure to examine rates, read all of the fine print, take a good long look at any relevant condominium association and to compare the governments to see exactly who is responsible for what. That is the best way to ensure that you make the best decision regarding the potential purchase of a condo.

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AN 8-PART BEGINNER’S GUIDE TO CHOOSING THE RIGHT MORTGAGE by Sandra O’Connor

Selecting a mortgage can be a complicated process. Educate yourself about the types of mortgages and what to look for in a mortgage; it will make the process much easier.

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hoosing the right mortgage can often make all the difference for a homeowner. It is essential that you understand the terms and conditions before you sign into any mortgage contract. Learn the different types of mortgages and some very important things that you should keep in mind while selecting the right mortgage for your specific needs and requirements.

SELECTING A MORTGAGE OPTION When it comes to buying your new home, you’re going to have to select an option for your mortgage. There are certain factors that you should keep in mind as you make this choice, especially if you plan on moving into an even better house after this one. There are also a few questions that you’ll need to have the answers to in order to choose correctly. The following will guide you into making the best decision on how to set up your mortgage.

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MORTGAGE TYPE 1: FIXED-RATE LOAN The title is pretty straight-forward: the fixed rate loan has an interest rate that is “fixed,” or never changes as time passes. Once you take out the loan, the interest rate remains the same for either 15 or 30 years, however long you decide

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that your term will be. Because the interest rate is constant, so is your payment. The fixed rate loan is one of the most commonly selected plans.

MORTGAGE TYPE 2: ADJUSTABLE-RATE MORTGAGE This type, known as ARM for short, will change over the period of your term. Adjustments typically occur every year or 6 months, but can become as frequent as every 30 days. The reasons that these fluctuations occur is because of the rate of the economy. Whenever the interest rate changes, so does your payment.

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If you have a very reliable form of income, and smart spending habits, this plan might be for you.

Alternatively, this plan could be liable to sink your finances if payments get to be so high that you start defaulting.

MORTGAGE TYPE 3: HYBRID LOANS The differences between hybrid loans contain features from all fixed rate loans and/or adjustable-rate loans. They are sometimes

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called intermediate ARMs. This type of mortgage loan begins just like the fixed rate loan, but only lasts for a specific amount of years, whether three, five, seven or ten.

Then, the loan adapts to an adjustable-rate, typically changing every half year or annually. There is also a subset of this loan called the interest only loan, which starts out with very low payments because you are only paying interest. However, once it comes time to begin paying the principal, the payments you are making will become much larger.

CAN YOU HANDLE THE RISK? When you set out to decide between your mortgage options, that is the first thing you should ask yourself. Are you willing, and if then, are you able, to shoulder the weight of the more complicated options? It can be risky to take on an adjustable rate. While it typically has a lower interest rate than a fixed loan does, your monthly payment will potentially go up every time the market does. If your finances aren’t padded properly in anticipation of this, you could end up in seriously hot water.

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WHAT ARE THE ADJUSTMENT CAPS? The two important things to check with an adjustable-rate mortgage is the periodic and life of loan adjustment cap. The periodic adjustment cap is the maximum amount that a rate would be able to change with an adjustment, and a life of loan adjustment cap is the highest interest rate allowed on the loan, period. It’s best to know these beforehand so that you’re aware of just how high these payments can go. Plan for the worst: if the maximum monthly payment would splinter your finances, you should definitely avoid an adjustablerate mortgage.

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WHAT WILL YOUR TERM BE? The amount of time you plan on spending in your house also has an effect on which type of mortgage you should choose. If you plan to be off of the property within the next 5-7 years, a hybrid loan would be pretty applicable, as the starting interest rate of a hybrid loan is even lower than that of the fixed rate loan, saving you money if you get out before the increase hits. But if you intend on being

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in your home for longer than that time, the fixed rate mortgage makes the most sense for you.

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DECIDING ON YOUR MORTGAGE PLAN Examining your finances carefully is key in selecting the best kind of mortgage for you. Taking a good look at the state of your savings, as well as the nature of the aforementioned mortgages will help you see which plans would overwhelm you, as well as which ones you could manage to make work. Don’t feel pressured to choose a specific kind of mortgage, no matter what anyone tells you; do the math, and pick what’s right for you.

Now that you have all of this information at your disposal, you are ready to make an informed decision when it comes to your mortgage. Owning a home is an excellent investment and with the right mortgage, with the right terms, it can be an amazing financial benefit. Be sure that you carefully examine the terms before selecting a mortgage to ensure that you are happy with your decision.

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

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8 Tips On How To Find

The Right Loan Officer For The Job by Daniel Pratt

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Finding an experienced and professional loan officer can make a very big difference. Learn how to sift through the options to find the right loan officer to work with.

f you are seeking a loan, it is important t h a t y o u s e l e c t a n ex p e r i e n c e d a n d p ro f e s s i o n a l l o a n o f f i c e r . C h o o s i n g the right loan officer can make all the difference between you ending up with a loan that is good for you and a loan that is basically just good for the loan officer ’s paycheck. The following information will help you to find a great loan officer to work with so you can increase your likelihood of obtaining a loan you are satisfied with.

ENSURE THAT YOUR LOAN OFFICER HAS A GOOD REPUTATION When looking for a loan, it is important to ensure that the loan officer you are working

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w i t h h a s a g o o d re p u t a t i o n f o r h e l p i n g others. Consumers that have worked to find a reputable loan company can still encounter problems if the loan officer they are working with is not working for the benefit of the consumer. The best loan companies available to consumers can have their reputations hurt by the poor work of a loan officer that is not up to par.

LOOK FOR A LOAN OFFICER WITH GOOD RATINGS You can give a top rating to a loan officer who can do a thorough appraisal and clarify all your doubts. Such a loan officer will certainly enjoy a huge reputation in the

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SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

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society for long and make available perfect loan plans. More importantly, this officer will be an automatic referral choice. These loan officers also don’t differentiate between loans depending upon on their volume and also make it a practice to return phone calls. It’s always wise to ask your real estate agent for a referral because you don’t want to meet a loan officer with poor credentials. When you tie up with a good loan officer you can remain confident of getting the desired results.

BAD LOAN OFFICERS ARE BAD FOR BANKS AND MORTGAGE COMPANIES TOO Banks or mortgage companies having even one inefficient loan officer often find themselves in a lot of trouble. But it’s so unfortunate that such bad loan officers could not be spotted by the mortgage firms before the former has played the spoil sport. If not, rest assured they will hold off until they have your letter of pre-approval before they waste their time on

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you. Asking your agent to get you information about loan officers they ’ve worked with in the past is a good idea.

YOUR AGENT WILL NOT LIKELY RECOMMEND A BAD LOAN OFFICER It is a safe assumption that your agent won’t be giving you information for a poor performing loan agent. Often times their list is short. Home-buyers are often curious if they get a lesser rate for referrals. Will a loan office end up paying that agent for the referral? Of course not. This isn’t supposed to be the case.

There is no allowance for a referral fee by law. The Real Estate Settlement Procedures Act of 1986 (RESPA) states that a fee collected during any transaction in real estate will need to be disclosed. Loan officers generate business through many sources. Some will make sales calls to different financial planners and accountants if the client is looking for help with their mortgage.

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WHERE CAN YOU FIND A LOAN OFFICER? Some loan officers will ask help from attorneys or from their contact list of friends and relatives or just about any other group of people who might have leads. There are ads from such loan officers in papers, online and on TV and radio. Mortgage companies get their business from many different places, so be sure you find out how long the agent you’re dealing with has been in the business. An agent with little experience in the business and with low closing numbers won’t have a good referral. If you have the top notch agent in town, you should know they are going to work with top notch loan officers. A real estate agent’s time is spent selling homes, not working on finding customer financing.

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REAL ESTATE OFFICERS PREFER EXPERIENCED LOAN OFFICERS Experienced and efficient loan officers are always preferred by leading real estate agents for the simple reason that these officers have a broad variety of products to offer at highly c o m p e t i t i v e ra t e s . T h a t ’s h ow t o p loan officers go on to earn as high as $200,000 annually despite restricting their business dealings with just three agents. Such loan officers pay top priority to your interests and offer you utmost satisfaction.

WHY ARE RECOMMENDATIONS FROM AGENTS USUALLY RELIABLE? T h e b e s t l o a n o f f i c e r s k n ow h ow important it is not to make a mistake in a transaction. If they do, they may never get another referral from that agent again. If the officer only has a few agents that they do business with, they ’ll be risking a big chunk of their livelihood if they alienate even one agent. Plus, the best loan officers know that word of mouth is a powerful thing.

Having a good relationship with one agent may very well open the door to a new relationship with another agent, who is aware of their relationship with others.

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REAL ESTATE AGENTS KNOW THE TOP PERFORMING LOAN OFFICERS A loan officer at the top of their game and able to make the right moves can make a substantial amount of money. If they are one that often makes mistakes and has troubles with mortgage loans, they may only handle a few loans during the month. Though the money is solid, it isn’t anywhere near what they could be pulling in. If your real estate agent is one of the top players in the game, you’ll get the business card from a local loan officer that should be kept as a possible mortgage prospect.

As you can see, there is a lot you can do to ensure that you end up working with an experienced and professional loan officer. Remember that if you end up working with a loan officer who makes mistakes, you may quite literally be paying for those mistakes for years to come. So be sure to put significant effort into your search for a loan officer. With your real estate agent’s assistance, you should be able to find the right loan officer to work with.

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8 TIPS TO HELP YOU SURVIVE REFINANCING

If you have been giving serious thought to refinancing your home loan, how can you decide?

Here’s how you can determine whether it is time for you to refinance your home. by Sandra O’Connor

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f you are thinking about refinancing your home loan, there is much to consider.

From the 2 percent rule to no-cost refis, there are many terms that are tossed around that you may be unfamiliar with. By familiarizing yourself with the common terminology and standards regarding refinancing, you can make more informed decisions as to whether refinancing is the right choice for you right now.

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REFINANCING MAY OCCUR AT ANY TIME Though it may be the last thing in your mind to refinance early in on your home purchase, time isn’t necessarily the important factor. Given how prices have risen so dramatically lately, if you refi right away, you may be able to get out some equity in cash. For the case of some owners, the decision is an easy one. You need to refi as soon as possible to lower your monthly payment or get money out. This can at times be a foolish decision, so weigh the consequences carefully. Many homeowners are considering refinancing their homes in order to save possibly thousands of dollars on high interest rates.

The 2 Percent Rule?

A popular refinancing rule that many homeowners have kept 26

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in mind for many years is the 2 percent rule. This is the rule that advises homeowners to wait for interest rates to drop by 2 percent before considering refinancing. Another variable that homeowners keep in mind before making any refinancing decisions is to refinance if money is needed immediately.

Also, if homeowners credit ratings have dropped since purchasing their home, it is wise to refinance when qualification for a refinancing option is possible. The fees that were associated with a refinance used to be a deterrent. Now, consumers of these loans are no longer required to pay two percent. In fact, no-cost refis are quite common in the mortgage market. Compared to back then, the price of refinancing is far lower than it once was.

A HIGHER RATE MAY ELIMINATE COSTS If you are willing to agree to a somewhat higher rate, you can eliminate all costs in many cases. Under these circumstances, it’s smart to take advantage of a refi anytime you can get a rate which will let you pay a smaller monthly amount without adding to the overall total balance. Just make sure that you don’t incur any extra charges. Say that you have a

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mortgage of $100,000 at seven percent and you pay $665 every month. It might be at this point that you see that you can refinance, reducing the interest to 6 percent and payments to $600 monthly. Of course, this comes with a price: $2500 closing costs. You can, however, ask the lender for a no cost plan, which would allow you to waive any extra fees if you take an interest rate of 6.375%.

CONSIDER A NO-COST REFI A new loan could adjust your payments to $624 per month, which would save around $41 from your regular payments, but will be $24 more than what it would have been if you’d paid for closing. The best thing to do in most cases is to opt for a no-cost refi. As interest rates fell and no-cost refi’s became more popular, homeowners were refinancing multiple times per year.

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So that excessive refinancing is discouraged, and there are lending companies who are asking for a penalty when there is a fast turnaround. The provision says that should the borrower refinance out the loan they’ve just received within a period

that could be somewhere between six to thirty-six months, the penalty might be at least $500.

SOME LENDERS DO NOT CHARGE THIS PENALTY AT ALL Naturally you can find lenders who don’t charge this penalty when the market is competitive and you can find them by shopping around. And you don’t want repeat refinancing to negatively impact your credit rating, either, but that shouldn’t happen if you wait for at least six months each time. While interest rates rise, refinancing starts to sound like a bad idea.

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It’s obvious that there’s no monetary benefits when going from a 5.2 percent mortgage to a 7.7 percent mortgage. Another aspect to consider when refinancing is the fact that you will be taking money out of your property’s equity. Many advisors do not recommend doing this unless you have good reason to do so.

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HOW TO DECIDE WHETHER TO REFINANCE Overall, it’s up to you to decide what makes the most sense. There are a few bad ideas as far as how to get quick money. One of those bad ideas is to take money from your property for a frivolous purpose like a car or vacation. How to determine a good or bad use for the money is generally based around time. Mortgage’s are longterm debts that range between 15 and 30 years.

However, purchasing a car is relatively short term and in 5 to 7 years, you’ll probably be ready for a new one.

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SHOULD YOU MAKE A PURCHASE FROM A REFI? It is not a wise idea to make a purchase from a refi, because you will be repaying for the next 15-30 years and that is even when you no longer have the purchase. Making short-term purchases and paying for them later is not recommended.

One exception to that rule is home improvement.

You can take money out of your equity for that and have it add to the value of the home and add to your equity in the home depending on what is improved and how it is improved.

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HOME IMPROVEMENT MAY NOT INCREASE YOUR PROPERTY VALUE While it is important to maintain the house from time to time, going overboard in the process of renovation and redecoration sends all the wrong signals to the neighbors. Most people however, tend to do home improvements when the economy is good and prices of homes are on the rise. Of course, as you notice them falling, it doesn’t necessarily seem worthwhile given the fact your house will probably be worth less tomorrow than it was today. Try to remember that on average, a home improvement won’t give back in return what you may have spent to do it. Often except for a kitchen or bathroom type renovation, a home improvement will cost far more than what it will add to your property value.

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As you can see, there are many reasons why refinancing may or may not be a good idea for you. If you are still unsure what to do, you should consider enlisting the assistance of a real estate professional. With their help, you can take a look at the big picture and determine whether or not refinancing right now is in your best interest.

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YOUR BEGINNER’S GUIDE TO

by Daniel Pratt

Property insurance and liability insurance are both tremendously important for all homeowners. Learn whether or not your home has been properly insured starting today.

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s a homeowner, you owe it to yourself to have both property insurance and liability insurance. Your liability insurance may very well save you your home some day and your property insurance can help you to rebuild or entirely replace your home if a disaster or emergency should occur. The following information will help you to start thinking about these important issues today.

WHY LIABILITY INSURANCE IS SO IMPORTANT Your negligence can cost you in legal claims so liability insurance protects you against those claims. It may seem like a luxury but may be a necessity in today’s world. Personal injury attorneys are becoming expertly astute at finding new ways to justify lawsuits against property owners. The maximum coverage ranges from $100,000 to $1 million that will be paid to any alleged negligence.

Larger amounts of liability insurance (normally more than $1 million) are sold under what is known as umbrella insurance. Many liability insurance policies will include medical coverage. The limits may be modest, but the purpose is when someone is injured on your property, though you may not be negligent, the medical bills will be taken care of.

WHAT PROPERTY INSURANCE COVERS Should someone accidentally stumble on the sidewalk for no reason, but cut their hand, the medical coverage would pay to treat the injury until a specific amount was reached. Your property can be damaged in different ways and if you think that the loss resulting SEC AUCUS REAL ESTATE TODAY | JAN/FEB 2016

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from such damages will be beyond your ability to bear, you must buy property insurance. But don’t think that the insurance company will pay whatever amount you claim. There is always a ceiling on the maximum amount the insurance company will pay to cover the damages.

Sometimes, you will be required to bear a small portion of the loss yourself and this amount is called the deductible. In the past, property insurance generally meant fire insurance but now it includes other risks also to which a property is prone to. The property owner can claim compensation for any damage caused to the property by natural forces or by people other than the owner himself.

MORTGAGES DICTATE THE MINIMUM INSURANCE LEVEL When there’s a mortgage, its amount will tell you what the minimum amount of insurance will be. You need to have enough so that your building can be replaced if there’s a complete loss. The land will remain, but be certain you are covering every loss, although there’s no one guideline for figuring that out. That’s especially true with liability coverage because it’s hard to decide what is sufficient to give you protection in the event 30

of any potential lawsuit that could arise. It’s an easier task to figure out the maximum potential loss you might incur when you’re dealing with property coverage.

WHY LIABILITY IS SO HARD TO DETERMINE Should the building be totally destroyed, your loss could be covered with replacement cost or with the amount of the investment you’ve already made. It’s simple to figure what these amounts are, but liability is much harder to determine because of how uncertain a lawsuit can be. This will need to be discussed fully with both your insurance provider and attorney.

More likely than not, your insurance agent will suggest purchasing an umbrella policy that will give additional coverage for liability. Your attorney may possibly suggest extra or a different coverage, or that you form a corporation in order to keep your assets safe. With rental income property, you’ll need a non owner occupied finance program.

AVOID GETTING INTO A NEGATIVE CASH FLOW SITUATION There are lenders that will want nothing to do with lending in regards to purchases or refinancing. There are others that have created programs specifically targeted at getting your business. It makes sense to borrow but you should do it carefully ensuring that the interest rate is the least and also that the perm period is adequately long. It is important that you are careful in determining the monthly payouts because you should not end up with a negative cash flow. Suppose your monthly installment

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

is $1000 but you can only realize $800 by way of rent: you now have a negative cash flow situation.

situation until you examine different offers. Whether your loan was from a mortgage company or a bank is not a big deal.

ENSURE YOUR FINANCING ALLOWS FOR A POSITIVE CASH FLOW If there is a monthly cash flow that is negative $200, the financing you choose should allow for a positive cash flow. You will need to make a larger down payment in order to borrow less. The monthly payment amount is determined by how many payments will be made.

Landlords for the most part look to do 30 year, 360 month financing.

YOUR LOAN MAY BE SOLD TO ANOTHER PARTY Most mortgage companies and banks sell the loan shortly after acquisition. Some sell them instantly and others will pull several mortgages together and sell them as a bundle. When this occurs your original terms cannot be changed. You should secure the very best interest rate and terms for your loan to be a successful real estate investor. You need to find a loan that is cost effective. The deal can come from a bank or a mortgage company. Local banks may be better when trying to purchase an unusual property. Any property featuring greater than four rental units or one that could be considered as a commercial property may be of more interest to community lenders as opposed to the out of area ones.

There may be an origination fee or a discount fee and will need to be fully examined with financing offers.

Generally, the origination fee will be 1 percent of the loan total. Discount fees are used to buy down interest rates. An example would be when lenders offer 6.5 percent interest on a loan, there would be a 6 percent interest rate with a 1 percent discount fee.

As you can see, there really are a lot of considerations you must take into account while you are setting up your home financing and your insurance policies.

Doing a little legwork at the beginning is the best way to ensure that you end up with a great deal for your home loan. You should also take care when setting up your insurance policies so that they can do what they were designed to do - protect you from potential financial ruin.

IS PAYING POINTS A GOOD OPTION FOR YOU? One percent is always equal to one point. If the amount loaned by the lender is 2 percent, then that would be two points. Occasionally, it is sensible to pay points, providing you will stay in the property and maintain financing. Usually, you will need to be there for two to four years before paying points is a good option.

But, you won’t know which options will be best for your

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YOUR 6-PART BEGINNER’S GUIDE

FOR NEGOTIATING YOUR HOUSE SALE by Sandra O’Connor

Negotiating the sale of your home can be a challenge in today’s economic uncertainty.

These tips will show you how to get max proceeds from your home.

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egotiating prices isn’t a very strong part of America’s culture. When you’re in the mall, or in a restaurant, you’re content with paying the listed price--either that, or you just don’t order. But when it comes to selling homes, things are different. People are going to come at you with offers far below your ideal asking price. How do you combat this?

Just knowing what your home is worth won’t convince a buyer that’s the price they should pay for your property. You’re going to need to know how to talk your way into getting the maximum proceeds out of your home.

THERE IS NO QUICK-FIT STRATEGY There is no negotiating strategy that is guaranteed to work on whoever it is that has taken an interest in your house. The key is to be able to judge the situation for yourself, as each one is different, and make an adjustment based on that. Factors that can make a difference are whether you’re negotiating from a strong position or a weak one, how motivated the seller and buyer are, and whether the property is well-priced. But the negotiating process doesn’t have to be hard.

With the application of a few simple processes, you can walk away with a price that will have both you and your buyer smiling.

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Applying for home financing online is a choice that many people are choosing today. You can make the process work well for you if you follow this advice.

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THE TROUBLE WITH EMOTIONS Both the act of selling and buying a house is an emotional ordeal. Sellers know that they need a certain amount of money from their sale in order to be able to afford their next home, and buyers are afraid of shelling out too much money. There are a lot of emotions on both sides of the table: in essence, the two of you are negotiating the price of shelter, but there are also other considerations to be kept in mind.

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Your ego is more than likely very attached to your home, and if the buyer becomes critical of your property in order to lower your price, you could end up offended. Likewise, the large sum of money your buyer is being asked for is likely to set them on edge, and if there are in life changes in either of your pasts (divorce, a death in the family, or even positive ones like babies on the way and marriages), things could get even more strained.

MANAGING YOUR FEELINGS Even though the market has more than likely seen properties depreciate in value rather than the other way around, you probably want to turn a profit on your home’s value and sell it for more than you originally purchased it. In

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many areas of the United States right now, this is essentially wishful thinking. However, it’s difficult to keep your emotions out of a home that you’ve come to consider as your own, that you have lived in, and more importantly, spent a great deal of money on.

It would be downright impossible to go through the selling process without feeling anything. This leaves you with two options: to either control your emotions, or watch as they control you.

TIPS FOR SUCCESS There are trusted tactics commonly used by negotiators to keep their emotions in check during the sale process. The first is that you must keep the situation in perspective. No one has ever died from a deal gone wrong. If the talk falls apart, you can move on to another potential buyer. That is, however, if you have time on your side. You need to give yourself enough time to sell comfortably, so that you’re not stressing yourself out with a looming deadline.

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And when you’re working out the details of a sale, be comfortable with leaving the deal behind if the two of you can’t agree on a price that suits you.

Keep your options open, as settling for too low of a price is not something you want to do. And finally,

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focusing on what your property is worth according to the market, not how much time and energy went into you renovating the living room three years ago.

RULES TO REMEMBER There are basic guidelines to all negotiations, and by following them, you can help yourself avoid a lot of hardship. The first is that you should never have any of your talks with a potential buyer over the phone, Internet, or any other form of communication that isn’t face-to-face.

You’ll also want to get everything that is agreed on in writing, including taking dated memos of conversations, and meet any deadlines that come along with real estate contracts.

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don’t fly blind: compare your home to others like it on the market. A patient real estate agent is a great help in that regard.

THE BENEFIT OF AN AGENT A real estate agent brings an element to the table during your selling process that you can never obtain: they aren’t you. Remaining objective is much easier for agents, because their life isn’t really affected by your deal. They’ll help keep negotiations straight and to the point,

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You can get through the selling process without ending up in the middle of an emotional minefield.

It can be tough, but by giving yourself enough time to go through buyers, as well as keeping a handle on your emotions, there should be no reason for things to spiral out of control. Having a real estate agent you can trust to lean on is always a big help.

When it comes to selling real estate, a little positivity goes a long way.

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YOUR 10-PART CHECKLIST FOR SUCCESSFULLY SELLING

RENTAL PROPERTY by Daniel Pratt

Are you thinking about selling your rental property? The following is a list of important considerations that you should take into account before selling your property.

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f you own a rental property, you have likely thought about selling it. If that is something you are considering, there are many things you should think about before you sell. Your home many not sell right away, giving you time to take action to boost the value of the property and you may be able to continue to rent the property out until you sell. The following information will help you to

understand some key considerations that should be taken into account before you sell your rental property.

you should take first. Selling rental real estate involves some critical issues that you’ll need to keep in mind.

RENTING OUT PROPERTY If you own your home, you may have rented out your last property. If you are currently considering selling that property, there are some careful considerations

DON’T CONVERT TO INCOME PROPERTY Sometimes a home owner can list their property on the market and go for months without getting any offers. The owner needs to move, but unless they are extremely wealthy, it won’t be possible for them to simply leave that property and move into another home without selling their first home, as that would mean double the mortgage, insurance, and tax payments.

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So, until that home can be sold, a possible alternative would be for that owner to rent out their property while it sits on the market. You should be careful however, as if ending your attempts to try and sell your home while you are renting it out could result in the IRS slapping you with extra taxes.

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THE BENEFIT OF RENTAL PROPERTIES If you’ve got extra cash you’d like to turn into an investment, whether from selling your home, an inheritance, or even your own personal savings, rental real estate could be an excellent option for you. These are good longterm investments, and generally see returns of 9-10%. These returns run SEC AUCUS REAL ESTATE TODAY | JAN/FEB 2016

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high because of the demand for land. As the economy and population continue to grow, so does the price of land, as well as the properties on it.

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USING RENTAL REAL ESTATE FOR RETIREMENT If you’re looking for something that will increase in value over time and leave you with a nice nest egg for your retirement, rental real estate is the way to go. And when you finally sell your property to tap into its equity, the taxes you pay for your capital gain amount to only 15%, which could be less than if you were actually paying for your investment or job income. Rental real estate is also a great way to expand your portfolio.

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BE CAREFUL WHEN SELLING RENTALS There is a distinction that the IRS makes between the property you as a taxpayer live in and the one you are renting out to other people. These could even be in the same building, but there is still a difference.

With this difference comes separate tax implications. For instance, you could be residing within a property that has an attached unit you’ve chosen to rent out.

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This is actually quite common. On your yearly tax return form, you claim depreciation deductions on the portion of your property that is being rented. However, when you sell your property as a whole, the IRS will actually count this as two transactions, and tax them as such: the portion of your profits accounted for by your part of the property, and the profits from the portion you were renting.

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DEFERRING INVESTMENT PROPERTY PROFITS The profits that are taxable on a property you’ve turned into an investment are often much higher than they would be on a property you were living in. The IRS give you the ability to depreciate an investment property while it is in your possession and take that depreciation out of your income taxes each year. While that tax break is a great thing, whatever depreciation you take out must be factored back in when the time comes for you to sell the property.

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

TIMING THE SALE OF YOUR RENTAL If there is a property in your possession that exists purely as an investment, you’ll likely wonder when exactly is a good time to sell it. You may be currently watching the prices of real estate, and taking note of the vacancy rates within your local area to determine what condition the market is currently in.

amount of income that it is pulling in minus how much you need to pay for expenses. A property’s cash flow is essentially its worth. If you buy a four-unit building in a rural area, versus purchasing the same kind of unit in a bustling city, your cash flow will be dramatically higher in the city. You can also increase your cash flow by making upgrades that will allow you to raise the rent of your individual units.

And while there’s no way for certain to determine the future, there are specific factors that you can be on the lookout for. These include the health of the local economy, whether new construction is on the way, an availability of land, the amount of houses for sale, and the health of the real estate market.

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OPPORTUNITIES TO ADD VALUE Before you purchased your rental property, you should have researched the effect that zoning and even rezoning could have on the use of your property.

However, many buyers bypass that step entirely. It’s possible that you may have done the research, but your zoning laws could have changed since you initially made your purchase. When you decide you’d like to sell your property, make sure to research so that you can do all you can to boost its value.

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MAXIMIZING A PROPERTY’S INCOME The cash flow of your rental property is the

MINIMIZING RENTAL EXPENSES Similarly, you’ll be able to keep more money in your pocket by bringing the expenses of your property down. Working with your property years in advance of its sale will give you time to spread out the cost of important upgrades, like insulation and more efficient appliances.

You should also check your insurance, and compare with similar values to see that you’re getting the best deal. By doing these things, you increase your property’s cash flow, which in turn raises its value.

As you can see, the sale of a rental property is not something you should rush into. Waiting a bit before selling your rental property and taking action such as upgrading appliances and making repairs is definitely a good idea. Just be sure to take note of what the market is doing and try to time your sale right so you can get the best deal.

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9 FREQUENTLY ASKED QUESTIONS ON CREDIT AND OBTAINING A MORTGAGE by Sandra O’Connor

Are you currently preparing to apply for a mortgage for your new home? If so, you need to know that your credit score plays an extremely important part in the process.

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f you are preparing to apply for a mortgage, you should know that your credit score is a vital factor. If you do not have a decent credit score, you may have a difficult time obtaining home financing. The following information explains why credit scores are so important to the process of obtaining a mortgage.

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HOW IS CREDIT IMPORTANT WHEN APPLYING FOR A MORTGAGE? When applying for a mortgage, you should know that credit is the most crucial risk factor.

Your payment history and information is evaluated and logged with each purchase, credit application and payment. Understanding what credit does to help or harm you during the loan process is incredibly important. Credit can carry many definitions, but really comes down to two things: ability and willingness.

Ability simply means that you can handle your monthly payments. The term willingness implies that it is a priority for you to pay the money on

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the loan that is due. The term ability refers to whether you have the means to pay the bill on time.

WHAT IS THE WILLINGNESS REQUIREMENT? You have to meet your bills on time every month if you want to meet the willingness requirement. Some people think about paying back loans in the wrong way. Paying back a loan when you get around to it isn’t the same as paying back the loan every month as agreed in the contract. These contracts always spell out how much is owed and when payments need to be paid.

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This becomes what is known as the ‘due date’.

Due dates can be set for any time, but there is a very specific time in which you will need to pay.

If you think paying your money sooner or later will work, you’re dead wrong. It used to be that if you were looking to borrow money or open some kind of credit account, you would need to

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have a face to face meeting with the applicable person.

WHAT DOES THE BANK DO WHEN YOU APPLY? Then apply for the credit and then the bank would contact other people that have carried your credit to be sure you’ve made timely payments. If you had, you’d probably end up getting the loan. You wouldn’t get the mortgage if that didn’t happen or it would be granted at a higher rate of interest.

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However, this was a difficult process for both sides, which is why credit repositories were created. It’s a place to keep records in storage so that information can be accessed. Vendors and financial institutions agree that there will be a central spot where such data is stored.

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HOW DO MOST LENDERS CHECK YOUR CREDIT? Many lenders today are no longer

spending a lot of time processing loan applications and checking all of an applicant’s credit references. Instead, they check credit information by looking up the applicant in a credit system. This allows them to more easily make loan decisions and increases the number of loans they can process. All of this information comes from merchants, who report to the system about a person’s payment history. The three major systems for reporting this information are Equifax, Experian and TransUnion.

WHAT INFORMATION IS IN A CREDIT REPORT? Lots of information related to your credit as well as personal will be in it. Firstly, it will list out the companies from whom you have received finance, your credit limit and also your credit history. Secondly, personal information such as your full name and other relevant information will be included in it. Your name of course could be listed slightly differently

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from company to company depending on their system. If you are John Q Public, you may also be called JQ Public or even John Quincy Public as per their rules. The record of your SSN and any inquires into your credit can be found here.

Any changes to your name will be recorded here too.

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WHAT KIND OF PERSONAL INFORMATION IS CONTAINED IN CREDIT REPORTS? There is a large amount of personal information listed on a credit report as well. Although the report doesn’t include your drivers license number, it does contain any address you’ve used to obtain credit. Something like your drivers license number is not going to show, but if you’ve had a bankruptcy, judgement or tax lien, don’t be surprised if you find that listed on your credit report. They’ll also know who else has pulled your credit report and when.

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WHAT ELSE WILL LENDERS SEE ON YOUR CREDIT REPORT? They’ll see the name of the company that gave you an auto loan last year, for instance, or of any other mortgage companies you’ve applied to. Your credit scores from each bureau will be listed as well as any comments that go along with them. Everyone is provided with a credit account that gives the entire picture such as when your account was opened, your credit limit, your monthly payments, payment dues and your past payment record.

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Usually, payment history is provided for thirty days, sixty days, ninety days and so on. If there is a record of 1x30 late payment, then that means your payment was delayed by a month.

Likewise if there is an entry that says 1x60 days late payment, then it simply means that you have delayed your payment by sixty days.

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

HOW DO CREDIT REPORTS KEEP TRACK OF OUTSTANDING OBLIGATIONS? That payment history will indicate, too, the amount you’ve borrowed, what the payments are and the length of time the account has been in existence. If you’re not making the payment on your car that’s due on the first until the fifth of every month, that’s not thought of as being late even though it might incur a late payment fee. The only thing that gets reported is an overdue payment that’s more than 30 days old.

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You’re probably in good credit standing if you have at least three lines of credit with a solid, on-time payment history over the last two years. If your payments haven’t been made or gone to collection, chances are your credit is poor. If your lines of credit have little history, chances are you probably don’t have any credit at all.

WHAT IS NOT CONTAINED WITHIN A CREDIT REPORT? A credit report collects information on you and your bill paying history. There will

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be nothing listed as far as your race or marital status. Should you apply jointly for your mortgage, your marital status may be included with the report, but that is only due to the fact you applied jointly.

A credit report will have no information on anything over seven years old and will not reflect if Chapter 7 bankruptcy has been filed for with a discharge date over a decade old. If you filed Chapter 13 bankruptcy, that will continue on your credit report seven years after filing.

Your credit report will carry no information in regards to your medical condition or personal life.

Now that you know more about credit reports and how vital your credit score is to obtaining home financing, you should take action. Obtain your credit report yourself so that there are no surprises when your potential lenders run it.

Once you see what is on your credit report, you can take the next step of settling your obligations starting right now. Best of luck!

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8 TIPS ON PURCHASING YOUR FIRST HOME - A GENERAL OVERVIEW by Daniel Pratt

Buying a home can be a highly intimidating prospect for a first time buyer. But it doesn’t have to be! Learn more about the process by reading this helpful information.

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f you are currently contemplating the purchase of your first home, you may be intimidated by the process. However, with the right information, you can make the process much less scary. The following information explains how mortgages work and what the benefits of home ownership are when compared to renting. After you’ve finished reading this you should know for sure whether buying a home is the right choice for you right now.

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Buying A Home Can Be A Tedious Process Buying a home is quite a tedious process; one that involves much more than choosing a house you like and then moving into it! Very few people are cash rich and can buy a home on their own savings. If you are like the average person, you will need to go for a mortgage plan to pay for the house.

Though mortgage lending has been around for quite some time, there are some changes that occur from time to time. It is best to learn everything about it so that you have all the relevant information before making a decision. Mortgaging your property means that you may live in it but it doesn’t really belong to you until you pay it off.

Home Owners Are Responsible For Repairs As a new home owner who has only rented before, you’ll find out quickly that you’re the only one responsible for any problems that arise in your house. You can’t call the landlord’s handyman to fix the kitchen sink.

You’ll be the one going to buy an expensive hot water heater if the old one breaks down leaving you without any hot water.

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This is a very different scenario from when you rent and you can just leave the premises after the contract is up.

What happens if you get tired of living at the place you leased? You can just find another place somewhere on the other side of the city. Renting is the best if you’re looking for the perks of a swimming pool and fitness center without the burden of ownership.

Renters Do Not Have To Pay For Upgrades Renting also allows for upgrades like new carpet, drapes, utility bills being paid, free cable,

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If you have been considering refinancing your home, how can you decide? Here’s how to determine whether or not now is the right time for you to refinance.

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etc. Renting offers a lot of incentives and less hassle than owning something. One of the simplest ways to understand if buying or renting is more for you is to look at what you’ll be saving in both scenarios. The internet has a ‘rent versus buy’ calculator that is easy to find.

What these calculators will do is compare and contrast your rent situation versus home ownership at this time.

You won’t have to look hard to find one. If you do an internet search for ‘mortgage and calculator,’ you’ll discover a million or more sites that use those two words together. These calculators will almost never tell you not to buy a house.

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Home Ownership Comes With Tax Advantages The reason they don’t is because of the tax advantages of owning property. Many of the taxes you pay on a mortgage are able to be deducted on your taxes. They can be deducted at tax time from your gross income, which you can’t do with rent. A renter gives monthly payments to the landlord and doesn’t pay tax or mortgage. But you won’t be able to deduct the rent.

When is renting better?

If you won’t be in your house more than a year or thereabouts. There are costs to purchasing a home, like down payment, fees, taxes and home insurance

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that costs a lot more than a tenant’s policy. In lots of apartment buildings your utilities, including water and electric, are paid by management. You pay all of these if you’re an owner.

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You Must Own Your Home For A While To See Tax Advantages If you’re going to only be in your home for a short time, renting is better than owning because the tax advantages won’t be more than what it costs to acquire the house. Your rent each month may be the same or even less than a mortgage, but it depends on where you live and what the interest rates are at the time. Imagine that you’re renting a large three bedroom house in a nice area with good schools. The cost of rent on such a place might cost you $1,800 monthly.

The price to buy a similar house in that area might come out to be $150,000. If you do all the calculations on what your monthly mortgage payment would be after things like the down payment and taxes are accounted for, the mortgage bill for a 30 year mortgage at a seven percent interest rate would be about $1,200. So as seen in this case it might be a good idea to buy if the mortgage payments are close to what the lease payments are in your area. Saving hundreds of dollars per month, getting the luxury of mortgage interest and property taxes written off, it’s a win-win situation.

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Appreciation Of Equity Explained Appreciation of equity is a another good reason for buying versus renting. Every rent payment made to the owner of the property, is another improvement in their equity numbers. Not that it’s a bad thing to do, but you could be doing it for yourself. With the fluctuation in property values, by renting, you could be stuck paying an inflated rent rate for some time. Let us assume that you pay a rent of $1000 and you are planning to purchase a house for $150,000.

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How Can You Decide If Buying A Home Is A Good Choice Financially?

If you have paid the 20% upfront, you will be borrowing $120,000 at 7% for a time period of 30 years for instance. Your EMI that includes both principle and interest calculates to $800. Suppose that your property value is also increasing by 5% on a year to year basis. Let us see your situation after 2 years. If you had continued in your rented home, you would have given $24,000 to someone else.

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Now you have saved about $16,600 by way of mortgage interest; you are well on the way of owning your own home and it will also increase your net worth considerably by the time you complete your payments. With a payment of $2500, you closed your loan but ended up increasing

your net worth by $18,000. This is great but this is not the only reason to buy a property.

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When You Find A House You Love, The Decision Is Easy Though buying a home is a huge financial commitment, you should also give importance to other considerations such as you love the place and you want to live in it with your family. Go online yourself prior to getting in touch with a real estate agent. Real estate is one industry that the internet serves well. Before its inception, you had to wait for the weekend newspaper and find one home you liked and contact its agent. Then that agent wound up taking you from house to house until at long last there was a home you liked.

Now you know why home ownership is such a great choice for so many individuals. If you have located a property that you have fallen in love with, it may very well be worth all of the associated expenses that come along with buying a house and home ownership to get your family into that house. On top of that, you may actually be saving money in the long run if you are paying down a house rather than paying someone else rent. So go out there and start looking at properties. Who knows, you may just find your dream home!

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9 Golden Rules For Home Maintenance by Sandra O’Connor

If you are a home owner, you should know that home maintenance is very important. Proper maintenance keeps your home livable and helps to protect the value of your home.

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s a h o m e ow n e r , y o u need to be vigilant when it comes to home maintenance. Home maintenance is important for many reasons. First of all, it makes your home more livable.

Second of all, it protects the value of your home so that you will be more likely to be able to sell it for a good price some day. The following is an explanation of the importance of home maintenance and some tips regarding what types of home maintenance projects are the most important.

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A HOME IS JUST LIKE A CAR A home needs to be m a i n t a i n e d a c c o rd i n g t o a schedule just like your car. It is sad that many homeowners just don’t know about this schedule a n d f a i l t o d o t h e re p a i r and maintenance required.

Consequently, they may have to face troublesome situations like a furnace not working or a heavily leaking roof. A much worse situation can be when the house starts tilting from a break in the foundation. In reality, if homeowners forget

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to keep the home maintenance schedule, it is because they don’t get it and hence should be excused!

KEEP A MAINTENANCE SCHEDULE Upon purchasing a home, you will get escrow closing papers, loan paperwork, HOA documents and sometimes a copy of the deed. However, how often has someone been given a home maintenance calendar? Sadly, it’s something which doesn’t happen, but should.

Below is an easy to follow maintenance schedule you can use for your home.

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You’re only asked to look at it twice a year in spring and fall to prepare for the extreme weather. Just choose two days annually, which could be the first day of the new season, birthdays in the family, or anything else that is easily remembered. Stick to this schedule and your home will most likely be free of problems for a long time.

WATER DRAINAGE IS VITALLY IMPORTANT If the home is on a typical lot, it’s going to drain toward the street, which is the usual way a lot is graded. In most cases, that water will begin in the backyard and then run around the house’s sides and out to its front. In summer, though, homeowners commonly pile materials out along their houses’ sides, such as sand or dirt or old appliances and toys. When winter returns and the rain begin, debris blocks water from flowing away from the house, backyard and puddles start to form. This can even cause your foundation to be undermined over time and you’ll suffer from dampness in crawl- spaces and basements soon after.

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SOLVE WATER FLOW ISSUES Water must be able to flow out to the street, so be sure to check that both sides of your home is clear. A low spot in the back may prevent even flow of water down the side drains, specifically during the winter

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months. If this is the case, to help lead the water out French drains may need to be installed.

French drains are buried under the ground to accumulate water. They are about 4’, made of plastic and full of holes to let the water slowly run off. If the problem does persist it may be required to use a sump pump, that is, a pump that will turn on when the water level comes up on it’s own.

HIRE PROFESSIONALS TO ASSESS THE ISSUE You may want to touch base with an experienced gardener, or possibly a soils specialist.

Be certain when the bad weather comes your wiring isn’t shorted out. Check the outside plugs to see that they’re away from the ground and don’t have anything leaning on them and of course are GFI to avoid shocks. Make sure that there’s no damaged insulation and some electricians advise tripping the circuit breakers once yearly to see that they’re working. Just be sure prior to doing electrical work that the power is off entirely.

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LANDSCAPING IS ANOTHER IMPORTANT CONSIDERATION Talk to a gardener to decide when to trim your roses and any trees or bushes. Be sure to either secure or store anything; things like the patio furniture covers or trellises, that may be damaged in the upcoming weather. A lot of homeowners fail to recognize the importance of doing this. Although drain spouts and gutters protect anyone coming or going from the home from rain pouring on them when they enter and keep the rain off of the windows, their true purpose is to preserve the strength of the house’s foundation.

ENSURE GUTTERS AND DRAIN SPOUTS WORK PROPERLY If water falls straight down when it runs off your roof, it will pool at the base of your home and put your foundation at risk. This is especially a problem with cold weather and freezing climates where soil expands. Gutters serve to collect water from your roof and send it to the draining spouts.

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The draining spouts then funnel the water down and away from your home and foundation.

Maintaining your gutters and drain spouts free from leaves and other debris, is a wise decision.

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To ensure that rain water doesn’t pool underneath them, it’s usually smart to lengthen the base of the drain spout a good distance from the house.

SURVEY YOUR HEATING SYSTEM AS SOON AS YOU CAN Assuming that the ideal time to fix something is before it breaks, a thorough survey of your heating system is recommended. First, install a new filter. Expect the filter to have accumulated a lot of dirt during the warm weather months, if you have a combination heater and air conditioner.

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Changing your filter will not only clean the air in your home, but increase your furnace’s efficiency.

Also, clean around your furnace with your vacuum. Oftentimes, dust will settle close to it and could potentially cause a fire. Don’t vacuum inside your furnace as it could cause damage.

OTHER ELEMENTS THAT SHOULD BE INSPECTED If your furnace blows, check your heat registers in every room to make sure they are opening and closing with no problems. After that make sure the heating system is working by turning it on. You might have a sticky oil or gas valve when it hasn’t been used for some months.

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Or the heater won’t turn on because the parts that work the safety devices and the thermostat are failing. These problems require the help of a professional. At the end, make sure you check your heat exchanger and that can be done either by a furnace installer or someone from your utility company.

The above are the most important home maintenance considerations. Water draining and heating elements are important because if they fail, the resulting damage can be devastating to your home and may even render it unlivable if the foundation cracks or if a faulty heating system causes a fire. Instead of falling victim to such problems, keep up with your home maintenance so that your home value remains high and so that you can live in your home for years to come.

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9 COMMON MISTAKES WHEN APPLYING FOR MORTGAGES ONLINE by Daniel Pratt

Applying for home financing online is a choice that many people are choosing today.

Learn how you can make the process work better for you by using the following advice.

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re you thinking about applying for home financing online? If you are, you should know that there are some differences and some similarities between applying in person for a loan and applying online. The following information will help you to understand why obtaining a mortgage today is both easier and harder than it once was.

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MISUNDERSTANDING THE DIFFERENCE BETWEEN LENDER AND SERVICE Things have changed so much over a few short years and now you will able able to fill out just one online application and then have a few lenders or brokers give you their lowest quotes. You might not do better than if you went to your local lender, but you find that out without needing to fill out several different application forms.

The most known of these online services is probably Lending Tree, but you can find lots of others out there, too.

If you search online for a mortgage loan, you will come across a number of companies which require you to fill out a simple form. The fact is that these companies are not the real lenders; what they actually do is to collect information about prospective borrowers.

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Selling your home can be quite the ordeal, but with the right knowledge you can make it through emotionally unscathed.

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APPLYING TO ONLY ONE LENDER Once you fill out the form, your details will be forwarded to the real money lenders.

Every lender wants to do business with you and you will be swarmed by so many lenders that it becomes difficult for you to choose the right one. A few years ago, the borrower had to apply to different lenders to get a mortgage loan but now many lenders vie among themselves to solicit a borrower. Applying to more than one lender is not at all illegal, but if a lender knew that you had applied elsewhere, he would force you to cancel the other loans before sanctioning your loan.

That is not the case today.

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MAKING TOO MANY APPLICATIONS You can now apply through some websites that require you to make just one mortgage application instead of many. The completed application is sent to a chosen group of brokers or lenders for their appraisal. They will find out the amount of money you make as well as your existing debt load and they will also get your credit scores and credit reports. Once there’s been an evaluation, lenders will make offerings for you to take or not. It’s a pretty easy way to make many applications, but sometimes you won’t know

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who’ll be doing the bidding. You could have a listing of approved lenders but still get a quote from a lender you’re not familiar with or who isn’t local.

UNFAMILIARITY WITH THE LENDER’S SIDE OF THE PROCESS The process of getting a mortgage is now easier and more difficult all at once. For a lender, marketing has become quite difficult when it comes to loans: while marketing necessarily depends upon differentiating one product from another, there is nothing different about loans. As the loan approval process has increased in efficiency, lenders and loan officers have been hard-pressed to differentiate their product from others. Since they have turned mortgages into off-the-shelf commodities, the only viable source of difference now lies in how wrong the papers are. Still, if it is something minor that the settlement officer or agent can alter, conceivably it can be fixed right there at your closing.

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NOT KNOWING HOW TO DEAL WITH A DISCREPANCY However what happens if you had a 7% quote but your papers say 7.50%? If you are currently closing and going to live in your new home now, there isn’t too much that can happen to change this. There might not be enough time. Certainly, you can stop the closing, but you might not get a refund on the money you put down. You might just have to accept it. How can a lender do this? Probably because they are able to. You

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

may use a lender on the Internet without an office in your town, if you don’t want an office that uses the real estate agents in your town.

NOT HAVING A RECOURSE IF AN ONLINE LENDER MESSES UP They lack a local customer base. In fact there are no loan officers in your area. They are not worried about protecting a reputation. So if they mess up your loan, what is your recourse? Should you complain to your estate agent? Should you file a grievance with the state? Local lenders who are trustworthy are concerned with their marketing and sales. When they mess things up on a constant basis, what happens?

Word gets out and no one uses them. Their reputation is trashed and they may have to close their doors. This isn’t the case with an online lender.

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FAILING TO ENSURE THAT THE LENDER IS HONEST If there is an issue and you become frustrated, what happens? You’re not restricted from using an online lender, but if you do, be sure you are diligent with every step. It is possible you could get a better deal, but you need to make sure they come through with every promise. Do some research about the company and avoid the ones that will only deal with you online, especially if you’re unfamiliar with how the process actually works. A pure play is when there is no physical presence for a company aside from their headquarters. It is key to establish a good, lengthy working relationship with the officer responsible for your loan, so you have a reliable source for answers when you have questions or if problems arise.

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THINKING THAT LOW ONLINE RATE QUOTES ARE GUARANTEED Using an online lender is fine, but if the rate quote is incredibly low from the online company, the local loan officer probably won’t be of much help. They will just tell you the rate will not be guaranteed and if you want to work with them, feel free to do so. A disadvantage of the Internet is that nearly every lender and mortgage broker has a website which makes it difficult or impossible to find out about the company based on the site.

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Sometimes a flashy website makes a mortgage broker look better than they really are and millions of dollars spent on advertising cannot make up for an incompetent broker. Looking at the site is useless in terms of evaluation. To combat this, mortgage companies will list testimonials on their site, but those

can be fictitious at times. A online loan module was tried for a time, but didn’t seem to work out.

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THINKING THAT TRADITIONAL LENDERS FEAR ONLINE LENDERS Traditional lenders in the 1990’s were somewhat panicked with this new loan process. Turns out they had nothing to worry about and it was the online lenders that decided this was too complicated of a process to do online only. With today’s technology, traditional lenders are able to use the Internet to their advantage with having standard applications available on their company websites. It turns out that traditional lenders did great online where online lenders have not.

Now you know much more about online lenders and the many considerations you should take into account if you are considering going with an online lender.

While many home buyers will continue to turn to traditional lenders, you may be able to be approved for financing and receive a great rate quote through an online lender. However, you must keep all of the caveats above in mind (no guarantees of a firm rate, no office to walk into, etc.) before deciding to go with an online lender. Best of luck!

SEC AUCUS REAL ESTATE TODAY | JAN/FEB 2016

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7 TIPS FOR HOW TO SURVIVE YOUR HUNT FOR THE RIGHT HOME by Sandra O’Connor

Are you currently on a hunt for the home of your dreams? If so, learn the best ways to go about searching for your dream home so that you can find it quickly and easily!

L

ooking for a home can be a difficult process.

Many a home buyer has settled for a property that they were not truly content with only to have massive buyer’s remorse. It is one thing to buy a pair of shoes and not like the fit, a serious investment like buying a home should be taken quite seriously.

The tips that follow can help you to approach the home buying process the right way so that you stand the best chance of finding your dream home.

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BE SURE THAT YOU ARE BUYING THE RIGHT HOME While doing all this figuring keep in mind that you’re buying the house because you like it and want it to be home. It’s among the biggest single financial commitments you’ll ever make, so don’t buy it because the calculations were right. Research things online even before you get in touch with a real estate agent. The internet is so useful for home buying that it’s as if the real estate industry invented it.

It used to be that you could only shop for homes in the newspaper, before the days of the Internet. Then you would simply need to call the real estate agent.

Then you would need to drive around and view many different homes with the agent until you hopefully

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came across the one that you fell in love with. These days, agents can be much more efficient because their websites allow shoppers to contact the agent only after they find houses on the website that they definitely like at first glance.

HOW TO FIND THE HOME OF YOUR DREAMS The listing agent is the one who advertises the home, putting it up on the MLS (multiple listing service).

He or she will show the home and find out if you’re using another agent. If not, you will be invited to see additional homes that are for sale. If you agree to this, that agent also becomes the buyer’s agent because he or she is helping you buy and not just listing houses. You tell this person what your dream home would look like, such as the number of bedrooms, location and amenities.

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Then your agent would hunt through the MLS to find these homes and you and he or she would get in the car and visit them together. However, now you get a jump start by seeing the houses on the internet first. Then you only go to the ones that hold some interest for you and you’re not being dragged all over the place to see those you’d never want. The agent gets to spend time selling or listing homes instead of driving hither and yon.

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

USING THE INTERNET TO FIND A NEW HOME A great place to start looking for a new home is realtor(dot)com. This is the official site for the National Association Of Realtors. Simply log onto the site and put in the area code of where you would like to live. You may then narrow down your search by putting in specific details about the home you wish to buy. Once your search is narrowed down you should have no problem finding a home you love for sale in your area! Any online “virtual tour” of houses is a good way to get an idea of what a given house looks like. Use the internet to find out what’s available in your general price range.

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While these are all important things to look at, they aren’t going to make a substantial difference in the end. Obviously, buying in the summer is much easier, especially if you have children that will be better off starting at a new school at the beginning of a new year.

Sure, home prices may be a little less in the winter as opposed to summer due to seasonal demand.

DON’T FEEL PRESSURED TO BUY BECAUSE OF THE FAVORABLE MARKET Right now is a very good time to purchase a house. However, you shouldn’t feel like you must purchase a house simply because a lot of people are selling or because interest rates are at very low.

Purchasing a home is something that should be done when you are ready to do so, not when the market analysts say that you should. Of course, if you are a real estate investor, you may definitely want to get into the real estate market at this time.

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THE RIGHT TIME FOR YOU TO BUY A HOME Agents will always be apt to advise you to buy now, rather than waiting. After all, this is how they make their living. An agent will always find a way to justify buying right away; either it’s a “buyer’s market” and you should act now while selection is good, or prices are on the rise and you need to make a decision before they rise further. Take only your own needs into account when deciding whether to buy. A lot of people tend to get lost in the wide world of real estate valuation, cycles of home prices, homes listed, ideal times to buy and more.

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If you are purchasing your first home on the other hand, you can take your time and wait if you need to do so. Purchase a house because you want it instead of as an investment and call it your own. Build equity, of course, but still use your heart at the same time as you use your head. Don’t buy it only because somebody in real estate told you it would yield millions over time, as

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GETTING ‘PRE-QUALIFIED’ FOR A MORTGAGE Prior to getting into the car with your agent, you’ll be asked if you have been pre-qualified or preapproved for a mortgage. You need to really understand the difference between those terms, because there is a definite difference. You will be pre-qualified assuming that your total debts from things like student loans, your house and your car are less than a certain amount of what your monthly gross income Is. And your payment on your new home will also be less than a certain amount of what your monthly gross income is.

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The old procedure used to be that the company issuing the loan would send you a pre-qualification letter stating whether or not you were pre-qualified. That’s all there is to it now, though. That may be all you have to do, assuming that you just want to see if the lender thinks you are capable of handling that amount of debt. However, pre-qualification doesn’t have much meaning when you are seriously ready to purchase a home. At that point, you need to apply for pre-approval as well.

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GETTING ‘PRE-APPROVED’ FOR A MORTGAGE The pre-approval process involves verifying that all of your information is actually correct. That involves running your credit report to see how much debt you have and whether or not your credit history is acceptable for loan qualification. When you get preapproved, there is verification of what you told the loan officer your income is. You need to show bank and investment statements so they know you actually have that money waiting to be used to buy a home. A preapproval is just a pre-qualification that’s been verified, but it has to be shown to your agent or home seller.

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You are now ready to find the home of your dreams. It may take some time before you find the right home. Or perhaps you’ll find a great home, but the timing will be off or you will not be financially prepared to buy it. If this happens, don’t lose heart! There are many wonderful homes out there just waiting to be purchased and you’re bound to find something that you can truly love when the time is right. Best of luck finding a great new home!

SEC AUCU S REAL ESTATE TODAY | JAN/FEB 2016

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Secaucus Mayor & Town Council present

Secaucus February Community Calendar SUNDAY 31

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MONDAY 1

8

SUPER BOWL BOY SCOUT PANCAKE BREAKFAST

SEC. Fire Dept.

Exempt ladies Aux. Valentine’s Breakfast

WEDNESDAY 3

GROUND HOG DAY

Home Energy Assistance & Weatherization Assistance Senior Center 12-17

9

10

15

TOWNHALL CLOSED

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22

Meet Farmer Margaret Fint out about local, Fresh, organic Veggies!

Town Hall 11am

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12

13

Paint Wine Party

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17

18

19

20

Wear your RED apparel 7:30-9:30 pm

Veteran Home Benefit Seminar Senior Center 10am

C.A.S.T. Perfomance Michael Griffo: A Concert at Home then & Now Senior Center 7pm

25

26

27

23

High School Day of Respect, Remembrance & Reflection PAC 9am

7PM

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Wine & Paint Party St. Matthew’s Church 7:00 pm 201-865-4185

Senior Citizen Valentine’s Day Breakfast and Concert Call 201-865-4422

1pm

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SATURDAY 6

Home Energy Assistance & Weatherization Assistance Senior Center 12-17

COUNCIL MEETING

Family Fitness Fun Day Recreation Center

FRIDAY 5

COUNCIL MEETING

PRESIDENT’S DAY

8am Senior Center 101 Centre Ave.

THURSDAY 4

Kid’s Night in Pizza & Movie ** Must pre-register by 2/10/16 at Rec Center Knights of Columbus Fish Fry ICC 5-7pm Town Hall Closed

7PM

MASONIC LODGE 8:30am-12:30pm

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TUESDAY 2

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Home Energy Assistance & Weatherization Assistance Senior Center 12-17

24

Home Energy Assistance & Weatherization Assistance Senior Center 12-17

FREE SKATING

CASINO NIGHT

5:00 Doors Open 6:00 BINGO

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2 3 4 To add anything on monthly calendar please email Lsnedeker@secaucus.net

*KIDS NIGHT IN MOVIE*

SENIOR CITIZEN BINGO

Guma Foundation CASINO NIGHT La Reggia 7pm

5

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• OWN YOUR HOME? BE SURE YOU HAVE ENOUGH INSURANCE! • YOUR GUIDE TO SELLING YOUR HOME AND MOVING TO A NEW ONE • THE ADVANTAGES OF TRADING DOWN • BE THE BEST LANDLORD YOU CAN BE WITH THESE TIPS

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