Buying a home

Should you pay cash for your home or finance it with your local bank?

Should you pay cash for your home or finance it with your local bank? Before making this big decision, review the pros and cons of each type of purchase. Everywhere you turn, you hear how bad it is to carry debt. So naturally, it is logical to think that buying a home with cash or sinking as much cash as possible into your home to avoid the massive debt associated with a mortgage is the smartest choice for your financial health. But there is a lot to consider when contemplating purchasing a home outright versus financing it. We will discuss some of the major differences between using cash or taking out a mortgage to buy a home.

Paying cash for a home means you won’t have to pay interest on a loan. Cash sales are attractive to sellers because they can close quicker. In this competitive market, a seller is likely to take a cash offer over other offers because they don’t have to worry about a buyer backing out due to financing being denied.

On the other hand, obtaining financing also has significant benefits. Even if a buyer can pay cash for a home, it might not make sense to tie up a lot of cash to purchase real estate. Doing so could limit your options if other needs arise down the road. If the home turns out to need major repairs or renovations, it may be tough to obtain a home-equity loan or mortgage, as you don’t know what your credit score will look like in the future, how much the home will then be worth, or other factors that determine approval for financing.

Paying a mortgage can also provide tax benefits for homeowners who itemize deductions versus taking the standard deduction. And while you should not opt for a mortgage just to get a deduction, a reduced tax obligation never hurts.

The best advice when considering whether cash or mortgage makes the most sense is to opt for the choice that gives you the bigger bang for your buck. Also, ask yourself which will provide a greater return on your investment. If you decide to purchase a house with a loan, make sure you can easily afford the principal and interest payments each month. If you decide to go with cash, make sure you will still have enough to cover ongoing costs like property taxes, homeowner’s insurance, and other fees each month.

Talk to your tax advisor, meet with your local mortgage lender and let them guide you to make the best decision for your needs.

Our market is crazy! Homes are going under contract in just hours, some with multiple offers. Inventory is still low. So, if you are considering selling your home, contact your local REALTOR® so they can get you the best price, whether it is a cash sale or a financed option.

Have a great week! Remember to do good things!

What is an HOA?

What is an HOA? Real estate developers establish homeowners’ associations as corporations for the purpose of marketing, managing, and selling homes and lots in a residential subdivision. Usually, the developer transfers ownership of the association to the homeowners after selling a predetermined number of lots. When you purchase a condo, townhome or single-family home within a “planned development”, you may also encounter the HOA structure. These structures are put in place to help maintain a clean and cohesive atmosphere in the neighborhood.

Before you buy a home that makes you part of an HOA, there are some questions you should ask of the association. What are the fees? What do they cover? Are there any special assessments? You should review the covenants and restrictions prior to making your offer. These documents detail what is allowed in the development and any expectations as a homeowner. You can obtain them directly from the HOA or ask your REALTOR® to provide them to you. You may need to obtain approval before putting in a pool or installing a fence, so you need to be well informed.

HOA’s are usually run by volunteers that live in the community. Some are very active, and some are not. You should do as much research as possible and talk with current homeowners in the development. Living in a planned development—and being governed in part by the rules of an HOA—can be a mixed blessing. It offers the prospect of exchanging some control over your home for the reduced responsibilities of maintaining it, and for the benefit of enjoying shared amenities and security. It can, however, also trade the diverse look of a typical neighborhood for a more uniform appearance, albeit one with a lower chance of a neighbor’s decorating taste or sloppy maintenance habits becoming a problem for you.

Homeowner Associations can be beneficial for your community. They can help maintain the look of the neighborhood which in turn can keep property values in line with the market. If you move to a neighborhood that has an active or even inactive HOA, get involved. The only way to make a difference is to help those that are volunteering their time to make the development a nice place to live.

There are hundreds of HOA’s in our Morgantown community. The Morgantown Board of REALTORS® has compiled a list of HOA’s including their covenants and restrictions. Contact your local REALTOR® for more information.

I hope everyone is enjoying our crazy weather, hang in there and try to stay cool!

Happy 4th of July to all and remember to do good things!

Flooding affected our town last week in so many ways.

Flooding affected our town last week in so many ways. People lost their personal belongings, cars and had damages to their homes. Water is a disaster that can have a long-term effect on your property if not properly remediated. There are companies that will assist with clean-up, mold prevention and future waterproofing.

Flooding. No one wants to talk about it or experience it firsthand. As a homeowner or potential buyer, you need to do research about the property to determine if it is in a flood plain. If a property is in a flood zone, this can mean higher insurance premiums and required flood insurance. You can check to see if you are in a flood zone by checking with fema.gov.

The National Flood Insurance Program (NFIP) provides flood insurance to property owners, renters and businesses, and having this coverage helps them recover faster when floodwaters recede. The NFIP, run by FEMA, also encourages communities to adopt and enforce floodplain management regulations that help mitigate the effects of flooding. Flood insurance is a type of property insurance that covers a dwelling for losses sustained by water damage specifically due to flooding caused by heavy or prolonged rain, melting snow, coastal storm surges, blocked storm drainage systems, or levee dam failure. In many places, a flood is considered a major event, and the damage or destruction it causes are uncovered if you do not get supplemental insurance. The NFIP continues to be the primary source of asset protection against flooding, the most common and costly natural disaster in the United States.

If you have experienced a flood, whether a few inches or several feet you know that lives can be destroyed by this disaster. Over the last several years, our great state has experienced some devasting floods. How do you prepare? Can you prepare? If you are in a low-lying area, the most extensive preparations may not be enough. Make sure you are adequately covered with flood protection.

I personally have experienced flooding in my life. Although it was only a few feet in my basement, it was horrible. We were not in a flood zone, and it was a freak storm. Fortunately, FEMA came into our area and assisted with grants to help those in need. Be prepared. Store important documents in a safe area. Check with your insurance company to see if you need flood insurance. Unlike the homeowners’ policy, deductibles on flood losses are applied separately. If the dwelling and contents are damaged, the homeowner pays two separate deductibles. In the homeowners’ policy, one deductible applies to the entire loss.

To end on a positive note, our market is hot! Contact your local REALTOR® today if you are ready to buy or sell. They need inventory, the buyers are looking, and rates are still low. I want to wish all the dad’s out there a Happy Father’s Day and Remember to do good things!

Do you dream of owning a second home?

Do you dream of owning a second home? A house by the ocean or in the mountains situated near a creek? Did you know a second home is also an investment property? When you purchase a second home and do not use it as your primary residence, financing and insurance can be quite different. Maybe you want a vacation home to visit on the weekends, holidays or in the summer. Or you would like to live in the home when you retire or pass it onto your children.

Owning a second home may come with perks, like potential tax write-offs, depending on how you use it. There are many benefits in purchasing a second home. If you decide to rent the property, when not using it, you could have some income potential. But a second home for vacations is different from an investment property you buy to generate income. That difference can affect your finances, including the taxes you owe on the property and the type of the insurance coverage you need.

There are a few steps to consider before purchasing a second home. Run the numbers to consider if you have the down payment you need and if you can afford to take on a second mortgage. Consider the other expenses that come with owning a home such as property taxes, insurance, maintenance, repairs, furniture and property management fees. Contact your tax advisor to see if this is a good investment for you and your family.

Next, talk to your local mortgage lender to see which financing options best suit your needs. Mortgage qualifications are tougher for a second home. For conventional financing on a second home, many lenders will want at least 20% down. Income requirements are also stiffer. You will need to show your income is high enough and your debt low enough to qualify for the second home mortgage. The lender will consider your taxes and insurance when calculating your payment and these can be higher especially in a resort area.

If you qualify to purchase a second home, it can be a great investment and a great escape for you and your family. More family time is important. Do some research. Whether you like the beach, the mountains or a villa in another country, make sure you enjoy the area and can see yourself living there. This is a huge purchase that needs careful thought.

In this college town, parents purchase a second home or townhome as an investment for their children to live in while attending school. This makes perfect sense if you have several kids that will be attending the same university. Many times, the mortgage payment is cheaper than the rent and you are hopefully making a wise investment.

Regardless as to which type of home you use, contact your REALTOR® to start looking for that perfect investment. Remember to do good things!

What is a multiple offer?

What is a multiple offer? A seller may like them, and a buyer may not. A multiple offer means that the house is priced right, in a desired location and many buyers are interested. But the true meaning is that many people are competing for the house that you as a buyer so love and there are several offers. This a good reason to hire a REALTOR®. A multiple offer situation can be very confusing and frustrating.

So, let us discuss what to expect if you are a seller. You have several showings, back-to-back, within the first day or two of the listing. While this can be a bit overwhelming, it is a good thing for you as the seller. The more showings, the more chances of offers. Your agent may bring you several offers and will help you negotiate each one. But do you have to negotiate with each offer? You do not. The best option is for your agent to send a multiple offer form and ask for all offers to be in by a certain time. Every offer will be different. You should do what is best for you and your family. Do not let emotion guide you, consider not just the monetary value but the inspection dates and buyers requests.

How do you negotiate all the offers? First, you should review them and determine if the terms meet your selling needs. Do they want a 60-day closing and you need 45 days? Do they want you to assist them with closing costs and money is tight? Are they asking for your washer and dryer and you need to take them with you? These are all things that you can negotiate. Let your REALTOR® help and guide you. He or she is working to represent you and to get you the best and highest offer.

A buyer may not be as excited as the seller to learn of multiple offers. Some may not want to compete; others will go over asking price. Again, your REALTOR® can help. Emotion will be driving you to get the house. Make sure you are not going over market value when making the offer.

Sometimes homebuyers wonder if it is even worth trying to compete against other buyers in a seller’s market. It is not unusual for a seller to receive 5 offers when there’s little inventory on the market. It is almost always a good idea to write an offer anyway. Somebody will be the winning offer. Why can’t that person be you?

In the end, a multiple offer situation will be exciting and scary at the same time. You can only accept one offer so make sure you ask advice from your family, REALTOR® and any other advisor that you trust. This is a huge purchase for everyone and must not be taken lightly.

Happy Graduation weekend to all the high school graduates and especially my beautiful daughter. Have a great weekend and Remember to do good things!

Last week we talked about curb appeal…

Last week we talked about curb appeal, unfortunately if you planted flowers you had to cover them or bring your hanging baskets inside. I hope the frost is over and the warm weather is on the way. The next two weeks are full of change and new beginnings as WVU graduates will be turning their tassels this weekend and the local high school’s next weekend.

You should be seeing a change in traffic as the students head out for the summer. Our rental market is having a big turnover as we speak. But how does all of this affect our housing market? Well, as you may have heard its quite hot! Homes are going under contract in the first few hours of being listed with multiple offers over asking price. This is crazy! When will we see a break? Not anytime soon according to national experts. Housing prices are up 20% across the country and with rates being so low, it’s a seller’s market.

In other cities, across the country, buyers are paying over asking price, waiving inspections and bringing cash to closing. If you need to buy, get ready for some competition. When you see a house that interests you, you need to call your REALTOR® immediately as some buyers are making offers site unseen. But let’s talk about your REALTOR® for a minute. Just because we don’t have any inventory to show you, doesn’t mean we aren’t working lots of hours trying to find your home for you. We talk to each other. We search our MLS and FSBO’s (for sale by owners). We ask everyone we know if they are selling, so we can help you find a house.

So, stop calling the number on the sign if you are currently working with a REALTOR®. If he or she has been showing you property for some time now and you like working with them, don’t jump ship. If they don’t answer your call or return your call within a few minutes of your voicemail, give them a break. They saw you called. It’s possible they are talking to a seller to see if that home would fit your needs. We know you are excited and maybe desperate to find a house and trust me, we are searching.  Hang in there, be patient and trust in your REALTOR®.

We all have sellers that want to sell, but where will they go? If they list their home and it goes under contract quickly, they will be in the same boat as our buyers. It is such a weird time in our market. So, what does all this mean for the future? Homebuyers who can wait for the bidding wars to disappear, prices to stagnate, and listings to stay on the market longer will get more house for their dollar. Be patient, exercise caution and don’t pay more than you can comfortably afford.

As things start to reopen and sellers become comfortable with strangers trapsing through their homes, we should see an increase in inventory which in turn will level out the pricing. Have a great week and remember to do good things!

The busy spring real estate market is in full swing.

The busy spring real estate market is in full swing. Buying a home, whether it is your first or where you will retire, is an exciting time. What will your design style be? Where will you live? These are all important things to consider. Inspections are an important part of the home buying process. But do you think about pests? This type of inspection is usually done toward the end of the process. As a buyer or seller, would you freak out if the inspector said you have termites, carpenter bees or worse, rats?

A pest inspection is a crucial step when buying or selling a home, and in maintaining the home you may already own. Pest inspectors typically search for insects that cause wood damage, but they might also look for pests that can be a threat or nuisance in general. Many people never give a second thought to pest inspections until a problem arises, or until they are buying or selling a home.

It is an ugly truth that most homes have some sort of pest issues. If you are selling your home, spend the extra money upfront to get a pest inspection. It is always best to get ahead of these things and not be surprised. Pests can affect your home inside and out and can cause a lot of damage.

Common concerns that can plague homeowners and homebuyers alike include determining who pays for an inspection, who to hire, and how to exterminate any pests that are discovered. The cost and labor of having your home inspected is well-worth the peace of mind you will have in knowing you have prevented structural damages down the road, or a disruption in the home-buying process.

Many pests, including termites, are practically invisible. Often, the damage they do to a home remains unseen until it is severe, potentially causing structural damage. Hire the professional inspector trained to determine what pests may be invading your home.

Professional inspectors are thorough in searching for signs of infestation. They will examine both the interior and exterior of a house, including foundations, areas around windows and rooflines, and rafters. If they find a soft spot or other signs of infestation, they use a specialized probing device to poke a hole in the wood. This is a normal part of an inspection and should not upset homeowners. If an inspector can easily poke a hole in the wood, that simply serves as evidence of a far greater problem.

Pest reports identify areas of concern and list a pest company’s recommendations to cure any problems, including repairing decaying wood. If you are the buyer, you may be asking the seller to have the pest problem repaired prior to closing. If you are the seller, I recommend having this inspection done prior to listing the property. As a homeowner, it can save you in the long run if you keep up the maintenance in your home with quarterly inspections and treatments. I prefer to let the pests live outside and not in my home, so get that inspection done soon!

Don’t be a pest, just do good things!

Are you in the market to buy your first home?

Are you in the market to buy your first home? Do you know where to begin? If not, maybe I can offer you some guidance. You will need to know your budget, get pre-approved, hire a REALTOR® and find a home. Sound easy? It can be if you have the right people working for you. Let us look at the process.

You should get pre-approved with a local lender, in your community, to see how much you can afford. It can be frustrating to look at homes out of your price range. Most lenders can pre-approve you over the phone. You will need to provide some financial documents and your work history, but all of this can be uploaded and emailed. Simple so far?

Next, find a REALTOR®. Ask your friends and family for recommendations. Interview them. Check out their social media and websites. Your REALTOR® is working for you so make sure you have a good relationship and strong communication. You are halfway through the process now.

The fun part? House hunting. I know many of you watch HGTV and those shows are entertaining. Let me tell you something, house hunting is nothing like “as seen on TV”. During the busy market, you are lucky to get to see the house before it has multiple offers, over asking price. So back to the pre-approval? Be prepared. If you see a house, contact your REALTOR® immediately to see if you can view the home.

Time to make an offer! Hopefully, YOU are not in a multiple offer situation and the seller accepts! Make sure your REALTOR® explains the ins and outs of the contract, so you understand the process. There are inspection deadlines that you do not want to miss, or you will not be able to ask for repairs from the seller. Again, ask around and hire a qualified inspector that meets your needs.

Do not forget to keep your bank in the loop. They need a copy of the purchase agreement so they can order the appraisal. The appraisal can be a long process, especially during a busy market season. Try to get all documents requested to your lender as soon as possible.

There are a few takeaways from all of this. Listen to your lender and your REALTOR®. Do not contact the listing agent or seller directly. This can cause you to lose the home and will most likely make someone mad. You will need a Real Estate attorney to do your title search and closing. Ask for recommendations.

Now that all inspections are done and the home appraised, you wait for a clear to close. Don’t make any large purchases like a new car or new furniture until after your closing. The bank may pull your credit one more time and this can affect the loan process. Call the utility companies, find a moving company and schedule to have your mail forwarded to your new home. Best of luck and congratulations on your new purchase!

Have a fantastic week and remember to do good things!

How important is internet connection when buying a home?

How important is internet connection when buying a home? With so many people working from home and children in virtual school, it seems to be especially important. We all need broadband at home. Although it is often available everywhere except the most inaccessible rural areas, speeds can vary enormously from place to place, and even street to street. For some, slow broadband connection would deter them from buying a house.

A good internet connection is now an essential part of modern life. Many of us are largely concerned with broadband speed in our area. It’s not hard to see why! It was recently revealed that the number of subscriptions to streaming services like Netflix last year overtook traditional pay TV services and that fewer young people are watching live TV. Fast connection is important for another reason. Many of us are working from home more and need good broadband for video conferencing, downloading work documents and handling bulky email attachments.

So how does this affect the home buying process? Recent studies show that half of buyers would reject a house that didn’t feature their desired broadband speed, while a third would try and negotiate a lower house price. The best way to test the broadband speed in a home is to ask the homeowner. Most people will know the quality of their internet access and be more than happy to share their information.

Smartphones have become a standard tool for most people. When presenting a home to a potential customer, REALTORS® must now consider an extra home presentation factor: signal strength. There are some factors that could affect the signal strength in a home. Lead paint is known to cause electromagnetic interference that will affect signal strength. If you suspect lead paint may be causing an issue, I suggest hiring a professional to remove it.

If you notice a decrease in cellular signal strength when you enter a home, the materials used in the construction of the home may be the culprits. Older homes tend to have more of an issue with affecting cellular signals. Metal bolts, pipes, tools, and bars can contribute to a loss in cellular signal. While there is not much we can do about the construction of an older home maybe suggest a signal booster to the buyer.

Check out the electronics being used in a home. Items such as microwaves, cordless phones, baby monitors, and Bluetooth devices can affect signal strength and could possibly deter a customer. Many of these devices operate on a similar wave frequency and can interfere with signal strength and Wi-Fi networks. These are just a few items that may interfere with signal strength.

Spring is on the horizon and homes are flying off the market! Now is a great time to buy and sell. Contact your local REALTOR® today! Have a great week and remember to do good things!

Can your REALTOR® represent you in a FSBO transaction?

 For sale by owner, often abbreviated as FSBO, is when a homeowner lists their home without the assistance of a professional real estate agent. When selling on your own, you are responsible for the process from start to finish, including pricing, staging, listing, negotiating, drawing up paperwork, and closing.

Why sell FSBO? Most sellers decide to go it alone to avoid paying the standard 6% commission fee to the real estate agents involved in the sale. While most FSBO sellers are trying to keep more of their profit in their pocket, it is important to note that a local real estate agent likely has more expertise in pricing strategy, so it is possible that the net profit you earn from a FSBO could end up being lower than if you had listed with an agent.

Can your REALTOR® represent you in a FSBO transaction? The answer is yes. If your REALTOR® has been showing you houses and you stumble upon a home that is not listed, do not ditch your REALTOR®. Many private sellers are willing to co-operate with Buyers’ Agents. They know the paperwork will be handled correctly and that the buyers have been properly qualified to make the purchase. If the private seller is unwilling to pay a commission, you will need to pay your Buyers’ Agent. But you can do so with the assurance that he/she is working for you and that the deal will be constructed with your best interests as the foundation.

So how does this work? Your agent approaches the owner and asks for permission to show the property, represent you and get paid by the owner. Your agent should already know this! The seller and the agent will come to an agreement as per commission and if you are ready to make an offer, the agent will process everything as if it was a listed property. Just because the property is not listed, does not mean you cannot get financing, do inspections and have your REALTOR® represent you until closing.

So why would you have your REALTOR® represent you? There are several reasons. They understand fair market value and pricing strategy. They will guide you to make sure you don’t pay too much. They will do all the paperwork, contact the attorney and inspectors. Your REALTOR® will discuss your inspections with you and help you make a list of items that need repaired. They will keep you updated throughout the entire process.

However, if you have the knowledge and expertise in buying real estate you may not need a REALTOR®. You would need to know market value and how to negotiate price. You would need to have a purchase agreement that would protect you. You would need to know which title attorney to hire and which inspector is good. You would need to know if you should do a radon or mold inspection. You would need to do all of this and your day job and make sure you are protected in the process. If this is too much for you, don’t ditch your REALTOR®.

Spring is right around the corner! Let’s have a great week and remember to do good things!