Lee Morof's Real Estate Blog

Are you about to buy a house or condo for the first time? Congratulations! Owning your own piece of real estate is a liberating experience and one that will provide you with the foundation to build your personal wealth and equity. Once you own your own home you’ll be responsible for a variety of new costs, including property taxes which are assessed by your local government to pay for municipal services. In this blog post we’ll share how property taxes work and what you can expect to pay when you buy your new home.

It All Begins with a Local Property Tax Assessment

As mentioned above, local governments assess property taxes as a means for paying for police officers, fire fighting services, road maintenance and the other various costs that come with running a town or city. Whether you’re buying a house, a townhouse or a condo, the property that your home sits on is inside of an area known as an “assessment area”. When the local government determines what your local tax levy or tax rate will be, they will assess your home based on the real estate market value of similar homes in the area. You can multiply your tax rate by the assessed value of your home to determine how much you’ll owe in property tax.

Property Taxes as Part of Your Closing Costs

When you close on your new home you’ll have to pay property taxes, and your real estate agent will help you to understand how much these taxes will be and how they will be paid. In most cities and counties you’ll pay a pro-rated amount of property tax that covers the time span from the date you purchase the home until the end of the year, after which time you’ll be paying your full assessed rate.

Don’t Forget Your Overall Tax Picture

Finally, don’t forget that property taxes can be factored in to the rest of your overall tax picture. Check with your accountant or another financial professional to determine whether or not you can write your property taxes off against your income tax to save some additional money. There are numerous tax benefits to owning a home, so it’s best to start using them from day one.

As with all other taxes, property taxes are a fact of life that every homeowner faces. When you’re ready to buy a new home and to learn more about how property taxes will affect your purchase, contact your local real estate agent today.

If you’ve been thinking about investing in a real estate project you may have considered buying a distressed house or two at a steep discount in order to fix them up and sell them at a higher price. This is known as “flipping”, and in today’s post we’ll share a quick guide to flipping homes and how to get started with this type of real estate investing.

Assessing Your Budget and Tolerance for Risk

We’ll start by stating the obvious: when you buy real estate with the intent of flipping it, losing money is a very real possibility. You’ll need to assess your own tolerance for risk and decide how much you want to invest in your real estate venture.

If you’re new to buying homes it’s a great idea to start small – an inexpensive “fixer upper” house or a condo – and work your way up from there. Spend some time crafting a budget to assess how much you’ll be spending to acquire the home and in repairs or renovations, and what you expect to receive when you sell.

Shopping for Suitable Houses and Condos

Once you’ve got your budget prepared and your finances are in order you’ll need to start looking for a suitable home. The ideal listing is one that is priced at a discount to all of the other homes in the neighborhood as the home is in some state of disrepair or has certain issues that need to be fixed up. Spend some time browsing through local property listings which are sorted by price and note which options are the least expensive. This is where you’ll want to start.

Scale Things Up by Finding a Partner

After you’ve bought, repaired and sold a home or two you’re likely going to want to scale things up. Consider bringing on a partner who can help shoulder some of the workload or one that may want to invest capital so that you can buy homes in a higher quantity. Remember, this is business; if you work with someone else you’ll want to formalize your arrangement with a written contract.

As with any business venture, there’s a bit of a learning curve that you’ll need to overcome when you begin flipping houses. As long as you’re patient and ready to move when you find the perfect home, you’ll soon find success with your real estate investments. 

Are you ready to make that leap from living at home or renting to owning a home of your own? While everyone moves at their own pace, here are some signs that you can use to determine if it is time to own your own home. Let’s take a look at some of the reasons you can use to justify your decision.

Are You Sticking Around?

If you plan on moving soon for a job or think that you won’t be in town much longer, it may be better to rent. However, if you are thinking about living in the same town or within the same county for years to come, it is time to put down roots.

The stability that comes with home ownership may make you more prepared for a marriage and/or a family if that is something that you want. This stability may make you more attractive if you are single and searching for a long-term relationship.

Do You Have a Steady Job?

Those who have a steady job and know that they have a stable salary may want to make the move to home ownership. As long as there aren’t any other major debts eating into your income, you can probably handle a mortgage and other costs associated with home ownership.

The equity that you build in your home can help you build wealth for the future if and when you want to retire. Your home may also make a great rental property in the future, which can help you diversify your portfolio and keep you solvent for years to come.

You Are Spending More Time Watching Television Shows Related to Home Ownership

You may have caught yourself recently watching shows revolving around people or couples who are looking for homes. You may also be watching programs dedicated to giving tips as to how you can upgrade your home. If you watch these shows frequently, it may be a sign that you are ready to move out on your own and take on the exciting challenge of being a homeowner.

Are you ready to be a homeowner in the near future? Only you can say for sure if it is time to make that leap. However, those who are looking for a long-term housing solution may be ready to make that move. For more information, it may be worthwhile to talk to a real estate agent today.

The real estate market has been in flux during the past few months. As a result, this could be a great time to both buy and sell a home. This is because mortgage rates are attractive for borrowers right now. With so many people who are looking to buy a home, is likely the people selling a home are going to receive multiple offers. On the other hand, given what the mortgage market looks like right now, borrowers also have attractive options.

As a result, many people are wondering if they should buy a house with cash or take advantage of low interest rates. For homebuyers in this position, there are a few important points to keep in mind. 

Consider What The Cash Can Do

Ultimately, a decision to buy a house with cash or taking advantage of low interest rates is going to be a personal decision. At the same time, there are several factors to consider. One of them involves what the cash is going to be used for. For example, many people have heard the saying that cash is king. Buying a house with cash might be right for some people. 

On the other hand, there might be some individuals or families who can put this cash to better use elsewhere. For example, if this cash is needed to buy a new car, fun retirement, or pay for someone’s education, then the cash might be better spent in this area. It is important to think about how this cash will be spent when deciding whether or not to use it to buy a home. 

The Competitiveness Of A Cash Offer

It is also important to consider the advantages of buying a house with cash. In addition to the obvious benefit of not having a mortgage payment, a cash offer is also going to be seen as more competitive. With so many people looking to buy a house right now, it is critical for homebuyers to appear competitive right off the bat. 

A cash offer is always going to look better than someone who is trying to take out a loan because the transaction is simpler, faster, and provides the seller with an instant source of liquidity. 

These are a few of the most important points that people should keep in mind when deciding how they are going to purchase a home.

You’ve found the perfect new house or condo, and you are now preparing an offer that you believe the seller will find tempting enough to accept. However, you know that there are going to be thousands of dollars in closing costs that need to be paid before the sale is completed and you become the home’s new owner.

The question is, should you ask the seller to pay some or all of the closing costs? In today’s blog post we’ll address this question and list a few scenarios in which you may want to consider having the seller pick up the tab.

Ask if You’re Offering the Full Listing Price

If you’re prepared to offer the full asking price for the home you can certainly include the caveat that the seller assist with some or all of the closing costs. Many sellers will price their home slightly higher than they expect to receive as they believe that buyers will submit low initial offers which need to be negotiated.

For example, if a home is listed at $275,000 a seller might actually be expecting $260,000 or $265,000 for it. You can offer $275,000 but ask that they take care of the closing costs.

Ask if You’re Confident the Seller Has Few Other Options

If the home has been on the market for a number of months or if you’re fairly confident that the seller isn’t going to find much luck elsewhere you can ask them to pick up the closing costs as one of your purchase conditions. You’ll obviously want to negotiate in good faith, but if you’re coming from a position of strength you can leverage this in to some additional savings.

Ask if You’re Ready to Close Immediately

Are you ready to sign on the dotted line today? If you’re sure that this is the right home for you, let the seller know that as long as they’re willing to assist with the closing costs and accept your bid that you’ll start the closing process today. Nearly all sellers will be willing to make a small sacrifice to get the deal done.

As you can see, there are a number of situations in which it makes sense to ask the seller to shoulder some of the closing costs. If you have found a home that you wish to purchase and you’d like advice on how to proceed, contact a real estate agent today. An experience real estate professional can help you craft an offer that the seller won’t be able to refuse.

With mortgage bubbles and real estate issues still in recent memory, one might feel that their best option is to buy their next home using cash instead of borrowing the necessary funds. In today’s article we’ll explore the pros and cons of paying cash for that next house or condo.

The Pros Include A Feeling of Complete Ownership

There’s a feeling of pride and joy that comes with owning a home outright. There are several other reasons for paying cash instead of signing on the dotted line and getting and being strapped to a 30-year mortgage. Perhaps the best reason is having 100 percent equity in the home.

The cash will be there to borrow in case of an emergency. Having cash on hand is great if a water pipe bursts or there’s a huge car repair bill. In addition, instead of paying a monthly mortgage, that money could be used to start a college fund, to grow savings or to invest.

And, credit problems wouldn’t be an issue since there wouldn’t be a need to check credit history in the first place. The homeowner may be able to negotiate a better price, which may result in a likelihood of a smoother sale, and attract more prospective buyers.

The Not So Great Reasons To Pay With Cash

Buying a home is one of the largest financial investments a person will make in his or her lifetime.

However, buying a home outright most likely means that a significant percentage of cash will be tied up in the house. Less cash will be on hand for savings, college funds, and emergencies like a plumbing malfunction or an expensive car repair.

While paying in cash may result in a mortgage life, if the property value drops for whatever reason, there’s no purchase protection. For instance, if the market value of a $100,000 home loses 10 percent that will be a loss of $10,000. Take this example and apply it to a mortgage down payment. If the market value falls, there’ll be a loss of $10,000, but the bank would take a loss for the remainder of the property value.

Also, when paying with cash, there is no third party property evaluation to ensure the buyer isn’t overpaying for the home. Banks will send a professional to provide a property evaluation check to verify the correct home value.

Buying a home is a significant personal decision. In today’s tough economy, homeowners are finding ways of cutting back on expenses. Owning a home outright, without the stress of mortgage payments can be extremely liberating. Sit down with a professional real estate agent today before making the decision to use cash to pay for a home.

For many people, owning a home is their dream. The COVID-19 pandemic has impacted the entire country and has left many people wondering if they can still afford to own a home. While this might put some things on hold, there are steps that everyone can take to keep the dream of owning a home alive.

Get Pre-Approved For A Mortgage

The first step that you should complete if you would like to own a home is to get pre-approved for a mortgage. The pre-approval process will give you a firm idea of what you can afford. Then, you can start to narrow your search and find homes that are within your price range.

Furthermore, when you do make an offer, sellers will know that you are serious about buying the home because you have already been pre-approved. Reach out to a lender and get pre-approved for a mortgage.

Connect With A Top Agent Virtually

Most people are used to going to home showing in person; however, there are ways to do this virtually. A trusted agent is going to have access to all of the listings in the local area and can help you understand what the process is regarding buying a home. You can connect with an agent either by phone or by video to learn what it is like to navigate the real estate market. While today’s market might be different from most markets, there are still opportunities to get a great deal on a home.

Do Research On Options For Assistance

Buying home is one of the most important ways to stimulate the economy. As a result, there are lots of options that have been put into place to help people buy homes in a responsible manner. This could include loan programs, payment assistance programs, and loan options that do not require a large down payment. This can help you afford a dream home without having to necessarily put down 20 percent.

Do Not Put Your Dreams On Hold

While the climate might be a bit different right now, this does not mean that people have to put their dreams of owning a home on hold. This simply means that everyone has to do their due diligence and find the home that is right for them.

Buying a home is a huge step for people who are ready to make an investment in their future. Getting a great deal on a home is just as important and knowing how much to offer could be confusing. It is important to make sure the home seller is not insulted by the lowball offer and is ready to negotiate to make sure everyone wins.

Make a List of Necessary Improvements

One of the best ways to validate a lowball offer on a home is to list improvements that need to be made to the property. If the home needs a new roof or a new heating and air conditioning system, these are reasons to offer less than the asking price.

Sometimes a home may also need new flooring, paint, or matching appliances which all cost money. The buyer can make a lowball offer stating additional expenses of making sure the home is move in ready.

Explain Any Issues with the Location

Another option when considering a lowball offer is to point out problems with the location. If the home is on a busy street or close to a manufacturing district, the buyer has legitimate concerns. In the offer, list the potential problems of living too close to fast food restaurants, train tracks, or airports. A less desirable location could equal a great buy on a new home.

Provide Pricing for Comparable Homes in the Area

A knowledgeable real estate agent can help compare homes that have sold in the area. When you are writing up a lowball offer, look at the lower priced homes that have sold in the same neighborhood. A seller will quickly realize that if he wants to sell the home, he will need to accept a reasonable offer or risk letting his house sit on the market for weeks or months.

Consider the Seller’s Reasons for Selling

Finally, the seller’s situation can also be key in getting a good deal on a home. If the seller is desperate to sell because of a job relocation or if he has already bought a new home this can be the perfect reason to make a low offer and take the home off the seller’s hands. Without insulting the seller, the buyer can make an offer for less than the asking price and agree to a quick closing.

Buying a home can be stressful and getting a good deal on the property without insulting the seller can take some negotiating. Working with a knowledgeable real estate agent will make the experience more enjoyable. Call today to make your dreams come true.

The purchase agreement is a vitally important document that outlines the provisions, terms and conditions for the transfer of property.

It should be read carefully and any ambiguities should be clarified prior to signing. It is a legally binding contract between the buyer and seller.

The purchase agreement may vary depending on the location. Most real estate agents use a form that has been approved by a state Realtors® Association.

The seller may have a different version that was drawn up by an attorney. It should not be assumed that they are all the same.

Typically, the purchase agreement will include an inspection period. This allows the buyer time to verify the conditions stated on the purchase agreement. Three of the most important stipulations in the contract are listed below.

All Owners Must Sign the Purchase Agreement

In most cases, the purchase agreement should be signed by the legal owner of the property.

If there is more than one owner, each owner should sign the agreement. In many states, both parties in a married couple have an interest in a property even if the title is held in one party’s name alone. Therefore, the purchase agreement should be signed by both parties of a married couple.

In the event the property is being sold by a corporation, verify that the person signing the agreement is authorized to commit the corporation to the sale.

List All Fixtures to be Transferred with the Sale

The purchase agreement should list all items that are to convey with the property. “Fixtures” are considered items that are attached to the property.

Legally, they should be included with the sale, but more than a few buyers have been dismayed to find the property stripped of countertops, appliances and window coverings. Any fixtures and personal property that are part of the sale should be included in the purchase agreement.

Verify Zoning Ordinances

The purchase agreement may contain various stipulations. One should include the right to cancel the contract if zoning prohibits the use of the property as planned.

Zoning ordinances may restrict the use of buildings or land. This may prove to be an obstacle for someone who intended to include a workshop on the property. The buyer should be able to withdraw from the contract if they discover that zoning prohibits the intended use.

These agreements can be complicated, so be sure to check with a local real estate agent if you’re unsure about how to proceed.

Size matters when you are buying a new home. Whether you plan to expand your family, need more room for your stuff, or are concerned with resale value, you want to get the most space for your money.

Also, if you want to add a feel of luxury to your home, one of the best ways to do it is to create open spaces rather than cramming all your furniture in rooms so tiny you can barely walk around without knocking something over.

Traditionally speaking, the larger a home is, the more it costs. If there are two newly built houses side by side in a subdivision, the bigger one is likely to cost more. However, there are some tricks to finding spacious houses that are affordable.

Choose Emerging Neighborhoods

Houses in this year’s trending neighborhood are at their peak prices. Clever buyers look for neighborhoods that are in the process of being gentrified, buying at the bottom rather than the top of the market, to get more house for their money.

Fix It Up

Houses in perfect condition, that show well, sell for a premium. If you want to get more house for your money, choose something that needs a bit of TLC. A house that has pink walls and orange shag carpet might appear just too ugly to consider when you first view it, but it might just need a few coats of paint and some new carpet to become a spacious dream home.

Do Some Finishing

Unfinished areas such as attics and basements can be finished to create additional living spaces. The basement could become a family room and the attic an extra bedroom or study. An unfinished space can become the extra bathroom you need to make morning more manageable.

Consider an Addition

Contractors can add rooms to a house. If you have a large lot, you can build an extra wing. With a one story ranch house, it may be possible to raise the roof and add a second story.

The more stuff you have, the smaller your home appears. Reduce clutter and invest in smaller condo size furniture to give even the smallest home the appearance of spaciousness.