Thinking About Putting Your House On The Market?

If you are thinking about putting your house on the market, make sure it is in top selling condition.  Here are some pointers from BCB Property Group:

Curb Appeal

• Drive up to your home and look at it through the eyes of a buyer
• Check and replace shingles if necessary
• Clean out the gutters
• Remove all toys, equipment and litter
• Remove cobwebs and nest
• Clean patio furniture
• Go around the exterior and touch up with putty and paint
• Clean and/or paint the front door and mailbox
• Wash the windows
• Mow the lawn and trim the trees and shrubs
• Weed the flower beds
• Plant colorful plants and foliage

Overall Interior

• Fix loose door knobs
• Replace all burned out light bulbs
• Add a fresh coat of paint in light, neutral colors
• Remove all valuables, such as jewelry, medications, cash
• Open all the window shades to create a spacious and bright look
• Put pet supplies and dishes in a place where they are not the first thing potential buyers see or smell when they walk into a room
• Use flameless candles to add a fresh smell, but don't over do it
• Clean the fireplace and vents
• Clean and organize closets
• Un-personalize your home (remove pictures, knick-knacks, etc.)

Living Room and Family Room

• Make these rooms spacious and inviting
• Discard or repair broken furniture
• Replace old pillows and rugs
• Remove toys, games, etc.
• Vacuum upholstery, drapes, and pillows

Dining Room

• Clean out your china cabinet
• Put a nice centerpiece on the table
• Set the table for a formal dinner to help potential buyers imagine entertaining there

Bedrooms

• Arrange furniture to create a spacious look
• Make beds
• Remove any knick-knacks

Bathrooms

• Remove rust and mildew stains
• Wash or replace shower curtains
• Make sure everything sparkles-including grout
• Replace worn rugs and towels

Kitchen

• Make sure all appliances work
• Clean the inside of refrigerator, stove, and cabinets
• If your stove has electric burners, purchase new drip pans
• Remove small appliances from countertops
• Make sure appliances and counters sparkle

Garage

• Get rid or unnecessary items
• Store or pack items you won't need until after the move
• Provide bright lighting

BCB Property Group provides complimentary "staging" services. We will help you get your home in top selling condition to get your home SOLD fast!

Finance Facts With Jim Mitzel

The Federal Reserve and Mortgage Rates

Understanding What Causes Interest Rate Movement

Consumers are often misled when it comes to the subject of the Federal REserve and how it affects mortgage interest rates. Often the media is the culprit causing the confusion. In the last few years, the Fed has taken action that caused mortgage interest rates to move in a direction other than what consumers expected, because the media provided weak reporting on the subject.

The Federal Reserve affects short-term interest rate maturities, the Fed Funds rate, and the Overnight Lending rate, These factors have a direct impact on the Prime rate, If you take only this into consideration, you may mistakenly conclude that changes made by the Fed will cause a similar movement in mortgage interest rates. However, mortgage interest rates are dictated by the trading of mortgage-backed securities, which trade on a daily basis. The real dynamic at the hear of interest rate movement is the relationship between stocks and bonds. 

Stocks and bonds compete for the same investment dollar on a daily basis. There is literally only so much money to be invested. When the Federal Reserve feels that interest rates need to be decreased in an effort to stimulate the economy, this reduction in rates can often cause a stock market rally. When the market becomes bullish, the money to invest in stocks comes from the selling of mortgage-backed securities. Unfortunately, selling mortgage-backed securities to fuel stock market rallies causes interest rates to go up, not down.

Historically, there have been many times when the Federal Reserve has increased interest rates. Stocks then sell off in fear that the increase will affect corporate profit margins, and the liquidated stock assets need a place to park until the next rally comes along. The safe haven is found in mortgage-backed securities which cause mortgage rates to drop. The daily flow of money is what matters most when it comes to the movement of mortgage interest rates.

Interview With A First Time Home Buyer

It's a "Buyer's Market" so we thought we'd ask a first time home buyer some questions about her current house hunting experience. 

BCB: "How long have you actively been searching for a house?"
Buyer:  "About 4 months."

BCB:  "About how many homes have your viewed online?  In person?" 

Buyer:  "Way too many online to count! I look all of the time.  In person, about 15."

BCB:  "What is your favorite online Real Estate site?  Why is it your favorite?"

Buyer:  "Trulia for the pictures and it also shows area comparables." 

BCB:  "What have you learned during the search for your first home?"

Buyer:  "So much!!  I have learned about negotiating, signing and contract and what money you have to put up front (down payment, earnest money, option money, etc), how to apply for a mortgage and all of the information they need for that too."

BCB:  "Is there anything that has surprised you during your search?"

Buyer:  "I was surprised that even though they say it is a buyer's market, there is still a lot of competition out there for the great houses.  In example, every house we have loved has also had another offer come in almost the same time."

BCB:  "What advice do you have for others who are just beginning their search?"

Buyer:  "Make sure to start looking even earlier than you may think you need to because it takes a long time to find "the one" and once you do, it is also a long process for inspection, any repairs that may need to be done, bank financing, etc."

Finance Facts With Jim Mitzel

Home Ownership Offers Plenty of Tax Benefits 

While renting offers zero tax breaks, buying a home offers several tax benefits that can make homeownership more affordable. Real estate professionals need to be careful in providing detailed tax advice to clients to avoid lawsuits, but you can ensure clients have the information they need to understand the all of the tax benefits of home ownership. 

The following is a few of the tax benefits to home ownership, according to Stephen Fishman, an author and lawyer who specializes in small business, tax and intellectual property law. 

▪ Home mortgage interest deduction: Home owners can take an itemized deduction on interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home. This deduction could potentially reduce the cost of borrowing by one-third or more.

▪ Property tax deduction: Home owners can deduct from their federal income taxes the state and local property taxes that you pay on the home. 

▪ Deductible home buying expenses: Several closing costs in a home purchase are also deductible, such as loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

▪ $250,000/$500,000 home-sale exclusion: Home owners who have lived in their home for two of the prior five years prior to its sale do not have to pay income tax on the majority of their profit — $250,000 for single home owners and $500,000 for married homeowners who file jointly. 

▪ 14 days of free rental income: Home owners can rent the home up to 14 days during the year and pay no tax at all on the rental income. 
Source: “The Tax Benefits of Homeownership,” Inman News (Feb. 4, 2011) 

Finance Facts With Jim Mitzel

When is Real Estate Going to get better?

I hear this question a lot lately and it has made me think about what is really being asked.  I think that question is asked by many, but has different meanings for different people.  I examine this question in regards to the mortgage and finance aspect of real estate.  The holidays brought us an interest rate increase and many thought this was going to be a discouragement for people to take advantage of the current market.  The reality is that 30 year fixed rate mortgages are still below 5.00% and other products are below 4.00%.  If you consider historic rates and the ability to loan substantial amounts of money at these rates, I am not sure how much better it could be.  I look at the recovery we have seen in the stock market since it hit rock bottom and I have heard many people tell me they wish they had invested money to take advantage of that upward swing.  I really feel we will see the same thing with real estate.  I know of many people on the sidelines waiting for real estate “to get better”.  I think what will happen is people will look back at the prices and interest rates we have right now and realize in a few years they have missed the boat.  There are many theories out there about future inflation, deflation, and other market reactions.  We all know at some point though, rates will go up.  The opportunity we see right now makes me think of a quote from Warren Buffett, “Be fearful when others are greedy and greedy when others are fearful”.  I think for our purposes, that the words greedy and fearful might be a bit strong, but this quote is very applicable to our current times.  I would think at some point these great rates will be behind us and hopefully everyone that wanted to take advantage of these rates has the opportunity to do so.

Finance Facts With Jim Mitzel

Know Your Credit Report

Everyone knows that the mortgage industry has overhauled its lending guidelines over the last few years.  In the past it was safe to assume if you have paid your bills on time and avoided bankruptcy, foreclosure, and repossessions, you would be safe to assume there would be no issue in securing a mortgage.  The reality is there are more hurdles and pitfalls regarding credit than ever before.  If you reveal there is an inaccurate or incorrect account reported on your report, you may decide to dispute that account.  This seems like a reasonable thing to do in order to correct inaccurate items on your report.  Although, a disputed account subsequently hides that account from the credit bureaus when they calculate the FICO scores.  Due to this factor, it can completely change the way your loan will be underwritten.  This can also affect the amount you can qualify for.  This could change the type of loan you need to pursue or if you can currently move forward at all.  Many lenders have also added credit monitoring programs that examine your credit from the time you apply for a mortgage until the day you close on your mortgage.  This leads to letters of explanation for any company that pulls your credit report and constant monitoring that there is no new credit obtained during the loan process.  There has also been a raise in minimum credit scores in order to obtain a mortgage and increased negative rate adjustments for less than perfect credit scores; this leads too many changes to already tight credit guidelines.  The best way to examine your full credit report is to have all three bureaus and credit scores obtained and meet with a professional that can go through the report with you.  Have a great Holiday!       

Finance Facts With Jim Mitzel

Mortgage Rates….UP, UP, & Away

The most common question I have received over the past year is, “When are rates going to go up?"  Well, the answer is now.  Rates have spent the last three weeks going up gradually and have spiked over the last few days.  There are many reasons and explanations on why the rates have begun to rise.  Some examples are that the economy has shown some sign if improving, the fundamentals that support mortgages have been artificially propped up, particular announcements from the FED, and legislation news from DC.  The reality is rates were not going to stay at the levels they were forever and they are still extremely low.  Rates might improve again and the spike might not continue, but eventually the rates will continue to go up.  If you have thought about refinancing, buying your first home, or upgrading your current home and rates are a major concern to you, it might be time to move forward.