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Benefits of Owning a Home

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I believe that many already know of some of the major benefits to owning a home but here are a few that you may have not thought of or considered.

TAX BENEFITS

RealtorsOne of greatest breaks that you’ll get on paying taxes will come from owning a home and they got a little better not too long ago.

For most of us (about 70%), we will need to get a mortgage when we buy a house.  Well, there’s good news!  A married couple filing jointly or an individual may write off their mortgage interest on loans up to $700,000.  If a married couple is filing separate, the limit is $375,000.  You can also deduct any points that you purchase to pay down the rate.

An individual or married couple filing jointly will also be able to deduct up to $10,000 of their property taxes each year.  For a married couple filing separate, the limit is $5,000.  Where I live and sell real estate in lower Alabama, property taxes are some of the lowest in the country but it is nice to know that you can even deduct that amount on your taxes.

There is also a “Standard Deduction” that covers everyone.  Here are the standard amounts:

  • Single home owner – $12,000
  • Married couple filing separate – $12,000
  • Head of household – $18,000
  • Married couple filing jointly – $24,000

Plus, (and here’s a big one) you get to enjoy tax free capital gains when you sell your home with profits up to $250,000 for a single owner and up to $500,000 for a married couple.  The only requirement is that you must have lived in the home as a primary residence for 2 of the last 5 years. Check out a more complete list of the benfits at the Tax Policy Center

HOME APPRECIATION

The real estate industry is cyclical – there are highs and lows.  This is where someone usually says that we don’t have a crystal ball.  However, for the long term home owner, history tells us that your home will appreciate and be worth more over time.  Depending on your area and demand, home appreciation (or depreciation) can occur in a short amount of time.

There are so many factors that effect appreciation like the national economy, jobs, wages, and so on.  But, by keeping an eye on current economic matters in the country as well as your town, you should be able to somewhat, “see the future”.

I often tell home buyers to consider purchasing if they plan on staying in the home for at least 3-4 years.  Areas that show a slow and steady growth annually are usually a good place to buy a home because it shows stability.  More on home appreciation in 2020 https://www.keepingcurrentmatters.com/2019/12/23/2020-forecast-shows-continued-home-price-appreciation/

PREDICTABILITY

Other what’s in your “one year” contract if you’re renting a home, there’s no guarantee that your rent won’t go up in the future.  This could absolutely create some anxiety for a lot of folks.

If you’re buying a home, getting a mortgage, and part of the 96% of borrowers in the country, you will be getting a fixed rate mortgage.  This means that your mortgage payment will be the same today as it will be 30 years from now or as long as you have the loan.  Now that’s peace of mind.  Yes, your property taxes and insurance could increase but if you have a fixed rate mortgage, your interest rate and premium will remain the same year after year.

Being able to predict what you have to pay in the future for your house is one of the biggest differences between renting and owning your home.

BUILDING SAVINGS

Every month that you make a house payment, you’re putting money away into a type of savings account.  If you go with historical facts, your home will increase in value over the years so bi-proxy, when you sell, you will receive a nice paycheck at the closing table.

Better yet, you won’t have to pay any capital gains to the federal government on that money up to $250k or $500k.

As a renter, you’re a building your landlord’s savings account.  It’s as simple as that.  Do you want to build your own financial future or someone else’s?

FREEDOM

People love to make their homes their own but if they rent, there are obvious limitations since the they don’t really have a say in what can be done with the house.

Whether it’s choosing the trendy wall color that you’re seeing in all the magazines or wanting to knock down a wall to open up the space, renters aren’t really allowed to make any changes to the home without permission.

As a home owner, you have all the freedom in the world to create a living space that is perfect for you.  If you want a privacy fence, you can have one installed.  If you prefer handicapped toilets, go for it.  The only things I can think of that would reduce your freedom as a home owner would come from your municipality or the home owner’s association.  So, you probably can’t have a llama farm in your backyard.  However, here again, you have the “freedom” to buy a house in an area that would allow a llama farm.

STABILITY

Stability is especially important if you have kids.  By living in the same area for several years or longer, you get the chance to build long lasting relationships with the people around you.  Also, your consistent existence over a long period of time in an area will help bring structure socially and in education.

How often have you heard that the kids were freaking out because they had to leave all their friends at school because they had to move?

There are so many joys and benefits to owning your own home and to many it’s the fulfillment of reaching the American dream.

Are you thinking about buying a home? Give our office a call and schedule an appointment to speak to one of our agents to discuss your home search. 254-965-7775 or Contact Us through our website

Understanding How Much Your House Is Worth: Comparative Marketing Analyses

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Understanding How Much Your House Is Worth: Comparative Marketing Analyses

Figuring out how much your house is worth can be a delicate dance. If you’re thinking about selling your home, pricing too high will scare away potential buyers – while pricing too low leaves money on the table.

Unlike other major purchases, like cars or appliances, you can’t simply look up the value of your home. Your home is unique – even if you live in a home that’s similar to your neighbors’, how you cared for and maintained your home is also a part of its value.

Fortunately, real estate agents are equipped to help you figure out how to fairly price your home based on a number of variables. One of the most important items they use to determine pricing is the comparative market analysis, or CMA.

What’s a comparative market analysis?

A comparative market analysis is a tool used by real estate agents to look at the values of other nearby homes and determine a fair market value for your property. You can think of it sort of like an appraisal, but less formal.

Comparative market analyses give you an idea of what similar homes in your area (your “comps,” or comparable properties) are selling for. Real estate agents use these to figure out how much your home is worth, so that when you sell your home, you know you’re asking a fair price.

What goes into a comparative market analysis?

A CMA isn’t a home value calculator. While there are tools that allow you to put in your address and get a rough estimate of your home’s value, an algorithm is no substitute for deep knowledge of the neighborhood!

When a real estate agent conducts a CMA, they look at many different things, including:

  • Number of bedrooms and bathrooms
  • Overall square footage
  • Features and amenities like a recently-renovated master bathroom or a chef’s kitchen
  • Age of the home
  • Location, including things like great views, proximity to retail space, etc.
  • Condition of the home

Your real estate agent will look at these elements not only for your home, but for very similar homes in your area. They will look for homes within a few hundred square feet of yours, and with a similar number of bedrooms and bathrooms. The recent sale price of your comps, or comparable properties, can help you determine a fair price for a home like yours in your area.

Which properties determine how much my house is worth?

Obviously, if your real estate agent is conducting a CMA, the properties they use to compare your home with matter a great deal. That’s why your agent tries to find properties that meet a few guidelines, such as:

  • Your comparable properties should be located within a quarter-mile or half-mile of your home.
  • These properties should have been sold within the last six months.
  • Your comps should be similar in size and style to your home.

Of course, each of these rules of thumb has a big caveat: Your home may simply not have any comparable properties within a reasonable radius or that have sold recently. That’s why creating a CMA is more of an art than a science – but it’s an art that your real estate agent has mastered.

How can I use a comparative market analysis when selling my home?

A CMA can be an invaluable tool when selling your home. Rather than pricing your home based on your emotional ties to the property or the price you paid for it, a CMA gives you a fair assessment of your home’s value.

Plus, if you receive a lowball offer from a buyer, it lets you point to a specific recently-sold property to justify asking for additional money. You can essentially say, “A very similar house three blocks away just sold for $10,000 more than what you’re offering.” It gives you ground to stand on.

If you’re considering selling your home, it can help to start with a CMA from a real estate professional. They will be able to help you better understand what similar homes in your neighborhood are selling for – and what you might be able to get out of a sale.

Do you want an accurate CMA for you current home Contact on of Realtors Today!

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Preparing to Sell

What You Need to Know About Researching Home Prices

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There are a lot of home pricing resources out there, and some are far better than others.

When it’s time to sell your house, you may be feeling a little anxious. A chapter of your life is closing. There’s a lot of money on the table. You may be thinking “Is my house priced too high?” “Too low?” “Am I leaving too much money on the table?” These are big questions.

Luckily, you have a few resources at your disposal to figure out where your house stands among the crowd: a listing agent’s expertise and guidance, plus online property sites to get insight into the market.

So take a deep breath. Then do your homework. The more you know, the more confident you’ll be when it’s time to make those big decisions.

Turn to Local Experts — Because They Really Know Their Stuff

The good news: Local market info is freely available online, so you, the seller, can get a sense of what your house is worth.

The bad news: Local market info is freely available online, so most buyers will also have a general idea of what they think your home is worth.

When pricing your house, a listing agent has your back in a way an online property listing site just can’t. An agent:

  • Has real world experience in your community.
  • Knows the nuances of your neighborhood’s micro-market.
  • Can expertly assess how your home compares to similar ones recently sold in your area.
  • Can tour your property to determine, inside and out, where your house fits in the real estate landscape.

A website will do none of the above.

An agent will, yes, consider online market data to help you set the price of your home. But he or she will also rely on first-hand knowledge about your home’s unique perks (and quirks), as well as about the neighborhood, to better inform your listing price.

He or she can also recommend ways to market your house (Instagram-able photos, blog-worthy descriptions, etc.), pro stagers who can set your home up to dazzle buyers, and inspectors and contractors who can make any needed repairs.

That being said, you’ll want to have your own sense of what your house is worth too. As invaluable as a listing agent is to your selling journey, being the seller means you’re also the final decision maker.

So keep your laptop out. We’re going to do a little research.

Interested in getting a Competitive Market Analysis of your home or property Contact Us

The Biggest Factors in Determining the Price of a Mortgage

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Price of a Mortgage Interest Rates – What You Need to Know

The biggest factors in determining the price of a mortgage. There are certain terms that you need to understand at this point. One is the principal. It refers to the amount of money that you are actually borrowing in order to pay for the price of your home. On top of paying the principal off, there is also a need to pay the interest. This extra amount is an additional earning to the lender. These rates usually come in the form of a percentage from the principal that is left to be paid. This is added to the monthly payments.

The trust of the lender in your capability to pay off the loan determines the interest rate. Because of the fact that interest rates are added to the overall price of the home, it is as important to take into consideration the way in which your financial situation may have an impact on the interest rates, as well as the actual amount that you pay.

How Are Interest Rates Determined for the Price of a Mortgage

In general, there are three factors that affect the way in which interest rates are determined.

  • Credit Scores

Put yourself in the shoes of a lender. How will you be able to know that you can trust someone who is borrowing money from you? One of the best ways in which you can do so is by looking at the credit scores of a potential borrower. The credit score refers to the number that determines your credit history. Each time you purchase real estate, open a financial account or take out a loan, the credit score of a lender may be affected.

Buyers who have higher credit scores often have better credibility, and as such, can get lower interest rates compared to buyers with lower credit scores. Your capacity to pay off your mortgage will also have an impact on the overall credit score, which is why it is essential to choose a mortgage option with an affordable interest rate.

  • Down Payment

The mortgage loan will pay the total price of the home, and you can remove a big piece of this price by paying a bigger down payment. A bigger down payment also provides you with the opportunity to pay less interest. For example, if you pay 20% down payment on your home, you can expect a significantly lower interest rate compared to actual buyers who are only paying 5% or 10% down.

The reason behind this? If a buyer is equipped with enough financial resources to pay a bigger down payment, it is more likely that lenders can give the trust that they will pay the rest of the house better. This means a lower level of risk, which merits buyers with a lower interest rate.

  • Economic Status

The general life of a mortgage loan is 30 years. Within this period, a lot of things may change in the economy, including your capacity to pay. A good economic status at the present may suddenly shift in the next few years. In order to be guided accordingly, discussing your options with a financial advisor can help. The discussion can include deciding on the best time in which you can take out a mortgage loan.

Tips on Getting a Better Interest Rate

The following are some tips in which you can get a better interest rate:

  • Look around for options on various offers.
  • Pay a bigger down payment for your home.
  • Observe and wait for the interest rates to go down in your area.
  • Make sure that you improve your credit standing and score. This means paying off debts, paying bills on time, and taking care of your credit card obligations.
  • If possible, get a mortgage rate that is adjustable. The interest rate may go up through time, but it usually starts at a lower rate compared to fixed-rate mortgages.
  • Provide evidence that you are trustworthy enough. This proof may include a detailed employment history.

Other Potential Factors that Determines Mortgage Rates

Aside from the interest rate, there are other possible factors that determine mortgage rates. This includes the following:

  • Price of the Home

The price of your home usually has a huge impact on the price of the mortgage. On top of that, renovation plans and property taxes also affect your mortgage. Extra loans or payments may also have an impact on your capacity to make payments monthly.

  • Terms of the Loan

You will end up paying more in a mortgage loan that lasts for 30 years. True, you will only have to pay less every month, but for every month that you are paying off the mortgage, more interest is accumulated. On the other hand, a 15-year fixed rate mortgage may end up with you paying more, but more of the loan will be completed every month.

Another factor which may increase the mortgage price is adjustable-rate loans. They increase the interest rate through time. These rates may also change depending on the adjustment periods covering the loan, including the conditions in the market.

With all of these factors taken into consideration, it is often best to select the best loan that comes with the best interest rate. If you are planning to get a mortgage loan soon, it is recommended to prepare accordingly. You may discuss your options with a lender in order to see the coverage, as well as other factors which may affect the overall price of the mortgage.

Looking to know more about the buying and selling of Real Estate process Contact Us

What does Pending, Under Contract & Contingent mean?

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Can you schedule a showing for a home in Pending status? Does the Under Contract status mean that there is a chance the current offer on a home may fall through? Will the seller consider a back up offer from you in the case that the current buyer is unable to sell their current home soon? These are all fantastic questions and each property status requires these questions to be addressed in different possible ways.

Every professional industry has its own language, and real estate is no exception. There are probably more terms and acronyms in the housing and mortgage businesses than most. When you are viewing real estate properties online you undoubtedly will start noticing different property statuses and wonder what each one means. While a local professional will always be the most beneficial to help navigate each situation, the following are the definitions of statuses according to the local MLS (multiple listing service) to give some background.

Active. For properties that are offered for sale and have no accepted contract.
Active Under Contract. For properties that have an accepted contract with contingencies or circumstances that would or could cause the contract to be removed and/or replaced.
Pending. For properties that have an accepted offer without a kick-out that establishes a process to remove the current offer outside of normal contractual conditions (i.e. inspections, financing, etc.).
Closed. For properties that have sold/leased. For the purposes of updating MLS status, ‘closed’ references the legal transfer of property and is not dependent on broker compensation being received.
Hold. For properties that are not being marketed for a period of time but are still subject to a brokerage agreement.
Withdrawn. For properties withdrawn from the system prior to expiration, but still subject to some listing broker rights. Listings will remain in this status until they move to the expired status.
Expired. For properties for which the listing period has expired.
Cancelled. For properties that have been withdrawn from the MLS and the listing agreement has been terminated. These listings will not expire.

Coming Soon – for properties that have a valid listing contract, but the property is not ready for marketing to the public. Properties in this status may not be shown to any potential buyers. So how quickly can you tour a Coming Soon listing?
Must be submitted to the MLS within 5 business days
Cannot be shown (including previews and open houses)
Only in the Coming Soon status up to 14 days. At 14 days, it automatically rolls to active. Although, it can manually be made active at any time
Days on market do not start until the property goes to Active

Looking to Buy or Sell your home or other property Contact Us

Six Steps to Take After You Purchase Land

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Land For Sale

Purchasing land may be a wise investment decision. Whether you are looking to build a home, raise cattle, hunt or whatever the reason or purposes, it is important to take the right steps after purchase to ensure your plans for the property can be carried out smoothly. After finalizing the purchase, you will need to carefully survey your land, get all documents in order, and get the property into a good place to fulfill your plans for it.

1. Study the Purchased Land Topographic Map

Obtain a topographic map you can find these through sites such as Google Earth and other mapping programs. You may also check with listing agent or seller to see if they have one. After the sale is finalized study the map to get the lay of the land. If you intend to build a home or other structure on the property, identify flat areas that may be good to lay a foundation, as well as areas that will need to be cleared of rocks or debris. If you are planning to raise livestock, you can also plan out where they can graze and how best to keep your animals penned in.

2. Establish Boundaries of the Land you Purchase

If the purchased land does not already have fencing or natural barriers running along the edges of the property, you will want to establish boundaries. Be sure to create your boundaries based on the specifications of the topographic map, which will show you exactly how far the property stretches, and choose the material for your boundary wisely. Wooden fencing is the most visually attractive, but not much else use, if you are looking to keep livestock in, barbed wire is usually best.

3. Have Your Land Evaluated

If you intend to build a home, or other structures such as a barn or garage, you will want to have your land professionally evaluated after purchase the land. Hire a local builder to assess the land; they can take into account topographic conditions, drainage, sun direction, privacy, and other factors that will help determine where on the property you decide to build. Many companies offer free on-site evaluations for customers intending to build.

4. Clean Up Trash on Your Land

You would be surprised at how much garbage can be accumulated on large plots of land, particularly if it was unowned or unused before your purchase. Whatever your intentions for the property, you will want to clear your land of trash. This will improve its visual appeal, get it ready for development, and keep livestock from coming in contact with garbage. Some trash will be obvious, but keep in mind that items like glass and rusted metal often rest just below the top layer of soil, which can cause them to blend in with the ground. Check the entire property carefully; occasionally, you may even find something interesting or useful among the waste.

5. Clear the Land you Bought

After trash has been removed, you will need to clear the land of obstructing boulders, fallen trees, or other debris that can cause problems for land development. You will likely need to hire professionals to help dig out large rocks or clear massive trees; although if you own a reliable chainsaw, you can often cut trees up yourself and then remove them or use them. Do not complete this step until you have carefully surveyed your property and chosen where you will be building, as you will likely need to more thoroughly clear the site of the foundation for your home, barn, or other building.

6. Meet the Neighbors Around the Land

One of the most important steps after you purchase land has nothing to do with building or finances. By introducing yourself to your neighbors, you not only gain potential friends, but if the neighbors have lived on their property for a long time, they may be able to offer advice on clearing and developing the land. In addition, being on good terms with your neighbors can be a lifesaver if you ever have a medical emergency or other crisis situation.

Following these six steps, you will help make your property ready to work or live on. The most important thing is to have a plan for what you will do with the land; while these steps will always need to be taken in some capacity, exactly how you go about it will depend on your intentions for the land. As long as you take stock of the property after purchase and hire professionals when necessary, you will have the land ready for farming, ranching, hunting, building a home, or other property development in no time.

Preferred Properties of Texas

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