Real Estate Information Archive

Seventy-five percent of Americans say that “Owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market,” according to a new survey of 2,000 bipartisan voters by the National Association of Home Builders.

Despite their situation — whether underwater on their home or even renters — the survey found Americans to be optimistic about home ownership. Eighty-one percent of those who own their homes outright, 76 percent with mortgages, 67 percent of renters, and 65 percent who have underwater mortgages cited home ownership as the “best long-term investment.” When survey respondents were asked whether they’d recommend buying a home to a friend or family member just starting out, 80 percent of Americans said “YES.” Even home owners currently underwater — those who owe more on their mortgage than their home is currently worth — overwhelmingly (78 percent) said they would recommend home ownership to family or friends starting out.

More buyers are coming up through the pipeline too. The survey found that 73 percent of those surveyed who do not own a home said their goal is eventually to buy one. The NAHB survey also found: ? 58 percent of Americans oppose eliminating the mortgage-interest deduction and 63 percent oppose lowering it. What’s more, 57 percent of those surveyed say they are less likely to support a candidate for Congress who wanted to eliminate the mortgage-interest deduction. ? Respondents were split on about requiring a 20 percent down payment to purchase a home: 49 percent were in favor and 49 percent opposed it. However, mortgage holders and renters aged 18 to 54 were more opposed to it: 58 percent of younger mortgage holders and 59 percent of younger renters opposed adding a 20 percent down payment requirement.

Source: “The Cook Report: The Home Front,” National Journal (June 2, 2011)

Save Thousands On Interest & Taxes....

Purchasing a home can save you money very quickly.

FIRST, you'll save on taxes because the interest on your home mortgage is tax deductible. If you rent, your landlord gets the break.

SECOND, you'll save on interest payments while keeping the great tax advantage.

For example if you are paying $900 per month in rent, you are paying a portion of this towards your landlord's property taxes and mortgage loan interest. Your landlord can write this amount off. You derive absolutely no tax break. When you own a home, you now reduce your taxes for the mortgage interest and for your property taxes. Your interest is always the highest during the early years of your loan, so your overall write-off is largest during these early years.

Paying rent is like throwing your money out the car window each month. You pay it out and never see it again. With home ownership you receive loan interest write-off, and gain money over the years from the increased value of your home. Over a ten year period, on an initial purchase price of $100,000, you could gain over $100,000 in tax advantages and appreciation based on an 8% mortgage interest rate and 5% per year increase in home values.

On both the 15 year and 30 year loans, your interest deduction is highest in the first few years of the loan, so your tax deduction is highest then, too. Remember, if you plan to move or refinance after 5 years, you will maximize your tax deductions. Keep in mind that as you pre-pay part of your loan to reduce the interest expense, you also reduce your tax deduction. How long you plan to keep your current mortgage loan can help determine which type of loan, and which payment strategy, is ideal for you.

Have questions? Give us a call. We are happy to help.

How Much Home Insurance Is Enough?

Home Owner's insurance policies are often an after-thought--that is, until disaster strikes. Home owners in Joplin, Mo., Tuscaloosa, Ala., and other cities recently flattened by tornados are now finding that out too late as they discover that their insurance policies likely will not entirely cover the costs to rebuild. While most home owner's insurance policies will cover tornado damage, many home insurance policies are undervalued. In fact, one study from 2008 by Marshall & Swift finds that 64 percent of homes are undervalued for insurance purposes. Home Owner's insurance coverage typically comes in three categories:

Replacement cost: It covers the cost of replacing or repairing a home, based on a certain dollar limit. However, some home owners with this type of insurance find that their insurance does not reflect increases in the cost of construction since they originally took out the policy.

Extended replacement cost: The insurance company will pay a certain percentage above the replacement cost to account for inflation. However, home owners still may face inadequate coverage with this too, particularly if they haven’t updated their insurance coverage in awhile.

Guaranteed replacement cost: Regardless of how much prices have increased since first taking out the policy, this coverage will pay the total cost of replacing your home. This coverage can be expensive and also difficult to even get. Most standard home insurance policies also include an "inflation guard" provision, which automatically adjusts the coverage limit when a policy is renewed, but some coverage may charge extra for this. Many policies also will cover lost or damaged possessions at about 50 percent to 70 percent of the amount of insurance on the home. (The USA Today cites an example: If your policy provides $250,000 to rebuild a home, you may stand to also get $125,000 extra to replace your damaged belongings.)

Source: “If Disaster Strikes, Will Your Insurance Come Through?” Gannett News Services (May 31, 2011)

Do Agent Bonuses Really Works…….

If you are trying to sell your home quickly, some real estate agents may recommend that you offer a bonus to the agent who brings in the buyer. They feel that a monetary incentive will cause an agent to push your house over the one down the street.

Do such bonuses work?

You cannot expect a bonus to sell an overpriced house or overcome housekeeping shortcomings that detract from your home's overall appeal. If your house looks great and is priced right, offering a bonus to the real estate agent could help it sell more quickly. Agents earn their reputations by helping people find homes that they love. When deciding which homes to show prospective buyers, their decision will be based on whether the home will meet their needs. If the Multiple Listing Service indicates that a bonus is being offered, it could encourage more agents to preview the house and result in more showings.

But remember that the bonus may get them in the door but…. if the house doesn’t show well or is not priced right it still will not sell.

How a New Car Payment Reduces Your Purchase Price……

When you contact a loan officer to get prequalified for a mortgage loan, keep in mind all the numbers that will go into figuring your approval level.   Student loans, car payments, credit cards and many other items to also include your payment history.

For example, suppose you earn $5000 a month and you have a car payment of $400. Using an interest rate of 8.0%, you would qualify for approximately $55,000 less than if you did not have the car payment.

Even if you feel you can afford the car payment, mortgage companies approve your mortgage based on their guidelines, not yours. Do not get discouraged, however. Think about buying a home first, buying a home is a much more important purchase when considering your future financial well being.

However, if you have not already bought a car, remember one thing. Whenever the thought of buying a car enters your mind, think ahead long term….

Buy the house first……. then look at purchasing a car!

Albuquerque / Rio Rancho Monthly Highlights

The median sales price for detached, single-family homes in April was $165,000, rising 1.85 percent from the previous month; the first positive increase in the median sale price since December.

• The top selling price range of detached, single-family homes went from $120K - $139K in March to $200K -$249K in April.
• April was the 2nd consecutive month this year that properties going under contract exceeded 900.

To View the Complete April Albuquerque Metro Market Report!

Source: Greater Albuquerque Board of Realtors – 10 May 2011

Albuquerque / Rio Rancho

Quarterly Highlights

1st QTR 2011 Market Recap for the Greater Albuquerque Metro Area

• Compared to 1st QTR 2010 the average sale price of a home has decreased 1.81 percent and the median sale price dropped 3.49 percent.
• When compared to 1st QTR 2010, closed sales decreased by 2.41 percent along with an increase of days on market of 7.59 percent.

To View the Complete Albuquerque Metro 1st Quarter Market Report!

Source: Greater Albuquerque Board of Realtors – 16 April 2011

WASHINGTON (April 13, 2011) – A new bill to improve the process for approving short sales may soon bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House this week, would impose a deadline of 45 days on lenders to respond to short sale requests.

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” said NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps.

The short-sale process has frustrated buyers because lenders are unable to decide whether to approve a short sale, he added. “After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps.

About 13% of recent home sales are short sales, according to NAR data. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close, and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers, and the entire community,” Phipps concluded.

Source: NATIONAL ASSOCIATION OF REALTORS® 14 April 2011

Read more at: www.Houselogic.com

Albuquerque / Rio Rancho

Monthly Highlights

• Closed sales for detached single-family homes in March increased 39.02 percent from the previous month.
• Of the 570 detached, single-family homes reported sold in March the top selling price range was $120,000 - $139,000.
• Sales in the City of Rio Rancho increased 1.68 percent from the previous year and 101.67 percent from previous month.

To View the Complete March Albuquerque Metro Market Report!

Source: Greater Albuquerque Board of Realtors – 12 April 2011