For Buyers:
The 4th quarter is a good time to be a buyer seasonally. After April or May, buyer activity gradually declines every month with the 4th quarter seeing the lowest level of contracts in escrow. This is typical within all price ranges. Meanwhile, supply levels tend to rally in October with new listings after becoming stale over summer months. This provides the remaining buyers with more listing s to choose from fewer competing for offers. A welcome relief for many, however, this seasonal lull doesn't mean buyers will win with low offers. For most buyers, this environment only provides fewer competing offers on their preferred properties. It doesn't necessarily mean they'll get a bargain.
Commentary written by Tamboer, Senior Real Estate Analyst with the Cromford Report. (copyright symbol)2017 Cromford Associates LLC and Tamboer Consulting LLC
Happy Thanksgiving! Today I want to take a moment to express some gratitude on behalf of my entire team. We want to thank each and every one of you for your support. We appreciate you giving us the opportunity to go to bat for you. Being able to demonstrate our experience, skill, dedication, and knowledge by helping you buy or sell property is something we are very grateful for.
With that said, I want to bring your attention to a magazine put out internationally by Keller Williams: OutFront. Recently, I was fortunate enough to be featured in the magazine, and I just want to share this experience with you.
At first, I hesitated to share this news because I don’t want to seem egotistical, but I ultimately decided that I should, since it is thanks to all of you that I’ve been able to achieve this honor. Since you helped make it happen, my team and I would love to ship you a copy of this issue out so that you can see it for yourselves.
The article mostly covers my real estate story. For those of you who don’t know, I entered the world of real estate in 2005 with $40 I borrowed from my sister. There was no YouTube or Zillow back then. It was all about advertising in the newspaper.
I entered the world of real estate in 2005 with $40 I borrowed from my sister.
Using the $40 I borrowed from my sister, I was able to put an ad in the Saturday newspaper saying: “For a free list of rentals in North Scottsdale, call Kelly.”
I thought that if I could help people find rental properties, I might be able to help those same people buy homes in the future once they were done with their lease. And that’s how it all began.
Just over 12 and a half years later, here I am. So, again, I just want to thank all of you who have supported my team and I over the years.
If you have any other questions or would like more information, feel to give me a call or send me an email. I look forward to hearing from you soon.
When purchasing a home, there are nine things you need to consider that the vast majority of other homebuyers don’t:
1. The neighborhood at night. Neighborhood’s change at night—it’s a fact. At least, most of them do. Drive through your prospective home’s neighborhood at night and around the home itself to see if there are any college students or dogs barking nonstop or things of that nature.
2. The daily commute. Even though Google Maps may say it takes a certain amount of time to go from point A to point B, drive that route yourself during the busiest time of day to make sure you’re not stuck in a commute that’s longer than what you bargained for.
3. The CC&Rs (covenants, conditions, and restrictions). Just because a neighborhood doesn’t have an HOA doesn’t mean they don’t have CC&Rs. I’d argue that if you have an HOA and valid CC&Rs, that’s the best of both worlds because there’s a standard of living for the people who live there and they’re not governed by an HOA.
4. Whether the home can be rented out or not. Some HOA neighborhoods don’t allow certain properties to be leased out, especially on a short-term rental basis.
These nine considerations will ensure you buy the right home for you.
5. The bedroom-to-bathroom ratio. If you buy a single-story home, always buy a property with at least two or 1.75 bathrooms. Buyers in the future will want that. If it’s a two-story home, I recommend that you have a powder room or a half-bathroom on the main level. That’s another thing future buyers will look for.
6. The need for specialty inspections. Home inspections are a must. However, if they red-flag something or tell you that you should look at something a little bit closer with a qualified inspector, we highly recommend you do that.
7. Features that cannot be changed. The two most important features that cannot be changed are location and lot. It’s very important to base the foundation of what you’re looking to buy off of these two factors.
8. The resale value. If your home backs up to a busy street, just because that doesn’t bother you doesn’t mean you shouldn’t consider whether it will bother a large part of the buyer pool when you sell the home in the future. Know what kind of adjustments or discounts you need to make when it comes to factors like that so you buy the home correctly and at market value.
9. Whether there is room to grow. When it comes to this, you want to know your lot setbacks, the zoning of your lot, and if you have load-bearing walls. If you want to knock down a wall to open a room up, you’ll want to check with a specialty engineer if that wall is load-bearing. If so, it can still be done, but it might cost a little more.
Our team does our best to check all nine of these boxes when helping our buyers buy homes. If you have any other questions about buying a home, don’t hesitate to reach out to us. We’d love to help you.
Should you rent a home or buy a home? There are four things you should consider when deciding what to do:
1. Can you afford it? In many cases, it’s actually more expensive to rent in Phoenix than to own a home if you look at the monthly payments. You might say, “I know that but I don’t have anything saved for a down payment.” If you are looking in certain price points, you may qualify for a down payment assistance program that will gift you 5% of the purchase price up to a certain amount. It’s a great program but we don’t know how much longer it will be there, so call me if you’re interested.
2. Is it better to rent or buy? It really depends on your personal circumstances. Are you self-employed or a W-2 employee? How much can you write off on your taxes due to owning real estate? Your rental payment may be close to a mortgage payment, but that tax return can make a big difference. Check in with your CPA and see if it may be more affordable for you to own a home.
How long are you willing to stay put?
Other things like home warranties hedge your risk on things breaking in your home when you own the property.
3. How long are you willing to stay put? What’s your exit strategy? Again, most homeowners stay in their home for about five to seven years, depending on the market cycle and whether or not they have equity in the home. If a market correction occurs and the market goes down, people may stay in their homes a little longer.
4. Are you ready to be a homeowner? You will be responsible for the property. If something breaks, you need a home warranty or money set aside for improvements and repairs. Your HVAC system and your roof both have a lifespan. Will you need to replace them?
You can get a home warranty for about $70 that will cover the vast majority of big issues. Homeowners insurance will also cover repairs and costs anywhere from $400 to $800 a year.
Hopefully, these four questions help you determine whether you should own or rent a home. If you have any other questions, just give me a call or send me an email. I would be happy to help you!
Today’s topic is near and dear to my heart: investing in real estate. I’d like to share five different ways you can go about investing in real estate.
There’s a myth that you have to be super wealthy to invest in real estate. But, based on five reasons, that is not true anymore. There are ways to invest with zero money down.
According to a recent survey, real estate investors now make about 15% of the population. That’s a staggering number. I never thought it’d be that high.
Here’s another statistic: 89% of US investors are interested in putting their money into real estate. There are all kinds of incentives and benefits, like cash flow, tax incentives, leverage, and value appreciation.
Real estate investors now make about 15% of the population.
Now, the five ways you can invest in real estate:
Buy and rent (a.k.a. buy and hold). This is what I and a lot of other investors like to do. It puts your money to work for you. The ROI, if you buy the property right, blows away the stock market. This isn’t a blanket statement. However, there is a lot of research, due diligence, and comparative analysis required. And that’s what we’re here for. We have plug-and-play formulas built for you that we can send, and all you have to do is enter what you want, and it will tell you all the percentage of returns and other metrics you’ll need to know if you’re investing in real estate.
Buy and sell (a.k.a. flipping). This has become very mainstream nowadays. But you should be careful. There are stories you rarely hear about telling how people sometimes lose a little on their investment because they didn’t turn out the way they expected. Nevertheless, if you have a professional who knows how to buy property correctly, how to source properties, and how to estimate the cost of the remodel, it can make you a lot of money.
Real estate investment groups. These are people that buy properties, fix them up, and lease them out for you, so there’s already an established cap rate and immediate cash flow on the property from the day you purchase it. They’ll sell it to you, and you become a sort of passive investor on that real estate, because many times they’ll even provide the property management for you for whatever fee they charge.
Crowdfunding sites. These sites do large-scale investments and they allow you to piggyback on their huge investments as part of a small pool. You get a specific guaranteed return. Although, sometimes it can fluctuate a little.
REIT (real estate investment trust). This is similar to a mutual fund for real estate. You can put your money into one, and they usually pay a decent dividend payout, so your money is passively working for you. These are large-scale projects—big commercial buildings that have anchor tenants in most cases. It’s not as liquid as other options, but you can do it.
If you’re interested in real estate investment whatsoever, we’d love to discuss how we can help you with some of these options. For those that we are not licensed to do ourselves, we can put you in touch with individuals who are. Please feel free to give us a call!
A great mentor of mine once told me, “You don’t wait to buy real estate. You buy real estate and wait.” It seems that all we hear about in today’s current market is whether or not to buy now. So, when is it a good time to buy, and how does the Fed’s most recent rate hike play into that?
First, the trend has been that since the Fed began raising rates last year, interest rates for mortgages have actually gone down. If that continues, it could mean lower interest rates for mortgages in the short term.
The economy continues to do well. Unemployment and inflation rates are still low, which gives the Federal Reserve more confidence to raise rates at this point.
You don’t wait to buy real estate—-you buy real estate and wait.
Finally, the Fed rate hike, which is usually meant to cool the economy, might actually do the opposite. Since the Fed starting raising the federal funds rate in December 2016, mortgages are actually up 2.5% year over year. This means that more people are applying for mortgages now than they were last year.
So, should you wait to buy a house? While the price of homes continues to rise, mortgage rates are still low, making it more affordable than ever to lock in that great mortgage rate and get into the home of your dreams.
If you have any other questions, or you’re looking to buy or sell a home, please give me a call. I look forward to helping you!
A common misconception in real estate is that when you’re buying a home you will always need to put 20% down.
However, this simply isn’t the case. In fact, there are many options out there that will allow you to buy a home with zero money down. Today, I’m going to share three ways to do this.
The first way is the USDA program. If you are looking for a property and are doing so in a designated rural area, you can buy that property for zero money down. The property doesn’t need to be a ranch or farm. In fact, many properties on the outskirts of the Phoenix Valley qualify.
Next, if you are a veteran, you can buy a property with zero money out of pocket using the VA loan. If this is something you qualify for, I would be more than happy to help you discuss the details.
You could literally be buying a house for less than it would take to rent.
The final option is one that many people may not have already heard of. Down Payment Assistance, or DPA, programs are designed to ensure that buyers don’t need to put anything down. Currently, bond programs falling under this category in Maricopa County will gift you the money for your down payment.
To qualify for this your FICO score must be above 620, and if you’re married you or your spouse must make under $88,000 a year. This is a great option not a lot of people know about. Though it has been ongoing for quite some time already, we never know when the federal government may decide to end it.
I’ve personally worked with many people using this last option. In these cases, we negotiate the closing cost of the loan to be paid for by the seller. This means that at closing, you are putting nothing down. You could literally be buying a house for less than it would take to rent.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
If you’re planning on doing some home improvement, you might as well follow what people want so you can improve your home’s value and get a good return when it comes time to sell it or refinance. Here are the hottest home improvement trends of 2017:
10. Open kitchen shelves
9. Stain-resistant fabrics
8. Stacked stone
7. Gravel landscaping
6. Bathroom remodels
5. Smarthome improvements
4. Neutral textures & pastel shades
3. Cut & loop carpets
2. Kitchen remodels
1. Pendant lighting
As you can see, there are a few mainstays and a few newcomers. Pastel shades are making a comeback. Kitchen and bathroom remodels are always in the conversation for the smartest improvements you can make to your home. Smarthomes are becoming more and more relevant as technology progresses.
If you have any questions about making improvements to your home or any other real estate topics, don’t hesitate to reach out to me. I’d be happy to help.
Have you thought about using vacation rental services like Airbnb as a property investment? It can offer a great return on your investment, but you need to consider a few important factors first.
Many real estate investors have taken on a new strategy of using vacation rentals like Airbnb and VRBO to generate returns. If this is a type of investment you're thinking about adding to your portfolio, there are three main points you need to be aware of first:
Location and zoning: For example, Scottsdale is by far the best area for vacation rentals because the demand is high for these properties. You have to be aware of zoning as well since certain subdivisions don't allow short-term rentals. You need to check with your CCNR or HOA to make sure they allow this kind of rental.
Management companies: This isn't a 'set it and forget it' kind of investment; it's very active. More tenants coming and going means a better return, but it also means more time. A management company can handle the influx of income, the books, cleaning, and other similar things.
Exit strategy: As with any investment, ask yourself why you're doing it. Have an exit strategy that allows you to rent the property long-term if you decide to change your investment strategy. Also make sure you buy a property that has a good chance at appreciating in value.
There are plenty of other nuances you'll need to consider for this type of investment. It's a full-time job to have a vacation rental. The upside is quite high though.
This isn't a 'set it and forget it' kind of investment; it's very active.
I recently spoke with a client who bought a property about seven years ago who is now only about a year away from paying off his 30-year mortgage on the property. His strategy was to put every dollar of profit from the vacation rental right back toward the principal and, as a result, he's going to pay off a 30-year mortgage in eight years or so.
You also have to provide full furnishing for the vacation rental from plates, silverware, and dishes to microwaves and furniture. Then there are towels, linens, and toiletries. The list goes on and on. Basically, you can't just consider the cost of acquisition for the house, you must factor in all those furnishings as well. Costs really add up when you start talking about chairs, beds, and couches.
We've helped a lot of clients maximize their investment with this strategy with a great return on their investment. If you have any other questions about this investment strategy, give me a call or send me an email. I'd love to talk with you about it!
I’d like to cover a few things today about the Phoenix housing market that I think you’ll be interested in hearing. The latest numbers are in, and they show us where our market is at and where it’s headed.
Here in Arizona, only 12% of homeowners are still “under water” on their homes in terms of equity. Most people are either able to sell for a profit or have started to build even more equity than they had before the market crash. There were only about 360 homes that were foreclosed last month. It might sound like a lot, but compared to where we were at 10 years ago, it’s nothing.
We are predicting a strong seller’s market for 2017 with modest appreciation. Realtor.com expects sales to increase by about 1.7% from last year. A steady rise in sales and appreciation are both signs of a healthy market.
Where we go from here is debatable. We are more than 10 years into the current housing cycle, which takes about 10 years to complete from peak to valley. We’re playing with house money right now, so to speak. Keep in mind that the market will look a lot different in the next year or two.
We’re in year 10 of a 10-year cycle.
Affordability in Phoenix right now is high. The salary needed to afford a median-priced home in Phoenix right now is $44,000. For first-time buyers who qualify for specific criteria, homes are even more affordable.
For example, a program in Maricopa County for first-time homebuyers gifts them with up to 3.5% for a down payment. This is a grant and doesn’t need to be repaid. If you also negotiate with the seller to pay for closing costs, you could get into a home for $0 out of pocket. How amazing is that? Keep in mind that there are a few criteria you need to meet, including a 620 credit score and a yearly income under $88,000.
If you have any questions for me about the market or if you’re looking to buy or sell a home, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.
Today I’m back with part two of the “Importance of Representation After Contract” to go over why you need to have representation during the appraisal process.
I’m back for part two of the “Importance of Representation After Contract.” Today I’ll go over the why it’s so important to keep your representation during the appraisal process.
So what is an appraisal?
An appraisal is a valuation done on a property by a professional known as an appraiser.
On the buyer’s side, if the appraisal does not come in at the contract price, you have three options. The first is to walk away from the sale. The second is to ask the seller to come down in price to the appraised value and the third is to meet somewhere in the middle. However, the third option requires the buyer to come up with extra cash out of pocket.
The seller, on the other hand, needs to sell their home first to the buyer and then to the appraiser. We help our sellers by providing an appraiser with anything they might need to see the value in a home that the seller and the buyer have agreed to.
We make sure our clients are taken care of all the way through closing.
A gentleman once came into my office whose home had been on the market for more than 160 days. He finally thought he had it sold, but the appraisal came in $30,000 lower than what he and the buyer had agreed to. He couldn’t reduce the price that low, so the sale fell through. I went through his appraisal and I found a few things that weren’t quite right. Unlike his agent, I would have disputed the appraisal to see if we could get a more accurate value.
I believe this is a great example of why you need to make sure you have representation even after the contract is signed. We work very hard for our clients during the appraisal process and really try to make sure they are taken care of all the way through closing.
If you have any further questions about this topic or you have any other real estate questions, please feel free to give me a call or send me an email. I look forward to hearing from you!
I believe having good representation after a home contract has been is accepted is just as (if not more) important than it is before a purchase agreement is accepted. Here's why.
In my opinion, your representation after you execute a purchase contract on a property is just as important (if not more important) than your representation when you first buy a home and negotiate a contract. Most people don't even consider the representation afterward.
I've personally seen tens of thousands of dollars saved that would have otherwise gone out the window if there had been bad or no advice given to the client. There are two main points for this: the inspection period and the appraisal. Today, we'll just talk about the inspection period. We'll cover appraisals next time.
Not having good representation after a contract is accepted could cost you thousands of dollars.
As for the inspection period, the buyer will do all their due diligence. When they do this, they have the right to as many inspections as they want. When they're done at the end of the 10-day inspection period, they'll submit a report of what they want the seller to fix in writing. Many sellers don't want the deal to fall through, so they capitulate and give the buyer most of what they want—this can be a grave mistake due to all the money riding on those repairs.
That's why it's good to have someone in your corner representing you who has contacts with good contractors and vendors so they can get estimates for the costs of these repairs. That way, you'll have everything at your disposal to make an informed decision. Secondly, you want great representation for their ability to negotiate and ask open-ended questions to the other agent and find out whether the buyer truly loves the house or they're on the fence about it. This can also help you get a sense of how important certain repairs are to them.
These are all things that a good agent will do for a seller after the contract has been accepted. If you have any other questions about this topic, I'd love to help you out. Negotiation can be fun and there's a level or art and skill to it, so give me a call or send me an email soon and let's get the conversation started!
I have seven New Year's resolutions that I'm taking on in 2017 that I think will really help me maintain my home more effectively. I recommend these seven things to all fellow homeowners!
In light of 2017, I decided there are a few New Year's resolutions I wanted to start and maintain when it comes to my home this year. There are seven that I want to share with you:
I will turn off all my lights. I have small kids, so I can't imagine how much money is wasted every month from lights being left on.
I will remove my shoes and compel others to do the same. This is always a good idea if you have carpet in your house. Taking your shoes off every single day can make a big difference over a long period of time.
I will put money into a maintenance account for my house regularly. This is for when things break and for preventative maintenance.
I will conduct many inspections of my house.
Simply taking your shoes off every day will make a big difference in keeping your carpet clean.
I will wash my windows consistently. Think of how much brighter your house is without that film of dust throughout the year.
I will change my A/C filters monthly. This is a big one most people forget. I actually write the day that I change the filter on it so I know when to change it out.
I will declutter a bit every single day. Just keep the house clean and when you move, you'll have less to deal with.
I highly recommend these seven tips to any fellow homeowners. If you have any questions or you're thinking about buying or selling a home, give me a call or send me an email. I'd love to hear from you!
