Fairfield County Real Estate and Community News

Aug. 31, 2021

12 Tips for an Easier Move

 

 

As exciting as it is to move into a new home, not many people look forward to the actual moving day. Whether you are moving across town or across the country, moving is stressful. Here are some helpful hints from expert movers to make the big day a little more bearable.

 

1. Schedule your move well ahead of time. Moving companies get booked up weeks in advance, so don’t wait until the last minute to schedule your move. Make sure they know ahead of time if you have any very large or heavy items to move. The last thing you want is for the movers to show up with a truck that isn’t big enough or without enough people to move your belongings safely.

 

2. Consider letting the moving company pack your items. If it’s within your budget to hire packers, it may be money well spent. Packers are usually very efficient and take time to wrap fragile items securely. Packers will usually pack you the day before your move, so you don’t have to pack items away that you may need up until the day of your move.

 

3. Schedule services. Don’t forget to have services transferred or started at your new home. These may include:

Power

Water

Trash service

Internet/TV/Phone

Gas

Lawn service

Pool service

Security system monitoring

 

4. Have your new home professionally cleaned. If your seller is not arranging for cleaning to be done prior to closing, arrange to have it done before you move in so that you won’t arrive to a dirty house.

 

5. Pack a moving supply box. Your moving supply box should contain items you may need while you are unpacking and getting settled in your new home, such as:

 

Toilet paper

Paper towels

Sponge

All-purpose cleaner and glass cleaner

Shelf liner paper

Scissors

Furniture moving pads

Tape measure

Cordless screwdriver

Hammer

Picture hanging kit

Bottled water, snacks, pet food

Paper plates, cups, and disposable utensils

Dish Soap and Hand Soap

   

6. Make Your Bed. As soon as your bed frames and mattresses come off the truck, put them together or have the movers put them together, and make them up. Pack your sheets, blankets, and pillows together in well-marked boxes so you can find them easily. When you are ready to collapse at the end of moving day, you’ll be thankful the beds are made up and ready to fall into.

 

7. Ditto for your towels and bath soap. Pack bath towels and soap with your bed sheets so you can jump in the shower before retiring without having to search for towels.

 

8. Make Plans for Your pets. The last thing you need on moving day is a stressed-out pup or kitty, or worse, one that escapes in an unfamiliar neighborhood. Make plans for your pets to spend the day with family or friends, a pet sitter, or boarding facility until you are ready to introduce them to their new home.

 

9. Say Yes to Helpers. Sometimes it’s hard to accept extra help from family or friends if you aren’t sure what they can help with. Here are some tasks you can delegate:

 

Lay shelf liner in the kitchen and bathroom cabinets and drawers

Unpack and put away your kitchen items (you can rearrange later!)

Babysit or keep your children occupied

Make up your beds, place towels in the bathrooms

Wipe down cabinets and counters

Break down packing boxes

Hang clothes in closets

Organize tools and equipment in the garage

Pick up lunch or dinner

 

10. Hire a Sitter. If you have little ones, they will be very excited about their new home, new rooms, and yard. They will want to be with you, but they will not be interested in unpacking boxes! Make plans for someone to be available just for them, so you can concentrate. A family member, friend or hired sitter can help them explore their new surroundings, build a box fort, or organize their toys in their new rooms without you worrying about where they are.

 

11. Hire someone to hang your art. Unless you love to hang things yourself, you might consider having a handyman scheduled to come in and hand your wall art and window treatments for you. This can save you a great deal of time getting settled. If you need help deciding where to hang art or portraits, a decorator may be a better choice than a handyman. They can help you decide on placement and hang items themselves or direct a handyman where to hang items.

 

12. Check out of the old house. Prior to closing, you should have submitted a change of address form with the post office. You’ll also need to remember to leave all keys and garage door or gate openers, and make sure the movers don’t pack up things like ceiling fan remote controls or other loose items that stay with the house. Don’t forget to clean out spaces like the attic, backyard sheds, crawl spaces, or any other hideaway spaces you might have stored items. It’s always nice to have the home professionally cleaned for the new owners, and, if you feel inclined, leave a list of recommended local vendors for household services.

Posted in Real Estate News
June 28, 2021

Considering Short Term Rentals?

Considering Short-Term Rentals?

 

Short-term rentals can be a highly lucrative investment and a fun way to make money. Some of the advantages to managing a short-term rental property include:

 

1. Your tenants are generally excited to be at your vacation property and may not require as much attention as a long-term tenant.

2. You can collect one-time, up-front payments instead of keeping track of monthly or weekly payments.

3. Depending on the location and amenities of your property, you may make several thousand dollars per month per property.

4. Platforms such as Airbnb, VRBO, and Booking.com make it easy to set up a website to market your property.

 

A short-term rental investment can be accomplished by purchasing a property to keep rented out or putting your own home up for rent when you travel. Whichever course you take, here are some things to think about before you hang up that “vacancy” sign.

 

1. Managing short term rentals is not exactly passive income. There is quite a lot of work involved in marketing the property, keeping it maintained, and turning it around between tenants. Consider whether you have the time to keep up with it yourself or if you will need to hire a property manager, and how much that will cut into your profits.

 

2. Think beyond vacation rentals. Short term rentals don’t have to be on the beach or a ski slope. Other reasons why someone may need a rental in your neighborhood include job interviews, waiting to close on a home, renovating a home, visiting family, traveling with pets, college tours, entertainment events occurring in the area, or having medical procedure done at a nearby hospital.

 

3. Do your due diligence when buying an investment property. You’ll want to assess the existing short-term rental market and find out what the going rates are and which areas are renting well. You should find out if there are HOA or condominium regulations that prohibit short-term rentals. Also inquire as to state, county, or city regulations and resort taxes.

 

4. Create a business plan. Many property owners wing it with their short-term rentals, but you will have more peace of mind and less surprises if you treat your rental as a business. Make a list of expenses, including insurance, mortgage payments, taxes, cleaning and handyman services, utilities, internet and TV, lawn or pool care, furnishings, consumables you will provide, and marketing costs.

 

5. Work with an agent who knows the area. Buying the right property at the right price takes some experience. Remember that the purchase of the property is the bigger investment than the rentals to follow. Let’s talk about how I can help you get started making money with short-term rentals!

Posted in Buying a Home
June 26, 2021

Understanding Home Equity

Home equity…Everybody wants it, but what exactly is it, and how do you get it?

 

Equity represents the degree of ownership an individual or entity has in an asset after subtracting any debts against the asset. To say someone shares equity in a company means they would share in any assets remaining after all debts are accounted for.

 

For example, if your business has sold $500,000 worth of product this year, but you have rent, operating expenses, and a business loan payment totaling $400,000 for the year, you have $100,000 of equity in your business. Equity changes as the value of your assets and debts change.

 

Home equity works the same way. When you take out a mortgage to purchase a home, your home is collateral on the mortgage loan, so the outstanding mortgage principal must be deducted from the value of the home to determine your home equity.

 

In most cases, you make a down payment when you purchase your home. That down payment is your initial home equity. If you pay a 20% down payment on a $200,000 home, you have $40,000 equity when you close on your purchase.

 

As time goes on and you continue to pay down your mortgage principal, your equity grows. Usually, the longer your own your home, the more equity you gain because you are paying down your mortgage. However, any debts you take on using your home value as collateral, such as a second mortgage or home equity line of credit (HELOC,) decrease your home equity.

 

The changing real estate market also influences your equity. If you paid $200,000 for your home, and two years later the homes in your neighborhood start selling in the $400,000 range, your theoretical equity increases. (Theoretical because you don’t realize your home equity until you sell your home and pay off all debts against it.) You can also lose equity if the market takes a dive but be patient and it should recover in time.

 

Equity also grows if you make improvements on your home that increase its value. Let’s say you add a swimming pool and all new appliances. You have increased the value of the home. Your equity doesn’t increase by the amount your spent on the improvements, but on the value you get upon resale. This is an important point when considering making improvements prior to putting your home on the market, and one that is often misunderstood.

 

Let’s say Joe spends $50,000 on upgrades to his home. He might tell his neighbor, “I have $50,000 in my home,” but when he goes to sell, the current market dictates how much he will actually get in return. If Joe ends up selling for $40,000 more than he originally paid, his $50,000 investment got him $40,000 in home equity.

 

Some things you can do to increase your home equity include:

 

1) Make a large down payment when you purchase your home. The more cash you put down, the more equity you begin with.

 

2) Make increased or extra payments on your mortgage principal. Adding to the principal portion only on your monthly payments, or making extra payments when you are able, helps chip away at your outstanding debt.

 

3) Be smart when making home improvements. Not all improvements build equity. Some improvements may be personal preferences that don’t necessarily add value for resale. Improvements such as a new HVAC system, new appliances, or a new roof are usually more reliable investments than a fountain in the front yard or surround sound speakers throughout the house.

 

4) Don’t borrow against your home equity unless you must. Home equity is often a homeowner’s biggest asset, and can help to build your retirement nest egg, but it can also come in handy if life throws you a curve ball and you need to borrow against it for an unforeseen emergency. Be careful not to borrow against your equity for frivolous purposes, so it will be there if you really need it.

 

5) Sell when the market is favorable. If you are counting on your home equity to help finance your next home, pay for your children’s education, or add to your retirement funds, try to sell during a seller’s market when inventory is needed in your area.

June 17, 2021

Buying Your First Home? Know These 3 Things

I love working with first-time home buyers. Helping you find your first home, learn the home buying process, and guiding you from house-hunting to move-in day gives me the warm fuzzies. Here are three things you should know before you start looking.

 

1. Work with one real estate agent. It’s best to have one agent who is helping you with your search. Your agent will be dedicated to finding you the right property, and then negotiating on all the terms of your transaction on your behalf. You want that person to get to know you and your family’s needs and preferences, rather than starting over with someone new each time you go look at a house. Keep in mind that the agent who shows you a home is, ethically, the one who should continue the transaction. Also, when you call an agent from a yard sign or advertisement, you are dealing with the seller’s agent. While most real estate professionals are adept at handling both sides of a transaction professionally, it makes more sense to deal with someone you have already taken time to get to know and who has your best interests at heart as the buyer. You aren’t paying your agent; unless otherwise stated, he or she is paid by the seller upon closing. Still, you are hiring someone to work for you, so feel free to interview multiple agents and pick the one that you feel fits you best.

 

2. You need to be pre-approved for financing. Unless you are paying cash for your home, you do need to talk to a lender before you start looking at houses. One reason is that it helps you set an accurate price range for house hunting. Looking at homes that you can’t afford to make an offer on just leads to frustration. A mortgage lender will not only tell you what amount you can borrow, but also your projected monthly payment, your closing costs, and what you should or shouldn’t do with your finances to maintain your eligibility throughout the lending process. Another reason for having an up-to-date pre-approval in hand is so you don’t lose out to another buyer. If you find the perfect house, you will want to get an offer in before someone else gets it, and that pre-approval letter must accompany your offer. I would be happy to provide you with names of mortgage lenders in our area who have provided excellent service to my clients.

 

3. There are some up-front costs. When you find the right house, and you and the seller have agreed on the price and terms and have signed the contract, you will first need to make your escrow, or “good faith” deposit. This is money you are risking if you back out of the deal for reasons not protected in the contract. Usually it is between 1% and 5% of the sales price but can be more or less depending on what you and the seller agree to in the contract. Your agent will help you with this during negotiations. The escrow deposit counts towards the sales price.

 

4. Next, you should have an inspection of the property done by a certified home inspector. This cost varies depending on the size, condition, age, and features of the home, but is usually a few hundred dollars. You will need to pay this at the time of service. You may elect to pay for other inspections based on the results of the initial inspection. For example, if the inspector notes an issue with the HVAC system, you may need to pay a service fee for an HVAC contractor to look at the system. You want to get as much information during your inspection period as you need to confidently move forward with the purchase.

 

5. An appraisal and a survey of the property will be ordered, but these are usually added to your closing costs and not expected to be paid in advance. However, you may be asked to provide a credit card number to be charged in the event that the closing does not take place.

 

I will guide you through all of these steps throughout your home buying journey. Ready to get started? Give me a call!

Posted in Buying a Home
May 28, 2021

The #1 Reason Homes Don’t Sell (and How to Fix It)

The #1 Reason Homes Don’t Sell (and How to Fix It)

You heard it’s a seller’s market right now so you couldn’t wait to sell your home. Except it’s sitting and you don’t know why.
You have plenty of people walk through it or inquire about it, but you aren’t receiving bids.

What’s the problem?

The price. It’s the number one reason homes don’t sell.
Sellers price homes too high and buyers are turned off. They don’t even want to see the home. So how do you know how much to sell your home for without losing? Here are the ways.

Know the Comparative Sales in the Area

The market dictates how much you can ask for your home. Buyers not only want to pay the ‘market rate’ but lenders won’t approve a mortgage if the sales price is too high.

The market value plays an important role in the transaction. Do your research or work with a licensed professional who can research comparative sales. Knowing how much comparable homes sold for in the last six months will be your guide when pricing your home.

Work with a Reputable Real Estate Agent

Working with just any real estate agent won’t do the trick. Not all agents have your best interests in mind. Some worry about their commission checks and price the home high to make the most commission.

This won’t work for you. It’s easy to tell if it’s happening. Here are telltale signs:

  • Few visits to your listing pages
  • Few inquiries about the home
  • Other homes in the area selling, but yours isn’t

Cut the Price

If you’ve already listed your home and feel stuck or you notice other homes are selling and yours isn’t – consider a price cut.

It may not need to be much. Even a 5% cut may bring in more attention. It depends on the difference between the average value of homes and your asking price. The listing will show the price history and that there was a recent drop. This may bring more attention.

The even better news is you still may get the price you wanted or close to it. Buyers place a bid and you may negotiate. In today’s competitive environment, there are often bidding wars too. This naturally drives the price up, getting you closer to the original price you wanted.

Don’t get Caught Pricing your Home too High

The simplest way to avoid this issue is to price your house right from the start. It’s not easy, but with the right support, you can do it.

If you make the mistake, don’t worry, it’s always fixable. Price adjustments happen all the time in real estate and it’s not a bad thing. Most buyers will see that the home was overpriced to start. If they ask, just tell buyers you made a mistake but dropped the price to make it more attractive.

In the end, you’ll sell your home faster and may even walk away with profits close to what you hand in mind.

 

May 28, 2021

1031 Exchange – What is it and How Does it Work

1031 Exchange – What is it and How Does it Work?

When you sell a real estate investment, you make capital gains, or at least that’s the hope. Those profits come at a price, though. You’ll owe taxes on the income, which depletes the money you earn.

There’s a way around it.

The 1031 exchange or like-kind exchange is a way around the tax issue. Not everyone qualifies and you must follow the instructions to the letter to make it work.

Here’s what you must know.

What is the 1031 Exchange?

You can do the 1031 exchange in one of two ways. A simultaneous 1031 exchange occurs when you sell a property and buy another on the same day. You transfer the profits from one property to another, never taking possession of the cash, which would trigger the tax liability.

A deferred 1031 exchange occurs when you sell a property, but don’t buy another property right away. To qualify, you must:

  • Within 45 days find another property to invest in and identify your intention by signing a contract and/or notifying an exchange facilitator of your intention. Telling your attorney or real estate agent doesn’t count.
  • Within 180 days of selling the first property or the tax due date including extensions for the tax year, whichever is first, complete the purchase of the second property.
  • Find a property that’s similar (or the same) as the property you sold.

Who Qualifies?

Real estate investors may qualify for the 1031 like-kind exchange. This includes individuals, partnerships, corporations, and LLCs. Anyone who operates as a business may qualify, but only properties you invest in, not live in, count.

What Properties Count?

The properties you ‘exchange’ must be similar, but not identical. For example, both properties must be real estate. You can’t exchange real estate property for a real estate trust, for example. It must be two properties.

As far as how alike they must be, differs. For example, you may sell land with a rental house for vacant land and it would count. As long as both properties are used in a business fashion, not for personal use, they may count.

Additionally, both properties must be within the United States. For example, you can’t sell one property here and buy another abroad and use the 1031 exchange.

1031 Exchange Helps Investors Avoid Capital Gains Taxes

If you’re an investor looking to keep your investments going, the 1031 exchange can help lower your tax liability. It takes careful planning and adhering to strict timelines to make it work. Using an exchange facilitator can help ensure you meet all deadlines so you can take advantage of the 1031 exchange.

Work with your tax advisor too, as this affects your taxes and what you will (or will not) owe. While you’ll pay taxes eventually on the capital gains you earn on real estate, it may not have to be right away if you continue investing after selling a property.

May 28, 2021

First time home-buyer mistakes to avoid

Buying your first home is one of the most exciting decisions you’ll make in your life! It comes with a lot of responsibility, but a lot of excitement too. Before you jump in and buy your first home, know the most common first-time homebuyer mistakes people make.

 

Not Getting Pre-Approved

The pre-approval is like your ticket to homes for sale. Sellers want that piece of paper that says ‘yes, they are approved to get financing.’ Getting pre-approved is easy and it makes sellers much more willing to consider your bid.

What to do: Find a lender and get pre-approved. Get quotes from a few lenders (three is a good number) to find the best offer.

 

Spending too Much on a Home

It’s tempting to want the very best (and we want that for you too) but buying more than you can afford only creates financial problems. Just because a bank says you qualify for a certain amount doesn’t mean you have to spend that much.

What to do: Before you buy a home, play with the numbers. See how a mortgage payment fits into your budget. Don’t be afraid to borrow less than you qualify for.

 

Not Leaving Money in your Savings Account

Putting everything you have down on a home leaves you without a cushion. What happens when the A/C breaks or there’s a plumbing leak? When you own a home, you’re responsible for the maintenance and repairs. It’s an eye-opener when that first repair hits.

What to do: Leave some money in your savings account as a buffer, especially if you can’t contribute to your savings for a while after buying a home.

 

Ruining your Credit before you Close

Lenders pull your credit a couple of times during the loan process. They pull it during the pre-approval process, sometimes again during underwriting (if more than 60 days pass from the pre-approval date) and again before closing. If you hurt your credit score during this time, you could lose your approval.

What to do: Keep your credit as stable as possible. Keep paying your bills on time, don’t apply for new credit, and don’t use your credit cards.

 

Making Large Deposits in your Bank Account before Closing

Lenders source every deposit on your bank statement. They track where the money originated to ensure you didn’t borrow it. If you suddenly have large deposits on your bank account, it could delay underwriting and eve cause you to lose your loan.

What to do: If you have large deposits, wait until they are in your account for at least 2 months before applying for a mortgage. Lenders consider funds in your account for 2 months ‘seasoned’ and they usually don’t source them then.

 

The more time you spend preparing for your first home purchase, the easier the process goes. Finding a home is the fun part, but qualifying for financing and finalizing the transaction requires careful planning and avoiding the top mistakes first-time homebuyers make.

May 28, 2021

How to get a home loan with bad credit

Many people think you need ‘perfect credit’ and a large down payment to get a home loan. You don’t.

Today, there are programs for people with less than perfect credit and little money down. While it helps to have good credit because you have more options, don’t let bad credit stop you from buying the home of your dreams.
What programs are available? Check out the list below.

 

FHA Loans

The FHA program is the best loan program for borrowers with ‘bad credit.’ All you need is a 580 credit score, which is almost 100 points less than what conventional home loan lenders require. If you have more money to put down (at least 10%), you can even get away with a credit score between 500 – 579. FHA loans require just a 3.5% down payment and allows debt-to-income ratios between 43 – 50%. This means that your total debts (new mortgage included) don’t take up more than 43 – 50% of your income before taxes.

 

VA Loans

The VA home loan program is great for veterans or current military members with less than perfect credit. If you served in the military for 90 days during wartime, 181 days during peacetime, or 6 years in the National Guard or Reserves, you’re likely eligible.
Why consider VA loans over any other program? They have the most flexible underwriting guidelines and the lowest closing costs. You don’t even need a down payment. The VA mostly focuses on your monthly disposable income or money you have left after paying your bills. If you have enough disposable income and you’re a veteran, you have a good chance at securing the loan.

 

Other Loan Options for Bad Credit

What if you don’t qualify for an FHA loan and aren’t a veteran?

Lenders have alternative financing options. These loans aren’t backed by the government, so each lender has its own guidelines. Some lenders cater to borrowers with bad credit, giving you a chance to become a homeowner.
Look around for lenders that offer ‘private mortgage loans’ as they are often more flexible with the guidelines, giving you more options.

 

Ways to Improve your Credit

If you can’t find an affordable loan given the state of your credit right now, try these tips to increase your credit score. In a matter of a few months, you can bring your credit score up and get the loan you need:

  • Pay your bills on time, eliminating all late payments
  • Pay your debts down to reduce your credit utilization rate (the comparison of your total debts to your total credit lines)
  • Don’t apply for new credit (every inquiry brings your credit score down)
  • Keep old credit lines open but don’t use them (the longer credit length helps your score)

Don’t think you can’t get a mortgage just because you have bad credit. There are options. If you take a loan now that’s more expensive than you’d like, work on improving your credit and refinance the loan in a year or two when things look better. This allows you to buy your home when you want, and not let bad credit hold you back.

May 28, 2021

Should I buy a house or rent?

Should I buy a house or rent?
Being a homeowner is a lifestyle change that comes with a lot more responsibility. Taking care of your property and extra costs are part of the deal. But the perks of being the primary decision-maker may make it all worthwhile.
✔️When you own your own home, that space becomes yours entirely. You can paint the walls orange—you can knock the walls down if you really want to.
✔️Paying your mortgage might feel similar to paying rent, but it’s not. Every month, a little more of that home becomes your financial asset. This is called building equity in your house. Once that equity is built up enough, it boosts your wealth and creditworthiness
✔️Rent can fluctuate, but a fixed-rate mortgage makes your housing costs more predictable. Improved home value, property taxes, and insurance rates can affect that payment some, but typically less than a spontaneous rent hike.
If you are ready to discuss your options, please give me a call!
May 26, 2021

7 Tips for Saying Goodbye to Sentimental Belongings

When I work with clients who are downsizing to a smaller home, one of the hardest chores they face is letting go of sentimental belongings they no longer have room for. Souvenirs collected during travels, family heirlooms, and your children’s keepsakes can be quite stressful to part with. It doesn’t matter whether the items have monetary value or not; in fact, often the most difficult items to let go of are worthless in terms of money, but priceless in sentimental value.

Here are some tips to help you part with belongings you are attached to but no longer want to keep.

1. Remember that our memories reside within us, not within our possessions.
Psychologists say that letting go of sentimental items can be extremely therapeutic. When we keep things, the items occupy both physical and mental space in our lives. It’s healthier to focus on your memories and not the items that represent your memories.

2. Focus on the present. Letting go also helps to bring your focus to the present. Sometimes things are continual reminders of the past and hold us back from living in the present. Dwelling in the past can make one more prone to depression and can affect our ability to deal with stressful situations in our lives. Realize that while we can always cherish our memories, we don’t need the past to be happy in the present.

3. Let go of guilt. People often hold onto an item they don’t want or need because someone special gave it to them or it represents a special person. Learn to let go of the guilt associated with getting rid of gifts you can’t use. Appreciate the thoughtfulness of the giver or the special memory it represents but pass the item on to someone else who can use it or donate it to charity.

4. Don’t save it for your grown children. Times have changed and today more young adults are able to buy their own furnishings. And they aren’t as sentimental about family heirlooms as prior generations were. Talk to your kids now and find out if you are holding onto your china, crystal, and silver tea service for nothing.

5. Compromise with your spouse. It’s not uncommon for one spouse to resent the others’ favorite belongings while holding onto their own special stuff. It’s important to recognize that, while you may not understand your husband’s need to keep a ball cap for every MLB team he’s seen play, he may feel the same way about his hats that you do about keeping every book you have read. Decide together on a reasonable number to keep.

6. Start with the easy stuff. If you have a lot of belongings to sort through, start with the easier decisions and work from there. Often people find that once they get some momentum going it feels good to let go.

7. Write a family memoir. Hold onto your memories with words instead of things by writing your memoir or the story of your family. Writing your story can be very therapeutic and can help you release your hold on tangible items. If you need help, try a service like Storyworth.com.