Real Estate Information Archive

The majority of articles advocating home ownership center around financial benefits—fixed monthly expenses, tax benefits, accruing equity, etc.—and indeed these incentives do propel many people to purchase a home.  According to two recent polls (Gallop and the Allstate / National Journal survey), however, other more intangible factors also motivate the purchase of a piece of real estate.

• Sense of community:  As a homeowner, you’ll be centered in a strong community of like-minded people, which can be a valuable asset for you and your family.  Homeownership brings a sense of pride in both your home and your community.  Various studies suggest that a higher homeownership rate brings lower crime rates, higher property values, better educated children, and ultimately closer communities.  Investing in a home may also mean investing in your family and your community by getting involved.  Once you own a home, you feel more attached to the area in which you live. You're more interested in what happens in your neighborhood, to the roads, schools, and shopping areas.
  
   
• Renewed belief in the American Dream:  Although confidence in that dream has faltered in recent years, the desire to own a home is rebounding, especially among younger buyers and members of diverse ethnic groups.  Pride and family stability are important factors in today’s dream. Your house is the physical manifestation of your years of hard work and financial responsibility. And nothing says “success story” like owning your very own piece of the American dream.
   
• Higher academic achievement of children:  Consistent findings show that homeownership does have a significant positive impact on educational achievement.  Some studies find that homeownership brings residential stability, and it is this stability that raises educational attainment.  Another asserts that while homeownership raises educational outcomes for children, neighborhood stability further enhances the positive outcome.  Additional research has shown that there is an increased chance of success in many areas for the children of homeowners.
   
• Freedom to “do your own thing.”  If you own your house, the home improvement store is your oyster! You can paint, remodel, remove, or restyle just about anything in your home to meet your individual needs and/or reflect your tastes and personality.

Owning a home is certainly a wise investment—in so many ways!

Information courtesy of New Castle County Realtor Tucker Robbins.

If you watch home-and-garden cable channels, it looks like everyone is flipping houses. i.e. buying a piece of real estate, making minor repairs, and quickly selling it at a substantially higher price.  Basic investing 101: Buy low, sell high.

Certainly sounds appealing--and you may be tempted to join the ranks of those who have been successful in this field.  Be forewarned, however, that like most money-making endeavors, real estate flipping requires time, money, patience and skill.

For tips on how to begin, steps to follow, and advice on how to avoid pitfalls, read on…

Do your research and be knowledgeable well in advance:

• Talk to (and learn from) successful flippers, read up on the subject, follow real estate deals in the newspaper, use the Internet as a teaching resource, attend open houses and auctions.
   
• Identify possible house locations, size, and style.  Educate yourself on how to recognize promising properties and how to spot a lemon.
   
• Familiarize yourself with current prices, taxes, utility rates, HOA fees, municipal and restrictions in each area you are considering.   Study your market. Get to know it as well as you possibly can. Understand the trends, the kinds of houses, the neighborhoods, the streets.
   
• Visit the potential homes and neighborhoods in person.  Talk to residents, Realtors, and repair companies who are familiar with the area.

Set up a budget, a time line, and financing:

• Figure out how much money you have (or can put your hands on using investors) without borrowing.
   
• Calculate the cost of repairs, taxes, utilities, materials, contractor/labor expenses, and the like.  Professional contractors advise flippers to add an extra 10% to their repair estimate.  Also, to be on the safe side, make sure that you’ll be able to hold on to the home as a rental property for a while, if need be.
   
• Experts suggest factoring in the flip time into your budget and your potential profit before you purchase the home. According to investors, a successful flip is one that makes you around a 15% profit.

Be prepared:

• When you find the right house, you must act quickly to buy it.
   
• Have appraisers, agents, contractors, skilled laborers lined up so they can start work immediately upon your purchase.  Remember, in flipping, time is money!
   
• Be ready to make quick decisions, devote a great deal of time (and possibly sweat equity) to this project, and face unexpected expenses.

Two major caveats:  Be patient and don’t get greedy!

Information courtesy of New Castle County DE Realtor Tucker Robbins.

Each year around 65% of all household moves take place between May and September, so obviously you need to plan ahead if you’re moving to a new home this summer.

While the act of relocating to a new place can certainly be exciting, there are, of course, challenges to be met, especially during a hot, busy summer season.  Although there are no foolproof ways to make the experience totally stress-free, there are, thankfully, actions you can take to make your “adventure” a more positive one.

Sage advice to heed includes:

• Plan ahead!  Contact moving companies or truck rental firms at least six weeks in advance if possible. Try to schedule your move for a weekday and at a time when traffic is less heavy. Make prior arrangements for the care of young children and pets on moving day—for their sake and yours!  Line up commitments from friends and family if you’ll need their assistance for the move.
   
• Be strategic about packing.  Gather necessary supplies and start packing early.  Whether it’s one room, one cabinet, or a drawer at a time, weed through what may be years of accumulation.  Decide what to donate to charity, give to a friend, recycle, trash, pack now, or keep handy until moving day.  Label boxes as to contents and intended room in the new home.
   
• Take care of logistics in advance.  Ideally, you should contact your future utilities provider at least two weeks before you move regarding turning on your electricity, gas, phone, cable, and internet before your arrival, if possible.  Contact any new school for a list of documents needed for registration.  Do not pack these materials away it’s better to hand carry them for easy retrieval.  If you’re going to need to spend a night in a hotel, make those arrangements early.
   
• Make life simple.  Keep all small parts labeled, in plastic bags, and all together in one box.  Likewise, take pictures of electronic hook-ups for future use.
   
• Consider the heat.  Dress appropriately, stay hydrated, and refrain from placing certain items in a hot truck—candles or wine, e.g.  Click here for tips on packing cleaning products and toxins.
   
• Stay calm.  Relax, whistle, smile, and anticipate the pleasure of living in your new home. 

Information courtesy of New Castle County Realtor Tucker Robbins.

Not to be confused with homeowner’s insurance, which covers the structure and contents of your  home, a warranty service contract is designed to cover systems and appliances that stop working due to normal usage.  Basic coverage generally includes the repair and replacement of major appliances such as heating/cooling system, water heater, refrigerator, dishwasher, stove, etc.  Plumbing and electrical systems are also usually covered, and some companies include washer, drier, microwave, and roof maintenance in the basic tier.

Gaining in popularity with both buyers and sellers, warranty service contracts serve to reassure owners that they won’t face major repair/replacement costs.  Sellers use them to protect the home while it’s on the market and as an incentive to attract buyers.  Buyers rely on them to protect them from unexpected and expensive repairs.  Even Freddie Mac will offer a $500 home warranty credit to home buyers who purchase a qualified, foreclosed single-family home, townhouse, or condominium through their HomeSteps® division.

A warranty plan is fairly inexpensive, typically ranging from $250 to $400, depending on coverage. The policy is prepaid for a year in advance, at which time it expires or can be renewed.  The usual procedure for service needs is as follows:

• If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
• The home warranty company calls a provider with which it has a business arrangement.
• The specific provider calls the home owner to make an appointment.
• The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
• The home owner pays a small trade service fee (less than $100) for each service call.

Most home warranty companies offer a variety of plans, each providing different levels of coverage, so be sure to read the details of any contract before buying. If you choose to renew the contract from year-to-year, double-check the details of your plan each time since coverage can change annually.

According to the Service Contract Industry Council, 32 states require home warranty companies to register or obtain a license with that state's department of insurance and comply with applicable laws and financial standards. Membership lists are available at their website.

Information courtesy of Wilmington DE Real Estate Expert Tucker Robbins.

You probably already know that you can invest your IRA money in stocks and bonds and even in mutual funds if you so desire, but did you know that you can also invest those IRA funds in real estate?  Doing so, however, is a bit complicated, and IRS rules concerning such purchases must be followed to the letter.  

Usually, when you take money out of an individual retirement account before you reach age 59 1/2, the IRS considers these premature distributions. In addition to owing any tax that might be due on the money, you'll face a 10 percent penalty charge on the amount.  This is not the case, however, when you use the money to buy your first investment real estate.  (Note: Technically, you don't have to be purchasing your very first home or building. You qualify under the tax rules as long as you, or your spouse, didn't own a principal residence at any time during the previous two years.)  You can use up to $10,000 in IRA funds toward this purchase. If you're married, and you and your spouse are both first-time buyers, you can each pull from retirement accounts, giving you $20,000 to use.

The restrictions are many (and perhaps time-consuming) and include the following:

• You will need to find an IRS custodian who handles these investments (and the options are currently limited).  Generally banks and brokerage firms do not handle IRA distributions for real estate transactions.
   
• Only the custodian may handle your IRS funds.
   
• The type of property you buy must be for investment only and may not be used by you or by relatives. 
   
• All proceeds from the investment will go back into your IRA fund.  Likewise, however, all expenses must be paid from that fund, so you must have enough liquidity in your IRA to cover such costs.
   
• You must let the IRS know that you used the retirement money early for a tax-acceptable purpose by filing Form 5329.
   
• You must use the IRA funds within 120 days of withdrawal to pay qualified acquisition costs. This includes the costs of buying, building or rebuilding a home, along with any usual settlement, financing or closing costs.

The above information applies only to traditional IRSs.  To learn about the procedure for an Roth IRA, click here.

Information courtesy of New Castle County Realtor Tucker Robbins, Berkshire Hathaway HomeServices.

Buying or selling real estate is a complex procedure, so it’s important to select a competent, honest agent who will skillfully represent your best interests throughout the entire process.  As you begin your search for property or for a new owner of your home, keep your eyes and ears open.  Notice the names on real estate signs in your neighborhood, ask friends and relatives for referrals, attend open houses in your target area to meet the agent on duty, and check the real estate section of your community newspaper,

Once you have compiled a list of names, you will next want to determine if the person is a Realtor, agent, or broker.  A Realtor is someone who is licensed by the National Association of Realtors (NAR), is bound by a Code of Ethics, and has access to the Multiple Listing Service (MLS). 

As you prepare to interview the New Castle County real estate agents on your list, be sure to discuss the following topics:

• The price range of most of their transactions.  Some agents specialize in high-end properties and won't give their best effort on properties under a set value. If they usually deal in fixer-uppers, they may not have the experience to navigate "Millionaire's Row".
   
• Their familiarity with and experience in your target area.  If you're buying, a Realtor should be able to provide you with information on the community, the schools, taxes, traffic, nearby amenities .and other facts. If you're selling, you want your agent to be able to talk to prospective buyers about these details.
   
• The amount of time they can give you—and availability to meet at your convenience.  If you need someone on weekday evenings or can meet only in the morning, will the agent be able to accommodate you?
   
• What services can you expect from them? In addition to helping you buy or sell real estate, interviewing potential clients, previewing and showing property, discussing sales conditions, drawing up and presenting offers, holding open houses, and writing contracts—all the while meeting deadlines and hand-holding when necessary—you should also expect your agent to be current on marketing strategies, federal/state programs, and area real estate trends and comps.
   
• References from previous clients.  Listen to what their past customers have to say. Google their names, too, and check the state for any licensing or disciplinary information.

Information courtesy of New Castle County Real Estate Expert Tucker Robbins.

Owning a home is part of the American Dream, yet standards on income, credit and debt are making it tougher to buy a home than it was 10 years ago. Even though requirements are relaxing, only three out of five borrowers get approved.

While stricter standards make it tougher for young families to qualify for a mortgage, millennials said they understand why these standards exist and think the tougher requirements won't stand in their way of buying a home.

Because mortgage lenders use debt-to-income to evaluate a borrowers' ability to repay a loan, student debt is a growing burden on millennials interested in financing a home. Unlike medical debt, student debt carries an equal weight to credit card debt. Nearly half of those surveyed said it's unfair to weigh both types of debt equally.

As for the tougher requirements to getting a mortgage, millennials do think the tougher standards guard against risky loans and will help prevent another mortgage crisis. More than half say making it easier to get a mortgage will result in more foreclosures.

If you have student debt and want to buy your first home, here are a few ideas and tips to help you prepare:

• Lower your debt-to-income ratio (DTI). DTI is your total monthly income as compared to your total monthly debt payments. Most lenders will only lend to you if your DTI is at or below 43 percent. So to lower it, try to increase your income by pursuing a promotion or raise, finding a higher-paying job or taking on part-time work. Decrease your required monthly debt payments by refinancing or consolidating student loans and paying down any credit card balances.
• Get your credit score in order. Analyze your credit report before you start the home buying process. Dispute incorrect derogatory information and ensure all three credit-reporting bureaus list all of your positive information. Pay all your bills on time, reduce credit card balances to 30 percent of the credit limit or lower, and don't open new credit cards if you already have a few.
• Save for a down payment. Make a budget for each month before it starts, with a plan for spending and saving, and stick to it. Stash away extra money from bonuses, overtime or financial gifts on your birthday or holidays. Find a roommate to help pay your rent or move into a less-expensive rental. Do freelance or contract work on the side. Sell unneeded stuff on Craigslist. (BPT)

Information courtesy of Wilmington DE Realtor Tucker Robbins.

The previous blog about preventing identity theft during a move dealt primarily with precautionary steps to take from your old residence to thwart clever criminals.  So you’re now safely ensconced in your new  home. And you can breathe a sigh of relief, right?

Actually, no.  Unfortunately, there are clever identity thieves waiting at that end of your relocation, also, and your efforts to outwit them must continue at your new address.  Read on for more advice:

• Once you have reached your new home, check to make certain that you have all the important papers and documents you carried with you—and immediately put them in a safe, secured place.
   
• Locate and unpack the box containing your electronic possessions—tablet, IPhone, computers, etc.  Account for each one and consider changing your passwords.
   
• Carefully look through your bank statements to make certain that there are no unauthorized charges.  You might also think about requesting new credit reports to be sure that your status hasn’t changed significantly.
   
• Make certain that you are receiving your mail at your new address.  If you are missing any statements, checks, and the like, report those losses immediately.
   
• Contact your old neighbor to verify that he/she is collecting any mail that arrives to the prior address.  Arrange for it to be mailed to you or go by and pick it up, if possible.
   
• If you have to cancel any bank accounts or credit cards because of your relocation, close the account, cut up any cards associated with the account, and shred unneeded papers.
   
• Replace the locks on immediately- preferably before you even move in, as the old tenants could still have keys.
   
• Be diligent and cautious when providing personal information, especially your social security number, to new doctors, organizations, or schools. 
   
• After the move set up a “safe zone” where you store important papers and can work on private matters away from the eyes of visitors to your new home, repairmen, utility workers, and strangers.

Although you may not be able to protect your identity 100%, you can go a long way in ensuring peace of mind by being proactive, diligent, and aware, especially during a move.

Information provided by Wilmington Real Estate Expert Tucker Robbins.

With all the news concerning retailers databases being compromised and resulting in consumer identity theft, you need to be acutely aware of the increase of identity theft during a move and take precautions to prevent your becoming a victim of enterprising criminals. Moving often makes it easier for identity theft to occur: we leave information behind that others can use---mail that is not rerouted to our new address, important papers that aren't shredded but left in the trash, or through hiring rogue movers. The following steps are essential to ensure your protection:

• If you are using a moving company, be sure that you know it is a trusted and reliable firm.  Sometimes simply getting recommendations from friends, family members, and real estate agents is not enough.
   
• Make a change of address checklist.  Before you move, make sure you take the time to list all companies, institutions, and subscriptions that you receive through the postal system. Click here for a list of those you should include.  Personally notify all financial institutions of your plans to leave your home.  One of the easiest ways that someone can obtain your personal identity is through mail theft.
   
• Submit a change of address form to the U.S. Post Office.  Once your form has been filed, double-check the confirmation from the Postal Service to make sure that they list your new address correctly. Your mail should start being delivered to your new residence within seven to 10 business days after you submit a change-of-address filing.  Ask a current neighbor to take in any mail that comes to your old address after you move.
   
• Although moving is a good time to discard unwanted personal files, records, and documents, don’t just throw them away; shred them!
   
• Make sure your technological “toys”---computers, cell phones, tablets, and the like—are secured by passwords and packed in unmarked boxes.  Better yet, take the computers, hard drives, and other external storage devices with you when you travel to your new home.
   
• Stay in your current home as much as you can while movers are there.

Information courtesy of New Castle County Realtor Tucker Robbins.

A new year has begun and it seems to me that time goes faster and faster each day. The economy is predicted to grow around 3% in 2015 and as you can guess that is good news for the real estate business!  The real estate market holds a few more predictions for 2015…

• Interest rates are still low compared to what they have been in years passed but Freddie Mac is predicting that interest rates will rise above the low 4% they had dipped to in 2014 to up to 5% by the end of 2015.  Still these interest rates are extremely low so if you are in the market for a new house you should go ahead and plan on making a purchase sometime in the year of 2015. 
• Prices for houses by the end of 2015 are predicted to be a little higher than in years passed but not so high that they won’t still be affordable.  Home appreciation will likely move to 4.5 percent instead of 9.3 percent as in 2014.  It may be that home appreciation will drop to 3 percent by the end of 2015.
• If building a home is in your plans then you are apparently on target with a lot of other folks. The building of new homes is expected to rise 20 percent from 2014.  If you don’t find the house that fits your every need this coming year on the market, it will be a great year to build it to your own specifications. 
• Not as many folks will be refinancing in 2015.  As a matter of fact refinances will drop to make up only about 23 percent of single family orientations this coming year.  In 2014 refinances made up roughly more than half of single family orientations. 
• It will be a bit easier to get a loan for your new home purchase in 2015 as some of the restrictions that were once placed on new home buyers will be eased.  Funding sources will grow for new home buyers in 2015 as well. 

As you can see there is a lot of good news for the real estate market in 2015.  If you are considering buying a home, don’t wait another day longer…get on the phone and call a qualified Real Estate agent today to get you started in the right direction.

Information courtesy of New Castle County Realtor Tucker Robbins!