Wednesday, December 22, 2010
Monday, December 20, 2010
As we approach Christmas 2010 and the upcoming New Year 2011 there is excitement, anticipation and memories to be made that will last a lifetime in the upcoming weeks. For many, celebrating Christmas is a time to reflect on childhood memories and to create and make new lasting memories with your friends or for your own family, children or grandchildren. It’s a time of joy, and a time for family and loved ones.
For me and others, it’s this time for family but also a celebration that dates back thousands of years to celebrate the birth of Jesus Christ. For others that are not religious or follow Christianity the Holiday means other things. Each is entitled to their own faith and traditions and I am not one to pass judgment.
I do however want to comment on what I feel can be shared by all regardless of faith and that is the great joy that can be felt by giving to others. As I get older, each year holidays like Christmas become more and more special to me. I love to sit back and watch my nieces and nephews dive into their gifts with reckless abandon and smiles from ear to ear! They tear away the wrapping paper in a blink of an eye and to watch their eyes light up is the best feeling I can describe. It takes me back to those days as kids when me, my brother and sister would wake up at the crack of dawn to run downstairs and see what gifts were under the tree, then run to mom and dad’s room to wake them up so we could get to those gifts!
Now as I grow older, I also realize that for all of the wonderful memories I’ve been blessed with and continue to look forward to making each year, there are also those less fortunate. I try to do my part to help where I can including buying gifts for toys for tots and recently for a name-less single mother with three children from my church that has requested help this Christmas to bring smiles to her children, but do I do enough? Not hardly. I’m certain I could do much more but knowing that I can help even in a small way put a smile on a face of someone feels good. I want to challenge you to keep the joy of giving as a focus this year and share the neat poem written below that sums it all up!
The Joy of Giving
John Greenleaf Whittier
Somehow, not only for Christmas,
Tuesday, December 14, 2010
Monday, December 6, 2010
You can use the Cap Rate to value your property. Let's say that your property generates $10,000 of annual net operating income. Your real estate agent tells you that the Capitalization Rate in your area is approximately 4%. That would mean that the approximate fair market value of your property is $250,000 ($10,000 / .04).
Let's assume that you are looking at investing in two properties. The first property has a projected NOI of $20,000 and an asking price of $500,000. The second property has a NOI of only $10,000 but an asking price of $110,000. Which one would the Cap Rate suggest is a better investment? That's right, the second property since the Cap Rate is 9% ($10,000 / $110,000) versus 4% ($20,000 / $500,000).
Wednesday, December 1, 2010
By Mike DeDoncker
I wanted to share the below article as it speaks of the wonderful life that my business partner Bob Hudetz may have saved through the act of being a bone marrow donor. He's extremely proud to have been a match for a person in need and I hope you share in the great news that his selfless act may have just saved someones life :)
Have a wonderful day and thanks for reading our blog as usual!
Posted Nov 28, 2010 @ 09:19 PM
ROCKFORD — Somewhere, an anonymous patient was waiting Tuesday for Bob Hudetz’s appointment at the Rock River Valley Blood Center to be over.
That’s because when Hudetz was finished with the four-hour procedure to extract stem cells from his blood, a courier would immediately fly them to the 64-year-old woman who would receive a transplant to treat her acute myelogenic leukemia.
“It’s cutting-edge stuff, and, of course, it doesn’t happen here every day,” said Jennifer Bowman, the blood center’s public relations and marketing manager.
Hudetz, owner of Advantage Realty Group in Naperville, became a part of a national marrow donor registry two years ago when a Neuqua Valley High School student needed a bone-marrow transplant and he joined a drive to find a match for the student.Hudetz wasn’t a match for the student, but in July, the blood center’s marrow donation coordinator, Julie Tilbury, contacted Hudetz to tell him he was one of 10 potential donors for the woman fighting leukemia.
“Apparently, they need the perfect match to have this person to be able to accept my stem cells,” Hudetz said, “and, then, earlier this month Julie called to say I was the perfect match, that there was an urgent need and could we get this done.”
In the procedure, the stem cells are extracted from the white cells of the donor’s peripheral blood.“It’s the most common way that we do marrow transplants,” Bowman said. “Most of them are from an adult donor.”
Holly Lindquist, the blood center’s automated collection coordinator, said blood is drawn from one of the donor’s arms and the blood passes through a machine that separates the cells with a centrifuge. The machine saves the white blood cells, and the red cells and plasma are returned to the donor into the other arm.
“When somebody said ‘bone marrow transplant,’” said Hudetz, who sat comfortably with both arms covered by small blankets, “I used to think that’s painful. It’s as easy as giving blood.”
He also said the test he took to become part of the national donor registry was a simple, painless swab of the inside of his mouth.“Of the people who need these transplants, of those who get it, it’s like an 80 percent success rate,” Hudetz said. “People should get in the registry because, if you’re the match, you can save somebody’s life.”
Staff writer Mike DeDoncker can be reached at 815-987-1382 or email@example.com.
Copyright 2010 Rockford Register Star. Some rights reserved
Monday, November 29, 2010
Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.
Before You Start
- Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
- Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
- Think about your lifestyle and how it might affect your choice of home and neighborhood.
- Do a little research on current home prices in the neighborhoods you plan to target.
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28% of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36%.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "prequalify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28% to 36% debt ratios assume a 10% down payment. In practice, down payment requirements vary from more than 20% to as low as 0% for some Veterans Administration (VA) loans. Down payments greater than 20% generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28% yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36% is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3% and 8% of your purchase price.
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5% to 7% and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
· Buying a home can mean building significant value through the years.
· Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
· Prequalifying with your lender is a good way to determine how much house you can afford.
· You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
· In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
· Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
· Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
· Remember to consider resalability when buying your home.
- Update your household budget so you can begin to realistically assess how much home you can afford. Be sure to factor in all your monthly income and all the expenses that may come with a home.
- Add up any savings you could use toward a down payment, and decide whether you need to save more before you start house shopping.
- Start talking to lenders about your options for prequalification and preapproval.
Wednesday, November 17, 2010
Contrary to conventional wisdom, I do think that home buyers have a responsibility to do their own independent research. Go on-line and look at homes, visit Open Houses and model homes and talk with friends who have bought homes. When you do these things AND talk with a competent professional real estate agent, you are much more likely to understand WHAT questions you need to ask AND to understand the implications of the counsel that you are being given. So often, I see clients who are given excellent information not follow it because they don't know enough about the issues at hand to make a good judgement.
According to data compiled by the National Association of Realtors, most people will only interview one agent. This is not wise. There are significant differences in the service and experience levels offered by real estate agents. Most people would not buy the first car they looked at on a lot or forgo having a second opinion when facing a major medical decision. Purchasing a home correctly is a hefty financial obligation. Give yourself the benefit of comparing your options. Choosing the right real estate agent greatly increases the likelihood that you will have the information necessary to make the right offer.
At a time when prices in some locations can plummet as much as 25% within a six month period, it's important to have as much information as you can prior to making an offer. A properly prepared Neighborhood analysis will enable you to make comparisons across different neighborhoods. If you are not constrained by a school district, this can afford some incredible opportunities to purchase a good deal. When you compare similar homes in different areas, it is possible to identify which areas are holding their value.
A Comparative Market analysis is the traditional vehicle for determining a home's value. Often this is ONLY made available to home sellers. As a home buyer seeking to protect your investment, you should INSIST that you are given access to this valuable information. A good real estate agent will modify the Comparative Market analysis to ensure that as a home buyer, you are obtaining the information which allows you to make an educated decision about a particular home purchase.
At Advantage Realty Group we provide a number of specialized services to clients who are interested in making a solid investment. We understand that the Value of a Home can never be reduced to simple monetary terms. However, we know that for many home buyers, the prospect of making a poor decision is daunting. Our goal is to put our considerable experience and resources to work for our clients and assist in facilitating a transaction which enables your dream home to remain an excellent investment.
Monday, November 15, 2010
Tuesday, November 9, 2010
There are two kinds of home winterizing tips. The first variety often involves spending a load of money to upgrade your energy efficiency. While definitely worthwhile and timely with many federal energy tax credits expiring this year, these fixes can still be very costly (think adding insulation, getting a new energy efficient furnace, energy efficient windows, etc.).
The other variety of home winterizing tips focus on the things that you can do on a weekend afternoon for very little money (or free) with a little bit of elbow grease. The cost savings of doing such work generally comes in the form of preventing costly fix-it repairs that come from neglect. Here are seven things that you should do around the house every year before the first sign of snow hits.
1. Clean Out Your Gutters
Estimated Cost: Free
4. Repair Your Shingles
Simply take one of your water hoses and fasten it to the water faucet at the bottom of your water heater. Turn off the water heater so that you don't get burned by hot water accidentally. Run the hose outdoors, preferably, but if you can't do that, then a laundry tub should be sufficient. Open the valve and let the water drain out completely, rinsing out the sediment with it.
Monday, November 1, 2010
Pull together a list of all the major repairs and upgrades that the home has. For example, if you replaced the roof a few years ago, make a note of that. Other key upkeeps are new water heaters, replaced windows and upgraded HVAC systems.
Take care of all the small things wrong with the home, such as burned-out light bulbs, broken front steps, sticky sliding glass doors and smoke detectors without batteries.
One Week Before An Appraisal
Get the inside of the home in as good a shape as possible, including a fresh coat of neutral-colored paint. Other ideas for sprucing up the home include professional carpet cleaning, window washing and hiring a professional cleaning crew.
Simplify the look and layout of furniture and storage inside the home. If you have too much furniture crowded in one room, rearrange and even remove pieces so the room looks bigger and more spacious.
The Day Before The Appraisal
Clean the house completely, with no room left undone. Look for cobwebs in high corners, dust light fixtures, sweep and mop floors and take out the garbage.
Friday, October 29, 2010
Tuesday, October 26, 2010
Friday, October 22, 2010
It's another option for home owners who want to trade up — and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.
The best bargain might be the home's price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.
And while many of Fannie and Freddie's homes are at the lower end of the market and in less-desirable areas, a SmartMoney.com search of Fannie Mae and Freddie Mac listings revealed that buyers could find properties in good neighborhoods — and for $100,000 less than comparable houses nearby. For example, a five-bedroom, three-bath with a backyard, deck and two-car garage in tony Alexandria, Va., was listed for $445,000, $100,000 less than the average listing price in the area, according to Trulia.com. Four blocks away, a similar non-foreclosed colonial is listed for $639,900.
Or how about a three-bedroom, two-bath in Bergen County's leafy River Edge, N.J for $359,900 -- $85,000 less than the average listing in the area. One avenue over, a non-foreclosed similar home is listed for $474,888.
The downside: Angry neighbors. These types of listings are devaluing nearby properties, says David Howell, realtor and executive vice president at McEnearney Associates, which sells homes in the metropolitan Washington D.C. area. That means in some areas where Freddie and Fannie homes are on the market, buyers could find a better deal on a nearby market-rate home that doesn't require repairs, he says.
Buying a Fannie or Freddie home can be more complex than pursuing an open-market real estate listing — or even a commercial bank foreclosed property. There's a smaller selection of appealing properties — there were just six higher-end homes listed on a recent day in Alexandria, for example — and those tend to sell the fastest. And there's little room to negotiate price.
"Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them," says a Freddie Mac spokesman. "We absolutely have no motivation to be leading a downward spiral in home prices."
The three best features of Fannie and Freddie foreclosures that make digging for these deals worthwhile:
- Small Down Payment
For its foreclosed properties, Fannie Mae will accept down payments as low as 3% on 30-year mortgages at the same interest rates banks are currently offering. And Fannie Mae doesn't require private mortgage insurance. Compared to a typical bank mortgage, which requires 10% down, plus PMI for buyers with less than 20%, that's a huge savings — an estimated $51,000 up front and upwards of $2,500 per year PMI on a $300,000 mortgage.
It's a tradeoff, though. For buyers with 20% down, mortgage payments on a 30-year mortgage loan at 5% would be $1,288 a month. With just 3% down, the buyer would need to borrow $291,000 and make a $1,562 monthly payment.
- Help with Renovations
Fannie and Freddie have fixed big flaws like leaky roofs and damaged electrical work, and they often handle small projects like replacing appliances that are broken or missing, tearing up old carpet, or fixing other damage left by former owners or vandals.
Now, to entice buyers who want to update or upgrade, many of Fannie Mae's properties come with an optional mortgage that includes extra financing up to $30,000 for repairs and improvements. But with a little down payment and the extra amount tacked on, the buyer could end up owing more than the house is worth — especially if home prices continue to drop.
- First Dibs
Buyers who plan to live in their Freddie Mac-purchased home will get to see properties for at least the first 15 days they're on the market — before the listing opens to would-be landlords. Many bank-owned foreclosure properties are snatched up by cash-stocked investors who can wait out the downturn to sell later at a profit.
And Fannie and Freddie homes can be seen inside and out — unlike some regular foreclosure listings. Consider bringing along a contractor when you view the home to help spot areas that need repairs and provide pricing. (Most contractors will do this for free.)
"It gives families who want to buy a home to live in the opportunity to look and bid without competition from cash-rich investors," says a Freddie Mac spokesman
Looking to purchase a home or want further information about opportunities near you? Contact me direct and you'll be well on your way to taking your first step towards a great new home or investment property!
Wednesday, October 20, 2010
• Option 1- Bring loan current. According to the FDIC, most homeowners in foreclosure have no savings and no available credit. And since the number one reason for foreclosure is due to job loss, there may be no way for the homeowner to catch up the loan. However, if you as a homeowner struggling with a foreclosure have the reasonable expectation of income coming in sometime in the near future, it may benefit you to talk to an extended family member or friend about a short term loan.
Friday, October 15, 2010
The tax credit gives you 30% of the cost up to $1,500 for:
- biomass stoves
- heating, ventilating, air-conditioning
- roofs (metal and asphalt)
- water heaters (non solar)
- windows and doors
The credit expires Dec. 31 and applies only to existing homes and principal residences. A tax credit of 30% with no upper limit is for:
- geothermal heat pumps
- small wind turbines
- solar energy systems
The credit expires Dec. 31, 2016, and applies to new and existing homes. Principal residences and second homes qualify, but not rental properties.
Be sure to keep up to date with all the latest news that is both relevant for real estate and life as it pertains to your wallet, living conditions and the economy by following my blog weekly for some informative articles published by yours truly, Ben :)
Feel free as always to please forward my blog onto any friends or family that may benefit from it!
Wednesday, October 13, 2010
Wednesday, October 6, 2010
Monday, October 4, 2010
Wednesday, September 29, 2010
Penalties on families. Families will pay a yearly penalty of $347 per child, up to $2,250 per family, if parents cannot show they have purchased a government- approved policy.