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You may be surprised to know that taking advantage of current favorable interest rates on the purchase of a $300K home (30 years) after the tax incentive program was actually a great business decision.  Compare the monthly payments of the available rates earlier in 2010 at the annual rate of 5.125% to the more recent rates now of 4.75%.  The difference in the total payment over the life of the 30 year loan is $22,320.  At this price range we’ll utilize the smaller of the two tax credits since this buyer was not likely a first time buyer.  Missing the $6,500 government tax credit was a blessing in disguise.  You would have made $15,820.  This is one case where procrastination paid dividends.

Dramatic Changes In Real Estate

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Tougher mortgage lender requirements and market conditions over the last year has changed the landscape of real estate.

A real estate short sale can take time, but can provide a good value to the patient buyer.

A short sale is one where the owner is not able to make up the difference financially between what a property will sell for after expenses and what is owed to the bank(s).  Banks will approve such a sale and take a financial loss now if the value offered is reasonable for today’s market in order to prevent future losses due to delinquent payments and costly foreclosure proceedings.  The seller must have a credible hardship.  The buyer must have patience.  Due to new guidelines, bank response times will be improving.

Banks have become tougher on loans. 

The good news is that loans banks are approving now will have a lower failure rate compared to just two years ago.  The banks have insulated the appraisal process, increased buyer credit rating requirements, and have been downright picky on stipulations that were overlooked in the past.  Money is still available for people to purchase a home, though not as many.  The byproduct of banking loan restrictions has been a robust demand for single family home rentals.  The buyers that are out of the market to purchase due to a blemish on the credit report still want a home are willing rent for a year or two.  Keep in mind with the new property tax laws, rental home tax rates (2% tax cap max.) can be double that of a neighboring home that is owner occupied.  The rental rate may trend up due to this extra cost.

As a real estate professional, I’ve opened up a toolbox of different strategies to accomplish the goal of buyers and sellers.  We have negotiated a sale with a bank while they fixed a foreclosed home, worked out a sale with a one year closing date, strategized with options on properties,  bought property with a personal retirement account fund, and saved years of seller’s financial hardship by negotiating short sales.  Due to the unusual market provided this past year, I feel more even more educated to be able to provide buyers and sellers valuable insight gleaned through our experiences.

Westfield Ranch Home with Bonus Room!

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Type:  Ranch with Bonus Room

Age:   Built in 2001

Location:   Near 156th Street and Springmill Road             

Neighborhood:   Mulberry Farms is a quiet community with a large central pond and playground.

Square footage:  1728

Rooms:   This three-bedroom home has two full baths, a large great room with vaulted ceilings, kitchen with new stainless appliances, main floor master suite and upstairs bonus room. 

Strengths:  This home has updated attractive décor and sits on nearly half an acre.  Many other ranch style homes in Westfield are older and more dated compared to this newer, more modern home. 

Challenges:  This home backs up to 156th Street but the large lot and trees help to create a barrier.  

WHAT’S IT WORTH?    $180,000

What's It Worth?- Westfield Ranch Home For Sale

by John Pacilio

 

Front with blue sky

Type:  Ranch

Age:   Built in 2001

Location:   Near 146th Street and Spring Mill Road

Neighborhood:   Centennial is a large neighborhood with a swimming pool, playground, basketball court, sledding hill, soccer fields, tennis court, and walking trails.

Square footage:  3179 including 1297 in the finished basement

Rooms:   This two-bedroom two-bath home has a main floor den, great room with wood-burning fireplace, formal dining room, full finished basement with a large recreation area, and two-car garage.

Strengths:  There is a full finished basement.  The property is immaculately landscaped and has a built-in sprinkler system and large covered porch.  This home is located directly across from a huge park. 

Challenges:  There are only two bedrooms but the office can be transformed into a third bedroom with the addition of a closet. 

WHAT’S IT WORTH?   $250,000

Displaying blog entries 1-4 of 4

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