The True Cost of Homeownership Versus Renting

March 2, 2012 Leave a comment

I saw this infographic published recently that dealt with the cost of homeownership versus renting and was floored.  The sources referenced in this infographic were Kiplinger and the New York Times; two respected providers of financial information.

While the information was presented in an easily digestible, side by side comparison and had some nifty ‘geewiz’ graphics, I was stunned by what was missing.  See if you can spot the major oversight.  (Click the graphic for a larger copy – it’s easier to read.)

Hellllloooooo!  Did anybody who put this infographic together pay their taxes this year?  Where is the line item for ‘Tax Savings’?

Missing from this analysis are the tax write-offs for prepaid mortgage interest (points), annual mortgage interest and real estate taxes.  Based on the assumptions in the infographic regarding these items, this will amount to a hefty chunk of change and alter the numbers significantly.

I do agree that there are definitely circumstances where a person should rent versus buy real estate.  But to paint a picture (or infographic) that is misleading and heavily slanted toward renting by using faulty data is wrong.

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The Foreclosure Process in Pennsylvania

February 14, 2012 Leave a comment

Foreclosures are never pretty.  They tear families apart.  They destroy a homeowner’s credit.  They ruin a neighborhood’s sense of closeness.  When someone that you know is in financial trouble, you feel like you’re living their nightmare.

The purpose of this post is not to draw attention to this troubling trend, but to assist homeowner’s in understanding the confusing process that they might go through if they find themselves in this unfortunate circumstance.


(Click the graphic above for a larger image)

Before the foreclosure process can begin, the borrower must be at least 60 days late on payments.  The lender usually sends the borrower two letters before starting the foreclosure.  These letters notify the borrower of the impending foreclosure and give the borrower options to prevent the foreclosure.  The owner has a period of 2-4 months to find a way to prevent the foreclosure before the lender takes further action.
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Four Trends That Will Rock the Real Estate Industry in 2012

January 23, 2012 2 Comments

If there is one thing that I’ve learned in the real estate business over the years it’s that change is constant.  New tools, programs, regulations and innovators make this an industry that doesn’t stand still.

From computerization of Multiple Listing Service data to smart phones to mortgage preapprovals to digital signatures; innovation waits for no one.  You either embrace it or get out of the way.

So without further ado, here are my predictions for the upcoming year and some of the things that I believe will rock our industry (again):

1.  Listing Syndication and Internet Data Exchange (IDX) Will Come Under Fire

It has been commonplace over the last couple of years for companies and agents to syndicate their listings to as many real estate web sites as possible to increase the chance that their properties will get noticed by home buyers who will in turn contact an agent to buy a home.  Sounds like a plan – right?

Enter Edina Realty.  Edina is a mega broker with 60 real estate offices and over $5 billion in sales located in Minnesota, Wisconsin and North Dakota.  In late 2011, Edina stopped syndicating their listings to national websites.  Why would one of the top ten real estate companies in the US decide to shun syndication?  If you listen to them, there are three reasons: Read more of this post

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The Dawn of the New Normal

October 7, 2011 1 Comment

A brave new world is dawning

We’ve all heard the old adage, “The more things change, the more they stay the same.”  Well in real estate sales, you can take this cute little saying and bury it under a pile of dirt and lay an R.I.P placard on top of it.  Staying the same in this business is wishful thinking.

Consider the following five trends that are staring the average REALTOR® squarely in the face as we approach the end of 2011:

1.  Transaction Management – Never in the history of selling real estate has it become more important for the REALTOR® to stay closely involved in the transaction.  The days of writing the agreement and showing up at the settlement table to collect the commission are dead.  Between stringent inspections, mortgage approvals, title issues, appraisal valuations, complex documentation standards and increased buyer/seller expectations, agents need to hone their problem solving skills.  The most valuable sales professionals will be those that can manage this chaos.
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Dying on the Vine

October 6, 2011 2 Comments

It is more important than ever to select a real estate agent that not only knows what they’re doing, but also can guide a buyer and seller through the complexities of a real estate transaction.

A recent study by the National Association of REALTORS® hits home on this point.  In August of 2010, 9% of all purchase agreements for real estate never made it to the settlement table.  Now – fast forward one year – the percentage of contracts canceled has doubled!  That’s right; we now sit at 18%.  Not a pretty figure.

There are many reasons for the explosion of unfulfilled contracts: appraisal issues, increased scrutiny of borrowers by mortgage lenders, home inspection problems, complex contractual documentation and unrealistic expectations of both the buyer and the seller.

So if you are about to get involved with a real estate purchase or sale, do yourself a favor and secure the services of a competent, reliable real estate agent.  After all, you want to be one of the 82% that successfully ends up sitting at the settlement table.

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What’s Up with Mortgage Points?

July 5, 2011 Leave a comment

Image via Wikipedia

If William Shakespeare financed a home today he’d probably ask the question regarding mortgage points: “To pay or not to pay? That is the question.” Homebuyers direct the same question to their real estate agents. Here are some perspectives:

In its simplest definition, a point is an additional loan fee that is paid to the lender in exchange for a lower interest rate. It’s called “buying down,” and it allows you to reduce your rate for the life of the loan.

Let’s say you secured a mortgage loan for $150,000 without points, at 4.6% on a 30-year mortgage, your principal and interst payment would be $768.97 a month. If you paid two points ($3,000), the interest rate in this example may go down to 4.1% and the monthly payment would decrease to $724.80, a savings of $44.17 a month.

In this scenario, it would take you about eight years to recoup the money you paid up front, so if you are planning on staying in your home a while, this will save you money in the long-run.

Home buyers must answer some key questions to determine if paying points is a wise decision. Specifically: Read more of this post

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Spring Advertising Campaign Set to Kick-Off

March 6, 2011 Leave a comment

Real people with a real message!  That’s the theme of these three television commercials that are starting to run on WGAL, Fox 43, WHP 21, Comcast and Viamedia.  They will run through the Spring buying season and end during the latter part of May.

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Hidden Benefits of Refinancing Your Mortgage

January 18, 2011 Leave a comment

How much cash is in your home?So you’ve had your mortgage for a while and think you have a good rate.  Most people only consider refinancing if their present interest rate drops one percentage point – - – say from 6½% to 5½%.  But there are other good reasons to refinance your mortgage that will save you cash and make your life easier in the long run.  Consider the following:

1.  Dis-ARM yourself.  You may have obtained an Adjustable Rate Mortgage (ARM) when you first purchased your home and received an unbelievable rate.  You’re now probably experiencing the escalation part of the ARM which means your monthly payment is going from great to – - – hmmm - – - not so great.  Check into refinancing your loan so that you can lock in an interest rate and with it, obtain peace of mind knowing it won’t increase in the future.

2.  Eliminate Holiday Blues.  Are you like many Americans that went out and racked up credit card bills over the holidays?  If you’ve been in your home a couple of years you probably have an untapped resource in the equity sitting in your home.  Read more of this post

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