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Considering a Second Home?

by Allison Simson

Happy Tuesday Morning to YOU!

We have a powdered-sugar-dusting of snow on the peaks this week- it's so pretty and a reminder that ski season is on its way!  Only 39 days until Keystone and Copper Mountain open!  It's likely that A-Basin and Loveland will open even sooner!

Ready to take the plunge into the wonderful world of resort property ownership??!! We are here to give you a hand! 

What to Consider When Buying a Second Home

Today we are happy to have Mark Scheets, a writer for Total Mortgage Services, as our guest blogger.

Sooner or later (if you haven't already!) you may reach a point in your life where you are financially able and plan to purchase a second home. For the most part, people who look to buy a second home are either looking at it as an investment or somewhere to vacation. It is important to become familiar with the process when looking for and making the decision to purchase a second home.

Purchasing a second home is similar to the purchase of your first home, but there are also some important differences that you may not be aware of. Two of the most important things to consider when buying a second home are to know what you’re looking for and how much you can spend before beginning the process.

When considering buying a second home, timing is a big aspect of the purchasing decision. If you are in the middle of your career or ready to retire, you need to ask yourself what is the point of buying a second home. Many homeowners will ask themselves “Do I want to use this home as a personal retreat or as a rental property?” Another question often asked is “Can I afford this?” You may have to wait 6 months or a year, but having a good understanding of the current market and knowing when you are planning on making the purchase, will get you what you want.

Do Your Research

Your second home can be whatever you want it to be, but one thing to keep in mind is that the location and property need to be a good fit with your current lifestyle. A good idea for buying an investment property is to make sure that it is somewhat near your current home, in order to be close to it in case of an emergency. When considering a vacation home, especially one that is far away, it is a good idea to talk to the locals who live there to get their prospective on the area. This is important because you will not be at the house year round; and you need to see yourself enjoying living there.

Whether you have planned to purchase a second home for years, or have finally started considering it, it is extremely important to make sure all of your finances are in order. It is a good idea to know exactly what is needed financially to get your plan into motion. When applying for a second mortgage, there will be stricter lending and mortgage requirements, especially if you will not be living in that home.

Be Prepared

Another aspect to take into consideration is your taxes, which will be based on the use of your second home. The IRS has stated “if you live in your home for more than 14 days, or more than 10% of the time you rent it out in a year, then it is considered your personal residence”. If these conditions are not met, your home will be considered a rental property and you must report all rental receipts as income. 

When the time comes to figuring out how to purchase your home, weighing your options is important. It’s good to know that buying an existing home is far cheaper than buying land and building. Many people with second homes have made financial mistakes with their home and are looking to sell quickly to cut their losses and move on. This fact could help a buyer if the house is similar to what they are looking for, as it can be had for a cheaper price.

A mortgage on a second home may have a slightly higher interest rate than one on a first home. It might be a good idea to consider a home equity line of credit (HELOC). A HELOC allows the buyer to tap into their existing home’s equity so that you can provide a bigger down payment.

Have fun! 

Buying and owning a second home is an amazing investment in you and your family's lifestyle.  Come on up to the mountains and take a look! 

Here is our featured property of the week:

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Red Hawk Lodge, Unit 2207

Price: $222,000

Beds: 1

Baths: 1

Sq Ft: 535

Step out the door to the Gondola terminal from this Red Hawk Lodge condo. It has tile counters and slate flooring. Red Hawk Lodge has a pool, hot tub and BBQ area with fabulous views of the ski slopes and wetlands. Have a steam or work out in the fi...

View this property >>

And Here's Your Morning Coffee!

Warmly,

Allison Simson, Owner/Broker
Kelie Gray, Buyer Specialist
Sarah McNeill, Buyer Specialist
Jen O'Neill, Client Care Manager
Margaret Bowes, Transaction Coordinator

 

 

The Housing Market and Good News!

by Allison Simson

Happy Tuesday Morning to YOU!

Despite the massive rain in Colorado (we've had nearly 50 straight days of rain in Summit County) the sun is shining today- hopefully it will help dry up some of our soggy state....!

Here's some good news from the Keeping Current Matters website:

Experts Comment on the Housing Market

Rick Judson, chairman of NAHB

Responding to the report that over 80% of housing markets are improving:

“While there is still plenty of room for growth, this is an excellent indication of how the housing recovery has begun to take hold across more geographical areas.”

Tim Sloan, Wells Fargo Chief Financial Officer

When you look at any sort of statistics in the demographics in terms of household creation as well as household affordability, they are still very attractive and should drive a continued recovery in the housing business.”

Dr. Alex Villacorta, VP of research and analytics at Clear Capital

With the continued strengthening of home price trends in August, the need for perspective on market activity is even more important…Considering the low tier price segment of the housing market led the recovery, the cooling in this segment will likely transfer through to the broader housing market. That’s not to say the recovery is slated to stall, rather growth patterns are likely to return to more historical rates of growth, between 4.0 percent to 5.0 percent, rather than align with bubble-like growth… At the end of the day, this is still great news for housing.”

Bradley F. Hunter, the chief economist at MetroStudy

“We have gone from a situation where five years ago everyone was saying, ‘There are too many lots,’ to today, builders are literally crying on our shoulder saying, ‘There are not enough lots. We can’t find any.”

Jay Brinkmann, Mortgage Bankers Association chief economist

“The recovery we’ve seen has been related to the fact that the economy is creating jobs at a steady rate and those jobs do translate into paychecks, some of those paychecks go to pay rentals and others go toward mortgages.”

The Real Estate market in Summit County has seen an overall increase in number of sales and volume - up by about 12% from 2011.  Prices are stable- not yet appreciating much, but happily not depreciating! 

Give us a call if you would like a detailed market valuation of any property in Summit County- or if you're just curious about what's happening here!  We'd love to help.

Here's our listing of the week:

 

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102 Twenty Grand Drive

Price: $540,000

Beds: 4

Baths: 2

½ Baths: 1

Sq Ft: 2034

This huge duplex boasts 4 bedrooms + den, oversized 2-car garage, tons of windows and sleeps 15! Gorgeous views all around from the large master deck in front, to the lovely views of Buffalo and Red Mountains from the private hot tub and deck in bac...

View this property >>

And Here's Your Morning Coffee!

Thinking of Selling? 5 Reasons to Do it Now

by Allison Simson

Thinking of Selling Your House? 5 Reasons to Do it Now

Many now realize that it is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

1.) Demand Is High

The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed a 17.2 percent increase in sales over July 2012; sales have remained above year-ago levels for 25 months. There are buyers out there right now and they are serious about purchasing.

2.) Supply Is Beginning to Increase

Total housing inventory last month rose 5.6% to 2.28 million homes for sale. This represents a 5.1-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months. Selling now while demand is high and before supply increases may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 4.57% which represents a jump of more than a full point since the beginning of the year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb.

Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

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Photo of Summit Real Estate Real Estate
Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker