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For Sell By Owner vs. Using a Real Estate Agent

by Allison Simson

Think you should For Sale By Owner? THINK AGAIN... [INFOGRAPHIC]

Posted: 02 May 2014 04:00 AM PDT

FSBO 1000

Wednesday Morning Coffee - Buyer's Purchasing Power

by Allison Simson

Happy Wednesday Morning to YOU!

With all the talk about interest rates in the news right now, I thought this little graphic would shed some light on how rates actually affect real estate buying power!  A 1% increase in interest rate equates to a 10% less purchase price with the same payment.  Also of note, in Summit County, CO last year, almost 50% of our transactions were cash deals! 

For more information about any specific property, complex or neighborhood, please reply to this email and we will get you what you are interested in right away! 

"Boomerang Buyers" - What Happens After Foreclosure

by Allison Simson

'Boomerang' Buyers Flying Back [INFOGRAPHIC]

Boomerang Buyers InfoGraphic

Note: “Boomerang buyers” are former homeowners who have gone through a short sale, foreclosure, or bankruptcy in the past few years and are saving up for a down payment to purchase a home again.

 

Why NOW is the Right Time to Sell

by Allison Simson

The #1 Reason You Should Sell Now

Posted: 13 Jan 2014 04:00 AM PST

Home For Sale Sign in Front of New House

The price of any item (including residential real estate) is determined by ‘supply and demand’. If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

According to the National Association of Realtors (NAR), the supply of homes for sale dramatically increases every spring. Putting your home on the market now instead of waiting for the increased competition of the spring might make a lot of sense.

Buyers in the market during the winter months are truly motivated purchasers. They want to buy now. With limited inventory available in most markets currently, a seller will be in a great position to negotiate.

2014 and Interest Rates

by Allison Simson

Predictions for 2014: Interest Rates Will Increase Significantly

 

Predictions for 2014: Interest Rates Will Increase Significantly

Posted: 08 Jan 2014 04:00 AM PST

Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.

The Fed announced last month that they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years. This should come as no surprise as the KCM Blog has been warning of this likelihood over the last several months.

1.8 Interest Rate Projections

Above are the most recent projections of where rates will be at the end of 2014 by the four major agencies. However, we believe that the government is not afraid to shoot right past these levels.

Doug Duncan, chief economist for Fannie Mae, this past summer announced:

“I don’t think the Fed ultimately would be troubled with a 6.5% mortgage rate.”

And Frank Nothaft, Freddie Mac VP and chief economist, at virtually the same time explained:

"As the economy continues to improve, we expect to see continued upward movement in long-term interest rates… At today’s house prices and income levels, mortgage rates would have to be nearly 7 percent before the U.S. median priced home would be unaffordable to a family making the median income in most parts of the country.”

Only time will tell. However, we feel that rates will be in the 5.75-6% range by year’s end.

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For more in depth coverage of mortgage interest rates and what impact tapering will have on future rates, sign up for a FREE 14 Day Trial of our full membership service, Keeping Current Matters here.

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Harvard Says: 5 Reasons to Buy a Home That Make Sense Financially

by Allison Simson

Harvard: 5 Financial Reasons to Buy a Home

Eric Belsky is Managing Director of the Joint Center of Housing Studies at Harvard University. He also currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. This year he released a new paper on homeownership - The Dream Lives On: the Future of Homeownership in America. In his paper, Belsky reveals five financial reasons people should consider buying a home.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available. 

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning. 

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for many social and family reasons. It also makes sense financially.

To Rent If You Can't Sell?

by Allison Simson

Should I Rent My House If I Can't Sell It?

Posted: 07 Oct 2013 04:00 AM PDT

For rent real estate sign in front of house

There has been a lot written about how buying a home is less expensive than renting one in most parts of the country. Rents are skyrocketing and homes are still at great prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, a homeowner can get great rental income now and perhaps wait until house values increase even further before selling.

This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for.

Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.

10 Questions to Ask BEFORE Renting Your Home

1.) How will you respond if your tenant says they can't afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2.) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5.) Will you allow pets? Cats? Dogs? How big a dog?

6.) How will you actually collect the rent? By mail? In person?

7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8.) Do you have a list of crafts-people readily available to handle these repairs?

9.) How often will you do a physical inspection of the property?

10.) Will you alert your current neighbors that you are renting the house?

Bottom Line

Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

 

What do interest rates mean for home costs?

by Allison Simson

HAPPY TUESDAY MORNING TO YOU!

The COST of a Home: Last Year, This Year & Next Year

Posted: 26 Aug 2013 04:00 AM PDT

Same Price, Lesser Cost

The cost of a home is determined mainly by two components: price and mortgage rate. Today, we want to show how the monthly cost of purchasing a median priced home has changed over the last twelve months and how it might change over the next twelve months. For the first two examples, we will be using the National Association of Realtors’ (NAR) Existing Home Sales Report to establish median price and Freddie Mac’s Primary Mortgage Market Survey to establish mortgage rate. We also assumed a 20% down payment in all examples.

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:

Last Year

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:

This Year

The monthly cost increased by: $190.78!

NEXT YEAR

Projecting into the future in real estate can be rather tricky. To establish future pricing, we depended on the over 100 housing experts surveyed for the Home Price Expectation Survey who called for an approximate appreciation rate of 5% over the next twelve months. For the interest rate, we took the average of the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae. Here is what these experts project will be the approximate cost of a home a year from now:

Next Year

The monthly cost will increase by about: $97.32!

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

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, Event Coordinator
 

Go Green 2

If you were in the mountains, you know that the weather was glorious and that lots of people were here!  The kick-off to summer is here and we are busy! 

Are you curious how the market is doing in Summit County, or specifically in any of our charming towns?  Here is the run-down:

1) Breckenridge
2) Dillon
3) Frisco
4) Keystone
5) Summit_County_Update
6) Wildernest / Silverthorne
 

For more specific information about any particular complex or subdivision, give us a holler!  We can give you all the details to help you make informed decisions about Summit County real estate! 

Displaying blog entries 1-9 of 9

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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