General
Real estate can be broken down into residential, commercial, industrial, and land. Residential real estate includes single-family homes, townhouses, and condominiums. Commercial real estate focuses on businesses and typically consists of office buildings and retail complexes. Industrial real estate includes industrial activities like manufacturing, warehouses, and storage units. Land encompasses any type of residential lot or acreage that may be used for residential or commercial purposes. Each type of real estate has its own considerations making it unique.
Real estate transactions can be complex and involved. Issues can range from misunderstandings between parties over the terms of the transaction to financing delays or disputes over closing costs and the final price. Title challenges and liens could come up. And, even after an agreement has been reached, there are other details in surveys, inspections, and appraisals which can cause unexpected delays. To ensure a successful real estate transaction it is important for all parties involved to be fully informed about their roles, as well as what objectives need to be met for everyone to complete their goals satisfactorily. By hiring a knowledgeable real estate team with experience and attention to detail, you will avoid many missteps and ensure the most seamless experience possible.
Investing in real estate can be a smart choice, as it tends to be relatively stable and yields profits over time. Depending on which type of property is chosen, taxes can range from income tax on rental income to capital gains tax when a property is sold. It’s wise to consult your trusted real estate advisor or financial planner before making any decisions regarding real estate investment decisions. With proper planning and due diligence, real estate investing can be a lucrative endeavor.
Capital gains tax is a tax that is paid on the profits you earn when selling your home. When selling a primary residence, you may be eligible to exclude up to $250,000 of capital gains from being taxed (single) and up to $500,000 (married couple) as long as the property has been used as your primary residence for 2 years or more. In other words, if you have lived in your home for 2 years or more, you can save money on any profit that you make.
Before investing, it is essential to understand relevant laws and regulations such as zoning codes, title requirements, liens, and landlord-tenant laws. Other potential pitfalls include HOA rules, hazards related to protected locations, tax obligations and restrictions on development of the property. Knowing the relevant legal parameters before investing in real estate can go a long way in protecting yourself from any costly surprises down the road.
Escrow is a neutral third party that provides security for both parties in a transaction. It holds the buyer’s funds until predetermined conditions have been met, verifying that all requirements are fulfilled before releasing payments. This neutral third party ensures fairness and full payment by providing an impartial intermediary service between buyers and sellers. It protects each side from any kind of financial loss and gives peace of mind for a secure exchange.
A seller’s market is an economic climate in which there are more buyers than sellers. This creates a situation where demand is greater than supply, resulting in higher prices and competition among buyers. Generally, a seller’s market will also be characterized by quick sales and short listing times, as well as minimal incentives to attract buyers. It is important for both buyers and sellers to understand the fundamentals of the current market, as it will significantly influence pricing decisions and strategies throughout the entire negotiation.
A buyer’s market is a competitive economic state in which the supply of homes exceeds the demand for them, resulting in lower prices for the buyers. Buyers should take advantage of this and look for better deals so they can secure their desired purchase at the lowest price possible.
A balanced market is one where buyers and sellers have nearly equal influence in setting prices and determining trends. Due to relatively stable supply and demand, a balanced market will not experience large spikes or dips in price due to fundamental changes or political uncertainty. Balanced markets also create a favorable environment for investors who can expect an equitable relationship between risk and reward. Overall, when the balance between supply and demand is optimal it creates a healthy economy for everyone involved.
Mortgage brokers and bankers provide two different services. A mortgage broker’s primary goal is to act as an intermediary between borrowers and lenders while helping the borrower shop for the best loan terms. When working with a mortgage broker, borrowers are able to access a wider range of home loan options than if they were to go directly to the lender. On the other hand, bankers typically work at or on behalf of financial institutions such as banks and credit unions. Banks provide borrowers with loans, but only the ones their institution is offering.
In Arizona, the difference between a real estate agent and a broker is quite distinct. By having a valid license, a real estate agent is able to list a property for sale or assist a client in buying a home, among other activities. Brokers can also do these tasks, but they also have an additional license that allows them to manage a salesperson or group of agents. This level of licensing carries more responsibilities, such as supervising contracts and setting up teams. Ultimately, becoming a broker requires additional training and entails additional responsibilities.
Dual agency is a real estate transaction in which the buyer’s agent and seller’s agent are either the same REALTOR® or REALTORS® under the same brokerage. All parties in dual agency should be aware that certain ethical and legal considerations come into play that are not present in transactions with single realtor representation. Knowing what dual agency entails before entering any real estate agreements can provide clarity, promote fairness, and provide added protections for all those involved.
Buying or selling real estate can be a daunting and intimidating process; however, taking the proper protective measures can ensure it goes smoothly. It is essential to hire a trustworthy and experienced real estate team to advise you of any legal matters pertaining to the transaction. During the transaction, getting an appraisal on the property will give you a better understanding of its current market value and an inspection during the due diligence period will help give you peace of mind.
Buyers
Deciding how much you should put towards a house down payment depends on the loan type you’re looking at. If you’re considering a conventional loan, many banks suggest putting a minimum of 20% down in order to avoid paying Private Mortgage Insurance (PMI). If an FHA loan is more your style, then you will generally need to make a 3.5% down payment as the minimum, with the option of raising it to 10%. Also, depending on income and credit score, many loan programs exist that may require no money down or even offer assistance with the down payment.
When buying a house, understanding the various types of housing loans that are available can be important. Interest rates will vary among loan types based on your financial eligibility and the price of the home. One type of loan is the FHA loan which allows lower credit scores and requires less money down than other programs. This can be great for first-time home buyers looking for assistance. VA loans are another option and these are exclusive to members of the Armed Forces or veterans seeking to purchase a house. Conventional loans, which do not require any special assistance, generally provide better interest rates if you have higher credit scores. Besides the type of loan, additional financing options provide further choices for a variety of situations.
When looking to buy a home, credit score is something you should become familiar with. Depending on your particular situation and loan type, the minimum credit score necessary to obtain a loan can range from 500-620. Generally, lenders prefer to see credit scores above 600, even if the minimum requirement is lower. This indicates you are a responsible borrower who will be more likely to make consistent payments. Although other important factors such as employment history and income are taken into account, your credit score is an important factor in determining the amount for which you will be approved.
When a lender talks about par rate, they are referring to the baseline interest rate on a loan. It is expressed in percentage points above or below prime and can often be modified by additional charges and buy-downs. The concept of how interest rates are calculated is complex and varies depending on each individual loan, so it is important to ask your lender which options are available for your situation.
PMI stands for Private Mortgage Insurance and is an insurance policy that protects the lender. It’s usually required by lenders when the buyer puts less than 20% down on the purchase of their new home and covers any amount they might have to pay if you are unable to fulfill your loan obligations. It helps keep loan costs low for both parties involved. This insurance policy can help borrowers in competitive housing markets, ensuring there’ll be more funds available to make the highest offer possible. PMI is also be tax-deductible, making your home purchase an even better investment!
A jumbo loan is used to finance properties that exceed the current conforming loan limit, a predetermined amount for typical home prices. Jumbo loans come with significantly higher interest rates than conventional mortgages due to the higher purchase price of the property. Homeowners use jumbo loans when they are unable to find traditional financing options than those available through government-backed mortgage products.
With an ARM (Adjustable Rate Mortgage), borrowers can benefit from lower initial interest rates that come with adjustable terms. This means that if you expect to be able to pay off your loan in a certain amount of time and are willing to take some risk, an ARM could help you save money over the entire term of the loan. ARMs come with rate structures which adjust according to prime rates and other economic factors at predetermined times. Over the long term, these changes in interest rate might be completely different than what was initially predicted by the lender. Knowing this, it is important for potential borrowers to weigh their appetite for risk when considering an ARM as an option.
Adjustable Rate Mortgages (ARMs) are a great choice for those looking to significantly reduce the overall cost of their home loan. ARMs have lower fixed-rate periods than conventional mortgages and adjustable rate periods that allow borrowers to capitalize on moving market interest rates. Bottom line: if you want to avoid a 30-year mortgage and are looking for more flexibility, affordability, and can tolerate some risk, an adjustable rate mortgage might be right for you.
Qualifying for a home loan without a W2 may seem impossible, but it can be done with the right evidence. If you are not employed through a traditional W2 format, bank statements and other financial documentation like proof of investment income, retirement distributions, 1099s, or tax returns could be used to show your ability to pay off the loan. Knowing what your bank needs ahead of time gives you ample time to prepare and gather all the necessary documents. Many lenders have different criteria, so it may be a good idea to consult with a few before deciding which will earn your business. Also remember that your credit score will factor into interest rates and affect your overall debt-to-income ratio.
When you are considering the purchase of a home, credit and loan qualifications play an important role. One of the key calculations when it comes to loan qualification is your debt-to-income ratio. This calculation is a comparison between your total monthly expenses, divided by your gross monthly income. A high debt-to-income ratio means that you have more debt in proportion to your income—which could potentially make it more difficult for you to qualify for a loan or credit card. Therefore, when buying a home, it is important to keep your credit use down so that lenders feel comfortable approving you for a loan. In other words, don’t buy a houseful of brand new furniture and upgrade to new cars right before applying for a home loan. A good credit history with low debts will help you achieve your dream of homeownership faster!
Prospective home buyers should pay close attention to all the details when it comes to escrow. The earnest money typically falls between 1-3% of the purchase price, and while this will be placed in escrow, it is not considered part of the down payment. Generally speaking, during the inspection period (which is part of the window of due diligence) or, if you decide to change your mind, you can get that money back. However, it’s important to find out all escrow details ahead of time and know what your rights are so that there are no surprises.
Escrow is a neutral third party that provides security for both parties in a transaction. It holds the buyer’s funds until predetermined conditions have been met, verifying that all requirements are fulfilled before releasing payments. This neutral third party ensures fairness and full payment by providing an impartial intermediary service between buyers and sellers. It protects each side from any kind of financial loss and gives peace of mind for a secure exchange.
Buying a house can be one of the most exciting and intimidating experiences. First, you’ll want to work with your trusted real estate team to understand the market and familiarize yourself with current trends and housing prices. Next, prepare a list of must-haves and would-likes so that you know what kind of house you are looking for and can begin narrowing your search. Next, it’s time to work with a lender to get pre-approved for a loan so you know how much you can spend. Once you find a home you love, work with your trusted real estate team to make a compelling offer. Finally, after getting through negotiations and paperwork it will be move-in day!
As a buyer, many of the questions you may have in real estate transactions are around timelines. Some of these have standard amounts of time while others are determined by the particular contract. The market status and strength and type of your offer will affect the length of time for consideration written into the contract. For this reason, it is important to work with a real estate team who is trustworthy, experienced and uses great communication to understand your goals and unique situation.
In Phoenix, the buyer’s market typically runs from September to December, making it the ideal time of year to buy a home. During this period, buyers typically find more competitive prices and plenty of available properties for sale. When buyers have more leverage during negotiations, homes may come with more concessions, including closing cost assistance and home warranty packages. Moreover, Phoenix tends not to experience as much of a decrease in property value during certain holidays or seasons as other metropolitan areas. This means that Phoenix homeowners can benefit from strong home values throughout the year.
Sellers
When selling a house, an extra room can often be considered a bedroom – but the rules vary by state and county. The key criteria are typically based on egress, adequate ventilation, and square footage so it’s important to check local laws for any requirements or restrictions. For example, most states require two means of egress and many mandate windows of appropriate size and opening for ventilation. Bottom Line: The room needs to feel like a bedroom to the market area in order to realize the value in the price. If this is a concern for a specific property, reach out today for your expert opinion.
Upgrading bathrooms with modern amenities is always a great way to increase marketability, however, when choosing which upgrades to make, it is important to consider return on investment. Making the change from a traditional bathtub to an expanded shower, may add value, depending on other elements such as bathroom size and number of bathrooms. Having at least one bathtub in the house will still be desirable to most buyers.
If your municipality requires you to obtain a work permit, it must be obtained prior to any property renovations, and may influence assessed value and property tax. When planning to sell a property, it is critical that the listing accurately reflects the actual physical characteristics of the property which includes any updates made while in your possession. Thus, it is essential that any work done on the property be authorized and documented to protect yourself against potential losses.
When it comes to major building or homeowner updates, obtaining a work permit is often necessary. This is true for major remodels and additions, roof replacement and installations, HVAC replacements, electrical wiring upgrades and plumbing updates. Minor updates like new carpeting, minor interior wall repairs and painting usually do not require a permit, but it is best to check with the local zoning department if you are unsure. Any type of structural build along with any licensed work such as major appliance installation or structural engineering projects require a permit.
If you’re looking to update your kitchen, there are a few important questions to ask yourself. Firstly, is it major or minor work – if major installations, demolition or changes in plumbing are needed, then you’ll need an architect or contractor. If you want a new layout and design with an expert’s guidance, an interior designer or architect will be most helpful. If there are major changes needed, but you know exactly how you would like them done, then a contractor is best. On the other hand, if you have only minor or superficial changes to make, then a handyman will be more economical. They aren’t certified in design, but know their way around tools and can handle most installations like cabinet doors, flooring, carpentry or a backsplash. Ultimately, it depends on the scope of your project. Hiring an expert might sound like an extra cost but for major re-designs or renovations having a professional manage the work will prevent any major issues such as structural problems.
Adding a half bath to our home could certainly add convenience, but it’s important to make sure we stay in compliance with the law. It turns out that there is indeed legislation requiring all bathrooms to have an exterior window or ventilation fan in order to let out humid air. As long as you have at least one, you will be in compliance.
The condition of your home can be one of the biggest determining factors in how quickly it sells and for how much. A fresh coat of neutral paint can make all the difference in whether or not potential buyers will show interest in the property. With the return on investment being high, painting your home before listing it is often worth doing in order to increase its “move-in-ready” factor. By taking this extra step, you are setting yourself up to have a house that shows well and potentially attracts higher offers.
If your carpeting is in poor condition, then replacing it may be your best bet to make sure your home appears move-in-ready to potential buyers. Unless you’re planning to install something specific and unique, opting for a neutral color and style tends to be the safest route. If you want to get the maximum amount for your home, ensuring a move-in ready state will avoid lowball offers and lost money during negotiations. If your goal is the quickest sale possible with least upfront investment, the skip the carpeting or offer a concession toward its replacement.
When listing a home, condition is key when looking to achieve the best return on investment. To ensure buyers are presented with move-in-ready condition upon closing, updates and improvements should be made before listing a home. Optimal updates are often neutral in color and design allowing potential buyers to easily visualize and see themselves in the space. Neutral updates include painting walls, replacing carpets or flooring, updating cabinetry, fixtures, and appliances. In addition to visual updates, home condition plays a major role in desirability, so ensure items like plumbing and electrical systems are in good order. These are all great examples of projects with a high ROI that will help your home show well and attract the best offers.
The condition of your home and local market conditions play a huge role in determining days on market. In addition, working with your trusted real estate team to accurately price and market your home is essential in a successful sale without delay.
Home prices are continually fluctuating with market market trends and updates. Factors to determine your home’s worth include lot size, home size and amenities, as well as a comparative market analysis (CMA). A market comparison inspects the sale price of similar homes in the same area to determine current market value. Working with your trusted real estate team to consider these factors and the direction the market is heading will determine an ideal price range.
A home’s assessed value is a complicated calculation and often will not reflect the true market value. For example, the assessed value of your home usually takes into account criteria like its size and age, but the market value is also affected by more intricate details such as recent renovations and updates as well as fluctuations within the real estate market. While it’s important to track changes in assessed values for tax purposes, it’s also important to consider what an actual buyer might offer for your home when considering it’s worth.
Before making the decision to sell or buy one of your largest assets, it’s important to carefully consider your goals and long-term financial plan. Take a look at your debt-to-income ratio to see if you could qualify for the new property without relying on the sale of the current one. If you can, buying something first may be less stressful than making a contingent offer or finding an intermediary living situation while searching for your dream home. Talk with your trusted real estate team to discuss all of the options and find what’s best for your particular situation.
Escrow is a neutral third party that provides security for both parties in a transaction. It holds the buyer’s funds until predetermined conditions have been met, verifying that all requirements are fulfilled before releasing payments. This neutral third party ensures fairness and full payment by providing an impartial intermediary service between buyers and sellers. It protects each side from any kind of financial loss and gives peace of mind for a secure exchange.
Prior to listing, the first step is to declutter your house as much as possible. This means putting away any extra or unused items, such as toys, books, decorations and appliances – basically anything that could be distracting or overwhelming to potential buyers. Keeping the surfaces of counters, tables and other areas clear goes a long way toward giving an open feel to the space. Additionally, make sure to do a deep cleaning so that floors, windows and furniture look their best. Work with your trusted real estate team to stage your house by adding strategically placed items like artwork, lamps and potted plants that highlight the architectural features of your home and showcase its size and potential. With proper decluttering and staging, you’ll reach more potential buyers and attract top dollar for your property.
Absolutely. Even when uncertain about whether to move or update your current home, it’s still a good idea to see what the market has to offer. You may discover a great opportunity that provides complete satisfaction, in better condition and with a lower overall price tag. It’s always worth exploring your options before making a final decision.
Be sure to ask questions to understand their expertise in the housing market as well as their pricing and marketing strategies. Selecting a knowledgeable and trustworthy agent or team will make all the difference in getting your home sold at maximum price with the least amount of risk and stress.
The MD Method is an innovative way to get your home ready to sell quickly and efficiently. With staging, a comparative market analysis, and professional pricing and marketing strategies, the MD Method has everything you need to make sure your home looks its best and sells at the right price. Staging helps create a positive first impression on potential buyers, while the comparative market analysis will give you an accurate picture of what homes in your area have sold for recently. A comprehensive pricing strategy ensures that you get maximum money for your home while getting it off the market as soon as possible. Finally, the marketing package which includes a coming soon campaign, launch weekend and avatar-based strategy engages potential buyers so they will want to see and make an offer right away. The combination of staging, analysis, pricing and marketing approaches mean that with the MD Method, you can get top dollar for your home as quickly as possible.
While no one can predict exact future market fluctuations, Phoenix does see its own cyclical market based on seasonal events. These localized cycles typically occur in addition to any baseline market phenomena. The Phoenix seller’s market usually peaks over the months of March through May. This is due to the tourist season, when many people come for sporting, cultural and work events hosted here. The Phoenix weather offers an escape from colder climates and appeals to many who visit. In order to maximize the value of your home sale during this time period, it is important to keep up with its general maintenance and work with highly rated, experienced realtor team familiar with Phoenix trends. When you are willing to invest a little effort in preparation and have local experts on your side, you can list at the ideal time and benefit from the extra buyer pool.
Luxury homes, typically priced at $1 million and up, do see an increase in days on market compared to a more traditionally priced homes. This is due to the fewer available buyers within the price range. It is important to work with a team you trust so that you have confidence in their pricing and marketing strategies.
When it comes to taking your favorite fixture when selling your home, it all comes down to the contract. Whoever is purchasing your home may have a different taste in light fixtures and may want to pick something entirely different. It’s best to make sure the listing and contract states that the light fixture will be yours to take when the time comes. If the buyer agrees, then by all means you can take the fixture with you. Otherwise, you may have to invest in a new fixture for your new living space. If it’s a must have, then it may be best to replace it and put it in storage before listing your home.
Understanding equity in your home is important. There are several ways to determine equity in your home, such as comparing an appraisal or comparative market analysis (CMA) to the remaining balance on your loan. We are happy to help answer this question for you; simply fill in our contact form and we will be in touch.
Before deciding to list your home, it is important to consider whether any repairs or renovations should be completed. Doing so can help make your house move-in-ready for prospective buyers, enabling them to imagine themselves living there. Additionally, if further inspection reveals any substantial issues that need addressing, having the repairs done ahead of time will help you avoid losses during negotiations. Investing time and effort into making necessary improvements today will likely bring a higher price and smoother transaction.
Selling your own home can be possible, however there is likely to be a lot of effort involved in marketing and negotiation. If you don’t have access to the Multiple Listing Service (MLS) and lack marketing experience, it may be worth considering using an experienced real estate agent. Agents will have the resources and experience to help ensure you get the best price for your property and ensure no details go unnoticed. The cost of an agent may also be significantly less than expected given the additional value they bring to the process.
Investors
Real estate can be broken down into residential, commercial, industrial, and land. Residential real estate includes single-family homes, townhouses, and condominiums. Commercial real estate focuses on businesses and typically consists of office buildings and retail complexes. Industrial real estate includes industrial activities like manufacturing, warehouses, and storage units. Land encompasses any type of residential lot or acreage that may be used for residential or commercial purposes. Each type of real estate has its own considerations making it unique.
Investing in real estate is a great way to position your assets with stability and long-term returns. By taking on ownership of an income property, you can create a positive cash flow so that you benefit both immediately and over time. Later, when you decide to sell you’ll have access to tax benefits due to depreciation deductions.
Investing in real estate can be a great way to grow your wealth for the future. If you’re looking to get into this space, the best place to start is by familiarizing yourself with the different types of investments. There are several common formats such as rental properties, home flipping, or commercial properties. Researching each of these options will help you determine which strategy might be best for you and your portfolio. You’ll need to assess how much risk you’re comfortable taking on and whether investing alone is right for you, or, if finding a partner could be beneficial.
Most importantly, build a network of professionals such as realtors and financial advisors to assist you on your journey. They know the ins-and-outs of real estate investing and will be invaluable assets. Before investing in any property, ensure you are familiar with the neighborhood, community regulations and market trends. Invest based on your research rather than emotion or group recommendations.
Real estate investing requires a substantial capital investment which can often be a gamble in itself. Income may not come in steady intervals and the market can be unpredictable. Environmental factors of the area – both on a macro and micro level – must also be taken into account when assessing risk. Investors should always remain aware of changing political, economical and environmental climates which can impact the value of their assets.
Failing to do your research and adequately understand the market in which you are investing could lead to losses. Over-estimating rental income or rushing into renovation projects without developing a cohesive plan can also put you at risk for low returns or unfavorable outcomes.
When considering a real estate investment, there are many factors to take into account. Firstly, you should always evaluate the location and assess its potential for growth. Is it in a growing neighborhood? Are there plans for new amenities or developments that could raise the value of the property? Next, research the financial performance of the particular property. Examining rent rolls, occupancy rates, maintenance costs, and capitalization rates can help you decide if this asset is worth taking on. Finally, consider other economic issues like zoning, taxation, and any permission requirements associated with your prospective purchase. Taking all these things into consideration before signing a contract can help you make a sound investment decision.
Once you identify your goal(s) and know what kind of investment property you are looking for, it’s important to build a network of experienced professionals who are knowledgeable about the market in your area. An experienced and trustworthy team will help you find potential properties, evaluate specific risks and benefits and lead you through negotiations.
Investing in real estate can be a smart choice, as it tends to be relatively stable and yields profits over time. Depending on which type of property is chosen, taxes can range from income tax on rental income to capital gains tax when a property is sold. It’s wise to consult your trusted real estate advisor or financial planner before making any decisions regarding real estate investment decisions. With proper planning and due diligence, real estate investing can be a lucrative endeavor.
Capital gains tax is a tax that is paid on the profits you earn when selling your home. When selling a primary residence, you may be eligible to exclude up to $250,000 of capital gains from being taxed (single) and up to $500,000 (married couple) as long as the property has been used as your primary residence for 2 years or more. In other words, if you have lived in your home for 2 years or more, you can save money on any profit that you make.
Before investing, it is essential to understand relevant laws and regulations such as zoning codes, title requirements, liens, and landlord-tenant laws. Other potential pitfalls include HOA rules, hazards related to protected locations, tax obligations and restrictions on development of the property. Knowing the relevant legal parameters before investing in real estate can go a long way in protecting yourself from any costly surprises down the road.
Real estate investors have access to a wealth of resources that can help ensure they are successful in their investments. Real Estate MDs can provide critical insight into which properties offer the greatest potential, and what steps should be taken in order to make the investment profitable. You should also consider consulting your financial planner or tax advisor before investing so you can make informed decisions based on your overall portfolio and long-term wealth strategy.
