Category Archives: Berkshire Hathaway HomeServices Hodnett Cooper Real Estate

Using Gifts as a Down Payment

Merry Christmas, homebuyer! Don’t cash Mom and Dad’s check yet! Your loan could be denied if the money isn’t carefully documented.

Why? Gifts can cause confusion. Is your parents’ money a gift or a loan? Unless the terms are clearly defined, don’t mix the gift with your own funds. It alters your bank statements and raises your income both of which could muddy your financial picture.

Lenders require a paper trail for all monies, so no phone deposits. They also limit the size of gifts in relationship to the total down payment. Some loan programs require the borrower to contribute at least 3%down payment gifts to 5% of the down payment if the down payment is less than 20%, while other programs allow the entire down payment to be supplied by a gift.

To avoid questions, provide a certified down payment gifts letter or sign an affidavit that explain:

  • The amount of the gift, accompanied by a corresponding cashier’s check, including a photocopy of the check
  • The name and address of the gift-giver and relationship the gift-giver has to the homebuyer
  • The purpose of the gift – to be used only as a down payment on the subject property, complete with the property’s address
  • A statement confirming that the gift is not a loan, and does not need to be repaid
  • Signatures of the borrower and the gift-giver

If you’re planning to use a gift as part or all of your down payment, ask your realtor how to meet all the appropriate requirements regarding down payment gifts.

Housing Forecast for 2018

There’s nothing like a new year to pump enthusiasm into your life, so what do the experts say about the housing forecast?

Unemployment remains low: Despite tens of thousands of people losing their homes as well as businesses and hospitality services crippled due to the storms, the unemployment rate remains at a low 4.2 percent, according to the U.S. Bureau of Labor Statistics. Buyers have the income to shop for homes.

New home construction lags 

Housing Forecast

demand: Due to costly governmental oversights, lack of skilled construction workers, and increased enforcement of undocumented workers, homebuilders are unable to meet demand for new homes, according to the U.S. Census. There’s currently five month’s worth of supplies at today’s rate of sales.

Millennials favor homeownership: Pew Research found that millennials are the largest living generation and are disproportionately renters compared with previous generations. As the generation matures (the oldest are at 34 years of age), seventy-two percent wish to become homeowners.

Demand is outpacing supply: According to Freddie Mac research, the hurricane season that hit the southern and eastern coastal areas, is exacerbating a market already short on homes, particularly in the affordable price ranges. Home prices are predicted to rise 4.9 percent.

Mortgage rates drop under four percent: Nationally, the average interest rates on conventional purchase-money mortgages decreased in the fall to less than four percent, reported the Federal Housing Finance Agency.

Market conditions suggest near-term winter and spring homebuying will remain brisk. You might be encouraged to buy before the summer rush!

Why Homebuyers Pass Up Good Homes

Why Homebuyers Pass Up Good Homes

Selling your home takes hard work and commitment to get it ready to impress buyers. While you can’t control the market, you can control your home’s appeal. Don’t let the following reasons make buyers pass on purchasing your home.

  1. Price: If you price your home too high, the right buyers won’t see it, and the ones who do see it will quickly realize other homes in the same range Homebuyers offer more value.
  2. Clutter: If your tables are full to the edges with photos, figurines, mail and coffee cups, buyers will be more focused on trying not to break something than considering your home for purchase. Too much stuff makes it confusing for buyers to see the rooms clearly, so they’ll move on to a clearer choice.
  3. Deferred maintenance: Buyers really want a home that’s been well-maintained, so it’s your job as the homeowner to keep your home in good condition. You don’t want buyers wondering what needs fixing and at what cost.
  4. Outdated décor: The reason people are looking at your home instead of buying brand new is because of cost and location. They want your neighborhood but not a dated-looking home. Take popcorn ceilings and flocked wallpaper down. Replace carpet with an upgrade or perhaps hardwoods.
  5. Smells: There’s not a buyer in the world who will buy a home that smells like pets, dirt or water damage. If you get an offer at all, it will be low and contingent on a positive inspection.

Preparing A Wood-burning Fireplace

Few winter delights beat the crackling sound and soothing aromas of a wood-burning fire. As you prepare for the upcoming holidays, make sure your fireplace and your fire-building skills are ready in time for cozy gatherings.

Have a chimney sweep company check your chimney for birds’ nests and other debris that could block smoke from properly venting outside. The sweep will also remove creosote from the chimney walls and test your damper to make sure it opens and closes easily.

fireplace with dog laying in front

Use only dried, aged logs or commercial logs appropriate for indoor use. Green, wet or soft woods produce more smoke and soot, so stick to hardwoods like oak and hickory. Never burn clothing, crates, boxes, or painted wood items that may have chemical finishes that produce unwanted gases.

Find a convenient dry place to store wood outside. Watch out for small critters and insects that can hitch rides on logs and settle in your home.

Open the damper before building any fire and keep it open until the fire has gone completely out. Smaller logs burn faster, so start with a small fire using kindling or a starter log. Add larger logs as the fire catches, leaving space between the logs for air to circulate. Never leave a fire unattended.

Ashes don’t smell nearly as good as the aromas of burning wood, so be sure to clean out the ashes before you use the fireplace again. Leave a small bed of ash to cushion embers as they fall from burning logs

Should You Rent Your Home?

Should You Rent Your Home?

Should You Rent Your Home

Assuming you’re current on your mortgage and have the credit scores to buy another home, now may be the time to turn your present home into a rental. If rent will cover your mortgage costs, you’re off to a good start.

To see if you can afford to carry a rental plus another home mortgage, your lender must see a signed rental contract, but counts only 80% of the rental income. Why? Many homes don’t rent as soon as they hit the market. You have to show enough resources to pay both mortgages, just in case.

There are other expenses to consider. Your home is no longer a homestead, but is now an income-producing asset which will change the tax rates on your home and on your income. You should consider contacting your income tax professional to learn how renting your home will impact your income taxes and deductions, so you can budget and escrow the appropriate estimated amount you’ll need at tax time.

The advantages are that someone else is building equity for you. The longer you own your rental, the more amortization rates work in your favor. You can deduct maintenance and improvement expenses and “depreciation” from your income taxes, benefits that are not available to homesteaders.

Berkshire Hathaway HomeServices Hodnett Cooper Real Estate can provide you with market comparables and advice about the pros and cons of becoming a landlord. We will also be able to share real-life property management situations and costs that may help you to decide.

St Simons Island Real Estate Market Update

Real Estate Market Update

Condominium Market Autumn 2017 Joe Wills BHHS Hodnett Cooper Real Estate

On the chart below you can see (in red) that average annual sales prices peaked in 2007 at $399,297 then fell 37% before bottoming at $250,855 in 2012. Sales units (in blue) peaked in 2003 with 324 condos sold and then began what would be a 78% decline over the next five years before crashing with only 70 condos sold in 2008. Today we are at 2003-04 average sales prices of $289,972.Sales of 316 units over the past year is 2½% below the historic peak of 2003.

There are 154 condos on the market today ranging in price from $137,500 to $2.495M; with a Median List Price of $329,990. Year over Year Sales Volume is up 6%, Average sales prices are up 2%. Demand exceeds Current Supply by 105%.

Real Estate Market Update

Single Family Home Market Autumn 2017 Joe Wills BHHS Hodnett Cooper Real Estate

On the chart below you can see that Average Sales Prices (in red) rose until 2006 at an average rate of 5% per year, peaking at $600,042 then falling 37% through 2012. Annual Sales (in blue) rose through 2004 then falling 75% over the next five years. We are at 2005 levels today for both Average Sales Price and Units Sales volume.

There are 268 houses on the market today ranging from $139,500 to $17.25M with a Median List Price of $675,000. Year over Year Sales Volume is up 9%, Average sales prices are up 14%. Demand exceeds Current Supply by 159%.

Real Estate Market Update

 

Market Update courtesy of Joe Wills, REALTOR at Berkshire Hathaway HomeServices Hodnett Cooper Real Estate

The Joy of Owning an Older Home

The Joy of Older Homes

If you’re planning to buy your first home in 2017, chances are good it will be an older home. The latest American Housing Survey (AHS) showed that 41% of housing stock in the U.S. was built prior to 1969 and that the median age of owner-occupied homes was 37 years.In most areas, smaller pre-war Tudor cottages, Craftsman bungalows, and mid-century ranches comprise many older homes. Each style has its own charm.
  1. The fairy-tale Tudor revival. The English Tudor revives late medieval architecture popularized during the House of Tudor reign, a period of unequaled enlightenment known for political reformation and the Renaissance. Late Gothic and ecclesiastical influences include charming leaded and stained glass windows, steep-pitch cathedral ceilings, arched doorways and exposed wood beams.
  2. The solid and home-y Craftsman bungalow. Popular as the middle-class retort to the fussy, formal Victorian style, the Craftsman ushered in minimalism, thanks to Frank Lloyd Wright and others. Craftsman homes celebrate wood, stone, iron, ceramic and glass artistry, with wood floors and wainscoting, large windows, built-in cabinets and hand-made Art Nouveau tiles.
  3. The automobile-loving Ranch. The mid-century ranch helped post-World War II families move to the sprawling suburbs while they commuted back to the city for work. Built with speed, ranch-style homes typically have no load-bearing walls in the interior of the home, making them easy and inexpensive to remodel. Get your atomic décor on with low-slung furniture, sputnik light fixtures and abstract art.

No matter which older home you choose, knowing a little history should bring you added enjoyment.