Real Estate Information Archive

Homeownership, part of the American Dream: a home of your own where you can feel safe, raise your family, share with your friends and enjoy life. The benefits are easily recognizable but maintenance is just a real and should be considered. Property taxes and insurance are two of the largest expenses homeowners have aside from their mortgage interest. But, as any homeowner knows, there will be occasional expenses for repairing toilets, faucets, windows and other things. There are also the significantly larger expenses that arise like replacing a water heater or HVAC unit. And don’t overlook the periodic maintenance like painting or floor coverings.

Financial experts suggest that homeowners save one to four percent of the home’s value per year for repairs and maintenance. Two to eight thousand dollars a year may sound like more than you’ll need but the cost of an air conditioning unit can easily be $6,000. Some homeowners purchase home warranties to avoid the unexpected costs. An annual premium instead of an unexpected large expenditure. Coverage varies from company to company and are not intended to cover existing conditions. The alternative to not saving for these anticipated expenditures means that a homeowner might have to put it on a credit card at a very high interest rate or get a home improvement loan.

Appreciation is a distinct benefit of home ownership and deferred maintenance can limit the value as well as lengthen the market time when it sells.

Saving the down payment may be unnecessarily keeping would-be buyers from getting into a home. They may be unaware that the funds might be available. The NAR Profile of Home Buyers and Sellers reports that 81% of first-time buyers got all or part of their down payment from savings. Less than 4% said that all or part of the down payment came from a withdrawal in their IRA and 8% from their 401(k) or pension fund. Traditional IRAs have a provision for first-time buyers which include anyone who hasn’t owned a home in the previous two years. A person and their spouse, if married, can each withdraw up to $10,000 from their traditional IRA for a first-time home purchase without incurring the 10% early-withdrawal penalty. However, they will have to recognize the withdrawal as income in that tax year. For more information, go to IRS.gov. 

Allowable withdrawals from traditional IRAs can be from yourself and your spouse; your or your spouse’s child; your or your spouse’s grandchild or your or your spouse’s parent or ancestor. Roth IRA owners can withdraw their contributions tax-free and penalty-free at any age for any reason because the contributions were made with post-tax income. After age 59 ½, earnings may be withdrawn as long as the Roth IRA have been in existence for at least five years. Up to half of the balance of a 401(k) or $50,000, whichever is less, can be borrowed by the owner at any age for any reason without tax or penalty assuming the employer permits it. There can be specific rules for loans from a 401(k) that would determine the repayment; interest is usually charged but goes back into the owner’s account. You can consult with your HR department to find out the specifics.

A risk in borrowing against a 401(k) comes if your employment ends before the loan has been repaid. The loan may have to be repaid as soon as 60 days to keep the loan from being considered a withdrawal and subject to tax and penalty. Even if you continue with the same employer, failure to repay the loan could be considered a withdrawal also. Your tax professional can provide you specific information on how making a withdrawal from your retirement program might affect you. Additional information can be found on www.IRS.gov.

If you are jumping into the real estate market to rent your first home, there's lots of decisions to make and many financial considerations! Like, is it better to rent or buy?

The New York Times has a great interactive artical on this "rent verses buy" subject.  Check it out here! This artical takes a very logical and practical approach to the age old question, and the results might surprise you.

If you are thinking about buying your first home, or would like more information on buying a home, call The DeHanas Team at 301-870-1717301-870-1717. DIscover the team advantage!

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The title sounds like the start of a riddle, and yet the answer is simple and can be complex.

Those of us (agents) that have been in the real estate industry for a long time all know each other.  We grew up together, attended high school and college together, our kids play together, we are friends, family, roommates, and in some cases spouses that work for different real estate brokerages.  Our local agent network is really not that large.  And we work and learn with each other, daily!

Often we all hear the same question from prospective clients; "What is the difference between real estate brokerages?" or "Why should I go with your company over XYZ National Brokerage?" When it comes down to it, what benefits do consumers have using one brokerage over another? What's the difference?  The difference is "nothing and everything".  Sorry to be so paradoxical about the answer, because it is so simple.  The difference is not in the brokerage. The difference is in the individual agent.

As agents, we choose the place where we are most comfortable hanging our hat, where the work place is inviting, nurturing and productive. I have also known real estate agents who have been affiliated with almost every local real estate brokerage at one time or another.  And the service they provided at one brokerage was no different than the service they provided at another.

It used to be that an agent would choose a brokerage over the tools it offered to make their jobs easier and more manageable, or the quality of in-house training programs. Quite frankly, now, the training is the same, and in some cases, the EXACT same. Just today I attended a class sponsored by Exit Realty, and have attended classes put on by Keller Williams, Remax, Century 21 and Coldwell Banker. The Webinar has also changed the playing field, creating an even opportunity for every agent regardless of if they are with a national franchise or an independently owned real estate brokerage.

Sometimes agents choose one company over the other because of the technological support. Again, another area where the Internet has created the same opportunities for all agents to take advantage of.  The same tools are available to every real estate brokerage regardless of if you are with Remax in Maryland or Century 21 in California. They are the same tools with a different label. 

The truth is most real estate brokerages are set up to support the agents, not the consumer.  It is the agent that makes the difference.  If a brokerage offers all kinds of marketing tools and the agent chooses or fails to utilize them, is that the brokerages fault?  Real Estate Agents are independent contractors.  They are a self contained businesses within a franchise name.Ten agents in the same brokerage are going to conduct business in ten different ways.  The important factor here is work ethic, know-how and results.

If you hire an agent with a strong work ethic, who is knowledgeable about their field, and has a track record of success, it does not matter if they are with Keller Williams Realty, Remax, Century 21 or any of the thousands of franchises, or if they have their own brand. 

Word of mouth used to be a popular method for finding a good quality agent. In Today's technology-driven world, it is fairly easy to identify who the hard-working, successful agents are.  And savvy home buyers and sellers will tell you, they "take to the net" and find out what other home buyers and sellers experiences are like by looking through feedback sites like Trulia, Zillow, Google, Yelp, Facebook,RateABIZ and dozens of others. Check out the testimonials.   No longer can an agent hide from a dissatisfied client, and likewise, when a real estate transaction has gone especially well, consumers will let you know.

The difference is as unique as the individual agent. 

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As we pass through the New Year and all of the holiday festivities, the Real Estate Market is beginning to heat up once again. The National Association of Realtors is forecasting a 15% to 20% increase in sales, and at a time when the housing inventory is at an all time low.  One segment of inventory that has remained consistent over the past couple of years is the supply of rental property.  Fueled by a combination of investors jumping into the market and homeowners unable to sell homes due to underwater mortgages, rental properties have held their own when it comes to supply vs demand, and as a result rental pricing has remained relatively stable.

Consumers on the move have plenty of hoops to jump through when it comes to buying a home because the mortgage industry continues to tighten its prerequisites for obtaining a mortgage, and if you are contemplating purchasing a home that is a short sale or Bank-owned, you better be prepared for a long wait that statistically results in more disappointments than wins.  As a result, many prospective home buyers end up renting.  But is this the best financial choice?  Home buying just might be worth a little "hoop-jumping" for some consumers.

In most cases, because of the low mortgage rates, a home buyer will pay $500-$600 per month less for the same home that a tenant is occupying.  And with home values finally stabilizing and heading in a more positive direction, the prospect of future equity certainly out weighs paying for someone else's mortgage. 

For those interested in a better understanding of the cost of renting verses the cost of buying, I came across this link featured in the New York Times: http://www.nytimes.com/interactive/business/buy-rent-calculator.html

Of course if you have any questions regarding buying, selling, renting or investing in real estate, DeHanas Real Estate is here to help!  Call us at 301-870-1717.

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A persons credit rating has never been more important than it is today!  As mortgage companies maintain a very tight leash on home borrowers, what their credit looks like will mean the difference between getting approved for a home loan or not.  And that is not all.  Credit ratings affect the outcome of rental applications, job applications, and even basic necessities like electric and gas are based on a persons ability to manage credit. Furthermore, if a person who has poor credit is approved for a loan, it is generally at a higher interest rate, meaning they pay more for the same loan that someone who has good credit.

The score used by most lenders and others considering a loan is called a FICO.  This is a score that is computed from a variety of different areas in a persons financial activities.

There are no overnight remedies for increasing your score, but there are some things that a person can do to "massage" their credit:

-Know what is on your credit.  Sometimes there are items on a persons credit report that do not belong to them.  There are methods for disputing erroneous information.  Contact each of the credit reporting agencies (there are three of them) and ask how you dispute information on your report.

-Pay your bills on time.  A late payment, even a few days late, can impact your credit rating.

-Make more than the minimum payment on your credit cards.

-Make payments early on credit cards.

-Make multiple payments in the same billing cycle.

-Never use all of the credit you have available.  Keep your balances low.

-Keep older accounts open to establish a "history".

-Open new credit accounts as you need them, and keep up with the payments.

If you are one of those people who have difficulty managing their money, you need to have a written budget for yourself.  There are plenty of on-line tools to help, like Quicken. Also, many banks have online budgeting tools you can utilize to never miss a payment.

If you are already in way over your head, do not get discouraged.  Take baby steps and begin getting things paid off. There are also credit experts that can help if needed. Having poor credit can be a temporary situation if you take the positive steps towards resolving it.

The comprehensive and non-partisan real estate website Trulia published a feature article in March that brashly trumpeted, “Ain’t No Lie, It’s Cheaper to Buy, Buy, Buy.” It’s safe to assume that if the headline were a bit longer, it would end with the words “a home.” That would have thrown off the whole catchy rhyming scheme, but the point is clear: it makes better financial sense, almost everywhere in America, for people to buy a home than to rent one.

The article goes on to report that, according to Trulia’s own Rent vs Buy Index for the winter of 2012, it was less expensive to buy than to rent in 98 of the nation’s 100 major metropolitan areas, including traditionally high-priced cities, such as Los Angeles, New York and Boston. The two exceptions are Honolulu and San Francisco, each of which landed in the next category, “renting and buying offer a similar value.”

After a little bit of research on the Internet, you should have no trouble figuring out if renting or buying is right for you in your individual situation. One simple formula to try is to research the asking price for a variety of rentals in the area in which you want to live and calculate the average. Repeat this process by researching the prices for homes that have sold recently in the same area (do not use listing prices as these are generally higher than the selling price), and then factor in some of the other costs usually incurred by both renters and buyers, such as deposits, insurance, maintenance, and taxes.

For a more immediate comparison, albeit potentially less applicable to your personal situation, there are numerous free rent-vs-buy calculators at your disposal online. Some of the comparatively more trustworthy sites to try include Ginnie Mae, MSN Money and the New York Times.

Of course, in the long run there is another factor to consider which goes beyond simple month-to-month expenses, namely the opportunity to build up equity as a homeowner. Over time, this has traditionally been a key source of wealth accumulation for Americans. Even though the current real estate market nationally continues to face challenges, this is still true today.