If Home Prices Fell, What Would That Mean To You?

What Would You Do If Prices Fell?
 Talking about real estate is always a hot topic. And everyone seems to have an opinion on where things will go.  I too have an opinion but fact is...these are all just opinions.  If anyone had the crystal ball, they would be rich. But let's talk about reality and "what-if".  I promise, you will find this VERY interesting. 

 

• If prices fell at the end of this year by just a bit, say a home that is worth $500,000 fell to $475,000, then what does that mean to you?
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• If you own your home, then it means you just lost $25,000 worth of equity to buy that next home.
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• It may mean that you will have to wait to move.  If that is the case, are you okay staying where you are?
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• I know what you are thinking though...if prices fell then my next home's price would be relevant, right? (We will take a look at that below)
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• If you own an income property, then you just lost money.
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• If you don't own, but want to buy you may think this is great for you, right? (We will take a look at that below)

 

But there are two main factors people consider when buying a home.  One- how much will the monthly payment be? Two- how much down payment will I need?

Follow me here:  If that $500,000 house fell to $475,000 you would go from $100k down payment to $95k.  That's only $5,000.  And chances are you just lost roughly $25k in equity.

And if prices fell but interest rates went up only 1%...well, let's take a look at what that means. 

This first screen shot shows interest rates at 3.5% for a $500,000 home. 




This second screen shot shows interest rates at 4.5% for a $475,000 home. 


So, in my example of everything you've seen, if a $500,000 home fell to $475,000 and interest rates went up only 1% then you would be paying more per month for your mortgage and as for your down payment, you would only save $5,0000.

Let's talk more about real estate and the what-if's.  If you are wanting to buy or sell a home, then my job is to help you accomplish that.  And you need to be informed of all the possibilities that could affect you and your decisions.  So call me and I'll be happy to go over this with you

Tips And Tricks For Your Home

Over the years selling real estate I've picked up a few simple tips and tricks that can really make a big difference and in some cases, save a lot of money.  Here are some of my favorites.  

Have a scratch on your wood floors?  Try taking a little bit of olive oil and vinegar and rubbing it in the scratch.  The magic potion is 1/4 cup vinegar and 3/4 cup olive oil. 

How about marks on your walls?  From hand prints, to crayon and scuff marks, try the Mr. Clean Magic eraser. One of my personal favorite products. 

A tear in the window screen?  Maybe you don't need to get a whole new screen. After all, that can be expensive.  Try buying a screen patch. You can find them in most hardware stores. And if your tear is too large to fix or it's just time for a new screen, see if you have a local Mobile Screen Maker. I have found the prices and convenience of the mobile screen makers to be much better than that of a hardware store when it comes to windows and door sizes that aren't the most common ones.  

Troubles Hanging that picture frame straight? Take a piece of tape such as painters tape and tape it across the back of the picture frame covering the area used to hold onto the nails.  Now take a pen and poke a hole where the nails on either side would hang.  Take that piece of tape off the back of the picture frame and put it on the wall where you want to hang it.  Viola! Instant marker for where to put your nails. 

Tired Looking Brass Hardware Not your Thing?  Take apart your door handles and separate them into pieces on a large piece of cardboard. You'll need the handle, the flat plate/ring that is on the main part of the handle attached to the door and the striker plates.  You can buy spray paints that mimic the look of most metals from rubbed brass, satin nickel and antique iron.  Figure out the best way to position your hardware and spray it down.  You will be amazed how you can look as if you have all new hardware just from spray paint.  (be sure to google how to remove your hardware if you don't already know how. It's not always as easy as it looks)

Need to Keep Your Bathroom Drains Running Smooth?  Pull up the stoppers on the drain and run hot water in the tub or sink.  Pour bleach into the water and then let the water drain slowly. Doing this once a month is a great way to prevent clogs.

                                                                         

When you are ready to start thinking about buying or selling, call me. I'm always here to help

All Cash Buyers Using An LLC

The Federal Government starting doing some looking around and found that there is a possibility that people have been using LLC's to purchase property and launder money from the transaction.  So as of recently, a couple of major cities in the US have made it so that when an LLC wants to purchase a property using all cash, the individual behind the LLC must identify themselves and show proof of their identity by means of a passport, driver's license and so forth.  Recently here in Los Angeles, it was reported that there was an LLC that purchased a large property using cash and that the cash that was used, may have been "stolen" or "laundered" (I'm not too clear on the specifics of what happened) But the point is that the Federal Government is now cracking down and will require anyone using an LLC to purchase a property with all cash over the amount of $2 million to show proof of identity to the title company.  So, if you fall into this category, just take note that this is how things are going to be done from here on out.  And if you have any other questions, feel free to call me anytime.
                                                                             

Housing Opportunity Through Modernization Act of 2016

Well, that is a mouth full..."The Housing Opportunity Through Modernization Act of 2016" But what does this mean?  There are a lot of new things about this Act that have to do with rental units, public housing and assistance programs.  And these things are important and good but there is another thing in this that is eye catching.  For many many years, if you wanted to purchase a condo using an FHA loan, the entire building had to go through an application process that involved time, money and meeting certain requirements.  When the economy recovered, most buildings felt they could sell to people who weren't using FHA loans and subsequently they decided to not have their buildings certified to be "FHA approved" since it was a hassle with the time and money to do so.  But that left people who were using FHA loans very limited choices on what they could buy.  If a house was not an option to purchase, and condo buildings weren't allowing people with FHA loans, then they were not able to make a purchase.  But this new Act could possibly loosen those tight strings and red tape and have it be that the entire building doesn't need to go through an application to have someone buy a unit using an FHA loan. But instead, the loan would be solely based on the unit the person is interested in purchasing.  This is quite a big deal and would allow people who need to use an FHA loan to purchase many more options.  Call your loan officer for more information if you would like to use an FHA loan on a condo.  Also, you can read more about it here https://www.congress.gov/bill/114th-congress/house-bill/3700

And when you are ready to buy or sell, please call me.  I'm always here to help