Steve kicks off Real Estate Round-Up by noting that home prices have risen to such a degree that small mom-and-pop investors are starting to partner up with others in order to afford them. Investment properties have surged about 25% from 2014 to 2016, according to the National Association of Realtors, and have attracted investors who are keen to flip homes to try and make some money.
The market is very tight in the $300,000 entry-level range, so investors are teaming up to buy more expensive homes where competition is not as pronounced.
Continuing on last week’s Real Estate Round-Up thread, Terry Story believes sellers are often unclear about a buyer’s “as is with right to inspect” a property before completing a sale. This leads to confusion and frustration, especially after sellers have completed price negotiations on an as-is sale and believe it’s a done deed.
The right-to-inspect clause gives a home buyer the right to have the property inspected before concluding the sale. If they don’t like the results of the home inspection, buyers have three choices: a) accept the property and move forward, b) renegotiate price and repair terms with the seller, or c) just flat-out walk away.
Steve kicks off Real Estate Round-Up with a study which shows that first-time home buyers tend to, on average, pay about $2,200 more for their homes than regular, non-first-time home buyers. Terry says this is because first-time home buyers generally purchase lower-priced starter homes, which is a really aggressive market compared to larger homes.
First-time home buyers are competing against investors and other first-time home buyers and have likely lost out on a few previous bids. Since they are eager to close a deal, they tend to pay a little bit more than seasoned buyers who might sit back a little and wait it out. First-time buyers typically focus on the positives, don’t really concentrate on or even evaluate the negatives, and often let their emotions get the better of them. Fortunately, though, paying a few thousand more doesn’t really matter in the long run.
Another common issue deals with the home inspection disclosure of defects in a house that’s up for sale. On this, The Supreme Court (Johnson vs. Davis) ruled that the seller must disclose all facts that materially affect the value of the property. Realtors, too, have an obligation to disclose issues that impact the value of a property. The straightforward path is to be honest and disclose everything up front to avoid problems and expensive litigation down the road.
Mar 1, 2018
Ever had an extraordinary experience as you were going about your work? Well, Terry Story did. Her tale starts with Terry driving a client (“Jane”) around, looking for a replacement property to buy after Terry got Jane an offer on her house that would give Jane about $200,000 in home equity proceeds after the sale was finalized. But before completing the sale, Terry wanted to make sure Jane had a suitable replacement house that she could move into after she sold her current home. Feb 22, 2018
With tremendous stock market gains over the past eight years, investors are increasingly looking at locking in their gains and diversifying into assets such as rental real estate. But being a landlord comes with its own set of positives and negatives. Feb 14, 2018
The sweeping tax reform, that was signed into law on December 22, 2017, is a massive document riddled with errors, handwritten notes, and the like, so the real impact on real estate isn’t quite clear. What is clear is the elimination of mortgage interest deduction on new home loans bigger than $750,000. (Existing mortgages are grandfathered in.) The deduction also applies to second homes. Terry believes the interest elimination may lower demand for homes priced above $750,000. Feb 7, 2018