Market Snapshot
Buyers, Are You On The Fence?
There is no better time to buy…than right now! Allow me to offer you some assistance!- Real estate market has excess supply – great deals are available to those who act now!
- Seller-provided incentives may mean cash credits or upgrades
- Declining interest rates get you more home for your money (and yes, rates have declined during the past year)
- Take advantage of additional income-tax deductions
Special Offer! Mention this advertisement and receive a free HSA Home Warranty* if your transaction closes by March 31, 2007!
Make your move! Call me at 414/412-7980!
*HSA Home Warranty: HSA Home Warranty provides comprehensive, affordable home warranty coverage and service that's second to none. A home warranty provides coverage for homeowners when their home's
mechanical systems or appliances break down due to normal wear and tear. The plan covers the cost of repairing the system or appliance, less the applicable deductible.
As a buyer,
you're prepared for the unexpected. An HSA Home Warranty provides the convenience of one source for most repair needs.
Asking prices reduced, sale prices increase
Does this make any sense? Despite the doom and gloom you read in the newspaper (e.g. excess supply of homes and frequent price reductions), the
overall sales price has increased over the past year. In fact, the average sale price is
up at least $7,000 this fall versus a year ago for all of
Southeastern Wisconsin. Although this is good news for sellers, our current inventory has increased greatly, thus, causing homes and condos to sit on the market a few weeks longer this year versus last year.
The Buyer’s Market
Despite what you hear,
the market is still very good. Pricing in a buyer’s market is much more important than pricing in a seller’s market. The downtown market has experienced a sellers market for the past ten-plus years. The tide has shifted and sellers need to be aware of the
importance of pricing their home or condo. In the past, the traditional method of pricing ruled. The traditional approach to pricing a home or condo was to look at properties that sold within the past six months. Our market today doesn’t resemble our market six months ago. Today, REALTORS® are determining today’s prices by analyzing properties sold one to two months ago. In fact, many REALTORS® have changed the way they determine the price of a property by focusing more of their analysis on current inventory versus recently sold properties.
Sellers, Here Is Why You Need Me To Be On Your Side!
In a soft market, it is critical that you are knowledgeable about the marketplace. As your REALTOR®,
I can give you up-to-date information on what is happening in the marketplace and the price, financing, terms, and condition of competing properties.
As your REALTOR®,
I not only market your property to the public, but I also market the property to other real estate agents. Sixty percent of all potential buyers are either shopping for real estate on the internet or using a REALTOR®. As your REALTOR®,
I act as a marketing coordinator, disbursing information about your property to other real estate agents.
As your REALTOR®,
I can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Buyers in a buyers market are looking for two things:
a good deal and a perfect home. This puts an incredible amount of pressure on sellers. As your REALTOR®, I am in a wonderful position to provide you with objective advice on marketing your home.
As your REALTOR®,
I can assist you objectively evaluate every buyer’s proposal without compromising your marketing position. In a single transaction, there are many obstacles sellers and buyers face – appraisals, inspections, and financing. A single transaction can fail as a result of not meeting any one of these obstacles. As your REALTOR®,
I can help you negotiate a deal that will more likely make it through the closing process.
As your REALTOR®,
I can help you close the sale of your home. The required paperwork alone is overwhelming for most sellers. Between the initial
sales agreement and closing, questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. As your REALTOR®,
I am the best person to objectively help you resolve these issues and move the transaction to closing.
Labels: Snapshot
Buyers have another great reason to act in 2007
Reasons for owning your own home:- Build equity by (1) holding onto your investment for the long-term and (2) paying down your loan principal balance
- For the long-run, as with any investment, your investment in your new home will appreciate in value; therefore, paying a steady rate of return on your investment
- Annual real estate taxes are fully deductible. Start reducing your income tax for 2007
- Mortgage interest payments are fully deductible for your primary residence. Make it your New Year’s resolution to reduce your income tax for 2007
In December 2006, President Bush signed a new tax law which will provide homeowners with another great reason for owning their home:- Private Mortgage Insurance or PMI premiums are deductible for the 2007 tax year. Unlike the deduction allowed for real estate taxes and mortgage interest, this deduction does have its limitations – which I explain later in this posting.
First a history of PMI
What is PMI?
When you buy your home, lenders study your credit scores and other credit reports to determine your credit-worthiness or credit-risk. They also take into consideration how much you are willing to pay up-front as a down payment. To avoid paying additional premiums the general rule of thumb is to pay
at least 20 percent of the purchase price as a down payment or obtain a piggyback loan (which has been very popular in the past few years). I will explain how buyers have been able to avoid paying PMI using this financial package.
How PMI works
Private Mortgage Insurance or PMI applies to buyers who
finance their purchase and
contribute less than 20 percent up-front as a down payment. You, the borrower, pay for the insurance policy and assign the lender as a beneficiary. In the unfortunate case where you fall behind on making your timely loan payment, the lender has the right to initiate foreclosure proceedings to recover from the lost payments. The mortgage insurance policy reimburses the lender for legal costs and lost income.
How buyers have recently avoided paying PMI
Many of my buyers in the past few years have avoided paying PMI with less than 20 percent down by obtaining a
piggyback loan. Essentially, these buyers are obtaining two home loans: a
primary loan for 80 percent of the purchase price and a
second mortgage for the rest of the money needed. The second mortgage or piggyback loan has a higher rate than the first mortgage.
Why are two loans better than one with PMI?
The
combined payments on a piggyback mortgage are less than the payment on a single loan with monthly insurance premiums. In addition to the lower combined payments,
mortgage interest on both loans is tax deductible. Until now, mortgage insurance premiums were not tax deductible. Now that has changed with limitations (see below for explanation).
Benefits of PMI over piggyback
Private Mortgage Insurance or
PMI can be canceled on loans more than two years old if the home’s value has appreciated enough for the owner to have more than 20 percent equity. Second mortgages or piggyback loans cannot be canceled. Piggyback borrowers can only terminate this loan by paying it off.
Should you choose PMI or piggyback?
It depends. If you plan on living in your new home for a short amount of time (2-3 years), then it might be beneficial to go with route that will provide smaller monthly payments (piggyback). If you plan on living in your new home for a longer period of time, then it might be beneficial to go with PMI as you will more likely see your equity grow beyond the 20 percent hurdle; therefore, PMI will cancel without additional expense.
As always,
ask your lender to compare the total costs for piggyback and mortgage-insured loans over various timeframes to determine the most appropriate plan to cut down on your expenses.
If you need assistance with finding a lender, please call me at 414/412-7980 or e-mail at dray@shorewest.com.
Here’s how the new tax law reads:
- The new deduction applies only to mortgages that are closed in 2007. Unfortunately, for those who purchased their homes through me in 2006, you will not be able to benefit from this deduction (unless your refinance in 2007). Therefore, you must close on your new home in 2007 for this deduction to apply.
- The new law is for 2007 only. Congress will have to renew the deduction to make it apply for the 2008 tax year and beyond. Therefore, potential buyers, you must act in 2007 if you want to take advantage of this money-saving opportunity.
- Income Limits: Buyers get a full deduction if your Adjusted Gross Income (AGI) is $100,000 or less. The amount you can deduct phases out rapidly after the $100,000 threshold and no deduction is available if your AGI is at least $110,000.
- Finally, you must itemize for this deduction to affect your income tax calculation. If you find that the standard deduction provides you with a larger benefit, then this opportunity to claim this deduction is lost.
For more information about this recent tax change, please contact your lender or check out these other useful websites:
KLM Mortgage Group, Inc.
Wisconsin Mortgage CorporationLabels: Tax
JSOnline: Milwaukee saw slight dip in home building in 2006 - But boom in downtown construction should help job growth, mayor says
Michele Derus of the Milwaukee Journal Sentinel reported that the pace of home building in the city of Milwaukee has slowed in 2006 - in comparison to previous years. The city added 540 homes in 2006 which is 22% below that of 2005.
Milwaukee Mayor Tom Barrett isn't concerned. He believes that people are interested in moving to the city and companies want to be in the city because more of their employees live there. For this reason, Barrett anticipates an increase in the number of jobs in 2007 for the city of Milwaukee. If his prediction holds true, this will be the first time in ten years that the city will see the creation of new jobs.
Michele Derus writes more about the housing market and its impact on our economy.
Click here to read more about this issue>>>Labels: Economy
Dream Big! Buffalo Building - $975,000
This building is located near the heart of the Historic Third Ward. This top floor unit offers:
- 3 Bedrooms
- 2 Full Baths with Whirlpool Tub
- 1 Half Bath
- 2 Indoor Parking Spaces
- Central Air
- Kitchen - updated with Granite Countertops
For more information about this property and other similar properties, please call me at 414.412.7980 or e-mail at dray@shorewest.com.Click here to print a detailed property sheet or see additional pictures>>>Labels: Dream
