Archives for February 2011

Buying a Rent-Producing Home by Joe Szabo, Scottsdale Real Estate Team

February 28, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

You are renting an apartment and really want a home, but you know you can’t afford what you want. You might be getting married soon or planning to live together. You also know that every month you pay your rent is money down the drain. The only way to build equity is to buy something. One solution is to purchase a lesser home in your price range and rent it with the idea of holding the property for a few years until it you build up equity through the payments you make and appreciation. If you find the right property, the rental money you receive should cover the payments and other expenses.

Be sure and consider the maintenance on the property. Just like you call the manager for that leaking toilet, your renters will be calling you and expect the repairs. Often affordable rental properties are older and require more up keep and repairs. Make sure you find a happy medium between a cheap property and repair nightmare.

There are tax ramifications to consider as well. As a homeowner that occupies the house you are allowed certain capital gains tax exclusions when you sell your property. With the sale of a rental property there are no exclusions. Any profit you see will be taxed at the capital gains rate unless you put the money back into another rental property. Rental property is considered a business and the IRS does not allow the exclusion if you sell the rental property (business) and put it all into a home for yourself (personal).

Another strategy is to buy a duplex or triplex and live in one of the units. Many lenders will consider the potential rental income in qualifying you for a loan. This may allow you to speed up your plan and move in to a nicer place right away.

There are many homes with a guest suite or mother-in-law suite. Buying a home with this feature could allow you to qualify for a little higher mortgage payment if you prove to the lender the suite will be rented. These suites are often in a separate part of the house, have their own bathroom, small living area and sometime their own entrance. Always check with zoning laws pertaining to single family versus multi family when considering this strategy.

The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area. Award winning Realtors and Re/MAX top producers, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale, Arizona.

Buying a Home with a Family Member or Partner by Joe Szabo, Scottsdale Real Estate Team

February 25, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

When the home of your dreams is out of your price range, why not buy it with someone else and share the equity. Perhaps you are considering buying with a partner, a family member or someone who wants to share the investment in a home in Scottsdale, Arizona.

The term for co-ownership is called ‘Equity Sharing’. This is when two or more non-married people invest in a house. Sometimes one of the people does not live in the house and merely uses the property as an investment and/or to help out the other person. Sometimes both people are equally sharing the mortgage and up keep as well as living together.

Whatever the situation you will want an ‘Equity Sharing’ or ‘Partnership Agreement’. This will determine who will pay for each item from the down payment to on going repairs and upkeep the co-ownership. There are also tax benefits to coordinate. The IRS will frown on both of you writing off all the interest on your mortgage. You will need to decide how you want the title to be held, (see article called “How to Hold Title”) and what to do when one partner wants out of the property, or worse yet, dies. There are many rules already in place for spouses, but a partnership agreement is akin to a business contract and everything is negotiable. This is where the help of a seasoned professional like Joe Szabo and the Scottsdale Real Estate can advise you and point you to a legal professional with experience in these situations.

One benefit to co-ownership is that both incomes and joint cash for a down payment can be considered in getting your loan. Make sure you have discussed at length the future possibility of one of you getting married and wanting to live in the house. Try to think of as many scenarios as possible and have as many clauses to you agreement as you need. A good real estate attorney can help you through this process. With careful planning shared equity could give you both more home than you could individually afford and be building equity for your futures and your Scottsdale home.

Contingent Sale Offers in Home Buying by Joe Szabo, Scottsdale Real Estate Team

February 21, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

Joe Szabo and Scottsdale Real Estate Team Real Estate have seen Sellers completely reject contingent sale offers. However, some Buyers find that a few Sellers are receptive to offers that are made contingent on the sale of another property. The market has changed drastically in the past few years and so for that reason and many more you need to make sure you chose a professional with a strong successful track record in different markets.

Sellers tend to reject contingent sale offers because they are often more risky then offers that aren’t dependent on another home selling. The worst scenario is that the Buyer will price their home too high and it will not sell at all. This would, in turn, have been a monumental waste of time for the Seller and leave them back at square one, trying to find a Buyer while there home has been off the market all the while.

There is even less room for contingent sale offers in a Seller’s market, because while the demand for listings outstrips supply, Sellers have no trouble finding non-contingent Buyers to negotiate with. Of course if the market has slowed, Sellers have much less room to be so choosy, and are more likely to accept a contingent Buyer. Also, if the highest offer has come from a contingent Buyer, the Seller will often accept this higher risk for the higher price. With a contingent sale offer, if the Buyers’ home does not sell, they are not obliged to buy the other home. However, if the contract includes a release clause, the Buyer may risk loosing the home to another Buyer if their current home doesn’t sell in time. A release clause means that the Seller can continue to market their home until the Buyer removes their sale contingency from the contract.

Suppose you are buying a home in Scottsdale, Arizona, and the Seller decides to accept another offer; if there is a release clause, the Seller will notify you to remove your contingency within a certain amount of time (generally 72 hours), or you will have to withdraw, and the home will go to the other Buyers. This is one of the drawbacks of contingent sale buying, and often the Buyer will sell their home at a lower price then they might have gotten in order to keep from loosing the other house.

It is also in the Sellers best interests to make sure that contingent sale Buyers price their home reasonably, and therefore make the deal a bit more certain. We understand here at Joe Szabo and Scottsdale Real Estate Team that home buying and selling can be a very difficult process, and invite you to contact us if you have any questions or would like further information.

We are excited for those taking the first steps in real estate investment, and would like to help you through the process. After all, we are the real estate experts when it comes to the buying and selling of homes in Scottsdale, Arizona.

Interviewing the Real Estate Agent Part 2 of 2 by Joe Szabo, Scottsdale Real Estate Team

February 20, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

At Joe Szabo and Scottsdale Real Estate Team, we know how important it is to find an Arizona Real Estate specialist that can handle the transaction from beginning to end. When buying and/or selling a home ask your specialist if they will review the closing procedure and costs with you and provide you with recommendations of lenders, mortgage brokers, inspectors, insurance agents, title agents, real estate attorneys, movers, etc. Does the specialist belong to the multiple listing service (MLS) and/or home shopping service for the area you want to look into? And can they qualify you for a loan or introduce you to someone who can?

A seasoned professional like Joe Szabo and the Scottsdale Real Estate Team can assure you the best possible recommendations with participants who have a solid proven track record of successful transactions.

Knowing exactly what your housing needs are and what your life style is like is essential when matching you up with potential prospects. When interviewing you, regarding your housing needs and wants, the real estate specialist should be listening attentively to your responses. It is important that you are feeling heard and taken care of during this process. When discussing agency relationships with you, does the real estate specialist work with you in a relationship that you find acceptable? Do they return your call promptly? And most importantly do they answer your real estate questions in a manner that you understand? How is their schedule? Do they have any conflicts that will interfere with your home hunt?

Whether buying or selling Scottsdale Real Estate for the first time, or one of many times, you deserve a real estate specialist who, in addition to knowing the areas you’re interested in, can show you homes that fit your needs, provide you with a list of properties that he or she is showing you, and guide you knowledgeably through the entire transaction.

At Joe Szabo and Scottsdale Real Estate Team, we can help you find the real estate specialist in La Jolla best suited for your buying and selling needs.

Interviewing the Real Estate Agent Part 1 of 2 by Joe Szabo, Scottsdale Real Estate Team

February 14, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

At Joe Szabo and Scottsdale Real Estate Team, we know how important it is to find a Scottsdale, Arizona Real Estate agent that you feel comfortable with. Buying or Selling a home is one of the biggest life decisions people make and having a winning real estate agent on your side makes all the difference in the world. What should you look for in a real estate agent? What should you look for in the agency representing you?

When interviewing a real estate specialist there are a few questions that you should keep in mind. First, does your agent have a real estate license in good standing? Check with the governing agency in your state if you’re not sure. Next you want to know how many years of experience your real estate specialist has in the business? In the event you decide to work with an agent who has fewer than three years experience, it’s important to know that the agent works under close supervision of an experienced broker who will assist you if necessary.

Feel free to ask for the names of Buyers who’ve used the agent recently and talk to them. It is important to feel comfortable with your representative and to know they have a good reputation for trustworthiness. Joe Szabo and Scottsdale Real Estate Team will stand up to even the most discriminating and particular client’s inspection.

Once those questions are answered the next should be does the real estate specialist have a personality you can relate to while maintaining a professional demeanor? After all, this person will be representing you to Sellers, other agents, lenders, etc. it is important to be comfortable with their representation. At Joe Szabo and Scottsdale Real Estate Team can help you find the real estate specialist in Scottsdale best suited for your buying and selling needs.

Five Tips to Make Your Home Purchase Easier by Joe Szabo, Scottsdale Real Estate Team

February 11, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

Buying a home can be difficult enough knowing everything there is to know about the process. However, there are some things that can help a home buying experience flow a little better. Using a seasoned professional like Joe Szabo and Scottsdale Real Estate Team can give you the peace of mind that is so difficult to find in the home buying process.

First, getting pre-approved for a home loan is extremely helpful. It lets the buyer know exactly what price range they have to work with, and prevents them from wasting time looking at homes out of this range. Also, knowingly looking at a home out of a buyers price range, in hopes to talk down the cost to an affordable one is not the best of ideas, and often just creates false hope.

Second, always work with a broker who as a prove track record. A buyer often does not have to pay any money out of pocket to consult a broker, and there is really no reason to go about home buying on your own. A seasoned broker can inform a buyer about the home, the sales history of the surrounding neighborhood, the demographics, and may prevent a buyer from wasting money on the wrong home.

Third, when purchasing a home, you are also buying into the neighborhood surrounding it. It is important to get familiar with the neighborhood and town/city before making an offer on a house. What is the history of the property values in that area? In an area like Scottsdale, you need an experienced professional that has been in the business a long time to maximize your investment.

Forth, buyers must make sure to protect themselves. Hire a proven professional, make sure the contract carries the right contingencies, and buy enough homeowner’s insurance. As the value of a buyer’s home increases, so should the insurance on it.

Fifth, buyer’s expectations of a home should be kept reasonable. If investing in an older home, there are likely to be older problems, and more of them. Know going into the deal that all homes, even new, are at least on step away from perfection.

Enhancing the Interior of Your Home by Joe Szabo, Scottsdale Real Estate Team

February 7, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

Upon inspecting the inside of a house, you can balance the entrepreneurial with the critical. Detailing what’s wrong will help you with a better purchase price. Detailing what’s right will give you insight to potential money-making improvements.

You need to verify square footage. Many factors can contribute to a wrong number over time. Who counted it? Has there been an improvement that was forgotten? Scrutinize here and get an accurate number that satisfies you. Some people count anything with a roof over it as space. Others count just the living areas. Make sure you know the square footage.

Imagine people living in the house. You can anticipate the needs of buyers and tenants and use your images to make enhancements. Modernize floor plans. Make extra storage. Create emotional appeal (for example a sky light). Clean, or make new, the most visually obvious areas.

Homes that need repairs scare buyers away (except of course for the savvy real estate investor). You need to make the home look new, even if it’s an older property. Areas to especially concentrate on are plumbing, heating and air conditioning, electrical, ceilings, walls, floors, and quality of materials.

Learn from experts. Talk to several different contractors and make your informed opinion based on many sources of input, not just one or two. If you are doing work yourself, find people that have done it as well and gather from their insight.

Finally, you owe your buyer a safe and practical home. Make sure utilities are in fine working order and safe. Energy efficiency pays off, and if you can show a potential buyer how they will save in that area, this strengthens your sales position greatly.

How to Find and Evaluate Property by Joe Szabo, Scottsdale Real Estate Team

February 4, 2011 szabogroup

By Joe Szabo, Scottsdale Real Estate Team

The first concern in the “fix it up and sell it” strategy is finding a good house. One that fits your budget, falls into the time and effort comforts of your life, and that will demand the resale price you desire.

The first step in realizing your first concern, is to find your target neighborhood. Choose an area that suits you (and your target market). Once you find that, your real estate agent can help you conquer the knowledge and gain a commanding mental handle on what’s happening in that area. A good real estate agent will give you insights into the neighborhood, show you the properties, and ultimately lead you through the process of buying and taking possession of your home. When looking at a property with an agent, he or she can tell you about comparable sales for an idea of the current value. If you are buying to rent, an agent can inform you about rental history and possibly even help you locate tenants.

What you can bring to the relationship with your agent is a clear idea of what you want. What type of property are you looking for both in concept (renting or fixer upper, etc.) and in physicality? Also, how much are you willing to spend? Together you and your agent will work toward a common goal that is your vision.

Finding property can be done in many ways — looking through the newspaper, the real estate listings, face to face, etc. But when you find properties to evaluate, there are a few VERY IMPORTANT things to watch for. Standing water on the lot indicates bad drainage. Water and moisture damage in the home promote the growth of mold and mildew. Structural problems can be disastrous if left untreated and are often too costly to make it a worth while venture in the first place. Underground tanks can be problematic and environmentally hazardous. Well and septic systems should be avoided in favor of sewage systems and public water. If you can avoid these larger pitfalls in a property, you are doing yourself a tremendous service. Almost anything else can be fixed or repaired without great concern. One of the best ways to find a great property is to call Joe Szabo of Szabo Real Estate Group.