Archives for June 2017

How to Attract Birds to Your Yard (Hint: Don’t Just Wing It) By Joe Szabo, Scottsdale Real Estate Team

June 30, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

It takes more than a bird feeder to attract a colorful variety of songbirds to your backyard. Think of your feeder as a drive-thru fast-food joint in an unsafe neighborhood: The birds will stop to eat, but they won’t stick around for very long. They want to get home to their comfy nest in an exclusive deciduous broadleaf community, where they can get fancier food anyway.

If you want to see more than bird backsides at a millet buffet, you need to give them all the luxuries they’ve come to expect.

Create a habitat

Birds prefer townhomes to single-level ranch houses. They need perches for preening, thickets for hiding, branches for bickering, wide-open spaces for showing off, and, eventually, a tree cavity where they can nest and paint their nursery a nice robin’s-egg

blue.

Give them privacy by planting walls of foliage. Native shrubs, small trees, and even tall grasses and perennials offer the versatility they need to make a quick escape.

Create a ceiling of tall deciduous and evergreen trees at the back of your property, and plant small understory trees between them and your house. Selectively prune lower limbs of shrubs and small trees so you can easily see perching birds from your window. They’ll appreciate the perch, and you’ll appreciate the camera angle.

Grow your own birdseed

Money doesn’t grow on trees, but, conveniently enough, birdseed does! It also grows on shrubs, perennials, grasses, annuals, and anything else that qualifies as a plant.

To grow the seed that your local bird species prefer, however, choose the native plants that they’d otherwise find in the wild. Native plants vary by region, but some good choices include coneflower, blanketflower, beautyberry, asters, and sunflowers.

Attract hummingbirds with nectar-filled trumpet honeysuckle and cardinal flowers. Native oaks, hollies, dogwoods, sumac, cedars, and spruces provide nuts and berries, as well as shelter.

Stage your birdhouse

Research the birds that you’d like to attract, and give them the house that suits their needs. For example, bluebirds like their nesting boxes out in the open, while chickadees like thick leaf cover.

Whichever bird you try to attract, keep that nesting box away from human noise and activity so you’ll never have to witness the heartbreaking sight of abandoned eggs in an empty nest. Also, keep your cat indoors, if possible. Otherwise, you may find birds not only in your backyard but on your front doorstep, too.

If birds haven’t moved in yet, be patient. Sometimes all your birdhouse needs is a little lichen, moss, or wear and tear to make it more appealing.

Turn a birdbath into a Jacuzzi

If your birdbath is emptier than a swimming pool in January, there could be a reason. The ideal birdbath doesn’t look like you’d expect — it’s placed directly on the ground in a shady space with nearby shrubs.

Add some gravel to the basin so birds can find their footing, and even add a few rocks on the outside to serve as steps. Include a small pump or fountain, if possible. This turns your birdbath into a miniature water feature, and the circulation keeps the water clean and helps birds cool off on hot days.

Leave the leaf litter

If you’re looking for an excuse to get out of gardening chores, you’ll be pleased to know that you’re absolutely allowed to keep that accumulation of dead leaves and small branches on your garden’s floor. It gives birds everything they could ever ask for — bugs and other small animals for snacking, materials for nesting, and even a hiding place from predators.

If things begin to look untidy, just break down the larger branches by hand or with a pair of anvil pruners, and spread everything out evenly. Everyone loves free mulch.

Invest in your feeder

Rather than spending money on multiple feeders that you have to replace year after year, invest in a feeder that’s made with quality materials, has a tightly fitting lid, and drains easily. Better yet, purchase a sturdy pole and squirrel baffle before you leave the garden center.

Even the best feeder will need maintenance, so give it a thorough cleaning every year, and break up any clogged holes so moisture doesn’t accumulate. Trust me on this — cleaning out a maggot-infested feeder is something nobody should have to experience in his or her lifetime.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, 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 and to search the Scottsdale MLS for Scottsdale Home Listings.

Buying Art Like a Grownup (for Investment or Inspiration) By Joe Szabo, Scottsdale Real Estate Team

June 27, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Bare, white walls are usually the reality when you first move into a new home. But if you want to show off your personality, there’s no better way to do it than with original art. A one-of-a-kind piece transforms a space, makes you feel more at home, and expresses your personal interests.

Diving into the art world can feel intimidating, but it doesn’t have to be. To help you get started, here are six tips for purchasing art you’ll want to grow old with.

Work within your budget

To find pieces you like without breaking your budget, visit flea or craft markets, where affordable options are plentiful. While you’re there, keep an eye out for posters that aren’t limited edition but are still interestingly designed.

“It’s important to think broadly about what art means,” says Bettina Huang, head of consignment at Artsy. “Combine plants with some of the flat, light objects you may have collected in your travels, and mix those in with posters or things typically thought of as art.”

Another option: Hang framed versions of your own drawings, doodles, or sketches to give your walls customized style. “If you frame them and hang them like a salon wall, that’s a budget-friendly solution that feels personal,” says Huang.

Know your goals

“It’s important to have an honest conversation with yourself,” says Huang. “Do you want to decorate your entire home? Do you need to fill a certain space? Or are you looking for bigger statement pieces for a salon wall? If you’re interested in art investing, do you want to buy works by emerging artists in the hopes they’ll dramatically increase in value?” These answers will help determine your spending.

For example, if you have $1,000 and want to invest, you can probably only afford to purchase one piece. If you’re looking to decorate, Huang suggests buying several less-expensive works. The kind of art you select and your budget will dictate your options.

Hit the art circuit

“Art fairs can be really great, because you get to talk to gallery owners in person,” says Huang, noting that this helps you sharpen your tastes and investing instincts. “Practice gives you more confidence and a reference point, so you can compare pricing and really start to understand the kinds of works that are available.”

Art school exhibitions are another great way to meet emerging artists whose careers you may want to follow.

If you’re looking for more established artists, works on paper, including drawings, prints and editions, or multiple copies of a given work, are an affordable way to begin your art collection.

“It’s nice to go that route, because it means other pieces from that artist have likely been sold, so there’s a precedent for the price you’ve been asked to pay,” says Huang.

Consider auctions

Whether you have $1,000 or $10,000 to spend, auctions, which are open to the public, give you a sense of what’s out there and expand your artistic horizons. “Research in advance to see what similar works have sold for,” says Huang, because the price a work sells for is closer to its actual market value. “There’s something reassuring about that level of transparency.”

As an aside, more auctions are being held partially or totally online, and sites such as Artsy play a big part in this. “A lot of times, online auctions are used to sell works that are somewhat more affordable,” notes Huang.

Do your homework

When buying secondary-market or previously owned work, Huang strongly suggests doing your research. Investigate the prices of comparable works, keeping factors like medium, size, rarity, and date in mind. “As much as possible, ask for a condition report, so you know if the work is pristine or if it’s been damaged.” The price will reflect this, too.

For high-end works by notable artists, check for a certificate of authenticity, and ask about the work’s provenance or history of ownership. With more transactions being done online, it’s particularly important to ask for the condition reports if you can’t view a work in advance.

Sell it if you outgrow it

“No matter what your budget is, your art collection should reflect your personality and interests, which will evolve over time,” says Huang. That means that buying goes hand-in-hand with selling when works no longer feel like they make sense for you.

When you sell, work with reputable establishments, and budget for (and ideally minimize) the commission and fees you pay for an auction house or gallery to take your work on consignment. “Services like Artsy get you proposals from networks of vetted partners, which makes the process easier, faster, and more transparent,” says Huang.

5 Facts Home Buyers and Sellers Should Know About Credits By Joe Szabo, Scottsdale Real Estate Team

June 23, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

After months of searching for the perfect home, making some offers, and maybe even competing with other buyers, you finally have a deal on your dream home. It took some negotiations, but you and the seller have come to terms.

Or have you?

Too often, getting a signed contract and putting your money into escrow is the beginning of what can become yet another round of negotiations. Here are five things every home buyer and seller should know about last-minute negotiations or credits.

Buyers may ask for credits based on property inspections.

Usually, a real estate contract either provides for a property inspection, or buyers inspect before signing. Depending on the property and the issues, a buyer might also have a particular type of inspection for the sewer line, septic, pool or roof.

These inspections can bring to light issues that the buyer couldn’t possibly have known about before making an offer. Once inspected, the buyer may still be interested in pursuing the sale. But given the needed repairs they will probably want to re-negotiate the price by asking for credits or a reduction in the purchase price.

Sellers should consider having a property inspection before listing.

The goal is to avoid negotiations once you’re under contract, because they’re not going to be in your favor. If you know the roof is near the end of its life or the furnace breaks from time to time, let it be known upfront, because rarely can you “sneak” something past the buyer.

You might even go as far as having your property inspected before listing the home. This way, you can address any issues, and make the inspection report available to buyers. They can come up with their best offer upfront, knowing what they’re getting.

If you have an inspection report or are otherwise assured your property is in great shape, you could even ask for an “as-is” clause in the contract. Although it’s not necessarily enforceable, it will send a strong message to the buyers that you aren’t open to more negotiation.

Sellers may try to avoid giving credits by having work done before escrow closes.

After inspections, the seller might agree to have work done before the closing. Or the seller may require that a payment is given directly to a contractor for the purpose of performing the specific, required work and nothing else.

These agreements help protect the seller, because buyers sometimes ask for credits just to help offset the closing costs — and never intends to do the repair work.

It also protects the seller if initial estimates for needed work turn out to have been overstated.

Buyers who ask for credits just to get the price down may be taking a chance.

Sometimes the buyer concedes on the purchase price thinking they can come back after the property inspection and ask for an additional concession.

The buyer may even feel empowered now that they’ve completed a series of inspections and are just weeks away from closing. The seller isn’t going to go back to the drawing board with a new buyer over a few more dollars, right?

Actually, they might. If it’s a strong buyer’s market, there’s a good chance the buyer can pull it off, but if it’s more of a neutral or a seller’s market, the seller may call your bluff. They’re assuming that you’re the one who, having invested all this time and money on inspections and an appraisal, isn’t going to walk away over a few dollars.

Buyers nearly always ask for credits, so sellers should give themselves some cushion.

You should also leave some additional room for negotiation when you’re in escrow. Always assume the buyer will ask for minor repair work — they nearly always do, even if there are no major issues. If you leave some cushion for yourself, you’ll feel better about the deal, and you’ll have protected yourself against the inevitable.

Conversely, the last thing you want is to be blindsided by a buyer asking for a few thousand dollars credit — just when you think the deal is finally done.

Mortgage Rates Start Summer Near 2017 Lows … Will It Hold? By Joe Szabo, Scottsdale Real Estate Team

June 21, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

This month the Federal Reserve hiked rates for the third time in seven months. Does this mean the end of low mortgage rates? Let’s take a closer look to see how it impacts your home-buying and refinancing plans.

What is a Fed rate hike, anyway?

The Fed Funds Rate is an overnight bank-to-bank lending rate. While this rate isn’t available to consumers, the Federal Reserve (America’s central bank) uses it to help influence overall rate levels in the economy.

When times are tough, the Fed lowers the Fed Funds Rate to stimulate the economy. In the heat of the 2008 financial crisis, it cut the Fed Funds Rate all they way down to .25 percent, and kept it there until December 2015, when it felt the economic recovery had solidified.

Then it started hiking in increments of .25 percent, and have done so four times: December 2015, December 2016, March 2017, and June 2017.

Even though the Fed Funds Rate has now risen to 1.25 percent, traditional mortgage rates haven’t risen much — and, in fact, are near 2017 lows as summer kicks off.

Certain mortgages are already up 1%

When we say “traditional mortgage rates” are holding near 2017 lows, we mean rates on primary mortgages that most people get on their homes.

However, one mortgage product that’s directly impacted by these Fed hikes is the Home Equity Line of Credit (HELOC).

HELOC rates are based on two components: a set base rate called a “margin,” plus a fluctuating rate called an “index.”

The index for HELOCs is the Prime Rate, which is a rate that is directly tied to Fed Funds. In fact, the Prime Rate is the Fed Funds Rate plus 3 percent.

We know that the Fed Funds Rate is now 1.25 percent after recent hikes. This means that the Prime Rate is now 4.25 percent.

Therefore anyone with a HELOC now has a rate of 4.25 percent plus whatever their margin is. Margins are typically somewhere between zero and three percent in addition to Prime, and your margin is based on your credit quality and how much or little you’re borrowing relative to the price of your home.

HELOC rates rising 1 percent because of recent with Fed hikes means that your monthly interest cost on a $100,000 HELOC is now $83 more per month.

If have or need a HELOC to get cash out of your home but don’t want to risk your rate rising further, here’s how to evaluate the difference between a HELOC, home equity loan, and a cash out mortgage.

Traditional mortgages are holding at 2017 lows

The reason rates on primary mortgages most people get haven’t spiked like HELOC rates is because primary mortgage rates are tied to trading in mortgage bonds, not the Fed Funds Rate.

Most U.S. mortgage loans up to $424,100 are packaged into mortgage bonds, and these bonds trade daily in global markets. Mortgage rates fall when prices of these bonds rise on economic uncertainty, and vice versa.

Rates have been holding near 2017 lows as demand for mortgage bonds remains strong. The reason for this demand is that these bonds are considered a safe investment when policy initiatives in Washington and global economic growth looks uncertain (like it does now).

Where do mortgage rates go from here?

Thirty-year fixed mortgage rates on loans up to $424,100 are currently at or just below 4 percent as of this writing — please note mortgage rates change throughout each day.

The Mortgage Bankers Association updates its rate forecasts monthly, and the June forecast calls for rates to rise very slightly — about .125 percent to .25 percent — from current levels as we move through the summer. And they call for rates to be around 4.375 percent as we move into the holidays.

These projections can change monthly as the economic and political environment evolves in the U.S. and globally, but for now you can see that rates might rise by about .375 percent by year end.

On a $300,000 loan, this would mean your payment rising by $66.

Not that $66 is small, but in the context of the global rate market, this is a relatively small increase that shouldn’t fundamentally alter how much home many people qualify for.

Sellers: Here’s How to Update Your Home With Looks Buyers Love By Joe Szabo, Scottsdale Real Estate Team

June 17, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

When you’re putting your home on the market, you want it looking its best. You know you’ll need to clean and declutter, but what about making cosmetic updates?

Investing in a new look for your home might be well worth the effort. The recent Zillow Paint Colors That Sell Analysis reported that certain paint colors in specific rooms can impact the sale price of a home. And many buyers perk up when they see terms like granite countertops, stainless steel appliances, and subway tile in a home’s listing.

Let’s take a look at ways to work these trends into your home for maximum impact.

More natural, less fussy

Today’s buyer is looking for fresh and natural design elements that easily blend between varying styles, from tailored and traditional to ultra-cool and modern.

Zillow discovered that shades of cool blue spoke to these home buyers, and offered a semi-blank canvas for them to put their own spin on. A natural blue tone also looks best in listing photos and videos.

Many elements impact a home’s value

While Zillow’s research shows that applying a fresh coat of paint to your home helps boost its value, there are many more components that impact a buyer’s willingness to pull out their checkbook.

In addition to paint, other elements of the kitchen and bath are important to keep in mind. Updating the countertop or flooring often breathes new life into a space.

If you don’t want to dip into construction territory, smaller scale projects like swapping out hardware, adding artwork, or installing stylish storage are all great fixes that signal your home’s been well cared for.

Dip your toe

We always tell clients who are nervous to jump into a new color or pattern this simple piece of advice: Dip your toe in and try it out.

As Zillow found, shades of blue are the go-to for home buyers today. However, that doesn’t mean you have to splash navy blue paint across your walls.

If you’re staging your home to sell, or just want to see what the color looks like in your environment, start small with throw pillows, an area rug, or window coverings. These decorative accents are small but mighty, and may offer just the right amount of impact to boost your home’s value.

Now that homeowners are gravitating toward fresh, bright and clean coloration, we can expect hues of blue and gray to offer the tranquility potential buyers are looking for.

Paired with classic white countertops and cabinets, these shades complement nearly every kitchen and bathroom, making your next home sale a slam dunk — especially if sky blue or periwinkle is involved!

Sell Your Flip Faster With These Expert Tips By Joe Szabo, Scottsdale Real Estate Team

June 13, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

If you’ve been flipping for a while, you know that selling a flipped house takes patience, and that some houses sell faster than others. While many factors affect how quickly a house sells, Success Path has three tips to help you sell your flipped houses faster.

Make a good first impression

Like a job interview, your house needs to make a good first impression. Regardless of how great it is on the inside, the outside appearance matters, and it can be the deciding factor for whether or not the potential buyer bothers to inquire further about the house.

There are many ways to give your house a quick facelift:

Start with the house itself — add new paint to the shutters, trim, and front door for a quick and inexpensive fix.
If possible and necessary, replace windows and the front door, or add trim and shutters.
Make sure the roof, porch, and yard are clean and tidy.
Use an eye-catching and sophisticated mailbox that matches the style of the house.
Repair the driveway if necessary, filling in cracks and removing any weeds.
Add edging to create clean landscaping lines.
Keep the grass tidy and mowed, filling in any bare spots and removing weeds.
If you have a garden, consider adding an arbor as a focal point. If you don’t have a garden, place flower pots strategically on the edge of the driveway or the porch.

Use the reach of social media

Social media is no longer just a place to keep in touch with distant friends and family. It’s a powerful marketing tool for companies and a platform for connecting with customers — both current and potential.

Most social media platforms have special tools for connecting with specific target markets, narrowing the demographics to match your product or service. Use these tools to your advantage! People spend a fair amount of time on social media, so why not put your house right in front of the people looking for a house?

Start by posting on local real estate pages, or even create your own house-flipping page where you can create ads to show specifically to the demographic of your choice. Don’t wait for the right buyers to find your ad — let your ad find the right buyers.

Don’t skimp on major improvements

The ultimate goal may be making a profit, but you’ll quickly learn the hard way that cutting corners or trying to skip major improvements altogether will cost you more in the long run — and may ultimately put you in the red.

If you’re flipping a house that needs a new roof, but you don’t have roofing experience, don’t ignore the roof or attempt to do it yourself. These things take time and money, and doing it yourself will likely result in costly mistakes. Buyers will look at the bones of the house, so if they see a shoddy roof job, poor plumbing, or major renovations done haphazardly, they’ll be turned off.

Before you even buy a house to flip, budget for hiring out major renovations or projects. Even if the house you want to flip seems manageable for your skill set, always assume that you’ll discover hidden costs and jobs that require a professional.

Don’t give your potential buyers any red flags. Be upfront about the renovations, particularly the ones done by a professional. Squashing their concerns will leave a good impression and ease their minds as they explore the rest of the house.

Building Credit 101: Tips for Recent Grads By Joe Szabo, Scottsdale Real Estate Team

June 10, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

If you’re a recent college grad, you’ve likely heard speeches about pursuing your passions and believing in yourself, but you probably haven’t heard much about establishing a good credit history. Here’s what you need to know.

It matters — a lot

Qualifying for mortgages, auto loans, apartments and even jobs has become dependent, to some degree, on your credit history.

Find out where you stand

The first step is knowing your current status. Access your credit report by visiting Annual Credit Report.com. Make sure all the information on the report is accurate, because errors can — and do — occur. Damaging discrepancies need to be corrected right away.

Build a credit history

Your credit history is one of the key factors making up your credit score, the all-important three-digit number that determines the rates you pay on everything from credit cards to mortgages to auto insurance.

The best time to build a credit history is when you’re young, and the best way to start a credit history is to get a credit card. This may sound counterintuitive, but if you don’t have a credit card, the scoring system has no information to go on for assessing your creditworthiness, so you come across as a credit risk.

Research credit card options

While many of the major issuers offer cards geared toward new applicants with little or no credit history, you might stand a better chance of getting a card at a credit union. Size up your card options on a site such as LowCards.com.

Gas cards and department store cards are also typically easy to get and can be a good place to start if your options are limited.

Another possibility — especially if you don’t have any credit history or your credit is damaged — is to get a secured card. These cards work just like a regular credit card, except that you place a security deposit with the credit card issuer to obtain one. They typically require $200 or more for the deposit, and this amount becomes the credit line for the account.

Use credit responsibly

The way to keep your credit score high is to spend responsibly within your means. Don’t use more than 30 percent of your available credit, and pay off your balances in full and on time every month. Your payment history contributes to 35 percent of your credit score, so this point is important.

Chip away at student loans

Student loans are a form of debt, and are therefore taken into account as part of your credit score. And while you may be worried about a lender seeing all of this debt (likely tens of thousands of dollars), there’s no need to be concerned if you’re handling your finances properly. Just be sure you’re managing your debt obligations and repaying them on time, every time.

Is Buying a ‘Starter Home’ Still Smart? By Joe Szabo, Scottsdale Real Estate Team

June 7, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

When the Baby Boomer generation was venturing into adulthood, it was common to buy a “starter home” — a modest, small dwelling. As their families grew and careers advanced, they moved into bigger or better homes.

Now, many people struggle to come up with the down payment for a first home. They may wonder if it’s smarter to wait and save more money so they can buy a home that makes more long-term sense, or go the other route, buying a starter home and planning to stay in it for more years.

It’s a personal, practical and financial decision, but here are some pros and cons of buying a starter home.

Pro: Build stability quicker

Lots of lessons come from homeownership. It exposes you to a new set of decisions and circumstances.

One surprise benefit that strikes most people is the stability they feel when they become homeowners. They might feel more grounded, and a part of a larger community.

After making a few cosmetic changes to make a home “theirs,” many new homeowners find they enjoy nesting at home, having friends over, and enjoying their own space.

Con: Buying twice means moving twice

Think you’ll be ready to upgrade in just a few years? It might be more cost-effective to save and stretch for the larger house, so you can stay in it longer.

Although mortgage rates are low, there are costs associated with buying and selling a home: title insurance, inspections, brokerage commission, along with a handful of loan fees.

Plus packing up and moving twice can be expensive and exhausting. Some prefer to pick one house for the long haul. While staying put and continuing to rent may seem wasteful in the short term, it might be a more strategic move.

Pro: Build equity sooner

Although not the guarantee it was a generation ago, odds are good that when you get into your first home, you can realize some equity. If you can commit to at least five to seven years, there’s a chance you can come out well ahead.

By making improvements that add value, you can take the equity you’ve built and apply it as a down payment on the next home. In essence, the starter home might help you purchase your dream home.

Con: You may spend more than you planned

There are soft costs to home ownership. Property taxes and mortgage payments aren’t the only expenses to owning. You’ll need to furnish your new home, purchase window coverings, and pay for landscaping improvements.

You’ll likely want to paint, refinish the floors, or change the carpet before moving in. And, you’ll surely make mistakes along the way by hiring the wrong contractor, making a poor landscaping decision, or mistakenly waiting to install the new AC condenser.

Some parts of homeownership are trial and error. It adds up. You might be better off avoiding those expenses by renting and saving for your long-term home.

Pro: Start realizing the tax benefits

When you own a home, the interest portion of your monthly mortgage payment can be written off, dollar for dollar against your income. If you spend $1,000 per month on mortgage interest, at the end of the year, you can deduct $12,000 off your taxes.

When you pay rent, the money goes to your landlord, and that’s it. The sooner you own, in theory, the faster you can save some money — perhaps toward your next home.

Con: Homeownership isn’t a sure thing

The world moves at a faster pace today, and that affects home values. Just a generation ago, people stayed closer to home, got married earlier, stayed married forever, and kept the same job through retirement.

Today, people choose to stay single longer, and may even purchase their starter home solo. Divorce rates are higher, the global economy moves people all over the world for work, and we prefer to stay more mobile.

That means homeownership may not be part of the equation. What happens if you buy your starter home and then get a job transfer, divorce, or the opportunity of a lifetime to live abroad? You might be stuck being an accidental landlord or selling your home at a loss.

It’s up to you

If you play your cards right, you can get into the starter home sooner rather than later and make a smart financial decision. If you buy the right first house, are open to building sweat equity, and plan to hang out there for five to seven years, there’s a good chance that you’ll have made a smart move.

This decision will enable you to get into a larger home, in a better neighborhood or school district, or maybe just your dream home.

Homeownership is a personal choice, and there is no one path to take. Stick within your comfort zone, and always go with your gut.

Can You Save Money by Bundling Home Services? By Joe Szabo, Scottsdale Real Estate Team

June 2, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Why pay full price for something if you can get what you want, plus another item, at a discount? This is called bundling, and researchers have been studying the pros and cons of it for decades.

Although many consumers think of bundling as a modern concept — it’s often used to combine TV, internet, and phone services, for example — the practice has been around for years in a variety of forms.

As a homeowner or renter, navigating the benefits and pitfalls of bundling household services means using a little common sense and a bit of economic reasoning. It also requires being aware of when and how products are bundled.

What is bundling?

Everything from fast-food combo meals to items in a two-for-one deal could be considered bundled, especially if sold at a lower price than the separate parts.

For households, bundling might mean purchasing home and car insurance together at a slightly lower rate — the average American, for example, saves 16 percent when bundling the two policies, according to the latest data from InsuranceQuotes.com.

The possibilities for bundling household services abound, according to Andrew Schrage, co-owner of Money Crashers Personal Finance: “You might find someone on Craigslist who can help with electrical, plumbing, and air-conditioning/heating needs. You’ll likely get a discount, because you’ll be bringing that person more work.”

Mixed versus pure bundling

There are several types of bundling, each with varying levels of consumer benefit, according to George John, a professor at the University of Minnesota’s Carlson School of Management. As a homeowner, you’ll most likely encounter these two types:

Mixed bundling. The consumer chooses between separate items or a bundle. The pieces will likely be more expensive individually, but the consumer has the option to buy just one piece.
Pure bundling. Occurs when the seller offers only a bundle and no individual pieces. This would happen, for example, if a town has only one moving service, which requires clients to buy its cardboard boxes.

In such a scenario, consumers are worse off, because the seller increases its profit by requiring such a deal. The company can get away with it “because they have a very strong market position,” John says.

Understanding your needs is key

Why are so many services offered in bundles? “This is somewhat controversial, but it turns out that companies make more money when they offer you discounts on those bundles, because consumers get tempted into buying it,” John says.

To win at the bundling game, keep your needs in mind, and stay strong in the face of alluring deals. Bundles are a true victory for consumers only if they genuinely need all parts included in it.

When consumers fail to shop around for the other items in the bundle and go for the packaged deal instead, they often walk away with products they don’t want or need — and sometimes pick up lesser-quality goods along the way.

Finally, the touted time-saving advantage of combining bills, which service providers sometimes use as a selling point, may not economize that much time, especially if a consumer would be signing up for automatic bill payments anyway.

Service providers “want to take your attention away from the fact that it’s actually a price move. They want to tell you that you’re getting a better experience if you bundle,” John says.

Client-controlled bundling

Consumers triumph when they control what’s in the bundle. Have a nanny who you pay a little extra to make dinner each night? That’s a bundle. “It’s totally a good deal, because you know the benefit that comes from having the same person watch your child and cook for you. You’ve made the judgment,” John says.

At the end of the day, discipline is key. Saying no to unnecessary items, looking for other options instead of pure bundling, and refusing to be duped by false benefits will ensure you win the bundling game.

What Do Buyers and Sellers Pay in Closing Costs? By Joe Szabo, Scottsdale Real Estate Team

June 1, 2017 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Rarely does a buyer or seller show up to the closing without knowing exactly what their costs of sale will be.

In fact, based on the mortgage loan amount of the purchase/sale price, it’s not hard to ballpark either side’s closing costs. Before you get too far along in the process, ask your real estate agent or mortgage professional for an estimate.

Once you have a real, live deal with a closing date, you should be able to know your costs pretty close to the penny.

If you’re new to real estate or haven’t bought or sold in a while, here’s what you need to know about closing costs.

Buyers have a higher number of costs

In a closing, both buyers and sellers have costs. Usually, the buyer is faced with more line-item expenses than the seller (although sellers pay more).

For starters, most buyers are getting loans to make the purchase, and many of the charges stem from the loan.

A buyer should receive a loan estimate form early on in the sale process. This document spells out all the approximate costs the buyer will face when making the purchase, so there aren’t any surprises at closing. Some buyers use the information on the loan estimate form to shop for different lenders, interest rates and costs.

Typically, buyers getting a loan will see some of the following costs:

Appraisal fee Origination fee Prepaid interest Prepaid insurance Flood certification fee Tax servicing fee	Credit report fee Bank processing fee Recording fee Notary fee Title insurance

Be sure to go through these fees line by line with your mortgage professional to understand exactly what they are and how they apply to your loan.

Aside from the expenses of getting a loan or buying a home, some expenses, such as property taxes or homeowners association dues, are pro-rated and paid at the time of closing. For example, if you’re buying a home and you close toward the end of the property tax period, you’ll likely need to pay the balance of taxes upfront.

The same holds true for prepaid loan interest. If you close toward the end of the month, the lender may ask for the first month’s payment up front.

Negotiate sharing some of the costs

Coming up with an extra one to two percent toward closing costs can be a bigger deal than a $5,000 reduction in the purchase price, so ask the seller to pick up some of the closing costs as a part of the negotiation.

Credit for $5,000 to go toward closing costs will be a much greater bang for the buyer’s buck. The price reduction won’t amount to much more than a few dollars per month over the length of the home loan. But saving $5,000 at the closing will be money right back in the buyer’s pocket.

Sellers pay the commission

For sellers, there are always fewer line items on an estimated closing statement. But the seller generally bears the biggest brunt of the fees: the real estate commission.

The commission is based on a percentage of the total sale price, so it tends to be the biggest fee. In addition to the real estate commission, sellers may have to pay the balance of their property taxes, if they haven’t done so already, as well as any prorated homeowners association dues.