By Joe Szabo, Scottsdale Real Estate Team Now that the summer season is in full swing, it’s time to turn your attention to your vacation home. Whether you’re perched on a tropical beach or kicking back surrounded by mountains, all vacation homes require a relaxing ambiance. Good news: It can be achieved by decorating with our easy-to-follow steps below. So sit back, pour yourself a summertime cocktail, and take notes on how you can better decorate your vacation home for yourself and your guests.

Keep durability in mind

More often than not, you’ll be playing host to family, friends, and out-of-town visitors. There will probably be small children, pets, and plenty of people to keep you on your toes as you cook dinner, serve cocktails, and entertain during the summer evenings. With this in mind, it’s always safe to start by subbing out your nice linens and fabrics for those that are durable and easy to clean. For high-traffic areas like the kitchen and living spaces, use outdoor rugs; they will maintain their shape and coloration despite muddy footprints, and help protect your tile or hardwood flooring at the same time. On sofas and chairs, opt for stylish slipcovers for easy fabric removal and care, or recover them with durable outdoor fabric for low-maintenance, high-impact design.

Be adventurous

Vacation homes are meant to be used as an escape from everyday life. Use this space to fulfill your design dreams of using bold colors or graphic patterns where you wouldn’t normally. Dare to be different by implementing your favorite decorating ideas like mixing patterns, trying a new wall color, or even simply rearranging furniture into a unique layout.

Keep an open concept

Whether it’s for your own enjoyment or for those who may rent the space from you, having an open floor concept with plenty of room to entertain is key to a comfortable vacation home. Vacationers head to rentals to relax and spend time with family and friends, so making the space as welcoming as possible for big groups is a way to make your vacation home stand out among the rest. Large pieces of furniture and open central areas, like an extra-long dining table or one with removable leaf extensions, is a real selling point. Another way to make room for extra guests is by keeping decor to a minimum in areas where renters might want to store their own things, like tabletops, counter space, and nooks.

Pay extra attention to private areas

Many vacationers will be looking for the most possible number of beds to accommodate large families, a big group of friends, or out-of-town visitors. Design guest rooms with numbers in mind. Putting two beds and a loveseat or sofa in guest rooms is a smart way to make space available to your guests, while also keeping them comfortable. When it comes to the master bedroom, be sure to be extra thoughtful. Whether you’ll use the vacation home yourself or rent it out, this room should be a getaway worth dreaming about. Polished furniture, fresh color palettes, and soft linens create a peaceful, relaxing atmosphere for an afternoon nap or rainy day lounging. With these steps in mind, you and your loved ones can enjoy a fun and stylish holiday all year-round. 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.

By Joe Szabo, Scottsdale Real Estate Team In a competitive rental market, you’ll need to do quite a bit more than simply fill out an application and put down a deposit. Since 2005, there has been “an uptick in renters, with people in their 50s and 60s making up the largest chunk of the increase,” CNN Money reports. With large numbers of millennials and Baby Boomers competing in a growing pool of renter applications, it’s important to consider ways to boost your odds during the application process. Read on to learn how to give yourself an edge over other renters when you’re applying for a rental home in a competitive market.

Apply online in advance

If you’ve browsed photos online of your dream rental property over and over, and your gut feeling is telling you that you’ve found “the one,” there’s no harm in filling out an application online if the option exists. This shows the property manager you’re already a serious applicant when you visit the property.

Come prepared

When you arrive for a viewing of the rental property, come with a copy of your credit report, copies of your last few pay stubs, your checkbook, and a printed list of references (including your current employer and previous landlords). Make the application review process easy for the property manager by bringing hard copies of more than enough application materials than your potential landlord would ever need. An optional (but oh-so-helpful) document for your application package is a letter written to the landlord, explaining why you would be an excellent tenant — and if you’ve already visited before, what the home means to you. Think of the application packet as an argument for why you’re the tenant for them. And beyond documentation, bring a strong interview game. Prepare for your first meeting with your potential landlord as you would for any job interview. You’ll be asked questions, but additionally, they expect you to present questions to them, too. This shows you’ve been thoughtful about the application process, and take the potential of living in their rental home seriously.

Express interest

It may seem obvious, but property managers want to see applicants excited about their home. While Utah-based landlord James Hedges certainly values excellent references, he looks for a potential renter who gives the impression that they appreciate the home. “Ultimately, you want someone who will take care of and respect your property,” he says. “How they react when they go through it should not be discounted.” “Showing an interest in the place and the neighborhood helps because it makes me feel like [the potential tenant] will treat my [rental] home and neighborhood as their own,” Virginia-based landlord Julia Jarrett adds. “That sets me at ease a bit.”

Be flexible

With lots of applicants in the pool, landlords often have a tough choice when deciding on a tenant. In addition to offering strong application materials and expressing sincere interest in the home, showing your ability to be flexible is another way to stand out. If you’re able to sign a longer lease, say so. It shows serious commitment, and means your potential landlord won’t have to hunt for more tenants anytime soon — surely a relief for them. And if it seems like the landlord wants to get the property rented immediately, mention that you’re willing to move in earlier than your listed preferred move-in date, if that’s possible.

Be transparent

Property managers will check references. Stretching the truth about something almost always comes out. “If you lie on the application or in person and a reference contradicts you, it’s a huge red flag,” Hedges says. “Any indication of money problems is a red flag as well.” This hint may come in the form of an applicant haggling on price, negotiating what’s included in the price, or asking to cash their check within a certain timeframe. “None of these are guarantees that they will be a bad renter, but they are warning signs that a landlord would take into consideration,” Hedges explains. Iowa-based landlord Laura Kilbride suggests potential renters keep their social media profiles somewhat public. “Having your Facebook profile visible can be a huge advantage,” she says. “If your profile is blocked, they can’t connect with you, and that’s off-putting when [another applicant] has theirs readily available.”

Follow up

After leaving your meeting or open house with the landlord, send an email thanking them, along with asking any follow-upquestions you may have. This encourages further dialogue, and having your name in their inbox serves as one more reminder as to who you are. Hunting for the perfect rental property doesn’t have to be a headache. Once you’ve found the rental home of your dreams, it’s up to you to make the application process easy for the property manager. 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.

By Joe Szabo, Scottsdale Real Estate Team If you bought a home with an adjustable rate mortgage (ARM) thinking you’d sell the home before the ARM adjusted, you’re not alone. Many people buy homes with ARMs because they plan to relocate or upgrade to a larger home in the near- to medium-term. But when plans change and you decide to stay, you must know what will happen to your ARM — and what you can do about it. Let’s take a look.

ARM vs. fixed rates

ARMs help your budget because rates on ARMs are lower than they are for fixed loans. For example, today’s rates for a loan on a $300,000 home purchase with 20 percent down are 2.75 percent for a 5/1 ARM versus 3.5 percent for a 30-year fixed. In this scenario, the monthly 5/1 ARM payment ($980) is $98 cheaper than the 30-year fixed payment ($1,078). This ARM vs. fixed savings is significant no matter what your home purchase price is, and if you are in fact only keeping the home (or the loan) short term, it can be worth it.

How to choose

The best way to determine whether you go with an ARM or a fixed loan is to peg your loan term as closely as you can to your expected time horizon in the home or the loan. Here are a few options to consider:

• If you’re buying a home with plans to relocate and sell the home within five years, a 5/1 ARM would be a good option. If you’re planning to move within 10 years, a 10/1 ARM would be a good option. You can also get 3/1 and 7/1 ARMs.
• If you plan to pay the loan off within five years and keep the home, a 5/1 ARM would also be a good option.
• If you’re going to relocate but want to keep the home, a fixed loan would be a good option.

How your ARM will adjust

If you get an ARM and plans change so that you need to keep the home (or the loan) longer than you intended, your payment will adjust at the end of the ARM’s fixed period. An ARM is a 30-year loan with a rate that’s fixed for the initial period of the ARM. For example, the quoted rate on a 5/1 ARM will be fixed for that initial five-year period. For the remaining 25 years, it will adjust to a base rate (called a margin) plus the current level of a certain index the loan is tied to. A common margin for a 5/1 ARM on a conforming loan up to $417,000 is 2.25 percent, and a common index for these loans is the one-year LIBOR which is 1.25 percent as of this week. If your 5/1 ARM adjusted today, it would adjust to a rate of 3.5 percent, which is the 2.25-percent margin plus the 1.25-percent LIBOR index level as of now, and it will adjust once per year every year after the initial five-year fixed period. The margin will always be 2.25 percent, but the LIBOR index changes in real time, and will be higher if economic conditions improve, or lower if economic conditions worsen in the future. And finally, it’s not just the rate that adjusts, it’s also your payment. In the initial five-year period, the payment is calculated using the initial rate and a 30-year amortization. After the initial period, the payment is calculated using the margin plus index rate and a 25-year amortization. Using our scenario above, this means your payment would adjust from $980 to $1,063.

What to do if your ARM is almost out of time

You could argue that a payment adjustment like this would be tolerable if you were keeping the home (or the loan), but this example is only the first adjustment, and it will adjust every year after the initial adjustment, so it’s a lot of risk to take on. The alternative is to refinance into a new loan, and the same rule would apply for deciding what loan to refinance into: do your best to peg the new loan term to your expected time horizon in the home (or loan) from this point forward. Rates have been steadily low for the past five years as the economy has been slowly recovering from the economic crisis. If this recovery and economic growth continues, rates have more risk of rising. As such, if you chose a new 5/1 ARM today, it would be safest to assume that your rate and payment would adjust up in another five years. If this is too much risk for you, the best choice is to take a slightly higher rate and payment now on a 30-year fixed, which gives you the security of knowing your rate and payment cannot change.

Other important facts about ARMs

Keep in mind that the payments above don’t include homeowners insurance and property taxes, which would be the same whether you chose an ARM or a fixed loan. You can run your own fixed vs. ARM scenarios, and the results will show you homeowners insurance and property taxes. Another point to remember is that ARMs shouldn’t be used to qualify for more home than you can afford. This was a common scenario prior to the economic crisis, when lenders were allowed to qualify borrowers using the lower ARM payment. Now lenders must use the highest-case payment that could occur after the adjustment. As a final note, if your loan amount is up to $417,000, a 5/1 ARM will get you the best savings relative to a 30-year fixed. If you have a jumbo loan above $417,000, you can also get strong savings using a 7/1 ARM relative to a 30-year fixed, so ask your lender to provide both options. 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.

By Joe Szabo, Scottsdale Real Estate Team Recent record-breaking home values in 26 percent of the country’s housing markets are both a sign of recovery and another barrier for home buyers as they head out into this season’s competitive housing market. San Francisco and San Jose shattered their median home-value records months ago. But more recently, markets in the South and even the Midwest and Northeast have also surpassed bubble peaks and clocked some of the highest median home values on record for their markets. Nearly half of all housing markets that recently reached new peaks were in the South, led by hot markets in Texas and Tennessee.

Low inventory drives up prices

Across the country, the number of homes listed for sale is much lower than it was a year ago, which means buyers’ options are limited. Even if a buyer has a down payment, finding a house can be incredibly difficult. In Portland, OR, inventory is down 28 percent, while home values are at an all-time high, up 13 percent. Limited inventory means increased competition for those homes that are available, spurring bidding wars and pricing out entry-level buyers. For first-time buyers, rising home prices and high monthly rental payments are making it difficult to save for a down payment to compete with trade-up or all-cash buyers.

Are we in another housing bubble?

The record-breaking home values have some experts worried about a new housing bubble, particularly in hot markets like San Francisco, Seattle, San Diego and Los Angeles. San Francisco and San Jose have been appreciating at a double-digit pace for several months, and Denver has been appreciating at this pace since the end of 2013. Many view this as an unsustainable pace of appreciation. The job market is hot in tech hubs like San Francisco and Seattle. With increased competition for homes in these markets, low inventory and high home prices start to have a real impact on renters looking to enter the housing market.

Returning to normal

The good news about rising home values is that fewer homeowners owe more on their mortgage than their homes are worth. When those homeowners are no longer underwater, they can sell their homes, raising inventory. More homes on the market means more options for home buyers. It also means we are that much closer to a “normal” housing market, where home values reach new records each month. “These new records mean we’re no longer making up ground lost during the housing recession,” said Zillow Chief Economist Svenja Gudell. “Instead, we’re laying a new path forward, based on demand for housing and economic growth throughout the economy. In some ways, the housing market has seen a return to normalcy, and these markets are well on their way. In an ideal world, they’ll set a new record home value every month as their home values rise at a normal pace. The fact that some markets are still off by double digits just highlights how extraordinarily inflated home values had been during the housing bubble.” 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.

By Joe Szabo, Scottsdale Real Estate Team With springtime comes a sense of renewal, and a desire to clean, organize and start anew. There’s nothing quite like breathing fresh air and sunshine with beautiful colors and textures all around you, both in nature and the home. Get your creative gears turning, and whip your home into shape for spring. You’ll be surprised how a few simple changes can give you a whole new outlook.

1. Embrace natural light

With warmer days comes more sun, so open those blinds and bask in all the beautiful natural light. Instead of flipping on your lights in the morning, pull back the curtains and let sunshine light the way. The simple act of opening your windows will instantly lift your mood. You’ll also save more on your electric bill. Don’t have many windows? Fake it by using large mirrors to reflect light and brighten up your room. Bonus: mirrors also give the illusion of a bigger space, making your home feel brighter, larger and clearer.

2. Give your furniture a clean slate

Spring is the perfect time to break out all of your lighter and cooler clothes — and this also goes for furniture. A white, beige or light gray couch is the perfect landing spot for house guests. Light neutral chairs set the tone, reflect light and keep you from getting too warm. If desired, you can keep these pieces out year-round to invoke springtime memories and stave off wintertime blues when skies are gray. If you don’t want to commit to white furniture, invest in slipcovers that you can use seasonally and remove once colder temperatures return.

3. Let nature be your guide

Nature comes back to life in the spring, and so should your home. Bring in lightweight natural materials — think wicker, woven baskets, light wood grain and cotton curtains. Keep it airy and light, leaning on nature to inspire you. Switch out heavy blankets for summery picnic throws, and pack away heavy, dark decor items in favor of woven baskets paired with colorful or nature-inspired accessories. By adding earthy materials to your home, you invoke nature inside and out for a fresh and renewed feel.

4. Pack some punch with pops of color

Spring is the perfect time to ditch all those moody blacks and grays of winter, and trade them in for something a bit cheerier. Oranges, pinks, yellows, purples, blues and greens are all colors that recall spring and sunshine. Pick your favorite hue from the rainbow and run with it. Try a few peachy throw pillows, springy green candles or periwinkle decorative bowls. Step out of your comfort zone and try a bold statement, or keep it cool with subtle hints of something you know you love. You’ll be surprised how much your mood lifts when you’re surrounded by a sea of pretty shades.

5. Go green and breathe deep

Adding potted plants, bouquets of flowers and herb gardens to your home is a great way to bring the outdoors in. Not only do they provide beautiful focal points and improve your mood, they also give off little hits of oxygen — so breathe deep. Hit up your local farmer’s market for pretty blooms on the cheap, or grow herbs in windowsill pots. And for all those black thumbs out there, faux plants will still give off a fresh green look, but without all the hassle and maintenance. Whether you’re looking to freshen up a couple of rooms in your house or overhaul your whole space, there are easy steps you can take to get your home spring-ready. Give yourself a new outlook and a fresh perspective by taking the time to rejuvenate your space and your mindset. From mixing up colors to looking to nature for inspiration, you can completely transform your home into a sunny, light and airy space that will be inviting to all. 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.

By Joe Szabo, Scottsdale Real Estate Team Early-career home buyers tend to be light on cash, while mid-career home buyers are saving for retirement, and retiree home buyers are facing less income. Each of these life phases requires a different mortgage strategy. Here are some planning tips to help you make smart decisions, no matter where you are in life.

Planning basics

There are three main considerations in mortgage planning:

1. Cash to close. Most home loans require a down payment, which can range from 3 percent to 20 percent of a home’s purchase price. In addition, a home purchase will also have closing costs, which can range from 1 percent to 3 percent of a home’s purchase price, and will cover lender fees, title/escrow fees, and various property taxes that vary by county.
2. Monthly cost. When you rent a home, you have a rental payment plus certain utility bills that your landlord doesn’t pay. When you’re a homeowner, you have a mortgage payment (comprised of interest and monthly pay-down on your loan), property taxes, insurance, all utility bills, and maintenance — plus mortgage insurance and condo homeowners association dues, if applicable. On top of this, you should also be saving a certain amount per month for longer-term maintenance and repairs as your home ages.
3. Home equity. The percentage of your home’s value that isn’t financed is called equity, and your equity can grow in two ways: by paying your loan down, or by your home increasing in value. Equity is the part of homeownership where your wealth can grow over time.

Let’s see how these planning concepts apply to home buyers in different phases of life.

Millennials: finding the down payment

Millennial home buyers haven’t been in the workforce that long, so cash to close is often the primary consideration for them. A 20-percent down payment means you’ll avoid extra costs like a second mortgage or mortgage insurance. However, if you’re a younger buyer who hasn’t saved 20 percent yet — and you don’t want to postpone the benefits of homeownership while you save — don’t worry: your down payment can be as low as 3 percent. On a $300,000 home purchase, a 3-percent down payment is $9,000, and a 20-percent down payment is $60,000. The tradeoff comes in monthly payment. If you go with the $9,000 down payment, your monthly payment using a 30-year fixed rate of 3.5 percent will be about $1,911. This includes your mortgage payment, property taxes, insurance, and mortgage insurance. The $60,000 down payment scenario gives you a $1,444 payment. Putting 3 percent down costs $467 more per month, but requires $51,000 less down payment. When figuring out your optimal down payment with your mortgage advisor, don’t forget that closing costs of 1 percent to 3 percent on a $300,000 purchase price will be $3,000 to $9,000 on top of down payment.

Gen Xers: balancing spending and saving

Gen X home buyers are mid-career, and monthly costs are often their primary consideration as they save for retirement and their kids’ college expenses. On our $300,000 purchase price example, Gen Xers’ big decision could be the same as the millennial decision: do you choose to pay $467 more per month to save $51,000 in down payment? If you did, we know you’d have a monthly cost of $1,911, excluding maintenance and utilities, for a $300,000 home with 3 percent down. We also know that your property taxes and mortgage interest are tax deductible, and this would result in an after-tax monthly housing cost of about $1,566. Now we need to compare $1,566 in after-tax housing cost to what it would cost to rent a home of the same quality in the same area. If it’s about the same to rent vs. buy, then you have a good scenario to conserve cash and be a homeowner. Your mortgage and financial advisers can run different down payment scenarios to optimize the balance between monthly cost and cash preservation.

Baby boomers: living on less

Because baby boomer home buyers are late-career or retired, living on less income is often their primary consideration. If you’re a baby boomer with equity in your home but less income-generating savings than you planned for, you have a few options to sort through with your mortgage adviser:

• Get a reverse mortgage that allows you to convert a portion of the equity in your home into cash to live on.
• Get a home equity loan to obtain cash from your home — but this is a traditional loan that comes with a monthly payment.
• Sell your home to buy or rent a cheaper home and get cash.

Like any other investing plan, a home-buying plan always proves more effective if you start young, because your home equity grows as you pay down your loan and your home appreciates in value. 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.