Using the Internet to Look for a Home Archives - Scottsdale Real Estate Team / Arizona Luxury Homes

Happy Holidays from Joe Szabo & the Scottsdale Real Estate Team

December 11, 2017 Joe Szabo

We at Scottdale Real Estate Team off your best wishes for a wonderful holiday season and a new year filled with peace, prosperity and happiness. Happy holidays and a very happy 2018!

Before & After: Cluttered Office Goes Chic By Joe Szabo, Scottsdale Real Estate Team

August 7, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

It’s hard to get any work done sitting in a space that is dark and cluttered. Such was the problem for Megan Duesterhaus of “The Homes I Have Made.”

A few years ago, she admittedly made what she called a “major furniture blunder,” when she bought an oversized desk with matching hutch and chair. The entire unit was clunky, dark and hard to keep organized. Additionally, the large piece of furniture blocked the one window in the room, making the small space appear even smaller.

Before

After

Go smaller in a small space

The large hutch dominated the small room. Removing the top of the hutch from the desk was a great way to open the space. Drawers provide spots for clutter and a file holder on the desk is essential for organizing paperwork. The desk is now wider, and provides more surface area to work. This is a reminder that not all sets will work in a space — sometimes it’s best to take a part away and use it in another space.

A smaller shelf provides the display space the top of the hutch provided.

Add little details

A little pizzazz — in this case, turquoise and gold — are the stars of the room. Swapping out the basic knobs of the desk for gold and crystal ones gives the desk a bit of elegance. Another inexpensive touch is to add patterned paper — in this case wrapping paper — to a Plexiglas desk top. Other small gold and aqua accessories tie the room together.

How to Determine What You Want in a Home By Joe Szabo, Scottsdale Real Estate Team

July 22, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

From the moment a first-time home buyer begins searching until the final closing papers are signed could be as short as three months or as long as three years.

Along the way, the journey is filled with twists, turns and probably some bumps in the road. So how do you navigate the journey? Once you get “in the game,” you should start setting the top criteria for your home early on. Establishing your most important factors upfront will help you stay on track as you move through the home buying process. It also will help you know when to compromise and when to stick to your original list.

As the home buying process evolves, your criteria may change as well. Nobody ever gets everything on their list. In fact, many buyers, around the closing table, have a chuckle as they compare their original list of criteria to what they eventually got.

Here are the three phases of the home buying journey where your criteria will be established.

1. Dreaming

Leveraging the Internet and online listings, buyers in this next generation of real estate have the opportunity to consider all options, get a feel for what they want, see what’s out there and start to understand their must-haves, nice-to-haves and the bonus stuff.

As the journey evolves, you should begin to nail down requirements and prioritize your wants and needs. The search often changes, and part of the process is to learn what works and what doesn’t. But starting out with a fairly concrete, realistic “wish” list will inform your search.

2. Getting in the game

Any serious buyer working with a great local agent, and with a bank pre-approval in hand, will take the home search up a notch. At this point, it’s important to determine the two biggest pieces of the puzzle: price and location. Without these criteria, you’d simply be shooting from the hip.

Price trumps all criteria. What you can afford generally dictates where you’ll live as well as the type of home you’ll purchase. Location is one of the three magic words in real estate, and it comes a close second in the home search. The thing about location is that it can’t ever be taken away from you. But a home can be altered to adapt to a location. Many buyers, keen on a certain neighborhood or school district, will consider buying a home that needs work or one that’s not ideal for their situation simply to be in the right location.

3. Compromising

After determining price and location, a buyer needs to consider things such as number of bedrooms, bathrooms and the size of the home. While there are times when you’ll choose size over location, generally the location informs the size.

After that, considerations such as a finished basement, large lot, pool or open floor plan, while important, may get trumped because of location and price.

The important thing is to prioritize what you really must have vs. what you want to have. Also, try to think ahead. Are today’s top priorities likely to remain your top priorities a few years from now? Or would it make more sense to get a 3-bedroom house, for instance, instead of a 2-bedroom home, as you may have children later or might need a home office down the road.

It’s not easy to set your criteria for buying a home, given how important the purchase will be. But if you don’t, you’ll be all over the map in your home search, wasting valuable time and effort. And if you’re busy chasing properties that don’t really meet your needs, you may overlook something that does.

7 Tips to Get the Best Mortgage By Joe Szabo, Scottsdale Real Estate Team

July 10, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

As the real estate market begins to perk up, many people find themselves in a good position to start looking for a home. Even though interest rates continue to hover at the lower end of the spectrum, shopping for a mortgage is still a tricky process, especially if you’re doing it for the first time. But don’t fret. These seven steps will help you navigate the treacherous waters of mortgage shopping, and they’ll save you time and money in the process.

1. Have your credit report ready

Lenders use your credit score as one of the major factors in determining if you will get approved for a loan, as well as what kind of interest rates you qualify for. That is why it’s important to review your report at least once a year to make sure everything is in order. If there are any errors that affect your credit score, you could be missing out on a few points here and there that will make a huge difference when you walk into a loan office. Interest rates could skyrocket, or you could even be denied a loan if your score is lacking.

If you can, try to get a credit report at least six months prior to applying for a loan. You will have time to review it and get in touch with a credit agency if you find any errors. You also can use this time to start sprucing your score up a bit by avoiding big purchases that put your finances in jeopardy and not opening up any more lines of credit.

2. Work on improving your debt-to-income ratio

Your debt-to-income ratio is the amount of money you make versus how much you owe. Lenders also take this into consideration when you apply for a loan, so it might be a good idea to try to reduce your debt or increase your income. Make bigger payments on credit card debt to boost your ratio, or pay off any outstanding loans you may have. You will be a more desirable candidate, and you might save some money in the long run.

3. Plan for a big down payment

A big down payment saves you lot of money. Save up for the biggest down payment you can afford so you can take advantage of bigger loans, smaller interest rates, and more attractive closing fees. It also helps lenders determine your property’s loan-to-value ratio. Most loan programs usually require a down payment that falls somewhere between 5 percent to 20 percent. In some cases, if you can’t afford a 20 percent down payment, your lender might require you to pay for mortgage insurance because they’re increasing their loss risk by loaning you more money.

Click here to see the final tips to get the best mortgage

30-Year Fixed Mortgage Rates Down Slightly By Joe Szabo, Scottsdale Real Estate Team

July 7, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Mortgage rates for 30-year fixed mortgages dipped slightly this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.98 percent, down 5 basis points from this time last week.

The 30-year fixed mortgage rate hovered around 4 percent for the majority of the week, before dropping slightly to the current rate on Tuesday morning.

“Last week, rates hit 4-week lows after a weaker-than-expected gross domestic product report suggested some softness in the U.S. economy,” said Erin Lantz, vice president of mortgages at Zillow. “This week, we expect mortgage rates to remain fairly flat unless the jobs report, out Thursday rather than Friday this week, reveals an unexpectedly strong gain in the labor market.”

Additionally, the 15-year fixed mortgage rate this morning was 2.98 percent, and for 5/1 ARMs, the rate was 2.77 percent.

What are the interest rates right now? Check Zillow Mortgage Marketplace for mortgage rate trends and up-to-the-minute mortgage rates for your state.

*The weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

Are You Ready to Buy a Home? By Joe Szabo, Scottsdale Real Estate Team

July 3, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Your parents did it. Your friends are doing it. But how do you know if you’re ready to buy a home? The decision to become a homeowner is a personal one that must be based on your life situation and finances. Ask yourself these six questions to determine if you’re real estate-ready.

1. Can I afford it?

Homeownership brings with it many new expenses. Beyond your mortgage, you’ll be paying for insurance, utilities and taxes, not to mention maintenance costs and perhaps homeowner’s association fees. If you don’t already have a budget, start one. It will help you manage your money, your spending and help you understand how much you can afford for a home.

2. Do I have money for a down payment?

Most conventional lenders require a down payment of 5 percent to 20 percent of the home’s price. The U.S. Census Bureau reports the median price of new homes sold in March 2014 was $290,000; 20 percent of that amount is $58,000. Less than 20 percent down will require that you take out private mortgage insurance (PMI), which protects the lender against default. PMI rates vary, but monthly premiums can range from $30 to $70 for every $100,000 borrowed. VA loans, available to consumers who have served or are presently serving in the U.S. military, require no down payment. Additionally, low-income borrowers with credit scores of at least 580 may qualify for an FHA loan (insured by the Federal Housing Administration) with a down payment of 3.5 percent.

3. Do I have a reliable source of income?

If there are murmurs of layoffs at your company or you’re thinking you might want to quit your job, where will your mortgage payment come from? Make sure you have a steady source of income.

4. How’s my credit?

Everyone has a credit score, also known as a FICO score (Fair Isaac & Company), which can range from 300 to 850. If your credit score is below 620, you’ll likely have a tough time getting a loan. If you do obtain a loan, it will probably require a higher down payment and a higher interest rate. If your credit score isn’t great, you should take some time to repair your credit and raise your credit score.

5. Am I planning to stay put for the next three to five years?

Real estate transaction costs are high enough that, unless you’re in a thriving real estate market, you’ll likely lose money if you don’t stay in your home for at least three to five years. Research your breakeven point, which is the amount of time that buying makes more sense than renting.

6. Am I ready for some DIY projects?

Owning a home means maintenance, such as mowing the lawn or making minor repairs. Do you have the time, skills and interest to maintain the property? Or, can you afford to hire someone to handle these tasks?

Summary

Once you have examined your financial health and decided you are ready for homeownership, take the time to choose your advisers wisely and enjoy the hunt.

Everything You Need to Know About Cash Buyers By Joe Szabo, Scottsdale Real Estate Team

June 30, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Even as the share of all-cash sales falls in many areas, it’s pretty clear that cash is still king, especially at the lower end of the market. This makes it more difficult for traditional buyers to compete with cash offers, especially in a tight inventory environment. So who are these cash buyers, and where are they located? Here are answers to some of your questions.

Why is this happening now?

It’s happening now for a couple of reasons. Lending standards are still very restrictive, and buyer competition is intense, particularly in markets with lots of demand and not much supply. The thinking is: If I pay with cash, I’ll get to the front of the line and have a leg up on the competition.

Where is this trend most prevalent?

This trend is nationwide, and while the share of cash sales is higher than “normal” in many parts of the country (even in rural heartland states that never had a housing bust), it’s most prevalent in Florida and Midwest markets. In the first quarter of this year, Miami had the largest share of cash buyers in the country at nearly 65 percent of total sales, down from 71 percent in 2012. Tampa and Cleveland were close behind with 57.1 percent and 54.2 percent, respectively.

Who are these all-cash buyers, anyway?

They aren’t all institutional investors, necessarily. After all, they found their deals last year and have more or less exited the party as home prices have risen. Rather, they are baby boomers, empty nesters, wealthy families buying second homes/vacation properties and foreign buyers who are coming to the U.S. from all over the world and snatching up properties in places such as Miami, New York City and Las Vegas.

What does this mean to traditional buyers?

Traditional buyers are faced with greater hurdles when making offers because they are likely to have to compete with cash offers, especially in the tight inventory environment in the bottom tier of the market.

Zillow examined the share of cash sales made in the bottom, middle and top one-third of home values and found that in 27 of the top 30 metros, more than one-third of all sales of the lowest-priced homes were made with cash. In three of the top 30 metros — Tampa, Detroit and Miami — more than 80 percent of all sales in the lowest price bracket were cash deals.

The good news is the portion of home purchases made with all cash is down from last year, which will help even the playing field for first-time and low-income home buyers.

How can non-cash buyers possibly compete with all-cash buyers?

Your best defense is to be a well-qualified buyer. You’re gainfully employed, able to make a substantial down payment (20+ percent), have been pre-approved, and, of course, have good credit. You should also make a strong offer and ideally one without any contingencies.

Finally, sweeten the offer any way you can. Find out what’s motivating the sellers and give them what they want. Remember, at the end of the day, money is money, and many sellers may not be in a great rush to close; they are simply looking for clean offers that are going to go through, hassle-free.

Should You Text With Your Landlord? By Joe Szabo, Scottsdale Real Estate Team

June 26, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Real estate and text messaging. Is there really a connection between these two seemingly unrelated things?

Interestingly, the answer is yes. As texting becomes more ubiquitous it is also entering the realm of real estate law, raising questions about whether texting information between landlord and tenant is legally binding. In many cases, it is!

You may wonder why this is even an issue. Can’t you just pick up the phone, knock on the door or write a letter or email? More and more, people are giving up their landlines and using only their mobile phones. And some people — depending on their age mainly — are more comfortable communicating with their thumbs than with their mouths. As our forms of communicating change we need to change with them. Texting about real estate issues — specifically landlord-tenant issues — is no different.

Of course, laws vary from state to state and city to city on this topic. But here are some examples from around the country to give a sense of which way the law is headed:

Q: If a landlord notifies a tenant via text message about changes in the terms of a lease, is that proper legal notice?

A: “A text or email can be a contract if there is an offer and an acceptance by both parties,” Centennial, CO, lawyer Christopher Leroi wrote in the Q&A forum on Avvo.com in response to the question. However, he added that he wouldn’t advise a landlord to serve notice of a rent increase via text. Instead, he would suggest that it is put in writing and mailed or handed to the tenant.

Adds San Francisco attorney Shaye Larkin, “An increase in rent should be in writing, but mere discussions can be via text message.”

Q: If a landlord offers a benefit — such as snow removal or cleaning — by text, is it legally binding?

A: Probably not, says attorney Peter Kirner of Cleveland. “Generally a lease will be looked at between the four corners of the document, meaning what is specifically ON your lease. If snow removal — or any other service — is not in there, then it is not a duty.”

Q: Does notifying tenants by text message that they must vacate qualify the same as notifying them via paper notice?

A: In New York City the answer is no, says New York landlord/tenant attorney Steven Smollens. “The controlling New York statute does not allow for a text message. It requires a written notice as well as ‘service’ in the same manner as an actual landlord and tenant lawsuit. This statute is only for New York City and is directed at how a New York City landlord may terminate a month-to-month tenancy.”

Smollens adds that a second law applies to all of New York state except for New York City. “That law allows the landlord as well as the tenant to give notice to the other terminating the month-to-month tenancy. It, however, is not explicit about requiring a written notice or manner of service. It requires a one-month advance notice, where the New York City law requires a 30-day notice.”

Q: What if tenants notify a landlord via text that they plan to move out. Is that considered “written notice?”

A: Yes, Saint Louis attorney Leonard Komen wrote on Avvo.com in response to the question. “Electronic communications in most commercial situations are now considered the equivalent of written communications. You will be hard-pressed to argue you did not get written notice.”

Bottom line?

If you prefer texting over calling or writing, tread carefully when it comes to tenant-landlord issues to make sure you are on strong legal ground.

5 Tips for Millennial Home Buyers By Joe Szabo, Scottsdale Real Estate Team

June 23, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

In previous generations, many people bought ‘starter’ homes while in their 20s or 30s. The world moved at a much slower pace then. People tended to stay put in the cities where they grew up. They wanted ‘roots’ and the status that homeownership afforded.

But times have definitely changed. In the next generation of real estate, we’re a much more mobile society. Millennials, Generations X and Y don’t necessarily want to be tied down by roots. They want the freedom to travel, or to take that new job, whether it’s in Chicago, Los Angeles, or Dubai. Homeownership doesn’t have the same status to them that it had to earlier generations. And, they’ve heard the horror stories of home ownership from those who bought during the market high only to see their home values plummet during the recession.

But there are still many who want to be homeowners. And, the approach is different now, then it may have been a generation ago. If you’re in your 20s or 30s today and considering buying a home vs. renting, here are some things to consider.

Don’t assume you can’t afford to buy

So many young people come out of college with student debt and very little savings. Even after a few years out of college, they assume they either don’t have the 20 percent down payment or don’t have the income to afford a purchase.

That doesn’t mean that if you’re in your 20s, you can’t afford to buy a home. Around the country, mortgage brokers, bankers and direct lenders are lending more than ever. Loan options such as those from the FHA (Federal Housing Authority) enable qualifying first-time buyers to purchase with as little as 5 percent down.

Is it wise to put down less than 20 percent? Not always. But if you’re credit-worthy and responsible with money, you can take advantage of the record low interest rates and loan options that exist today.

Keep in mind that in some markets, renting is as expensive as buying. If you do your homework, you may understand that a home purchase is within your reach.

Don’t go it alone

With today’s easy access to online listings, most people old and young believe you don’t need a real estate agent. People assume that the role of the agent, pre-Internet, was primarily providing access to the “keys.” In reality, agents have always played such a bigger role, one that many people don’t realize until they’ve gone through a transaction. A good local agent has years of intellectual capital inside his or her head.

Agents know the market like no one else because they’ve been inside hundreds of homes, have relationships with many of the agents and have done many deals. They know exactly what to do when a red flag arises. Additionally, the home purchase is both personal and emotional. Through the years, buyers have acknowledged how they’ve let their emotions get the best of them to kill an opportunity. But having a solid resource beside them at all times — the agent — has helped keep them in check.

Ask your parents for advice

Your parents likely bought real estate in a different market, when interest rates were north of 12 percent and they were without access to the Web and online listings. But they have that home buying experience. They have been through the market before and can add value to your home search. They may be out of touch with social media and the technology available to help in the home buying process, but they likely have a solid financial opinion or helpful feedback. Plus, your parents simply have more grey hair and life experiences that have informed them about home buying and finances.

Take your time

Buying a home is not like buying a new smart phone, computer or flat-screen TV. It’s not only a lot more expensive, it’s much more personal and emotional and not something to take lightly.

Even though the flow of information is quick today with texting, email and the Internet, a home purchase takes lots and lots of time, research and due diligence. It should never be rushed, ever. The home purchase evolves over time. Don’t feel compelled to rush into it or leap to a decision on a home. Don’t feel pressured by a “hot” market or competitive bidders. Slowly learn the market, do your research online and go to some open houses. Over time, you’ll get more comfortable with the market, and with luck, you’ll get pre-approved for a loan and hooked up with a good, local real estate agent. You may make an offer or two or three or four before you find the best home at the best price. Let the process work itself out over time. You’ll avoid buyer’s remorse.

Don’t be overwhelmed by data

When your parents bought a home, there was probably little to no data available to them. They worked with a real estate agent who showed them homes, but they didn’t have access to so much historic data or access to the technology and information we have today.

Even so, access to all this information isn’t always a positive force. Sometimes, it can stall a buyer or make them question whether or not they want to be a buyer. If you have a down payment saved up, can afford the monthly payment and plan to commit to the home for at least 5-7 years, then go for it.

Chances are, if any of the above doesn’t add up, you may not quite ready to buy — which means you might be better off renting for the time being.

Top 10 Real Estate Investor Mistakes By Joe Szabo, Scottsdale Real Estate Team

June 19, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Many people have learned that Investing in real estate is not as easy as it seems. At least that is true for investors trying to get a fair deal. For those of us who have been investing for years, and learned many hard and expensive lessons, here are issues you should think through, understand, and consider before jumping into the real estate investing arena. These are in no particular order, since an individual would be smart to read and think through each and every “lesson learned” in the list.

1. Not penciling out your real estate deal

This describes about 80 percent or more of real estate investors.

They don’t take the time to put pencil to paper and make sure that the rental revenue from the property will be more than all the property expenses – and leave some monies left over to return to one’s bank account.

A negative cash flow property will virtually guarantee a measly – at best – investment return on your money.

2. Not penciling out your deal with conservative numbers

For those few fortunate ones who do know how to pencil out a deal, many use unrealistic numbers. They overestimate rental income, underestimate the vacancy, then underestimate the expenses associated with operating a property. That turns into low or negative investment returns for the property owner.

3. Getting renovation costs wrong

Most buyers have little idea how much it costs to renovate a property. They listen to the home inspector, their real estate agent, and just throw out a number like $25,000 for everything. Then they start getting bids for the work and quickly see it will actually cost $80,000 for everything. Word to the wise: Always do a lot of homework and be very conservative in your renovation budget estimates.

4. Underestimating renovation time

Additionally, inexperienced investors believe a good renovation can be done in 30 days, or 60 days. Many times it takes much longer to finish these projects than originally estimated. As a real estate buyer, you should talk to others who are experienced to get a realistic expectation of the time involved in a property rehabilitation.

5. Thinking something can only cost ‘that much’

It never does, it always costs more; many times much much more. So whatever the expense, renovation, service, contract, capital item, etc; chances are it will cost more than you think.

6. Thinking that stocks, bonds and real estate are all comparable investments

People often say they want to buy real estate to get better returns than their stock, bond or bank account can provide. Real estate is a unique asset that comes with clogged toilets, challenging tenants, nebbish neighbors, etc. It’s not an asset where you can invest and just look at an account statement every few months like you could with a stock, mutual fund or bond. Owning rental properties is a business, it can be time consuming and stressful. Make sure that makes sense for you before you buy.

7. Thinking it’s a “turn-key” real estate deal

Earning money with almost no work on the investor’s part? Never! Not going to happen!

8. Believing that flipping properties is investing

Flipping is “speculating” for most real estate buyers. Unfortunately, most lose money. Sure, it looks easy on TV and those shows are fascinating! I personally enjoy watching them; but they are not realistic. Not everything you see on TV or the Internet is true you know…..

9. Thinking that real estate is low risk

There are all kinds of risk issues that come along with owning real estate. Many an investor can mitigate and/or remove some of those with prudent behavior and the proper due diligence. Most investors do not do any of that, leaving them exposed to a myriad of items and issues that can and sometimes do become financially painful.

10. Believing what others say about their “profitable” real estate investing acumen

There is also no way to verify what someone else is telling you about how they did on their real estate investments – unless they show you their tax returns and credit report. But since people love to boast, we often only hear about the winners, not the losers. Many times the statements from those supposed “winners” are embellished with questionable claims. Be careful, do your own homework, but verify your own conclusions.

Those are many mistakes that investors can make. Some are very challenging to mitigate. Experience will teach you a multitude of lessons over your real estate investing career. Just try to avoid the big expensive ones that could clobber you; and end your investing career before it even gets off the ground.

Before<img decoding="async" fetchpriority="high" class="aligncenter size-full wp-image-156293" src="https://cdn2.blog-media.zillowstatic.com/1/Office-Before-2-a632fe-e1406315008143.jpg" alt="Office Before 2" width="333" height="500" />

After

Go smaller in a small space

Add little details

1. Dreaming

2. Getting in the game

3. Compromising

1. Have your credit report ready

2. Work on improving your debt-to-income ratio

3. Plan for a big down payment

1. Can I afford it?

2. Do I have money for a down payment?

3. Do I have a reliable source of income?

4. How’s my credit?

5. Am I planning to stay put for the next three to five years?

6. Am I ready for some DIY projects?

Summary

Why is this happening now?

Where is this trend most prevalent?

Who are these all-cash buyers, anyway?

What does this mean to traditional buyers?

How can non-cash buyers possibly compete with all-cash buyers?

Don’t assume you can’t afford to buy

Don’t go it alone

Ask your parents for advice

Take your time

Don’t be overwhelmed by data

<img decoding="async" class="alignleft wp-image-4850" src="https://scottsdalerealestateteam.com/wp-content/uploads/2014/06/009_Living-Dining-slider-300x89.jpg" alt="009_Living-Dining slider" width="300" height="100" />1. Not penciling out your real estate deal

2. Not penciling out your deal with conservative numbers

3. Getting renovation costs wrong

4. Underestimating renovation time

5. Thinking something can only cost ‘that much’

6. Thinking that stocks, bonds and real estate are all comparable investments

7. Thinking it’s a “turn-key” real estate deal

8. Believing that flipping properties is investing

9. Thinking that real estate is low risk

10. Believing what others say about their “profitable” real estate investing acumen

Before

1. Not penciling out your real estate deal