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Confessions of a Serial Refinancer By Joe Szabo, Scottsdale Real Estate Team

March 31, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team My wife and I bought our first home in July of 1999. We were newlyweds at the time, and in lieu of taking a honeymoon we decided to purchase a house and gut it. Our date nights involved going to Home Depot, and talking to plumbers and tradesmen for advice. During the five years we owned the house, we never refinanced because the interest rates weren’t attractive enough, but it’s a different story with our second home. We purchased our second house — where we’re still living — in 2004 with a 30-year fixed mortgage at a 5.5-percent interest rate. The first time we refinanced was in 2008 using a 30-year fixed note at a 4.25-percent rate. That reduced our monthly payment by about $300. We decided to pay the points upfront instead of doing a no-cost closing because it got us a much lower rate and a nice tax break. I never thought interest rates would drop lower than 4.25 percent, but they did in 2012. Before we could decide to refinance, we had to assess our timeline. We knew we’d be in our home for at least another five years, so I ran the numbers and found it would only take two years to reach a break-even point; everything after that would be gravy in our bucket. That’s why we decided to refinance in 2012 to a 30-year fixed rate mortgage at 3.25 percent. It saved us $120 a month, and brought our mortgage down to just under $1,000 a month. Once again, we decided to pay $2,500 in points upfront because it would save us money in the long run when we factored in amortization.

Rate race

Since I’m both a real estate broker and a real estate attorney, I was in a unique position in that I didn’t have to pay a closing company either time we refinanced; that saved us a significant amount of money. I also had connections in the lending field and knew how to shop around to get the best deal. After we got pre-approved, we’d sit back and watch interest rates daily because we knew we needed to pounce on the best rate. So we’d wait until the rates dropped significantly, then jump on it. The second time we refinanced there was a midday adjustment and the interest rate dropped a full quarter point in the same day. It was unbelievable.

Lessons learned

There’s an emotional satisfaction you get from refinancing. Any time you save a significant amount of money, you feel good about what you’ve achieved. You’ve not only eased your financial burden, but also gained a sense of security. I will say that the paperwork when you refinance is exhausting. You need tax returns, bank statements, and history of large deposits and large purchases, among other documentation. Sometimes you need to get errors fixed on your credit report. There was a questionable charge on one of our accounts, and it put a black mark on our credit. We eventually got the error removed, but it took time to dispute it. Over time, we learned an important lesson. We used to make larger monthly payments on our mortgage than what was required because we wanted to free up some of the equity in the home. And, from a psychological standpoint, it felt good to pay down our mortgage and come closer to being free of owing money to a lender. However, we eventually realized that by investing the money elsewhere, we could get a much higher return than using it to pay down our mortgage. So now we don’t accelerate our loan payments. Instead, we invest in private mortgages, where the return can be up to nine percent. We’ve also put some of the money we’ve saved into making home improvements. We updated a bathroom, a bedroom, and flooring. These days I don’t pay as much attention to daily fluctuations in interest rates because I don’t have a desire to refinance again. I definitely talk about refinancing in conversations with my real estate clients and with my friends and family — people are always asking me about where the market is heading — but I have no personal interest in refinancing. Granted, I still have my eyes open. If the perfect house came on the market and we wanted to buy it, we wouldn’t hesitate — especially with interest rates being so low.

Advice for first-time refinancers

There are a lot of ultra-low interest rates advertised by lenders online and plastered on billboards, but rates aren’t fixes. They’re teaser rates, and when you read the fine print, you realize you may not meet all of the qualifications. Unfortunately, there are a lot of bait-and-switch lenders. You should compare quotes from at least three lenders, and make sure they offer the same terms so you can get an apples-to-apples comparison. Let the lenders know you’re shopping around, and pit them against each other. Nine times out of 10, there’s room to negotiate, so don’t be afraid to ask for a better deal. Read more here 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, info@ScottsdaleRealEstateTeam.com 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.

How Record-Breaking Home Values Impact Potential Home Buyers By Joe Szabo, Scottsdale Real Estate Team

March 28, 2016 Joe Szabo

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, info@ScottsdaleRealEstateTeam.com 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.

5 Ways to Refresh Your Space for Spring By Joe Szabo, Scottsdale Real Estate Team

March 25, 2016 Joe Szabo

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

Create the feel of windows with large mirrors. Photo via Laurel & Wolf.

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, info@ScottsdaleRealEstateTeam.com 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.

Landscaping Tips to Maximize Curb Appeal By Joe Szabo, Scottsdale Real Estate Team

March 22, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Other sellers in your area are dressing up the lawn with little flowerbeds and a good trim, but why settle? Follow these five tips to set your home apart from the competition.

Get a competitive edge

Many sellers know that a clean-cut edge can turn even the most mundane lawn into a manicured carpet of green. Set yourself apart and bring a bit of architectural structure to your landscape by installing a brick mowing strip. Not only will this make your lawn look 100 percent nicer, the hard and level boundary between your lawn and landscaping makes subsequent mowings and trimmings a breeze. A less durable, but easier and more cost-effective method, is to create your edge with landscaping timbers that have been staked in place. Plastic edges are the cheapest solution of all, but be warned: They also look cheap, and can even lead buyers to dismiss your home as tacky.

Refresh your mailbox

Replacing your mailbox is a classic approach to achieving curb appeal, but why stop there? You’ll already be deep in the trenches with a shovel in hand, so you might as well plant a welcoming mailbox garden to capture potential buyers from their very first glance. When designing your mailbox garden, choose plants that will not become overgrown or require too much upkeep. Dwarf, compact shrubs are good choices because they stay smaller and require less pruning. Groundcovers such as Liriope, daylilies and Agapanthus are useful because they don’t get too tall, and quickly fill in, eventually eliminating the need for mulch. Place taller plants along the back of the bed, and leave a space towards the front where you can plant a fewseasonally appropriate annuals. Just don’t overdo it, since annuals might fizzle out before the house has been sold.

Bring beauty to your doorstep

Placing a container garden at your doorstep is a quick and affordable way to liven things up, but since the front door is where the agent pauses to fumble around for a key and discuss the home with her clients, set the tone for that conversation with something bold: Two big stately glazed ceramic pots to each side of the door, each filled with spectacular foliage plants. While flowers seem to scream “Look at me!” in desperation, foliage plants exude grace and confidence. Plant them with something low-maintenance so that they thrive during the stressful move. Choose pots and plants that complement the colors and style of the house: A minimalist planting of snake plant or horsetail in sleek red pots may be appropriate for a mid-century modern home with a red door, but would be out of place on a Victorian porch.

Prune the landscape

Notice that I said to prune not just the shrubs, but the entire landscape. It’s common knowledge that you should give your landscape plantings a trim before selling a home, but in the case of so-called ‘trash trees’ and overgrown foundation plantings, those hedge trimmers just aren’t enough. Anything this big should be removed by a professional so that you can focus on the important stuff. Now is also the time to evaluate the effectiveness of your landscape as a whole — not just to you, but everyone else. That vegetable patch or above-ground pool taking up your lawn might be paradise on earth to you and your family, but most prospective buyers will only see weeds and maintenance. However, some features, such as paved paths or patios, can actually bring value to the property because they make life easier without costing much time or effort.

Make emotional connections with plants

Cookies in the oven are supposed to make buyers associate your home with their fondest memories, but well-chosen plants turn a house into someone’s home. Fragrant roses, jasmines and herbs will perfume the entry with nostalgia and make your house memorable to buyers. However, avoid placing strong-smelling plants too close to the entry, as this can be off-putting to some. Another trick is to incorporate plants that create a connection to the best features of your property. If it’s a waterfront property in the deep South, use palm trees to frame the view and create a sense of paradise. If the property offers a nice view of a prairie, plant a groundcover of ornamental grasses to connect the yard to the beauty beyond. Don’t skimp on the price either, because the bigger and nicer the plants, the bigger the impact. 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, info@ScottsdaleRealEstateTeam.com 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.

Curb Appeal: What It Really Is, and Why It Matters By Joe Szabo, Scottsdale Real Estate Team

March 18, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Let’s face it, first impressions matter. We care about how we dress for a job interview, and we spent extra time in front of the mirror before that first date. When it comes to selling a home, first impressions matter, too. The term “curb appeal” derives from real estate sales and home design. For years, buyers have formed their first impressions of homes while standing in the street or sitting inside the car, just beyond the curb. Before the advent of text messaging and smartphones, a buyer would get a phone call or fax from their agent about a new listing. The initial drive-by would determine whether or not they would go for an actual showing. To get that buyer in the door, the seller spent hours, even days, seeding new grass and planting flowers, painting their front door, mulching, weeding and cleaning up the yard. If the home didn’t appeal from the curb, buyers moved on to the next house. Curb appeal was always the single most important piece of the home sale puzzle.

Expanded appeal

Today, curb appeal still matters — but it matters differently. Almost every buyer forms their first impression from a home’s online photos. Instead of driving to your home, buyers will scroll through pictures of both the outside and the inside, before ever stepping foot inside. What’s more, they may never come to see it if they don’t like what they see online. While the exterior of your home should be high on your priority list, it is most valuable only when the buyer walks up or drives by. But they may not ever get that far. The interior also needs to show your home in its best possible light, because Web appeal has become the new curb appeal. And if your home doesn’t photograph well — either because you didn’t have it professionally shot, didn’t post high-resolution photos, or you haven’t taken the time to prep it — then curb appeal won’t even make a difference.

What sellers should do

Sellers need to spend ample time preparing the inside of their home and getting great photos, so buyers will form the best possible impression. The downside for sellers is that they have to work so much harder than they did just 15 years ago. In our ever-more-visual society, buyers make immediate judgments about a home within moments of clicking on the new listing on their smartphone. Sellers only have one chance to make a good impression. The home still needs to look good from the curb — but to get the buyers there in person, it needs to look great on the Web. 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, info@ScottsdaleRealEstateTeam.com 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.

20750 N 87th St #1099 Scottsdale AZ 85255 | Encore at Grayhawk Homes for Sale

March 17, 2016 Joe Szabo

Welcome to 20750 N 87th St #1099 Scottsdale AZ 85255. Spectacular Golf Course & Sunset Views!!! Golf Course Premium Lot! Located on the 18^th hole on Talon Golf Course! Come see for yourself! Tucked away in the guard gated enclave of The Encore at Grayhawk. Resort living at its best! Gorgeous & immaculate single level townhome with 2,101 sf, 3 bed/2 bath features gated courtyard entry, Great Room with soaring ceilings, wood flooring & gas fireplace w/tumbled stone surround, Plantation shutters, laundry room, 2 car garage w/built-ins, no interior steps and so much more. Truly an amazing kitchen featuring slab granite, stainless steel double sinks, 5 burner gas cooktop, double ovens, walk-in pantry & breakfast area.

20750 N 87th St #1099 has a private Master suite w/surround sound, French door leading to yard, double sinks, closet with built-ins & walk-in shower.Gorgeous backyard with built-in BBQ, above ground built-in spa, tiled patio, view fencing with golf course views! A SPECTACULAR setting at 20750 N 87th St #1099 for entertaining family and friends or just relax or Dine under the stars with a skyline of city lights. Enjoy all the amenities of The Encore of Grayhawk as well including clubhouse, fitness room & community pool & spa.

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Irish Luck or Just Good Timing, These Home Buyers are Rolling in the Green By Joe Szabo, Scottsdale Real Estate Team

March 15, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team This St. Patrick’s Day, Zillow took a look at the luckiest time to buy across the country. What we found: the home buyers who bought right at the bottom of the housing bust, allowing them to gain the most equity in their homes as the market bounced back. For example, a buyer who purchased a home in the Las Vegas metro in January 2012 has seen their home value increase an average of 75 percent. That’s a pot of gold — no rainbow required.

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, info@ScottsdaleRealEstateTeam.com 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.

When Do You Really Need a Real Estate Lawyer? By Joe Szabo, Scottsdale Real Estate Team

March 11, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team Price-conscious consumers are constantly looking for ways to snag savings. Be it a do-it-yourself bathroom backsplash or self-help legal documents, the current trend in real estate is shying away from enlisting a perceived-as-pricey professional. However, some projects are too complex, valuable, or regulated to take on as a layperson — and the result is often a frantic call to the local plumber or electrician. In the legal realm — particularly the transfer of real estate — there are definitely times when an attorney is not necessary, and the transaction will most certainly process without the assistance of a real estate lawyer. However, certain states mandate attorney involvement (or at least prohibit non-attorney over-involvement), making it unlawful to participate in a real estate settlement without a licensed attorney presiding. And certain transactions are too complicated, costly, or stressful to go it alone. Here are four situations when you should consult a real estate lawyer.

When it’s mandatory

A handful of states unequivocally mandate the involvement of a licensed attorney in a real estate transaction. These states take a dim view of non-attorney staff members preparing and conducting real estate settlements, calling such acts an “unauthorized practice of law.” This phrase actually derives from the rules of professional conduct (i.e., ethics) that govern attorney practice, and can result in sanctions against an attorney-supervisor for allowing this unauthorized practice with minimal oversight. Currently, Delaware, Georgia, New York, North Carolina, and South Carolina require attorney involvement, oversight, and direction in all aspects of a real estate transfer, from title review to signing documents. In Alabama, a non-attorney can perform a title search and issue title insurance, as long as a licensed attorney drafts all legal documents (e.g., deeds, mortgages and promissory notes). In all these states, the buyer has the unequivocal right to choose his or her legal representation; realtors, brokers, and lenders are not generally permitted to force a buyer to work with a certain attorney.

When it’s complex

For buyers in other states, working with a real estate attorney may still be advisable if the situation involves a complex or unique issue, such as:

Oil and gas rights
Riparian rights (i.e., access to water)
Beachfront property
Any property subject to an easement
Adverse possession claim
Historical property
Preserved property (i.e., farm preservation)
Zoning and/or land use disputes

When any of these issues arise at the outset of a real estate transaction, working with an attorney will inevitably be more cost-effective than dealing with a major conflict or claim later. In addition, the attorney can help review the title and ancillary documentation to ensure all documents comply with state and federal laws.

When it’s high value

Likewise, working with an attorney in a high-value residential transaction can be extremely important, particularly given the extent of the investment. When making a major real property purchase, buyers should ensure that the property is in prime shape — and demanding afull home inspection is one of the most important aspects of this process. Not only can an attorney work with the home inspector to ensure the property meets the buyers’ expectations, but the attorney can help negotiate with the seller if any issues arise. Also, high-end real estate may be subject to several liens, encumbrances, or judgments. A proper title search by an experienced real estate lawyer is the best way to ensure that these issues do not pass to the buyer on settlement day.

When it’s high stress

Lastly, not all real estate transactions are positive experiences, particularly if the seller is in a financial bind or the property is being sold from the estate of a recently deceased individual. When an air of emotion permeates the process, parties are apt to make rash decisions on price, contingencies, or conditions. And when a residential home sale feels “forced,” tempers may flare at the settlement table. By invoking the help of a legal professional to work through the process, buyers and sellers can participate in the transaction with confidence and a full understanding of what is happening, from the initial contract execution to the final closing. 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, info@ScottsdaleRealEstateTeam.com 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.

How Mortgage Strategy Differs for Millennials, Gen Xers, and Baby Boomers By Joe Szabo, Scottsdale Real Estate Team

March 8, 2016 Joe Szabo

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:

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.
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.
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, info@ScottsdaleRealEstateTeam.com 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.

Time Your Listing in the Magic Window to Sell Faster and for More Money By Joe Szabo, Scottsdale Real Estate Team

March 4, 2016 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team In early May, homes sell fastest and for more money, according to the newest data. This is the new magic listing window for the country’s 25 biggest metro areas. Weather and housing market dynamics affect the exact best window to sell in different areas, and this year, a low supply of homes on the market has pushed the window later in the spring. In Zillow’s first analysis of the best time to list, homes listed between mid-March and mid-April sold fastest and for the highest price. But the decline of the number of homes on the market has increased competition, so shoppers who start looking for a home in early spring may need to look at several homes and will often still be shopping a few months later. By May, some buyers may be anxious to get settled into a new home before the next school year — and will be more willing to pay a premium to close the deal. For sellers hoping to sell quickly and get the maximum sale price for your home, the time to list is right in the first half of May. Nationally, homes sold May 1-15 sell about 18.5 days faster and for 1 percent more than the average listing. That means an average premium of $1,700 for the seller of a median home. Today, Zillow has launched a new tool to personalize this data for individual sellers. The new Best Time to List feature estimates how much more money a seller can make by changing the listing date on their individual home. The tool is live for 71 million off-market homes, and registered Zillow users can find it by clicking the “Sell Your Home” on the home details page for an individual home. The methodology for the analysis, originally featured in “Zillow Talk: Rewriting the Rules of Real Estate,” is detailed on Zillow Research. 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, info@ScottsdaleRealEstateTeam.com 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.

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