Tuesday, December 31, 2013

Number of home buyers paying with cash increasing


One of the real estate industry trends of 2013 was fairly easy to spot. Cash buyers accounted for one-third of all home sales in the past 12 months. This is about where it has been for the last three years.

Surprisingly, cash home sales took a jump in November, according to RealtyTrac. Cash sales accounted for 42 percent of all homes purchased in November, which is the highest level since RealtyTrac began tracking it. The percentage of cash sales in October was higher than average at 38.4.

Who pays cash?

There are certain segments of the population that have the liquid assets available to pay cash for homes.
  • flippers
  • retirees who are downsizing
  • wealthy who are investing or purchasing vacation homes
  • investors who expect the market to improve enough for a good return on investment through rentals
  • overseas buyers
  • people who have trouble getting financed

What it means

While the housing market is slowly heading back to normal, the rising number of cash sales is a sign that recovery is not complete. The pace is simply not sustainable.

The trend upward in cash-only sales began when mortgage rates began to tick up. Buyers with cash are willing to forego the tax advantage of carrying a mortgage to save on interest. Other savings for cash buyers include loan origination fees, appraisals and some closing costs.

Other advantages for cash buyers include avoiding the loan qualification process and the ability to close the deal very quickly.

BSharper® Real Estate is your premier boutique real estate firm in Silver Spring, Prince Georges County, Montgomery County, Alexandria VA, Arlington VA, and Washington DC area specializing in the purchase, sale, rental, and marketing of select residential properties.  Give them a call at (301) 377-9317 today for all your real estate needs.

Tuesday, December 24, 2013

How your property taxes are paid


Last week, we talked about where your property taxes go. This week, we’ll talk a little about how they are paid, which for most homeowners is a line item on their mortgage statement.

For most borrowers, holding property taxes in escrow is required by the lender. Some lenders who will let you do it still discourage it by charging you more interest. Today, though, most banks won’t even give you the option of not having an escrow account unless you can prove you have a certain amount of funds on hand or you have a certain amount of equity in your home, usually 20 percent.

No matter what state you live in, if you have a mortgage, chances are pretty good that your lender pays your property taxes through an escrow account. In fact, many people never even become aware of the monthly allocation until their mortgages are paid in full and they are directly responsible for paying the property taxes themselves.

Even if your bank pays your personal property taxes, you should receive a copy of the bill at least once each year, whether you pay your property taxes directly to the tax authorities or through your mortgage lender.

Always keep the latest copy of your tax bill where you have easy access to it. You never know when you might need it to prove residency. For example, some school districts require it when you enroll the kids in school, particularly if you're enrolling them in a new school. And you'll ALWAYS need it to do your income taxes, too!

The obvious reason to use an escrow account is, quite honestly, convenience. Simply adding it to your mortgage payment, not worrying about the paperwork, ensuring that it is paid on time... it honestly negates any cons related to escrow.

Some people who own their home continue to use an escrow account because they can set it on autopilot and don’t have to worry about making the payments when they are due.

BSharper® Real Estate is your premier boutique real estate firm in Silver Spring, Prince Georges County, Montgomery County, Alexandria VA, Arlington VA, and Washington DC area specializing in the purchase, sale, rental, and marketing of select residential properties.  Give them a call at (301) 377-9317 today for all your real estate needs.

Tuesday, December 17, 2013

What do property taxes pay for?


The end of the year brings holiday celebrations, New Year’s resolutions, football playoffs and bowl games, and for many, the dreaded property tax bill.

If you're like most people, you look at your property tax statement and automatically think "That's too high." But if you take a closer look, you'll see that your property taxes are spent in a lot of different areas, which is why it’s so hard to get lower taxes overall.

Depending upon where you live, your property taxes fund any number of state and local government functions. Here are the most common lines you'll see on your property tax.

Schools
By far, public schools are the largest single line item in nearly any property tax bill. A commitment to providing the best possible education often leads to higher local property values. In addition, the houses in neighborhoods with higher rated schools generally have higher prices. Although public school systems get funding from a variety of sources, including federal government, state government, fund raising efforts, the largest source is generally from property taxes. This is also why any tax reduction attempts meet strong resistance from both school employees and parents of school-aged children.

Public roads and parks
Although a lot of money from gasoline goes to roads, those are mostly financed by state and federal government. City and neighborhood street repair comes from property tax. Public park maintenance is funded as well.

Utilities
Depending upon the area in which you live, your property tax bill may also include certain utility costs that are provided by the county or municipality, which could include sewer, water and maybe garbage collection.

Government administration costs
This is a relatively small part of the local budget, but it covers salaries and benefits for municipal administrative staff and the buildings that house them.

Public safety
Many people mistakenly think that traffic citations fund police budgets, but most of their operating budget is provided through property taxes. Firefighters are also included in this category. This includes not only salary and benefits for policemen and firemen, but support personnel as well the acquisition of buildings and police cars.

Libraries
Although they’re not usually very large parts of your tax bill, they are considered highly desirable in most communities and largely beyond political haggling. When a tax increase is on the ballot, it rarely fails.

City and county allocations
Both rely primarily on real estate tax revenues to support their operations, so taxes are usually collected and paid to both. In many cities and counties, one government agency may collect the tax under a single bill, then apportion the funds, so you may pay your taxes to your municipality who then forwards the required portion to your county.

BSharper® Real Estate is your premier boutique real estate firm in Silver Spring, Prince Georges County, Montgomery County, Alexandria VA, Arlington VA, and Washington DC area specializing in the purchase, sale, rental, and marketing of select residential properties.  Give them a call at (301) 377-9317 today for all your real estate needs.

Tuesday, December 10, 2013

The pros and cons of buying a home during the holidays


Two weeks ago, we talked about the pros and cons of selling your home during the holiday, so this week we'll talk about why buying your home at the same time presents challenges and opportunities.

The pros

The holiday season can be a good time to find a home. If you are planning to buy a home, but are waiting until the market heats up in the Spring, you might want to reconsider.

  • Right now, interest rates remain low, but because there is less demand for mortgage loans, you could get an even better rate.
  • Prices can be lower because sellers may drop their asking price
  • Fewer buyers = Less competition
  • Homeowners who keep their homes on the market are motivated sellers
  • Tax deduction for the current year
  • Fewer closings = faster transactions

The cons
Of course, there are some disadvantages to trying to buy a new home during the holiday. There's a shortage of inventory—the best homes in your price range may not be available because the seller may choose to wait until Spring. The market is slower because many agents schedule vacations at this time of the year. A blanket of snow can hide defects in the home's exterior and the landscape as well.

If you’re considering buying a new home, this time of year could prove to be advantageous. It could be the best time of year to buy. Talk to your REALTOR® to discuss your options.

BSharper® Real Estate is your premier boutique real estate firm in Silver Spring, Prince Georges County, Montgomery County, Alexandria VA, Arlington VA, and Washington DC area specializing in the purchase, sale, rental, and marketing of select residential properties.  Give them a call at (301) 377-9317 today for all your real estate needs.