Posts Tagged 'keith reilly'

A Year in Review…

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Since beginning my real estate career in May of this year, I have had the privilege of experiencing many different aspects of the business and I have to say…I love it!  I just wanted to share with you some of the things that I’ve been blessed with doing this year:

· I have attended countless training courses in subjects such as ethics, buyer/seller representation, real estate investing, commercial transactions, foreclosures and many other topics in order to get up to speed with my peers within the industry. 

· I have shown over 150 homes to clients throughout Bucks County, Montgomery County, Philadelphia County, Chester County and Delaware County resulting in successful sales and satisfied customers.

· I have connected out of state clients with trustworthy, local real estate professionals in South Carolina and Delaware that have resulted in closed transactions and satisfied customers.

I am hoping that with a can-do attitude and strong work ethic my business will continue to grow in 2009 in the face of a challenging market. 

I would like to personally thank those of you who have supported my transition from the US Marine Corps into real estate this year.  I continue to find this career an exciting challenge and am optimistically looking forward to serving you in 2009!

 Happy Holidays to you all and many blessings in the New Year!

Can You Afford That House?

Before you start searching for your dream home, you first need to determine a price range you can afford. According to the Federal Housing Administration (FHA), depending on the consumer’s current debt ratio, most people can typically afford to pay 31 percent of their gross monthly income for mortgage payments. For example, if you earn $50,000 annually, then your monthly income is about $4,167. Thirty-one percent of that is $1,292.

There are several online tools to calculate a monthly mortgage you can afford using factors such as your current monthly expenses, down payment and the interest rate. You can also work with a lender to get pre-qualified for a loan. This estimate will help you gauge how much money you may be able to borrow and the monthly mortgage payments.

However, the amount you are able to afford for a home loan should not be your only consideration for determining your price range. With homeownership come other housing expenses.

 Utilities

The most obvious of additional housing expenses are utilities—gas, electricity and water. But don’t forget about telephone, trash collection, and cable or satellite bills.

Taxes

As a property owner, you are responsible for property taxes. The rate will vary from city to city. In our community, the tax rate is (insert %) percent. That means for a home with a market value of $200,000, yearly taxes will run (insert dollar amount). To get a general idea on how much the tax bill will be for a property, ask the seller for a copy of the previous year’s tax assessment. Your real estate professional can help you refine these figures.

Association Dues

Another cost you may incur is homeowner association (HOA) dues. Most condominiums and some (residential developments/subdivisions/neighborhoods) have HOAs, which are legal entities, created to maintain common areas and enforce deed restrictions. As a property owner, you are required to pay the established monthly or annual homeowner association dues. Be sure you factor this cost into your budget.

Maintenance

You also need to consider the upkeep of your home. You should budget for seasonal maintenance such as lawn care, pest inspections and carpet cleaning, as well as unexpected repairs. The amount you budget will depend on the age of the home, as older homes tend to require more repairs such as installing a new roof, painting and replacing older appliances.

Insurance

Depending on the type of coverage and your area, the costs for homeowners insurance each year can be anywhere from a few hundred to thousands of dollars.  And, if you live in an area that has high risks for flooding, earthquakes, hurricanes, etc., you may need supplemental insurance.

Remodeling/Upgrades

Unless the home you purchase is picture perfect, you’ll more than likely be adding your personal touch. Therefore, you need add to your housing budget the costs for remodeling and upgrades. According to “Remodeling Magazine’s” 2007 Cost vs. Value Report, the national average for a midrange minor kitchen remodel is $21,185; a bathroom remodel averages $15,789.

Even minor cosmetic fix-ups such as light fixtures, window treatments, carpeting and decorative cabinet knobs can begin to add up.

By determining all the costs associated with homeownership, you can go into your home search with a reasonable price range that will allow you stay within your budget.

Tips for First Time Home Buyers

Home-price adjustments in markets around the country have opened doors of opportunity for many renters. If you are transitioning from renter to homeowner, the prospect of making such a large investment may be exciting, while at the same time overwhelming. But it doesn’t have to be. Here are six common mistakes to avoid.

1. Not understanding the home buying process. Educate yourself. Find a homebuyer seminar that you can attend or research online. The U.S. Department of Housing and Urban Development Web site (www.hud.gov) has an entire section devoted to homebuyers with common questions of first-time homebuyers, mortgage and home-buying programs information, downloadable tools such as a wish list and home-shopping checklist, tips on selecting a real estate professional, etc. Likewise, Prudential Real Estate’s popular Web site, prudential.com/real estate, offers consumers brand-new tools for the home buying process, such as free home environmental reports, Value Range Estimates and Property Profiles, among other resources.

2. Not asking questions. There are many facets and intricacies to the home buying process, so although you may gain a basic knowledge, you will still have questions. Don’t hesitate to let your real estate professional know that you are new to the process. Make sure you choose a sales professional who is willing to spend time with you and walk you through the entire process. He or she will expect you to have questions at each step—from house hunting, to making an offer to the closing. Remember, this is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on.

3. Buying on impulse. Don’t feel pressured into making an offer on the first home you see. Buyers, especially first-timers, may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives about each home. Narrow the prospects to three or four and then return for a closer look. When you decide to make a bid on a property, work with your real estate professional to get all of your questions answered before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

4. Looking outside your price range. Before beginning your home search, consider getting pre-qualified to so get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities, private mortgage insurance (PMI) and maintenance.

5. Not planning ahead. Think about personal changes you are planning in the next five to seven years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If this will be a starter home or if you think you’ll be relocating in a few years, you’ll probably want to pay closer attention to appreciation and resale value. If a double-income is necessary to qualify for financing and to make your payments, do your plans foresee an income sufficient to continue making payments?

6. Failure to focus on location. Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and what new construction is planned on vacant land in the immediate area. Also consider the property marketability when it’s time to sell.

Above all, remember knowledge is key. No question is a silly question. Your real estate professional can be an invaluable asset throughout the process. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.

Five Tips for a Green Home

Eco-friendly.  Being “green”. Energy-efficiency. These catch phrases have become part of our every day language as we’ve become more aware of not only our impact on the environment, but also the rising costs of energy. As a homeowner, there are some simple, inexpensive steps you can take to make your home energy-efficient. Get started on the road to being “green” with these five tips:

Change Your Light Bulbs

By replacing just five incandescent light bulbs with compact fluorescent (CFL) bulbs, you can save $100 per year on electric bills while using up to 75 percent less energy and removing greenhouse gases from the environment.

Buy ENERGY STAR® Appliances

ENERGY STAR-qualified appliances, such as refrigerators, washers and air conditioners, meet a higher level of energy efficiency set by the Environmental Protection Agency and U.S. Department of Energy than standard models. According to ENERGY STAR, if just one in 10 homes used ENERGY STAR-qualified appliances, the impact could be compared to planting 1.7 million new acres of trees. And, switching to these appliances is not only good for the environment, but easy on your pocketbook. Although these appliances may costs more, you can reduce your energy bill by $80 per year.

Seal Up

Cracks and air leaks represent cash seeping from your doors and windows. Get rid of air leaks in doors, windows and other areas by caulking gaps and cracks. This will help decrease your heating and air conditioning bill. But make sure you use silicone sealants. Acrylic caulk tends to shrink, while silicone sealants are waterproof and won’t shrink or crack, creating less waste.

Use Less Water

Did you know that roughly 60 percent of a home’s water consumption takes place in the bathroom, according to the California Urban Water Conservation Council? The largest culprit is the toilet, which accounts for 27 percent of your household supply every year. By installing low-flow toilets, showerheads and faucets, you can save thousands of gallons of water each year. In addition, replace leaky fixtures. That slow-dripping faucet can waste as much as 2,400 gallons of water per year.

Adjust the Thermostat

When adjusting your home’s thermostat, the rule of thumb should be: turn up the dial in the summer and down in the winter. Lowering the temperature by just one degree will reduce your electrical costs. And if you use a programmable thermostat, you can program your air-conditioning and heating systems to reduce output while no one is at home or at night while you sleep. Ceiling fans are also helpful in circulating the air to keep the room cool in the summer and warm in the winter.

Going green doesn’t have to be overwhelming or costly. By making just a few small changes within your home, you can help decrease energy consumption and help make the world a “greener” place while saving yourself a few bucks in the process.

Philadelphia-area home market still outperforms nation

Finally, some good news on the real estate market in Bucks County!  On November 13th, 2008 the Philadelphia Inquirer wrote an article outlining how the Philadelphia area market was outperforming the rest of the nation.  Here are some notable quotes from the article:

“Just 4.4% of area homes sold in the last five years had negative equity.  Nationally it was 14.3%”

“The area has a healthy five year annualized appreciation of 6 percent, compared with 3.4 percent nationally”

“It seems Philadelphia may escape the worst of the housing market woes affecting much of the rest of the country”

14.3 percent of national homes with negative equity and Philadelphia area only had 4.4%.  That is great news!  Well of course we would rather see NO negative equity but with all things being considered, I think we should feel pretty good about our current market.  Posted below is the news article.

Phila-area home market still outperforms nation

Flipping houses- The Down & Dirty

So you wanna try flipping houses?  I’ll give you some pure basics to get you started.

1.  Locate an undervalued home for sale that is structurally sound but requires some pretty extensive cosmetic work.  When I say cosmetics I mean rehabbing the siding, windows, kitchen, bathrooms, carpets, appliances and painting the walls.  To find an undervalued home, I would recommend using a Realtor.

2.  Once you’ve found your target home,  you are going to need financing.  One source of funding that rehabbers use are “hard money lenders”.  These types of loans are secured by the value of the house you are going to flip and are usually issued by private investors.  Talk to your Realtor about finding hard money lenders or check with your local real estate investing group.  For those of you from Bucks County, the local investing group would be DIG (www.digonline.org).

3.  Ok, you’ve found the home and got the financing.  Now is time for the number crunching.  First determine your After Rehab Value or ARV.  This is the value of the property once you’ve finished all the cosmetic work.  This can be determined by your Realtor.  Here is the basic format for determining your bottom line and what your offer should be for you to make a minimum of $10,000 cash on the flip (The Golden Rule).

ARV minus:

  • Repair Costs
  • Holding Costs (monthly loan charges)
  • Sales commission (5%-6% of ARV)
  • Closing Costs ( transfer taxes on the buy and the sell, 1% for each in Bucks County)
  • Hard Money Costs (points-probably around 3%-5% of the loan)
  • PROFIT ($10,000 MINIMUM!)

Now, what’s left is what your offer is going to be.  Simple right?  Again, for more details please consult a real estate professional.

BUCKS COUNTY EXAMPLE

Your average home in Falls Twp is selling for around $230,000; so we’ll make that our ARV.

ARV $230,000 minus:

  • Repair costs $20,000
  • Holding costs $6,000 (takes three months to flip and sell)
  • Commission $11,500 (5% commission on the sale)
  • Closing Costs $4,000 (transfer taxes of 1% on the buy and then on the sell, estimated)
  • Hard Money Costs $5,000 ( 5 points estimated)
  • PROFIT $10,000 MINIMUM

EQUALS YOUR OFFER $173,500

Now, can you find houses selling for $173,000 in Falls Twp?  You bet.  I’d love to show them to you!

Bucks County real estate market update

**The average sold price in Bucks County for October 08 was $321,352**

For a comparison, here are the stats for October in previous years for Bucks County:

The average sold price for October 07 was $325,029

The average sold price for October 06 was $331,924

The average sold price for October 05 was $326,519

Market Statistics Criteria Used:

Price Range: 0 to 999,000

Property Category: Residential

Area: All Bucks County

Source:  http://www.TrendMLS.com

How much lower will it go?

That’s the question everyone in Bucks County is asking and I certainly wish I knew that answer. Many people are holding their breath and waiting to see how this election will affect the market. The only immediate reaction that I foresee stemming from this election will be a boost in consumer confidence. A fresh face with exciting new ideas will help some consumers to get off the fence and finally buy or sell that home they have patiently been waiting on. John McCain and Barack Obama both have good ideas for jump starting the economy but remember, no matter who gets elected, the various policies each presidential candidate would like to enact still have to be ratified by the rest of the government and are nothing but good ideas until that happens.