Six Reasons Why New York Real Estate Prices Could Go Higher

cu1) With zero or negative interest rates, many buyers consider Manhattan real estate to be like a secure savings account that will keep its value. When faced with the choice of a guaranteed loss in a bank, or real estate that holds real value and is expected to appreciate over time, buyers may continue to bid up Manhattan real estate prices.

2) According to CBRE research, the average price of property in New York sold for $842 per sq. ft. compared to London at $1,025 per sq. ft. and Hong Kong at $1,416 per sq. ft. This means that New York prices could continue to rise another 21 to 68 percent in order to reach the same relative price levels.

3) The US is considered a safe haven compared to other geographic regions. Wealthy buyers from Russia, China, India and other parts of the emerging world perceive New York a stable market to invest. The US economy still remains one of the strongest in the world, and hasn’t suffered the same decline as commodity producing emerging countries. The US dollar has been strong and it’s considered a politically stable place for foreigners to put money.

4) New York Manhattan real estate is much more affordable than other global cities when comparing average income to average prices. New York is 2.8 times more affordable than London, and 6.4 times more affordable than Mumbai.

5) Renters may choose to lock in their cost of living in fear of being priced out of the market. If prices continue to rise, or interest rates rise, renters may decide the pull the trigger in a purchase before they lose the opportunity. While prices are higher than they were in the past, at least they will have locked in their price. Many tenants are seeing their rent go up faster than property prices so it could make sense to lock in a long-term cost for living in New York.

6) Many affluent and wealthy millennials will inherit or be gifted the funds to purchase their homes. Their parents may be financially successful and want to give their children a leg up. In many cases parents or grandparents can gift, guarantee or co-sign a purchase to help them acquire a home which they can live in and launch a career. New York has many great professional opportunities and world-class living. Many families consider it well worth the cost of buying an apartment to provide the very best opportunities for their children that could last them a lifetime.

Factors To Consider When Buying An Apartment

c33Apartments offer an affordable entry point into the property market. While this is the case, it doesn’t mean that you should go in blindly. To help you out, here are critical factors that you should consider when buying an apartment:

Access to amenities

This is probably the most important factor that you should consider. To have an easy time the property that you are planning to buy should be close to the amenities that you need. These include hospitals, gym, schools, public transport, shops and parks. If you would like entertaining yourself within the area of your residence go for an apartment that is close to clubs, cafes and other entertainment joints.

Peace is of essence. For you to have peace of mind ensure that the apartment isn’t too noisy. Before making the purchase, take your time and inspect the amount of passing traffic. Inspect the building during the evening or during any other peak hour traffic and determine whether the noise will affect your lifestyle. As rule of thumb never invest in a property that negatively affects your style of living.

Cash flow

This is an important factor to consider if you are planning of buying the apartment and then rent it out. For you to decide on whether the apartment will generate income for you, you need to consider a number of factors including: size of down payment, strength of the local rental market, interest rate on your financing and type of market that you are buying into. While C class buildings have more tenant turnover, they attract higher repairs and maintenance.

If you are unable to determine whether a given property is of value to you, consult an expert.

Age of the building

Just like any other old item, an old building requires regular repairs and replacement. Experts recommend that you avoid buying apartments that are more than 20 years old as they have high maintenance costs. Buildings that are too old also tend to be out of style and risky to live in. Before parting with your money get a report from certified architects or engineers on the condition of the building.

Car parking

This is an important factor that many people ignore. If you have a car, it’s important that you consider where you will be parking it. Understand whether there is a car parking in the apartment or whether you will be required to pay extra for it.

Appreciation

If you are planning of selling the apartment at a later date, consider the appreciation of the property. The real estate industry is speculative and you have to buy the property at the right stage of the real estate cycle. You also need to buy the property at the right neighborhood. When making the purchase, look at areas that have the potential of growing at an average pace of 5-7%.

Home Buying Myths Debunked!

dgYou want to buy your first home and there is information EVERYWHERE – from your family, friends, real estate professionals and countless online articles. With all of that information coming at you, how do you separate fact from fiction? Here are some questions we see most often:

1) Buy the cheapest house in the best neighborhood

While somewhat true, it’s important to think about WHY that home is priced so much lower than others. There could be hidden issues or major repairs that you’ll need to address once moved in and this could cost you big time!

2) Get more bang for your buck in the burbs

While it’s true that land costs less in the suburbs than in the city, you need to consider things like travel time (commuting back and forth) and its associated costs such as automobile payments, gas, repairs and even public transit costs. Not only if you’re commuting for work, if you’re someone who likes to be in the city to watch your favourite bands, sports teams or the latest play, factor in all the time you’ll spend going back and forth.

3) Location, Location, Location

OK, location actually IS important but think ahead. The best deals can be in areas that aren’t fully developed yet – this could be new construction or a neighborhood that is going through an urban renewal process. Imagining your neighborhood 10-15 years down the road can save you big bucks and get you in that perfect location.

4) Get a home inspection and forget it

Most first time buyers believe that getting a home inspection that has passed means that they’ll never have to worry about home repairs (at least for the near future). It’s important to know that home inspections will cover the systems and materials on the date of the inspection so it won’t cover a furnace if it goes kaput 2 weeks after the inspection. Also, keep in mind that a home inspector will only be looking at the surface – if anything leaks or the electrical has issues behind your walls, it won’t show up in the report.

5) I won’t be able to pay my monthly payments

If you take that time to plan your finances out, you’ll be fine. Many times, you’ll be approved for a mortgage for example that will strain your monthly finances. It’s a good idea to buy a home with a lower price than your maximum approved amount so you have some flexibility as the years go on.

The 10 A’s of Property Acquisition

vttThe 10 A’s are certain factors to keep in mind to guide the potential buyers on what they should be looking for in acquiring property:

1. ACCESSIBILITY – is one of the most important factors for consideration. Money can improve your property in the future, but money can do very little to improve your location and accessibility to where you go from day to day. So check the location of public transportation terminals, how many rides, how long the travel time, the traffic condition, etc. Because you are trying to improve your lifestyle, the property that you are acquiring must be easily accessible to your work, your children’s schooling and your lifestyle, where you spend most of your time that defines your life. As Real Estate Broker for over 15 years, accessibility is what my clients are looking for in a property aside from the goodness of the property itself.

2. ADEQUACY – The property must be adequate for you which means sufficient in terms of rooms, lot area, floor area, utilities, amenities, car garage if you have a car or planning to buy one. Ideally should remain spacious even if you install all the appliances and furnishings you need as well as the cabinets and closets for all your belongings. Most often though adequacy might be in conflict with affordability, so you might compromise by accepting a less adequate space for the meantime but can be expanded in the future when you have the budget which brings us to the next A, which is…

3. ADAPTABILITY – The property must be adaptable to the growing needs of the family. It may be just small for now, but the structure must be solid enough to add more space like adding a second or third floor in the future, or upgrading the house to your future anticipated needs. Be aware that there are subdivision developments that do not allow changes in the structure of the house, so you need to check on the details as to how you will adapt to your future space needs. This brings us to the next A which is…

4. ACCEPTABILITY – The condition of the unit, the materials used, the style, the neighborhood, the quietness, the security, the deed of restrictions imposed on subdivisions or condominium corporations are acceptable to you. For example, some developers do not approve any changes in the frontage of the house while others do allow. There are those who allow vertical expansion such as second floor for bungalow unit or third floor for 2-storey unit but there are those who cannot allow this to happen. There are condominium projects that do not allow pets and you might not like the idea. It will be good to know the deeds of restrictions of any development before deciding to reserve a unit to ensure that you are acceptable to all conditions and restrictions of living in the place.

5. ADMIRABILITY – Usually this is the higher form of acceptability which is mostly applicable for high end properties. It could be the spectacular mountain or city view, the design of the house, the beachfront feature, etc. This may not be very necessary especially on low cost housing which acceptability may just be enough but it’s a great factor for consideration too because admirability means extreme feeling of likeness for something.

6. APPRECIABILITY – The property must easily appreciate over time. So, it must be durable enough to last a lifetime and that the style is so that it will not easily become obsolete. You will never know that you can be transferred to other areas as required by your work or business or your children have grown, etc. And so, the property must have a very good resale value such that when you sell it in the future, you make a good profit aside from using it for so long. To often, the lack of consideration for appreciability has been a big blunder for some home buyers or builders. They focus too much on what they want in a house, too often blinded by their desires only to fall victim of a real estate principle which is OVER IMPROVEMENT. Look at your neighborhood, if your house is the biggest and most expensive one, you might be a victim of over improvement. The effect is that, when the time comes you don’t need your property and you have to sell it, you cannot even sell it at cost. You need to sell it at big loss to make the sale happen. And so, in this case, real estate is not an investment for you. It’s a loss because you focus too much on what you want. The most practical is to enjoy the house at the same time you are confident that someone will buy it the moment you don’t need it and of course, for a profit.

7. AVAILABILITY – You may have so many wishes for features of your dream home, but if these are not available, it’s still useless. Waiting for them to become available may elude you with the investment that you could have started right away. Your real estate agent or broker will be more than happy to help you find what’s available for you. You need to be watchful always for availability of a good deal. It nothing seems very interesting at the moment, it’s sometimes a good idea to just keep in saving money for the time being and when it accumulates, you can use it wisely the moment a very good deal comes along.

8. AFFORDABILITY – What is the price of the property, what is the equity or down payment, what is the interest rate if financed, what is the monthly amortization, how much you are allowed to loan basing on your income. If your income is not enough for a 20 year term loan, you can choose the longest term up to 30 years depending on your age. Or you can combine the income of your family members. Pag-ibig can allow members of your family to become your co-applicant up to 3 applicants including yourself. These are the questions to ask to find out your affordability and if how much a financing institution can grant you loan. Again, a real estate broker or agent can help you find a way to make the property affordable for you.

9. ACQUIRABILITY – is the condition of the property that can make it easily acquired by the buyer by checking if it is titled, the tax declaration is current and real estate taxes are updated, the are no zoning violations nor violations of ordinance or existing laws, no boundary problems, not mortgaged nor having legal problems such as lis pendens, or not subject to road expansion, etc. The development must not have issued with CDO (Cease and Desist Order) by HLURB (Housing and Land Use Regulatory Board) for violation of building code, rules and regulations. The property is not prone to flood or land slides. Checking should be farther than what your eyes can see. Aside from interviews with neighbors, it may be a good idea to check back on the property during rainy days. Due diligence on the part of the buyer must be exercised as this is required by law. Due diligence is to do everything within the power of the prospect buyer to check and protect himself from troublesome deals. Negligence to do this could produce disastrous results.

10. APPLICABILITY – Applicability means the property is suitable, appropriate, useful and serves a purpose. So, even if it is not the most ideal property and even if it’s not the best deal at the moment, for as long as it serves a good purpose, it’s a good deal.

The above 10 A’s of Property Acquisition is written by the author to help real estate buyers to make sure that they get the value for their money. As we can observe in the internet and numerous websites today, too many brokers and agents ENTICE prospect buyers by their usual practice of RESERVE NOW! TO AVOID PRICE INCREASE!. For me, it’s absurd to hurry up buyers making them fear of the price increase or any form of enticement. The motive is clear, which is nothing but just to make a sale. In contrast, I strive to make sure that my prospect buyers will be disclosed with everything they need to know in order to help make sure that they make the right investment decision. I believe that sharing is caring, and it’s my passion.

10 Must-Do’s When Shopping for a Mortgage

ce3You’ve made the decision to buy a first home or trade-up to larger digs for the growing family. Or, as in my case, I’m in the hunt for a home after moving from Oklahoma to North Carolina. At any rate, I can tell you that the focus on shopping for a mortgage is every bit as important as finding the right house to buy.

In 2016-2107 home construction is projected to rise with housing prices going up. Mortgage rates will also rise as a byproduct of the Federal Reserve tightening credit.

New home starts rising, mortgage rates increasing, a strengthening economy and the Federal Reserve tightening credit are all good reasons you should follow this approach for capturing a good mortgage.

You’ll probably find more loans available than homes, so be as active in this search as in you are in viewing homes. Finding your best mortgage is a challenge because fees and rates can change daily, so be inspired and meet this challenge.

Check your credit and get it in order. Lenders will pour through your credit with a fine toothed comb to determine your ability to service debt. Knowing your credit profile will give you time to improve your credit or fix any errors before approaching lenders. Your credit rating will directly affect mortgage rates, so do not neglect this step.

Hold off opening new lines of credit or closing old lines. Applying for a new credit card or canceling one you no longer use will lower your credit score. This will be a temporary dip, but any hard inquiry on your credit will cause a drop in score.

A variety of lenders, including credit unions, consumer banks, mortgage companies and commercial banks, can underwrite a home loans. Start with your personal bank first but consider all lenders in play.

Meet in person with your banker, mortgage lender or broker. Speaking face to face gives the chance to ask questions and get immediate answers. Developing a personal relationship with a lender will energize the search process and get you a pre-approval. The pre-approval allows you to make a serious offer on a home when you find the right one.

Banks may have fewer options since they are dealing with their own products, but they can be more flexible and may negotiate if you have large assets. Understanding the mortgage process provides an edge to finding the best deal, and your banking relationship can help out here.

Mortgage brokers have more options because they shop among many lenders. If a loan can be made, a broker can find a lender to do it. Brokers don’t lend money directly. They gather paperwork from the borrower, passes it to a mortgage lender for approval, and collect a loan origination fee as compensation.

Don’t hide any known negatives from a potential lender. Being honest up front is the best chance of getting a good deal. If a lender will not consider you for some reason, it’s best to know this right away and move to another funding source.

Stay in contact with your lender of choice. If anything changes in your home search, let your contact person know immediately via short email or text.

Compare apples to apples. As loan options surface, don’t make the mistake of just comparing the mortgage rate. Compare all fees: points, origination fees, and any cost charged by the lender. Often, a “no-fee” loan will be offered but the fees are actually included in the rates.

Always get a Good Faith Estimate worksheet. The GFE summarizes all estimated costs for the mortgage loan and helps you:

  • Compare offers
  • Understand all loan cost & fees
  • Make a good decision when choosing a loan

Your take away is to diligently shop for a good mortgage before looking for a home. Find a good banker or mortgage broker, but also remain proactive and stay on top of the process. Mortgage rates are still quite low and lending options are abundant. Take the challenge, be thorough, and find your best new home loan.

Checklist For Buying Real Estate

5Be careful when approaching your first foremost real estate transaction. By demonstrating patience and taking your time when you are selecting real estate, you can circumvent becoming a victim of a scam and diminish the chances of something going wrong.

In order to avoid buying real estate that is in need of some severe work and requires more money on your part, you need to exploit a checklist for buying real estate. If this is your first venture into the real estate market, it is only normal for you to feel a bit frightened. There are risks allied with any type of investment, but you can reduce them by acting as a very careful and diligent buyer. It does take some time, however. So do not rush, or you may end up a sorrowful property owner.

You need to know what to anticipate during the purchasing procedure. You should take a glance at any contracts and know how to look for the ideal property. You should also be recognizable with making offers, evaluations, and mortgages and financing with other things.

If you are purchasing investment property such as housing, you need to initiate putting down on paper what type of deal you are looking for. Estimate the amount of money you will require to invest and what you be expecting to earn as a return on your investment.

Know what you mean to do in your instantaneous and long-term future. If you want to shun a long-term mortgage and plan to possess a house absolute in 6 years or less, then you may be better off renting. This way, you are not slaying any money on a property that you don’t aim to keep and are not putting yourself under needless stress. If you choose that in 5 years or more from now you may desire to become a homeowner, you need to get a property that you adore, enjoy and still feel is the just right fit for you additional down the road.

Be organized at all times. In the real estate commerce, it is always preeminent if you are organized for anything that may happen when you are dealing with a purchase. Instead of killing your time trying to score a deal on sales and foreclosures, you would be clever to discover more traditional properties that can be found on catalogs and through property advisers.

Depending on your private credit condition, it may be rapid and easy or painfully complicated for you to be endorsed for financing. Thus, you need to be conscious of what is deemed a good deal for you. It is in your preeminent interest to display and interview some unusual lenders so you can find one or several eager to give you a fair deal. This will keep you from getting in over your head and will assist you to make a superior decision about which lender you should accept.

First Time Home Owner Grants for Your 1st Time Home Buyers

w2sWith the Homestart grant, you will receive $5,000 to help with your down payment and closing costs. Most first home owners will be required to put down 3.5% through a government housing loan (if in an urban area) or 0% down (if in a rural area). If you are looking for first time home owner grants, you are doing the right thing. The Federal Government has many programs in every state that will help with buying a home. Here in Salt Lake City, and throughout Utah and other western states, we have a home loan grant called Home$tart. This grant is managed by the Federal Home Loan Bank in Des Moines, IA.

Urban areas will use an FHA home loan program and if you are in a rural area, you can use a USDA home loan program.

FHA Housing Loans

Simply put, this is a loan insured by the Federal Government. They guarantee the loan will be paid back so a lender can rest assured they will not lose money. This makes it easier for a lender to accept a new home buyer, despite being new to credit or other normal obstacles that might get in the way. Normally, to get a conventional mortgage, the income guidelines are more strict. FHA will allow you to make less money and get more house.

The downside to FHA is that they require a lifetime insurance that you have to pay each month. This is called mortgage insurance and this is broken down into two different payments. One payment is 1.75% of the entire loan and this is added to the loan’s subtotal and financed over the life of the loan. If you get a $100,000 house, you will pay $101,075 and this will be spread out over the life of the loan and you will pay interest on this money. You will also have to add.85% to your monthly payment for mortgage insurance. This would essentially be $85 a month per 100k and this would have to be paid throughout the life of the loan. This would cost your $30,000 over the course of a 30 year mortgage. For a $200,000 price tag (average cost to buy a house in Salt Lake City, Utah), you will pay $60,000 over the life of a loan (if you don’t refinance with a conventional loan at some point).

USDA Housing Loans

USDA is another option for a Federal housing loan. However, this government funded program can only be used in areas they consider rural. You can can visit the HUD website to see if your possible property will classify for the USDA program.

USDA does not require any down payment and their mortgage insurance is a lot cheaper. You will only be required to pay.05% of the loan value, equaling about $50 a month. That is about $18,000 over the course of 30 years.

VA Housing Loans

The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). A VA loan is guaranteed by the U.S. Department of Veterans Affairs (VA), similar to the FHA and USDA loans.

If you are a member of the military or retired or discharged from the military, then you will qualify and take advantage of their house loans rates. They do not require mortgage insurance and they do not require a down payment. However, they do charge a lending fee. This fee varies from 1.5% of the total home loan, to 3.3%. You can reduce this fee by paying a down payment and it is less if it’s your first time using the VA home loan program. You are allowed to use this twice over the course of your life.

Generally, a VA loan is your cheapest option. You will get the low interest rates that are offered by government backed lending programs. You will also not be required to pay mortgage insurance or not have to come up with a down payment.

Conventional Housing Loans

This type of home mortgage is a little easier for us to understand. It is simply a private lender willing to loan you money. You will generally pay a higher interest rate than FHA, USDA or VA but you will not be required to pay mortgage insurance once your have 20% equity in the house. This, in the end, ends up being cheaper than FHA but about the same as USDA and a little more expensive than a VA loan. Also, you will be required to put down 5-10% when borrowing money from a private lender. Not to mention that they are more strict on your income and credit.

A First Home Owner’s Loan Grant And Down Payment Assistance Program – Home$tart Grant

With the Homestart Grant, you can go with any mortgage lending program you would like to go with. You can use the $5,000 with all loan options. Whether a down payment is required or not. You can either use the money for closing costs or just put it towards the equity of the home.

You can use this money in every county in Utah and as long as the bank you are borrowing from is offering the grant, you can use the money in any of the 50 states.

The only qualification is your income. You have to make 80% or less of the median income of your area. In Salt Lake County, if you are single, you can make more than $40,000 a year. If there are two people in the house, you can not make more than $46,000 and it increases about $5000 per person in the house, up to 8 people.

Liberty Bank of Utah can assist you with this grant and all your home buying needs. See our contact information below and visit our website for more information on grants for a first time home owner.