Got Sticker Shock?

These Factors Are Influencing a Home's Asking Price

Ever gotten excited about a house for sale, then looked at the price and thought, “Are they out of their minds?” Yeah, us too.

It can be a disheartening moment when you're house hunting. And that jaw-dropping asking price might simply seem like an arbitrary, money-grabbing number that's keeping you from your dream home.

But before you dismiss a house for being too expensive, you should know that there are a variety of reasons a property is priced the way it is. “Pricing a home is part science and part art,” says Carriene Porter, an associate broker with Precision Realty & Associates, in Salt Lake City, Utah.

Understanding the reasoning behind a home's price tag can make you a smarter buyer—and help you know exactly what you're getting for your money. Here are five factors that experienced real estate agents consider before slapping that "For Sale" sign on a home.

1. What's happening in your local housing market at any particular moment

Current real estate market conditions—including how many houses are up for sale, and how fast they’re being snapped up—determine how a property should be priced. Low inventory creates a seller’s market with aggressive listing prices. A surplus of homes for sale results in overall lower asking prices.Perhaps you know all that. But what you might not realize is how quickly it can all change.

Markets can turn on a dime, and I find home buyers usually have old data in their heads; often, they’re lagging about six months to a year.”  That's why he recommends working with an experienced real estate agent who's familiar with the neighborhood you're shopping in and can assess whether a home is priced fairly—or not.

2. The (extremely specific) location of the house

Yes, you’ve heard the old place-based adage (which we won't repeat here). But did you know how granular the idea of "location" gets? We're not just talking about being in a good neighborhood. Similar or even identical houses just streets apart from each other can have wildly different price tags based on things like traffic noise and access to quality schools, shops, and restaurants.

“The asking price also depends on what else is on the block; for example, is there a tear-down next door? And how old are the buildings to your right and left?”  “Is there a park nearby, or a dog run within five blocks?”

A quiet cul-de-sac or a busy thoroughfare will also affect the prices of homes on them, he notes, as will the direction the home faces (any hardened home shopper can tell you how much light affects the overall perception of a home).

And in most areas, properties with easy access to highways fetch higher dollars.

3. The comps

Often, sellers have a figure in mind based on nothing more than a wish. But real estate pros will do a comparable market analysis—what similar homes have recently sold for—before determining how to price a property.

“Historical data plays a huge role in setting a listing price; it's not a number just pulled out of the air. So find an agent who can interpret that data.” “The name of the game is what the competition is charging.” 

4. The amenities (and overall appeal) of the home

Sure, size matters. But today’s demanding buyers are concerned with much more than square footage—all of which helps determine an asking price.

"Clients prefer new construction, brand-name appliances, and large bedrooms—[preferably] at least three on one floor if they have kids—plus a den or office.” “Light plays a major role in the value of a house: The more windows, the more people enjoy the house. Ceiling heights factor in, too:10 feet and up are where it's all at.”

Additional features such as parking, central air conditioning, outdoor space, and floor plan also affect the sticker price.

“Layout and functionality are huge; people want open layouts, so homes built in the '50s or '60s without open plans are priced lower,. 

5. Age and condition of the home

If you happen to fall for an aging, poorly maintained property that you're just dying to fix up, know this: You won't automatically see a deeply discounted price tag. It all depends on the home's location (see No. 2) and other factors we've discussed. But chances are good it won't cost the big bucks that a recently revamped home in the same neighborhood would.

If you want a newer, turnkey home, expect to pay more for that. Caveat: Even if a seller has done multiple upgrades, quality trumps quantity every time. “If there’s been an addition to the house or some serious electrical work done in an unprofessional manner, that will reduce the sales price,” she says.

Don't forget to Completing a Loan Pre-Qualification you'll be on your way to locking in your interest rate and giving assurance to prospective sellers that you mean business. 

So what are you waiting for? CALL or TEXT Today 801-809-9866 There’s no substitute for the expertise of Carriene Porter @ Precision Realty & Associates, that can help you home in. 

#Mortgage #UtahRealEstate #Selling #Buying

Ownership Rates for Low-Income Families

Salt Lake City:

Homeownership rateamong low-income households: 53.8% Median sales price: $319,000. 

Minneapolis may offer the most possibilities for low-income households to become homeowners.

The city has the nation’s highest homeownership rate among households in the bottom 25 percent of income at 57.7 percent, according to a new analysis of the 50 largest metros. Pittsburgh and St. Louis followed on the list, also having homes that tend to sell for less than the national median of $285,000.

Homeownership allows people to share in the prosperity of their communities and gain wealth through home equity.

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In many expensive metros, low-income residents aren’t able to access the benefits of homeownership because of a lack of affordable starter homes. But in areas like Minneapolis and Pittsburgh, low-income workers are still able to get their foot in the door on the American dream of homeownership.”

The following are the metros with the highest homeownership rates for low-income households, 

• Minneapolis Homeownership rate among households in bottom 25% of income (2017): 57.7% Median sales price: $255,000
• Pittsburgh Homeownership rate among low-income households: 55.8% Median sales price: $149,000
• St. Louis Homeownership rate among low-income households: 55.5% Median sales price: $173,000
• DetroitHomeownership rate among low-income households: 55% Median sales price: $122,000
• Tampa, Fla. Homeownership rate among low-income households: 54.4% Median sales price: $220,000
• Louisville, Ky. Homeownership rate among low-income households: 54.2% Median sales price: $181,000
• Salt Lake City Homeownership rate among low-income households: 53.8% Median sales price: $319,000
• Nashville, Tenn. Homeownership rate among low-income households: 53.7% Median sales price: $284,000
• Charlotte, N.C. Homeownership rate among low-income households: 53.1% Median sales price: $230,000
• Philadelphia Homeownership rate among low-income households: 52.6%Median sales price: $190,000

Meanwhile, some metros—particularly the pricey coastal markets—saw some of the lowest amount of low-income homeownership (bottom 25 percent of income earners in 2017). Those metros are Los Angeles (31%); New York (35%), San Diego (37.6%), Las Vegas (39.7%), and Columbus, Ohio (39.8%).

Ready to Buy: Get a Loan Pre-Qualification you'll be on your way to locking in your interest rate and giving assurance to prospective sellers that you mean business.

So what are you waiting for? CALL or TEXT Today 801-809-9866Carriene Porter has access to a vast database of information with recently listed and recent sold to help you home in. 

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Did You Take Them All?

5 Sweet Tax Deductions When Selling a Home: You may be wondering

 if there are tax deductions when selling a home.

And the answer is: You bet!

But there's also a new tax code—aka the Tax Cuts and Jobs Act—causing quite a bit of confusion this filing season. Rest assured that if you sold your home last year (or are planning to in the future), the tax deductions may amount to sizable savings when you file with the IRS.

You'll want to know all the tax deductions (as well as tax exemptions or other write-offs) at your disposal. So here's a rundown.

1. Selling costs

Good news! These deductions are still allowed under the new tax law as long as they are directly tied to the sale of the home and a married couple—or a single taxpayer—lived in the home for at least two out of the five years preceding the sale. Another caveat: The home must be a principal residence and not an investment property.

“You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, NY.

This could also include home staging fees.

Just remember that you can’t deduct these costs in the same way as, say, mortgage interest. Instead, you subtract them from the sales price of your home, which in turn positively affects your capital gains tax.

2. Home improvements and repairs

Score again. The new tax law left this deduction as well. If you renovated a few rooms to make your home more marketable (and so you can fetch a higher sales price), now you can deduct those upgrade costs as well. This includes painting the house or repairing the roof or water heater.

But there’s a catch, and it all boils down to timing.

“If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing.” 

3. Property taxes

This deduction is still allowed, but your total deductions are capped at $10,000.

If you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes this year up to $10,000.

4. Mortgage interest

As with property taxes, you can deduct the interest on your mortgage for the portion of the year you owned your home. However, the rules have changed slightly from last year.

Just remember that under the new tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million, according to Zimmelman.

Note that the mortgage interest and property taxes are itemized deductions. This means that for it to work in your favor, all of your itemized deductions need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly (for comparison, it used to be $12,700 for married couples filing jointly).

5. But what's up with capital gains tax for sellers?

Lawmakers tried to change the capital gains rule, but it managed to survive—so it’s still one home sellers can use. It isn't technically a deduction (it's an exclusion), but you’re still going to like it.

As a reminder, capital gains are your profits from selling your home—whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. And yes, these profits are taxed as income. But here's the good news: You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years. However, look for the rules of this exemption to possibly change in a future tax bill.

Ralph DiBugnara, president of Home Qualified and vice president at Residential Home Funding, says lawmakers might push to change this so that homeowners would have to live in the property for five of the past eight years, instead of two out of five.

Looking to sell your home? Claim your home and get info on your home's value. CALL or TEXT Today 801-809-9866 There’s no substitute for the expertise of Carriene Porter @ Precision Realty & Associates, that can help you home in. 

#Mortgage #UtahRealEstate #Selling #Buying

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Homeownership Move to Highest Level Since 2014

Are some households switching from renting to owning. 

More Americans are becoming homeowners. The national homeownership rate increased slightly to the highest level since 2014 in the fourth quarter of 2018, reaching 64.8 percent, the U.S. Census Bureau reported this week.

The homeownership rate has been gradually increasing since reaching an all-time low of 62.9 percent in the second quarter of 2016. Researchers at data analysis firm CoreLogic attribute the housing market’s“healthy path of recovery” to three main factors:

An uptick in homeownership that has been persistent “despite the existence of low housing affordability and inventory;” household formation that has been on the strongest streak in more than a decade; and an increase in the rate at which young households—who represent the largest pool of potential buyers—are entering homeownership. The homeownership rate of young adults ages 34 to 44 rose 1.2 points year over year to reach 61.1 percent in the fourth quarter, the largest gain of any age group.

“American households, especially young households, are becoming confident enough in their financial and familial circumstances to take the plunge into homeownership, despite rocky outcrops of affordability and sparse inventory,” says Carriene @ Precision Realty & Associates.

“This is good news for proponents of homeownership in the United States since young households represent the largest pool of potential homebuyers since their parents, the baby boomers, came of homebuying age over three decades ago. The future of homeownership in this country indeed looks bright.”

Mortgage Rates Remain Low

Young adults are increasing their stake in the housing market, but it’s not happening everywhere. Millennials are buying homes at the highest rates in more affordable areas, and they’re buying homes at the lowest rates in the priciest pockets.

Millennials comprise the largest share of purchase mortgage applicants in Provo, Utah (56 percent); and Rochester, N.Y. (55 percent). However, they make up the lowest share of mortgage applicants in Sarasota, Fla. (24 percent); Cape Coral, Fla. (30 percent); and Ventura, Calif. (32 percent), according to CoreLogic research.

Overall, the fourth quarter of last year, owner-occupied households rose by more than a million, to 1.7 million new owner households. Also, the number of new renter households is decreasing, which suggests that some households are switching from renting to owning.

Don't forget to Completing a Loan Pre-Qualification you'll be on your way to locking in your interest rate and giving assurance to prospective sellers that you mean business. Pre-qualification is easy and can be done via email or over the phone.

So what are you waiting for? CALL or TEXT Today 801-809-9866 There’s no substitute for the expertise of Carriene Porter @ Precision Realty & Associates, that can help you home in. 

#Mortgage #UtahRealEstate #Selling #Buying

Spring Is in the Air:

We May See a Cooler Spring Home-Buying Market, 

About 73,000 more listings are for sale this year compared to last year. That's because for the fifth month in a row, the number of homes on the market surged 6% in February compared with the same time the year before, recent inventory report. Until last year, the nation had seen several years of housing shortages.

The housing market is changing quite a bit from a year ago. The number of homes up for sale is growing, reversing an inventory shortage trend that has plagued many markets over the last few years.

The higher inventories are also driving greater price cuts, February housing report, released Wednesday.

The median list price rose 7 percent year over year in February to $294,800. But prices are showing signs of cooling. Thirty-nine of the 50 largest housing markets saw an increase in price cuts in February.

As is often the case in real estate, the important trends are going on at the local level. We see large markets continue to cool, but some markets still have some strength. Additionally, we still see fewer homes priced under $200,000 on the market, so entry-level buyers won’t see the same availability of options as high-end buyers.”

Don't forget to Completing a Loan Pre-Qualification you'll be on your way to locking in your interest rate and giving assurance to prospective sellers that you mean business. Pre-qualification is easy and can be done via email or over the phone.

So what are you waiting for? CALL or TEXT Today 801-809-9866 There’s no substitute for the expertise of Carriene Porter @ Precision Realty & Associates LLC.com, that can help you home in. 

#Mortgage #UtahRealEstate #Selling #Buying