Five reasons homeownership is a good financial investment

Five reasons homeownership is a good financial investment

According to a report by Trulia, “buying is cheaper than renting in 100 of the largest metro areas by an average of 37.7%.” That may have some thinking about buying a home instead of signing another lease extension, but does that make sense from a financial perspective? 
In the report, Ralph McLaughlin, Trulia’s Chief Economist, explains: 
“Owning a home is one of the most common ways households build long-term wealth, as it acts like a forced savings account. Instead of paying your landlord, you can pay yourself in the long run through paying down a mortgage on a house.” 

The report listed five reasons why owning a home makes financial sense:

  • Mortgage payments can be fixed while rents go up.
  • Equity in your home can be a financial resource later.
  • You can build wealth without paying capital gains.
  • A mortgage can act as a forced savings account.
  • Overall, homeowners can enjoy greater wealth growth than renters. 
Bottom Line 
Before you sign another lease, why not discuss your options with a trusted financial adviser or Realtor?

Low Cost Upgrades That Increase Property Value

This is a special guest post from Alexa Collins at HomeLight.

Watch any episode of HGTV’s House Hunters and every house the real estate agent shows the buyer is impeccably clean. The hedges are trimmed, countertops scrubbed, bathroom sinks gleaming. Even if the buyers choose a different place, each home is TV worthy–and in some cases the buyers fall in love with more than one.

In order to get your home up to House Hunters standard, you may think a $10,000 kitchen remodel or other large scale renovation is in order. There’s no reason to spend so much cash on a big renovation, especially since, according to Cost vs. Value’s most recent renovation report, your home will look great but you won’t make back the money you spent.

We put together a list of low cost, easy updates you can make to your home so that it stands out as worthy of a House Hunters TV spot. Before you start on the updates, make sure to run your home through an online home value estimator or talk with your real estate agent to get an idea of how much your home is worth before you begin. Then you will be able to see just how much you improved the value of your home with these simple (but effective) tasks.

Low Cost Interior Upgrades That Increase Property Value

  1. Refinish the Kitchen Cabinets
    Your kitchen cabinets are the backdrop (and focal point) of the entire kitchen space. A little bit of work (and a small amount of money) can update and freshen the entire space. First, take a solution of hot water and Murphy Oil Soap. Scrub the cabinets inside and out with this solution.

    If the cabinets are painted, you’ll want to sand them down and give them a fresh coat of a clean, bright white in a satin finish. If the cabinets are a natural wood, making them shine with a product like Howard Feed-In-Wax is less work for you and has just as big of an impact on the space.

    When you’ve finished your cabinet rehab, make sure to tighten the hinges and switch out any mismatched knobs and drawer pulls.

  1. Give Everything a Deep Clean

    Your home should be as clean as a five star hotel room is before you come to stay. You might be skeptical of what a good clean can do but think about that same hotel room after you spend a night there. The maid comes in, tidies up, and the room looks drastically different with a fresh bathroom, made bed, and vacuumed rug.

    You’ll want to scrub every surface, mop, dust, and vacuum all floors. Any cleaning jobs that you overlook on a weekly basis and save for the ever-so-often times be sure to take care of. This may include dusting the blades of you ceiling fan, taking apart the stove to clean under the grates, or replacing an old shower curtain.

    You’d be surprised at how much a deep clean can brighten and bring fresh life to your space. Be sure to give your home a serious scrub before contemplating any mid to large scale renovation projects.

Low Cost Exterior Upgrades That Increase Property Value

  1. Increase Your Lawn’s Curb Appeal

    A study by the National Association of Realtors found that seeding your lawn has a 417% return on the money you put into it. Top real estate agents agree that a green, freshly mowed lawn is one of the best updates you can make to your property. The exterior of the house is the first space buyers will see when they walk up, so having a great lawn can seriously impact the way a buyer reacts to your home from minute one. A green lawn also photographs well and with so many buyers house hunting online, you need to make a good impression on the internet too.

  1. Pressure Wash the House Exterior

    The house exterior needs to look fresh and clean, and many buyers make the mistake of spending thousands on a new paint job before they list. If you don’t have peeling paint or rotted siding, a good power wash is all you need to freshen the exterior. You can call in the professionals for this project or do it yourself. Pressure washers run around $150 on the low end. Buying your own machine is a good call since you can use it to clean up your driveway and walkways as well.

    Now that you’ve cleaned, refreshed the kitchen, and improved your curb appeal you’re ready to sell! Don’t forget to check out your home’s value before you begin to see how your hard work impacted its value.

A bridge loan can be beneficial in certain real estate transactions

Sometimes in the real estate business, we’ll encounter an individual who wants to purchase a home before selling their existing home. While that’s not always an ideal situation, a bridge loan may be the answer to the financing question.
So what is a bridge loan? A recent article posted on thebalance.com went into great detail on this subject. Today we’ll share with you some highlights from the article.
  • The main advantage of a bridge loan is to avoid having to make a contingent offer on the new home.
  • The bridge loan is a temporary loan that bridges the gap between the sale price of a new home and a home buyer’s new mortgage in the event the buyer’s home has not sold.
  • The bridge loan is secured to the buyer’s existing home, with funds from the bridge loan used as a down payment for the move-up home.
  • Rates for bridge loans will vary among lenders, so do your homework. 
  • Before taking any action, please speak to a trusted financial advisor and experienced Realtor who can provide some much-needed professional advice.
Want to learn more about bridge loans and other financial options for selling your house while you buy a new home? Join us for a seminar with M&T Bank on Saturday, May 20 at 10:30 a.m. The seminar will be held the M&T Bank Mortgage Office, 80 Holtz Drive in Cheektowaga. Download our bridge loans and other financial options seminar flyer. 

Will power of attorney allow you to conduct a real estate transaction?

If someone were to grant you power of attorney in regard to their finances, belongings and property, is that enough to allow you to conduct real estate transactions on their behalf? Actually, it’s a question that we hear quite often.
In such cases, the person who gives power to another individual is call a “principal.” And, the principal can assign various levels of power of attorney to his or her “agent,” thus allowing the agent to legally act on the principal’s behalf.
According to LegalZoom.com, power of attorney can be classified as limited or general. Limited power of attorney will allow an individual appointed by the principal to conduct specific transactions, such as the sale of a home. General power of attorney grants the agent much broader authority, allowing him or her to do anything the principal can do.
Additionally, powers of attorney can be classified as durable or nondurable. In simple terms, a durable power of attorney remains in effect should the principal become incapacitated due to failing health, while a nondurable power of attorney is terminated when and if the principal becomes incapacitated.
No matter what label the power of attorney carries, the agent must always act in the best interest of the principal. For example, the agent cannot legally sell property to himself for far under market value if that’s not in the principal’s best interests.
Like all legal matters, it is best to seek the advice of an attorney and/or a trusted Realtor, especially in situations that involve the sale of property.

Starting to look for a home? Know what you want vs. what you need

In this day and age of being able to shop for anything anywhere, it is really important to know what you’re looking for when you start your home search

If you’ve been thinking about buying a home of your own for some time now, you’ve probably come up with a list of things that you’d love to have in your new home. Many new homebuyers fantasize about the amenities that they see on television or Pinterest, and start looking at the countless homes listed for sale with rose-colored glasses. 

Do you really need that farmhouse sink in the kitchen in order to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the man cave of your dreams be a future renovation project instead of a make or break now? 

 The first step in your home buying process should be to get pre-approved for your mortgage. This allows you to know your budget before you fall in love with a home that is way outside of it. 
The next step is to list all the features of a home that you would like, and to qualify them as follows:
  • Must-Haves – If this property does not have these items, then it shouldn’t even be considered (ex: distance from work or family, number of bedrooms/bathrooms).
  • Should-Haves – If the property hits all of the “must-haves” and some of the “should-haves,” it stays in contention but does not need to have all of these features.
  • Absolute-Wish List – If we find a property in our budget that has all of the “must-haves,” most of the “should-haves” and ANY of these, it’s the winner!

Bottom Line

Having this list fleshed out before starting your search will save you time and frustration, while also letting your agent know what features are most important to you before he or she begins to show you houses in your desired area.