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Make A Cash Offer On A House
With Or Without Cash

In the current real estate environment, you may be competing with other buyers for your next home purchase. Making a cash offer can improve your odds in a bidding war.

When you find a property and submit an offer to purchase it outright without financing, the funds typically come from savings, selling an existing home, gift money, or borrowing against another asset.

But not everyone has enough cash or assets to make a cash offer, including first-time home buyers.

Another option is to work with a company that will pay cash on your behalf.

Here’s how this typically works:
1. The company provides the cash for your offer from its own funds.
2. These companies typically promise a quick closing which appeals to the seller, and may give you an edge in a bidding war with other buyers.
3. When the purchase is completed, the home is held by the company until you finalize your mortgage with your lender.
4. The company then sells the home to you. Your new mortgage repays the company.

Benefits of buying a house with cash

Cash deals typically close faster and involve less hassle for both buyer and seller.

Paying in cash can allow you to remove the financing contingency from your offer. Without the financing contingency, you bypass the time-consuming steps in the mortgage
process and there is less risk to the seller that you might cancel the contract.

Cash buyers typically pay less closing costs.
• Mortgage loan fees are eliminated.
• An appraisal is optional.
• There is no mortgage loan interest to pay
• Fees paid to a title company and/or attorney may be less.

Drawbacks of making a cash offer

The biggest challenge of a cash offer is the potential for draining your financial resources, reducing your liquidity, and leaving you financially vulnerable.

Remember that the costs of homeownership are ongoing, such as:
• Property taxes
• Homeowners insurance
• Repairs
• Maintenance
• Furnishings
• HOA fees (if applicable)

Be sure to maintain an emergency fund to cover unexpected expenses such as medical bills or home repairs.

Paying with cash also means that mortgage interest will not be deducted on your federal income tax return.

Of course, the right move depends entirely on your personal finances and long–term goals. If you’re not sure what’s best for you, speak to a trusted financial advisor.

Give me a call to explore all your options for your next home purchase!

Source: themortgagereports.com

Becoming A Real Estate Investor In 2022

If you’ve considered becoming a real estate investor, let’s look at ways to invest and what’s needed to be successful.

Cash-flowing property

Buying income-producing property with stable cash flow is the most popular way to invest in real estate.

Buy-and-hold

While positive cash flow is important, buying and holding over the long-term can reap the rewards of potential windfalls years or even decades from today.

Fix-and-flip

These properties typically need repairs and updating. The fix-and flip strategy requires buying low, accurately estimating the cost of repairs, managing
completion of the work needed, and then selling the property for more than the amount invested. This can be easier said than done.

Wholesaling

Real estate wholesalers find highly motivated sellers in distress, accurately estimate the repair cost and fair market value of the home, then assign the contract to another investor in exchange for a fixed profit.

Crowdfunding and Real Estate

Investment Trusts (REITs) Real estate crowdfunds collect small amounts of money from a large number of investors to purchase and manage large and complex income
producing properties. Shares in publicly traded REITs can be found on the major stock exchanges. Investors receive a small pro-rata share of the quarterly cash flow and profit when the property is sold.

Investors need a knowledge and understanding of these market factors:

• Fair market property values and trends.
• Market rents to gauge income potential and cash-flow.
• Understand that money is made in real estate when the property is bought, not when it’s sold.

Investing in real estate can require more cash than expected, so having access to working capital is critical.

Plan on investing at least 20% down for a rental property. Set up a separate account for repairs and maintenance. Consider the loss of cash flow created by tenant vacancies.

Learn the local real estate rules and laws to avoid potential problems and litigation.

• Eviction processes vary from place to place and may limit your rights as a landlord.
• Conducting background checks helps avoid renting to problem tenants.
• Rental security deposits and prepayments may have amounts capped by local landlord-tenant laws.
• Insurance coverage for rental property should include general liability coverage that protects you against claims from the tenant or the tenant’s guests.

Becoming a real estate investor also involves:

• Finding the right property that makes sense! This can take a lot of time and effort, and it’s harder than it appears on HGTV.
• Developing a track record of proven success in order to raise investment capital using other people’s money.
• Developing a list of go-to vendors and service providers. Many are booked well in advance and have established relationships with industry professionals.
• Following Fair Housing laws. This can easily turn into a full-time job. Successful real estate investors often hire professional property managers who specialize in the local market.

Are you ready to become a real estate investor? Call me and let’s discuss how you can get started!

Source: roofstock.com
Photo by Binyamin Mellish from Pexels

Wildfire Preparedness

Wildfire Preparedness:

Homeowners insurance typically covers property losses caused by wildfire and coverage continues to be available in most wildfire prone areas.

Many insurance companies require customers to share the wildfire risk by taking precautions to protect their property, requiring on-site inspections and notifying policyholders of necessary mitigation that will reduce risk to their home and keep it insurable.

Additional insurance considerations include:
• The type of construction, materials, and features on your home, including the
roofing, windows and siding.
• Distance to a fire hydrant and a fire station.
• Insurers consider many individual and geographical risk factors beyond
wildfire that affect premiums and insurability, such as hail proneness and
unique construction.

Wildfire Mitigation Resources:
• Firewise USA®: Provides instructional resources to inform communities how to
adapt to living with wildfire. csfs.colostate.edu/ wildfire-mitigation/coloradofirewise-communities/
• The Colorado State Forest Service: Provides professional forestry assistance,
wildfire mitigation expertise and outreach and education to help landowners
and communities reduce wildfire risk. csfs.colostate.edu/wildfire-mitigation
• The Fire Adapted Communities Coalition is committed to helping people and
communities in the wildland-urban interface adapt to living with wildfire and
reduce their risk for damage. FireAdapted.org

For more information, visit the resource center at coloradoprojectwildfire.com

General tips for maintaining your home insurance policy:
1. Schedule annual reviews with your insurance agent.
2. Understand the difference between replacement cost and market value.
3. Feel confident that the replacement cost of your home is sufficient to rebuild it.
4. Ask your insurance agent if your replacement cost automatically updates over time.
5. Photo or video the condition and contents of your home. Keep accurate inventories of personal possessions for faster and smoother claims’ settlements. Store video and photo records in the cloud. Check out these resources: https://one.google.com/about, https://www.carbonite.com, https://www.idrive.com, https://www.dropbox.com

Contact your insurance company or agent to learn more about reducing wildfire risk for your home.

Source: coloradorealtors.com; Unruh Allstate Team, Windsor, CO
Photo by Sippakorn Yamkasikorn from Pexels

Forecast: 2022 Real Estate Market Will Be A Mixed Bag

From remote work trends impacting where people can live to affordability issues cropping up as home prices rise, the real estate markets in 2022 will have a fair share of new challenges and opportunities. According to the realtor.com® 2022 Housing Forecast, next year is set to be a mixed bag.

Housing trends to watch in 2022:
• While 2020-2021 brought a homebuying frenzy largely fueled by first-time millennial homebuyers, potential homeowners will face increased competition for at least the
next three years.
• Workplace flexibility and higher incomes may give employees the advantage in 2022 with more sellers looking to move because they no longer need to live near the office.
• The suburbs will become increasingly popular compared to big urban metros as home shoppers search for more space— a trend brought on by the pandemic. However, as
demand is expected to outpace new construction growth, buyers may have to sacrifice space due to affordability constraints.
• Hispanic homeownership is predicted to rise in 2022, driving housing demand and impacting the homeownership rate for years to come.

The takeaway:
“Whether the pandemic delayed plans or created new opportunities to make a move, Americans are poised for a whirlwind year of home-buying in 2022,” according to
realtor.com® Chief Economist Danielle Hale.

While buyer competition will remain fierce, more sellers will be entering the market. “We anticipate strong home sales growth at a more sustainable pace than in 2021,” explained Hale.

“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise,” added Hale.

With more than 45 million potential millennial buyers between the ages of 26-35, the market is expected to remain competitive.

George Ratiu, manager of Economic Research for realtor.com®, commented, “With most real estate markets expected to be competitive in 2022, it’s important to remember that you’re in the driver’s seat of your real estate journey.”

“The bottom line for buyers is to make sure you’re comfortable with your timeline and budget — and especially for younger buyers making this massive financial decision for
the first time. For sellers, take into account your local market conditions as well as the likely increase in the number of homes for sale, and price yours competitively.”

Give me a call to discuss your real estate opportunities in 2022!

Source: rismedia.com

Housing Inventory Has Increased Since Spring

There’s a lot of talk lately about how challenging it can be to find a home to buy. While housing inventory is still low, there are a few important things to understand about the supply of homes for sale as we move towards the end of the year.

The Number of Homes for Sale Usually Peaks in the Fall
In the residential real estate market, trends generally follow a predictable and seasonal pattern. Typically, the number of homes available for sale, or active monthly listings, peaks in the fall.

A look at the active monthly listings for 2021 shows that the number of homes on the market increased fairly steadily since spring. Realtor.com data shows an increase in active inventory month-over-month.

While data shows that the month-to-month gain lessened as the year progressed, the important takeaway is the latest monthly numbers continue to show growth. Buyers
had more options to pick from in recent months than they did in the spring.

That’s encouraging for buyers who may have paused their search months ago because they had trouble finding a home. Danielle Hale, Chief Economist at realtor.com, recently commented that buyers were presented with more options during the early fall than they had all year, and that’s not what happened in 2020. It’s still important to remember that while more homes were available for buyers, the market remained more competitive than it typically is at this time of the year.

Hale explained that a peak in fall inventory is in line with typical seasonal trends. While it’s impossible to say for certain what the future holds for housing inventory, data indicated that both buyers and sellers had opportunities during recent months.

What Does That Mean for You?
This isn’t the time to slow your search. Focus on your options with renewed energy and be prepared for ongoing competition from other buyers.

If you’re considering selling your house, realize that while inventory has been increasing, it is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line.

Whether you’re buying or selling, there are opportunities to make your goals a reality at any time of the year. Let’s connect so we can discuss what’s going on with the
local market and current trends and what they mean for you.

Source: keepingcurrentmatters.com