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10 Steps to Purchasing a New-Construction House

10 Steps to Purchasing a New-Construction House

10 Steps to Purchasing a New-Construction House

10 Steps to Purchasing a New-Construction House

Purchasing most things in life is usually straightforward – just add them to your cart and pay with a credit card. However, when it comes to buying a home, the process becomes understandably more intricate. This complexity is particularly true if you’re looking to purchase a brand-new home, as it involves a distinct set of steps and considerations.

While the process of buying a new-construction home shares similarities with purchasing an existing house, there are several notable distinctions. With new-construction homes now accounting for approximately one-third of the U.S. housing inventory, it has become an attractive option that many prospective buyers will undoubtedly contemplate.

To provide you with a glimpse of what lies ahead, let’s explore the step-by-step process of buying a new-construction home, along with valuable advice to ensure a seamless experience from start to finish.

1. Set a budget

Before diving into the process of purchasing a new-construction home, the initial and crucial step for any prospective homebuyer is to assess their affordability. This becomes particularly significant as new-construction homes generally come with a higher upfront cost, with the median price currently standing at $493,000.

Don Turner, the regional sales director of new homes at Realtor.com, emphasizes the importance of avoiding the allure of a home that surpasses both your needs and budget. He advises prospective buyers to be mindful of their income relative to their spending habits and establish clear guidelines to steer clear of this situation.

2. Get preapproved for a mortgage

Obtaining preapproval is a wise step to ascertain your purchasing capacity and effectively communicate this information to the builders you are exploring. Securing preapproval can be accomplished through various methods. One option is to apply online, where you can discover the loan amount you qualify for based on your present income and debt.

During the lending process, lenders will request financial documentation from you. Therefore, it’s essential to be prepared with your bank records and pay stubs ready to go. Having these documents readily available will help expedite the process and ensure a smoother experience.

It’s important to remember that obtaining preapproval from a lender doesn’t obligate you to proceed with them. On the contrary, it is highly recommended to explore different options and compare preapproval offers from at least three lenders. This way, you can ensure you are securing the most favorable terms and the best overall deal for your situation.

3. Choose a location

Selecting the ideal community and location for your new-construction home is a critical aspect of the process, as not every community will be a perfect fit for every buyer. It’s essential to carefully consider your preferences and needs to ensure you find a community that aligns perfectly with your lifestyle and requirements.

For instance, if you have a young family, your criteria for a new home will undoubtedly differ from those of a homebuyer in search of a 55+ neighborhood with HOA activities tailored for retirees. Each buyer’s preferences and priorities will shape their quest for the ideal home and community.

Landers proposes a helpful exercise called the “what matters most” ranking, which assists in refining your area search. In this exercise, prioritize the following factors from one to twelve based on their significance to you, and utilize the list as a guiding reference for making informed location decisions:

  1. Travel/commute times
  2. Distance to family/friends
  3. School district quality/higher education
  4. Access to nature/parks/lakes
  5. Availability of community clubhouse/social areas
  6. Walking trails/sidewalks
  7. Outdoor recreation (e.g., tennis/pickleball courts, playgrounds)
  8. Neighborhood pool
  9. Fitness center
  10. Pet friendliness
  11. Proximity to shopping/dining/entertainment
  12. Nearby health care/medical facilities

4. Hire a real estate agent

While it’s technically possible to acquire a new-construction home without representation, having the right real estate agent can prove to be an invaluable asset. They can provide you with crucial guidance and support, helping you identify the perfect fit in a new home and community that aligns with your preferences and needs.

It’s essential to remember that the on-site agent you encounter at a new-construction office represents the builder’s interests. As a savvy homebuyer, it’s prudent to engage your own agent to join the process. Having your agent by your side will enable you to negotiate effectively and ensure you have proper protection throughout the transaction, safeguarding your best interests.

An excellent buyer’s agent possesses the ability to thoroughly review contracts before you commit, ensuring you don’t unknowingly agree to terms that solely favor the builder. Additionally, in numerous instances, the builder will cover your agent’s commission as an expression of gratitude for directing your business to them. This arrangement can be highly advantageous, providing you with professional guidance and protection throughout the buying process at no direct cost to you.

Landers advises that before hiring an agent, it’s essential to conduct thorough due diligence.

5. Shop home builders

Just like when selecting a real estate agent, it’s crucial to find a homebuilder with a strong reputation. Take the time to review their online feedback and testimonials. Additionally, closely examine the floor plans they provide. Ensuring that the builder offers floor plans that align with your family’s current requirements and future growth needs is essential for making a wise decision.

There are other important factors to consider as well. Given that finances often play a significant role for new-construction buyers, it’s essential to thoroughly compare and contrast the builder incentives that are being offered. Taking the time to evaluate these incentives will help you make a well-informed decision that aligns with your financial goals and priorities.

It’s advantageous to find a builder that provides buyer incentives, such as special financing deals or assistance with closing costs. Additionally, if you come across a builder offering complimentary upgrades in the home, such as upgraded cabinets, appliances, or improved flooring, these perks can be significant wins for the customer.

Consider posing the following questions as well:

  • What are the HOA dues? Are they monthly or annual? What do they cover as far as amenities, activities, and programs?
  • Can guests use the community pool, fitness center, and other amenities?
  • What is the community pet policy?
  • Do you offer a new home warranty? If so, what does it cover?
  • What are the average utility bills and other associated costs of home ownership in the community?

6. Decide whether to build or buy move-in ready

Spec homes are constructed, or at least initiated, without having a buyer contract in place and can be found in different stages of construction. When the home is completed or nearly finished, it may also be referred to as “move-in ready” or “quick move-in” (QMI), usually available for occupancy within three months. However, it’s worth noting that each builder may have its own interpretation of what “quick” entails.

“Build from scratch” entails commencing construction from the ground up after you finalize the contract. Generally, the process of building a home from scratch takes around 6.5 months, though this timeline can significantly vary depending on the builder. To gain clarity, it is essential to inquire about the specific timeline from the builder you are considering. Buyers who can patiently wait during this period may enjoy the advantage of having more control over various design decisions. This control may encompass aspects like the home’s layout, finishes, and other personalized details, making it a potentially rewarding choice for those seeking a customized living space.

To avoid any confusion, it’s crucial for homebuyers to recognize the significant distinction between a build-from-scratch home offered by a production builder in a planned community and a “custom home.” In the case of a custom home, you take on full responsibility for every aspect, which includes purchasing the land, engaging an architect, obtaining construction loans, handling city permits, and more. Building a truly custom home can be a lengthier process, sometimes taking up to two years to complete due to the extensive level of personalization involved.

7. Sign a builder contract

Based on the type of home you select, the subsequent step involves signing a contract. If you opt for a move-in-ready home, the sales process will resemble a typical real estate transaction for an existing house. You make a down payment, move in, and commence with monthly mortgage payments.

On the other hand, if you lean towards a build-from-scratch situation, the financing process will differ. When you sign a builder contract, there will likely be a required deposit, typically ranging from $1,000 to $2,000. The good news is that “most builders use this deposit as a credit toward the purchase price of the home,” according to Turner.

Within the contract, the projected completion timeline should be specified. This is also an opportune moment to seek clarification on how unforeseen issues during construction will be handled. For instance, what recourse do you have if supply chain delays impact the construction schedule, and how will any changes be communicated to you?

To ensure you’re protected, it’s advisable to have your real estate agent review the contract. Additionally, seeking legal counsel to review the agreement and all addendums before signing can provide an added layer of protection.

8. Prepare to move in

If you plan to sell your current home before moving into your new build, it’s essential to seek advice from your real estate agent regarding the optimal timing to put your current home on the market. Waiting too long might result in a situation with dual mortgages, so proper planning is crucial. However, in the event that you sell your current home before your new-construction home is completed, you may need to arrange for interim housing and storage for your belongings during the transition. This aspect adds an additional consideration to the purchase of a new-construction home.

Furthermore, prospective buyers should refrain from making significant purchases like buying new furniture or a car during the interim period while their home is being built. Such actions can negatively impact their credit score and potentially jeopardize their mortgage approval. Practicing financial caution during this time is essential to ensure a smooth and successful home buying process.

9. Have your new home inspected, and do a final walk-through

Despite something being new, it doesn’t guarantee absolute perfection. Even if your new-construction home comes with a home warranty, it remains essential to conduct an inspection before officially taking ownership.

Throughout the construction process, new-construction homes undergo inspections by local municipalities, and before move-in, these groups provide a final certificate of occupancy (CO) to ensure compliance with regulations. However, it’s advisable to hire your own home inspector to ensure that everything meets your standards.

Before moving in, you should also be granted the opportunity to perform a final walk-through of your home. During this walk-through, you can create a “punch list” of items for the builder to address, typically consisting of minor issues such as paint drips and scuffs on floor tiles, ensuring that your new home is in pristine condition.

10. Close on your mortgage and move in

Once your new-construction home is finally complete, the builder will likely be eager to close the deal and have you move in swiftly. This is one reason why many builders prefer when homebuyers work with their preferred lenders; it helps ensure a smooth and timely transfer of ownership.

When you receive the go-ahead to proceed, be prepared to act promptly. At that stage, you’ll be expected to make the full down payment (minus your initial deposit) and commence making monthly mortgage payments to your lender moving forward. Being prepared and responsive will facilitate a seamless transition into your new home.

Experts in Residential Real Estate in Orlando

If you are BUYING or SELLING real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

10 Tips For Selecting the Best Property Manager

10 Tips For Selecting the Best Property Manager

10 Tips For Selecting the Best Property Manager

10 Tips For Selecting the Best Property Manager

 

Owning rental property can be a pretty cool opportunity for savvy investors, but it also means taking on the landlord gig. Some folks love the challenge, but let’s be real, managing tenants isn’t everyone’s cup of tea. If you’re not up for it, no worries! You can always think about hiring a property manager to handle the nitty-gritty. A good one will keep your tenants happy, handle the cash flow like a pro, and make sure your property stays in top-notch condition. But beware, a bad property manager can really mess things up, wasting your time and money. They might bungle inspections, let rent go unpaid, and tank your retention rates.

So, how do you find the right manager for your properties? No worries, we got you covered with our top 10 tips to score the best property manager around. Keep reading and take the stress out of managing your rental business!

What is a Property Manager?

Before you make your choice, it’s essential to know what a property manager actually does. These guys can be either individuals or firms who handle the day-to-day rental stuff for a fee. Basically, they step in when the owner can’t or just doesn’t want to deal with landlord duties. Some of their responsibilities include: 

  • Targeted Marketing
  • Applicant Screening
  • Legal Leasing Documents
  • Property Inspections
  • Rent Collection
  • Basic Accounting and Reports
  • Maintenance Coordination
  • Tenant Communications
  • Fair Housing and Legal Compliance

10 Tips for Selecting the Best Property Manager

Getting the right property manager on board can really elevate your investment game. But let’s face it, rental management is no walk in the park. Dealing with legal stuff, communicating with tenants, and safeguarding your property takes serious effort. The rental industry is booming, and with that, property management firms are cropping up left and right. But hold up, not all of them are top-notch. To discover the perfect fit for your needs, take a look at these tips on finding the best property manager below. Happy hunting!

  1. Do Your Research
  2. Stick with Local Expertise
  3. Prioritize Organization and Technology
  4. Interview Multiple Candidates
  5. Test Candidates with Very Specific Questions
  6. Get Referrals from Other Investors
  7. Review Local Ads
  8. Look for a Proven Track Record
  9. Only Entertain Licensed Property Managers
  10. Personal Impressions Matter

Do Your Research to Select the Best Property Manager

Thanks to modern technology, owners seeking professional property management now have a wealth of information at their fingertips. The easiest way to kick off your search is with a simple Google query. It will help you filter through the options and zero in on the property management companies that might suit your needs. Once you’ve got your shortlist, dive into each company’s website for these crucial pieces of information:

  • List of Services (tenant screening, rent collection, etc.)
  • Management Fees, Fee Schedule, and any Ala Carte Services/Fees
  • Staff and Leadership Information
  • Special Features for Owners and Tenants
  • Contact Information
  • Client Testimonials
  • Tenant Reviews

Stick with Local Expertise

When it comes to nailing property management, having a solid grasp of the local market is crucial. But we’re not just talking about checking out the competition and setting prices. The top-notch property managers boast proven local experience, which includes:

  • Applicable Laws and Licensing Requirements In every jurisdiction, there are specific laws that oversee rental properties. These might cover things like rental licensing, inspections, or lead certification, among other requirements.
  • Market Demographics To efficiently fill vacancies, it’s essential to know your tenant pool inside out. Are you in an area popular among students, or is it more likely to attract families? Understanding the demographics of potential tenants allows managers to target their marketing efforts strategically, ensuring maximum exposure for the property.
  • Vendor Relationships In the world of rentals, repairs and maintenance are inevitable at some point. That’s why it’s crucial to team up with a property manager who has solid vendor relationships in place. This ensures that your property gets the attention it needs promptly, without any unnecessary delays.

Prioritize Organization and Technology

Being a property manager means handling a ton of communication and record-keeping. That’s why it’s crucial to pick a property manager who’s equipped with the right processes and technology to handle the administrative demands smoothly. The best ones are super organized, efficient, and prefer using electronic or “paperless” systems. It’s not just about being tech-savvy, but also about ensuring security and accuracy. So, owners can breathe easy when they find a company that stays up-to-date with technology. It’s a massive plus!

Interview Multiple Candidates

Aside from reviewing their website, asking some questions is equally important. When searching for the best property manager, gathering as much information as possible is the key. After all, you want to find a property manager you feel comfortable entrusting your business with. Take the initiative to reach out to the companies you consider as potential contenders and ask them the following questions:

  • How long have you been in business?
  • Will the company allow you to review key documents such as the Property Management Agreement and lease?
  • How many employees does the company have?
  • What is or is not included in the monthly management fee?
  • Is the management fee based on rent collected or rent due?
  • How many properties does each manager typically oversee at a time?
  • What are the standard applicant requirements and basic screening process?
  • How do you perform property inspections?
  • What are your practices for returning security deposits?
  • Do you have an online portal for tenants and owners?
  • Do I receive monthly and annual financial statements?

Asking these questions to a few different candidates will give you a better sense of who would be the ideal property manager for you. Keep an eye on how responsive they are to your inquiries during this process. If they don’t prioritize your questions as a prospective client, chances are their service might not be the best if you become their client. Responsiveness is a good indicator of how they value their customers, so pay attention to it while making your decision.

Test Candidates with Very Specific Questions

The perfect property manager is someone with the right balance of flexibility and experience to handle a wide array of property issues. To evaluate candidates, ask them specific questions that gauge their skill set. Some talking points to consider may include:

  • The process for after-hours emergencies
  • Marketing strategies to limit vacancy
  • How they would deal with sudden or severe property damage
  • What would happen if a tenant needs to be evicted

Get Referrals from Other Investors

The best property managers are often those referred by friends and colleagues. Don’t hesitate to ask anyone you know in the real estate or property management industry if they can recommend a good fit for you. Word of mouth remains a powerful way to find a quality management company. If a property management company has a bad reputation, chances are it will spread among industry professionals.

In addition to seeking referrals, it’s essential to do your homework. Check with your state’s Real Estate Commission and the Better Business Bureau to ensure that the prospective property manager is licensed and has no complaints against them. This way, you can make a well-informed decision and find a reliable manager for your property.

Review Local Ads

A lot of local property managers rely on local advertisements to promote their vacancies. To find sample rental ads, you can explore newspapers, online classifieds, and websites like Craigslist. Reputable companies usually have a website that lists their available properties, which offers an excellent chance to assess the quality of their rental ads.

The top-notch rental ads are featured on various platforms to get maximum exposure and often include:

  • A Dynamic Unit Description The perfect unit descriptions strike a balance between accurate representation and captivating details that catch the reader’s eye. Be cautious of any descriptions with grammatical errors or excessive exaggeration that seems unrealistic, as these could be red flags to watch out for.
  • Professional Quality Photos In the world of property listings, pictures are worth a thousand words. As prospective tenants scroll through various listings, grabbing their attention becomes crucial. High-quality pictures have the power to entice viewers to click on the listing and spark their curiosity to learn more.
  • The Option for Virtual Tours Virtual tours have become increasingly popular during the COVID-19 pandemic, but their benefits go way beyond just coping with lockdown restrictions. These tours offer applicants the opportunity to explore the property’s full potential from anywhere and at any time, all conveniently online. It’s a game-changer that allows for a seamless and flexible viewing experience.

Look for a Proven Track Record

Empty units can seriously dent owners’ profits and miss out on potential opportunities. To avoid this, seek a property management firm with a solid track record. While it’s essential to consider the average time it takes for a company to fill a unit, remember that speedy filling is only beneficial if the tenants are well-qualified and stable. To get a clearer picture, don’t hesitate to inquire about the company’s eviction rate in addition to their vacancy-filling speed. This will help you make a more informed decision about the reliability of their tenant selection process.

Only Entertain Licensed Property Managers

In the majority of states, property management companies are required to hold a real estate broker’s license or management license. Licensed property managers have completed an approved property management course and successfully passed a state licensing exam. This extra layer of knowledge equips them to assist owners in navigating their business needs more effectively. It’s a reassuring factor for owners to know they’re working with professionals who have met the necessary qualifications.

Personal Impressions Matter

In addition to experience and management approach, establishing a strong professional rapport is crucial for a successful partnership. Take the time to get to know potential managers on a personal level by asking about their lives, interests, and any other details that may influence how they approach their job. Since owners and managers work closely together, effective communication and collaboration are essential. If your communication styles don’t align, there’s a risk of not being on the same page when it comes to important matters. Building a good working relationship ensures smoother interactions and a more harmonious management experience.

Looking for rental services in Orlando – we can help.

We work with our Owners and tenants as individuals and never under estimate what it takes to keep you happy with your choice of Management Company.

By doing our due diligence with our clients, tenants, and vendors we create a service that exceeds expectations and generates positive referrals. Click HERE to learn more and how one of our property management professionals can help you!

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

6 Signs You Should Sell Your Home

6 Signs You Should Sell Your Home

6 Signs You Should Sell Your Home

6 Signs You Should Sell Your Home

At some point, you might find yourself contemplating: Is it time to consider selling my house?

 

Based on data from the National Association of Realtors®, homeowners typically reside in a house for approximately ten years before deciding to sell. Does this duration strike you as surprisingly brief or excessively lengthy? In reality, the length of time varies significantly among individuals, primarily influenced by their specific reasons for selling.

 

The choice to sell your home can stem from various reasons. It might be a well-pondered decision you’ve contemplated for a considerable duration, or it could be a spontaneous choice that emerged in the spur of the moment.

 

A swift decision to sell a home may arise from a sudden defining event like a transfer, death, or divorce. Conversely, in many instances, the process is more gradual, influenced by various factors such as children leaving the nest, a longing to be nearer to family, retirement plans, or the aspiration to reside in a smaller, larger, newer, or different neighborhood. Typically, this type of decision undergoes a gestation period lasting around two to four years.

 

Numerous common reasons, both financial and emotional, drive us to sell our current homes. Sometimes, these reasons can catch us by surprise. If you’re contemplating whether it’s the right time to list your house, here are some unmistakable signs indicating it’s time to sell, even if you haven’t reached the ten-year mark.

 

It’s a seller’s market

Let’s begin with one of the most evident motives for selling: It’s currently a seller’s market, offering you the opportunity to reap a substantial profit from your property. You need to gauge the key indicators of a strong seller’s market.

 

Here are a few indicators to watch for: First, observe an uptick in the price per square foot for real estate in your area. Second, notice a decrease in the amount of time properties stay on the market. Third, keep an eye on the increased brokerage activity in your neighborhood. If your location is particularly in demand, you might even receive a letter or a visit from a listing agent eager to assist you in capitalizing on the current market momentum.

 

If any of these conditions hold true in your area, it might be worth considering selling your property.

 

Local homes are selling for a lot

To monitor comparable home prices in your neighborhood, make sure to check online real estate listings and pay attention to the “recently sold” flyers you receive in your mailbox.

 

If other houses on your street with the same bedroom/bathroom count as yours are selling for a price that would leave you more than content, it could be the right moment to consider moving on.

Another indicator of a thriving home sales market is the correlation between asking prices and sale prices. In a seller’s market, if prospective buyers swiftly make offers, matching or even exceeding the sellers’ asking prices, it becomes evident. As a result, you may receive an offer from a buyer that you simply can’t turn down.

 

You’re financially stressed

Not all individuals sell their real estate solely to boost their financial reserves. Some homeowners sell their property because they underestimated their ongoing housing costs and seek relief from their mortgage burden. Others choose to capitalize on their equity for various purposes beyond financial gain.

 

if your property taxes or mortgage payments have become overwhelming, the most viable solution could be to sell your current home and seek a more affordable option. Opting to sell is a better alternative than grappling with a burdensome mortgage loan, which could potentially lead to the risk of foreclosure.

In order to ensure financial ease, it is recommended that your monthly housing expenses, encompassing mortgage interest, principal, property taxes, homeowners insurance, and any applicable HOA or condo fees, should not surpass 28% of your gross monthly income.

Prior to selling your home with the aim of reducing your monthly living expenses, it is crucial to ensure that you can find another home available for rent or purchase within your budget. Additionally, verify that you meet the qualifications for a loan at the prevailing interest rates when you decide to make the transition.

 

You’ve outgrown your home

The starter home that once suited you while anticipating your first child may no longer be suitable now that you have three preteens and pets. Although it may be bittersweet to part with the memories you’ve created in your current home, if it is causing you more stress than comfort, Shayanfekr suggests it might be time to take the leap and consider selling the property.

 

Other life changes, such as death, serious illness, or divorce, can also be significant factors influencing the decision to sell a home. These emotionally challenging experiences may create a strong need for change. Another factor to consider is relocation due to a new job opportunity.

 

You’re tired of home maintenance

On average, homeowners spend approximately $2,000 per year on maintenance services. This expense covers scheduled services like landscaping, snow removal, septic service, private trash and recycling, as well as housecleaning—excluding any unexpected repair costs.

Tired of witnessing these payments gradually draining your bank account? You have the option to sell your current property and consider purchasing lower-maintenance real estate, like a condo or new construction.

Alternatively, you might want to explore the possibility of renting, where a landlord can handle concerns such as leaky pipes and other property-related hassles, allowing you to experience a more carefree living situation.

 

You’ve built up enough home equity

Selling your home too soon, especially if you have a mortgage, might not allow you to build substantial equity beyond the initial down payment. During the initial stages, a significant portion of your mortgage payments mainly goes towards covering interest expenses.

In reality, unless the housing market experiences a significant boom (as mentioned earlier), selling your home could lead to a financial loss. In some cases, you might even end up owing more than what you can acquire from the sale, considering the closing costs involved.

Keep in mind that selling your home isn’t cost-free. You’ll need to allocate funds to cover various expenses related to hiring a real estate agent, the closing process, and, naturally, the purchase of another home.

 

Staying in your current home for at least five years, unless you have an urgent need to move. Rapidly selling can send potential buyers a negative message.

Buyers become uneasy when it seems like you’re selling too soon. They may wonder what’s wrong with the house or why you’re leaving so quickly. It can lead them to imagine various negative scenarios, like potential structural issues, troublesome neighbors, or other concerning issues.

Another reason to reconsider selling is if you don’t meet the qualifications to avoid paying capital gains tax on your profit from the sale. Typically, you can exclude the gain if you’ve owned and lived in the home for at least two of the past five years. Selling before the two-year mark, without qualifying for any exceptions, could result in a costly mistake. Paying capital gains tax might significantly reduce the equity you originally planned to have from the sale.

But beware of snap decisions

Certainly, there are no guarantees that selling will be the best long-term option for you. Take your time to carefully consider whether selling is the right decision for you, and collaborate with your real estate agent to analyze the local home sales market before setting the price for your home. Underpricing could lead to a buyer snagging it for too cheaply, while overpricing may deter the right buyer from considering it.

Ultimately, selling your home is a deeply personal decision. Prioritize what will help you live a fulfilling life, even if it’s not necessarily “happily ever after,” but rather “happily for now.”

Experts in Residential Real Estate in Orlando

If you are BUYING or SELLING real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.

Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

Real Estate Agent vs. Broker vs. Realtor

Real Estate Agent vs. Broker vs. Realtor

Real Estate Agent vs. Broker vs. Realtor

Real Estate Agent vs. Broker vs. Realtor

If you’re looking to purchase or sell a home, having some assistance is essential. But who should you enlist for the job? Professionals in the real estate industry are known by different titles, such as real estate agent, real estate broker, or Realtor®.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

Renting Out a House With a Mortgage

Renting Out a House With a Mortgage

Renting Out a House With a Mortgage

Renting Out a House With a Mortgage

Investing in a rental property presents an excellent opportunity for creating passive income, especially when you possess a property that you’re ready to lease out. However, if the property currently carries a mortgage that you are paying off, you might be curious about the feasibility of renting it out without breaching the terms of your mortgage agreement.

In general, the answer is affirmative; however, it’s essential to take specific factors into account. Continue reading to discover what those considerations are and explore the tools available to assist you in efficiently managing your rental property like an expert.

Can You Rent Out a House With a Mortgage?

The majority of mortgage agreements contain a section outlining the necessary steps to take before renting out your home. Consequently, whether you can rent out your house or not will hinge on the specific terms and conditions stipulated in your mortgage agreement.

Suppose your mortgage lender permits it; in that case, you should ascertain the essential steps you must undertake to prevent occupancy fraud, as defined by the Federal Bureau of Investigation (FBI) as “when the borrower declares their intention to reside in the property they are purchasing when, in reality, it is an investment property.”

Certain mortgage lenders might impose additional conditions that you need to adhere to, such as a waiting period before renting the property to tenants and one-time fees to be accounted for. For instance, loans from the U.S. Department of Agriculture (USDA) and Federal Housing Administration (FHA) usually necessitate living in the property for one year before allowing rental arrangements in most cases.

Due to these considerations, it’s crucial to inform your mortgage lender about your intentions and have a discussion regarding the necessary steps to take before proceeding with finding tenants.

What to Know About Renting Out a House With a Mortgage

To ensure compliance with your mortgage lender’s agreement, here are the essential steps to consider when planning your next course of action:

Research loan restrictions: Different types of mortgage loans, including conventional loans, FHA loans, USDA loans, Veterans Affairs (VA) loans, adjustable-rate loans, and fixed-rate mortgage loans, each come with specific terms. Depending on your loan type, verify whether there are any restrictions regarding renting out the property.

Review your mortgage contract: Examine the document for any loan restrictions, take note of the stipulated waiting period before renting out the property, and pay attention to any occupancy requirements specified in the agreement.

Inquire with  your HOA about its rental policy: Certain single-family homes and condominiums may fall under the purview of an HOA, which may have its distinct policies concerning rentals. If your property is part of an HOA, it’s essential to ask about any rental restrictions to stay informed.

Consult local landlord-tenant laws: To ensure compliance with local regulations, refer to the pertinent landlord-tenant laws that govern aspects such as applicant screening, rent collection, security deposits, non-discrimination policies, and other essential guidelines.

Consider capital gain consequences: Depending on the state, residing in the property for a specific duration may be necessary to avoid capital gains taxes, which are levied on the profits property owners earn from selling their property. If you have resided in the property for less than two years, you might no longer be eligible for an exemption from paying taxes on capital gains.

Do I Need to Tell My Mortgage Provider that I’m Renting Out My House?

Indeed, it is necessary to inform your mortgage lender of your intention to rent out your house before proceeding to find tenants.

Neglecting to do so could lead to a breach of the agreement and potentially incur substantial fees. To avoid such repercussions, make sure to get in touch with them before taking any further actions.

3 Tips for Renting Out Your House

After notifying your mortgage lender and receiving approval to rent out your home, the subsequent crucial task is to secure tenants. Here are valuable tips to guide you in becoming a landlord and successfully renting out your home for the first time.

Find the right rent price through a competitive analysis: Begin by researching local rental comparables to gauge the rates that other landlords are currently charging for properties similar to yours in the area.

Opt for a lawyer-reviewed lease agreement: When seeking your mortgage lender’s approval to rent out your property, it’s crucial to ensure the utmost protection for yourself and your asset. To achieve this, having a well-crafted lease agreement is essential.

Looking for rental services in Orlando – we can help.

We work with our Owners and tenants as individuals and never under estimate what it takes to keep you happy with your choice of Management Company.

By doing our due diligence with our clients, tenants, and vendors we create a service that exceeds expectations and generates positive referrals. Click HERE to learn more and how one of our property management professionals can help you!

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

 

Existing-Home Sales Retreated 3.3% in June; Monthly Median Sales Price Reached Second-Highest Amount Ever

Existing-Home Sales Retreated 3.3% in June; Monthly Median Sales Price Reached Second-Highest Amount Ever

Existing-Home Sales Retreated 3.3% in June; Monthly Median Sales Price Reached Second-Highest Amount Ever

WASHINGTON (July 20, 2023) – Existing-home sales slipped in June, according to the National Association of REALTORS®. Sales varied among the four major U.S. regions, with the Northeast experiencing gains, the Midwest holding steady, and the South and West posting decreases. All four regions recorded year-over-year sales declines.

Total existing-home sales1 – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Year-over-year, sales fell 18.9% (down from 5.13 million in June 2022).

“The first half of the year was a downer for sure with sales lower by 23%,” said NAR Chief Economist Lawrence Yun. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”

Total housing inventory2 registered at the end of June was 1.08 million units, identical to May but down 13.6% from one year ago (1.25 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, up from 3.0 months in May and 2.9 months in June 2022.

“There are simply not enough homes for sale,” Yun added. “The market can easily absorb a doubling of inventory.”

The median existing-home price3 for all housing types in June was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Prices rose in the Northeast and Midwest but waned in the South and West.

“Home sales fell but home prices have held firm in most parts of the country,” Yun said. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”

Properties typically remained on the market for 18 days in June, identical to May but up from 14 days in June 2022. Seventy-six percent of homes sold in June were on the market for less than a month.

First-time buyers were responsible for 27% of sales in June, down from 28% in May and 30% in June 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 20224 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 26% of transactions in June, up from 25% in both May 2023 and June 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.

Distressed sales5 – foreclosures and short sales – represented 2% of sales in June, virtually unchanged from last month and the prior year.

According to Freddie Mac, the 30-year fixed-rate mortgage(link is external) averaged 6.96% as of July 13. That’s up from 6.81% the previous week and 5.51% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales decreased to a seasonally adjusted annual rate of 3.72 million in June, down 3.4% from 3.85 million in May and 18.8% from the previous year. The median existing single-family home price was $416,000 in June, down 1.2% from June 2022.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 440,000 units in June, down 2.2% from May and 20.0% from one year ago. The median existing condo price was $361,600 in June, up 1.9% from the previous year ($354,800).

Regional Breakdown

Existing-home sales in the Northeast grew 2.0% from May to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price in the Northeast was $475,300, up 4.9% from the prior year.

In the Midwest, existing-home sales were unchanged from one month ago at an annual rate of 990,000 in June, slumping 19.5% from one year ago. The median price in the Midwest was $311,800, up 2.1% from June 2022.

Existing-home sales in the South faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price in the South was $366,600, down 1.2% from June 2022.

In the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price in the West was $606,500, down 3.4% from June 2022.

About NAR

The National Association of REALTORS® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

# # #

For local information, please contact the local association of REALTORS® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

NOTE: NAR’s Pending Home Sales Index for June is scheduled for release on July 27, and Existing-Home Sales for July will be released on August 22. Release times are 10 a.m. Eastern.


1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

3 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

4 Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s REALTORS® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.

5 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s REALTORS® Confidence Index, posted at nar.realtor.

 

SOURCE

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.