The RE/MAX Associates Louisville Real Estate Blog

Natural Gas for Homes on the Rise

Environmentalists throughout the country and around the world are protesting the new popularity of hydraulic fracturing, also known as “fracking”. It is a process that forces an array of chemicals underground the break up geologic formations that contain fossil fuel deposits, ranging from natural gas to the “timeless” black oil.

Even though this practice began in 1947, its entire effect on the earth is unknown. We do know in the meantime it is quite hazardous and tearing up the earth. We are seeing more seismic activity and contamination of groundwater, as well as chemicals seeping to the surface.

While environmentalists protest the dangerous extraction practice, fracking has lent a hand to other green friendly campaigns, namely the mass exodus of power producers from coat to natural gas. Natural gas has a lot of reasons it’s just becoming more popular, one of the biggest ones is fracking.

Coal burning power plants were the main source of energy before the economic collapse in 2008. At this point in time natural gas was an extremely volatile commodity. It traded for multiple times what a comparable amount of coal would trade for.

Coal was going through a perfect storm at the time and the economic meltdown depressed all fuel prices and energy producers began looking at more economical ways to produce energy, thus we have fracking. This allowed oil and natural gas to be withdrawn from deposits. Natural gas has become a dominant source of energy as a result from an intricate web of political and environmental considerations.  

No one can ignore the debate on climate change, and it has become evident that natural gas produces half as much carbon dioxide as coal. Since we have begun heavily using natural gas, carbon emissions have decreased 3.8% from 2011 to 2012. This has led legislation to pass laws encouraging utility companies to replace their dirty coal with natural gas plants. Obama and the EPA...

Diversifying Your Property Portfolio

Investing in any asset class is never guaranteed, there is always risk of losing as much as you put in. Residential property is no different. Just as there is potential for growth, there is potential for stagnation or decline in market value.

                A good way to reduce these risks is to diversify your property portfolio. There are two ways to do this. First, buy properties in different locations. Maybe you might have one in a city, the other in the suburbs, and another in a different state.

                When you have all your investments in the same location, your exposure to risk is too large. If the market changes for the worse all your investments will be hurting. It’s kind of like putting all your eggs in one basket.

                Let’s say you buy all your properties still in the same location and in ten or twelve years the area loses its popularity for whatever reason(s). The decrease in demand very well could affect the resale value of your property. If your properties could be playing host to a new express way which will create constant noise. This almost certainly will decrease the value of your asset.

When you change the locations of your investments you can minimize the risk if your total investments. If one property falls in value a bit, not everything is lost. The others in different markets will hold their own and it won’t hurt as bad.

The second strategy is to buy across different price ranges. The benefit in this is flexibility. You will be quite flexible when you have to sell your properties to free up equity, like when you retire and want to add some heavy cash to your super fund.

Let’s now say you have $1 million to spend on investments. You can either...

Homebuilding Index Slips for December, but No Worries

For the month of December, homebuilder’s confidence has slipped. The market for new single-family homes has fallen by a point after a four-point jump in November. Do not worry though; the market is still on a slow walk back to normal.

Even though the Housing Market Index has slipped to 57, that is still a strong enough number to show the market is on the upward trend. As 2015 approaches, the housing market is expected to continually recover at a steady pace.

If you are a builder, do not worry just yet. If you are a buyer, this is your market.
Happy Holidays everyone!

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Tax Breaks of 2014

Whether you are buying a house or currently own a home, let us take a look at how your taxes will stack up. No one wants to pay more in taxes than they had anticipated. Trust me; it’s worth it to look at this now than in April.

                After a year of debate, the incompetent congress has finally approved the tax extenders bill. But what exactly is this bill? The tax extension bill is a collection of more than 48 deductions and credits that had expired, which gives us taxpayers a break through the end of 2014.

                It’s not easy to know all the current tax laws when our congress procrastinates on every issue and slides the laws by at the last moment. This bill is targeted for special interests, for example, the research and development credit, which you may think doesn’t apply to you.

                However, they do apply to you if you own a home or are looking to buy one.  Let’s have a look at the tax breaks in this bill that apply to you.

                Mortgage Debt Forgiveness: when a mortgage lender writes off all or any part of a debt, the amount that is forgiven is then passed back to the borrower as taxable for income tax purposes. This rule applies to all debts, even home mortgages. In 2007, congress passes the mortgage Forgiveness Debt Relief Act, which allowed for an exemption.

                Under this rule most homeowners who have either lost their home to foreclosure, or qualified for other repayment adjustments do not have to pick up the forgiven debt...

The Top 4 Regrets of Real Estate

This post is going to reveal all the hidden costs when you’ve moved in, and sort of make you feel sorry for doing so. So let’s begin!

                When buying or renting, there always comes a point when “buyer’s remorse” sets in. We all have it, moving, buying, renting, and all the chaos that surrounds the process will sometimes leave a few stones unturned. If you’re the lucky one these stones won’t be unturned until you have every box unpacked and you are finally settled into your new home. Call it buyer’s remorse, second-guessing, or what have you, but this can be avoided if you know what you’re getting into before you take the new keys to your new home.

Where are we going to put all this?

                According to a Trulia.com survey, 52% of all homebuyers have at least, one regret about their new home, or the process they took to get it. The largest regret: wishing they had chosen a larger home. The most common complaint is there isn’t enough space to put all their belongings once they’ve unpacked. Older apartments and homes will probably lack in closet/storage space since our lifestyles have grown in the past 60 years.

                Look at the other hand too. The beautifully decorated home looked perfect with the scaled-down furniture, but now that you’ve moved in with all your giant new age furniture, the room looks a bit smaller now doesn’t it?     Nine months is usually when a young couple starts to regret moving into their first house.

We have no money left!

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Why millenials are hurting the real estate recovery

First time home buyers haven’t been helping the housing recovery as planned. They haven’t helped not because they don’t want to be homeowners, but because they have more obstacles standing in their way.

                It is a tough road for this generation (ages 18-39), but it is something they all aspire to do. It is in most of their plans, but renting has become somewhat of an undesirable situation, and they want to own for the next time they move. What is getting in the way for this generation is the economy. There are repercussions that are far too dangerous to go ahead and buy a house if it is not done right.

                What this generation is facing is a lack of savings, poor credit scores, and horrible student loan debt is what is hindering young people from buying a home.  Young people now a day are waiting longer to get married and start a family, which are life events that lead them to purchase a home.

                For now, this absence of young adults from the housing market continues to dent the homeownership rate. The age group 25-35 is having the hardest time recovering from the “great recession”. This generation is mostly renting. While experts believe it will get worse before it gets better, one thing is for sure: Young people have plenty of hurdles to becoming homeowners.

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Twelve Things To Do After A Move

Finally, every last box is packed up in the moving van and you are closing the door for the last time on your old home. The move isn’t quite finished though, here is a checklist of the final things you need to do before you move into your new home!

  1. Check all your expensive appliances and furniture. Most movers and insurance companies have a deadline in which you can file a claim. Check to make sure all appliances and furniture are not damaged and are working properly.
  2. Hire an exterminator before you start unloading all your belongings. If time allows, give the new home a thorough cleaning before you start unpacking and organizing.
  3. Open one box at a time; don’t open every box at once. Have a plan to organize and unpack room by room. Opening everything at once will tempt you to start stuffing things in closets to get them out of the way and then you’ll forget about them. Make a timetable of a certain room a day, or three boxes a day, that way you will be completely unpacked within a week.
  4. Change all locks and alarm codes. Do you know if the previous owner has kept any spare keys? Maybe, but it is best to play it safe.
  5. Be sure that all smoke detectors are working within the house.
  6. Update your current address with your job, the bank, post office, insurance provider, etc.
  7. Meet your neighbors. Invite them over for a meet and greet over tea or coffee. Knowing them will give you the feeling of settled in.
  8. Update your driver’s licenses and license plates. Visit the local DMV to find more info.
  9. Register to vote in your new area.
  10. Find the local healthcare professionals in the area. Dentist, doctor, vet, pediatrician, etc. Ask your insurance provider for the closest hospitals that come under their network.
  11. Make sure all moving receipts are kept in a single place. They will be needed when you do your taxes for tax deductions.
  12. Find out about trash disposal policies and if curb side pickup is available in your area....

How to Stage You Bathrooms for Sale

It’s no secret when you are getting ready to sell your home, a lot of effort must be put in to embellish every room. This will enable you to maximize every room’s potential and get the best deal possible. Keep in mind though; you don’t really have to account for these expenses since you are increasing the value of your home.

            Bathrooms are always the starting point when trying to stage your home. It’s a small enough room and easy enough to do that professional help is not needed.

 

  1. Perfectly Clean Surfaces: It’s no ones dream to come home after work to take a relaxing bath in a moldy tub with old cobwebs looming over them, alongside a nasty old shower curtain. Your buyer especially won’t want to even see this. A sparkling bathroom is one of the most crucial things a seller can do to entice the buyer. Spend a weekend to clean every inch of it for the next open house. Caulk any cracks, clean all mirrors, and buy an air freshener to eliminate all foul odors. You’ll be surprised how different of a room it will look once it’s perfectly clean.
  2. Remove All Personal Items: People are judgmental so be sure and remove all personal hygiene items, toothbrushes, toothpaste, lotions, medications, etc. It’s best to put them in a plastic shower basket s so they can easily be transported when a new buyer is coming. An empty and clean mirror cabinet allows the potential buyer to envision their own belongings to be sitting in there.
  3. Less is More: Despite having a love for the flashy shower curtain, and crazy floor mats, these must go. These items tend to be looked at as dirty even if they are brand new. Another item to hide is your dirty clothes hamper. No one wants to see your underwear from the week.
  4. Add Luxury & Details: A simple vase with pretty flowers in it goes a long way. Even scented candles will do the trick. The point is to make...

Top 5 Things Buyers Want From Their Real Estate Agents

Here are the top five most important traits home buyers want from their real estate agents.

 

  1. Honest and Credibility: This stems from buyers having terrible past experiences with their real estate agents. These agents would be rather pushy, trying to get them to buy a more expensive house, and the urgency agents placed on the buyer. Everyone knows how difficult it can be to trust anyone in real estate today, so that is why it is essential for agents to help them feel more comfortable.
  2. Area Familiarity: Buyers look heavily on which agents who sell homes in a specific neighborhood, but also which ones know the neighborhood well. They want to know which agent can tell them about the local schools, parks, restaurants, safety, and even the hidden gems of the neighborhood.
  3. Good Follow Through: The most frustrating aspect for buyers is when they wait forever for their agent to do what they promised they would do. If an agent says they will do something, it is expected to be done relatively soon. It is ok to gently remind them here and there to make sure they still know it has to be done. Agents should do what they say they will, with some honesty, and this will help the buyer feel they can trust a little bit more.
  4. Organization: If you are honest, know the neighborhood like the back of your hand, and try your hardest to follow through but it’s difficult to return every phone call, text message, and email. Home buyers expect you to at least be organized and have your stuff together. Just be organized and following through won’t be such a problem.
  5. Good Listener: Most of all, agents should be expert listeners. Agents shouldn’t assume their client wants this, or would look good in this house. They want an agent who will listen to their wants and needs, and one who asks questions to understand what they are truly looking for.  
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How Home Apprails Can Derail Your Refinancing

Current rates are quite low, so now would be an excellent time to refinance your home. However, there are a few ways a property appraisal can delay or even disqualify you from getting your refinance. Here are a few things you should know before you decide to get your appraisal.

 LOAN OFFICERS CANNOT TALK TO YOUR APPRAISER

                Until 2009 your loan officer was able to communicate market value trends in your neighborhood with your appraiser. From this information they were able to set target loan amounts and rates. Now new federal laws prohibit the two parties from communicating. This was designed to safeguard appraiser independence, which changes the way a homeowner can pre-screen their property before a refinance.

YOU CAN AND SHOULD ESTIMATE VALUES BEFORE ORDERING APPRAISALS

                Appraisals are not free and can range from $300 to $1,200 depending on the property type occupancy status and location. So it is still in your best interest to find the estimated value of your property before you order an appraisal, especially if the outcome could render your refinance unqualified.

                The first thing you can do is to find out the estimated value of your home on your local real estate website. The next thing you can do is look at the estimated value of similar homes in your neighborhood. Once you have an estimate of where your home stands versus similar homes, then take into consideration the proximity of that home to yours, date of sale, location, quality of construction, number of rooms, lot and room sizes, parking, and condition.

                Then ask your real estate agent to gather the comparable sales and analyze it. Give your appraiser this data,...

Mortgage Rate Update

The 30-year fixed mortgage rate fell this week. The current rate borrowers were quoted on at 3.36 percent, while last week the rate was at 3.77 percent. It hovered around 3.75 percent this time last week before it settled at 3.76

Erin Lantz, VP of mortgages at Zillow states, “Rates continued to slide last week and are now down more than a half of a percentage point from their mid-September peak. Strong economic data suggests rates should move higher, but weak demand for new loans as kept rates low. This week we expect to see some volatility as markets react to Friday’s job report but anticipate rates to increase modestly by week’s end.”

Furthermore, a 15-year fixed mortgage rate is currently 2.97 percent and for 5/1 ARMs, the rate was 2.76. Zillow predicts tomorrow’s seasonally adjusted Mortgage Bankers Associates Weekly Application Index will show purchase loan activity boost by 15 percent from last week. Stay tuned for another update, coming soon!

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Red States Pummel Blue States in Housing Recovery

According to data from RealtyTrac, more housing markets (52% to be exact) are now better off than they were two years ago. 11% exactly are worse off, and the other 37% have stayed right where they are.

There are five factors to account for when deemed “better off”. Further more, a county must meet three of these five to be considered better off. All five factors have a major influence on the state of a houses health. Let’s go through the list shall we?

  1. Significant fewer foreclosures.
  2. Higher median home prices.
  3. A percentage of homeowners who are deeply underwater on their mortgages that is lower than the national average.
  4. Drastically lower unemployment.
  5. Counties where home prices didn’t rise rapidly that many average people could not afford to buy in those areas anymore.

 

We must also consider the role of politics. The status of your state’s housing market may depend on if you live in a “red state”, or “blue state”. When we look at the market from two years ago, we can see that 53% (10/19 analyzed) of the Blue states were better off, while fully 78% (18/23 analyzed) of the Red states housing markets were better off.

Out of the 1,547 total counties studied by RealtyTrac (accounting for 77% of the total U.S. population) from August 2012 – August 2014, Colorado, Florida, Virginia, Ohio, and Nevada were thrown out because they are swing states. Also, Delaware, Hawaii, and South Dakota were omitted because there wasn’t enough statistical data.

While RealtyTrac is unsure of the exact reasons for the Red states being better off, they believe it has to do with how each state handled the foreclosure crisis. He says, “This fits with the storyline of many of the blue states taking a more pro-active/aggressive stance toward foreclosure prevention, while many of the red states have taken a more laissez-faire approach,” Because blue states...

Tips for Cutting Energy Bills During Winter

Winter is here, and the temperatures about to drop while your energy bills rise. I’m going to let you in on a few tips to save some money on your energy bills this winter. These are fairly easy to do and should save you a noticeable amount of money.

The whole point to saving energy is keeping the heat locked inside the house, so your heating system won’t have to be working around the clock. Most of all heat that escapes the house, escapes through doors and windows. This is a relatively quick fix- try weather-stripping, spray-foam insulation, plastic window film, heavy curtains, and even make-shift door sealers. These all should reduce the amount of heat that escapes. But if you really want to get serious about keeping in the heat, investing in high-grade windows will do the trick. Ask a local window and pane company which windows are ideal for winter.

The next best investment you can make is a Wi-Fi connected programmable thermostat. These new age thermostats allow you to control your homes temperature though your smartphone. How many times have you left for work in the morning without turning off your heat and warmed and empty house; same for air conditioning? There is also the benefit of switching on your heat on the way home from work and coming home to a toasty house. Not only is that efficient, but it’s also smart.  

Another helpful tip is to get an energy monitor. These allow for homeowners to observe how much energy they’re using. It can show how quicker showers over a month can make a difference. It will subconsciously remind you to turn off lights when leaving a room.  Maybe a drying rack should be brought out instead of tumble drying clothes one last time?

The last tip is to switch to LED bulbs. Reasons why:

  • LED lights are brighter while using less wattage
  • They last 50x longer
  • They don’t emit nearly as much heat as the incandescent bulbs, reducing the risk of a fire

Yes, these bulbs do cost a tad more than the standard bulbs, but...