Wednesday, March 30, 2011

GUEST POST: Housing Affordability Index Continues to Rise

Our guest blogger is Jon Wagner, home mortgage loan originator with River City Mortgage & Financial.  You can find more information about Jon here.


As we move further into 2011, the Housing Affordability Index continues to rise.  But what does this mean?  In simple terms, it means that it’s more affordable to own versus rent in most cases. Many analysts forecast a rent increase as high as 10% and the rental market is sure to be flooded with consumers that no longer qualify for home loans because of a short sale or foreclosure.  The more competition there is for rental housing, the higher rental prices will go.

Now is a great time to purchase a home:  rates are historically low, home prices are down almost 30% off of the highs, and when you factor in the tax advantages of home ownership it really makes sense to act now.  The interest that you pay on a mortgage loan is tax deductible through the Mortgage Interest Deduction (MID). 

If I can answer any questions with regards to financing or you would like a free Pre-Approval, please contact me!

Respectfully,
Jon R. Wagner
NMLS: 331960
Company ID: 1048

Thursday, March 24, 2011

Wonderful Testimonial

I helped my Grandma rent out her home in Roseville, and she had very kind things to say about the job I did:
Dear Josh,

Thank you for the fine job you did on renting my property in Roseville.

You were always available when I called with questions or were prompt returning calls.  I appreciate the knowledgeable advice you gave me regarding landlord requirements and responsibilities (example: correct and up-to-date forms about lead-based paints).  The correct forms were always furnished in a timely manner.

My property was listed for less than 24 hours when you were calling me with excellent candidates to rent the property.  I'm happy to say that within less than two weeks of first contacting you for help, my property has been rented to a lovely, responsible family.

Thanks again Josh!

As someone who provides a service to people, this is one of the highest forms of praise I can receive.  I am very appreciative!

Tuesday, March 22, 2011

Tips for Successful Leasing

With the real estate market hurting and people stuck in homes they can hardly afford, many potential sellers are looking towards renting their houses as a viable alternative.  Renting can be a great option if the circumstances permit.  But what can you do as someone trying to find renters to make sure the process goes smoothly and you end up with trustworthy tenants who pay their rent on time and in full?

 Have a REALTOR or leasing agent represent you 
This is the best thing you can do to protect yourself.  Employing a REALTOR or leasing agent to act as a buffer between yourself and potential tenants will save you time, energy, and patience.  Agents  typically charge a few hundred dollars and will market the property, show your house to potential tenants, process applications, and advise you as to who you should choose as renters.

Include utility costs in the price of the rent

This tip on its own won’t necessarily lead you to better tenants.  But it will make your tenants life easier and you can rest assured that all the bills are being paid.  One specific example as to why this is a good idea is the water bill.  Water bills are property-specific, meaning they stay with the property.  If you are $500 behind on your water bill and want to move, you won’t be able to until that amount is satisfied.  On the contrary, if you are behind $500 on your heat bill, the energy company will come after just you, not the property itself. 

Using an online tenant screening service
There is no dearth of companies offering tenant screening services.  These companies offer more or less the same services for very similar costs:  criminal background check, eviction history, credit check, etc..  Most companies charge between $30 and $50 per applicant and the service will tell you whether or not applicants would make acceptable renters.

Ask for references
This is another really simple way to safeguard yourself.  When a potential tenant asks for an application, ask them to include 3 “professional” references.  These could be colleagues, previous landlords, former managers, etc...  Ask for a phone number and during the screening process, put a 5-10 minute call into these references.  By asking good questions, you might learn quite a bit about their behaviors, activities, and expectations.

This list is far from all-encompassing but it should give you an idea of what you need to do to get your house rented.  I do believe very strongly that those looking to rent their houses use an agent or REALTOR.  We are professionals and do this for a living - we have access to the proper forms, we know the laws, and perhaps most importantly, we can bring professional credibility to the process and help you find great tenants. 

Wednesday, March 16, 2011

"Out of Sight, Out of Mind"

When I take buyers house-hunting, it’s easy to get wrapped up in the physically visible aspects of the houses:  What kind of condition is the foundation in?  How old is the furnace and how much longer might it continue to work?  What kind of material is the exterior and what kind of maintenance might it require?  These are all important questions and buyers rightfully wonder about these things as they make their purchase decision.

Many of these questions we can answer on the spot.  It’s easy to spot horizontal shifts in the foundation, clear signs of wear to the furnace, or the degradation of the exterior material. Other questions require the expertise of a well-trained inspector, whose function is to provide an objective analysis for clients.  But one very important thing that many buyers overlook, and many REALTORs are guilty of as well, is the sewer system. 

In my mind, the sewer system represents one of these “out of sight, out of mind” situations.  Once you see the main sewer line go into the basement floor, you figure everything is getting to the main sewer line in the road and you have nothing to worry about.  But while the sewer system might be “out of sight, out of mind,” the problems that arise from a backup or clog are anything but. 

The dire consequences of a sewer backup are one reason that we are starting to see more and more cities require a televised viewing of the sewer line prior to listing a house for sale.  The city of Golden Valley has been the pioneer on this front.  When the city first began performing televised sewer inspections, everyone was mad.  Sellers didn’t want to pony up for the inspection, buyers were frustrated because their deals were falling apart due to the poor condition of sewer lines, and real estate agents saw it as one more in a long line of hoops to jump through in order to close.

Say what you will about requiring sellers to have a sewer inspection, but one thing is clear:  requiring a sewer inspection has prevented many, many people from expensive, disgusting, and humiliating sewer backups.  Buyers in Golden Valley now have peace of mind when they move in their new homes - they know that their sewer is cleared out, functioning properly, and that their is nothing “goofy” going on with their sewer system.

Do I think what the city of Golden Valley has done will spread to other cities?  Long-term I think it is inevitable.  Sewer systems fall into a strange gray area - should they be the responsibility of the city, whose job it is to manage the vast infrastructure of sewers?  Or should it be the responsibility of the homeowner, whose sewer hooks into the vast infrastructure?  Short term, I think the prospects are a bit more bleak.  Many cities already require extensive pre-sale home inspections and to add another would be to add more bureaucracy to an already bureaucratic system.

Although I don’t believe Golden Valley’s idea will spread in the short term, there is nothing that is preventing buyers from having a sewer inspection performed before the sale.  They might even negotiate to have the seller pay for the inspection.  There are a number of ways to approach it, but the important take away here is that although you might assume the sewer system is fine, never assume.  If you are worried, have an inspection done - it might save you a massive headache in the future.