The Best Day!

Winter Glory
Winter Glory

Ralph Waldo Emerson said “Write it on your heart that every day is the best day of the year”.

As I reflect on the:  many joys, some difficulties, embarrassing moments, successes, failures, new friends, fun days,  and blessings experienced in 2014 I have to say THANK YOU GOD FOR YEAR PAST, AND HURRAH FOR NEW ONE COMING!

Helen Keller- so familiar with every kind of difficulty –  profoundly expressed a New Years Resolve:

“Your success and happiness lies in you.

Resolve to keep happy,

and your joy and you

shall form an invincible host against difficulties.”

Happy New Year!

Should I Purchase a Rental Property?

Investing in Real Estate can make terrific sense, but as in all investment strategies – there is some inherent risk…

Here is a brief summary of things to consider when purchasing a rental property:

  • Personal Finance considerations: Lenders typically require 25% down on an investment property mortgage (caveat -if part of the rental property is your primary home – as in a duplex where you live in one unit and rent the other unit out, loan programs such as FHA with as little as 3.5% down are available).  Interest rates will also be higher than the rate available on a primary residential mortgage.  Your credit, income, assets and debt ratios all factor in on the interest rate offered.  As with all mortgages, closing costs will be associated (plan on 3% of the loan amount).   It’s wise to have a large “nest egg” saved up to cover vacancy loss, improvements and repair costs.  Money desperation can facilitate unwise decisions in accepting “risky” renters – leading to serious money woes.
  • Personality considerations: Ask yourself, “Do I want to be a Landlord?”  Landlords have to screen for tenants.   Will you be able to say “No” when you need to?  Will you be able to be firm about collecting rent?  How do you feel about doing/ or hiring out repair work?  Using a property management company is a very good option (one I recommend) if you don’t want to be a landlord.  Most management companies charge around 10% of the rental income (becoming another financial consideration).
  • Property considerations: Budget will dictate some things, but when evaluating properties consider the neighborhood and associated demographics.  Properties near the university are in high demand (low vacancy), and often can glean higher rents (depending on the condition of the property), but also may have higher turn-over and more repair costs.  A single family home near a school may provide more rental stability and lower turnover once rented but may be harder to rent initially.  The age, size, condition, location and amenities (garage, laundry, yard etc…) of the property will influence potential rental income as well as the potential outlay for maintenance.
  • Investment considerations: Return on investment (ROI) a profitability measure that evaluates the performance of a business by dividing net profit by net worth,   cash flow Income less expenses, risk, and tax implications are all important aspects of investment considerations.   

Cash flow example:  

                     1900 sq. ft, 3BR, 2 BA single family home in North Logan

                     $160,000 (negotiated seller paid closing costs $4800)

                     25% down            $40,000 

                     Loan                      $120,000 @ 4.75% interest

          Payments             $626 + $100 per month tax & insurance = $726/mo

         Potential rent      $1150/mo – less 10% management fee =    $1035/mo

         Gross monthly cash flow:   $309   ($3708 per year)

                                  9.27% ROI, excluding vacancy loss & repairs – (an unknown)   

Additional tax advantages & appreciation of the asset (Real Estate has traditionally appreciated at a rate of 3 -4% per year, although we all know this is not a fail safe assumption) May make this purchase a very desirable investment decision.                                                     

Home buyers – the sequence is significant!

Jan 2014

This happens frequently… I get a call on the phone, a nice someone says “my friend said you’re a good Realtor…  I saw a house I like in Logan – can you show it to me?”  I absolutely love a call like this – because there are few things more satisfying than helping someone find a great home.  BUT…there are a few steps that should be taken BEFORE we go out & look at homes.  Just as successful baking (following a recipe) often has sequential ramifications, home buying goes much more smoothly if things are performed in a certain order.  It should go something like this:

1) Find a Realtor – that you trust, is attentive,  knowledgeable and that you won’t mind spending time with. (Check references). Make sure the Realtor is someone who will have your best interests in mind, and then please be loyal to them in return.  Realtors receive no compensation until  a transaction (home sale or purchase) is successfully completed.

2) Get pre-approved for a loan with a lender who is competent, qualified & knowledgeable! Once again, check references… there are many loan programs, find out which one will be the best for your situation.  If you need to wait a while & save up some more money or get rid of some debt in order to obtain a loan with more favorable terms… do it!  A good lender will give you direction.  Either you or your lender need to let your Realtor know what loan program you will be using.  FHA loans have certain guidelines – not all houses will qualify for that type of loan.  USDA loans have geographic parameters – so if you are getting a USDA loan, you need to look at homes only in certain areas.. (In Cache Valley, homes in North Logan, Logan, River Heights, Providence, and parts of Nibley will NOT qualify for a USDA loan).  

If you have CASH to buy a home, you may ignore step two – and go straight to looking at homes!  You’ll also have additional negotiation power:-)

3)  Now that you know your budget, know your loan parameters, have your pre-approval letter and you have the ability to act when you find the home that “trips your trigger”   IT’S TIME TO LOOK AT HOMES!  When you find a home/homes that you want to see, please let your Realtor know  a day in advance if possible.  Showings need to be scheduled with the sellers who often need ample notice to get the home ready and find a place to go while you’re there.  It also makes sense to be able to schedule showings logistically – saving time, gas & air quality.

When these steps are performed out of order, sellers are inconvenienced needlessly  ( getting their homes in order for showings – often dragging children away from dinner, homework etc… – not to mention the emotional drag of getting their hopes up) and the buyers themselves waste time & emotional turmoil looking when they may not be in the position to buy.

If you discover you’re not quite financially ready to purchase, but you really have the hankering to look at homes,  spend time looking at properties online (your Realtor will send you properties to view if you’d like to have things filtered & only look at what fits your guidelines), and by all means attend open houses.

Happy Buying!

What are the odds?

Real Estate transactions – whether purchasing or selling – are stressful because there are so many uncertainties…It really is a game of numbers.

People worry:  What if my home sells and I cant find another? Will it close – on time?  Should I pack now?  What if I move out and buy/rent another place & the deal fails?  When should I schedule the movers – take time off work?   ???

Lets look at some of the ways to make odds of a successful transaction favorable :

  • Dependable, competent people are involved in the transaction – a dependable Realtor (s),  competent lender,  thorough inspector, a good escrow officer.
  • Buyers are pre-approved with that competent lender BEFORE an offer is made.
  • The home is maintained – if possible, repairs are made BEFORE it is put on the market and an offer is accepted.
  • Communication between All parties is frequent and clear.

Even with high odds of a successful Real Estate transaction, deals do sometimes fail… Tragedies can befall one of the parties – people become ill,  die, lose a job, etc…  Interest rates can rise dramatically within the escrow period and buyers no longer qualify for the loan.  Something terrible can happen to the home before closing – fire, flood, lightening, vandalism etc… Bad things can happen, but odds are they won’t.

If the right people are involved, and the right steps taken, odds are that the deal will close, and close on time.

REASONABLE is the word of the day

Things might be returning to the more normal state of affairs in the Real Estate world…. the days of low-ball offers (6% + below market value) being accepted are becoming a thing of the past, and multiple offers are no longer a rarity.  Foreclosures in Cache Valley are on a continual decline, and the foreclosing banks are no longer giving the properties away.

What does this mean…?

Well, sellers don’t get too excited yet… you still have to base your home value on market conditions (not what YOU THINK your home is worth), your home will still have to meet appraisal values if it goes under contract, and buyers are still cautious about over paying, but please don’t let yourself be talked into listing at the bottom of the market, and don’t feel obligated to accept the first offer that comes in if it’s a low offer.  Let your Realtor negotiate an equitable price – and if equitable terms can’t be met, don’t feel desperate.  If your house is in good condition, it will sell for a reasonable price in a reasonable amount of time.  If it’s not in good condition, let’s get it in good condition!

Buyers – it is a great time to buy!  The affordability is still fantastic because prices are still good and interest rates are great, but don’t expect a “steal”.  Expect to make a reasonable offer, and yes – unreasonable offers can and do offend sellers.  If you want a particular home  make an offer based on market value, not what an infomercial real estate guru says you can get a home for.  Even foreclosures and short sales are receiving multiple offers.  Let your Realtor do some research on the history of the property as well as what the value is based on similar properties that have sold.  Make an informed… and I’ll use this word again – REASONABLE – offer.

The Real Estate market is entering a situation of balance – not a buyers market, not a sellers market … a reasonable market.

Reviews for Terri Sizemore

Here are some testimonials and Thank You’s received from previous clients.

“I put my house on the market just about one and a half months after another friend of mine. I used Terri, he used another agent. Both houses were very similar in size and price range, the difference was that Terri worked very hard for me to help stage and prep the things needed to get the house to sell. Mine sold in around thirty days, while my friend’s house went for the whole six month contract without selling and he even lost the new house he wanted. When it comes time to sell my current house I will track Terri down to have her sell it.  Talk to Terri before you go to anyone else!  Tom Watkins.”

Dear Terri–
We couldn’t have done it without you and your 18-hour days. You treated the Pitkins as though they were your only clients and pure gold. Not merely were your suggestions for improvements always spot on, you and your family pitched in and helped get them done. We got our home sold, and in the bargain we acquired a friend forever.
Will Pitkin

–“It was a sheer pleasure working with Terri to -sell our home.  I have worked with a number of agents over the years and have never received such amazing help.  She went the extra mile on everything she did, from marketing our home on the internet, holding open-houses that featured our property and making sure that it was always in top condition to show to prospective buyers.  She even advised us on things that we could do to make the home more appealing and sale-able.  She was able to sell our home quickly and for more money than I anticipated.  We were thrilled with her professionalism and service. I heartily recommend Terri, I wouldn’t use anyone else. She is the best!”  Jim Welch 

Dear Terri,

I wanted to thank you for all the hard work you put into helping me sell my home. This was the first home I ever bought and I did not know anything about selling it. I was afraid at first to go with a real estate agent because I heard so many bad stories. When I met you in person, I knew I could trust you. You explained everything to me and helped me so much with your valuable advice on setting up my house to be shown and increase the curb appeal. I could not believe that in the first 5 days on the market, your office set up 10 showings and my house sold after 5 days! During the entire sale process, you always returned my calls promptly; you kept me up to date with all the steps and paperwork. I could not have sold my house this fast on my own and I am so glad that I had you as a real estate agent! I have recommended you to all of my friends and family! Thank you for all your time, advice and dedication to my family during the sale of our home. You are such a great person and a hard worker. We are all so grateful to you!

Celeste Theodore

My husband and I recently bought our first home.  We were very fortunate to have Terri Sizemore as our real-estate agent.  She is very passionate about what she does, and she really cared about getting us the best result.  She answered all our questions and was very patient with us.  We looked at lots and lots of houses with Terri before we found the one that was right for us.  The home buying experience can be a stressful one; I would recommend that you have someone like Terri to help you through the whole process.   STEPHANIE STEWART

I’d like thank Terri and let others know how much I appreciate her help with my real estate affairs. Terri assisted me with the purchase of my home. Buying a house isn’t something you do every day and it was reassuring to have her walk me through the process. Peace of mind. Priceless. I also have a building lot that Teri is selling for me. She has tons of energy and puts forth much time and effort to advertise and sell the property.   She is a great communicator and contacts me a few times a week, to keep me updated.  She always exceeds my expectations.  If you need a real estate professional, look no farther. Terri Sizemore will take great care of you. Terri thanks for all you do.  Bob Van Slyke

Working with Terri is a pleasure.  She really listened to what we were looking for and worked hard to find what we were after.  When it came to closing she made the process smooth and painless.  Best of all, she is a truly caring person who looks out for her clients and, if you have the pleasure of working with her, you are likely to find yourself with a wonderful new friend.  Sally Brown

Terri was so wonderful.  I always knew that she cared about ME.  She explained things to me carefully, she kept in touch with me every few days, and she worked hard to get my house sold.  She and her husband even painted my living room to make it look better, and when my house sold so quickly she and her husband MOVED ME!  Now that is what I call service beyond expectation!!  She is the BEST!    Mrs. Parnell

Terri was awesome to work with. She cared about getting us into a perfect home for our family. She was responded quickly, and kept on top of every contact. I had to bring small children with me several times and she was very understanding and patient with them. She had great suggestions and knew the area well. She was aggressive in getting a good deal for us. I loved working with her and I hope to work with her again.  Celeste Balio

When I first called Terri about some land I was looking at I could tell immediately that I had not just met a Realtor but I had made a good friend.  Terri worked hard checking on all the different rules and laws and HOA fees.  She made lots of calls, showed me many lots, and really did her homework (and mine too).  She is a hard worker and always made me feel special. When I finally found the land I wanted she helped me with all the details with that purchase and we still stay in touch.   Lisa Jorgensen

      Terri was great to work with in so many ways.  We were moving in from out of state, and Terri worked with our schedule for looking at houses.  Terri made it easy to get into each of the places we wanted to see in a short amount of time.  She let us make our own assessment of each house, but also provided valuable input from her point of view.  It was easy to talk to Terri about what we liked and didn’t like about different places.  Terri was really good at following up with us even after we were in our home.  Terri went above and beyond our expectations in helping us get into a good home and we would recommend to anyone in Cache Valley.    Joshua & Alesia Southwick   

Terri Sizemore was an amazing realtor to our family.  We never felt pressured in buying a home.  She always told us her opinion on the homes and she found an amazing home that was best for our family. Terri was very friendly and was so nice to our two young boys.  She would go out of her way to bring a treat for them, whenever we would meet. When we were looking at each home she made an effort to play with our boys, so my husband and I could focus on looking at the home.  Terri was very professional and knew the realtor business well.  She helped us put the best offer on our home and we were first to be accepted, among other offers.  We were so blessed to have her as our realtor and would refer her to anyone.  If you have Terri Sizemore as a Realtor, you will not be disappointed.           Brent and Kara Buist

“Terri went above and beyond to help me with the purchase of my home. I never thought home ownership was possible for me at this point in my life. Terri was knowledgeable, supportive and professional. But, beyond that which one could expect from a skilled agent, Terri was an excellent advocate and friend. Every time I look at my beautiful home I am grateful for her help, support and friendship in making my dream come true.” Jen Hobby

Terri was so very helpful in helping our family move into our first home. Even knowing we had a tight budget and were at the lower end of the market she was more than willing to help us look at many houses and assist in our decision on which one would be best for our growing family.  She walked us through the entire process and even helped us in finding someone to help us with the financing. She was more than patient as we waited for a short sale house, which eventually fell through, but stuck with us and helped us find an even better house a few weeks later. We were surprised at how much she did for us, including the numerous phone calls she would make to the listing agent, our lender, inspector and other people on our behalf.   Terri even skillfully helped us in getting this new home ready with some DIY projects so we could qualify for our loan.  She was available before and after the sale to answer some new homeowner questions.  We feel she went the extra mile for us when helping us find our first home.  We trusted her completely and she never disappointed. Thank you Terri!  The Edgar Family.

Terri was amazing.  She is the only reason I have a house today. A foreclosed bungalow came on the market and of all the offers (four or five) that were made on the house, my offer was the only one with all the paperwork in order. As such, my offer was accepted and I did not have to go through the counter offer process.  Terri took care of all the paperwork and made the whole process incredibly easy.

Anna Forest

Short Sales in layman’s terms

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In brief – a short salerefers to a situation where market value on a home is less than the mortgage they owe, and a third party (lien holder,  mortgage holder (bank/lender), and or tax entity) must grant the homeowner approval to sell for less than the amount owed.

It is typically advantageous for a financially distressed homeowner to short sale their home vs. losing the home through foreclosure – eviction is avoided and credit ramifications are reduced.  Qualifying for HAFA – Home Affordable Foreclosure Alternatives program – (and many/most people do), can provide additional benefits of $3000 relocation assistance and a deficiency waiver (the bank will not pursue you for the “shorted” amount at a later time).

In order to qualify for any short sale, a  homeowner must have a hardship other than just a decline in their property’s value.  A hardship may be job loss, reduced work hours, divorce, sickness, death of spouse etc… The homeowner (generally helped by their Realtor) submits a hardship package to the third party for short sale approval.

Short sale impact on a buyer:  Because a short sale involves 3 players – the homeowner, the third party (bank)  and the buyer, a home purchase can be complicated.  Buyers should:

  • Expect Delays: After a purchase agreement has been made by the homeowner and the buyer, a short sale requires written approval by the third party/parties.  The third party may do any number of things:   they might not respond at all – or take months to respond, they may reject the agreement outright, or they may modify the agreement completely.
  • Expect Uncertainty:  The Third Parties may require the seller to keep the property on the market even after the buyer and seller have agreed to terms of a proposed purchase contract.  They may not respond to the short sale until they have seen a number of back-up offers…

I recently read an article where short sales were likened to Forrest Gump and his Box of Chocolates – very apropos!  They can be quick and easy or lengthy and frustrating and sometimes they fail altogether.

How does this relate to the Cache Valley Real Estate Market?  In Cache Valley, Utah  in 2011, out of  899  homes sold, 34 were short sales; with an average sold per foot price of $68 (well below the standard price per foot) proving that for buyers with flexible time frames and patience – short sales can be a great buy!