What does it mean? Well sounds pretty straight forward, but it’s worth thinking about.

I had a settlement this morning with a home buyer I was representing that really represented this saying so well and made me think of it again.

This couple was getting ready to rent a town home. They had already viewed it with the owner and put their name on a list of prospective renters he had shown it to. (All of who were ready to help this nice landlord pay for his property)  He was in the process of painting it and getting it ready to rent.  It offered three bedrooms and one and a half baths and was in a prefect location for this couple. The monthly rent was going to be $985.00 a month plus utilities.

A town home entered the market FOR SALE right down the street and we connected. We viewed the home together and they loved it! The home for sale actually offered an additional full bath and was in better shape than the rental.

I assisted them with financing options and we found out they qualified for a 100 percent financing program! We wrote an offer and were able to get the seller to agree to pay most of the buyers closing costs.

This morning these folks, who were days away from being renters, paying $985.00 a month for rent and PAYING for the home they live in for SOMEONE ELSE ( the landlord ) became homeowners! Their total monthly mortgage payment?  $932.00 !  ( Makes me smile )

This is $53.00 less a month they will pay owning their own home, a bigger nicer home, than they would have been paying in rent. Now they are paying for the home they live in   for themselves and not paying for someone else’s home!

( Of course this same principle applies if you are renting an apartment. The factor is where is your monthly payment going, to benefit you or someone else )

They also needed about the same amount of cash to purchase as they would have needed for the security deposit and first months rent for the rental.

This does not even begin to factor in the tax deductions, appreciation, paying the mortgage down and gaining equity aspects of this equation. These items would make the monthly saving over renting well over $200.00 a month!

Yes, we pay for the house we live in. The question is, are we paying for it for someone else, or for ourselves?

The second example for buying Lancaster Real Estate as an investment would be a little nicer home that would cost more in a great location. This home, if bought right may break even on a monthly basis. So, it would pay for itself but it would not be putting cash in the pocket of the owner on a monthly basis. However, let’s say you own that home for ten years. During that time the tenants have greatly paid down your mortgage and because it was a desirable floor plan in a desirable location the home has increased in value and now has a great deal of equity in it. That home was a good deal!

So, it’s important to understand what your goals are when looking for a property. What is a good deal to one person may very well not be anything the next buyer would even consider.

I am looking for a GOOD DEAL! I have often heard a potential buyer make this statement. And let’s face it, who doesn’t want a good deal? A “good deal” can mean different things depending on the goals and needs of the buyer. Part of my job is finding out what those goals and needs are.  For today let’s talk about a real estate investor.

For example, if you are a real estate investor looking to buy a home in Lancaster County to fix up and resell, your requirements for a good deal will be different. You will need to buy a home at a price that will allow you room to make a profit after putting money into the home for improvements and reselling it rather quickly. Most professional investors are in a position to look at a property and make a VERY quick decision. They can usually make an offer without any contingencies such as needing to sell a home in order to be able to purchase the investment home. They can often make the offers cash, as is, with a very quick settlement. This allows them to offer the sellers the best possible terms and improves the chances of the investor buyer to purchase the property at the best price possible. This type of real estate buyer is not looking at the home thinking about if the master bedroom will be big enough or if the home is in the right location for his or her commute to work or if they like the layout of the kitchen. This buyer is looking at the numbers. Does this make sense and can they make the needed profit. So, the consideration for a true real estate that is looking for a good deal or a well priced Lancaster Home because they are an investor who is buying to resell is very different.

How about someone that wants to buy a home to rent out to help them build long term wealth or have monthly cash flow? Well that buyer will have very different requirements than the fix and flip buyer. Also, the home that's a "good deal" for that buyer-investor may be very different, because that buyers needs is different, than what the first buyer needed in a good deal.  More to come in my future posts!

Example

VA loans are eligible for veterans of the military with a certificate of eligibility.  A Veteran can get a 100% loan up to the maximum VA loan amount and the seller can pay ALL their closing costs which would allow a Vet to get into a home with no down payment and no closing costs.  The VA Funding Fee can be rolled into the mortgage or paid by the Seller. Just last week I represented a buyer making an offer on the very nice townhome. This buyer put the home under agreement at a sales price in the $135,000 range. His total monthly payment will be $935.00 a month. This buyer was getting ready to rent a smaller home that was not as nice and his RENT payment was going to be $985.00 a month ! So, he is buying a his OWN HOME , a nicer home and his payments will be $50.00 a month less than his rent! This does not even begin to take into account his tax benefit of owning, long term appreciation and so much more. VA can be a great option for many buyers.

When the Vet sells the home, their VA loan is assumable at the existing interest rates but does require qualification of the new buyer.  The benefits would be a possible lower interest rate and lower closing costs. This may also help make the home even more desirable to new buyers.

There's more to finding the "Right" home than driving around looking at houses.  A Residential Finance Consultant can help you make better decisions to help you understand the tax advantages, financing alternatives and investment aspects of homeownership.

Buyers who are ready to take action can still lock in the lower MIP.  If they have a contract signed by all parties and get a FHA case number issued prior to 4/18/11, the lower MIP rate will apply.

For a $175,000 home at 5% interest, the new MIP will mean the buyer will pay $35 more to live in the same home.  If you don't have to pay more, why would you?

Another possibility is that if interest rates go up .5% by the same effective date, you could pay $88 more to live in the same home.  What would you spend $88.36 on if you don't have to make a larger payment?

April 18th is a Monday this year, so you'll probably need to get your contract completed by the previous Friday at the latest to give your loan officer an opportunity to order the case number.  If you don't have a loan officer, Kim and I can recommend a reliable one.  We can even give you the names of a few if you want to compare. Making good decisions will improve your entire homeowner experience and save you money.

Yes, come January and February things do tend to slow down some. But, if the weather is not bad and we don’t have a lot of snow often even these months can be rather busy. Bottom line is, life goes on, and many of the reasons people have a need to move goes on, regardless of the month of the year or the outside temperature.

This weekend also kicks off the Annual Fall Open House at Eastland Alpacas in Mount Joy. Visitors, including children, can "get up close and personal with an alpaca or baby cria." Enjoy a wagon ride, view an obstacle course demonstration by the 4-H Club, and then stop by the "Boutique" featuring a variety of items made from warm, soft alpaca fibers. Here is a photo taken during last year's open house:

Have a fanastic fall weekend; whatever you do. And if you're running in the Amish Country Bird-In-Hand Half Marathon on November 6th - We wish you good luck!

Have fun, whatever your plans are for the weekend. The weather should be great!

This colorful photo that was taken at Stauffers Fall Fest a few weeks ago.

This was the heading from our recent publication from the Lancaster Association of Realtors. The average sale price here was UP 7 percent over August 2009 to $202,606

This is the recap of the areas numbers through August 2010. Though pending home sales for the month were down 27 percent over August 2009, pending sales over the last 12 months show a 6 percent increase over the previous 12 month period. The Lancaster County real estate market continues to compare favorably to the national market.

48 percent of the homes and condos that sold in August were on the market for 60 days or fewer. ( National trends report 5-6 months months on market averages )

If you are a potential home buyer, today's low interest rates can have a BIG impact on you. For many buyers obtaining a mortgage, a mere 1% interest rate rise has the same effect as a home price increase of 10%!

For example: Let's say you are looking at a home priced at $175,000, and the interest rate is 4.5%. If you wait too long, and the rate increases by just 1%, buying that same home would be like making payments on a home priced at $192,500.

So what do low rates mean? You get MORE HOME, FOR LESS MONEY! Lower rates mean lower payments. Your interest rate often has a much larger impact, than the actual home price.

Click here for a graph showing the effects of interest rate increases.

Bring you own chairs or blankets and be prepared for a great day.

Lancaster ranked #7, with 8 percent of homeowners owing more on their houses than their homes are worth on the market; 21.5 percent of single family homes nationwide were underwater in the second quarter, the article said. Pittsburgh ranked #1 with 5.6 percent of homeowners underwater.

The analysis said Lancaster has a low cost of living and proxminity to major cities, and that the housing market there is leveling out more quickly than elsewhere in the state.

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-150

The extension applies only to transactions that had ratified contracts in place as of April 30, 2010, and have not yet closed.  There will be no gap between June 30 and the date the President signs the bill into law. 

This is really helpful for some folks who may have had list minute mortgage issues or other factors that prevented them from being able to close by the end of June. This may also benefit some people who are building homes. In some of these cases the builders may not have been able to complete the homes in time for the end of June deadline.

So what's the big change? Sometime this Summer the guidelines will change and the sellers will only be allowed to contribute a maximum of THREE percent toward the buyers costs. For many buyers this will make it much more difficult to come up with the funds needed to buy their home. For some buyers it will make it impossible! Buyers need to be aware of this as it could come as a surpise if they wait to long to "make the move"

They did not realize how the taxes would be calculated on the their new home. They were often not aware of items in the "builders agreement" that could hurt them down the road. They did not know their options with construction financing verses end loan financing and which one may protect them more.I could go on and on. Bottom line, it costs a buyer nothing to have representation and it can cost them a GREAT DEAL not to!

When selecting an agent to represent you in new construction be SURE to ask that agent questions. Don't assume all will do the same thing or all are equally qualified. Just a few of the questions to ask should be.

a) How many buyers a year do YOU represent?

b) How often have you represented buyers in new construction?

c) What kind of things will you do to protect me during the process and after?

Again, I could go on. The key here is you don't want an agent using YOU to practice on. You want an experienced professional in your corner.

Half of these sold in 60 days or less!

Pending home sales rose to 315 from 279 a year ago-a 12.9% increase! Even with all the crazy weather this year.

The average sales price was $187,429-an 11.4% increase over last January.

Take a look at the breakdown we have included here as well as a press release on these very encouraging numbers!

PRESS RELEASE: The Lancaster County Association of Realtors® (LCAR) today released their monthly recap of the area’s real estate market activity in January 2010, noting several positive indicators:

• Pending home sales rose to 315 from 279 a year ago—a 12.9% increase.

• New listings increased 25.9%.

• The average sale price was $187,429—an 11.4% increase over last January.

• 197 homes were sold, up 4.2 percent over January 2009.

• Half of the homes and condos that sold in January were on the market for 60 days or less. 

LCAR president Bob Rose noted, “Last year we started off slowly and then picked up in the last quarter. The January stats show a continued upswing, probably due in part to the home buyer tax credits, but also due to the overall long-term strength of our market. While Lancaster County real estate may have its highs and lows, they’re certainly not as extreme as many other markets.”

“It’s especially encouraging to see that half the homes that sold in January were on the market 60 days or less, and we hope that continues. The numbers also seem to indicate that first-time home buyers are continuing to take advantage of the tax credits, but current home owners don’t seem to be as aware of the incentive.”

When the tax credit program was extended in November, qualified homeowners who have lived in their home for five consecutive years within the last eight became eligible for up to $6,500 in tax credits. First-time home buyers who have not owned a home in the last three years are eligible for up to $8,000. The new deadline for both tax credits is April 30th to put a home under contract and June 30th to close.

“When you combine the tax credits, the relative strength and stability of Lancaster County’s real estate market, plus historically low mortgage rates and reasonable prices, we would expect to see much more activity over the coming months.” 

Contact a Realtor® for more information about the tax credit program.

LCAR, representing more than 1,500 members involved in all aspects of the real estate industry, is one of more than 1,800 location associations nationwide that comprise the National Association of Realtors®.