***if you know anyone who is thinking
about buying a home, our next classes are:
Saturday,
January 19, 2013, from 1pm-4pm at the Vancouver YMCA located at 11324 NE 51st
Circle (corner of SR-500 & 112th/Gher Road).
Monday,
January 28, 2013, from 5pm-8pm, at the Marshall Center, conference room at 1009
E. McLoughlin Blvd. (kitty corner from Clark
College)
Remember….with reservation…we will throw in lunch,
or dinner! 🙂 …we also have other class dates/times…check out the
website
Please go to www.learningtobuyahome.com, or www.traciedemars.com for information on ALL upcoming
Free Community Home Buyer Classes. I do keep all updated information, and
directions there… I would love to hear from you about when you might like to
see the classes. These classes are for you, so please, I love your comments and
feedback!! 🙂 ***
Happy
Sunday oops…er…Monday~
Yes,
again, I am a day late this week. I spent this weekend trying to get all my 2012
receipts in order, and entered into the spreadsheet….I am about halfway
through. Ugh! So many…. 🙂 This is what I get for procrastinating, but I want
to point out that it isn’t March yet so I am technically AHEAD of the game!
LOL
I
know that I was hoping to talk about credit this week, but Chris had a family
emergency, so he will get that to me as soon as he can, until then… I have a
lot of questions this week about building….whether or on a lot in a
development, or with a builder on acreage. Building is fun since you do get to
choose so much…the color/siding of the home, the flooring, the counters, the
cabinets, the fixtures, the floorplan, etc., but there is definitely some
drawbacks to it as well. So….let’s look at a couple of things…
There
are 3 values to the home:
Taxable
Value…. this is value that the county uses to assess the amount of
taxes owed on the home. This is the lowest of the three values, and is usually
about a year or so behind the actual market value of the home since the county
looks at old records.
Building
Value…Â this is the approximate cost it would take to rebuild the home
in case of destruction….such as fire. This cost is driven by cost of
materials, gas, economy, wage costs, etc. For a builder they base building value
on these items, construction loan rates, and availability, and cost of land to
build on.
Market
Value…Â this is the value of the home on the open market if the seller
were to put it up for sale. This value is driven by the economy, interest rates,
supply/inventory of homes on the market, how many buyers are purchasing homes,
etc. In an ‘average’ market this is the highest value of a home.
About
6 years ago we had low supply of homes, and a high demand for them and it drove
up the prices of homes. We also had some other external factors that gave us a
‘bubble’. People were avoiding mortgage insurance by dong 80/20 loans that were
NOT in their best interest. People were taking out loans based on equity to pay
off things, or doing things with, that was in essence, ‘borrowing’ from a
non-existent number. Your home is NOT a piggy bank. Equity is only a
number….not actual cash in the bank….it is more like, ‘easy come, easy go’.
We all know what happened then when the economy got in over its head…..People
then started going into foreclosures and short seling their homes.
When
the market ‘popped’, home prices fell to about taxable values, and it was
cheaper to buy a home already built rather than to have one built. The county
put a hold on land purchases for building…and most builders couldn’t afford to
buy that land to have it developed anyway since no one was building anyway.
The
market bottomed out in 2011, as prices ‘bumped’ along all year, and started
going up in 2012. Currently, it costs about as much to have a home built in a
development as it does to buy a comparable one currently standing…and there
isn’t a whole lot of homes on the market, so building has become popular again.
It is kind of a trade off though….newer, bigger home on a smaller lot vs an
older, smaller home with a bigger lot in an established neighborhood.
Interest
rates are now very low, and while prices are higher than what they were last
year, interest rates are lower than they were last year. The difference is that
we have less home inventory, and more of a buyer demand for homes. What is
helping us currently is that the inventory of bank owned homes has a couple of
years and that is helping to keep prices more level. This is helping a lot of
people… It is also helping the builders. Homes are selling above tax value
again and home values are comparable again to building values so building is
attractive again. Builders are having a hard time finding land though, and
development costs have gone up.
This
is different than building on land/acreage. When you are attempting to build a
home on acreage you have four routes. You can buy a home already built on
acreage which is the cheapest route with acreage. You can purchase a home to be
built with the builder on land they already have, and this is the second best
way to do it since the builder already has incurred the costs of the land and
development. The third route is to contract with a builder to have them purchase
some land, and them build a home on it. Most builders do have a charge for this
as they are taking all the risk of buying the land, developing it, and then
building it. You will need to know your numbers as unforeseen costs in buying
and developing the land can limit how much house you have built….size and
finishes. The fourth way is to buy the land yourself, and then contract with a
builder to have a home built. What is the difference between option 3 and 4?
Risk…. In option 3, the builder takes all the risk…the construction loan,
the costs, and the turning the construction loan over to a home loan. In option
4, you take on some of the risk….or rather your bank does. Not many banks will
loan on bare land anymore….and not with FHA loans or interest rates.
Remember….banks don’t like risk. It is less risky for the bank to loan to a
builder which is a company, than it is to loan to you…a single person/couple.
I
hope this all helps! Next week we will go over the Pros/Cons of building a home
since I have run out of space here. Have a good week!
Please call, email, text, or even facebook
me (at Tracie DeMars
Real Estate) anytime with any questions, or if there is anything I can do to
assist you with your home buying adventure! As your buyers agent, I am, as
always, here to help!! 😀
Thank
you again for your business and for your referrals!
…as
always…if you have already purchased a home, or no longer would like to
receive these emails from me, please let me know and I will be happy to remove
you from receiving any more.
Thank you again for attending
the home buyer education classes, and I hope that you will continue to refer the
classes out to your friends, family, and co-workers. Upcoming class dates and
times are located at www.freehomebuyerclasses.com. Just click on the link on
the left hand side. Or you can go to www.learningtobuyahome.com and click the
links.
We
appreciate your referrals and word of mouth! Also, if you have somewhere that we
can place the flyers at, please let me know….
:-D
Next Week: Credit….explained (coming up –
Inspections…explained & Mortgage
Insurance….explained)
Last Week: Tax Benefits of owning a
home
Remember that you can always go to ‘Tracie
DeMars Real Estate’Â on
Facebook for all of my weekly blogs
and upcoming class dates/times/locations.
I post the weekly blogs on there as
well.
Have a great day, and I will talk to you soon,
;-D
