To List or Not to List
Posted: February 10, 2012 Filed under: Uncategorized | Tags: Absolute Mortgage Banking, Buying, Finance, Homeownership, lending, Market, money, mortgage, real estate, Selling Leave a comment »
Let’s Let’s say one is sitting in their beautiful home in lovely Palo Alto, CA enjoying the wonderful weather and contemplating whether to sell that home. Let’s also say that the home has a ton of equity, so much so that the TAXABLE capital gains on that home will be $1mm. Today, tax on capital gains is running $15%, so this fortunate client is looking at a $150,000 tax bill*. But the client also sees the market doing well and thinks, “Maybe I should wait until next year to sell..?” While that’s certainly an option, let’s look at what might happen:Million Dollar Homes for Less than $2,000 per Month?
Posted: January 18, 2012 Filed under: Uncategorized | Tags: financing, housing, lending, loans, money, mortgage, rates, real estate Leave a comment »Happy New Year!
Is it just me or do you also find it absolutely fascinating that today’s buyers can purchase a $1mm home for less than $2,000 per month? No really, as one does the math associated with purchasing a $1mm home with 20% down and taking into consideration property taxes and insurance in addition to principal and interest, the tax-adjusted total is less than $2,000 per month. And how about the fact that it’s not just about low mortgage rates, but the fact that the amount of principal repaid on loans today is 30% MORE than what is was just three years ago. That’s right, buyers today are building 30% more equity with every payment that they make on their home or investment property versus three years ago.
So let’s combine cheap money with:
- Clogged freeways again (higher employment)
- Stabilized property values
- Higher employee/employer confidence
- Easier qualification for loans
- 2009 tax returns no longer required for self-employed buyers who file 2011 returns
And anyone in real estate sees that Spring 2012 may set a record associated with closed sales. Which begs the question, “Why are all of the economists forecasting a rather flat year for 2012 as it relates to closed transactions?” And my answer is that the forecasts are very conservative, and I am very confident that expectations will be exceeded. Plus, agents are working more effectively and efficiently because of tools/services like Producers Forum.
Just a reminder that those who bought investment property in 2003-2006 and elected an accelerated depreciation schedule should highly consider a 1031 exchange today since it likely makes financial sense to purchase a replacement investment property give the depreciation benefits have likely decreased dramatically at this point.
So what’s happening with mortgage rates? How about the fact that 5/1 ARMS are running BELOW 3% and that the 30-year fixed is running BELOW 4%! As you know, rates applicable to any individual client are based on a variety of factors, but he highest-qualified borrowers are closing on these rates. Those who aren’t as well qualified are still receiving great rates, even when debt ratios are high and down payments are low. The main concern about rates is the fact that there are more and more fees being attached to loans, which will force rates higher. This is something that we predicted in 2010 and it’s finally coming to roost. This only makes sense given the fact that processing a loan has twice the requirements and requires twice the effort to close versus what we experienced in 2007. As such, it’s high time to reach out to those who may be in the market to sell or buy since we appear to be in an optimal period.
Finally, if you’re wondering whether a transaction involving a “jumbo” mortgage can fund in three weeks, we closed one last month. A great testimonial about that transaction is posted here.
