August 2014 Fine Homes Magazine

Welcome to our Fine Homes magazine, featuring the finest luxury homes on the market in Utah County.

Luxury homes are a cut above and at Prudential Utah Elite Real Estate we specialize in helping buyers and sellers of these fine homes. In fact, you could say we’ve cornered the market when it comes to homes over $750,000. Last year 89% of luxury homes sold in Utah County were sold by Prudential Utah Elite agents. Our agents are among the most trusted and experienced agents when it comes to high-end real estate.

If you are thinking of buying or selling high-end real estate, let us show you what we can do for you.
Sincerely,
Bruce Tucker
Principal Broker/Owner

 

Homeownership, Your Best Piggy Bank

We’ve talked in the past about some of the financial aspects and benefits of homeownership, including:

Real estate is the best long-term investment

Tax benefits of homeownership

Is now the time to buy?

Mortgage rate as a factor of affordability

A recent Federal Reserve report took a look at “Changes in U.S. Family Finances“, and specifically examined the relationship between homeownership and its impact on net worth. The study found several interesting correlations:

  • Homeowner Net WorthHomeowner vs Renter net worthThe average American family has a net worth of $77,300
  • Of that net worth, 61.4% ($47,500) of it is in home equity
  • A homeowner’s net worth is over thirty times greater than that of a renter
  • The average homeowner has a net worth of $174,500 while the average net worth of a renter is $5,100

If you want to get on the road to homeownership and improve your family’s financial standing, we’d love to meet with you. Becoming a homeowner is easier than you might think. Let us help you navigate the process.

Do-It-Yourself Home Maintenance Advice

Whether you are planning to stay in your home forever, or fall into the group of homeowners that moves every 5-7 years, home maintenance is extremely important. The last thing you want to do is let your most valuable asset fall into disrepair. It can affect your quality of life if you are staying in the home and your resale value if you are looking to sell. In fact, many home maintenance items are quite easy and affordable if tackled early on. Whereas if left, they tend to get worse and more costly. Our friends over at HouseLogic.com have put together an entire library of home maintenance tips and advice that will help save you money. We’ve included several links to some of their best advice below. We even recommend that you sign up for HouseLogic.com’s updates. They do a fantastic job of helping homeowners make informed decisions about their home.

DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic 6 DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic 5 DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic 4 DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic 3 DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic 2 DIY_Home_Improvement___Do_It_Yourself_Projects___HouseLogic

Here are some more links to great home maintenance advice:

Home Maintenance Strategy

5 Critical Maintenance Tasks

The Best Home Maintenance Tool

99-Cent Maintenance Solutions

Preventative Home Maintenance

 Caring For Your Plumbing System

Checklist For HVAC Maintenance

 

Mortgage Downpayment Misconceptions

Mortgage Misconceptions 1We continually hear from agents stories of buyers who thought they couldn’t buy a home and then the joy and happiness they experience when they close on their first home. We aren’t sure why buyers disqualify themselves from buying a home without first meeting with an agent and a lender, but we do know it happens far too often. Don’t let this happen to you!

Perhaps the first misconception is that it costs money just to meet with an agent and a lender to find out if you qualify. Nothing could be further from the truth. Our agents gladly consult with buyers for FREE. And more importantly, they can help you find a good lender who will run the pre-qualification process for FREE. So there is nothing to lose to find out if 1. you do qualify to buy a home, or 2. what you need to do to get qualified and on the path to homeownership.

The next misconception is what it takes to actually buy home. In June 2014 Freddie Mac reported:

  • A person “can get a conforming, conventional mortgage with a downpayment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets)”.
  • Freddie Mac’s purchase of mortgages with downpayments under 10 percent more than quadrupled between 2009 and 2013.
  • More than one in five borrowers who took out conforming, conventional mortgages in 2014 put down 10 percent or less.

Christina Boyle, Freddie Mac VP & Head of Single-Family Sales said, “Letting more consumers know how downpayments are determined could bring more qualified borrowers off the sidelines. Depending on their credit history and other factors, many borrowers can expect to make a downpayment of about 5 or 10 percent.”

 Mortgage Misconceptions 2

The fact is, homeownership has tremendous cost saving benefits that benefit renters. However, those same people that could benefit from homeownership are disqualifying themselves simply because of the misconception that it is out of their reach. Meet with us today and let us help you get pre-qualified and on the path to owning a home of your very own!

Thinking About “For Sale By Owner”? Think Again…

There’s a famous American Indian saying about walking a mile in someone’s moccasins before you judge them. It’s easy to look at almost any line of work and think you could probably do what they do all on your own for the sole purpose of saving money. Well, of course, with the exception of maybe brain surgery. But we could totally pull off minor surgery on our own right? One of the problems that the real estate industry faces is we don’t tell our clients the full story of what we do or what it takes to sell their homes. This leads many consumers to falsely believe that it’s an easy process, one they can simply do themselves by planting a sign in the front yard and waiting for those buyers to come charging through their doors. Sadly, that rarely happens, and most For Sale By Owners (FSBO) eventually get frustrated and list with an agent. In the process though, they lose valuable time. But what of those who actually do successfully sell on their own. Again, sadly, many sell for less than they could have gotten had they used an agent and exposed their home to more potential buyers. In fact many buyers who pursue FSBO’s typically ask for a reduction in price since there isn’t an agent involved, thus reducing the possible “savings” from the start.

The process of selling a home is fraught with land mines and pitfalls that a professional can successfully guide you through unscathed. There are laws that must be followed. Disclosures that must be made. There are typically more than a dozen different parties that you must coordinate with to guide a sale to fruition. That is of course assuming you get the offer to purchase. Putting a sign up nowadays is more of a marker to help the buyer correctly identify the home they originally found online. Agents have strong internet marketing plans that include syndication of the MLS listing to various portals that are popular amongst today’s home buyer’s. The bottom line is if you are thinking about For Sale By Owner, take the time first to meet with an agent and really get to know and understand what they do and what they can bring to the table when it comes to selling your home. We think you’ll be surprised and find that it’s both well worth it to have a professional in your corner and you most likely will net more money.

FSBO

Mortgage Rate as a Factor of Affordability

Recently we addressed the question, “Is Now The Time To Buy?” We examined the effects of increasing mortgage rates and prices would have on a future purchase compared to a purchase today. The study found that an increase of price from $250,000 to $265,000 combined with a rate increase of just over 1% to 5.4%, resulted in a monthly payment increase of over $265/month.

With the prospect of mortgage rates increasing, we thought it would be good to look at the average interest rate and mortgage payment over the last 4 decades and compare that to where we are currently. As you can see below, historically we are experience the best mortgage rates. This has a direct relation on your mortgage payment and affordability. Many consumers wish they had acted when rates were in the 3% range. While those rates may never be seen again, you still have the opportunity to snag a historically low rate, making owning your own home more affordable than renting.

Cost-across-the-decades-1500

Want to learn more about the road to homeownership? Meet with one of our incredible agents today and take advantage of this opportunity to own affordably.

Radon and Your Home

RadioactiveThere has been a lot of talk in Utah recently about radon. Last year the Utah Legislature even addressed the issue with proposed mandatory testing. REALTORS® have been at the forefront of radon awareness, even launching a campaign to encourage homeowners to get their homes tested. Surprisingly, testing is rather inexpensive and the cost to remedy is also quite reasonable.

Radon is a result of the naturally occurring radioactive breakdown of uranium in soil, rock and water. That breakdown gets into the air we breathe, which is why radon is a leading cause of lung cancer. It tends to get trapped in indoor spaces, and your home is where you spend most of your time, leading to your greatest risk of exposure. It can be found everywhere, but Utah seems to have a fairly high percentage of radon exposure. Radon levels above 2 pCi/L are considered risky. Anything over 4pCi/L it is recommended that you install mitigation devices to reduce the levels in your home.

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How Radon entersRadon can get into your home in various ways, including; cracks in floors, cracks in walls, gaps around pipes, construction joints and even through your water supply. Nearly 1 out every 15 homes has elevated levels of radon. Testing can be done via a professional or you can do self testing as well. Kits can be obtained at Home Depot or Lowes. You can also order them online. Utah has a special arrangement for test kits for only $7.95 at http://doctorhomeair.com/utah/.

The EPA provides an entire guide to help you understand radon and the risks it might pose to your home and your health. We’ve provided it for ease of access, simply click on the cover page image below.

For more answers to your questions on radon, please visit  http://www.radon.utah.gov/ or http://www.epa.gov/radon/pubs/citguide.html

EPA Radon Guide

 

 

Preparing Your Home For A Natural Disaster

Once again we are hearing about devastating natural disasters wreaking havoc in our country and around the world. While we are fortunate in Utah to see very few of these natural disasters, it does not mean that we are immune. Utah is prone to fire, flood and even earthquakes. It’s important that you take some precautions to make sure your home is ready for these possibilities. This infographic covers many of the issues you should be concerned about when it comes to preparing your home for a natural disaster.

how-prepare-natural-disaster-infographic_a68c15f98be8b356a3f056f52359b994

Utah Home Prices Up 7.2% Year Over Year

FHFA has released their 1st Quarter year over year home price analysis, showing Utah experienced at 7.2% increase in value. This is good news as many homeowners are still trying to regain the value lost in the recession. Reports continue to come in that home values are getting closer and closer to pre-recession prices. We are seeing this as sellers who previously couldn’t sell are now listing their homes. New listings in Utah County are up 21.3% year to date compared to 2013. Total inventory is up 12.4%.

Now is a great time to speak with a REALTOR® to find out what your home value might be. Please keep in mind websites such as Zillow that use Automated Valuation Models, or computers, to assess value are subject to inaccurate fluctuations. The image below shows the change of value of 9 homes in a two block radius in Orem, over just a 30 day period.

FHFA-State-Map-5-27-14FHFA-Regional-Map-5-27-142

Zestimates are a JOKE

Is Now The Time To Buy?

This is probably one of the most popular questions real estate agents get asked. And while that question is very specific to the individual’s current financial situation, we can analyze the current market conditions and expectations to give a general answer. Some of the factors that come into play when considering if it is the right time to buy include; pricing, financing rates, and appreciation. So let’s take a look at what is currently happening and what the projections are on these factors.

Pricing – As of our last report, both the median and average sales prices were up substantially year over year and year to date.

April 2014 Price

 

Financing Rates – While these have fluctuated recently, the overall consensus is that they must go up. They have been artificially kept down to keep the economy on a recovery path.

30 Year Fixed Rate MortgagesAppreciation – This is the anticipated growth in pricing. While this is good if you own, it’s bad if you don’t own yet, as it means the price will be higher the longer you wait.

Projected Mean Appreciation

 

Now when you combine all of this together, and you compare what it costs today to buy to the projection of what it could cost later to buy, it helps when considering the question “Is Now The Time To Buy”.

Cost of Waiting

 

As you can see in the example above, changes in rates and pricing can create a very expensive change in monthly costs, which of course can add up over the life of a 30 year mortgage. To find out if now is the right time for you to buy, meet with one of our great agents. They can walk you through the process and help you find a mortgage professional to guide you through the financial side of purchasing a home.