Real Estate Weekly: October 14, 2022

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Record-low interest rates is renewing interest in the housing market for many people.

“When sellers are interviewing real estate agents to market their homes, their primary focus is usually on the advertising that the agent will offer them,” says Jessica Goodbody of Weichert Realtors.

Let us help you meet your marketing goals by advertising your listings in Real Estate Weekly.

RealEstate

Why is a home’s location so important and what makes it “good”?

By Erik J. Martin CTW Features

It’s been said that the number one rule of real estate is “location, location, location.” Indeed, the ad dress can prove to be crucial when deciding whether or not to purchase a home for sale. But is it really the top criterion buyers should prioritize when shopping for a dwelling in 2022?

Absolutely, many experts agree.

“In my opinion, home buyers should place location at the top of their list above any other deciding factor,” says Jason Gelios, a Real tor in Southeast Michigan.

“Choosing the wrong location can easily result in buyer’s remorse.”

Zev Freidus, a broker at

ZFC Real Estate in Boca Raton, Florida, subscribes to that theory.

“Consider that a home’s location is the only aspect of real estate that cannot be changed or improved in the future,” he points out. “The structure itself can be reno vated, rebuilt, or improved in other ways, but the loca tion is what it is. When you ponder the fact that the rea son real estate is often such a good investment is because of the land, not the struc ture – which can depreciate while the land itself appreci ates – it becomes obvious that the location of the land is crucial.”

Several important factors are tied to the location of a home. These include the nearby school district and the quality of public schools

within it; crime rates in the area; community amenities, including emergency, police, and fire services; proximity to nearby stores, restaurants, hospitals, libraries, and other desired facilities; nearness to parks, highways, airports, and desirable recreational features; and much more.

“Your ZIP Code can affect things like shipping costs and delivery times, too, as well as matters like insurance rates,” notes Zach Larson, a personal finance expert and co-founder of Pine applemoney.com. He says location should rank within the top three determinants factoring into your purchase decision, alongside home price and home size/ameni ties.

When evaluating location, also give thought to infra-

structure issues and avail ability of utilities, including Internet in the area.

And even if you don’t have kids or plan to raise a family in the future, remember that the quality of your nearby school district will significantly affect property values in your neighborhood – including the value of a home you may be thinking about buying.

A “good” home location versus an undesirable one provides all the amenities and needs a buyer is looking for, per Gelios.

“Other factors include the safety of the area and the overall appearance of the neighborhoods,” he con tinues. “Prospective buyers should further be aware of multiple homes for sale on any given street. If too

many homes are listed on that street at the same time, that could mean a major problem exists on that block or nearby.”

It’s smart to carefully evalu ate how a home’s location will change or evolve over time, as well.

“For example, it may be a safe neighborhood today, but what is the trend of crime in the area? If it’s get ting worse, there’s a real pos sibility you’ll wake up one day and no longer be living in a safe neighborhood,” cautions Freidus.

Lynne Martin, owner of Cash for Houses in Denver, says there are other impor tant questions to ask, as well, before committing to a home purchase.

“How close is the house to schools and malls? How

accessible is the road during winter? What is the standard of living among the people in that neighborhood? And what is the average cost of homes for sale within that zip code?”

Lastly, also give thought to the availability of vacant to developable land in the immediate vicinity.

“If you think forward 10 years, the home will be 10 years older and likely be dated or may need some repairs – all things that can lower its value,” Freidus says.

“Fortunately, the land typi cally will appreciate a higher rate than the depreciation of your structure. But if there is a large supply of vacant developable land, this may not be the case, at least tem porarily until the area is fully developed.”

Trading home equity lines of credit for cash

Question:

We want to have cash on hand in case of a job loss or emergency expense. We have a lot of real estate equity because the value of our home has risen so much during the past few years. Is this the time to get a home equity line of credit so we can get cash if we need it?

Answer:

A home equity line of credit (HELOC) allows borrowers to get cash from their property on an as-needed basis up to a maximum loan amount. HELOCs typically have adjustable rates and two phases. In phase one, a HELOC allows the borrower to take money out and put it back in, much like a credit card. In phase two, any remaining loan balance from phase one is treated as a loan that must be repaid over ten or 15 years. No further withdrawals are allowed in phase two.

If a lender requires 20% equity, your current loan balance is $150,000, and your property

is worth $500,000 you may be able to obtain a substantial HELOC.

The property is worth $500,000.

The lender wants you to have 20% equity or $100,000 in this example. You have $400,000 in remaining equity. Your current loan balance is $150,000.

Subtract $150,000 from $400,000 and you might qualify for as much as a $250,000 HELOC.

A HELOC can be attractive because it gives homeowners access to their equity with a minimal cost, especially if it turns out some or all of the line is unneeded.

However, with a HELOC, banks have the right to reduce or suspend HELOC withdrawals if property values go down. And that’s not all.

“In addition to permitting lenders to reduce or suspend credit limits following a significant decline in a property’s value,” the FDIC explained in 2008, “Regulation Z also permits such actions if the ‘creditor reasonably believes that the consumer will be unable to fulfill the

Q&A Q&A

ASK OUR BROKER

By Peter G. Miller

repayment obligations under the plan because of a material change in the consumer’s financial circumstances.’”

In other words, when you need emergency cash, you need the money at that moment. That’s not a certainty with a HELOC. To get cash from your property for emergency use, you might want to consider a second mortgage or a cashout refinance now, before a need arises. These options put cash in your pocket upon closing, but there are costs for origination and interest.

Banks are not pushing HELOCs, so even if you want such financing, it may be difficult to get. According to the Federal Reserve Bank of New York, in the first quarter “limits on home equity lines of credit (HELOC) declined by $6 billion.”

For details, speak with local loan officers and be sure to ask about such matters as interest rates, up-front costs, and – for a HELOC – the length of each phase.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

for

Dicing and slicing second homes

Sharing the costs, responsibilities and perks of a vacation home

By Nancy Mattia CTW Features

Americans have a passion for beautiful homes, with vacation homes holding their own special appeal. Like dessert, though, second homes are tempting, and not neces sary.

Enter online platforms like SecondShare, Ember, and Pacaso, which offer second home ownership, but in more affordable slices.

“Fractional ownership” or “co-ownership” are the commonly used terms for this model. Each platform has its own unique approach to securing homes, providing ownership to multiple parties, managing the property and arranging owners’ stays, but the basic idea is that a home is pur chased by the platform, which arranges legal ownership for several parties, from

two to four or more.

Fractional ownership isn’t a new concept, says Jason Gamel, president and CEO of the American Resort Development As sociation {ARDA}. In the early 2000’s, fractional shares of condos and homes associated with resorts, which provided maintenance and other services to fractional residents, mushroomed in popularity, he notes.

While fractional ownership firms say they are distinct from a “timeshare,” the distinction can get blurry, says Gamel. “Most states have a legal definition of what a ‘timeshare,’ is,” he explains. Often, factors defining a time share include reoccurring occupancy rights, for at least one-seventh to one-eighth share of a year.

That means one-eighth of fractional ownership could be like a timeshare. But, most timeshare owners have just a week or

two share, Gamel acknowledges.

Given this is a model many buyers are unfamiliar with, due diligence investigat ing details like the ease of scheduling visit times, what to expect in maintenance and upkeep charges, and how owners can sell their share, is advised.

Real estate agents are beginning to team with some of the platforms, and may in troduce buyers to the concept. Josh Dotoli, of Compass Dotoli Group, Ft. Lauderdale, Fla., says he might show buyers who want a certain type of home but can’t afford the prices offerings from Pacaso.

Himself a co-owner of a home in the Florida Keys, Dotoli says he offers clients his personal experience when guiding them through the process. So, will you inquire about the possibilities of where co-owner ship may take you?

425 East Jones Road in Sedro-Woolley, WA

Brand new 3 bedroom, 2 bath, 6,000 square foot lot. 2 decks, fenced and cross-fenced, 2 car concrete spaces, and birch trees. Ranch Rambler. In a nice neighborhood.

Price Reduction

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Gorgeous low maintenance 1 level Condo in desirable Eaglemont Communit y, features an open floor plan with cathedral ceilings, great room, gas fireplace. 2 bedrooms plus office/den, craftsman st yle millwork. Kitchen w/ plent y of cabinets, stainless steel appliances, space to enter tain with large Granite eating bar & dining with sliding door leading to covered patio to enjoy nature. Deluxe primar y suite with jetted tub, walk-in closet & shower. Large 2- car garage and spacious driveway. Truly a home with all the comfor ts and privac y! MLS#1990564

Pacific Pl ace # 20, Mount Vernon

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nookaCHamPS HillS DriVe lot 136, mount Vernon $235 000

Ready to Build with power, water,

Riverside Health

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Danya Wolf

Classic 1965, 4 bedroom/3.5 bath home one block east of Skagit Valley Hospital. Billiard room, bonus room and two sinks in basement. Also, near medical facilities, schools, and Hillcrest Park. The outdoor patio is next to a brick barbecue. There is also a covered patio. This classic beauty has many favorite mid-centur y modern features; vaulted wood beamed ceilings, slate entr y, extensive built-ins, and a lovely stone fireplace in the daylight basement. The workshop in the far corner of the large, enclosed backyard is wired for power tools.

MLS#1981154

Danya Wolf (360) 708-8294

104 n Haw tHorne St, Burlington $399,000

This coz y 2 bedroom Burlington home needs some work but has lots of personality : beautiful pergola to welcome you home; ample cabinets and counter space in the step down k itchen, bath has a farmhouse style sink and plenty of room for a stack ing

washer/dr yer; off-street park ing and awesome trees and shrubs. Covered concrete patio. Private yet in town and close to Maiben Park

Danya Wolf

1919 e HigHlanD aVe, mount Vernon $420,000

Three bedroom, 1 bath rambler has a large 2-tier deck with built-in bench seating and a backyard that would be wonder ful for enter taining. New roof this year, ex tra storage above garage, and fenced back yard on a nice low-traffic street. Great location close to schools,

hospital, and easy access to 1-5.