Moving scams & how to avoid them

https://www.flickr.com/photos/128359034@N07/17027321127Recently, there was a rise in the occurrence of moving scams commonly referred to as the “bait and switch” where movers get your belongings in their truck and then hold it hostage until you pay significantly more than the original amount agreed upon.

To be clear, federal law allows movers to raise the price a total of 10% more than the original contracted price as a buffer of under-estimating the amount to be moved. But, anything above 10% is not permitted.

I have a list of vetted movers who have clean records, so please call me to help out, but if you prefer not, below 3 useful resources that will help you navigate moving a little better….

Moving Apps that help:

  • Unpakt makes getting quotes from multiple movers a stream lined process. Users fill out one form and can pay for the love all on the app or website. The process allows you to add and remove items to see how each effects the bottom line price. They also offer reviews of the moving companies.
  • Wunderlist is an app designed to help organize the moving process, creating lists of things to do like accounts that need switching to new address or closing, items to donate or garage sale, top priorities upon moving in to the new home, etc.
  • MagicPlan can help with designing the layout of your furniture in each room which is handy for moving as well as a remodel plan.

Two Articles:

https://www.flickr.com/photos/museemccordmuseum/2860496396/in/photostream/

If only we had just enough belongings to fill a wagon instead of a big truck. 🙂

Today Show article addressing Moving Scams This article, while from 2009, is full of strategies to avoid being taken advantage of.

MovingScam.com is a site designed to help with being scammed as well as has a list of already vetted movers known to be reputable and not scam clients

UPDATED: Online Home Value Estimates Are NOT Appraisals

I recently discovered that as a real estate who is a REALTOR® I have access to articles that Buyers and Sellers may find useful in their goal to buy/sell a home.

Below is one I have to correct with Sellers when they tell me what they think their home is worth. When they tell me the number they think their home is worth, I ask, where did they get this number, and often, the main source is a third party listing site that tells them what their home could sell for, and then begins my mini lesson in why these numbers are not as reliable as they may think. This article explains it simply.

UPDATED: Online Home Value Estimates Are NOT Appraisals

House Investment moscow idaho real estate

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This blog was originally published on June 29, 2017.  It has since been updated to reflect new data.

Consumers who are seriously in the home buying and home selling market should be mindful of a variety of competing home price estimators. Solely relying on just one price estimate is likely to skew the views of what a particular property will actually transact for. When it comes to online home value estimates, however, the number one caveat for consumers is that these estimates are not a substitute for formal appraisals, comparative market analyses, and the in-depth expertise of real estate professionals. Nonetheless, it is important to know the different sources of Automated Valuation Models or AVMs and home value estimates available online, so that members can help clients and potential clients understand these estimates in their proper context.

Where are these home value estimates coming from? The prevalence of technology can give anyone more access to a broad spectrum of information on the internet. In real estate, access to property details and values is easier due partly to low-cost immense computing power. AVMs spit out a price for a property based on computer algorithms and calculations that take different sets of property data and look for patterns and relationships between property value and the input data. There are websites that will have a home value estimate available by just searching an address, while others may provide an estimate only upon request.

The most popular sources of home value estimates online are those that use AVMs. These estimates have varying levels of accuracies and may not take into account the unique qualities of a home, a neighborhood, and local markets. The main sources of AVM estimates are:

 

  • Realtors Property Resource® (RPR®): RPR® has two home value estimates, their AVM estimate and the Realtors Valuation Model® (RVM®) estimate. The difference between the two is that RVM® uses the same data as the AVM plus Multiple Listing Service (MLS) Data. Both AVM and RVM® show the accuracy level of the estimate by giving estimate ranges and confidence scores. This resource is available for REALTORS® only and allows a significant amount of expert customization, making it a useful tool for members, especially when working with well-researched clients.
  • REALTOR.com®: Realtor.com® uses tax assessment records, recent sale prices of comparable properties, and other factors to estimate home values. This estimate is free and publicly available.
  • Redfin: Redfin is a web-based real estate brokerage that gives the Redfin estimate for the property, which is based on market, neighborhood, and home-specific data, including MLS data on recently sold homes. Redfin cites that their estimates for properties currently on the market are more accurate than estimates for off-market properties. This estimate is free and publicly available.
  • HouseCanary: HouseCanary has two main services: valuations and forecasting. Their estimates use property level data from public records and the MLS. Their accuracy will vary across markets depending on the availability of data. This estimate is available with subscription to their services.
  • Homes.com: Homes.com’s estimate mainly uses public records. They test and benchmark the accuracy of their estimates. This estimate is free and publicly available.
  • Zillow: Zillow has the Zestimate, which is their home value estimate for properties and is computed using public and user-submitted data. Their estimates have different accuracy levels depending on the data of the property and location. This estimate is free and publicly available.
  • Eppraisal.com: Eppraisal.com uses property records, home sales data, and local market data for their estimates. Their accuracy depends on the accuracy and completeness of public data. This estimate is free and publicly available.
  • Trulia: The estimate from Trulia is likely to be very similar to Zillow’s zestimate since it is part of the same Zillow Group. Having a separate Trulia price estimate is more a marketing gimmick to give the impression to consumers that there is more competition, though it is just the same company trying to establish a greater market power, hence the ability to extract a higher fee from real estate professionals.

There are also websites that provide home value estimates by request only or estimates using user inputs: ForSaleByOwner.com, GuaranteedSale.com, HomeFacts.com, HomeLight.com, HomeValues.com, SmartAlto.com, ValuemyHouse.com, and ZipRealty.com. Some banking and financial institutions, such as Chase Bank, Bank of America, the Federal Housing Finance Agency, Fifth Third Bank, and PennyMac, also provide estimates to accompany their other financial services. Some real estate agents and brokerages also share their estimators through their websites. Again, it is important to know that these estimates have varying levels of accuracies. These sites may or may not use Automated Valuation Models, but can be another source of property and home value data that anyone can access.  Additionally, there are also data companies, such as Attom Data Solutions and CoreLogic, that market propriety AVMs.

As technologies advance and more data becomes available, the number of sites that provide home value estimates may grow. With the knowledge of where to find home value estimates online, it is important to note that these home value estimates are not interchangeable with formal appraisals, comparative market analyses, and they cannot be used as a basis for a loan. Most of these sites, if not all, reiterate the importance of consulting the expertise of real estate professionals to receive an in-depth and in-person analysis of the property and the local market.

 

Source: UPDATED: Online Home Value Estimates Are NOT Appraisals

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What’s Your Home Buying Power?

So, this is an article I’ve reserved for my clients who are looking to buy that has a nice formula in it to help Buyers figure how far their dollars can go. Decided I would go ahead and make it public. Just be careful to also estimate taxes and insurance when trying to calculate what your monthly payments will be. A good agent can lead you in the right direction for this additional info. 😉

What's your home buying power1 moscow id real estateWhat's your home buying power2 moscow id real estate

How much home equity did you gain last year?

moscow id real estate

Photo by Binyamin Mellish from Pexels

According to a study published on CNBC by Diana Olick, Idahoans gained 21,000 on average in 12 months last year. The national average was 15,000 which was the highest since 2013.

To learn more, click here to read the article and check out the map of year over year equity gain averages per state.

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Xeriscape & how it can help sell your home or just lower your bills & maintenace…

I have removed an earlier blog on this topic as it is impossible to discuss the design, layout and types of plants ideal for our region and for improving curb appeal without showing images that demonstrate it. Unfortunately due to copyright concerns, I can only discuss this privately and not on a blog. If you wish to learn more about what you can do this spring to improve your landscape’s beauty without adding to your water bill, please feel free to submit a comment below with your email address and I will follow up with you.

The above image is from the EPA’s photo gallery of water smart landscape designs. If this interests you, I’d encourage you to visit their site and explore the photos of xeriscapes in the Northwest.

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Buyers tricked out of $91,000 in savings: 3 ways to avoid you being next

 

moscow id real estate

Photo by GotCredit

In this digital day and age when business is largely conducted over the cybersphere, we are capable of transactions our forefathers could not have completed with the ease we can today, but this convenience comes at a cost, one which the Bown’s of Utah understand only too well.

Cyber thieves have learned new ways to find out who is buying a home and enough related information that they can trick Buyers into wiring money to them instead of the Title or Escrow company overseeing the purchase of their home-to-be.

As Jotham Sederstrom from Inman noted:

“Acell and Anne Bown of Payson, Utah, were gunning to close the deal on a new home in the small town of Mona by Dec. 22 when they received an email purportedly sent by their agent, Carrie Butterfield of Intermountain Properties. But the email — one letter off from Butterfield’s authentic account — was a hoax, directing the couple to wire $91,000 as a down payment, immediately.

The email also directed the Bowns not to contact Butterfield because she would be tied up in meetings all day, according to a report from local CBS affiliate KUTV 2 in Salt Lake City.

‘The message from our agent said ‘I will be in a workshop all day, so don’t try to call me,’ ‘ Anne Bown told CBS. ‘We were so eager to get everything done in a hurry so we could move.’ ‘ “

The truth was revealed at the time of closing when they discovered they still owed $91,000.

While this type of cyber theft is occurring more often where Buyers are tricked into wiring money to another account and not the Title or Escrow company, there are ways to assure you are not a victim of such theft. Hacking Cyber Security Internet Security

Here are 3 steps you can take to make sure you don’t fall prey to such schemes:

  • Do not share over the internet any information regarding your purchasing of a home so that thieves cannot use it against you.
  • If you cannot personally visit, call the title/escrow company to ensure you understand their process of collecting the money for the purchase of the home you’re buying. (note: get the title company’s contact information from a reliable source such as your agent, walk-in, or the title company’s website, verified that it is the correct site through a third party such as your agent.)
  • If you receive an email from your agent or the title company regarding any changes in closing instructions regarding the exchange of money, follow up in person or over the phone to ensure these changes are correct. (Again, being careful to use a number you already vetted to be the correct company number.)

With a little preparation and clear communication before any changes occur, buyers and sellers can greatly minimize the chances that they fall victim to one of these schemes. In the age of the internet, we have conveniences our ancestors couldn’t even dream of, and so long as we stay in contact with key players in a transaction as large as buying a home, we can enjoy those conveniences without the potential headaches. This I am sure that both Acell and Anne Bown of Utah would much agree with.

 

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Who’s Buying & Selling in the Mountain Region

The National Association of REALTORS® (NAR) has published a new study on buying and selling patterns in America and here is another infographic sharing in simple terms what it shows for our region….


Real estate moscow ID

On a personal note about how our area plays into these fast facts, I’d say our local median income is lower and buying demand is steady despite the lower than normal inventory.

If you’d like to know more about our local market activity and whether this is a good time to consider buying or selling, feel free to contact me to learn more.

Why Real Estate Investing Makes Sense

 

moscow idaho real estate

INTRODUCTION

Turn on the television or scroll through Facebook and chances are, you’ll see at least one advertisement for a group or “guru” who promises to teach you how to “get rich quick” through real estate investing. The truth is, much of what they’re selling are high-risk tactics that aren’t a good fit for the average investor. However, there is a way to make steady, predictable, low-risk income through real estate investing. In this blog post, I’ll examine the tried-and-true tactics that can be used to increase your income, pay off debt … even fund your retirement!

 

WHY INVEST IN REAL ESTATE?

One of the basic principles of real estate investment lies in this fact: everyone needs a place to live. And according to the Bureau of Labor Statistics’ most recent Consumer Expenditures Survey, housing is typically an American’s largest expense.1

But there are other reasons why real estate is a great investment choice, and I’ve outlined the top five below:

 

  1. Appreciation

Appreciation is the increase in your property’s value over time. History has proven that over an extended period of time, the value of real estate continues to rise. That doesn’t mean recessions won’t occur. The real estate market is cyclical, and market ups and downs are natural. In fact, the U.S. housing market took a sharp downturn in 2008, and many properties took several years to recover their value. However, in the vast majority of markets, the value of real estate does grow over the long term.

The S&P CoreLogic Case-Shiller National Home Price Index, which tracks U.S. residential real estate prices, released its latest results on August 29 with the headline “National Home Price Index Rises Again to All Time High.”2

moscow idaho real estate

While no investment is without risk, real estate has proven again and again to be a solid choice to invest your money over the long term.

 

  1. Hedge Against Inflation

Inflation is the rate at which the general cost of goods and services rises. As inflation rises, prices go up. This means the money you have in your bank account is essentially worth less because your purchasing power has decreased.

Luckily, real estate prices also rise when inflation increases. That means any money you have invested in real estate will rise with (or often exceed) the rate of inflation. Therefore, real estate is a smart place to put your money to guard against inflation.

 

  1. Cash Flow

One of the big benefits of investing in real estate over the stock market is its ability to provide a fairly steady and predictable monthly cash flow. That is, if you choose to rent out your investment property to a tenant, you can expect to receive a rent payment each month.

If you’ve invested wisely, the rent payment should cover the debt obligation you may have on the property (i.e. mortgage), as well as any repairs and maintenance that are needed. Ideally, the monthly rental income would be great enough to leave you a little extra cash each month, as well. You could use that extra money to pay off the mortgage faster, cover your own household expenses, or save for another investment property.Vintage Register, compressedEven if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase, until you own the property free and clear … leaving you with residual cash flow for years to come.

As the owner, you will also benefit from the property’s appreciation when it comes time to sell. This can be a great way to save for retirement or even fund a child’s college education. Purchase a property when the child is young, and with a little discipline, it can be paid off by the time they are ready to go to college. You can sell it for a lump sum, or use the monthly income to pay their tuition and expenses.

 

  1. Leverage

One of the unique features that sets real estate apart from other asset classes is the ability to leverage your investment. Leverage is the use of borrowed capital to increase the potential return of an investment.

 

For example, if you purchase an investment property for $100,000, you might put 10% down ($10,000) and borrow the remaining $90,000 in the form of a mortgage.House Investment moscow idaho real estate

Even though you’ve only invested $10,000 at this point, you have the ability to earn a profit on the entire $100,000 investment. So, if the property appreciates to $120,000 – a 20% increase over the purchase price – you still only have to pay the bank back the original $90,000 (plus interest) … and you get to keep the $20,000 profit.

That means you made $20,000 off of a $10,000 investment, essentially doubling your money, even though the market only went up by 20%! That’s the power of leverage.

 

  1. Tax Advantages

One of the top reasons to invest in real estate is the tax benefit. There are numerous ways a real estate investment can save you money each year on taxes:

Depreciation

When you record your income from a rental property on your annual tax return, you get to deduct any expenses associated with the investment. This includes interest paid on the mortgage, maintenance, repairs and improvements, but it also includes something called depreciation.

Depreciation is the theoretical loss your property suffers each year due to aging. While it’s true that as a home ages it will structurally need repairs and systems will eventually need to be replaced, I’ve also learned in this post that the value of real estate appreciates over time. So getting to claim a “loss” on your investment that is actually gaining in value makes real estate an appealing investment choice.

 

Serial Home Selling

Even if you’re not interested in owning a rental property, other types of real estate investments offer tax advantages, as well. Generally, when you own an investment property you pay a capital gains tax on any profits you make when you sell the property.

moscow idaho real estate

by 401kcalculator.org

However, when you sell your principal residence, you are exempt from paying taxes on capital gains (up to $250,000 for singles and $500,000 for couples). The Internal Revenue Service (IRS) only requires that you live in the house for two of the previous five years. That means you can purchase an investment property, live in it while you remodel it, and then sell it for a tax-free profit two years later. This can be a great way to get started in real estate investing.

 

Section 1031 Exchanges

In addition to profiting off of your personal residence tax free, it is possible to sell an investment property tax free if you do it through a 1031 Exchange. If structured properly, the IRS Tax Code enables an investor to sell a property and reinvest the proceeds in a new property while deferring all capital gains taxes.

 

Tax-Deferred Retirement Account

It’s a common misconception that you can only purchase financial instruments (i.e. stocks, bonds, mutual funds, etc.) through an Individual Retirement Account (IRA) or 401(k). In actuality, the IRS allows individuals to invest retirement funds in real estate and other alternative types of investments, as well. By purchasing your investment property through an IRA, you can take advantage of all of the tax savings these accounts offer.

Be sure to consult a tax professional regarding all tax matters related to your real estate investments. If structured correctly, the profits you earn on your real estate investments can be largely shielded from tax liability. Just another reason to choose real estate as your preferred investment vehicle.

 

TYPES OF REAL ESTATE INVESTMENTS

While there are numerous ways to invest in real estate, I’m going to focus on three primary ways average investors earn money through real estate. I touched on several of these already in the previous section.money-2724235_1280 moscow real estate

 

  1. Remodel and Resell

HGTV has countless “reality” shows featuring property flippers who make this investment strategy look easy. Commonly referred to as a “Fix and Flip,” investors purchase a property with the intention of remodeling it in a short period of time, with the hope of selling it quickly for a profit.

This is a higher-risk tactic, and one for which many of the real estate “gurus” I talked about earlier claim to have the magic formula. They promise huge profits in a short amount of time. But investors need to understand the risks involved, and be prepared financially to cover additional expenses that may arise.

Luckily, an experienced real estate agent can help you identify properties that may be good candidates for this type of investment strategy… and help you avoid some of the pitfalls that could derail your plans.

 

  1. Traditional Rental

One of the more conservative choices for investing in real estate is to purchase a rental property. The appeal of a rental property is that you can generate cash flow to cover the expenses, while taking advantage of the property’s long-term appreciation in value, and the tax benefits of investing in real estate. It’s a win-win, and a great way for first-time investors to get started.

And according to the U.S. Bureau of Labor Statistics, rents for primary residences have increased 21.9 percent between 2007 and 2015 as demand for rental units continues to grow.1For rent moscow idaho real estate

 

  1. Short-term Rental

With the huge movement toward a “sharing economy,” platforms that facilitate short-term rentals, like Airbnb and HomeAway, are booming. Their popularity has spurred a growing trend toward dual-purpose vacation homes, which owners use themselves part of the year, and rent out the remainder of the time. There are also a growing number of investors purchasing single-family homes for the sole purpose of leasing them on these sites.

Short-term rentals offer several benefits over traditional rentals, which many investors find attractive, including flexibility and higher profit margins. However, the most profitable properties are strategically located near popular tourist destinations. You’ll need an experienced real estate professional to help you identify the right property if you want to be successful in this highly-competitive market.

 

DOES REAL ESTATE INVESTING SOUND TOO GOOD TO BE TRUE?

 I’ve all heard stories, or maybe even know someone, who struck it rich with a well-timed real estate purchase. However, just like any investment strategy, a high potential for earnings often goes hand-in-hand with an increase in risk. Still, there’s substantial evidence that a well-executed real estate investment can be one of the best choices for your money.

Purchasing a home to remodel and resell can be highly profitable, as long as you have a trusted team in place to complete the remodel quickly and within budget … and the financial means to carry the property for a few extra months if delays occur.

Or, if you buy a house for appreciation and cash flow, you can ride through the market ups and downs without stress because you know your property value is bound to increase over time, and your expenses are covered by your rental income.

In either scenario, make sure you’re working with a real estate agent who has knowledge of the investment market and can guide you through the process. While no investment is without risk, a conservative and well-planned investment in real estate can supplement your income and set you up for future financial security.

 

If you are considering an investment in real estate, please contact me to set up a free consultation. I have experience working with all types of investors and can help you determine the best strategy to meet your investment goals.

moscow id real estate agent

Sources:

  1. Bureau of Labor Statistics Consumer Expenditure Survey Annual Report – https://www.bls.gov/opub/reports/consumer-expenditures/2015/home.htm
  2. S&P Dow Jones Indices Press Release –
    https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/574349_cshomeprice-release-0829.pdf?force_download=true
  3. Durden, T. (2016 November 29). US Home Prices Rise Above July 2006 Levels, Hit New Record High [blog post] ZeroHedge –
    http://www.zerohedge.com/news/2016-11-29/us-home-prices-rise-above-july-2006-levels-hit-new-record-hig
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