RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Four Reasons Why Seller-Paid Points Matter

September 22, 2014 1:31 am

‘Seller-paid points’ refer to circumstances in which the seller pays points to reduce the interest rate on the buyer’s mortgage. A sample scenario:

A home is listed for $200,000. The seller is willing to accept $193,000. If the seller reduced the price to $193,000, the buyer would be able to purchase and both would walk away happy. However, if the price remained $200,000, the buyer could ask the seller to contribute $7,000 in closing costs – and both would still walk away happy.

The latter is much more beneficial. Here are four reasons why seller contribution to closing costs benefits the buyer.

1. Your interest rate and monthly payment will be lower.
Interest rates and monthly payments are always lower (rates typically 0.5 percent-0.75 percent lower) when the seller pays closing costs instead of reducing the price.

2. It’s easier to qualify for a mortgage. Because your interest rate and monthly payments are lower, your debt ratio may also be low, resulting in an easier approval process.

3. You’ll pay less interest over the life of the loan.
Your total savings will likely be more with seller-paid points – often 2-3 times more.

4. The IRS allows free tax deductions.
The IRS accepts tax deductions for seller paid-points, meaning you can claim $7,000 in closing costs that year, even though they were paid by someone else on your behalf.


Published with permission from RISMedia.


10 Signs You Are Ready to Invest in Real Estate

September 22, 2014 1:31 am

When it comes to property investment, timing is everything. Ultimately, choosing the right time to enter the market will have a significant impact on the long-term success of your investment.

But how can you as an investor know whether the timing is right? Global property portal Lamudi has compiled a list of 10 tell-tale signs that now is the time to start building your investment portfolio.

1. You are financially ready. You have saved enough for the down payment and you have also established your emergency fund. You have taken into account home maintenance expenses. Your credit history is good and you are able to meet all the financial obligations.

2. You have set your long-term goals. You have a clear picture in your mind of the purpose of your investment and you are flexible enough to adjust to changing circumstances. You are not hesitant and when the timing is right, you are able to adapt to the market needs and the development of technologies.

3. You have done your research. You know the neighborhood of your future property well enough to foresee the coming trends and the possible changes in the community. You have researched all the schools in the area as well as the best commuting means and you are able to predict the next homebuyers needs.

4. You have chosen a stable economy. The area is financially stable, economic trends are promising and equities are surging. No demographic fluctuation or no irregular variation of population have been recorded in the area.

5. You understand the country’s policies regarding real estate. The policies of the region promote and encourage a positive, innovative environment as well as drive further economic growth. The tax policy in the country is positive for homeowners. Global innovation index is rising in the area.

6. Infrastructure projects are underway and likely to lead to an increase in property values. The infrastructure of the area is being developed with a focus on: transport, energy, solid waste and water management developments.

7. The region is moving toward sustainable development. The region’s awareness of global and local environmental issues is increasing, the demand for eco-friendly homes as well as for sustainable rural and urban development is rising. As more and more people head toward sustainable living, investing in sustainable property will increase its value in the future.

8. The location draws a lot of interest. Whether it is the best travel destination or the hot jobs spot, the location is always on the top of the search engine. It has become a successful startup hub already or is planning to do so in the coming years, driving a lot of job seekers into the area. The number of enrolled students is increasing every year, the area draws interest of international students.

9. You have found a reliable real estate agent. If you are an overseas buyer, it is particularly crucial to make sure you have a good representative on the ground. Your real estate agent is trustworthy and knows the local market well enough to be able to help you make the choice.

10. You have researched local differences in the property market. Whether you plan to invest in a residential property and turn it into a rental or an office space, you are fully aware of all cultural differences that might occur when you deal with a property seller.

Source: Lamudi

Published with permission from RISMedia.