10 Things You Should Know About in the Real Estate World

1.  Do you live near power-lines, transformers or electric substations?  Lots of buyers balk at the sight of giant power-lines near their houses and when they research EMF (electromagnetic fields) they discover that in the USA there are varying degrees of concern about EMF’s and health. Then they learn that in other parts of the world there are places where it is commonplace to keep people, schools and hospitals far away from EMF’s. People selling their houses run into problems as they don’t know if they are risking their family’s health.  Learn what the EPA sayshere  (a new site to deal with this issue).


Electromagnetic fields (EMF) are a combination of electric and magnetic fields of energy that surround any electrical device that is plugged in and turned on.

Scientific experiments have not clearly shown whether or not exposure to EMF increases cancer risk. Scientists continue to conduct research on the issue.

The strength of electromagnetic fields fades with distance from the source. Limiting the amount of time spent around a source and increasing the distance from a source reduces exposure.

I’m not getting a warm and fuzzy feeling about it either.

2.

Want to buy beat up, foreclosed properties and flip them to make money?  You may have some considerable competition.  Billion dollar hedge funds are playing in the same playgrounds. They have cash…lots of it. They have experts in pricing and value. They have the latest studies about the hottest kitchen designs, the most popular light fixtures, the colors that sell houses and they have access to the top real estate experts across the country (like us).  Some of these branches of hedge funds are acting nationally. One company that we work with is flipping seven properties a month in the Philadelphia region. The average purchase price is $500,000 and the average resale is $800,000. The profits are 18-25% returns for the hedge funds. It is smart money and if you go into the flipping business this is the new competition that will outbid you on the purchase and outshine you on the finished product.

 

3.  Are you ready to sell your house?  Do you have a cat or a dog?  Did you know that Pennsylvania real estate disclosures ask you to disclose if a cat or a dog ever lived in the house?  I mention this because some people think that there are mysteries as to why some houses sell and some don’t or why some houses sell for top dollar while others seem like a bargain.  This is a part of the puzzle that a seller should try to understand. Real estate professionals know what I am about to say. But real estate professionals also know that saying bad things about mans best friends is not going to win us any popularity contests.

 

15 to 30% of all Americans suffer from pet allergies. Cat allergies are 2 times more prevalent than dog allergies. Most people think it is the hair or fur on an animal that is the culprit, but the experts in allergies say that it is the dander that does the damage. Danger can be airborne for long periods of time. It sticks to walls, furniture and floors. Allergy sufferers can usually tell you if a house has a pet long before they see a pet. Many do not want to wait the 6 to 12 months for the dander to break down and dissipate when they walk thru a house and it makes them feel itchy and restricts their breathing.


Realtors will tell you that a house that smells like a cat or a dog will sell for 10-20% less than a house that has no pet in the house. 


Geez I already feel bad for even mentioning it…

4.  Is the real estate market back? Is this the time to buy?  We all know that every real estate agent will always say that this is the best time to buy.  So let’s go with the facts from the last quarter of 2014,


Median sale price in the Philadelphia region (city, suburbs and New Jersey counties across the river) is up 3.3% over the same time last year.


The price that sellers realized against their final asking price was 91.4% of their asking price, up 1.2% over the prior year.


There are 6.4% less homes for sale than the previous year.


The average days on the market are 123, down 8 days from the previous year. 


Generally, all indicators are in the green showing improvement and appreciation across the board.

5.  3D is the next big thing.  Your house can now be shown in 3D on many websites. Laptops and TV’s are showing up in stores 3D capable. Photographing a house in 3D is a new challenge for agents.

6.  Ignore the price of homes.  Real Estate taxes especially in the suburbs are gaining in importance. With rates at 3.8%, a $150,000 loan is $698.00 in principle and interest.


A $150,000 mortgage on a house with taxes of $8500 (Drexel Hill) will have a payment of $1406 plus insurance.


A $150,000 property with taxes of $3400 (West Chester) will have a payment of $981.00 plus insurance.


Most buyers are still lost in trying to negotiate a price down by a few thousand dollars and claiming a win when they get a house for a slightly less price.  However, smart buyers (working with Artisan agents) keep their eye on the ball.  Artisan agents know how to search by price and taxes. It is a technique that is available to all agents but few know how to manipulate the MLS to search in those parameters.

7.  Love that Zillow, Trulia and Realtor.com? Get ready for a new site.  Did you know that the agents pay huge amounts of cash to receive the leads created from those sites? Well, a new site is being developed as I write this that will give the consumer access directly to the mls data. Yep this is the same info that agents get to see and the consumers will then be able to contact the agents who know the most about those houses.  The agents will not have to pay a fortune to list their houses on these sites. It is called a front facing (open) MLS and I predict that it will be up and running in about 12 months.  Good bye Zillow, Trulia and Realtor.com.  It should be a good thing for the industry and the customers.

8.  USDA  100% Grade A savings.  Did your bank or mortgage broker ever tell you to go somewhere else where you can get a better mortgage rate and lower costs?  Well I will.   If you are buying outside of the Philadelphia metro, beginning from about Coatesville to the West, and RT 202 to the North, and up above Hatboro in the North and up into Quakertown, the property may qualify for a USDA mortgage.


USDA mortgages require no down-payment (really). They give cheap, private mortgage insurance payments and the seller can pay most or all of your closing costs. 


Lenders don’t tell you about this because they want to sell you other products. Most agents don’t know much about the program either.  If someone is buying a house in Downingtown for $200,000, the savings are huge. Zero down-payment…no closing costs….lower payments.  It’s no trick. It’s a federal program created for rural areas, and the lines have not changed for decades, so areas that you may think of as a city are included in the eligibility maps. Check it out.

9.  Transfer taxes. Did you know that the transfer taxes are different in different areas? Transfer taxes are usually the biggest fee paid by a buyer or a seller to transfer a house.


Here are the rates in different parts of town.


Philadelphia is 4%. 


Most of Delaware, Bucks, Berks, Montgomery and Chester County are 2% total.


In Montgomery County, Radnor Township and Upper Providence it is 2.5% total.


In the City of Reading the total transfer tax is 5% (really).


Having a higher transfer tax is a huge hurdle to buyers and sellers.  You will never see this advertised in the sale price but it’s a good thing to know about.

 

10.  Big Data is at play.  Did you know that if your mortgage payment is late and you step into the foreclosure process (different in every state) that your name address and a photo of your house will show up on huge portals in real estate? Zillow, for example, publishes this information routinely, claiming that it is available to anyone who wants to go to the courthouse to find the list. 


Imagine that you were applying for a job, dating or otherwise trying to sell the positive attributes of who you are and then your name and address was all over the internet for being behind in your mortgage payments.  If someone Googles your name, your house and name and all other kinds of information about your mortgage obligations are right there in the top search sites. What’s next?

 

I hope you found this helpful and learned something. And, I hope that you consider Artisan Realty when you need help with a real estate matter.  At Artisan we focus on helping our clients make smart decisions.

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