What value does a REALTOR have in today’s market? Why use a REALTOR?

 

When you think of a REALTOR, what do you think of? Lately We are hearing overpaid, a rip off-- this saddens us as there is a Very Big Difference from a REALTOR and anyone who is licensed to sell real estate in my eyes. There is so much talk about value and what we do or don't do for the public. It is hard to see the differences or what is the benefits of using a Full Time- Full- Service REALTOR.  WE think of negotiating and building relationship, protection for our clients, working hard, educated to what is happening around a specific area and the pitfalls to know about, helping people every way WE can. We think of helping you get to your Whooo hooo!!!! moment, quickly, efficiently and navigating all the obstacles that can be in your path!

 Yes, you can sell your home yourself, use a discount brokerage, or hire a agent/a broker not associated with NAR with the designation of a REALTOR. So why does it matter? What difference does it make? REALTORS have taken an oath and are held to the code of ethics from NAR(National Association or Realtors); they give you a Protection from what you do not know and will guide you to make educated decisions. They have tools to help you stay on track and focused on what is important. We have a Fiduciary responsibility to our clients, to act in their best interest. An I-buyer like Open Door, Zillow, etc., etc., ARE the buyer, their goal and driving force is to buy the home as cheap as possible, so they can resell it back on the open market. They have no duty to the owner of the property or the the Buyer of Open Door's home.... In a nutshell there are your differences.  Now, in the litigious world we live in- you can be sued for anything, mix in the most expensive item most people buy in their lifetime and that puts the general public at risk. As many lawyers, NAR, ADRE and AAR have all said. 

 Today I am listing the top 5 reasons why a buyer needs to work with Team Beery as your BUYER'S Agent!

   #1.  Having someone who has YOUR back. A buyer's agent has a Fiduciary responsibility to make sure you as the buyer understands what is being signed, has all the tools to make the best decisions and  follows the appropriate timelines and procedures.

   #2.  Not understanding what sellers must disclose- material facts or not disclosing important details about the property to potential buyers, in writing. What may seem a small detail to you- could be a very big thing to someone else. One of the only documents that is still valid after the closing is the Seller Disclosure Statement. so just because you closed on the home, does not mean the buyers can't come back and sue if they feel wronged by what you disclosed on the seller disclosure paperwork, sellers are asked a myriad of questions regarding their home including items like any roof or water leaks, termites, or pest issues, plumbing or air conditioning issues, zoning ordinance violations, building code violations, and more. It is vital that a seller makes every effort to disclose past and present issues, even if they have been resolved and even if they happened before they owned the house. If it is a known defect, it needs to be disclosed. Failure to disclose a material fact can certainly lead to a lawsuit. And it can be simple for a buyer to learn a seller knew of a defect. It’s not uncommon for a neighbor to provide a statement outlining a previously known issue.  

#3. In Arizona Real Estate Brokers and agents have the right to write contracts and addendum to the contracts, without using a lawyer. This saves you thousands of dollars in additional costs. Team Beery will also negotiate to get the seller to pay some or all of our fee on your behalf. In doing this, it doesn't hurt your ability to receive other concessions to off set your closing costs or to help buy down the interest rate. 

#4. We have all the tools for you to make educated decisions. We have a ROBUST vendor list for all types of trades you might need. We have a comprehensive list & a  Buyer's Advisory guide to make sure you have information not only about the home you will be buying, but the neighborhood and the city...as when you buy a home you are buying into both the neighborhood and the community... 

#5. We make sure you are following all timelines and appropriate paperwork to keep the transaction in line and  

As We see it this is a big value....  So if you want a great team behind you- contact us to buy or sell a home throughout the East Valley of Phoenix, including: Phoenix, Mesa, Gilbert, Chandler, Tempe, Scottsdale, Queen Creek, Apache Junction, San Tan Valley, Gold Canyon! 602-644-1416.

What buyers need to know about escalation clauses

 

An escalation clause can help buyers gain a crucial edge in today's seller's market, but these offer addendums need to be handled with care. What is it? An escalation clause is a real estate contract, sometimes called an escalator, that lets a home buyer say: “I will pay “x” price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer by “Z” to “Y” price. Just be sure you have the cash to back up the offer. 

How does an escalation clause work? While escalation clauses vary significantly, the general escalation addendum has a few basic components:

•             What is the original offer of purchase price?

•             How much will that price be escalated above any other competitive bid?

•             What is the maximum amount that the purchase price can reach in case of multiple offers?

For example, buyer Brown offers $100,000 for a home or piece of real estate. Her Realtor® adds an escalation clause that, in the case of a higher competing offer, will increase Brown’s offer in increments of $2,000 above the competing offer.

Her escalation clause goes up to a maximum of $110,000. If no other offers are submitted, Brown’s offer remains at $100,000.

If buyer Green offers the seller $103,000, then Brown’s offer would automatically escalate to $2,000 above that, bringing Brown’s offer to $105,000. If buyer Orange offers $111,000 for the home, then Brown’s maximum of $110,000 will be exceeded, and Orange will have the top offer.

Will the seller accept an escalation clause?

Some home and real estate sellers simply state that they will not accept an offer with an escalation clause. They would prefer that every buyer submits exactly what they’re willing to pay for the home or real estate.

Sellers sometimes prefer this method, because it motivates buyers to outbid one another on the first try. It also streamlines the contract paperwork and the decision-making process.

Will there definitely be multiple offers? Almost always in the 2021 market so far. Some folks hate to put all their cards on the table upfront- Yes, I get that, but in the market, it does help the seller select the best offer.

Escalation clauses should only be used when the buyer is fairly confident that there will be multiple offers, or when the buyer expects to pay an increased price.

Buyers who submit an offer with an escalation clause are laying all their cards on the table: The seller knows immediately how far the buyer will go to secure the home. If that offer ends up being the only offer submitted, it technically remains at its original price.

A Realtor representing the seller will know, however, to counteroffer to the buyer at a higher, escalated price, since the buyer is clearly willing to pay more. While there’s no guarantee that the buyers will agree to the higher price, it is likely that they will.

A buyer gives up a lot of negotiating power and potentially leaves money on the table when using an escalation clause that goes unmet by a competitor. The only protection they have is the appraisal, and if they chose to waive that, too—they are agreeing to the price no matter what… so be sure you can come up with all the extra money before adding this clause.

Has the seller’s agent clearly stated a one-day review or multiple rounds of offers? In hot real estate markets, a wide variety of offer-review processes can be available. Some might specify, for example, that the property is going on the market on Friday, and that all offers will be reviewed the following Thursday. The sellers and their Realtor will make a final decision that day.

This situation can be ideal for the escalation clause, when a buyer knows it’s an all-or-nothing offer. Other sellers take a back-and-forth approach.

They may collect offers from buyers for one week, and then respond to a handful of the best offers by saying “Send us your highest and best offer.”

This technique is particularly disliked by many consumers and professionals for its lack of clarity, but it’s important to know that it exists. Before writing an offer, a buyer’s Realtor can inquire to feel out the details and make sure the buyer is prepared for the situation.

Writing an escalation clause on the initial offer in a multistage situation could put the buyer in a weak position during the second round. It’s perfectly legal for a seller’s Realtor, with the seller’s permission, to reveal to all potential buyers what the top initial offer is and to ask everyone to beat it.

In this case, the escalation clause would reveal that buyer’s maximum, losing a competitive edge.

Bid with careful confidence, and know that each situation is unique

If you’re considering an escalation clause,  The Realtor’s knowledge of normal practices and probable outcomes in your market will make your offer much more likely to succeed. They will help you see what the downfalls are and explain any advantages. Buyers shouldn’t be tempted to escalate their purchase price above a figure that they would be comfortable paying. At the same time, they should realize if inventory and interest rates are low that aggressively pursuing a good home at a good price is necessary to winning in a competitive market.

Escalation clauses can cause a lot of stress for home buyers, but when they’re boiled down to the basics, they’re fairly straightforward. Remember to be realistic, to be comfortable with how much of a competing bid you’re willing to offer, and to confidently go after a piece of real estate at that price.

Potential buyers who are only looking to get a steal often end up not being buyers at all. With the way homes are going up in value in 2021-- 2 months of looking for a home could potentially cost you $10,000- $20,000… so some buyers are taking that value on at the time of the offer, to hedge their bet. But bottom line, the only protection the buyer has in this situation is the appraisal. Now, that could bite you too- as what if the appraisal come in low—will you have the cash on top of your down payment to make up the difference?  So just tread carefully and know what you are getting into- before you jump in!! 

 Want to know more, Contact Team Beery and we will be happy to help you navigate the in’s and out’s of this market.   

Things you can write off on your taxes when buying a home

 

Buying a home can be very expensive. First there's the down payment. Then there are closing costs, including fees for an appraisal, inspection, and title search. And once you own it, the expenses continue to add up, with everything from maintenance to taxes and insurance.

There are some tax benefits to owning a home, though. Tax-deductible homeowner costs can reduce the amount of income tax you have to pay.

What is a tax-deductible expense?

A tax-deductible expense is one that you can deduct from your adjustable gross income (AGI) when you file your taxes for the year. Deducting these costs reduces your taxable income, and the lower your taxable income, the less you'll pay in taxes.

When looking at potential homeowner tax deductions, it's crucial to know the differences between standard and itemized deductions.

A standard deduction is a specific dollar amount that reduces the amount of income on which you're taxed, based on your filing status, age, and other variables. Itemized deductions include each individual deduction, such as certain homeowner expenses and charitable donations. When filing your income taxes, you must choose either the standard deduction or itemized deductions, not both.

Here are the standard deductions for the 2021 tax year:

•             Single or married filed separately: $12,550

•             Married filing jointly or eligible widow/widower: $25,100

•             Head of household: $18,800

If itemized deductions would decrease your taxable income by more than the standard deduction, you'll probably want to include the following deductions for homeowners to save even more money.

7 tax deductions for homeowners

1. Mortgage interest

Each month, part of your mortgage payment goes toward the principal (the amount you borrowed), and another portion covers interest. Over the entire life of your loan, you can deduct interest paid on up to $750,000 of your principal balance if you're single or married and filing taxes jointly. If you're married filing separately, you may deduct interest paid on up to $375,000 each.

 

There are some exceptions to this. If you bought your home between Oct. 14, 1987, and Dec. 15, 2017, you can deduct interest paid on up to $1 million over the life of your mortgage. If you bought it before Oct. 14, 1987, you're allowed to deduct all paid interest.

2. Home equity loan interest

A home equity loan is a second mortgage, and you borrow against the equity you have in your home. If your home is worth $350,000 and you still owe $300,000, you have $50,000 of equity.

As with your first mortgage, the interest you pay on your home equity loan may be tax deductible. There are no restrictions on how you can use the cash from a home equity loan, but the interest is only tax-deductible if you use the money on substantial home improvements.

Note: If you've already deducted the maximum allowable amount of interest paid on your mortgage, you won't qualify for additional interest deductions on your home equity loan.

3. Discount points

You have the option to pay a fee, referred to as "discount points," at closing that lowers the interest rate you'll pay on your mortgage. One discount point usually costs 1% of your new mortgage, and it reduces your rate by 0.25%. So if your rate on a $200,000 mortgage is 3.5%, and you pay $4,000 for two discount points, your new interest rate is 3%.

The money you pay for discount points is typically tax deductible over the life of the loan. If you meet a bunch of Internal Revenue Service requirements, your discount points may be fully deductible in the year that you pay them.

Note: Discount points are different from loan origination points, which are fees you'll pay the mortgage lender for processing your mortgage. Loan origination points are not tax deductible.

4. Property taxes

You can deduct up to $10,000 per year in paid property taxes if you're single. You're able to deduct up to $5,000 each if you're married filing separately, or $10,000 if you're married filing jointly. This limit applies to both local and state income and property taxes combined.

5. Mortgage insurance

As of early 2022, mortgage insurance payments through the tax year 2021 will be deductible. It was still undetermined whether mortgage insurance payments for 2022 and beyond will be deductible.

You may deduct private mortgage insurance on conventional mortgages, mortgage insurance on FHA mortgages, the funding fee for VA mortgages, and the guarantee fee for USDA mortgages.

You can deduct all of your insurance premiums if you earn $100,000 or less, or $50,000 if you're married filing separately. If you earn between $100,000 and $109,000, your deduction goes down by 10% for each additional $1,000 you earn.

Your mortgage insurance isn't deductible if you earn $109,000 or more, or $54,500 as a married couple filing separately.

6. Home improvements

Necessary improvements to your home may be tax deductible. For example, you may need to update the home for medical reasons or to make the home accessible for someone with disabilities. These expenses may be deductible if the updates are made to accommodate you, your spouse, or a dependent.

7. Home office costs

You may deduct home office costs if you run a business out of your home and use the space exclusively for business. However, you can't deduct expenses if you work from home for an employer. The amount you can deduct depends on how large your office space is relative to the rest of your home.

What homeowner expenses are not tax deductible?

You can never deduct any of the following expenses from your adjustable gross income:

•             Loan origination points

•             Title insurance

•             Closing costs

•             Down payment

•             Forfeited earnest money

You might be able to deduct some of the following expenses — but only if they are related to your home office deduction in certain circumstances. If you're wondering about any of these costs, it's best to ask a tax specialist.

•             Homeowners insurance

•             Fire insurance

•             Homeowners association fees

•             Utilities

•             Refinancing costs

•             Depreciation of the home

•             Domestic services

Add up your tax deductions in the eight eligible categories to find out if an itemized deduction would save you more money than a standard deduction. If you have questions, reach out to a tax specialist for assistance, or contact Team Beery and we can get you in touch with the best professionals in the business!  office@TeamBeery.com or 602-644-1416

December Market Update 2021

Here's what we're seeing in the market these days: 

With buyers and sellers focused on the holidays, the downward trend we are seeing is very common for this time of year. Although the numbers (in terms of inventory) and sales price are not in favor of buyers, hopefully buyers will see some new and rising inventory just around the corner (January/February). On a positive note for buyers, this is still an amazing time for buyers to take advantage of record low interest rates especially with the Federal Reserve acknowledging that they plan to raise rates (more than once) in the upcoming year.

2022 is forecasted to be a seller’s market, albeit a weaker one than we have seen in 2021. Sellers should continue to avoid overpricing their homes because numbers indicate a direct correlation between overpriced listings to higher concessions to buyers and higher days on the market. Overall, Arizona is still seeing record numbers in the real estate market and experts do not see a “cool off” in the near future.

With over 230 people moving into the metro  Phoenix  area a day. Competition  for homes, condos, townhouses are still around... if you will be in the market to buy or sell a home Team Beery would be happy to help out! Contact us to get the process started! ❤ 602-644-1416  or office@teambeery.com 

Tips to get your home staged to sell- 2021

 In this day and age- with HGTV and all the fuss made about homes it is so important to have your home staged... so here are a few tips from the pros to get the most bang for your buck!  

Maximize Curb Appeal

Getting them through the front door starts at the curb. Manicure the lawn, trim the trees and shrubs. Pull weeds and plant some colorful flowers. Clear the walkways. Fix peeling paint and wind up that hose. Paint the address number on the curb.

Make Repairs to Visible Blemishes
Is there something that’s an eyesore, but an easy fix? If looking at it bothers you, it could bother a potential buyer and reduce the appeal of your home. Replace burnt out light bulbs, fix that loose door handle, make needed paint touch-ups.

Make a Buyer’s Entrance Inviting
Freshly paint the front door with a color that contrasts the house. Add a new welcome mat. Hang a fresh wreath on the door.

Let the Light Shine In
Removing heavy window coverings to let in the natural light we all crave. Add lamps to brighten up darker areas to add more cheer.

Remove the Clutter
This serves two purposes. First, you want your home to have an open and inviting appearance. Removing clutter will make rooms appear larger and more appealing. Second, it helps YOU prepare to move. Going through the clutter and getting rid of what you don’t need will make your move much easier.

Remove Personal Items
It will be much easier for a potential buyer to imagine your home as theirs when they can envision their own items in it.

Highlight Special Features
Use accents and color to draw eyes to special features that you want potential buyers to notice—throw pillows, plants or other eye-catching accessories.

Add Mirrors
Use mirrors to make rooms look larger and lighter. Position opposite windows for best effect.

Clean Out Cabinets and Closets
Buyers are nosy and they WILL open the cabinets. Make sure your contents are orderly and organized.

Eliminate Odors
Clean to remove any odors and do not cook any meals with heavy, lasting smells before a showing.

Add Aromas
You can easily add appeal by quartering an orange and adding it to a pot of water with a cinnamon stick. Simmer on low for an inviting aroma. Or bake a fresh batch of cookies (and leave a plate of them on the counter for visitors).

If you feel you need more help- Team Beery is always here to help!  Just contact us and our team can get you on a plan to get your home ready for sale!