Real Estate Questions/Concerns
What is a 1031 Exchange?
Under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due. In 1979, this was expanded by the courts to include non-simultaneous sale and purchase of real estate, what is colloquially known as a Starker exchange.
Real Estate Myths
Myth #1 Open Houses are an effective marketing tool.
In our community, Open Houses are usually held as a way for the local Realtors to become familiar with your listing.
Serious buyers almost always use a Realtor to help them find and purchase a home…in part, because Realtor services are “free” to the home buyer. Surveys consistently show that most buyers who make it to the closing table worked with a Realtor to buy their home and were not introduced to their home through an open house. Since open houses appeal to looky-loo’s, they are a terrific way for us to meet new buyers to work with, but not a good way to sell your home.
What are the Differences between Pre-Qualification, Pre-Approval and Loan Commitment?
I always recommend that you get pre-approved for a mortgage before you look at homes to be sure you are looking in the appropriate price range and to strengthen your bargaining position when you locate the home you wish to buy. If your offer to a seller includes a letter from your lender indicating you already qualify for a loan, the seller will take you more seriously and you’ll have a competitive edge over other offers.
With some variations, the process of buying land is similar to buying a home. First decide on your price range and some basic parameters, like the general area and approximate parcel size you want, then arrange financing, survey the market to see what’s available, and make an offer to buy.
Buying land on which to build your custom dream home in the near future is a good idea. Buying land as a long-term investment, unless it is at least 35 acres in size, may not be a good idea because state and county regulations change over time, limiting the use (and therefore the value) of the parcel in the future. While these changes may differ in content, you can be sure that their direction will be toward more restrictions on drilling wells and preserving our uncrowded natural landscape.
Could anything be better? Design and build your own custom home in the mountains with every room, every color and every finish exactly the way you want? It’s possible and it’s rewarding. But it takes time and attention to detail worthy of a military campaign.
An experienced and considerate homebuilder can counsel and guide you through the process – we suggest you not hesitate to interview a number of contractors to determine the type and quality of homes they specialize in, how involved they want you to be once the project gets under way and the commitments they’ll agree to by way of guarantees, deadlines and costs. Be sure to talk to the builders’ past clients about their experiences.
Surviving a Hot Market
Making an offer on a house in a hot market can be challenging, anxious and frustrating. Prices are rising, buyers are circling houses and, with a short supply of homes, many buyers are chasing fewer homes. These tips will increase your success in being the winning buyer for the house that you want.
Be pre-approved. Pre-plan your financing by meeting with a mortgage lender ahead of time and receive a pre-approval letter that can be submitted with a written offer. The more assurance of your creditworthiness and ability to close that you can offer the seller, the more competitive your offer will be.