“Comps” is a term that is thrown around real estate offices as much as Starbuck’s sells coffee. It is short for Comparable Sales. If you are entering into a real estate transaction then you should know and understand this term well. It refers to properties located in the same area that are of a similar caliber (features, beds, baths, condition, etc.) as the property you are trying to buy or sell.

For Buyers, looking at comps will help them determine the best price to put in an offer for a home. Sellers use comps to determine the best price to put their home on the market. Real estate agents live off of comps and they look at them all day long. If you are interested in entering the market then it is definitely helpful to analyze comps and it will become a crucial part in determining the best price.

Location Is The Highest Priority

When looking at comps the location of the property becomes the starting point. The market is all based upon location. By keeping within a close radius of the property you will have a better understanding of what the property might sell for. Try keeping it within the same neighborhood as this is the most effective approach. Sometimes there just isn’t enough information so it is perfectly fine to expand your search but you will need to establish a boundary such as a certain school districts reach.

Time Is Of The Essence

The best comps to look at are homes that are currently “pending”. This is because a pending home is live data. When a home is pending that means that a buyer and seller have made a deal. This piece of information reflects live results and in our case the price that the property will sell for. There is always negotiating and wiggle room so the property might not actually be sold for what the pending price is, but that gives us the best data we could hope for. Never look at sales that have gone past 6 months because the market is always in a state of flux.

Home Features Matter

Always look for homes that have similar features to the one that you are trying to buy or sell. Compare square footage, lot size, beds and baths. If there was some work done, consider what has been added on, new appliances, new flooring, new painting and so on and so forth. Consider if there is a view, which is something that is highly prized in real estate and certainly adds value to a property. By finding homes that have similar features you will have a better understanding of the price range you should set for buying or selling.

Don’t Overthink It

You will need to find a good local agent to keep you from overthinking the whole process. Let your real estate agent stress the little things. Hopefully your agent is familiar with recent sales and they can help differentiate why one comp would be better than another. A good real estate agent will know the small nuances that will affect the value of the property.

As always, if you need help buying or selling a property Realty Executives Dillon would be happy to guide you through the process, every step of the way. 

Inexpensive Home Updates That Will Add Instant Value To Your Home

Adding value to ones home is a task that may be difficult for some to understand because often, what we like other people do not. We've all had moments where we look at an item or section in our home that once was a good fit, but as the days go by we are no longer in love with what was done or what we have put into that space. Trends change and with that comes new styles and tastes that are much more up-to-date. Some repairs in our homes are no doubt costly but there are a few things that you can do at an inexpensive cost that will add value to your home. 

A Kitchen Renewed
A big factor for many homeowners are kitchens. Start by refacing cabinets instead of installing new ones. This comes at a fraction of the cost of replacing them and takes less time as well. Once the cabinets are done go ahead and repaint the space. Light, airy colors work best in kitchens and you don't want to repaint it with a color that isn't appealing to potential homebuyer's because if you decide to sell then you might have to repaint it, again! Next why not replace all that old hardware so you can get a nice shine going on? Replace the drawer handles and the faucet for a nice stainless steel look. If you don't have any of these things to upgrade or replace then take the alternative route and upgrade your appliances to stainless steel if you haven't already. Stainless steel is timeless and these appliances will never lose value unless they're broken.

Bathroom Overhaul
Give your bathroom a makeover by replacing the countertop with a new piece of quartz or granite. These can be found at very affordable prices and offer a non-porous surface with a unique blend of beauty and easy care. Next, how about replacing the faucet with one that sits a little higher than your current one for a more luxurious feel. Update the mirror to one that doesn't stick out of the wall with a seamless, clip-less mirror. Finally, repaint the bathroom space with nice light inviting colors such as cool shades of pastel blue, green or yellow.

The Upside to Curb Appeal
When you begin to put your home on the market the first thing that any prospective buyer sees is the curb appeal that your home has to offer. Curb appeal can bring a great return on investment if done right. Repainting the exterior of a home can cost upwards to $10,000 but offers the most value to your home. Try replacing your door with a new door of contrasting color to really pop and make your home's entry stand out. Bring in some big pot plants to frame the entry. Update shrubs, grass, bark/rocks and mulch to bring the exterior back to life. Replacing old worn out grass might be the best option if you are not the type to take care of it. 

Repaint, Repaint, Repaint!
Old, outdated, or even ugly paint can really hurt your chances of landing a potential buyer. Many homeowners simply do a quick covering of the walls instead of actually hiring a painting professional to redo the interior. If possible, run one color throughout your home to create a sense of consistency. Neutral shades will keep your space looking clean and bring a nice contrast to the light. airy, pastel colors of your kitchen and bathroom. A good paint job can make a huge difference. 

All of these can be a DIY project but hiring a professional to do it for you might be in your best interest. All of these tasks can be done for less than $10,000 and will make your home feel fresh, inviting and best of all NEW!

We hope you've enjoyed these tidbits and as always Realty Executives Dillon can assist you in the next sale or purchase of a property.  

Buying
Initial costs
There are initial costs that you acquire when you enter into the closing phase of the property that you are purchasing . These costs include down payment, service fees charged by a lender ( credit reports, appraisals, documentation and administrative costs), inspections and maintenance costs that you should consider. Remember buying and selling houses is expensive. So, if your not ready to settle in for a couple of years then it is probably in your best interest to rent

Recurring costs 
Recurring costs are expenses you will have to pay per month or per year in owning your home. These include mortgage payments, home owners associations fees, maintenance, property taxes and homeowner’s insurance. 

Opportunity costs 
Opportunity costs are tracked for the initial purchase costs and for the recurring costs. To put it simply, it means what could this money be earning elsewhere? When you own a house your equity will be locked up in the house and will be earning zero interest or dividends.

Net proceeds 
Net proceeds is the amount of money a seller will receive after the sale of a home. Net proceeds is calculated by taking the sale price of a home and subtracting all selling costs. Typical selling costs include:

• Payoff of existing mortgages
• Pro-ration of property taxes and utilities
• Real estate commissions
• Transfer and/or excise taxes
• Title/escrow/closing fees

Net proceeds is different than equity since it accounts for closing costs. A transaction with negative net proceeds means that the seller will have to bring money to closing in order to complete the transaction.


Benefits of owning a home
There are certainly benefits to owning a home. One of them is tax benefits. There is the mortgage interest deduction - the most coveted of tax breaks. This is often at the epicenter of arguments as to why owning a home is better than renting. Next up we have appreciation/inflation. The housing market is always influx. This means there are time when it is downright killer to sell your home, and you could potentially make some great money and then there are times when selling your home would mean you lose some money. You must also consider about keeping up with inflation. As the years go by the cost of living will definitely increase. This means the value of your home will increase over the years but so will maintenance, insurances, and other expenses as well. Do your due diligence, and weigh the pro's and con's of home ownership.


Renting
Initial costs 
Initial costs include the rent security deposit and, if applicable, the broker’s fee.

Recurring costs 
The recurring costs include the monthly rent and the cost of renter’s insurance.

Opportunity costs 
With renting, you may have more money to invest elsewhere. If you owned a home this would be money that would be tied up in equity and as a result, you wouldn't be making any money off of it. This is the missing link between renting and buying, which is poorly understood. Tied up equity is the largest cost of home ownership that you must consider.

Net proceeds 
Net proceeds include the return of the rental security deposit, which typically occurs at the end of a lease. Usually you will have to maintain the rental in the condition that it was to receive your security deposit back. 

So, now that we have gotten all that information out of the way, Let's throw some numbers around. 

Let's say you are pondering the decision to purchase a $235,000 house. And, let's say you plan on staying in that house for 1 year. If you can rent a similar home for $2,746 per month then renting would be the better option. This is because costs after 1 year of buying will be broken down like this: Initial costs, $60,000, recurring costs, $17,216, Opportunity costs, $2,040. This was calculated with mortgage details that have a 3.67% mortgage rate, a 20% down payment with a 30 year mortgage, 1% maintenance/renovation fees, 0.46% homeowners insurance and $100 in monthly utilities. We won't delve into net proceeds as this is a variable that is dependent upon multiple items. 

Now we'll break down the rental aspect after 1 year. Initial costs, $2,746 (plus the deposit for the first month), Recurring costs, $34,152, and Opportunity costs, $93. This was calculated with 0% broker's fee and 1.32% renter's insurance with $100 in monthly utilities. Renter's insurance varies so don't take that number as an average. 

Now, if you plan on staying in that house for 5 years and all of that information in the former paragraph's stays the same then if you can find a rental of similar caliber for $1,064 per month, then renting is better. As you can see the longer you plan on staying in a house the better it is for your money overall. There aren't too many rentals that are going for $1,064 right now and you certainly will not get into a house with that amount. With $1,064 you will most likely be looking at apartments instead of houses. 

In conclusion, Renting Vs. Buying is something that you should heavily consider. The longer you plan on staying in one spot the better it is for your money. If you are just looking for somewhere to live for a short period of time then renting would be your best option. There are many factors to consider so just do your homework, or better yet, find a real estate agent to help you calculate all of this out for you. 

As your San Diego Real Estate Experts, Realty Executives Dillon can assist you in the next purchase or sale of a property. Feel free to contact us should you have any questions. 

Become Financially Independent

As 4th of July is closing in on us this weekend, many of us are preparing to celebrate during the three day weekend. Why not use this time to ponder about becoming financially free?

Some things to consider and start doing now to help you become financially independent in the future.

Automatic Money Savings

This one is simple. Make your savings automatic instead of having to manually input your savings into your bank account every check. The less effort that it takes to save, the more likely you are to contribute to your savings. Whereas you are less likely to save if you have to manually input your savings.

When money is taken straight from your paycheck and directly deposited into your savings or 401k account- you are boosting your wealth. Paying yourself first means you don’t see that money so you won’t even consider missing it. Avoid the mistakes that many of us make when we pay ourselves last. When you do that, often there is nothing left!

Take Care of That Mortgage Payment

Many American homeowners are on the path to refinance their home. If you have already refinanced or don’t qualify for one, you might be thinking about other options you have to save on your mortgage payment. Why not try rounding up your payments?

Let’s say you have a monthly mortgage payment of $954.83. If you round up your payment to $1,000 you will pay off your debt two years and five months earlier than expected! By simply paying an extra $45.17 per month. It’s the simple things in life that are often the most overlooked. Head over to our mortgage calculators to check out what rounding up your payments can do for you.

Establish A Budget

Another simple yet affective activity that will help you become financially independent, establishing a budget. Spending more than you earn is never smart. Yet many Americans spend more than they can afford to! Live within your means, or better yet, live BELOW your means. You must establish a budget system if you want to one day become financially independent. By not establishing one you will almost always spend more money than you should.

Focus On The Future

Do you have food on your plate, gas in your car and a roof over your head? Then you would consider yourself as doing well, right? Many people only think about right now, but you’ve got to think ahead. Ask yourself where you see yourself in 5 years. What are your aspirations right now and how are you acting on those to get to where you want to be? Develop a 5 year plan and work on it every single day. Consistency is key, especially when working on improving yourself. Don’t cheat either because you would only be cheating yourself.

Implement these actions into your life now and you will see the growth and benefits in no time. Saving money is no easy task but once you master it you will be glad that you started when you did.

As your San Diego Real Estate experts, Realty Executives Dillon can assist you in the sale or purchase of your next home. Contact us should you have any questions. Now enjoy that Summer Sun!