Don’t wait too long before taking a peek at my newest listing in Settlers Bridge.
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A few days ago I was showing property to an out of state buyer when I noticed his spreadsheet on the homes we were previewing had a Zestimate Value column.
What is a Zestimate: (Definition from Zillow)
The Zestimate® (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value.
The Zestimate on my buyers spreadsheet was substantially lower than the listing prices of the homes we were previewing which peaked my curiosity. It’s critical to have accurate data in order to make an informed decision about buying a home. No one wants to pay more than necessary to obtain their dream home nor do most want to insult the seller of a home with an unrealistic offer. Knowing what’s happening in the the current market is crucial!
How is it that Zillow could obtain sold data on Idaho homes when Idaho is a non disclosure state? Non disclosure states do not publish sold prices for public record. I decided to do a little research.
Using information from our local data base, Intermountain Multiple Listing Service, I found recent sold homes and compared them with the Zestimate value on Zillow. In every sample the numbers were far apart.
Here is one example of a home that I recently listed and within a couple of days secured a full price offer. This particular home was listed just a little under average square foot price for the neighborhood.
Listing & Offer Price: $499,000
Zestimate Value: $414,894
That’s a pretty substantial gap!
If you want to know what a home actually sold for, you need to call a Realtor. As a Realtor, I can look up that information for you in our MLS system. When we input a home into the MLS and that house sells, we are required to report accurate sold information.
I was able to provide my buyer using the Zestimate Value accurate data about our current home market. Happily, we secured a new home for him and he is excited to move his family to Idaho.
If you are looking to buy or sell a home and want accurate data to help you make an informed decision, your best bet is to call a Realtor.
Have you ever dared to look at the total amount of interest you’d pay if your mortgage went to a typical 30 year term? Yikes! Want a few simple ways to cut that interest down to size? Found this great article written by Barbara Bayer that I thought some of you might enjoy.
Send in extra money to pay down principal
In the mid-1970s, Marc Eisenson coined the term “banker’s secret,” which promoted a cost-saving idea: Pay more than required on your monthly mortgage, and you’ll save a pile of money. Eisenson says, “It was a secret that bankers knew, but didn’t share with their customers.”
Here’s how it works. If you take out a $200,000 30-year mortgage at an interest rate of 6%, and hold it to term, you’ll pay a total of $382,537.97 for your home, including interest of $182,537.97. However, if you send in just $100 each month in additional principal, you’ll save more than $49,000 in interest over the term of the loan.
There’s another huge perk: You’ll pay off the loan five years and five months ahead of schedule. This strategy puts you in total control of the restructuring process, and there are no fees involved.
Another way to pay off your loan early is to use a bi-weekly payment plan. Banks and third-party companies can implement this plan for you, but they’ll charge hundreds or thousands of dollars in fees. We don’t recommend you pay for the service unless you lack the self-discipline to make the payments yourself.
With this strategy, you make half your monthly mortgage payment every two weeks, which equals 13 payments a year instead of 12. With bi-weekly payments on a 30-year $200,000 loan, you’ll save more than $49,000 in interest over the course of the loan, and pay it off approximately five years earlier.
Other ways to easily do it yourself:
- Make one additional mortgage payment per year at any time.
- Divide your monthly payment by 12, and add that extra amount each month when you pay your mortgage.
Recast mortgage for lower payments
If you want to lower your monthly payment and have at least $5,000 to contribute, you can request a mortgage recast. In this scenario, you don’t change the interest rate or term of your mortgage, you change the principal balance, and the term begins anew.
Here’s how it works: After 10 years of paying your 30-year mortgage with a 6% interest rate and a monthly payment of $1,432.86, your balance is $200,000. With a mortgage recast, you contribute an additional $20,000, and have a new principal amount of $180,000, with the same remaining 20 years to pay it off at 6%. However, your new monthly payment is $1,289.58, for a savings of $143.28 per month.
There’s a small fee for this service — approximately $250. The bank gets nothing out of this except retaining your loyalty, so they don’t promote it. It’s up to the lender whether it’ll do it, so all you can do is ask. It’s also likely to be a lengthy process. You have nothing to lose, however, except a higher monthly payment.
Refinance your loan
The most common way to restructure your loan is with a mortgage refinance, where you replace your current mortgage with a new one at a lower interest rate. If you took that same $200,000 balance on your 6% mortgage and refinanced into one with a 5% interest rate, you’d reduce your monthly payment from $1,199 to $1,074, saving $125 monthly.
Refinancing may be challenging to get approved for in a tight lending environment, where you need stellar credit scores and a steady job history. You’ll also need to pay closing costs, which can run 3% to 6% of the loan amount.
These tips are appropriate if you’re current on your mortgage and have extra money. Struggling home owners should consider the government-sponsored Home Affordable Modification Program (HAMP) for mortgage restructuring.
What is it? That thing which we cannot live without, water. Oh sure it’s nice to have in the house to do random things with like bathe or brush your teeth but not behind the walls or heaven forbid, in the crawl hole. The dreaded crawl hole, that dark place that makes claustrophobic men shudder.
It’s the last thing you want to find out when you are giddy with excitement about finding your dream home or trying to sell your current one. But let’s face it, it has to be dealt with or it will only get worse.
I have a good deal of stories about water intrusion from my 23 years in the real estate market. The ones that make me cringe the most are the stories of buyers who didn’t find out about water problems until after they bought their home. Sometimes these buyers did not choose to hire a home inspector (never, I say never do that) or they hired someone unqualified do the job right.
It’s very important to hire professionals with plenty of experience and referrals when investing in something as expensive as a new home.
Infrared thermal imaging is one way home inspectors can find traces of moisture in your walls before any visual evidence appears. I recently experienced this first hand with a home I was marketing and we were able to make the repairs much cheaper than if it had gone undetected. Whew! Happy seller makes me happy Realtor.
I highly recommend considering a home inspector who uses this new technology. Do I know one you ask? Of course. His name is Randy Funk. Check out his website for more information here. He serves all of SW Idaho and is regularly featured on 670KBOI. He might just be a local celebrity.
When hiring a Realtor to help you find your new home or sell your existing home in the Boise area, it’s just as important to hire a professional with lots of experience and referrals. I might happen to know a great Realtor too….ME!
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On tuesday, March 13, 2012 the Joint School District #2 will be asking voters to approve a $28 million dollar supplemental levy that will be used for school district operations. According to the district the supplemental levy will be used to restore 9 school days during each of the next two school years and to replace the one-time revenue that funds the district’s current general operations.
What will this cost you? For a home with $100,000 in taxable value the increase would be $115.00 per year. For example, if your home’s assessed taxable value is $200,000. your tax increase will be $230.00 per year.
Whether you are a property owner or a renter, both will be effected as costs are passed on to the end user. These are tough times for many families and business with many making cutbacks in their budgets. Now is not a good time to be raising taxes on homeowners who for the last couple of years have had an increase to cover the Idaho State welfare budget shortfall.
Whatever your opinion, we have the privilege and responsibility to vote, so please do.
Who is eligible to vote? You must be a U.S citizens who has been a residents of Joint School District No. 2 for at least 30 days and are 18 years of age or older.
Curious about your neighborhood values? Visit my website at: igroupre.com and sign up for my Dream Home Finder. It’s quick and easy!