Building Long-Term Wealth With Your House

I know you want your children and grandchildren to live happy, healthy and prosperous lives — and through your home and property, you can take steps to providing that security! Click through to learn how you are already positively impacting the next generations' wealth.   Often people ask me, "Theresa why did you become a Realtor®?" And my answer, "well because its in my family blood!" Real estate is one of the largest assets people own. Real estate tends to appreciate over time, so with care, home equity can be the foundation for your family's fortunes, resulting in profits that can affect your children's and grandchildren's wealth. I am living proof that owning real estate can put you on a path to growing generational assets. On both sides of my family it was instilled in me that "you can't make land" one of the safest investments is usually real property. Home equity Why all the buz about home equity? Home equity is the portion of your house and property that you own; it is not the full value of your house, but rather the house's current market value minus any outstanding mortgage debt. When you borrow to buy a home, your initial equity stake is usually just your down payment. Over time, your home equity increases as you make mortgage payments and as your home's market value hopefully climbs. You might look at your monthly mortgage payment as a forced savings account: You're investing for the future. When you make home improvements — remodeling the kitchen or adding energy-efficient features that provide tax deductions — you improve the property's appeal and thus its marketability. Your equity is your real financial potential! On top of it being a type of "forced savings account, "it is an asset that can be borrowed against or sold for profit. It is an asset that you can use essentially at anytime and usually with lower financial consequences than a credit card for example. You can tap into that equity through a home equity loan or line of credit, or with a cash-out refinance, perhaps getting better interest rates than on a personal loan.  Transferring home equity to your descendants If you include the house in your estate, bequeathing it to your children, you can pass along this wealth to your descendants. Your descendants might choose one of several options: They might sell the house. They might make it their primary residence, especially if they have affection for the house, perhaps because they were brought up in it and/or have some appreciation for what you did to acquire and maintain it. They might choose to rent out the property, making it a potential source of passive income. Including the house in your estate can both improve bonds between generations and provide for the younger generation financially, as they will be able to leverage the home's equity for their own purposes. How do you pass your house and its equity to your descendants? There are a few options: You can leave it to them in your will. This document includes instructions to distribute your assets, such as your house, to the beneficiaries you choose. You can create a trust. This places your home in a legal entity that you create. The trust takes title to the house and then distributes ownership to your designated beneficiaries when you pass away or at a date you specify. You can create co-ownership of the house. Joint tenancy puts your heirs' names on your deed. Full ownership of the home passes to them when you die. There may be gift tax consequences and your heirs may pay more in capital gains tax if/when the property is sold. You can create a transfer-on-death deed. For this, you designate a beneficiary as you would for an insurance policy or investment account, and your home goes immediately to your heir on your death. It's efficient and avoids federal gift taxes. However, many states don't allow this type of deed. For best results, be sure to work on your home and generational wealth issues with legal and financial professionals. Not all options are good choices for all families. Owning a home is a cornerstone of the American dream; it can also be a tool for building generational wealth. Your house can give your children a financial advantage, as it allows them to combine your property with whatever they have made on their own. When you establish home equity, you create a lasting financial legacy for your family, setting up your heirs for long-term success. I love to share more of my own family history and how owning real estate changed my life and made it my life's passion to help others establish their own American dream! Modified by: Theresa Tscheschke Gunal to reflect Colorado local Real Estate ; Used courtesy of Racel Lefkowitz, Home Actions, LLC

Making The Right Offer

You’ve found your dream home and been preapproved for a mortgage, and now you’re ready to make an offer on the property. But how big of an offer should you make? Click through for some insights into getting started on a negotiation.   Should you make a full-price offer, one equal to the home’s listing price? Or should you offer $10,000 less? That depends largely on the real estate market of the neighborhood you are in and the season of the year. (Yes, the real estate market is seasonal.) How do you make an offer? Once you find a home that fits your needs, you’ll work with me to make an offer on that property. Say the sellers are listing the home for $550,000. You might make a full-price offer for that amount. Or you might try to negotiate a lower sale price, perhaps offering $530,000. Your real estate agent will submit your offer to the agent representing the sellers. The sellers can then accept the offer, reject it or come back with a counteroffer. That third option is a common one. Say you offer $530,000. The sellers might counter, asking for a final sale price of $540,000. In either case,  if your offer is so low to begin with the seller might feel insulted and then might end negotiations, thinking that you and they will never reach an agreement. Sellers do not have to accept an offer under list price and most sellers are especially reluctant to do so when inventory levels are low in their metro area. You then have the option to accept the counteroffer, reject it outright or make another offer. In this case, you might offer $535,000. These negotiations continue until either you and the sellers agree on an offer or one side cuts off the negotiations and walks away from the deal. What should you offer? How much should you offer on a home for sale? There is no one answer to that question. It’s important, though, to understand the demand for homes in your market and how long homes have been on the market in that area. Generally. if homes have been on the market less than a month sellers are less willing to negotiate. If homes are selling quickly and often fetching full-price offers, you might offer the sellers their full asking price or more. This is especially important if homes often attract more than one bidder. If you make an offer $20,000 under the sellers’ asking price and another bidder makes a full-price offer, you might lose your chance to buy the home. But if home sales have slowed down in an area, you might have more room to negotiate on the sale price. Maybe the sellers have had their property on the market for several months without receiving offers. They might be more willing to accept an offer under their listing price. Other factors Price isn’t the only factor when making an offer. You can also negotiate the date on which the sellers will move out or offer a post occupancy agreement if the seller's need more time to find a home. You might ask, too, for the sellers to leave certain items behind when they move. Maybe there’s a swing set in the backyard that you know your children will love. You can ask in your offer that the sellers leave that set behind. The key is to make a fair offer. Your goal is to not overpay for a home. But you don’t want to insult the sellers, either, by making an offer that is too low. I will help you understand the best way to handle the offer in order to make a fair offer along different steps of the transactions and even BEFORE you setup showings.  I will also reach out to the sellers agent to help you decide if their is any contingencies or factors important to the seller that will help you before even submitting an offer. This knowledge can help you make an offer that increases your odds of landing your dream home! Modified by: Theresa Tscheschke Gunal ; Used courtesy of Carol Kerner-Odgis, Home Actions, LLC

Is This Your Situation: Worried That Job Hopping Could Hurt Your Loan Chances?

Thinking of switching jobs, or had a recent change? This can affect your ability to get a mortgage. With many homeowners staying in jobs for shorter periods of time vs our older counter-parts, it is good to plan when to make that job hop if you are also considering buying a home.  Ready to jump to a new job? That’s great news. But if you’re also applying for a mortgage loan, you might want to put a hold on that job-hopping until after your loan closes, especially if you are planning to take a job in a new industry. Changing jobs right before you apply for a home loan could hurt your chances of actually qualifying for it. That’s because lenders might worry that you’re more likely to lose that new job than you are a position you’ve held for two years or more. In general, lenders want to see that you’ve worked in the same job for at least two years. Barring that, they prefer working with borrowers who have at least worked in the same occupation for at least that long. The jobs rule isn’t a hard and fast one. Different lenders will view your job hopping in a different light. But if you want to give yourself the best chance of securing that mortgage loan, resist the temptation to jump to a new employer until after the closing papers are signed and the financing for your new home is finalized. For even more information about what lenders are looking for and how to score a mortgage loan, give me a call today. Modified by: Theresa Tscheschke Gunal ; Used courtesy of Jasser Ryan Go, Home Actions, LLC