Of all the things people do in attempts to predict any market; calculations, charts, graphs, etc. there is one very simple, time proven strategy that works more than all others. You do not even have to have a PhD. in economics or from Harvard to understand it. The predictor of when to buy and when to sell is 'Buy Low, Sell High'.
The smart money follows this simple rule while the rest of society runs around looking for the end of the rainbow. If one were to maintain their senses, stop and look around at what the real estate market has done, is doing and continues to do they might just learn something. That 'something' would be that the smart money has already moved to real estate. This is no more evident than Warren Buffett's holding company, Berkshire Hathaway, getting into the real estate market. Since 2013 Berkshire Hathaway, lead by Buffet, has segued into the real estate market by forming Home Services. Home Services is a real estate operation that licenses its name to independent real estate brokerages. With the Berkshire brand behind them many brokerages are finding amazing success. Why would Buffet do this? The answer is simple. Buffet has long been known to be ahead of the market, especially when it comes to investing. He has also watched as the market has self corrected and the real estate industry is pulling itself up, without the help of government. Many economists and investors know when something is able to pick itself up, without help, that is good for everyone and something to be part of and this is why the 'smart' money is getting into real estate. People will always need a home. Whether it is a young couple looking for their first, a growing family needing more space, a grown family looking for a vacation spot or empty nesters looking to retire. Buffet and savvy investors realize this and with the market on a continual rise what better time to put your money into real estate? PNP Real Estate is a part of Dunes Real Estate Group that helps buyers and sellers of real estate in the Hilton Head Island and Bluffton area of South Carolina. If you are looking for someone to provide you with information that will allow you to buyer or sell and save you two of your most valuable assets, TIME and MONEY, call us for a no-obligation consultation on property values in your area at 843.338.6737 or email pnp14@msn.com.
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In light of the recent tax assessments sent out by Beaufort County we thought we would shed some light on this topic since it seems to have sparked some interest.
Beaufort County determined the assessed value of a property based off sales from the past 5 years of comparable properties. Comparable properties would be homes, condos or lots that are of similar size and location within the area. Essentially an average of like properties is determined and can/will be modified if a home has been remodeled, updated, expanded, etc. Many have expressed their view that their property taxes are higher than the value of their property or similar properties within their community. It is important to remember, if there have not been any sales of comparable properties in your neighborhood the county will use comparable properties in nearby neighborhoods. If the assessed value is higher by 20%-30% that does not mean your taxes go up by an equal amount. Let us explain. If you own a property that is your primary residence, in the 501District on Hilton Head Island and feel your property is worth $300,000 but the county has recently assessed it at $400,000 that would seem like a big difference. However, the difference in taxes is less than $230/yr. or just more than $19/month. If you owned a home in the 600 Disctrict of Bluffton that you felt was worth $500,000 but the county had at $600,000 the difference would be $540/yr or just more than $63/month. To some the difference in taxes might be worth fighting the county. If you choose to fight the county on your assessed value you should be certain of a few things:
We are not saying the county is right and you should turn a blind eye to negligence if you feel that is what has taken place. We just want you to know the process of assessments in Beaufort County prior to you taking on the task of challenging local government. If you would like more information about tax assessments in Beaufort County, property values in your area of interest or know someone that is looking to buy or sell real estate in the Hilton Head/Bluffton area feel free to contact PNP Real Estate for a no-obligation consultation. We look forward to sharing our 20 years of experience in the area to save you TIME & MONEY. Catastrophic events are something many homeowners have to deal with. Whether it is damage caused by a fire, hurricane, tornado, flooding or something else being prepared is the first step to recovery. Building back your life, after a tragedy happens, can be made much easier if you have the right things in place. Let's take a look at what the Town of Hilton Head Island is doing and some things you will need to get your home back as soon as possible. Should you experience a disaster to your home, the Town of Hilton Head believes being prepared to build back and reestablish the community as soon as possible is of the utmost importance. To help homeowners do this they have established the disaster recovery procedure so the preapproval process of plans and documents for residential structures are in place. This allows the process of building back to be much more efficient. These are required documents that expedite the rebuilding of damaged structures due to disasters such as fire, hurricane, flooding, etc. The disaster recovery program started for two reasons 1) to reduce the number of approval requests after a disaster and 2) to help owners quickly begin the recovery process. Disaster recovery documentation means your home will be top priority. The recovery process will be faster, with less red tape and down time. In addition, you will have first access to contractors who want to get to work quickly. When a disaster strikes your home, where the things you value are kept, it is important for you to be able to verify the state of your home or business prior to the event. If your home is properly documented and registered, rebuilding can occur more quickly. If you do not have things in place you will have to search for your documents and if they were destroyed you will be required to replace them. If this happens, you will be waiting in long lines at overburdened town offices trying to obtain the permits necessary to get your life back to normal. Some key items to have registered for your disaster recovery documentation would be:
* You will be asked to provide an inventory of lost or damaged items. This kind of detailed record is invaluable for insurance claims. What should you do to get started? A surveying company can help you with all the aforementioned items. Once taken your data is scanned, registered with the Town of Hilton Head and then digitally stored on a CD or memory stick for your records. Duplicate sets are then stored at the offices of the surveying company and on a secure offsite server. These are but some of the things that will help you get your life back to normal should you experience a disaster. If you would like more information or have questions about real estate on Hilton Head Island or in Bluffton, SC, contact PNP Real Estate. 8/5/2013 Flood Insurance: What changes are being made by FEMA, What you need to know and How will it effect you?Read NowDue to the number of devastating hurricanes that have hit our coasts in the past few years, FEMA (Federal Emergency Management Agency) will no longer be subsidizing flood insurance. What does this mean for homeowners around the country? It means, flood insurance rates and how those rates are determined will be going up.
This is not just a coastal change either. This applies to anyone and everyone that carries flood insurance; i.e. those that live near lakes, rivers and streams are just as susceptible to flooding as those along the coast. As it pertains to Beaufort County, South Carolina there are different categories a property may fall into based off when it was built. These categories would be as follows: FIRM - Flood Insurance Rate Map Prior to 1977 in Beaufort County the use of flood maps was virtually non-existent. As a result, homes built at this time were not required to meet the criteria they do today. From 1978-1984 is when flood maps started being utilized. This put any home being built into a different category for insurance. When the Town of Hilton Head incorporated in 1984 the maps were redrawn and have remained so until now. As this is being written the new maps are being configured and should be out in the near future. To gain a better understanding of each time period and how the property will be effected please see below: PRE-FIRM
NOTE: Hilton Head Island was incorporated as a town on 9/12/84. If you are getting a flood insurance quote on a home that was built 1977-1984 it should be for a POST FIRM. POST FIRM
Reserve Fund Everyone that has flood insurance will be required to pay a 5% premium for an emergency fund. This will become effective 10/1/13 and is set in place for any shortfalls that may occur within the flood insurance programs offered. For more information on flood insurance and how it could effect your current property or the purchase/sale of a property in Bluffton or Hilton Head Island call PNP Real Estate or your local insurance agent. The condominium market on Hilton Head Island and in Bluffton is booming. We have seen a significant reduction in the amount of inventory of condominiums and all signs indicate this trend will continue throughout the summer. One thing buyers of condominiums need to be aware of is condominium insurance, also known as HO-6 insurance. What is HO-6 Insurance? When you buy a condominium on Hilton Head Island or in Bluffton, there is often a POA (Property Owners Association) that manages the complex for the owners. One of the things the property management does is contract and pay for insurance on the complex and monies to pay for this is taken out of your monthly fee. However, the insurance typically covers the exterior and standard replacement of the interior. If you upgraded your unit with granite, tile, etc. you would NOT be covered by the group policy. In this case you would benefit greatly from HO-6 insurance. In addition to covering any upgrades to your unit it would also cover the contents, loss of use if the property is used as a rental, and liability should someone get hurt. These policies often start around $350/yr., depending on the coverage. Prior to getting a HO-6 policy you should check with your lender, if you have a mortgage, to see if there are any requirements they have. If you would like to know more about Condominium Insurance; i.e. HO-6 insurance, contact your insurance agent. If you have a minute, watch local insurance agent Kristen Hayrinen discuss this topic in the video below: A recent article in The Island Packet discussed how US mortgage rates are on the rise. After years of record low interest rates this rise could have a negative effect on your purchasing power. According to Freddie Mac the average rate on a 30 year fixed mortgage is now 4.46%, which is up almost a full percentage point from a year ago. PURCHASING POWER Any increase in the interest rate reduces your purchasing power. For example a buyer that a few months ago locked in a 3.35% rate on a $200,000 mortgage would have a monthly payment of $881 according to Bankrate.com. The same mortgage at the current rate of 4.46% would increase the monthly payment to $1,008 per month (not including taxes, insurance). This adds up to quite a bit over the term of the loan, $45,720 to be exact, which is why many buyers have been getting off the fence to BUY NOW. This is no better illustrated than by the significant reduction in inventory levels on Hilton Head Island and in Bluffton. We are now below a 9 month supply of homes and condos and that number continues to drop. For many of you that have been considering buying but are not sure, this should be a wake up call that NOW IS THE TIME TO BUY!!! Although the Fed is doing what it can to raise interest rates, they are still extremely low. Does anyone remember the 1980's and interest rates in the 17%-22% range? As inventory levels continue to plummet the choices you have to choose from dwindle as well. As this continues your dream home might be gone while you procrastinate on whether you should BUY NOW or wait. But let me ask you this question, 'What are you waiting for?' There has not been a better time to purchase real estate, especially on Hilton Head Island or Bluffton. You have spent the last 20, 30 or 40 years working so you could enjoy your life. Why wait any longer when you can take advantage of prices that have not been this low in 10 years and interest rates that are still ripe for the taking. Take advantage of this opportunity before its to late and your 20/20 hindsight tells you that you missed out on a once in a decade opportunity. Real estate closings on Hilton Head Island and in Bluffton differ from what you may be used to in your state. A majority of soon to be owners are not at the closing but are done through either a Power-of-Attorney (POA) or a mail away (where documents requiring a signature are mailed to the client). One of the role's of the attorney in the real estate transaction is to coordinate the closing with you, the lender, your realtor and the seller's attorney. The attorney is often the moderator of the transaction. On the day of the closing, the Purchaser signs the required documents and funds are then transferred. However, this does not mean you will walk out of your attorneys office with the keys to your knew home in hand. Time is required for the funds to transfer and clear and paperwork to be processed. Typically, if you sign paperwork in the morning you will be into your home by that afternoon or evening. It is recommended for those coming from out of the area or for those scheduling contractors to allow 1-2 business days before moving in or scheduling work to be done. This allows time for any oversights to be corrected and does not leave you having to stay in a hotel while the issues are resolved. For more on the real estate attorneys role on Hilton Head Island and in Bluffton listen to what Chuck Wiseman and Jeff Reilley of Wiseman & Reilley, LLC have to say about the closing process in our video below: One of the best things someone looking to purchase real estate can do, prior to beginning their search, is to talk to a local lender. For a number of different reasons 1) to see how much they can qualify for and 2) to see what type of loan might suit them the best. If you do not talk to a lender prior to conducting a real estate search you might be wasting your time. Often buyers will look long and hard before finding the 'perfect' property only to find out they do not qualify for the amount needed to purchase such a property. On the other hand, they might find they qualify for more than they thought and thus are able to purchase that one of a kind property they once thought was out of their price range. With that being said there are a number of different loans a buyer may have to choose from. Let's take a look at some of these loans and what distinguishes each from one another. CONVENTIONAL- These loans typically involve a loan amount of 97%, 95%, 90%, 80% or below the purchase price. If the LTV (Loan to Value of the property) is greater than 80% Mortgage Insurance (a.k.a. PMI) may be required since it is considered a higher risk to the lender. Conventional loans are most often used to purchase a primary residence, second home or investment property and often require a minimum credit score of 640. In South Carolina the conforming loan limit is $417,000. This means that the loan amount (not the contracted purchase price) is $417,000 or less. FHA- On an FHA (Federal Housing Administration) loan a buyer can borrow up to 96.5% of the purchase price. This means you can borrow up to 96.5% of the value of the property. Typically those that use an FHA loan are borrowers with lower credit scores but are on the rise. You can only use an FHA loan for a primary residence and cannot use it to purchase a second home or investment property. The maximum loan amount on this type of loan is $387,500. VA- (Veterans Administration) With a VA loan you can finance the entire purchase; i.e. 100% LTV. There is no mortgage insurance required on 100% financing. Yet, there is a VA Funding Fee unless you are exempt from such a fee, which is generally financed into the loan. As long as you qualify you can get a VA loan more than once however, it must be for a primary residence only (no secondary or investment properties). The maximum loan amount you can receive is $417,000. RURAL HOUSING (USDA)- Those looking to use a USDA loan do NOT have to be first time homeowners. But, you cannot own another home in the immediate area. It is possible to get 100% LTV. USDA loans do not have mortgage insurance however, there is also a fee associated with this type of transaction that is paid directly to the USDA. Unlike a VA the USDA loan does have a monthly fee which is relatively low compared to a conventional mortgage insurance payment. USDA loans are area and income specific. Make sure to check yours and the properties eligibility with the lender. This type of loan must also be used to purchase a primary residence and cannot be used to purchase secondary or investment property. If you have a family of four you cannot earn more than $80,300/yr and for a family of 5 or more you cannot earn more than $106,000. NON-CONFORMING/JUMBO- These loans are used for primary or secondary homes on amounts over $417,000. The rates are generally higher than conforming loans and the down payment requirements typically increase the higher the sales price. However, make sure to check with your lender as sometimes special financing may be offered. For more information on Mortgages and Lending visit the Finance page of our website at http://www.pnprealestate.com/finance.html. You will find some of the sharpest minds on Hilton Head Island and in Bluffton to answer your most asked questions. If you do not find the answers you are looking for contact us and we will get the answer for you. We are proud to announce the launch of our new website www.pnprealestate.com. This website was created so Buyers & Sellers alike could have access to an abundance of information when considering owning or selling real estate on Hilton Head Island, SC or Bluffton, SC. The website will eventually be able to be accessed through www.hiltonheadrealestateinfo.com as well as www.blufftonrealestateinfo.com.
We built this website after listening to what you, the client/customer, had to say about the real estate process. Our research showed us you would much rather spend time listening to an expert (we have provided the best in the area) than reading page after page of information. We have taken the time to eliminate the garbage and given you the important things you will need to know when buying or selling real estate. Whether you are a first time visitor to the area, looking to purchase real estate or a long time resident looking to sell your property you will find our website second to none for information. And as many of you know in today's world, information is everything. We look forward to earning your trust and helping you buy or sell real estate on Hilton Head Island or in Bluffton. For more on PNP Real Estate and why you would benefit from working with us take a few minutes to watch one of our videos below: |
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PNP Real EstateOur goal is to help you Buy or Sell your property in a timely fashion by providing you with all the information necessaryFor answers to all your questions contact us at (843)-338-6737. Archives
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