Beyond your dreams, yet within your means
Real Estate ForumBY JOYCE NENNINGERQuestion: I want to buy a second home, but I do not want to get caught in a speculator market. Do you have any comments? Answer: Inman News just published a very interesting article on this very subject, written by Christing Hrib Karpinski. She begins her comments with the estimate that 40 percent to 60 percent of the more than 60,000 condos and homes under construction in Southeast Florida are under contract with speculators. Speculators only purchase properties in areas where they think there will be huge appreciation factors. They never intend to occupy the property, but just want to sell at an appreciated price. Areas where a large percentage of speculators invest make those areas more vulnerable to artificially inflated prices.All of this talk about a real estate bubble shouldn’t stop anyone from buying a dream vacation home. But it should make prospective buyers do more research. A little homework is required to protect buyers and make sure they’re making a sound investment. If you buy in an area where there are too many speculators, the risks of the bubble bursting, and you getting soaked by the burst, are much higher.
Here are some tips for buyers interested in purchasing vacation homes:- Start with a plan: Whether buying for personal use or for investment, you should start with a plan. Confidence in an investment takes some research. – In Summit County it is likely you can buy beyond your dreams yet within your means. Buy with your head as well as your heart. It’s easy to get caught up and sign on the dotted line when you see that gorgeous beach home or perfect ski resort. Just be sure to do your due diligence. – Research the area: Is this a new emerging area? Or is it an older, more developed area? This makes a lot of difference. If you are looking to purchase in an area that’s well-developed, such as Cape Cod, then there’s less to worry about. The supply is so low in these areas that historically they indeed hold their value. But exercise caution in an emerging market such as Southwest Florida to be sure that there are not too many new developments causing inventory to exceed demand. – Use a real estate agent. Pick his/her brain. Ask tons of questions, scour through good websites and absorb as much information as possible. Use your agent’s expertise to your advantage. – Beware of overextending with “teaser” mortgages: Yes, you can afford that property with a 3.5 percent interest-only payment, but be realistic. That payment is likely to go up, and maybe faster than you think. Mortgage rates today are still at an all-time low, but if you’re using an adjustable-rate or interest-only just for the affordability factor, watch out, your rates will go up. – Leave your options open: You might be saying, “I want to buy a vacation home for personal use. I never intend to rent it out.” Well that is perfectly fine, but you can never be sure what tomorrow brings. Today, it may be financially feasible to not rent your home, but what will tomorrow bring? What will change in your finances over the years? Will you be retiring? Will your children be attending college? What about the simple costs of ownership? Buy in an area where you know you can utilize the option to rent your property.
Vacation homes can be good strong investments. If you make well-researched, educated decisions you’ll be setting yourself up for success, not failure. Smart investing is all about eliminating your risks from the start. Call one of our buyer specialists now and start exploring the many options in Summit County.Question: Joyce, we are going to sell our home this summer. What do we need to do ahead of time?Answer: Suggestions to help you get started:
1. Start packing. You will want your home to show like a gem. Have you ever looked at a model home? This is how you want your home to show. Open spaces help buyers visualize how their items will look in your home. Buyers do not want to look at all of your lovely memorabilia and years of treasures. So put items in storage and clear out clutter. You will have to pack sooner or later, so pack now.2. Get estimates from a reliable repair person on items that need to be replaced, a roof or worn carpeting, for example. In this way, buyers will have a better sense of how much these needed repairs will affect their costs. Or if you are able, a fresh coat of paint and new carpeting could put you ahead of your competition.3. Get a presale home inspection so you’ll be able to make repairs before buyers become concerned and cancel a contract.4. Gather together warranties and guarantees on the furnace, appliances and other items that will remain with the house.5. Fill out a disclosure form provided by your real estate agent. Take the time to be sure that you don’t forget problems, however minor, that might create liability for you after the sale.Call JOYCE NENNINGER at (970) 468-6800 or (800) 262-8442 for answers to your real estate questions. Or e-mail Joyce@SummitRealEstate.com or you can visit her website at http://www.SummitRealEstate.com. She has lived in Summit County for more than 20 years. Joyce is the broker/ owner of Summit Real Estate – The Nenninger Team at the Dillon Ridge Marketplace. Her longtime residency and years of real estate experience can help you make the most of any buying or selling situation. She is a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field. She ranks in the top 4 percent of Realtors nationally.
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