How to Stop Worrying & Start Living!

The title of this post has been borrowed from Dale Carnegie’s book of the same name and all of these quotes are from his books. 

Many many people live their entire life without ever owning a home because fear got the best of them. The intentions here are not to push you into doing something you don’t want to do, but to nudge you to actually do the things you have always wanted to do. Read these quotes and apply them to your life in anyway that helps.

One of the worst features about worrying is that it destroys our ability to concentrate. When we worry, our minds jump here and there and everywhere, and we lose all power of decision. However, when we force ourselves to face the worst and accept it mentally, we then eliminate all those vague imaginings and put ourselves in a position in which we are able to concentrate on our problem.


Take a chance! All life is a chance. The man who goes farthest is generally the one who is willing to do and dare.


One of the most tragic things I know about human nature is that all of us tend to put off living. We are all dreaming of some magical rose garden over the horizon instead of enjoying the roses that are blooming outside our windows today.


 

If you are not in the process of becoming the person you want to be, you are automatically engaged in becoming the person you don’t want to be.

 

 

The American Dream

Have you thought much about your goals and dreams lately? Where would you like to be in 5 years?  Take a moment and actually think about that.

Would you be happy if you were in the same exact spot, but 5 years older? If not, what would you like to see change? Would you like a better job? Would you like a better home?

Why not strive for it? We live in a great country. And if you work hard, are determined, and have initiative you can achieve anything. That is the American Dream.

No matter what that dream is, whether it is home-ownership, having a successful business, or retiring in Florida, you can start your path there today.

Here are a couple reasons Home-ownership is part of the American Dream, and it can be part of your dream too.

  • It doesn’t matter how old you are. As long as you are an adult, finances permitting, you can buy a house.
  • Financing makes home-ownership more realistic for the common person.
  • You cannot be kicked out of a house you own, as long as you make the payments you will have stability.
  • Owning a home is like a savings plan. You will build equity over the years, to cash out of or to pass on as an inheritance.
  • You make your rules. You can have pets, or not. Paint your room whatever color you like, change whatever you want, and play the drums as loud as you can.
  • Rent prices will likely rise but your fixed mortgage will not.
  • Someday the house will be paid in full. No more mortgage!

Here are a couple steps to get going in the right direction.

  1. Start Saving – You will need a down-payment. If you don’t have any extra monthly income to save, cut back on what’s unnecessary. Stop buying things, and start selling things. Get rid of cable. Drive around an older, cheaper car. Be creative and you will find some money to tuck away.
  2. Build your Credit – Keeping a Credit Card paid off, and having a contract cell phone will help build credit if you have none. But don’t fall trap and get into debt. That will hurt your chances of qualifying for a loan.
  3. Build Relationships – It’s never too early to start talking with a loan officer and a real estate agent about your goals. Building good relationships with these people can benefit you greatly. A loan officer can give you more specifics on what you need to qualify and can alert you to lower interest rates or changes in loaning guidelines that will affect you, while a Realtor will be able to alert you to a particularly good deal that comes on the market.

If you would like to start the conversation of home-ownership with a Realtor, feel free to contact me. Angie Uttecht 605-350-2553

Avoiding Bad Trends when Updating your House

 

There has never been a time in history where trends could spread quicker. Trends involving updating a house are no different. Not long ago you would have to go over to someone's house in order to see what they've done. But not today. Whether you are on Facebook and seeing updates on your friends DIY projects or you have been scrolling through Pinterest ideas, seeing unique home improvements has never been easier. If a lady in Albuquerque paints her ceiling red and pins it on Pinterest, one month later that could have inspired thousands of ceilings to get painted red across the world. That could have never happened a decade ago.

With so many ideas out there you need to be careful not to turn a "home-improvement" into an eye sore down the road. 

As they say "Easy Come, Easy Go". If something gains popularity really quickly you can almost bet it will loose popularity quickly too. Shag carpet in earth-tone colors like gold and green wasn't heard of in early 1960's but in the 70's it had become the floor covering of choice. And then only a decade later it was gone again. 

Let's look at today's trends. What kind of styles are going as quickly as they came? 

 

Bypass Vintage Spoked Sliding Barn Door Closet by TheWhiteShanty: Barn Doors and barn wood everywhere. The trend probably started because old tumbled over barns needed to be put to use and someone got crafty and re-purposed it to make picture frames and shelves. Now you can buy Faux Barn Wood Furniture. They have even created vaulted ceilings out of barn wood and corrugated metal.  Can you imagine looking back on that and cringing?

Beautiful cobalt blue vessel sink....It needs a different faucet, etc., however.  Houzz ᘡղbᘠ: Unusual Sinks. It's not hard to imagine these going out of style quickly. Every design of these glass bowls are very style specific. And a small percentage of people would like the color and pattern than if it was a regular sink. Future buyers just might not be able to imagine that bathroom being their own.

House of Turquoise: Colordrunk Designs  (Would LOVE to try this tile in a bathroom!): Chevron. This pattern got a ton of attention very quickly and could be found on every skirt, baby blanket, and book cover. But should it belong in the house? Especially paired with a trendy color, you can bet on the year this backsplash was installed, 2013. It has only been 3 years and it is dated.

Fix it or Leave it?

Fix it or Leave it?

This is the question on most seller’s mines when it is about time to sell. Will it be worth the expense of repairing and upgrading the house? There really is no way of telling if any one thing would be worth it for sure. But there are general guide lines to consider.

Who will be buying your house? Obviously you won’t know the individuals but you can guess the type of person. If it is a very low dollar house that is all-around outdated, it is likely going to be bought by an investor to be used as a rental. They are mostly interested in how much work NEEDS to be done to be fit to rent and getting it for bottom dollar. Certain things can still be done but don’t waist your money upgrading to nicer counter top or nicer carpet. If what’s there is in decent shape, skip it.

However, if it is a medium to high priced house, you will likely be appealing to someone who actually wants to live there. These are the type of people who will actually care about the style of the house.

So what should be upgraded? Take a look with fresh eyes at your house and fix the most obvious problems first. Does it need to be painted? That can be a worth while investment. Chipping paint on the exterior can make the entire house look poorly cared for. And the opposite is true. A very nice exterior paint job can make the entire house looked cared for.

Most importantly is to fix the ugliest and visually broken/neglected parts of your house first. Crumbling front steps take priority over wallpaper. Too much overgrown shrubbery takes priority over new windows. Stained and fraying carpet takes priority over upgrading the bathroom vanity. Water damaged ceiling take priority over new light fixtures.

Is your house almost immaculate? You might be appealing to someone who doesn’t want to make any repairs. If your house is “almost perfect”, consider doing what it takes to make it actually “perfect”.

One last bit of advice… clean and clean more. When you are done cleaning, clean even more. That is the cheapest thing you can do to a house that will give it a leg up. Shampoo the carpet. Wipe down the wood work and cabinets. Dust the fans and make everything sparkle. Buyers will notice, possibly subconsciously,  but they WILL notice a clean house and think more favorably of it.


If you have a specific question about whether a repair/upgrade is worth it, please don’t hesitate to give me a call. Angie Uttecht 605-350-2553

 

But is it really a good investment?

On the internet you can find every type of article. Why eggs are good for you and why they are bad for you. Evidence taken from the same studies but with different points of view. This is true about every topic imaginable. What about real estate? Is real estate really a good investment and why do so many people choose to never buy a house?

What you will find is a lot of people who are in a city telling you that real estate isn’t what it’s cooked up to be. They will tell you that it is actually cheaper to rent and that the equity you build is nothing compared to being able to skip town on a drop of a dime.

And in many areas of the country they are right. San Francisco for example has average rent of a 2BR at $4126/month where the average 2BR home value is 1.2Million. That is a mortgage payment of roughly $8,000/month including property taxes. So buying in San Francisco was a good investment in the past but being a new home owner will cost you almost twice as much as renting.

How about in Huron, South Dakota? Is it really a good investment?

Here are the numbers: Rent for a 2BR is around $600. You can buy a investment quality 2BR home for around $45,000. The mortgage, plus property taxes for that is around $330.  But you wouldn’t buy a investment quality home. You could afford  $82,000 home for the same monthly payment of $600/month.

Houses in that price range have a lot more going for them. Many have 3+ bedrooms and garages.

So, even though it is true that in many parts of the county buying a house isn’t worth it, that isn’t the case for Huron. You will be living with a lot more for your money AND build equity.

Tax Advantages of Owning Real Estate

 

Home-ownership comes with many perks. One advantage is a little bit of tax relief. You would be spending this money whether or not you owned a home because all expenses are built into the price of rent, however, a homeowner can deduct them!

Mortgage Interest Deductions: During the first years of a mortgage, most of the payment is going towards interest and only a small amount goes towards principal. For homeowners, all the interest is tax deductible. On a $100,000 30yr-loan at 4.25%, $4,200 goes towards interest in the first year. All $4,200 is deductible. This is the same for home-improvement loan interest!

Property Taxes: Property taxes are another expense homeowners have that are tax deductible.

Energy Efficiency Tax Credit: This is due to expire at the end of this year. But if you have made your home more energy efficient, you can get a tax credit of $500!

PMI: If you don’t have at least 20% paid down on your house you will be paying Private Mortgage Insurance. This is also deductible but only if you make less than $109,000 a year.

Depreciation: If you are renting out a house you can deduct the depreciation value of the house. The recovery period for a rental house is 27.5 years.  To calculate what you could deduct use this calculator. Make sure to set the recovery period to 27.5 years.
http://www.calculatorsoup.com/calculators/financial/depreciation-property-realestate.php

This information is for awareness only. I am not a tax adviser. All information given here has been abbreviated from Marketwatch.com. Consult a tax expert to fully take advantage of all home-ownership tax breaks.

Where does SD rank for best retirement state? You’ll be surprised!

It ranks #5! 

According to kiplinger.com our beloved South Dakota is ranked in the top for retirement friendly states. Their reasons are as follows:

  1. There is no state income tax so Social Security benefits and other retirement income are not taxed.
  2. Cost of living is low.
  3. Percentage of the population over 65 is above the national average with 14.5%
  4. Sales tax is relatively low.
  5. SD offers many home-owner benefits for Seniors including tax freezes, property tax reduction, and property tax homestead exemptions. Property Tax homestead exemption is for homeowners 70 or order or a surviving spouse. This allows them to delay paying property payment until the sale of the property.
  6. There are no inheritance and estate taxes.

The only states that rank better than SD for retirement are Delaware, Florida, West Virginia and Pennsylvania.

Our neighbors, Nebraska and Minnesota, are among the worst states for retirees along with North Carolina, New York, New Mexico, California, & District of Columbia.

So why not move all your older relatives to the wonderful state of South Dakota!

Click here to see the full report and how every state ranks.

2 things you need to know about your loan

During a home purchase it might feel like you are being guided a little too well and aren’t making any decisions for yourself.

You have options! At least, you probably have options. A loan officer might just sign you up for a 30-year fixed loan without asking you if that is what you wanted. There is nothing wrong with 30-year loans. But understanding and deciding for yourself is a good idea. Knowledge is power.

Understanding the difference between 30-yr and 15-year mortgages.

30-Year Mortgage Pros: 

  • Lower Payment! Stretching the payments over this amount of time will result in significantly lower payments every month. You can expect to save $220/month on a $100k loan.
  • More buying power. A $244k house with a 30 year mortgage has very similar monthly payment to a $167k house with a 15-year mortgage.

15-Year Mortgage Pros:

  • Lower Interest Rate. 15 year mortgages have significantly lower interest rates than 30-year mortgages. If a 30-year rate is at 4.12%, you can expect a 15-year to be at 3.36%. That means less money is going towards interest and more towards paying off the house.
  • Quicker equity growth. The higher payment and lower interest rate goes to good use and pays off your house 15 years earlier!

Understanding the difference between fixed rate loans and balloons.

Fixed-rate: Your balance will be paid by the end of the term. That is the way they are constructed. If you have a 15 or 30-year fixed mortgage you can keep that loan, at that interest rate, until the entirety of your loan is paid.

Balloon Mortgages: Balloon mortgages require your balance to be paid in full at the end of a short term. Typically 5-years. If you don’t have the money to pay it off, you will need to refinance. The risk here is that there is no guarantee interest rates will be reasonable in 5 years.

If you are only offered a Balloon Mortgage, shop around! There might be another bank that will loan to you on a fixed-rate!

Ready or Not? When to consider buying a home.

Let’s be honest. Buying a house is NOT for everyone. There are a great number of people who shouldn’t be buying a house right now. It is imperative to know not only if you can, but if you should be purchasing a home.

Many people have home-ownership goals, and that is fantastic! But yet home-ownership doesn’t fit well with their current lifestyle.

Example 1: If you are a college student in a large city somewhere, you can only find a place to rent for $1100/month. But if you were to buy a condo your payment would only be $750 a month. This is understandably tempting, but if you only plan to live in that area for another 2-3 years before you sell it, you won’t be able to re-coop the closing and Realtor costs. This situation will more than likely just add expenses and headache. Someone in this situation probably shouldn’t be buying right now.

Example 2: You are single, have college debt, work for minimum wage, live with your parents, and have no savings. You would like to start feeling more like an adult and move out of the house but there isn’t a lot of affordable rentals. You find that you could purchase a small home for a monthly payment of $400. If you can get the financing, can afford the payments and plan to live in the area for a while, it isn’t the WORST idea. But first consider the possibility of staying with your parents longer and paying off the student debt. It will also allow you to be more mobile if a job that uses your degree is available in another town.

Example 3: You are planning on staying in the town for the foreseeable future, you live paycheck to paycheck paying $700/mo rent. You find a $40,000 house that fits your needs and you are pre-approved at the bank. The payment on this house will be around $300/mo so you should have plenty to spend on repairs and updates. Maybe even grow a healthy savings and upgrade to a bigger, nicer house someday.

Example 4: You have a steady well-paying job, good credit, and some savings. You know you want to live in the area for quite some time. And home-ownership is on your mind? Go for it!!

Home-ownership can be a wonderful, helpful, and important life changing decision. It can even be the key to financial stability. But only if it is done responsibly during the right time in your life. Otherwise, sadly, home-ownership can be burdensome, risky and end in foreclosure.


 

If you want to pursue home-ownership, please contact me. Angie Uttecht 605-350-2553 angie@soldbyangie.com

 

 

Fixer Uppers — Is it a Good Deal or a Money Pit?

If you have been browsing through houses online and you found an under priced house that is a fixer-upper, you might have found a bargain! The other reality is that it could be a money pit.

Here are some questions to figure out before making an offer:

  1. Is it just ugly? or does it have bigger problems?  Old carpet, cat urine smell, ripping wallpaper, chipping paint, no problem! Not to say that it will be cheap to replace carpet and paint but it is a cost that you can easily calculate and decide if it is worth it. You can get a really good deal on a nice house if you are willing to use some elbow grease.
    Leaking roof, missing siding, broken furnace, missing plumbing? Now this is a problem. This is not a property to jump on. Take your time. You will need to get estimates to fix each of the issues. And plan for it being twice as expensive. If you believe its still worth it, then go for it. But don’t expect to be able to move in quickly!
  2. Always stay in your comfort zone. This isn’t usual advice but when it involves this much risk you need to know what you can handle. If you aren’t comfortable with a deal it is likely that you aren’t understanding everything that it will involve. And a miscalculation can be very very spendy!
  3. Have the money to spend. Make sure that you have your finances in order. If you can barely make the down payment, how will you afford the repairs? If you can’t move in until the repairs are done, you will be paying insurance, utilities, and interest on a property that you aren’t living in. If you are going to be taking a risk, make sure you can handle your worst case scenarios.
  4. Have a backup plan. In the worst of cases what will you do? Your Plan-B doesn’t have to be spectacular, make you money, or be convenient; but you should have one! Can you easily resell the property as-is for what you paid? Can you live in the house before repairs are made? Just as long as your plan isn’t to skip town and let the home be foreclosed on!

    If you need my assistance please don’t hesitate to call, Angie Uttecht 605-350-2553