Mortgages – Where to get started in 2014

I have had several transactions since the (new) lending changes took effect in 2014. Unfortunately the sentiment from almost all of my buyers is frustration with lenders.

I’ve spoken with one of our local lenders, Cathy Starrett at Stearns Lending asking what I can do to better serve my buyers and prepare them for the roller coaster process that financing real estate seems to be. Cathy had some good tips and I wanted to elaborate here.

- Buyer Confidence and Trust It seems that buyers and lenders have both lost the human element of trust with downturn in our real estate market. Buyers seem to have lost trust in Realtors, appraisers and financial institutions. It is understandable with home values that have literally been on a landslide for the past few years. However, it appears that the tide has shifted. “REALTORS® generally expect prices to increase over the next 12 months at a modest pace with the median expected price increase at 3.9 percent, according to the latest REALTORS® Confidence Index. Demand has slowed somewhat because of the increase in home values and the cost of borrowing from higher mortgage rates and mortgage insurance premiums for FHA loans. The modest pace of economic growth has also kept the lid on price growth.” -National Association of Realtors

State Median Price Expectation

State Median Price Expectation

Of course, the other side of the coin is lender trust. Lenders have also lost trust in home owners. With the high rate of foreclosure during the downturn, lenders went from very lenient guidelines to very strict ones. We are now starting to see the balancing of the scales, and qualified buyers are able to get financing at very favorable rates.

- Confusion and Miscommunication  There are so many sales pitches for buyers. Many are unsure where to even start. Should the search begin with looking at homes? Talking to a Realtor? Talking to a mortgage lender? Stalk sites like Zillow, Trulia? My answer is contact both a Realtor and a mortgage lender early on. Most of the time a buyer will have to have a pre-qualification or pre-approval letter from their lender to even submit an offer. It also doesn’t serve anyone for a buyer to be looking at homes they can’t qualify for. Cathy says “When looking for a mortgage, you don’t have to apply to ask questions.  And no question is silly…after all, how many times will you be purchasing a house?  Get the facts!!  Find out if the lender is focused on you…or the loan.  Does the lender have your best interest at heart?  A good lender will listen to you and can give you advice to move you closer to your goals and secure a loan that is suited to your needs.” Also, be wary of some advertised rates. While the rate may be very appealing, there could also be hidden fees or discount points (cost of the rate) that aren’t apparent at first glance. Find out what the true cost of a loan is before applying. Ask your lender for a Good Faith Estimate (GFE).

- Finding the RIGHT lender Start by asking someone that may have recently purchased a home. Ask your Realtor, call your financial adviser, get referrals. Then CALL these people. The person you’ll be working with is human, and different personalities work better with certain people. You’ll want to take a few minutes to have a lender answer your questions. If you feel comfortable talking to this person and you like the rates you’re being quoted, then chances are you’ve found a good “fit” and can look forward to a pretty good experience. Take control of your loan by talking with a live loan officer who can give you answers.

- Don’t get frustrated It may seem that the lender needs to know everything about you for the application. Actually all the lender needs to know about is:

  • Can you afford the loan
  • Do you qualify for a particular program?
  • Do you have the ability to repay?

The ability to repay the loan will include your credit report (score and proof of paying your liabilities on time) and your stability of income.  You will, however, need to provide quite a lot of details (read: paperwork) about these topics.  The goal with fitting a loan program to your needs is to avoid financial hardships. This is the lender’s way of ensuring they are not risking losing money on a home that a buyer can not pay for, as well as keeping a borrower from stretching too thin while they repay the loan. I know you’ve heard it time and time again: Check your credit score! Know what your numbers are, or if you have some clouds on your report that need cleaned up before a lender can help you purchase a home. One of the best websites for obtaining a free, annual, credit score is to go to www.annualcreditreport.com. This website will give you all three credit bureau scores.  Most other sites will only give you one score.  Lenders usually get all three scores and will use the middle score.

- Your Realtor and Lender It is also important for the two to communicate. Both your Realtor and Lender need to keep each other updated and when you find that symbiotic relationship, it makes the transaction so much easier for a buyer. Ask your lender about communicating with your Realtor.

Ultimately, the lender is trying to help you as much as your Realtor. There are times when it seems like a lender is obsessing over every minute detail of your financial life. This is not a personal vendetta. The lender is trying to make sure that you are able to repay the loan you’re asking for. With the changes in the underwriting requirements that occurred in the beginning of 2014, lenders are cautiously moving forward. Buyers can help themselves by having income and expense documentation easily accessible. Get your copies of your tax returns in order so when you’re ready to hit the gas, you aren’t stalled by missing paperwork. Most lenders will give a buyer a checklist early on to make sure that the majority of the documentation is received in one package; don’t procrastinate. It may be the difference in getting the home you love or missing out because you aren’t ready with your lenders approval letter.  Every indication is telling us the market is heating up, buyers have excellent opportunities as well as incentive. Make the most of this market by finding a lender, Realtor and a home that will work for you!

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New economic development projects in Victor!

City of Victor

April 9, 2014“Lighter-Quicker-Cheaper” Economic Development comes to Victor! Your ideas and thoughts on how to enhance Victor’s public spaces (along Main Street and Center Street, parks & pathways) are needed!

Would benches, picnic areas, more trees, and water fountains encourage you and your family to spend more time on Main Street or in Victor’s parks? Do you appreciate the hanging flower baskets on Main Street during the summer and the holiday decorations during the winter? Would you like to see public art like interactive sculptures or murals in Victor? Would you post news and flyers for events on a community bulletin board in a public space?

These examples above are just a few of a limitless amount of small scale economic development projects that could enhance life in Victor and you are invited to contribute your ideas! (See more ideas for inspiration here and here.)

The kickoff for this project will take place next Wednesday, April 17th. See the schedule for the day in the flyer above. If you are interested in participating in one, several or all of the sessions please e-mail a RSVP to Brittany Skelton, City Planner, at brittanys@victorcityidaho.com If you are unable to participate next Wednesday look for updates in your e-mail, on the City of Victor website, and on the City of Victor Facebook page.

- City of Victor

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Huntsman Springs – Updated Price & Availability List

Interested in learning more about Huntsman Springs? See below link with the 2014 pricing & availability!

FULL HUNTSMAN BROCHURE

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How Property Tax Works

by Tayson Rockefeller

Trying to figure out how property tax and levies are created can be daunting, even for a real estate agent! Property tax can be defined as the primary source of revenue for the local governments that serve and protect the community, such as school districts, ambulance, fire, and so on.
First, we should understand how your property values are assessed. Basically, the assessor’s office identifies and values all the taxable property in the county.  They use recent sales data, estimated construction costs, and other data to estimate the value of each property. All valuations are monitored by the state tax commission to ensure accuracy and compliance with state laws. The letters that you receive asking about sale data after you purchase a property are used to help value your property. Note*** Idaho is a nondisclosure state, and you are not required to submit this document. Weigh the pros and cons of giving this information to the County.
Next, we need to understand how the levy (imposed tax) is calculated. This job is handled by the County Clerk. The simplest answer is the rate is calculated by dividing the amount of property tax needed by the total taxable value of all the properties. The long answer is not quite that simple, but it uses the same method. This method is used by 14 districts within the county that create their own budget, and calculate a tax rate for that specific district. District 1, the City of Driggs has a slightly different tax rate and budget than District 2, in the City of Victor. So, each district divides their budget by the taxable value of the properties within that district to come up with the tax rate for that district.
Now that we have the tax rate for your district, and your assessed value, all each district has to do is multiply the value of your property by the tax rate to come up with your property tax amount. So, this is the final step before you receive your bill. It’s important to understand that each budget is created at the end of the year, and therefore your taxes are assessed for the prior year. The taxes are paid in two halves for each year. The first half of each year becomes due December 20th and the second half of that year is due the following year on June 20th. State law limits budget increases as a whole (not on an individual basis) to 3%.
Understanding that this is a very brief description of how the system works, coming from someone who does not work for the County with only a limited understanding, there are a few other points to be made here. One question you might ask yourself is, how can I reduce the amount I pay in property taxes? There are a few things to keep your eye on. First, if the property is your primary residence, make sure that you have applied for the homeowners exemption. This must be filed with the assessor’s office by April 15th. Second, always review your annual assessment notice, and call the assessor’s office if things seem out of line.  Idaho Code states that any claim for tax reduction shall be filed with the assessor’s office between January 1st and April 15th of each year.

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Updated price list Huntsman Springs

11

380 Cottongrass Road $1,890,000

Bedrooms: 5
Bathrooms: 5+
Sq Ft: 4,735
11

420 Cottongrass Road $1,790,000

Bedrooms: 6
Bathrooms: 6
Sq Ft: 4,203
11

440 Cottongrass Road $1,690,000

Bedrooms: 4
Bathrooms: 4
Sq Ft: 3,481
10

480 Cottongrass Road $1,690,000

Bedrooms: 4
Bathrooms: 4.5
Sq Ft: 3,570

736 Harper Dr. $749,000

Bedrooms: 4
Bathrooms: 3
Sq Ft: 2,964

735 Jasmine Avenue $800,000

Bedrooms: 4
Bathrooms: 3
Sq Ft: 2,964
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Are the days of a good bargain gone in Teton Valley? By Tayson Rockefeller

I’ve heard this a few times recently. Now that the economy is obviously improving, buyers are feeling like they missed the bandwagon. Before I go into details, I’ll start my response to the above question by trying to establish a clear understanding of the actual value of real estate. The value of real estate can be perceived in a few different ways. Namely, replacement cost, and comparable sales data. Replacement cost is fairly easy to nail down, though often is not considered, or is miscalculated. Comparable sales data often creates an artificial meaning of what property is worth. The psychology behind this method of valuation effects certain markets more than others, and these small community and recreation based markets often times take a hit much more than other markets. They can be based on the real estate boom, or bust, which has a dramatic effect. The boom can create a huge amount of artificial inflation, and the bust can cause irrational values and depression. In the past decade, we have seen both in our market. Getting back to the actual value or replacement value of real estate, I’m going to attempt to break it down, though I’m always up for further discussion. As a real estate agent, I must have a clear, or at least a general understanding of costs related to construction and replacement. In fact, it is my duty to my Sellers to have an understanding. Because of that, I interviewed with a reputable local builder prior to writing my article. When we first started to converse, I mentioned that buyers are feeling like there are no more good deals. I have to say, the gentleman I was speaking with chuckled as he started to give me an idea on construction costs. “Do you know how much it costs to drill a 300-foot well?” is where we started. Well, I have an idea, last I checked, by the time a pump, plumbing and case is installed it’s about 40 bucks a foot. I also know that on average, septic systems can run 4 to 5000, landscaping can range from 10 to 30,000, (and beyond) then you have construction costs. Now, there are some huge variables here, just like there are some huge variables in well depths, location, etc. I spoke with several builders, and came up with numbers that range from $100 to $350 per foot. Though I can tell you that for 100/ft you’re not going to build a home similar to what we typically see in the valley floor with comp shingle roof, cedar siding, some tile, maybe some hardwood, and some decent finishes with a few vaulted ceilings. Finishes can make all the difference. HVAC, media, roof, windows and doors, and many other variables and finishes can change that number substantially. I’ll probably get a few phone calls on this, but for the sake of keeping my article short, let’s say $150. To wrap this up, let’s put the price of a building site with a well, septic and landscape at 75k – which is cheap – and let’s construct a 2000 square foot house. Considering I’m only scratching the surface of the costs associated with building, I’d say there are still some good deals out there. Now let’s get those sold, and put Teton Valley back to work!

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New Construction in Victor, ID

New and exciting changes to our Teton Valley Community are further proof of an improving economy. New Construction by the City of Victor should help Victor, ID Real Estate improve, after several years of depression. Check out this exciting news and rendering below!

From the city of Victor:

By this time next year you will see a “new” business district on and around Main Street in Victor. A stop light at the intersection of Main Street and Center Street will allow pedestrians to cross the street more safely and facilitate automobile traffic. The sidewalks on Center Street will be reconstructed and beautified with new street lights and paving and these enhancements (known as “streetscape improvements”) will be visual cues that invite residents and visitors alike to stop and spend time in town. The streetscape improvements will extend to Depot Way, where a parking area, pavilion with picnic tables, and public restrooms will be constructed at the historic Depot. Issues with pipes freezing in the winter will be alleviated thanks to a new water main that will have been installed on the south side of West Center Street.

Depot Building - Victor, ID

Depot Building – Victor, ID

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Huntsman Springs Update

Teton Valley Realty would like to update the community on what’s happening at Huntsman Springs in Teton Valley. Set for 2014, Huntsman Springs has scheduled the following:

Fitness center to open early summer
Groundbreaking on Citywalk – early summer
Groundbreaking on Huntsman Lodge and village – early summer

The fitness center at Huntsman Springs is already underway. The “City Walk” is planned to encompass now vacant space behind the “Park Homes” from Depot Street to Huntsman Springs Blvd, see below image from huntsmansprings.com. The new Huntsman Lodge is an exciting new project to begin Summer ’14. Stay tuned!

Huntsman SPrings Master Plan

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Invest in… Land???

Invest in… Land?

It’s no secret, building sites for sale in Teton Valley are not flying off the shelf the past few years. The number of lots sold in Teton Valley between ’06 and ’08 was near 1200… The past 2 years Teton Valley has sold 386 lots.

Stats aside, Teton Valley’s real estate market is rebounding quickly, and that’s no secret either. Driggs and Victor homes for sale under 200k are virtually non-existent, and the higher end developments such as Teton Springs and Huntsman Springs are seeing a definite increase as well. There are still some great investment opportunities though, they just may come in the form of raw land, building sites, and commercial sites. Here are some ideas:

Teton Springs residential “Mountain Meadows” lots – there are still a few left. Starting at 29k with a reasonable hoa of about 1200/year, these are great mid-long term investments.

There are some great commercial opportunities in Driggs in Victor, including some great bank owned opportunities under 100k.

Driggs Fly-in parkway (airport) has some great hangar & hangar lot opportunities for great prices.

Other miscellaneous subdivisions in Teton Valley start in the high teens and low 20′s, some of them without HOA dues. These deals WILL begin to become realized, don’t miss your opportunity, contact a Teton Valley Realty agent today!

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Happy New Year!

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