Days on Market.....Does it Matter???

      Days on market can be a good indicator of what's going on with a property before you even see it. With street views, interior photos, public records and access to comparable sales a savvy agent can tell you exactly why a house has been on the market for an extended amount of time.  The myth is that the longer a home has been on the market, the better the deal is that you can get on it.  While that may be true on an overpriced house, it's not very common. Truth is, there are NUMEROUS reasons a home stays on the market for an extended amount of time. I'll discuss the top three reasons:

OVERPRICED
      If a home is overpriced, unless someone is paying cash for it, it will have a hard time selling if the sales price is over the appraised value.  More important than the appraised value is what the market value is of the property. A home is only worth what buyers are willing to pay for it even if it will appraise for a higher amount. Sellers don't overprice their homes just because! Here are some common factors:

• Current mortgage amount
• Improvements / upgrades cost
• Meeting short sale requirements
• Testing market demand
• Seller/Agent unaware of comparable sales
• Title Issues / Liens on the property

CONDITION / FLOOR PLAN

      The more work a property needs the smaller the number of buyers there are for it. Homes with more than $5K in repairs eliminate all FHA buyers. Rehab loans are available, but not very popular. Once a home needs more than $25K in repairs, most buyers are not only paying with cash but are (or are aspiring to become) familiar with construction.  No matter the condition of a property, fire damage or even a tear down, if it's priced right there is a buyer for it.  The actual style of the property can play into this as well. Homes with 1 bathroom that are OTP are difficult to sell in the suburbs which are (larger) family-oriented.  Homes with no master bathroom or a shared master bath are obsolete floor plans which can be a hard sell. More recently, split foyer floor plans are not as popular ---especially those with only one bedroom on the upper level.  The same goes for two-story homes where the master bedroom is the only bedroom on the main floor. Homes with a small master bedroom also have a VERY difficult time selling especially when they are in a higher price point.

EXTERNAL FACTORS

      You may think a bad neighborhood is an automatic deterrent but not all the time. The vicinity from the less desirable things is the key. Having a crack house in the area isn't the issue but it being across the street or NEXT DOOR is.  Being the 1st house in a neighborhood is usually a turn-off for most buyers inside a subdivision.  Here are some common external factors that will affect how fast a house sells:

• Power lines / cell towers
• Main roads or highways with high road noise
• Retention ponds, water runoffs, sewer access drains
• Steep driveways or sloped backyards
• Surface street traffic during rush hour / weekends
• No similar properties around or near the property; house stands out too much

Luckily with the use of satellite views and even street view technology, you can identify these things without even visiting the property. Interior photos can also reveal a homes flaws even if there are no pics of the flaws.  Some agents won't photograph the issues with the property--have you ever seen a listing with only exterior photos???

Larger Tax Refund or Larger House? Pick one.

      It's tax season. Many people are looking for the fastest way to file and get their money back so they can use that money for large purchases---like a down payment on a home.  In order to get a larger refund, you will usually identify expenses that will allow you to lower your taxable income. Many tax preparation companies advertise that they can get you the maximum refund but is that in your best interest when you're planning on purchasing a home?
      One common misconception about tax refunds is that they are a 'good' thing. A refund simply means you've overpaid in taxes the previous year and are being refunded.  While this annual check is good for some, many could do more with that money during the year.  Instead of the making the IRS a savings account, you can save that money yourself throughout the year and put it towards things you need.  The self-employed understand this and their main goal is to either break even or owe as little as possible.  Running a business requires you to use all available funds for expenses that must be paid in order for your business to sustain and grow.  However, when those that are self-employed go to purchase cars or properties, they soon learn that claiming all of those expenses and/or taking losses will decrease their taxable income which is what lenders use to qualify you for a mortgage.  It's common for some one with a million dollar income to only show themselves making $25k-$30K annually! As much as it hurts, you must show your true expenses in order to increase that number in order for a bank to lend you an mortgage that reflects your income.
      Another popular misconception is that this only affects the self-employed since a W-2 employee has taxes taken out automatically. Not the case. There are a LOT of W-2 employees that claim additional dependents, write off expenses from side businesses, rental properties, and will even claim losses in order to get a bigger tax refund.  Unnecessary expenses will lower your taxable income and decrease the amount of your potential mortgage.  In both self-employed & W-2 employee cases, your tax returns cannot be immediately amended and then reconsidered AND they have to reflect these numbers for two years.
      If you plan on purchasing a home in the next few years, be sure to connect with a loan officer before you file your taxes. They know more than just credit scores!!! They will show you what banks are looking for on a tax return and can provide tips on how to increase your chances to get not only approved, but increasing the amount you can get approved for.