Lynn D'Avolio
Coldwell Banker Residential Brokerage | 801-597-2857 | lynn1@soldbylynn.com


Posted by Lynn D'Avolio on 10/23/2012

If you have been dreaming of owning a vacation home now may be the time to buy. Home prices and mortgage rates continue to fall and there are some great deals for buyers looking for a second home. Here are five things you need to know before taking the leap. 1. Prices are at all-time lows In many second-home hot spots, prices are still close to their five-year lows. When the real-estate bubble burst, some of the hardest-hit markets were vacation destinations. Many vacation home areas experienced overgrowth and may now be suffering from foreclosures. 2. Think ROI Consider the possible return on your investment. Whether or not you decide to rent the home out, you will want to consider buying a place that has good rent potential. That's because a home's rent ability can affect its resale value. Before you bid on a house, make sure the homeowners association or township allows short-term rentals. 3. Don't count on rental income If you are planning on counting on rental income to cover the costs beware. According to HomeAway.com, a typical second home property rents out just 17 weeks a year. Make sure to account for the weeks the home won't rent. Plus, you'll need to pay for cleaning, maintenance, insurance, and maybe management fees. Make sure to plan on the maintenance costs of the property being at least 15% of the income. 4. Your mortgage rate depends on how you use the home How you use the home depends on the mortgage rate you will receive. If you plan to use the property primarily as a second home and you'll pay about the same mortgage rate as you would on a primary residence. If your plans are to use the home for rental income and need that income to qualify for the loan, you'll need to have as much as 25% for the down payment and pay up to one percentage point more in interest. 5. Take advantage of tax benefits Talk to your tax guy before you buy. If you rent the home out for two weeks or less you won't have to report a cent of income to the IRS. The good news here, you can still deduct property taxes and mortgage interest. On the flipside, if you stay there for less than two weeks or 10% of rental days, you can deduct operating costs in addition to interest and property tax. But where should you buy? According to CNBC here are the top places to buy a second home. If you are thinking about buying a second home I can help you find a professional agent in that area.





Posted by Lynn D'Avolio on 10/9/2012

Have you noticed the number of new construction homes going up lately? A recent report by The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) showed single-family home building permits up almost 5%. The process of building a new home can be stressful; there are lots of decisions to be made and obstacles to overcome. Here are some useful tips to keep stress at bay when building a new home. 1. Get pre-approved for a loan. Make sure that you do all the steps necessary to put the proper loan in place. You will need to fill out a mortgage application and provide the necessary documentation to check your financial background and credit rating. This process will let you know exactly how much you can afford to spend. You will also need to make sure your lender knows you are planning on purchasing new construction. 2. Do your homework. Check the reputation of your builder. You can search for information online, contact the better business bureau or ask your friends for recommendations. If you are building in a subdivision you may want to ask some neighbors who have already moved in about their experience. 3. Watch you budget. The advertised price of a new home is rarely the final price. The price can escalate quickly when you start upgrading the standard flooring, cabinetry or lighting. Plan on how much you can afford to spend before you start upgrading and budget accordingly. 4. Don't forget about resale. You may love the upgraded plumbing and light fixtures but know that those things rarely bring in a good return. You will not be the last owner of your home. Be mindful not to add so many upgrades that you overprice your home for the neighborhood. 5. Keep the lines of communication open. Communicate with your builder, ask questions and make sure you know where your money is going. You may want to keep a running list of quotes for extras and upgrades. Be comfortable asking even the simplest questions. 6. Be prepared for delays. Building a home can be a long process. Depending on the size of your home it can take anywhere from three months to a year or more. Get an estimate of when the building of your new home will be completed and plan accordingly.