Tuesday, June 19, 2018

7 Things Every Buyer Should Know About Real Estate in an Escalating Market

7 Things Every Buyer Should Know About Real Estate in an Escalating Market

By Emilio DiSpirito, Licensed Rhode Island Real Estate Agent / Member of National Association of Realtors 401-359-2338 emiliodiv@gmail.com

Being a buyer in 2018 and 2019 will absolutely have its benefits, however, will cost you more than it did over the recent past years. In this article, we are going to discuss 7 things every buyer should know about real estate in this escalating market!

1.) What is an escalating real estate market? 

Picture an escalator at the mall, the one that goes up. Like a chart or a staircase, it brings you from one level to another level. In 2018 going into 2019, we will experience a new level of increased prices and mortgage interest rates. 

2.) How much are home values expected to rise? 

Before we talk about where we are going, we must first realize where we have come. Prices rose 13% on the median single-family home in Rhode Island in 2017 over 2016, multi-family homes 18%! Those numbers are massive seeing as historically, real estate should grow 3.5%. 

One last fact before we jump ahead; Single Family home prices rose 9% so far in 2018 year over year from 2017 and multi-family prices rose another 20%. Condominiums saw a 16% increase in 2018. 

Where are home prices expected to go? Prices across the board are expected to rise between 9 and 10% here in Rhode Island. 

FACT: The Median Single Family, Multi-Family and Condominium Home prices peaked in June of 2006 at $290,000 which is 7% higher than today's $270,000 median price.

Click Link to Schedule a Buyer or Seller Consultation with a Top Realtor NOW! www.Calendly.com/emiliodiv

The chart represents median Single Family, Multi-Family and Condominium Prices in Rhode Island Between 2004 to 2018

3.) Where are interest rates going?

Interest rates, like pricing, are going up. We could see 6% in 2019 after the Fed hikes rates as they are anticipating. Rates were at their lowest in 2017 at 3.25%. 

4.) How much more will the same house cost me in 2019?

Let's take the median price point of $270,000 with the June 2018 30-year fixed FHA mortgage rate of 4.75%. You are left with a mortgage payment of $1359 which includes principle and interest. 

In 2019, rates should be 6% and prices are projected to be 9% higher for a median price of $294,300. Your mortgage payment under the same 30 year fixed FHA rate of 6% will now be $1703 per month. An additional $344 per month and $4,128 per year. 

5.) What is driving the current real estate market?

Simply put, supply and demand are driving the current real estate market. There are more buyers than homes available for sale. When you have increased demand and low supply, prices increase. When you have low demand and high supply, prices fall.

Here are the factors contributing to the low supply of homes available for buyers:

  • Student Loan Debt has forced mom and dad to hold on to their home which accommodates their graduate that is having a hard time making ends meet. 
  • Baby Boomers are caretakers of mom and dad and need the bigger home. 
  • Homeowners who bought with rates in the 3% are worried they will be spending more per month when they downsize. 
  • Builders are having a hard time finding the right kind of land and are hit with increased costs of materials, land, labor, etc. 
  • Builders are having a difficult time finding qualified labor. 
Click Link to Schedule a Buyer or Seller Consultation with a Top Realtor NOW! www.Calendly.com/emiliodiv

6.) How to Place Offers?

When you are touring homes in hot price ranges and see several buyers walking out as you walk in and walking in as you walk out, you need to understand that you will be going up against multiple buyers when placing offers. 

Here are some quick tips to get the home you want:

  • Obtain a mortgage pre-approval before you shop. You can't place an offer without it because no one will take you seriously when they have 3 other buyers with proof they can obtain a mortgage. (We can point you in the right direction). 
  • For properties with a lot of interested buyers - Go in with your best foot forward. Offer at or above purchase price with a 30 day or less mortgage approval and flexible closing date if you can.
  • If it is an owner-occupied property, write the owners a heartfelt letter. Almost like a job interview, people want to make sure they get the best candidate. 
  • Go in with a buyers agent. A buyers agent will have your back and will help you navigate through the 175+ steps involved with buying a home. 
Get Advice on Buying! Schedule a Time and Day that Work Best for You! www.Calendly.com/emiliodiv

7.) Where do buyers have the hardest time?

Buyers have the hardest time when bringing outside parties in to help them make a decision. Sometimes it can be parents, friends, extended family, etc. If these people are not involved from the start, they are in the same boat you will be in from day one without the hard knock education of losing offers, seeing the flow of buyers in and out of properties and getting the buyer consultation from your Realtor. Have them come in from the get-go and view every property with you if you will be consulting them for advice. 

Placing offers is not something buyers have an easy time with. First time home buyers lose 3 homes on average before they realize it's best to place an aggressive offer in this market. If you want to find a home that needs work or that you can get less than list price, you will want to search for homes that have been on the market for over 90 days. These homes are almost always overpriced anyways and will need a lot of work. 

Home inspections come up and can cause concern to buyers. Make sure to hire the right home inspector, someone who is through but does not "overdo" it and scare you with minor repairs. Homes require a lot of maintenance, and it's important you understand that before buying. When buying an existing home, ask sellers for large-scale repairs and do not nickel and dime them for that outlet that is not a GFI ($12 fix). Many sellers will tell buyers to take a hike, especially when they have received multiple offers and buyers waiting with baited breath!! 

Hire a Pro to Guide You! FREE! www.Calendly.com/emiliodiv

Tuesday, June 12, 2018

5 Renovations You Should Avoid and 5 Renovations You Should Take On for Your Home!

5 Renovations You Should Avoid and 5 Renovations You Should Take On for Your Home!

By Emilio DiSpirito
The DiSpirito Team

Regardless if you are preparing your home to sell or not, your home one day will be hitting the market. It's at that time you will remember reading this article and you'll either thank it or curse it! 

Remodeling a home can be very exciting and costly in the initial approach, however, it will be most costly when you add any of the items from the "5 Lowest Return Renovations" list! 

Here are the top 5 Lowest Return REnovations You can Do in a Home:

(According to http://www.remodeling.hw.net/cost-vs-value/2018/)

  1. Backyard patio
    1. Average cost $57,147
    2. Average resale value $24,889
    3. Return on Investment 43.7%
  2. Master Suite Addition 
    1. Average cost $`130,432
    2. Average resale value $67,947
    3. Return on Investment 53.2%
  3. Bathroom Addition
    1. Average cost $47,715
    2. Average resale value $26,990
    3. Return on Investment 56.5%
  4. Kitchen Remodel
    1. Average cost $66,845
    2. Average resale value $42,753
    3. Return on Investment 64.3%
  5. Bathroom Remodel 
    1. Average cost $20,640
    2. Average resale value $14,588
    3. Return on Investment 71%
rhode island
Hire a 5-Star Top Selling Agent Now

Here are the 5 Best Items to Renovate in a Home for the Largest Return:

  1. Garage Door Replacement
    1. Average cost $3,474
    2. Average resale value $3,446
    3. Return on Investment 99.2%
  2. Siding Replacement
    1. Average cost $15,885
    2. Average resale value $12,659
    3. Return on Investment 80.2%
  3. Manufactured Stone Veneer
    1. Average cost $8,143
    2. Average resale value $6,518
    3. Return on Investment 80.2%
  4. Minor Kitchen Remodel
    1. Average cost $22,407
    2. Average resale value $17,091
    3. Return on Investment 76.1%
  5. Vinyl Replacement Windows
    1. Average cost $16,213
    2. Average resale value $12,152
    3. Return on Investment 75%
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Tuesday, May 29, 2018

5 areas homeowners lose the most money when selling their home. Number 4 has to be the toughest!

5 areas homeowners lose the most money when selling their home. Number 4 has to be the toughest! 

By Emilio DiSpirito, Realtor

After a long day of listing consultations, real estate agent Joe Fazio was planning to head to dinner when his phone rang. 

On the line, was a very enthusiastic seller! "Joe, you come highly recommended and I'd like for you to list my home for sale as soon as possible, when can we meet?"

Joe, eager to earn this gentleman's business, took down all of his contact information, set a time and date and spent several hours to prepare an in-depth market analysis and strategic marketing plan on the home. 

After the meeting, Joe thought it was odd a few days went by without a call, so he picked up the phone and the prospective seller said, "Joe, I'm going with the agent who gave me the highest price at the lowest commission." 

After being completely awestruck at this remark, it was apparent that the homeowner did not want to discuss any reason but was emotionally tied to what was to be empty promises. The homeowner would be listing his property 10% over market price. Joe knew what was to come.

120 days later, in a market where homes were selling in 45 days, Joe had noticed that this property was taken off the market as an "expired listing". Joe immediately called the seller who had then said: "We relisted with the #1 brokerage in the country, and we are all set". 

The home was relisted 4% over market value this time and 60 days went by, it was withdrawn and listed again the same day -3% under where Joe suggested it be priced and sold -7% less than what it should have sold for. 

These, unfortunately, are just a couple examples of how homeowners lose money. Joe and I decided to share a list of the many ways homeowners lose money when selling real estate and figured you may find this list helpful. 

Here is our list of the top 7 reasons why homeowners lose money when selling real estate:

1. The prospective seller went with the agent who gave them the "best price".

    1. Listing your home above fair market value is a proven way to decrease your chances of getting the highest sales price by limiting the number of actual buyers who see your property.
      1. PRO TIP: Get tons of online and foot traffic on your home and an accurate and FREE Fair Market Value Report of your home and learn why it's best to list it here www.MyDreamHomeNow.com/sell

2. The homeowner went with the Realtor with the lowest fee. 

    1. The old adage "you get what you pay for" applies here. Compare services, experience, agent statistics and client reviews, side by side when interviewing multiple agents and understand which areas the "discount brokerage" is skimping on and how it will affect your bottom line. 

3. The property owner went with the "#1 brokerage in the country".

    1. You are not hiring the brokerage. You are hiring a subcontractor called an agent who operates on his or her own business. 
      1. PRO TIP: Ask the agent specifically where they rank in your town, county or state and what their overall sale price to list price ratio is compared to that of the median transaction in your market. Assess that information side by side with the other agents you are interviewing. There is proof in numbers and they do not lie. 
 Simply schedule a phone call with a top Realtor NOW by Clicking Here https://calendly.com/emiliodiv/phone-or-video-call/

4. The homeowner decides to go for sale by owner aka FSBO.

    1. According to NAR, The median FSBO sold at $190,000 in 2017 vs. a Realtor-assisted listing at $250,000. If you could invest $15,000 to make an additional $45,000 would you?
    2. 68% of FSBO homes were sold to someone they knew. When dealing with friends and family, do you charge them full price? What will your circle think? 
      1. What if they have a Realtor? There goes 2.5% to 3% right there.
      2. Repair requests? Attorney fees? Marketing Fees? 

5. The seller wants to sell their property "as-is", wants the highest sales price and is unwilling or unable to do the bare minimum work to get the property ready for the overall market. 

    1. Roughly 7 out of 10 buyers are using FHA, VA, USDA financing. These are low to no money down mortgage programs which have certain health and safety requirements in order for a buyer to qualify. 
      1. When your home is not marketable to 70% of the market, you are already cutting your odds down. 
    2. Condition plays a large part in overall appraised value. Conventional and Government-insured mortgage programs alike will send out an appraiser who will put a fair market price on your home in which you will receive a lower price for a property in poor condition with deferred maintenance. 
    3.  PRO TIP: Get a pre-list home inspection done on the property to fully disclose all defects and price the home accordingly. When in the position to make needed repairs, make the repairs in order to have a home that can be sold to all buyers. 

Schedule your FREE Seller Consultation with one of our

Leave your comments below!! 

Tuesday, April 10, 2018

How much does it cost to prepare my home to sell on the market?

How much does it cost to prepare my home to sell on the market?

Overlooked and misunderstood, homeowners place their homes on the market unprepared for prospective buyers who are willing to pay top dollar.

The misconception comes in with sellers being so caught up with the hype of the current sellers market, where they feel as if they can just list and their home will sell as fast and high as their neighbors... Unfortunately, that is furthest from the case.

Before we dive into this, lets talk about the factors that go into home pricing:

  1. Location
  2. Condition
  3. Market
  4. Marketing

Preparation truly being key. You see, according to Inman, 78% of homeowners invest roughly $5,000 on average across the country on preparing their home for sale. The costs include but are not limited to, painting, staging, moving, etc.

There are a few vital areas that 99% of sellers and agents don't think of. The following items will offer a strong return on investment, as well as satisfied buyers and banks. Follow these steps for a successful sale.
  1. Aside from making sure to declutter and depersonalize, make sure that you thoroughly clean your property. Here are the major areas to cover!
    1. Front entrance walkway. Are there cobwebs around the lights? Does the home need to be power washed? Overgrowth around the front of the home?
    2. Floors! Is there dog hair or dust bunnies on your floor? In the corners of the floor? Stuck in-between hardwood surfaces? Make sure that your floors shine clean! 
    3. Bathrooms! Is there mold in the bathrooms? Odor? Are the fixtures shiny and clean? Make sure the bathroom smells fresh and sparkles! 
    4. A clean kitchen represents the overall health of a home. Are there grease marks and hand prints all over your cabinets? Did you forget to take out the trash? Dishes in the sink? Make sure your kitchen is clean and clear and ready for a buyer to fire up their imagination on what they can conjure up for their guests in your amazing kitchen! 
    5. Utility areas need to be cleared for easy home inspection as well as buyer access. 
  2. Can buyers get financing on your home? FHA, VA, Rhode Island Housing and USDA all require that the property be safe for an individual to move into! In brief, make sure to figure this out before you list.                                                                                                                                                                         An experienced real estate agent and pre list home inspection from a reputable home inspector can assist with helping you identify what the property can not have:
    1. Chipping and peeling paint on the exterior or interior. 
    2. Broken windows
    3. Missing handrailings
    4. Broken heating system
    5. and many other items
  3. Fix the red flags and disclose everything else! Buyers ask for $3 worth of concessions or repair credits for every actual $1 worth of repairs. When you price your home appropriately for the work that is left over after doing a pre list home inspection and disclose what needs to be done, buyers sign off on the disclsoures and accept the work needed when they place their initial offer. 

Tuesday, March 20, 2018

Traditional Solo Realtor Vs. Team of Realtors

By Emilio DiSpirito February 28, 2018

Real Estate Home Listing FAQs

Weekly, customers come to us at the DiSpirito Team and ask us, what is the difference between a real estate team and an individual agent? Is there an unbiased place to get information to their real estate questions about whom to hire on the web?

Recently, one of our clients reached out and and shared that he does not believe there is such a place to find equitable content for homeowners on which is the best way to sell his home.

"I've searched the internet for hours upon hours not finding anything relevant to my questions. You will find nuggets of information scattered here and there, but there has not been one reliable resource online that has answered any of my questions such as, when selling my home, which type of agent and service will truly earn me the most? Will selling my home for sale by owner vs using a Realtor or a Team of Realtors net me more? How about a discount brokerage vs. a traditional Realtor or Team? Not anywhere is there such information and it's frustrating to say the least.. can you point me in any direction?"

This article is our effort to assist homeowners in getting a straightforward, "non-salesy" approach to questions that our clients and many other consumers have.

Book your no-obligation consultation with a noted Top Team of Realtors in Rhode Island and Massachusetts here ---> www.Calendly.com/emiliodiv

Traditional Solo Realtor Pros and Cons

Pros of using a Traditional Solo Realtor

  • One call does it all: One phone call will get you to the direct source of where the information you need lives. 
  • Personal touch: Some people want to see and talk with only one person. This is for the client who feels most comfortable dealing with one individual. 
  • Accountability: You will know exactly who to speak with about any concerns. 

Cons of using a Traditional Solo Realtor

  • Limited Availability: Realtors cannot make a living on only one transaction and need to constantly be prospecting as well as working with multiple buyers and sellers. When a solo agent is performing these other tasks, often times, her availability is scarcely low to assist all of her clients in a reasonable time. 
  • Juggling Act: When a solo agent takes a vacation or a day off or is simply working with other clients, there is not anyone to respond to showing requests, client needs or to assist with marketing. 
  • Limited Resources: Individual agents are self-employed and cover the costs of all of the marketing materials which are often times overlooked due to lack of availability of funds and time to do it all. 
  • Inaccuracies in Paperwork: Realtors often times are fantastic sales people, however, are not the greatest at paperwork. Paperwork should be prepared with care and vital dates should be met. The details in this step could be the difference between winning or losing a boatload of money at any given point of the transaction. 
  • Lock Box Showings:  With other listings and buyers to tend to, a solo agent will depend on other Realtors, not associated with their company and unaware of your properties features and benefits, bring their clients in. When questions to simple answers are not taken care of on the spot, this could lead to objections which could cost the sale. 


Realtor Team Pros and Cons

Pros of using a Team of Realtors

  • 24/7 and 365 Availability: A team of agents allows for a homeowner to get someone on the phone who knows the file at any time of day. 
  • Efficient and Effective Systems: A well-organized team of Realtors will have systems in place to ensure effective measures are taken to protect the sellers best interest at all times. There is someone responsible for each individual step from marketing, to showings, paperwork and other vital facilitating tasks.  
  • Accurate Paperwork: Teams have administrative support who work full time to prepare and maintain all paperwork while sales agents are allowed to focus on selling their listings. 
  • Specialize: A team will have agents who specialize in working with buyers and agents who specialize in listing homes. Working with a Realtor with experience and who specifies in listing homes for sale will allow them to assist you in finding the right buyer.  
  • Advanced Marketing: Teams operate as a collaboration of agents, who pool their money together to offer a stronger presence for sellers online. Often times a team will invest hundreds of additional dollars in professional photos, website development, social media and other aggressive marketing channels. 
  • Teams Have More Buyers: Teams will have more buyers than an individual agent and will also have agents who focus specifically on bringing buyers into the teams listings. 
  • Personalized Home Showings: Often times, real estate teams will have a "showing agent" or "servicing agent" who is responsible for bringing buyers and agents through the home. This is a much safer approach than lock boxes, as your property is looked after and someone is there answering questions and clearing objections, often times leading to less days on market and a higher sale price. Negotiations start upon entrance. 
  • Stronger Negotiations: A team of Realtors will often times have two points of contact for the buyers agent to connect with. This allows for the classic "good cop, bad cop" approach when it comes to negotiations and will often times put the sellers at a stronger stance when negotiating offers in their own favor. 

Cons of using a Team of Realtors

  • New Team? If the team is new, there may be many kinks to work out and these sometimes can affect the level of personal service and overall outcome. 
  • No Systems in Place: A team of individuals without a core set of values, standards and systems can be just as disastrous as hiring a solo Realtor who chases his or her tail. Systems are vital and make sure you can get a good idea of what the teams offer under all the "fluff" that you interview. 
Schedule a convenient time to speak with a top Realtor here ---> www.Calendly.com/emiliodiv

Friday, December 15, 2017

Finalized Tax Cuts and Jobs Act Bill - Details Affecting Real Estate

Finalized Tax Cuts and Jobs Act Bill - Details Affecting Real Estate

By Emilio DiSpirito Radio Show Host www.TheRoundTableRadio.com

Realtor Emilio DiSpirito in the iHeartradio studios

The highly anticipated bill dubbed "Tax Cuts and Jobs Act", pushed by the Republicans, has been finalized on Friday, December 15th 2017 and will go to both Houses of Congress Tuesday, December 19th for full approval. Once thereafter it will cross President Trump's desk for his blessing. 

There is a lot of concern that certain details like deductions for mortgage interest and property tax would disrupt the real estate market. As a Realtor and member of agents selling in the top 1% of the country, I strongly disagree. Let me explain.

  1. This bill serves to help the middle class (about time!) with lower tax brackets and double the standard deduction! Federal tax deductions from $6350 to $12,700 filing single and from $12,000 to $24,000 when filing married! 
    1. Think about folks retiring or in retirement! They need deductions more than anyone!
  2. "Main Street" business, aka small business owners will find that their tax rate will be reduced up to 29.6%!
    1. When local business owners pay fewer taxes, they invest in their business and create jobs. 
  3. Corporations in America will be paying -14% less in 2018 than they do today! Currently, at 35%, America is the highest taxed country in the industrial world when talking corporations! 
    1. When companies earn more, they hire and spend more. This stimulates all income classes through job growth.
  4. When there are jobs, there is additional income to be spent, money to be lent and the economic wheel is turning.
  5. Currently, homeowners can deduct up to $1.1 million of their first and second homes in interest deductions. 
    1. Under the new bill, two things happen.
      1. All current mortgages are grandfathered in and nothing changes. 
      2. All new home purchases on 1st and 2nd homes will receive interest deductions on the first $750,000.
  6. Right now you can write off all of your property taxes on your first home, land and vacation homes. 
    1. The bill will allow for a deduction of up to $10,000 total on property taxes. 
      1. Now allowing taxpayers to write off Sales Tax, Income Tax or Property Tax. This allows taxpayers in all circumstances, property owners or not to benefit!
        1. Imagine car sales, luxury goods sold, etc! They will all increase!!
Other Important Factors That Will Increase Spending:
  1. No more Obamacare penalties!
  2. Relief for medical bills!
  3. Expanding ability for citizens to contribute more to non-profits!
  4. Allowing extra support for Grad students!
  5. Significantly improves America's position on energy production
  6. Hurricane Relief
Stay tuned for additional information as it comes in! www.TheRoundTableRadio.com

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Barry Habib joins Emilio DiSpirito on The Round Table to Talk New Tax Plan and How It May Effect Real Estate!

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Monday, November 20, 2017

Is buying a home a good investment?

Is buying a single family home a good investment?

By Emilio DiSpirito Real Estate expert and radio show host of The Round Table Real Estate Simplified

We all need a place to live, right? So when choosing to buy a home, the question hits everyone the same; "is buying a home right for me?". "What are the pros, cons and long-term benefits or pitfalls of owning a home?" we ask ourselves! Well, the math does not lie.. so let's take some basic numbers and see if buying that single family home is a good investment! 

Let's assume that we own a home and will hold on to it for 30 years, basically the length of our mortgage. We are on time with our payments each month and let's also assume that the cost of taxes and insurance won't increase over time 😅
  • The median sale price for a single-family home is $287,700. 
  • An estimated property tax per year would be $4,000 per year
    • $120,000
  • Approximate insurance cost $1000 per year
    • $30,000
  • 4.5% rate with 20% down on a 30-year mortgage
    • $189,667 over the life of the loan
  • Maintenance? Roof, furnace, upgrades/cosmetics, etc.
    • $47,000
  • Heat, Hot Water, Electricity at $2400 per year
    • $72,000
  • Water and Sewer
    • $36,000
By taking this simple calculation, your home you thought you had purchased for $287,700 had really cost you $782,367 or $26,079 per year and $2173 per month. 

Keep in mind that real estate increases in value roughly 3.5% per year when averaged over time. When you use a compounding growth of 3.5% year over year to $287,700 you get $807,515 sale price 30 years down the road!! 

$807,515 (sale price) - $782,367 (cost) = $25,148! Roughly a  9% return on your original investment or a 3% take from the homes value.

Needless to say the following benefits are not taken into consideration:
  • Mortgage interest rate deduction savings
  • You have to spend money to live somewhere anyway
  • Living comfortably in your own domain
Buying a single-family home in 2017 and holding on to it for 30 years is NOT a good investment, however, it's more or less an opportunity to break even and live for free in the end.

warwick rhode island real estate infomration


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