It is hard to miss all of the Flip/House Makeover shows on television.  Some transformations are incredible, but some seem ‘too good to be true.’  Okay, maybe they are ‘true,’ but are the makeovers good enough to last long-term?

When inventory is tight and newly renovated homes are wooing prospective buyers, you must take a step back and remember that the home you’re hunting for is a long-term investment. While futuristic appliances and gleaming hardwood floors may seduce you into making a quick offer, understand there’s much more to a home than what lies on the surface.

Investors who renovate homes want to maximize their profit as quickly as possible. While many are upstanding, others will cut corners to boost their return. Sometimes, an investor will do a “lipstick flip” on a home renovation. This flip type means fixing up what’s cosmetic and leaving the rest as-is. Paint, flooring, appliances, fixtures –all may get a tune-up. But this doesn’t necessarily consider foundation issues, leaks, plumbing problems, and work performed without permits.

Foundational and mechanical problems are a significant concern, but I want to caution buyers that cosmetic changes must be inspected for quality. A new DIY floor that is installed quickly may present problems. 

Just look at the products’ quality and the renovation details before getting ‘wowed’ by the fresh new paint.

Once buyers close on a home, they’re responsible for the home. This includes issues that may be costly to repair or unsafe for habitation. You must take the necessary steps to protect yourself before signing off. Here are some tips to prevent the headache and heartache of a bad “lipstick flip”:

• Do not waive the inspection. In addition to the usual areas, inspect exposed wiring in the attic and mold. Include a termite inspection.

• Ask for a complete list of all work done with receipts for the work. 

• For all work done, make sure the seller used a licensed contractor.

• Ensure the work on the home passed inspection and is up to code. Request a copy of the certificate of occupancy.

• Ask the seller for a current disclosure statement, as required by law.

If the seller balks at these requests, it may be necessary to pass on the home. If issues arise during the inspection, you may change your mind about the house or negotiate for repairs or closing credits, depending on your agent’s advice.

Don’t worry; not all flipped homes are money pits. Prescott has many beautiful homes to offer. As a trusted real estate advisor, I like to ensure my clients don’t get burned! Let us use our years of experience and help you look for your next home (928) 830-6976.

When you become a homeowner, you are also responsible for paying property taxes. These taxes can take a significant chunk out of your finances, and it’s essential to understand their impact on your mortgage payment. Property tax is a recurring expense and can affect the affordability of your home, especially if you’re purchasing in an area where rates are high. 

When applying for a mortgage, you’ll see one of two acronyms in your paperwork, P&I or PITI, depending on whether you include your taxes in your mortgage payment.

P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. PITI stands for Principal, Interest, Taxes, and Insurance. Taxes and Insurance can be included in your payment, although, sometimes, you can elect to pay those items directly. Either way, they are all important factors to calculate when you want to determine the cost of your new home.

Understanding Property Taxes

Before diving into how property taxes affect your mortgage payments, it’s vital to understand the basics of property tax. Property taxes are a form of tax paid on real estate by landowners. Local governments use property tax to fund their services and operations, such as schools, hospitals, and services like garbage collection. The amount of property tax you pay can vary depending on your property’s assessed value and your area’s tax rate.

Including Property Taxes in Your Mortgage Payments

When you buy a home, you’ll have a mortgage. In most cases, you are required to make an additional monthly payment toward property taxes. The mortgage company holds the taxes in a separate account called an escrow account. When property taxes are due, your lender will use the money held in escrow to make payments on your behalf.

Tax Hikes and Your Monthly Payments

Property tax rates are not fixed and will change over time. Governments and local councils have the power to increase property tax rates, which can significantly impact your mortgage payment. It’s essential to be aware of any expected property tax increases and consider them when budgeting for your mortgage.

Yavapai County Tax

We are fortunate in Yavapai County to have a user-friendly online system to look up the property taxes for individual properties. If you are considering a house and want to look up the amount of past property tax, enter the property address on the Yavapai County Interactive Map.   http://gis.yavapai.us/v4/  Once you have the address displayed, select ‘Taxes’ from the right-hand column and view the taxes for the past five years. The Yavapai GIS System also shows assessed values and the amount of previous sales.

Purchasing a home is a significant investment, and it’s essential to understand all expenses you will incur, including property taxes. Property taxes can significantly impact your mortgage payment, and it’s essential to factor them into your home-buying plans. 

Dena and Dave Plane

(928) 830-6976

In today’s housing market, low inventory dominates many conversations in Prescott and many areas of the country. With less inventory available, this increases the need for preparation for homebuyers when a house becomes available. Without preparation, you may miss out on a great opportunity. To help out, we have summarized five tips from Realtor.com’s article, “How to Find Your Dream Home—Without Losing Your Mind.”

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you’re serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage. Even if you’re in a market that is not as competitive, understanding your budget will give you the confidence to know whether or not your dream home is within your reach. Being pre-approved will help you avoid the disappointment of falling in love with a home well outside your price range.

HOW TO MAKE A DOWN PAYMENT POSSIBLE

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you need a large kitchen island to be happy with your home choice? Would a three-car garage be a convenience or a necessity? Before you search, list all the features of a home you would like. Qualify them as ‘must-haves,’ ‘should-haves,’ or ‘absolute-wish list’ items. Taking time to recognize your priorities at this point in the process will help you stay focused on what’s most important.

3. Research and Choose a Neighborhood Where You Want to Live

Every neighborhood has a unique charm. Before you commit to a home based solely on the house itself, take a test drive of the area. Make sure it meets your needs for included amenities, how far is the commute to work or school, look at the school district, check out the neighborhood noise, and survey the traffic. 

HOMES FOR SALE IN PRESCOTT

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that will best serve those needs. Just because you’ve narrowed your search to a zip code doesn’t mean you must tour every nearby listing. For example, if you need all your bedrooms on the same level, avoid two-story homes that don’t meet those criteria. If you don’t want to spend time working in a yard, avoid touring homes with large yards and high maintenance. 

5. Document Your Home Visits

Once you start touring homes, the features of each home will begin to blur together. Having a journal or notebook to organize your thoughts and comments for each house would be helpful. Keep your camera handy and make notes to document what you love and don’t love about each property you visit.

Being prepared is your best advantage. Get your ‘must-haves’ and ‘must-nots’ ironed out, check with the mortgage company, and of course, enlist the help of a realtor (like me) to research homes that meet your criteria.  

When you are ready to start searching for a home, call me, and I will put my resources to work.

Dena and Dave Plane

(928) 830-6976