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Top 5 Major Reasons Why it is Better to Own Than Rent

Owning a home has great financial benefits.

I am often asked, why should I buy a house? Is it better to buy a home vs renting? In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

 

1. Housing is typically the one leveraged investment available

When you own your home it allows you to amplify any appreciation on the value of your home by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

These are only my top 5 favorite financial benefits of homeownership but there are even more! From a financial standpoint, if you can achieve homeownership and opt for renting you may be cheating yourself. Owning a home is definitely better than renting if you have the financial ability.

Your local real estate expert is always happy to help.

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Danielle Gaynor, REALTOR

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

 

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why should I buy a house?

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Slaying the Largest Homebuying Myths Today [INFOGRAPHIC]

Slaying the Largest Homebuying Myths Today [INFOGRAPHIC] | Simplifying the Market

Some Highlights:

  • The average down payment for first-time homebuyers is only 6%!
  • Mortgage interest rates have been on the decline since November! Hop in now to lock in a low rate!
  • 88% of property managers raised their rents in the last 12 months!
  • The average credit score on approved loans continues to fall across many loan types!

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

#DGRealEstateDMV #Goodmorning #Realtor #RealEstate #buy #sell #invest #equity #profits #homeimprovement #homebuyer #homeseller #homeowner #dc #md #dmv #baltimore #uppermarlboro #nationalharbor #capitolheights #takomapark #capitolhill #bowie #laurel #bethesda #silverspring #buyrealestate #sellrealestate #investrealestate #financialfreedom

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, Move-Up Buyers, Tips for Purchasing Real Estate

A Financial Checklist for First Time Home Buyers

Don’t forget this checklist when you buy your first home!

Have questions?

I am always happy to help.

Schedule a Free Real Estate Consultation

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

All Real Estate Blog Posts, First Time Home Buyers, For Buyers, For Sellers, General, Real Estate News, Real Estate Services

How does a REALTOR® spend their time?

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Key Takeaways

  • A real estate agent’s job is to make sure everyone else involved in the transaction is doing their job.
  • Agents have to continuously shift gears to quickly adapt and respond to their clients and customer needs.

Trying to explain to the public how real estate agents spend their time is similar to explaining what a doctor or lawyer does all day. There is a lot of things that go on behind the scenes that goes into “treating patients” or “handling legal matters” and the same goes for “helping people buy, sell or rent property.”

From a consumer’s first thought about making a real estate move to actually taking the leap (whether that means right now, next month or three years from now), the agent is incubator, initiator, action-taker, coordinator, scheduler, personal concierge, resource person, problem-solver, mediator, miracle worker, red-tape cutter, transaction manager and chief make-it-happen officer of everything else that doesn’t fall into the prior categories.

They may delegate some of these roles, but nothing gets completed without their oversight and input into what needs to be done and how.

An agent has a workday like anyone else, but there are typically little to no boundaries to that agent’s day and week. Here’s how an agent’s workday often goes:

Responding 

There are no official days off in real estate. You might have spans without any scheduled appointments, but there are always inquiries, emails, and texts to respond to.

Agents are “on-the-clock” no matter where they are. If a consumer contacts them about a property, they respond. If other agents contact them to ask questions about their listing or want to show one of their properties, they get back to them. If they receive an offer, they work on it regardless of the day, place and time. There is no stop-and-start in this business.

Despite what people might say, it is nearly impossible to shut off the communication, ever. The workplace is anywhere an agent is and that doesn’t mean agents have to go to an office for the day to start — work happens at home, in the car, during vacations, and on the go.

The job often begins early in the morning or the night before managing emails and follow-up communications — phone calls and texts about any number of things from showing feedback on listings, following-up on in-progress transactions and creating to-do lists for assistants and staff.

Reviewing MLS activity

Agents review MLS activity for any pertinent listings and updates on properties of interest to their buyers and sellers (competitive listings, price changes, under contracts, back on the markets, off the markets or solds, etc.) and notify their clients of relevant information.

Keeping up a database

Agents must continually update their contact databases with new customer information, updates to existing customer contact information, birthdays and new-home anniversaries, and more.

Scheduling showings

Agents put together property itineraries for clients who are planning a house hunting trip, which could involve numerous showings in a short period of time.

Scheduling these tours requires a delicate dance that takes into consideration geography and logistics against the backdrop of unknown time constraints that sellers may impose. (“Can you come at 2 p.m. instead of 10 a.m.?” or “Today’s not good, but how about Friday?”)

These impromptu changes in plans wouldn’t be a problem if agents didn’t have anything else to do, buyers had the luxury of time and they were local — but rarely are agents working with that kind of flexibility.

And Murphy’s Law says the property that’s causing the scheduling difficulties will be the one at the top of buyers’ wish list. Agents have to find a way to make it happen.

Making contact

Agents reach out to establish initial contact, discuss real estate needs and provide advice on the market to customers who have just been referred to them.

They conduct in-depth research on possible options for buyers and dive into market comparables to get an idea of what sellers’ homes can realistically sell for.

Setting and attending appointments

Then there are the appointments — meeting buyers and sellers for initial discussions, previewing and touring properties, meeting inspectors, appraisers and a plethora of specialists, contractors, stagers, photographers and repair professionals.

While out on these meetings, business carries on and the emails, calls and texts flood in.

Oftentimes agents will be juggling these meetings with the sellers from six months ago who call and want to meet immediately — or the inactive buyer couple who suddenly found the perfect home that they need to see right this minute.

Negotiating offers and managing the sale

Negotiating offers may go on for days or weeks. Once an offer gets worked out and a property goes under contract, that is just the beginning. There’s no jumping up and down, high-fiving and laughing all the way to the bank. Quite the contrary, this is where it can all go wrong.

At this point, agents have to make sure that everyone involved in this process does their job. From whatever side of the transaction they represent — buyer or seller — agents need to make sure everyone is fulfilling their obligations of the transaction in a timely manner.

If a lender is involved, active and frequent communication is a must to ensure the loan process is on track.

Agents check in with the title company or attorney’s office to make sure the file is being handled and all details and nuances are being attended to. They also address anything unexpected that may arise — a closing that needs to be a mail-away to the seller, or a situation in which a power of attorney needs to be present because one of the buyers will not be.

There are an endless number of tasks that agents must ensure get done from contract to close, from reminding clients about utility transfers to ensuring the seller has everything moved out on the day the buyer legally takes possession.

Problem-solving

Problem-solving and crisis management happens at every turn. This entails educating clients about the realities of what they are trying to accomplish; running down information about a community, association or property; or troubleshooting umpteen potential issues that could derail a property search, transaction or closing.

Unlike many jobs, no two days are the same. One week could be plagued by multiple snags (a buyer’s financing falls apart, home inspection issues, etc.), and on another day, it may all come together in an eerily smooth manner. But never fear; in this business, the other shoe is always about to drop.

Speaking of the other shoe dropping, there is no guarantee that the time spent and the hours put in will result in a paycheck.

Agents can’t bill for the time and effort they’ve expended giving advice and information, showing properties, attending showings, creating and hosting broker and consumer open house events and more.

The buyer may never buy; the seller may never sell, and the agent’s paycheck is affected by other people’s circumstances and decisions.

The enthused buyer could have a job transfer fall through. An unexpected medical situation could put a house hunt on hold for someone else. Or a couple of sellers could suddenly decide they love their house more than they did before.

The agent — if he or she is lucky in these cases — will get a “thank you.”

Marketing

Then there is the marketing and business development agents pour into their brand, knowledge, and expertise. That website, newsletter, postcard, video or other marketing pieces (social media posts, custom property ads) didn’t appear out of thin air.

Agents devote thought and resources to each marketing piece with an eye toward implementation, execution and tracking results at every turn.

In short, real estate is a profession full of follow-up, follow-up, follow-up; multi-tasking; prioritizing, re-prioritizing; juggling; figuring out how to be in three places at once; evaluating, advising and coaching; hand-holding; researching and problem-solving; and responding.

Despite what reality television portrays, agents don’t simply ride around in expensive cars or have their private driver take them to unlock a door. They don’t show up in designer clothes at some swanky place to negotiate a deal over trendy cocktails.

It might appear glamorous and easy, but showing a customer properties or putting a home on the market happens sometime in the middle of a very involved process.

Marketing, branding and creating top-of-mind presence usually comes first, and those are the things that motivate customers to choose an agent.

Agents are the catalyst for the entire process of buying, selling or renting a property; and, from that perspective, they help keep the economy moving in every sense of the word.

Re-Posted from inman.com

Schedule a Free Real Estate Consultation

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com