When looking to buy a property that’s a part of a larger building, you might often see the term “co-op property.” While co-ops are similar to condos in some regards, there are a few distinct differences between the two.
You Can’t Technically Own a Co-op
“Co-op” is short for cooperative, which basically brings the concept of teamwork to homeownership. When you buy a co-op, you aren’t technically buying the property itself. Instead, you purchase shares in the corporation that owns the property and the bigger the co-op home, the more shares that you own.
The number of shares that you own doesn’t mean that you have more deciding power over other co-op owners in the building. However, the number of shares that you do own will affect the maintenance fees, your taxes, and some other financial aspects. Each co-op owner typically has roughly the same influence on the maintenance and direction that the company takes and the residents will vote on every decision that affects the property.
Additionally, some residents can have a seat on the board and will work to carry out the group’s decisions.
Where Are Co-ops?
You can find co-op properties largely on the east coast of the U.S. in the big cities like New York and Washington, DC. There aren’t many in Maryland or Virginia. According to a New York Times report, 75% of Manhattan’s housing is comprised of co-op properties, many of which carry the Trump name or other prominent brands.
Advantages of Co-ops
If you want to live at a specific address overlooking a landmark in New York City or Philadelphia for instance, you won’t have much choice in the type of housing you’ll have. Typically, properties in these areas are almost entirely co-ops. Also, living in a co-op property means that most of your neighbors are friendly and will pay their bills on time because of the strict application process which goes far in ensuring the building is properly maintained.
Co-ops are usually more “bang for your buck” than condos in that you receive more space for less money since many people are scared off by the ownership structure.
Are you interested in purchasing property to rent to others in Maryland, Virginia, Washington DC, or Baltimore? Whether this is your first time investing in rental property or if you have some experience, there are a few characteristics you should take into account when considering a property to make sure that you are getting the most for your investment.
The area and neighborhood where the property is should play a crucial role in your decision process. The area will significantly affect the rent prices, the type of tenants that you will attract, and potentially your vacancy rate.
Referencing the location, what changes will the area experience in the coming years? If there is significant development planned around the property including shopping centers, apartment complexes, and business parks, it is a good sign and can have positive impacts on the property’s value over time.
If you are in the market for family-sized rental properties, the quality of the local schools should play a significant role in your decision-making process. Having quality schools close to your property will significantly improve its value in many ways besides price. For instance, families will be willing to stay longer if their kids are enrolled in a school they like which helps you reduce your vacancy rates.
Work that Needs to Be Done
When looking at rental properties, you should perform an adequate evaluation of the condition of the home. If you aren’t very experienced, you can hire someone to take a look at the property to make sure that you know what you are buying. If the home needs extensive work and you don’t have the skills or desire to fix it, it’s best to pass and find a property that is in better condition.
Property taxes will vary from area to area, and because you are hoping to generate income from the rental property, you need to know how much you’ll be losing to taxes. Visit the local assessment office to see the property tax rates for the area so you can accurately include it in your revenue estimates.
As a rule of thumb, many experts will recommend that you put down 20% or more when buying a new home. The reason they cite is that this huge sum paid before the mortgage will show lenders that you are a trustworthy borrower serious about paying off the home yielding a lower interest rate.
Is 20% still the tried-and-true standard or is it possible to buy a home with a smaller down payment? Here are the pros and cons of each option.
The Pros of Putting Down 20%
When you put down 20%, you’re more likely to secure a loan from reputable lenders with a lower interest rate. By putting down 20%, the lender then knows that in the worst-case scenario, they only need to recoup 80% of the home’s value should the borrower fail to pay the loan back. Since you’ve paid more up front, your monthly mortgage payment will be smaller.
Why Less Can Sometimes Be More
Usually, the minimum that you must put down to secure a 30-year mortgage is 3.5%. This is quite a bit less than 20% and will save you some money up front before the mortgage starts. By putting down less initially, you will be able to move into your new home sooner than later without having to spend months or years trying to scrape together the funds for a traditional 20% down payment.
You don’t need to shell out the big bucks to secure a mortgage loan, however, the more you put down up front, the less you’ll have to pay over time. Consider both of the options carefully, and do your research and crunch the numbers before signing any paperwork.
If you’d like to talk about selling your house in Virginia, Maryland, or Washington DC so you can buy another one, head over to our Contact page.
If you are looking for a house in Virginia, Maryland or Washington DC, either to inhabit or as an investment, you might have heard the term “short sale” before. It can seem confusing, but in reality, it is an incredibly simple real estate term to understand and could save you thousands on your next property purchase.
In the real estate industry, a short sale is basically when the proceeds of a property sale aren’t enough to cover the balance remaining on the property’s mortgage loan. To put it simply, the seller of the property owes more to the mortgage lender (the bank) than what they are selling it for.
For the seller to do this, the bank must agree to discount the loan balance which is essentially agreeing to take less money than what is initially owed. The owner will have to prove they are dealing with financial hardships before the lender will accept a real estate short sale. It will have severe consequences on the seller’s credit.
Why Would a Lender Accept a Short Sale?
It is worth asking since any lender in their right mind would want only to accept the amount of money owed to them and nothing less, right? In reality, if a house is foreclosed upon by the lender, they must still list the home on the market and sometimes wait months or years to sell the home.
Foreclosure is expensive for all parties, and most lenders would rather go through with a short sale, cut their losses, and avoid the hassle of reselling the property themselves altogether.
Pros and Cons Buying a Short Sale
Short sales are not necessarily better deals than regularly listed homes. For example, if someone bought a house at the height of the market and went underwater, their loan amount could be way more than the house is worth. Short sale houses are also sold “as is”. This means you could be left holding the bag on issues. Banks are also notoriously difficult to deal with when buying a short sale as they are effectively losing money. All that said, the right short sale can be a great buy.
When it comes time to purchase a house in Maryland, Virginia, Washington DC, or Baltimore, buyers have a lot of options. Some of the most commonly compared housing options comes down to condominiums versus single-family houses right now.
Aside from location, housing type is one of the most important decisions for an individual or family to make. It’s important to sit back and really consider the unique pros and cons that accompany condos and single family homes today, as they could make or break your living experience. By focusing on lifestyle and cost, you can better determine which is right for you.
PROS: In recent years, there has been a huge upswing in condo purchases over homes due to a resurgence in urban living. Condos are most typically located in urban areas, with walkability to shops, restaurants, and other places of interest and entertainment. Condos come with resort-like amenities, including pools and fitness centers, cleaning services, and 24-7 support. Especially with people living busier lives today, condos offer a convenient solution to a low-maintenance lifestyle.
CONS: As you could guess, this kind of convenience plus luxury amenities does not come at a cheap cost. One major drawback to the condo life is association fees, collected outside the monthly mortgage payment and put towards building maintenance and amenities. These fees can be expensive, and they can increase at any time when extra money is needed. Additionally, condos mean you’re sharing a building with other homeowners, presenting a potential for noise and other disturbance complaints.
Single Family Home
PROS: The best advantage of buying a single-family home is that you have total control over the property. It is all yours. You can remodel, make changes, and do whatever your heart desires without the consent of others. Homes also allow for extra indoor and outdoor space, providing you with much more wiggle room than a condo. Accommodating for families and pets, your home can expand with your family, equipped with closets, attics, basements, and garages. Lastly, homes offer you more privacy, placing outdoor space between you and your neighbors.
CONS: Homeownership is tough work, however. As part of the privacy and personal control perk, you are completely responsible for maintenance inside and outside the property, including upkeep of the yard and trees. You also need to factor in buying equipment and tools for the maintenance when purchasing a home, as well as the service costs for bringing in professionals to make repairs. Finally, utility bills with homes are much higher than condos, as you have to heat/cool and power up much more space than that of a condominium.
What’s Right For You?
If you’re single, looking for an urban setting and working long hours at work, a condo might seem appealing. However, if you’re newly married, looking to start a family and add personal touches to your living space, then consider the single-family home option.
Purchasing a house is one of the largest investments a person makes in his or her life. Most people don’t fully understand the home buying/selling process. Every house transaction involves a title company that handles the actual transfer of the house. Title companies vary in quality, price, and experience. You have the right to choose your own title company. Most people don’t take advantage of this right. Choosing the wrong title company could cost you more money and title issues down the road. Here are some factors you should consider when choosing a title company in Maryland, Virginia, or Washington DC:
Reputation and Experience
Undoubtedly, you would want your work to be handled by a reputable and trustworthy company, especially if you want to sell my house fast in Maryland or Washington DC. Thus, it is essential that you check the reputation and track record of the company you are considering. Check online reviews and ask a few realtors if they have experience with the company. Call the company and ask them questions about their process.
Choosing a title company near you is helpful if you need to discuss issues in person, drop off checks, etc. If you close at their office, having it near by will make your life easier.
House transactions are very expensive. The last thing you want to do is waste money on title fees when you are trying to sell my house fast in Maryland, Virginia, or Washington DC. Ask the company about their fees and force them to provide estimates. Check around with other companies and compare prices. You could end up saving thousands of dollars.
As always, at 8 Day Home Sale we buy houses in Maryland, Virginia, and Washington DC for cash. We have years of experience buying houses and working with title companies. If you sell your house to us, you can rest assured we will handle all title issues.
Real estate is believed to be among one of the top 3 long term investments in the United States, coming only second place to stocks and ranking better than gold. In some economies particularly those in Europe, real estate is ranked highest in stable returns for any investment.
But where does the value of real estate come from? Do you just buy a house haphazardly or are there strategies? When you think of real estate investing, most people make it sound easy. House flipping shows have glamorized real estate, portraying many falsehoods and leaving out pitfalls. In terms of primary residences, many people believe any house they buy will go up in value no matter what. Buying houses should be taken as seriously as all other forms of investing.
Here are some tips for buying a house in Maryland or Washington DC that will appreciate in value:
1. Check your location
Let’s say you see a nice property that is really affordable and is selling at a lower price than the usual market price, it wouldn’t be a wise decision to just go straight ahead and buy the property before doing your research. Go to the local board and look for the plan of the neighborhood. If there is going to be an industrial area or even a land dump close by, the value of that particular property will drastically decrease.
2. Unusually High Houses for Sale
Unless a neighborhood is in its initial development stages, you should be wary of acquiring a property if more than five other houses in the area are for sale. People might be running away from that neighborhood for some a reason. Zillow is a great resource for this.
What facilities are in the area where you want to purchase property? The three facilities which are a must and will have a positive impact on the overall value of your house are schools, medical centers and shopping malls. If an area does not have these three or any plans indicating that these will be there soon, then it’s not a wise idea for you to get a property in such an area.
4. Fixer uppers are the best
Houses that will require work are usually the best investment. You can buy a house and get a 203K loan for renovations. This will usually lead to $30,000+ in instant equity.
You might be thinking I want to “sell my house fast” and buy a new one. If this is true, knowledge of any easements on the property is critical. An easement is a sharing of land. It gives the right to a particular person or group to utilize the land. When trying to sell your house fast, an easement can be problematic as it may affect resale value.
An easement dictates legal usage of the property by an outsider. That person or group cannot be stopped from using the space in specific legally designated ways. Easements occur in the following forms:
The Right of Passage – This easement entitles a person to cross through a property that is not owned by them. For example, if a person owns a house near the beach and the only possible way to the beach is on the property, the owner has to allow the people to access the beach via its property. The second example can be a neighbor that may not have access to any other road, which leads to the main road rather than the property of the owner.
The Right to Utility Maintenance– This easement entitles utility organizations to use property for laying power cables and/or reaching out to neighboring places for maintenance work.
The Right to Historic Lands – This easement involves individuals whose property is located in the same district as a historic property. The owner needs to abide by the rules of the historic property. The rules can be related to the coloring of the property or can also be related to structural changes that cannot be made to the property. Read about historical easements in Maryland.
Recreational Easement – The easement pertains to the usage of land which has not been developed. The government can allow public use of such land for recreational activities such as fishing, hiking, biking, etc.
Easements are listed on the property deed. For property you own, you should check the deed for easements before listing the property before you “sell my house fast”. When buying a house, always ask your realtor about easements. At 8 Day Home Sale, we buy houses for cash and have been doing so for years. As such, we always work with home owners to find and understand existing easements on their property.
Your home is more than the place you raised your family, it is also one of the largest investments you own. When it is time to sell you deserve the best return possible, but is a real estate agent worth those huge commissions? For the right one – yes!
So does that mean you need to pay 7% commissions to an agent? Not if you pick carefully. Commissions are negotiable, but sometimes lower fees can mean less service as well. Are they willing to accept a flat fee versus a commission? Will they reduce their rate if you conduct your own open houses?
Treat hiring a real estate agent like any other job interview. No matter what market you live in, there are lots of agents competing for your business. Interview at least three or four as you would for any contractor. Before you meet with them, review the quality of their current listings and call some owners from their recent sales. Review the time on market for their listings, and the percentage of selling price compared to the listing price.
All agents will offer some of the basic services, but what more will they do for you? Have them describe their marketing plan. How will they provide maximum exposure for your property? They need to be more creative than simply listing on MLS. Will they assist in staging your home? Do they use professional photographers? How many websites, and other advertising mediums will they use? How many open houses will they conduct? Will your home be a priority over their other listings?
The first item on a real estate agent’s agenda is the appraisal. It is often tempting to sign on with the agent who promises you the highest listing price, but is their valuation realistic in your market? Have them show you comparable listings and recent sales in your marketplace. How knowledgeable are they about those listings? Can they accurately compare the features of those homes versus yours?
The worst thing an agent can do for you is to overprice your house. In these instances, the house doesn’t sell, so you lower the price. Now it has been on the market longer than desired and people will think either there is something wrong with your house, or you will be open to a lowball offer. In this way overpricing may ultimately lead to a lower sale price!
Time spent in carefully selecting your agent will always be a good investment.