Moving from WNY outside the U.S How to Begin Your Search?

At some point in our lives, we fantasize about owning a vacation home in some beautiful part of the world.

Or great escape may be in a home, cabana, cabin or a chalet near a lake or by the ocean. Buried in a lush forest or among a mountain range, or whatever scenery seems more appealing to live, vacation, or even retire to.

Turning a fantasy like this into a reality is possible, but buying a home outside the United States is a complicated process. Buying a home in a foreign country often requires complicated contracts that must be translated, larger down payments and higher interest rates.

The United States mortgage lending institutions will not loan money to individuals for the purposes of buying a home on foreign soil. Individuals must obtain a loan through a mortgage lending institution in the country they wish to buy in.

American home owners have the advantage of the U.S. tax write off. This is when the Internal Revenue Service will make deductions on the mortgage interest of the primary home and the second home for up to one million dollars, no matter where in the world the second home is located. As long as all requirements are met for the primary and second residences, this is true.

Gathering all the necessary paperwork and organizing it in a way that the Internal Revenue Service will find acceptable may take some time to do. Especially if the paperwork must be translated into English.

Mortgage interest paid on the property, along with all money involved, will have to be converted to American funds. This entire process will come along more smoothly if the individual employs a tax preparer to help convert these transactions.

The value of the American dollar can be a bonus when buying a home on foreign soil. The buyer should expect some headaches with the amount of paperwork involved though. Some countries have laws that regulate what types of properties and locations can be bought by non-citizens. For example: In Mexico, non-citizens are not allowed to buy beach front properties.

Usually, buyers can overcome many problems once they have found the property of their dreams with plenty of patience and persistence and the right mortgage lending institution. Buyers must make sure to find a real estate agent and mortgage lender that are familiar with the rules about non-citizens buying property in their country. 

Buying properties in Canada and Mexico is a fairly easy process compared to buying properties in other foreign countries. Buying properties in other parts of the world may prove more challenging and would be best if the buyer checked in with the United States Embassy in the country where they would like to buy properties.

Mortgage requirements are pretty much the same in foreign countries as it is in the United States. First the buyer will need an appraisal on the property to prove that it is worth the asking price. Then the buyer will have to prove their credit worthiness to the lending institution by providing income tax statements, references and proof of employment. The buyer may have to make an extra effort to prove that they will be able to make the required monthly payments.

There may also be extra costs involved in obtaining a credit report that must be sent internationally and if the credit report must be translated. Interest rates on foreign property can vary throughout the world. So regardless of the value of the American dollar, don’t expect to save a lot on interest rates.

Down payments on property in Canada can be as high as 25% and the entire transaction can be done in English, in exception of Quebec, where law requires the transaction to be done in French. Mexico often requires a down payment as high as 60% for a 15 year mortgage.

All Mexican transactions must be done in Spanish. Many lending institutions in Mexico deal with Americans on a regular basis, mostly in Guadalajara, where more Americans have retired to or maintain a summer home.

Buyers interested in buying a home outside the United States to retire to may have to pay both U.S. and foreign residence taxes. Most often the Internal Revenue Service will allow the buyers to deduct any foreign taxes paid from what is owed in the United States. All tax matters regarding foreign properties are best left to the experienced tax preparer or personal financial advisor before making any decisions to buy property outside of the U.S. With all this being said you will always be welcome back to WNY. If you should need any info regarding this post or any other post please feel free to contact Mark Key direct.

Mark Key

Realty Eldge

716-603-8649

Moving from WNY outside the U.S How to Begin Your Search?

WNY Home Buyers What You Need To Know About Easement, Right of Way, and Restrictive Covenants: What are they and why do you need to know?

When you are in the market to buy a home, you are going to come across a lot of terms and real estate lingo that you have probably never heard of before. Buying property is like stepping into a whole new world with so much to learn, processes to endure and rules and regulations that must be followed to a T. Most home buyers are amazed on how much they learn so fast. Take for instance the importance and benefits of an easement, right of way and restrictive covenants. What are they and why do you need to know? Well, let’s take a look.

Easement. An easement is the right to use someone else’s property for a specific purpose. Normally these easements are granted to telephone companies or to public utility services to run lines under joint properties or perform other work on or under your property to neighboring houses. A housing developer may also possess an easement to allow him to build or maintain a water storage facility on your property.

Long ago easements were limited to the right over flowing waters and other rights that would only be attached to adjacent properties to benefit all parties involved and not just one specific person. Easements can be beneficial to a property as well as significantly affecting the value of the property. All easements should be included and described in your deed and remain there until your land is sold.

Usually a land owner who grants an easement cannot install fences or build other structures within the easement area that would impede access. Before purchasing any property, you should be fully informed of where all the easements are placed and any restrictions associated with them.

Right of Way. A right of way is a different form of an easement that has been granted by a property owner to give permission to others to have reasonable use of your property as long as it doesn’t interfere with your personal time. Ownership rights to the property may be lessened by an easement, but there can be a great amount of benefits due to the additional freedom.

Restrictive Covenants. They may not sound like it, but restrictive covenants are actually a good thing. Restrictive covenants are basically deed restrictions that apply to groups of homes as in a subdivision.

The restrictions are normally placed there by the developer and can be different, depending on what area you live in. These restrictive covenants help give a development a more common appearance and market value and will also help control some of the activities taken place within those boundaries.

When enforced, these covenant restrictions can help prevent homeowners from letting the appearance of their property fall into disarray and actually protect the property values.

Although these restrictions are normally a plus, all home buyers should always do their homework and study the restrictive covenants before making an offer on any home. It’s important for home buyers to understand restrictive covenants and other deed restrictions because these restrictions dictate how you can use the property. Home buyers need to be certain that they will be able to live with the rules and regulations before deciding to buy.

Other issues you may see in a restrictive covenant may be:

1. Easements for pathways and other land use that must be described.

2. Maintenance or other amenity fees.

3. Rules regarding pets and other animals, e.g., prohibitions on breeding domestic animals, livestock or having unchained pets.

4. Rules regarding home businesses or renting homes.

5. Clauses that dictate what types of fences, if any, can be used.

6. Clauses that prohibit home owners from storing clutter, inoperable vehicles or other recreational vehicles within view on the property.

This is only an example of what can be expected in a restrictive covenant. This is why it is so important to thoroughly investigate what restrictions apply before placing an offer. Your WNY Realtor or the seller of the property should supply you with a list of restrictions before you make an offer. These restrictions may or may not benefit you, it all depends on the buyer and what you are looking for. It’s important for you, as the buyer, to be well informed to protect your own interests.

WNY Home Buyers What You Need To Know About Easement, Right of Way, and Restrictive Covenants: What are they and why do you need to know?

Have You Ever Considered Buying A WNY Home from the Feds: Buying a Home from the U.S. Government

 If you are a first time homebuyer or are in the low to moderate income range, buying a home listed through the Department of Housing and Urban Development (HUD) is an appealing option.  HUD homes are actually available to anyone who can qualify for a mortgage. Although they are popular with lower income families, they are also appropriate for savvy consumers looking for a great deal.  HUD also has special purchase programs for educators and law enforcement officers, which may qualify them for discounts up to 50%. 

If you have fallen on hard times or have less than stellar credit, you may still be able to purchase a home with government assistance.  There are several government programs available to those in need. You can go over your alternatives with a HUD funded housing counseling agency. 

In order to find a HUD home, go to your state’s HUD website.  If you live in the WNY area you will go to this site HUD In New York You will be able to browse the available homes.  When you find a home you like, you should find a HUD approved real estate office to show you the property.  The agency’s website will have a list of approved offices.  Contact them so that they can set you up with an agent.  When you meet with an agent, the process is much like buying any home.  You want to lay out your wants and needs so that the agent knows what you are looking for in a home.  Pictures may not be enough to base your decision on, so you need to have an open dialogue with the agent.

The home buying process is a little different for HUD homes than it is for a regular listing.  If a homeowner with a HUD insured mortgage cannot make the payments, the home is auctioned off after the lender forecloses. 

HUD pays the lender for what is owed on the property and takes ownership of the home.  These homes are sometimes auctioned off for less than the appraised market value.  This is why such great deals can be found on HUD homes. 

The auction is considered the “offer period”.  Everyone places their bids and the highest bidder gets the house.  You can submit a bid at any time if the house isn’t sold in the offer period.  If HUD approves your bid, your agent will be contacted within 48 hours. 

In the event that your bid wins, your agent will help you with the paperwork. Your settlement date will usually fall within 30-60 days of your winning bid.  It is important to remember that you cannot finance a home through HUD. You need to have your own financing arrangements.  Have everything ready to go at the time you place your bid.   If your bid wins, but you do not close, you may lose your deposit. 

If the home is in need of repairs, the responsibility falls on the buyer.  HUD homes are sold “as is” and do not come with a warranty. HUD will not make the repairs because the price of the home is always adjusted downward to reflect the cost of repairs. 

Don’t consider buying a HUD home unless you are willing to absorb the cost of repairs.  The repairs might be minor, so don’t turn your back on good home because it needs a little work. 

Before looking for homes, you should determine what your repair threshold is and stick to that.  Some like the challenge of it and others would prefer to keep repairs to a minimum.  It is important to have the home inspected prior to making an offer so that you can figure the cost of repairs into your bid.

If you are purchasing a HUD home for real estate investing, you should be aware that you cannot bid during the initial offering.  Families in need of housing take priority; therefore, the initial offering is only available to buyers with the intent to live in the home.  If no one bids on the home, investors can then place their bids.

If a foreclosure cannot be sold within 6 months, HUD will then sell them to charities or agencies for the purpose of providing housing for needy families.  Either way, the homes are likely going to those individuals that need them the most.

If you are interested in purchasing a HUD Home feel free to contact me Mark Key and I will guide you through all the tedious process for I have lots of experience with guiding buyers through it.

Mark Key

RealtyUSA.com

716-603-8649

mkey@realtyusa.com

Have You Ever Considered Buying A WNY Home from the Feds: Buying a Home from the U.S. Government

Let’s Talk About Adjustable Rate Mortgages: WNY Home Buyers what you need to know?

If you’ve been trying to buy a house you may have noticed there are a lot of numbers to consider: the price of the house, your savings, the amounts of the down payment and monthly payments you can afford, as well as a host of other figures and fees. Trying to find a mortgage that meets your needs is another numbers game, but this one can work in your favor.

You may not realize it, but there is great variety available to home buyers shopping around for a suitable mortgage. Different banks, brokers and other lending institutions all offer their own mix of short-term and long-term mortgages, as well as both fixed rate and adjustable rate mortgages.

So how do you know which combination is the best for you? That depends on your circumstances.

Traditional fixed rate mortgages allow you the security and stability of knowing that your mortgage interest rate will not fluctuate with market conditions. This means that if interest rates spike, you will be protected. Conversely, if interest rates drop, you will not be able to take advantage of the potential savings without transferring your mortgage to another institution or making other possibly complicated arrangements.

Adjustable rate mortgages (also known as variable rate mortgages), are different than fixed mortgages in that the interest rate you pay on the outstanding principal of your loan fluctuates according to changes in the posted index rate.

There is a certain amount of risk involved with an adjustable rate mortgage in that you may end up paying more money in the long run if interest rates rise and stay high. You also have the potential to take advantage of savings if interest rates fall.

An additional bonus to adjustable rate mortgage is the lower initial interest rate. You may be risking higher or unstable payments, but you are rewarded with a lower interest rate when your loan is at its fullest point. Unless interest rates rise dramatically, this advantage is likely to save you more money than if you had chosen a fixed rate mortgage.

There are advantages and disadvantage to securing an adjustable rate mortgage loan. However, you may find an adjustable rate mortgage worthwhile if you intend to pay off a large portion of your outstanding balance early into your loan period. By doing so, you reduce the bulk of your loan while paying the initially lower interest rate.

An adjustable rate mortgage may also be the best choice for you if you anticipate greater future income or if you intend to pay off the entire mortgage loan quickly – again due to the lower initial interest rate. Even if rates were to increase early into your mortgage period, the fluctuation would unlikely be so great that it negated the difference in interest rates between a fixed rate plan and a variable rate plan.

You can reduce the financial risks associated with an adjustable rate mortgage by asking your lender about interest rate ceilings or caps that protect mortgage holders from sharp increases in the amount of money they must pay each month (or whatever their payment period is: monthly, weekly, bi-weekly, etc.).

The overall ‘ceiling’ restriction is legislated in almost all cases, and it limits the total possible interest rate increases over the period you hold the loan. Periodic caps help control interest rate hikes between adjustment periods.

Your lender may also be willing to consider payment caps, which stabilize your monthly or periodic payments so any interest rate fluctuations are worked into your payment by way of adjusting the ratio of principal to interest each payment covers. This is a great option if you have limited income flexibility, but could result in a negative amortization period over the long haul.

This happens when the balance of your mortgage is actually growing rather than shrinking because your regular payments are not large enough to pay all the interest plus a portion of your outstanding principal.

A final option to consider is arranging to have the ability to convert your adjustable rate mortgage into a fixed rate mortgage at a designated time. You may pay a fee for converting your mortgage, but if you find yourself in a situation where interest rates are rising rapidly, it may be worthwhile to stabilize your payments and balance by switching to a fixed rate plan. Personally in today’s market I would consider getting a fixed rate mortgage because of the low interest rates. For more on this topic it will be wise to speak to your financial adviser to find a mortgage plan that fits your budget and your needs.

Please feel free to contact Mark Key for connections to mortgages lenders who can help you find the right loan for your particular circumstance.

Mark Key

RealtyUSA.com

716-603-8649

mkey@realtyusa.com

Let’s Talk About Adjustable Rate Mortgages: WNY Home Buyers what you need to know?

How Can WNY Realtors Do Better To Serve You?

 Being a Realtor and working with people every day I like to know what I CAN DO BETTER to serve my clients? sometimes I’m asking myself what I can do better but I think that I will  be asking the wrong person for I am not servicing myself so what better way to get answers than to ask the people of Buffalo and WNY who I am proudly serving how I can better serve them?

I am asking not only for myself but all Realtor if you haven’t worked with me I know many of you have had your own experience with a Realtor here and there so what got you annoyed or angry about the process or even better what made you happy you had that experience in buying or selling real estate.

Please be as honest as possible and don’t worry about stepping on toes let it rip because I know this is only going to make for better Realtor because we need to know what where doing wrong and right.

I’ll be the first to start with what drives me nuts about some Realtors!  When there not upfront with their clients, my experience taught me about Honesty Be upfront with potential home buyers: explain the selling costs and how long they need to live in the house to recoup their money, and how in many instances people really shouldn't buy.  Provide them accurate calculations to determine what they can really afford and recommend they don't spend the max on a house and be house poor. I can remember when I sold myself a house I had to be the worst client or the worst Realtor to myself because I didn’t follow any of my own rules such as get a home inspection. I thought I saw it all so therefore there was no need to get my home inspected but boy was I wrong see I didn’t notice the standing water in the basement and the huge down the line cost from a plumber. So the moral of this was! I could have been a better Realtor to myself and made it a requirement to get a home inspection but in turn I could have been a better client also.

Another thing about honesty, I hate when Realtor are less than truthful to the home seller about the price of their home just to get the listing. The Realtor knows that the home will sit on the market for God knows how long and in turn doing a disservice to their client. Oh I have one more I hate when Realtors doesn’t answer their phone that is one of my biggest pet peeve there are times when I have a client that wants to see a listing to” BUY IT” and I call the listing agent and no answer because the agent didn’t answer their phone which make me wonder how are they even in business and how do they help their seller when they don’t answer the phone for another agent who is bringing them a buyer for their listing isn’t that doing a disservice to their client?

Well I said what I had to say if you have anything you would like to add on this topic please leave comment at the bottom of the post and if you are looking for a Realtor who is willing to serve you to the fullest please feel free to contact me anytime.

Mark Key

RealtyUSA.com

mkey@realtyusa.com

How Can WNY Realtors Do Better To Serve You?

When I Purchase My WNY Home Should I Use a Sellers Agent?

You need to be market savvy and an excellent negotiator. You may use the seller's agent to write up your contracts. A reputable agent will guide you through the process and ensure your transaction is completed in a timely and professional manner. If you don't know an agent, ask around. Ask your friends, family, coworkers if they were happy with their agent and if they would recommend them. Select someone you feel comfortable with and allow that agent to work for you.

You do need to work with a buyer's agent to get the best deal on the house. Just make sure you appropriately interview them rather than just going with a relative/friend who happens to have a license. You don't part of your financial future tied to someone that does this "on the side"! 

For someone who works with buyers I highly recommend you work with an agent who represents your interests. And most important in my mind, the listing agent is contractually obligated to represent the seller's best interests.  Are the seller’s interests the same as yours? Nope.  The seller wants the highest price, and you want the lowest price.  Automatic conflict if there's only one agent involved.

And that's not to speak of the $1,000's of dollars in other negotiable items like closing costs, inspections, etc. that a buyer's agent should be working diligently to swing in your favor. Just make certain that you interview the agent and review all the contracts that you sign and understand them thoroughly. Remember that a buyer's agent is there to get you the best price. Listing agents work for the seller.

 All that said it is possible to deal with the list agent if you are comfortable negotiating and get a fair deal. Listing agents must deal with buyers fairly. As far as compensation the list agent usually pays the buyer’s agent fee. So yes, in a way it doesn't cost you anything. You get representation and the list agent pays the selling agent.

There is times I have worked with the buyer and the seller at the same time and I was sure to be fair to them both there has never been a time that I hadn’t let both sides know what was going to take place.

My recommendation are that you choose the agent who will represent you in the transaction, for you have a better chance in getting what you ask for. There are times when I will ask another agent in my office to work with the buyer if they feel uncomfortable with working with me while I representing the seller and that way both parties are feeling secure.

For all my WNY Home Buyers most of the time you are not charged for the services of a buyers Agent for the Agent is normally compensated by the seller in-turn we agree to bring them a buyer. Win Win or no deal.

To conclude if you ever need assistance finding a home in the WNY Buffalo NY Area please feel free to contact me any time and I will gladly help assist you with all your real estate needs.

What do you think?

Mark Key

RealtyUSA.com

 mkey@realtyusa.com

When I Purchase My WNY Home Should I Use a Sellers Agent?

For WNY Home Buyers- A FEW POINTS ABOUT INTEREST RATES!!

Less is more
If you're new to investing or real estate and don't know the first thing about interest rates, here's a good tip: the higher the interest rate, the more expensive it's going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability increases if you use an adjustable rate mortgage (it's easier to qualify this way). Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose..
Not even the Fed knows for sure
The Fed holds a considerable amount of power, but they can't control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So there is no guarantee what direction interest rates will go, despite the forecasts of the experts. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans.
Locking in rates assures your lowest interest
If you do decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your WNY lender as soon as possible. This must be done so that your commitment doesn't run out before your loan is approved. Follow up and be sure that the lender is receiving all of the necessary documentation. Get a property appraisal, which usually costs about $300, through your loan agent as soon as possible.
Don't obsess and miss a good real estate deal
Although rising interest rates can create more problems for home buyers, waiting and hoping for low rates is not necessarily a smart move. You may end up paying a higher price. Also, refinancing is always an option in the event that interest rates come down.

As always if you should need any help in all your real estate endeavors I am here to help call me direct at 716-603-8649 e-mail mkey@realtyusa.com

For WNY Home Buyers- A FEW POINTS ABOUT INTEREST RATES!!