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Make sure your short-term rental unit is legal

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These days, many people rent out their homes through companies like Airbnb and VRBO. While this can be a good way to make some extra money, it’s essential to make sure you don’t violate any laws or regulations.

If you’re a renter, you’ll need to check with your landlord before renting out your home on a short-term basis. Your lease may prohibit you from subletting. If you violate the terms of your lease, your landlord will have grounds to evict you. If your landlord agrees to let you provide short-term rentals, be sure to get this agreement in writing.

If you’re a homeowner who belongs to a homeowners’ association (HOA), it may be against the HOA’s rules to use your home for short-term rentals.

You also need to carefully research zone and land-use laws in your area before renting out your home. In many cities and towns, short-term rental hosting is restricted or prohibited. Violating these laws could result in exorbitant fines. You may also need to pay certain fees and taxes to your municipal government to ensure that your short-term rental unit is legal.

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Ask the Expert: Should I co-sign my kid’s mortgage?

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As a parent, you would do anything for your child. But co-signing a mortgage is a major business decision, not just a family plan. I recommend you take the child out of the equation and think of the child as a borrower.

There are advantages for the borrower if you co-sign the mortgage. With you as co-signer, the borrower may qualify for a loan he or she wouldn’t otherwise get, whether it’s a larger amount or a better rate. Many people have legitimate reasons to seek out a co-signer, including those with the cash to pay the monthly payment but not much credit history. Many self-employed folks also can’t prove a steady source of income.

Ideally, the borrower would refinance to a loan in their own name in the not-too-distant future. In the meantime, if you are confident that the borrower has the ability to pay and can be counted on to pay on time, this could be a good option. You should make a written agreement with the borrower as to when he or she will refinance, what happens if the borrower doesn’t refinance, and what happens if the mortgage payment is not made. Then, you should stick to the agreement. Remember, that as a business decision, nothing is in this for you.

Risks – Beware the pitfalls. They include:

* You are a joint applicant for the loan with all the implications of taking a mortgage. A late payment is a penalty against you, not just the other borrower.

* Remember signing on a new mortgage affects your own debt-to-income ratio. If you need to refinance, you might not be able to do that.

* Ask yourself what would happen in the worst case scenario. If your risk is too high in the worst case, you might think again. If you’re aware of and comfortable with the risks, make sure you know the details and have read the fine print before getting yourself involved in this serious transaction.

* Consider whether the borrower can actually afford the home he or she wants to buy. If they had to use their own money and their own credit, could they qualify for this home? Using your name to buy bigger could be a bad start to this venture and a sign that things may not go well in the future. The ideal situation is that the borrower is realistic about his or her own circumstances.

Back to thinking of the borrower as a child for a second: Young people usually start out with a higher-interest mortgage and their credit standing improves over time. It’s a life thing. Nonetheless, there is nothing wrong with helping out the kids. Just don’t do it at the cost of your own financial well-being.

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Real Estate

Warren County Market Report – June 2019

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Watch this video for a quick summary of Warren County real estate for June 2019.  Charts demonstrate the changes in the market, so be sure to click play!

In general summary:

  1. Pending Sales LARGE increase compared to this time last year. UP 31.7%
  2. Average Median Sold $249,900.
  3. Average Days on Market 76.

*If you would like a copy of this report emailed to you, please send request to Jennifer@nexthomerealtyselect.com.

Resource: 2019 Market Stats by ShowingTime
MRIS: Statistics calculated June 2019

Jennifer Avery, Realtor for NextHome Realty Select
“Your Happy Home Expert”

BPOR, SRS, CNE, E-Pro Certified | Licensed in VA
jennifer@nexthomerealtyselect.com | 540-683-0790
210 E Main Street, Front Royal VA
www.jenaveryrealtor.com 

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3 tips for winning a bidding war

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Do you have your sights set on a particular home but aren’t the only one? If so, you may find yourself in a bidding war. Here are three tips for coming out on top.

1. Write a personal letter. Consider including a cover letter when you submit an offer. In it you can talk about why you’re attached to the home, what makes you a good buyer and why the seller should choose you.

This may tilt the odds in your favor, especially in circumstances where the home has sentimental value to the seller. It’s likely that they want to sell it to someone who’ll take good care of it.

2. Keep your offer clean. The highest offer doesn’t always win out in a multi-bid scenario. Sellers will often settle for a lower offer if it’s the “cleanest.” A clean offer is one that has preapproved financing and isn’t a conditional sale.

In the same vein, don’t be stingy with your deposit. A substantial payment shows that you mean business. Note that this money goes toward the down payment if you get the home and that you’ll be reimbursed if you don’t get it.

3. Be flexible about conditions. Making life easier for the seller will give you the advantage in a bidding war. Specifically, you may want to relax some of the conditions you’ve set.

For instance, you could consider dropping conditions such as cleaning up the yard, retiling a room or leaving certain appliances behind.

However, don’t waive conditions that protect you as a buyer, such as your home inspection contingency.

Finally, turn to your real estate agent for additional tips and strategies. You can bet that they’re battle-hardened when it comes to bidding wars. Good luck!

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Agent etiquette: 3 rules for homebuyers

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Your real estate agent is a key collaborator in finding a home. However, a good collaboration presupposes a good relationship. This is why maintaining correct etiquette in your dealings with your agent is essential. Here are three rules to stick to.

1. Be upfront with your agent
Be honest with your agent about what you’re looking for and what you can afford to pay. While it may be tempting to visit the more luxurious homes on offer, only do so if they’re within your price range and you’re truly interested. While such visits may be enjoyable for you, they represent time wasted for your agent.

2. Be selective with your visits

It’s normal to visit about 10 homes before choosing one. On average, this process takes two to three months. If you end up looking at upwards of 15 or 20 homes, you’ll probably wear on your agent’s patience. To avoid this scenario, only visit a home after you’ve done ample research about it and are sure you’re interested.

3. Be on time for showings
Preparing a showing requires a good deal of planning on the part of both the seller and your agent. Always be on time, and if you’re going to be late or need to reschedule, let your agent know as soon as possible.

While maintaining proper etiquette with your agent is worthwhile, it’s equally important to choose a real estate professional who’s courteous, respectful and honest. A harmonious relationship between agent and buyer requires both parties to be considerate.

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Supply of housing sees increase

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Good news for buyers who have been watching and waiting: the market is showing signs of increased supply and a potential cooling of prices. In other words, you may have more to choose from and better deals.

National inventory grew 4 percent year-over-year in April, while inventory in large markets grew 10 percent, according to a Realtor.com report. Much of that appears to be existing homes, as new construction figures were down this spring as compared to 2018.

In fact, the supply trend started in 2018 and carried over into 2019. The reasons are varied but could be due in part to a series of interest rate hikes that in turn affected mortgage rates (which are hovering near 4.5 percent) as well as factors like tariffs (which affect construction).

One caveat to the recent stories about increased supply and a cooling on bidding wars: it relates mainly to houses in the median ranges to higher price points. Realtor.com also reported that the number of homes $200,000 and under declined by 8 percent, continuing a year-over-year decline in starter homes. So buyers looking for something a bit more affordable may still be battling some competition.

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Ask the expert: What is a cap rate?

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You might have heard the term “cap rate” among those who invest or aspire to invest in real estate. Short for “capitalization rate,” the concept is key if you’re going to pursue a career in rentals and/or commercial properties.

The cap rate is a method for estimating the potential return on a property and assumes it’s paid for with cash. The formula includes dividing the Net Operating Income (NOI) by purchase price, or value; NOI is the gross income minus expenses except for debt service.

Example: A property costs $100,000 and generates $10,000 in income. NOI/Value means 10k/100k = 10% cap rate.

Debt service isn’t included because cap rate makes all things equal. The investor who will finance a property knows that it starts at a 10 percent cap rate and then does additional figuring to arrive at his or her actual return on investment (ROI).

So what’s a good cap rate? That’s up to you. Similar to comps in single-family properties, it’s important to know the typical cap rate in your area. So a “10 cap” might be the norm where you’re from, while a “7 cap” is acceptable elsewhere. And every investor has their individual threshold as well.

It gets more complex, naturally. Investors also need to consider things like depreciation and capital expenses, and evaluate whether the NOI is accurate. There are also other ways to calculate your return. But for a quick analysis and a way to help determine optimal purchase price, cap rate is the way to go.

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6:30 pm Pour Me Another Fluid Art @ Strokes of Creativity
Pour Me Another Fluid Art @ Strokes of Creativity
Jul 18 @ 6:30 pm – 8:30 pm
Pour Me Another Fluid Art @ Strokes of Creativity
Two classes in July – the 18th and 26th at 6:30pm. Pre-Registration is a must! Pour Me Another is an actual class. You will learn the ins and outs of paint pouring and go home[...]
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PAVAN Showcase Performances @ Sherando High School
Jul 19 @ 5:30 pm – 9:00 pm
PAVAN Showcase Performances @ Sherando High School
You are cordially invited to PAVAN Showcase Performances: 5:30 pm – Solo Recitals 5:30 pm – Art Gallery Open House: Browse art works at your leisure 7:00 pm – Concert performances by Guitar, Theatre, and[...]
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10:00 am Design a chair for the SPCA CHAI... @ SPCA of Winchester, Frederick, and Clarke Counties
Design a chair for the SPCA CHAI... @ SPCA of Winchester, Frederick, and Clarke Counties
Jul 22 @ 10:00 am – 5:00 pm
Design a chair for the SPCA CHAIR-ity Brunch @ SPCA of Winchester, Frederick, and Clarke Counties
Calling all artists!! Design a chair for the SPCA CHAIR-ity Brunch and save homeless animals. Pick up a chair from the SPCA Thrift Shop, build a chair, up-cycle a chair, paint a chair, or upholster[...]
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23
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1:30 pm Botanical Drawing 1 @ Art in the Valley
Botanical Drawing 1 @ Art in the Valley
Jul 23 @ 1:30 pm – 4:00 pm
Botanical Drawing 1 @ Art in the Valley
Learn and practice the art of botanical drawing in pencil with local artist and instructor Elena Maza. Tuesdays: 1:30pm – 4:00pm, July 9th – 30th. Classes will be held in our upstairs studio at 205[...]
Jul
26
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6:30 pm Pour Me Another Fluid Art @ Strokes of Creativity
Pour Me Another Fluid Art @ Strokes of Creativity
Jul 26 @ 6:30 pm – 8:30 pm
Pour Me Another Fluid Art @ Strokes of Creativity
Two classes in July – the 18th and 26th at 6:30pm. Pre-Registration is a must! Pour Me Another is an actual class. You will learn the ins and outs of paint pouring and go home[...]
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3:00 pm Teacher Classroom Door Hanger @ Strokes of Creativity
Teacher Classroom Door Hanger @ Strokes of Creativity
Jul 27 @ 3:00 pm – 6:00 pm
Teacher Classroom Door Hanger @ Strokes of Creativity
Welcome in the new school year with a Personalized Classroom Door Hanger! Make your choice of a pencil, bus, apple or cloud sign. Must preregister with deposit of $10 and the choice of shape by[...]
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12:00 pm Crop With Us @ Strokes of Creativity
Crop With Us @ Strokes of Creativity
Jul 28 @ 12:00 pm – 5:00 pm
Crop With Us @ Strokes of Creativity
Come Crop With Us Sunday, July 28, 12 noon to 5:00 pm. Receive a gift for pre-registering and attending. $15 No refunds. Feel free to bring your own snacks or drinks!
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10:00 am Design a chair for the SPCA CHAI... @ SPCA of Winchester, Frederick, and Clarke Counties
Design a chair for the SPCA CHAI... @ SPCA of Winchester, Frederick, and Clarke Counties
Jul 29 @ 10:00 am – 5:00 pm
Design a chair for the SPCA CHAIR-ity Brunch @ SPCA of Winchester, Frederick, and Clarke Counties
Calling all artists!! Design a chair for the SPCA CHAIR-ity Brunch and save homeless animals. Pick up a chair from the SPCA Thrift Shop, build a chair, up-cycle a chair, paint a chair, or upholster[...]
10:00 am Let’s Explore Art @ Strokes of Creativity
Let’s Explore Art @ Strokes of Creativity
Jul 29 @ 10:00 am – 12:30 pm
Let's Explore Art @ Strokes of Creativity
Monday July 29th – Wednesday July 31st – Friday August 2nd 10:00 AM -12:30 PM Ages: 6-9 $100 per student: Includes an art supply kit and snack & drink Day One: Lines, lines, they go[...]
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1:30 pm Botanical Drawing 1 @ Art in the Valley
Botanical Drawing 1 @ Art in the Valley
Jul 30 @ 1:30 pm – 4:00 pm
Botanical Drawing 1 @ Art in the Valley
Learn and practice the art of botanical drawing in pencil with local artist and instructor Elena Maza. Tuesdays: 1:30pm – 4:00pm, July 9th – 30th. Classes will be held in our upstairs studio at 205[...]

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