Blog - Leagan Realty

Leagan Realty

Lisa & Gary Eagan

Wishing You a Safe and Happy Labor Day!

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Labor Day is more than just a day off—it’s a time to honor the hard work and dedication that drives our nation forward. As we enjoy the last days of summer, let’s take a moment to celebrate the achievements of workers everywhere. Whether you’re relaxing with family, firing up the grill, or taking a well-deserved break, remember that this holiday is about recognizing the contributions that make our communities strong.

Stay safe, enjoy your time off, and take pride in the work you’ve done. Happy Labor Day!

The Value of Thinking Long-Term with Real Estate

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Homes & Real Estate

Purchasing a home is one of the most significant financial decisions you’ll ever make. With so much at stake, it’s easy to get caught up in short-term considerations. But what if, instead, you took a long-term view? Thinking ahead—beyond just the next few years—can profoundly impact your financial future and overall satisfaction with your home. Here’s why taking a long-term approach to real estate is crucial.

The Allure of the Present vs. the Reality of the Future

When you’re in the market for a home, it’s tempting to prioritize what’s trendy or convenient right now. You might be drawn to a home that’s close to your current job, in a popular neighborhood, or with features that are currently in vogue. These factors can certainly add to your immediate satisfaction, but will they still be important a decade from now?

Consider the long-term fundamentals: the neighborhood’s potential for growth, the quality of local schools, the condition of the property, and the home’s ability to meet your needs as your life evolves. A trendy location might lose its appeal, but a solid, well-maintained home in a stable area is likely to hold—or even increase—its value over time.

The Hidden Savings of Staying Put

Owning a home comes with upfront expenses, such as closing costs, and ongoing costs, like maintenance and repairs. At first glance, these might make renting seem more appealing. However, the longer you stay in your home, the more these costs spread out, reducing their impact on your budget. Over time, the stability of a fixed mortgage payment can become a financial advantage, especially as rent prices in your area rise.

If you anticipate staying in one place for several years, the benefits of homeownership begin to add up. Not only do you avoid the unpredictability of rising rents, but you also start building equity—a financial asset that can grow significantly over time. Plus, homeownership often comes with tax advantages that can further enhance your financial standing.

Building Wealth, One Payment at a Time

A home is more than just a place to live—it’s an investment in your future. As you make mortgage payments, you build equity, which can contribute to your overall wealth. Over time, as property values rise, this equity can grow substantially, providing a financial cushion or even a source of funds for future endeavors.

Research has shown that homeowners tend to accumulate more wealth over time than renters. This isn’t just due to rising property values; it’s also because homeownership can encourage a more disciplined approach to saving and spending. When you own a home, you’re more likely to make decisions that protect and enhance your investment, leading to a stronger financial position in the long run.

The Power of Patience

In today’s fast-paced world, it can be easy to focus on instant gratification. But when it comes to real estate, patience truly pays off. By thinking long-term, you’re not just buying a home—you’re making a strategic investment in your future. This mindset can help you navigate the ups and downs of the housing market, giving you the confidence to make decisions that will benefit you for years to come.

Ultimately, the value of thinking long-term with real estate is about more than just money. It’s about creating stability, building wealth, and securing a place where you can grow and thrive over the years. So before you make your next move, take a moment to look beyond the present and consider what will serve you best in the long run. Give us a call to discuss your options.

What to Do When an Inspector Finds Mold

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Mold—it’s a word that can send shivers down the spine of any prospective homeowner. But what happens when an inspector discovers mold in your dream home? Does it mean the deal is off, or are there steps you can take to remedy the situation without walking away? Here’s a guide to help you navigate this common yet serious issue.

What Does Mold Mean for Your Home Purchase?

First, it’s important to understand that mold is a common occurrence in homes. Whether it’s in the shower, under the kitchen sink, or in an attic, many houses have some level of mold. The key is determining the extent of the problem and whether it poses a significant risk to your health or the home’s structure.

When an inspector finds mold, don’t panic. Instead, focus on understanding the situation. Ask the inspector about the severity of the mold, where it’s located, and what might be causing it. Often, mold is the result of a leak, high humidity, or poor ventilation. Identifying the root cause is crucial for effective remediation.

Next Steps: Testing and Remediation

Once you know there’s mold, your next step is to hire a professional mold tester. This specialist will determine the type of mold, the extent of its spread, and recommend appropriate actions. It’s wise to get multiple estimates and thoroughly research the testing and removal businesses. Stick with licensed, independent testers who aren’t affiliated with removal companies to avoid any conflicts of interest.

Mold removal can be tricky, and unfortunately, the industry is prone to fraudulent practices. Be wary of inflated charges and ensure that any company you hire is reputable. Keep in mind, though, that legitimate costs can rise if the mold is more widespread than initially thought. It’s not uncommon for mold to be hidden in areas that aren’t immediately visible.

DIY vs. Professional Help

In some cases, mold removal can be a DIY project, especially if the mold is localized and not too severe. There are plenty of online resources and even weekend workshops at home improvement stores that can guide you through the process. However, if the mold issue is extensive, it’s better to call in professionals. Proper mold removal is more hazardous and involved than many people realize, especially if it requires dealing with hidden or hard-to-reach areas.

The Cost Factor: Are You Covered?

Mold removal can be costly, sometimes running into the tens of thousands of dollars, especially if it involves gutting parts of the home. Before proceeding, contact your insurer to see if the mold removal and any related repairs are covered under your homeowner’s policy. Coverage often depends on the type of mold and the cause of the problem, so it’s essential to get this clarified upfront.

Moving Forward: Preventing Future Mold

If you decide to proceed with the purchase, it’s crucial to take steps to prevent mold from returning. Regular maintenance, such as caulking around sinks and showers, cleaning gutters, sealing windows, and fixing any leaks, will go a long way in keeping your home mold-free.

Don’t Let Mold Ruin Your Dream

Finding mold in a home you want to buy doesn’t have to be a dealbreaker. With the right approach, including professional help and preventive measures, you can address the issue and move forward with confidence in your purchase

Understanding the Tax Implications and Financial Benefits of Homeownership

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Taxes & Homeownership

This year is flying by as we head into fall. Many times homeowners wait until the last minute to research taxes and deductions. As tax season is soon approaching, it’s important for homeowners to understand the various forms and documents that influence their financial obligations. One key document is the IRS Form 1098, Mortgage Interest Statement. We will explain what the 1098 form is, its significance for tax filing, and how owning a home can potentially benefit you financially during tax season.

What Is a 1098 Form?

The IRS Form 1098 is a document provided by mortgage lenders to borrowers who have paid more than $600 in interest on their home loan during the tax year. This form details the amount of mortgage interest paid, which is crucial information for taxpayers when preparing their annual income tax returns.

How Does a 1098 Form Affect Your Taxes?

Tax Deductions:

The 1098 form plays a significant role in tax deductions for homeowners. Mortgage interest payments are often deductible, meaning that homeowners can potentially reduce their taxable income by the amount of interest paid. This deduction can lead to substantial savings and may make homeownership more financially advantageous compared to renting.

Itemizing Deductions:

To take advantage of the mortgage interest deduction, taxpayers need to itemize their deductions on their tax return instead of opting for the standard deduction. While this involves more detailed record-keeping, the potential tax savings from itemizing can be considerable, making it a worthwhile consideration for many homeowners.

Home Equity Loans and Property Taxes:

The 1098 form might also provide information about home equity loan interest and property taxes paid. Both home equity loan interest and property taxes can be deductible, potentially increasing the tax benefits of owning a home.

Understanding these tax advantages helps homeowners make informed decisions about their real estate investments. Owning a home can offer not only stability and potential appreciation but also significant financial benefits through tax deductions. As tax season approaches, homeowners should take full advantage of the benefits provided by the 1098 form to optimize their tax returns.

Final Advice

For personalized advice and to ensure you’re making the most of your tax benefits, it’s always a good idea to consult a tax professional. They can provide specific guidance based on your individual financial situation and help you navigate the complexities of tax deductions related to homeownership.

Can You Make an Offer on a Home That’s Pending Sale?

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Congratulations! You’ve found your dream home! The only problem? Someone else found it first, and now the property is marked as “sale pending.” Does this mean you’ve missed your chance, or can you still make an offer? Let’s discuss what “sale pending” means and explore the options that might still be available to you.

What Does “Sale Pending” Mean?

When a home is labeled as “sale pending,” it means that the seller has accepted an offer from a buyer, and both parties are in the process of finalizing the deal. During this period, the home is typically removed from public listings and websites like Zillow and Redfin. However, the sale isn’t fully closed yet, which leaves a small window of opportunity for other interested buyers.

Even though you can’t formally submit a new offer while the home is in this status, there’s nothing stopping you from letting the seller and their agent know that you’re still very interested. This way, if the current deal falls through, you might be the next in line.

Understanding the Reality

It’s important to be realistic—only about 4% of homes marked as “sale pending” end up back on the market. In some states, laws prohibit sellers from backing out of a deal just because they receive a better offer. The buyer is usually the one with the power to cancel the deal if certain contingencies aren’t met.

A deal may fall apart for several reasons, such as issues found during the inspection, problems with the buyer’s financing, or the inability to agree on necessary repairs. For instance, if an inspection reveals significant issues like structural damage or a lien on the property, the buyer might decide to walk away. Alternatively, if the buyer can’t secure financing within the agreed timeframe, the seller may be forced to consider other offers.

Your Strategy Moving Forward

If you’re still interested in the home despite the “sale pending” status, here are some strategies to consider:

  • Express Your Interest: Reach out to the seller’s agent and let them know you’re ready to make an offer if the current deal falls through. This way, your interest is already on their radar, potentially giving you an edge if the property comes back on the market.
  • Consider Offering More: In certain locations, if the seller has the flexibility to entertain other offers, you might consider offering a higher price or better terms. For example, you could waive contingencies or accept the property “as is” to make your offer more attractive.
  • Incentivize the Buyer: If the seller is legally bound to the current buyer, consider offering the buyer a financial incentive to walk away. This could be the amount you’d planned to offer the seller or a similar sum to encourage the buyer to reconsider their purchase.

While the odds may be against you, it’s not impossible to secure a home that’s marked as “sale pending.” However, it’s crucial to perform your due diligence and understand why the original deal might have faltered. If you’re confident that the property is still a good investment, you might find yourself moving into your new home sooner than you think.

What’s Ahead For Mortgage Rates This Week – August 26th, 2024

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Last week’s light release schedule suggests that the Federal Reserve may be planning to cut rates this year, as most inflation data align with this expectation. This week, the only notable releases are the minor FOMC Minutes and the U.S. leading economic indicator index. While these indicators came in slightly worse than expected, the results are not significant enough to impact the upcoming rate decision.

U.S. Leading Indicators

The leading index for the economy fell 0.6% in July, the fifth straight monthly decline, the Conference Board said Monday. Economists polled by the Wall Street Journal had forecast a 0.4% decline.

FOMC Minutes

“Several” top Federal Reserve officials were ready to cut interest rates in July and most believed a reduction next month is justified in light of slowing inflation and a weakening jobs market, new documents show. “The majority overserved that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” the minutes of the Fed’s July 30-31 meeting said.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates are seeing a decrease this week by -0.04% with the current rate at 5.62%
  • 30-Yr FRM rates are seeing a decrease this week by -0.03% with the current rate at 6.46%

MND Rate Index

  • 30-Yr FHA rates are seeing a -0.20% decrease for this week. Current rates at 5.90%
  • 30-Yr VA rates are seeing a -0.20% decrease for this week. Current rates at 5.92%

Jobless Claims

Initial Claims were reported to be 232,000 compared to the expected claims of 230,000. The prior week landed at 228,000.

What’s Ahead

The Federal Reserve’s preferred inflation data report is heading up the pack with the PCI Index releasing at the tail end of the week, headed up by Personal Income and Consumer Confidence reports before that. The PCE Index data will be the strongest motivator for a soon-to-be rate cut.

Hard Inquiry vs. Soft Inquiry — What’s the Difference?

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Knowing the difference between a hard inquiry vs soft inquiry can help you maintain a good credit score. Here’s what you need to know.

Most people know that your credit score can drop if you miss a payment or have a new collection filed against you. But how about when you apply for new credit? Yes, a credit application will trigger a “hard inquiry” on your report, which can have an impact on your credit score. Here’s what to know about hard inquiries, and how they compare with “soft inquiries.”

What is a Hard Inquiry?

Hard inquiries occur when you apply for credit and consent to allow a lender to check your credit report. These inquiries dated within the past 12 months count toward 10% of your credit scores even though 24-months of inquiry history is retained in your credit report.

Hard inquiries are listed by date and include the lender’s name and the name of the third-party credit provider that provided the report to the lender.

Examples of hard inquiries include:

  • Applying for a car loan and the dealer checks your credit report
  • Applying for a new credit card
  • Requesting to have the credit limit increased on an existing credit card
  • Applying for a mortgage
  • Applying to lease an apartment

Only authorized parties are allowed to access your credit report, and to do so, they must have a permissible purpose. Lenders only have permissible purpose if you have applied for credit and given the potential lender consent to check your credit report. Hard inquiries made for any other reason without your consent are not permissible and you have the right to dispute any unauthorized inquiries.

How Many Points Does a Hard Inquiry Affect Your Credit Score?

According to credit experts, “In most cases, a hard inquiry from a lender will decrease your scores by 7 points or less. The highest drop in scores that I’ve seen was 23 points, but that is very rare.”

The impact of applying for credit will differ from person to person based on their unique credit history. Individuals with very little or no credit history may see a bigger drop in scores compared to someone who has established credit and who has proven to manage more accounts over time.

It is true that in most cases, an occasional hard inquiry will have little to no impact on your credit scores. However, a new hard inquiry can lower your score by a few points when certain factors come together in your credit report:

  • Opening a new credit card or line of credit will affect your length of credit history because it lowers the average age of your total accounts. This, in turn, will lower your length of credit history and subsequently, will lower your credit scores.
  • New credit, once used, will increase the “amounts owed/credit utilization” factor of your credit scores and may also contribute to lowering your scores.

Minimize the Impact of a Hard Inquiry on Your Credit Score

To minimize the impact on your score, do your rate shopping within a focused amount of time. Most credit scores are not affected by multiple inquiries from the same type of creditor within a short period of time.

Credit score models have been programmed to accommodate typical “rate shopping periods” for auto, mortgage, or student loans. This means that if you are looking to buy a new automobile, conduct your comparison shopping among multiple dealers and creditors within a 30-day average period. Then, multiple hard credit inquiries from auto lenders will only count as a single hard inquiry for credit scoring purposes.

Hard inquiries count toward the calculation of your credit scores, so it’s important to monitor your inquiries. Make sure that you know who, when, and why a creditor has reviewed a copy of your credit report. If you notice hard inquiries in your credit report that you do not recognize, it’s important to find out more about them by using the information in your report and disputing the inquiries. You can learn more about how to dispute inaccuracies in your credit report by visiting the FTC’s website.

How to Check for Hard Inquiries

The next time you apply for new credit, you’d be wise to obtain and review your credit report. Or, get a free report at annualcreditreport.com, a federally-mandated website that gives you a free report from each of the three major credit bureaus. In your report, you’ll see a list of the creditors and lenders who have checked your credit file over the past 24 months. These credit checks by creditors and lenders are called “inquiries.”

But not all inquiries are created equal — hard inquiries and soft inquiries have different effects on your credit score.

What is a Soft Inquiry?

Soft inquiries are checks of your credit report that are not associated with your credit application. They do not impact your credit scores in any way.

Examples of soft inquiries might include any of the following:

  • Checking your credit report and credit scores through an organization authorized to provide credit reports to consumers
  • Applying for a job
  • Receiving prescreened offers of credit from credit card companies, insurers, and other creditors

Hard Inquiry vs. Soft Inquiry: Rule of Thumb

If you’re not applying for credit, you won’t incur a hard inquiry. So you don’t need to worry about dragging down your credit score by signing up for an app or service that helps you monitor your credit.

That being said, don’t be afraid to apply for credit if you need it. The impact on your score is typically small if you are not applying for many kinds of credit within a short time.

Financing Home Improvements with Renovation Loans

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Homeowners and buyers are always looking for ways to finance their home improvement projects. Renovation loans offer a fantastic solution, enabling you to upgrade and personalize your home while incorporating the cost into your mortgage. We will explore the different renovation loan options available, such as FHA 203(k) and Fannie Mae HomeStyle, to see how they can help you achieve your dream home.

FHA 203(k) Loan

The FHA 203(k) loan is a government-backed mortgage that allows you to finance the purchase of a home and its renovation costs with a single loan. This loan is ideal for buyers looking to purchase a fixer-upper or homeowners wanting to make substantial improvements to their existing property. There are two types of FHA 203(k) loans:

  1. Standard 203(k) Loan: This option is for major renovations and structural repairs. It requires a minimum renovation cost of $5,000, and all work must be completed by a licensed contractor. The maximum loan amount is determined by the lesser of the home’s value after improvements or 110% of the appraised value before renovations.
  2. Limited 203(k) Loan: This option is for smaller projects, such as minor repairs or cosmetic upgrades. It has a maximum renovation cost of $35,000 and does not require a minimum amount. Like the standard 203(k), all work must be completed by a licensed contractor.

Fannie Mae HomeStyle Loan

The Fannie Mae HomeStyle loan is a conventional loan that allows you to finance both the purchase and renovation of a home with a single mortgage. Unlike the FHA 203(k) loan, the HomeStyle loan can be used for luxury improvements, such as swimming pools and landscaping, in addition to necessary repairs and upgrades. Key features of the HomeStyle loan include:

  1. Flexibility: The HomeStyle loan can be used for a wide range of renovation projects, from minor repairs to extensive remodeling. There are no restrictions on the types of improvements you can make, as long as they are permanently affixed to the property.
  2. Loan Limits: The maximum loan amount is determined by the lesser of the home’s value after improvements or the conforming loan limit for your area. This allows you to borrow a significant amount to finance your renovations.
  3. Interest Rates: The HomeStyle loan typically offers competitive interest rates, making it an attractive option for borrowers with good credit.

Benefits of Renovation Loans

  1. Single Loan Solution: Renovation loans combine the cost of your home and improvements into one mortgage, simplifying the financing process and potentially saving you money on closing costs and interest rates.
  2. Increased Home Value: By financing renovations through your mortgage, you can increase the value of your home, potentially leading to a higher resale price in the future.
  3. Personalization: Renovation loans allow you to customize your home to meet your needs and preferences, creating a space that truly reflects your style and lifestyle.
  4. Immediate Access to Funds: With a renovation loan, you have immediate access to the funds needed to complete your home improvements, allowing you to start your projects right away.

Renovation loans, such as the FHA 203(k) and Fannie Mae HomeStyle, offer homeowners and buyers a convenient and cost-effective way to finance home improvements. Whether you’re looking to purchase a fixer-upper or upgrade your current home, these loan options provide the flexibility and funds needed to create your dream home. As a real estate agent, I encourage you to explore these renovation loan options and take the first step toward transforming your home today. Give me a call so we can discuss it in more detail.

Managing Your Debt During the Homebuying Process: A Guide for Homebuyers

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Embarking on the journey to homeownership is an exciting milestone, but it also requires careful financial planning. One crucial aspect is managing your debt effectively. I want to ensure you have the tools and knowledge to navigate this process smoothly. Let’s discuss some essential strategies for managing your debt while purchasing a home.

Understand Your Debt-to-Income Ratio

Firstly, it’s essential to understand your debt-to-income (DTI) ratio. This ratio compares your monthly debt payments to your gross monthly income and is a critical factor lenders consider when approving a mortgage. A lower DTI ratio indicates you have a healthy balance between debt and income, making you a more attractive borrower.

Prioritize High-Interest Debt

Next, prioritize paying off high-interest debt. Credit cards typically have higher interest rates than other types of debt. By focusing on reducing or eliminating these balances, you’ll not only save on interest but also improve your credit score. Consequently, this can lead to better mortgage terms.

Avoid New Debt

Additionally, avoid taking on new debt during the home-buying process. New loans or credit card accounts can increase your DTI ratio and negatively impact your credit score. Instead, focus on maintaining your current financial status until your mortgage is finalized.

Create a Budget

Moreover, creating a budget is crucial. A well-planned budget will help you allocate funds for debt payments, savings, and other expenses. Tracking your spending ensures you stay on top of your financial obligations and avoid unnecessary expenditures.

Save for a Down Payment

Simultaneously, save for a substantial down payment. A larger down payment reduces the loan amount you’ll need and can lead to lower monthly payments. It also shows lenders that you have financial discipline and are less risky.

Communicate with Your Lender

Furthermore, maintain open communication with your lender. If you have any concerns or anticipate changes in your financial situation, inform them promptly. They can provide guidance and may offer solutions to help you manage your debt more effectively.

Seek Professional Advice

Finally, don’t hesitate to seek professional advice. Financial advisors and mortgage professionals can offer personalized strategies tailored to your situation. Their expertise can be invaluable in helping you manage debt and achieve homeownership successfully.

Managing your debt during the home-buying process requires careful planning and discipline. By understanding your DTI ratio, prioritizing high-interest debt, avoiding new debt, creating a budget, saving for a down payment, communicating with your lender, and seeking professional advice, you’ll be well-prepared to navigate this exciting journey.

#HomebuyingTips #DebtManagement #RealEstateAdvice #FinancialPlanning

House Hacking Pros And Cons Explained

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Have you ever heard of house hacking? It’s a real estate strategy that allows you to live in a property while renting out part of it to generate income. This approach helps offset your living expenses and can even pave the way to financial independence. Here’s a breakdown of what house hacking entails, along with its benefits and drawbacks.

What Is House Hacking?

House hacking involves purchasing a property, living in one part of it, and renting out the other parts. The most common setup is buying a multi-family property (like a duplex or triplex) and renting out the other units. However, house hacking can also involve renting out extra bedrooms in a single-family home or even converting parts of your property into rental spaces, such as a basement or garage apartment.

How Does House Hacking Work?

  1. Purchase a Property: First, you need to find and purchase a property that suits house hacking. This could be a multi-family home or a single-family home with additional rentable spaces.
  2. Live in Part of the Property: You occupy one unit or part of the property as your primary residence.
  3. Rent Out the Rest: You lease the other units or spaces to tenants. The rental income helps cover your mortgage, property taxes, and maintenance costs.
  4. Manage the Property: As a house hacker, you’ll also take on the role of a landlord, which includes maintaining the property, dealing with tenant issues, and handling leases.

The Pros of House Hacking

1. Reduced Housing Costs

One of the biggest advantages of house hacking is the potential to significantly reduce or even eliminate your housing costs. The rental income can cover a substantial portion of your mortgage and other property expenses, allowing you to save money or invest it elsewhere.

2. Building Equity

By owning a property, you build equity over time as you pay down the mortgage. This equity can be leveraged in the future for additional investments or major financial needs.

3. Real Estate Experience

House hacking provides firsthand experience in real estate investing and property management. It’s an excellent way to learn the ropes before diving into more significant real estate ventures.

4. Tax Benefits

As a property owner, you may be eligible for various tax deductions, including mortgage interest, property taxes, and maintenance costs. These tax benefits can make house hacking even more financially attractive.

The Cons of House Hacking

1. Landlord Responsibilities

Being a landlord comes with its own set of challenges. You’ll need to handle maintenance issues, screen tenants, and potentially deal with difficult tenant situations. This responsibility can be time-consuming and sometimes stressful.

2. Privacy Concerns

Living in close proximity to your tenants can lead to privacy concerns. You may have to navigate noise issues or conflicts that arise from shared spaces.

3. Upfront Costs

Purchasing a property requires a significant upfront investment, including a down payment, closing costs, and potential renovations. It’s essential to have a solid financial plan in place before embarking on house hacking.

4. Market Risks

Real estate markets can be unpredictable. Property values may fluctuate, and rental demand can vary based on the location and economic conditions. These factors can impact your rental income and overall investment.

Is House Hacking Right for You?

House hacking can be a powerful strategy for those looking to reduce living expenses and gain real estate experience. It is crucial to weigh the pros and cons and assess your circumstances. If you’re willing to take on the responsibilities of property management and are financially prepared for the initial investment, house hacking could be a rewarding path toward financial independence.

House hacking is more than just a trendy term in real estate. It’s a practical approach that can lead to significant financial benefits. By understanding the potential advantages and challenges, you can make an informed decision about whether house hacking is the right strategy for you.

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Leagan Realty


12862 East Summit Drive
Scottsdale, Arizona 85259
Phone: 480.766.2115

Email: lisaeagan@leaganrealty.com