A Beginners Guide to Equity

Building Equity in Your Home

Your home is one of the best investments you'll ever make. Not only does it provide you and your family the security of an inflation-proof dwelling, but as your equity grows, it becomes a solid financial tool in building wealth. Understanding the basics of what equity is, how it grows and what you can do with it is the first step in using your home as an asset that grows in value.

What is Equity?

Simply put, equity is the difference between what your home is worth and how much you owe against that value. For example, if you own a home worth $500,000 and you currently owe $400,000 on your mortgage, your equity is $100,000. This is actually the amount of the home you own, and if you sold the home (minus costs related to its sale) would be the amount you receive from the sale.

Building Equity

Equity grows in one of several ways: the property value increases, you pay down the debt, or you add value to the home in some way.

The most common driver of property value increase comes from market demand. When interest rates are low and the economy is strong, more buyers enter the market and the demand for homes outpaces the amount of inventory, or homes for sale. This, in turn, causes a "seller's market." When this happens, the value of homes increases and equity rises along with it.

Paying down the debt owed on a home also adds to your equity. Some homeowners choose to make extra payments against the principal of their mortgage loan along with their monthly payment. Even an extra $500/month can add up over time, shorten the repayment length, decrease the total interest paid, and grow equity.

Renovations and home improvements can also add to the value of the home, thus increasing equity. Updated kitchens and bathrooms, adding extra square footage, remodeling the back yard or adding a pool can create more than a dollar-for-dollar increase in value. A well maintained, upgraded home will always command a higher sale price than its run-down counterpart.

Using Your Equity

Having equity in your home provides financial security. Not only does it provide peace of mind, it can be used, even without selling the property.

• Borrow Against Your Equity - A second home loan, usually referred to as a HELOC or home equity line of credit, allows the homeowner to take some (or all) of the equity out of the home to use for investment, home improvement, or any number of other cases.
• Receive Cash at Selling - Of course, the most obvious use of equity is to have money left over when you sell your home. This can be used to help with a down payment on a new home, for retirement spending, or to add to your savings.

Buying a property and building equity is one of the biggest advantages of homeownership. As rental rates continue to rise, a 30-year mortgage payment stays the same, protecting against inflation. With each payment, the borrower pays more principal and less interest. As the market appreciates and equity increases, the property provides an asset which not only provides the owners a home to enjoy, but a financial investment that continues to grow in value.

A Keyes Realtor is always available to answer your real estate questions. Call or come in to your local office today, or visit us at www.Keyes.com

Keyes Luxury Report Gives Insights into High End Markets in South Florida

From the Sun Sentinel 

The luxury market in South Florida is unique in many ways. The defining characteristics of this rarified set of properties have led to "what luxury real estate agents are happily calling one of South Florida's best price and sales surges in recent memory."

Leading the way in bringing this information to the public eye, The Keyes Company's Luxury Market Report demonstrated a few of the reasons for this boom - when other cities might not be undergoing the same increase in sales of their own high-end listings.

Check out insights into the mind of Keyes' Vice President of Luxury, Kevin Leonard, and why this trend might continue here.

http://www.sun-sentinel.com/business/fl-bz-south-florida-luxury-home-market-spikes-20180718-story.html#

Want to make the most money on your home? Don’t sell it yourself!

Want to make the most money on the sale of your home? Don’t sell it yourself. On this week’s Miami Herald Business Monday, Keyes Company’s CEO Mike Pappas explains the importance of hiring a Realtor® when you are ready to sell your home.

If you want to save money by selling your home yourself, that’s OK. Just don’t expect to make any money doing it. A study by two leading economists finds that owners secure deals at prices below those on similar properties sold by Realtors using the Multiple Listing Service. 


Read the full article here!

Read more here: http://www.miamiherald.com/real-estate/article186599503.html#storylink=cpy

Single Family Homes on the Market range up to $65 million.

Recent article of Miami Today discusses the amount of high priced single family homes.

Source: Miami Today

The number of expensive single-family homes is not dwindling, but instead there is an abundance of them. 

With the high price of these homes, only a small amount are willing to reduce the price. Many sellers are wary to reduce their price, but in the market for the past few years, it may be what is needed to get the listing sold. 

Sales of listing were also slowed down with the arrival of Hurricane Irma in South Florida. Agents were out of the office for about 2 weeks, causing closings to be delayed and making the market seem sluggish.

"There is a strong demand and interest for properties that are priced at a realistic market price and are in move-in condition," says Keyes CEO and President Mike Pappas. He ends with saying that he believes that the upcoming season will be good for the luxury market due to the proposed tax reduction.

What Does 'Contingency' Mean in a Real Estate Listing?

Realtor.com article featuring Keyes' own Jimmy Branham discusses contingent listings.

In a recent article on realtor.com by Audrey Ference, the topic of what contingency means when dealing with a real estate listing is discussed.

Keyes Company's Jimmy Branham starts off the article  with an explanation on the matter:

'A contingency in a deal means there's something the buyer has to do for the process to go forward, whether that's getting approved for a loan or selling a property they own.'

- Jimmy Branham

The article will explain what other things contingent listings could means and common examples of it. Ference's piece will also explain if you should still make an offer on a contingent listing.

Read the full article here!

Home mortgages are becoming more affordable and easier to more home buyers now.

First-Time Home Buyers are finding it easer to obtain a mortgage now.

"It's easier than one year or five years ago," said VP of Capital Partners Mortgage, an affiliate of the Keyes Company, when referring to how much easier it is to obtain mortgages. Rates have now changed, before they usually required a 20% down payment, but now could be as low as 3% down.

"Some loans only had a fixed rate for two years, it was predatory; people were set up to fail." said Garcia. Both mortgage companies, Fannie Mae and Freddie Mac offer loans starting with a low 3%, but are limited to $424,100 maximum. However, what is different is that federally backed loans have began to ease up on some of the requirements, acknowledging that many first-time buyers may have high student loan debt.

While loans and mortgages may help, the other issue that is the amount of housing that is able to be afforded by these first-time buyers. Roughly, there is only 16% of homes in South Florida that are under $180,000. Having mortgages that are easier to be eligible for, has allowed for first-time buyers to really get into the market. 

Charlie Weiss, a mortgage broker in Boca Raton stated that nearly 5 years ago, it was almost impossible to get a mortgage with less than 35% down. "Now many companies are getting into the private mortgage business." said Weiss. Believing that this will make it easier for buyers to secure the necessary loan coverage. 

20 Luxury custom homes set to come into Miami-Dade!

Spec developer to bring 20 luxury custom homes to south Miami-Dade.

A new community being introduced to the Pincrest-Kendall area, Veridian Grove, will bring in 20 luxury homes. These homes will be designed by a joint effort between Sotolongo Salman Henderson Architects and TOGU Architecture.

Prices for these properties will start at $2.6M, this does include 6,000 ft²  with a 15,000 ft² lot, which will also allow buyers the opportunity to customize their homes.

This community will also be with in relatively close distance to one of Florida's largest open air shopping centers, The Falls.

Read the full article here!

CEO Mike Pappas Gives His Take on Renting vs. Buying for Millenials

"The National Association of Realtors reports that people 36 years or younger make up the largest demographic of home buyers." - Mike Pappas.

An article in Money Inc. by our very own, Mike Pappas, President and CEO to The Keyes Company. In it, explaining the pros of owning rather than renting, as both sale prices and rent prices are rising it is still cheaper to own than rent.


Read the full article here!