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Breaking Down the Steps to Buying a House

Single Women Outpace Men in Homebuying

As we conclude Women’s History Month, I decided to share how women are changing the landscape in the real estate world. First, here are some interesting facts: 

  1. It wasn’t until 1900 that all states allowed women to hold property in their own names. 
  2. It wasn’t until 1974 that women were able to apply for and obtain mortgages on their own without a male co-signer. 

A lot has changed since then. With the rise of women in the US workforce, women now account for 12.9% of American owner-occupied homes. In 2022, 17% of single homebuyers were women and 9% were single men. That means that single women almost doubled single men in the purchase of their primary homes last year.

When speaking to my single male colleagues, clients, and friends many of them prefer to rent because it gives them more flexibility as to where they want to live or, in case they want to move, they are not “stuck” with a home they need to sell.  Women, on the other hand, prefer the stability and security that being a homeowner entails.

In the past, being single past your late 20’s was socially unacceptable, but as more women decide to stay single for a longer period of time to pursue their careers, this real estate trend will continue to rise.  

In my opinion, purchasing your primary residence, regardless if you decide to stay single forever or just until you find your significant other, is a smart decision. Real estate in most instances, is a long term investment and the equity that is built is always a positive thing in anyone’s life. You can always keep the property as an investment or sell it and use the equity to buy your marital home. 

So, to all my single ladies out there, purchase your home and be happy in it! Because a happy house is always full of love — no matter your relationship status. 

Life Insurance, Wills, and an Expiration Box

If there is one thing we can be certain of is that one day we will no longer be on this earth. Mother Nature has made sure we have an expiration date and as much as we may not like to think about death, that doesn’t mean it won’t happen. Once we have responsibilities such as a family, owning real estate, or any assets for that matter, it is of utmost importance that our loved ones and our assets are protected. 

When a property is purchased, the mortgage company requires you to purchase property insurance which is not optional. The mortgage company is protecting themselves against the worst scenario possible that could happen to the property. Because they have such a huge interest in the property (in lending the money to purchase the property), the mortgage company needs to make sure that their investment is safe. 

The same is to be said with protecting your life’s interest. If you and/or your partner are considering purchasing a home, recently bought one, or have owned one for years, it is imperative to have life insurance. If not, you are putting your family’s livelihood at risk. Have you thought about how your family would pay the mortgage if you were no longer here? 

Because there is such excitement of purchasing a home, this is not something that is often thought about. However, this is the best time to take care of such matters. Having these honest conversations shortly after moving into your new home is just as important as purchasing the home. At the same time, a will should be drafted because you do not want to put your family through a long and dreadful probate process. The pain of losing a loved one alone is a lot to bear. Additionally, planning these matters is much better when everyone is in good spirits and in good health. 

Finally, to avoid confusion and to make sure that all documentation, accounts, and policies are accounted for, preparing a death box is essential. This “box” which could be in a digital file and/or actually stored in a safe box should include the following: 

  • Bank accounts
  • Loans/Credit Cards 
  • Mortgages 
  • Will and Trust 
  • Life insurance policies 
  • Car Title & Insurance
  • Home Title & Insurance 
  • CPA and Lawyer Information

Diana Vasquez Makes Guest Appearance on “Beyond the Close”

I was recently invited to make a guest appearance on Beyond The CloseBeyond The Close is a real estate reality show on American Stories Network showcasing ten real estate agents from across the country. 

Not only did the agents compete to win prizes, but they were mentored by successful entrepreneurs such as Jay Abraham, Kevin Harrington from Shark Tank, and Jason Williford. I am very lucky to call Jason my mentor. He has been an incredible source of real estate knowledge and marketing wisdom.  

We toured spectacular multi-million dollar properties in Miami such as The Regalia’s $34M penthouse and a new development site at Dezer’s Porsche Design Tower. We met with super star agent, Christine Quinn from Selling Sunset. And yes, she is as fabulous as she looks! 

I was given an inside tour of one of Journal Square’s newest projects located at 413 Summit Avenue by Titanium Realty Group. The project is still under construction and I got to see the level of detail and expertise of the men and women behind this tower. 

I feel such gratitude to have such amazing people around me.  I truly believe that professional growth comes from having an amazing team. 

Cheers to a New Year, teamwork, and a new year of real estate opportunities. 

What is an assumable mortgage?

With the unforeseen mortgage interest rate hikes, many buyers of both residential and commercial real estate cannot afford what they could afford last year. For residential buyers, their buying power has diminished as their monthly payments increased substantially and home prices have not dropped enough. For investors looking to find a deal, it is almost impossible to achieve. Interest rates are as high as cap rates, leaving little to no cash flow, and in some instances even negative cash flow. 

A solution for this dilemma is an assumable mortgage. An assumable mortgage is a mortgage that has an assumption clause in the contract stating that another party can take over the same terms as the initial buyer did. This means that if your mortgage is 3.5% for 30 years the new buyer can take over that exact same mortgage amount, interest rate, and term years.  If someone locked in a great rate, they can now sell their property and let the new buyer assume the mortgage with the same interest rate. However, they can only assume the balance of the existing loan. If you are selling the property above the loan amount for a profit, the new buyer will either have to come up with the cash difference or get a second mortgage. 

You will have to look through your mortgage documents to make sure your loan is assumable and the new buyer will have to be approved by the lender to assume the mortgage just like a regular mortgage transaction. These assumable mortgages function both in residential and commercial loans as long as the clause is in the contract.

Ready to begin your home buying journey? Get started with DV Real Estate Group today.

Have you thought about what will happen to your property once you die? 

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Did you know there are only four options?   Today we will discuss these options and how they can affect you. 

1. The property is passed on to your inheritors. 

PROS

This option is a great way to build generational wealth and avoid taxation. The property benefits of step-up basis making the capital gains taxes less once the property is sold. 

CONS

The property must be maintained for the life ownership making it a liability unless it is producing income. Also, not all children want to maintain or inherit property, some see it as a burden and want nothing to do with it. 

2. You sell the property. 

PROS

This option is beneficial to unlock the equity in the property. It can be used as a retirement fund or to pay for college or other debts. By selling a property you can use part of the proceeds to buy a smaller house/apartment and invest/save the rest. There are many possibilities once a property is sold. 

CONS 

The taxes are due at the time of the sale unless it is an investment property and you use a 1031 exchange and move the capital into another property. 

3. The property is donated to a charity. 

PROS

You are supporting a cause that is dear to your heart and your donation will continue to impact people in a positive way for many years to come. 

CONS 

You have to make sure you have very specific language in your testament about how the property is to be used and how (if ever) it can be sold. Otherwise the property can be mismanaged. 

4. The state takes possession of your property. 

PROS

We do not see any pros with this option. It is called escheat. This occurs if the person dies without a living will and no heirs. 

CONS 

This option is the worst option. The state takes possession of your property. We highly recommend having a will so that this cannot happen. 

We at DV Real Estate Group pride ourselves in our professional network.  Our friend Maurice Giro is an elderly law and estate planning lawyer. He is an excellent resource when it comes to protecting all your assets. 

www.girolaw.com

If you have any questions on how to protect your property, sell your property, or simply need a property evaluation please give us a call at 201-277-0044.

What is a 1031 Exchange?

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Like Kind Exchanges, also known as tax deferred exchanges, are defined by Internal Revenue Code (IRC) section 1031.

A 1031 Tax Deferred Exchange offers taxpayers the opportunity to build wealth and save taxes. By completing a 1031 Exchange, the Taxpayer can dispose of investment properties, acquire replacement property, and defer the tax that would ordinarily be due upon the sale.

This permits taxpayer to exchange business use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which otherwise would have been due from the sale are thus deferred.

A 1031 Exchange allows investors to defer Federal capital gains tax, state ordinary income tax, net investment income tax, and depreciation recapture on the sale of Investment property if certain criteria are met including:

  • Buy replacement property for equal or greater than sold for and reinvest all proceeds
  • Identify replacement property within 45 days of close of sale
  • Purchase replacement property within 180 days of close of sale
  • Must Sell and Buy property that is considered “like-kind” to each other

Meaning if the asset you sold was real estate, your LIKE-KIND buy must also be real estate. You cannot jump from real estate to gold or stocks. However, you can go from a multifamily property to a hotel, or from an industrial property to an office building. It is all real estate; therefore, it is a LIKE-KIND exchange.

  • Process must be handled by a Qualified Intermediary (QI)

Reasons to Exchange

There are many reasons to exchange, such as:

  • Defer Taxes: Federal, State & Depreciation Recapture
  • Diversify or Consolidate a Real Estate Portfolio
  • Increase Cash Flow
  • Switch Property Types (Land, Industrial, Multi-Family, Office, Retail, Residential, Easements)
  • Get Into Other Real Estate Markets (Exchange anywhere within the U.S. & Territories)
  • Build & Preserve Wealth
  • Set up Heirs for the Future (Estate Planning: Stepped Up Basis)
  • Increase Purchasing Power 

Don’t hesitate to contact us to get started on your real estate investing journey, and don’t forget the highest form of a compliment is a referral!

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