Real Estate

Top 8 Tips on Saving Money (and your credit) for Your First Home

We recently posted about investing in yourself and it seemed to have resonated with a lot of people. It could be because we are still at the beginning of the year and there is still follow through with the resolutions we made for ourselves. Some people join a gym, others start a savings account, and then there are people who are determined to buy their first home. Talk about investing in yourself! Stick to your goal. Almost all of the resolutions we set for ourselves are long-term. So why buy a home when you can rent? I mean you’re not sure you’re going to be living in Naples, Chicago, Boston, etc. forever. 

The answer is obvious: When you rent, you are investing in someone else’s financial future. If you don’t plan on living in the city forever, then I would look into rentals in the area. If you are able to rent out your property for a much higher amount than your mortgage, then it might be worth looking into. For example, I purchased a condo this year. My mortgage is  about $500 less than what the rent was on my apartment. I used to pay close to $1,500 in rent. My mortgage and HOA payment put my living expense at $1,053. My mortgage is an affordable payment I can make every month and when I am done fixing it up, I can rent it out for $400-$500 more than my mortgage payment.  So even if I move, I will still enjoy tax benefits from this property (since my mortgage, interest, and property taxes are all deductible on my income tax), have the additional income for savings, AND have someone else who rents pay off my mortgage while my property is most likely to increase in value with time. How awesome is that?! Of course, I am a Realtor® and I had the help of my Broker to determine where to invest. I had to wait three years into my Real Estate career to be able to buy. Every year I told myself I was going to buy but my actions said otherwise. So stick to it!  Real Estate is a strong foundation for people to build on their financial wealth for the future. We are here to help! You can always call or stop by to discuss how we can help get you started on the path to homeownership. 

If you need some ideas for saving money or help with credit, here are a few tips: 

1.  Start by checking your credit score. 

Here is How:  Your banks offer it, websites like Credit Karma do too.  Your credit score affects your ability to buy as well as your loan’s interest rate. 

2. Figure out your Debt to Income ratio. 

Here is How: Add all your monthly bills like cable, power, etc. and divide by your gross total income (income before taxes). This equals your Debt to Income ratio. The lower this ratio is, the better you look to lenders because you are considered less of a risk. 

3. If you have too much debt or need to save in order to buy, we suggest creating a realist, sustainable budget. 

Here is How: Start with small changes and progress from there.  I suggest using a budget app like Intuit’s Mint. You get to set your budget for expenses like shopping, credit cards, insurance, and everything else. It alerts you when you have gone over your budget and best of all, it allows you to stay on track when it comes to your money. 

4. Plan for major purchases or expenses. 

Here is How: If you have birthdays, holidays or big bills coming up, start saving ahead of time. Groceries can get expensive as well so make sure to take advantage of digital savings. Grocery stores like Lucky’s and Publix let you see their weekly savings so you can plan your meals ahead of time and avoid last minute restaurant trips. You can save even more on the Lucky’s app by earning $5 for every 100 points you earn. $5 off my grocery bill? Yes, please! 

5. Open up a savings account whether it is at your current bank or an online bank

Here is How: Banks like Chase offer incentives for opening up savings accounts but online banks like Ally offer a high Annual Percentage Yield (APY refers to how much money you earn on a deposit over the year). Once you have opened up your savings account, start putting away 10% of your residual income away and increase up to 15% whenever you are financially able to do so. The secret to success is to set up the savings account for automatic deposit. 

6. Low credit score? Start to pay off that pesky debt. 

Here is How:  Start by taking a look at your credit report. Are there mistakes or late payments?  You can dispute them online or via mail.  Does one credit card charge you a higher interest than the other? Pay that one off first. Make sure to make every payment moving forward on time. 

7. No credit? You can work on improving that. 

Here is How: There are options like E-credable that allow your bill payments to be used to create a credit report and credit score.  This option allows you build your credit without accruing any more debt by taking out credits cards. 

8. Cut out unnecessary expenses. 

Here is How: The subscription box(es) you love so much? Unless it’s life or death, cancel them.  It will be much more gratifying to receive a box at your own house than the place you rent. Don’t think a subscription box can make a difference? According to inc.com, the average subscriber to box deliveries receives at least seven boxes and has another 12 on their wish list! I am subscribed to four and the yearly amount I spend is close to $1,200! This does not include my unhealthy Starbucks obsession. Another way to save is cutting off your cable. I do not watch a lot of t.v. but there are t.v. streaming services I use for a whole lot less than what Comcast cable would charge me. If you decide to cut off your cable, you are not alone. A November 2017 Leichtman Research Group collection of data showed that in the third quarter, large satellite companies and cable operators lost about 405,000 users! 

We hope these tips help but if you need additional information or have any questions, as always, our doors are open. You can contact us at (239) 228-5348 or stop by at your new office location: 3200 Bayshore Drive, Naples, FL 34112.

Caution: Team May Be Worse Than It Appears

I was lucky to have worked in a Real Estate office, side by side with the broker, before considering getting my Real Estate license. Others do not have the same luck; they go on to do Real Estate on their own or they join a team. Now, I am not against joining a team. I am against joining a team that is not a right fit for you as a new Realtor®.  With that being said, I am sure you are thinking, "I can't possibly do it by myself. I need someone to guide me".  "He/she is successful in Commercial, Residential, luxury, etc. Real Estate. They can help me be successful in that market too." Yes, there is some truth to both statements.  However, there is only so much a broker can teach you or so many doors another Realtor's name can open for you. You have to be willing to put in the work, be self-motivated, and dedicated to working "smarter", consistently. The drive to make it in Real Estate is not something a broker, team, or other Realtor® can teach you.

The ideal team leader will take the time to sit down with you to discuss your goals and realistic plans to achieve those goals. They will ensure you join them during listing appointments, show you how to write listing agreements and sales contracts, they teach you which addenda you will need to protect your Buyer or Seller, and most importantly, they will be available at all weird times for you to pick their brain. I haven't met many team leaders who fit all of this criteria. I have met team leaders who were always on vacation leaving the other newish team members to help the newest ones. There are the team leaders who are too busy or impatient to teach you every aspect of the business. They are most likely out there selling Real Estate while you wait for them at the office. There are even team leaders who take an arm and a leg portion of your commission for you being on their team. Here is the thing: Not everyone has the communication or teaching skills to be leading a team. They are great as an independent Realtor® or as part of the husband-wife (parent-child, sibling, enter any other kind of relationship here) team. 

Here are my Do's and Don'ts of joining a team: 

Do: Have a sit-down meeting with the Realtor® or team leader you are planning on joining. Make sure you are on the same page and have your goals at the forefront.

Don't: Rely on your friend's recommendation, email or text communication, or the team's/ Realtor's big name as a way of determining this is a good fit. 

Do: Make sure you like this Realtor® or team leader as a person. 

Don't: Join a team because of the other team members. At the end of the day, it is the team leader's group and if you can't see eye to eye, there's not much other team members can do. 

Do: Discuss money. You don't want to join a team only to find out your split is small compared to what you have to give towards the team/office. Besides, open and transparent communication is important for all aspects when working with others. If the team leader doesn't promote open dialogue, DON'T JOIN THE TEAM!

Don't: Assume they will bring up money. If money is more important than the experience or amount of help, make sure to say so. 

Do: Join a team/ Realtor® who is settled or has been with the same company for at least two to three years.  

Don't: Join a team/ Realtor® who is in the middle of moving brokerages. The reality is, you will likely not get the attention, lessons, information you need to get yourself started in this industry. Besides, the listings belong to the broker and most Realtors will not willingly or easily give up their listing and will have you waiting at the new office until the property(ies) get(s) sold. 

What I am long-windedly trying to say is DON'T let anything or anyone put you and your Real Estate career on hold. Get started whether you are part of a team or not; learn from those who are experienced and willing to teach. Be patient, flexible, and practice open communication to express what your needs are to be successful. For me, a team did not work but learning from my broker in a one on one setting, did. She guided me, invited me to every listing and showing appointment, and made sure to get my name out there. 

I hope this shed some light if you were considering joining a team. Did I miss anything? Feel free to let me know in the comments. I would love to hear from you! 

The Truth About Realtors®

 As of July 5, 2017, the Department of Business and Professional Regulation had 195,613,810 Real Estate Agents registered in Florida! I hate to admit this but here is the truth: Not all Realtors® are created equal.  To some, customers are merely a way to pay the bills. Others use their sense of power to scam money out of potential buyers or sellers. Then there are the those you give their customers the bare minimum.  Those are the ones who put a sign up, cross their fingers and hope it sells. You know, the kind who take photos of your property with their cell phone and place them in MLS, toilet seat up and all. If your Realtor shows up for pictures with their cell phone and tells you the mess in the room is fine, rip your contract up! A "good" Realtor® will see the problem (dirty room, bathroom, etc.) and offer a solution (Photoshop the mess out, hire cleaning people, etc.). I remember early on in the Real Estate career,  I went to take pictures of a property my customer was selling and one of the rooms was a complete and utter mess. I did not want to skip taking pictures of the room and I did not want the mess to end up in the photos so I did what I had to do: I took every unnecessary item out of the room, took the pictures and then put everything back. Was it ideal? Not really but it was a solution.

When it comes to Realtors®, you have to hire one who is willing to do what is best for you. Don't hire your neighbor, your mom's friend, your friend from high school or anyone else you feel obligated to hire. Hire the Agent who cares about you and places your needs ahead of their own. I had a customer who called me back in 2015 wanting to buy a lot in a particular area we were selling. After talking with her about how much money she had, what she wanted to do with her money and her goals, I figured out a better area for her to put her money; it was an area with a lot more growth. She ended up calling me again in 2017, wanting to sell. I talked to her and although I wanted to sell her lot, I advised her to hold on to it a little bit longer because it would be worth more in a matter of a year or two. She insisted on selling and so we put it on the market and in less than one month, we had an offer. We sold it for almost double what she paid for! The moral of the story is, find a Realtor® who will listen to what you want and do what is best for you. I could have sold my customer the original lot I was selling in the other neighborhood and made commission off of both sides but I didn't because that would not have best suited her needs. I could have jumped at the opportunity to sell her lot without looking at the numbers but again, I didn't. I told her the truth: she would be better off waiting. Your Agent needs to listen to you and advise you as best as they can. They shouldn't consider your business as a way to pay an upcoming bill.