Harleysville-Lansdale Real Estate and More

Did you know that you can invest in real estate with a Self Directed IRA?

Many people would love to take advantage of the current housing prices and low interest rates to purchase an investment property.  However, many of these same people lack the additional and significant cash often needed to purchase an investment property.  Such potential investors don’t realize that money they have currently invested in retirement accounts can be redirected to purchase real estate.  Certainly, such a decision should be reviewed with a competent financial advisor, but it may be an excellent way to diversify and grow an investment portfolio.

Most Individual Retirement Accounts (IRA’s) are held with major brokerage firms which only deal in the more traditional investments (stocks, bonds, etc.).  However, it is only the limitations or rules of the brokerage firm that restrict you to these traditional investments.  A Self Directed IRA is easy to establish and will allow you to invest in all of the investment types that are permitted by the IRS, including real estate.  

How to set-up a Self Directed IRA?

There are numerous firms that can help you establish a Self Directed IRA and act as the custodian for your account (just as a brokerage firm might act as custodian for your traditional IRA).  One good resource is EntrustCAMA.  In many cases, the necessary forms can be completed online in just a few minutes and the custodial fees are relatively low.

What other steps are needed to buy an Investment Property in a Self Directed IRA?

One of the first steps is to fund your Self Directed IRA.  You can make contributions to it just like a traditional IRA.  You can also transfer or rollover funds from a traditional IRA (or other qualified retirement plan) into your new Self Directed IRA.  If you have enough assets in your Self Directed IRA to purchase a property outright, that simplifies things, but there are also lenders who will finance property purchased within Self Directed IRA’s.

Once you identify a good investment property, you proceed with the normal steps of submitting an offer through closing on the property as you would for a personal purchase.  Because of IRS rules, however, you don’t personally sign any documents related to the purchase of the investment property.  Everything must be in the name of your Self Directed IRA and you direct the custodian to sign all necessary documents for the purchase.   In addition to a good Realtor and a qualified custodian, you should also consult with a CPA or financial advisor competent in Self Directed IRA’s.  With this team in place, you can diversify your retirement plan and take advantage of the many investment benefits that real estate has to offer.

There are terrific deals in real estate right now.  Coupled with the low interest rates, these deals make it a great time to consider buying an investment property.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling an investment property in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. Search for Investment Property in Montgomery County, PA.  Get more information about Buying Investment Property in Montgomery County, PA.

Copyright © 2010, The Scott Loper Team, All rights reserved. Invest in Real Estate with a Self Directed IRA.

I heard on the news that yesterday was the most depressing day of the year.  Whew!  Thank goodness that day is behind us.  January 25th was depressing for a number of reasons:

• It was a Monday.
• It was windy and pouring rain (at least here in Montgomery County, PA it was).  Snow would have been far more uplifting than all the rain.
• Spring still seems very far away.  Vacation even farther….
• It is exactly one month after Christmas.  All the holiday fun, decorations and good will have passed.  The credit card bills have arrived.  Even the retailers aren’t offering the deep discounts like the ones we saw prior to the holidays.
• Three weeks have passed since New Years.  Many are finding that their resolve to fulfill those resolutions is quickly fading.  For some the weight isn’t coming off, for others the home is still disorganized with unfinished projects, and for the ActiveRainers we aren’t blogging and commenting as much as we should.

Perhaps it would be good to keep in mind that nothing magical happened when the clock turned to 2010.  Real estate is just as challenging as it was in 2009.  Modifying the daily routine is just as difficult too.

But today is Tuesday.  One day closer to spring (and Christmas).  The sun is out in Montgomery County, PA.  Good and bad days are sure to pass.  But remember, the worst day of the year is behind us (and it really wasn’t that bad).

Smile, be happy and write a blog post.

~Lisa

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2010, The Scott Loper Team, All rights reserved.  The Most Depressing Day of the Year.

The Montgomery County, PA Market Report for December 2009 shows some positive news.  A long streak of year-over-year falling prices has ended and the year-over-year number of home sales remains in positive territory.

The average price of a home in Montgomery County increased to $310,012 compared to $305,882 for December, 2008; a 1.4% increase. This ends a 24 month streak in which home prices had fallen from the prior year level.

The number of homes sold this past December increased to 513 units versus 494 homes sold in December of the prior year; a 3.8% increase. This marks the 6th consecutive month that the number of homes sold has increased from its prior year level.

A particularly interesting observation from this market report is that December's numbers should give a more normal indication of the market in comparison to November when the original first time buyer tax credit was set to expire.  That deadline caused an unnaturally high amount of sales in November, but also caused the average price to dip significantly for that month due to the generally lower price range of first time buyers.  One might have expected December's number of sales to suffer due to the forced activity the previous month.  However, December's sale increased over last year and the average price jumped by 12.8% from November's level of $274,706.

By the way, the home buyer tax credit has been extended and expanded to include "current" home owners.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Montgomery County, PA Market Report for December 2009.

The Montgomery County, PA Market Report for November 2009 shows that home prices again declined from the previous year’s level while the number of home sales rose dramatically.

The average price of a home in Montgomery County dropped to $274,706 compared to $295,494 for November, 2008; an 7.0% decrease. This marks the 24th consecutive month in which home prices have fallen from the prior year level.

The number of homes sold this past November increased to 860 units versus 479 homes sold in November of the prior year; a 80% increase. This marks the 5th consecutive month that the number of homes sold has increased from its prior year level.

If anyone had any doubts about the popularity of the $8,000 tax credit that was set to expire this past November, this market report should make it crystal clear.  An 80% increase in the number of units sold at generally lower price levels can only be attributed to one market segment; first-time buyers.  They definitely showed up in force to settle on homes before the anticipated expiration of the tax credit.  By the way, the home buyer tax credit has since been extended and expanded to include "current" home owners. 

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Montgomery County, PA Market Report for November 2009.

Well, by now most AR members know that an extension and expansion of the first-time buyer tax credit is imminent.  This news is creating a lot of buzz which hopefully will translate into some home sales (we’ll see).  As this is breaking news, however, it’s also generating a lot of questions.  A couple of good ones that I have been asked (and don’t yet know the answers to) are:

Is the any retroactive feature in the new version of the tax credit for current homeowners.  For example, if a couple sold a home and bought a home earlier in 2009 (assuming all other criteria are met), would they be eligible for the $6,500 credit?

If a current home owner buys a new home and makes it his/her principal residence (again assuming all other criteria are met), does that homeowner need to sell the prior principal residence or can it be kept as an investment property?

If anyone know the answers to these questions or has some other good questions of their own, please post your responses.

Copyright © 2009, The Scott Loper Team, All rights reserved. Update on The First-Time Home Buyer Tax Credit - Not So Fast, Sparky.

This is an Update on the First-Time Home Buyer Tax Credit specifically addressing some recent reports that the tax credit has been extended.   While some significant steps have been made towards extending the tax credit and even expanding it beyond first-time home buyers, it seems that these reports are a bit premature in claiming this as a done deal.  Here’s what I found out on the subject.

A bill was originated in the U.S. House of Representatives on September 10, 2009 to extend the availability of certain unemployment compensation benefits (totally unrelated to the tax credit or housing in general).  That bill was passed by the House and made its way to the Senate where numerous amendments were made including those related to the first-time home buyer tax credit.  The Senate unanimously passed their version of this bill yesterday, November 4, 2009.  However, there are still significant hurdles that the legislation must clear before becoming law.  Namely, the bill now moves back to the House and the differences must be resolved.  The bill would then move on to the President for signature into law.

So again, it’s a bit premature to count on any tax credit beyond the current expiration date of December 1, 2009.  It is very encouraging, however, that the amended bill passed through the Senate with a unanimous vote showing strong bipartisan support.

Here are a few provisions (as I understand them) of the bill as amended by the Senate:

Time Extensions
The $8,000 tax credit for first-time home buyers would be extended until May 1, 2010, except that buyers who are under a written contract by May 1, 2010 can even take advantage of the tax credit until July 1, 2010.

Expansion Beyond First-Time Home Buyers
A tax credit of up to $6,500 would be available to “Long-Time Residents” who have owned a home and purchase a new one.   A Long-Time Resident is currently defined as one that has owned a home as their principal residence for any 5-year consecutive period during the 8-year period ending on the date of the purchase of the subsequent principal residence.

Increased Income Limits
The income limits for eligibility of the tax credits would be increased from $150,000 to $225,000 for married persons filing jointly and from $75,000 to $125,000 for other taxpayers.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Update on The First-Time Home Buyer Tax Credit - Not So Fast, Sparky.

Copyright © 2009, The Scott Loper Team, All rights reserved. Wordless Wednesday: Big Fish, Little Fish.

I happily had showing appointments lined up for this past Sunday.  But, when another client asked to see a home on Saturday, Lisa took the appointment to give me a little bit of a break.  I’m going to be paying for that thoughtful gesture for quite a while as, in her words, this turned out to be “the worst showing of her life”.

The “worst showing of her life” had nothing to do with our clients (they’re terrific people) or with the property, but rather with the tenant’s easily excited dog.  Lisa had instructions that there would be a small friendly dog in the home and to not let him out.  Just after entering the home, the pooch appeared sprang up and sprinkled a bit on Lisa and on the floor.  With each effort to calm down the canine, he released again and again.  Lisa quickly ceased all contact with the dog and began to case the house for paper towels and cleaning supplies.

With the mess cleaned up, my dear wife regained her composure to resume the showing.  That is until the dog became excited again and started to jump up.  Lisa yelled “no”.  The dog stopped, gave her the puppy eyes, and rolled over on his back.    Despite the recent events that would suggest against her next action, Lisa praised the dog with “good boy” and gave him a scratch on the tummy.  Apparently this was just too much for the dog to handle because he unloaded like a baby getting a premature diaper change, soaking Lisa in dog pee.  Her blouse, skirt, shoes and jacket all took direct hits.

Now before you think that this is the end of the showing from hell, think again.  The client (husband) inadvertently let the dog out of the house.  For the dog, this was great fun and he began a game of “catch me if you can”.  Our clients along with poor pee soaked Lisa spent the next 20 minutes in the rain and mud before finally getting the dog back in the house.

As I said, I’ll to be paying for this showing for some time to come.  If I had been on the showing, there might be one less dog in the world right now.

What’s your worst showing story?  Please share.

Copyright © 2009, The Scott Loper Team, All rights reserved. The Worst Showing of Her Life.

The Montgomery County, PA Market Report for October 2009 shows a continuation of recent patterns; home prices again declined from the previous year’s level while the number of home sales rose.  

The average price of a home in Montgomery County dropped to $285,817 compared to $304,327 for October, 2008; an 8.2% decrease.  This marks the 23rd consecutive month in which home prices have fallen from the prior year level.

The number of homes sold this past October increased to 731 units versus 604 homes sold in October of the prior year; a 21% increase.  This marks the 4th consecutive month that the number of homes sold has increased from its prior year level.

How is it possible that home sales are increasing, but home prices continue to fall?  In a very general sense, the overall decrease in housing prices has caused some buyers to step into the market and snap up good deals.  Specifically and probably to a larger extent, the first-time buyer tax credit has resulted in an abnormally high number of sales at the lower price ranges of the market.  Also, housing inventory remains relatively high at approximately 8.5 months (even with October’s impressive sales rate).  Housing Inventory is the number of months it would take to sell all of the currently listed homes at the current seasonally adjusted monthly sales rate.  Until we start to consistently see housing inventory down near 6 months of supply, look for continued (but hopefully moderate) pressure on home prices.

To get a sense of the broader national housing market (which will certainly have some effect on our local housing market), check out my blog from this past weekend:  Market Outlook: The Calm Before the Storm.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Montgomery County, PA Market Report for October 2009.

I attended an eye opening seminar this past week.  The speaker was Dave Liniger, chairman and founder of RE/MAX International.  I found it extremely interesting to listen to the insights and opinions of this man.  You may have you own opinion of him (his brashness is likely to draw an opinion or two) or possibly you’ve never heard his name, but he started and currently runs the top rated (by Entrepreneur Magazine) real estate franchise in the world and has been summoned for advice on the housing markets by members of Congress and organizations such as NAR.  So when he spoke, I listened intently.

To be blunt, a lot of the information about the near future of the housing market was sobering.  I have seen some posts here on AR that project continued hard times for real estate, but I have also seen many posts (and written a couple myself) that were more upbeat or pointing to signs of improvement.  I’m not sure whether it was Dave’s no-nonsense style or just the volume of supporting data, but I left the seminar with a distinct sense that any recent improvements in home prices and sales could just be a calming before the real storm begins.  Here are some key reasons for that outlook.

• Unemployment is forecast by the Federal Reserve and by NAR to average just above 9.5% through 2010.  The Fed further predicts that it will remain above 8.0% for nearly all of 2011.  This alone makes me wonder how NAR’s prediction of increasing homes sales and prices for 2010 could hold true.

• Another large round of mortgage resets is just beginning and will grow through 2010 and 2011.  For those who don’t know, a mortgage reset is when an initial fixed rate period expires and the interest rate adjusts to reflect current market conditions and other terms of the reset.  In most current cases, these initial fixed rates were very low and the resulting reset rate is substantially higher; high enough that many of these people will no longer be able to afford their mortgage payments.  For the most part we have made just it through the first wave of resets known as the “sub-prime mortgage crisis”.  I say made it through, but look at the number of foreclosures and short sales left in the wake.  Beginning at the end of this year, a second and equally sizeable wave is coming in the form of expiring option ARMs (see graph below).

• Both of the above points result in the next predictions related to foreclosures.  Foreclosure sales are currently at a record annual rate of just under 1.8 million units and are forecast to increase to about 1.9 million units by the middle of 2010 before declining to 1.1 million units in mid-2011.  For comparison, foreclosure sales ran at an annual rate of about 0.5 million for much of 2005 through 2007.

If you were like me, you probably looked at some recent positive signs in your local housing market and thought just maybe we were turning the corner.   By taking a hard look at some data like that given above, you really have to consider that any recent uptick is just a smooth spot in the bumpy road that lies ahead.  The good news is that if you know what lies ahead you can prepare and actually prosper as a result.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Copyright © 2009, The Scott Loper Team, All rights reserved. Market Outlook: The Calm Before the Storm.