These unprecedented times have changed the way we do business in real estate. Whether you’re buying or selling in 2021, here are 5 early thoughts from Lake Homes Realty’s CEO that you must consider.
Safe Home Showings. Home showings are a lot safer than initially thought. Keeping a safe distance from others and wearing a mask have limited the risk of exposure. Though taking safety precautions such as wiping down surfaces and proper handwashing are still important, having proper air circulation within your property is imperative to ensure a safe home showing.
Step-Up Basis Repeal. The new administration under Joe Biden has proposed major changes to the step-up in cost basis for capital gains tax. This could influence your decision to sell or keep your inherited property. Learn more about the Estate Tax Reform Proposal here.
Buyer Demand. There is a huge demand from home buyers in this current market, but homes are only selling if they are appropriately priced. Be sure to enlist a professional agent to help you properly price your lake home for competing bid offers.
ACT Immediately. Be ready to act immediately. If you find a home that is appropriately priced, be ready to buy because it might not be on the market the following week.
Think Multiple Markets. When buyers are looking for lake homes, chances are they are shopping multiple lake areas in multiple states. If you’re a seller, you must think of selling your property in relation to other markets and price it accordingly. To get the full scope on lake properties in various markets, be sure to download our Lake Real Estate Market Report.
It’s no secret that moving is an emotionally taxing life event. Even if you’re excited about your move (who wouldn’t be excited about moving to the lake?), it can still be highly stressful. There are so many things to consider — and even more factors when you’re moving out of state. Whether you’re in the process of moving or just thinking about it, we’re here to help you cover the basics.
Update Your Address
This one might go without saying; it’s important to update your address when moving out of state. First, you can fill out the change of address form on the USPS website. This will forward mail from your old address to your new one. You’ll also receive discounts at places like Bed Bath and Beyond for all your new home essentials. Don’t forget to change your address on your bank account, credit cards, and subscription platforms like Netflix. Finally, remember to change the address of your voter registration. Voting in your new state and getting involved in local politics will allow you to be more integrated into your community.
Learn the New Tax Rates
Once you update your address, your zip code and house number aren’t the only things that change — so do your taxes (hopefully, they change in your favor!). When moving out of state to a lake house, many people pick lake homes in states with lower tax rates. For example, lakes in Tennessee will not come with a state income tax, although you will still have to pay the federal tax. Other states without income taxes include Texas, Washington, and Florida. Keep in mind that if it’s the middle of the year, you will have to pay taxes in both states, which can get confusing.
Switch Your Licenses
If you drive a vehicle, this is one of the first things you should do when moving out of state. The grace period between moving and updating your license can range anywhere between 10-30 days, so be sure to check state requirements. Given the short turnaround time, it’s best to make an appointment with the DMV before your move. This way, you can avoid the long lines, which are ubiquitous across states. Lucky for lake homeowners, though, one thing that does not need to be updated is your boating license. If you take a boating test approved by the NASBLA, the National Association of State Boating Law Administrators, these certificates are valid in all 50 states.
Understand the Lake Fees
If you’re moving to a house with lake access, specific fees can add up. But this depends on who owns your lake. The U.S. Army Corps of Engineers owns many larger lakes. Their interests are preserving wildlife, maintaining flood control, and other public concerns. On Army Corps lakes, living in a home with direct lake access can be expensive because owning a boat dock comes with a fee. There may even be certain size limits on boat docks, so be sure to check the regulations before visiting. On the other hand, homeowners associations (HOAs) control many smaller lakes in the country. Since they do not share the same public concerns as Army Corps lakes and are more focused on recreation, there are different regulations. Usually, you’ll need to get approval for the construction of a boat dock, and membership fees may be required.
If you’re moving out of state, you’ll need new health insurance. For those of us who are self-employed (a freelance business working remotely from a lake house? Sounds perfect!), you’ll need to alert the health insurance marketplace about your move and search for a health insurance agent to assist you. If you have health insurance through your job, you’ll need to find new healthcare providers in your network.
Searching for providers can be difficult for those who live on the lake, especially if your lake house is in a remote location. As such, choosing a lake house with close proximity to a hospital is an important consideration, especially if you’re moving for retirement. However, this doesn’t mean you have to choose an urban lake. For example, Tellico Lake in Tennessee is in a remote community with a 45-minute driving distance from the city of Knoxville, home to the University of Tennessee’s Medical Center. Even if you aren’t someone with routine medical needs, it’s best to be prepared for the future.
When you are considering buying a lake home, particularly in a rural area, here are 4 “Gotta Haves” you will have to keep in mind.
Cell Signal
Internet Access
Television Service
24-Hour Emergency Room
There might be hundreds of miles of lake shoreline, one side of the lake might have these services while the other side might not. Also, the terrain of the lake areas might determine the availability of these services as well.
Our knowledgeable agents are here to help you answer these questions and assist you in your lake home-buying journey.
If you’re thinking of buying or selling a lake home, here are 4 things you need to know about appraisal risk.
Appraiser Lacks Lake Experience. Lake lots and property value vary greatly due to many factors such as location, lake characteristics and features. An inexperienced appraiser might not be able to provide accurate information regarding your lake home.
Inflexible Appraiser. Due to time constraints and unfamiliarity with lake areas, getting good quality comps could be difficult. In situations like these, knowledgeable agents can oftentimes help the appraiser get a head start in getting a good quality appraisal.
Lack of Recent “Comps”. In today’s real estate market where the inventory is low and the demand is high, this trend has made it difficult for appraisers to provide comps to support the new prices.
Appraisal Too Low. You can de-risk the offer by making up the difference or a portion of it. There is an assumption that if the appraisal is lower then the sellers would drop the price. Lake property is discretionary so there is a good chance that the homeowners would choose to not sell their home or they could get an offer from another buyer.
For more information on buying or selling a lake home or property, be sure to visit Lakehomes.com or contact our lake experts. We’re here to help you navigate the lake home buying or selling process that can oftentimes be complicated.
One thing in a real estate transaction that some people may not understand is title insurance. They may ask themselves “What is it?” and “Do I really need it?” To navigate the confusion or uncertainty, here are three things to know about title insurance.
Right to Sell. Title insurance is basically just insurance that guarantees that the seller has the right to sell that property. There can be a lot of confusion surrounding whether someone has the right to sell a property — whether that be fraud, a mistake, or ownership uncertainty — but title insurance can help clarify and clean up that misinformation.
Clients Can Shop. You can shop around for title insurance that best fits your needs. The price of title insurance typically reflects the sale price of your home, and relative to many of the other costs involved in a real estate transaction, it isn’t that expensive. Though there are laws in place to protect buyers and sellers from fraudulent title insurance companies, you always have the option to shop around and get prices from various suppliers.
One-Time Cost. This is not a recurring payment. It is a one-time cost that takes place at a closing. Once the title insurance company is paid, they will do additional filings and verifications at the courthouse, and several days later, the buyer will receive their policy.
Whether you’re buying or selling your lake home or property, our agents at Lake Homes Realty can help provide insight into today’s lake real estate market and guide you in your home journey.
Even though we do not do this as a brokerage, some businesses in the real estate industry may propose a guaranteed offer for your home if they don’t sell it. And while that could be a good opportunity in some cases, here are four reasons why you should be thoughtful when considering an offer like that as you plan to sell your lake home or any other property.
Understand. Make sure you fully understand what this offer entails, including the fine print. Some people may assume that if their home does not sell, the company will take their asking price and give them that amount. However, there are usually some caveats to this offer that are not always obvious. Be sure to ask questions and do not be shy — this is your house!
Not Full-Price. A “guaranteed” offer is not necessarily a “full-priced” offer. Since there are so many wholesalers who partner with brokerages, these offers are usually discounted. Understand what “guaranteed” means relative to price.
Cost of Time. A lot of these deals have timelines where if your home does not sell in a certain number of days, then they will move forward with their process. This means that if that path does not come to fruition or you do not want to take one of the guaranteed offers, you may have to start over with your marketing, thus making your home appear stale since it’s been on the market for a while. Be aware that if everything does not work out, you need to know how much time that will cost you.
If It Looks Too Good… This does not mean that anyone is being deceitful, but oftentimes if it looks too good to be true, it just might be. Make sure you know what the offer really is and how it applies to you and your situation.
Whether you’re buying or selling your lake home or property, our agents at Lake Homes Realty can help provide insight into today’s lake real estate market and guide you in your home journey.
In real estate, especially in competitive markets, agents typically ask for the “highest and best offers.” It’s important to understand what this means, and whether you’re buying or selling your lake home, here are five things you will need to know about “Highest and Best” offers.
This is not an auction. The biggest number doesn’t always win the deal. Ultimately, the sellers decide on what is best for them.
Mortgage vs. cash. Cash transactions typically don’t go through an appraisal process (there are exceptions). There’s usually a pre-approval process with transactions involving mortgages, which could lead to an inconvenient holding pattern, thus making it a riskier transaction than cash.
Timeframe matters. You can de-risk the deal to a seller if there is a shorter timeframe from contract to close.
Earnest money. A large amount of earnest money offered ensures the buyer’s level of commitment, which further de-risks the deal.
Connection. An emotional connection can help make an offer highest and best.
Whether you’re buying or selling your lake home or property, our agents at Lake Homes Realty can help provide insight in today’s lake real estate market and guide you in your home journey.
When it’s time to sell your lake home, you’re likely keeping a mental list of what home buyers find important. However, your attempt to read buyers’ minds could be incorrect. To avoid this pitfall, Lake Homes CEO, Glenn Phillips, shares 5 things that home buyers don’t care about.
What you paid for the lake house
The price of nearby homes in the market
Personal effort that you put into the home
Using outliers in the market as a proxy for your home
Your feelings about the home (don’t take an offer personally!)
There’s no question that the pandemic has rendered city life stifling. With no bars, movie theaters, or indoor dining, the draw of big cities has dissolved. As a result, more people are investing in lake houses for the freedom the city doesn’t provide anymore. Real estate appraiser and consultant Jonathan Miller told CNN that he calls these “co-primary” homes.
Instead of spending more time in one home and occasionally vacationing, those with co-primary residences spend equal time at both. According to Forbes, people are especially seeking markets where you can live comfortably “off the grid.” As the pandemic continues, this trend isn’t slowing down. If you’re looking to make a lake house your co-primary home, check out the key reasons driving this trend.
A simple rationale for this trend is that due to the pandemic, a city home isn’t necessary anymore. Many people stayed in cities for their in-person obligations. However, more shutdowns of offices and social life defeat the purpose of owning a city home. According to brokerage firm Miller Samuel Inc., Manhattan Sales have fallen 54% from last year. Instead, New York dwellers are investing in lake houses and other vacation homes in places like Connecticut and the Hudson Valley. This way, they can go back and forth between their co-primary homes whenever they need.
Before COVID-19, a thriving social scene, and employment opportunities were a huge draw for urban environments. Living in a small apartment didn’t matter because many people practically lived at the office. However, as non-essential workers continue to work remotely, spacious homes are a bigger priority. With more people choosing open spaces over proximity to a now fading city life, investing in lake houses has become popular. According to a Zillow survey, among Americans working at home currently, 66% would consider moving homes if their job continued remotely. This majority position marks a clear priority shift from access to work to access to space.
Many buyers cannot afford a lake house as a co-primary residence. These individuals may move to the lake full-time, in part, because it’s less expensive. This trend is especially true for buyers who have lost their jobs due to the pandemic. The country’s unemployment rate rose from 3.8% in February to 13.0% in May. According to the Pew Research Center, even these numbers might be underreported. When money is scarce, why stay in a pricey urban apartment when you can retreat to a less expensive lake house? Saving on expenses is just one reason why city renters are buying lake houses as a first home.
Typically, buyers see lake houses as an investment—something to put stock in and reap the benefits later. However, now that things are more distressing and uncertain, buyers want something they can enjoy immediately. For similar reasons, rentals have been harder to come by. Robert Nelson, sales managing director for Brown Harris Stevens, told CNN that those who may typically rent their lake house to guests are opting to spend more time at their vacation residence. When everything else is up in the air, being at a lake house offers a sense of immediate security.
This Pandemic Was the Last Straw
For many buyers, investing in lake houses during the pandemic was not a split-second decision. They had been mulling over it for a while, and COVID-19 was the final straw that prompted the purchase. In New York specifically, an influx of people have left the city in favor of more remote locations. According to CNBC, there are not enough homes on the market in nearby vacation areas to meet the current demand. Many of those who said “maybe one day” to their dream of a lake house are deciding that day is today.
With so much uncertainty ahead, owning a lake house provides a much-needed sense of warmth and comfort. Are you interested in hopping on the bandwagon? Check out our listings in multiple states at Lakehomes.com!
