Archive for April, 2010

Here are the terms that we often see in real estate transactions that have uncommon names, and their meaning:

PITI: abbreviation for principal, interest, taxes and insurance.

Note: a signed document that acknowledges a debt and shows the borrower is obligated to pay it.

Mortgage insurance: money paid to insure the lender against loss due to foreclosure or loan default. Mortgage insurance is required on conventional loans with less than 20% downpayment. FHA mortgage insurance requires payment of 1.5% of the loan amount to be paid at closing, as well as an annual fee of 0.5% of the loan amount added to each monthly payment.


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Replacing windows, a roof, siding and other major components of your home can be pricey. It’s a good idea to know approximately how long before the refrigerator is likely to stop working or the roof may spring a leak.

This knowledge is critical to buyers when they are getting ready to put an offer on a home. The costs for replacement of aging components should be taken in consideration when making an offer.  Owners can use this information to decide whether to replace the component before placing the home on the market.

A new study by the National Association of Home Builders provides some very helpful insight that can help buyers and sellers estimate the average useful life of more than 100 household appliances and building materials. The true lifespan of any household material depends on maintenance, use, quality of installation, and climate conditions, so these averages are provided as a general guide.  Here are the most useful numbers to keep track:

100 years or more

Brick siding: lifetime of the home

All wooden floors: lifetime of the home

Cellulose insulation material: 100-plus years

50-100 years

Slate, copper, and clay and concrete roofs: 50+ years

Kitchen cabinets: up to 50 years

Modified acrylic kitchen sinks: 50 years

Vinyl floors: 50 years

30-50 years

Thermostats: 35 years

Wooden windows: 30 years

Wood shake roofs: 30 years

French interior doors: 30-50 years

10-20 years

Built-in audio system: 20 years

Aluminum windows: 15-20 years

Asphalt shingle roofs: 30 years

Faucets, kitchen sinks: 15 years

Gas ranges: 15 years

Cultured marble countertops: 20 years

Dryers and refrigerators: 13 years

Air conditioning units: 10-15 years

Lighting controls: 10+ years

Interior and exterior paints: 15+ years

Electric or gas water heaters: 10 years

Air conditioners: 10-15 years

Furnaces: 15-20 years

5-10 years

Security systems: 5-10 years

Heat and smoke detectors: 5-10 years

Dishwashers: 9 years

Microwave ovens: 9 years

Carpet: 8-10 years

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Here are some common real estate terms that have uncommon names and what they mean:

Escrow: money placed with a third party for safekeeping either for final closing on a property or for payment of property taxes and homeowners insurance throughout the year.

Qualification: as determined by the lender, the ability of the borrower to repay mortgage loan based on the borrower’s credit history, employment status, assets, debts and income.

Points: charges levied by the lender based on the loan amount. Each point equals 1% of the loan amount. For example, 2 points on a $100,000 mortgage equal $2,000. Discount points are used to buy down the interest rate. Points can also include origination fee, which is usually one point.

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Hey, you don’t have to repaint the whole room. One wall is totally doable. Check out these cool paints to get you and your family creative:

1. Magnetic paint

Adults would love it for kitchen walls (think calendars, order to your schedules, calendars, etc.). Kids would love it for ABC fun and other activities. Try Liquid Magic Wall Magnetic Paint, $25.50/Gallon, at http://www.amazon.com.

2. Dry-erase paint

Think organized office, no mess. Kids can use it instead of chalk board, again, no mess! Try  Rust-Oleum Dry-erase brush-on kit, $22.28/kit, at http://www.amazon.com.

3.  Chalkboard paint

Adults will love it to jot down numbers, dates, and times. Kids will love playing teacher/students, working on their math homework. Try Rust-Oleum Specialty Clalkboard, $11, at Home Depot.

4. Glow-in-the-dark paint

Yep, there is one. Oh those helpful reminders where the bathroom and toilet paper are at night. And kids can discover astronomy on their ceiling… Try Rust-Oleum glow-in-the dark paint, $7.79/container, at www. amazon.com.

Have FUN!!!

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Save the date!!!

Bucks  First Federal Credit Union is sponsoring a FREE community shredder day, on Saturday, April 24, 9-11am.

Bring up to 3 boxes of paperwork to Bucks County Technical High School at 610 Wistar Rd, Fairless Hills, PA 19030.

For more information, please visit www.savebucks.org.

Happy Safe Shredding!!!

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Why Pennsylvania real estate market is on track to rebound faster than most of the country

You will be surprised. Let’s get started by looking at the casino industry. Pennsylvania has 8 casinos throughout the state. What affects us here, on the border of PA and NJ are 4 casinos: Mt. Airy in Poconos, Sands in Bethlehem, Lehigh Valley (60 min. from Phila), Parx in Bucks County, and Harrah’s in Chester, Delaware County (about 30 min. from Phila).

These casinos have been giving Atlantic City headaches for a couple of years now. The state of Pennsylvania taxes all casinos a chunky 55% (approx.) on gross revenues. Here is how the numbers look for a good prospective, for 2009/2010 months:

Parx casino is located in Bensalem, PA. It’s a short drive from Burlington and Mercer Counties, NJ, and is a considerable contributor to Bucks County’s economy:
(in millions)
State tax (34%) :                                                                                540,619,247
LSA (local share assessment) 5%:                                               63,602,264
EDTF (economic development & tourism fund) 5%:            79,502830
PRHDF (PA race horse development fund) approx. 12%:  190,737,337

These are just the financial figures for 1 casino. These places are running full force 24-7-365.

As of April 8, 2010, 5 casinos (Mohegan Sun at Pocono Downs, Luzerne County, Parx, and Sands, that are important to us) got permissions for table games, more headaches for AC. This work is under way now and is expected to be operational by mid-2010. New table games will bring in 2,300 new jobs, plus all 5 casinos have financial responsibility to pay the state-mandated $16.5 million table game fee each, by June 1, 2010 and all 5 casinos will dedicate millions of dollars towards construction at their facilities to accommodate new games.

New jobs are being created, more manufacturers, suppliers and vendors for goods and services will be involved. The surrounding businesses will also benefit from the expansion: restaurants, hotels, grocery stores. When new jobs are created in the area, demand for housing goes up: rentals, resales. With the rising demand, the prices for homes will also go up.

As you noticed, the casino industry is infusing a superb chunk of money in Pennsylvania horse racing industry: over 190 million dollarslast year and for the first 3 months of 2010. PA horse racing industry that was dying a few years ago, is now an envy of the nation. The infusion of cash has nearly quadrupled purse money and put the Keystone state on the map with Louisville, Baltimore and New York as a destination for breeders and horse owners.

Purse money is the life blood of horse racing, because the winnings ultimately trickle down to owners, jockeys, trainers, breeders. The infusion of cash since 2006 brought 2 new race tracks and nearly 5,000 horse racing industry jobs, a growth of nearly 70%. In addition to these jobs, the industry has helped create thousands of race-related jobs that are not at the tracks: new farms, breeding, veterinary hospitals, grain and hay sellers and other members of communities.

Reports project that by 2013, Pennsylvania would pass California in purse money. And the highest track in the nation won’t be the Churchill Downs, Belmont Park or Santa Anita. It will be Philadelphia Park, right here, in our backyard: Bensalem Township, Bucks County, PA.

More tourists, more demand, more $$$, more jobs, companies doing good business: demand for real estate = higher prices, good resales. Price rebounding and values going up.

Uh, there is more.

Pennsylvania is at the forefront of the nation’s gas drilling boom, with at least 4,000 new oil and gas wells drilled in 2008, more than in any other state except Texas. When energy prices spiked in 2008, drillers flocked to PA, bringing sorely needed 29,000 new jobs and $240 million in state and local taxes.

Marcellus Shale, a deeply buried layer of rock that runs through the western portion of Pennsylvania, according to some analysts, holds enough gas to meet the nation’s natural gas needs for more than 20 years.

Surging Marcellus Shale gas demand tripled applications for PA drilling permits in 2010 to 5,200 permits and produced twice the expected revenue from a recent auction of state lands for drilling.

Energy companies are paying around 2,500 an acre, a lump sum of about $375,000 for a typical 150 acre farm. More money will also flow to land owners, the state and into local economies from gas royalty payments and taxes.

There are plans to build new waste water processing plants. A total of 17 new plants have been proposed. These plants will

process and purify the millions of gallons of water that are pumped deep into the earth to break layers of rock and release the gas. When water is sucked back out, it contains natural toxins dredged up during drilling.  It is necessary to process this water, before it is released into rivers and streams. New plants are going operational with projected 2011-2012 start.

It is getting crazy busy, here in the state and it’s just the beginning. This boom has transformed lives of local farmers, hotels and food industry that have been struggling for a number of years. More and more businesses are benefiting from the gas exploration: trucking and railroad companies, auto repair shops, restaurants, and  of course real estate.

I believe it’s a good time to reinforce the fact that national news are NOT local news. It’s time to take a note of fact- based statistics that talk about our local real estate market and economy, not opinion-based news from 2, 3 or 6 or 9 states away.
Our real estate market can not be compared to Florida, CA, or Nevada. I found out yesterday that Miami area in Florida  has about 83 months of inventory.  Our average here in Bucks/Mont/Phila/Mercer/Burlington is 9.8 months. This means that in Florida, it will take 83 months to sell the current supply of homes that are on the market.  We are doing just fine.

Our real estate market is still buyers’ market, as in most places around the country, however homes are selling and buyers are buying! It’s not too late to take advantage of free government money and put your home on the market or to purchase that dream home.

What do you think?

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