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Friday, February 9, 2018

Tax Tips for Homeowners

New buyers can get overwhelmed by the additional expenses incurred during homeownership. Besides making monthly mortgage payments, homeowners may have to pay for gardening, pest control, pool maintenance, plumbing fixes, electrical work and more.

But the good news is that tax time offers homeowners a number of deductions and credits not available to renters. Check with a tax consultant to see if these deductions apply to you.

Private Mortgage Insurance
PMI is the premium you pay every month until your equity equals 20 percent of your home’s value. Luckily, these premiums can be deducted from your income.

Mortgage Interest
If you paid more than $600 dollars in mortgage interest during the tax year, every penny you paid is deductible—and that includes interest on a second mortgage.

Local Real Estate Taxes
Some taxpayers overlook the fact that homeowners can deduct local, state and even foreign real estate taxes on their federal returns. Lower-income homeowners may also get special property tax benefits from their state or municipality, so look into further breaks specific to your community.

Losses From Weather, Fire or Theft
While nobody wants a tree to fall on their house or burglars to make off with their flat screen, the IRS grants a break to any property or casualty loss that is more than 10 percent of your gross income and is not reimbursed by your insurance.

Moving Expenses
If you moved 50 miles or more for a new job during the tax year, you can deduct your moving expenses. (Note, that if you started the new job more than a year before purchasing the new home, the moving expenses are not tax deductible.)

Selling Costs
If you sold a home during the tax year, the commission paid to a real estate agent is tax deductible, as are any legal fees and closing costs. Just like home-improvement costs reduce your cost basis, so do your selling costs.

Tuesday, January 23, 2018

4 Pros, 4 Cons of Open Floor Plans

The open floor plan has been popular in many new home designs. Homeowners are showing a desire to have no walls separating the kitchen, dining, and living areas. In fact, 84 percent of new single-family homes have fully or partially open layouts, according to the National Association of Home Builders.

Some owners are knocking down walls during home renovations to have their own open floor plan. But before they do, they may want to reconsider if an open floor plan is what they really want or if they’re just motivated because of its popularity.® recently highlighted some pros and cons of open floor plans to help owners and buyers decide if it’s right for them:
  • Takes advantage of square footage: “An open floor plan home will feel bigger because you don’t have all this unused space,” says Jay Kallos, vice president of architecture for Ashton Woods in Atlanta.
  • Brightens a home: More natural light from windows can spread throughout an open home.
  • Fosters social gathering: Open floor plans can make it easier to socialize, putting family and guests all in one space together.
  • Encourages flexibility: “Open floor plans create a usable space that’s flexible, based on your needs,” says Jimmy Branham, a real estate professional with the Keyes Company in Fort Lauderdale, Fla. Homeowners can define the space without having to make architectural changes.
  • Smells travel: The cooking heat and kitchen aromas will be impossible to contain, so the smells are more present in an open floor home.
  • Offers less privacy and can be noisier: You may have a tough time hiding from noise—the lack of walls makes the space echo and absorb less sound.
  • Can’​t hide messiness: Without separate rooms, any mess will be on display. You can’t conceal anything behind closed doors.
  • Being a fad that fades: The open floor plan is a hot trend right now, but everything eventually goes out of style. The trend doesn’t appear to be slowing yet, but® cautions that you could be setting yourself up to look outdated in 10 or 20 years.
Source: “Open Floor Plan Homes: You Really Want One? The Pros and Cons,”®

Tuesday, January 16, 2018

Should Seller Have a Pre Listing Inspection?

In the typical real estate transaction, the buyer is the one to order a home inspection. But sellers, too, can request a professional assessment of their home before putting it on the market. A pre-listing inspection provides sellers with upfront information about the condition of their property, which gives them more control over repairs and potentially strengthens their negotiating position.
Few sellers take advantage of this opportunity, according to Steve Wadlington, president of national home inspection services company WIN Home Inspection. “I don’t expect pre-listing inspections to become mainstream in my lifetime,” he says. Lack of awareness contributes to the underutilization, Wadlington adds, but he also acknowledges that sellers may be reluctant to spend the money for such services.
Additionally, sellers and their agents have a legal duty to disclose to buyers any property issues that are revealed in a pre-inspection report. REALTOR® Magazine spoke with Wadlington about how pre-listing inspections can boost home sales and help sellers defend their asking price.

Are there any differences between a pre-listing inspection and a buyer’s inspection?

The only differences are the customer for whom the inspection is being conducted—in this case it’s the seller, not the buyer—and the point when the inspection occurs. The scope of the inspection is the same. A pre-listing inspection focuses on proper functionality of all major systems and components of the house: heating and cooling; electrical; plumbing; roof and structure; siding; and doors and windows. It’s a full inspection for the seller to better understand the condition of their home prior to the buyer’s inspection. This gives the seller important information to consider so they’re not caught off-guard in the midst of a transaction.

How much does a typical pre-listing inspection cost?

The fee is usually the same as a buyer’s inspection, generally ranging from $350 to $500 for a qualified inspector who carries E&O insurance. Of course, the price varies based on the types of inspections to be performed, property location, square footage, age of the home, and any special conditions, such as whether the home is built on a steep incline.

Why should a seller do an inspection, particularly if the buyer is going to do one anyway?

The value to the seller is that a pre-listing inspection makes them aware of issues in advance of negotiating a purchase agreement, allowing them the chance to resolve the issues or have them accounted for upfront in the asking price. This may give the seller better control in marketing their home and helps minimize stress from heat-of-the-moment negotiations once a purchase agreement is tendered. Homes that have a pre-listing inspection generally sell faster and have fewer inspection-related issues to negotiate, enabling a smoother transaction.

What should a seller do if a pre-listing inspection uncovers significant problems in the home?

It’s always better for everyone to know about major inspection issues as soon as possible. Once they’re identified, they can be carefully assessed for proper resolution. Depending on the nature of the issue, a seller shouldn’t automatically assume that everything needs to be fixed before putting the home on the market. Their real estate professional should advise whether the repairs are necessary to the viability of the sale. Regardless of who owns the property, issues of concern to the buyer will need to be dealt with somehow, and the associated cost of the resolution is a consideration for both the buyer and seller.

If the seller doesn’t want to pay for repairs, what solace does a pre-listing inspection give to the buyer?

For many buyers, being provided forthcoming inspection information has both tangible and emotional value. They’re made aware of issues identified in the inspection report, which gives them more facts to work with, and then they’re provided subsequent clarity on which issues have been or will be resolved as part of the transaction. Sellers who proactively disclose pre-listing issues give buyers proper awareness to factor them into their offers.

Can pre-listing inspections help real estate professionals when marketing a home?

The more information agents can provide to give buyers peace of mind, the better it is for the sale. A pre-listing inspection can also reinforce the seller’s asking price. It enables agents to explain how the inspection report—plus any repairs that were made before listing—helped the sellers arrive at the home’s value. At WIN, we also provide a “Ready for Purchase” sign rider to identify the house as one that has pre-listing inspection information available. It’s similar to what the auto industry has done with marketing certified used cars.

What about sellers who don’t see the sense in paying for an inspection?

Actually, a pre-listing inspection can ultimately save money for sellers in two ways. First, by being aware of and disclosing known property issues upfront, the seller can make it known that consideration for those items has already been factored into the sales price. That effectively takes these issues off the negotiation table. Second, the seller can choose to repair the issues prior to listing, which gives them more control over repair costs.

Should a seller offer the entire pre-listing inspection report to a buyer or just a summary? How much detail is necessary?

I think this is a situational consideration, where sellers should consult with their real estate professional. The industry has evolved such that it is reasonable to view the inspection summary as containing all of the important need-to-know items found in the full report. Since the real goal here is to ensure transparency and awareness, the summary should be adequate to achieve that. Depending on the length and complexity of the full report, as well as the technical complexity of the issues presented in the summary, I can see where a good faith effort to offer more detail could actually cause undue alarm if the buyer can’t put the information in proper perspective. But bear in mind that much of the longer report will also confirm positive functionality of the major systems and components of the home, so it can offer added positive value as well.

Wouldn’t buyers still want to do their own inspection?

Yes, absolutely. If a seller claims to have resolved issues that were uncovered in a pre-listing inspection, the buyer will want a subsequent inspection to confirm those repairs. Whether the buyer uses the same inspector that the seller used is a matter of personal preference, and there are pros and cons either way. Using the same inspector can be beneficial because their prior experience and familiarity with the home allows them to better detect changes based on a point in time. But a properly trained and certified home inspector will inspect the home for the seller or the buyer in the same manner. This person’s view of the home is objective and won’t change based on who hired them.

Source Realtor Magazine January 2018

Wednesday, October 25, 2017

Painting Mistakes That’ll Show

Painting can be one of the most cost-effective ways to spruce up a listing. But homeowners can also make a lot of mistakes with this common DIY job.® recently spoke with staging and color experts to find out some of the most obvious mistakes that they see most often.

1. Choosing the wrong finish.
Homeowners need to select a paint finish that correlates with the room’s purpose. "Many homeowners are nervous about using shiny semigloss, but it's more durable than flat or matte and more moisture-resistant, which makes it perfect for bathrooms and the kitchen," Kristen Chuber, marketing director at Paintzen, told®. However, flat and matte finishes may make better choices for high-traffic areas like hallways or kids’ rooms, since they usually allow for easier touch-ups.

2. Not paying attention to the room’s undertones.
Pay close attention to the other elements of the room that can influence how the color looks on the walls. "Your color will look off if you pair a pink undertone with a yellow one, so look at the counters, the stone fireplace, and cabinets when choosing paint," Karen Gray-Plaisted, a home staging expert with Design Solutions KGP, told®. The flooring can influence the color perception too. For example, a warm mahogany hardwood might look strange when paired with a cool gray paint, Gray-Plaisted says. Also, be sure to "test your color swatches in different lighting, or you'll end up with a shade that's all wrong," Chuber notes.

3. Selecting the wrong color of white.
White paint comes in many shades. "Some whites are cool, others warm, still more are neutral, so the one you pick will depend on the room's finishes and undertones," Gray-Plaisted says. Liat Tzoubari, CEO of home decor boutique Sevensmith, told® she sees homeowners overuse white paint in a home. "Instead, choose a white with a slight pink or yellow tint, such as cream," she suggests.

4. Forgetting about what's overhead.
Ignoring the ceiling when repainting can make the room appear dull and dirty, says Chuber. "Whether you pick white or a bright color, painting it properly will give you those sharp edges along the top and can make wall color pop," Chuber says.

5. Adding an accent wall in an odd place.
Adding a pop of color to an accent wall is a popular move, but homeowners should make sure the effect isn't jarring. "Accent walls are supposed to draw attention to a beautiful area, like the dining room—but not the bathroom or toilet area," Kaitlin Willhoit, a real estate pro with The Boutique Real Estate Group, told®. Also, the paint chosen for the accent wall needs to still work with the overall color scheme of the room or the house, says Bee Heinemann, interior designer with Vant Wall Panels. Too bright or too bold a color may be a turnoff to buyers.


Tuesday, October 17, 2017

Getting Your Credit Ready to Buy a Home

If buying a home is in your future, one of the first things you should do is check your credit score. Even if you’re still saving for a down payment, the sooner you know your score, the better. You can get your score by requesting a credit report from one of the three major credit reporting companies: Equifax, Experian, and TransUnion. Federal law requires these companies to offer you a free credit report : once per year, so take advantage of this benefit.
After you get your report, thoroughly check for any errors or inaccuracies. Are the addresses, accounts, and balances accurate? Are there accounts you don’t recognize? If you find a mistake, contact the credit reporting company and file a dispute. You want to make sure your credit report is completely accurate before you start house shopping.

What Credit Score Do You Need?

Once you know your credit score, this will help you understand how it will impact the type of mortgage you might be able to qualify for. Conventional loans typically require your credit score to be at least 620. If your credit score is less than that, then you will likely want to look into a Federal Housing Administration (FHA) loan. If you have a credit score of 580 or over and a 3.5 percent down payment, you may qualify for an FHA loan. Finally, if you have a score of 500 to 579, then you will need at least a 10 percent down payment for an FHA loan.
That said, the closer you are to an 850 FICO score, the better your chances of qualifying for a loan, and the better interest rate you are likely to get.

Steps to Improving Your Score

According to FICO, the scoring system used by the majority of banks, the following are key to having the best possible credit score:
  1. Pay your bills on time. Your payment history is the most important factor for determining your score. If you have a tendency to be forgetful, consider setting up your bills on automatic payment.
  2. Keep your credit card balances low. This is the next most important factor in your credit score, so do what you can to keep your debt as low as possible and pay off what you can.
  3. Open credit only when you need it. The older the age of your open credit card accounts the better it is for your credit.
Improving your credit score takes time, so be wary of any services that claim to be able to fix your credit overnight. If you want to learn more, the FICO company offers a variety of credit resources, including information on how to understand your report : and how to improve your score :

Monday, October 16, 2017

Top Amenities for Relocating Baby Boomers


“Retirement marks a new phase in a baby boomer’s life, and it only seems natural to relocate or move to a new home when transitioning away from their primary career, or from the day-to-day rearing of school-aged children,” says Jay Mason, vice president of market intelligence at PulteGroup. “Whether they are selling the homes where they raised their children and heading to sunnier pastures or staying near their hometown, it’s not surprising that the 55-and-older buyer wants a variety of options in their homes.”

Baby boomers have differing expectations for retirement, so their home preferences are diverse. But overall, they indicate that their top must-have features for their next home are a multicar garage with storage, open deck or patio, open floor plan, eat-in kitchen, and small, private yard. Further, 30 percent rank proximity to grandchildren as their number one consideration when choosing a community. The other two most popular community amenities are access to water (such as a beach, river, or lake) and parks or other open green spaces.

“Having grandchildren nearby was a surprise, as previous Del Webb surveys have shown that having grandchildren nearby in retirement wasn’t a priority,” Mason says. “The desire to nurture the grandchildren-to-grandparent connection appears to be strengthening between baby boomers and the millennial generation, who also have a strong desire to be near aging parents.”

Source: Daily Real Estate News