interesting article from marketwatch.com
In order for the transaction to work properly, you have to plan ahead — here’s a rundown of your options
Before the days of income and estate taxes, adult children often just moved into the family home after their parents died. Unfortunately, it’s not that simple anymore.
There are several ways to give a home to your child. And a few are tax-free. But to get the best tax results, you’ve got to plan ahead. Here is a rundown of your options.
Stay put
If you plan to live in your home until you die, and your estate is below the unified federal estate gift and estate tax exemption amount ($11.4 million for 2019), this is your best strategy. When you die, your home’s tax basis will be stepped up to fair market value as of the date of death. So you and your heirs will escape capital-gains tax on all the appreciation that occurs up to that date. And, because the value of your estate is below the estate tax exemption, your heirs will owe no federal estate tax. They are free to move into the house, or sell it and keep the cash while owing little or no tax to the Feds (thanks to the basis step-up rule). If they do move into the house, their tax basis for calculating the gain or loss on subsequent sales will be the home’s fair market value at the time of your death.
This is a much better strategy than gifting your house to heirs while you continue living there. Why? Even if you pay a market-rate rent to your child, the IRS might argue the home’s full date-of-death value still belongs in your taxable estate. The only sure way around this problem is with a qualified personal residence trust, which is explained later in this story.
Outright gift
If you are moving out of your home, you can give the property to your child today. However, you will probably have to dip into your unified federal gift and estate tax exemption ($11.4 million for 2019). Here’s how it works.
First, offset the amount of the gift by using your $15,000 annual gift-tax exclusion. Remember it is $15,000 per donor per donee (gift recipient). So if you and your spouse make a joint gift to both your child and his spouse, you can offset $60,000 of the home’s value (4 x $15,000) for gift tax purposes. Then, as long as the net figure is less than $11.4 million or $22.8 million for a married couple for 2019, you won’t owe any current gift tax (unless you made very substantial gifts earlier that used up part of your exemption).
There are two drawbacks to this strategy. First, your child’s tax basis on the home will be your presumably low cost for the property, which increases the odds he or she will owe capital-gains tax on a later sale. Second, you’ve whittled down your unified federal gift and estate tax exemption (the exemption is reduced dollar for dollar by gifts in excess of the $15,000 annual exclusion amount).
On the plus side, you at least get any future appreciation in the home’s value out of your taxable estate.
Sale for a bargain price
If you sell a home to a perfect stranger for less than fair market value (FMV), you’ve simply made a bad deal. The IRS doesn’t care. When you sell to a relative, however, it’s a different story. You will be treated as making a gift equal to the difference between FMV and the sale price.
For example, if your house is worth $700,000 and you sell it to your child for $350,000, you just made a gift of $350,000. Of course, you can use your $15,000 annual gift exclusion to whittle this down. The net amount of the gift then goes against your unified federal gift and estate tax exemption ($11.4 million for 2019). However, that’s OK if the property is expected to appreciate, because the sale successfully removes all future appreciation from your taxable estate.
For income tax purposes, you subtract your tax basis in the home from the $350,000 sale price to calculate your gain or loss. Any loss is nondeductible. If you have a gain, it’s probably eligible for the $250,000 (for singles) or $500,000 (for married couples) home sale gain exclusion. However, your child’s tax basis in the home will be only $350,000, which increases the likelihood that he will owe capital-gains tax on a later sale.
Full-price sale with seller financing
Instead of making a bargain sale, consider making an installment sale for full market value instead. As you will see, this can still meet your primary objective of transferring the home to your child in a way he or she can afford — probably with better tax consequences.
Here’s the deal. You sell the property to your son or daughter for a relatively small down payment and carry a note for the balance of the purchase price. Let’s again say the house is worth $700,000 and your child can afford to pay $70,000 down. So you take back a note for $630,000. Make sure it’s a written note. Also, it definitely helps your case if the child has the wherewithal to make the monthly payments.
Speaking of payments. You should charge at least the applicable federal rate (or AFR) on the loan. That rate, which changes monthly and is almost always well below the average commercial mortgage rate, is available in monthly Internal Revenue Bulletins. You can find them on the website at www.irs.gov. Make sure to go through the legal process of securing the note with the house. That way, your child can deduct the interest payments make to you as qualified mortgage interest. If you fail to take this step, your child won’t be able to deduct the interest payments.
If you wish, you can then ease your child’s financial burden by making gifts under the annual $15,000 gift-tax exclusion rule. Just make sure your child actually makes all the payments on the note. Then write checks for any gifts you decide to make. That keeps the sale, the note and the gifts separate. If you simply forgive some of the payments, the IRS may recast the entire arrangement as a bargain sale (with the less-desirable tax consequences explained earlier).
Income-tax-wise, you are treated as making a sale for $700,000. Assuming you qualify for the $250,000/$500,000 exclusion, you will hopefully be able to dodge any federal capital-gains tax. You will however owe income tax on your interest income from the note. But remember, your child will get an equal mortgage interest deduction, and the whole idea was to help the kid out. Your child’s tax basis on the property is now the full $700,000 purchase price, which reduces the chance he or she will owe any capital-gains tax when the home is eventually sold again.
As far as the gift tax is concerned, you are in the clear. Estate-tax-wise, the sale removes from your taxable estate any future appreciation in the value of the home.
A few years after the sale, your child may be able to refinance and pay off the note. If so, your generosity comes to an end with no further tax implications. However, if there’s still a balance due when you die, your child will be treated as receiving a bequest if the note is forgiven at that point. Of course, this uses up part of your estate-tax exemption, but that’s OK because of the other tax benefits.
What if you want to live in your home?
Unfortunately, the IRS gets cranky when you transfer your home to a relative and then continue to live there. So tread carefully if this is your intention. One strategy is to make a seller-financed full market value sale to your child, as explained above, and then rent the property back at the market rate.
In a perfect world, this would remove the home’s future appreciation from your taxable estate and you could shelter all or part of your gain with the $250,000 (for singles) or $500,000 (for married couples) home sale exclusion. The rental payments to your child could, in effect, finance at least part of the cost of buying the home. The payments would be nondeductible to you and taxable income to your child. But he or she could claim rental property depreciation write-offs, opening up the possibility of noncash deductible losses each year.
In fact, all these nice tax outcomes should be possible — if you sell the home for FMV and pay market-level rent afterward. If you sell for less or pay below-market rent, an obscure tax code provision could include the full date-of-death value of the home in your taxable estate. Why? Because you are considered to still own the home since you never completely gave up “possession and enjoyment” of the property. Also, paying below-market rent will preclude any deductible rental losses for your child.
The bottom line: If you want to transfer ownership to your child but stay put, make sure you make a FMV sale (as opposed to any gift or bargain sale arrangement). Then be sure to pay market-level rent to your child. You can still make $15,000 annual tax-free gifts to help your child out. However, keep these acts of generosity separate from your dealings regarding the sale or rental of the house. In other words, don’t forgive payments on your seller-financed note and don’t include gifts in your rent checks.
Qualified personal residence trusts
There is one way you can make an IRS-approved gift of your home while still living there. That is with a qualified personal residence trust (or QPRT). Using a QPRT potentially allows you to get the residence out of your taxable estate without moving out — even though you have not made a full FMV sale to your child. But there are heavy risks involved.
Here’s how a QPRT works. Say a retired doctor in Florida wants to give his $1 million beachfront home to his two daughters. This strategy would require the doctor to put his home into an irrevocable trust for several years, while he continues to live in it. Through a complex IRS calculation based on interest rates, the length of the trust and his age, the IRS values his right to live in the house at, say, $600,000.
For the purposes of his taxable estate, that knocks the value of his house down to just $400,000 — regardless of how much the house appreciates in the meantime. (That $400,000, though, comes out of the doctor’s unified federal gift and estate tax exemption.) When the trust is up after the stipulated number of years, if he chooses to continue living there, he can pay his daughters rent, further reducing the size of his taxable estate.
Of course, if you have a poor relationship with your kids, you might find yourself out on the street. And there is a tax catch to this kind of trust: You have to outlive it. If you die before the term of the trust expires, the full date-of-death value of the house is included in your taxable estate and your heirs receive no estate tax benefit.
Friday, October 4, 2019
Tuesday, October 1, 2019
Metro Denver Home Price Gains Now Lagging
helpful info here on the changing market...from the Denver Post....
Below average isn’t something most people aspire to, but that is what homeowners in metro Denver likely face after years of robust home price appreciation, according to Zillow.
Zillow said its Denver Home Price Index has risen 3.4% to $411,200 the past year through August.
That contrasts with a gain in the national index of 4.9% to $229,600.
Higher interest rates weighed on the market in the first part of the year, and when they moved lower again, home price appreciation accelerated, but at a more modest pace.
“We have persistently strong consumer confidence and the significant drop in mortgage rates to thank for the housing market’s return to modest home value growth,” Skylar Olsen, Zillow’s director of economic research, said in her report.
Annualizing the quarter-over-quarter change through August, home prices are rising 3.4% nationally, while metro Denver’s gain is only running 1.1%, according to Zillow.
Both those are better than the 0.4% quarterly annualized pace seen in May for the U.S. and Denver’s annualized 0.6% decline.
Not every market saw gains turn positive again with lower mortgage rates. In California’s San Francisco and San Jose markets, home prices are down 1.9% and 10.8% respectively over the past year, according to Zillow’s counts.
And they are dropping on a quarter-over-quarter annualized basis in Las Vegas, Chicago, Portland, Seattle, Sacramento, Boston, Baltimore, New York, Los Angeles, Washington, D.C., and San Diego.
Major metros where homeowners are enjoying the greatest price momentum are Indianapolis, up 7.9%; Charlotte, N.C., up 7.1%; and Atlanta, up 6.9%.
Tony Carnesi, CEO and managing broker of Keller Williams Realty DTC, said the prime summer selling season wasn’t as robust as expected this year in metro Denver, which he attributed to a colder-than-usual May and June.
“We had such a weird summer,” he said. “We usually see a summer spike. We never saw that. Our summer got so compressed.”
His hope is that the sales that were delayed this summer show up in the fourth quarter, or what he calls the second season.
Part of the struggle the local market faces is that sellers continue to hold unrealistic expectations of what they can get for their homes.
That stubbornness has caused some listings that went on the market in March to still be sitting there.
“A lot of sellers have been overpricing their properties, and they are taking longer to sell,” he said.
To back up his point, he provides some statistics from the past week. In the past seven days in the six-county core metro area, there have been 1,847 new listings, but also 2,091 price decreases on existing listings.
But there were also 1,993 listings that went under contract, which points to demand still being there, he said.
Below average isn’t something most people aspire to, but that is what homeowners in metro Denver likely face after years of robust home price appreciation, according to Zillow.
Zillow said its Denver Home Price Index has risen 3.4% to $411,200 the past year through August.
That contrasts with a gain in the national index of 4.9% to $229,600.
Higher interest rates weighed on the market in the first part of the year, and when they moved lower again, home price appreciation accelerated, but at a more modest pace.
“We have persistently strong consumer confidence and the significant drop in mortgage rates to thank for the housing market’s return to modest home value growth,” Skylar Olsen, Zillow’s director of economic research, said in her report.
Annualizing the quarter-over-quarter change through August, home prices are rising 3.4% nationally, while metro Denver’s gain is only running 1.1%, according to Zillow.
Both those are better than the 0.4% quarterly annualized pace seen in May for the U.S. and Denver’s annualized 0.6% decline.
Not every market saw gains turn positive again with lower mortgage rates. In California’s San Francisco and San Jose markets, home prices are down 1.9% and 10.8% respectively over the past year, according to Zillow’s counts.
And they are dropping on a quarter-over-quarter annualized basis in Las Vegas, Chicago, Portland, Seattle, Sacramento, Boston, Baltimore, New York, Los Angeles, Washington, D.C., and San Diego.
Major metros where homeowners are enjoying the greatest price momentum are Indianapolis, up 7.9%; Charlotte, N.C., up 7.1%; and Atlanta, up 6.9%.
Tony Carnesi, CEO and managing broker of Keller Williams Realty DTC, said the prime summer selling season wasn’t as robust as expected this year in metro Denver, which he attributed to a colder-than-usual May and June.
“We had such a weird summer,” he said. “We usually see a summer spike. We never saw that. Our summer got so compressed.”
His hope is that the sales that were delayed this summer show up in the fourth quarter, or what he calls the second season.
Part of the struggle the local market faces is that sellers continue to hold unrealistic expectations of what they can get for their homes.
That stubbornness has caused some listings that went on the market in March to still be sitting there.
“A lot of sellers have been overpricing their properties, and they are taking longer to sell,” he said.
To back up his point, he provides some statistics from the past week. In the past seven days in the six-county core metro area, there have been 1,847 new listings, but also 2,091 price decreases on existing listings.
But there were also 1,993 listings that went under contract, which points to demand still being there, he said.
Tips for Selling Your Home in the Fall and Winter
helpful snippets from an hgtv article on selling in the fall and winter:
Show Buyers What It Looks Like During the Spring and Summer
Showcase what your home has to offer by giving potential buyers the opportunity to see the home during other months of the year. Michelle Caracci Corsi from Howard Hanna Real Estate Services suggests you "include a photo album or digital slideshow of the exterior in the summer, spring, and fall. Highlight garden beds, and patios or decks with furniture so the buyer can envision the home year-round.”
She also adds, "Consider using a realtor who can provide a digital 3-D tour that shows the home in the daylight. Folks who work during the day usually tour homes in the evening when it's dark. Less natural light makes the home feel smaller, and it’s hard to picture the outdoor space.”
Get 5-Star Curb Appeal to Enhance the Outdoor Experience
Leaf- and snow-covered sidewalks can make a perfectly nice home look sloppy and poorly maintained. Use a leaf blower daily to keep leaves, branches, and outdoor dirt off the walkways, and do your best to keep the yard clear of leaves, too.
Add fresh mulch to garden beds so they look their best.
Rinse loose dirt from your home’s siding one last time before the temperature drops.
"Another challenge for buyers in the fall and winter is that everything usually looks dull and drab," adds Michelle. The lot lines are not as visible covered with snow and leaves, so it’s difficult to get a sense of the outdoor space unless it is clearly defined. Define property boundaries with brightly-colored flags tied to stakes, and place them at the four corners of your property.
If it's snowy, keep the deck shoveled and salted so buyers can walk outside to experience the space. If the climate allows, keep outdoor furniture on your patio so they can get a better feel for the outdoor living space.
Let There Be Light
Retract blinds, and widen curtains, so there’s minimal window coverage. The windows will look bigger, and it’ll encourage daylight to flow into your space.
Experiment with your lightbulbs to find the most flattering hues for your space. A bathroom looks great with daylight bulbs (5,000-6,500K) and living spaces, such as bedrooms and living rooms, look best with soft white bulbs (2,700K). In general, your home’s design and color palette will play a part in what looks most appealing. Go for cozy and bright. If you’re upgrading bulbs in hard-wired fixtures, consider going all LED. Let the buyers know you’re leaving the bulbs for them.
Use hardwoods to your advantage. In my experience, nothing shows off a home better than daylight bouncing off beautiful hardwood floors. Remove unnecessary area rugs to maximize the effect.
Bring in extra floor lamps. Add them to rooms with dark corners to create a warmer setting.
Consider investing in landscape lighting, since visitors touring during the late afternoon or evening will have a much different experience than visitors who tour a home earlier in the day. Outdoor lighting accessories will amplify your home’s appeal, so consider solar lights lining a walkway, motion-activated spotlights, and landscape spotlights.
Remove screens from the windows to allow more natural light to flow into your home, and clean the windows. Be sure to let potential buyers know you will replace the screens.
Spend Time on Basic Home Maintenance
Check window seals and doors for drafts. A drafty window is most noticeable on a cold day, so take extra efforts to weather seal and insulate around windows and doors.
Have the furnace or boiler maintained prior to putting your house on the market On a cold day, buyers will make sure the systems are in good shape. Be a step ahead by having your maintenance team leave a sticker or magnet marking the date of the last inspection to add peace of mind for buyers.
Swap out the HVAC filter to help reduce any odors or fall allergens in the home.
Check for spiderwebs – everywhere.
Deep Clean: A Few Places You Might Forget About
Clean inside the cabinet beneath your sink. It’s likely they’ll glance at the plumbing, and they'll notice if the plumbing and inside of the cabinet are dirty. Clean it well, consider adding a new piece of shelf liner on the bottom, and install slide out drawers or extra utility that’ll be appealing.
Make shower heads look like new.
Dust ceiling fan blades and the inside of your dishwasher and washing machine. Don't forget all the nooks and crannies in the kitchen.
Paint? Maybe.
Contrary to many pro recommendations, I’m not a huge fan of painting walls neutral colors to make a home more salable. A light-colored interior will reflect more light than a dark one, and that may make all the difference on a gloomy, cool day.
If the walls look dingy or dated, refresh the look of a room with a $25 can of satin or eggshell.
Embrace Hygge
That’s to say, make your home as cozy and inviting as possible, so potential buyers can easily envision it as a friendly, welcoming space for family and friends.
Accessorize the main living area with neutral-but-coordinated throws and pillows and unscented candles for ambiance.
Make an impression with your gas or electric fireplace. Leave a note with the remote, prompting the potential buyers to turn it on, so they can enjoy the ambiance. Include a reference sheet that cites the maintenance schedule you followed and the increased utility costs you experience in running the fireplace.
Remove the TV in the living room if you can live without it. Yep, big black screens are an eyesore, especially if they’re blocking light or detracting from a beautiful mantel.
Take another look at how the furniture is positioned now that the TV isn't there. Consider rearranging to maximize the functionality of the space. It might not be how your family used the room, but it’ll present really well.
Be Sensitive to Seasonal Decor
Both in your listing photos and in real life during showings, keep the seasonal decor at bay while you’re trying to sell. No one expects a home to completely lack holiday decorations during these months, but simplicity is appealing. Opt for modest, neutral accessories — think white string lights or a Christmas tree that truly flatters the space.
Do you have vaulted ceilings? You’re green-lighted to get a big tree, so buyers can appreciate the spectacular height of the ceilings.
One snowy weather accessory that wins us over? A classic snowman in the front yard.
Resist the urge to add too many scents to your home – it’ll look like you’re hiding something. An unlit pine candle in a bathroom will appeal to the senses.
Have holiday music playing low on a radio during December. During an open house, offer freshly-baked cookies, pumpkin muffins, or hot cocoa for visitors.
Maintain Cleanliness Between Showings
Dry mop to remove dust and dirt that you track in every evening. Vacuum area rugs and entryway mats daily, and keep toys at bay.
Keep a focus on curb appeal. Continue to sweep or snowplow sidewalks, driveways, decks, and patio spaces.
Show Buyers What It Looks Like During the Spring and Summer
Showcase what your home has to offer by giving potential buyers the opportunity to see the home during other months of the year. Michelle Caracci Corsi from Howard Hanna Real Estate Services suggests you "include a photo album or digital slideshow of the exterior in the summer, spring, and fall. Highlight garden beds, and patios or decks with furniture so the buyer can envision the home year-round.”
She also adds, "Consider using a realtor who can provide a digital 3-D tour that shows the home in the daylight. Folks who work during the day usually tour homes in the evening when it's dark. Less natural light makes the home feel smaller, and it’s hard to picture the outdoor space.”
Get 5-Star Curb Appeal to Enhance the Outdoor Experience
Leaf- and snow-covered sidewalks can make a perfectly nice home look sloppy and poorly maintained. Use a leaf blower daily to keep leaves, branches, and outdoor dirt off the walkways, and do your best to keep the yard clear of leaves, too.
Add fresh mulch to garden beds so they look their best.
Rinse loose dirt from your home’s siding one last time before the temperature drops.
"Another challenge for buyers in the fall and winter is that everything usually looks dull and drab," adds Michelle. The lot lines are not as visible covered with snow and leaves, so it’s difficult to get a sense of the outdoor space unless it is clearly defined. Define property boundaries with brightly-colored flags tied to stakes, and place them at the four corners of your property.
If it's snowy, keep the deck shoveled and salted so buyers can walk outside to experience the space. If the climate allows, keep outdoor furniture on your patio so they can get a better feel for the outdoor living space.
Let There Be Light
Retract blinds, and widen curtains, so there’s minimal window coverage. The windows will look bigger, and it’ll encourage daylight to flow into your space.
Experiment with your lightbulbs to find the most flattering hues for your space. A bathroom looks great with daylight bulbs (5,000-6,500K) and living spaces, such as bedrooms and living rooms, look best with soft white bulbs (2,700K). In general, your home’s design and color palette will play a part in what looks most appealing. Go for cozy and bright. If you’re upgrading bulbs in hard-wired fixtures, consider going all LED. Let the buyers know you’re leaving the bulbs for them.
Use hardwoods to your advantage. In my experience, nothing shows off a home better than daylight bouncing off beautiful hardwood floors. Remove unnecessary area rugs to maximize the effect.
Bring in extra floor lamps. Add them to rooms with dark corners to create a warmer setting.
Consider investing in landscape lighting, since visitors touring during the late afternoon or evening will have a much different experience than visitors who tour a home earlier in the day. Outdoor lighting accessories will amplify your home’s appeal, so consider solar lights lining a walkway, motion-activated spotlights, and landscape spotlights.
Remove screens from the windows to allow more natural light to flow into your home, and clean the windows. Be sure to let potential buyers know you will replace the screens.
Spend Time on Basic Home Maintenance
Check window seals and doors for drafts. A drafty window is most noticeable on a cold day, so take extra efforts to weather seal and insulate around windows and doors.
Have the furnace or boiler maintained prior to putting your house on the market On a cold day, buyers will make sure the systems are in good shape. Be a step ahead by having your maintenance team leave a sticker or magnet marking the date of the last inspection to add peace of mind for buyers.
Swap out the HVAC filter to help reduce any odors or fall allergens in the home.
Check for spiderwebs – everywhere.
Deep Clean: A Few Places You Might Forget About
Clean inside the cabinet beneath your sink. It’s likely they’ll glance at the plumbing, and they'll notice if the plumbing and inside of the cabinet are dirty. Clean it well, consider adding a new piece of shelf liner on the bottom, and install slide out drawers or extra utility that’ll be appealing.
Make shower heads look like new.
Dust ceiling fan blades and the inside of your dishwasher and washing machine. Don't forget all the nooks and crannies in the kitchen.
Paint? Maybe.
Contrary to many pro recommendations, I’m not a huge fan of painting walls neutral colors to make a home more salable. A light-colored interior will reflect more light than a dark one, and that may make all the difference on a gloomy, cool day.
If the walls look dingy or dated, refresh the look of a room with a $25 can of satin or eggshell.
Embrace Hygge
That’s to say, make your home as cozy and inviting as possible, so potential buyers can easily envision it as a friendly, welcoming space for family and friends.
Accessorize the main living area with neutral-but-coordinated throws and pillows and unscented candles for ambiance.
Make an impression with your gas or electric fireplace. Leave a note with the remote, prompting the potential buyers to turn it on, so they can enjoy the ambiance. Include a reference sheet that cites the maintenance schedule you followed and the increased utility costs you experience in running the fireplace.
Remove the TV in the living room if you can live without it. Yep, big black screens are an eyesore, especially if they’re blocking light or detracting from a beautiful mantel.
Take another look at how the furniture is positioned now that the TV isn't there. Consider rearranging to maximize the functionality of the space. It might not be how your family used the room, but it’ll present really well.
Be Sensitive to Seasonal Decor
Both in your listing photos and in real life during showings, keep the seasonal decor at bay while you’re trying to sell. No one expects a home to completely lack holiday decorations during these months, but simplicity is appealing. Opt for modest, neutral accessories — think white string lights or a Christmas tree that truly flatters the space.
Do you have vaulted ceilings? You’re green-lighted to get a big tree, so buyers can appreciate the spectacular height of the ceilings.
One snowy weather accessory that wins us over? A classic snowman in the front yard.
Resist the urge to add too many scents to your home – it’ll look like you’re hiding something. An unlit pine candle in a bathroom will appeal to the senses.
Have holiday music playing low on a radio during December. During an open house, offer freshly-baked cookies, pumpkin muffins, or hot cocoa for visitors.
Maintain Cleanliness Between Showings
Dry mop to remove dust and dirt that you track in every evening. Vacuum area rugs and entryway mats daily, and keep toys at bay.
Keep a focus on curb appeal. Continue to sweep or snowplow sidewalks, driveways, decks, and patio spaces.
Denver Remains at top of Recovery for Home Prices
interesting article from the Denver Post...
Of the 100 largest metros in the United States, 75 now have home prices above the peak reached before last decade’s housing crash, according to the latest update to the Home Price Recovery Index from HSH.com. And metro Denver continues to hold the top spot — something it has done in every quarter but one since the index launched in 2015.
Home prices in Denver-Aurora-Lakewood are 91% above the old high. Runners-up include Austin, Texas, with an 81.4% increase, and San Francisco, up 73.5%.
“Aside from routinely strong home price appreciation, it’s important to know that the Denver metro’s housing ‘bust’ was relatively short and shallow,” said Keith Gumbinger, the report’s author.
The peak-to-trough for home values was only three years long and the total decline in value was just under 8 percent in metro Denver, he said. By contrast, a half-dozen large metros have seen home prices more than double from their lows and still not reach the old highs. On that list are Las Vegas, Sacramento, Calif., and Cape Coral, Fla.
“A short-term, relatively small drop meant a sooner start on recovery and less ground to make up,” Gumbinger said of Denver. Yet, metro Denver has also managed to outperform Texas metros when it comes to home price gains, which also didn’t get carried away in the housing boom and had strong migration. The difference appears to be that Texas is doing a much better job of building homes than Colorado, according to a count of permit activity.
Metro Denver’s inadequate supply has put pressure on surrounding markets. Colorado Springs in the second quarter broke into the top 10 metros for its home price recovery, with a 45.8% gain above the pre-crash high. A year ago, Colorado Springs ranked 13th for the size of its recovery, and two years earlier, it was 20th. Whether robust home price gains are a good thing depends on if someone already owns a home or wants to own one. And there are more signs emerging that the trend could shift the other way. In three of the 100 metros, home prices are down year-over-year, according to the Federal Housing Finance Agency’s Home Price Index. They include Seattle, Oxnard, Calif., and Frederick, Md.
— Aldo Svaldi, The Denver Post
Of the 100 largest metros in the United States, 75 now have home prices above the peak reached before last decade’s housing crash, according to the latest update to the Home Price Recovery Index from HSH.com. And metro Denver continues to hold the top spot — something it has done in every quarter but one since the index launched in 2015.
Home prices in Denver-Aurora-Lakewood are 91% above the old high. Runners-up include Austin, Texas, with an 81.4% increase, and San Francisco, up 73.5%.
“Aside from routinely strong home price appreciation, it’s important to know that the Denver metro’s housing ‘bust’ was relatively short and shallow,” said Keith Gumbinger, the report’s author.
The peak-to-trough for home values was only three years long and the total decline in value was just under 8 percent in metro Denver, he said. By contrast, a half-dozen large metros have seen home prices more than double from their lows and still not reach the old highs. On that list are Las Vegas, Sacramento, Calif., and Cape Coral, Fla.
“A short-term, relatively small drop meant a sooner start on recovery and less ground to make up,” Gumbinger said of Denver. Yet, metro Denver has also managed to outperform Texas metros when it comes to home price gains, which also didn’t get carried away in the housing boom and had strong migration. The difference appears to be that Texas is doing a much better job of building homes than Colorado, according to a count of permit activity.
Metro Denver’s inadequate supply has put pressure on surrounding markets. Colorado Springs in the second quarter broke into the top 10 metros for its home price recovery, with a 45.8% gain above the pre-crash high. A year ago, Colorado Springs ranked 13th for the size of its recovery, and two years earlier, it was 20th. Whether robust home price gains are a good thing depends on if someone already owns a home or wants to own one. And there are more signs emerging that the trend could shift the other way. In three of the 100 metros, home prices are down year-over-year, according to the Federal Housing Finance Agency’s Home Price Index. They include Seattle, Oxnard, Calif., and Frederick, Md.
— Aldo Svaldi, The Denver Post
5 Creepy, Halloween Horror Homes
interesting article for that Halloween time of year...from hgtv.com
As All Hallow's Eve approaches, it's time for ghost stories, apple cider and walks in the woods where one can occasionally stumble upon a derelict house long abandoned or a pioneer-era graveyard with headstones barely visible. Would you buy a haunted house? According to a survey by Realtor.com, 33 percent out of 1,000 people said they would. Discover five ghoulish houses with histories of past horrors for the curious or the brave where spirits might come out to play on Halloween night.
Mannequin House
Hauntings and the macabre usually take place in abandoned structures in the woods or near graveyards, but what about a house built in 2000 in a swanky community just outside of Houston, Texas? It's a manicured and stately house from the street like all the neighboring houses, but bring your most stable friend with you if you plan on going inside and make sure you, your friend and the real estate agent are the only ones in the house when you go. Crazy? Insane? The house is filled with people but none of them are alive! You hope. Not one inch of wall, floor or table space can be seen that isn't covered in mannequins, animal skins, picture frames, taxidermy or bizarre doodads. Mannequins are sitting at the bar, hanging feet first from the ceiling and crawling under the bed with their legs sticking out.
The Mortician's House
When the last owner was in the process of turning his historic 1911 house into a Dead and Breakfast, he and his wife had first-hand experience with its resident gang of ghosties. He figured out that they were probably hanging out in the old mortuary — the remnants of which were still on the first floor. Brad Warner and his wife had bought the house in foreclosure in 2010 and were in the process of beginning a major restoration when they first became acquainted with the existing spirits. Well located off scenic I-5 across from the Sacramento River and a stone's throw from Mt. Shasta and its much-publicized Bigfoot population, there would be no shortage of human guests to fill the extra bedrooms and enjoy being terrorized by his non-human guests. But, sadly, just as a large portion of the house had been gutted for the redo, Warner and his wife divorced and the house is now back on the market for $100,000, a far cry from its original listing price of $900,000 a few years ago. Could this be the B&B, er ... D&B that you've always wanted? You'll enjoy bragging to your guests that this house was the inspiration for the best-selling book The Mortician's Wife.
Crazy Clown Motel
There may not be anything quite as foreboding than to be named "the scariest motel in America," as was the Clown Motel in Tonopah, Nev., by Roadtrippers.com. A brother and sister built a motel in the '80s next to the Tonopah graveyard so they could be close to their deceased father. This obviously doesn’t start off well from the get-go, and after they added their small clown collection as decor, the motel attracted the producers of the Travel Channel show Ghost Adventures. The show attracted clown donors from around the world, and now the Clown Motel is chock-full of horrific/funny (you choose) clowns.
At 79 years old, the owner is interested in selling the motel with the caveat that the clowns stay; he hopes to get about $900,000. He said he's had some offers. How could anyone resist the hundreds of clowns and the sublime view from the owner's apartment overlooking the old miners' graveyard?
Thousand Islands Haunted Mansion
Seventy years ago, Carleton Manor in St. Vincent, N.Y. was abandoned. Chances are with no living residents to frighten, the resident spirits got tired of waiting for someone to move in and may have moved on. Or they may still be waiting and hovering inside the falling ceilings or up the chimneys, bunking up with the ravens nesting there. When it was constructed in 1895 for the president of Remington Arms and Typewriter Company, William O. Wyckoff, Carleton Manor was one of the grandest structures in New York. The solid stone outer structure sits on an island, is comprised of 6.9 acres and is surrounded by almost one thousand feet of waterfront. For a mere $495,000, the buyer willing to make this piece of history into a grand restoration project can turn this house from a nightmare into a dream home.
Howey-in-the-Hills Haunted House
Mysterious and abandoned for years, Howey Mansion was completed in 1927 for its owner, citrus magnate, William Howey, who founded the small town of Howey-in-the-Hills just north of Orlando, Fla. The Mediterranean Revival-style house was one of the most opulent homes in the state of Florida, and to celebrate its completion, Howey engaged the New York Civic Opera Company. Even President Calvin Coolidge was a guest in the early years when Howey hosted many dignitaries and the rich and famous.
Measuring in at 8,832 square feet, the mansion has eight bedrooms, eight bathrooms and is sited on 3.63 acres. But it's not a ruin. Of course, the red-tile roof needs thousands of dollars of repairs and the marble that was stripped from the tall foyer walls needs to be replaced, but the exquisite stained glass and wrought-iron banisters, sunroom, giant cypress front door and ballroom with its romantic upper terrace are intact, though the ceilings need a redo. The mansion has had only one other owner, an heiress who died in 2015. The house foreclosed and has been sitting abandoned until April when the mortgage company put it on the market for $480,000. Bids started pouring in and it sold right away for an undisclosed amount that was considerably higher than the asking price. It's estimated that it will take another $3 million to restore it to its full glory.
As All Hallow's Eve approaches, it's time for ghost stories, apple cider and walks in the woods where one can occasionally stumble upon a derelict house long abandoned or a pioneer-era graveyard with headstones barely visible. Would you buy a haunted house? According to a survey by Realtor.com, 33 percent out of 1,000 people said they would. Discover five ghoulish houses with histories of past horrors for the curious or the brave where spirits might come out to play on Halloween night.
Mannequin House
Hauntings and the macabre usually take place in abandoned structures in the woods or near graveyards, but what about a house built in 2000 in a swanky community just outside of Houston, Texas? It's a manicured and stately house from the street like all the neighboring houses, but bring your most stable friend with you if you plan on going inside and make sure you, your friend and the real estate agent are the only ones in the house when you go. Crazy? Insane? The house is filled with people but none of them are alive! You hope. Not one inch of wall, floor or table space can be seen that isn't covered in mannequins, animal skins, picture frames, taxidermy or bizarre doodads. Mannequins are sitting at the bar, hanging feet first from the ceiling and crawling under the bed with their legs sticking out.
The Mortician's House
When the last owner was in the process of turning his historic 1911 house into a Dead and Breakfast, he and his wife had first-hand experience with its resident gang of ghosties. He figured out that they were probably hanging out in the old mortuary — the remnants of which were still on the first floor. Brad Warner and his wife had bought the house in foreclosure in 2010 and were in the process of beginning a major restoration when they first became acquainted with the existing spirits. Well located off scenic I-5 across from the Sacramento River and a stone's throw from Mt. Shasta and its much-publicized Bigfoot population, there would be no shortage of human guests to fill the extra bedrooms and enjoy being terrorized by his non-human guests. But, sadly, just as a large portion of the house had been gutted for the redo, Warner and his wife divorced and the house is now back on the market for $100,000, a far cry from its original listing price of $900,000 a few years ago. Could this be the B&B, er ... D&B that you've always wanted? You'll enjoy bragging to your guests that this house was the inspiration for the best-selling book The Mortician's Wife.
Crazy Clown Motel
There may not be anything quite as foreboding than to be named "the scariest motel in America," as was the Clown Motel in Tonopah, Nev., by Roadtrippers.com. A brother and sister built a motel in the '80s next to the Tonopah graveyard so they could be close to their deceased father. This obviously doesn’t start off well from the get-go, and after they added their small clown collection as decor, the motel attracted the producers of the Travel Channel show Ghost Adventures. The show attracted clown donors from around the world, and now the Clown Motel is chock-full of horrific/funny (you choose) clowns.
At 79 years old, the owner is interested in selling the motel with the caveat that the clowns stay; he hopes to get about $900,000. He said he's had some offers. How could anyone resist the hundreds of clowns and the sublime view from the owner's apartment overlooking the old miners' graveyard?
Thousand Islands Haunted Mansion
Seventy years ago, Carleton Manor in St. Vincent, N.Y. was abandoned. Chances are with no living residents to frighten, the resident spirits got tired of waiting for someone to move in and may have moved on. Or they may still be waiting and hovering inside the falling ceilings or up the chimneys, bunking up with the ravens nesting there. When it was constructed in 1895 for the president of Remington Arms and Typewriter Company, William O. Wyckoff, Carleton Manor was one of the grandest structures in New York. The solid stone outer structure sits on an island, is comprised of 6.9 acres and is surrounded by almost one thousand feet of waterfront. For a mere $495,000, the buyer willing to make this piece of history into a grand restoration project can turn this house from a nightmare into a dream home.
Howey-in-the-Hills Haunted House
Mysterious and abandoned for years, Howey Mansion was completed in 1927 for its owner, citrus magnate, William Howey, who founded the small town of Howey-in-the-Hills just north of Orlando, Fla. The Mediterranean Revival-style house was one of the most opulent homes in the state of Florida, and to celebrate its completion, Howey engaged the New York Civic Opera Company. Even President Calvin Coolidge was a guest in the early years when Howey hosted many dignitaries and the rich and famous.
Measuring in at 8,832 square feet, the mansion has eight bedrooms, eight bathrooms and is sited on 3.63 acres. But it's not a ruin. Of course, the red-tile roof needs thousands of dollars of repairs and the marble that was stripped from the tall foyer walls needs to be replaced, but the exquisite stained glass and wrought-iron banisters, sunroom, giant cypress front door and ballroom with its romantic upper terrace are intact, though the ceilings need a redo. The mansion has had only one other owner, an heiress who died in 2015. The house foreclosed and has been sitting abandoned until April when the mortgage company put it on the market for $480,000. Bids started pouring in and it sold right away for an undisclosed amount that was considerably higher than the asking price. It's estimated that it will take another $3 million to restore it to its full glory.
Wednesday, March 27, 2019
5 Big Reasons to Sell Your Home This Year in 2019
of course, this has to be adjusted for every area of Colorado, but there are some helpful generalizations in here...
from realtor.com
It's no secret that life's been pretty good to sellers for the past several years. Even if you had no need—or desire—to move, the housing landscape might have seriously tempted you to put your house on the market anyway. After all, it's hard not to see visions of dollar signs when your neighbors are unloading their homes for tens of thousands over asking price.
But as they say, all good things must come to an end. And you've probably heard that the white-hot housing market of years past is finally beginning to cool.
So if you haven't listed your home before now, did you miss the boat? Absolutely not. But with each passing month, the experts say, you can expect the housing climate to shift a bit more in buyers' favor.
"It’s definitely still a seller’s market in most of the country. But it’s not the same seller’s market that you saw in the last couple of years," says Danielle Hale, chief economist of realtor.com®. "You might have to think about how your home compares to the competition that buyers are going to see when they're shopping. And you might have to price a little bit more competitively, or think about other enticements to attract buyers."
There's still a chance to cash in for top dollar, though, if you move quickly. Here are the biggest reasons to sell ASAP in 2019.
1. You won't be the only listing for long
The top reason sellers have been in the catbird seat for the past several years? Inventory. There simply weren't enough homes on the market to keep up with buyer demand. And when a "For Sale" sign did go up, you can bet a bidding war would soon follow.
"You might have been the only listing in your neighborhood, and you could put your home up at a certain list price and you would likely see multiple offers at or above that list price," Hale explains.
That tide is turning this year, Hale says. That's because the number of homes for sale is finally increasing, albeit slowly. For now, buyers still outnumber inventory. But if you're thinking about selling and don't want to compete with your neighbors, it'll pay off (literally) to list earlier rather than later. (This is particularly true in pricier markets, where inventory is increasing at a faster rate than more affordable areas.)
"It's going to depend on what neighborhood you're in, but we expect it to be more common this year that you won't be the only listing," Hale says.
2. You still stand to make a 'handsome profit'
Home prices have been on a meteoric rise for the past seven years. In January 2012, the U.S. median home price was $154,700. Today, that figure has nearly doubled—to $289,300—and sellers have rejoiced.
Now comes a twist: 15% of all home listings saw price cuts in January, according to realtor.com data.
That might sound like bad news if you're thinking of selling. But hear us out: Those moderating prices, combined with today's mortgage rates (more on that below), mean increased buyer demand for your house.
Plus, it's not that home prices aren't still increasing—they're just not increasing at the frenzied pace of previous years, which often featured multiple offers at or above asking price, Hale says. So even though you might have some more competition as a seller, things are still looking pretty sweet for you when it comes to cold, hard cash.
"Even if you don't get an offer above your asking price, you're probably still going to come away with a handsome profit from being a seller in 2019," Hale says.
But again, it'll pay to put your home on the market as soon as you can—before conditions change.
"Sellers who list their homes earlier in the year tend to get a higher sales price, often above list, and shorter days on market," says Ali Wolf, director of economic research at Meyers Research.
3. There's high demand for homes under $300K
There's more good news if you own a home below the national median price of $289,300. Not only is that inventory increasing at a slower rate than its luxury counterparts, but there are more buyers shopping at those price points.
"If you’re a below-median-price seller, you will see a seller’s market that is as good as what you saw in previous years—maybe even better," Hale says. "You might still see multiple offers coming in quickly, maybe even above asking price."
4. Mortgage rates are at a new low
Something strange has been happening over the past few months. Experts predicted mortgage rates would rise—and at the end of 2018, they were indeed ticking upward as expected.
But since the start of the year, rates on a 30-year fixed mortgage (the most popular home loan) have been falling, sliding last week to a new 12-month low of 4.37%. And of course, those historically low mortgage rates mean you could have more buyers knocking on your door.
Plus, this temporary dip in rates creates an opportunity for trade-up buyers as well. After all, if you're selling your home, there's a good chance you'll need to buy another one.
Bottom line: Now's the time to hustle and get both transactions done.
"Sellers need to take advantage of low rates as much as buyers do," Wolf says. "Sellers don’t want to get stuck in their homes when rates go up and the math no longer makes sense to move."
5. Millennials are flooding the market
Historically speaking, people tend to buy their first home around age 30. And guess what? We've got a whole bunch of people turning 30 in the next two years—nearly 5 million, in fact, according to realtor.com data. So you can count on those millennials to be a driving force in the housing market.
"Millennials want to own a home as much as prior generations," Wolf says. "We saw millennial shoppers scooping up homes in 2018—and 2019 will be no different."
What's more, Hale adds, is that you won't just be seeing demand from first-time buyers. Older millennials in their middle to late 30s have already owned a home for a few years, and could be looking at now as a prime time to trade up.
"From a seller’s perspective, you’re going to have possibly more interested buyers," Hale says. "So that’s motivation to put your house on the market."
from realtor.com
It's no secret that life's been pretty good to sellers for the past several years. Even if you had no need—or desire—to move, the housing landscape might have seriously tempted you to put your house on the market anyway. After all, it's hard not to see visions of dollar signs when your neighbors are unloading their homes for tens of thousands over asking price.
But as they say, all good things must come to an end. And you've probably heard that the white-hot housing market of years past is finally beginning to cool.
So if you haven't listed your home before now, did you miss the boat? Absolutely not. But with each passing month, the experts say, you can expect the housing climate to shift a bit more in buyers' favor.
"It’s definitely still a seller’s market in most of the country. But it’s not the same seller’s market that you saw in the last couple of years," says Danielle Hale, chief economist of realtor.com®. "You might have to think about how your home compares to the competition that buyers are going to see when they're shopping. And you might have to price a little bit more competitively, or think about other enticements to attract buyers."
There's still a chance to cash in for top dollar, though, if you move quickly. Here are the biggest reasons to sell ASAP in 2019.
1. You won't be the only listing for long
The top reason sellers have been in the catbird seat for the past several years? Inventory. There simply weren't enough homes on the market to keep up with buyer demand. And when a "For Sale" sign did go up, you can bet a bidding war would soon follow.
"You might have been the only listing in your neighborhood, and you could put your home up at a certain list price and you would likely see multiple offers at or above that list price," Hale explains.
That tide is turning this year, Hale says. That's because the number of homes for sale is finally increasing, albeit slowly. For now, buyers still outnumber inventory. But if you're thinking about selling and don't want to compete with your neighbors, it'll pay off (literally) to list earlier rather than later. (This is particularly true in pricier markets, where inventory is increasing at a faster rate than more affordable areas.)
"It's going to depend on what neighborhood you're in, but we expect it to be more common this year that you won't be the only listing," Hale says.
2. You still stand to make a 'handsome profit'
Home prices have been on a meteoric rise for the past seven years. In January 2012, the U.S. median home price was $154,700. Today, that figure has nearly doubled—to $289,300—and sellers have rejoiced.
Now comes a twist: 15% of all home listings saw price cuts in January, according to realtor.com data.
That might sound like bad news if you're thinking of selling. But hear us out: Those moderating prices, combined with today's mortgage rates (more on that below), mean increased buyer demand for your house.
Plus, it's not that home prices aren't still increasing—they're just not increasing at the frenzied pace of previous years, which often featured multiple offers at or above asking price, Hale says. So even though you might have some more competition as a seller, things are still looking pretty sweet for you when it comes to cold, hard cash.
"Even if you don't get an offer above your asking price, you're probably still going to come away with a handsome profit from being a seller in 2019," Hale says.
But again, it'll pay to put your home on the market as soon as you can—before conditions change.
"Sellers who list their homes earlier in the year tend to get a higher sales price, often above list, and shorter days on market," says Ali Wolf, director of economic research at Meyers Research.
3. There's high demand for homes under $300K
There's more good news if you own a home below the national median price of $289,300. Not only is that inventory increasing at a slower rate than its luxury counterparts, but there are more buyers shopping at those price points.
"If you’re a below-median-price seller, you will see a seller’s market that is as good as what you saw in previous years—maybe even better," Hale says. "You might still see multiple offers coming in quickly, maybe even above asking price."
4. Mortgage rates are at a new low
Something strange has been happening over the past few months. Experts predicted mortgage rates would rise—and at the end of 2018, they were indeed ticking upward as expected.
But since the start of the year, rates on a 30-year fixed mortgage (the most popular home loan) have been falling, sliding last week to a new 12-month low of 4.37%. And of course, those historically low mortgage rates mean you could have more buyers knocking on your door.
Plus, this temporary dip in rates creates an opportunity for trade-up buyers as well. After all, if you're selling your home, there's a good chance you'll need to buy another one.
Bottom line: Now's the time to hustle and get both transactions done.
"Sellers need to take advantage of low rates as much as buyers do," Wolf says. "Sellers don’t want to get stuck in their homes when rates go up and the math no longer makes sense to move."
5. Millennials are flooding the market
Historically speaking, people tend to buy their first home around age 30. And guess what? We've got a whole bunch of people turning 30 in the next two years—nearly 5 million, in fact, according to realtor.com data. So you can count on those millennials to be a driving force in the housing market.
"Millennials want to own a home as much as prior generations," Wolf says. "We saw millennial shoppers scooping up homes in 2018—and 2019 will be no different."
What's more, Hale adds, is that you won't just be seeing demand from first-time buyers. Older millennials in their middle to late 30s have already owned a home for a few years, and could be looking at now as a prime time to trade up.
"From a seller’s perspective, you’re going to have possibly more interested buyers," Hale says. "So that’s motivation to put your house on the market."
Tax Benefits of Buying a Home in 2019
interesting tax considerations on home purchasing from lendingtree.com
For many investors, buying a home has always had an almost magnetic pull. First, there’s the promise of a possible long-term return once the house is sold. But homebuying also promises more immediate tax benefits, like deductions on mortgage interest or property tax payments that might help shave a year-end tax bill.
If you are thinking of buying a home soon, you should know some of the more readily available tax benefits of home ownership recently underwent significant changes because of the new federal Tax Cuts and Jobs Act (TCJA), which Congress enacted in December 2017. Unless it’s extended, the law is expected to end on Dec. 31, 2025.
The TCJA swept in extensive tax reform, and in terms of paperwork alone, the IRS estimated it had to create or revise more than 400 taxpayer forms, instructions and publications for the 2019 tax filing season. This is more than double what a typical year requires.
For many consumers, buying a home still makes sense. But there’s no question the new law has muddied the tax picture, and consumers will most likely need time catching up with both the breadth and details of the changes. Read on to see what you need to know about the new tax law now.
Mortgage-related deductions
One of the primary tax benefits of buying a home is the mortgage interest deduction, which means homeowners can deduct the interest they pay on a mortgage for debt related to buying, constructing, or improving either a primary or secondary home.
Before Dec. 15, 2017, the mortgage tax deduction was limited to interest paid on a maximum of $1 million debt on the property for married people filing a joint tax return, $500,000 for married couples filing separately, and $1 million for single filers. Now, however, the rules are different. For home mortgages taken out on or after Dec. 15, 2017, debt caps are lower: $750,000 in for married couples filing jointly; $375,000 for married couples filing separately; and $750,000 for individuals.
What do drops in debt limit mean for potential buyers?
Let’s start by looking at a married couple filing jointly who just bought a home for $1.1 million, putting 20% down and whose mortgage is now $880,000. With the new cap, that couple can now deduct mortgage interest for only $750,000 of that debt.
If you bought your home before Dec.15, 2017, there’s no need to worry: The new law is “grandfathered in” to protect you from the debt cap changes.
“If you bought your home in 2014 and you have a million dollars of debt on the books, this particular provision does not affect you,” said Kevin Rose, a certified public accountant and certified financial planner, as well as partner at Market Street Partners in Chattanooga, Tenn.
Home equity line of credit changes
With the new tax law, there’s now also a strong chance some homeowners might have less incentive to take on a home equity line of credit (HELOC), a type of second mortgage that is also a popular tool for using home equity as a way to potentially pay off both home — and non-home — expenses.
Before Dec. 15, 2017, homeowners could take out a HELOC and deduct interest on up to $100,000 in home equity debt, regardless of what the money was used for, even if it was used to pay for non-home expenses like college costs. Now, however, home equity loan interest is still deductible for up to $100,000, but only if it’s used to purchase, build or improve a home. That almost certainly means consumers will now find HELOCs to be less attractive options for paying for personal expenses, and that may cut down on their use, said Rose.
Private mortgage insurance changes
With the new tax law, homeowners can also expect to see a change in the tax status of any private mortgage insurance (PMI) they have to pay. That’s because private mortgage insurance (PMI) premiums are no longer tax deductible. That itemized deduction expired on Dec. 31, 2017, and it’s unknown when — or if — it will be reinstated.
First-time homebuyers are typically required to buy private mortgage insurance if they put down less than 20% of the cost of a home. Meanwhile, PMI insurance is required for any mortgage obtained through the government-insured loan program offered by the Federal Housing Administration (FHA). With FHA loans, down payments can be as low 3.5%, but PMI costs can add up quickly. That’s because an FHA loan now charges an upfront 1.75% PMI fee (as a percentage of the total cost of the loan), and annual charges are .85%.
The PMI deduction is one Congress wrestles with regularly. But Chris Hervochon, a certified public accountant and owner of SOAR — A Better Way CPA in Hilton Head, S.C., thinks the PMI tax deduction was done away with this time because the the larger standard tax deduction many taxpayers now claim is able to capture smaller itemized expenses like PMI, so eliminating the deduction actually makes it easier to prepare taxes.
Standard deduction changes
Anyone shopping for a home now needs to pay particular attention to the standard tax deduction allowed by the IRS. That means deciding whether it might be better to ultimately itemize deductions (and claim mortgage interest deductions as well), or just take the standard tax deduction the IRS allows.
Under the new law, the standard deductions allowed by the IRS increased; for example, for a married couple filing jointly, it went from $12,700 in 2017 to $24,000 in 2018. If a married couple had less than $24,000 in itemized deductions — including mortgage interest — then it might be financially smarter for them to go with the standard deduction.
There is a complicating factor: The new tax law now limits deductions of state and local taxes to just $10,000 for married couples and individuals and $5,000 for married couples filing separately. That means it also sets a cap on how much property tax can be deducted, a huge disadvantage for homeowners who live in states like New York, California, Florida and Texas, where property taxes often reach far more than $10,000 annually.
Here’s an example of how this works: If you’re a married homeowner in South Carolina who now pays $7,000 in state income taxes but your property taxes are $5,000, any property tax amount over $3,000 is not deductible under the new tax legislation.
“If you’re thinking about (taking) a standard deduction of $24,000, it’s kind of tough to get there because you’re now limited to $10,000 of real estate tax and state and local income tax,” Hervochon said.
Before the new tax law, Hervochon used to just ask clients whether they owned a home or rented.
“If they said ‘own a home,’ well, you’re going to itemize,” he said. “Now you can’t get away with asking just that question.”
Rose, for his part, said he started seeing clients trying to prepay their property taxes toward the end of 2017, and “going forward, that’s a big change.”
Tax-free profits
Even with the Tax Cut and Jobs Act, there is one significant tax benefit that is staying the same: the amount of capital gains that can go tax-free after a homeowner sells a house at a profit. For example, married homeowners may now retain up to $500,000 in tax-free profits from the sale of their home, and for single filers the number is $250,000.
To qualify for this exclusion, homeowners must have lived in and used the home as their primary residence for at least two years out of the five years before the sale date.
Moving expenses
Before December 2017, taxpayers could deduct moving expenses if they met certain requirements related to distance and time. But under the new tax law, all deductions for moving expenses have been suspended. The only exception is for members of the U.S. Armed Forces on active duty who relocate per a military order related to a permanent change of station.
Another new development: Employers who reimburse moving expenses for employees must now include those expenses as taxable income in employee wages. Before December 2017, those reimbursed moving expenses could be excluded from income.
The final word
It’s still possible some of the tax benefits described above may reappear once the new tax law expires in 2025. But until then — or until Congress passes new tax legislation — buyers in the running will need to look more closely at the tax benefits of homebuying, including whether they’re comfortable making do with potentially larger loads of debt and fewer allowable deductions.
“Sometimes [people] let the tax results affect their decision-making,” Rose said. “They convince themselves it’s a good tax move, but you don’t want to pay a dollar to save 35 cents.”
Before signing the dotted line, consult your accountant to determine if the tax benefits of buying a home make good financial sense for you.
For many investors, buying a home has always had an almost magnetic pull. First, there’s the promise of a possible long-term return once the house is sold. But homebuying also promises more immediate tax benefits, like deductions on mortgage interest or property tax payments that might help shave a year-end tax bill.
If you are thinking of buying a home soon, you should know some of the more readily available tax benefits of home ownership recently underwent significant changes because of the new federal Tax Cuts and Jobs Act (TCJA), which Congress enacted in December 2017. Unless it’s extended, the law is expected to end on Dec. 31, 2025.
The TCJA swept in extensive tax reform, and in terms of paperwork alone, the IRS estimated it had to create or revise more than 400 taxpayer forms, instructions and publications for the 2019 tax filing season. This is more than double what a typical year requires.
For many consumers, buying a home still makes sense. But there’s no question the new law has muddied the tax picture, and consumers will most likely need time catching up with both the breadth and details of the changes. Read on to see what you need to know about the new tax law now.
Mortgage-related deductions
One of the primary tax benefits of buying a home is the mortgage interest deduction, which means homeowners can deduct the interest they pay on a mortgage for debt related to buying, constructing, or improving either a primary or secondary home.
Before Dec. 15, 2017, the mortgage tax deduction was limited to interest paid on a maximum of $1 million debt on the property for married people filing a joint tax return, $500,000 for married couples filing separately, and $1 million for single filers. Now, however, the rules are different. For home mortgages taken out on or after Dec. 15, 2017, debt caps are lower: $750,000 in for married couples filing jointly; $375,000 for married couples filing separately; and $750,000 for individuals.
What do drops in debt limit mean for potential buyers?
Let’s start by looking at a married couple filing jointly who just bought a home for $1.1 million, putting 20% down and whose mortgage is now $880,000. With the new cap, that couple can now deduct mortgage interest for only $750,000 of that debt.
If you bought your home before Dec.15, 2017, there’s no need to worry: The new law is “grandfathered in” to protect you from the debt cap changes.
“If you bought your home in 2014 and you have a million dollars of debt on the books, this particular provision does not affect you,” said Kevin Rose, a certified public accountant and certified financial planner, as well as partner at Market Street Partners in Chattanooga, Tenn.
Home equity line of credit changes
With the new tax law, there’s now also a strong chance some homeowners might have less incentive to take on a home equity line of credit (HELOC), a type of second mortgage that is also a popular tool for using home equity as a way to potentially pay off both home — and non-home — expenses.
Before Dec. 15, 2017, homeowners could take out a HELOC and deduct interest on up to $100,000 in home equity debt, regardless of what the money was used for, even if it was used to pay for non-home expenses like college costs. Now, however, home equity loan interest is still deductible for up to $100,000, but only if it’s used to purchase, build or improve a home. That almost certainly means consumers will now find HELOCs to be less attractive options for paying for personal expenses, and that may cut down on their use, said Rose.
Private mortgage insurance changes
With the new tax law, homeowners can also expect to see a change in the tax status of any private mortgage insurance (PMI) they have to pay. That’s because private mortgage insurance (PMI) premiums are no longer tax deductible. That itemized deduction expired on Dec. 31, 2017, and it’s unknown when — or if — it will be reinstated.
First-time homebuyers are typically required to buy private mortgage insurance if they put down less than 20% of the cost of a home. Meanwhile, PMI insurance is required for any mortgage obtained through the government-insured loan program offered by the Federal Housing Administration (FHA). With FHA loans, down payments can be as low 3.5%, but PMI costs can add up quickly. That’s because an FHA loan now charges an upfront 1.75% PMI fee (as a percentage of the total cost of the loan), and annual charges are .85%.
The PMI deduction is one Congress wrestles with regularly. But Chris Hervochon, a certified public accountant and owner of SOAR — A Better Way CPA in Hilton Head, S.C., thinks the PMI tax deduction was done away with this time because the the larger standard tax deduction many taxpayers now claim is able to capture smaller itemized expenses like PMI, so eliminating the deduction actually makes it easier to prepare taxes.
Standard deduction changes
Anyone shopping for a home now needs to pay particular attention to the standard tax deduction allowed by the IRS. That means deciding whether it might be better to ultimately itemize deductions (and claim mortgage interest deductions as well), or just take the standard tax deduction the IRS allows.
Under the new law, the standard deductions allowed by the IRS increased; for example, for a married couple filing jointly, it went from $12,700 in 2017 to $24,000 in 2018. If a married couple had less than $24,000 in itemized deductions — including mortgage interest — then it might be financially smarter for them to go with the standard deduction.
There is a complicating factor: The new tax law now limits deductions of state and local taxes to just $10,000 for married couples and individuals and $5,000 for married couples filing separately. That means it also sets a cap on how much property tax can be deducted, a huge disadvantage for homeowners who live in states like New York, California, Florida and Texas, where property taxes often reach far more than $10,000 annually.
Here’s an example of how this works: If you’re a married homeowner in South Carolina who now pays $7,000 in state income taxes but your property taxes are $5,000, any property tax amount over $3,000 is not deductible under the new tax legislation.
“If you’re thinking about (taking) a standard deduction of $24,000, it’s kind of tough to get there because you’re now limited to $10,000 of real estate tax and state and local income tax,” Hervochon said.
Before the new tax law, Hervochon used to just ask clients whether they owned a home or rented.
“If they said ‘own a home,’ well, you’re going to itemize,” he said. “Now you can’t get away with asking just that question.”
Rose, for his part, said he started seeing clients trying to prepay their property taxes toward the end of 2017, and “going forward, that’s a big change.”
Tax-free profits
Even with the Tax Cut and Jobs Act, there is one significant tax benefit that is staying the same: the amount of capital gains that can go tax-free after a homeowner sells a house at a profit. For example, married homeowners may now retain up to $500,000 in tax-free profits from the sale of their home, and for single filers the number is $250,000.
To qualify for this exclusion, homeowners must have lived in and used the home as their primary residence for at least two years out of the five years before the sale date.
Moving expenses
Before December 2017, taxpayers could deduct moving expenses if they met certain requirements related to distance and time. But under the new tax law, all deductions for moving expenses have been suspended. The only exception is for members of the U.S. Armed Forces on active duty who relocate per a military order related to a permanent change of station.
Another new development: Employers who reimburse moving expenses for employees must now include those expenses as taxable income in employee wages. Before December 2017, those reimbursed moving expenses could be excluded from income.
The final word
It’s still possible some of the tax benefits described above may reappear once the new tax law expires in 2025. But until then — or until Congress passes new tax legislation — buyers in the running will need to look more closely at the tax benefits of homebuying, including whether they’re comfortable making do with potentially larger loads of debt and fewer allowable deductions.
“Sometimes [people] let the tax results affect their decision-making,” Rose said. “They convince themselves it’s a good tax move, but you don’t want to pay a dollar to save 35 cents.”
Before signing the dotted line, consult your accountant to determine if the tax benefits of buying a home make good financial sense for you.
Greenhouses That Are Actual Homes
from moneywatch.com
fun article from moneywatch on people incorporating greenhouses and conventional houses together...
Homeowners across the world are realizing that one of the simplest ways to save money on heating, lighting and food is to move in with the plants.
Greenhouses don't have to be purely recreational hobby spaces exiled to the backyard. Living inside them can provide insulation for an existing structure, define space in an open floor plan or give your kitchen herbs the sunlight they need to thrive.
Practical considerations aside, greenhouses can also be turned into really beautiful places to call home. The greenhouse where Amy and Rob MacMillan lived in Rhode Island is a prime example of how creative renovators can turn "eco-friendly" into "eco-cozy."
If you're going to live in a greenhouse, you should really play up the light and capture that passive solar energy," Amy MacMillan said. "That aspect of the house is great. If you use it to your advantage, and embrace the landscape outside, you can really minimize your heating costs. ... But when it comes to design, you should really focus on playing up the features that make your home so special. That's true when you renovate a house or just move in to a home."
This Newport, Rhode Island, property was once a greenhouse on the Bonniecrest mansion estate. It was converted into a rough living space in the 1950s, but several decades later Amy and Rob MacMillan bought it from a family friend and turned it into a home.
"Basically everything required a custom design because the house is super unique," MacMillan said. "We really just wanted to work with the space as it was -- it has such a specific vibe -- so we did things like turning the linen closet into a space for the refrigerator and a bar area."
In 1976, architect Bengt Warne decided he wanted to have a greenhouse home in Vänersborg, Sweden. But rather than converting an existing structure and moving inside it, he built a normal house -- and then a greenhouse around it.
The glass shell surrounding Nature House -- or "Naturhus" -- covers about 984 square feet of space. In addition to providing a sunny and warm environment for plants, it also insulates the small inner 492-square-foot dwelling from the cold and cuts the property's estimated electric bill in half. Both structures are heated by an eco-friendly wood-burning oven and a hot water masonry heater.
Naturhus features a large Mediterranean fruit and vegetable garden, which is sustained by a system that recycles the home's gray water and compost to feed the plants. The garden has kiwi, figs, peaches and grapes for wine, among other things that would normally never grow in the chilly Swedish climate.
Famed interior architect and designer Grégoire De Lafforest, known for working with brands like Hermès and Cartier, used a small prefabricated greenhouse structure to define kitchen space in this Parisian Rue Voltaire loft. This former warehouse space used to have a completely open, 1,100-square-foot floor plan and De Lafforest divided it into six sections that he calls "a village of six small houses," according to Dornob.com.
While this greenhouse is used for cooking rather than growing plants, the loft is full of sunlight and reminders of the natural world. The most prominent example is the tall pine tree in the center of the dining room, which can be seen from inside the glass enclosure. Presumably to avoid the mess of falling pine needles, De Lafforest didn't install a live tree. He cut and dried the branches, and then re-attached them to the tree truck with plastic needles.
This greenhouse in Bucks County, Pennsylvania, was inspired by an innovative nearby restaurant: Terrain Garden Café in Glen Mills. Terrain's indoor-outdoor space was appealing to Groundswell Design Group architect David Fierabend, according to Houzz.com, but he also thought his clients would appreciate the restaurant's bright colors and unique display of antiques. Once the clients ate lunch at Terrain, they were sold on building that kind of live-in green space.
A patio made out of recycled railroad tires and a succulent garden connect the main home to the greenhouse, where the homeowners get a beautiful 360-degree view of their 6-acre property. The greenhouse features heated concrete floors and a large fireplace so it can be used during Pennsylvania's cold winters. An array of potted plants and a display of vintage watering cans help retain the greenhouse feel, but these rustic details are balanced with industrial furniture pieces and mixed textures.
"Camouglage House 3," designed by Tokyo-based architect Hiroshi Iguchi, is a glass greenhouse home that blends in perfectly with its surroundings. It's located in Nagano, Japan, a mountainous and lush area with lots to offer. But the forested area outside the property didn't fully satisfy Iguchi, who decided to add some extra space for growing trees inside.
fun article from moneywatch on people incorporating greenhouses and conventional houses together...
Homeowners across the world are realizing that one of the simplest ways to save money on heating, lighting and food is to move in with the plants.
Greenhouses don't have to be purely recreational hobby spaces exiled to the backyard. Living inside them can provide insulation for an existing structure, define space in an open floor plan or give your kitchen herbs the sunlight they need to thrive.
Practical considerations aside, greenhouses can also be turned into really beautiful places to call home. The greenhouse where Amy and Rob MacMillan lived in Rhode Island is a prime example of how creative renovators can turn "eco-friendly" into "eco-cozy."
If you're going to live in a greenhouse, you should really play up the light and capture that passive solar energy," Amy MacMillan said. "That aspect of the house is great. If you use it to your advantage, and embrace the landscape outside, you can really minimize your heating costs. ... But when it comes to design, you should really focus on playing up the features that make your home so special. That's true when you renovate a house or just move in to a home."
This Newport, Rhode Island, property was once a greenhouse on the Bonniecrest mansion estate. It was converted into a rough living space in the 1950s, but several decades later Amy and Rob MacMillan bought it from a family friend and turned it into a home.
"Basically everything required a custom design because the house is super unique," MacMillan said. "We really just wanted to work with the space as it was -- it has such a specific vibe -- so we did things like turning the linen closet into a space for the refrigerator and a bar area."
In 1976, architect Bengt Warne decided he wanted to have a greenhouse home in Vänersborg, Sweden. But rather than converting an existing structure and moving inside it, he built a normal house -- and then a greenhouse around it.
The glass shell surrounding Nature House -- or "Naturhus" -- covers about 984 square feet of space. In addition to providing a sunny and warm environment for plants, it also insulates the small inner 492-square-foot dwelling from the cold and cuts the property's estimated electric bill in half. Both structures are heated by an eco-friendly wood-burning oven and a hot water masonry heater.
Naturhus features a large Mediterranean fruit and vegetable garden, which is sustained by a system that recycles the home's gray water and compost to feed the plants. The garden has kiwi, figs, peaches and grapes for wine, among other things that would normally never grow in the chilly Swedish climate.
Famed interior architect and designer Grégoire De Lafforest, known for working with brands like Hermès and Cartier, used a small prefabricated greenhouse structure to define kitchen space in this Parisian Rue Voltaire loft. This former warehouse space used to have a completely open, 1,100-square-foot floor plan and De Lafforest divided it into six sections that he calls "a village of six small houses," according to Dornob.com.
While this greenhouse is used for cooking rather than growing plants, the loft is full of sunlight and reminders of the natural world. The most prominent example is the tall pine tree in the center of the dining room, which can be seen from inside the glass enclosure. Presumably to avoid the mess of falling pine needles, De Lafforest didn't install a live tree. He cut and dried the branches, and then re-attached them to the tree truck with plastic needles.
This greenhouse in Bucks County, Pennsylvania, was inspired by an innovative nearby restaurant: Terrain Garden Café in Glen Mills. Terrain's indoor-outdoor space was appealing to Groundswell Design Group architect David Fierabend, according to Houzz.com, but he also thought his clients would appreciate the restaurant's bright colors and unique display of antiques. Once the clients ate lunch at Terrain, they were sold on building that kind of live-in green space.
A patio made out of recycled railroad tires and a succulent garden connect the main home to the greenhouse, where the homeowners get a beautiful 360-degree view of their 6-acre property. The greenhouse features heated concrete floors and a large fireplace so it can be used during Pennsylvania's cold winters. An array of potted plants and a display of vintage watering cans help retain the greenhouse feel, but these rustic details are balanced with industrial furniture pieces and mixed textures.
"Camouglage House 3," designed by Tokyo-based architect Hiroshi Iguchi, is a glass greenhouse home that blends in perfectly with its surroundings. It's located in Nagano, Japan, a mountainous and lush area with lots to offer. But the forested area outside the property didn't fully satisfy Iguchi, who decided to add some extra space for growing trees inside.
6 Beautiful Natural Built Homes
from offgridworld.com
Natural built houses are gaining popularity all over the world, and the come in many shapes and sizes. Some small, some large, some quaint and still more and on the verge of fantasy cottages in a fantasy land. Practical, inexpensive, and structurally sound, natural homes are one of the most aesthetically pleasing, and versatile homes in the world. Building with natural materials is pleasing, and there’s something to be said for the intrinsic contentment that comes from building a house with your bare hands. Here are some of the most spectacular natural homes in the world!
Natural built houses are gaining popularity all over the world, and the come in many shapes and sizes. Some small, some large, some quaint and still more and on the verge of fantasy cottages in a fantasy land. Practical, inexpensive, and structurally sound, natural homes are one of the most aesthetically pleasing, and versatile homes in the world. Building with natural materials is pleasing, and there’s something to be said for the intrinsic contentment that comes from building a house with your bare hands. Here are some of the most spectacular natural homes in the world!
Tuesday, February 26, 2019
10 Things to Do the Week Before Listing a Home for Sale
helpful info from moving.com
If your home is about to go live on the market, you’re probably feeling a mix of nervousness and excitement—and possibly a bit of stress about whether you will sell quickly. Selling your home is as much as a mental exercise as it is a real estate transaction, and it’s totally normal to be facing a bit of jitters. On the bright side, there is plenty that you can do in the week before listing a home for sale that can help ease your mind, and that may even help your home get under contract faster. As with most aspects of selling a house, taking active steps is usually going to get you better results than just sitting back and waiting for everything to fall in line on its own. So here are 10 things to do now, before your home goes live.
1. Start spreading the word
Just because your home isn’t technically ready for showings yet doesn’t mean that you can’t start the process of letting people know it will be available. Some realtors will provide you with a “coming soon” sign that you can post up in your front yard, but even if yours doesn’t, you can take the initiative and start letting people know on your social channels. Listed houses are often at their most desirable right when they hit the market, so the more interest you can generate right in the beginning, the better.
2. Toss out, recycle, or donate what you don’t need anymore
You may not be ready to pack up and move yet, but that doesn’t mean you shouldn’t be getting rid of stuff. Buyers want to be able to see themselves in homes when they go for a showing, and having a bunch of the previous owner’s things lying around can really mess with that vision. In addition to helping buyers imagine themselves living in your home, editing down your things now will be a big help when you need to clear out for last-minute showings.Go through each room (yes, even closets—buyers will want to look in there) and organize unwanted items into three piles—trash, recycle, and donate. Try to donate or recycle as much as possible instead of sending things to the landfill.
3. Start staging
Staging is the art of designing your home to highlight its best features. And even if decorating isn’t your strong suit, it’s a part of the home selling process you can’t really ignore—49% of buyers’ agents state that home staging has a positive effect on how buyers view a home, according to the National Association of Realtors’ 2017 Staging Stats report, and 21% of buyers’ agents say it increases the value of a home and decreases the time it sits on the market. The week before listing a home for sale is a great time to start staging, since you’ll have some time to really make sure it’s done right. And don’t feel like you have to spend a ton of money to do a good job; it is definitely possible to stage your home on a budget.
4. Figure out a plan for kids and/or pets
If you have little ones at home—two-legged or four—make sure that you have a plan in place for when showings happen. The house should be completely empty when prospective buyers come through, which is an inconvenience on your end but something that has to be managed. If you don’t have a lot of flexibility, talk to a trusted friend, neighbor, or family member and see if they can arrange to help you out in the event that your kids or pets need a place to go during a showing.
5. Set expectations with your realtor
The first couple of weeks that a home is listed for sale tend to be pretty busy in terms of market activity. Talk to your realtor now, in the week before you go live, about expectations you have about how things should go so that you know exactly what to anticipate. This includes the lead time you would like to have between showing requests and the showings themselves (two hours is usually a good way to go), any rules you have for when buyers and their agents are in your house (let your realtor know if you’re a no-shoe household so they can provide booties), and anything else that will be harder to control once the listing is active.
6. Boost your curb appeal
In addition to staging inside your home, you also want to put some effort into making the exterior of your home look as inviting as possible. After all, while the saying may be not to judge a book by its cover, people often do. Trim your lawn, remove any weeds, and tidy up as necessary. If your siding or driveway could use a refresh, use a power washer to clean them off and have them looking good as new. For other easy ways to improve your home’s curb appeal, check out these tips.
7. Find another place for personal items
A fundamental part of selling your home quickly and in as stress-free a manner as possible is depersonalizing it. Because again, buyers are trying to picture what their life would be like in your home, and that can be hard to do when they’re surrounded by somebody else’s family pictures. The week before listing a home for sale, go through and remove as much personal items as you can. This includes pictures, papers, and pretty much anything with your name on it (and definitely anything hanging up on the fridge). Don’t throw these things out, obviously, but do store them somewhere safe and out of view. It will feel a little bit weird to live in your home without all these personal things around, but it’s worth it if it means your home gets scooped up faster.
8. Stow away valuables
A large majority of the people who go to home showings are doing it with the best of intentions, but there are certainly horror stories of people who go in looking for valuables to take. It’s always better to be safe than sorry, so find a safe storage spot for things like jewelry, checkbooks, medications, and anything else that may be of strong interest to somebody else. If you don’t have one already, purchase a fireproof safe that you can store these items in, and then move it to your car when you’re going to be out and know that showings will be taking place. It’s a small step to take, and one that you’ll definitely be upset you didn’t take if something goes missing.
9. Do some repair work
The week before you list is a great time to make sure all small repairs are taken care of. Fixing up chips or cracks in paint, scuff marks, and loose cabinets will go a long way toward ensuring that your home looks its very best. If there are any major repairs that you plan to take care of, start looking into your options now so that your agent can let buyers know that fixes are in the works.
10. Deep clean
Part of the stress that comes with living in a for sale house is having to keep it museum-levels of clean all of the time. There’s no such thing as just leaving the dishes out for another day when there’s a chance that a buyer might come through. Start the process early and get going with a blank slate by setting aside a day for giving your home a top-to-bottom deep clean. Follow the same tips you’d use to clean a home upon move-in, making sure to get in all of the nooks and crannies. It won’t be fun, but at least it will be easier to ensure your home is as clean as possible for showings when they do start happening.
Selling a home is a major transition long before the moving truck arrives. Using the week before listing a home for sale to get your bearings and optimize your property for a quick sale is a smart idea for all sellers, and will definitely make the entire process easier on you and your family. If you ever have any questions about additional things that you should or should not be doing, ask your realtor about it. They’re there to make your own role easier as much as they are to facilitate the sale itself. So take a deep breath and then dive in—the more you get done now, the more simple the whole thing should go.
If your home is about to go live on the market, you’re probably feeling a mix of nervousness and excitement—and possibly a bit of stress about whether you will sell quickly. Selling your home is as much as a mental exercise as it is a real estate transaction, and it’s totally normal to be facing a bit of jitters. On the bright side, there is plenty that you can do in the week before listing a home for sale that can help ease your mind, and that may even help your home get under contract faster. As with most aspects of selling a house, taking active steps is usually going to get you better results than just sitting back and waiting for everything to fall in line on its own. So here are 10 things to do now, before your home goes live.
1. Start spreading the word
Just because your home isn’t technically ready for showings yet doesn’t mean that you can’t start the process of letting people know it will be available. Some realtors will provide you with a “coming soon” sign that you can post up in your front yard, but even if yours doesn’t, you can take the initiative and start letting people know on your social channels. Listed houses are often at their most desirable right when they hit the market, so the more interest you can generate right in the beginning, the better.
2. Toss out, recycle, or donate what you don’t need anymore
You may not be ready to pack up and move yet, but that doesn’t mean you shouldn’t be getting rid of stuff. Buyers want to be able to see themselves in homes when they go for a showing, and having a bunch of the previous owner’s things lying around can really mess with that vision. In addition to helping buyers imagine themselves living in your home, editing down your things now will be a big help when you need to clear out for last-minute showings.Go through each room (yes, even closets—buyers will want to look in there) and organize unwanted items into three piles—trash, recycle, and donate. Try to donate or recycle as much as possible instead of sending things to the landfill.
3. Start staging
Staging is the art of designing your home to highlight its best features. And even if decorating isn’t your strong suit, it’s a part of the home selling process you can’t really ignore—49% of buyers’ agents state that home staging has a positive effect on how buyers view a home, according to the National Association of Realtors’ 2017 Staging Stats report, and 21% of buyers’ agents say it increases the value of a home and decreases the time it sits on the market. The week before listing a home for sale is a great time to start staging, since you’ll have some time to really make sure it’s done right. And don’t feel like you have to spend a ton of money to do a good job; it is definitely possible to stage your home on a budget.
4. Figure out a plan for kids and/or pets
If you have little ones at home—two-legged or four—make sure that you have a plan in place for when showings happen. The house should be completely empty when prospective buyers come through, which is an inconvenience on your end but something that has to be managed. If you don’t have a lot of flexibility, talk to a trusted friend, neighbor, or family member and see if they can arrange to help you out in the event that your kids or pets need a place to go during a showing.
5. Set expectations with your realtor
The first couple of weeks that a home is listed for sale tend to be pretty busy in terms of market activity. Talk to your realtor now, in the week before you go live, about expectations you have about how things should go so that you know exactly what to anticipate. This includes the lead time you would like to have between showing requests and the showings themselves (two hours is usually a good way to go), any rules you have for when buyers and their agents are in your house (let your realtor know if you’re a no-shoe household so they can provide booties), and anything else that will be harder to control once the listing is active.
6. Boost your curb appeal
In addition to staging inside your home, you also want to put some effort into making the exterior of your home look as inviting as possible. After all, while the saying may be not to judge a book by its cover, people often do. Trim your lawn, remove any weeds, and tidy up as necessary. If your siding or driveway could use a refresh, use a power washer to clean them off and have them looking good as new. For other easy ways to improve your home’s curb appeal, check out these tips.
7. Find another place for personal items
A fundamental part of selling your home quickly and in as stress-free a manner as possible is depersonalizing it. Because again, buyers are trying to picture what their life would be like in your home, and that can be hard to do when they’re surrounded by somebody else’s family pictures. The week before listing a home for sale, go through and remove as much personal items as you can. This includes pictures, papers, and pretty much anything with your name on it (and definitely anything hanging up on the fridge). Don’t throw these things out, obviously, but do store them somewhere safe and out of view. It will feel a little bit weird to live in your home without all these personal things around, but it’s worth it if it means your home gets scooped up faster.
8. Stow away valuables
A large majority of the people who go to home showings are doing it with the best of intentions, but there are certainly horror stories of people who go in looking for valuables to take. It’s always better to be safe than sorry, so find a safe storage spot for things like jewelry, checkbooks, medications, and anything else that may be of strong interest to somebody else. If you don’t have one already, purchase a fireproof safe that you can store these items in, and then move it to your car when you’re going to be out and know that showings will be taking place. It’s a small step to take, and one that you’ll definitely be upset you didn’t take if something goes missing.
9. Do some repair work
The week before you list is a great time to make sure all small repairs are taken care of. Fixing up chips or cracks in paint, scuff marks, and loose cabinets will go a long way toward ensuring that your home looks its very best. If there are any major repairs that you plan to take care of, start looking into your options now so that your agent can let buyers know that fixes are in the works.
10. Deep clean
Part of the stress that comes with living in a for sale house is having to keep it museum-levels of clean all of the time. There’s no such thing as just leaving the dishes out for another day when there’s a chance that a buyer might come through. Start the process early and get going with a blank slate by setting aside a day for giving your home a top-to-bottom deep clean. Follow the same tips you’d use to clean a home upon move-in, making sure to get in all of the nooks and crannies. It won’t be fun, but at least it will be easier to ensure your home is as clean as possible for showings when they do start happening.
Selling a home is a major transition long before the moving truck arrives. Using the week before listing a home for sale to get your bearings and optimize your property for a quick sale is a smart idea for all sellers, and will definitely make the entire process easier on you and your family. If you ever have any questions about additional things that you should or should not be doing, ask your realtor about it. They’re there to make your own role easier as much as they are to facilitate the sale itself. So take a deep breath and then dive in—the more you get done now, the more simple the whole thing should go.
There Goes the Neighborhood: Watch Out for These 7 Red Flags When Buying a Home
good considerations on the buying side from realtor.com
Finally, you've done it: You've scoured the market for available homes—and then some—and found one you can't stop thinking about. It's time to make an offer!
But before you put your money on the line, take a peek around the neighborhood. We won't use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can't change the neighborhood. And if your hood is on the decline, you just might have a helluva time offloading your home when you decide to sell.
A bad neighborhood isn't always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we've identified seven red flags that should give you pause before you sign on the dotted line.
Red flag No.1: Too many houses are on the market
There's nothing wrong with two or three listed houses on the same street. But if you see an army of "For Sale" signs, consider looking elsewhere.
"This points to illiquidity in the market and pricing pressure, which is a risk for buyers," says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.
Of course, the hue of this particular red flag depends on the reason for those "For Sale" signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there's a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.
Red flag No.2: The schools are enrolling fewer students
Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there's no physical room to grow.
"Shrinking class sizes are a red flag," Bernstein says.
There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it's certainly something to consider.
Red flag No.3: The area leans industrial
A nearby strip of cute boutique stores might be a nice selling point, but reconsider the purchase if the closest commercial influences lean toward the industrial.
"Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise," says Ralph DiBugnara, the vice president at Residential Home Funding.
Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.
Red flag No.4: There are lots of empty storefronts
Don't just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?
"Empty storefronts can tell you a lot," Bernstein says. "They point to less disposable income of residents than clearly there once was."
Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don't have money for dinner out, they probably don't have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.
Red flag No. 5: The Stepford style is in full force
You might love the homogenous, well-groomed suburban look (and there's nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?
If all the neighborhood's homes (and landscaping) look suspiciously similar, "explore how restrictive the homeowners association is," says Susanna Haynie, a Realtor in Colorado Springs, Co. "It could be an issue."
Red flag No.6: There's no parking
Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse's car? If the streets have bumper-to-bumper traffic, think twice about buying in the
neighborhood—especially if the home lacks a garage or carport.
"I'm always on the lookout for a lack of parking," DiBugnara say. "It's best to visit at night or on weekends to really, truly tell what will be available to you once you live there."
Unless you commute primarily by foot or bike—or you're OK spending your weekends circling the block—the neighborhood may not be a good fit for you.
Red flag No.7: Surrounding homes aren't well-maintained
A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.
Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept
as more expensive ones. It's about pride. Neighbors with no pride in their home's appearance and upkeep decrease property values for everyone.
Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights.
"If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage," DiBugnara says. Fixing these major problems "could be a major expense, hassle, or detriment to your value later on."
Finally, you've done it: You've scoured the market for available homes—and then some—and found one you can't stop thinking about. It's time to make an offer!
But before you put your money on the line, take a peek around the neighborhood. We won't use a certain cliché, but there is a reason the pros emphasize location when buying real estate. You can change your house—but you can't change the neighborhood. And if your hood is on the decline, you just might have a helluva time offloading your home when you decide to sell.
A bad neighborhood isn't always obvious, though; sometimes you need to do a little digging to know if a community is worth buying in. Luckily, we've identified seven red flags that should give you pause before you sign on the dotted line.
Red flag No.1: Too many houses are on the market
There's nothing wrong with two or three listed houses on the same street. But if you see an army of "For Sale" signs, consider looking elsewhere.
"This points to illiquidity in the market and pricing pressure, which is a risk for buyers," says Alison Bernstein, the founder of Suburban Jungle, which helps families find their ideal suburb.
Of course, the hue of this particular red flag depends on the reason for those "For Sale" signs. Perhaps the neighborhood is rapidly gentrifying and longtime residents have decided to cash in. Maybe there are many older residents who are downsizing. Or maybe there's a more sinister explanation, like increasing crime rates. Do your homework to assess the situation before making any big moves.
Red flag No.2: The schools are enrolling fewer students
Schools in healthy communities should be steadily increasing their enrollment—or at least keeping the population steady, if there's no physical room to grow.
"Shrinking class sizes are a red flag," Bernstein says.
There are a number of reasons enrollment might decrease. Your local school might have a reputation for poor management, sending parents fleeing to charter or private options. Or perhaps residents are staying put as their kids grow up, leading to older neighbors and fewer close-by pals for your kids. That may or may not be a deal breaker, but it's certainly something to consider.
Red flag No.3: The area leans industrial
A nearby strip of cute boutique stores might be a nice selling point, but reconsider the purchase if the closest commercial influences lean toward the industrial.
"Be mindful of any kind of commercial influence on the block, such as close gas stations or anything that could be undesirable health-wise," says Ralph DiBugnara, the vice president at Residential Home Funding.
Any nearby industrial plants should automatically nix a neighborhood, and think long and hard before buying across from a car dealership or auto body shop, which attract a lot of car traffic.
Red flag No.4: There are lots of empty storefronts
Don't just stop at counting boutiques versus gas stations. Are the stores actually thriving, or are there lots of retail spaces for rent?
"Empty storefronts can tell you a lot," Bernstein says. "They point to less disposable income of residents than clearly there once was."
Why does that matter? Decreased disposable income indicates a neighborhood on the decline. If homeowners don't have money for dinner out, they probably don't have cash for upkeep. Shabby homes drag down property values. Meager cash flow can also lead to future foreclosures—and a foreclosed-upon home is a neighbor that no one wants.
Red flag No. 5: The Stepford style is in full force
You might love the homogenous, well-groomed suburban look (and there's nothing wrong with that!). But take a moment to examine it more closely. Are there any unique decorative doodads dotting each garden, like aluminum chickens or wind chimes? Or is the front porch furniture identical?
If all the neighborhood's homes (and landscaping) look suspiciously similar, "explore how restrictive the homeowners association is," says Susanna Haynie, a Realtor in Colorado Springs, Co. "It could be an issue."
Red flag No.6: There's no parking
Sure, the property may have a one-car garage—but where will your friends park, and where can you keep your spouse's car? If the streets have bumper-to-bumper traffic, think twice about buying in the
neighborhood—especially if the home lacks a garage or carport.
"I'm always on the lookout for a lack of parking," DiBugnara say. "It's best to visit at night or on weekends to really, truly tell what will be available to you once you live there."
Unless you commute primarily by foot or bike—or you're OK spending your weekends circling the block—the neighborhood may not be a good fit for you.
Red flag No.7: Surrounding homes aren't well-maintained
A street in shambles might seem like an obvious red flag. But you also might have heard that buying the best house in the worst neighborhood is a prime opportunity for profit.
Tread lightly here: A street full of run-down homes with overgrown yards and broken fences should set off warning signals. And this has nothing to do with wealth; lower-income neighborhoods can be just as well-kept
as more expensive ones. It's about pride. Neighbors with no pride in their home's appearance and upkeep decrease property values for everyone.
Plus, problems with the homes next door can indicate that the house you want might have bigger issues than meet the eye. Look at every house on the block for issues such as water pooling in the yards, or flickering porch lights.
"If there are problems such as water pipes or electrical issues, you will tend to see more than one home showing damage," DiBugnara says. Fixing these major problems "could be a major expense, hassle, or detriment to your value later on."
Monday, January 14, 2019
7 must-do’s before buying a home
good considerations from bankrate.com
7 must-do’s before buying a home
“Wanting” to buy a home and “being ready” to buy a home are two completely different things.
A Bank of the West study found that 56 percent of Millennials believe owning a home is more important than paying off debt or retiring comfortably. They may want to buy a home but they might not be ready for it.
Even as many are still hoping to achieve their American dream of buying a home, that doesn’t mean everyone is financially prepared.
Here are seven things you need to do before you buy your home.
Pull your credit report and check your score
Review your budget
Get preapproved
Beef up your down payment
Get an agent
Don’t skimp on an inspection
Make a plan B (and C)
1. Pull your credit report and check your score
Your credit report and corresponding score are your golden tickets to buying a home. They showcase your credit responsibility and worthiness. Your credit score can seriously impact your mortgage rate. The higher your credit score, the lower your interest rate will be. This means you’ll end up owing a lot less money over the life of the loan.
our credit score is broken down by:
Payment history: 35 percent
Credit utilization: 30 percent
Length of history: 15 percent
Types of credit: 10 percent
New credit: 10 percent
You can pull your credit report for free from Bankrate to go over your credit history. Cleaning up your credit report is one of your first steps to pre-buying a home. If there are errors, call one of the three major credit bureaus — Equifax, Experian, and TransUnion — to have them removed.
If you’re noticing a high credit utilization, start chunking away at your debt. See if you can consolidate your debt, refinance for lower interest payments, or transfer a big credit card balance to another card with friendlier repayment terms. Keep your utilization below 30 percent of your total limit.
Avoid getting new credit within a year of buying a home since it can cause a temporary dip in your score. The length of your credit history matters, too. The longer your credit history, the more credit-responsible you look.
2. Review your budget
If you’re working on a clean bill of credit health, give your budget a hard assessment. Use the 28-36 rule to see where your money is going. This is when your maximum household expenses shouldn’t exceed 28 percent of your gross monthly income. Your debt, like credit cards and loans, shouldn’t exceed 36 percent.
Your debt-to-income ratio, or DTI, is important to lenders for determining how much home you can afford and if you’re a good candidate to receive a mortgage. You might discover you need to make some adjustments, like spending less on travel and clothing, for example, to make room for a mortgage payment.
Fine-tuning your budget pre-homebuying will allow you to put extra cash towards a down payment, closing costs, or potentially higher home costs than you’re paying right now.
3. Get preapproved
With a stellar credit score and a solid down payment built up, you might feel confident in buying the house of your dreams. But until you get preapproved, that house will stay in your dreams.
Getting prequalified is nice, but it’s not the same thing. A prequalification is only based off information you give a lender. A preapproval is completing a mortgage application that pulls all your financial records.
Lenders base how much money they’re willing to give you based on your entire financial existence: your income, debt, and credit history all pay a crucial role. But it’s also there to show you how much home you can afford. If you know you can only get a $200,000 loan, you won’t waste your time looking at half a million-dollar homes.
It’s important to remember that you don’t need to settle on the first lender you find. Browse through different banks, online lenders, and credit unions to see which ones offer the best terms. Compare interest rates, fees, and the terms for paying back your loan. Consider working with a mortgage broker to help you weed through your options.
4. Beef up your down payment
Down payments for homes and cars are very similar: the higher the down payment, the less each monthly payment will be. But homes are much more expensive, which means the more you can put towards your down payment, the better off you’ll be every month.
It can be difficult to keep stashing money away for a down payment when you’re trying to afford basic necessities right now. Try cutting back on things you can manage, like dining out, grocery spending, unnecessary purchases, and travel.
Your debt might be holding you back as well. Try making larger debt payments every month until it’s completely paid off. Then the money you were putting towards your debt can now go to your down payment fund.
5. Get an agent
Whether you’re looking for a home 300 miles away or three, it’s a good idea to find someone who knows the neighborhoods better than you.
A real estate agent is on the hunt for your best interest because they want you to find the right home and buy it. Agents get their commission after a home is sold, so you don’t have to worry about costs up front.
Not all realtors do the same great job. So if you’re on the hunt for a great one, do your research. Look for one with top-notch credentials that has a proven track record. It’s similar to interviewing someone for a job, so talking to a potential agent’s former clients through may help you determine if they’re the right fit for you.
6. Don’t skimp on an inspection
You might think getting a home inspection is unnecessary. After all, you toured the home yourself and you would’ve seen major issues. True, maybe you can spot the big problems, but what about the small ones?
Home inspections go over every single detail of your home, from walls and appliances to the roof and drainage. Getting an inspection is a major part of buying a home because if there is, say, a water leak, you can take this issue back to the seller for negotiation. Either they fix the problem before you buy it or they lower their asking price of the home to accommodate the new cost of fixing the leak.
7. Make a plan B (and C)
As you’ve diligently prepared for your future home, you might not have considered what might happen if it doesn’t work out. What if your down payment is a little low? What if you don’t get the lender with the best terms? What if your dream home has an old roof?
Regardless of the setback, build the “just in case” options into your plan. If your down payment is too low, maybe you get an FHA loan instead of a conventional one. If you don’t get the lender with the best terms, maybe you get the second-best terms. That old roof may save you a lot if you talk the seller down, but you’ll need to make sure you can afford to replace after you close on the home.
Throughout the entire home-buying process, you will face different options for every single step you make. It’s important to remember how your choices are impacted along the way.
7 must-do’s before buying a home
“Wanting” to buy a home and “being ready” to buy a home are two completely different things.
A Bank of the West study found that 56 percent of Millennials believe owning a home is more important than paying off debt or retiring comfortably. They may want to buy a home but they might not be ready for it.
Even as many are still hoping to achieve their American dream of buying a home, that doesn’t mean everyone is financially prepared.
Here are seven things you need to do before you buy your home.
Pull your credit report and check your score
Review your budget
Get preapproved
Beef up your down payment
Get an agent
Don’t skimp on an inspection
Make a plan B (and C)
1. Pull your credit report and check your score
Your credit report and corresponding score are your golden tickets to buying a home. They showcase your credit responsibility and worthiness. Your credit score can seriously impact your mortgage rate. The higher your credit score, the lower your interest rate will be. This means you’ll end up owing a lot less money over the life of the loan.
our credit score is broken down by:
Payment history: 35 percent
Credit utilization: 30 percent
Length of history: 15 percent
Types of credit: 10 percent
New credit: 10 percent
You can pull your credit report for free from Bankrate to go over your credit history. Cleaning up your credit report is one of your first steps to pre-buying a home. If there are errors, call one of the three major credit bureaus — Equifax, Experian, and TransUnion — to have them removed.
If you’re noticing a high credit utilization, start chunking away at your debt. See if you can consolidate your debt, refinance for lower interest payments, or transfer a big credit card balance to another card with friendlier repayment terms. Keep your utilization below 30 percent of your total limit.
Avoid getting new credit within a year of buying a home since it can cause a temporary dip in your score. The length of your credit history matters, too. The longer your credit history, the more credit-responsible you look.
2. Review your budget
If you’re working on a clean bill of credit health, give your budget a hard assessment. Use the 28-36 rule to see where your money is going. This is when your maximum household expenses shouldn’t exceed 28 percent of your gross monthly income. Your debt, like credit cards and loans, shouldn’t exceed 36 percent.
Your debt-to-income ratio, or DTI, is important to lenders for determining how much home you can afford and if you’re a good candidate to receive a mortgage. You might discover you need to make some adjustments, like spending less on travel and clothing, for example, to make room for a mortgage payment.
Fine-tuning your budget pre-homebuying will allow you to put extra cash towards a down payment, closing costs, or potentially higher home costs than you’re paying right now.
3. Get preapproved
With a stellar credit score and a solid down payment built up, you might feel confident in buying the house of your dreams. But until you get preapproved, that house will stay in your dreams.
Getting prequalified is nice, but it’s not the same thing. A prequalification is only based off information you give a lender. A preapproval is completing a mortgage application that pulls all your financial records.
Lenders base how much money they’re willing to give you based on your entire financial existence: your income, debt, and credit history all pay a crucial role. But it’s also there to show you how much home you can afford. If you know you can only get a $200,000 loan, you won’t waste your time looking at half a million-dollar homes.
It’s important to remember that you don’t need to settle on the first lender you find. Browse through different banks, online lenders, and credit unions to see which ones offer the best terms. Compare interest rates, fees, and the terms for paying back your loan. Consider working with a mortgage broker to help you weed through your options.
4. Beef up your down payment
Down payments for homes and cars are very similar: the higher the down payment, the less each monthly payment will be. But homes are much more expensive, which means the more you can put towards your down payment, the better off you’ll be every month.
It can be difficult to keep stashing money away for a down payment when you’re trying to afford basic necessities right now. Try cutting back on things you can manage, like dining out, grocery spending, unnecessary purchases, and travel.
Your debt might be holding you back as well. Try making larger debt payments every month until it’s completely paid off. Then the money you were putting towards your debt can now go to your down payment fund.
5. Get an agent
Whether you’re looking for a home 300 miles away or three, it’s a good idea to find someone who knows the neighborhoods better than you.
A real estate agent is on the hunt for your best interest because they want you to find the right home and buy it. Agents get their commission after a home is sold, so you don’t have to worry about costs up front.
Not all realtors do the same great job. So if you’re on the hunt for a great one, do your research. Look for one with top-notch credentials that has a proven track record. It’s similar to interviewing someone for a job, so talking to a potential agent’s former clients through may help you determine if they’re the right fit for you.
6. Don’t skimp on an inspection
You might think getting a home inspection is unnecessary. After all, you toured the home yourself and you would’ve seen major issues. True, maybe you can spot the big problems, but what about the small ones?
Home inspections go over every single detail of your home, from walls and appliances to the roof and drainage. Getting an inspection is a major part of buying a home because if there is, say, a water leak, you can take this issue back to the seller for negotiation. Either they fix the problem before you buy it or they lower their asking price of the home to accommodate the new cost of fixing the leak.
7. Make a plan B (and C)
As you’ve diligently prepared for your future home, you might not have considered what might happen if it doesn’t work out. What if your down payment is a little low? What if you don’t get the lender with the best terms? What if your dream home has an old roof?
Regardless of the setback, build the “just in case” options into your plan. If your down payment is too low, maybe you get an FHA loan instead of a conventional one. If you don’t get the lender with the best terms, maybe you get the second-best terms. That old roof may save you a lot if you talk the seller down, but you’ll need to make sure you can afford to replace after you close on the home.
Throughout the entire home-buying process, you will face different options for every single step you make. It’s important to remember how your choices are impacted along the way.
Buyers in Denver follow trend of wanting hidden doors, secret rooms in custom homes
fun article excerpts from Denver Post.com on houses with hidden doors and rooms...
Buyers in Denver follow trend of wanting hidden doors, secret rooms in custom homes
Custom builders say that it’s common for wealthy clients to want secret rooms in addition to giant kitchens, indoor pools, media rooms, home gyms and 11 bathrooms.
"The woman stepped out from the shower in her Denver home — built between 1930 and 1933 — and started to slip on the wet tile. She grabbed a towel rack for support but instead got a surprise: The rack swiveled down and clicked, activating a segment of the wall. It swung open and revealed a small, dark room. Inside was a bar, fully stocked, dusty.
She surmised that it was likely untouched since Prohibition.
The woman — not named for obvious reasons — lives near the Denver Country Club in an iconic mansion. She had discovered by accident what more people are designing by intent.
Secret rooms are only slightly newer than rooms themselves. The builders of the pyramids famously created hidden rooms and passageways and ensured their secrecy for centuries by killing the workers who built them. (Today’s contractors usually just have to sign non-disclosure agreements.) Hidden rooms and passages have long been used to protect valuables and hide crimes, such as El Chapo’s secret escape tunnel or the mansion of H.H. Holmes in Chicago."
"Today, secret rooms are enjoying a new-found appeal. Custom builders say that it’s common for wealthy clients to want secret rooms in addition to giant kitchens, indoor pools, media rooms, home gyms and 11 bathrooms. The motivations vary between fun and fear, and perhaps mask an even deeper motivation: an innate need for privacy.
“In the late 16th century, English hiding places protected Roman Catholics (Recusants) and those to be sequestered in cabinets and cupboards,” according to Elizabeth Goodenough, a professor at the University of Michigan, editor of “Secret Spaces of Childhood,” and an advocate of getting away from it all. (The spaces are called “priest holes,” and were common.) “Today, we hear the expression ‘to recuse oneself.’
“In our own country, we recall the dark places where Abolitionists hid runaway slaves on the Underground Railroad,” Goodenough wrote in an email. “Global surveillance threatens privacy even further today. Secret spaces allow adults to grow inwardly in a noisy, fragmented and chaotic environment of cellphone and computer distraction.”
Steve Humble, whose Gilbert, Ariz.-based company, Creative Home Engineering (CHE), specializes in installing hidden doors and secret passageways, said that the impetus for hidden rooms is changing. “Ten years ago, 70 percent of our customers wanted hidden rooms for fun. They wanted smoking rooms, bars, that sort of thing. Thirty percent wanted them as protection from home invasion or to store their valuables. But over the years, the motivation has shifted more to storage for valuables.”
“What people want is security and invisibility,” Humble said. “Hidden rooms protect your valuables and they’re fun. They make people feel like James Bond. But they protect your valuables in a way that a safe can’t. A big house – and a big safe or a vault door – attracts a thief. And people in these homes don’t necessarily want a big metal box on their wall. Besides, safes aren’t that secure. You can go onto You Tube and see how easy it is to crack one.”
Denver realtor Dan Polimino said that many of his clients who are looking for houses in the $2 million-plus range are attracted to ones with hidden rooms, which are a selling point. He’s sold houses with hidden rooms that owners have used as panic rooms and as places to conceal computers and servers. Some professional athletes like hidden rooms to store athletic memorabilia, he said.
Adding a hidden room to a house starts at about $10,000, Humble said (although his company is developing more affordable, do-it-yourself kits). Humble seems especially qualified to design and build secret spaces. A mechanical engineer by education, he has worked in aerospace, on medical devices and in robotics. He started CHE after he couldn’t find anyone to build a hidden passageway in a house, so he decided to build one himself.
And designing and building hidden rooms is a specialty. Humble has designed and patented a special hinge system that makes many of his company’s doors possible, allowing tiny adjustments to the door to make all the reveals absolutely perfect and that even compensate for a house settling or sagging.
Humble also has designed “really cool secret switches like wine bottles that contain a secret transmitter that causes a door to open when the bottle is twisted, or a kit for piano that will open a secret door when a certain melody is played.”
Humble said his most elaborate job involved designing a number of secret rooms for a bomb shelter. One of the 10 secret doors was big enough to drive a car through. Some doors look like bookcases, some like full-length mirrors. One included a false floor that dropped away to allow a hidden door built to withstand a nuclear blast to close. Hiding Christmas presents from the kids would be a breeze.
For secret rooms to stay secret, homeowners can’t tell anyone about them. One contractor said he had a client who waited for his adult children to go on vacation before he had a hidden room built.
But as secret as they’re supposed to be, a lot of people have stories about secret rooms. Denverite Juliet Hindahl said her grandfather lived in a house near Alameda and Downing where he discovered a secret room. Juliet herself grew up in a house with a hidden room that the family used to store canned goods. She has friends who now use 1950s-era bomb shelters as hiding places.
And while most people with secret rooms tell someone about them, not all do, as the woman in the Country Club home has attested.
It makes you want to jiggle the towel racks."
What to Do When Your Property Tax Bill Increases
it's about that time of the year again where you start getting property tax assessments in the mail, here's a helpful article from usnew.com below...of course, feel free to let me know if I can help you appeal any of your property tax assessments by providing comparable home sales....
What to Do When Your Property Tax Bill Increases
If you have a higher bill than expected, consider following these expert-backed strategies.
Property tax bills can increase for a variety of reasons. Your local, state or federal government laws may change, causing property taxes to spike. The value of your neighborhood could rise, a sign of the real estate market starting to recover. Or, once your county reassesses the value of the land in your area, you could see an uptick in your property taxes.
The average tax bill in 2017 was $3,400, 3 percent higher than 2016, according to a recent report from Attom Data Solutions, a property data company. What's more, the recent tax cuts from Congress are expected to cause property tax bills to climb in many metropolitan areas.
Fortunately, homeowners have a few options to trim costs – or file an appeal – if their property tax bill increases. Read on to learn how to deal with higher property taxes.
Don't procrastinate. Depending on where you live, you may not have much time (think: two weeks to a few months) to contest a higher property tax bill. To file an appeal, you'll need to fill out legal paperwork from your county and evaluate the value of comparable homes in your neighborhood.
"Every state has a different procedure and timeline for appealing property tax assessments. It's important to be aware of the procedure and follow the timeline, or your appeal will be barred," says Bruce Ailion, an attorney and realtor with Re/Max Town and Country in Atlanta.
In Georgia, a homeowner typically has 120 days to appeal an assessment of your property, Ailion says.
"The county can accept, reject or propose a different value. Typically, the county rejects your value and schedules a hearing before a board of adjustment," he says. A board of adjustment has the power to make important zoning decisions. If you do not have a board of adjustment in your district, your county seat will have some sort of assessor's office, where property values are determined.
"In Georgia, you will present your case, and the assessor will present their case to an impartial panel of citizens. They will determine the value of the property. If you are still unhappy with the value, you can file suit and have a judge decide," Ailion explains.
Do your homework. While you may contend that your property values have been improperly raised, you need to offer up some reasoning behind your appeal.
"You can also go about researching your neighbors and your town by looking at similar homes. Many times, info regarding other assessments is public knowledge, so it's important to compare other residences with yours," says David Hryck, a New York City-based tax lawyer and partner at Reed Smith, a global law firm.
There is a chance you could find a discrepancy, which could help lower your property tax rate. If you do [find a discrepancy], bring this info to your assessor's attention and you may qualify for a reassessment," Hryck says.
Ralph DiBugnara, president of HomeQualified.com, an online guide for homebuyers, and vice president of Residential Home Funding, a mortgage lender, who's based in New York City, echoes similar advice.
"All tax assessments are of public record and are easily available on sites such as Zillow.com," DiBugnara says.
Make sure to be accurate, Ailion stresses. "The assessor will be prepared," he says. "They will have photos of your home showing it in its best condition." He quips, "I almost think they are photoshopped."
Seek help from a property tax abatement or exemption program. Levar Haffoney, a financial planner and principal at Fayohne Advisors in New York City, suggests giving either a shot.
"Your city, town or county may offer tax abatement and exemption programs to help you reduce your property taxes. Abatements help property owners reduce or eliminate property tax increases on new construction, rehabilitation or other improvements. Exemptions help property owners reduce the taxable portion of your property assessment," he says. For instance, some cities offer exemptions for disabled homeowners and others for veterans.
You might also get what's often called a homestead exemption, where your property taxes won't go up if your spouse has died and was the main breadwinner.
Get an appraisal. "The home appraisal will also show values of neighboring homes and their current property taxes," DiBugnara says.
A typical home appraisal, according to Angie's List and HomeAdvisor.com, is about $300, but expect to pay hundreds more, particularly if your house is in a major metropolitan area or if your home is especially spacious.
Consider hiring a third party to represent you. You could find a property tax services company to make your appeal for you or hire someone such as a realtor or an attorney who specializes in property tax appeals. As for pricing, it's hard to predict how much a third party will cost you. While some companies will charge a flat fee of $300 or $500, others will take a percentage of what you save in property taxes.
For example, Ailion will sometimes file an appeal for clients for a $75 fee and receive 30 percent of the savings on a residential home. "That's a little lower than the firms that only do tax appeals," he says. "I'll review anyone's property and tell them if they stand a good chance or not of winning."
When your house is being assessed, work directly with the assessor, Hryck says. This isn't the time to tell him or her to check out your house while you're at work. "Don't let them inspect your property without you being present," he says. "This will ensure that they don't overlook anything such as outdated appliances, which could lower your rate. It's on you to point out the good as well as the bad parts of your property."
And if you're going to go through the trouble of appealing your property taxes, follow through. "Over 50 percent of the appeals filed by owners result in no-shows by the owner," Ailion says.
What to Do When Your Property Tax Bill Increases
If you have a higher bill than expected, consider following these expert-backed strategies.
Property tax bills can increase for a variety of reasons. Your local, state or federal government laws may change, causing property taxes to spike. The value of your neighborhood could rise, a sign of the real estate market starting to recover. Or, once your county reassesses the value of the land in your area, you could see an uptick in your property taxes.
The average tax bill in 2017 was $3,400, 3 percent higher than 2016, according to a recent report from Attom Data Solutions, a property data company. What's more, the recent tax cuts from Congress are expected to cause property tax bills to climb in many metropolitan areas.
Fortunately, homeowners have a few options to trim costs – or file an appeal – if their property tax bill increases. Read on to learn how to deal with higher property taxes.
Don't procrastinate. Depending on where you live, you may not have much time (think: two weeks to a few months) to contest a higher property tax bill. To file an appeal, you'll need to fill out legal paperwork from your county and evaluate the value of comparable homes in your neighborhood.
"Every state has a different procedure and timeline for appealing property tax assessments. It's important to be aware of the procedure and follow the timeline, or your appeal will be barred," says Bruce Ailion, an attorney and realtor with Re/Max Town and Country in Atlanta.
In Georgia, a homeowner typically has 120 days to appeal an assessment of your property, Ailion says.
"The county can accept, reject or propose a different value. Typically, the county rejects your value and schedules a hearing before a board of adjustment," he says. A board of adjustment has the power to make important zoning decisions. If you do not have a board of adjustment in your district, your county seat will have some sort of assessor's office, where property values are determined.
"In Georgia, you will present your case, and the assessor will present their case to an impartial panel of citizens. They will determine the value of the property. If you are still unhappy with the value, you can file suit and have a judge decide," Ailion explains.
Do your homework. While you may contend that your property values have been improperly raised, you need to offer up some reasoning behind your appeal.
"You can also go about researching your neighbors and your town by looking at similar homes. Many times, info regarding other assessments is public knowledge, so it's important to compare other residences with yours," says David Hryck, a New York City-based tax lawyer and partner at Reed Smith, a global law firm.
There is a chance you could find a discrepancy, which could help lower your property tax rate. If you do [find a discrepancy], bring this info to your assessor's attention and you may qualify for a reassessment," Hryck says.
Ralph DiBugnara, president of HomeQualified.com, an online guide for homebuyers, and vice president of Residential Home Funding, a mortgage lender, who's based in New York City, echoes similar advice.
"All tax assessments are of public record and are easily available on sites such as Zillow.com," DiBugnara says.
Make sure to be accurate, Ailion stresses. "The assessor will be prepared," he says. "They will have photos of your home showing it in its best condition." He quips, "I almost think they are photoshopped."
Seek help from a property tax abatement or exemption program. Levar Haffoney, a financial planner and principal at Fayohne Advisors in New York City, suggests giving either a shot.
"Your city, town or county may offer tax abatement and exemption programs to help you reduce your property taxes. Abatements help property owners reduce or eliminate property tax increases on new construction, rehabilitation or other improvements. Exemptions help property owners reduce the taxable portion of your property assessment," he says. For instance, some cities offer exemptions for disabled homeowners and others for veterans.
You might also get what's often called a homestead exemption, where your property taxes won't go up if your spouse has died and was the main breadwinner.
Get an appraisal. "The home appraisal will also show values of neighboring homes and their current property taxes," DiBugnara says.
A typical home appraisal, according to Angie's List and HomeAdvisor.com, is about $300, but expect to pay hundreds more, particularly if your house is in a major metropolitan area or if your home is especially spacious.
Consider hiring a third party to represent you. You could find a property tax services company to make your appeal for you or hire someone such as a realtor or an attorney who specializes in property tax appeals. As for pricing, it's hard to predict how much a third party will cost you. While some companies will charge a flat fee of $300 or $500, others will take a percentage of what you save in property taxes.
For example, Ailion will sometimes file an appeal for clients for a $75 fee and receive 30 percent of the savings on a residential home. "That's a little lower than the firms that only do tax appeals," he says. "I'll review anyone's property and tell them if they stand a good chance or not of winning."
When your house is being assessed, work directly with the assessor, Hryck says. This isn't the time to tell him or her to check out your house while you're at work. "Don't let them inspect your property without you being present," he says. "This will ensure that they don't overlook anything such as outdated appliances, which could lower your rate. It's on you to point out the good as well as the bad parts of your property."
And if you're going to go through the trouble of appealing your property taxes, follow through. "Over 50 percent of the appeals filed by owners result in no-shows by the owner," Ailion says.
How Tax Reform Impacts Homeowners
some homeowner considerations from US News and World Report....
How Tax Reform Impacts Homeowners
Current and aspiring homeowners should know the impacts tax reform will have on their 2018 tax returns.
For many, homeownership represents one of the biggest milestones in life. Few are thinking about the tax implications of exciting moments like buying their first home or even remodeling it, but with the historic tax reform that passed in late 2017 and Tax Day right around the corner, it's important to understand your tax situation and how it will impact your current and future home-buying decisions.
One important thing to remember: For the majority of taxpayers, the new tax reform law does not impact your tax year 2017 taxes (the ones you're filing now). The majority of the changes will be reflected on your 2018 taxes, which you file in 2019.
Whether you're just beginning to tour homes or you've already signed the deal, here are the major tax reform provisions that potential and new homeowners should be aware of for their 2018 taxes.
Mortgage interest deduction cap. For those home shopping in areas with high housing costs, be aware that starting in 2018, you can deduct home mortgage interest secured by your principal residence on acquisition indebtedness – the outstanding amount incurred in acquiring or improving your property – of up to $750,000. If you purchased your home before 2018, you will still be able to deduct home mortgage interest based on $1,000,000 in home acquisition indebtedness. If you find yourself drawn to areas with high housing costs, consider paying a bigger down payment if you can to keep your loan under the new tax reform law's $750,000 loan threshold, so you can still deduct all of your mortgage interest at tax time.
State and local property tax deduction limits. If you are searching for a home in a high property tax area, keep in mind that the new law limits the amount of state and local property, income and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
Moving expenses. Did you move for a new job in the last year? Take advantage of claiming your unreimbursed moving expenses this year before the new tax reform law eliminates this deduction on your 2018 taxes. You qualify if you started your new job and have worked full time for at least 39 weeks within the first 12 months after your move. Your new place of employment must also be at least 50 miles or farther away from your old home and place of employment.
Beginning on tax year 2018 taxes, which you'll file in 2019, only members of armed forces on active duty are allowed to take advantage of these tax breaks.
While it may seem like several things will be changing for homeowners this year, there are techniques to increase your tax refund or reduce your tax bill. Here are several tax tips that you should be taking advantage of when filing 2018 taxes.
Adjusting your withholding. If your new home will increase the size of your mortgage interest deduction or make you an itemizer for the first time, you don't have to wait until you file your tax return to see the savings. You can start collecting the savings right away by adjusting your federal income tax withholding at work, which will boost your take-home pay.
Penalty-free IRA payouts for first-time buyers. Did you know that at any age, you can withdraw up to $10,000 penalty free from your individual retirement account to help buy or build a first home for yourself, your spouse, your kids, your grandchildren or even your parents? To qualify, the money must be used to buy or build a first home within 120 days of the time it's withdrawn. Although the 10 percent penalty is waived, you will be taxed on the distribution based on your tax bracket.
Using Roth IRA distributions for your first home purchase. If you use Roth IRA distributions to buy your first home, you may be able to withdraw up to $10,000 from your Roth IRA tax free and penalty free. That's if you had your Roth IRA for at least five years before taking the distribution.
How Tax Reform Impacts Homeowners
Current and aspiring homeowners should know the impacts tax reform will have on their 2018 tax returns.
For many, homeownership represents one of the biggest milestones in life. Few are thinking about the tax implications of exciting moments like buying their first home or even remodeling it, but with the historic tax reform that passed in late 2017 and Tax Day right around the corner, it's important to understand your tax situation and how it will impact your current and future home-buying decisions.
One important thing to remember: For the majority of taxpayers, the new tax reform law does not impact your tax year 2017 taxes (the ones you're filing now). The majority of the changes will be reflected on your 2018 taxes, which you file in 2019.
Whether you're just beginning to tour homes or you've already signed the deal, here are the major tax reform provisions that potential and new homeowners should be aware of for their 2018 taxes.
Mortgage interest deduction cap. For those home shopping in areas with high housing costs, be aware that starting in 2018, you can deduct home mortgage interest secured by your principal residence on acquisition indebtedness – the outstanding amount incurred in acquiring or improving your property – of up to $750,000. If you purchased your home before 2018, you will still be able to deduct home mortgage interest based on $1,000,000 in home acquisition indebtedness. If you find yourself drawn to areas with high housing costs, consider paying a bigger down payment if you can to keep your loan under the new tax reform law's $750,000 loan threshold, so you can still deduct all of your mortgage interest at tax time.
State and local property tax deduction limits. If you are searching for a home in a high property tax area, keep in mind that the new law limits the amount of state and local property, income and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
Moving expenses. Did you move for a new job in the last year? Take advantage of claiming your unreimbursed moving expenses this year before the new tax reform law eliminates this deduction on your 2018 taxes. You qualify if you started your new job and have worked full time for at least 39 weeks within the first 12 months after your move. Your new place of employment must also be at least 50 miles or farther away from your old home and place of employment.
Beginning on tax year 2018 taxes, which you'll file in 2019, only members of armed forces on active duty are allowed to take advantage of these tax breaks.
While it may seem like several things will be changing for homeowners this year, there are techniques to increase your tax refund or reduce your tax bill. Here are several tax tips that you should be taking advantage of when filing 2018 taxes.
Adjusting your withholding. If your new home will increase the size of your mortgage interest deduction or make you an itemizer for the first time, you don't have to wait until you file your tax return to see the savings. You can start collecting the savings right away by adjusting your federal income tax withholding at work, which will boost your take-home pay.
Penalty-free IRA payouts for first-time buyers. Did you know that at any age, you can withdraw up to $10,000 penalty free from your individual retirement account to help buy or build a first home for yourself, your spouse, your kids, your grandchildren or even your parents? To qualify, the money must be used to buy or build a first home within 120 days of the time it's withdrawn. Although the 10 percent penalty is waived, you will be taxed on the distribution based on your tax bracket.
Using Roth IRA distributions for your first home purchase. If you use Roth IRA distributions to buy your first home, you may be able to withdraw up to $10,000 from your Roth IRA tax free and penalty free. That's if you had your Roth IRA for at least five years before taking the distribution.
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