Saturday, January 24, 2015
Use Technology To Include Friends In Your Home Search
Depending on your desired area of residence, budget and personal preferences, searching for a new place to call home can be tedious. Whether it be an apartment, condo, townhouse or single-residence youre in the market for, including close family and friends in your search can alleviate some of the stress associated with the process. But, if you live in a different city, you can still include your friends via technology.
Start a Blog
Using a tool like Blogger or WordPress, you can write about every step of your house-hunting journey. This way your closest friends and >
Start with a comprehensive wish list of features youre looking for in your next home. This will serve as a guide to others, outside of your realtor, who can provide information on properties that may best suit your needs.
The next series of posts can be similar to diary entries, detailing your experiences, likes and dislikes at each property. Publishing your thoughts on each property can be useful when its time to narrow down your options. Plus, your friends can better help you make the final decision this way.
To wrap things up, publish a post revealing your final decision so those involved in the process can see which property you decided to go with. After all, a big-reveal blog post is much more exciting than a generic text message. Also, use this as an opportunity to thank those who helped you make your decision.
Once youre all settled in, post pictures to show off the new place you call home.
Designate a Hashtag
If Twitter is more your >
Create Virtual Tours
Once youve narrowed down your selections, its fairly simple to create a virtual tour using pictures or videos. All you need to do is embed the hyperlinks into an email message and hit send, leaving it up to the recipients to browse the pictures at their own convenience. But, if you really want to give them an up close and personal view of the property, use your tablet to connect with them on Google Hangouts, Skype or Facetime. This way you can take them on a guided tour and talk to them while youre at the property. Friends and family will be able to get a complete feel of the property and give you honest feedback since pictures sometimes miss important details.
Overall, your friends and family can help you make a wise decision. By using technology, you can track all the important details and keep everyone in the loop.
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Dealing With An Inherited House
Question: My father recently passed and I have inherited his townhouse. He had an existing mortgage. I am continuing to make the mortgage payments. I have not notified the mortgage company. I am unable to obtain financing for a home in my name at this time, and was turned down for 2 home loan attempts. If the lender finds out that I now own the house, can they pull the loan? I dont want to lose the house. There was a Will I was the PR and sole beneficiary and I had an attorney prepare the deed which was properly recorded in my name. If I sell the home and payoff the mortgage, are there capital gains taxes or other taxes that I may have to pay? It was my fathers wish that the house be mine upon his death, yet I am afraid if I notify the mortgage company, they will pull the loan.
Answer: You have nothing to worry about so long as you continue to pay the mortgage. I suspect there is a "due on sale" clause in the mortgage document that your father signed, which states that the lender can call the entire loan due if the property is sold or otherwise transferred without the lenders consent.
However, back in l982, Congress enacted the Garn-St. Germain Depository Institutions Act, named after its principal sponsors, Congressman Fernand St. Germain D-RI and Senator Jack Garn R-Utah. Among its many provisions, the Act restricted lenders from enforcing the due on sales clause under certain circumstances. According to the law, "a lender may not exercise its option pursuant to a due-on-sale clause upon ..a transfer to a >
Since your fathers property was transferred to you upon his death, your lender cannot call that loan due, so long as you remain current with the monthly mortgage obligations. I would not hesitate to advise the lender that you are the new owner, and send a copy of the Deed which reflects that you transferred the property to yourself in your capacity as Personal Representative of your fathers estate. You want the lender to start sending you the mortgage payment coupons. More importantly, at the end of each year, lenders are required to send their borrowers and the IRS a statement regarding the amount of interest and real estate taxes that were paid in that year, and you want to make sure that this statement is in your name and reflects your social security number. Otherwise, the IRS may question as to why you are deducting mortgage interest when they do not have this confirmation from your lender.
It should also be pointed out that there is another important restriction contained in the Act. A lender cannot enforce the due-on-sale clause upon "a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety". This means that if two people hold property as joint tenants or husband and wife hold as tenants by the entirety, on the death of one of the parties, the survivor gets the title and does not have to pay off any outstanding mortgage.
You asked about any taxes that you may have to pay should you decide to sell the house. Here is where the concept of the "stepped-up" basis comes into play. This means that when a person inherits real estate, their tax basis is the value of the house on the date of death. Note: it can also be based on the value six months after death, but you have to discuss this with your tax advisors.
Heres an example: your dad bought the property with your mother many years ago for 30,000. Your mother died in 2000, when the property was worth 200,000. We have to determine the tax basis of the property. The basis for your mother and father was 15,000 each. In 2000, your dad received the stepped up basis of half of the value, namely 100,000, thereby increasing his basis to 115,000.
When your father died, the house was worth 400,000. If you sell it for that amount, you will not have made any gain, and thus will not have to pay any capital gains tax. Should you sell for a higher price, your gain will currently be taxed at 20 percent for federal tax plus whatever applicable state tax you will have to pay.
If, on the other hand, you decide to stay in the house, you may be eligible for the up-to-250,000 exclusion of gain or 500,000 if you are married and file a joint tax return. You must have owned and used the home as your principal residence for two out of five years or a total of 730 days before the house is sold, in order to be eligible for this great tax break.
Lets say that you decide to sell the house three years from now, when it is worth 500,000. Assuming that you did not make any improvements to the property -- which would increase your tax basis -- and ignoring closing costs and commissions which would reduce your profit, you will have made a gain of 100,000 500,000- your basis of 400,000.Since that is below the 250,000 ceiling, you will not have to pay any capital gains tax.
Our tax laws are complex, but in your case, it appears that you are a big winner.
But please dont >
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Use Mortgage Insurance to Buy a Home Sooner
One of the services that enables borrowers to buy homes without making large down-payments is mortgage insurance MI.
While all loans by nature are risky, borrowers who put 20 percent down, or who refinance with 20 equity in their homes, are considered to be good risks. They have "skin in the game" that they dont want to lose and that helps protect the lender, too.
Many first-time and low-income borrowers are good risks, but it would take them too many years to save enough money to buy a home with 20 percent down or more. Many high-income borrowers may have enough cash to put that much down, but they prefer to leverage their credit and use their cash for other purposes.
If youre one of these borrowers, the advantages to MI are many. You can get into a home sooner with a much lower down payment, as little as five percent down in some cases. Your MI is 100 tax deductible and you can tailor your MI payments to suit your income. You can pay monthly, annually, or finance the entire amount into your loan.
Depending on the laws in your state, how well youve handled your payments, and other criteria, you can get your private MI canceled once youve reached 20 percent in equity. Its canceled automatically if the loan to value is paid down to 78 percent based on the original value of the property.
In markets with significant housing appreciation, its possible to get MI removed from your loan sooner than five years. You can do this by paying more toward your principal each month, or if you can prove that your home has acquired at least 20 percent equity via the marketplace.
There are several ways to get mortgage insurance. MI is available with government-insured loans like FHA for qualifying borrowers and through private mortgage insurance companies such as PMI Group.
A typical mortgage insurance program is a five-year term, which means the insurance is paid in full in five years. This is based on the loan amortization schedule for loans in which most of the monthly payment goes to pay the interest on the loan and to reduce the principal. Once the principal has been reduced to the amount insured by MI, the MI is paid in full and is automatically removed from the loan.
Your lender will tell you what is required to remove MI, such as getting a bank appraisal and showing recent sold comps provided by your real estate professional. But with some types of loans such as FHA loans, which are popular for requiring >
The alternative to getting a loan with MI is simply pay the bank a higher interest rate, and they pay the MI, but keep in mind that interest rates never go down unless you are able to refinance the loan to a lower rate.
Should you be concerned if you cant afford to buy a home without MI? No. Just think of it as part of the interest rate. Because you have less skin in the game, the lender wants to make sure the loan will be paid in case of default. MI provides that assurance.
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6 Patio Cover Ideas To Shade Your Space And Style
Around mid-winter, most of us begin pining for that casual, outdoor life>
Start by doing everything you can to bring the outdoors in with upgrades like larger windows, French doors, and window coverings such as Roman shades or plantation shutters that allow you to maximize light and sight lines. Then start planning how to bring the indoors out with patio furniture thats sturdy and stylish enough to entice you out to the patio.
One of the most effective ways to add the perception of square footage to your home is to form an outdoor living space. To create that illusion, a patio cover is key. It adds months of access to your new outdoor space, and really helps to protect that new furniture.
There are many patio-cover options these days, and the right choice for you is dependent on what your outdoor life>
Here are six great options to get you daydreaming about the sunny days to come:
Solid Shingles:This solid choice is just that-solid. Solid patio covers built as a simple addition over the patio use the same shingles the roof does and deliver a polished version of an outdoor living space. Gabled construction adds an architectural element to the homes exterior, lending >
Solid Metal:All the same benefits apply here, but where the solid shingle look is great for more traditional architecture, we love the sophisticated look that a painted metal top can bring to a more contemporary or transitional home. It creates a real opportunity to expand square footage using fabrics, rugs and furnishings that look like they may belong inside. Thanks to the advancements in indoor/outdoor furnishings and materials, you can maintain the same palette on the patio that you have going on in your interior space.
Solar Panels:Trending these days are eco-chic solar panel patio covers that let in a little light, but also collect energy. This obviously offers the most tangible return on your investment from the energy savings alone, but the forward thinking and contemporary styling are a definite upgrade when it comes time to sell your home.
Lattice:The open lattice look doesnt offer all the cover of some other options, but the filtered sunshine and the chance to add a little green to the architecture with a climbing vine are almost instantly soothing. You can actually purchase open lattice patio covers already constructed in wood or aluminum. Make sure to opt for the aluminum if youre considering that climbing vine. Otherwise, prepare for a bit more maintenance or to embrace a "weathered wood" aesthetic.
Retractable:Our current favorite, retractable patio covers bring all the casual >
Shade sails:These are another great choice for more casual and contemporary outdoor spaces. They also let you bring in a playful splash of color to brighten up the garden area. Best of all, theyre super flexible-you can easily move them with the path of the sun, or to different areas of your outdoor space. It all depends on your mood, livability and entertaining needs.
Are you considering one of these patio cover options? What are your top priorities in an outdoor living space?
Kerrie Kelly is the author of the DIY design book Home Dcor: A Sunset Design Guide. Kerrie is an award-winning interior designer who writes on outdoor dcor for Home Depot. Home Depots large selection of windows, including those for a patio, can be found at www.homedepot.com/b/Doors-Windows/N-5yc1vZaqih.
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Trade HOA Stress for Success
Too often serving on a homeowner association HOA board feels like a I-got-stuck-with-it kind of position. But a few simple changes can turn HOA drudgery into an enjoyable and rewarding experience. The book Trade HOA Stress for Success explores proven methods to transform your board from crisis-driven, overworked and isolated into a focused team with clear goals and direction. Learn to communicate the boards success to your members and create the kind of carefree living an HOA promises. Co-written by The HOA Expert Richard Thompson, CPA Doug McLain and Erik Wecks, Trade HOA Stress for Success provides a shortcut to years of proven HOA management experience without the usual learn-from-experience mistakes.
Homeowner association management is unique because it involves neighbors managing neighbors. This >
What is so special about this book? It provides proven solutions in concise, layman terms to highly complex issues. It also reveals phenomena unique to HOAs, like:
Meeting seating. Did you know that the seating arrangement at a board meeting has a profound impact on the meeting outcome? Learn how to make your meetings smashing success stories.
How do you find a qualified manager? Most states do not require professional licensing for HOA managers. Some HOA managers seek out professional education and credentialing while others do not. This variable makes it critical for the board to identify those managers who are qualified to do the work Hint: many are not. A sample Request for Proposal is available to help you with this process.
Two reasons for hiring professional management: Rules and Collections. While its true that managers dont work for free, no neighbor should have to enforce rules or collections on another neighbor. Managers provide the buffer between neighbors and are good at defusing neighbor on neighbor hostility.
Kinder, gentler rules. While rules will be necessary as long as there are humans, there is a harmonizing rules philosophy that will promote compliance and reduce the number of rules in an HOA.
Secret to recruiting volunteers. Since HOAs are run by volunteers, finding the brightest and best is easier than you think if you make the job attractive enough. Successful people want to be part of a successful board.
Long range planning. It never ceases to amaze how many HOA boards define "long range planning" as "tomorrow". These boards, of course, are continually putting out fires instead of harvesting the fruits of good planning. Learn how to plan, schedule, fund and invest to maximize value for the members.
Improve efficiency by trimming costs. Just because youve always done it that way doesnt mean you cant improve and cut costs at the same time. This is particularly true about communications.
Proper accounting. Learn the value of accrual accounting, fraud embezzlement prevention and proper tax filing.
There are many more how-to secrets revealed in Trade HOA Stress for Success. If you serve on an HOA board or manage one, this books for you. Its an easy read available in both hardcopy and Kindle editions at www.Amazon.com, Click Here.
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10 Things That Will Absolutely Kill Your Home Sale
When youre selling your home, you need every advantage you can get. And there are few homes that are magically market ready without a little help. If your home needs a touch more than a little help, its time to get focused. After all, listing your home when its not in the right condition to sell will probably only end in frustration. And, in this case, frustration means: your home sitting on the market for months with no offers or the errant, offensive, lowball.
If you want to make sure you get home sold quickly and for the right price, youll want to avoid listing it with the following:
1. Excessive damage
Maybe the home youre selling was used as a rental and trashed by frat boy tenants, or maybe you just havent kept it up as you should. Either way, those holes in the wall that look like the living room was used as a boxing gym, the scratched-up wood floors on which dinosaurs have clearly been racing, and the yard thats barren except for those two-foot-tall patches of weeds are not what buyers are looking for. Unless youre planning to offer your house for a price that will make buyers emphasize the good and ignore the bad and the ugly, its going to need some attention.
2. Carpet in the bathroom
Its just gross. And everyone who walks into that bathroom is thinking one of two things: 1 Theres gotta be mold under there; 2 Theres gotta be pee on the floor around that toilet. This is one update youll want to do before you list. Or, if youre already listed and your homes not selling.
3. Big, nasty stains
A buyer shouldnt know where your dog likes to mark or where your kids spilled the entire bowl of holiday punch. If the stains on your carpet are that bad, potential buyers will stroll in and run right back out. No one wants to buy a pigsty. Invest a few bucks in new carpet. Youll make the money back since you wont have to drop your sales price.
4. Pet smells
Speaking of petsthey smell. You probably dont notice since you live with them everyday, but buyers will, and it might be enough to turn them off. Deep clean the carpets and the upholstery, invest in some air fresheners, and remove cat boxes from the house for showings. The last thing you want is a potential buyer referring to your house as "the stinky one."
5. Loud dogs who bark every time someone approaches the home
One last word on pets. Barking happens, whether its your dog or one that belongs to a neighbor. But you dont need that on the day of your open house. Offering to pay for doggie day care for a neighbors pooch can eliminate the issue and help create the serene setting buyers want.
6. Your dead lawn
Lack of curb appeal wont necessarily kill a deal. In many cases, you wont even get potential buyers to get out of the car. If the front yard is a mess, buyers will naturally think the mess continues inside.
7. A bad agent
Face it. Not all of them are winners. If your agent is: rude, uninformed, lazy, uncommunicative, belligerent, or unwilling to take your opinions into consideration, get a new one. An agent who isnt giving their client the right type of attention probably isnt going to get the job done.
8. Your sloppiness
Those drawers and cabinets you shoved everything into when you cleaned off your kitchen and bathroom cabinets could be a deal breaker for picky buyers. We all know buyers open stuff. They look in drawers, they open cabinets, they examine closets. If these spaces are messy and overstuffed, they may assume theres not enough storage space.
9. Unreasonable sellers
Big problems in your house can be deal killers, but they can also be deal sealers, if you are reasonable. If your inspection uncovers plumbing, electrical, or roofing problems or all three and youre unwilling to negotiate, you can kiss that sale goodbye.
10. Bad Taste
Your poor decorating choices and failure to keep up with trends from this yearor centurymay haunt you when its time to sell. If its true that many buyers have no visionand all you have to do is watch House Hunters and observe a buyer getting hung up on a paint color to know thats truethen you are really in for it with your crowded house full of ugly, outdated crap. A few simple updates can help it to look fresh and give buyers something to fall in love with. Not sure where to start? Check out FrontDoors 15 Updates That Pay Off and HGTVs 10 Best-Kept Secrets For Selling Your Home.
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Smaller Remodeling Jobs Deliver Better ROI
Your home may need some work, but that doesnt mean you want to lose money on it when you sell. Thats why you might be interested in the 2015 Remodeling Cost vs. Value Report from Remodeling Magazine and the National Association of REALTORS.
It may surprise you to learn that large remodeling jobs wont return their full cost in home price gains, while other could return 100 percent or more of their cost.
Any improvements should help your home sell faster and for more money in the aggregate, but if youre choosing remodeling projects, you may need to decide which ones are more important for resale, and which ones will bring you and your family the most enjoyment.
Keep in mind that buyers may not get excited about your choices unless the improvement is attractive and makes sense for them, too. It also has to look organic to the home, not like an add-on or afterthought.
Think of how you want the home to flow. Floors in new additions should be installed at the same levels as the original house, whereas a step-down is a dead giveaway that the home has been expanded and not very well.
According to Remodeling Magazine editor-in-chief Craig Webb, the simpler and lower-cost the project, the bigger its cost-value ratio is likely to be. Three of the four projects that cost less than 5,000 for a professional remodeler to do were ranked in the top five for cost recouped at resale, while no project costing more than 25,000 ranked any better than 14th.
Thats useful to know if you want to do improvements according to resale value. For example, replacing the front door with a steel entry door returns more than 101.8 percent of its cost, but if you dont need a new door, that wont make much difference to you.
Further, the cost-vs.-value ratios arent based on real property resales. Theyre based on resale value as a percentage of construction costs, as well as surveys of Realtors and their opinions of value in their own markets.
Explains Webb, "When cost and value are equal, the ratio is 100; when cost is higher than value, the ratio is less than 100; when value is higher than cost, the ratio exceeds 100."
That means there could be wide regional variations in the value of most home improvements. Within the 102 markets surveyed in the 2015 report, only 269 of the 3,672 total projects recouped 100 percent. The steel entry door job recouped all its costs and more in 43 markets. Midrange garage door replacements topped 100 percent in 28 markets.
Suggests NARs vice president of business-to-business communications Stacey Moncrieff, "The replacements that offer the greatest payback are the ones that are most obvious to buyers when they first view a house in person or online, such as new door or garage door."
When grouped by job type, siding jobs fared better than most, said Webb, perhaps because of a rising perception nationwide of the value of curb appeal. Out of remodeling jobs, kitchens still reign supreme returning nearly 20 percent of value on resale.
New to the annual list is manufactured stone veneer, which returned 100 percent of investment in 27 markets, followed by upscale garage-door replacements which topped 100 percent in 17 markets. Midrange wood window replacements returned all costs in 16 markets, while minor kitchen remodels did so in 15 markets.
To Moncrieff, the Cost vs. Value Report is a starting point, but she says there are also factors that vary from house to house and sale to sale, such as what updates are typical for the neighborhood, the quality of the work, and how important the improvement is to a particular buyer.
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