Real Estate Information

While it is certainly understandable why some people would like to avoid paying a real estate agent’s commission—especially in today’s economy—homeowners need to be aware of the serious pitfalls that can occur before they embark on the process of selling their own home.

As a member of the Top 5 in Real Estate Network®, I have had many clients enlist my services after losing valuable time and money attempting to sell their own home. What seems like a relatively easy undertaking at first, can become a time-consuming and overwhelming process. I’d like to share with you some of the most significant snags that often occur when selling one’s own home:

1.  Ineffective marketing. Most homeowners simply lack the resources necessary to effectively market their own home. Working with a professional real estate agent, such as a member of the Top 5 in Real Estate Network®, however, usually means your home will be marketed to the widest group of potential buyers possible, both through digital and print advertising, virtual tours, and online listing portals.

2.  Mispricing your home. In order to sell your home quickly for the best possible price, pricing your home correctly is critical. This very nuanced process of choosing the right listing price, however, is always best left to a real estate professional. Most who sell their own homes price too high, resulting in their home sitting on the market for an extended period of time. And, unfortunately, the longer a home remains on the market, the less desirable it becomes for buyers.

3.  Missing documentation. These days, a real estate transaction requires more documentation than ever before. It’s virtually impossible for the average homeowner to be aware of all the forms necessary to complete a real estate deal, and missing paperwork will bring any transaction to a grinding halt.

4.  Overlooking legalities. The risk of overlooking important legalities, such as disclosure and compliance regulations that vary from state to state, is high for most homeowners. The average person is, understandably, not well versed in the many laws that govern the sale and purchase of a property.

5.  Dealing with unqualified buyers. If you accept an offer from an unqualified buyer, you can delay the sale of your home indefinitely. A professional real estate agent will take the necessary steps to work with a lender to ensure a buyer is qualified before accepting their offer.

In most cases, owners end up exhausting more dollars than they would have paid in commission when attempting to sell their own home. If you would like more information on selling your home, please e-mail me. I also encourage you to forward this blog to anyone you know who might be considering taking on the monumental task of selling their own home.

As a rule of thumb, bankruptcy is the least desirable option available to you when your finances have gotten out of control. However, if your financial situation has been going downhill for an extended period of time, your credit standing is probably so bad that filing for bankruptcy really won’t do much to make it worse, with one exception: A bankruptcy remains on your credit report for 10 long years. With this in mind, creditors will know that once you file bankruptcy, you cannot do so again for seven years.

As a member of the Top 5 in Real Estate Network®, I am well versed in some of the ways you—or someone you know—can start to rebuild your financial life after bankruptcy. Here are 10 tips from consumer credit experts ApprovalGuard.com:

1. Plan your credit recovery. Take it slow and easy, do it right and don’t exceed what you can afford.

2. Learn more about how credit works through the Internet, counseling services or a service. Do it right and know what you’re doing.

3.  If your credit report contains inaccuracies about debt that was discharged through your bankruptcy, contact the creditor or the credit bureaus to request a correction.

4. If you didn’t have enough savings to survive a setback, get serious about savings for an emergency fund. In the current economy you need at least 12-16 months.

5. If your problem was overspending, create a written budget and stick to it.

6. If your problem was related to medical bills, seek out a solution for insurance.

7. To re-establish a strong credit profile, you need a good history of payments from credit cards and installment debt such as autos, student loans or a home loan.

8. The rebuilding process requires you to use credit responsibly. Use only a small portion (30% or less) of your available credit line and ensure you make a payment every month.

9.  When you start to re-establish your credit, consider a “secure” credit card. Such cards are usually backed by your savings account or money you place in escrow to cover 100% of your credit line in case you don’t pay your payment.

10.You may be able to apply for a home loan in as little as two years after the discharge of your bankruptcy, however, expect to pay higher fees and interest rates.

When you are ready to rebuild, make sure you understand credit and how to use it responsibly. Feel free to e-mail me for further information and please forward this e-mail to family and friends to keep them in the know as well.

Top 5 Remodeling Headaches to Avoid

Whether you’re adding a room to accommodate an expanding family or remodeling to increase value, home renovations can be one of the best investments you make, especially in today’s economy. The key to a successful remodel, however, is knowing what mistakes to avoid.

As a member of the Top 5 in Real Estate Network®, I have advised many clients on what renovations will offer the best return on their investment and pay dividends when the time comes to sell their home.

According to a Consumer Reports poll, the most popular remodeling projects for homeowners are kitchens (19%) and bathrooms (17%). In another survey, however, Consumer Reports asked 6,000 readers to reveal what went wrong when they remodeled their kitchens and baths and how much those mistakes added to the overall cost of their projects. Here's how to avoid their mistakes and save:

1.Don't rush in. Changing plans is the most common, but costliest remodeling gaffe. Be sure to leave time for research and create a comprehensive plan, listing every product.
2.Prepare for the unexpected. There's a lot going on behind the walls. Unexpected water damage was an issue with 17% of bathroom remodels, while structural problems caused headaches for 10% of kitchen projects. A good contractor will be able to anticipate such problems, allowing the homeowner to budget accordingly.
3.Don't chase the “low ball.” Contractors are lowering their profit margins due to the tight market, but they often make up their costs in labor or other areas. Readers who went for “low-ball” pricing ended up spending a median of $1,500 extra for labor on their kitchens and $1,000 extra on their bathrooms. Don't sign a contract with a lot of open-ended amounts for products and materials—these are called "allowances," in contractor speak.
4.Get the paperwork in order. Have the contractor attach copies of his or her up-to-date license, insurance and workers' compensation policies to the written contract. He or she should also get permits and provide a lien waiver when the job is done; this will keep suppliers from contacting the homeowner for unpaid bills.
5.Focus on the boring bits. Specifying lighting and placement of trash cans are not much fun, but are critical to the process. For example, the proper exhaust fan will prevent mildew in baths and vent odors in kitchens.

Following the above advice will help ensure a successful—and profitable—remodel. For more information or for contractor referrals, please e-mail me. And please forward this email on to anyone you know in the midst of remodeling—don’t let them make these same mistakes!

If you’re one of the many who have recently taken advantage of the first-time or move-up home buyer tax credit, there’s a happy move in your future. Unfortunately, I’ve seen the stresses of moving cast a cloud over the excitement my clients feel about heading to their new home, making for a nightmarish experience instead of a momentous occasion.

Thanks to my network of leading real estate professionals, the Top 5 in Real Estate Network®, and my relationships with top moving experts, I can offer several tips to make moving a more streamlined, more palatable experience:

• Put your move details in writing.
Use a large notebook or binder to centralize all the important details of your move. It should contain detailed lists, including an inventory of boxes. Supplement this with a computer printout of box contents and e-mail it to yourself and a couple of other trusted sources as a back-up.

• Order boxes and moving supplies as far in advance as possible.
It’s never too early to start packing as we all have items that are not currently in use—think winter clothes, your baseball card collection, holiday decorations. Moving companies may allow you to return unused boxes, so order more than you think you'll need, by 20%. Invest in the right tape to keep boxes securely fastened, some new Sharpie pens, and labels to color-code your move.

• Document your AV details.
Take photos and notes on how your media equipment is set up: television, sound equipment, computer equipment, etc., in order to avoid an AV nightmare in your new home. Label all remotes and wires as well.

• Plan for your pets.
Moving can be particularly stressful for animals. Consider leaving them with a friend or at a reputable pet boarding service.

• Plan for valuables and critical documents.
Most homeowners insurance will not cover property in transit, so consider insuring certain items separately. Take photos for documentation to support loss or damage claims, and carry irreplaceable and legal items, like passports and birth certificates, with you.

• Choose a reputable moving company.
Good companies that can guide you through the process will have a proven track record. Ask your friends and your real estate agent for referrals.

• Keep your moving receipts for income tax deductions.
In many cases, moving expenses are deductible from federal income taxes. If you are moving because of a change in employment, you may be able to claim this deduction even if you do not itemize.

For more information on making your move as painless as possible, please e-mail me—and please feel free to forward these tips to any family and friends with a move in their future.

Did you know that in 2009, the Federal Housing Administration (FHA) insured nearly 30% of the single-family mortgage market and that more than 50% of all first-time home buyers used FHA programs?

In today’s challenging credit climate, many home buyers and homeowners are turning to FHA for insurance, to purchase loans, and for refinancing options to get out of risky ARMs or subprime loans. As a Member of the Top 5 in Real Estate Network®, I have access to information from the National Association of Realtors® (NAR) regarding recent and upcoming changes to FHA’s single-family program that could impact the use of these important programs for consumers in the future. According to Jerome Nagy, senior regulatory policy representative at NAR, in order to replenish its dwindling reserves, FHA has implemented or proposed the following changes:

1.  Mortgage Insurance Premium (MIP)
FHA has increased the upfront MIP from 1.75% to 2.25% for borrowers while it awaits legislative authority to increase the annual premium. FHA stated it will decrease the upfront premium when they can increase the annual premium.

2.  Credit Score Changes
FHA has proposed that borrowers with a credit score below 580 be required to make at least a 10% down payment. The minimum down payment will remain at 3.5% for all other borrowers.

3.  Seller Concessions
FHA intends to propose a rule to decrease allowable seller concessions from 6% to 3%. NAR plans to argue against this decrease since closing costs differ greatly among states, and with fees on services (such as appraisals) increasing, seller concessions can be a vital part of closing the transaction.

4.  FHA Loan Limits
Current FHA loan limits are as high as $729,750 in high-cost areas, and are set to expire at the end of the year and revert to lower amounts, potentially putting a damper on a housing market rebound. A decrease of current limits would adversely affect 612 counties in 40 states and the District of Columbia, reports NAR, which is urging passage of legislation to make the loan limits permanent.

5.  Condominium Rules
FHA is delaying implementation of “Mortgagee Letter 2009-19” and making temporary enhancements to the policy instead, such as eliminating the owner-occupancy requirement for FHA condo mortgages and reducing the number of units sold prior to FHA’s endorsement of a unit from 50% to 30%.

Please feel free to e-mail me for guidance on the above FHA programs and how changes might affect your particular situation. Also, please pass this article on to anyone you know who could be impacted by changes to FHA policy.

Fact: All Real Estate Headlines Are Not Local

None of us are immune to the constant stream of negative news about the real estate market. There’s no denying the fact that the market has suffered, along with our country’s economy, over the past couple of years.

Unfortunately, this has created a serious dilemma as many consumers unwittingly base their real estate decisions on national media reports. Those of us in the industry live by the term “all real estate is local,” and as a consumer, so should you—otherwise, you run the risk of making an irreversible real estate mistake.

The truth, which you won’t find in the national media, is that real estate markets not only vary from region to region but from county to county, neighborhood to neighborhood…even street to street. I know from my national network of leading real estate professionals, The Top 5 in Real Estate Network®, that there is tremendous variation in home sales prices from locality to locality, and that buyers and sellers are often heading into—or worse, avoiding all together—a real estate investment based on misinformation from national media reporting.

Therefore, if you are thinking about buying or selling a home, it’s essential that you talk to a seasoned real estate professional in the areas you’re considering. Keep the following tips in mind when considering a real estate sale or purchase:

1.  Consult with a local real estate professional—like a Member of Top 5—for the most up-to-date information on the local market.
2.  Ask for statistical reports and trend graphs—the hard facts. Real estate professionals have access to actual data that can be broken down into extremely finite components, such as a particular street or neighborhood.
3.  Ask for comparative reports for the last 3-4 months of the current year, versus the previous year. This will reveal the latest market trend and provide you with concrete facts.
4.  Media reports can vary widely based on state, city, and neighborhood – read, listen, learn, but always revert to the facts for the specific area in which you are looking, especially if you are relocating to a different state or region.
5.  Also take seasonal considerations into account. In vacation-destination areas, the numbers will vary greatly from national and state data.

For many real estate consumers, today’s market is an unbelievable opportunity to buy or move up to a different home. Don’t let the national headlines scare you away. Consult with a local real estate professional to get only the facts that matter to your specific situation and location. Please e-mail me for more information and pass this article along to others who might benefit from the real facts.

Expand Outdoors, Increase Your Home's Value

With many Americans experiencing a financial pinch these days, there is a growing trend among homeowners nationwide to look to the outdoor areas of their own property for not only relaxation and entertainment value, but to also expand their living space and thereby, increase their home’s value.

Through my national network of leading real estate professionals, the Top 5 in Real Estate Network®, I have learned that homeowners across the country are spending more time at home and showing an increased interest in outdoor living areas. By sprucing up your patios, porches and decks, you are making your home more livable now and more attractive to future buyers.

Stylish patios and outdoor rooms with comfortable furnishings and convenient cooking and eating areas provide new opportunities for recreation and relaxing family times. A recent survey by the Propane Education & Research Council, found that 35% of homeowners have a finished outdoor room and 34% say they are planning to design one in the next year or two.

Some of my clients are even foregoing expensive vacations in favor of putting in a swimming pool. The reality is, however, that you do not need to make a major investment to improve your outdoor living areas. Here are five quick additions that will make an immediate difference:

1. Outdoor lighting units
2. Gas grills with cooking and food preparation surfaces
3. Outdoor fire pits or fireplaces
4. Patio heaters
5. Mosquito/bug eliminators

In any market, financial planners all agree, real estate is the best investment one can make. Increasing the value of that investment with features that extend and enhance the family living area is always a wise decision. For more information and ideas, feel free to e-mail me…and be sure to pass this on to family and friends who are ready to explore the “great outdoors.”

How to Save Money on Your Homeowners Insurance

In today’s economy, homeowners need to save money wherever possible. If you’ve been the victim of damage this winter, thanks to Mother Nature, you may be confronting the not-so-pleasant realities of your homeowners’ insurance policy. From high deductibles to lack of coverage to rising rates, many homeowners have been left to foot a big—unexpected!—bill.

As a member of the Top 5 in Real Estate Network®, I am well versed in some of the ways you can save money when it comes to homeowners insurance. For starters, you may be able to save hundreds of dollars a year by shopping your homeowners’ policy around, so please e-mail me if you need a referral or two. Also, here are some great, money-saving ideas from the Federal Citizen Information Center (www.consumeraction.gov):

•Increasing your deductible is an easy way to save money on a monthly basis. Even raising it by just a few hundred dollars can make a big difference in your premium.
•Ask your insurance agent about discounts. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing material. Long-term customers and those over age 55 may also be offered discounts.
•Insure your house, not the land under it. After all, your land will still be there even if your home is damaged. If you don't subtract the value of the land when deciding how much homeowner's insurance to buy, you will pay more than you should.
•Don't wait until you have a loss to find out if you have the right type and amount of insurance. Discuss with your insurance agent exactly what types of damage are covered, including natural “acts of God.” Many homeowners are caught offguard by this loophole.
•Purchase enough coverage to replace what is insured. "Replacement" coverage gives you the money to rebuild your home and replace its contents. An "Actual Cash Value" policy is cheaper but pays only what your property is worth at the time of loss - your cost, minus depreciation for age and wear.
•Consider any special coverage you may need for valuable and/or unique items, such as computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
•Remember that flood damage may not be covered by a standard homeowners’ policy. If you live in an area prone to flooding, take advantage of the National Flood Insurance Program.

Bottom line, make sure you are working with an insurance agent who is experienced and trustworthy. Feel free to e-mail me for further information and please forward this e-mail to family and friends to keep them in the know as well.

Top 5 Reasons Why Now Is the Best Time to Buy a Second Home

With all the negative news about the economy and the real estate market, in particular, there’s a good chance you’ve put any ideas of buying a second home on permanent hold.

As a Member of the Top 5 in Real Estate Network®, however, I can tell you that just the opposite is true. The reality is that now is the best possible time to shop for a second home, whether it be the vacation spot you’ve always dreamed of, a retirement home or an investment purchase. Or, if you’ve thought that a second home was not a possibility for you, it just might be now. Here’s why:

1. Just about across the board, prices are down…in some spots, they are actually down to 2001 levels. Those of you who may have been priced out of the market in past years are suddenly back in.

2. Mortgage rates are sticking at about 5%. This won’t last forever, however, especially as the market slowly starts its climb upwards.

3. If you're able to itemize deductions on your tax return, then the interest expense on your second mortgage is tax deductible.

4. If you’re buying in a popular vacation spot—such as on the shore, in the mountains, near a lake, in the city—then you can rest assured that your investment will increase as the market continues to recover.

5. If you’re not ready to retire or take advantage of a second home yet, bear in mind you’re creating an excellent source of additional income in terms of rental revenue…something we can all use in today’s economy. Consider making this purchase now, while conditions are favorable for buyers, rent it out, and then enjoy your home when the time comes.

I’ve seen many a savvy client take advantage of today’s market to make a desired lifestyle change or an investment that will pay dividends when the market picks up. Don’t let the media negativity prevent you from missing this great opportunity to buy a second home. Please e-mail me for more information and pass this article along to friends and family who might also find it helpful.

The article below identifies some the the expansion stiupulations of the homebuyer tax credit extension that was signed into law in November 2009.  Remember, time is ticking, if you're in the market to buy a home, NOW is the time, if you qualify for the homebuyer tax credit.

RISMEDIA, December 7, 2009—

The extension is part of a $24 billion economic stimulus bill that extends the $8,000 tax credit for homebuyers who purchase their first home and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. The home must be purchased prior May 1, 2010,

The following details apply to the homebuyer tax credit expansion:

Who Is Eligible

-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.

-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.

-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.

-For married couples filing a joint return, the combined income limit is $225,000.

-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify

-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable

-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:

-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).

-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).

-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Examples of Who Can Benefit

“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:

Example 1:

Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:

Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:

Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

“If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:

-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).

-The credit applies even if you have co-signers on your mortgage loan

The www.federalhousingtaxcredit.com site has been updated. Check this site or www.CMPSInstitute.org and www.nahb.org for more information.