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Monday, May 11, 2015

Are You Ready To Buy A Home?

While it may be acceptable to snap up a pair of shoes on an impulse, the choice to buy a home requires thoughtful planning and decision making.

Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a home is a financial and emotional decision that requires the experience and support of a team of reliable professionals including a REALTOR®, a lender, a lawyer and a range of other individuals.

Why Do You Want to Buy a Home?

The emotional part of the decision comes into play when you think about why you want to move. If you’re a first-time buyer, you need stability in your career and the desire to commit to living in the same community for five to seven years. You should want to establish roots in a neighborhood and look forward to decorating as you please without requiring a landlord’s permission.

Purchasing a home is a lifestyle choice that requires you to think about how you like to spend your time and the type of community where you want to live—such as a rural area without nearby neighbors, a high-rise building in a city or a home within a planned community with recreational amenities.

The more you understand your priorities for a home, the easier it will be for you to narrow your real estate decisions.

Homeownership can also be a powerful way to increase your personal wealth for you and your family, since you’ll be building equity in your home as you pay off your mortgage.

Are Your Finances Ready for Homeownership?


While your dream home may not be within your reach right away, you can take steps to become a homeowner the moment you earn your first paycheck.

In order to qualify for a mortgage to buy a home, you’ll need good credit, a pattern of paying your bills on time while still saving money and a maximum debt-to-income ratio—your gross monthly income compared to the minimum payments on all recurring debts—of 43% or less. Some lenders have stricter guidelines, so the lower your debt-to-income ratio, the better your chances of a loan approval.

While loan programs are available with low down payments of 3.5% to 5%—and a few programs offer no down payment at all—you’ll still need some savings to pay for closing costs, moving expenses and an earnest money deposit on a home. It also is very wise to have cash reserves on hand after you buy.

Saving money and preserving or improving your credit history are essential elements to homeownership.

What Can You Afford to Buy?

Housing prices and rents vary from one location to another, but you can use a Rent vs. Buy calculator to estimate the difference between your current rent and buying a home. In some markets, buying a home can cost the same or even less than renting.
       
Remember, when you’re a homeowner, you also need to include homeowners insurance, property taxes and homeowners association dues in your housing costs. You can use a home affordability calculator to help you estimate what you can pay for a home.

In addition, you should think about your plans for the future and how you spend your money—along with your comfort level with a mortgage payment. A lender will tell you how much you can borrow, but that lender won’t know how much you spend on travel or golf or your plans for potentially reducing your work hours when you have a family.

Once you’ve thought through the emotional and financial aspects of becoming a homeowner, your next steps should be to find a reliable, experienced REALTOR® to become your partner in the home-buying process and to meet with a reputable lender who can discuss your options for financing your purchase.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


 

Monday, April 27, 2015

12 Ways to Make a Fantastic First Impression

First impressions count.

You may not be able to tell a book by its cover, but you’ll likely pay more for a book if the cover is charming and attractive.

If your home is for sale, or soon will be, creating a positive first impression is one of the most important things you can do. Thankfully, it’s not hard. Here are 12 steps you can take; most of them fall under simple maintenance and organization, but some of them could possibly help you decide when it’s time to move.

How to impress visitors

1. Go outside. Mow the law, prune bushes, remove dead tree branches, and get rid of outdoor furniture you don’t plan to take with you.

2. Clean the front door and lintels, or paint them if necessary.

3. Check for leaks throughout the house. A drip may not seem important, but it could suggest poor maintenance elsewhere in the house. Don’t leave room for doubt in a buyer’s mind.

4. Clean out closets and storage areas. Donate old clothes and furniture to local charities. This will create a sense of greater space in the home, and mean fewer items to move.

5. Professionally clean the carpets. This is especially important if the carpeting will remain for the new owners.

6. Flip every switch to make sure the electrical works throughout the house. Prospective home buyers will do this. Fix any switches that need help.

7. Caulk around tubs and sinks. New caulk looks better than old caulk, and you’ll also prevent those tricky leaks.

8. Replace lightbulbs that don’t work and use as much wattage as the fixture will take. Good illumination makes your home seem light and airy.

9. Tour the property from the perspective of a first-time visitor. Is there anything that may seem uncomfortable to visitors? The 30-year-old green shag carpeting can be off-putting and mirrors in poorly lit basements can be dangerous, for example.

10. Clean out medicine cabinets. Remove out-of-date items, and consider removing prescription pills when buyers visit. Buyers might look in every nook and open every door. No one wants to be embarrassed by what they find.

11. If you have a pet, make arrangements to have it elsewhere when your home is being shown. Some people have allergies. No one wants to be barked or pawed at when they enter.

12. Ask your broker to examine the property for specific showing tips to make your home more attractive when compared to others in the area.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.






Monday, April 13, 2015

What Stays With the House When You Move?

When you’re selling your home, it is natural to assume that anything you can safely remove is yours to keep—like the light fixtures you painstakingly cleaned and repaired, or the appliances you bought last year—but the buyer may want some of those items, too.

Rather than keep everything, you should decide what you can keep and what you should leave as a way to entice buyers into making an offer. Here’s what you should consider:

What stays with the house?

Generally, certain items stay with the house when you sell and move. Here’s what to expect:

Built-ins: Built-in bookshelves, benches, and pull-out furniture generally stays inside the home.

Landscaping: Trees, shrubs, and any flowers planted in the ground should stay in the yard.

Wall mounts: If you have TV wall mounts or picture mounts that might damage the wall if you remove them, it is a good idea to leave them in place when you move.

Custom-fit items: If you have custom-made curtains, plantation shutters, or blinds, leave them on the windows and doors.

Hardware: If you upgraded the knobs and drawer pulls in your bathrooms and the kitchen, you’ll either have to leave those behind or install replacements before you move.

Alarm systems: Wireless alarm systems are designed to be removed. Otherwise, leave the alarm monitoring station attached and either relocate or cancel the monitoring service.

Smoke detectors: Smoke detectors and sprinkler systems should stay in the house, especially if you plan to move before selling the house.

What can you take?

While you’re expected to leave some items behind, in general your belongings are yours to keep. Here are some examples:

Patio furniture, lawn equipment, and play sets: If you have a wooden swing set in the backyard and a bistro table on the front porch, take those items with you.

Appliances: Some lenders require that a home have an oven installed before approving a loan, but for all other appliances, it’s up to you to decide what you will take and what you will offer as part of the home.

Some light fixtures: Generally, homeowners leave light fixtures behind, but if you’re attached to a certain fixture, you can make arrangements with the buyer to take it.

Built-in kitchen tools: If you can safely remove a mounted spice rack or the pasta arm, you can take it with you.

Rugs, basic curtains, wreaths: Small decor items like rugs or curtain rods that can be safely removed can be taken.

What should you consider leaving?

Some of your personal items can be used to help sell your house—or increase the asking price. Before you take everything just to take it, consider offering some hot items like the following:

Appliances: Homeowners, especially new homeowners, don’t always have their own appliances. Many buyers would be more likely to place an offer on a home if it came fully stocked with appliances.

Custom swing and play sets: If you have a swing set or playhouse your children have outgrown and you notice a potential buyer has children, offer to include the item with the deal.

Kitchen built-ins: Built-in spice racks, pantry organization, and windowsill shelves can really help sell a kitchen. Consider offering the items to an interested buyer.

Light fixtures, curtains, rugs, and other upgrades:
If you’ve upgraded the light fixtures or have custom rugs in the entryway, a buyer may be willing to increase his or her offer to keep those items in the home.

If you’re not sure what would entice a buyer, ask your Realtor® to provide suggestions.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


Monday, March 30, 2015

Sold Your Parents’ Home in 2014? Check This Tax Advice

Q. We sold our parents’ home in 2014. What do we need to know for taxes this year?
A. The tax implications of a home sale can be complex, particularly when you’re selling a relative’s property rather than your primary residence. It’s always best to consult a professional tax adviser to get individualized advice, but there are some general tax tips that could apply to your situation.

Selling a home as an heir to the property

Your tax bill will vary according to how you acquired the property and when.

Recent inheritance. “If you inherited your home through a will or a trust and you sold it right away, you won’t have to pay a capital gains tax,” says Pat Simasko, owner of Simasko Law in Mount Clemens, MI.

Your residence. If you’ve lived in the property as your primary residence for at least two of the past five years, then you would be eligible for a capital gains exclusion up to $250,000 (single tax filer) or $500,000 (married couples filing jointly), says Simasko.

Investment property. On the other hand, if you’ve kept the home for a few years, you could owe taxes on your profit from the sale if you haven’t claimed it as your primary residence, Simasko says. This situation applies whether the home has been empty or you’ve used it occasionally.

Heirs who sold their parents’ home without having lived in it—but did not do so immediately after the property was inherited—will have to determine the “basis,” or value of the property, for tax purposes, says Vanessa Borges, an enrolled agent and tax preparation supervisor at Tax Defense Network in Jacksonville, FL. Next, you subtract the basis price from the sales price to determine whether you have a profit or a loss.

The good news is that beneficiaries typically have a “stepped-up” basis for a home, which is the property’s fair market value at the date of the parents’ death, says Borges. When you sell that property, you pay taxes only on gains over that basis, not the original price of the home.

For example, if your parents purchased their home for $50,000, but the property value when they passed away was $100,000, you would pay capital gains taxes only if you sold the house for more than $100,000. If you keep the house for years and then sell it for $200,000, then you would owe capital gains taxes on the $100,000 profit, says Borges.

Selling a home when your parent moves to assisted living

A similar situation applies if one of your parents has already passed away and the other recently moved into assisted living.

“If one of the parents is deceased, the surviving parent receives the ‘step up’ in basis at the time of death,” says Borges.

If you sold the home on behalf of your parent, then the parent would be responsible for paying a capital gains tax on that stepped-up basis.

Simasko says, though, that your parent may owe extra taxes depending on how long he or she has been in assisted living.

“The city or the county where the house is located can claim the house as ‘nonhomestead,’ considering the parent’s primary residence is the assisted-living facility,” says Simasko. “The taxes could be higher, because the property would be considered a second home.”

Selling a home when the property has been transferred to your name

Borges warns that there are multiple tax and financial implications for transferring property from parent to child. For example, the child might owe transfer and gift taxes when the transfer is completed. There can be an inheritance tax owed on the percentage of the property being transferred to a child or children after death, as well as capital gains tax, if the child hasn’t been living in the property for two of the past five years.

As you can see, the tax impact of selling your parents’ home can be complicated, so it’s always wise to consult a tax adviser familiar with your state laws, IRS regulations, and your finances.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.



Monday, March 16, 2015

Managing the Details

Once you have negotiated a contract and agreed on a sale price, the next phase of the home sale job begins.

Below is a list of some of the details your agent will manage through this process.

They will constantly check with the title company to assess when they need additional information and whether there will be any problems that could affect obtaining title.

They will ensure that both you and your Buyer receive copies of all documents pertaining to the transaction. They will have the Buyer sign to acknowledge that he/she has received his/her copies.

They will make sure that the Buyer meets and removes all contingencies within the time limit provided or get an extension, if needed, signed by both you and the Buyer.

They will keep you abreast of the Buyer's application for a loan and the progress of the appraisal on your home.

They will work with the appraiser to arrange for entry to the property and to answer any questions he/she may have about the home or neighborhood. I wil also provide the appraiser with the most recent comparable sales in the area.

They will make sure that the Buyer increases their deposit in a timely manner.

They will coordinate and attend as many inspections as possible and keep you informed of all findings.

Once the inspections are complete, they will negotiate for you if any problems arise.

They will cooperate with the Buyer and others involved ensuring that corrective work is completed according to the terms of the contract.

They will ensure that all documents are ordered and drawn, including your loan pay-off and insurance for the Buyer.

They will do their best to have your closing papers drawn one week before Close of Escrow (COE) so that if any problems arise, they can solve them while remaining within the time frame you expect.

If you prefer, they may be able to deliver your escrow check to you personally as well as coordinate move-in dates and key exchanges.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


 408.687.2026   Julie@JulieWyss.com   www.JulieWyss.com

Monday, March 2, 2015

The Purchase Agreement

You've found a home you love and you're offer has been accepted. Now what?


Your agent will use a standard form of Purchase Agreement, developed by the Association of Realtors ® , a local Association of Realtors ® , or a private publishing company, depending on the custom in the area. You can make changes – but the seller must agree to each of the changes you make.

In the United States, oral contracts are not enforceable – real estate contracts must be in writing. Even if you give me, your agent, permission to bargain on your behalf, I must have a Purchase Agreement signed by all buyers before I can present your offer.

When you read the Purchase Agreement, try to imagine yourself as an independent party who has no knowledge of the transaction other than what’s included in the contract. Is the meaning of each clause clear? For example, to avoid miscommunication list all personal property you expect to be included in the transaction. Also, it’s a good idea to stipulate the exact date and time of possession – if you’re not specific, you and your moving van could arrive and find that the seller still inside the home!

Specify in the contract that the seller is obligated to repair any damage (along with the conditions causing such damage) noted in the pest control report and the reports of other inspections.

Elements in the Purchase Agreement


Sales Price
Self-explanatory, but still the most important term.

Earnest money
Along with your Purchase Agreement, you will submit earnest money to demonstrate your seriousness about the home.  “Earnest Money” is generally between 1% and 5% of the purchase price. If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal against the terms of the contract, you may have to forfeit the entire amount.

Title
"Title" refers to the legal ownership. The seller should provide title, free and clear of claims by others not acceptable to you, the buyer. Title insurance will assure that the home is free of "unacceptable liens" or "encumbrances."  It’s negotiable who will pay for the title insurance policy.

Mortgage Clause
A clause which specifies that the obtaining of a mortgage loan on the property on terms and conditions acceptable to you is a condition of the sale, and provides for the refund of your deposit if you fail to get the mortgage loan.

Pest Inspection
This clause provides for a pest control inspection and report by a licensed pest control operator. Sometimes sellers will provide this report prior to the purchase agreement. If not, it provides for a method of allocating whether seller, buyer or both will pay for the repairs disclosed by the report. Your lender may require a certificate from a qualified inspector stating that the property is free from termites, pests and dry rot.

Home Inspection
I strongly recommend an inspection and written report by a home inspector who is a licensed general contractor to determine the condition of plumbing, heating, cooling and electrical systems, the structure of the home, the grading, roof, siding, windows and doors. Most buyers prefer to pay for inspections (generally between $300 - $500) so that it’s clear that the inspector is working for them, not the seller. I also strongly recommend that you request any such additional inspections as may be recommended by your home inspector, such as a separate roof inspection, foundation or soils inspection, pool inspection, etc. These additional inspections may reveal conditions or defects beyond the ability of a general home inspector to ascertain.

Other Disclosure and Inspection Terms
See the section on "What you need to know" for a detailed discussion of these disclosure and inspection items.

Contingencies
You can specify, in your Purchase Agreement, that certain conditions must be met before the sale goes through. Contingencies are crucial, so be sure to speak up and tell me what’s important to you, so that all of your concerns are reflected in the offer. They may include:

Your ability to obtain specific financing from a lending institution. This contingency will ensure that if you can’t find the loan, you will not be bound by the contract.
That the home inspector you hire provides a satisfactory report within 10 days (for example) after the seller accepts your offer. With the proper contingency, if the report does not satisfy you, the contract becomes void.

The sale of your existing home.

Obviously, in a slower home sale market, sellers are more willing to accept contingencies than they are during more active circumstances. Too many contingencies in a strong real estate market may prevent your offer from being accepted. Make sure your contingencies are clear.
Earnest Money
This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." The real estate agent usually holds the deposit, the amount of which varies from community to community. This amount will become part of the down payment.

Escrow Company
In most instances, the buyer will select the escrow company which is also the title company providing the title insurance policy after close of escrow. In some counties where the custom is for the seller to pay for the title insurance policy, the seller will select the escrow and title company.

Closing Costs
You can negotiate which closing costs you will pay and which will be paid by the seller. However, be aware that longstanding custom regarding the handling of the allocation of these costs makes many of them hard to negotiate on terms different from local custom. If a seller was obligated to pay a certain closing cost when he or she bought the property, they will expect you, the buyer, to pay the same cost on your purchase. See the section on "Who Pays What?" which details these cost allocations in the area we serve.

Withdrawing an offer
In most cases the buyer may withdraw an offer right up until the moment the offer is accepted. Consult us as to the best and safest way to withdraw your offer.

The seller’s response to the offer
You will have a binding contract if the seller, upon receiving the written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as the signed offer is delivered to you or me, your agent. If the offer is rejected, then the offer is no longer valid. If the seller likes everything except the sale price, or the proposed closing date, or the terms of your offer, you may receive a written counteroffer, with the changes the seller prefers. You are then free to accept or reject the counteroffer, or even to make your own counteroffer.

Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal and that final, unchanged document is delivered to the other party or their agent.

How the seller may counteroffer
The buyer and seller can negotiate and agree about any of the terms, conditions, costs and who pays for them. Some terms and conditions that are negotiable include:

  • Termite inspection fee and costs to repair any damage
  • Closing costs
  • Points to the buyer’s lender
  • Buyer’s broker
  • Repairs required by the lender
  • Repairs of conditions or defects disclosed by the seller, uncovered by inspectors, or required by governmental agencies
  • Date for the close of escrow
  • Date and time for possession by buyer
  • A holding over, or rent back, by seller after close of escrow
If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.

 

Monday, February 16, 2015

9 Steps To Take Before Selling Your Home

The home selling process differs from state to state, but there are some important steps that you should take before you put your house on the market--all steps that protect your interests and help you get the most return from your investment.


1. Get Pre-Approved for a Home Loan

 

I've known sellers who signed a contract to sell their house before they knew if they were qualified to buy another. Either their financial circumstances had changed since their last purchase, and they could no longer qualify for a loan, or they weren't able to sell at a price that allowed them to buy the type of replacement house they wanted. They ended up renting or buying something that was far from ideal. 

Before you decide to sell the house, get pre-approved by a lender you trust and research the housing market in the area where you wish to live so that you have a good idea how much it will take to buy a replacement. 

2. Check Your Mortgage Payoff

 

Call your lender to check the payoff for your current home mortgage. You'll need the figure to complete Step 6. 

3. Determine How Much the House Is Worth

 

Determine your home's fair market value. Real estate agents will usually help you determine value as a courtesy, but you might take it a step further and order an appraisal.

4. Estimate Your Costs to Sell

  • Real estate commission if you use an agency to sell.
  • Advertising costs, signs, other fees if you plan to sell by owner.
  • Attorney, closing agent and other professional fees.
  • Excise tax for the sale.
  • Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and fuel tank rentals.
  • Any other fees typically paid by the seller in your area (surveys, inspections, etc.).
  • Real estate agents deal with transactions every day and can give you a very close estimate of seller closing costs. 

5. Determine Your Costs to Acquire a New Home

  • Total your costs to acquire a new home: moving expenses, loan costs, down payment, home inspections, title work and policy, paying for a new hazard insurance policy--all expenses related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for pre-approval.

6. Calculate Your Estimated Proceeds

  1. Deduct your mortgage payoff from your home's fair market value.
  2. Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.
  3.  Will your closing proceeds cover your costs to acquire a new home? If not, do you have cash or other funding to make up the difference? 

7. Make Necessary Repairs

 

Make all needed repairs unless you want the house to be regarded as a fixer-upper. I'm not referring to cosmetic updates, but to items in need of repair. Anything that's obviously broken gives potential buyers a reason to submit a lower offer. 

For a preview of several repair hot spots that worry buyers the most, read Passing Your Home Inspection

8. Get the House Ready to Show

 

Most houses need at least a little spiffing up before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling clean windows and appliances, and a clutter-free atmosphere are essential if you want the house to appeal to buyers. 

Read: The Importance of Curb Appeal and Getting the House Ready for Showings for more prep advice. 

9. Get Psyched Up to Let People In

 

If you're listing with a real estate agent, she'll no doubt ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous--they don't feel comfortable inspecting the house when they feel they are intruding. 

Unless there's a real reason for it, don't ask your agent to be present for all showings. That's the kiss of death for showing activity. Other agents want privacy with their buyers and they don't usually have time to work around your agent's schedule.
If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.
  www.JulieWyss.com   |   Julie@JulieWyss.com   |   408.687.2026