Tuesday, February 23, 2016

20 Tips For Selling Your Home

As a homeowner, you can play an important part in
the timely sale of your property. When you take the following steps, you'll help your Sales Agent sell your home faster, at the best possible price.

Make the Most of that First Impression - A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch welcome prospects. So does a freshly painted, or at least freshly scrubbed, front door. If it's autumn, rake the leaves. If it's winter, shovel the walkways. The fewer obstacles between prospects and the true appeal of your home, the better.
Invest a Few Hours for Future Dividends - Here's your chance to clean up
in real estate. Clean up in the living room, the bathroom, the kitchen. If your woodwork is scuffed or the paint is fading, consider some minor redecoration. Fresh wallpaper adds charm and value to your property. Prospects would rather see how great your home really looks than hear how great it could look, "with
a little work."
Check Faucets and Bulbs - Dripping water rattles the nerves, discolors sinks and suggests faulty or worn-out plumbing. Burned out bulbs leave prospects in the dark. Don't let little problems detract from what's right with your home.
Don't Shut Out a Sale - If cabinets or closet doors stick in your home, you can be sure they will also stick in a prospect's mind. Don't try to explain away sticky situations when you can easily plane them away. A little effort on your part can smooth the way toward a closing.
Think Safety - Homeowners learn to live with all kinds of self-set booby traps: roller skates on the stairs, festooned extension cords, slippery throw rugs and low hanging overhead lights. Make your residence as non-perilous as possible for uninitiated visitors.
Make Room for Space - Remember, potential buyers are looking for more than just comfortable living space. They're looking for storage space, too. Make sure your attic and basement are clean and free of unnecessary items.
Consider Your Closets - The better organized a closet, the larger it appears. Now's the time to box up those unwanted clothes and donate them to charity.
Make Your Bathrooms Sparkle - Bathrooms sell homes, so let them shine. Check and repair damaged or unsightly caulking in the tubs and showers. For added allure, display your best towels, mats and shower curtains.
Create Dream Bedrooms - Wake up prospects to the cozy comforts of your bedrooms. For a spacious look, get rid of excess furniture. Colorful bedspreads and fresh curtains are a must.
Open up in the Daytime - Let the sun shine in! Pull back your curtains and drapes so prospects can see how bright and cheery your home is.
Lighten up at Night - Turn on the excitement by turning on all your lights, both inside and outside, when showing your home in the evening. Lights add color and warmth, and make prospects feel welcome.
Avoid Crowd Scenes - Potential buyers often feel like intruders when they enter a home filled with people. Rather than giving your house the attention it deserves, they're likely to hurry through. Keep the company present to a minimum.
Watch Your Pets - Dogs and cats are great companions, but not when you're showing your home. Pets have a talent for getting underfoot. So do everybody a favor: Keep Kitty and Spot outside, or at least out of the way.

14. Think Volume - Rock-and-roll will never die.
But it might kill a real estate transaction. When
it's time to show your home, it's time to turn down the stereo or TV.
15. Relax - Be friendly, but don't try to force con- versation. Prospects want to view your home with a minimum of distraction.
16. Don't Apologize - No matter how humble your abode, never apologize for its short- comings. If a prospect volunteers a derogatory comment about your home's appearance,
let your experienced Agent handle the situation.
17. Keep a Low Profile - Nobody knows your home as well as you do. But Sales Agents know buyers - what they need and what they want. Your Sale Agent will have an easier time articulating the virtues of your home if you stay in the background.
18. Don't Turn Your Home into a Second-Hand Store - When prospects come to view your home, don't distract them with offers to sell those furnishings you no longer need. You may lose the biggest sale of all.
19. Defer to Experience - When prospects want to talk price, terms, or other real estate matters, let them speak to an expert - your Sales Agent.
20. Help Your Agent - Your Pam Covey Realtor
will have an easier time selling your home if showings are scheduled through his or her office. You'll appreciate the results!

Friday, February 19, 2016

Curb Appeal

Curb Appeal
Are you interested in putting your home on the market, but wonder what repairs and touch ups to do? And then there's bankrolling the work, not to mention sacrificing weekends to get it done.
Slow down. Get a grip. There are some no cost/low cost ways to get your home in showing shape and help you put your best foot, er... house, forward to prospective buyers.
When real estate agents and buyers refer to curb appeal,
it means the initial impact the home makes when the buy- er first views it. Visualize a buyer driving up to your curb. What would he see? Landscaping in need of work? A fence in need of paint? If the outside of the house is in shambles, a buyer may not be motivated to get out of
the car and come inside!
So what things are important to fix-up and replace before you sell? Let's cover them as the buyer sees them, from the outside, in.
Walk across the street from your home and pretend you're a buyer, viewing
the home for the first time. From the parking area, glance around the front yard. Note hedges and trees that need to be trimmed. Are they cut back away from the front door, the windows, and the porch area? This is not only for aesthetics but for safety reasons as well (a big priority with buyers today.) A safe home is one that has a clear view of the parking area and walk ways, free of obstructions and overgrown foliage.
What about paint trim near the front door and on the eaves? Could it use a new coat? Make sure your front door is in good repair, too - including the screen door, if applicable. Buyers' impressions as they enter the home set the stage for the rest of the showing.
Let's go inside the house. The cardinal rule before putting your home on the market is making sure it's clean. In a competitive sales market, why would an eager buyer waste time viewing
a house that needed elbow grease? And a less than spic and span house could also signal
that other maintenance in the house hasn't been kept up - like plumbing that leaks and furnace systems in need of cleaning or repair. Don't forget that a house that doesn't show
well will often take longer to sell, costing you money in the long run.

Friday, November 20, 2015

9 ways to save on closing costs

Aug 07, 2015

April Dykman HSH.com

The process of securing a home loan can be confusing and daunting, especially when it comes to the laundry list of fees associated with your mortgage. It can be very difficult to understand all the fees and closing costs and whether or not you're being overcharged.

Shopping around for the lowest closing costs could save you thousands -- money that could be spent on your new home instead of on your loan.

Here are nine tips on how to save on your mortgage’s closing costs:

No. 1: Shop around

Mortgage rates aren’t the only thing you need to shop around for when buying a home or refinancing. Getting quotes from several mortgage lenders is the number one piece of advice when it comes to mortgage shopping. Although lenders don't have to provide an estimate before you apply for the loan, you should be able to find lenders who are willing to provide some ballpark figures when it comes to closing costs.

Try to get at least three estimates from local lenders. Speaking to local lenders is extremely important, especially when it comes to closing costs.

Closing cost calculator

What’s the best way to pay your closing costs — pay them all upfront or a little at a time? To learn more about your options, HSH.com designed the “FeePay BestWay” closing cost calculator to help you crunch the numbers for three different payment methods: paying closing costs out of pocket, adding the closing costs into the loan amount or adding the closing costs into the interest rate. Fill in the information once and compare the costs or savings the other choices might bring.

No. 2: Lender competition means lower closing costs

The good news is that more lenders in the market is make closing costs decrease.

Financial firms that aren't traditional banks, such as Quicken Loans, are now taking up a greater percentage of the mortgage origination market. Online lenders without the need for physical branches are keeping costs down and forcing traditional lenders with bank branches to cut closing costs to compete.

Banks are not making as much on loans despite the rise in mortgage originations. That's not good news for traditional lenders, but may help you when you close.

No. 3: Know your locale—different areas, different closing costs

Location is very important when it comes to understanding the closing costs associated with your loan. According to the Federal Reserve, a general rule of thumb is to expect closing costs to be roughly 3 percent of your home's price. However, in certain high-tax areas of the country, closing costs can be closer to 5 or 6 percent of the home price.

"Closing costs really depend on what state you're in," says Jim Pendleton, a Long Island, New York-based loan officer with Financial Services of America.

Pendleton, who writes mortgages in all 50 states, recently worked on a loan for a homeowner on the east end of Long Island, where borrowers are subjected to an additional 5 percent mortgage tax. "So their closing costs were closer to 9 percent," Pendleton says.

Which closing costs can I negotiate?

"But in some states, where there's a flat fee for title insurance, I can close a loan very, very cheaply -- down to about 1 percent of the mortgage," Pendleton adds.

No. 4: Don't pay points when mortgage rates are low?

Homebuyers have the option to pay more points at closing in exchange for a lower interest rate. However, experts say paying points may not be worth it when mortgage rates are already low.

"I would suggest not buying down an interest rate," says Mark Hanley, a mortgage officer in Austin, Texas. Paying upfront discount points can seem unnecessary when rates are really low already, he says.

However, Keith Gumbinger, vice president of HSH.com, says there can be valid reasons to pay points when mortgage rates are low, especially if you plan on remaining in the home for a long stretch.

15 Yr. Fixed - Refinance Rates from Our Lenders in Pennsylvania

Lenders

Rate

APR

Monthly Payment

Details

Sebonic Financial

2.875%

3.159%

$1,369

Learn More

ditech

3.250%

3.454%

$1,405

Learn More

Quicken Loans

3.500%

3.890%

$1,430

Learn More

Amerisave NMLS #1168

3.375%

3.429%

$1,418

Learn More

New Penn Financial

2.625%

3.012%

$1,345

Learn More

Disclaimer - Rates Last Updated: 11/20/2015More Mortgage Rates

No. 5: Shop around for homeowner's insurance

Moira Vahey, spokesperson for the Consumer Financial Protection Bureau (CFPB), says even though the CFPB recently issued rules that "provide consumers with options to avoid costly force-placed insurance," the best way to avoid pricier insurance is to shop around.

It'll reduce your closing costs and save you money long-term on your insurance premiums.

To review a list of home insurance carriers, visit Insure.com and search for “best insurance companies.”

No. 6: Review closing-cost forms—negotiate and spot red flags

Take notice of cost estimates that are particularly higher or lower than the rest. If one lender is charging significantly more for a third-party fee than the others, ask about it.

"If one lender is not disclosing a fee that another lender is, ask why," says Hanley. "I have seen competing bids where lenders purposely lowball a tax payment estimate in order to look like their estimate carries an overall lower cash-to-close figure."

Fees charged by the lender also can be negotiated. The best way to know what's negotiable is to ask the lender directly. Also look for "junk" fees, which might be listed as "warehousing fees" or "processing fees" (or other names) and are sometimes a way for unscrupulous lenders to increase their bottom line.

"These are easy to spot because every lender doesn't charge them, so they stick out on estimates," says Lynda Conway, a real estate agent in Austin, Texas.

No. 7: Inquire about Reissue Rates

You could save as much as 40 percent on your insurance premium through a Reissue Rate.

The Reissue Rate is a discount on the homeowner's title insurance policy. To take advantage of this discount, most states require that the seller had to have purchased the home and insurance policy within 10 years.

You will need to get a copy of the seller's policy. If they don't have it, you can ask your title company to see if they can locate the policy on the database.

This simple task could save you hundreds on closing costs.

No. 8: Ask if seller will pay for a portion or all closing costs

This isn't likely in a hot real estate market, but it could be an option in the right situation.

A struggling market, a desperate seller, a home that's been on the market a long time -- these are all perfect situations to ask the seller to pick up at least a portion of closing costs.

Ask your real estate advisor and see if your lender has any limitations on a seller paying closing costs. If the seller is motivated enough to make the transaction, you may save some money on closing costs in the process.

No. 9: Look for new or added fees

Three business days after submitting your loan application, your mortgage lender is required to provide you with the CFPB’s “Loan Estimate” form which details your loan’s terms, expected fees and closing costs. This new form replaces the “Good Faith Estimate.”

Three business days before closing, your lender is required to provide you with the CFPB’s “Closing Disclosure” form. This form replaces the “Truth in Lending statement” and the “HUD-1 settlement statement.”

If the fees have changed (some of the fees on your Loan Estimate form aren't set in stone), ask your lender for an explanation. The Loan Estimate form will tell you which fees could change prior to settlement and the maximum amount by which they are allowed to change.

“What the new forms from the CFPB—the “Loan Estimate” and “Closing Disclosure” forms--set out to do for the first time, was to display the full list of fees in the exact same format,” says Gumbinger. “So while lenders still may charge different fees for different things, the fees are displayed on the same exact form as another lender, making it easier for the borrower to compare. The new form also informs you as to what fees can and cannot change from the time the application is placed and the loan closes.”

Do a final check

If you do notice new or significantly higher closing costs, don't be afraid to ask about them. The CFPB advises homebuyers never to sign papers you don't fully understand. Lastly, consult with a real estate attorney about your options should you decide to walk away from the loan.

Credit to HSH.com

Les Masterson contributed to this article.

(Photos: iStockphoto)

Monday, November 16, 2015

Why Do You Need Mold Inspection?

Mold could be lurking in your home, often found in bathrooms, kitchens, basements, and laundry rooms. You can also find mold near leaking pipes, faulty air ducts, leaking roofs, and areas that have previously been flooded. Mold found in your home can cause you serious health problems and major damage to your home. The only way to truly know if you have a mold problem is to have a professional mold inspection. Here are a few reasons why you should hire a professional home mold inspector: 1. To see if you have hidden mold growth. A professional mold inspector has special equipment to locate mold. Hidden mold is found in places like in the drywall, under the carpets, and in the air ducts. 2. Do you suffer from allergies, coughing, or headaches? All of these could be symptoms of mold exposure. 3. Before you buy a home have a mold inspection to identify and address any mold issues before closing on the home. That way you will feel more comfortable and confident with purchasing the home. 4. Most home insurance policies do not cover major mold damage. It is important to protect your investment by knowing if the home has mold that needs to be addressed. A professional mold inspection can help protect your health and protect your investment as well.

Credit to : How to.

Sunday, August 3, 2014

Depreciation Tax Mistake; Credit to bigger pocket.

4 Depreciation Tax Mistakes Investors Need to Avoid

by AMANDA HAN on JULY 31, 2014 · 6 COMMENTS

Four Depreciation Tax Mistakes Investors Need to Avoid

If you are someone who invests in long term rentals, you probably already know how depreciation can be your best friend when it comes to paying less taxes.

What you may not know is that as investors, we can also make some pretty big mistakes when it comes to taking depreciation for our real estate. In today’s blog, I wanted to go over some of those common depreciation mistakes that real estate investors make.

Before we get to the mistakes however, let’s take a step back to discuss what depreciation is. Simply put depreciation is a paper write-off. What this means is that we are taking a tax deduction on our rental properties when we may not have suffered any actual loss on the property.

Depreciation, under the IRS definition, is “a tax deduction that allows a taxpayer to recover the cost of a property over time. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.”

So if you purchase a property for $100,000, and assuming the depreciable building is 80% of the purchase price, then you are generally able to depreciate $80,000 of the purchase price over the life of the rental. This results in a tax deduction each year that can be used to offset your rental income.

What we as investors love about depreciation is that this deduction is available to you regardless of whether the property actually increases or decreases in value. This means that even if your property appreciated in value and is now worth $130,000, you are still able to write off your depreciation based on what you purchased it for.

Another important thing to understand about depreciation is that the amount you write off is not dependent on how much money you put down to purchase the property.

Rather it is based on the purchase price of the contract. For example, on a $100,000 property, you take the same depreciation expense whether you put 20% down or if you put zero money down. This means that it is possible to use depreciation to get tax write-offs without any cash out of pocket.

Now that we talked about how depreciation can be used to help us save on taxes, let’s talk about the four most common depreciation mistakes that we need to watch out for a real estate investors.

1. Depreciation is Not a Choice

Very often we come across taxpayers who either chose not to take depreciation (due to bad advice) or simply didn’t know they can take depreciation (again, due to bad advice).

It is important to know that depreciation is not a choice and if you are eligible to take it, you must take the tax write off. If your rental is eligible for depreciation but you choose not to take it or forget to take it, the IRS will still assume it has been taken and when your property is sold you may end up paying taxes on depreciation recapture that you never received a benefit for previously.

The good news is that if you have not taken your allowable depreciation in the past, there are ways to rectify that problem with amended tax returns to claim what you have previously lost.

2. Recapture is Not the Enemy

Now you may be thinking why in the world would someone choose not to take depreciation?

Well, one of the more common reasons I hear is that people are afraid of depreciation recapture. So what exactly is depreciation recapture? Let’s go over an example: if you take a depreciation deduction for $5,000 today, you may need to pay taxes on that $5,000 if you were to sell your property at a gain down the road.

Sometimes people are afraid of taking depreciation simply because they don’t want the possibility of having to pay taxes on it later. Here are three reasons why this thought process is flawed:

Depreciation is required and not a choice. Choosing not to claim depreciation does not protect you from recapture down the road.
If you ultimately sell your property at break-even or at a loss then you generally do not need to worry about recapture taxes.
Even if you do sell your property at a gain and need to pay recapture taxes, doesn’t it make sense to pay taxes years down the road rather than to pay taxes today? You would not want to prepay the next 20 years’ worth of taxes today would you?

3. Maximizing Your Depreciation

There are lots of different ways to calculate depreciation and it is somewhat rare that I see a tax return with depreciation done in a way that accelerates the depreciation deduction strategically.

Most of the time what I see are investors who depreciate their rental property with two components: land and building. Depending on the investor’s tax profile, this could hurt the investor when it comes to depreciation write-offs.

Most rental properties have many more components than this. There may be appliances, parking structures, landscaping, furniture, fixtures, and much more.

These items can be depreciated much faster than land and building. This concept of identifying the different components and accelerating the depreciation write off is known as a cost segregation.

So if you have made improvements to your property or if you purchased a recently rehabbed property, be sure to provide these break-outs to your tax advisors to accelerate your tax deduction.

4. Something Better than Depreciation?

Believe it or not there is actually something that is even better than depreciation and cost segregation, and that is a “repairs expense”.

Repairs are even better than depreciation because rather than writing off your money over 5, 7, or 27 years, you are able to write off 100% of the repairs cost in the year you incur that expense. If you are looking at making some improvements to your rental property, here is where strategic planning can really help.

For example, rather than spending $30,000 to change out your entire roof and then having to depreciate that $30,000 over multiple years, why not consider repairing part of the roof over time so that each repair cost can be deducted on the year you spend the money?

A slight shift in how your repairs and improvements are done can mean writing off your costs today rather than in the future.

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By Amanda Han

Amanda's Website:http://keystonecpa.com/biggerpockets.php

Amanda has written 40 articles for us.

Amanda Han of Keystone CPA is a tax strategist who specializes in creating cutting-edge tax saving strategies for real estate investors. As real estate investors herself, Amanda has an in-depth understanding of the various aspects of investing including taxation, self-directed investing, entity structuring, and money-raising.

{ 6 comments… read them below or add one }

Anuj Sharma July 31, 2014 at 3:30 pm

Hi Amanda,

Well written. I have few cents to add here. I am not sure if its state to state based or federal, but my CPA (both of them) told me that if you make too much money you can’t file for depreciation yearly, so sometimes its over-hyped the power of depreciation/expenses on year to year basis. Now even though you can’t file for them yearly, you can still write off every expense and even depreciation when you sell your property. In other words according to IRS, for more money making people (which I am not ;), they put all expenses and depreciation in a bucket and you can use that bucket only when you sell your property. So if you sell your property with 50k profit and you showed IRS that expenses and depreciation have costed you 30k for that property, then you will pay capital earning tax only on (50-30)k = 20k. This is little tricky rule as in most of the hyped-up salespitches related to real estate investing, they tell you that you can write off all your expenses and depreciation etc, but they don’t tell you that it all depends upon your income to write them off, If you have less income you can write them every year but if you have high income (high according to IRS not me :)) you have to wait till you sell your property and then you can use those expenses and depreciation to save some money on capital earning tax. Just my few thoughts. Overall very informative article.

Thanks for sharing

Amanda Han August 1, 2014 at 12:36 pm: this statement is accurate and inaccurate at the same time and is often a confusion point for people. Essentially depreciation is just like any other expenses in that it can always be used to offset rental income (this is regardless of how much money a person makes). Therefore there is no different rule for depreciation for high income people. The potential limitation with respect to income is that for people who invest passively on the side and also make a lot of income, any excess losses from rentals may not be able to offset their W-2 income fully. Great comment nonetheless and maybe I can write an article about it in the coming week!
REPLY

Larry Brown July 31, 2014 at 6:04 pm

Can you elaborate a little more on your last comment (about how to claim a roof replacement as a repair vs capital improvement)? I once had an investor tell me you could take all the costs associated with a roof job off your taxes in the year you do the work as long as you only do 1/2 of the work one year and the other half the next year – is that true??

Amanda Han August 1, 2014 at 12:37 pm: Hi Larry this was a strategy we used with one of our clients to split the roof work over two years to accelerate the write off! =)
REPLY

Lear August 2, 2014 at 5:49 am

I want to install a second bathroom in my 3BR 1 BR investment property to raise the value to meet he areas current growing property values for 3/2 properties from a tax planning perspective it would be ideal to begin the improvements in late December and carry through to January of the following year? Or do the upgrades whenever I can and have the costs split across two years

Matt August 3, 2014 at 9:12 am

Can you clarify “repairing part of the roof over time” a little more? Are you suggesting we just do patch jobs as required, or only do one section of the roof after it shows signs of damage?

Ex) replace shingles on west side of house in 2014 and east side in 2015?

Just trying to get an applied idea of repairs vs improvement here.