Thursday, February 22, 2018
Selling Your Home? A Kitchen Clean Up Pays Off
When it comes to selling a home, a kitchen clean up pays. You dont have to do an expensive remodel to make your kitchen appealing to buyers. If youre starting with a good kitchen space, then making a few inexpensive modifications can help you get your home noticed and sell for more money.
Here are a few things to start with. Some people like to leave every single appliance that theyve used in the last week out, but, to show good space,youre going to have to clear your counters. One of the major mistakes sellers make is leaving the kitchen, or their home, the everyday way they live in it. The way you sell and show a home is not usually the way you live in it. Yes, it may be an inconvenience but its worth the hassle if it brings in more money when your home sells.
So, look around your kitchen and see what you can put away. The more empty the counter tops, the better. A few subtle decorations that bring your kitchen to life are perfect. Leave open space for buyers to imagine their own belongings in your kitchen.
If you have any low-hanging pots and pans on racks from the walls or ceilings, consider removing them and patch the holes. Unless the rack is very necessary or really nice decor that doesnt block views or hang too low, removing it will help create a greater feeling of spaciousness.
Wipe the counter tops thoroughly. Sounds so ridiculously simple and obvious. But many sellers forget to do this and the counter tops are left sticky or with stains on them. A little elbow grease could remove a wine stain or watermark and make the kitchen look much more cared-for.
If you dont have an island in your kitchen but have some extra room, a rolling butcher block island works like a charm for adding convenient working space and a sophisticated look. You might also have some delicious-smelling freshly baked cookies out alongside your flyers for open houses.
Get some light in the kitchen. If you have all recessed lighting, you might try adding a few pendant lights. They add a completely different look and can be quite attractive.
Change your flooring if its very old, torn up, or outdated. Putting in some inexpensive flooring that gives an updated look will help. You dont have to spend lots of money and get the best flooring around; just make sure your flooring doesnt make your home look like its in a time warp.
Add some plants and greenery to the kitchen. Using fresh herbs in simple containers is a great way to add some pretty decor plus their lovely aromatic odors help buyers think about the meals theyd cook in your kitchen.
Clean up or replace old worn-down appliances. You can sell the home with appliances "as is" but a broken dishwasher, for instance, is a point of price negotiation. You can expect buyers to want some money off or for it to be replaced.
The kitchen is one of the most important areas of a home for most buyers, even if they dont cook. Taking the time to enhance it before you list your home will help make sure your home sells for top dollar.
One of the biggest reasons that people buy homes instead of continuing to rent is to have more space.
But the cost of buying with little money down or to move up to a better neighborhood could mean a compromise on space.
Many older homes, particularly those built before the 1990s, average less square footage than newer homes. One way homeowners get more space is by converting the garage.
The average garage is approximately 20 by 20 feet. Converting it gives you approximately 400 more square feet of living area.
The location of the garage is ideal. Its already under the roof and walled on three sides, making it >And thats where your plans can go wrong.
Unless you remodel the garage from the outside, it will always look like a conversion. The driveway will lead to... a wall, so it will have to be remodeled, too.
Youll have problems on the interior as well. The floor will be lower than the rest of the house because its a concrete slab. It isnt insulated like the rest of the house, so there will be a noticeable difference in sound absorption and temperature.
Where youll encounter the most difficulty is in determining your homes value. When you purchased the home, you paid so much per square foot. Only living space is counted, which doesnt include the garage, porch or patio, even if they are under the roof.
Youll get more living space for less per square foot, but when it comes time to sell your converted home, get ready for mixed reactions from buyers. Many will refuse to even look at your home. They want the security, storage, and utility of a garage.
Others will consider your home but they will punish the lack of a garage with a low offer. Some will refuse to count the square footage of the garage as equal to the rest of the house. Others will deduct the cost of reconversion or building a new garage in their offer.
So, youre getting ready to buy your first home, and you feel like youre at the mercy of the market. And your mortgage lender. In some ways, it might even feel like theyre working against each other - especially if youre in a really hot market in which you cant qualify for the amount youd need to buy what you want.
When it comes to providing pre-approvals for would-be homebuyers, lenders today are more careful than they were in the years leading up to the market crash, and that means your financial picture will be more rigorously scrutinized to determine your credit-worthiness and develop your max approval amount. Trust us, thats a good thing. The last thing you want is to be house poor. Having a great place to live that you cant enjoy or furnish or even leave because you have no money left wont be fun.
"Just because a lender says younbsp;cannbsp;afford a certain mortgage doesnt mean younbsp;should," said TIME: Money. "Consider your take-home pay - what actually goes into the bank after taxes, health insurance, and savings for retirement and college. Then add up all your monthly bills, not just debt but also things like utilities, phone, and groceries. You want to feel comfortable that you can cover all your household obligations while still meeting your other financial goalsnbsp;andnbsp;keeping six months of expenses in annbsp;emergency fund."
Thats why its so important to consider all of your monthly expenses >
Increased commuter costs
Are you moving out to the lsquo;burbs? That hour-long commute each way is going to add to your bottom line. Of course youll be using more gas. Will you also incur tolls? Then there is the wear and tear on your car, which could mean additional costs. You can estimate your commuter costs here.
Higher utility bills
A larger place could mean higher utility bills. Then again, more energy-efficient appliances, windows and doors, and HVAC could potentially result in lower bills, which could be a reason to look for a newer home over something older. Its not out of line to inquire about utility bill costs from the existing owner through your Realtor is probably best. This information could be critical in helping to make the best decision when buying a new home.
Your pre-approval amount is an all-in number, but that number only includes principal, interest, taxes, and insurance. If you are buying in a community that has a Homeowners Association, your fee will be a separate cost that needs to be considered. An HOA fee can range greatly depending on your location, the number of homes in the community, and the amenities and services included.
Youre likely going to have a mailbox full of credit card pre-approvals and offers from places like Home Depot and Lowes after you close escrow - and they can be tempting. Reeeaaallly tempting, especially if you need new appliances or countertops or flooring or all of the above. Ditto for furniture stores, because, like Lowes and Home Depot, those offers are often zero-interest deals. It may make sense to take advantage of one or more of them to make some necessary or wanted updates to your home - if you can swing the payments. They obviously add to your monthly obligations, even at no interest. And keep in mind that if you miss, or are late on, a payment, that zero interest is replaced with a much larger number, and that means youll face a much larger balance to pay.
If youre coming from an apartment or a rental where the outside maintenance is taken care of by someone else, get ready to either: buy a lawnmower and an edger and spend your Saturday mornings in the yard, or pay someone else to take care of it.
If youre buying a brand-new home, youll typically have a warranty provided by the builder or developer, often for one year. You have the option of extending that, or buying/extending an existing warranty on an older home, and all of those options will cost you.
You dont have to pay through the nose to have the best backyard on the block. If you have a few simple DIY skills and know how to use a tape measure and level, you can easily upgrade and update your backyard all on your own.
If youve ever dreamed of a lovely garden path, perennial garden or a privacy fence, but youve hesitated because of cost, now is the time to invest a little sweat equity to create the backyard of your dreams.
Plant a Perennial Garden
Tending perennials may seem daunting to inexperienced gardeners, but in reality, theyre some of the easiest flowers to grow. Best of all, plant them once and they return to bloom every year. Perennial gardens make lively backgrounds for your annual plantings. Use them along fences and border porches and decks to add color from early summer to late fall.
To ensure the stability and livelihood of your perennial plants:
Install a Privacy Fence
If you crave a secluded backyard oasis, consider installing a 6-foot or 8-foot section of privacy fence. Your local home improvement store sells this type of fencing in sections. All you have to do is level the terrain and dig the post holes. Use a quick-setting cement to anchor your fence posts, making sure everything is level and square before moving on to the next section.
With a little tenacity, you can install a privacy fence in one weekend. Done properly, it adds privacy and enjoyment to your backyard and value to your home.
Replace Your Pool Liner
It sounds like a difficult challenge, but replacing your pool liner is quite simple when you start with the right tools and quality supplies. Visit webpages such as poolproducts.com inground liner to find the materials you, as a DIYer, need to perform simple maintenance on your in-ground pool. Keep the following points in mind as you replace your pools liner:
Hardscape Your Backyard
The addition of pavers, retaining walls, fire pits and patios all add value and comfort to your backyard, but many homeowners dont realize they can easily complete these upgrades without the help of professional landscapers.
Lay decorative pavers on a bed of tamped sand to make an easy patio that stands up to the elements, or layer simple bricks with or without mortar to make attractive and functional retaining walls. A meandering garden path guided by decorative cobblestones can lead to a simple water feature or wooden bench in your garden. Delight your backyard guests and yourself this summer by creating a simple hardscape that complements the design of your home.
Investing in mortgages should not be looked at with trepidation. As with other cash flow investments such as corporate bonds, government notes, or money market funds, mortgage investments can be looked at in the same vein. Mortgage investments have an attractive risk-return ratio in comparison to other income-producing investments. If you choose your investment intelligently, individual short-term mortgages which I define as first deeds of trust on real estate with 65 loan-to-value LTV ratios, maturing in two years or less are considered more risky than money market accounts or US Treasury bills, but they offer yields at the level of high yield corporate bonds, or even higher with potentially lesser risk.
Chart 1 shows the general risk of short-term mortgages as compared to other income producing investments.
Risk in terms of loss of principal taking into consideration opportunity costs if interest rates rise. Generally, individual mortgages do not trade in the open market; thus, the principal is not subject to market fluctuations as compared to Govt T-Notes, Govt Notes, and Corporate Bonds. In addition, mortgages that have a 65 LTV enjoy some protection if the underlying property declines in value. Govt Notes and Bonds have no collateral backing but are Govt backed and Corporate bonds usually have no specific collateral and are based upon the full faith and credit of the issuer.
Chart 2 shows the general return of mortgage investments on a current rate of return as compared to other income producing investments.
Chart 3 is a grid that shows the comparative advantage of mortgage investments over alternative income producing investments when considering opportunity risk/reward ratios by combing Charts 1 amp; 2.
For purposes of this article, we have defined the following:
Govt T-Bills -- 1 yr obligations guaranteed by the US Government
Govt T-Notes -- 5-10 yr obligations guaranteed by the US Government
Govt T-Bonds -- 15-30 yr obligations guaranteed by the US Government
CDs -- 1 yr FDIC insured
Money Mkt Funds -- liquid mutual funds maintaining a 1 share price
Corporate Bonds -- 15-30 yr obligations guaranteed by a US corporation rated BBB or better
Mortgage Investments -- 1st deeds of trust on real estate with 65 loan to value maturing in two years.
Risks involved in mortgages vary from the other investments that financial advisors might be more familiar with and more due diligence is required. First of all, unlike CDs or US government obligations, mortgage investments are not FDIC-insured and have no government guarantee. Do not confuse these types of mortgage investments with past GNMAs, the pooled investments created by the quasi-governmental mortgage company Ginnie Mae and sold to the public. GNMAs are mortgage-type investments and have a quasi-government backing. By contrast, the mortgages used in the above examples are individual mortgages; thus, the principal is fixed and does not fluctuate unlike GNMAs, which return a portion of principal with each interest payment and trade in the open market and are thus subjected to market volatility. The mortgage investments backing is primarily going to be the underlying real estate on which the mortgage is recorded specific versus blind pool and almost all short-term mortgages will pay interest only, thus keeping the principal intact.
However, all income-producing investments carry some risk -- and its often misunderstood, even by sophisticated financial advisors. For example, money market funds generally are only backed by the mutual funds integrity to honor the 1 share price because all they are holding are short-term obligations, both government and corporate. However, in the early 1990s, when many corporate bonds went sour, investors suddenly learned that their 1 share price was not guaranteed; they could actually lose principal. The mutual fund families that sponsored the money market funds paid out of pocket to subsidize the share prices, thereby preserving the sacred cow.
Corporate bonds carry the risk of strength and integrity of the corporation that issued the bonds. Independent rating services such as Standard and Poors and Moodys have been shown to misjudge the security of many corporate bonds -- whether through conflicts-of-interest or simple mistakes. Even without misjudgments, the price of a corporate bond fluctuates based on the performance of the company, its industry, and the economy overall. In addition, as interest rates rise, the value of the bonds decrease.
The risks that a mortgage investor faces primarily involve the borrower and the underlying real estate. An investor may choose to work with a borrower with less than perfect credit if there is sufficient equity in the property that it is worth the risk. Alternatively, a property may be marginal, but the borrower has excellent credit. These are the main factors determining the interest rate that an investor can expect on his mortgage investment.
Another factor in determining the rate on a mortgage is the competition for these types of investments. In the past, they were considered one of the best kept secrets in investing. No longer. The competition for mortgage investments has heightened to where lenders are competing for loans. This, in turn, drives down the rates. Good for the borrowers; not so for the investors. On the positive side, what once was considered an illiquid investment has risen to a semi-liquid investment. Although there is not a trading market for mortgages as there is for stocks and bonds, new companies have come to the marketplace in search of purchasing existing loans; thus, a market has opened up providing liquidity to those holders of mortgages who want to sell their loans. Giving up yield for liquidity has been attractive to some investors. The yield may be upwards of 1 lower for this ability to sell, but many have decided it is worth it. An Internet search of purchasers of mortgage investments provides many companies willing to buy them.
With the Great Recession now more than five years in the rear view mirror, many financial institutions have loosened some of their lending restrictions. This has also caused interest rates to remain competitive for borrowers. However, because of strict regulations with Dodd Frank and the ATR [Ability To Repay] requirements imposed upon both conventional and private lenders, many borrowers are facing difficulties obtaining the financing necessary to purchase owner occupied real estate used for their primary residence. Otherwise, >
One of the major problems holders of long-term debt instruments be they government or corporate bonds encounter is not so much the risk of failure, but the opportunity cost during rising interest rates. As interest rates rise as we are slowly starting to see now, the investor is caught holding investments that are losing principal, albeit temporarily. Sure, these investors can hold on to lower-return investments until maturity, but the price they pay in the lack of opportunity to participate in higher yielding instruments usually outweighs the wait. Of course, in times of declining interest rates, one would be better served to be in the longest-term bond possible and to sell just as interest rates begin to rise. The question then becomes one of using a crystal ball in which way interest rates are headed.
One solution for the risk-averse investor is to look to short-term mortgage investments no more than 5-year maturities for >
Where do investors and their advisors find these short-term real estate mortgages? There are lenders called "private money real estate lenders" who provide private financing to borrowers who may not be able to obtain conventional loans for a variety of reasons. Advisors should primarily deal with lenders who have a good reputation and record the deed of trust. In some cases, investors may want to invest in a specific mortgage because they know exactly which property is securing their investment; however, the down side to this strategy is that there is now a lot of competition for these types of loan investments and one may be sitting on the sidelines waiting for an opportunity to invest. If the investors money sits too long [in a low interest, liquid account waiting to deploy funds for a new loan], the blended rate of return after the loan is found and invested in may be lower than if the investor invested in a Fund that holds mortgages. For example, if an investor allows his/her money to rest in a money market fund paying 1 and it takes six months to find an 8 note, after one year, the average rate of return for that year was only 4.5 as compared to a Fund that may pay 7. Something else to consider is that a Fund may allow for a reinvestment of monthly distributions thereby compounding the yield. With an individual mortgage, the lender has to take the monthly payments with no reinvestment allowed. In addition, a Fund allows for diversification because the Fund has many mortgages, similar to a mutual fund holding a variety of stocks. Because this type of investment is no longer a secret, many individual investors are competing for mortgages. When a broker presents a potential scenario to an investor, that broker usually also sends the same scenario to many other potential investors, as the broker wants to make sure that he can fund the loan in a timely fashion to the borrower. Many an investor has gotten upset when, after giving the broker the green light for the loan, the broker informs the investor that he was too late and some other investor snapped up the loan. This creates a frustrating situation for the investor and wastes his time. At some point, the investor may tell the broker to stop sending him deals, as he never knows if he will be allowed to invest in the specific loan [because another investor was faster in saying, "yes"].
Many investors choose to invest in a Fund to avoid those disappointments. In addition, many Funds provide a liquidity feature, so the investor can withdraw his money if he needs to. Advisors should look for Funds that charge no load to get in or out and make sure the manager of the Funds interests are aligned. One way is for the Fund to participate in the points being charged to the borrower. This lends itself to make sure the manager does not charge a large amount of points [which the manager could retain] and a small interest rate [which is paid to the Fund].
Although short-term mortgages and mortgage Funds are not the "end all" investment, they may play a prominent place in many investment portfolios looking to provide high yields for >
Edward Brown is in the Investor >415-883-2150
Question: Our condo has an election coming up: eight applicants for four positions. Residents are sent packets with applicants resumes and proxy sheet to mail n if they are not able to attend the meeting to vote in person. Some residents ignore the entire event.
Some applicants are going door to door asking residents to sign a proxy form for them. These applicants will then walk into the meeting with signed proxies - more or less rigging the voting process.
This process just appears to me to be slightly unethical. Please send your opinion. - Bonnie
Answer: Bonnie: Join the wonderful world of condominium living. Personally, I dont like the concept of a "proxy;" if you care enough about your association, come to the meetings. However, as a practical matter, proxies are usually needed to meet quorum requirements.
I do not, however, consider what is occurring in your association unethical. Whats wrong with meeting with fellow owners and trying to get their vote. Thats the way politics works for national, state and local elections, so why is it wrong in your association?
So long as all potential candidates have the same opportunity to solicit votes, that, in my opinion, is democracy.
Question: When a condominium association needs to make a decision regarding a choice between an assessment versus increasing condominium fees, which is wiser? Our over-55 community has six sub-associations and unfortunately ours has depleted our reserve funds due to the repair of some extensive structural damage for which the builder is no longer responsible after almost 14 years.
The property management company contends an assessment is less desirable and would result in a negative for the entire development. I feel that a seriously depleted reserve fund is more detrimental and should be addressed with an assessment immediately versus increasing the monthly fees. - Joan
Answer: You asked a very good question, but unfortunately, there is no easy answer. This can not be answered in a vacuum; we have to look at all of the facts. And perhaps the most important fact is to analyze the makeup of the owners. Can they afford a large assessment? Will such an assessment trigger more defaults, which would make your financial situation even worse.
What repairs are immediately needed? Has the board considered getting a bank loan, especially now that interest rates are low? Has the board considered a combination of assessment and increased monthly fees?
Bottom line: The board - with the input of owners such as you - should carefully consider all of the facts and all of the various options before making a decision. There is no universal answer.
Question: I have not seen or I have missed info in your column on reverse mortgages. Im 77 and have my own home. I have four adult children who own their homes and are not interested in mine. I still have a mortgage balance of 113,000. Would you please provide me with some information on reverse mortgages - the pros and cons or who I can get in touch with for info? Mary.
Answer: Mary: Perhaps the best place to start learning about reverse mortgages is from the AARP. They have lots of helpful material which you can get online.
Pro: Depending on the value of your house and the amount if any of your current mortgage, you can get a lump sum right now.
Alternatively, you can receive a monthly payment for the rest of your life or until the house is sold. And this is true even if these payments ultimately exceed the value of your house.
Con: You still have to pay the insurance and the real estate tax every year. You still have to maintain the house. And perhaps the most significant negative: You may have no equity left in the house to give to your children or your grandchildren.
I cannot - in this short column - provide more information. In addition to AARP, there are a lot of helpful studies and articles on the web, which you can find just by searching "reverse mortgages." But beware of scammers. And dont >
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Avoid Contractor Estimation Errors; Hire A Contractor That Uses The Bluebook Pro Estimator
There are many things to consider when it comes to remodeling or any other home improvements on a home. The pressure to get things done in the right way can at times be overwhelming. However, choosing the right residential construction contractor can help you >
One of the must-have tools a homeowner should look for when choosing a residential contractor, is the Bluebook PRO Estimator. This cloud-based cost estimating solution enables contractors to build fair, accurate home improvement estimates for the homeowner. Below is a rundown of the benefits you can expect by hiring a contractor that uses the Bluebook PRO Estimator.
When it comes to estimating the cost of a construction project, you cannot afford to be wrong. A wrong estimation can lead to wastage or even stalling of a project if you realize later that you cannot finance it. You, therefore, need a contractor with the most objective way of doing estimates. The Bluebook PRO Estimator is arguably the most accurate tool that residential contractors can use to estimate the cost, and even manage the actual project. Working with a contractor that uses the Bluebook Pro Estimator will significantly eliminate the chances of human error in estimation.
Your home is probably the most valuable thing that you have. Thus, you want to make sure to leave its construction, repair, or renovation in the hands of qualified professionals. You need a contractor exhibiting the highest standards of professionalism. Although there are other things that you can consider to ascertain professionalism, the tools that they use can give a clue. The Bluebook PRO Estimator is a must-have tool for all residential contractors, giving you valuable, early insight into the tools they employ and the professionalism at all levels of their work.
The best part of hiring a contractor that uses the Bluebook PRO Estimator is their ability to make accurate bids time and time again. This makes it possible for them to draw up accurate timeframes and put cost-cutting measures by looking at past projects and comparing the similar ones. Thus, by working with contractors who use Bluebook PRO Estimator, it will be possible for them to create realistic expectations on your project based on the past, ensuring you will not be frustrated in the end.
Fair Pricing and Efficiency
For you to get value from your project, it is imperative to ensure that you get a contractor that will deliver quality work at the fairest cost possible. This is what contractors that use Bluebook PRO Estimator are best known for. This tool enables them to work efficiently and provide you trusted pricing, which will go a long way in saving you time and money.
Overall, it is apparent that Bluebook PRO Estimator is an essential tool for all residential contractors and one factor that homeowners should look for when making a decision on their home improvement project. This tool enables contractors to deliver estimated project costs with accuracy, professionalism, and efficiency. If you are looking for a contractor to build, repair or remodel your home, it is wise to ensure that they are using Bluebook PRO Estimator, the official recommended nationwide Cost Estimating tool of Realty Times.
Ask your contractor; "Are you a Bluebook PRO Estimator?"
It costs a lot more to buy a home in Toronto or Vancouver than it did in 2010. While some of the increase is >
A new study by Canada Mortgage and Housing Corp. looked at the period from 2010 to 2016, during which prices in Vancouver rose by 48 per cent and in Toronto by 40 per cent. It determined that about 75 per cent of the increase in Vancouver could be attributed to conventional economic factors -- including mortgage interest rates that were near historic lows, higher disposable incomes and population growth. But in Toronto, those factors only accounted for 40 per cent of the increase, says the report.
"We investigated the data for additional key factors that could explain the elevated activity levels," says the report. "We found that there had been a shift in the distribution of sales toward high-end homes, with almost all growth in prices for these properties coming from more expensive, single-detached units. This suggests that looking at different points in the income distribution is just as important as studying how income levels evolve across the distribution."
The highest-paying jobs are in the largest cities. Toronto is the financial services capital of Canada and both Toronto and Vancouver have many well-paying jobs in the advanced technology and health care fields.
"Businesses located their workforces where they can access pools of talent -- in major metropolitan centres. Consequently, disposal income among some groups is rising more rapidly in certain cities," says the CMHC report. "These trends reinforce the role of larger cities in attracting highly educated professionals from both other parts of Canada and abroad, thereby providing even a further boost to the demand for housing."
How much did investor and speculative activity drive up prices? Perhaps not as much as many think, and investors are probably helping boost the supply of available homes, says the report.
"If the number of housing starts is much higher than the rate of household formation, we argue that this difference was likely financed by investors," says the report. It says rising home prices attract small-scale rental investors, including individuals who rent out part of their homes to help them with their mortgage payments. "It is also possible that many of these investors have effectively generated demand for builders and developers to construct more housing. In this regard, investors could be effectively encouraging more supply rather than increasing demand."
The controversial issue of foreign investment is "a persistent challenge" because of a lack of data, although Statistics Canada and CMHC have increased their efforts to track foreign buying activity. A recent report from Statistics Canada found that non-residents own 3.4 per cent of residential properties in Toronto and 4.9 per cent in Vancouver.
"While official data on the stock and flow of foreign investment appear low, it is possible that upsurges of foreign investment at market peaks could alter expectations of domestic homebuyers on the price they should pay for housing, and encourage domestic speculators," says the report. A CMHC survey found that 52 per cent of recent homebuyers in Toronto and Vancouver believed that foreign buyers were having an influence on home prices.
Both B.C. and Ontario have introduced taxes on non-resident real estate buyers.
For years, the development and real estate industries have said that government policies that limit the supply of developable land, along with land-use policies and "not in my backyard" movements, have made it impossible for the industry to keep up with demand. That means that more affordable low-rise housing such as townhomes, semi-detached homes and multiplexes, are not being built.
"We found that supply responses to price increases in Toronto and Vancouver were proportionately weaker than the response in other cities, which is consistent with corresponding regulation and geographic characteristics," says CMHC.
The study says many Vancouver homes are demolished and replaced with more expensive ones that house the same number of people. "There also appears to be a sizable price gap when moving from two- to three-bedroom homes, suggesting there is a shortage of three-bedroom homes. We do not have data for Toronto on this issue, but we suspect this is happening there as well."
The study calls for the densification of cities. "Densification, however, needs to increase the supply of all types of housing. Preserving enclaves of single-detached housing will likely only serve to increase wealth inequity and not meet the housing needs of a growing population. It is particularly imperative that the process of redeveloping land within the borders of Canadian cities occur efficiently and promote change in the form of local neighbourhoods. While many Canadians fear density, we found evidence that high-density communities can be made in low-rise structures through partnerships between developers and local communities and government."
It cites examples such as the redevelopment of Humbertown shopping plaza in Toronto and the Oakridge Shopping Centre in Vancouver. In both cases, old 1950s->CMHC says there are several key "data and analytical gaps in housing that restrict our ability to predict housing market forces and anticipate changing needs." It has pledged to work with all levels of government to try to share more information and "better understand the underlying factors that limit housing supply in high-priced markets, and support more timely and flexible ways to respond to those challenges."
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California Broker-Owned Escrows Need To Submit Activity Reports
It is time again -- but there is not much time left -- for affected California brokers to submit their annual Escrow Activity Report to the Bureau of Real Estate BRE. This applies to firms that operate a "broker-controlled escrow" that engaged in five or more transactions or whose escrow activities exceeded 1 million in the past calendar year.
Not every California Broker has an escrow division. Many own escrow companies that operate under the Department of Business Oversight DBO. Many others simply have no ownership interest in any escrow operation. On the other hand, there are those who operate a "broker-controlled escrow", pursuant to their real estate brokers license. These escrows are restricted to transactions in which the >Broker-controlled escrows are significantly restricted as to their potential market when compared to the more common escrow company operating under the DBO. Nonetheless, broker escrows require less capitalization and can still bring a decent profit into a brokerage.
In October of 2011, Senate Bill 53 Calderon was signed into law adding section 10141.6 to the Business and Professions Code. It set forth filing requirements for broker-controlled escrows. If such operations conduct escrow activities for five or more transactions in a calendar year, or whose activities equal or exceed one million dollars in a calendar year, it is required that a report be filed within sixty days following the completion of the calendar year. Except for leap years, the deadline is March 1.
The report is submitted on the Bureaus form RE 890. It is neither particularly burdensome nor time-consuming to complete. In addition to asking about the number and dollar volume of escrow transactions, it requests the location of escrow offices and basic information regarding the escrow officers and escrow trust accounts. If anyone has difficulty with the form, they may contact the CalBRE Mortgage Loan Activities section at 916 263-8941.
It has been a source of particular annoyance to the Bureau and its Commissioner that, so far, there appears to be a serious lack of compliance with Business and Professions Code 10141.6.
In the first year the requirement went into effect, for calendar year 2013, 206 real estate brokers reported broker escrow activities totaling 8.63 billion. Since then, the number of reporting brokers has actually declined.
The Bureau estimates that more than 700 brokerages should be submitting reports. Note that the number is an estimate. There is no special form or requirement for a broker to conduct escrow activity, so the Bureau has never been able to compile a data base of broker-controlled escrows. It would have such a data base if everyone affected by Business and Professions Code 10146.6 complied with the law. At least it would have a list of those who meet the reporting requirements described in paragraph one, above. But, because not everyone has complied, the Bureau doesnt even know who the non-compliant ones are.
How then, you ask, does it know that there actually are non-compliant brokers with respect to escrow activities? Because it finds them when conducting audits. Some of those audits are random; others are the result of complaints, not necessarily >Last year, the Bureau conducted 632 audits, of which approximately 15 95 were >Fines for failing to submit a timely report can run up to 10,000. There can also be non-monetary penalties as well as the often-substantial cost of a BRE audit. The Bureaus Audit section is actively pursuing brokers to determine if they have met their reporting requirements, if any. Brokers who have escrows that meet the >Bob Hunt is a director of the California Association of Realtorsreg;. He is the author of Real Estate the Ethical Way. His email address is .
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DIY Renovating Donts We Learned From Experience
DIY always seems like such a good idea in the dream stage. Build in some equity with elbow grease. Get more for our money while learning some important skills. Create pretty spaces without having to deal with contractors. What could go wrong?
Plenty, actually. If you dont already have a DIY horror story, or at least a tale of woe thats funny only in the rear-view mirror, youre probably overdue. But you can avoid the problems and the pain by learning from others mistakes.
Dont start a project without educating yourself
Putting up a backsplash. It seems like an easy enough task. One that you can involve your children in, even. And then you step back and take a look at your post-backsplash handiwork and realizeperhaps you should have consulted an expert. Or at least watched a YouTube video or two.
The truth is that you can learn almost anything you want today just by Googling it. There are tons of tutorials out there that can teach you how to lay wood floor or replace a window or, yes, do your own backsplash. Or, build a house from scratch, if thats what youre into. They probably wont turn you into an expert overnight, and, in many cases, an abbreviated study isnt going to compare to the work of someone who has been honing their craft for many years. But for the persistent DIYer, getting in some good study before starting your project is essential to doing a job well.
Dont paint your cabinets without prepping first
Guilty. Yes, we knew sanding was necessary for a smooth finish. Yes, we did it anyway Weve since learned from our mistakes but still. If you want cabinets that chip and peel and generally look like crap, painting without prepping is definitely the way to go.
Commit to finishing a project
Anyone else paint half a room - the lower half that doesnt require standing on a ladder, perhaps - with the intention of finishing the other half in a day or two? Anyone else have one or more unpainted rooms? Sometimes, the DIY brain just wont rest, and its always looking ahead to the next project. That can lead to a house-full of projects in progress and a chaotic home. Of course, that could just be us.
One way to combat this is by goal-setting with an actual deadline, whether its a weekend or a month. You abide by them at work, right? Make your projects a priority by setting realistic deadlines you can follow, and then commit to getting it all done before starting something new.
Measure, measure, measure
Weve all heard the saying. "Measure twice, cut once." But, honestly, sometimes measuring twice doesnt feel sufficient to us. If we can get it right three times in a two, we feel pretty confident weve got the right measurements.
"One of the biggest fails you can make is also one of the most common, especially for do-it-yourselfers," said HomeAdvisor. "Measuring incorrectly can cost you a lot of money and cause a lot of headaches. Being off by an inch, a half-inch, or an even smaller fraction of an inch can have dire consequences when it comes to your home renovation project. Incorrect measurements can mean that you dont have enough space to install your appliances or you dont purchase enough materials to complete the project. To avoid making this mistake, measure multiple times. If youre working with someone, have him or her measure as well to ensure that the numbers are accurate."
Dont rush your paint choice
If it looks great in the store, itll look great in or on your place, right? Not always. Theres a reason paint stores have samples. Do yourself a favor and buy a couple. The light and shadows in your room could make the color look completely different in your home, turning what you thought was the perfect shade into something meh.
Youll also want to make sure you try the paint in every room you plan to use it in. Perfect Greige is one of our favorite colors, and it looked great in our sunny office. Used in our dark-ish bathroom, however, it turned it into a muddy, cave-like space.
Another important factor to remember is what type of paint to use. That same bathroom was extra challenging to make over because someone had slathered the walls in flat paint long before we got there. "Manufacturers make paint for every surface in your home and they are not all the same," said HomeAdvisor. "Flat paint does not have a shine, shows marks, and is not easy to clean. Use this type of paint on ceilings and on walls in low-traffic areas. Semi-gloss and gloss paints have a nice shine and are a better option for walls in bathrooms, kitchens, and other high-traffic rooms."
Make a realistic budget
When it comes to our home, we all want more than we want to or can pay for. But lowballing your reno budget just to get a project going typically wont work out so well in the end when the numbers start to add up and you dont have enough money to comfortably finish it. Planning out a project well and doing sufficient research to come up with legitimate numbers is key.
"To calculate how much remodel you can afford, follow these four steps: Ballpark the cost, establish a spending limit, get quotes from contractors, and set your priorities," said houselogic. A fifth, very important step is this: Once you arrive at that magic number, add more money to it. "Add a 15 to 20 contingency for the unforeseen problems and changes that occur on every project. Is the total still within your ability to pay? If so, youre ready to get started. If not, its time to scale back your plans."
Make sure your contractor is qualified
There are times you just arent going to be able to DIY something or will find yourself overmatched by a task and in need of someone to pick it up and finish. It happens.
The handyman down the street may be affordable and gung ho about redoing your bathroom, but is he qualified? Trying to save a buck can cost you big time in the end if the work is done incorrectly. Sometimes, it pays to go with a qualified contractor who may cost a bit more upfront but who you can be confident about.
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Renovation Tips For A Classic, Not Trendy, Home
Heres the dilemma. Youre getting ready to redo your kitchen and you want it to be stylish and modern but not trendy. After all, this is the only kitchen renovation you ever plan to do and you dont want it to be outdated before you are even finished with the final touches.
If youre paralyzed because youre afraid of making the wrong decision, we get it. Were facing a similar dilemma here, FYI, with floors that need to be done and so many options from which to choose and no winner yet because its not yet clear if what is currently hot is just a flash in the floor pan or will stick around for a while.
So how do you know how to choose? First, it depends on what your goals are. If youre just looking to update and then sell your house, choosing materials that are trending now may be a good call. If youre thinking, "I want to love this and have it still look good in 10 years," thats another story.
"Youve probably taken on a renovation project because you want to update the >
Yes, neutral can be boring. Its true. It can also be super chic when done right. Making a bold choice with your kitchen countertops might feel like the right way to go right now, but you may turn around in a couple years and regret that choice, especially if youre going to try to sell your home. You can always bring in pops of color with accessories or items that are easier to replace or redo.
For the last several years, grey has been the go-to color for homes. Prior to that, it was beige - a color that is currently seeing a resurgence even though grey is not gone - yet. Black and white is another currently hot option for color schemes, and, the bonus is, "black and white remains a >
Just keep in mind that high ceilings and other architectural features may make a DIY situation un-DIY-able and may make a redo more expensive because you have to hire someone. Key in on walls that dont soar to a pitched ceiling or that can act as a focal wall for high-impact thats easy to accomplish yourself.
Be smart about your kitchen
You may have a desired look cemented in your head for your kitchen, but are you making smart choices? Shaker cabinets, farmhouse sinks, and marble countertops are a few good options if you want something that looks modern but "will stand the test of time and still look as beautiful twenty years from now as it does today," said Apartment Therapy.
Go eclectic with your furniture
An entire house full of mid-century modern furniture can begin to look like a showroom, and when the trend is over, it can be painful to replace it all. Creating a more eclectic look with an eye toward >
Avoid hyper trends in larger items
Drapery, rugs, and bedding can be easily changed out to accommodate your fickle design taste. But when it comes to the larger pieces in the home - a couch or a set of chairs, perhaps, avoiding trends will give you longevity. "Timeless decor means fabrics that will stand up to years of changing trends They transcend those changes," said Stone Gable. "Dont rush out and buy foundational furniture in the lsquo;color of the year Its only the lsquo;color of the year for one year Choose colors and patterns, especially when buying big ticket items, that will still look amazing when this years trends have come and gone. Add layers of accent decor like lamps, art, tableware, pillows, bedding, etc. in more updated colors and >
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Tips For Negotiating With Sellers
If you dread the negotiating process when buying a home, never fear. Your real estate agent is an experienced negotiator who helps keep the bargaining from becoming emotional and veering off track.
Your agent must know your desires by heart and have quick access to you if a negotiation point needs to be made. Its important to stick to the strategy you and your agent have agreed upon -- showing the seller how strong your offer is.
First, get preapproved for a mortgage loan. That means your mortgage lender has reviewed your credit history and assets, checked employment and income, examined your debt-to-income ratios, and has preapproved you for a certain amount, terms and interest rate so you know exactly how much you can spend.
Being preapproved shows sellers that you are prepared and able to buy. Before you submit an offer, ask your agent to find out more what the seller wants as far as terms. The more your offer matches up with the sellers requests, such as a closing date, the more likely your offer will be accepted.
Find out when the house will be vacated, if any repairs or improvements are planned, and if the seller has any pressure points such as a >Your agent must also find out if other offers are on the table. Your position is stronger if there are no other offers. The seller may be less likely to bend on price concessions or repairs if there are other offers.
Have your agent pull up the most recent CMA comparable homes recently sold or on the market within a reasonable radius of the home, so you can sculpt your offer price. Be sure that you are comparing apples to apples in terms of updates, size of the home, amenities, location, schools districts, etc.
Once these steps are made, you are ready to write an offer.
Making the offer
Make yourself think like the seller. It helps you anticipate what the seller will accept in price, terms, and other conditions. By considering the sellers position, you will likely create an offer that is either accepted or strongly considered.
Your offer should be clear on the terms, closing dates, repair requests or other conditions the seller needs to meet and it should be accompanied by a letter from your lender that you are preapproved to buy the sellers home. Include a cover letter summarizing your strengths as a buyer in terms of creditworthiness, flexibility in closing, and the strength of the offer.
Dont insult the seller with an offer thats too low or requires too many concessions. The seller may be nostalgic about his or her life in the house and may not like the idea that you want to remodel.
The only thing a seller cant argue with is a strong set of comparables that show the home is overpriced or out of date. These are homes that have sold that are nearby within two blocks and similar in age, size and features. If you can show that a similar home has sold within the last two months for less than the seller is asking, thats good.
Be sure all conditions, repairs, etc. are agreed to in writing. Some sellers may feel that a handshake covers a promise, but its essential to be clear on paper what is expected and when. A sellers promise to paint should be included as an addendum to the contract and include all details, such as primer, exact color and type of paint, how many coats, and when the work will be finished for inspection.
Negotiating after inspections
The offer is negotiated and accepted, the earnest money is at the escrow agents office. Now the inspections occur, and this is where the contract negotiations can break down.
No home is perfect, not even brand-new construction. During the inspection process, the inspector is usually required to tell you about any condition of appliances, heating and cooling systems, roofs, electrical and plumbing systems, etc, and if your future home is up to current city codes.
Sellers are usually not required to bring a house completely up to current local building codes. Negotiate a repair only when a system is unsafe or a major repair is needed to make the system operate effectively.
As long as the seller has a reasonable explanation of what your position is and why, and communication remains open, the seller should have as much desire to make the contract work as you do.
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Design Tips for Upgrading Your Sunroom
The bones of your sunroom are all there - windows, floors, ceiling and maybe even some >
Big Changes for Big Effects
Take a good look at your space. What do you see? The "bones" of your space set the tone for everything that goes in it: this includes flooring, wall color or wall finish, ceiling, and other architectural elements that give your room its distinctive atmosphere. Tile and stained concrete are both tempting options for sunroom floors since they lend a breezy, sophisticated atmosphere to a sunshiny space.
Overhaul Your Floor with Tile
If youre looking to make a big impact with your floor, tile is a fantastic choicemdash;its sophisticated, you can do it yourself with a bit of practice and know-how, and your options are endless. Opt for a cozy, rustic brick feel, or perhaps Moroccan elegance with colorful tiles boasting a cool, casual feel. This Old House offers step-by-step instructions to lay your own tile floor. Keep in mind that when youre laying your own tile, the simpler the pattern, the better.
Treat Your Walls
For a Tuscan feel, go with a light Tuscan plaster wall treatment, and offset the coziness of your wall color with breezy, cream-colored sheer curtains or other light window treatments. Coupled with sophisticated furniture, youll love your understated Italian-inspired getaway, but make sure you dont overdo the accessories and clutter up the look.
Create an Atmosphere with Accessories Alone
If you live in an apartment or a rental home that doesnt lend itself to major overhauls, you still have plenty of options for updating your sunrooms look. ForRent.com offers countless ideas for designing your rented space. Something as simple as new patio cushions, candlesticks, brightly-colored pillows, or wall art can make your space look like something out of a design magazine. The best part about this kind of design: Its easy to overhaul your look without repainting Just view your space as a blank canvas, and fill it with colors and textures representing the >
Photo by Wickerfurniture via Flickr
Patio Cushions and Curtains
If youre handy with a needle and thread, sew your own patio cushions and curtains without paying the exorbitant prices that custom design firms charge. Check out SewMamaSew for step-by-step instructions to sew your own patio cushions.
Paint is your friend here. The hardest part about this step is harnessing your creativity, so choose a palette and run with it. Try picking up some old candlesticks from an antique store or flea market, then update them with high-gloss paint. Going for a beachy feel? Print a few sepia-toned beach shots you took on your last vacation, then frame them in simple wooden frames youve painted to match your >
Repurpose an old wood pallet into a coffee table that adds rustic >
Photo by Wickerfurniture via Flickr
Sure, the right number of bedrooms is important. And, of course, you wouldnt even consider a house in the wrong school district. But what are the other things that really matter when buying a home? You know, the things that make your life easier - or at least a little less chaotic - on a daily basis and that support your life>
Whats true of >
The right location
If youve never had to sit in traffic for three hours a day, you probably dont know exactly how much it completely sucks. It may be worth it to you because a long commute is the only way youll be able to afford a home, but have a serious talk with yourself first.
The right overall layout
Sure, walls can be moved and floorplans reimagined, if thats what youre into. But some things you might not be able to change, perhaps because you lack budget or spacemdash;or both. If the idea of being on a different floor than your children stresses you out and you fear youll never be able to >
Nothing kills the mood like having to squeeze your knees together while your honey is in the only or only functioning bathroom. If youve ever watched House Hunters and seen a couple buy an old home with one bathroom, which they justified because the place was "just so charming," let us set the record straight: Theres nothing charming about peeing your pants.
So the house youre considering has an updated master bathroom, and what it lacks in space it makes up for in >
A good family gathering space
Whether or not you have kids or ever plan to, a good family room or living room is key to long-term enjoyment of a home. The amount of square footage is obviously important, but also pay attention to the key features of the room. Otherwise, youll end up with a space you hate being in because the west-facing windows make it too hot in the summer and too cold in the winter and the TV niche is shoved into the corner, making it hard to see unless youre sitting directly across from it. Or perhaps thats just us.
Back to House Hunters for a moment. Who else cringes every time someone buys a house with a laundry room in a creaky old basement? Just the thought of having to carry laundry baskets down two flights of stairs is enough for us to say a hard "No" to that. Many basement-free homes have laundry rooms on the first floor, when all the bedrooms are upstairs. This may be an acceptable feature for most peoplemdash;and it may be all youve known to this pointmdash;but trust us: Once youve enjoyed the convenience of an upstairs laundry room, youll never want anything else.
A sufficient garage
Burning your butt on a hot car seat in the summer and having to run the engine for 10 minutes before you get into a freezing cold car in the winter might anger you every single time you do it.
The right size backyard
Taking the kids to the park instead of letting them loose in a backyard you dont have. Getting out of bed to walk the dog in the middle of the nightmdash;and in the rainmdash;because, again, no backyard. Not having a backyard at all, or a tiny patch of grass that doesnt give you space to move, might not be the kind of compromise you want to make. On the flip side, a large back yard that requires time and effort to maintain may take away from family time and create stress or anxiety.
A kitchen you can work with
Yes, you can replace a dishwasher or repaint your cabinets. Heck, you can rip the whole thing out and start over if you want, but most people arent looking to drop that kind of money on a brand-new kitchen. Is the kitchen workable as is? Are there small tweaks you can make that would create a space you want to cook in? Being honest with yourself about what you need, what you can handle, and what is realistic can help you make a good choice instead of one you may soon regret.
Holding an open house for your soon-to-be-listed or newly on the market home is a lot like being on a game show where edging out the other contestants in a short period of time is key. In TV game shows, such as "Jeopardy," the contestants donrsquo;t automatically know answers to so many trivia questions; they study and they plan and they make it appear to viewers like they walk around with that body of knowledge every day. Open houses need to be thought of similarly. Once your home is on the market, an open house is your opportunity to plan and strategize how you are going to win over buyers in very short time.
Even in a strong real estate market where houses sell quickly, itrsquo;s still important to ask your agent to hold as many open houses as possible until the home sells. One reason is that even buyers with agents still like to look at homes on their own without feeling the pressure of a home tour. Sometimes their agent is out of town when your house goes on the market. Many buyers are not represented by an agent and the only way for them to tour a home is through an open house. Your agent will plan the open house to include everything from signage to freshly baked cookies. As a seller, you should take the following steps:
Back to the game show analogy, think of depersonalizing as studying the answers and questions before trying out for "Jeopardy." Your house is lovely for how you live in it, but buyers donrsquo;t want to see you in your house. In fact, the more your house makes it difficult to guess who lives there age, >
While you are depersonalizing itrsquo;s also a good time to declutter as the two go hand in hand. The more simple and understated your home is, the more likely buyers can see the home for what it is and imagine themselves in it. When you have too much stuff cluttering walls and counters and shelves, buyers turn their focus toward those things and sometimes even make the assumption in logic that if you are cluttery, then you are disorganized, which means maybe you donrsquo;t take care of the house as well or as on time as you should. A good rule of thumb is to box up or store at least half of the smaller items displayed in your home.
For example, how much is on your kitchen counter right now? Now imagine reducing that number to just three things. What would you choose to keep versus store? Some sellers are benefited by going to other open houses in their area and looking at how other people have decluttered and arranged what is left. Online pictures, such as what is found on Pinterest, can help too. Often you can get some good ideas on what works visually just by seeing how others do it. When you are all done decluttering, clean your home like never before because buyers notice dirt and grime. Hire a maid service if you have to.
Lure Them In
The outside of your home is as important as the inside, especially the front entry area. Before an open house, take care of simple yard maintenance such as mowing, edging and weeding flower beds. A fresh layer of mulch adds color especially in winter months when not much is blooming. At your front door, clean off spider webs, blown leaves, and place a large, colorful pot of annuals or anything you can buy in season.
Complete Your Honey-Do List
While you have the yard power tools out, dust of your workbench and take a walk around your house inside and out. Make a list of all maintenance issues such as wiggly door handles, missing fascia, paint that has chipped, etc. and repair them before the open house. Buyers see even the smallest of maintenance issues as an extension of the condition of larger items such as roofs, plumbing and major appliances and assume you havenrsquo;t taken care of the home. You might talk to your realtor about a pre-inspection to deal with all home maintenance and problems upfront, before you get into contract with a buyer.
Once you have taken the above steps and you are ready for the actual open house, therersquo;s one last thing to plan. Protecting your valuables and identity. It might be rare, but criminals do use open houses as a way to case a house or to find collateral to steal identities. Make sure indoor safes are locked and hidden. Store heirlooms, checkbooks, prescriptions, and valuable jewelry away from prying eyes. Utilize a >
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Death And Taxes: Not Always Inevitable
Question. My husband recently died of a massive heart attack, leaving me a widow at a young age. I was thrust into a new life status that was not my choice or my desire. I believe I am being penalized for something that has already devastated my life in many ways.
We were fortunate to have invested wisely in our principal home many years ago, and have made more than 250,000 in profit. I want to sell, and it now appears I will have to pay the tax on any profit over 250,000, since I no longer file a joint return. If couples are making the life choice to divorce, they can sell their home prior to the divorce and get the 500,000 exemption recently enacted by Congress. A widow has no option or choice in the change that has happened in her life.
Please advise me how I should proceed; I need the money for my future more than the government.
Answer. It has often been stated that two things are inevitable: death and taxes. However, there is a measure of hope based on an often forgotten concept in the tax law known as the "stepped-up" basis. And, fortunately, this was not modified or repealed under the new tax law that was just enacted.
Oversimplified, this means the value of a persons real property on the date of his/her death becomes the basis of the person who inherits that property.
Let us take this example: in 1995, you and your husband purchased your first home for 100,000. You took title as tenants by the entireties -- which is the common form of ownership for married couples. Your husband died in 2017, and the property was valued at 800,000 on the day he died.
Your basis is as follows:
Initial basis: half of purchase price 50,000
Inherited stepped up basis: 400,000
New basis: 450,000
Please note that since the property was worth 800,000 on the date your husband died, you inherited his half of the property -- namely 400,000.
If you sell your property today for 800,000, your profit before excluding such items as real estate commissions, legal fees and fix-up costs will be 350,000 800,000 - 450,000. As you correctly pointed out, since you are now filing a single tax return, under the current tax laws, you are entitled to completely exempt the first 250,000 of this gain. Once again, Congress did not repeal or amend this important homeowner benefit.
Thus, your capital gain tax will be on 100,000 350,000-250,000. Because the income tax brackets were changed under the new law, please talk with your financial advisors as to what your tax obligation will be.
However, lets analyze this even further. Did you and your husband make any improvements to your house over the many years of your ownership? If you put on a new addition, installed a new kitchen, or significantly improved the back yard, all of the costs of these improvements are added to your basis. Thus, if the costs of your improvements were at least 100,000, you will not have to pay any capital gains tax at all.
Furthermore, try to find the settlement statement when you first purchased the property. There were a number of costs which you incurred -- title examination, title insurance, legal fees -- which can properly be added to basis.
Keep in mind that for every dollar you add to basis, you are going to save from paying capital gains tax. Clearly every dollar can add up to a considerable tax saving.
Although you did not raise this next issue, I want to take the opportunity to comment on a question I often get: should you put your children on title now?
Generally speaking, my answer is no. The reason is the same as discussed above -- on your death, your children will get the benefit of the stepped up basis, and indeed under the circumstances may not have to pay any capital gains tax. For example, were you to die when the property is valued at 800,000, if your children sold the property for this price, they would have no gain at all -- and thus no tax to pay.
However, if you were to gift them the house now, during your lifetime, their basis for tax purposes would be your basis -- i.e., 450,000. The law requires that the basis of the donor becomes the basis of the donee. If they sold the property for 800,000 -- and the house was not their principal residence -- they would have to pay capital gains tax on profit of 350,000 800,000 - 450,000 At the maximum rate, this could be a nice gift to Uncle Sam.
You must, of course, fully discuss these issues with your tax advisors. These are not easy questions, and the answers are even more complex.
The purpose of a Maintenance Plan is to instruct a homeowner association board and property manager how to properly maintain common element components. Following a well prepared Maintenance Plan will help extend the useful life of the components and reduce costs to the members.
An effective preventive maintenance plan should satisfy the following five key goals:
1. Preserve owners investment. Preventive maintenance can extend the life of building components, sustaining and enhancing the propertys value.
2. Help buildings operate at peak efficiency. Because preventive maintenance keeps equipment functioning as designed, it reduces inefficiencies in operations and energy usage.
3. Prevent failures of building systems. Buildings that operate trouble-free allow the occupants to enjoy the property as intended. Preventive maintenance includes regular inspections and replacement of equipment crucial to building operations.
4. Sustain a safe and healthy environment. Protecting the physical integrity of building components preserves a safe environment for residents.
5. Provide cost effective maintenance. Preventive maintenance can prevent minor problems from escalating into major failures and costly repairs. Preventive maintenance can be handled >The objective of the Maintenance Plan is to provide clear direction to the board and management how and when to provide repairs to building and grounds components. If consistently followed in conjunction with a properly prepared reserve study schedule, the components will enjoy their maximum useful lives and >For more innovative homeowner association management strategies, see www.Regenesis.net.
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Get Ready to Buy This Spring
Once you decide that this Spring you want to buy a new home mdash; or your first house mdash; the question is, "Where do we start?"
The answer lies in two sets of decisions:
1. Start With Success: Begin by deciding what success means to you. Clarify what you really want and why, not just whats "in" right now. Explore this practical side before viewing properties. What matters is not the number of homes you see, but zeroing in on genuine good matches. For instance, a couple who wanted to add a mortgage-paying basement suite to their next home, decided to search for houses with an existing basement bathroom since this would be the most expensive part of creating a rental unit.
2. Whos "We"?: The other essential to a good start is to decide who "we" is going to be:
If you want to buy this Spring, when should you start?: How quickly you can find a home to buy and move into it depends on many factors:
Somewhere in between those extremes lies your ideal time line:
Real estate professionals, committed to understanding market pace in areas they work, can help you manage timing. One thing they may suggest, is not to wait for the Spring Market, but to get ahead of the mass of spring buyers and jump into real estate now. For instance, sellers who are listed now are serious about selling and, depending how long their property has been on the market, they may be more receptive to negotiation.
Whether you decide to wait until Spring or jump in now, here are Five Savvy Buying Tips that ensure youll get the best property for your needs, at the best price, with the minimum amount of hassle and disappointment:
1. Apply Smart Buying Rules: If you consider yourself a smart buyer when purchasing a car, a phone, or travel, apply that savvy to buying real estate. Understand what you need and why. Set a realistic budget. Learn how things work. With all these issues, the right professional should save you time, stress, and money.
2. Ensure Location Overrules Features Decor: Real estate is an immoveable object. That reality dictates that where you buy is the prime value concern. Smart buyers look for the least property in the best area, so their real estate improvements result in increased market value. Values within a neighborhood or community are not uniform. There are specific streets, even ends of streets, that represent the highest local value just as boundary streets and other locations may represent lower prices. Particularly in urban areas, proximity to the most highly-regarded schools, popular shopping areas, and sought-after local features like parks dictates price, as your real estate professional will explain.
3. Maximize Move-In Timing: The more flexible your move-in date, the more room to negotiate with sellers. Agree to their ideal move date and that may generate concessions in price or inclusions. When you have a fixed move-in date, you may find yourself paying more to buy what you want, when you want it. Timing is a significant consideration when deciding whether to buy your next home before you have sold your current property, that is, taking the risk of paying on two mortgages at once. Since the market where you are selling may be different from that where you want to buy, timing decisions should involve the experience of a real estate professional or two.
4. Own The Money Factor: Affordability encompasses costs ranging from purchase price including legal fees and other costs, mortgage financing, and the cost of customizing the living space to including ongoing expenses like heating, cooling, commuting, and anything else that matters. With mortgage rates on the rise, reducing consumer car loans and credit card debt may open up borrowing room.Mortgage professionals can help you shop a wider range of lenders. These money experts can also explain why there is so much more to consider than just interest rate.
5. Face Reality Head On: Compromises to your "must have" list can maximize value and returns.
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