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7 Smart Steps Every New Homeowner Should Take

Antelope Valley Real Estate Experts

RE/MAX All-Pro Presents Real Estate Tips from Investopedia

800.336.3629 Bringing families Home Serving the Entire Antelope Valley Since 1990 

7 Smart Steps Every New Homeowner Should Take

Turning the key in a lock that no landlord has access to, reading in a hammock in your own backyard and painting your dining room bright red – what could be more exciting than making the leap from renter to first-time homeowner? Getting swept up in all the excitement is a wonderful feeling, but some first-time homeowners lose their heads and make mistakes that can jeopardize everything they’ve worked so hard to earn.

TUTORIAL: How To Buy Your First Home

Don’t be one of those people; take a few moments to ponder these seven practical concerns that will help ensure that your first home becomes the place of luxury and financial freedomyou’ve anticipated.

1. Don’t Overspend on Furniture and Remodeling 
You’ve just handed over a large portion of your life savings for a down paymentclosing costs and moving expenses. Money is tight for most first-time homeowners – not only are their savings depleted, their monthly expenses are often higher as well, thanks to the new expenses that come with home ownership, such as water and trash bills, and extra insurance.

 

Everyone wants to personalize a new home and upgrade what may have been temporary apartment furniture for something nicer, but don’t go on a massive spending spree to improve everything all at once. Just as important as getting your first home is staying in it, and as nice as solid maple kitchen cabinets might be, they aren’t worth jeopardizing your new status as a homeowner. Give yourself time to adjust to the expenses of home ownership and rebuild your savings – the cabinets will still be waiting for you when you can more comfortably afford them. (For further reading, see To Rent Or Buy? The Financial Issues.)

 

2. Don’t Ignore Important Maintenance Items
One of the new expenses that accompanies home ownership is making repairs. There is no landlord to call if your roof is leaking or your toilet is clogged (on the plus side, there is also no rent increase notice taped to your door on a random Friday afternoon when you were looking forward to a nice weekend). While you should exercise restraint in purchasing the nonessentials, you shouldn’t neglect any problem that puts you in danger or could get worse over time, turning a relatively small problem into a much larger and costlier one. (For tips on how to spot problems with a potential home before you buy it, see Do You Need A Home Inspector?)

 

3. Hire Qualified Contractors
Don’t try to save money by making improvements and repairs yourself that you aren’t qualified to make. This may seem to contradict the first point slightly, but it really doesn’t. Your home is both the place where you live and an investment, and it deserves the same level of care and attention you would give to anything else you value highly. There’s nothing wrong with painting the walls yourself, but if there’s no wiring for an electric opener in your garage, don’t cut a hole in the wall and start playing with copper. Hiring professionals to do work you don’t know how to do is the best way to keep your home in top condition and avoid injuring – or even killing – yourself. (For tips on finding qualified workers, read The Better Business Bureau’s Tool Belt For Saving Cash. For home improvement projects most homeowners can tackle themselves, read Do-It-Yourself Projects To Boost Home Value.)

 

4. Get Help with Your Tax Return 
Even if you hate the thought of spending money on an accountant when you normally do your returns yourself, and even if you’re already feeling broke from buying that house, hiring an accountant to make sure you complete your return correctly and maximize your refund is a good idea. Home ownership significantly changes most people’s tax situations and the deductions they are eligible to claim. Just getting your taxes professionally done for one year can give you a template to use in future years if you want to continue doing your taxes yourself. (For more insight, see Crunch Numbers To Find The Ideal Accountant and Give Your Taxes Some Credit.)

 

5. Keep Receipts for Home Improvements
When you sell your home, you can use these costs to increase your home’s basis, which can help you to maximize your tax-free earnings on the sale of your home. In 2008, you could have earned up to $250,000 tax free from the sale of your home if it was your primary residence and you had lived there for at least two of five years before you sold it. This assumes that you owned the home alone – if you owned it jointly with a spouse, you could each have gotten the $250,000 exemption. (To learn more about how having a spouse can affect your tax return, read The Tax Benefits Of Having A Spouse and Happily Married? File Separately!)

 

Let’s say you purchased your home for $150,000 and were able to sell it for $450,000. You’ve also made $20,000 in home improvements over the years you’ve lived in the home. If you haven’t saved your receipts, your basis in the home, or the amount you originally paid for your investment, is $150,000. You take your $250,000 exemption on the proceeds and are left with $50,000 of taxable income on the sale of your home. However, if you saved all $20,000 of your receipts, your basis would be $170,000 and you would only pay taxes on $30,000. That’s a huge savings: in this case, it would be $5,000 if your marginal tax rate is 25%. (For more insight, see Is it true that you can sell your home and not pay capital gains tax?)

 

6. Don’t Confuse a Repair with an Improvement
Unfortunately, not all home expenses are treated equally for the purpose of determining your home’s basis. The IRS considers repairs to be part and parcel of home ownership -something that preserves the home’s original value, but does not enhance its value. This may not always seem true. For example, if you bought a foreclosure and had to fix a lot of broken stuff, the home is obviously worth more after you fix those items, but the IRS doesn’t care – you did get a discount on the purchase price because of those unmade repairs, after all. It’s only improvements, like replacing the roof or adding central air conditioning, which will help decrease your future tax bill when you sell your home.

 

For gray areas (like remodeling your bathroom because you had to bust open the wall to repair some old, failed plumbing), consult IRS Publication 530 and/or your accountant. And on a non-tax-related note, don’t trick yourself into thinking it’s OK to spend money on something because it’s a necessary “repair” when in truth it’s really a fun improvement. That isn’t good for your finances. (To find out which improvements can add the most value to your home, read Add Value To Real Estate Investments.)

 

7. Get Properly Insured
Your mortgage lender requires you not only to purchase homeowners insurance, but also to purchase enough to fully replace the property in the event of a total loss. But that’s not the only insurance coverage you need as a homeowner. If you share your home with anyone who relies on your income to help pay the mortgage, whether it’s a girlfriend or a child, you’ll need life insurance with that person named as a beneficiary so he or she won’t lose the house if you die unexpectedly. Similarly, you’ll want to have disability-income insurance to replace your income if you become so disabled that you can’t work. (For ideas on how to save money on your home insurance, readInsurance Tips For Homeowners.)

 

Also, once you own a home, you have more to lose in the event of a lawsuit, so you’ll want to make sure you have excellent car insurance coverage. If you are self-employed as a sole proprietor, you may want to consider forming a corporation for greater legal protection of your assets. You may also want to purchase an umbrella policy that picks up where your other policies leave off. If you are found at fault in a car accident with a judgment of $1 million against you and your car insurance only covers the first $250,000, an umbrella policy can pick up the rest of the slack. These policies are usually issued in the millions. (For more on car insurance, see Shopping For Car Insurance.)

Bottom Line
With the great freedom of owning your own home comes great responsibilities. You must manage your finances well enough to keep the home and maintain the home’s condition well enough to protect your investment and keep your family safe. Don’t let the excitement of being a new homeowner lead you to bad decisions or oversights that jeopardize your financial or physical security. 

 

For further reading, see To Rent Or Buy? There’s More To It Than Money.

 

Amy Fontinelle is a financial journalist and editor for a variety of websites, public policy organizations, and book publishers. She has written hundreds of published articles and blog posts on topics including budgeting, credit management, real estate and investing. Her articles have been featured on the homepage of Yahoo! and on Yahoo! Finance, Forbes.com, SFGate.com and numerous local news websites.

 

 

Read more: http://www.investopedia.com/articles/mortgages-real-estate/09/new-homeowner-tips.asp#ixzz1T9Kf8Wwr

Antelope Valley Real Estate Experts800.336.3629 Bringing families Home Serving the Entire Antelope Valley Since 1990 

Is It Important To Have A Professional Short Sale Agent Negotiating On Your Behalf?

Is It Important To Have A Professional Short Sale Agent Negotiating On Your Behalf?

RE/MAX All-Pro; Dedicated & Educated Realtors Working For YOU!

RE/MAX All-Pro; Dedicated & Educated Realtors Working For YOU!

Finding the right home can be a daunting challenge. You want to have the very best real estate professionals on your team. No one in the Antelope Valley sells more homes than RE/MAX All-Pro and the reason is simple. We are the best and we know our market. Search our easy-to-use and extensive database of homes for sale in Lancaster, Palmdale, Quartz Hill, and all of the surrounding Antelope Valley real estate market. If you need help finding your dream home, contact one of our real estate professionals to put their local knowledge and experience to work for you.

 

There Was Only ONE Thing To Do; Help The Children Of The Antelope Valley!

There Was Only ONE Thing To Do; Help The Children Of The Antelope Valley!

The annual Cure-A-Child Spring Festival was a HUGE success. A fun filled day with a rock wall, kids corner, dunk tank, live auction and MUCH MORE! Raising over $68,000, it was definitely a great way to give back to the kids.

We are already excited for next year!

Thank you to everyone who came out and showed support. The event would not have been the same without you all.

Take a look at the video below. Some of the best moments from the event were caught on tape! 

 

It’s not to late to donate!

“With your support we are making a difference in the lives of sick children and their families throughout the Antelope Valley.  Year after year our ambition is to help as many children as we can, but we can only do that with the generosity, love and support from our corporate partners and individual sponsors.” –Cure-A-Child

For every $15 donated, you will receive a Cure-A-Child t-shirt!

 

nonprofit organization (NPO) is an organization that uses surplus revenues to achieve its goals rather than to distribute them as profit or dividends. States in the United States defer to theIRS designation conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an organization eligible.[1]

Behind The Scenes Look At Cure-A-Child Spring Festival!

Behind The Scenes Look At Cure-A-Child Spring Festival!

http://cureachild.com
Jeremy Herider and Keny Terracciano show where we will hold the annual Cure-A-Child Spring Festival and what to expect at our event!

 

http://cureachild.com
Join us to help support the cause.

 

MAY 20th, 2012

 

1:00PM — 4:00PM
43832 20th Street West
Lancaster, CA 93534
RE/MAX All-PRO, MOJAVE DESERT BANK,
HARLEY DAVIDSON PARKING LOT

 

Ways to help:
One of the most simple ways you can help is by making a donation through PayPaltoday! No donation you are able to offer is too small.

 

Auction Item Contributors:
The Live Auction provides a great way for companies and individuals to donate to Cure a Childin an exciting platform. All patrons receive recognition in the event program and are observed during the auction. Items valued at $250.00 or greater will be considered for the live auction and you may donate any item of your choice. If you would like to participate but don’t have the time to shop we will also accept flat donations and find the perfect item for you!

 

Corporate Partner:
Our Corporate Partners are featured at all Cure a Child events hosted throughout the year and across various marketing and advertising platforms.

Join Us To Help Support The Cause; Making Miracles Happen!

Join Us To Help Support The Cause.

MAY 20th, 2012

1:00PM – 4:00PM

43832 20th Street West

Lancaster, CA 93534

RE/MAX All-PRO, MOJAVE DESERT BANK,

HARLEY DAVIDSON PARKING LOT

Ways to help:

One of the most simple ways you can help is by making a donation through PayPal today! No donation you are able to offer is too small. Visit us online and find the DONATE NOW button!

Auction Item Contributors:

The Live Auction provides a great way for companies and individuals to donate to Cure a Child in an exciting platform. All patrons receive recognition in the event program and are observed during the auction. Items valued at $250.00 or greater will be considered for the live auction and you may donate any item of your choice. If you would like to participate but don’t have the time to shop we will also accept flat donations and find the perfect item for you!

Corporate Partner:

Our Corporate Partners are featured at all Cure a Child events hosted throughout the year and across various marketing and advertising platforms.