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Tag Archives: buying a home

5 Next Steps When a Sale Falls Through

2016-3-5steps

Remember Charlie Brown, lying dejected on the ground after Lucy yanked the football away at the very last second? That’s how it can feel when your home sale falls through.

Unfortunately, several things can derail a sale, from lenders rejecting your buyer’s mortgage application to buyer’s remorse. Your agent may suggest several different next steps after a sale collapses. Here are some possibilities.

1. Go to Plan B
In the best-case scenario, you’ll have several backup offers on your property and, without re-listing or re-marketing, your agent can simply move on to the next buyer.

2. Re-inspect
Do you take issue with the report filed by the buyer’s home inspector? Hire your own for a second opinion.

3. Don’t despair – repair
Did the buyer present you with a list of improvements they wanted addressed? Your agent can help you decide which, if any, of those items might be worth fixing before relisting.

4. Is the price right?
Your agent may look at any changes in your local market that took place in the time since you first listed your home. You may consider bumping your listing price up, or down, to more accurately reflect the current market.

5. Update your listing
Freshen the listing content with new photos and descriptions based on some of the feedback from prospective buyers. If your home has been on the market through a change of seasons, new pictures of the exterior are also a good idea.

Sales can fall through for a wide range of reasons. Work with an experienced agent who can lay the groundwork for a successful closing. Find one here.

Books About Moving to Read to Your Kids

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Moving to a new home, a new neighborhood and a new school can be tough for kids. Luckily, a variety of children’s books are out there to help parents explain things, add some fun and hopefully alleviate fears.

Here are a few classics – and you can post your favorite children’s book titles about moving in the comments section below:

1. “Alexander, Who’s Not (Do You Hear Me? I Mean It!) Going to Move” by Judith Viorst
Atheneum Books for Young Readers, 1995
Poor Alexander. First, the kid had a Terrible, Horrible, No Good, Very Bad Day. Now, his family is moving! Just like your kids, Alexander has to say goodbye to some special places and people, but with the help of his parents he learns to make the most of the situation.

2. “The Berenstain Bears’ Moving Day” by Stan and Jan Berenstain
Random House Books for Young Readers, 1981
Little Brother Bear’s pretty worried about moving, and more than a little scared. Kids can relate to his apprehension, and hopefully his positive change of view as moving day gets closer.

3. “A House for Hermit Crab” by Eric Carle
Aladdin Paperbacks, 1987
A little hermit crab has outgrown his shell and needs to find a bigger one – and new friends to help decorate it. This book will reassure kids that it will be easy to make new friends in their new town.

4. “Tigger’s Moving Day” by Kathleen W. Zoehfeld
Disney, 1999
Tigger needs a place with more bouncing room! His friends aren’t as close to his new house, but they still come and visit. A story to help kids understand they’ll still be able to hold on to old connections.

5. “Goodbye House” by Frank Asch
Moonbear Books, 1989
This book is a terrific way to talk about moving with preschoolers. After the moving van is packed, a little bear returns to say farewell to his old house, saying goodbye to everything, except, of course, the memories.

Other favorites include: “Big Dan’s Moving Van,” by Leslie McGuire, “Neville,” by Norton Juster, “The Moving House” by Mark Siegel, “I’m Not Moving, Mama” by Nancy White Carlstrom, and “The Leaving Morning,” by Angela Johnston.

Looking to a move to a neighborhood that’s great for kids (and parents)? Find a local RE/MAX agent who can help.

6 Questions to Ask on a Home Tour

2015-7-6-questionsThanks to the Internet and your Realtor’s digital tools, you can learn a lot about a home before visiting, such as when the house was built and the HOA or tax costs. Some things, however, are best to ask the agent in person when you’re touring a property.

1. Why are the owners selling?
The agent isn’t obligated to tell you, but he or she might. The answer could reveal issues not included in the listing description. Is there a new highway planned nearby? Are the HOA restrictions too much for the sellers to handle? If the agent does reveal, for instance, that the owner is desperate to close quickly, you might be able to use that to your advantage when negotiating price.

2. What’s the sellers’ timeline?
Do the property owners need to relocate immediately for work? Or are they waiting for their children to finish the current school year? It’s important that your timeline for moving into the home and the owner’s timeline for moving out line up.

3. What, exactly, is for sale?
Find out precisely what’s included in the sales price. That nifty new fridge with the built-in smart screen you admire might be going with the sellers to their new home. Learn whether the appliances and fixtures, such as ceiling fans, are included in the sale price.

4. Are there any issues with the property?
Yes, the sellers are required to reveal most problems, but a chatty sales agent might reveal more than is included in the disclosure document. It certainly can’t hurt to ask.

5. How are the neighbors?
Ask about the types of people that live nearby. Retirees? Young families with kids? College students? The primary population will influence the overall culture of the neighborhood and can help you determine if this is the home for you.

6. Have the owners completed any major home projects?
Lots of recent home improvements could mean the property is in better shape than ever, ready for you to enjoy. It could also indicate more work will need to be done in the future. Be sure to get the full story about any recent property updates.

You’ll have tons of questions as you search for your next home. A RE/MAX agent can help you find the answers. To meet an agent, start here: www.remaxallpro.com/agents.

8 Tools Every Homeowner Should Own

2014-10Tools

Every home at some point requires maintenance. Some of that maintenance doesn’t have to cost you a lot of money if you keep some basic tools around the house. Here are some helpful tools you can keep on hand.

Screwdrivers
Make sure you have both flathead and Phillips-head screwdrivers of various sizes. A complete set is even better, letting you do everything from tightening loose fixtures to putting together furniture. For light projects, you could opt for a single, multi-bit screwdriver that stores detachable heads in the handle and doubles as a nut driver.

Hammer
A good hammer is an absolute staple for everything from hanging photos to repairing fence pickets. The most common size weighs 16 ounces. Consider investing in a good hammer with a claw head and an anti-vibration rubber grip.

Utility knife
A trusty utility knife or box cutter can come in handy, especially if you’re just moving into your home and need to unpack those well-taped-up boxes. And as long as we’re on the subject of knives, consider getting a putty knife. You’ll be surprised how often you’ll reach for it.

Wall level
It only takes a few millimeters for a shelf or artwork to look off-kilter; a wall level takes the guesswork away. Unless you have an experienced eye, a level will help you hang items on the wall evenly the first time.

Measuring tape
You’ll save yourself a lot of frustration if you measure appliances and furniture before trying to fit them into your new place. A long, 35-foot tape measure will do the job in big and small projects. A more modest, 12-foot measuring tape also is a good alternative, particularly for jobs like hanging artwork.

Flashlight
Power outages can happen anytime, so be ready with at least one durable flashlight and batteries. They also come in handy when you’re working on repairs in those darker and tighter spaces. Look for hybrid versions, which use solar power and contain a back-up battery. If your new place has electricity upon move-in, you also can purchase a rechargeable work light.

Wrench and pliers
Start with an adjustable wrench that can handle many different jobs. Six-, eight- or 10-inch long wrenches are the most popular. Pliers also are indispensible; look for ones with serrated jaws that grip objects firmly.

Toolbox
Store your most commonly used tools in a single place, such as an easy-to-carry toolbox, and you’ll always know where to find these tools when you need them.

Do you have a favorite go-to tool? Share it below!

Are you thinking about buying a house? You’ll need a lot of information – and not just about tools! Contact your local RE/MAX All Pro agent to help you find the right home for you.

Listing Photos: What to Look for When Shopping

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These days, very little is left to the imagination when it comes to browsing homes for sale online. With virtual tours, professional photos and mapped locations, it’s easy to see what you might be getting – before you ever set foot in a potential purchase. Technology certainly has its advantages, doesn’t it?

These listing features help you, the homebuyer, narrow down your home search and direct your real estate agent to specific properties. And although you shouldn’t risk ruling out an otherwise perfect property based solely on its online reputation – hey, even houses have bad days – photos and videos can help save time and energy when it comes to building your short list of homes to tour.

So what should you really be looking for based on these photos, videos and mapping tools? Start with:

  • Layout. Does it meet your space needs? Are the only bathrooms upstairs? Is there a pantry?
  • Potential Repairs. Have the original hardwood floors seen better days? Are you up for the challenge of rehabbing?
  • Yard maintenance. Does the home feature a half-acre yard – on a hill – with 30 bushes that need regular pruning? Will you have time to maintain it all – and is the yard worth the effort?
  • Lot location. Are you concerned about being on a corner lot at one of the neighborhood’s main intersections?

Remember, photos and videos can’t always capture everything, so consider your top three priorities in a home. When you think you’ve found them in a property online, it might be worth taking a look in person – even if that shade of green in the kitchen isn’t your first choice.

The best thing you can do is see what’s really there. Contact a RE/MAX real estate agent who can help you find your picture-perfect place.

Things to keep in mind when buying a home

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The benefits of home ownership

Plain and simple, owning a home can improve your quality of life, provide stability and give you a sense of control you just can’t get from renting. You have a place to live when you rent, but buying is something much deeper – and better.

The intangibles are tough to measure, but there are other benefits you can quantify:

Financial investment:
Your monthly mortgage payment creates equity for you, not your landlord.

The interest on your mortgage is a tax deduction:
While this isn’t a reason in itself to buy a home, it’s nice to get a break at tax time.

Fixed monthly housing payment:
If you opt for a fixed-rate mortgage, the monthly rate of your mortgage won’t change for the length of the term.

Look for a house you can stay in long-term; one that will “grow” with your family and needs. The financial benefits of owning increase over time.

Look for an agent who understands your lifestyle. Make sure the agent knows the neighborhoods you’re interested in, and can answer questions you’ll have about the location.

Tax-free gain:

When it’s time to sell your home, you don’t pay taxes on the proceeds of the sale that are above what you paid (with some restrictions – see information on capital gains).

The importance of a buyers agent

A real estate transaction is a complex process involving stacks of paperwork and a number of outside service providers and contractors.

An experienced buyer’s agent can guide you through the process, answering your questions and serving as your advocate (see the Anatomy of a Home Purchase). Your agent will help you find the property that fits your needs, submit offers and counteroffers, suggest a good property inspector and other professionals, and provide all sorts of relevant advice.

With a buyer’s agent, you’ll have someone on your side, looking out for your interests every step of the way.

When seeking out a buyer’s agent, look for factors such as productivity, education and experience.

Look for an agent who understands your lifestyle. Make sure the agent knows the neighborhoods you’re interested in, and can answer questions you’ll have about the location.

What are the costs involved in hiring a buyer’s agent?

As a buyer, you don’t pay your agent directly. Instead, the agent receives an agreed-upon portion of the listing agent’s sales commission (usually about half), which is paid by the seller.

If you’re thinking this structure works against you by giving your buyer’s agent an incentive to let you pay more than you need to, consider this:

The increase in a buyer’s agent commission on, say, a $5,000 to $10,000 jump in price would be only $125 to $250. Good buyer’s agents – those who are productive and engaged in the business full time – aren’t going to risk their reputations. Your satisfaction – which can generate referrals to your friends and family – is the lifeblood of their careers.

Deciding where to live

If you’re unfamiliar with the area where you’re moving, your buyer’s agent is an invaluable resource. He or she can offer insider knowledge on neighborhoods, schools, access to recreation and shopping districts, and the many other details on local neighborhoods and subdivisions.

It’s important to have a clear picture on the features that matter most to you in a home or location. Creating a list of “must haves” and flexible “nice-to-haves” from the start will make things a lot easier for you.

Factors to consider:

1. Size of home – square footage, number of bathrooms, rooms, etc.

2. Home features – updated fixtures/appliances, property size, garage, storage, etc.

3. Location – proximity to schools, open space, entertainment, work, etc.

4. Neighborhood – older or newer homes? Families, retirees or singles?

5. Room to grow – planning to have more children?

6. Condition – move-in ready or a less expensive home in need of improvements?

Your buyer’s agent can offer advice on the countless items you should consider according to your lifestyle, budget and particulars.

Anatomy of a home purchase

For most people, finding the right home begins with a house-hunting strategy combining personal preferences, guidance from others (including an agent) and a mix of neighborhood exploring and online search.

For some, the search takes a while; others find what they want right away. In either case, your real estate agent can be a huge resource of insight and guidance, working through issues or complications that arise along the way.

Here’s a general outline of what to expect during a home purchase, from the buyer’s perspective.

Buyers make a purchase offer.
This is it! You’ve found the home of your dreams, looked over disclosure documents, reviewed comparable sales data, talked it over with your agent and submitted an offer. The sellers may accept your first offer, but more often will return a counteroffer. In fact, additional negotiations are common, and your agent will help you through this generally stressful stage.

Check out our interactive HUD-1 and GFE (Good Faith Estimate) documents so you’ll know what to expect when these appear lap during the transaction.

The sellers accept.

Once everyone is happy with the terms, the parties have reached what is known as mutual acceptance and enter into a purchase and sale agreement.

Buyers put up earnest money.
To solidify your intent to buy, you’ll place a deposit, or earnest money, on the property. The amount varies, but is generally at least 1 percent of the purchase price. You’ll write the check to the escrow company, not the seller. Note: This money counts toward your down payment later.

Escrow opens.
The earnest money deposit goes into an escrow account, where all funds will be held until closing, when they are then distributed to the right people (lender, mortgage broker, title insurer, real estate agents, etc.).

Buyers apply for a mortgage.
This step is streamlined if you’ve already been preapproved for a loan (which is a smart thing to do). If not, you’ll begin the loan application process now.

The lender inspects title history and orders a property appraisal.
The lender needs key information about the property before granting a loan. This is when potential problems can come to light. For example, the appraisal could show a lower value than the purchase price, or the lender could have trouble finding comparable homes. Also, the title search could turn up liens or other problems.

A home inspection takes place.
You’ll hire an inspector – generally, your agent will suggest one, or provide several options – to check the home and point out minor and major problems that should be fixed before closing. At this point, you still have the option of backing out of the deal. Through your agent, you’ll submit a list of requested work, and the sellers have the option to complete the tasks, do some of them but not others, or reject the request. The sides will negotiate until reaching an agreement.

Removing contingencies.
If the house passes inspection, appraisal and title search, and everything is good to go, then all contingencies can be removed, paving the way to a closing.

Closing time arrives.
Once contingencies are removed and financing is set, all parties sign a seemingly endless stack of documents, and the transaction closes.

Packing begins!
When the final signatures are in place, it’s time to put down the pens, shake hands, exchange smiles and start packing for the move!

How much house can you afford

Knowing how much you can afford to pay is a crucial step in your search. Nailing down your budget early will make the overall process more focused and less stressful.

Here’s a good way to figure out how much you can afford:

The 28/36 Rule

The 28/36 rule is an established benchmark used by many lenders to determine how much credit to offer you. Here’s how it works:

Get preapproved for a mortgage. Your lender can approve you for a certain to loan amount prior to your home search. This gives you a solid number against which you can assess the affordability of the houses you visit.

The “28” refers to the notion that no more than 28 percent of your gross monthly household income should go toward housing costs, which include mortgage principal, interest, taxes and insurance.

To calculate, simply multiply your gross monthly income (amount before taxes) by .28. Use this amount as a guide for how much house you can afford.

Example: You earn an annual salary of $70,000. Divide 70,000 by 12, giving you a monthly gross income of $5,833. Multiply that by .28, and you’ll find you should spend no more than $1,633 each month on total housing costs.

The “36” part of the 28/36 rule refers to your overall debt, which shouldn’t exceed 36 percent of your income. This is important to consider because other high monthly debt loads – such as car and credit card payments – impact the amount you can afford to spend on housing.

For first-time home buyers, the tricky part is knowing how much to budget for taxes and insurance. An experienced real estate professional can assist you with this.

 

2013 Spring Market Housing Market

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 

Buying Homes in the Antelope Valley; Palmdale/Lancaster Real Estate

 Buying Homes in the Antelope Valley; Palmdale/Lancaster Real Estate

Have you noticed how some “housing experts” say that demand is “overwhelmed by supply” while others throw out estimates of an “excess supply” of over three million homes? Yet, buyers keep saying how there‟s nothing to choose from? Worse yet, when they do finally find a home they want, they often submit an offer only to find that theirs is one of multiple offers the seller‟s received! Do you have a bidding war and multiple offers in your market on any listings? What‟s going on? How can in- ventory be high with slim pickings and multiple offers? According to one study, although listings may be up from January-which is true every year due to the annual winter hibernation of the housing market-on-market inventoryand new listings, are actually down from this same time last year. The study continues, “every „major market‟ except Las Vegas has less listings than this time in 2010”! Moreover, new listings of non-distressed homes, which are more frequently well-kept and owner-occupied (i.e. the kind of home that most non-investor buyers are interested in), are falling over twice as fast as bank-owned (REO) listings. Where all the listings are hiding? -Jack

From the study, “If we don‟t start to see more listings from owners who have the equity to put their homes on the market, prices of increasingly rare non-distressed listings seem likely to stop falling soon, just due to basic supply and demand. Of course, that claim leads to the big ques- tion: howsoon?” Although supply and demand are the primary drivers of the real estate market, prices seem to react to these inputs with ice-age speed. When the bubble was inflating, it took over a year of declining sales and increasing inventory before prices peaked and began to fall, and although on-market inven- tory has been declining since mid-2008, the slow recovery of sales along with a shift in psychology away from home ownership has delayed the turnaround of prices (and this isn‟t even considering all the government intervention!) As Calculated Risk recently pointed out, home prices are not far above their historic lows, although it‟s a pretty safe bet that we‟ll have a bit of an overshoot on the downside, followed by at least a few years of flat prices (which is down when inflation is factored in). Foreclosures are still quite high and will likely take three to five years to work through, but growth in both the beginning and the end of the foreclosure pipeline seem to be backing off their 2010 peaks. The worst seems to be behind us on that front. Every region has different dynamics, but with generally lousy selection, slowly recovering sales, and year‟s worth of foreclosures to work through, where does that put us today, and through the end of this year? Barring some unforeseen economic events, some believe that home prices will likely stop falling by this time next year, while others expect prices to end the year higher than where they are today. Sales will continue their slow increases, foreclosures will be slowly but surely absorbed (many by all-cash investors), and hopefully, non- distressed sellers will begin to return to the market. In the end, nobody is able to perfectly time the market, and no matter where anyone thinks the bottom is, they‟re probably wrong. Is buying a home today less risky than it was five years ago? Absolutely. Will buying a home ever be a risk-free proposition? Unfortunately, no.

Did You Know………that while gloom and doom about the housing market dominate the news, it may be overlooked that it might be a great time to buy! In a recent survey, 64% of respondents say that they think it‟s a good time to buy a house. We all know the average median house price is down almost 10% from its peak in 2007, take a closer look at the attachments to this week‟s Newsletter at when homes have been at their cheapest.


 

7 Smart Steps Every New Homeowner Should Take

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 freedom you’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

 

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