Real Estate

FINDING A GREAT HOME BUILDER

Many first-time home buyers or experienced homeowners decide that buying a lot and building their home is the best option for them. Custom building allows for you to design and personalize a space all your own, in a specific budget and timeframe. On the other hand, there is also a lot more work and ongoing decisions that the home construction process requires, with a main one being who is going to build it! Here’s a guide to help you find the best contractor for you.

Make a List

The first step when looking for any professional in your area is to look up your options! With one simple online search you can find tons of potential builders with their websites and contact information. But the internet isn’t always most reliable source, so it may be best to find some potential builders through fellow professionals. Your local real estate agent is a great resource for anything home related, including builders. Another option is contacting your local home builder’s association and asking for a list of members. Lastly, ask friends and family! They might have used a builder or know of someone else who has used one and had a great experience.

Research, Research, Research

Your home is nothing to make a quick decision on. Once you make your list of potential builders in your area, it’s time to do some research and ask a lot of questions. Just as a real estate agent would present you with a listing presentation in an interview type setting, your home builder should be willing to do the same with you. This is a great way to see their previous work, discuss what styles they specialize in and ask any and all questions. Before you leave, ask for the addresses of some builds nearby so that you can drive by and see the work for yourself. If you drive by and happen to see the homeowners outside, it may be a good idea to stop and introduce yourself and ask them about their experience. Most homeowners will be very open and honest about their process, good or bad.

Some Questions to Ask the Homeowner

  • Were you happy with the outcome of your home?
  • Was your contractor responsive and accessible?
  • Would you use this company again?
  • Did they deal with problems or obstacles quickly and efficiently?

Value and Quality

Of course you will want to be mindful of your budget when shopping for home builders, but also look carefully at the quality in the details. Little things like the trim, cabinets and paint job will show you a lot about the time and attention to detail the contractor and his or her team takes on each project. This might be difficult to see only in pictures, so look to see if the company is going to be featured in a city home tour or walkthrough soon. A builder that takes the extra effort on these smaller features may be worth a higher price tag. But of course, if a builder is out of your budget, it’s best to move on to your next option. There’s nothing worse than stretching your budget right from the start and causing stress throughout the entire home project.

Building your dream home is an exciting time and you will have the opportunity to create a place all your own from the property lot to the color of the front door. As long as you take the time to research, ask your local home experts and take a thorough look at example homes, you can’t go wrong with your perfect builder. 

*Source: Realty Executives International

Real Estate

Avoid These 10 Home Improvements That Do Not Add Value

Bottom Line

Consider your selling timeline before you embark on a home improvement that does not add value to your home. If you plan to sell your home in the near future, it’s best to spruce it up with a new coat of neutral paint and other improvements proven to add value and increase marketability.

On the other hand, if you plan to stay awhile, it’s okay to focus on home improvements that bring you joy, even if they don’t add significant value to your home.

Real Estate

Is Homeownership Still Considered Part of the American Dream?

Photo by William Fortunato on Pexels.com

Since the birth of our nation, homeownership has always been considered a major piece of the American Dream. As Frederick Peters reports in Forbes:

The idea of a place of one’s own drives the American story. We became a nation out of a desire to slip the bonds of Europe, which was still in many respects a collection of feudal societies. Old rich families, or the church, owned all the land and, with few exceptions, everyone else was a tenant. The magic of America lay not only in its sense of opportunity, but also in the belief that life could in every way be shaped by the individual. People traveled here not just for religious freedom, but because in America anything seemed possible.”

Additionally, a research paper released just prior to the shelter-in-place orders issued last year concludes:

“Homeownership is undeniably the cornerstone of the American Dream, and is inseparable from our national ethos that, through hard work, every American should have opportunities for prosperity and success. It is the stability and wealth creation that homeownership provides that represents the primary mechanism through which many American families are able to achieve upward socioeconomic mobility and greater opportunities for their children.”

Has the past year changed the American view on homeownership?

Definitely not. A survey of prospective homebuyers released by realtor.com last week reveals that becoming a homeowner is still the main reason this year’s first-time homebuyers want to purchase a home. When asked why they want to buy, three of the top four responses center on the financial benefits of owning a home. The top four reasons for buying are:

  • 59% – “I want to be a homeowner”
  • 33% – “I want to live in a space that I can invest in improving”
  • 31% – “I need more space”
  • 22% – “I want to build equity”

Millennials believe most strongly in homeownership.

The survey also reports that 62% of millennials say a desire to be a homeowner is the main reason they’re buying a home. This contradicts the thinking of some experts who had believed millennials were going to be the first “renter generation” in our nation’s history.

While reporting on the survey, George Ratiu, Senior Economist at realtor.com, said:

“Americans, even millennials who many thought would never buy, have a strong preference for homeownership for the same reasons many generations before them have — to invest in a place of their own and in their communities, and to build a solid financial foundation for themselves and their families.”

Odeta Kushi, Deputy Chief Economist for First American, also addresses millennial homeownership:

“Millennials have delayed marriage and having children in favor of investing in education, pushing marriage and family formation to their early-to-mid thirties, compared with previous generations, who primarily made these lifestyle choices in their twenties…Delayed lifestyle choices delay the desire for homeownership.”

Kushi goes on to explain:

“As more millennials get married and form families, millennials remain poised to transform the housing market. In fact, the housing market is already experiencing the earliest gusts of the tailwind.”

Bottom Line

As it always has been and very likely always will be, homeownership continues to be a major component in every generation’s pursuit of the American Dream.

*Source: KeepingCurrentMatters.com

Real Estate

8 Easy Mistakes Homeowners Make on Their Taxes

Don’t rouse the IRS or pay more taxes than necessary — know the score to avoid common tax mistakes.

#1 Deducting the Wrong Year for Property Taxes

You take a tax deduction for property tax in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind — that is, you’re not billed this year’s property taxes until next year. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in that tax year, no matter what the date is on your tax bill. Dave Hampton, CPA, a tax manager with HG CPA, LLC, in Cincinnati, has seen homeowners confuse payments for different years and claim the incorrect amount.

Tip: Taking this deduction requires that you itemize. 

#2 Confusing Escrow Amount for Actual Taxes Paid

Here’s another property tax issue that results in common tax mistakes. If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your actual property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200 or the actual amount of property taxes paid that is noted on the Form 1098 that your lender sends. If you don’t receive Form 1098, contact the agency that collects property tax to find out how much you paid.

#3 Deducting Points Paid to Refinance

In many cases, you can deduct in full the points you paid your lender to secure your mortgage for the year you bought your home, if you itemize. However, if you pay points in connection with a refinance, you must deduct the points over the life of your new loan.

For example, if you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $2,000 divided by 15 years, or $133 per year.

#4 Misjudging the Home Office Tax Deduction

There are two ways to calculate the home office deduction. One is complicated, has to be partially recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. But it also can amount to more of a deduction than the simpler method.

If you don’t care to claim actual costs, which you do under the more complicated method, you can use the simplified home office deduction.  If you’re eligible, you can deduct $5 per square foot up to 300 feet of office space, or up to $1,500 per year.

#5 Failing to Repay the First-Time Homebuyer Tax Credit

If you used the original homebuyer tax credit in 2008, you must repay 1/15th of the credit over 15 years.

If you used the tax credit in 2009 or 2010 and then within 36 months you sold your house or stopped using it as your primary residence, you also have to pay back the credit.

The IRS has a tool you can use to help figure out what you owe.

#6 Failing to Track Home-Related Expenses

Common tax mistakes are often of omission: not keeping records. If the IRS comes a-knockin’, don’t be scrambling to compile your records. File or scan and store home office and home improvement expense receipts and other home-related documents as you go.

#7 Forgetting to Keep Track of Capital Gains

If you sold your main home last year, don’t forget to report capital gains on any profit above the excluded amounts. You can typically exclude $250,000 of any profits from your income (or $500,000 if you’re married filing jointly).

So, if your cost basis for your home is $100,000 (what you paid for it plus any improvements) and you sold it for $400,000, your capital gain is $300,000. If you’re single, you owe taxes on $50,000 of gains.

However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523. And some high-income earners could get hit with an additional tax.

#8 Claiming Too Much for the Mortgage Interest Deduction

If you’re eligible to itemize, the MID limit is $750,000. Before Dec. 16, 2017, the limit was $1 million.  Make sure your loan is grandfathered under the previous tax law before claiming the old limit. 

Interest on home equity loans and second mortgages is deductible, but only if the proceeds of such loans are used to substantially improve the home that secures the loan. You can’t deduct interest on home equity loans that were used for things like student loans or cars.  

And the amount of all mortgage loans (first, second, home equity, and loans for a second home) can’t exceed the $750,000 or $1 million limits.  

Source: Houselogic.com

Real Estate · Videos

Modern Design Style

Modern Design was a rejection of the ornate flourishes of other design styles, such as Gothic, Renaissance and Victorian styles of design. 

Modern design is a designated time period, from the early to mid-20th century. It originated at the turn of the century, and really gained popularity throughout the first half of the century. Both mid-century modern (popular in the ’40s-’60s), and post-modern design evolved from modern design. 

Real Estate

RESPONSIBILITIES OF A TITLE COMPANY

When buying a home, a common term that will come up is “title”. Although it’s a common term, do you really know what it means or what a title company does for you and the home seller? Let’s take a look at what to expect from a title company during your home buying process.

What is a title company?

The role of title company spans across a couple different spaces in real estate, but it’s main priority is to verify the title to the property or real estate given to the home buyer is legitimate. To put it simply- they make sure all the bases are covered and the seller has a right to sell the property.

Once the verification is complete, the company will guarantee the property title with title insurance. This insurance protects the owner in the event that someone or multiple people come along and claim ownership.

What do they look for?

We mentioned the main thing your title company will look for is whether or not other people have rights to the property you are looking to buy. But they also search for other issues including the ones below.

Easements: A large portion of a title search will be looking for easements. These are agreements that have been made on behalf of a previous owner that allows the right of another person/group to use part of the property for a specific purpose. This could include a city claiming part of your property be untouched by landscaping or a neighbor having the right to park in a designated area.

Existing Liens: A lien on a property could include an existing home equity line of credit or an existing loan to pay off for a specific amenity of the home. These will need to be paid before the closing.

Outstanding Mortgage: Any current mortgage tied to the property will need to be paid off completely at closing in order for the title to be transferred to your name.

HOA Dues: This varies based on the existing Home Owner Association contract, but any unpaid dues will need to be addressed before closing.

Restrictions: These are most common in designated age communities, such as 65+ living. The title company will ensure the buyer is not in violation of any area or community restrictions.

What to expect when working with a title company?

To start, you will want to ask your real estate agent if they have a title company they recommend. Oftentimes, they have a trusted title partner they work with and can help you get connected with them quickly and efficiently. Once you choose a title company, you should feel comfortable calling them anytime you have questions or concerns about the property. They are there to protect you! So utilize them.

There are two types of insurances they will offer, lender’s and owner’s title insurance. Lender’s insurance protects the mortgage company, and is required if you are taking out a loan to purchase the home. Owner’s insurance protects the property owner from title issues. Owner’s insurance is usually optional, meaning who pays for it can be negotiated. Lender’s insurance, on the other hand, will be your responsibility as a buyer.

Lastly, your title company may also be responsible for conducting the closing process. They will maintain escrow accounts, which will be used to hold your closing costs until the day you close on your new home.

*Info provided by Realty Executives International

Real Estate

Is It a Good Time to Sell My House?

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Last year, many homeowners thought twice about selling their houses due to the onset of the health crisis. This year, however, homeowners are beginning to regain their confidence when it comes to selling safely. The latest Home Purchase Sentiment Index (HPSI) by Fannie Mae shows that 57% of consumers believe now is a good time to sell.

Doug Duncan, Vice President and Chief Economist at Fannie Mae, explains:

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale.”

Normally, spring is the busiest season in the housing market – the time when many homeowners decide to list their houses. While this is obviously not a normal year since the pandemic is still very much upon us, experts are optimistic that consumer positivity around selling will lead to more homeowners making moves this year. Duncan continues to say:

“We will pay close attention to see if this newfound optimism develops into a trend.”

What does this mean if you’re thinking of selling your house?

The fact that there are so few houses available for sale today is one driver that’s encouraging consumers to think more positively about selling. The National Association of Realtors (NAR) states:

“Total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million).”

With so few homes available to buy, your house will be more likely to rise to the top of an eager purchaser’s wish list in this competitive market. Today’s high buyer activity is creating upward pressure on home prices and more multiple-offer scenarios. According to the Realtors Confidence Index Survey from NAR, the average home for sale is receiving 3.7 offers today, up from 2.3 offers just one year ago. This makes selling even more enticing.

In this kind of sellers’ market, you have a huge advantage in the process. And here’s another win – you can also use your equity toward a down payment on a new home when you move.

Wondering where you’ll go if you try to move while it’s so challenging to find a home to buy? Well, in many areas, there are more homes available at the higher end of the market, so finding a move-up home may be less of an issue if you’re ready to search for your dream home this spring.

Bottom Line

If you pressed pause on selling your house last year, now may be the best time to put your plans back into motion while inventory is so low. Contact a local real estate professional today to get the process started.

Source: keepingmattercurrents.com

Real Estate

Where Have All the Houses Gone?

In today’s housing market, it seems harder than ever to find a home to buy. Before the health crisis hit us a year ago, there was already a shortage of homes for sale. When many homeowners delayed their plans to sell at the same time that more buyers aimed to take advantage of record-low mortgage rates and purchase a home, housing inventory dropped even further. Experts consider this to be the biggest challenge facing an otherwise hot market while buyers continue to compete for homes. As Danielle Hale, Chief Economist at realtor.comexplains:

“With buyers active in the market and seller participation lagging, homes are selling quickly and the total number available for sale at any point in time continues to drop lower. In January as a whole, the number of for sale homes dropped below 600,000.”

Where Have All the Houses Gone? | Keeping Current Matters

Every month, realtor.com releases new data showing the year-over-year change in inventory of existing homes for sale. As you can see in the map below, nationwide, inventory is 42.6% lower than it was at this time last year:

Does this mean houses aren’t being put on the market for sale?

Not exactly. While there are fewer existing homes being listed right now, many homes are simply selling faster than they’re being counted as current inventory. The market is that competitive! It’s like when everyone was trying to find toilet paper to buy last spring and it was flying off the shelves faster than it could be stocked in the stores. That’s what’s happening in the housing market: homes are being listed for sale, but not at a rate that can keep up with heavy demand from competitive buyers.

In the same realtor.com report, Hale explains:

Time on the market was 10 days faster than last year meaning that buyers still have to make decisions quickly in order to be successful. Today’s buyers have many tools to help them do that, including the ability to be notified as soon as homes meeting their search criteria hit the market. By tailoring search and notifications to the homes that are a solid match, buyers can act quickly and compete successfully in this faster-paced housing market.”

The Good News for Homeowners

The health crisis has been a major reason why potential sellers have held off this long, but as vaccines become more widely available, homeowners will start making their moves. Ali Wolf, Chief Economist at Zondaconfirms:

“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed.”

With more homeowners getting ready to sell later this year, putting your house on the market sooner rather than later is the best way to make sure your listing shines brighter than the rest.

When you’re ready to sell your house, you’ll likely want it to sell as quickly as possible, for the best price, and with little to no hassle. If you’re looking for these selling conditions, you’ll find them in today’s market. When demand is high and inventory is low, sellers have the ability to create optimal terms and timelines for the sale, making now an exceptional time to move.

Bottom Line

Today’s housing market is a big win for sellers, but these conditions won’t last forever. If you’re in a position to sell your house now, you may not want to wait for your neighbors to do the same. Contact a local real estate professional for advice on how to sell your house safely so you’re able to benefit from today’s high demand and low inventory.

Source: Keeping Current Matters