Tuesday, October 14, 2014

Home Improvement or Repair?


Capital Improvement Register.pngHomeowners can raise the basis or cost in their home by money spent on capital improvements. The benefit is that it will lower their gain and may save them taxes when they sell their home. Improvements must add value to your home, prolong its useful life or adapt it to new uses. Repairs are routine in nature to maintain the value and keep the property in an ordinary, operating condition. Additions of decks, pools, fences and landscaping add value to a home as well as new floor covering, counter-tops and other updates. Replacing a roof, appliances or heating and cooling systems would be considered to extend the useful life of the home. Completing an unfinished basement or converting a garage to living space are common examples of adapting a portion of the home to a new use. Other items that can raise the basis in your home are special assessments for local improvements like sidewalks or curbs and money spent to restore damage from casualty losses not covered by insurance. Here’s a simple idea that could save you money years from now. Every time you spend money on your home other than the house payment and the utilities, put the receipt or canceled check in an envelope labeled “Home Improvements.” Regardless of whether you know if the money would be classified as maintenance or improvements, the receipt or cancelled check goes in the envelope. Years from now, when you’ve sold your home and you need to report the gain on the property, you or your accountant can go through the envelope and determine which of the expenditures will be adjustments to your basis. Some people disregard this idea because of the generous exclusion allowed on principal residences. At the unknown point in the future when you sell your home, circumstances may have changed and the proof of these expenditures will be valuable. The tax laws could lower the exclusion amount or eliminate it altogether. Your marital status may change because of death or divorce. The market value of your home may skyrocket. Since the future is unknown, it is better to keep track of the improvements as they are made and how much is spent on them. Download an Improvement Register and examples or read more in Publication 523 on Increases to Basis.

Wednesday, October 8, 2014

Opportunity Costs

iStock_000003622913X200x200.jpgSometimes, there are costs associated with not taking a particular action. If a person left their money in a certificate of deposit earning 2% when they could have made an investment that earned 8%, the difference is the opportunity costs associated to not taking action. If a couple has a down payment and good credit, locking in a low interest rate mortgage for 30 years could easily provide their lowest cost of housing. If that couple waits three years to purchase a home, the price would probably be higher as would the mortgage rate. However, assuming the price and interest rate remained constant, look at what the opportunity costs might be compared to doing nothing. If their money was invested in a certificate of deposit at 2.00%, in two years their $8,750 would have grown to $9,104. They would have earned $354 and had to pay ordinary income tax on the interest. If their money was invested in the stock market that had increased 7%, in two years they would have a profit of $1,268 which would be subject to long-term capital gains tax. On the other hand, it the same investment was used to buy a home that increased in value at 3% annually, the equity would be $31,938 or an increase of $23,188. Tax would not be triggered until the home is sold and may not be due then based on their homeowner’s principal residence exclusion. The home goes up in value due to appreciation and the unpaid balance goes down because of amortization. The dramatic difference in growth in the equity of the home is effected by leverage: the use of borrowed funds controlling the asset. A home is a place of your own where you can feel safe and secure, to enjoy with your family and friends and in many instances, a very good investment. It is difficult to measure the opportunity costs of intangibles but not necessarily money. Make your own projections with Your Best Investment. your best investment.png

Crafting an Acceptable Offer


Table-250.jpg An agent was presenting a contract to a single, senior woman who was moving into a retirement home. It was a full price offer with reasonable terms and timelines but the seller wouldn’t accept it. When the agent probed deeper, she discovered that the seller was concerned with her dining room table. It had been the first piece of nice furniture that she and her husband had purchased and they had literally spent a lifetime celebrating and making decisions at that table. It troubled the owner to think that the table would go to strangers who might not appreciate it as much as her family had. The agent told the elderly seller that she knew of a church nearby that had a community room filled with lovely tables like hers. If she liked the idea, the agent would call the church to see if they’d like to have it. Once a new home for the table was found, the sale of the home went smoothly. Lower inventory and increased demand in certain price ranges have increased the frequency of multiple offers on the same home. Sellers are frequently faced with a decision dilemma on which offer to accept and the price may not be the most important factor. Sellers generally need the equity from the sale of their home to purchase another one but they also don’t want to have to temporarily move if they’re not able to get into the home they’re purchasing. Flexible buyers have discovered the value in coordinating the sale and possession of the homes. Sellers want to know when they make a decision on an offer, that the buyers will be able to perform as the contract is written. The more contingencies that can be eliminated or minimized, the more comfortable a seller will feel about the certainty that it will close according to schedule. The buyer should be pre-approved with all verifications and credit reports having been done. Simply having a loan officer’s opinion is definitely not the same thing as a pre-approval. There is a unique dynamic to every transaction because the parties are individuals with infinite priorities and values. The art of the deal takes place when these unique variables are considered to define a mutually acceptable offer involving price, terms and conditions. The role and experience of the agents contribute to the successful outcome.

Monday, September 29, 2014

Seller Safety Plan


43997828_250pixel.jpgSeptember is REALTOR® Safety month when special attention is focused on the security of having a home on the market and the concerns for the well-being of owners is a day-to-day effort. The following list may help sellers secure their home and minimize risk.

  • Locks – doors and windows should be locked at all times. Additional locks like deadbolts or safety locks can provide a higher level of security.
  • Home lighting - turn on the lights prior to purchasers arriving to improve the showing. Not only will they be able to see things better, it could prevent them hurting themselves unnecessarily. Outdoor motion-sensor lights provide additional security.
  • Eliminate the possible hazards – try to identify anything that might cause a person to trip and fall such as loose objects on the floor or floor coverings that aren’t properly secured.
  • Security system – If you have a security system, it should be monitored and armed, especially when you’re away from home. Most systems will allow you to program a temporary code that agents will be able to use based on your instructions.
  • Prescription medications – remove or secure the drugs before showing the home.
  • Secure valuables – jewelry, artwork, gaming systems; mail containing personal information like bank and credit card statements, investment reports; wine and liquor can also be a security issue.
  • Remove family photos –pictures can be distracting to prospective purchasers but the concern at hand is to eliminate photos of a wife, teenage daughter or children that might provide information to a possible pedophile or stalker who could be posing as a buyer.
  • Remove weapons – the reason to remove guns should be obvious to everyone but a knife block on the kitchen counter can become an opportunity of convenience.
  • Unexpected callers - when some people see a for sale sign in the yard, they think that it’s an invitation to look at the home immediately. Keep your doors locked so that people can’t let themselves in. If they ring the doorbell and want to see the home but aren’t accompanied by an agent, ask them to call your listing agent.
These precautions should be taken before the photos or virtual tours are made. Having these items in plain sight in the pictures posted on the Internet can unwillingly provide prospective criminals with a menu of what is available. Agents cannot protect a seller’s valuables other than to inform the owner of potential threats to their security. In most cases, the seller’s agent will not be present at home showings and even if they were, it is not always practical nor desirable to follow the buyers and their agent through the home.

Tuesday, September 16, 2014

Periodic Home Maintenance


home maintenance 250.jpgA common expectation of homeowners is to want the components and systems in their home to work when they need them. Periodic maintenance is just as important as having a trusted service provider to make necessary repairs. Victims of Murphy’s Law can attest that their air conditioner goes out on the hottest day of the year or the water heater fails when you have out of town visitors. If the convenience of having things work doesn’t justify maintaining your home’s systems, consider that it can be less expensive than the results of neglect causing repairs or replacement.

  • Replace burned-out, dim or missing bulbs in light fixtures and lamps. Consider switching to LED bulbs.
  • Dryer exhaust vents build up lint even though you may be cleaning the filter regularly.
  • Fire extinguishers need to be recharged or replaced after expiration date.
  • Establish a recurring appointment on your calendar to change filters in your HVAC.
  • Replace missing or damaged caulk around sinks, bathtubs, showers, windows and other areas.
  • Clean gutters.
  • Schedule an inspection with a pest control a minimum of once a year unless you have a service contract.
  • Schedule a chimney cleaning prior to using the fireplace for the first time in the season.
  • Keep all tree branches and shrubs trimmed away from the home.
  • Pressure wash exterior, deck, patio, sidewalks and driveway.
  • Keep levels of insulation in the attic above your ceiling joists.
  • Check appliances with water lines for leaks or worn hoses. • ice maker • washing machine • dishwasher • others
  • Test all GFI breakers and reset.
  • Inspect all electrical outlets for broken receptacles, fire hazards or loose fitting plugs.
  • Have furnace and air conditioner serviced annually.
  • Test smoke and carbon monoxide detectors and change batteries.
The early fall is a great time to take care of these items before the weather becomes harsh.

Tuesday, September 9, 2014

Money Down the Drain


iStock_000012313013Small200.jpgPrivate mortgage insurance is necessary for buyers who don’t have or choose not to put 20% or more down payment when they purchase a home. It is required for high loan-to-value mortgages and it provides an opportunity for many people to get into a home who otherwise would not be able. The problem is that it is expensive and a homeowner’s goal should be to eliminate it as soon as possible to lower their monthly payment and avoid putting good money down the drain. FHA loans made after 6/1/13 that have 90% or higher loan-to-value at time of purchase have mortgage insurance premium for the life of the loan. FHA loans made prior to 6/1/13, can have the MIP removed after five years and if the unpaid balance is 78% or less than the original loan-to-value. VA loans do not require mortgage insurance. Conventional loans, in most cases, with higher than 80% loan-to-value require mortgage insurance. The cost of that insurance varies but with a $250,000 mortgage, it could easily be between $100 and $200 a month. Your monthly mortgage statement should itemize what your monthly fee is for the mortgage insurance. Unlike interest that is deductible, most homeowners are not able to deduct mortgage insurance premiums. If you plan to remain in the home or to stay there for a considerable number of years, the solution may be to refinance the home. If the home has increased since it was purchased, the loan-to-value at its new appraised value may not require PMI. You might even be fortunate enough to obtain a lower rate than you currently have.

Cash Flow and Equity Build-up


Cash Flow.pngMany years ago, Las Vegas hotels would entice customers with inexpensive rooms, meals and entertainment so they would gamble. It may have worked initially but if you’ve been to Las Vegas recently, the bargains are gone. Hotels expect each division to be a profit center on its own. As a consumer, I might not like the changes but as an investor, I’d have to be pleased with increased profitability. Years ago, real estate investors used to accept negative cash flow buoyed by tax incentives in hopes of making a big payday due to appreciation when they sold it. Today’s investors are focusing on tangible, current results like cash flow and equity build-up. Cash flow is the amount of money you have left over after collecting the rent and paying the expenses. Since rents have gone up considerably due to supply and demand in the last few years and mortgage rates are at near record lows, income is up and expenses are down, making the cash flows attractive. If the cash flow is sufficient, you could have a good investment even if the value of the property never increased. Cash on Cash doesn’t consider appreciation and measures the cash flow before tax advantages by the initial investment. A rental with $3,170 CFBT divided by an initial investment of $29,000 would generate a 10.93% Cash on Cash rate of return. Low down payments on investor properties are also a thing of the past. Non-owner occupied mortgage money is available but the investor should expect to put down 25-30%. An advantage of having a smaller mortgage is a lower payment. Most mortgages are amortized loans with both principal and interest due with each payment. The forced savings of the principal contribution builds equity in the property and can be considered a part of the rate of return. A $100,000 mortgage at 4.5% for 30 years would have $1,613.29 applied to principal in the first year. Divide that by the same $29,000 initial investment and the amortization would generate another 6%. Without factoring in appreciation or tax advantages, this rental example generates much more than most alternative investments. There certainly are many different aspects that affect the risk and return on rental investments. If you haven’t scrutinized single-family rental opportunities in a while, you should look again.

Which Furnace Filter to Use?


iStock_000012737667Small250.jpgA dirty air filter decreases the effectiveness of your HVAC system because it inhibits airflow and allows dirt, dust, pollen and other materials to blow through the system. The challenge is how often it should be changed to keep the system working efficiently and extend the equipment life. Too often and you’re wasting money and not often enough and your increasing the operating and maintenance costs. Fiberglass panel filters are inexpensive and easy to find but they’re not very efficient and they allow most dust to pass through. They were popular years ago but there are much better products available currently. Pleated air filters are available in MERV ratings from 5 to 12. As these filters collect dirt and other particles, they become less efficient to the point of impacting air flow. Allergy sufferers can benefit from this type of filter. These should be changed every two to three months based on local conditions. HEPA filters stand for High Efficiency Particulate Arrestance. They are very efficient and more expensive than previously described filters. Since they are very efficient, they require changing more frequently; possibly, every month. Electrostatic air filters are permanent and washable. They generally cost more initially but the savings will be based on how long they last. This type does not add to landfill issues or produce ozone. Improperly maintained filters will lower the quality of the air in the home, have a negative impact on air flow, cause it to use more electricity and eventually require maintenance to the systems. In an attempt to easily comparing filters, a rating system was created called MERV, an acronym for Minimum Efficiency Reporting Value. The rating from 1 to 16 indicates the efficiency of a filter based on standards set by ASHRAE. Higher ratings indicate a greater percentage of particles are being captured in the filter. To create a system to remind you when to change your filters, set a reminder on your electronic calendar to recur for whatever frequency you determine is best for you. Be sure to keep a supply of filters on hand to be ready to change them out when the time comes.

Monday, September 8, 2014

How is Your Memory


home inventory3.pngHow old is your bedroom furniture and what did you pay for it? Don’t know? That’s okay, let’s try an easier question. When did you buy the TV in your family room and is it a plasma, LCD or a LED? Whether you are the victim of a burglary, a fire or a tornado, most people are comforted they have insurance to cover the losses. However, unless you’ve filed a claim, you may not be familiar with the procedures. The adjustor will want to know the date and how the loss occurred. Assuming you have contents coverage, the claim for personal belongings is separate from damage to the home. You’ll be asked to provide proof of purchase, like receipts or cancelled checks, or a current inventory. If they’re not available, you can reconstruct an inventory from memory. The challenge is trying to remember things you may not have used for years and may not miss for years more. Relying on memory can be a very expensive alternative. A prudent homeowner will create a home inventory with pictures or videos while all of their belongings are in the home and they can see them. Download a home inventory to make your project a little easier.

Reverse Mortgage


39095344-small250.jpgWith all of the encouragement from celebrity spokespersons like Fred Thompson, Robert Wagner and Henry Winkler, there is a growing awareness of reverse mortgages. The fact is that our population is getting older and more than 25 million homeowners meet the age requirement. A reverse mortgage will allow homeowners age 62 or older currently living in their home to tap into their equity. The amount available is determined by the borrower’s age, the home’s current value and current interest rates. The loan proceeds can be received in a single, lump-sum or periodic payments. The closing costs can be paid in cash or rolled into the loan amount. There are no payments on a reverse mortgage but the homeowner is still responsible for property taxes, insurance, maintenance and other home costs. When the borrower dies, moves or fails to fulfill the terms of the loan, the lender is paid from the sale of the home. The borrower or their estate is not responsible for more than the proceeds of the sale. However, if the proceeds are greater than the amount owed to the lender, the remainder goes to the homeowner or their heirs. Unlike normal mortgage requirements, the borrower’s income and credit are not used to determine the amount of the loan. The homeowner must occupy the home as their principal residence and it must be free and clear of encumbrances or have substantial equity. Reverse mortgages are an opportunity to generate income or funds for capital expenditures but they can pose risks to homeowners. HUD, the largest insurer of reverse mortgages, is concerned about misleading or deceptive program descriptions encouraging borrowers to obtain HUD reverse mortgages also known as the HECM (Home Equity Conversion Mortgage). As of June 18, 2014, FHA will only insure fixed rate reverse mortgages where the homeowner is limited to a single, full draw made at closing. A reverse mortgage, like any financial decision involving a home, is an important decision that deserves careful consideration, due diligence and expert advice. For more information, check out The National Association of REALTORS® Field Guide to Reverse Mortgages, FAQs about HUD’s Reverse Mortgages and Reverse Mortgages – Alternative Home Equity Funding by Real Estate Center at Texas A & M.

Tuesday, March 18, 2014

Every Homeowner Needs One


water meter key.jpgA water meter key is like insurance; buy it before you need it. Imagine a pipe has burst and there is water flowing like a river through your home. There may a cut-off valve to each sink if it works and if that’s where the leak is coming from. Your home may have a master cut-off valve but if you haven't used it before, you might not know where it is. The last resort is to cut off all the water to your house at the meter. In most cases, you'll need a key to get into the meter. With water starting to rise in your home, concern over the damage being done may add to your anxieties. You don’t have time to call a plumber or even go the store to buy a water meter key. Emergencies are handled much better when you plan for them in advance and practice, even though you hope you’ll never need it. 1. Determine what kind of key you need to open your water meter. 2. Purchase it at the home improvement or hardware store. 3. Practice opening the meter to be able to do it quickly and easily. 4. If your meter key doesn’t have a wrench on one end, you need a wrench to turn the water valve. 5. Practice turning the water off just to see how it works and feels. 6. Put the key in an obvious and conspicuous place. 7. Have the phone number of an emergency plumber, just in case you need it. While you’re planning for the unexpected, it might be a good idea to show some of the other family members how it works and where you keep the key.

Reasonable Expectations


fortune cookie2.pngCoffee should be hot. Beer should be cold. Mexican food should be spicy. However, if these things are less than the standard that you expect, there are not any lasting consequences. As the value of the object in question rises, either in price or gravity, the expectations usually increase and decisions become progressively more important. Marriage, children, health and careers are certainly a few of the more important items that bear careful consideration. The sale of the largest asset that most people own, their home, also merits having reasonable expectations. A homeowner should expect to get the market value for their home in a reasonable period of time with as few inconveniences as possible. According to the latest Home Buyers and Sellers Survey, more homeowners are entrusting the sale of their home to real estate professionals. Owners can increase the likelihood of a favorable outcome by sharing their expectations with agents prior to listing their home for sale. Challenge your agent to explain what they intend to do to:

  • Price the home correctly
  • Prepare the home to make a good impression
  • Position the home in the marketplace
It is reasonable for a seller to expect the agent will work hard to sell the home; will tell the truth and represent the client’s interests to the best of their ability. Agents exemplify remarkable service when they exceed the seller’s expectations.

Making Room in Your House


retain remove.jpgThe more things you have, the more you have to take care of. And in this case, the more that you have to store that gets in the way of finding the things that you actually use. Periodically, you need to go through every closet, drawer, cabinet and storage area to get rid of the things that are just taking up space in your home and your life. Every item requires the decision to retain or remove. Consider these questions as you examine each item: • When was the last time you used it? • Do you believe you’ll use it again? • Is there a sentimental reason to keep it? You have four options for the things that you’re not going to keep. If you know someone who needs it or will appreciate it, you can give it to them. You can sell it in a garage sale or on Craig’s List. You can donate it to a charity and receive a tax deduction or you can discard it to the trash. Start with your closet. If you haven’t worn something in five years, get rid of it. Then, go through the things again and if you haven’t worn it in two years, ask yourself the real probability that you’ll wear it again. Another way to do it is to move it from your active closet to another closet. If a year goes by in the other closet, the next time you go through this exercise, those clothes are on their way out. If the items taking up space are financial records and receipts, the solution may be to scan them and store them in the cloud. There are plenty of sites that will offer you several gigabytes of free space and it may cost as little as $10 a month for 100 GB at Dropbox to get the additional space you need. It will certainly be cheaper than the mini-storage building.

Rate/Payment Relationship


Rate Payment Relationship 2 small.pngA ½% increase in interest rate may not sound like much but it is roughly equivalent to a 5% increase in price.  It becomes obvious when you compare the payments. If you financed 100% of the cost of a $250,000 home at 4.5% interest for 30 years, the payment would be $1,266.71 per month.  If the mortgage rate went up to 5%, the payment would be $1,342.05.  If the home increased 5% in value, the $262,250 loan at the lower 4.5% rate would have payments of $1,330.05. The two payments are close enough to justify the statement that a ½% change in interest is approximately equal to 5% change in price. Each time interest rates go up, fewer people can qualify to buy a seller’s home.  The mortgage rules that went into effect this year require buyers to meet specific payment to income ratios.  As demand picks up for the seasonal market, most experts expect rates to increase. Buyers will be doubly challenged in the current market because prices are rising (NAR reports 11% last year) along with the anticipated mortgage rates.  Buyers who wait will inevitably be paying more to live in the same home had they acted sooner. Check out on how Interest Affects Price for a home in your price range.

Rent or Buy - The Cost is Going Up


Buy or rent small.jpgWhether you continue to rent or decide to buy a home, according to recent Zillow 2014 housing projections, the cost is going up. Zillow projects home prices to increase nationally by 3%, mortgages to rise to 5% interest rate by the end of the year and rents to go up by 2.5% on average. If it will cost a person more whether they rent or buy, the conclusion can be made that one way or the other, they will pay for the house they occupy. The question will be whether they buy it for themselves or their landlord? Will they benefit from the equity build-up and the appreciation? The following analysis looks at a $200,000 home that can be purchased with a 30 year FHA mortgage at 4.3%. The assumption uses 3% appreciation and tenant currently paying $1,750 a month in rent. The house payment, principal, interest, taxes and insurance would be about $1,609 a month. However, once you consider the benefits of the principal reduction each month, the appreciation and the tax savings and the increased cost of maintenance, the net cost of housing is closer to $630 per month. Even if you ignored the tax savings, the net cost of housing would only be $919.06 per month. The tenant would pay considerably more to rent than to own the home. Over time, the decision to buy a home could result in a considerable financial asset that the tenant will not benefit from. To estimate your cost of housing, use the Rent vs. Own.

Finding a Better Investment on Return


Return on Investment.pngA certificate of deposit will generate a cash flow based on the interest rate that it pays which is the only way it generates a return for the investor. An investment in a stock that doesn’t pay dividends, would need to be worth more than you paid for it to earn a profit. On the other hand, a stock that paid dividends could make the investor a profit even if it sold for the same price that he paid for it. Investors can profit four different ways with an investment in rental real estate. 1. Cash flows that result from having a surplus after collecting the rent and paying the expenses. 2. Equity build-up results from a portion of each monthly payment reducing the unpaid balance. 3. Tax benefits can result from the depreciation allowed on the property and the preferential long-term capital gains tax rate. 4. Appreciation benefits the investor when the value of the property increases. The most conservative investors in real estate make decisions to purchase a rental property based on its ability to generate a cash flow and reduce the mortgage through normal amortization. If the property can offer an acceptable rate of return compared to other available investments, the tax benefits and possible appreciation become an added bonus. With increased rents and low mortgage rates for investors, rental property can offer significantly higher returns than many of the available alternatives. Contact me for more information- ckraus@mris.com; you may be amazed about what is available in the market.

Personal Finance Review


Reveiw checklist.pngYou’ll need to earn $2.00 for every $1.00 you want to spend assuming you pay 50% of your earnings on income tax, social security and Medicare. On the other hand, you get to keep 100% of every dollar you save on your personal expenses because the taxes have already been paid. Periodically, review your expenditures with the diligence of an exuberant IRS agent on commission. It’s an exercise that most people don’t feel they have time to do but the rewards make it entirely worthwhile.

  • Get comparative quotes on insurance – car, home, other
  • Review and compare utility providers
  • Review plans on cell phones
  • Review plans on cable TV, satellite for unused channels and packages or receivers
  • Review available discounts on property taxes
  • Consider refinancing home – lower rate, shorter term or cash out to payoff higher rate loans
  • Consider refinancing cars
  • Call credit card companies to ask for a lower rate
  • Review all of the automatic charges on your credit cards – consider no-fee cards
  • Search for late fees that are regularly being paid and eliminate them.
  • Review all bank charges for accounts and debit cards; determine if they can be reduced or eliminated.
If you don’t want to review your credit card accounts, consider reporting the cards stolen so that new numbers will be issued. You can notify the companies that need your number. Companies who might have your number won’t be able to automatically renew services that you may no longer be using. You can be assured that they’ll contact you when the old number doesn’t go through and you can re-evaluate the decision at that time.

Tuesday, January 21, 2014

Interviewing a Mover

Mover 250.jpg“I’d wish I’d know that before I made a decision.” If you’ve ever regrettably said this to yourself, having a checklist might have prevented the issue in the first place. This list of questions can provide you with things to discuss when interviewing a moving company. Fees
  • What is the charge for packing?
  • Does it include boxes? If not, what do they cost and will you deliver them?
  • Is there an additional charge to deliver some items to a storage unit?
Insurance
  • How is a damage claim handled?
  • What insurance do you provide and is there a cost?
  • Does the insurance cover items packed by the owner?
  • Can additional insurance be purchased?
  • If items are covered by my Homeowner’s insurance, whose insurance pays first?
Unusual Items
  • Can you ship my car(s)? Will they be in the moving van or towed?
  • What are the charges for shipping cars, lawn tractors, etc?
  • What items cannot be shipped?
  • If a shuttle truck is needed because of the location of my house or size of the drive way, is there an additional charge?
  • If packing and loading are on different days, can you leave the beds and other basics out for us to use?
Dates
  • What dates are available for our move?
  • What date will you pack and how long will this take?
  • What date will you load the van?
  • What date will the van arrive at my new location?
  • If my new home is not ready for delivery, how many days can it be delayed before there is a charge?
  • What is the charge for additional days or weeks?
Terms
  • Are there any additional fees that I’m responsible for that have not been discussed?
  • What are the terms of payment?
  • Is a down payment required?
  • When will the balance be due and who is authorized to accept it?

Future Increases For Mortgage rates and Housing Prices?


crystal ball 2.pngThe two most frequently quoted constants in life are death and taxes. Two more things would-be homeowners can expect in the near future are increases in mortgage rates and housing prices. Interest rates have been kept artificially low for several years by the Federal Reserve in an effort to strengthen the economy. Policy is shifting to allow them to seek their own natural level and that will surely result in higher mortgage rates. Rates on 30 year fixed mortgages are up over 1% from January, 2013. Foreclosure activity is down, new home starts are up and prices have been increasing in most markets for two years. Most experts agree that the cost of housing is going up. If the price were to go up by 2% and the mortgage rate by 1% while a buyer is “sitting on the fence” making a decision, the payment would go up by almost $175.00 each and every month for the term of the mortgage. Even if a person can afford to make the higher payments, what could they have done with that extra $175.00 a month? Buy furniture? Car payment? Principal reduction? Retirement contribution? Save for a rainy day? Click here to determine what the cost of waiting to buy will be using your price home. cost of waiting to buy.png

What Kind of Showing Was It?


Types of Showings.pngOne of the most frequent calls from homeowners to their agents is about the listing’s inactivity due to the lack of showings. The homeowner commonly believes that the home is shown only when a buyer walks through the house with an agent. Today’s buyers are more sophisticated than in the past due to the abundance of information available to the public on the Internet. There are seemingly inexhaustible sites with homes for sale, valuation estimates and virtual tours. There are extensive mapping sites with satellite images, traffic conditions, entertainment, shopping and other points of interest. There are actually three legitimate types of property showings. A knowledgeable buyer can view a home for sale online and make a reasonable determination of whether the home will fit their needs. Occasionally, buyers will drive by a home to get a feel for the home and also the neighborhood which might cause them to eliminate any further examination or consideration. The third type, the physical showing, certainly gives the buyer the opportunity for the closest scrutiny but is generally reserved for properties that have passed the inspections of at least one other type of showing. Sellers should be aware of the different types of showings and that a sales agent’s job is to help the buyer find the right home. The listing agent’s job is to market the home so that the right buyer finds it either through their own efforts or that of the buyer’s agent.

Can You See the Savings?

Mover 250.jpg“I’d wish I’d know that before I made a decision.” If you’ve ever regrettably said this to yourself, having a checklist might have prevented the issue in the first place. This list of questions can provide you with things to discuss when interviewing a moving company. Fees
  • What is the charge for packing?
  • Does it include boxes? If not, what do they cost and will you deliver them?
  • Is there an additional charge to deliver some items to a storage unit?
Insurance
  • How is a damage claim handled?
  • What insurance do you provide and is there a cost?
  • Does the insurance cover items packed by the owner?
  • Can additional insurance be purchased?
  • If items are covered by my Homeowner’s insurance, whose insurance pays first?
Unusual Items
  • Can you ship my car(s)? Will they be in the moving van or towed?
  • What are the charges for shipping cars, lawn tractors, etc?
  • What items cannot be shipped?
  • If a shuttle truck is needed because of the location of my house or size of the drive way, is there an additional charge?
  • If packing and loading are on different days, can you leave the beds and other basics out for us to use?
Dates
  • What dates are available for our move?
  • What date will you pack and how long will this take?
  • What date will you load the van?
  • What date will the van arrive at my new location?
  • If my new home is not ready for delivery, how many days can it be delayed before there is a charge?
  • What is the charge for additional days or weeks?
Terms
  • Are there any additional fees that I’m responsible for that have not been discussed?
  • What are the terms of payment?
  • Is a down payment required?
  • When will the balance be due and who is authorized to accept it?