June 21, 2020

The Benefits of Buying vs Renting

If you are considering purchasing a home, it is always a good idea to stop and consider the timing of your purchase. Is it really a good time to buy or should I rent until the market is better?

In the current market, you may very well pay less per month to own a home than rent one! Even better, the amount you may need to put down in rents/deposits to move in may be enough to cover a portion of your closing costs and down-payment to buy. 

In this case, the benefits of buying a home far outweigh the benefits of renting. Read our list of the top benefits of buying a home below:

1. You will have a fixed mortgage rate

With a “Fixed Mortgage Rate” you have a fixed monthly payment. When you rent, you have no control of monthly rent increases set by your landlord if you plan to remain in your lease over time.

2. You will build equity over time 

If you buy and plan on keeping your home long-term, you will build up equity over time. When you rent, you receive no equity. Basically, when you move out of a rental, you have no chance of earning money from the property you have been living in.

3. You may have tax advantages 

There are certain tax advantages you may get that are not available for renters. I am not a CPA, but I do recommend you speak with a local CPA to learn of the tax benefits of owning a home vs. renting because many of my clients can write off mortgage interest payments. You may qualify for that tax benefit too!

4. You never have to worry about the home selling 

Landlords can sell the home you are renting without conferring with you! When you own, you never have to worry about your Landlord deciding to sell the property you are living in and kicking you out once your lease is up.

5. You will not have pet restrictions

Do you have pets or breeds that landlords will not agree to? When you own, in most cases, you can own any type/breed of animal you wish.

6. You do not have to pay realtor fees 

When you buy a home, my fees to help you are paid by the seller of the home your purchase.

Posted in Buyers
June 20, 2020

Advice for Visiting New Builds and Open Houses

If you are considering a New Construction or New Build home and wish to visit the models, you could lose your right to have an outside Realtor help you if you visit the community or model without representation on the first visit. Know that you may have to use the Realtor at the new builds sales office who is actually representing the seller/builder. If you have your own realtor represent you, we will be there to take care of your wants and needs.
 
With open houses, it’s a little different. Although you can visit the home without your Realtor, the agent still represents the seller and has only the seller’s interest in mind. Ideally, letting your Realtor know you are going to do some open house “shopping” before you go would be the best thing.

Then they can provide you their cards to hand the agents when you walk in, or better yet, go with you! However, if you see one you MUST see last minute, just be sure to advise the agent on site that you have a buyer’s agent as soon as you walk in. 

In these two situations, your best interest is to have personal representation. The seller’s agent cannot possibly provide you 100% of the assistance you deserve, as they are also working for the seller.

We have found many clients think they will get a better dealing going directly to the listing agent, but this is not the case. Either way, a commission will be charged, so you might as well have someone fully representing you. Make sense?

Simply let me know ahead of time when you wish to visit new construction or open houses so I can help you the best I can. Then you never lose an opportunity to have incredible buyer representation! My goal is always to get you’re the best price, the best advice, and best guidance through the whole home purchase process.

Posted in Buyers
June 19, 2020

New Neighborhood Research Resources

When moving to a new neighborhood, it's crucial to do your research. Below is a list of websites that you may want to refer to as you determine where you want to purchase a home. 

For example, you may need a specific school and want to be sure the neighborhood you are looking in will allow your family to enroll in the school you would like, or you may need to rely on public transportation. 

The following resources can help with questions like those: 

School Ratings

Crime Rates & Statistics

Walkability & Public Transportation

Hospital Ratings

Posted in Buyers
June 18, 2020

Is Buying a Vacation Home a Good Investment?

You know the feeling: You’ve just wrapped up a wonderful vacation! Now you’re going through withdrawals as you head back home to the drudgeries of everyday life. While there may be no way to escape your job (short of winning the lottery), more and more people are hanging onto a little piece of vacation by investing in a second home.

Buying a vacation property can be a wise way to invest disposable income and diversify your assets — and a growing number of people are doing just that. In record numbers, Baby Boomers across the country are realizing their dreams while taking advantage of favorable tax laws and historically low mortgage rates by opening the door to a second home.

Buying a second home is often different than primary home purchases, so here are some tips if you’re considering the investment of a vacation property: 

1. Determine the best location for your vacation home. 

The most popular locations for second homes are near the ocean, lakes, mountains, and more rural settings than urban homes. They’re also typically less than a day’s drive from primary residences.

2. Research locations.

A real estate professional is an invaluable resource for distant places. Realtors can highlight areas of interest and offer important information on other issues such as affordability, climate, and population.

3. Identify your favorite pastimes. 

Vacation living equals more leisure time, so think about your recreational interests. Many people are buying vacation homes near golf courses, beaches, ski slopes, boating facilities, and biking, hiking, or horseback riding trails. What is your favorite leisure activity?  

4. Know the income tax laws. 

Vacation homes that are used primarily by the owner are considered personal residences. Individuals can deduct a certain amount of interest from these homes. 

Vacation homes can also be rented out for two weeks each year, while still allowing owners to benefit from deductions in property taxes. Involve your tax professional in this financing part of the deal. 

5. Timing. 

Almost every real estate market has a seasonal slump when buyers are scarce and purchase costs drop, so do your research to find the best time to buy your vacation home! You can also use local brokers and mortgage lenders who know the market and can price competitively.

6. Visit the destination. 

By visiting the location, you can get a feel for the travel time and the area’s culture and resources. Many people who buy a vacation home ultimately use the property as their primary residence upon retirement, so it’s extremely important to find a location that fits your long-term plans. 

Investing in real estate is a historically good choice, and second homes are no exception. Do your homework and you’ll be on your way to finding your perfect new home away from home! 

Posted in Buyers
May 8, 2020

Determining the Right Offer Price

Determining the price you are willing to offer should be determined by what the market warrants. To know this information, you will need to see the comparables.

That is a list of homes that are currently under contract and the most recent homes that have sold. There is a high and a low range that homes are selling in.

Homes in the lower range tend to be less desirable. They may not have the best location or need some TLC. Homes in the high range are usually move-in ready and have desirable features.

We have found that homes not priced within the selling range will often sit until a seller becomes realistic and reduces the price within the market range. Homes that do sell will usually be sold within 97% of their list price. Often, desirable homes will sell for full price or higher!

This is why it’s important to work with a professional who actively sells homes and is aware of the market sales in the area they work in.

Be sure you have set yourself up to receive market updates showing you what homes are active, under contract, and recently sold in the area and price range you are looking at. This is invaluable information as you continue in your home buying journey.

 

Click here to learn how to sign up for monthly market updates and then click the button below to get started:

CLICK HERE TO GET STARTED

Posted in Buyers
April 8, 2020

Planning for Closing Costs

Let's talk about closing costs associated with buying a home. You probably understand that you will need to have a down payment in order to close on your new home. Most likely, you have factored in this amount and have saved it or are currently saving for your “down.”  However, from our experience, many buyers we have worked with do not understand that there are other fees associated with a home buying transaction that go over and above the down payment.

To be sure you are prepared when the time comes, we wanted to provide you a list of some of the additional costs you need to be ready to have in hand. Possible fees are referred to as closing costs and/or pre-paids.

Some of these additional fees and costs may include: 

  • Lender Fees

  • Impounds

  • Taxes

  • Appraisal Fee

  • Credit Report Fee

  • Escrow Fee

  • Title Fee

  • Homeowner’s Insurance Fees

  • Homeowner Association Fees

  • Recording Fees

Though these fees may seem endless, take comfort in the fact these are normal in any home purchase transaction. If you are paying cash, lender fees will not apply.

You may be wondering how much additional money you should expect to have to close on your new home. Unfortunately, each property and transaction is unique and there is no way to provide an exact amount.

For instance, is some scenarios, you might be able to get the seller to pay for some of these fees. This would obviously change your out-of-pocket costs.
 
Are you interested in getting a better idea of what you should be anticipating for closing costs? We can certainly help you with this! Give us a call and schedule a time to discuss it. 

Posted in Buyers
March 1, 2020

Vacation Money Saving Tips

Planning your vacation while saving to buy a home? It’s not impossible! Taking a vacation on a scaled-back budget is totally possible. Check out a few ideas on ways to save money when you travel:

1. Shop around for bargains 

The old concept of “supply and demand” is likely going to work in your favor during the vacation season. People are saving their money and not spending as much — and the hotels and resorts are feeling it.

You can find some killer deals on the internet, so take advantage of deals that involve things like free meals for kids. That tip alone can save you $100 or more over the course of a week! 

You can also sign up for weekly email alerts for airfare specials on websites like travelzoo.com and airfarewatchdog.com. If you can plan to be flexible on your travel dates, you may be able to score last-minute bargains and save additional money.

Another great site is priceline.com. You can often bid for lower prices at great hotels, car rental places, and more. It really works!

2. Enjoy a “staycation”

Save money on your vacation by staying at home. Take a break from normal responsibilities, but try exploring local parks, hiking trails, state parks, museums, zoos, and more. Many of these places offer an array of wonderful possibilities — and you can forget the travel costs! 

Not only will you save money on airfare, lodging, and food, but you will get to explore your very own backyard.



3. Bring along refillable water bottles 

Pack refillable water bottles in your suitcase to use once you arrive at your destination. A family of four can easily spend $20 or more per day on water alone! You can also eat more meals in your room by making a quick grocery store stop. Pick up some food items for snacks, breakfast, and lunch. This will save you money and give you a break from restaurant dining. 

Pro-tip: book hotels with small kitchens, mini-fridges, and microwaves. This will expand your ability to store and cook meals in your room.



4. Take advantage of coupons 

Spend a couple of weeks collecting coupons and you can easily save money while on vacation. Whether they’re for lodging, food, or attractions, coupons will save you money. You can find them online, in local newspapers, at grocery stores, etc. Just be sure to read the fine print carefully to make sure they don’t expire before your trip! 


5. Pack lightly and carefully 

All airlines have baggage limits and some carriers are charging fees if you check more than one suitcase per person. To avoid unnecessary fees, check the weather conditions at your destination ahead of time and pack according to the forecast. It may be tempting to pack several outfits per day, but it will take up unnecessary space. 



6. Consider getting a credit card that gives you travel points or miles 

United Airlines and Southwest both offer credit cards that reward you with miles based on your spending. Be sure to read the fine print and ask about associated fees. If you travel a lot, however, having a travel credit card can really pay off for you. 

Posted in Buyers, Owners, Sellers
Feb. 12, 2020

Location, Location, Location

You may have heard the phrase that the three things that matter most in real estate are, “location, location, and location.” Nonetheless, some buyers end up purchasing a home in a location that’s not right for them, simply because they make their choice for all the wrong reasons. 

They’re looking at a house in the wrong area or the wrong school district, but they buy it because they like the kitchen or the color of the paint.

Purchasing a home is usually the biggest financial decision a person makes. We look at the home buying process as a journey we take with our clients. During the journey, we listen to what our clients say is important to them in the homes we tour. We make note of those things to help us refine our clients’ search objectives.

We understand a home purchase is a process that unfolds. What may have been important to a buyer at first becomes less important as they begin to see the options available to them from one home to the next.

Posted in Buyers
Jan. 23, 2020

Move-In Ready vs. Fixer-Upper Homes

We can’t tell you how many times our clients have had an idea of what something will cost to improve their new home, only to be surprised by the outcome. Whether it be flooring, a new roof, or a new HVAC system, we have been able to share our contacts with them and they were able to do the job for much less money than they expected.

On the other hand, if you're on a budget and can’t do the repairs or remodeling right away, you can look for homes whose full potential has yet to be realized. These are fixer-upper homes!  Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness (for a while) in exchange for getting a house you can afford.

If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away. Homebuyers should look for a house that they can add value to, as this ensures a bump in equity to help them up the property ladder. As a side note, if renovations are required, lenders may have loan programs that allow the cost of those renovations to be included as part of the loan.

Posted in Buyers
Sept. 16, 2019

15 Overlooked Tax Deductions to Pay Attention to

In just a few short months, tax season will be upon us! We know it’s tempting, but don’t take the easy way out this year. Chances are, you’ll end up losing a lot of hard-earned money. Although the reform on taxes in 2018 did change many popular write-offs, there are still plenty of deductions to take advantage of.

It just takes a little bit of research. The good news is, we’ve already done that for you. Here are 15 overlooked tax deductions to pay attention to below:

1. Reinvested dividends

This is a subtraction that can earn you some big savings. Unfortunately, it’s also one of the most missed by taxpayers. So how does it work? If you have mutual fund dividends that are automatically invested in additional shares, each reinvestment increases the stock or mutual fund, aka your “tax basis.” 

This lowers your taxable amount of capital gain when you sell these shares. It’s crucial to remember to include this in your cost basis or you’ll end up overpaying your taxes. 

Sound complicated? There are tools out there that can help you, like TurboTax Premier and Home & Business. 

2. Out-of-pocket charitable contributions 

Did you know you can write off things like food purchased for a soup kitchen or stamps purchased for a school fundraising event? Most people don’t miss the larger charitable donations they give throughout the year, but don’t forget, smaller donations add up too! You can also write off miles driven to do charitable work, including tolls and parking fees. 

3. Student loan interest paid by guardians

If you’re paying off your child’s student loans and not claiming them as a dependent, the IRS treats it as though you gave that money directly to your child. That means that students can deduct up to $2,500 of student loan interest paid by their parents if they qualify. They don’t have to itemize to utilize this either. 

4. Personal legal bills

Have legal bills? If your lawyer is pursuing taxable income on your behalf or working on the determination, collection, or refund of any tax, you may be able to deduct legal bills on Schedule A, line 23. This would count as a miscellaneous deduction subject to the 2% AGI floor. 

5. Losses due to theft or casualty 

If you’ve unfortunately dealt with losses due to vandalism, storm, fire, or theft this year, those items may be deductible. This also counts for car, boat, or other accidents! If you have money in a financial institution that was lost due to insolvency or bankruptcy of the institution, you may be able to deduct that as well. You must figure out how much you can deduct by completing Form 4684, Casualties and Thefts. 

Just keep in mind, there are three limits on the losses you can claim: 

  • If the money was reimbursed by insurance, it cannot be claimed 
  • Each occurrence must be more than $100
  • The total amount of all losses (reduced by $100 for each loss) must be greater than 10% of AGI 

6. Last year’s state income taxes

If you owed taxes last year and paid them this year, you can deduct them as an itemized deduction. You can also choose to deduct state general sales tax instead of deducting state income tax. If you go this route, you can include the sales tax on larger items like vehicles, boats, airplanes, or renovation materials. 

7. Moving expenses for military orders  

If you are in the military and must move due to orders, you can deduct the moving expenses incurred to make this transition. You can get this write-off even if you don’t itemize!

8. Dependent care tax credit

Did you know you can get additional support for childcare, even if you pay your childcare bills through a reimbursement account at work? Up to $6,000 can qualify for the credit, aside from the $5,000 you can put into a tax-favored account. Take advantage of this tax credit while you can, as It can cut your tax bill significantly. Children over 16 years old no longer qualify.  

Pro-tip: Don’t miss out on tax credits! They are far superior to tax deductions because they reduce your tax bill dollar for dollar! 

9. EITC (Earned Income Tax Credit) 

Remember what we just said about tax credits? This is not one you want to miss! According to the IRS, a whopping 25% of taxpayers eligible for the Earned Income Tax Credit fail to claim it each year. It can be complicated to figure out and many aren’t aware that they qualify. 

This credit is designed to supplement wages for low to moderate-income workers. However, many people can be considered “middle class” if they lost a job, took a pay cut, or worked fewer hours during the year. 

10. Refinancing mortgage points

Buying a house has many perks, taxes included. When you refinance a mortgage, you must deduct the points paid over the life of the loan. It doesn’t add up to that much in the long run, but it’s still worth saving! 

However, if you use part of the refinanced loan to improve your home, you may be able to deduct those points right away. 

11. Jury pay paid to the employer

Although most employees continue to pay employees who are on jury duty, the employees must turn over their jury pay to the company. However, the IRS requires the employee to report those fees as taxable income. To even the playing field, you can deduct the amount you give to your employer so you are not taxes on money that doesn’t end up in your bank account. 

12. Baggage fees for airports 

Calling all self-employers! Did you know you can be reimbursed for those pesky baggage, online booking, and changing travel plan fees? You can add these costs to your deductible travel expenses and save a chunk of money each year. 

13. Hobby expenses

It may sound strange, but you may be able to get reimbursed for the costs of some of your hobbies. For example, if you create custom jewelry holders on the weekend and sell $200 worth, you can deduct that as an expense. Keep in mind, even if it takes $500 for all the materials to make the holders, you can only deduct $200. 

This may help you recoup some of the expenses if your side gig hasn’t made a profit in three of the last five years. The IRS deems this to be a hobby. 

14. Tax preparation fees 

Taxes are difficult to manage, so it stands to reason that you should be able to deduct the costs for preparing them. This is possible if you deduct them as a miscellaneous deduction on Schedule A in the year you pay them. 

However, fees for preparing Schedule C for a small business, Schedule E for rents or royalties, or Schedule F for farm income should be deducted on their corresponding schedules. 

15. Financial planning and management expenses

Several expenses are deductive or subject to the 2% AGI threshold. If you paid a financial advisor, had an attorney prepare a living will or trust, or spent money to manage money this year, you’re eligible for this deduction. 

Posted in Buyers, Owners, Sellers