For Buyers

Market conditions have never been better for buyers, but finding the right property, negotiating the best deal, and managing all the details are as complicated as ever. Whether you’re a first-time buyer, a current homeowner, or a real estate investor, you need a trustworthy, knowledgable real estate professional to help you through the home buying process. You need an Executive.

Executives Versus Agents

A real estate Executive is more than an agent. An Executive is a trusted source of local information, familiar with every block of every neighborhood, and able to help you understand how and where you’d fit best. An Executive understands local market conditions, so you can make a conservative but fair offer that will get you in the right home at the right price. Above all, an Executive is a professional, with years of experience negotiating deals and managing legal and regulatory red tape. When you’re dealing with an Executive, you can relax and focus on finding the perfect home, knowing you’re in good hands.

The Perfect Home

A home is more than a number of bathrooms and bedrooms. While amenities set baselines and standards for your search, an ideal home is one that meets your needs for things that can’t be measured in bedrooms, bathrooms, and square footage. Style, safety, history, neighborhood character, local schools, cultural resources, and how much you can reasonably afford are just a few of the factors your Executive will consider during your home search. A perfect home should stir your emotions, and an Executive will help you find the home that does just that–without letting emotions get in the way of your negotiations.

Negotiations and Financing

An Executive is an expert negotiator who knows where to start an offer, how far to push, and when to walk away. Executives can also help you understand the “hidden” costs and fees associated with the home buying process to ensure that you don’t get in over your head. Once your offer is accepted, an Executive will walk you through inspections and other contingencies, closing, underwriting, and escrow, so you can move into your new home without any worries.

I’ve included some relevant blog posts and links for your review. If you would like more information on how an Executive can help you find you dream home, please contact me.

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Get A Tax Break For Home Improvement

Posted on September 22, 2011 by Julie Scarborough

Real Estate Tax Talk

By Stephen Fishman
Inman News™
August 16, 2011

In today’s  down market, many homeowners are reluctant to pour more money into their homes.  Before deciding whether to replace a roof or merely patch it, homeowner’s  should consider the tax implications.

Home  improvements — a new bathroom or kitchen, for example — can increase the  value of a home and reduce any taxes due on the profit earned from its sale.

Home  repairs provide no immediate tax benefits to a homeowner. They are not tax  deductible and they are not added to the home’s basis (cost), for tax purposes.  As far as taxes go, they are a nonevent. Thus, a homeowner who patches a leaky  roof gets not tax benefits.

Home  improvements are very different, though. The cost of an improvement is not  deductible, but it is added to the home’s basis for tax purposes. For example,  the cost of adding a new roof to a home is added to its tax basis. This reduces any taxable gain when the home is sold.

Of course,  a substantial amount of gain is usually tax free, anyway, under the home sale  tax exclusion: $250,000 for single homeowners and $500,000 for married owners  filing jointly. But homeowners with substantial equity can still benefit from  an increased tax basis in their homes.

For  example, if Joe and Jane purchased their home in 1990 for $250,000 and it is  now worthy $1 million, they will have a $750,000 gain. A full $500,000 of this  amount is tax-free because Joe and Jane are a married couple and qualify for  the tax exclusion.

But this  leaves $250,000 subject to taxation. If Joe and Jan had spent $250,000 adding  improvements to their home, they would have no taxable gain. This is because  the $250,000 is added to the home’s original $250,000 basis, providing an adjusted  tax basis of $500,000.

As a  result, their gain on the sale would only be $500,000, not $750,000; and this  entire gain would be tax-free because of the $500,000 exclusion.

So how do  you tell the difference between an improvement and a repair? Here’s the basic  rule provided by the Internal Revenue Service: A repair keeps a homeowner’s  property in good operating condition but it does not:

-Materially  add to the value of the property
-Substantially  prolong its useful life, or
-Make it  more useful (see: Treasury  Regulations, Subchapter A, Section 1.162-4).

In  contrast, an improvement adds to the value of a homeowner’s property, prolongs  its life, or adapts it to new uses.

The problem  with this definition is that virtually all repairs increase both the value and  useful life of the property being repaired. The key difference between a repair  and an improvement is that a repair  merely returns property to more-or-less the state it was in before it stopped  working properly. The property is not substantially more valuable,  long-lived, or useful than it was before the need for the repair arose.

In  contrast, an improvement makes property substantially more valuable and/or long-lived or useful than it was before the improvement.

You need to  compare the situation before and after you made the expenditure involved. Have  you just returned your property to the state it was in before the need for the  repair arose? Or, have you made it much better?

If the  answer to the first question is “yes,” you’ve repaired the home. If  the answer to the second question is “yes,” it’s a home improvement.

Good  examples of repairs include repainting a home, fixing gutters or floors, fixing  leaks, plastering, and replacing broken windows. Examples of improvements  include adding a deck to a home, a new bathroom, installing a new heating  system, or putting on a new roof.

 

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including “Working for Yourself: Law & Taxes for Contractors,  Freelancers and Consultants,” “Deduct  It,” “Working as an Independent Contractor,” and  “Working with Independent Contractors.” He  welcomes your questions for this weekly column.

Contact Stephen Fishman:
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Posted in For Buyers, For Sellers, Home Finance, Home Improvement, Lifestyle and Community, Uncategorized | Leave a comment

Five Considerations for First-Time Buyers

Posted on August 15, 2011 by Julie Scarborough

Your first home purchase is exciting, but it can also be stressful. Here are some tips to limit the trauma and help you find the home of your dreams the first time around.

1. Set your budget

The most important step in selecting a home is knowing how much you can spend. If you already use an electronic budgeting system, you’re ahead of the game. If not, track your expenses for the past several months to a year. Try to quantify the “gray areas” of cash withdrawals that disappear on small purchases. Now add up your current rent and other related expenses. If you’ve been saving money toward your down payment, note that, as well. Finally, ask yourself where you can tighten your belt with your existing discretionary purchases. This is the maximum amount you could pay per month.

Now ask yourself if this is reasonable, given your current savings and possible expenses. Only you know the answer to that. When you’ve arrived at a comfortable number, write it down, and save your calculations. You’ll take this to the bank when you apply for loan pre-approval. For now, you have an estimated payment you can use while shopping online.

2. Set your Criteria

A home is the biggest purchase you’ll probably ever make. Stay focused and don’t let emotion guide you. If you have one child and no plans for more, four bedrooms are probably a waste. Write down a list of must-haves, nice-to-haves, and can’t haves before you start visiting homes. You’ll save time, help your agent work more productively, and keep yourself from getting carried away—into the wrong house.

Important criteria include:

  • Age of house
  • Number of bedrooms and bathrooms
  • Size of lot / yard
  • School district requirements
  • Type of street (Are busy streets OK, or do you want a cul de sac? Do you need to be near a bus or light rail line?)
  • Type of home (Single-story? Mutli-level? Are there any dominant architectural styles in your area that you refuse to buy?)
  • Central heating and cooling
  • Expensive additions, such as in-ground pools

3. Make a list of Homes

After you’ve made this list, search online and find several representative homes. If you have time and you’re fairly local, drive by a few of them to get a feel for the neighborhoods. Write down your impressions. This will help you understand home much of a home’s description is fact versus fluff, and give your real estate agent a good idea of your likes and dislikes.

4. Find a Realtor®

Most home buyers select a licensed Realtor® to represent them, and they are almost always happy they did. Realtors® are real estate agents who subscribe to a strict code of ethics and are acknowledged experts in the field. A Realtor® knows your local market, and can help you through every step of the home buying process, from finding your dream home to negotiating the best possible terms, explaining everything along the way.

5. Bring a Camera

Your Realtor® will take you on a number of open houses, and your opinions can be lost in the blur. To keep things straight, bring a digital camera on your trips. Take a picture of the street nu,ber of each property, then photograph each room during your walk-through. Photograph a house even if you decide it’s wrong for you—there may be furnishings, construction tips, or other features you notice later that could come in handy when you find the right home.

by Cormac Foster

Posted in For Buyers, Home Finance | Tagged , , , | Leave a comment

Fixed-Rate or Adjustable-Rate Mortgages?

Posted on August 12, 2011 by Julie Scarborough

 

Whether you’re buying your first home or refinancing your existing home, you have a host of financing options available.  But before you start talking about points, fees, and closing costs, you need to decide whether to choose a fixed-rate or adjustable-rate mortgage.

Adjustable-rate mortgages (ARMs) earned a bad reputation leading up to the housing bust, and with good reason, but that was largely the fault of predatory lenders who oversold houses to underqualified buyers with artificially low initial payments.  Still, ARMs are a bit of a gamble, and they are absolutely the wrong tool for homeowners trying to squeeze into the most house they can afford.

Interest rates are extremely low right now, so you shouldn’t expect an adjustable rate to go anywhere but up.  For this reasons, most homebuyers will be more comfortable with fixed-rate mortgages that provide a predictable payment future–particularly for their primary residence.  On the other hand, quick turnarounds can be  different story.  If you’re an experienced real estate investor looking to flip a house quickly, an ARM could save you some money while you hold the house.  Smart Money Magazine has an excellent calculator on their Web site that helps explain the break points, but be warned–a calculator can’t predict market fluctuations.  If you choose an ARM, be sure to work with a mortgage company you trust, and have a backup plan if the house doesn’t sell as quickly as you’d like.

by Cormac Foster

Posted in For Buyers, Home Finance | Tagged , , , , , | Leave a comment

Home Inspections 101

Posted on October 7, 2010 by Realty Executives

According to a study conducted by the National Association of Realtors (NAR) and the American Society of Home Inspectors (ASHI) in 2001, 97 percent of home buyers who received home inspections believe they received a good value for their money. A home’s history gives it character and charm, but also takes a toll.

Over time, roofs sag, mortar cracks, and furnaces lose efficiency. Beyond this normal wear and tear, older homes can harbor mold, water damage, termites, or other structural threats that can cost tens of thousands of dollars to fix.
Continue reading – Home Inspections 101

Posted in For Buyers | Tagged , , , | Leave a comment
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