Friday, June 14, 2019

Don't Leave Home Without...

You've been planning this trip for some time and almost every detail has been considered...or has it?  Have you thought about how to protect your home while you're out of town?  What's going to make sure that everything you left is still there in you return?

Nothing could ruin a trip more than coming back to find out your home has been burglarized or worse.  It makes sense to spend a little time before you leave on making sure your home is as safe and sound as it can be.

There are a host of devices to use across the Internet including camera door bells, video cameras, door locks, garage door openers, light and thermostat controls.  You can monitor your home whenever you have an Internet connection.  The question is whether you want the distraction from your trip.

Consider these low-tech suggestions along with your other normal efforts:

  • Tell your neighbors you'll be out of town and to be aware of any unusual activity.
  • Notify your alarm company
  • Discontinue your postal delivery
  • Use timers on interior lights to make it appear you're home as usual.
  • Don't make it easy for burglars by leaving messages on voice mail or posting on social networks.
  • Post on social networks after you've returned about your vacation.
  • Remove the hidden spare keys and give it to a trusted neighbor or friend.
  • Lock everything, double-check and set the alarm.
  • Take pictures of your belongings in case you need them.
  • Disconnect TVs and other equipment in case of unexpected power surges.
  • Adjust your thermostat.
  • Arrange for lawn care.
  • Consider disconnecting the garage door opener.
  • Put irreplaceable valuables in a safety deposit box.

It's nice to go out of town on a well-deserved trip and it's always nice to get back home...especially when it is just the way you left it.

Friday, June 7, 2019

Temporarily Renting a Home

IRS has provisions for homeowners regarding the sale of a principal residence that allows for temporarily renting the home without losing the ability to exclude the gain if the home is sold under the correct conditions.

The rules for the exclusion of gain on the sale of a principal residence are:

  • Up to $250,000 of gain may be excluded for single taxpayers and up to $500,000 for married taxpayers filing jointly.
  • Ownership and Use must have been a principal residence for two of the five years preceding the date of sale (closing date).  This allows for a temporary rental for up to three years maximum.
  • Either spouse may meet the ownership test.
  • Both spouses must meet the use test.
  • No exclusion has been used in the previous 24-month period.

Let's pretend that a person had owned a home from more than two years.  This person married and moved into their new spouse's home two years, six months ago.  That person decided to sell the home and would have approximately $200,000 of gain in the sale.

If the property is put on the market, sold and closed prior to the three-years that they moved out, the home would still be eligible for the section 121 exclusion on the sale of a principal residence.  If the sales closes after that three-year period, the owner would owe tax on the gain.  If the long-term capital gains rate for the owner was 15%, they would owe approximately $30,000 in taxes.

If you or a person you know is in a situation like this, they should certainly seek professional tax advice as well as discussing the marketing and value of the property with their real estate professional.  This is something that I have experience with; call me at (956) 725-3838.  The timing is very important and critical to a favorable outcome.


Friday, May 31, 2019

Time to Buy Again

For people who have experienced a distressed sale of a home and gotten their finances and credit back in shape, there can still be an unanswered question of "How long do we have to wait to qualify for another mortgage."  The loan types for the new loan will differ in amounts of time based on the event. 

The different lending authorities, VA, FHA, Fannie Mae (FNMA) and Freddie Mac (FHLMC), establish their own waiting periods.  A borrower may be eligible to qualify for one type of mortgage before another type, even though during this waiting period, that the person was current on all payments and maintained a history of good credit.

The following chart indicates how long a person might have to wait.

waiting period for distressed sales.png

A recommended lender can give you specific information regarding your individual situation and can make suggestions that will improve your ability to qualify for a mortgage.  This process should be started before looking at homes because of the time constraints listed here can vary based on current requirements and possible extenuating circumstances of your case.

We want to be your personal source of real estate information and we're committed to helping from purchase to sale and all the years in between.  Call us at (956) 725-3838 for lender recommendations.


Friday, May 24, 2019

Tech to Find the Right Home

According to the 2018 Profile of Buyers and Sellers, 52% of buyers want help to find the right home to purchase.  Physically locating the home is certainly part of what buyers want from their agent but finding the right home at the right price and terms is also crucial.

87% of buyers purchased their home through a real estate agent or broker.  Slightly more than half of buyers were referred to their real estate professional by/or is a friend or relative or had used the agent previously to buy or sell a home.

There are tech tools that can be used together with the expertise and experience of your real estate professional to make the home buying process efficient and effective.

Listing Alert ... while this service is called by other names, the buyer identifies the specifics about the home they want, and it will notify them directly when a new listing comes on the market that matches their needs.

Real estate smartphone apps ... imagine driving a neighborhood, seeing a sign and immediately being able to know the price and specifics about the home; very convenient.  There are a variety of different apps available such as Homesnap, and others, ask your agent for their recommendation before installing one.

Digital documents ... companies like DocuSign have revolutionized real estate negotiations by doing everything digitally so that you're not going back and forth between the parties signing and initialing changes.  It is safe and secure and your agent will handle this end of it for you.

ColorSnap Visualizer ... this Sherwin Williams app for iPad allows you to paint walls on a picture, match photos to find paint colors and other things before you commit to a color.

Google maps ... plug in an address on Google Maps and you see street view of the home, satellite view, surrounding businesses, traffic speed and other things.

Sex Offender Registry ... NSOPW, the National Sex Offender Public Website is a safety resource that provides the public with access to sex offender data nationwide.

Financial Calculators ... fill in the blank applications that can illustrate the benefits of renting vs. owning, Equity Accelerator, Adjustable Rate Comparison, Cost of Waiting to Buy and many other homeowner situations.

Free Public Records Directory - OnlineSearches provides access to public record sources like deeds and assessor and property tax records.  While this service is free, some state and county agencies may charge fees for accessing public records.

Virtual open house ... an alternative to physically viewing a home is to look at the multiple photos online.  If the property is interesting, you can schedule a physical showing with your agent.

Check your credit ... Order free credit reports from Equifax, Experian and TransUnion each once a year at www.AnnualCreditReport.com.

The final recommendation is your phone.  When you have a question, contact your agent.  Calling another agent may seem like an expedient way to get an answer, especially if you cannot get a hold of your agent but it could inadvertently, cause issues.

Your real estate professional can assist you with these and other tools to help you find the right home.  If you have any questions, feel free to call us at (956) 725-3838.


Friday, May 17, 2019

Comfort Systems

Heating and air-conditioning are frequently referred to as the "comfort systems."  If one has gone out in the dead of winter or the heat of summer, lack of comfort becomes a primary concern.  Regular maintenance with a HVAC checklist is something that homeowners can do themselves to ensure that the units operate properly.

Periodically

  • Change your filter every 90 days; every 30 days if you have shedding pets. 
  • Maintain at least two feet of clearance around outdoor air conditioning units and heat pumps.
  • Don't allow leaves, grass clippings, lint or other things to block circulation of coils.
  • Inspect insulation on refrigerant lines leading into house monthly and replace if missing or damaged.

Annually, in spring

  • Confirm that outdoor air conditioning units and heat pumps are on level pads.
  • Pour bleach in the air conditioner's condensation drain to clear mold and algae which can cause a clog.
  • Avoid closing more than 20% of a home's registers to keep from overworking the system.
  • Replace the battery in the home's carbon monoxide detector.


While using this list will prevent some things that may impede the comfort system's proper performance, it is recommended that you have your units serviced annually by a licensed contractor.  Furnaces should also be inspected for carbon monoxide leaks. Preventative maintenance may help avoid costly repairs.


Friday, May 10, 2019

A Home Warranty Can Save Money

Your income tax is probably filed for last year by now and you've been through your expenses for the year.  Money spent on repairs to your home is not deductible but being aware of how much you spent last year may help you make a decision that could save you money this year.

Sellers, often, provide a home warranty to buyers to give them peace of mind by limiting some of the out-of-pocket money spent on unexpected repairs for one year.  Home warranties can be renewed by the buyer by paying the annual fee and any homeowner can purchase one for their home whether they had one when they bought it or not.

A home service contract typically covers mechanical systems and built-in appliances in the home.  Many times, these items are not covered by the homeowner's insurance policy.  They can also include other things such as pool and spa equipment, and free-standing appliances like refrigerators, washers and dryers.

The process is simple.  It doesn't cover pre-existing conditions.  Once a plan is in effect, you call to report a claim.  The company will assign a local profession to assess the problem and if covered, they will repair or replace the item.  You will only pay a service fee.

Home protection plans can range in prices depending on area and coverages.  Most start around $400-500 a year which could easily cover the cost for one claim alone.

For more information on home warranties in general, you can go to HomeServiceContract.org which is an association representing some of the premier home service contract providers.  If you'd like to have a recommendation based on companies we work with in our area, give me a call at (956) 725-3838.


Friday, May 3, 2019

iBuyers - Convenient at a Price

There are an increasing number of real estate companies, termed iBuyers, like Open Door, Offerpad, Zillow, Knock and others that market a service that has an appeal to homeowners.  The pitch for these quick cash offer companies will include some variation of "let us buy your home in days without the normal hassles of listing."

This approach attempts to provide an alternative to selling a home in a normal manner at the expense of not realizing the full equity a homeowner is entitled. There is no fiduciary relationship requiring the broker to put a seller's best interest above their own interest.  An iBuyer does not represent a seller and does not owe client-level services like loyalty, obedience disclosure among other things required by most state license laws.

The offer is based on an automated valuation model, many times, without a physical inspection of the home.  In some cases, a contract is written but there are provisions that allow iBuyers time to possibly "flip" the property to an investor or use an "out" in the contract to void the sale.

The reality is that a company cannot stay in business if they pay too much for the property.  The iBuyer becomes the Seller who now must be concerned with pricing the home properly to cover the normal selling expenses as well as repairs, improvements, and holding costs that will be incurred until the property sells.

There could be circumstances that make it necessary for a homeowner to sell their home at a discount.  The seller could be in a distressed situation needing immediate cash.  They might need a quick sale and don't want to be bothered with repairs or marketing efforts.  Or possibly, they may have found their next home   and need to act quickly. The instant liquidity comes at a cost to the seller in lower proceeds from the sale.

To realize the maximum possible equity, a real estate professional in your area can advise you about the fair market value of your home, a reasonably expected sales price, the costs involved and how long it will take.  Before accepting a price to sell your home to a wholesaler, you owe it to yourself and your family to find out what you can expect if you take a conventional sales route.