January 9, 2012 3:30 pm
Whether it’s to focus on a career, education or simply themselves, people are getting married later in life these days, however, that doesn’t mean they’ve given up on the prospect of owning a home.
In fact, buying a home with a friend or non-spousal family member is a trend that has been gaining popularity over the last decade. Not only does taking part in a group purchase provide individuals the opportunity to buy something bigger and better than what they would have been able to afford on their own, it also provides each person a real estate investment and takes away the prospect of renting. Additionally, it can even strengthen the friendship.
While the prospect of owning a home with a friend may seem like a great idea, it’s important that the parties involved understand that they are taking a risk when it comes to their friendship surviving the financial and emotional toll that comes with homeownership.
Before any decisions are made, it’s crucial that each party be willing to disclose their financial information, agree upon the type of home and location and make sure each is comfortable living with the other. Getting a lawyer involved isn’t a bad idea either.
In addition, a contract between both parties is vital, as is listing each person’s name on the deed and mortgage papers. The percentage of ownership must be clearly stated in the contract, including details pertaining to each person’s share of the down payment and the way in which mortgage payments will be divided. This information will help set the stage for deciding each person’s share when the house is sold at some point down the road.
Money can also be a problem when trying to purchase a home with a friend. Mortgage companies aren’t always thrilled to be lending to two unmarried or unrelated people. In most instances, you will need to jointly qualify as co-borrowers on a single mortgage in order to purchase a property held in TIC or Joint Tenancy.
Since house options, mortgage rates and contract terms are contingent on each individual’s credit history, financial health and short-term and long-term obligations, it’s a good idea to discuss these issues ahead of time so that you know your options well in advance.
It’s also important to have an exit strategy in place should one or both of you need to move elsewhere unexpectedly. Be sure to take into consideration an unexpected job change or a surprise romance that could lead to marriage and have a plan in place as to what will happen to the house should any of these situations occur.
The process doesn’t get any easier once all of the above details are agreed upon and you have a mortgage commitment in hand. Finding the perfect home is hard enough on its own, but finding the perfect home for two can be even more challenging.
Sitting down together and coming up with a list of must-have features is one way to take the stress out of the home search process as you will most likely each have different ideas when it comes to what you’re looking for.
Most friendships are strong enough to easily deal with housing issues, so don’t be scared off by the notion. Take the time to plan ahead and do your homework, and most importantly, don’t let the friendship cloud your judgment.
For more information about buying a home, contact our office today.
January 9, 2012 3:30 pm
The expenses associated with owning and maintaining a home can be a shock to new homeowners, however, a current estimate of what your new home is worth can often times work in your favor when it comes to lowering your property taxes. If you recently purchased a home, it’s a good bet that you may have bought the house for a price lower than the property value, so sometimes taxes can be lowered if the value has changed.
“A tax assessment is an estimate on the value of your property solely for the purpose of determining how much you owe in property taxes,” said Peter Hoegen, an attorney with Hoegen & Associates, PC in Pennsylvania who specializes in tax assessments.
Lowering property taxes isn’t the only reason that homeowners go through the reassessment process. Another reason for a reassessment is for insurance purposes, to make sure the home has an appropriate level of coverage. Additionally, homeowners may opt for a reassessment due to changes in value that have been caused by the downturn in the economy.
For those who may be thinking of selling, an assessment is a good way to learn if the house is worth more than what is owed, and can provide valuable data for homeowners who are looking to get a lower mortgage rate.
“If you are thinking of having your home assessed for a possible readjusting of the value, it’s important to understand the protocol and timelines that your city or state has, because all are different,” Hoegen said.
The first step is to begin with the county assessor’s office. In 2012, the process has become much simpler for some, as more places are allowing homeowners to appeal tax assessments online. If that’s not an option where you live, plan a visit to your local assessor’s office to register for an appeal.
The appeal process is most commonly conducted by someone coming out and inspecting the property and comparing it to neighboring houses. Some will rely on computer models, but that could be problematic because you’re not seeing everything that can be viewed with the naked eye.
Although the appeal process itself can be relatively quick, if it’s clear that a change needs to be made, actually having someone come out to your property to perform the assessment can take anywhere from a month to a year, depending on the amount of people following suit. In today’s housing market, with property values decreasing in many areas, more people are turning to reassessments to lower their taxes.
When making your case, be sure to have documents ready that show what homes in the neighborhood have sold for. Prices of comparable homes that have sold in the past six to 12 months will be most helpful to build your case. Much of this data can be found on the Internet, but the real estate agent who helped you buy your home can assist in gathering the information as well.
Remember, assessed value is often not equal to market value. Many times, an assessment is only a percentage of what the home could actually be sold for, so appealing the value of your home might not be as financially advantageous as you think. The last thing you want is for your taxes to rise because the house is now worth more.
For more information about property reassessment, please contact our office today.
January 9, 2012 3:30 pm
Anyone who has recently gone through the process of getting their home ready for sale can attest to the fact that there is no shortage of things to be done before putting a home on the market. If you’re planning on taking advantage of the spring selling season and listing your home within the coming months, be sure to add the laundry room to your list of projects that can’t be overlooked.
For sellers who really want to make a statement with their laundry room, adding new, energy-efficient washers and dryers can go a long way toward attracting prospective buyers. Thanks to new washer and dryer technologies, today’s models will not only save time and energy, they may even make laundry feel like less of a chore.
According to the U.S. Department of Energy, installing machines with the ENERGY STAR label will cut water costs by up to 50 percent. There are also machines that automatically adjust the water temperature and the amount of water used for each load to prevent excess and waste.
Many new models are available in a variety of designer finishes and bright colors that give the look of stainless steel without the stainless steel price tag, which can really make a bold statement.
If you’re planning to add a new washer to your laundry room, the first thing you need to decide is whether to go with a front- or top-loading machine. While a top-loading machine requires enough water to cover all the clothes in its drum, a front-loading washer needs only a third of that amount because its drum is set horizontally in the machine. One downside to front-loading washers: cost. In addition to being more expensive, there’s also a better chance for front-loading washers to develop mold since they don’t empty dirty water as efficiently as a top-loading machine.
When it comes to dryers, sensors are the thing to look for. Consumer Reports revealed that dryers with a moisture sensor tend to recognize when laundry is dry more quickly than machines that use a traditional thermostat. Because they don't subject clothing to unnecessary heat, moisture-sensor models are easier on fabrics. And since they shut themselves off when the laundry is dry, they use less energy.
The use of steam washers and dryers for greater energy and water efficiency is also a rising trend. Steam machines offer enhanced clothing care options such as short, steam-only cycles that help to reduce wrinkles and remove odors from clothing.
Laundry rooms used to be relegated to the basement, but today, people are finding space for washers and dryers in more convenient areas of the house such as the kitchen or near bedrooms. Housing experts agree that installing a laundry nook will not only raise the value of a home, it will also make laundry day much more convenient.
For more information about revamping your laundry room, contact our office today.
January 9, 2012 3:30 pm
Our lead story in this month’s Home Matters, brought to you through our company's membership in RISMedia’s Real Estate Information Network® (RREIN), examines how you can revamp your laundry room to attract prospective buyers. Other topics covered this month include going through the home-buying process with a friend, simple tips to lower your homeowners insurance, and more. We hope you enjoy this month’s edition of Home Matters and as always, we welcome your feedback. Email us anytime!
January 9, 2012 4:14 am
When someone is considering paying off debt, they are often under the misconception that closing a credit card will damage their credit score. While this may be true in some circumstances, there are many instances in which it will not cause a score to drop. When helping people decide whether to close a credit card account, there are two important factors to consider.
First, consider whether you still owe a balance on the credit card. If you do, this is probably not the time to close the card. By electing to close a credit card before it is paid off, you effectively lower your available credit limit-to-credit balance ratio (utilization ratio). To have a good credit limit ratio, you need to keep balances at 30% or less of your available credit limit. When you close a credit card with a balance on it, you effectively lower the credit limit to the level of the current balance.
Here is an example:
Open credit card: credit limit is $1,000; current balance owed is $300.
Ratio = 30%
Closed credit card: credit limit is $300; current balance owed is $300
Ratio = 100%
That 100% is very hard on a credit score and will cause it to drop. It is important to note that utilization rates do not look at one card at a time. If someone has multiple cards, the rate will consider the total limits and amounts owed on all cards. If possible, pay off your credit cards in full each month.
Another misconception about closing credit cards is that the card will be removed from the credit report after seven years. The truth is that positive credit history can remain on your credit report forever; even if you close the account. The only items required to come off a report in seven years are negative entries (10 years for some items like bankruptcy and judgments). It is true that items that have not been reported in the last 24 months may not be as heavily weighted in a credit score. However, they will still be included.
Finally, think about how you may be using your credit in the next six-to-12 months. If you are considering purchasing a home or a car, you may do better to wait to make changes to your credit until after you have completed the purchase. It is not a time to be opening a new credit account or incurring additional debt on existing accounts. At that point the focus should be on paying down any credit card debt you may already have.
Bottom line, when considering closing credit card accounts make sure the accounts are paid-in-full first. Also, understand that a positive account in good standing may remain on a credit report indefinitely. That is a good thing.
To learn more about managing credit and credit cards or to learn more about options for getting out of debt, visit www.myfinancialgoals.org.
January 9, 2012 4:14 am
Unemployment and other factors have caused many homeowners to involuntarily default on their mortgages. At the same time, falling home prices, the possibility of being underwater for many years and advice from certain influencers, or "mavens," may have encouraged others to simply stop paying, with deleterious consequences in some markets, according to a study released today by the Mortgage Bankers Association (MBA).
The study entitled "Strategic Default in the Context of a Social Network: An Epidemiological Approach," conducted by Michael J. Seiler of Old Dominion University, Andrew J. Collins of the Virginia Modeling, Analysis and Simulation Center and Nina H. Fefferman of Rutgers University and sponsored by MBA's Research Institute for Housing America (RIHA), received the Governor's Technology Award for 2011 for Virginia in the category of "Cross-Boundary Collaboration in Modeling & Simulation." The study examines the factors that can lead to mortgage default, the role that influential members of our society play in people's decision to stop paying their mortgage, and the impact on the broader housing market. The award was presented at the 2011 Commonwealth of Virginia's Innovative Technology Symposium (COVITS) in Richmond on September 26, 2011.
"Recently, the overwhelming media coverage of the current financial crisis has made homeowners aware - or at least alerted them to become aware - of their equity position in their home," said Michael Seiler. "While the merits of such a choice can and will continue to be debated, what is indisputable is that the possibility to strategically default has certainly been brought to the attention of current homeowners like never before, with potentially negative consequences for housing markets," said Seiler.
Key findings from the study include:
• The study, citing other research, reviews the main drivers of default including unemployment, declines in home prices, life changes such as illness or divorce and other shocks to household income or wealth. Strategic default is a result of a borrower's unwillingness to pay, even if able. It can be very difficult to determine whether a borrower is unable or unwilling to pay.
• Ideas are transmitted through the population in ways similar to those in which diseases are transmitted. Thus, they can be modeled in a similar manner. Certain corrective factors may lead some borrowers to be resistant to the temptation to strategically default, including the ability of lenders to pursue deficiency judgments, provisions of the tax code and bankruptcy laws.
• The model shows that real estate experts can influence market dynamics, but not in all cases. Markets are strong or weak due to fundamentals, however, markets in between can be pulled down or lifted up depending upon individual and expert behavior.
The study highlights those factors that distinguish an "economic default" (caused by hardship) from "strategic default" (selected as an option by homeowners who may be underwater on their mortgage), and the methods by which an idea such as "strategic default" can be transmitted through a population by contact with individuals and through social networks. Through simulation modeling, the authors demonstrate that because defaults and foreclosures lead to lower home prices, an epidemic of strategic defaults initiated by advice from those who might be considered experts can lead to the collapse of a housing market.
"Housing pundits share their expert opinion with a large audience on a frequent basis through the media. These social networks create the potential for much faster disease spread/cure than in the past. They can greatly impact mortgage markets through their use of behavioral advocacy. In fragile markets, advice by those considered to be experts, can result in a flood of strategic defaults, causing a contagious downward spiral of home prices and potentially a market collapse," said Seiler.
"Whether by choice or necessity, as foreclosures increase, they have an increasingly negative impact on the price of the healthy homes around them," said Selier. "One default does little to negatively impact the price of surrounding homes. However, as more and more mortgages in the neighborhood go into default, the negative impact is felt at an increasing rate. Much the same way as a disease spreads throughout a population, so, too, do decisions to 'strategically' default."
Michael Fratantoni, MBA's Vice President of Research and Economics added, "Research has clearly shown the factor that is most predictive of a mortgage default - a borrower's inability to continue making mortgage payments. It is much more difficult to predict or even detect a strategic default - a borrower who has the ability to pay, but simply stops in expectation of a financial gain. This research illuminates the consequences of strategic defaults on housing markets, finding that they can be destabilizing, particularly in markets that are already on the edge. From a policy standpoint, the research supports the contention that opinion and information (or disinformation) can move markets. More specifically, that policymakers and Mavens have the ability to stabilize or de-stabilize markets."
To access a copy of the report, please visit the RIHA website at www.housingamerica.org.
January 9, 2012 4:14 am
Listing photos are crucially important for both listing and selling your home. The highest quality photos are the best tool sellers can use to lure buyers to view the home and hopefully make an offer. Consider these tips when taking photos - they could end up being a make-or-break factor for your transaction.
Removing clutter is the first step. Nobody wants to see pictures of a home filled with your personal junk. Hide stacks of papers, fluff your pillows, and clean your counters. A neat and organized home looks great in photos and can really bring buyers in.
Stay out of the frame. Beware of any reflections that may occur near windows or mirrors. Keep the image clean and make sure that you and your equipment are hidden from view.
Vary your shooting angles. While wide shots can really show off a home's spaciousness, focus in on some well-chosen areas for added detail as well. It can help paint a different picture for the prospective buyer, providing him or her with a different view than what listing photos usually offer. In addition, try to avoid shooting at downward or upward angles. These types of shots may not always convey what you want them too.
Be mindful of the sun. Shooting into the sun will not produce great shots. The best time to shoot outdoors is in the morning or early evening. You'll capture the ideal natural light backdrop for your home that way.
Listing photos hold lots of power. They are usually the deciding factor as to whether or not buyers want to visit and tour your home. Put your best foot forward and offer prospective buyers the best visual picture you can offer.
Source: AOL Real Estate
January 6, 2012 4:10 am
The International Window Film Association (IWFA), a non-profit organization, is educating the public on window film use for residential and commercial applications, to reduce harmful solar glare, while delivering significant energy savings.
"People often wear sunglasses outdoors during winter months to protect from glare and ultraviolet (UV) rays, but glare is ever-present inside too," said Darrell Smith, executive director of the IWFA. "With winter sun lower in the sky, it passes directly into windows with damaging effects on furnishings and art, along with unhealthy UV rays' impact on people's eyes and skin," he added.
In northern states, snow on the ground can reflect up to 85% of harmful UV rays upwards, according to the Vision Counsel of America. This magnifies the issue of glare coming into windows, added Smith. Professionally installed window film can be a cost-effective solution to make interior environments more enjoyable.
Glare issues can be ameliorated by window film, which uses advanced technology to deliver energy savings similar to low-e windows. Window film is available in a range of shades from clear to darker. It reduces glare and still allows adequate light in while blocking UV rays that can harm skin and eyes, and fade furniture, carpets and fabrics.
According to the IWFA, window films may also eliminate uncomfortable hot spots by blocking solar heat. This enables HVAC systems to work more efficiently. For larger commercial and office buildings, which run heating and cooling systems year-round, energy savings are even more significant.
For more information on protecting a home or office from glare, please visit www.iwfa.com.
January 6, 2012 4:10 am
For those who made the “nice list” last year and received an extra special gift for the holidays, like diamonds, furs, watches, or fine art, to name a few, it is important to insure the item in case of unforeseen situations that may cause damage.
Homeowner’s policyholders, including those with condo or renter’s insurance, who received gifts during this past holiday season, are automatically covered for losses such as fire, vandalism and wind, with some limitations. For those without homeowner’s insurance or with limitations to their policies, the following advice may be of help to make sure their most valuable gifts are protected in the New Year.
1. Review your homeowner’s policy for coverage limitations.
For those who are currently covered under a homeowner’s insurance policy, their gift will automatically be covered by the policy for losses such as fire, vandalism or wind damage; however, there may be situations in which the homeowner’s policy does not extend coverage to an expensive gift received during the holidays. Items such as jewelry, watches, coins, hand tools and guns have coverage limitations for certain types of losses, including theft. Additionally, accidental breakage of any item is typically not included in a homeowner’s policy. Policyholders should speak with their insurance agent to discuss broadening their coverage to include losses such as breakage, as well as increasing coverage limits for valuable gifts.
2. Get a stand-alone insurance policy for valuable gifts.
If you do not have a homeowner, condo or renter’s policy, consider investing in one. There may be value limitations for items including jewelry, furs, fine art, musical instruments, coins, guns, cameras and silverware. Often these limits are not an issue as the majority of gifts purchased fall below the value limitation, which can range from $5,000 to $100,000 depending on the state.
3. Ask the gift-giver for a receipt or bill of sale.
In order to insure a gift, the recipient should retain the proper information, including a receipt or bill of sale, and a detailed description of the gift. An appraisal may be required. Consult with your independent insurance agent regarding coverage. He or she will need to know exactly what the gift was, as well as its monetary value, in order to provide proper coverage.
For more information about which gifts may be covered under a homeowner’s policy, visit www.GrangeInsurance.com.
January 6, 2012 4:10 am
Builder confidence in the market for newly built, single-family homes edged up two points from a downwardly revised number to 21 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December. This marks a third consecutive month in which builder confidence has improved, and brings the index to its highest point since May of 2010.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev.
“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Each of the HMI’s three component indexes registered a third consecutive month of improvement in December. The component gauging current sales conditions rose two points in the latest month to 22, while the component gauging sales expectations in the next six months edged up one point to 26. The component gauging traffic of prospective buyers gained three points to 18, which is its highest level since May of 2008.
Builder confidence primarily gained strength in the South in December, where a four-point gain to 25 brought that region’s HMI score to its highest level since March of 2008. A one-point gain to 16 was registered in the West, while the Midwest held unchanged at 24 and the Northeast slipped one point to 15.
For more information, visit www.nahb.org.