Tip Answers
Tip #13 - Amend your tax returns to receive your tax credits this year
Much improved benefits for 2009 buyers
Under the American Recovery and Reinvestment Act, signed into law Feb. 17, 2009, the first-time homebuyer credit offers buyers a much better tax break.
And there's another big plus: Taxpayers who purchase in 2009 can claim the credit when they file their 2008 tax returns, or amend their 2008 tax returns, assuming they meet other qualifications. That way, they can get the credit right after they make their purchase, rather than waiting until their file their 2009 taxes in 2010.
The new law increases the $7,500 first-time homebuyer credit to $8,000 for primary residences purchased between Jan. 1, 2009 and Nov. 30, 2009, and eliminates the requirement that the credit be repaid, as long as the house isn’t sold within three years.
The credit is equal to 10 percent of the home purchase price, up to a limit of $8,000. Those who qualify for the credit will have their refunds increased or their taxes reduced by up to $8,000, on a dollar-for-dollar basis.
Taxpayers who qualify for the credit for a home purchased in 2009, and who filed their 2008 returns before the credit was increased, can amend their 2008 return to receive the additional $500.
Qualified buyers who purchase a home in 2009 after filing their 2008 taxes can amend to get their credit quickly. A special, upfront benefit for some buyers in 2009
Most people who qualify for the First-Time Homebuyer Credit will not receive it until after they buy their homes, and claim the credit on their tax returns.
However, some buyers can get all or part of their credit up front, to pay for closing costs and all or part of their down payments, thanks to federal and state housing programs:
- The federal department of Housing and Urban Development (HUD) announced May 29 that homebuyers using Federal Housing Administration (FHA) loans can apply the credit to their down payments and closing costs. Buyers must first make a 3.5 percent minimum down payment to qualify for the loan, but can immediately use the credit for additional down payment or other closing costs.
- In some states, state Housing Finance Agencies and certain non-profit organizations will allow qualified homebuyers to apply the credit to their down payments (without the 3.5 percent buyer's contribution), using financing provided by the agencies or the non-profits.
For more information, visit the HUD website.
In these times of uncertainty, an experienced REALTOR can talk to you about the options to save or give up your home. Foreclosure is one of the worst (if not the worst) things you can do to your credit. There are some options that a little better than foreclosure, there are ways to avoid foreclosure with proper planning. It's not a magic pill, but a little due diligence now can help you in the long run. At a time when other REALTORS are getting out of the business or doing it part time, you have to work with someone that has dedicated themselves full time to helping people get through these tough times with empathy and leadership.
Options to Keep Your Home
Forbearance: If you know you will have a source of funds to bring the account current by a certain date, you may be eligible to arrange for a temporary reduction or suspension of payments for a specified period of time. After which, another option must be agreed upon to bring the account current.
Repayment Plan: An agreement where you would resume making your regular monthly payments in addition to a portion of the past-due payments.
Modification: If you can make payments on your loan, but you do not have enough money to bring the account current or you cannot afford the total amount of your current payment, you may be able to modify the terms of your original loan to make the payments more affordable. Under certain circumstances, you may be able to reduce your interest rate, extend the term of your loan, or add the delinquent interest amount to the unpaid principal balance.
Partial Claim: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor in order to make your account current.
Options to Give Up Your Home
Short Sale: If the payoff amount of your loan is greater than the fair market value of your property, you may qualify to sell your home for less than what you owe. Work with a realtor to sell the property for the fair market value and guide you through the short sale process.
Assumption: A qualified buyer may be allowed to assume your mortgage, even if your mortgage states that it is non-assumable. If you have a very good loan that is desirable, you may be able to sell your house by marketing the loan assumption.
Deed In Lieu: If you have had your property listed for a period of time with no activity, the bank may accept title to your property as settlement for the debt.
Retailers have been enticing prospects to buy their goods with thousands of scents for thousands of years. Scent has a power of its own.
We instinctively know the power of scent can be good or bad. Strong smells from pets, cooking or other activities can make prospects run from buying a home. But the right, clean scent can have quite the opposite affect.
Scent Suggestions
Let's say you are selling your updated, contemporary condo or lofts in a hip urban neighborhood where younger singles and newlyweds are buying. You may decide you don't want these prospects to be highly relaxed, but rather attentive and excited instead. This will help them make decisions more quickly. In this case, use scents of rosemary, peppermint or grapefruit for alertness and stimulation.
If you want to enhance the mood of an older home with many rooms that may invoke a bit of uneasiness or confusion, use any citrus scent. Citrus is refreshing and energizing, eases tension and promotes mental clarity. Or use lavender to promote calming.
Some Scents and their reactions:
- Chamomile: Calming and soothing. Eases anger and anxiety.
- Clary Sage: Relaxing, euphoric. Eases anxiety, tension and stress.
- Eucalyptus: Fresh cooling and invigorating. Promotes alertness.
- Jasmine: Alleviates anxiety and depression.
- Lavender: Calming.
- Lemon: Refreshing and energizing. Eases tension. Heightens mental clarity.
- Mandarin: Relaxing and calming. Relieves insomnia.
- Neroli/ Orange Blossom: Relieves stress, anxiety and insomnia.
- Peppermint: Refreshing and stimulating. Increases alertness.
- Rosemary: A stimulant that promotes mental clarity and alertness.
- Sandalwood: Warm, sensual aroma. Euphoric and seductive.
A rent to own option is an option to your rental agreement to purchase the house at a later date. Any rent to own "option" should work as follows:
It is a separate agreement from the rental agreement/lease.
There are 4 major parts to the agreement, all of which are negotiated depending on the property:
1. Sales price – set up front, good until the end of the agreement.
2. Option deposit – non refundable deposit, usually 1% of the sales price, goes towards your purchase at the end of agreement.
3. Monthly rent credit – set up front, each month accrues towards the purchase at the end of the agreement.
4. Time frames - when the lease starts and when it expires. It usually coincides with the rental agreement, but does not have to.
Your monthly rent credit, option deposit, security deposit will all total towards your closing costs when you are ready to purchase. At the end of the option term, if you do not buy the property, you forfeit all monies except for your security deposit like a traditional rental.
If you're interested in purchasing now, you can negotiate your closing costs now, because it's a buyer's market. You will NOT be able to get the same type of deals when the seller's market picks back up.
Tip#9 - Don't pay any contractors cash!
Contractors can not be trusted! It doesn't matter how long you have known them or if they come from a trusted referral. Do not pay any contractors unless you have a written, signed agreement about what works is going to be done and pay only with a credit card. Do not work with any contractors that do not accept credit cards! If they do not show up to do the work, you can always call the credit card company to dispute the charge.
Tip #8 - Seller/Listing agents get paid: Traditionally, sellers will hire an agent to market their home for sale. The commission for that seller's agent is negotiable typically from 4-6% based on how much marketing is required to sell your home. The more marketing that is required, the higher the commission. In years past with a strong seller's market, there were more buyers than there were houses. The national average commission was 5%. In today's market where a home will take significantly longer to sell, more marketing effort is required, so we're seeing a return in higher commissions. Seller agents will typically take half of the total commission and apart of their marketing strategy is to offer a commission for any agent that brings the buyer. Buyer agents get paid: Buyer agents represent the buyer's best interest in the transaction, and is paid the other half of the commission by the seller as agreed by their agent. If a buyer doesn't have an agent representing them, the seller's agent can conduct the transaction for both parties, but represents the seller's best interests only. In most cases, it is free for a buyer to use a buyer's agent. Rental agents get paid: Typically, the owner/landlord pays the agent one month's rent to find a suitable tenant. Agents can represent tenants and will receive half of the month's rent. Note: this is merely a synopsis of how agents get paid, every situation is negotiable. The numbers may vary, the data here is strictly for informational purposes.
Tip #7 - The federal interest rate just dropped Sept. 18, 2007. Find out what it is.
See how the rate has fluctuated through the years.
Tip #6 - Buyer market cycles typically run 2-3 years and Seller market cycles typically run about 5 years. Your personal timelines will dictate when is the right time to buy for you. Contact your realtor to create a strategy for your future, whether it involves putting down on a bigger house, starting your own business down the line or for wealth building. A great realtor will be able to provide you with valuable insight, experience, tax tips and creative financing to achieve your goals.
Tip #5 - According to the 2006 National Association of Realtors Profile of Home Buyers and Sellers, the typical FSBO home sold for $187,200 compared to $247,000 for agent-assisted home sales.Tip #4 – Do you have wood cabinets (kitchen, bathroom, garage, laundy, basement) that you want to paint? Take the cabinet off the hinge, clean the cabinet with ammonia and water, then use an oil-based primer. Paint directly on top of the cabinet to AVOID sanding!
Tip #3 - Find out exactly what type of mortgage you have NOW! What are ALL the terms? Is there a pre-payment penalty? Is there a balloon payment? When does the ARM adjust? Is it interest-only? What are the terms for the second loan?
If your ARM is going to adjust in the next year, call the bank directly and demand to negotiate a better loan program before the loan adjusts or expires! They DON’T want your house! The mortgage crisis is being fed by millions of homeowners that are not paying attention to the type of mortgage they have, and getting a letter in the mail that says that the monthly payment has increased to an amount they can’t pay! It can be too late by then, find out now so that you have time to prepare to refinance or negotiate with the bank.
Tip #2 – Buying or selling a house is an involved process, emotionally and financially. A realtor should have been through the process to fully understand your position. Taking care of a house comes with ownership, and your realtor should know as much about home improvement as well as the sales process to be effective.
Investors, owning investment property is a different ballgame than owning a personal home. Make sure your realtor has their own rehabs, owned rental property, owned land, have vacation rentals or whatever type of investment you’re looking for to give you valuable insight and direction so that you don’t make the same mistakes. Many realtors are concerned with their bottom line, not yours, so don’t get stuck with an investment-property-turned-money-pit without knowing all of the risks and having all of the information.
Tip #1 - Top 5 'good payback' projects
According to the NAR/Remodeling magazine's 2006 Cost vs. Value report, the projects that will pay back the most at resale are:
5 projects to boost home value
1. New siding (87-88%)
2. Window replacement (85.3%)
3. Minor kitchen remodel (85.2%)
4. Midrange bathroom remodel (84.9%)
5. 2 story addition (83.2%)
