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Tuesday, 15 September 2009
When selling your home you can exclude up to $250,000 of your profit from taxes if you file your income taxes singly and $500,000 if you file jointly as a married couple. To qualify, the home must have been your principal residence for at least 24 months of the previous 60 months. This provision may be used once every two years. You are only required to pay capital gains tax on any amount in excess of the exclusions. This tax break was one of the principal features of the Taxpayer Relief Act of 1997
For profits in excess of the exclusions, the Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered the capital gains tax rates from 20% to 15% for taxpayers in the higher income brackets and from 10% to 5% for taxpayers in the lower income brackets. These rates applied to properties purchased on or after May 6, 2003. In 2008 the 15% rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. On January 1, 2009, the 15% and 5% rates will be reinstated.
Consult your tax advisor to consider your particular circumstance. We have a list of tax advisors in Kosciusko County area, Warsaw & Syracuse for you to consider if you are looking for further information on this.
Thursday, 13 August 2009
Streak is longest since July 2003
By Inman News, Wednesday, August 5, 2009.
Pending home sales rose 3.6 percent from May to June, marking five consecutive months of gains for the first time since July 2003, the National Association of Realtors said.
The gains were spurred by low interest rates and affordable home prices, and were strongest in the South (7.1 percent) and West (2.9 percent), NAR said. Month-over month gains in NAR's pending home sales index were more modest in the Midwest (0.8 percent) and Northeast (0.4 percent).
Looking back a year, the index was up 11.6 percent in the Midwest, 8.9 percent in the South, and 5.8 percent in the Northeast. In the West, however, NAR's pending home sales index was down 0.2 percent from a year ago.
A monthly rise in home prices and somewhat higher mortgage interest rates led to a "modest decline" in affordability in June, NAR said, but another index measuring affordability "remains very favorable."
Although the median existing single-family home price in June was $181,600, a family earning the median income of $60,700 could afford a home costing $289,100 with a 20 percent down payment and 25 percent of their gross income devoted to mortgage payments.
NAR has complained that recent increases in the pending home sales index have not been providing all of the expected boost in closed transactions in subsequent months, in part because appraisals often come in under the contracted sales price.
The group has blamed the situation on new rules for appraisals conducted on loans slated for purchase or guarantee by Fannie Mae and Freddie Mac, and called for their suspension.
Fannie and Freddie's regulator, the Federal Housing Finance Agency, and many appraisers and appraisal management companies, say market forces, not the new rules, are more often the reason valuations come in below the contracted sales price (see story).
Thursday, 13 August 2009
When you make an offer on a house your biggest decision is how much to offer. You want to pay a fair price, and sometimes it is hard to predict how much is adequate for the sellers.
Some sellers price their homes at their bottom line and may be unwilling to negotiate, unless the house has been on the market for a long time. Others build in a little room for negotiation. Some sellers are more motivated than others to get their homes sold. Whatever your situation, it is hard to know what sellers will do until they are presented with an offer. If your bid is very low and the sellers have more attractive offers, they may just not respond. If your original proposal is unacceptable, the seller will usually make a counter offer. While sellers like to get their asking prices, good listing agents prepare them for the possibility of receiving offers that involve some compromises.
Tuesday, 11 August 2009
In every area there are homes that sell rather quickly, while others seem to linger on the market. If the "For Sale" sign in front of your house has become a neighborhood fixture, it is important to work with your agent to keep your listing fresh.
Whenever your house is shown, the Realtor will get feedback from the buyers or other Realtors about your house – what they liked about it and what did not work for them. Invite your agent to be completely honest with you about any feedback. Listen with an open mind and with the understanding that there is nothing personal about these comments. Don't delay in implementing any of the ideas that make sense to you. In addition to the feedback, examine three factors: price, condition, and marketing. Should there be a price reduction? Are there any features that make your home show poorly? Are there other avenues of marketing?
It is almost as frustrating for the agent as for the seller if you have had no offers. Real estate professionals have tried everything from fresh paint to new landscaping to attract buyers. The right one will come along, especially if your house looks its best. These days it’s especially critical to be priced correctly relative to location, size and condition of your home.
Monday, 03 August 2009
It might surprise you to learn that a third of all homes sold during the past year were second homes – those to be used as a vacation residence or investment property. This was revealed in the “2008 Investment and Vacation Home Buyers Survey,” conducted by the National Association of Realtors. The survey showed that 12 percent of home sales were vacation homes, while 21 percent were purchased for investment purposes.
Even in a generally sluggish sales market, the appeal of owning a private vacation home is strong. It provides a get-away retreat from the stresses of a busy work and home life.
“Vacation home purchases are largely tied to lifestyle consideration,” it was noted in the NAR report. “Households seek to own an additional home in a desirable destination.”
Other buyers see the current market as an opportunity to acquire homes as investments, sometimes at below-market bargain prices. The purchase of a home for investment is a dollars-and-cents decision resting in part on current cash flow from rental income and expectations of future profit gains. The motivation to buy investment homes is partially driven by investors seeking to diversify their assets and generate income.
Lake Wawasee is second to none in water quality, property values and desirability. The many lakes in Kosciusko County including Webster Lake, Dewart Lake, Waubee Lake, Winona Lake, Syracuse lake among many others are a good investment in today’s economy.
Wednesday, 22 July 2009
When you sell a house, the buyers will probably schedule a home inspection before they are contractually obligated to purchase the home. If the inspector finds areas that need attention or repair, the buyers may produce a list of items they are concerned about, and may want to discuss some of the major problems with you as a condition for moving forward on the sale.
When you get the buyers' list, remember that some of the items may be negotiable. Sales contracts usually require that all systems be in working condition, but some buyers may make requests that go beyond the normal obligations of the seller. They may ask for a new roof or certain structural repairs that you may not want to make. Your agent can help you to assess the risks of just saying "no" to buyers who are making demands you consider unreasonable. Usually compromise is the best approach. If you just decline the requests, the buyers may back out of the deal. It’s usually best to handle the needed repairs now, because the next buyer will probably have the same concerns. When you agree to make repairs, hire licensed professionals who will back up their work and give copies of the receipts to the buyers. Arrange to have the repairs made as far ahead of time as possible to avoid last‑minute complications that could compromise the transaction.
Thursday, 25 June 2009
Some buyers and sellers arrive at the closing feeling terrific about the transaction‑‑they like each other, they like their new home, their Realtor, and even the lender. Others feel stressed out by the process, and come to the closing table with a list of questions and concerns. Whether you are the buyer or the seller, your approach will play an important part in determining which of these scenarios characterizes your closing.
The professionals who are involved in real estate transactions work hard to ensure that things proceed as smoothly as possible. However, the quality of the transaction often depends not so much on what happens, but how you react to what happens. If you communicate confidence in the professionals who are helping you, the atmosphere will remain positive even if there are complications. Problems are more effectively resolved if both seller and buyer trust the Realtors to guide them through the inherent complexity of a real estate transaction. One of a Realtor's most important responsibilities is to complete the sale, even if everything that could possibly go wrong occurs.
These are very stressful times, it is critical you have a professional that understands the dynamics of today’s real estate market and demands. Century 21 agents are aggressively trained to stay abreast of current conditions and requirements for successful closings in Kosciusko County and surrounding.
Wednesday, 27 May 2009
Perhaps no single decision in a real estate purchase has more possible variables than "How much money should I put down?" Conventional wisdom centers on either putting down as much as you can or as little as the lender allows.
If you provide a large down payment, you get some leverage with the lender: little or no mortgage insurance, a good equity position, and perhaps a preferred mortgage deal. You will also have lower mortgage payments. One disadvantage of a large down payment is that you will be using after-tax dollars on which you could be earning interest. You will also have less tax-deductible interest.
The advantages of a low down payment are not insignificant. You will have more tax-deductible interest, and your investment value percentage will increase faster. Contrary to the effects of a large down payment, you will have little equity at the outset, and your payments (and perhaps your interest) will be higher. You will also keep more of your own money in hand for future repairs, improvements, or to potentially earn more interest in other investments.
We will be happy to help you in your search for a reputable lender or mortgage broker. Local lenders in Warsaw, Syracuse, North Webster and Milford are happy to work with buyers during this time of extremely low interest rates.
Friday, 22 May 2009
The recently enacted first-time home buyer tax credit has been made retroactive to January 1, 2009. The repayment feature has been eliminated for 2009 purchasers and the credit amount has increased to $8000.
Here are some basic rules of the credit:
- It is available to first-time home buyers only, but that means people who have not owned a home in the past three years. The home must be the principal residence and there is a recapture provision if one moves out or sells before three years.
- It is limited by income and starts to phase out for individuals at $75,000 and couples filing jointly at $150,000. Consult your tax professional for more details.
- It expires on November 30, 2009. For existing home buyers, you must close by that date; for new construction buyers, you must occupy by that date.
- It is not available directly at the closing table.
- A new home buyer does not need to wait until 2010 to claim the credit. It may be claimed on their 2008 taxes by filing an amended return after they close on their home. The credit is 10% of the price of the home or $8000, whichever is less. If more than one eligible person is making the purchase, the credit must be divided. In other words, it is up to $8000 per home purchased, not first-time home buyer.
- There aren’t any restrictions on the type of home, even houseboats are included; however, one cannot purchase a home from a close relative.
Home buyers should consult with their tax professionals to ensure eligibility for the credit and the proper way to claim it.
Wednesday, 06 May 2009
Every real estate transaction requires negotiation. Many factors are written into a home purchase contract, such as price, terms, dates for the home inspection, appraisal and closing, moving dates and what personal property will be included or excluded from the sale. In coming to terms on these issues, the needs of the parties involved are likely to conflict at some point. The key to a satisfactory resolution is the willingness to compromise.
The foundation of a “win-win” negotiation is that no one expects to triumph absolutely at the expense of the other participants. If everyone assumes that some concessions will be made at the bargaining table, a resolution is easier to achieve. Both buyer and seller must also be clear about their priorities – which points of the contract they will remain firm on, and where they feel they can be flexible.
In an atmosphere of mutual trust, where each party is really willing to listen and take the other’s needs into account, negotiations are most successful.
Working with real estate agents who are skilled negotiators will be of great benefit to both buyer and seller. In our local markets of Syracuse and Lake Wawasee we are not seeing ‘fire sale’ tactics for successful sales. Our local markets are still steady in value, including the Warsaw area also, making Kosciusko County a good place to call home, or consider increasing your investment portfolio. Professionals at The Integrity Group can give you the latest up to date reports on our residential markets, and lake properties or commercial opportunities.
Monday, 27 April 2009
It might surprise you to learn that a third of all homes sold during the past year were second homes – those to be used as a vacation residence or investment property. This was revealed in the “2008 Investment and Vacation Home Buyers Survey,” conducted by the National Association of Realtors. The survey showed that 12 percent of home sales were vacation homes, while 21 percent were purchased for investment purposes.
Even in a generally sluggish sales market, the appeal of owning a private vacation home is strong. It provides a get-away retreat from the stresses of a busy work and home life.
“Vacation home purchases are largely tied to lifestyle consideration,” it was noted in the NAR report. “Households seek to own an additional home in a desirable destination.”
Other buyers see the current market as an opportunity to acquire homes as investments, sometimes at below-market bargain prices. The purchase of a home for investment is a dollars-and-cents decision resting in part on current cash flow from rental income and expectations of future profit gains. The motivation to buy investment homes is partially driven by investors seeking to diversify their assets and generate income.
Lake Wawasee is second to none in water quality, property values and desirability. The many lakes in Kosciusko County including Webster Lake, Dewart Lake, Waubee Lake, Winona Lake, Syracuse lake among many others are a good investment in today’s economy.
Monday, 20 April 2009
When selling your home you can exclude up to $250,000 of your profit from taxes if you file your income taxes singly and $500,000 if you file jointly as a married couple. To qualify, the home must have been your principal residence for at least 24 months of the previous 60 months. This provision may be used once every two years. You are only required to pay capital gains tax on any amount in excess of the exclusions. This tax break was one of the principal features of the Taxpayer Relief Act of 1997
For profits in excess of the exclusions, the Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered the capital gains tax rates from 20% to 15% for taxpayers in the higher income brackets and from 10% to 5% for taxpayers in the lower income brackets. These rates applied to properties purchased on or after May 6, 2003. In 2008 the 15% rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. On January 1, 2009, the 15% and 5% rates will be reinstated.
Consult your tax advisor to consider your particular circumstance. We have a list of tax advisors in Kosciusko County area, Warsaw & Syracuse for you to consider if you are looking for further information on this.
Thursday, 16 April 2009
Most people know that have a checkered credit history can disqualify you for a home loan. Making monthly payments on credit cards charged up to the limit can do the same thing. But what most people don't know is that merely having a large number of credit cards, even with low balances and a history of timely payments can disqualify you for a home mortgage loan just as quickly.
According to credit experts, having a number of credit cards can be just as detrimental to the granting of further credit as a history of late payments. Lenders look at it this way: If you have ten credit cards, each with a limit of $5,000, that means you have the potential to run up $50,000 in debt virtually any time you choose. That mere possibility makes you a greater risk, from their point of view.
What’s the moral of this story? If you are planning to apply for a home loan in the future, keep only those credit cards you actually need to use and cancel the others.
Contact us at wawaseerealestate.com or 4warsawhomes.com for more direction and advice on buying a residential or lake home in Kosciusko County.
Wednesday, 08 April 2009
After your search for a house and all the negotiations are over, you arrive at the bottom line--the sales price. It is not unusual for there to be disagreements between the buyer and seller about what is included in the sales price. Careful drafting of the paperwork can help you avoid future disputes.
The following definitions may help. Real property is land and any permanent attachments, such as buildings, landscaping and fences. Personal property consists of movable possessions, such as furniture and clothing. A fixture is defined as an item of personal property that has become part of the real property by virtue of becoming permanently attached, such as a new sink, a spa, or a chandelier.
The principal area of dispute about what is included usually concerns fixtures. Most preprinted real estate contracts will provide space for exclusions. Whether you are selling or buying, you should make use of this space. Do not assume curtains, satellite discs, antennas or fireplace equipment convey with the house. You should also make it very clear what you don'twant left on the property. If you are specific about every item that may be questionable, you will greatly reduce the chances of a dispute after the closing.
Monday, 06 April 2009
Most buyers want a home that is in tip-top condition and ready for them to occupy, but many homes go for lower prices because they need work. Some buyers love "fixer-uppers" for the obvious reasons: the price and the satisfaction of designing something attractive. Whether you are buying the property for yourself or as an investment, choose a house that is in a good location and structurally sound. It should be priced enough below market value to allow plenty of room for a profitable re-sale after the work is completed.
It is important to educate yourself before taking on such a project. For example, inexpensive cosmetic improvements often give the greatest return-- paint will increase the value three times for every dollar invested. Landscaping, carpeting, and light fixtures are also relatively inexpensive improvements. Expensive structural improvements, such as a new roof, plumbing, wiring, or foundation repairs, usually do not add as much to the market value of a home. Remodeling a kitchen will rarely add more than the cost, but new appliances usually give a fine return. An updated bathroom is the best renovation from an investment point of view.
It is important to talk to your Realtor before making any significant improvements. We have a list of recommended home improvement contractors and builders in the Kosciusko County area to share with you, just call the Warsaw, IN or Syracuse, IN office.
Thursday, 02 April 2009
We’ve all seen the news reports about the real estate market slow down. Those reports have motivated many home buyers to wait until they are certain that the market has reached the bottom before they buy, so they can get the best deal. This might not be the best strategy, here’s why:
First, it is nearly impossible to accurately predict the real estate market’s ups and downs. According to several analysts, prices generally are now at or near the bottom of the cycle. In some areas the market is already coming back and seeing a gradual increase in values.
The larger selection of homes that are listed these days makes it easier for you to find your ideal home in the right location. Once the slump is over, that selection will dwindle. With so many properties on the market, sellers may be willing to negotiate price and terms and even offer incentives. This is the best way to make a deal rather than waiting for home prices to drop significantly.
Mortgage financing is still available at near record low interest rates. True, it’s tougher to qualify for a loan today, but if you have good credit and a decent “credit score” you should have no problem in obtaining financing with very favorable terms.
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Amanda & Daniel Harstine
Century 21®
Integrity Real Estate Group
2510 E. Center St.
Warsaw, IN 46580
574.269.7878
1406 S Huntington Street
Syracuse, IN 46567
Office: 574.457.5018
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