Fix it or Leave it?

Fix it or Leave it?

What to Fix and What to Leave for the New Owners

The new trend in the automobile industry is the electric car. Be it a hybrid version or a car that is 100% electric, the industry is certainly pointing in that direction by eliminating the need for fossil fuels. As with any new technology there will always be a few fits and starts as it relates to maintenance. Some of the maintenance can be ignored as it is inconsequential. Other items are an absolute must, otherwise the electric car will be undrivable. If you own a home and are preparing to sell it or you are already awaiting new owners, are there some things you absolutely must fix or can you leave behind a few maintenance issues and let the new owners deal with them?

Deferred Maintenance

There are a couple of considerations. The first being what is called “deferred maintenance”. Deferred maintenance is most often an item highlighted during the course of a property appraisal.  Before a lender will place a loan on a property the seller must address the deferred maintenance issues. When a buyer applies for a loan and the lender orders the appraisal, if any deferred maintenance is listed, the loan will stop until the issue is corrected. Sometimes the issue is so severe the buyers cancel the sales contract altogether.

Required Maintenance

The seller will need to fix items listed in the sales contract before the closing can take place. If the sellers do not fix these items, it can hold up the closing. If the seller does not address the issues the buyers may elect to renegotiate the offer. The buyers order an inspection once after signing the contract.  During the inspection, inspectors locate stains on the carpet in one of the bedrooms.  The buyers can then resubmit a revised sales contract asking the sellers to remove the stain or replace the carpet. If the sellers agree, they’re obligated to repair or replace the carpet. One last note, there are some things your real estate agent will suggest that you address in order to make the home more appealing. While you may not need a new coat of interior paint, your agent might tell you that you’ll get more money from the sale if you make certain improvements and touch-ups. These of course are all optional. But if it’s in the contract, be prepared to perform.

Post Divorce Real Estate Issues

Post Divorce Real Estate Issues

How to Handle Real Estate after a Divorce

In this digital age it seems that nearly every form of communication is electronic. Couples email each other knowing they’ll get it and it will be read at some point and not have to place a phone call to an office and perhaps end up on voicemail. Twitter is a favorite as well and it appears it’s really a favorite with Donald Trump. But those 140 characters in each tweet can bring good news or not so good news. When couples decide it’s time for a divorce, most often those tweets are anything but nice. And owning real estate together only complicates the matter. In so-called Community Property states, of which California is one, property that is acquired prior to getting legally married remains in full ownership with the party that acquired the asset.

That means if a home is bought and owned by one party as a single person and then later marries, the new spouse does not have any legal interest in that property. That is unless the owner of the property grants partial ownership in the home and records that interest with the county clerk. When a couple acquires a home together after they’re married, both have an equal interest in the real estate purchased. Most often, ownership of a newly acquired home is done so as joint tenants. These joint tenants own equal portions on the property.

Real Estate Options After a Divorce

Yet later should the marriage dissolve the home is most likely the single largest asset the couple owns. What are the options? The first is to sell the home and split the proceeds. That is the simplest and most common approach. Or, the couple can agree not to sell and keep the home as a rental property. The owners could agree that one party will continue to occupy the home and the other ex-spouse must find a new place to live. The divorced couple could decide which individual would be responsible for the mortgage payment. The divorced couple may also elect to split the monthly payment. All of these decisions will be part of the final divorce decree and has the rule of law. The courts must approve all agreements made outside the divorce decree. It’s important to note that the mortgage payment and title are two different things here. One party may file a quit claim deed taking the non-occupying spouse off title. The quit claim does not remove that person from being responsible paying the mortgage payment. If one spouse is responsible for making the mortgage payment as listed in the divorce decree, if payments fall behind, both parties will find the delinquent payments on their individual credit report. The only way to remove one individual from the mortgage is to refinance the loan in its entirety and qualify as an individual.  

Should You Open?

The Pros and Cons of Open Houses We’re getting closer and closer to Trump’s official Inauguration. On January 20th all the traditional pomp and circumstance will be on full display as President-elect Trump becomes President Trump. There will be parades, performances and Presidential Balls as Trump, his family and entourage make multiple public appearances will into the night. These events put on their very best and decorated to the utmost to reflect the importance this traditional transfer of power. As it relates to your own home, do you put on your very best when you prepare your home for an open house? Or further, should you even have an open house?

Pros. Having an open house is like having a party. Your home is professionally cleaned and uncluttered and marketed in the multiple listing service. When you have an open house event, buyer’s agents will bring qualified buyers directly to your home for a visit. Your agent will put together a successful open house with announcements, flyers and even balloons attached to your “For Sale” sign. It’s show-time and your house has the starring role. Open houses are typically staged over the weekend and most often on a Sunday when most are off for the weekend. Agents will list the open houses that are showing and bring their clients to your home. For a brand new open house showing, you might expect to see more buyers than you thought you would see all within a three to four hour period. The advantage with your open house is all marketing. Cons. There are those that don’t employ the services of a real estate agent and are “open house addicts” who travel around the area snooping into other people’s homes wondering what’s inside. Of course, there are some serious shoppers who search for real estate on your own but you don’t know if they’re qualified. Next, your agent won’t want you at your own showing. The agent takes charge of the event and your job is to go to a movie or something. Second, virtual tours using the latest technology can replace a traditional open house and is essentially an open house 24/7. Buyers can view the virtual tour to decide whether or not to do a bit more research and visit your home personally without having to prepare for a physical open house on a weekend.

Home Star Power

How to Create a Stellar Curb Appeal If you’re a movie buff then you already know we’re in the middle of movie award season. In January alone the season really kicks off with the Golden Globe Awards as well as the opening of the Academy Award voting. In February, the DGA, Annie and BAFTA Awards are also on the docket and producers, actors and directors all lobby in some fashion to get noticed and be eligible for an award from their peers. If you’re a homeowner and you want your home to win an award, or at least look like it deserves one, you need to first concentrate on curb appeal. When a potential buyer stops in front of your house, does it invite them in for a further look? Here are a few tips to create a winning curb appeal.

Clean up. The very first thing you must do is clean. That’s right, cleaning. Clear your lawn from leaves, sticks and debris. Mow the lawn and add a crisp edge. Trim the hedges as well. Have your driveway, sidewalks and porch pressure-washed. Fresh paint. If your exterior paint job is showing signs of wear, then a new coat of paint all around the house is in order. However, if your paint is in good shape then painting the front door, trim or shutters will make an immediate and cost-effective DIY improvement that will pay off. New mailbox? Another cost-effective way to upgrade your curb appeal is to upgrade your mailbox. Head to the home improvement store and pick out a new, attractive metal mailbox. If you need a new pole, you can grab one there as well. What’s your number? You know your street address better than anybody. But others don’t. Have you ever driven down a road looking for a particular street address and can’t find it? Don’t let your house number be nothing more than a footnote on your curb. Instead, invest in some new house numbers and clearly display them on your home. Lighting.  Potential buyers don’t always shop during the day. In fact, they just might start out some evening and not wait for the weekend or even drive by your home on the way back from work. Think about installing sidewalk lighting leading up to your home and replace those old exterior porch lights. You’ll be amazed at the difference just a bit of lighting can make.

Tax Deductions for Homeowners

Potential Tax Deductions for Homeowners It’s that time of year again. For NFL fans, the good stuff is just getting started- it’s time for the NFL playoffs. Up until now, the regular season was about winning one game at a time to ultimately get to the number of wins needed to earn a playoff spot, at least a wild-card. In the playoffs, it’s one-and-done. You lose, you go home.

For homeowners, they can also lose if they don’t take advantage of all the potential tax deductions owning real estate provides. Note, it’s important to work with your financial planner or tax adviser when preparing your income tax returns, but here is a basic list of items that may be eligible for a tax deduction for those who itemize. Mortgage Interest.  The income tax deduction that packs a punch is the ability to deduct interest paid on a mortgage loan from taxable income.  As a homeowner makes a mortgage payment each month, a portion is applied to the outstanding loan balance and some toward interest due the lender. Your lender will send your interest statement to you using the IRS form 1098. You can deduct interest on your primary residence loan as well as interest on a second or vacation home. If you have a home equity line of credit or a home equity loan, the interest with these loans is also eligible for the deduction on loans up to $100,000. Property taxes. No one likes to pay taxes but at least with property taxes paid on your home you can deduct those taxes from your taxable income. If you impound each month for taxes, your lender will send you a statement that your taxes were paid and how much. You’ll use this for tax purposes. Monthly payments going forward to fund an impound account for property taxes are not tax deductible. You’re not able to deduct the taxes your lender paid in addition to the amounts paid toward the impound account. Discount points. Did you pay a discount point or two to lower the interest rate on the mortgage you got to finance your purchase? Points are tax deductible as long as a lower rate was the result and deductible in the year paid. If you paid a point to refinance your mortgage, you can deduct the point over the life of the loan, not in the year paid. Energy efficiency credit. If you made any qualifying energy efficiency improvements to your home over the past year, there may be a tax credit waiting. Note, this is a credit which effectively reduces your tax bill by the amount of the improvement and not a deduction which lowers your taxable income. Mortgage insurance.  If you pay monthly mortgage insurance, you may be eligible to deduct these payments from taxable income as well. The amount of the deduction decreases when your adjusted gross income exceeds $100,000.

Is It Time to Downsize?

Is It Time to Downsize?

Did you make your New Year’s resolutions? Again? Are you still holding your own or did you fall off the wagon just after a few days? New Year’s resolutions are a time-honored tradition that allow us to start fresh. Often by throwing away old habits and trying to establish newer, better ones. The most popular of resolutions have to do with losing weight or eating better or making more sound financial decisions. And speaking of financial decisions, many homeowners are wondering if it’s time to downsize, to trade in the older, larger home for a smaller, less expensive property in which to retire. If you’re thinking of downsizing now or in the near future, here are some things you should consider.

Retiring soon?

One way to spend less and let your retirement savings help out with monthly expenses is to live in a smaller place. A smaller and less expensive property will not only save on any mortgage payment you might choose to have but your property taxes and insurance will drop as well.

Empty spaces?

If you’re now an empty nester and the last of your four children have moved out, either to college or starting their own careers, suddenly those rooms are strangely empty. You rarely go to these once occupied bedrooms and when you do it’s probably to just clean up a little bit. Fewer rooms mean less maintenance and expense.

Pocket the difference?

By downsizing you’re essentially trading a larger home for a smaller, less expensive one. If your current home is worth $550,000 and you have a mortgage balance of say $100,000, by downsizing to a home selling for $300,000, not only will you no longer have a mortgage payment but you’ll pocket an extra $150,000 to add to your retirement fund.

Moving closer?

As children grow and leave the family nest, it’s not a given they’ll choose to live in the same city where they grew up. In fact, they must go where their new jobs take them. However, you do have the flexibility when you retire because you can live pretty much anywhere you want. By downsizing, you can choose to live closer to family while reducing your monthly living expenses at the same time.