Turn that movie in on time!
When working with Buyers I always get asked about how they can boost their credit scores especially when trying to qualify to purchase their first time home. My 13 years experience in the finance industry spanning from retail banking, credit, to mortgage brokering has taught me to not to take your credit history for granted. A lot of folks don’t understand that something miniscule as not paying your movie rental collection can come back to truly haunt you on your credit report; and thus prevent you from buying a home sooner than later.
For instance, just recently I had a new buyer pre-approved for a loan, and we discovered that he actually can not start looking for a home until early next Summer. He had to correct a major derogatory item on his credit report beforehand. I told him to please not feel defeated! Read more
How HIGH do I go?
I was talking to a colleague today. She said she had a disappointing day yesterday. I asked her what had happened. She explained that her client made an offer on a property. Of course there were multiple offers and their offer was already, what my friend believes, over the market value. The seller which is a bank, or perhaps the listing agent counters the top 2 offers for their highest and best offer. My friend doesn’t want her client to buy this property for more than what it’s worth. But, on the other hand she doesn’t want her client to loose another house to multiple offers, either. She said that she would feel guilty no matter what the outcome. “I know the house will not appraise,” she said. My advice was that she explains everything to her clients and let them make a decision.
It seems like the inventory is low and some listing agents take advantage of the situation and list the properties below market value. This becomes very difficult for the buyers. How high should they offer? How can a regular buyer who is using a conventional loan compete with an investor who is buying properties all cash and waiving all inspections and financing contingencies? Read more
Converting your Primary Residence into Rental Property
The tax code allows you to keep some or all of the gain on the sale of a primary residence if you meet certain conditions. IRC §121 permits the exclusion of realized capital gain of $250,000 for a single person and $500,000 for a married couple upon the sale of a home that was their primary residence for any two years during the five years preceding the sale. If your gain is in excess of this exclusion, you may have to pay capital gain tax on the amount over the exemption. This exemption cannot be used more than once every two years.
Let’s assume you have lived in your home as a primary residence more than two years, but decide to move out and turn the property into rental housing. If you sell the property less than three years after you move out, you still qualify for that primary residence exemption of $250,000 or $500,000. So if your gain (profit) is less than those thresholds, you will have no tax to pay on your gain, though you will have to pay depreciation recapture tax on the amount that you depreciated the property while it was a rental. Read more
Environmental Issues When Buying Real Estate – Part II
In a recent article, I covered many of the important facts that homeowners should know about asbestos. Today, I will be talking about a little known environmental concern called “Radon.”
Radon is an odorless gas that you can’t smell and/or taste. And, unfortunately, it is the second leading cause of of lung cancer. According to the Environmental Protection Agency (EPA), if you smoke and your home has high radon levels, your risk of lung cancer is especially high.
Basically, radon is a radioactive gas. It is caused by the natural decay of uranium that is found in nearly all soil. It moves into your home through cracks and other holes in the foundation. It can, also, enter your home through well water.
In some cases, certainly not all, granite counter tops are known to contain dangerous levels of radon. There is no need to panic if you have granite counters, but it is a good idea to test their radon levels.
It is very easy to test for radon. There are several short term tests that can be purchased at your local hardware store. They are easy to use and can let you know if you have a problem within a very short period of time. The EPA recommends that everyone test for radon, whether they are in an old or new home.
If you take the short term test and your result is 4 pCi/L or higher, you should take a follow up test just to be sure. And, if it comes back high a second time, then you should contact the EPA and do the long term test.
If you are doing renovation of your home, such as converting an unfinished basement to living space, it is especially important to test the radon levels since major renovations can change the radon levels of any home.
There are ways to lower the radon levels of your home. One such method is to use a vent pipe system and a fan. These pull the radon from beneath the house and vents it to the outside. It is called a soil suction radon reduction system. Before beginning any repairs, it is wise to consult the state radon office for advice and recommendations.
Home sellers would be well advised to check out their radon levels before putting the house on the market, since more and more buyers are asking about it. In addition, every person who purchases new construction should definitely check their radon level prior to occupying the home.
For more details on the information contained in this article, please check out the EPA’s website at: www.epa.gov/radon/.
Kathy Wall
(415) 608-4168
It’s Still My House!! Well….
This is the place you’ve rested your head, had numerous family gatherings and lovingly taken care of for years. You’ve decided to put your home on the market and while you understand this will involve some inconvenience, the buyers will understand this is still my home, right? Well, while this is technically true, the sooner you make the transition to thinking of your home as a product to sell, the better off you will be. Read more
Are They Comparing Apples to Apples
When you and I purchase a new computer we compare the memory, the speed, the screen size: does it come with a camera, DVD player/recorder and more. A home the largest purchase most of us will ever make often is not reviewed with such detail by the people doing the lending and sometimes by the people doing the spending. Yes, they look at the square footage, the general condition, and the location. Appraisers often do not have any idea of the cost of section one termite repairs. The differential in repair costs could be 3%, 5% even 10% of the purchase price. Roofs costs could range between $5000 to $25,000. A home with a two year old roof should be valued higher than one with a 25 year old roof. Appraisers know roughly how old the roof is on the subject property but they don’t know the age of the comparables. Same with double paned windows and furnaces. A home with copper piping through out or or with upgraded electric needs to have additional value added to it. All this information does not show up in the MLS. Read more
A Difficult Day
Hi Jean,
Just wanted to say Hi, and acknowledge that which I am sure was your most difficult day in real estate. Sometimes it is easier when we know we made a mistake than when people hurt us, and damage our confidence for no reason. Guess one could say that it won’t be the last time, and while that may true, it is a bit like kicking someone when they are down. One way to measure potential for future success, is to gauge the ability to jump back up and move forward. I promise you the rewards will far out weigh the disappointments. You have all the tools, personality and skills necessary to be successful, but no one really knows about the reactions to disappointment until faced with it. If my 39 years experience counts for anything, my money would be bet on YOU. See you tomorrow, and thank you for the opportunity to work with such a special person,
Michael
Such is the email I received from one of our brokers, Michael Monozon, on a day early in my real estate career when a transaction fell apart for the first time and I was feeling down. The email had the subject heading “Difficult Day”, and the email itself just captured so much of what Michael was to me and countless other agents. He was always cheering us on, encouraging us to persevere, and reminding us to value ourselves and what we had to offer our clients. Read more
How Many Offers before I’m a Home Owner?
Recently, it seems like buyers are writing several offers on multiple properties simultaneously before they can ratify one. One of my clients has 3 offers on short sale properties. He asked me yesterday to show him two more properties. There is no certainty that he ratifies any of the offers. Good thing is that he is not giving up and in fact, he is certain that one of these days he will own a house. Is this a numbers game? How many offers do you have to write before you actually ratify one and become a home owner? What has been your experience lately?
Here’s the story of how I became a home owner … I bought my house about 9 years ago. I looked at properties for about a month, found a house and made an offer. I got countered to give my best and highest offer because there were 2 other offers. I came back with my best offer which was $25,000 over asking. Luckily, I wrote the winning offer. The point is that I only wrote ONE offer and I became a home owner.
Shokoofeh Nowbakht http://www.shokoo.com/
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