Posts

Good Records Can Reduce Capital Gains

Image
Regardless of whether you're entitled to $250,000 or $500,000 of exclusion when you sell your home, prices have gone up so much in the past two years, you may be approaching the limit where you might have to pay tax on the excess when you sell. Any improvements you have made to the home during your ownership can be used to raise your basis in the home which will reduce your gain.   It is worth the effort to start reconstructing the list, both big ticket items and lower priced items that qualify. While repairs to your home do not count as improvements, other money which either materially adds value, appreciably prolongs the useful life of the property, or adapts a portion of the property to a new use will qualify.   Hopefully, you have contracts and agreements on the major items and receipts on things over $75. If you have photographs before and after the improvements were made, it can help serve as evidence that they were in fact made.   The best proof is to record t

Moving Down in an Up Market

Image
Selling and buying a lower priced home in an "Up" market can be to your advantage.   The advantage is to maximize the sales price on your existing home and replace it with a less expensive one. Moving down in an "up" market may be to your advantage in multiple ways.   It is possible that your present home doesn't meet your current needs like it once did.   Making a move can allow you to "re-balance" the equity in your home to better reach your future goals. The "up" market maximizes the sales price you can expect to receive, and it will free the equity in your home. A lower priced home will result in reducing your housing costs with lower property taxes, insurance, utilities, and maintenance...while improving your liquidity position. It is not required to reinvest the proceeds of the sale.   You may decide to get an 80% loan-to-value mortgage on the replacement home to get the best interest rate and avoid private mortgage insura

Showing How Earnest You Are

Image
The expression "putting your money where your mouth is" demonstrates a monetary sincerity to what could be empty words.   In today's competitive market where multiple offers are common, sellers want as much assurance as possible that the buyer is sincere and will close on the sale. The seller who accepts a contract expects the buyer to follow through but, in most cases, doesn't know the buyer either personally or by reputation.   The earnest money submitted by the buyer with the contract shows their commitment to the terms of the offer. If the amount is relatively small, the seller could be concerned that the buyer may walk away from the contract if they change their mind before closing.   The lost time could be injurious to a seller who is trying to meet a deadline. The more earnest money a buyer deposits indicates to the seller a higher level of commitment to the contract.   Except for stated contingencies in the sales contract, if the buyer fails to c

Is Your Home Inventory Up To Date?

Image
A current inventory of all the personal items in your home is important and even necessary, if you are faced with filing a police report or insurance claim. The homeowner is usually asked if they have a home inventory.   If not, the homeowner can reconstruct one to estimate the loss. Imagine you are in this position; would you be able to make an accurate list of your belongings and their value?   As an exercise, pick a room of your home, and, while being in another room, list all the belongings and their value.   When you're finished with the list, go into the room, and check to see how you did. This little project should demonstrate the difficulty of reconstructing a list and depending on whether you missed a lot of items and the importance of having an up-to-date home inventory.   Not only will this help you purchase the right amount and type of insurance, having an accurate inventory will make filing a claim easier. An accurate accounting of your belongings can als

Difficult to Buy What Is Not For Sale

Image
Buyers are becoming discouraged there are not enough homes on the market, especially, in certain price ranges.   When they do find something they want, there may be multiple offers and they end up losing to another buyer. Some buyers after experiencing several of these instances have decided to wait until the market changes.   It is understandable but it may be a very long wait as well as being a very costly decision. Inflation is affecting all sectors of the economy; prices on food, cars, and electronics are going up as well as housing and mortgage rates.   Home prices rose 20.2% year over year in May 2022 over 2021, according to a recently released CoreLogic report.   The advantage to current homeowners wanting to move up is that their home is now worth more and it takes the sting out of the price they will have to pay for a larger home. Unfortunately, first-time buyers and those who don't currently own a home are seeing the prices continue to increase at a rate

Questions to Ask a Mover

Image
"I'd wish I'd known that before I picked a mover."   Having a checklist of questions might have prevented this issue.   This list of questions will provide you with things to discuss when interviewing a moving company. Fees What is the charge for packing? Does it include boxes?   If not, what do they cost and will you deliver them? Is there an additional charge to deliver some items to a storage unit? Insurance How is a damage claim handled? What insurance do you provide and is there a cost? Does the insurance cover items packed by the owner? Can additional insurance be purchased? If items are covered by my Homeowner's insurance, whose insurance pays first? Unusual Items Can you ship my car(s)?   Will they be in the moving van or towed? What are the charges for shipping cars, lawn tractors, etc? What items cannot be shipped? If a shuttle truck is needed because of the location of my house or size of the drive way, is there an additio

Buy Before You Sell

Image
A common concern for homeowners is that if they sell their home first, they may not be able to find another home to buy.  It is understandable with the low inventories currently available in most markets, but a strong argument can be made to buy your replacement home first. In fact, there are some advisors that would tell you not to sell at all.  Instead, keep the home for a rental investment and refinance it to pull out some cash for the down payment and closing costs for the new one. Many homeowners recognize that their home has been an excellent investment for them.  Their home may have outperformed their retirement and other investments.  In all likelihood, homeowners understand the management and benefits of a single-family home far better than they understand stocks, mutual funds, annuities, or ETFs. Just as there are low inventories of homes for sales, there are shortages of available single-family homes for rent, as is evidenced by rent continuing to rise.  Rising