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Showing posts from May, 2022

Helping the Seller See Your FHA/VA Offer More Favorably

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With multiple offers the norm on many listings these days, the seller relies on their listing agent to help them determine which one to accept.   In some cases, offers subject to FHA or VA mortgages tend to move to the bottom of the list. Some sellers consider all cash offers first and then, conventional offers with at least 20% down payments as the next most likely to close.   It may be because of a common misconception that FHA or VA buyers are poor credit risks and have a higher likelihood of not being approved.   Both FHA and VA do not require as strict credit requirements as conventional loans but if a buyer has been preapproved, that should alleviate that worry. A legitimate concern regarding FHA and VA contracts could be that if the appraisal doesn't come in at the sales price, the buyer has an option to void the contract.   This means that the property would have to go back on the market and valuable time could be lost.   However, that could...

Today is a Skills Market

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In today's ultra-competitive real estate market where there is only 1.7 months supply of inventory compared to 6 months in a balanced market, and the average home is getting 4.8 offers per sale, it is more important than ever to have the right person "champion" your cause. In the Middle Ages, it became customary for a person of nobility to appoint a "champion" to fight for them in their stead.   Trial by combat ended in the 15 th to 16 th centuries but the practice of "fighting" or speaking in one's behalf continues even to this day. Lawyers will take up the cause of their client to win justice for them.   Professional athletes are recruited for their abilities to help their team become victorious.   Craftsmen of every type imaginable are in high demand because of their finished product. Sellers' and buyers' objectives are different and, in many cases opposing in nature.   Sellers, rightfully so, believe they should get...

Existing Homeowners May be Facing Higher Payments

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As a current homeowner, you may be basking in the consolation that you bought before the market got crazy with higher prices and interest rates. However, it doesn't mean that you may not be facing higher mortgage payments for next year. Most homeowners pay their taxes and insurance into an escrow account with their mortgage payment.   The lender monitors the account to be sure there are enough funds available when the taxes and insurance are due.   If there is a shortage, it could cause your payment to increase. In 2021, the national average increase in home prices was just under 20% but may have been considerably higher in some local markets.   The increased value of homes doesn't just affect buyers, in can affect the assessed value of properties across the board resulting in their property taxes going up. Various taxing authorities, like state, city, school, and other special districts, can establish the rate they charge and exemptions that apply.   ...

Homeownership and the Three M's

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Homes are valuable assets and must be maintained so they function properly, are safe, enjoyable and hold their value.   Attention to maintenance, minimizing expenses and managing debt & risk will protect your investment. Maintenance It is interesting that people understand the necessity to maintain a car and regularly have the car inspected, repaired and do regular maintenance.   Even though a house could be worth many times more than a car, homeowners regularly neglect what should be routine maintenance. Failure to maintain a home properly adversely affects the value.   Many times, buyers will discount the price they are willing to pay for a home more than the actual cost of the repair or expenditure.   A home in good condition instills confidence while a home in less than good condition generates concern about unknown items that may also need repair. HVAC systems, as well as appliances, run more efficiently when they are maintained which will r...

Will Selling Your Home Increase Your Tax Bill?

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With home prices rising 20% nationwide in the past year and in some markets, even dramatically more, many homeowners are excited about the equity in their homes.   In the past, most homeowners were not concerned about profit from the sale being taxed but some may be surprised. The profit homeowners make on the sale of their homes have enjoyed a generous exclusion.   Since 1997, for qualified sales, single taxpayers exclude up to $250,000 of capital gain and married taxpayers filing jointly, can exclude up to $500,000 of gain. Prior to the Taxpayer Relief Act of 1997, homeowners over the age of 55 were only allowed a once in a lifetime exclusion of $125,000.   The new rule greatly increased the amount of excluded profit to the extent that most homeowners did not think about paying tax on the profit from their principal residences. Section 121, commonly called the Home Sale Tax Exclusion, requires that you owned and used the property as your principal residence...