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FAIR HOUSING AND YOUR HOME SEARCH

5/25/2020

Many homebuyers want and expect their buyer's rep to help them make good choices. Buyers know that real estate agents are intimately familiar with various neighborhoods. It’s only logical that you’d be interested in your agent’s professional advice.

However, Fair Housing laws make some topics off-limits. For example, your buyer's rep isn’t allowed to answer questions like:

  • Who lives here?
  • Is the neighborhood safe?  

Instead of sharing personal opinions, buyer's reps are instructed to suggest helpful resources so clients can do their research and draw their own conclusions. 

For example, what makes you feel safe in a neighborhood? Some people will look at local crime rates, whereas others will use various subjective factors—factors that might overlap with one of the protected classes.

Under Fair Housing, it is unlawful for an agent to engage in any conduct that is discriminatory towards any of the seven protected classes. 

Your buyer's rep can suggest the best websites and other helpful resources. But you get to form your own opinion about whether a home or a neighborhood is desirable.  

HOW COVID-19 HAS ALTERED THE HOME BUYING PROCESS

5/21/2020

1. Showings.

In some markets, virtual showings may be offered instead of in-person showings. Where in-person tours are allowed, understand that sellers may be hesitant about letting strangers into their home. 

You might be asked to leave non-essential items outside and wear a face mask, gloves, and booties over your shoes. Don’t be surprised if you’re asked to stay off the furniture, keep drawers and cabinets closed, or spend as little time as possible in the home.  

You may need to fill out a health screening questionnaire, asking about any current symptoms and exposure to individuals with COVID-19. 

While these measures may seem “unfriendly” to buyers, they are only intended to keep everyone safe, as much as possible, until the risk of infection subsides or better solutions are found.

2. Social distancing.

The practice of social distancing may become the new normal for many buyers, sellers, and real estate professionals, even after “flattening the curve.”

Fortunately, there are several easy ways to practice social distancing with your buyer’s rep. Instead of piling into your agent’s car, for example, meet your agent at the property in your own vehicle. While touring a home, maintain at least six feet of distance with your agent.

After seeing a home, instead of discussing your reactions at a nearby coffee shop (if they’re open) or your agent’s office, consider regrouping over a conference call, using FaceTime, Zoom, or similar platform.

3. Negotiating.

All offers and counteroffers may be presented over the phone or in virtual meetings, using electronic signatures.

Resist any temptation to take advantage of sellers by tossing out lowball offers or making unrealistic demands. Fair offers usually yield better results, regardless of market conditions. 

Your Accredited Buyer's Representative (ABR®) can provide the most timely guidance, especially during quickly evolving market conditions. 

Yes, some sellers will opt to reduce their listing prices to attract buyers. It’s also possible that pent-up buying pressure will drive prices up, once economic conditions begin moving in a positive direction.

4. Closing and moving.

Once you and a seller have agreed to contract terms, numerous steps must occur before your transaction closes. It’s never a simple process, but the coronavirus pandemic has added complexities. Real estate transactions are still closing but may take a little longer.

Everyone involved in the process, including inspectors, lenders, appraisers, and title companies are creating workarounds, but also encountering unavoidable setbacks.

For buyers, the best way to manage the situation is to give yourself a little more time to move into your new home. If you’re terminating a lease, consider extending it for a month or two to accommodate potential delays.

It may also be challenging to schedule moving crews during this time, even though moving services are considered an essential service in most locations.

Also, moving companies may prefer to provide estimates by doing a virtual walkthrough of your current home.

5. Mortgages.

On the bright side, mortgage interest rates are at historic lows, making this an extremely favorable time to lock in long-term financing for your home, even if it does take a bit longer to process your application.

Unfortunately, the coronavirus pandemic has also made it difficult for many people to meet their monthly mortgage obligations. If you or someone you know is facing financial setbacks, learn more about the mortgage forbearance provisions in the CARES Act, and contact your mortgage service provider.

Looking Forward

Undoubtedly, the home buying process will continue to change in the months ahead. Regardless of how it evolves, one thing is certain: Now, more than ever, it’s essential to have a trusted real estate professional by your side, watching out for your interests. 

An agent who has earned the ABR® designation has special training and proven experience in representing buyers. You can count on an ABR® to deliver the highest level of buyer-representation services!

Spring To-Do List

5/18/2020

From 2-10 Home Warranty
Enhance curb appeal

It’s important for sellers to take care of any exterior issues which may turn off prospective buyers. This means removing stray leaves and branches, shaping up hedges and keeping the lawn neatly cut. If exterior siding is rotting or the paint has begun to peel, it’s important to fix these issues before a home goes on the market. Your clients should also inspect their windows to make sure they don’t stick or have any flaws that might cause concern among buyers.

Avoid certain improvements

While the right renovations can add value to a home, some provide poor returns on a homeowner’s investment. Kitchen renovations tend to bring only about 50 cents on the dollar, while basement renovations yield even less value in most instances. Unfortunately, many sellers mistakenly believe these types of renovations will allow them to increase their asking prices. Be sure to advise your clients against fruitless renovations that cost more than they will get in return.

Make the right renovations

Certain upgrades can enhance a home’s value without putting a large dent in your client’s bank account. To add real value to your home, it’s generally best to focus on projects that offer a double impact. For instance, instead of targeting upgrades that make your home more beautiful, your clients should look for ways to make their homes more functional and energy efficient. New doors and windows can bring a nice return on a seller’s investment. A mid-range bathroom remodel such as tiling the floor and replacing the tub, toilet and light fixtures can also add value..

Declutter living space

Your clients should do a sweep of tables, windowsills, counters and any other visible areas. They should also thoroughly clean and organize drawers, closets and cupboards. Make sure your clients understand the importance of decluttering – when it comes time to show a home, nothing should be off-limits to prospective buyers..

Depersonalize a home

It’s important for sellers to eliminate any distractions that would keep buyers from being able to visualize themselves living within a home. Family photos and other personal items should be packed away before the first showing. Since people have varying tastes, it’s a good idea to remove bold furniture and artwork. If your clients don’t have another home yet, advise them to place personal possessions in storage.

Perform a smell test

Even the slightest strange odor can turn buyers away from a home. Unfortunately, most people have difficulty detecting odors after a while. It can be hard for agents to tell clients their homes have unusual smells without putting them off. Advise your clients to have an unbiased third party to inspect the property for pet odors or lingering kitchen smells.

2-10 HBW offers comprehensive Systems and Appliances Home Warranties to help protect your clients from unexpected repair and replacement costs. Contact us to learn more.

Coronavirus and Your Mortgage Transaction

5/14/2020

Your Real Estate Transaction

If you’re going to be buying or selling a home in the near future, find out if your county recording office can complete the deal online.

In addition, more than half of states, many under emergency state directive, allow for remote online notarization of documents. This makes it safe and easy to complete real estate transactions under social distancing orders. The number of states allowing remote notarization could grow as pandemic legislation expands.

Your Appraisal

Fannie Mae and Freddie Mac have provided detailed appraisal alternative guidelines, so homeowners and appraisers can practice social distancing on Freddie and Fannie loans through May 17, 2020.

FHA, VA, and RHS are also allowing variations on the usual appraisal protocol. Check with your servicer for details.

Look Out For Scams

Fear breeds scams. And scammers are out in full force during the pandemic. Beware of third parties offering mortgage assistance and other help. Seek help from your lender directly.

Coronavirus Mortgage Relief: What You Need To Know Part 2

5/11/2020

Your Credit

The CARES Act forbids lenders from dinging your credit score for missed payments on federally backed mortgages and student loans during your forbearance period. The federal government is also encouraging private lenders to suspend reporting late payments on eligible mortgages. The Consumer Financial Protection Bureau has more advice about protecting your credit.

To keep close tabs on your credit, you can now obtain a free credit report from each of the three credit bureaus, Experian, Equifax, and TransUnion, every week for the next year through April 20, 2020. The companies ratcheted up their once-a-year allowance to help consumers “protect their financial health during the sudden and unprecedented hardship caused by COVID-19.”

Get all three reports in one spot: annualcreditreport.com.

Your Student Loan

The CARES Act includes immediate relief for those who can’t make their monthly payments on federally held loans due to coronavirus. All loan payments (both principal and interest) are suspended through Sept. 30, 2020, with no penalty. You don’t need to apply for this program or contact your lender. It’s automatic.

If you keep making payments, they’ll be applied entirely toward the principal. These suspended payments will count towards any student loan forgiveness already in effect.

Here’s a list of servicers — and their phone numbers — for loans backed by the U.S. Department of Education.

Some loans under the Federal Family Education Loan (FFEL) program and some Perkins Loans not owned by the Department of Education aren’t eligible for suspended payments. Nor are private student loans owned by banks, credit unions, schools, or other private entities. If you can’t make payments, contact your loan servicer to find out what options are available. Many are offering ways, like forbearance, to postpone payments.

Not sure who your servicer is? Look on your most recent statement and contact the servicer immediately.

If your student loan is already in default, the relief act immediately suspends wage garnishments or tax refund deductions. They’ll resume after the suspension ends.

Find out more about student loan relief at the Consumer Financial Protection Bureau. 

Your Taxes

The IRS has pushed back the deadline for filing and payment of federal taxes to July 15, 2020. Many states are following suit. Check with your state tax agency, or see this list from the American Institute of CPAs for details on deadlines.

Related: Tips to Get Filing Ready for (Delayed) Tax Deadline

Coronavirus Mortgage Relief: What You Need To Know

5/7/2020

By: Leanne Potts

Published: April 7, 2020

It’s a confusing time, but lenders are putting remedies, like forbearance, in place to help homeowners.

 

Mortgage lenders, and the federal agencies that regulate lenders, are putting coronavirus mortgage relief measures in place to ensure homeowners have options if they’re unable to make payments.

Your first stop in the face of financial hardship is your lender or bank.

Just keep in mind lenders are working to figure out and implement the new mortgage relief polices outlined by the regulatory agencies. So you might read one thing from the FHFA, a federal regulator, but your bank might be doing something else.

In addition, due to the number of homeowners affected by the pandemic, lenders are dealing with a crush of calls and online queries. Be patient, persistent, and prepared to spend time on hold.  

Here are the resources you need now.

Your Mortgage

Federally Backed Mortgages
If you have a mortgage backed by Federal Housing Administration (FHA), Veteran’s Administration (VA), United States Department of Agriculture (USDA), Fannie Mae, or Freddie Mac, your loan servicer must offer you deferred or reduced mortgage payment options – called forbearance — for up to six months. This means you don’t have to pay your mortgage and you won’t be charged late fees, penalties, or interest while you can’t pay.

Loan servicers for FHA, Freddie, and Fannie must provide an additional six months of forbearance if you request it. 

Not sure who backs your own loan? Fannie Mae and Freddie Mac have loan look-up sites where you can find out who owns it, and how to get in touch with them.

In addition, here are direct links to some lenders and banks’ Covid-19 resources:

  • Ally
  • BNC National Bank
  • Bank of America
  • Better.com
  • Caliber Home Loans
  • Capital One
  • Chase
  • Citibank
  • Navy Federal
  • PHH
  • PNC
  • Quicken Loans
  • Truist (formerly BB&T and Suntrust)
  • U.S. Bank
  • Wells Fargo

Mortgages Not Federally Backed
If your mortgage is one of the 5 million in the United States not backed by a federal entity, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which includes a coronavirus mortgage relief mandate, doesn’t apply. But regulators have encouraged those lenders to work with borrowers who can’t pay their mortgages, and most banks and other lenders are suspending mortgage payments or offering forbearance.

The level of relief you get will depend on who owns your loan. Contact your lender to find out what’s available.

Regardless of the type of loan you have, you must apply for coronavirus mortgage relief through their mortgage servicer. That’s the entity that collects your monthly payments and decides how long the assistance will last. When you reach your mortgage servicer, you’ll need to explain your situation and provide information about your income, expenses, and assets. 

TIP: If you’re an at-risk homeowner, this downloadable PDF will help you understand the sources you can approach for help.

Foreclosure and Evictions

Federal officials have imposed a nationwide halt to foreclosures and evictions for more than 36 million Americans with home mortgages backed by the FHA, Fannie Mae, and Freddie Mac.

The moratorium only affects borrowers with mortgages backed by Fannie Mae, Freddie Mac, FHA, VA, and RHS (Rural Housing Service loans through the USDA). This doesn’t apply to the roughly 35% of mortgages held in bank portfolios and private label securities. But some individual lenders are offering relief.

Some cities, counties, and states, including Delaware, Indiana, Kansas, Louisiana, New Hampshire, North Carolina and Texas, have placed a moratorium on foreclosures. Check with your city, county, and state governments. Find state-by-state tallies online.

5 Awesomely Easy Landscaping Projects

5/4/2020

By:

Published: February 26, 2013

No need for fancy DIY skills, a lot of money, or a ton of time to pull off these yard upgrades.

 

It’s your yard -- yours to do with as you wish. And while that’s great, that doesn’t mean you have to be one of those people who spends every spare moment in their yard, sprucing it up. 

But, still, your landscaping could use a little something. But something easy. 

Here are five totally doable projects that your budget will barely notice, but your neighbors definitely will:

#1 Add Some (Tough) Edging

 

Tell your grass who’s boss with edging that can stand up to even the crabbiest of all crabgrasses. 

But don’t make the mistake that many homeowners make of buying the flexible plastic stuff, thinking it will be easier to install. It’ll look cheap and amateurish from day one.

Worse, it won’t last. And before you know it, you won’t be able to tell where your garden bed ends and your “lawn” begins.

Instead buy the more rigid, tough stuff in either fiberglass, aluminum, or steel.

Tips on installing edging:

  • Lay out a hose in the pattern you want.
  • Sprinkle flour or powdered chalk to mark the hose pattern.
  • Use a lawn edger (or spade) to make an incision for the edging.
  • Tap the edging into the incision with a rubber mallet.

The cost? Mostly your time, and up to $2.50 a square foot for the edging.

#2 Create a Focal Point with a Berm

 

A berm is a mound of gently sloping earth, often created to help with drainage. You can also build them to create “island beds,” a focal point of textures and colors that are so much more interesting than plain ol’ green grass. 

Plus, they’ll give you privacy -- and diffuse street noises. What’s not to like about that? Especially if you live in more urban areas.

For most yards, berms should max out at 2-feet high because of the space needed to properly build one.

They need a ratio of 4-6 feet of width for every foot of height. That’s at least 8 feet for a typical 2-foot high berm. So be sure you have the room, or decrease the height of your berm.

Popular berm plantings include:

  • Flowering bushes, such as azaleas
  • Evergreens, such as blue spruce 
  • Perennials such as periwinkle
  • Tall, swaying prairie grasses
  • Lots of mulch to keep weeds away

The cost? Usually less than $300, depending on how big you make it, how much soil you need to buy to get to your desired height, and what plants you choose.

#3 Make a Flagstone Wall

Aim to build a wall no more than 12 inches tall, and it becomes a super simple DIY project -- no mortar needed at all! 

 

How to build an easy flagstone wall:

  • Dig a trench a couple of inches deep and wide enough to accommodate the flagstones.
  • Fill with pea gravel and/or sand and tamp to make level.
  • Lay out the flagstones to see their shapes and sizes.
  • Stack the smaller stones first.
  • Save the largest, prettiest flagstones for the top layer.
  • Backfill with gravel.

Choose a stone of consistent thickness. Flagstone might be limestone, sandstone, shale — any rock that splits into slabs. 

The cost? About $300 for stones and sand (a ton of 2-inch-thick stone is enough for a wall 10 feet long and 12 inches high).

 

#4 Install a Path with Flagstone or Gravel

There’s something romantic, charming, and simply welcoming about a meandering pathway to your front door or back garden — which means it has super-huge impact when it comes to your home’s curb appeal. 

You can use flagstone, pea gravel, decomposed or crushed granite, even poured concrete (although that’s not easy to DIY). 

A few tips for building a pathway:

  • Allow 3 feet of width for clearance.
  • Create curves rather than straight lines for a pleasing effect.
  • Remove sod at least 3 to 4 inches deep to keep grass from coming back.
  • If you live in an area with heavy rains, opt for large, heavy stones.

The cost? Anywhere from a couple of hundred bucks to upwards of $500 depending on the material you use, with decomposed granite being the least expensive, and flagstone (also the easiest of the bunch to install) the costliest. 

 

#5 Build a Tree Surround

 

Installing a masonry surround for a tree is a two-fer project: It looks great, and it means you’ve got less to mow. Come to think of it, it’s a three-fer. It can work as extra seating when you have your lawn party, too! 

All it takes is digging a circular trench, adding some sand, and installing brick, cement blocks, or stone. Just go for whatever look you like best. 

The trickiest part is getting an even circle around the tree. Here’s how: 

  1. Tie a rope around the tree, making a loop big enough so that when you pull it taut against the tree, the outer edge of the loop is right where you want the surround to be. 
  2. Set your spade inside the loop with the handle plumb — straight up and down. Now, as you move around the tree, the loop of rope keeps the spade exactly the same distance from the base of the tree, creating a nice circle.

Then build the tree surround:

  • Dig out a circular trench about 8 inches deep and 6 inches wide. 
  • Add a layer of sand. 
  • Set bricks at an angle for a saw-tooth effect or lay them end-to-end.
  • Fill the surround with 2 to 3 inches of mulch.

The cost? Super cheap. You can do it for less than $25 with commonly-available pavers and stones. 

Fixed-Rate Versus Adjustable-Rate Mortgages

4/30/2020

With fixed-rate mortgages, monthly payments remain the same for the life of the loan, no matter how long it runs. With an adjustable-rate mortgage (ARM), monthly payments remain the same for a set period, then may change thereafter.

While predetermined rates with a fixed-rate mortgage mean that you always know what your payment is, an ARM tends to have a lower initial interest rate and the potential for monthly payments to drop. Of course, depending on the market, your payments also could become higher over time.

There are some interesting ARMs out there: In a 5/1 ARM, the rate is fixed for five years and then changes once annually. Similarly, there are 3/1, 7/1 and 10/1 ARMs, meaning that your rate could be fixed for three, seven or 10 years before adjustments.

Also consider lifestyle choices: A fixed-rate mortgage works if you're established in your career and expect to settle into your new house for years. If you expect to move in a few years, then perhaps you can opt for an ARM and save money during the initial fixed-rate period before you sell and move on. Of course, homeowners with fixed-rate mortgages can always refinance to take advantage of falling rates if they don't mind paying out more closing costs. It may be worth it.

Some ARMs set a cap on how high your interest rate can go, and some limit how low your rate can go. In considering the pros and cons of ARMs, find out:

  • How high your interest rate and monthly payments can go with each adjustment.
  • How frequently your interest rate will adjust.
  • How soon your payment could go up.
  • Whether there is a cap on how high your interest rate could go.
  • Whether there is a limit on how low your interest rate could go.

The main advantage of a fixed-rate loan is that you're protected from sudden and potentially significant increases in monthly mortgage payments if interest rates rise. Fixed rates are easy to understand and vary little from lender to lender. The downside is that if interest rates are high, qualifying for a loan is more difficult because the payments are less affordable. Thirty-year mortgages tend to offer the lowest monthly payment. The trade-off for the low payment is a significantly higher overall cost because the extra decade or more in the term is devoted primarily to paying interest. Shorter-term mortgages cost significantly less.

Another advantage of an ARM: Its initial low payment may enable you to qualify for a larger loan, and in an environment with a falling interest rate, that allows you to enjoy lower rates without needing to refinance. Consider personal factors too, and balance them with the economic realities of an ever-changing marketplace. Your finances often experience periods of advance and decline; interest rates rise and fall, and the economy itself waxes and wanes

RENT OR BUY?

4/27/2020

How long will I live here?

Purchasing a home is one of the best ways to build wealth in terms of building equity in an appreciating asset. But it also requires substantial upfront expenses. As a general rule, it takes five to seven years for the financial benefits of homeownership to kick in.

On the flip side, the cost of renting will only go up over time, especially if your neighborhood becomes trendy or inflation rates increase.

Capital gains taxes are another consideration. Most home-sale profit is now tax-free. However, you must own and live in your home for at least two years to exclude any gains you receive from selling it. (Losses, on the other hand, are not deductible.)

 Is it a good time to buy, in terms of the economy?

For most homebuyers, this question relates to the cost of borrowing money. When interest rates are low, you’ll spend substantially less to finance your purchase over the life of your loan. As of this writing, 30-year mortgage rates are approaching historically low levels.

Is it a good time to buy, in terms of my finances?

Have you saved enough for a down payment? Many buyers assume the minimum down payment is 20 percent. However, if you borrow through one of several U.S. government assistance programs, your down payment can be substantially less.

Does my local market favor renters or buyers?

It’s best to ask me, your Accredited Buyer’s Representative this question. They can provide details for specific neighborhoods.

Tax Deductions When Selling a Home

4/23/2020
Selling costs: These deductions are allowed as long as they are directly tied to the sale of the home, and you lived in the home for at least two out of the five years preceding the sale. Another caveat: The home must be a principal residence and not an investment property.
You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions, staging. etc.

Home improvements and repairs: If you renovated a few rooms to make your home more marketable (and so you could fetch a higher sales price), you can deduct those upgrade costs as well. This includes painting the house or repairing the roof or water heater.

Property taxes: This deduction is capped at $10,000. So if you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes this year up to $10,000.

As with property taxes, you can deduct the interest on your mortgage for the portion of the year you owned your home.

Just remember that under the 2018 tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million.

Capital gains tax for sellers: The capital gains rule isn't technically a deduction (it's an exclusion), but you’re still going to like it.

As a reminder, capital gains are your profits from selling your home—whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. And yes, these profits are taxed as income. But here's the good news: You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years.

 



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