All posts by Philip Ford

Housing, Interesting Facts, Real Estate, Seller

Improve Your Odds of an Offer

  1. Price it right. Set a price at the lower end of your property’s realistic price range.
  2. Prepare for visitors. Get your house market ready at least two weeks before you begin showing it.
  3. Be flexible about showings. It’s often disruptive to have a house ready to show at the spur of the moment. But the more amenable you can be about letting people see your home, the sooner you’ll find a buyer.
  4. Anticipate the offers. Decide in advance what price and terms you’ll find acceptable.
  5. Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, you should be prepared to at least consider lowering your asking price.

Source: National Association of REALTORS®

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Housing, Interesting Facts, Real Estate, Real Estate Investing

How to Calculate Capital Gains

When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale. The same holds true in home sales, but there are other considerations.

How to Calculate Gain

Your home’s original sales price when you bought it (not what you brought to closing).  
Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage). +
Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items). +
Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale). +
Add the above items to get your adjusted cost basis: =

 

The final sale amount for your home.  
The adjusted cost basis figure from above. –
Your capital gain: =

 

A Special Real Estate Exemption for Capital Gains
Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

Source: National Association of REALTORS®

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Home Buying, Home Inspections, Housing, Interesting Facts, Real Estate

Understanding the Home Inspection

Some items should always be examined.

Structure

The home’s “skeleton” should be able to stand up to weather, gravity, and the earth that surrounds it. Structural components include items such as the foundation and the framing.

Exterior

The inspector should look at sidewalks, driveways, steps, windows, doors, siding, trim, and surface drainage. They should also examine any attached porches, decks, and balconies.

Roofing

A good inspector will provide very important information about your roof, including its age, roof draining systems, buckled shingles, and loose gutters and downspouts. They should also inform you of the condition of any skylights and chimneys as well as the potential for pooling water.

Plumbing

They should thoroughly examine the water supply and drainage systems, water heating equipment, and fuel storage systems. Drainage pumps and sump pumps also fall under this category. Poor water pressure, banging pipes, rust spots, or corrosion can indicate larger problems.

Electrical

You should be informed of the condition of service entrance wires, service panels, breakers and fuses, and disconnects. Also take note of the number of outlets in each room.

Heating and air conditioning

The home’s vents, flues, and chimneys should be inspected. The inspector should be able to tell you the water heater’s age, its energy rating, and whether the size is adequate for the house. They should also describe and inspect all the central air and through-wall cooling equipment.

Interiors

Your inspector should take a close look at walls, ceilings and floors; steps, stairways, and railings; countertops and cabinets; and garage systems. These areas can reveal leaks, insect damage, rot, construction defects, and more.

Ventilation/insulation

Inspectors should check for adequate insulation and ventilation in the attic and in unfinished areas such as crawl spaces. Insulation should be appropriate for the climate. Without proper ventilation, excess moisture can lead to mold and water damage.

Fireplaces

They’re charming, but fireplaces can be dangerous if they’re not properly installed. Inspectors should examine the vent and flue, and describe solid fuel-burning appliances.

Source: National Association of REALTORS®

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How To Attract More Buyers

These tips will help you convince buyers your property offers top value for their dollar.

Amp up curb appeal.

Look at your home objectively from the street. Check the condition of the landscaping, paint, roof, shutters, front door, knocker, windows, and house number. Observe how your window treatments look from the outside. Something special—such as big flowerpots or an antique bench—can help your property stand out after a long day of house hunting.

Enrich with color.

Paint is cheap, but it can make a big impression. The shade doesn’t have to be white or beige, but stay away from jarring pinks, oranges, and purples. Soft yellows and pale greens say “welcome,” lead the eye from room to room, and flatter skin tones. Tint ceilings in a lighter shade.

Upgrade the kitchen and bathrooms.

These are make-or-break rooms. Make sure they’re squeaky clean and clutter-free, and update the pulls, sinks, and faucets. In a kitchen, add one cool appliance, such as an espresso maker.

Add old-world patina to walls.

Crown molding that’s at least six to nine inches deep and proportional to the room’s size can add great detail on a budget. For ceilings nine feet high or higher, consider dentil detailing, which is comprised of small, tooth-shaped blocks in a repeating ornamentation.

Screen hardwood floors.

Refinishing is costly, messy, and time-consuming, so consider screening instead. This entails a light sanding — not a full stripping of color or polyurethane — then a coat of finish.

Clean out and organize closets.

Remove anything you don’t need or haven’t worn in a while. Closets should only be half-full so buyers can visualize fitting their stuff in.

Update window treatments.

Buyers want light and views, not dated, heavy drapes. To diffuse light and add privacy, consider energy-efficient shades and blinds.

Hire a home inspector.

Do a preemptive strike to find and fix problems before you sell your home. Then you can show receipts to buyers, demonstrating your detailed care for their future home.

Source: National Association of REALTORS

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Home Buying, Interesting Facts, Real Estate, Seller

Checklist: Prepare for Your Move

Update your mailing address at usps.com or fill out a change-of-address form at your local post office.

Change your address with important service providers, such as your bank(s), credit companies, magazine subscriptions, and others.

Create a list of people who will need your new address. Whether you plan on sending formal change-of-address notices in the mail or just e-mailing the family members, friends, and colleagues who should be informed, a list will ensure no one gets left out.

Contact utility companies. Make sure they’re aware of your move date, and arrange for service at your new home if the service provider will remain the same.

Check insurance coverage. The insurance your moving company provides will generally only cover the items they transport for you. Ensure you have coverage for any items you’ll be moving yourself.

Unplug, disassemble, and clean out appliances. This will make them easier to pack, move, and plug in at your new place.

Check with the condo board or HOA about any restrictions on using the elevator or particular exits or entrances for moving, if applicable

Pack an “Open First” box. Include items you’ll need most, such as toilet paper, soap, trash bags, chargers, box cutters, scissors, hammer, screwdriver, pens and paper, cups and plates, water, snacks, towels, and basic toiletries.

If you’re moving a long distance:

Obtain copies of important records from your doctor, dentist, pharmacy, veterinarian, and children’s schools.

E-mail a copy of your driving route to a family member or friend.

Empty your safe deposit box.

Source: National Association of REALTORS®

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Home Buying, Housing, Interesting Facts, Real Estate

Questions to Ask About Property Tax

It’s natural for the sale price of a home to loom large in your mind. But don’t forget to look at what your property tax bill might be.

What is the assessed value of the property?

Assessed value is generally less than market value. A recent copy of the seller’s tax bill will help you determine this information.

How often are properties reassessed in this area?

In general, this will happen annually, but properties in areas of slower growth may be reassessed less often.

When was the last reassessment done on this property?

Most significant tax increases on an individual property can be linked to when that property was last reassessed.

Will the sale of the property trigger a tax increase?

Depending upon where you live, the assessed value of a property may increase based on the amount you pay for it. And in some areas, such as California, taxes aren’t allowed to increase until the property in question is resold.

Is the tax bill comparable to other properties in the area?

If not, it might be possible to appeal the assessment and lower the rate.

Does the current tax bill reflect any special exemptions for which I might not qualify?

For example, many tax districts offer reductions to those individuals 65 and older.

Source: National Association of REALTORS®

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