Wednesday, December 28, 2011

6 tips for timing a real estate purchase


How fence-sitters can get a jump on the competition


By Dian Hymer / Inman News®
In mid-June, interest rates on home loans were lower than they were a year ago. However, this failed to ignite the housing market. Many buyers and homeowners would like to make a move, but some find it impossible to make a decision. They are commonly referred to as fence-sitters, poised to make a move when the time seems right.December 28, 2011
The housing market is unlikely to turn around soon, but this doesn't mean that now is not a good time to buy or sell. It depends on your personal situation and market conditions in the area where you plan to buy or sell.

Become an expert on your local market. Knowing a good deal when you see it or what price to ask if you decide to sell depends on having a good understanding of how much properties are selling for in your neighborhood.

While you're trying to decide what to do, line up a team that can help you accomplish your goal when you decide to move ahead. You can do this by researching online, attending open houses in the area and asking a real estate agent to keep you on top of market fluctuations.

Your decision to buy should be based on your personal financial situation, not on the national or global economy. For example, if you bought during the bubble market and are now getting divorced, you'll probably sell for less than you paid.

But, if the house is too expensive for one to support, it may be cheaper in the long run to cut your losses and sell now. No one knows how long the housing downturn will last. Prices could move lower before rebounding. This is not an ordinary recession.

HOUSE-HUNTING TIP: Don't get caught up following the herd. Just because most people in your area aren't buying or are having difficulty selling doesn't mean that you shouldn't make a move. Just make sure if you're a buyer that you have job security, a relatively healthy economy in your local area and a plan to stay put for at least 10 years.

The housing market will be volatile going forward. Good economic news will help fence-sitters make the decision to get serious about moving. Bad news of any sort can cause the market to stall. To take advantage of the upticks in the market, you need to be prepared in advance.

Find a good local real estate agent to work with who understands your needs, and wait to buy or sell until the time is right for you. It could take you a year or so to make the final decision. Some agents don't have the patience to stick it out.

Select an agent who will educate you about the market and the idiosyncrasies of the home-sale business in your area. Ask to be kept informed about sales in the area. Many agents are set up to do this electronically, which is an easy way to keep you informed without taking up a lot of the agent's time.

One of the most difficult aspects of the current home-sale business is financing the transaction. Find a loan agent or mortgage broker who is a real professional, has been in the business for years and who understands what current underwriters will require from you to process your loan.

Assemble all the financial documents you'll need for loan approval even before you start looking. Ask your agent or broker to have your loan package previewed by an underwriter so that you know beforehand if there are any problems.

THE CLOSING: Remedy these in advance so that they don't cause last-minute delays in closing.

Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

Sunday, November 6, 2011

Tri-Cities comes in second for housing market recovery


By Kristi Pihl, Herald staff writer

Tri-City home prices are expected to grow by 3.4 percent this year, ranking the area second in the nation for best recovery in the housing market.
The recent rating by the Housing Predictor, an independent real estate market forecaster, is more evidence of how well the Tri-City economy is doing, said Rene Dahlgren, Home Builders Association of Tri-Cities director of government affairs.
Housing Predictor said the only housing market expected to see more growth in home prices is El Paso, Texas, which is expected to see a 3.7 price increase.
It's hardly the first time the Tri-Cities has made lists of best housing markets, Dahlgren said.
In February, the Tri-Cities was named the fifth best housing market, according to Builder Magazine. In 2010, the Tri-Cities was fifth on the list of best performing large cities based on job and salary growth as rated by the Milken Institute, and ranked first out of 372 areas for employment growth in the last five years by Garner Economics.
And despite looming layoffs at Hanford, Dahlgren said they hope the market will remain strong and that the economic slump will be less than in the past.
"We've definitely come a long ways in diversifying our economy," she said.
Having a strong housing market is a good indicator of whether the economy is going well because that means people are willing and able to invest in real estate, Dahlgren said.
In 2011, 890 single-family homes received building permits as of July, according to the Home Builders Association of Tri-Cities. Pasco had the most new home permits, at 321, while Kennewick had 192 and Richland 175. West Richland issued permits for 80 new homes.


Read more: http://www.tri-cityherald.com/2011/09/10/1637924/tri-cities-comes-in-second-for.html#storylink=mirelated#ixzz1cz9A69qE

Tri-City housing market rated at No. 17 by magazine


By Kristi Pihl, Tri-City Herald

The Tri-Cities is expected to have one of the top 20 healthiest housing markets in the nation next year.
The Tri-Cities, at No. 17, was the only metropolitan area in the Northwest to make the list created by Builder Magazine and Hanley Wood Market Intelligence.
The healthiest of the 100 largest markets nationwide were determined using home prices, employment, population projections, unemployment rates and median household incomes, said Jonathan Smoke, executive director of research for the real estate research firm.
The Tri-Cities does well in all categories, and each is expected to improve in 2012, he said. For example, the area's home prices are expected to grow by about 3.8 percent next year.
The Tri-Cities might be one of the smaller markets to make the top 20 list, but the area's economy has been relatively strong during the national housing downturn and recession, Smoke said.
Already, construction permits in the Tri-Cities have been rebounding for more than a year.
The area also has an above-average number of high paying jobs, combined with relatively affordable housing, Smoke said.
And the Tri-City home ownership rate is higher than the national average, he said. It increased to 69.5 percent in July, while nationally the rate is 66 percent and has been declining each year.
The Tri-Cities is the most affordable metropolitan area in the state, said Paul Roy, president of the Tri-City Association of Realtors.
Housing affordability means it has made more sense for families moving to the Tri-Cities in the past decade to buy homes rather than to rent, he said.
An increasing home ownership rate combined with a growing number of households creates a demand for homes, Storm said.
Roy said August and September were disappointing in terms of home sales in the Tri-Cities. Consumer confidence is low, but he expects that confidence to improve.
Through September this year, 2,145 homes were sold in the Tri-Cities, according to a report by Coldwell Banker Tomlinson Associated Brokers of Kennewick.
An average of almost eight homes were sold each day so far in 2011, compared with about nine homes sold a day on average in 2009 and 2010, according to the report.
Roy said October sales should end up better than the same month last year.
There is about eight months of inventory for sale because of fewer sales and more listings, he said. But he expects that anomaly will correct itself after winter.
Inventory is based on the sales pace in the past, he said. And if things pick up to 2008, 2009 or 2010 levels, the housing inventory will be just right.
The Tri-Cities is estimated to have 1,244 new homes issued building permits this year and 1,099 in 2012, according to Builder Magazine's report.
Rene Dahlgren, director of government affairs for the Home Builders Association of Tri-Cities, said builders expect to see a similar number of permits for new single-family homes next year as this year.
As of September, 1,089 permits for new single-family homes were issued in the Tri-Cities, and about 1,300 total are expected by the end of the year, according to the association.
Dahlgren said that is sustainable and keeps builders relatively busy. But they would like to see some growth.
Unlike the rest of the state, the Tri-City home market has maintained its stability, she said.
-- Kristi Pihl: 582-1512; kpihl@tricityherald.com


Read more: http://www.tri-cityherald.com/2011/10/28/1696277/tri-city-housing-market-rated.html#storylink=mirelated#ixzz1cz7vRtUZ

Housing market does well, despite Hanford layoffs


By Kristi Pihl, Tri-City Herald

RICHLAND — Richland's Canyon Crest Apartments are starting to fill with residents, even though the 30-unit complex isn't expected to open until the end of November.
Thomas Masterson of T.R. Masterson Construction doesn't expect the recent Hanford layoffs to slow demand for his new apartments.
"We couldn't be happier," said Masterson.
The $1.96 billion in stimulus money from the American Recovery and Reinvestment Act, which pumped up jobs at the Hanford nuclear reservation in the past two and a half years, is mostly spent now.
But despite almost 2,000 layoffs so far at Hanford and up to another 1,060 possible by fall, many apartment owners and homebuilders remain optimistic about the Tri-City housing market.
"People have to live someplace," said Masterson, a builder for 35 years.
Hanford helped keep the Tri-City housing market healthy while the recession beat up housing markets in many other parts of the nation.
Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said he doesn't see the same thing happening here.
With the stimulus money spent, Crellin said he expects some softening, with fewer home sales and some declines in prices. But there isn't likely to be the plummeting prices other regions have seen.
The Tri-Cities is on a different cycle than the rest of the state, he said.
Rick White, Pasco's economic and community development director, agreed, saying he expects to see a minor dip in the housing market that will even out over time.
Interest rates are at record lows, possibly helping to counteract the impact of the Hanford cuts, he said.
Pasco isn't seeing much of a slowdown in home construction. The city ended September with 402 new permits for single-family homes -- just 41 fewer than at the same time last year.
Katie Wilson, assistant manager at The Crossings at Chapel Hill in Pasco, said they expect the Hanford layoffs will mean more of their 228 apartments will soon be available. But the demand for apartments remains high.
The Tri-Cities' apartment market has been operating at an almost unprecedented vacancy rate of 1 percent to 2 percent for a couple of years, said Crellin.
Last month in Kennewick and Pasco, 97 percent of apartments were occupied, while in Richland, there was 95 percent occupancy, according to the survey completed by Kennewick's Crown Property Management.
The layoffs could help the market return to a more sustainable 5 percent vacancy rate as workers who came specifically for stimulus-funded jobs move, Crellin said.
Most property managers consider a 5 percent vacancy rate ideal because it gives managers a chance to keep up on maintenance, he said.
Typically, new apartment construction eases rental shortages, but tight lending because of the national economy means that hasn't happened in the Tri-Cities, he said.
Even in the early '80s, when about 10,400 people lost their jobs, Masterson said his Kennewick company kept going for several years building custom homes. Although the volume was down, homes still were needed.
Similarly, just this month ground was broken on a new 5,000-home planned community called Badger Mountain South.
Paul Roy, president of the Tri-City Association of Realtors, said he is more worried about "perceptions" than the actual economy.
If consumer confidence is low, people are more hesitant to make financial commitments, he said. And because consumers are responsible for about 70 percent of the economy, he said it's a self-fulfilling prophecy if they stop spending.
Still, Roy said believes the Tri-Cities will end the year with a similar number of home sales to last year.
During the last major round of Hanford layoffs in 1995, when about 5,400 jobs were cut, people still were buying homes, he said. Sales took a temporary dip before picking up again.
And the Tri-City population is continuing to grow, Roy said.
Contributing to that growth are retirees moving here from other areas because of the affordable cost of living, mild weather and good services, he said.
"What we can't lose track of is that we are selling houses every day in the Tri-Cities," Roy said.
-- Kristi Pihl: 509-582-1512; kpihl@tricityherald.com


Read more: http://www.tri-cityherald.com/2011/10/18/1683490/housing-market-does-well-despite.html#ixzz1cz6Jnh2e

Wednesday, July 27, 2011

6 tips for a better outdoor deck


By Paul Bianchina
Inman News™

July 27, 2011
Few projects are as enjoyable as building a new outdoor deck. They're fun to design and build; they look great; and they enhance both the enjoyment of your home and its resale value. Decks are also a great do-it-yourself project, and there are lots of products on the market that can help you get the job done faster, safer and with better results.

Wander the aisles of your local home center or hardware store or do an online search, and you'll find more than enough inspiration to get you itching to grab a hammer!

Deck design:
Let's start at the beginning -- with a great design. If you have something in your head in the way of a perfect deck but you're not sure how to turn it into reality, start with a simple computerized drawing program. You can pick them up inexpensively at a number of retailers, and they're pretty intuitive to learn. Most not only help you design the deck in 2-D, but also do 3-D modeling, structural details, and even material lists.

If you'd prefer to have someone else tap the mouse, check with your local lumberyard. Many of them offer computerized deck design services that can save you hours of planning. The design consultant will walk you through several basic designs, and help you customize them to your exact size and layout requirements.

Structural hardware:
When it comes time to do the actual framing, companies like Simpson Strong-Tie offer an incredible selection of steel framing hardware that greatly simplifies all those connections. For example, there are simple joist hangers that support and connect the joists where they attach to the ledger or rim joist, and inside angle connectors to strengthen a variety of framing joints.

Where a beam sits on top of a post, there are post cap connectors, as well as post base anchors to connect the post to the patio or pier block. There are even specialty connectors specifically designed for attaching deck railing posts to deck framing quickly and with much greater strength than simply nailing or bolting alone. Simpson's decking site is worth a visit:www.strongtie.com/deckcenter.

Duo-Fast DF150S-TC TICO Nailer:
All that helpful structural hardware also means driving a whole lot of nails to make the connections work properly. So if you've got a big deck project in the works, or you're a pro who does a lot of decks, you might want to consider a pneumatic nailer to help you out.

Duo-Fast's TICO Nailer is designed specifically to drive the 1 1/2-inch, .148-shank nails required by most building codes for use with structural hangers. It's compact to get into tight spots, has a convenient rafter hook, and has an adjustable exhaust to keep the air out of your face.

Best of all is the unique "probing tip," which accurately locates the hole in the hanger before you shoot the nail. Check it out at www.duo-fastconstruction.com.

Bench brackets:
Want to add a bench to your deck? Bench brackets make it easy. Made of steel or a durable resin, they bolt to both the decking and the deck framing for stability, then you add your own decking material to the top and back to form a seat and backrest.

The brackets are angled to form a comfortable backrest while eliminating all those difficult angle calculations. You can see a couple of different styles at www.rockler.com.

Precut stair stringers:
If your deck design calls for steps, don't despair over how to cut the stringers. Many lumberyards and home centers carry or can order precut stringers in different lengths. They're made of pressure-treated lumber so they're safe for ground contact, and all the hard layout and cutting has been done for you.

Just select the number of steps you need based on how high the deck is, secure them to the deck and to the ground using the appropriate hardware connectors, and you're all set. Finish off the installation with treads that match your decking boards.

Railings:
A deck railing adds a lot of visual interest to a deck, and it's also a code requirement if the deck will be more than 30 inches above the ground. Thanks to the tremendous interest in decks and the number of do-it-yourself deck builders, there are lots of different railing ideas that you can choose from, as well as the parts to build them with.

You can go with simple wooden pickets, which your local lumberyard will have in stock. Or you can step it up a bit with metal pickets, which are available in different colors and styles at places like www.stair-parts.com or www.deckdepot.com, or from many local welding shops. For a more open look, consider steel cables instead -- you can check out some examples at www.cablerail.com.

Remember that your new deck and railing will almost certainly require a building permit, and that certain construction standards must be adhered to for safety. Check with your local building department before you get going on any deck design or construction project.

Remodeling and repair questions? Email Paul at paulbianchina@inman.comAll product reviews are based on the author's actual testing of free review samples provided by the manufacturers.


Copyright 2011 Paul Bianchina

An economical kitchen, bath remodel


By Bill and Kevin Burnett
Inman News™
July 27, 2011
Editor's note: This is the second of two parts.


Last week we answered a question from an empty-nest couple who had just paid off the mortgage on their 1980s-era rancher in Pleasanton, Calif. Rather than sell and downsize, they decided to stay put. Trouble was, they were getting tired of their home's tired look. How, they wanted to know, should they go about updating?

We tackled walls, floors, doors and trim, suggesting new paint, some hardwood flooring, new molding and baseboard, and new interior doors. Today we'll discuss the "wet" rooms -- kitchen and baths.

Kitchens
Any way you crunch the numbers, a kitchen update is going to be expensive. But, assuming you don't have to open too many walls, reroute plumbing or add electrical circuits, it won't break the bank. If you have a workable footprint, cabinets, countertops and appliances are all you need to transform a 1980s kitchen into a 2011 model.
Whether custom-made or modular, new high-quality cabinets will cost thousands of dollars -- sometimes tens of thousands. For that you get silky-smooth sliding drawers, Lazy Susans and other fancy accoutrements that will never be seen from the outside.

If you can continue to live with the existing interiors, you can save fully 75 percent of the cost of new cabinets by refacing the fronts and adding new, custom-made doors and drawer fronts. You'll save even more if you use a paint finish, rather than stain and polyurethane, because you won't have to replace the cabinet faces.

Choose some nice, modern knobs and pulls, or go with a minimalist look and have your door and drawer maker include a routed finger pull.

Chances are your 1980s countertops are either a laminate such as Formica or Wilsonart, or tile and grout. You're going to want to ditch this for something more modern. While granite is still the darling, you have a bunch of other good choices, including marble, soapstone, crushed quartz or concrete. We've even seen countertops jacketed in pewter.

For a good primer on countertop choices, including pros and cons, check out http://interiordec.about.com/od/kitchencounters/tp/tp_countertops.htm.

Bottom line: It's up to you and your budget, but figure on spending at the minimum $150 per linear foot.

Appliances are also a personal choice between you and your budget. Figure on spending at least $6,000 -- and easily double or triple that -- for a classy refrigerator, oven, range and dishwasher. Bill loves his Electrolux induction range and Fisher & Paykel drawer dishwasher. Kevin wouldn't trade the Garland commercial range and oven he's been using for years.

Finish with a good sink and faucet. For the sink, deeper is better, and we like 16-gauge stainless steel. For your faucet, do your shopping on the Web and then buy at a plumbing supply house. Or do what Bill did -- buy $7,000 worth of appliances at a discount store and get them to throw in a $600 faucet for free.

Finally, consider adding some under-counter lighting. Kitchen designers call it "task" lighting, but if your kitchen is open to other rooms, add a dimmer switch and make it mood lighting as well.

Bathrooms
The standard 1980s bathroom has a tile shower or tub surround, vinyl floors, wood vanity, and an onyx or faux marble countertop.

Because tearing out tile and replacing it is a big, expensive job, we recommend that you keep the tile and spruce it up with a new grout job.

If your vanity has seen better days, we recommend that you replace it. There's a whole aisle of styles at the big-box home improvement stores. Find one that you like but forgo the faux stone countertops with the recessed sink.
Find a good stone dealer and have the real thing made to order. Bill went that route, choosing Jerusalem Gold limestone. The fabrication and installation set him back about $800, but every time he looks at it he thinks it's money well spent. For a more rustic look, consider a soapstone counter with matching sink.

Your flooring choices include tile, wood and vinyl. We would steer clear of tile, as it can be cold and hard underfoot. And, although we love wood everywhere else, we think it just doesn't look that good in the bathroom. Also, you're one leaky toilet away from costly repairs.

That leaves vinyl. We strongly recommend single sheets (no seams) of top-quality linoleum. We're especially partial to a product called Marmoleum.

Finish off your bathroom rejuvenation with a new shower door, faucet, towel racks, mirrors and light fixtures.

Copyright 2011 Bill and Kevin Burnett

Tuesday, July 26, 2011

Growth in Tri-Cities Not Without Challenges

By John Collett                           Story Published: Jul 1, 2011 at 6:11 PM PDT


TRI-CITIES -- The Tri-Cities community has grown significantly in the past decade and experts say that will continue strong for another ten years. In fact, a new report KEPR first told you about last week has our community getting bigger by about 35 percent in less than ten years.

Thought of more growth are astounding to Tri-Cities local Barb Maheu, who has already seen major changes in her day.

“They have all that new housing in west Pasco and really it expanded, Kennewick is more crowded cause they didn't have that mall at all,” said Maheu. “I mean when I was born here like 60 years ago, they didn't have any of that.”

The 35 percent prediction is going to need some help according to TRIDEC President Carl Adrian.

“This dream will only come true if there are jobs in the community and there's a reason for people to come in,” said Adrian.

Even if the jobs come, the idea of all that growth may be a double-edged sword, that could affect the quality of life that people here enjoy. One of the major areas of concern is how the schools would handle growth since they’re already filled to the max.

“It's harder for them to finance new buildings and that sort of thing,” added Adrian. “So that kind of growth would be a concern.”

Real estate agent Paul Roy is well aware of the growth and what can happen when it’s not handled correctly.

“Not all growth is good growth, and most people you talk to are pro smart growth,” said Roy. “What we look at that is having the infrastructure in place, having the services to service that growth and not just grow for the sake of growing.”

A bonus would likely come to homes though as they expect an increase in housing prices for homeowners, and bring an overall boom to the market.

“Right now there's some issues there,” said Roy. “Especially in what we call affordable housing under 200 it's very tight, very slow.”

TRIDEC explained they don't expect growth to be an issue on healthcare since Kadlec and KGH both plan to expand. Traffic may be an issue, but it's all relative.

For Maheu though, some things will never change.

“It still feels like it’s kind of an ideal town,” said Maheu.

TRIDEC also tells Action News the 35 percent estimate seems a bit high, and guesses it will be more like 20 percent. That would still mean an additional 50,000 people in our community over the next ten years.

Saturday, March 26, 2011

Stay Warm from the Ground Up: The Basics of Basement Insulation

By Charles Furlough



RISMEDIA, February 23, 2011—If heat is escaping your home, this is the time of year when you’ll feel it—in most areas of the country anyway—not just physically, but in your wallet. Too many people spend way more than they should on heating a home due to heat escape. Your first instinct, if you’re spinning your wheels trying to heat your home, is that the culprits are things you see every day, from picture windows in the living room to your bathroom skylight. And those very well might be part of the problem. But you may not know that a huge potential source of heat loss is the basement. In fact, basements can account for over one-third of a home’s heat loss.
A major reason for this is incorrect insulation in basements. There are many types of insulation and the best choice for your basement is based on the area where you live and the age of your home: fiberglass, mineral wool blanketing, loose fill (cellulose, fiberglass or vermiculite) and spray foam. One of the most effective types, however, is rigid board insulation (typically either fiberglass boards or foam polystyrene boards). This type is typically the most expensive and tough to fit into irregular spaces, but many find the initial cost and effort well worth it in energy savings.
Even if the basement walls are well insulated, there’s another consideration: the foundation. Older foundations (like rubble, stone and brick) often suffer from moisture problems and should generally be insulated from the outside. Concrete foundations can be insulated from either the inside or outside if they’re structurally sound. Preserved-wood foundations generally must be fully insulated.
Crawl spaces should generally be insulated, as well, but must follow proper ventilation codes and guidelines (1 to 500, vent area to floor area) and the floor must be covered with a polyethylene moisture barrier.
You might be reading this feeling slightly helpless, thinking: How do I know if I’ve got a 1 to 500 ratio and how do I know what kind of insulation, if any, my foundation has? If you’ve recently moved and got a thorough, well-documented home inspection at closing—or if you’re in a new home and can contact the builder—you might already have records of this information. But in the absence of such records—or if you’re in an older home and feel that time and age has lowered your quality of insulation—call in a certified home inspector. Insulation quality isn’t something that you can check yourself, if you’re untrained; especially in older homes, to do so can be dangerous. A certified, professional home inspector can check your insulation and let you know where it’s lacking and how it can be improved or made more energy-efficient.
In addition to efficiency in energy use, safety is a concern too: When upgrading existing insulation to improve efficiency, it’s essential to follow local codes and laws. That’s where a local, certified professional home inspector can help as he or she will know what your area’s laws are. For instance, in many areas it’s necessary to place a fire-resistant gypsum board layer over existing insulation to reduce the emission of harmful gases in the event of a fire. In many cases, a home inspection reveals safety lapses, like the lack of such a safety measure. The result: suggested fixes that make your home not only warmer, but safer too.
Charles Furlough is vice president of Pillar To Post Professional Home Inspections.
For more information, visit www.pillartopost.com.
Copyright© 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

The tax benefits of homeownership


Inman News™, February 04, 2011
By STEPHEN FISHMAN

The tax benefits of buying a home include:

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get.

Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.

Tax benefits of renting:
The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.

Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.

Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit.

This is why the blanket statement "it's always better to buy than rent" is not always true. It all depends on the buyer's individual circumstances.

You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

Common Impediments to Selling and How to Overcome Them


RISMEDIA, February 1, 2011—
Even with the economy improving overall, it would be false to say the real estate market is booming, especially for home sellers. Unfortunately, negative financial headlines are causing some potential sellers to needlessly hide in fear. For many, it truly is not the ideal time to put their home on the market. But, even in a less-than-robust economy, you might be in the right—perhaps even the ideal—situation to sell. Unfortunately, some common impediments may make you run from doing so. Here are a few of those mental roadblocks, and how to overcome them:
I know my house is too big and expensive to maintain, but it’s filled with good memories. A lot of people, specifically in their 50s and 60s and beyond, are reticent to sell a home, because it’s where they raised their kids. At holiday time, that pull becomes even more powerful, when family comes back to visit. While memories are extremely important, they can keep people in a home that’s too expensive to maintain and too large for them, for too long. And, what’s worse, sometimes young adults pressure their parents to hold onto a home. If you’re one of those folks who’s just left the nest and you suspect that your parents are hanging onto the home just for memory’s sake, a little conversation goes a long way. Let your parent or parents know that you want the best for them, and if that’s a newer, easier-to-maintain home, that’s OK by you. Often, giving a parent gentle encouragement to move on, frees them up to make the decision they know they should make: to sell and downsize.
There’s so much inventory out there. Who’s even going to stop to look at my house?It’s true: in this market, there are a lot of options out there for buyers. But sellers who lament a flurry of potential competition often use this as a bad excuse not to sell. Many real estate professionals these days know a lot about preparing a home for sale, including conducting a home inspection to clearly understand the condition—and value—of your home. Speaking with a real estate professional can give you inspiration and ideas that you never imagined regarding how to distinguish your property. That’s the thing about selling your house: you don’t have to go it alone. In the best case, you can enlist a team full of great ideas.
The housing market’s down. The Federal Reserve recently noted that after losing ground in the spring, Americans’ wealth grew 2.2% throughout July-September, and household net worth rose to nearly $55 trillion. But despite this, the value of real estate holdings sank 3.7%. It’s true, the real estate market truly hasn’t fully recovered, and it would be disingenuous to sugar-coat it and say that you’ll easily get your ideal asking price in a week if you sell. But still, too many people read the second statement above—home prices are down—without taking it in stride with the first: things are improving overall. A lot of us focus on bad news without looking at the good. Home values have not fully rebounded. But the increase in Americans’ wealth means there are more people with cash freed up to buy. Also, these figures don’t take geographical areas into account. Your area might be doing better than the national average; values aren’t depressed in every single market. The best way to know what’s best for you is to ask a trusted real estate professional. Communication is the key to success, rather than hiding when you see a negative headline.
Dan Steward Is president of Pillar To Post Professional Home Inspections.
For more information, visit www.pillartopost.com.
Copyright© 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

When It Pays to Do It Yourself

By:Oliver Marks

Published: March 8, 2011

Doing home improvement jobs yourself can be a smart way to save money, but choose the right DIY projects or you’ll end up paying dearly.

Why pay someone to do something you can do yourself? Because sometimes doing it yourself costs more than it saves.

More than 100,000 people injure themselves each year doing home improvement jobs. So add medical bills to your DYI budget, and you ending up spending the same, or more, than if you hired a pro.

We’re not suggesting that you call a plumber each time you need to plunge a toilet. But think twice about what DYI might really cost you. Here’s how to decide.

Stick to routine maintenance for savings and safety
Seasonal home maintenance is ideal work for the weekend warrior because you can tackle these jobs when your schedule permits. Because these are routine maintenance projects, your savings will add up. Mowing your own lawn, for example, saves $55 to $65 a week for a half-acre lawn. The bigger the lot, the bigger the savings: with two acres, you’ll pocket around $150 per week.

When it pays:
  • Snow removal
  • Pruning shrubs
  • Washing windows (be careful on that ladder)
  • Sealing decks
  • Painting fences
  • Fertilizing lawns
  • Replacing air conditioner filters
  • Cleaning gutters
When it costs:

Unless you have skill and experience on your side, stay off any ladder taller than six feet; according to the U.S. Consumer Product Safety Commission, emergency rooms are filled with people with ladder injuries. The same goes for operating power saws or attempting any major electrical work—it’s simply too risky if you don’t have the experience.


Become your own general contractor
If you’re more comfortable operating an iPhone than a circular saw, you could act as your own general contractor on some home improvement projects. That means you hire, schedule, and pay the carpenters, plumbers, and other tradesmen yourself. You’ll save 10% to 20% of the job cost, which is the contractor’s typical fee.

When it pays:

If it’s a small job that requires only two or three subcontractors, and you have good relationships with top-quality professionals in those fields, consider DIY contracting.

When it costs:

When you don’t have an established network of reliable workers, time to supervise, construction experience to spot problems, and the skill to negotiate disputes between subcontractors, your project and budget are at risk.


Invest sweat equity on big jobs
Contribute your own labor to big jobs being handled by a professional crew and cut hundreds, even thousands, off construction costs. For instance, tear out kitchen cabinets and appliances before the contractor gets started, and you might knock $800 off the cost of your remodel. Make sure you negotiate cost savings with your contractor before pitching in.

When it pays:

Jobs that are labor-intensive but require relatively little skill make perfect sweat equity jobs. Perform minor interior demolition, such as pulling up old flooring, daily job site cleanup, product assembly, and simple landscaping.

When it costs:

If you get in the crew’s way, you may slow them down far more than you help. Make your contributions when the workers aren’t around; mornings before they arrive, or nights and weekends after they’ve left.


Add finishing touches
Unlike the early phases of a construction job—which require skilled labor to frame walls, install plumbing pipes, and run wires—many finishing touches are comparatively simple and DIY-friendly. If you paint a basement remodel yourself, for instance, you can save up to $1,800.

When it pays:

If you have skill, patience, or an experienced friend to teach you, setting tile, laying flooring, painting walls, and installing trim are good DIY jobs.

When it costs:

The downside to attempting your own finish work is that the results are very visible. Hammer dents in woodwork, or sander ruts in hardwood floors will annoy you every time you see them. So unless you have a sure eye and a steady hand, don’t perform the tasks that only a skilled tradesperson will get right.

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

7 Steps To A Stress-Free Home Closing


By doing homework in advance, you’ll understand what you’re asked to sign when you close the sale of your home.


You’ve already cleared several hurdles by finding the right home, negotiating the best price, and securing favorable financing. The last obstacle on your homebuying track is the closing, which can be both tedious and tense. By knowing what to expect and doing some legwork, you can put your closing behind you. These seven steps will guide you through a smooth closing.

1. Set a closing date

Your real estate agent will work with the seller’s agent and title company to schedule your closing date. Be sure it meshes with the end of your lease or the sale of your existing home and a time when you’ll able to play hooky from work. If you’re tight on cash, schedule your closing for the end of the month because that’s when you’ll have to pay the least amount of interest at the closing table.

2. Gather your funds

You may be required to bring funds to the closing. If they’re not easily accessible, arrange early to transfer them to a liquid account to avoid last-minute problems. If the title company requires the funds in the form of a cashier’s check, also leave time to stop by the bank and pick one up.

3. Purchase title insurance

Title insurance protects the policyholder against trouble with a home’s title. Your lender will insist that you purchase a policy to protect it. You should also consider purchasing what’s called an owner’s title policy from the same insurer, which protects you from fraudulent claims against your ownership and errors in earlier sales. In some areas, sellers traditionally pay for the buyer’s title policy. Shop online at Closing.comEasyTitleQuote.com, and FreeTitleQuote.com. If your home has been sold within the past few years, ask the prior owner’s insurance company for a reissue discount.

4. Line up homeowners insurance

Get quotes and compare policies to be sure coverage will be in effect by your closing date. An annual policy should run $500-$1,000, depending on your home’s size, age, and amenities. If you live in an area where natural disasters occur, like earthquakes, floods, or hurricanes, you’ll need separate insurance to protect your home.

5. Review your good-faith estimate and HUD-1 settlement sheet

Your lender must provide a good-faith estimate of your closing fees. Some of those fees can’t change, and others can rise by 10%. Before you go to the closing, read your good-faith estimate, compare it with your HUD-1 settlement statement, and question any fees that increased.

6. Do a walk-through

Schedule an appointment to walk through the home one last time just before your closing. Make sure repairs you requested have been made, no major changes have occurred since you last viewed the property, and that the sellers left anything they agreed to leave and took all their belongings.

Also test electronics and appliances, such as the doorbell, dishwasher, washer and dryer, and oven, to ensure they’re functioning properly. Do the same with the hot water heater and heating and air conditioning systems. Walk the yard to be sure no plants or shrubs have been removed.

7. Resolve issues identified in your walk-through

If your walk-through uncovers problems, in some states you can delay the closing until the seller corrects them. But that’s often not feasible because your lease is probably over and you’ve already scheduled movers. Another option is to negotiate a discount to your sales price to cover the cost of the work needed. If the air conditioning is on the fritz and a contractor says the repair will cost $500, ask that the sales price be reduced by that amount. If you make that request at closing, however, be ready for a delay while the title company redoes the paperwork.

A third option: Have the title company hold a portion of the seller’s proceeds in escrow until the dispute is resolved. Once that happens, the funds will be released to you or the seller, depending on the outcome.

More from HouseLogic

Do you have the right amount of homeowners insurance?

Shop for an umbrella policy when you shop for homeowners insurance

G.M. Filisko is an attorney and award-winning writer who has endured several property closings, but the easiest was done through the mail. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.


Read more: http://buyandsell.houselogic.com/articles/7-steps-stress-free-home-closing/#ixzz1HkZIjs6z

HOAs: What You Need To Know About "Home Owners Association" Rules


If you live in a newer suburban community or planned unit development, you—like some 59.5 million other Americans, according to the Community Associations Institute—are probably a member of a homeowners association. It’s also a good bet that you haven’t given your HOA much thought until you have a problem. Since HOAs make and enforce the community rules, it’s smart to understand what you can do if you can’t or don’t want to follow them.


HOA facts

Each HOA, a volunteer group of neighbors who manage common areas of a subdivision, creates its own covenants, conditions, and restrictions. These CC&Rs cover resident behavior (no glass containers around the pool), property management (no fences higher than 8 feet) and common responsibilities (fee schedules and fines for non-compliance).

Average annual dues for a homeowners association is $420, according to the U.S. Census Bureau. And there’s value in the fee. A 2005 study, which appeared in the Cato Institute’s Regulation magazine, compared a group of Washington, D.C., area HOA properties with similar homes without community benefits—a total of about 12,000 homes. The HOA house values were found to be 5.4% higher. That’s $1,067 on the average U.S. home value of $197,600.

When you don’t like the rules  

Some boards can impose what some homeowners believe are invasive, silly, or elitist rules. In 2008, some news outlets reported on a homeowner in an upscale gated community in Frisco, Texas, who was threatened with fines for parking his new Ford F-150 series truck in his driveway overnight. The board made exceptions for several luxury brands, but his mid-range truck was ruled “not classy enough.”

Even if you disagree with the rules, keep paying your dues. HOAs have broad legal powers to collect fines and fees and regulate activities. If you don’t respond to letters from the board, property manager, or a collection agency, the HOA can and will turn to small claims court or file a lien against your property.

You can handle some issues, if they don’t affect the CC&Rs, with a phone call. For example, adding recycling to the garbage collection route is a budget, not a rules, issue. Call the board member who oversees trash collection to find out if there’s leeway in the budget. Also, the board might find a way to add a service by cutting back on something else.

If you want to do something that’s against the rules—like flying the American flag in your yard—start by making a written request for variance, using the appropriate HOA form in your CC&R documents. A variance gives you permission to be the exception to the rule. Submit your request to the board and property management company.

Help your cause by seeking a compromise: That you’d like to fly the American flag, but only on national holidays.

Don’t expect a quick solution

Some HOA boards meet as little as twice a year. If the board decides the issue is worth pursuing, it may require a community vote. If it passes a majority, the board will adopt it. Board members also may consult the HOA attorney to see if there’s a legal liability if they rule against you.

If you don’t get a timely response, request a hearing and resubmit your request for variance with as much support for your cause as possible.

If the board rules against you without a community vote, you can appeal the ruling with a petition signed by a majority of other homeowners.

But if you fly your flag without permission, expect to get fined. Fines can range from a nominal $25 to a painful $100 or more depending on the issue. Your CC&Rs will indicate the fine schedule—per day, per incident, etc. Interest for nonpayment can accrue, and the HOA can sue you in small claims court.

If you feel the ruling or the fines are unjust, the last resort is to hire an attorney and sue the HOA, as a flag-flying couple did in 1999. They battled their HOA in court for nine years before the case was settled in their favor.

Become the rule-maker  

If you don’t like the rules, the best way to change them is to become part of the process.

1. Know your CC&Rs, annual budget, and employee contracts. Do you see areas where expenses can be cut? Are service providers doing their jobs?

2. Volunteer for a committee or task. If the board needs to enforce parking rules, for instance, you can volunteer to gather license plate numbers of residents’ vehicles. In addition, put your professional expertise to work: Assist the board with data entry, accounting, or website design.

3. Stand for election to the board. When a position becomes open, the board notifies the members, and you can put your name forward. New board members are elected at the annual meeting by member majority vote. Many boards are three to nine members large, with terms of one to two years.

Involvement drawbacks

As a board member, be prepared to spend two to four hours a month reviewing property management reports, monitoring budgets, or talking to other board members and residents. Most boards meet quarterly; small boards only meet twice a year, for a couple of hours.

Accept that you might become less popular if homeowners don’t like your decisions. In the worst case, you could be sued, along with the rest of the association.

Involvement benefits

But their are rewards. You’ll feel more in control of your community’s fate. You may find that some rules you didn’t support have merit after all. But most of all, you’ll know you’re doing all you can to protect your quality of life and your home’s value.

Blanche Evans is an award-winning journalist with more than 15 years’ experience in real estate consumer advocacy. She is the author of five books including Bubbles, Booms, and Busts: Make Money in Any Real Estate Market. Blanche owns a townhome in Dallas and is treasurer of her homeowners association. 

Read more: http://www.houselogic.com/articles/hoas-what-you-need-to-know-about-rules/#ixzz1HkVMGWIs