Is Your Property Ready for A Close Up?

Posted at 7:56 PM, Feb. 1, 2007

Pretend you've never seen the house before. Does the exterior – paint, siding, gutters – need attention? Are the bushes trimmed, flowerbeds weeded, walk ways swept? If you have a garage, is it clean and uncluttered? Your home should say "Welcome!" even before you reach the door. 

Step inside, close your eyes, and sniff. How does your house smell? Cigarette smoke, pet smells, greasy cooking odors are immediate turn-offs. A small pan with orange rind and cinnamon in water simmering on the stove will help your house smell like home.

Now walk through as if you were a buyer. Try every light switch, turn on every faucet, open cabinets and closet doors. Make a list as you go of anything that needs fixing.

·        Repair or replace leaky faucets. It's a minor expense that makes a major difference.

·        Tighten hinges, knobs and pulls on cabinet doors and drawers. While you're at it, clean out the cabinets to make them look more spacious.

·        Oil hinges to eliminate squeaky doors.

·        Are the windows clean, and do they open and close easily? Check for ill-fitting or torn screens, too. 

·        Look for scuffed paint on walls or bits of wallpaper that are coming loose and need re-gluing. Touch up or repaint as needed.

·        Replace burned out or dim light bulbs. Your Realtor will turn on all the lights before a showing so make sure they work.

·        Inspect the appliances. Make sure they are clean and in good working order. Clean the lint filter on the dryer, change the filters in the air conditioner, change the drip pans under the stove burners.

·        Look down. If your carpet is dirty, clean it. If it's stained beyond cleaning, replace it with a neutral color that will make the home look bigger. Clean and polish hardwood floors.

·        Spend money on a storage locker, and de-clutter ruthlessly. Aim to make your home look as big, open, and bright as possible. Just think of it as advance packing for when you sell the house and move to your new home.

If all this seems overwhelming, get some help. Most communities have local handyman- or handywoman-type businesses that will do small jobs for an hourly or flat fee. The investment you make to get your home ready for its close-up can pay off handsomely at the settlement table.

Three Resolutions You Can Actually Keep

Posted at 8:06 PM, Jan. 10, 2007

How are you doing so far with those resolutions you made a couple weeks ago?  You know, the ones about getting in shape and eating right and all the others we make every year. 

If it's not going so well, you're not alone. But there's no need to feel bad about it – simply replace those unattainable resolutions with a few that you really can accomplish.  Forget about giving up a favorite food. Think instead of these three resolutions that will help protect what you have and build for the future.

1.  Manage your mortgage. If you have an adjustable rate mortgage, look into converting it to a fixed rate.  30-year mortgage rates are still relatively low, and that ARM could soon start eating you up – if it hasn't already.  Even if you do have a fixed rate mortgage, if it's more than a few years old, look into whether you could save by refinancing at a lower rate.

2.  Improve your home and your tax bill.  If you're thinking about doing some home improvements, consider taking a home equity loan to cover the costs rather than financing them through a credit card or other loan.  Interest on this kind of loan can be deductible just as is mortgage interest when the funds are used for home improvements. Depending on the type of improvement, you may be able to recover most of the cost through the increased value of your home when you sell it someday. 

3. Keep Uncle Sam out of your pocket.  Do you usually get a tax refund because you pay in too much over the year, either through payroll deduction or by estimate payments?  Stop it!  Sure, that refund feels like found money, but all you've really found is money that you might as well have buried in the back yard.  Uncle Sam had your money for months and paid no interest – zip.  Work with your tax professional to adjust your withholding or estimated payments so you come out as close as possible to what you owe each year. The trick then is to not spend the extra you take home, but instead increase your savings either through an IRA, a 401(k) or similar plan, or a well-managed investment plan.

For all of these you'll want to have some expert advice from your tax and financial adviser.  Always consult your professional before making a decision about changing your mortgage, taking a home equity loan, or changing your withholding and/or estimated tax deposits.  It will be time well spent and give you peace of mind. 

And as for those other resolutions?  Well, there's always next year!

Happy New Year from…Uncle Sam?

Posted at 12:15 PM, Dec. 28, 2006

That's right. Contrary to his usual habit of dipping into your pocket, Uncle Sam has a gift for you in 2007 if you buy or refinance a home. For the first time, mortgage insurance premiums will be tax deductible. This means that, for some people, getting mortgage insurance could be cheaper than using a piggyback loan to cover the downpayment.

According to an article on Seattlepi.com, "… lenders consider you a riskier borrower if you make a down payment of less than 20 percent." Historically, people have had the choice of paying for that risk by taking a piggyback loan or buying mortgage insurance.  Since mortgage insurance has been a non-deductible expense, most people took the loan. That got them into the house, but also burdened them with a higher total loan and less equity. 

As one of its last acts, the 109^th Congress passed the bill that creates the deduction for mortgage insurance, and the President signed the billed into law. This new legislation is welcomed by The Mortgage Insurance Companies of America (MICA), a trade association. MICA Executive Vice President Suzanne Hutchinson said, "We are pleased that policymakers have recognized mortgage insurance as a cost of finance just like mortgage interest. Mortgage insurance plays a crucial role in maintaining the stability and continued health of the mortgage finance system. In today’s climate of steadily rising interest rates and slowing home price appreciation, an insured loan is often the most borrower-friendly alternative."

 There are some restrictions, of course, but they won't block many homeowners from taking the deduction. The limits include:

·        You can only take the deduction for mortgages that are closed in 2007. This means that only new loans or loans refinanced in 2007   qualify.

 ·        There are income limits. You can get the full deduction if your adjusted gross income is $100,000 or less, and you must itemize to get the deduction.

 ·        This is for one year only. If Congress wants to extend the deduction beyond 2007, it will have to pass further legislation.

Of course, you should always talk to your tax/financial advisor before making a decision that affects your tax liability, including the choice of a piggyback loan vs. private mortgage insurance.

The bottom line, according to the Seattlepi.com article is this:  "Don't get a piggyback loan without taking a serious look at mortgage insurance, because mortgage insurance is likely to be cheaper in the long run, and it might even cost less in the short run."

 Cheaper in the long run and might cost less in the short run – now that's a Happy New Year, thanks to your good old Uncle Sam. 

Links:

http://seattlepi.nwsource.com/business/296168_real16.html

http://www.micanews.com/press/press_releases/pr.cfv?ID=106

Your 401(k) – What's New

Posted at 8:57 PM, Dec. 20, 2006

In 2006 some large companies put in place a new policy – each employee hired was automatically signed up for the company 401(k) plan with 3% of their pay being set aside in a 401(k) investment account.  Employees could opt-out, but if they did not take the time to say "No, thanks," they were in.

Uncle Sam took a look at the practice and said, "OK by me," or official IRS words to that effect.  As reported on the website of Cooley Godward Kronish LLP, "The IRS recently ruled that a 401(k) plan may require mandatory 401(k) contributions to be withheld from eligible employees' compensation, if the employer gives appropriate notice to its employees and the employees have an opportunity to 'elect out' of the mandatory contributions."

So now folks will have help saving for retirement in the most painless way possible…the money is deducted before taxes so they never see it, and, contributions grow tax free until withdrawal. When you consider that many companies have a policy of matching employee contributions, a 401(k) can be the best way to save for your future. 

And if that future – in the near future – includes buying a home?  A 401(k) can help there, too.  The IRS says, "… depending on the rules for your 401(k) plan, you may be able to borrow money from your 401(k) plan to purchase your first home. Your plan administrator should have written information about your particular plan that explains when you can borrow funds from your 401(k) plan…."  You will need to talk to the administrator to find out how your plan works. Generally, you pay interest on the loan but you pay it to yourself – the interest goes back into your account and replaces the earnings you might otherwise get on the investments.  Provided you pay back the loan, the money you borrow is not taxable. 

With automatic investment, and help buying that first home, a 401(k) account could be the best decision you don't make all year!

Now this is important:  Always talk to your tax/financial advisor before taking a loan from your 401(k), or before making any change in your retirement planning.  This article is not intended to give any legal, financial, or tax advice, and does not cover all possible restrictions or regulations related to 401(k) plans or other investments.  Always speak with your investment and/or tax advisor before making any decision based on information in this, or any other, source.

It's Still True – You Get What You Pay For

Posted at 10:24 AM, Dec. 7, 2006

You go back to basics and common sense. If you buy a television and choose a no-name brand that's cheap, do you expect it to have a great picture and to last a long time? Or do you know that you are getting lesser quality? Most people recognize that you get what you pay for.

It's the same with choosing a professional Realtor® and a full-service commission. You want to sell your house quickly and for the best possible price. The more qualified buyers who see your house, the more likely you are to do just that. And finding those buyers – not just Sunday-afternoon-lookers – takes market knowledge, experience, and investment on the Realtor's® part.

A Realtor® does so much more than stick a sign in the ground and put your house on a web site. An experienced professional will help you prepare your house for sale, qualify buyers so you only have people in your house who can buy and who are seriously looking to buy, help you negotiate the best price, handle the reams of paperwork that today's real estate transactions require, make sure all the details are covered, and always be available to answer your questions and provide support throughout the process. Remember that you may sell or buy a home a few times in your life, but professional Realtors® do it many times a year. The right one can save you time, money, and a lot of headaches. 

One of the interesting things we're seeing in the current market is an increase in the number of people who choose a full-service Realtor after having gone the do-it-yourself or discount route. When there are no showings and no offers, it doesn't take long to recognize the value of an experienced professional. 

And the bottom line…when the money is in your pocket as you walk away from the settlement table is what you want and need, you know the commission is worth it.

Trust is More Than a Just a Word

Posted at 6:09 AM, Nov. 30, 2006

In a game show, trust isn't that important, and it only matters for about half an hour. But buying or selling a home is too important for games. You want a Realtor® you can trust, and someone who will be looking out for you all the way.

Where do you look for this person who will give you personal attention, who will answer your questions, and answer your phone calls?

You might look at a large real estate brokerage with dozens of agents. They certainly have impressive numbers that show they sell a lot of houses. They have standard procedures, forms, and policies that fit most needs. You may see their signs all over the area, and they do an acceptable job on average. They depend on volume to support a lot of advertising and overhead expense. The question you need to ask is, "Will a large company know me and my needs, or will I be just another 'deal' in their real estate machine?"

Now look at a smaller broker, one who places his name on the line with every transaction, and works with a small team of proven professionals. They know your name. They take the time to ask questions and really listen to your answers. They know the area they serve and all about the neighborhoods. They take your phone calls and return calls quickly. They look out for your interests, always, and unconditionally. And they depend on building lasting client relationships based on personalized service for their success. Individual attention and meeting the client's specific needs are their hallmarks. No games, just people you can trust.

Michael Trust and the Michael Trust Team – we work together to deliver what we promise.

·        Personalized service

·        Total client satisfaction

·        Trust

What's the Best Time of Year for Home Buyers?

Posted at 5:54 AM, Nov. 24, 2006

First, only serious sellers, who are strongly motivated to accept a reasonable offer, will be showing their homes during the holidays.  These weeks are traditionally the slowest of the year for real estate sales.  Most people are thinking about holiday travel and family feasts, so if they can wait to put their house on the market they will. Therefore, homeowners who are having showings are serious about making a sale.

Second, most potential buyers are also concentrating on celebrations and the season – they've put their house hunting on hold for a few weeks.  That means there is less competition from other buyers, and that's an advantage in what is becoming a buyer's market. 

And I've saved the best for last…money in your pocket courtesy of Uncle Sam. There's still time to buy a home and settle before the end of the year, and that could mean a substantial tax deduction from your 2006 income. Of course, you'll want to consult your tax preparer about your specific situation. But mortgage rates are still low, and I can recommend lenders, inspectors, and attorneys who can shepherd deals through to closing quickly. 

Then when the clock strikes midnight on New Year's Eve, you'll really have something to celebrate. Call me today and let's get started.

Five reasons why now is a good time to buy or sell a home

Posted at 12:04 PM, Nov. 15, 2006

You might have seen the full-page ads in newspapers lately from the National Association of Realtors saying that this is actually a great time to get into real estate. Sure, they are the industry association, but it's in their interest to tell you the truth. And I agree – this is a good time. Here's why:

1.      Great interest rates. Despite all the ups and downs of the various markets, 30-year fixed rate mortgage interest rates are near an all-time low. This means your payments will be as low as possible, making it a good time to buy and lock in favorable rates.

2.      Plenty of choices. There is a good selection of houses to choose from now. Housing inventories grew over the spring and summer so buyers have many more choices than they did at this time last year. This means that there are more homes looking for buyers, and sellers are starting to make some adjustments to encourage sales. Buying today gives new owners the opportunity to find their dream house at a favorable price.

3.      Good value pricing. Housing prices have slowed their dramatic climb. Some areas have experienced declines while others are still increasing, but the enormous increases of a year ago are no longer the rule. Buyers are finding good values today. And with the trend indicating continued increases through the rest of this year and into 2007, this may be the time of best prices.

4.      Positive outlook. The overall outlook for real estate is good. On October 26, 2006, Former Federal Reserve Chair Alan Greenspan said, "Most of the negatives in housing are probably behind us." (Reuters News) And real estate is still one of the best investments you can make to help build long-term wealth. There will always be fluctuations, but overall real estate is one of the best performing investments.

5.      Local knowledge and personal service. The Michael Trust Team will help you meet your real estate goals with personal, individualized service. We are a small, established company and we know our territory, so we provide the local market knowledge that will help you take advantage of the opportunities in the current market.

 Take advantage of this combination of interest rates, inventory, and pricing to find your dream home today. 

What Advice Would You Give to This Seller?

Posted at 10:02 AM, Oct. 19, 2006

A question was posed to me and I thought it would make great blog discussion.  Here is the question and my response is posted below.  What do you think?

Q- The second loan on top of the original mortgage wiped out most of the equity long before the condominium was listed for sale three months ago.  Recent price reductions reduce what little equity was remaining, yet the drop from $500,000 to $460,000 still has not attracted buyers.  The monthly loan payments are difficult for the owner who is convinced she should walk away, giving the property back to the bank.  What would you tell her?  What are the tax, financial, and personal implications of defaulting on the loans?

A- Walking away is certainly an option but not one that I would necessarily recommend. From a tax perspective, should the lender agree to a short sale, any “forgiven” loan amounts could be reported as taxable income to the IRS on a 1099, resulting in a large tax liability (with some exceptions; consult your tax advisor for more details and guidance); a foreclosure is more damaging to a personal credit profile than a short sale (neither of which are particularly good), so exploring a short sale would be worthwhile, provided it could be made to work for all parties.

The damage to the seller’s personal credit report would follow her for a number of years, although some mortgage lenders would potentially look past it in a couple to a few years’ time depending on other credit factors. 

Obviously, the best solution would be to sell the property as listed and try to extricate the owner from the situation. A short sale or a foreclosure should be the last resort for any seller. In some cases, selling to a “fast cash” type of organization may be an option, but any sale would likely be far below market value and the seller may walk away without any profit (but this would still be better than a foreclosure or a short sale in most cases). 

Any discussion about a short sale or foreclosure should be handled by an agent or broker with knowledge of the ramifications from a real estate perspective, and clients should be strongly advised to seek competent tax and/or legal advice for ramifications involving either or both areas.

Open House Flyers by Michael Trust as published on Realty Times

Posted at 11:14 AM, Sep. 13, 2006

Blanche Evans Article about being "Zillowed"

Posted at 7:21 AM, Sep. 6, 2006

I thought this was a very interesting article. This article is by Blanche Evans from Realty Times can be found at http://realtytimes.com/rtapages/20060831_zillowed.htm.

Tips for Creating a Great Open House Flyer

Posted at 7:21 AM, Aug. 7, 2006

• Print the flyer on light colored paper. If the Buyer is touring several Open House events in one day and has a stack of flyers on white paper, your flyer will be color-coded and can be easily identified. Dark papers conflict with colored photos so better to use light colored good stock paper to make a lasting impression.

• Print good quality colored photos on your flyer…3 or 4 at most. These photos should show the best views of the property; front, foyer, living room with fireplace and so forth. If you do not have good quality photos then you will need to get them taken. Poor photos are not a good sign of a quality sales presentation. 

• Make sure the photos are current and do not show any holiday decorations left over from last season. Holiday decorations date the home so if you are having an Open House in July but the photos show Christmas decorations from December, this is a clear indication to the Buyer that this home has been for sale for some time and there might be a problem.

• List the basic information first on the flyer; number of bedrooms, bathrooms and then go right into good descriptions of the best qualities of the home. Begin each short sentence with solid, descriptive and visual words such as, “Park-like views”, “Tree-lined street”, “Winding oak staircase”, for example. Bullet these descriptions on the front of the flyer using the bullet tool in your word processing or flyer program. The features need to be quickly read in eye-easy font, bold and should be to the point. Too much information with a difficult font and little open background or “white space” in the margins is a turn-off. Give the Buyer the facts and make it easy to remember.

• The flyer heading should only include a simple heading such as, “Open House – Saturday – August 5, 2006- 1:00 p.m. to 4:00 p.m.” Below that, include the address of the property in good detail. Use a larger font for this heading but make sure the font used for the entire flyer is the same throughout. Avoid script, fancy or italic fonts. They can be difficult to read, especially for senior Buyers.

• Always run a spell check before printing the flyer. Have someone else proofread it for accuracy. 

• At the bottom of the flyer include the realtor listing information with at least two phone numbers and an email address. Sometimes people would rather communicate by email rather than pick up the phone so leave email as an open option for communication. Do not try to advertise too heavily on these flyers. The realtor’s agency name, homeowner name (if applicable), realtor name, phone numbers (2), email address is fine.  If you must use the back of the flyer for additional information, keep it simple and uncluttered. You want to advertise the home and keep the Buyer focused on the important aspects of the listing, which are printed on the front of the flyer.