Real Estate Information Archive

Good Monday Morning!

Is a Natiinal Real Estate sales tax fact or fiction?  Read this interesting article from Realty Times for complete details that just might shock you!

On January 1, 2013, the Net Investment tax went into effect. Despite numerous articles and columns reminding consumers that this tax does not apply to every real estate sale, rumors continue to keep flying all over the country, claiming that the Health Reform legislation Congress enacted includes a sales tax on all real estate sales. While there is a tax, it does not apply to everyone.

The Health Care and Education Reconciliation Act of 2010 was signed into law by President Obama on March 30, 2010. It is a comprehensive and extremely complex piece of legislation. One section (1402) is entitled "Unearned Income Medicare Contribution" and does impose a 3.8 percent tax on any profit on the sale of real estate – residential or investment.

But it is aimed at high-income consumers, who comprise a small majority of American citizens.

Let's look at the true facts of this new law.

First, it is not a sales tax, nor does it impose any transfer or recordation tax. It is often called a "medicare" tax because the moneys received will be allocated to the Medicare Trust Fund, which is part of the Social Security System.

Next, if your income (technically called "adjusted gross income) is less than $200,000, you are home free. The income thresholds are clearly spelled out in the law. If you are married and file a joint tax return with your spouse, the law will apply only if your income is over $250,000. (If you and your spouse opt to file a separate tax return, the threshold is reduced to $125,000. For all other taxpayers, you have to earn more than $200,000 in order to be under the new law.

The up-to-$500,000 exclusion of gain for married couples filing a joint tax return (or up-to-$250,000 for single taxpayers) has not been repealed. Nor has the right to deduct mortgage interest and real estate tax payment been eliminated.

How is the tax calculated? It is a complex formula that could be called "the accountant's protection act". As a taxpayer, you (or your financial advisor) must determine which is less: the gain you have made on the sale of your house or the amount that your income exceeds the appropriate threshold.

Complicated? Yes. Let's look at these examples. Your adjusted gross income is $150,000. You sell your house and made a profit of $400,000. There is no change in the way you determine your gain: you take your purchase price, add any major improvements you have made over the years, and subtract that number from the net sales price. Based on this formula, you and your spouse have owned and lived in the property for at least two out of the five years before it was sold. Accordingly, you are eligible to exclude all of your profit; you are not subject to the new 3.8 tax. Keep the money and enjoy.

Change the example so that your adjusted gross income is $300,000. Since you are eligible to take the profit exclusion of up-to-$500,000, once again you do not have to pay the Medicare tax; your entire gain is excluded, and thus there is no profit to tax.

But let's assume you strike it rich and have made a profit of $600,000. Your income is $300,000. You can only exclude $500,000 under current law, so you will have to pay capital gains tax on the remaining balance. The rate currently is 20 percent, so you will owe Uncle Sam $20,000 ($100,000 x 20%).

But since your income is over the threshold, you now have to pay the 3.8 percent tax. But on what amount?

As indicated earlier, the tax is based on lesser of your profit or the difference between the threshold and your income. Your profit is $100,000. The difference between your income and the threshold is $50,000 ($300,000 - $250,000). In our example, the lower number is $50,000, and you will have to pay an additional $1900 to the IRS (3.8% x $50,000).

According to statistics provided by the National Association of Realtors, the median average sales price for homes in the United States (as of July, 2014) was $213.400. Clearly, none of these homes could make a profit of even $250,000, so if you qualify for the exclusion of gain requirements, you will not be impacted by this new law. Those requirements are: you have to have owned and used the property as your principal residence for two out of the five years before it is sold.

Of course, in homes where a large profit will be made, some home owners may be hit with this tax. But the large profit that you make should offset the nominal tax that has to be paid.

Since the law applies to all forms of real estate, including vacation homes, you should consider consulting with your tax and financial advisors as to your exposure.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

141 KOURT DR Price: $240,000 Beds: 3 Baths: 2 Sq Ft: 1846 Beautiful energy star rated home! New laminate floors and carpet, interior sprinklers, vaulted ceiling, skylights & architectural ledges. Living room with gas fireplace, kitchen with eating bar opens to dining room with slider to back. Master suite ... View this property >>

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Good Monday Morning!

There is some really good news on the mortgage front.  100% home financing is back.  A new home loan program is now available for those buyers qualifying for FHA financing in the Eugene and Springfield market areas.  This new home financing option is called the OMT 100 loan.  It consists of a 96.5% first loan and a 3.5% second loan. The interest rate is at whatever the going FHA rate is at the time of the loan application.  All homes that would qualify for FHA finacing will qualify for this loan program.

Another twist to this loan is the fact that in many cases, the home seller can contribute towards the buyers closing costs and create a situation where the buyers bring little or no money to the table for the home purchase.  This loan program will make homes affordable to many who were stuck because they could not come up with the money needed for a down payment.

Reemember, mortgage loan interest rates are still bouncing around at historic low levels. This is not going to last forever, so if you have been left out of the ability to purchase a home because of not having enough money for the down payment, this is your opportunity to jump in and take advantage of the current attractive home purchase environment.

Call me or e-mail me for information on the OMT 100 mortgage loan program.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING! 

2097 LAKE WIND DR Price: $265,000 Beds: 3 Baths: 3 Sq Ft: 1789 Serene and Stylish! Enjoy the beautiful, gated subdivision of Lake Shore Estates. Contemporary styling, slate tile, Shaw flooring, Hunter Douglas blinds, cherry cabinets, high ceilings, recessed lights, Great Room layout. Two level home functions as... View this property >>

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Good Monday Morning! Nationally, home sales were up in June of 2014.  The average home sales price increased as well.  This is good news that the nations housing market trend continues to rise.  Over the past several months, this same trend seems to be headed downwards in the Eugene and Springfield home market areas.  It will be interesting when June statistics come out in a week as to whether our local market is also starting to rebound again. Mortgage interest rates remain very stable and are still hovering at just slightly over 4%.  For home buyers there is still time to take action on a home purchase while home prices remain a bargain and interest rates continue to hold at historic low levels.  Right now there is plenty of good home inventory to choose from in the Eugene and Springfield market as well. Have An Awesome Week!   THIS WEEKS HOT HOME LISTING!

Video Link: http://eugeneoregonhomesforsale.com/video/This-Month-in-Real-Estate-July-2014

1669 ELANCO AVE Price: $203,000 Beds: 3 Baths: 2 Sq Ft: 1182 Darling home in culdesac. Enjoy privacy in this efficient & updated ranch style home. Living room with gas fireplace opens to dining area with slider. Kitchen with under-mount sink, eating bar and pantry. Master bedroom with vanity, bath & large clo... View this property >>

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Good Monday Morning!

Is this the right time to purchase a home?  Here are some compelling reasons that will say yes.  In fact you may never find a better time to purchase than rihgt now.  Just when we thought the mortgage interest rates would start going back up and home price would begin soaring, just the opposite has taken place.  With current low interest rates and affordable home prices, right now is when you need to take action.  Here is an articel from Realty Times that gives yoou some great reasons for purchasing a home now!

The nature of market bottoms is that it's hard to tell one's occurred until prices and sales volume start to rise again. That's why the best time to buy is when market conditions suggest a bottom.

That means there's still some risk for homebuyers, since no one has a crystal ball that predicts the future. To take advantage of low mortgage interest rates and home prices still well below previous records, you may have to take a risk, such as riding out another short-term dip in property values.

But the rewards may be well worth it. Here are five reasons to buy a home right now.

1.   More jobs are available Total nonfarm payrolls rose by 217,000 in May, and the unemployment rate is 6.3 percent, according to the U.S. Bureau of Labor Statistics. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.

2. Houses are a great hedge against inflation The Labor Department also says the May Computer Price Index is up 2.13 percent year-over-year. The index for all items less food and energy rose 0.3 percent in May, its largest increase since August 2011.The CPI excludes volatile food and energy, so you can bet that the accelerating cost of things, otherwise known as inflation, also includes housing. You may be paying more for goods and services, but if you're a homeowner, you're better off financially. A major asset such as a home, purchased at a fixed cost, becomes more valuable when prices inflate.

3. Housing price increases are slowing The median existing-home price was $213,400, over 5 percent above May 2013. Considering that the national median existing-home price was $158,800 in January 2011. That's when the PMI Insurance Company said home prices relative to income are below market fundamentals in more than half of U.S. states. Prices overcorrected during the recession, and then they soared by the double-digits in 2013.Now housing is correcting once again from an overcorrection. Now's the time to take advantage of better homebuying conditions.

4. Mortgage interest rates are still low During the recession, mortgage interest rates for a benchmark 30-year, fixed-rate loan, averaged 4.32 percent. Now they're close to that and there's no recession. That means mortgage rates have nowhere to go but up.

5. Pent-up demand ready to release

 Since the recession, household formation fell dramatically to one percent of the national population. But considering that the leading age of the largest generation ever - 81 million Echo Boomers -- is now over 30, the numbers should be closer to the 2.3% annual growth of the 1970's, when 78 million Baby Boomers reached adulthood.The National Association of Homebuilders (NAHB) said about 2.1 million households delayed formation due to the recession which allegedly ended in 2011. Now there's pent-up demand for housing that should continue to drive home prices higher.

The takeaway A housing recovery doesn't occur in a straight line. There are surges and dips. Buyers could wait for better conditions, but the present alignment of falling mortgage interest rates, slower home prices, and larger selection is highly unlikely to reoccur.

 This may not be the bottom, but it's close enough

Have An Awesome Weekl

THIS WEEKS HOT HOME LISTING!

1669 ELANCO AVE Price: $203,000 Beds: 3 Baths: 2 Sq Ft: 1182 Darling home in culdesac. Enjoy privacy in this efficient & updated ranch style home. Living room with gas fireplace opens to dining area with slider. Kitchen with under-mount sink, eating bar and pantry. Master bedroom with vanity, bath & large clo... View this property >>

Good Monday Morning!

Home inspections are an important part of the home sellling, home buying process.  For sellers, home inspections can be nerve wracking and uncertain.  Just a little prep work by the seller can have a huge influence over the success of the inspection.  Here are some tips from an article I found in" Realty Times".

One of the big things that sellers sweat is the home inspection. What will the inspector find that is wrong with my home? Don’t just sweat it, be aware of what the inspector will be looking at and for and do some things to help make it go more smoothly. You should actually be hoping that you get a good, competent inspector, one that is thorough and honest. That is good for both you and the buyers. 

Many sellers think all they have to do is leave during the inspection and that is their role. While it is recommended by most Realtors that the home owners leave during the inspection, there are some things that you can do to be ready for your home inspection and make it go more smoothly:

Clear out the closets that have the attic access scuttles in them. The inspector will need to get into the attic spaces. Please note that some attic insulation may fall out through the scuttle during this process. The inspector will normally try to clean it all up, but that is one of the reasons that they ask that you clear out the closet – so that the insulation doesn’t get on your clothes or stuff.

If a Radon test is to be part of the inspection, leave the windows in the basement closed for 2-3 days before the test. The Radon test equipment will be placed in the basement and will need to be there for at least 48 hours, maybe 72 hours, in order to collect enough data for the test. The inspector will need to come back to pick up his equipment.

Make sure that the mechanicals (HVAC and water heater) are accessible. The inspector will run the heating and cooling systems and they will inspect the hot water heater too. The electrical service panel needs to be accessible too. The water softener will also likely be cycled during the inspection to make sure that it is working properly. 

Make sure that all appliances that are staying are plugged in and working. The inspector may cycle the dishwasher and try all burners and the oven on the stove. He will run the microwave and will check the ice maker in the refrigerator. If there are other appliances, like a trash compactor, he will cycle that, too. A good inspector will be able to give the buyer a report on the condition and operation of all appliances. 

Make sure the that the garage door openers work and hopefully the safeties on them are set correctly. The inspector will check to see if something breaking the safety beam causes the door to stop closing and if pressure on the door that might indicate that it has hit something (or someone) makes it stop, too. Improperly installed or adjusted garage doors kill people every years.

If the inspector will be doing well and septic tests Identify and mark the septic tank cleanout location or dig down to it to expose the top. The septic inspector will need to open the septic tank. For the well they be pressure testing the bladder tank (holding tank) to make sure that the pressure bladder is not ruptured. They will also take a water sample which in Michigan will be sent to the County Health Department for analysis.

Other things to be aware of that will be checked by a good inspector -

Usually all faucets will be run, all toilets flushed and the sinks and tubs will be filled and then drained to test the plumbing for leaks or other problems

All windows may be opened and closed to see if they are stuck or working properly

The inspector will get on the roof and inspect it and all valleys and flashing, especially around any chimney.

In the basement the inspector will be looking for cracks that might indicate excessive foundation settling or problems and any signs of water intrusion. If you have obvious cracks or stains that indicate water issues, you may wish to leave some explanation for the inspector and proof of any repair/water proofing work that has been done.

While as fire will not be built; if there is a fireplace, the inspector will look up the chimney and/or check the damper (if any). If there is a wood burning insert or wood-burning system installed the inspector will look at it to see if he can see any defects or installation mistakes. Would you be surprised that many of these DIY wood burner installations are done wrong and pose a safety hazard?

Keep in mind that a good inspector will look under and behind things, so don’t try to cover up a problem by sliding a piece of furniture in front of it.

The home inspection doesn’t have to be scary for either the seller or the buyer. The reason that I said above that you should be hoping for a good, thorough inspector in that a good inspector will explain things to the buyers as he goes along and give them his opinion on whether what he is reporting is a minor or major problem. He may also offer the buyers some advice as to the potential cost of dealing with the issue (again major cost or minor). A good inspector will report what he finds without causing undue alarm on the part of the buyers. About 95% of the issues that an inspector might find are usually minor and involve delayed maintenance or improper installation or maintenance. Most are things that can be fixed or resolved for a few hundred dollars or less. The buyers will definitely get back to you for relief on the ones costing thousands.

So, why do Realtors ask yo to leave during the inspection? There are a couple of reasons:

1. Homeowners can tend to be overly defensive and argumentative with the inspector if they are there listening to him as he goes along. That sets a bad tome with the inspector and the buyers.

2. Some homeowners are “overly helpful”, pointing out defects that they know about that the inspector might have overlooked or wouldn’t otherwise have found. If the homeowner has been honest on reporting what he knows about the home on the Seller’s Disclosure, there is no need for him to go above and beyond that report to point out everything.

And, 3. Sellers tend to get in the way as they follow the inspector around. 

So get the house ready for the inspection and then get out of the way. You’ll have your chance to argue the points in the report later.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

2659 TANDY TURN Price: $415,000 Beds: 3 Baths: 2 ½ Baths: 1 Sq Ft: 2493 Picturesque & Exclusive! Enjoy the gated & quaint subdivision of Tandy Court. Lots of architectural features, high & vaulted ceilings, lots of natural light, accent lighting, hardwood & tile floors, granite counter tops and gas fireplace. Second sto... View this property >>

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Good Monday Morning!

This is the time of year that most people who want to sell their home choose to put it on the market.  Typically the inventory is higher because of the time of year. and the competition can be tough.  Here is an article from Realty Times that will give you some tips on how to make your home show better than your competition.

Your home is listed on the Multiple Listing Service (MLS) and the sign goes up in your front yard. Now what? Sit back and let the offers roll in. Of course, that's what every seller wants but that's not always what happens.

So, let's rewind a bit and see what can be done to make buyers want your home. The steps you take before you actually put your home on the market can help to ensure interest in your home.

Start by creating a "buy-me-now" attitude. How's that done?

Several ways. Take a good look at your home and decide which, if any repairs, need to be made. Are you selling "as is" or do you want to put a little money into your home and fix some surface problems that could potentially distract or concern buyers?

Next, clear away clutter. If you don't have any place other than your home to put your boxes and extra furniture that you're taking with you on the move, try storing them in the garage or on the side of the house. If you do this be sure that you don't stack your boxes so high that you block views to the outside.

When you block a view, buyers may think you're hiding something bad about the property or they may have a very closed-in feeling when they enter that particular room. Buyers do understand that you're moving and things may be a little out of order, but try to keep that to only one room or half of the garage. You want to make sure that buyers can see your entire home. Limiting them from viewing one or several rooms may discourage them. Tidy up and keep things packed away.

Always keep in mind that more room and more storage space are two things buyers really like. Create a feeling of openness and spaciousness by trading out, or removing entirely, bulky pieces of furniture that suck up square footage in a room. Instead find another piece of furniture that can fit into the room... maybe something from another area of your home. Even if it's not an ideal placement for you, do it anyway.

Remember, the idea is to show your home in its best light. More space is a huge plus. Another way to make a room look larger is to use mirrors. Strategically hanging a mirror on a wall can help open up the room.

Your agent may elect to hold an open house and prior to that list your home on the MLS but not allow any showings until the weekend of the very first open house. This can be an excellent strategy because you may end up with lots of buyers passing through for that first open house since they couldn't see your home sooner. You can then allow showings by appointment for a period of time. This strategy can generate a lot of interest and even start a bidding war. May the highest and best offer win.

Do your work and clean up before you open the doors to buyers. You don't always get another chance, so make buyers want your home by showing them that you've loved and cared for your home and now you'd like to see it go to buyers who will enjoy it like you did.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

2659 TANDY TURN Price: $415,000 Beds: 3 Baths: 2 ½ Baths: 1 Sq Ft: 2493 Picturesque & Exclusive! Enjoy the gated & quaint subdivision of Tandy Court. Lots of architectural features, high & vaulted ceilings, lots of natural light, accent lighting, hardwood & tile floors, granite counter tops and gas fireplace. Second sto... View this property >>

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Sincerely,
Galand

32773 HIDDEN MEADOWS DR Price: $1,200,000 Beds: 4 Baths: 4 Sq Ft: 4776 The sounds of the birds and the breeze are the only noises to disturb the tranquility of country life here. Close in, minutes to town, hospitals and the university, this 2006 Koala built home has granite counters, cherry cabinets, hardwood floors, w... View this property >>

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One of the most important components of the home purchase process is having the home you are wanting to buy inspected.  I am asked by many about the home inspection process.  Here is a great article on home inspections that was recently published in Realty Times.

If you're hiring someone to inspect the home you want to buy, or you're a seller trying to find out if there are any hidden problems that need fixing before you put your home on the market, here are five things you need to know:

1.   You can choose your home inspector. 

Your real estate professional can recommend an inspector, or you can find one on your own. Members of the National Association of Home Inspectors, Inc. (NAHI), must complete an approved home inspector training program, demonstrate experience and competence as a home inspector, complete a written exam, and adhere to the NAHI Standards of Practice and Code of Ethics.

2. Home inspections are intended to point out adverse conditions, not cosmetic flaws.

You should attend the inspection and follow the inspector throughout the inspection so you can learn what's important and what's not. No house is perfect and an inspection on any home is bound to uncover faults. A home inspector will point out conditions that need repair and/or potential safety-related concerns relating to the home. They won't comment on cosmetic items if they don't impair the integrity of the home. They also do not do destructive testing.

3. Home inspection reports include only the basics.

A home inspector considers hundreds of items during an average inspection. The home inspection should include the home's exterior, steps, porches, decks, chimneys, roof, windows, and doors. Inside, they will look at attics, electrical components, plumbing, central heating and air conditioning, basement/crawlspaces, and garages.

They report on the working order of items such as faucets to see if they leak, or garage doors to see if they close properly. Inspectors may point out termite damage and suggest that you get a separate pest inspection. The final written report should be concise and easy to understand.

4. Home inspectors work for the party who is paying the fee.

The NAHI Standards of Practice and Code of Ethics clearly state that members act as an unbiased third party to the real estate transaction and "will discharge the Inspector's duties with integrity and fidelity to the client." A reputable home inspector will not conduct a home inspection or prepare a home inspection report if his or her fee is contingent on untruthful conclusions.

The inspector should maintain client confidentiality and keep all report findings private, unless required by court order. That means it is your choice whether or not to share the report with others. If you're a seller, you don't have to disclose the report to buyers, but you must disclose any failure in the systems or integrity of your home.

5. Inspectors are not responsible for the condition of the home.

Inspectors don't go behind walls or under flooring, so it's possible that a serious problem can be overlooked. Keep in mind that inspectors are not party to the sales transaction, so if you buy a home where an expensive problem surfaces after the sale, you won't be able to make the inspector liable or get the inspector to pay for the damage. In fact, you may not be entitled to any compensation beyond the cost of the inspection.

As a buyer, you need the home inspection to decide if the home is in condition that you can tolerate. You can use the report to show the seller the need for a certain repair or negotiate a better price. You can also take the report to a contractor and use it to make repairs or to remodel a section of the home.

One thing you should not do when buying a home is skip having the home inspected because of cost or undue pressure by the seller. A home inspection is reasonable, it can save you money in the long run, and it's required by many lenders, particularly for FHA loans. There's a reason why buyers should beware, and a home inspection gives you the information you need to make a sound buying decision.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING! 

141 KOURT DR Price: $247,500 Beds: 3 Baths: 2 Sq Ft: 1846 Beautiful energy star rated home! New laminate floors and carpet, interior sprinklers, vaulted ceiling, skylights & architectural ledges. Living room with gas fireplace, kitchen with eating bar opens to dining room with slider to back. Master suite ... View this property >>

AND HERE'S YOUR MONDAY MORNING COFFEE!!