When Listing Your Home For Sale, Remember These Best Practices

Even in a seller’s market, homes aren’t guaranteed to sell. When preparing to sell your home, following a few best practices can keep the property from sitting on the market — or even worse, not selling at all.

Price it just right.

Overpricing a listing is a kiss of death on the market. Research homes in the area that have sold recently, and make sure they are actually comparable (i.e., don’t compare a fixer-upper to a newly remodeled house). Check how long local listings are typically on the market for, and adjust your expectations accordingly. Keep your eye on what else is on the market at the same time as your listing — if there is another home that is seen as a better deal, your listing will look less desirable.

Even though a seller will always want the highest price possible, it may prove strategic to list for a lower price and let buyers bid the price up in competition. Listing at a lower price is common practice in very competitive real estate markets like San Francisco and Los Angeles. This approach often ends up getting more exposure on the listing since it will show up on more home buyers’ online feeds. 

Take beautiful professional photographs.

Some buyers love a project, but most are hoping to have to do as little work as possible (and keep their budget as low as possible). Keeping the home clean and uncluttered and presenting clear photos will present the home at its best.

The majority of buyers are starting their home search online nowadays, and can form an attachment to a house before even seeing it in person. Bad photos, or no photos at all, can completely eliminate interest.

There are inexpensive ways to spruce up your house to make it look more appealing, and pointing out all the positive aspects of the home in the listing (such as the features, upgrades and location) is also vital.

Be open to negotiations.

I can’t stress enough that keeping an open mind is key when selling your home. A buyer may come in with a low price or not-so-great terms on an offer, but it’s best not to write them off completely. If the buyer wants the house, they are likely open to negotiating. If the offer is rejected in a rude way, the buyers may feel like they do not want to work with the seller/their agent in the future at all and may not revisit an offer even after the home has been sitting on the market. Emotions run high on both the buyer and seller side of buying a home, and while it’s important for buyers to not write ridiculously low offers, it’s also key for the sellers to keep from being offended, and try to see if there is some reasoning.

In competitive real estate markets, offers are most likely to come in within the first two weeks of the listing becoming active. Serious buyers are already searching and seeing new listings as they come up for sale. Be sure the home is available and presentable right away for showings. In addition to listing the home in the MLS, it’s essential that the listing be spread to as many potential buyers and local agents as possible. If you want to sell, spread the word.

Source: forbes.com ~ By: Beatrice de Jong ~ Image: 21online Asset Library

6 Reasons Fall May Be the Best Time to Buy a Home

Traditionally, spring is considered peak season in the real estate market. Families with school-aged children find it less disruptive to move over the summer. Spring is also a time when people are eager to get outside and properties usually look their best. On the flip side, however, there are a number of good reasons for homebuyers to hold off until fall:

1. Sellers are Motivated

If they weren’t, they’d probably hold off until spring, since April is the best month to sell a home. By fall, sellers who were “testing the waters” with a listing in prime selling season are either eliminated or are now serious sellers.

These motivated sellers often want to get things settled before the end of the year, completing their own move before the holidays. Living “in limbo” for several months can be exhausting and provides another motivating factor.

The longer a house has been on the market, the more likely a seller is willing to negotiate on everything from price, to closing costs, to move-in dates.

2. There are Fewer Buyers

Potential buyers with children are less likely to be in the market once school has started. Other autumn buyers may become hampered by inclement weather, shorter daylight hours, and holiday demands. If you are flexible, less competition in the fall can pay off for you!

3. Lower Home Prices

October may be the best month to buy a home. After reviewing 32 million sales of single family homes over a 15-year period, RealtyTrac(link is external) found that properties that went under contract in the month of October sold for an average of 2.6 percent below estimated full market value.

While pointing out that specific results vary by location, RealtyTrac found that October also had more “best days” to buy than any other month in the year. Among the top 10 best days to buy, all but two were in the last quarter of the year:

4. The Focus is On You

During prime selling months, everyone involved in real estate transactions tends to be swamped. In fall, however, real estate agents, lenders, inspectors, title companies, moving companies, etc., experience a lighter schedule, giving them more time and energy to focus on helping you. In general, their response time will be improved and your experience may be less stressful and more snag-free.

5. Tax Advantages

Even if you close on the last day of the year, you can apply the property taxes you paid and any interest or points (pre-paid interest to lower interest rates) on a home purchase to offset your income for that entire calendar year. This could be a significant advantage when April rolls around.

Consult with your tax or financial planning professional to determine how to leverage the timing details and other aspects of your purchase to your benefit.

6. Needed Changes and Upgrades May be Cheaper

If you are purchasing a house that needs new carpet, paint, appliances or other upgrades, buying in the fall may save you money beyond the purchase price of the home. Many of these items are at their lowest prices in the fall. According to Consumer Reports, September is the best time to buy paint and carpeting and the best time to purchase major appliances is November and December.

With careful negotiation, you may be able to get price concessions from the seller on cosmetic issues like worn carpeting, faded wall paint, or outdated appliances that exceed the cost of the upgrades, saving money on the cost of the house and getting brand new paint, carpet and/or appliances at the same time!

Additionally, September is the best time to get deals on snow blowers as well as outdoor plants, shrubs, flowers, and trees. September and October are the best time to buy lawn mowers and tractors. The savings can really add up, leaving you with a bit more cash to cover other expenses.

The Best Time To Buy Varies By Location

Remember that the advantages of buying in the fall may be diminished in certain markets. For instance, in Florida, you may find yourself competing with “snowbirds” looking to purchase in the area, making fall months less of a buyer’s market than in northern locations.

Source: homebuying.realtor ~ By: REBAC Staff ~ Image:  pixabay.com

25 AWESOME STAYCATION IDEAS

Ah vacation.  How many of us don’t sometimes wish we could escape the hustle, bustle, & day-to-day responsibilities of our normal lives for a week of fun and relaxation somewhere far, far away?

The truth is that for many of us a traditional vacation is not always in the cards.  Between restaurants, hotels, and transportation, travel costs can add up fast especially when those costs are multiplied for a family.  And even when the cost isn’t a factor, sometimes health concerns or work obligations prevent us from leaving town anytime the urge strikes.

But that doesn’t mean when Spring Break or summer vacation time rolls around and the kids are home from school that you can’t still have a great time! This year, why not plan a vacation in your own backyard?  A true Staycation is more than just a week at home, it is an intentional time of fun and relaxation for your whole family.  It does take a little effort to do it right, but can ultimately be just as satisfying as going somewhere far away.

SET SOME GROUND RULES

The point of a Staycation is to make it feel as much like a real family getaway as possible, without leaving the comfort of your own home.  Thus, to make sure the whole family is on the same page, it is good to start with some ground rules that everyone can agree on.  Start with deciding exactly when your vacation at home starts and ends, and then set a few guidelines for what your family may and may not do during this time.  These could include all or some of the following:

  • No smart phone
  • No email
  • No computer or video games
  • No television
  • No working from home
  • No worrying
  • No fighting
  • Family time only—no independent activities or outside plans
  • No cooking
  • No cleaning
  • No laundry

PLAN FOR FUN!

Just like a real vacation, the more you plan for fun, the more successful your Staycation is likely to be.  Start by setting a reasonable, realistic budget for your week of fun at home.  Set some money aside for activities, eating out, and perhaps even paying for a splurge or two such as paying for a house cleaner or treating yourself to a massage or pedicure at a local spa.

DIG DEEPER

Next, take the time to figure out just what you will do on your Staycation.  If your kids are old enough to have an opinion, hold a family meeting to discuss your ideas and to get a feel for what everyone wants to do. (The list below is a great start!)  If you like spontinaeity, consider putting everyone’s ideas into a jar, then picking one activity each day.  Or, if your family prefers more structure, use your ideas to develop an itinerary for the week.

Be sure to also spend some time prepping your home and kitchen to make things as easy—and neat—as possible for your relaxing week at home.  Gather menus to all the local restaurants that offer takeout and delivery or, if eating out every day is not an option, plan a freezer cooking session ahead of time to prepare a week’s worth of easy stress-free meals.  You might also want to consider using disposable dishes and serve ware to cut down on dishes.  Make sure to caught up on laundry before your week begins, and, if possible, do a family power-cleaning session the day before your Staycation starts.

GET CREATIVE

Chances are there are dozens of fun things to do in your own hometown that you either never have time for, or don’t even think about because they are so close by.  Here are 25 fun and creative ideas to get you started:

  • Try Geocaching-According to the official Geocaching website, “Geocaching is a real-world, outdoor treasure hunting game using GPS-enabled devices. Participants navigate to a specific set of GPS coordinates and then attempt to find the geocache (container) hidden at that location.”  Get more information here, or find local Geocaching groups here.
Go on an a family adventure by getting out the map and exploring your neck of the woods.
  • Try Paintballing or Laser Tag-Invite a few other families to join yours and battle it out for the title of Most Awesome Family.  There are paintball or laser tag facilities almost everywhere—use Google to find one nearby.
  • Visit a Nearby National Park-National parks truly are one of our country’s greatest treasures, and most NPs have a variety of awesome family friendly activities to choose from.  After finding a park in your area, first visit the Ranger Station to pick up a Junior Ranger kit, then complete the required number of activities to receive a badge.  You can also purchase a Passport to National Parks at any NP gift shop, then collect passport stamps at every park you visit.  Most park fees are nominal, but you can also check out this page to find free entrance days.
  • Enjoy Your Local Theater-Check the local newspaper or theater website to see what plays, musicals, concerts, or family-friendly comedy shows will be playing during your planned Staycation time, then book tickets and plan for an evening at the theater.
  • Visit a Nearby Amusement Park-While Disney World may not be in the cards this year, that doesn’t mean you can’t still have a blast at a nearby theme park.  Check out this list to find an amusement park in your own state or town.
  • Visit a Local Children’s Museum-If you’ve got younger kids it can sometimes be hard to find activities that the whole family can enjoy, but a great Children’s Museum can definitely fit the bill!  Most have a variety of fun and interactive activities that can keep you busy the whole day.  Check out the Association of Children’s Museums website to find one in your area, and consider purchasing a Family pass—you can usually get your money back in just two visits.
  • Visit the Zoo or Aquarium-Who doesn’t love seeing animals?  Check out the Association of Zoos & Aquariums to find an AZA accredited zoo or aquarium in your area, then be sure to also check what special programs your zoo has available.  Some offer Junior zookeeper programs or opportunities to feed the animals, while some others even allow you to spend the night in the zoo!  Be sure to pack a lunch to save on pricey zoo fare!
  • Check out the Local Library-Most libraries have family-friendly events and activities happening every weekend, and sometimes even daily during spring break and summer vacations.  Check your local library website for details.
  • Major or Minor League Sporting Event-While major league events are a lot of fun, they can get pricey quickly, especially for a family.  Luckily almost every city has a minor league team these days, which can give you (almost) the same experience for a fraction of the price!  Be sure to check out which days include special events, such as free caps or fireworks for added fun!
  • Go Bowling-If your kids are small, try bumper bowling; for older kids go at night during “glow bowling” times!  Many bowling alleys around the country even participate in a free bowling program that allows kids to bowl free and parents to join them for just a few dollars more.
Sometimes every family needs to pitch a tent and kick back together, cooling your bare feet in the breeze!
  • Camp in Your Own Backyard-Why not enjoy the great outdoors in your own backyard?  Set up a tent and sleeping bags, build a fire (or use the grill) to cook s’mores, and take turns telling ghost stories.  Then download the Night Sky app (make sure your device is GPS-enabled first!) to identify stars, planets, and even satellites in the sky.
  • Tour a Local Factory or Brewery-Is there a large manufacturing facility near your town or city?  Most offer tours and even samples of their goods.  Check the company website for details!
  • Visit a Nearby Tourist Spot-Is there an area nearby that always draws the crowds? Even if you normally avoid the tourist traps, every once in a while it is fun to become a tourist in your own town.  Make all the cheesy stops and take pictures along the way!
  • Theme Restaurant or Dinner Theater-Make dining an event!  Depending on where you live there may be theme restaurants, dinner theater, or even a murder-mystery dinner train or cruise
  • Go Paddleboarding or Canoeing-If there is a river, lake, or ocean nearby, chances are pretty good there is also a paddleboard or canoe rental facility nearby as well.   Both are a fun way to enjoy the water and test your skills!
  • Create Your Own Art-Spend an afternoon getting creative at a nearby paint-your-own pottery facility.  Not only is it fun, you’ll have your own gorgeous dishes to take home when you’re done.
  • Get Wet-Spend the day at a local pool or waterpark, or just head to the beach!  If that sounds like too much effort, simply set up a slip & slide in the backyard and have a family water day at home.
  • Tackle a family project-Have the kids been begging for a tree house or wanting to redecorate their rooms?  Consider spending your week together working on something to improve your home.  You’ll not only bond while painting and building together, but at the end of the week have something concrete to show for your time!
  • Host Your Own Film Festival-Pick a theme, allow each family member to pick a movie, then get comfortable for a day of movies.  Be sure to provide plenty of snacks, and take breaks to discuss and rate each film.
  • Give Yourselves a Makeover-Do hair and makeup at home, or take a day to go to the local spa or beauty parlor.  Complete the new look with a new outfit!
  • Find a Local Festival-Check your local newspaper or chamber of commerce website to find out what is happening in your town or towns nearby the week of your Staycation.  Depending where you live there are often events happening almost every weekend!
  • Go Golfing-If dad is into real golf, consider spending an afternoon doing a family golf lesson; otherwise, stick to mini golf at a local novelty course!
  • Play Outside-Go fly a kite, take a walk, go for a bike ride, or take a hike–most state and national parks have at least a few walking, hiking, or biking trails to choose from.  Do a little research to find one that fits your family’s athletic ability, then head out to enjoy the great outdoors.  Don’t forget to pack snacks and water for your trek!

RELAX AND ENJOY!

For most people—and moms especially—the hardest part of trying to “relax” at home is letting go of the all the everyday obligations and distractions that bombard us in our own homes.  But the key to having the best Staycation ever ultimately has nothing to do with the activities you choose, but with your own attitude and commitment to making your week a time of fun and relaxation.   Let the chores be for a week and instead give yourself permission to kick back and enjoy the moment.  Laugh and talk with your kids and spouse and create memories that you will cherish for a lifetime.  This is your time…..make the most of it!

Source: livingwellspendingless.com ~ Image: Pixabay

How to Buy a Vacation Home in 5 Steps

Turn your getaway daydreams into reality — this guide will walk you through it, step by step.

Dream of owning a vacation home but find the idea of buying one too intimidating? It’s actually easier than you may think.

Here’s a guide to help you analyze your options.

1. Match housing choices to your lifestyle

Many people assume they must own a primary residence before owning a vacation home, but that’s not necessarily true. What’s really important is matching your housing choices to your lifestyle.

You may live in a city and want lots of space that you can’t afford there. You could rent a modest condo in the city and buy a large vacation home outside the metro area.

Or you may live in a large country house and want to enjoy city life as much as you can. In that case, you could own your country home and also buy a vacation condo in the city.

Either way, the financing and tax implications are almost the same.

2. Decide how you’ll use it

From a financing and tax standpoint, you need to consider how you intend to own and use your property. You have three options:

  • Primary residence. You can buy for as little as 3 percent down (if your loan doesn’t exceed $417,000), and you get significant homeowner tax benefits.
  • Second home. You can use your second home anytime you want, but lenders won’t let you rent the home. Buy for as little as 20 percent down, and qualify for the loan using your full primary residence cost plus your full second home cost. Mortgage rates and tax benefits are the same as primary residences.
  • Investment property. You can rent the home and use it when it’s not rented. Rates are .25 percent to .375 percent higher than second home rates, and your down payment usually starts at 30 percent. You qualify for the loan using your full primary residence cost plus your full investment home cost, but you can use rental income to help qualify. Tax treatment is less beneficial, but the extra income can help with affordability.

3. Understand the total cost of owning it

You can determine what you can afford in seconds. Then you’ll find a lender to formally analyze the cash available for down payment, closing costs and reserves. You’ll also calculate the total monthly cost on your existing home (whether you rent or own), plus the total monthly cost on the vacation home.

You also need to plan for personal budget items that lenders don’t use in their qualifying calculations:

  • Gas, electric, cable TV and internet
  • Furniture and housewares
  • Travel costs to your vacation home
  • Total cost of property maintenance items, like cleaning, landscaping and pool/spa upkeep

4. Review monthly and transactional cost line items

Suppose you live in San Francisco and want to purchase a home in the wine country of Sonoma County, CA, for $600,000. Here’s how much it would cost as a primary residence, second home and investment property.

Estimated monthly costs
Primary or second home Investment property
Mortgage payment $2,223 (30-year fixed mortgage at 3.75%) $2,035 (30-year fixed mortgage at 4.125%)
Insurance $100 $100
Property tax $600 $600
TOTAL ESTIMATED MONTHLY COSTS $2,923 $2,735
Estimated cash to close
Primary or second home Investment property
Down payment $120,000 (20%) $180,000 (30%)
Lender fees $2,500 $2,500
Title/escrow/inspection fees $3,500 $3,500
TOTAL ESTIMATED CASH TO CLOSE $126,000 $186,000

5. Make an offer using a local real estate agent and lender

Many vacation properties are in specialized local markets, so it’s best to find local real estate agents and lenders.

Your real estate agent will clarify local transaction fees, taxes and commissions, as well as advise on local zoning and property rental rules. For example, the town of Sonoma doesn’t allow short-term rentals for vacation homes, but other towns in Sonoma County do.

In destination areas, real estate agent commissions can be higher and can also be seller- or buyer-paid, depending on the area. Only a local expert can advise properly. And, of course, they will structure your offer for you and negotiate on all facets of the deal that are a priority to you.

Likewise, local lenders will be comfortable with appraisals and lending in rural areas. Appraisals are more difficult in less populated areas because comparable sales can be old and hard to find.

If you follow these steps, your closing will be a snap, and you’ll be relaxing in your vacation home before you know it.

Source: zillow.com ~ By: JULIAN HEBRON ~ Image: pixabay.com

Stay Safe this 4th of July

The American Academy of Pediatrics (AAP) continues to urge families NOT to buy fireworks for their own or their children’s use, as thousands of people, most often children and teens, are injured each year while using consumer fireworks. 

Despite the dangers of fireworks, few people understand the associated risks — devastating burns, other injuries, fires and even death. The AAP is part of the Alliance to Stop Consumer Fireworks, a group of health and safety organizations that urges the public to avoid the use of consumer fireworks and to only enjoy displays of fireworks conducted by trained professionals.

Fireworks Safety Tips for Families:

  • Fireworks can result in severe burns​, blindness, scars and even death.
  • Fireworks that are often thought to be safe, such as sparklers, can reach temperatures above 1000°Fahrenheit, and can burn users and bystanders.
  • Families should attend community fireworks displays run by professionals rather than using fireworks at home.
  • The AAP recommends prohibiting public sale of all fireworks, including those by mail or the Internet.​​

Small Updates, Big Return: 5 Ways to Increase Your Home’s Value

No matter your budget, there’s always an upgrade or two that’ll up the resale ante.

Whether your home improvements are for you or potential buyers, consider their impact on your home’s potential resale price before picking up your toolbox (or the phone to call a contractor).

A brand-new kitchen or bathroom will undoubtedly wow potential buyers, but there’s no guarantee you’ll recoup the money you put into those pricey remodels.

To help you navigate the choices that lead to the best return on investment, we asked two industry experts (and one enthusiastic DIYer) to weigh in.

Kitchen renovations

“Renovating the kitchen is always the biggest way to add value to your home,” says Grace Fancher, real estate agent at Kansas City firm Sarah Snodgrass. “People love to cook, and everyone tends to gather in the kitchen. If you add seating, such as an island with barstools, buyers go crazy for that.”

A full remodel is a major investment, but smaller projects make a big difference if you can’t — or don’t want to — go all out. “Nicer appliances really stick out to potential buyers — even if you’re planning to take them with you,” Fancher says.

She also suggests replacing tired finishes with fresh, neutral materials. “You don’t want to be too trendy, but you want it to look up-to-date,” she says. “Everyone loves clean, white subway tiles now, but they’re really a timeless look.”

Replacing dated countertops (quartz is your best bet, according to Fancher) and flooring is also worth the time and money.

Photo from Zillow listing.

Bathroom updates

The smallest rooms in the house can have a big impact on its value, so Fancher suggests adding a second bathroom or upgrading existing ones so your home features at least two full baths.

Joe Monda, co-owner of Seattle-based general contracting firm Promondo, agrees. “People are spending more on upgrading their houses before listing them,” he says. “They really want to maximize the potential house value.”

But if you’re remodeling a bathroom just to put your house on the market, keep it simple. “Most people don’t want to pay for upgrades, so you want it to be a neutral space that doesn’t look straight out of the big DIY warehouse stores — even if it is,” says Fancher.

She adds that an easy solution is spending a little more on details, like high-quality towel bars and upgraded hardware for those big-box store vanities.

Not in a position to remodel? “Re-grouting tile, or even just using one of those grout paint pens, gives any bathroom a fresher look,” says Sharyn Young, a self-proclaimed DIY addict from Minneapolis.

Photo from Zillow listing.

Lighting upgrades

“The brighter a room feels, the bigger it looks,” says Fancher. “And when you’re selling, you want every space to look as big as possible.”

She recommends replacing flush-mount ceiling lights with recessed and/or pendant lighting — a relatively cheap upgrade that looks modern and makes a huge impact.

“LED lighting has changed everything,” says Young. “There are so many readily available, inexpensive options now that are easy to install. I added Ikea under-cabinet lighting in the kitchen of my last house, and I was amazed at how that one simple upgrade made the space feel larger and cleaner.”

Photo from Zillow listing.

Fresh paint

Like lighting, a new coat of paint can also make a space feel cleaner and brighter. Stick to neutral shades, such as light gray and beige, and if you don’t have time or budget to do the whole house, start with the living areas you see when you first walk in.

An even quicker fix is refreshing just the trim. “Beat-up, dirty trim can give buyers a subtle impression that the whole house is dingy,” Fancher says. “Repainting gives a sharper look and shows the buyer that you’ve taken care of the house.”

Photo from Zillow listing.

Landscape improvements

“A lot of people overlook how important landscaping is, especially when you’re selling in the spring or summer,” says Fancher, adding that you can increase curb appeal by just putting down new, dark-colored mulch, if you don’t want to spend a lot of money on planting.

Monda suggests paying special attention to the entry. Repair or replace any damaged stepping stones, concrete paths, and porch plants, then give the front door a fresh coat of paint and add some potted plants. “You want people to be excited to walk in the door,” he says.

Source: zillow.com ~ By: LARA HALE ~ Image: Pixabay.com

How Much Commute Is Too Much Commute?

Rising home prices send buyers further out of the city in search of an affordable home – or more home than they can swing closer to where they had rather be. It’s an age-old tale and one that forces buyers to accept a cringe-worry tradeoff for a home of their own: a longer commute.

Currently, the average commute is around 26 minutes, but anyone in Los Angeles or New York or Dallas or Chicago or any one of the dozens of cities across the country with a lengthy commute would scoff at that number.

WNYC’s cool commuter map allows you put your cursor on different cities and areas throughout the country and see its average commute time, like the 60.5-minute average in Sonoma County, CA and the 18.3-minute average for North Canaan, CT. Overflow Data’s similar interactive map uses census data of the average commute times throughout the U.S. “Zoom in on a state, or check out the range within each state,” said Lifehacker. “Commutes are worst along the East coast; L.A. traffic still isn’t as bad as New York subways. And the worst commutes of all are in Pike County, PA, a three-hour drive from New York.”

According to Census Bureau data, commutes have increased by 20 percent since they first started tracking them in 1980. The combination of continued urban sprawl and rising home prices will likely cause this number to jump even further over the next few years. The good news is that remote work and flexible schedules are also on the rise. “The number of telecommuting workers has increased 115% in a decade, according to a new report from Global Workplace Analytics and FlexJobs,” said CNN: Money. “That translates to 3.9 million workers, or almost 3% of the total U.S. workforce, working from home at least half the time in 2015, an increase from 1.8 million in 2005.” Negotiating some flexibility into your schedule or new job offer could reduce the number of days you have to drive to work and make a longer commute easier to deal with.

How much is too much?

The question of “How much commute is too much commute?” is one that each individual has to answer for themselves. Twenty minutes each way may not seem like a big deal, but what if it creeps past 30? And what if you’re considering becoming a “super commuter,” defined as someone who commutes three hours per day, like nearly four million American workers do? “That works out to more than a full month out of the year commuting,” said the Washington Post. “Imagine spending the entire month of August – 24 hours of every day – stuck in your car or riding the bus.”

Chances are you’ll go through the five stages of grief – denial, anger, bargaining, depression, and, finally, acceptance when weighing the advantages of owning a home against the disadvantages of never being there. But the acceptance here can take two roads: In one, you realize you don’t want to spend so much time in the car and ask your Realtor to start looking into areas that are closer in; the other requires you to resign yourself to this new reality of a daily date with a packed freeway, a grande mocha, and endless morning radio shtick.

The dangers of long commutes

Before you pull the trigger on a house with a 45-minute commute each way, there are a few things you’ll want to ask yourself:

How much will this actually change your life? If you’re buying a new home for your family but you never see them because you’ll be leaving for work at the crack of dawn and getting home after the kids go to bed, is it worth it? The fact that townhomes are currently the “fastest-growing segment of the single-family housing construction market,” according to the National Association of Home Builders, is important to note. “They made up about 12.4% of all new construction in the single-family home market last year, according to U.S. Census Bureau data,” proving that many homebuyers are seeking out attached residences that are often well-located for their needs and more affordable than single-family homes in the city.

How much time can you really see yourself spending behind the wheel before you lose it? Are you able to zone out and enjoy the ride, or are we talking potential road rage situation?

Have you considered the added costs? More gas, tolls, and wear and tear on your car can add to your bottom line and chip away at the savings you thought you’d enjoy with a home out in the suburbs.

What about the cost to your mental health? It’s not just about road rage. You may think you can adapt to anything, but commuting can be a serious buzzkill. “In happiness studies, commuting consistently ranks at or near the bottom of human activities,” said Smartasset. “The biggest offender is commuting alone in a car. It makes us feel more isolated and powerless, and cuts into our time for community engagement, exercise and sleep.” Nobel laureate Daniel Kahneman and economist Alan Krueger did a study with 900 Texas women and found that, “People hate their commutes more than just about any other activity in their lives,” said the Washington Post. “The morning commute came in dead-last in terms of positive emotions, behind work, child care, and home chores.” Higher rates of divorce and depression have also been linked to long commutes.

Have you thought about the effect on your body? Longer commutes have been linked to everything from high cholesterol, high blood pressure, and obesity to back and neck issues.

Source: Realtytimes.com ~ By: JAYMI NACIRI

Here are four housing predictions for 2018

Entry level home prices could increase up to 11%.

2017 is now officially over and 2018 has begun. As the year comes into full swing, many experts continue to give their predictions for the housing market during the new year.

American Enterprise Institute’s Center on Housing Markets and Finance Co-director Edward Pinto gave four points he expects to see from the housing market in 2018.

Many of his predictions, including low inventory and rising home prices, are shared by other housing experts. However, Pinto forecasted home prices will increase at a faster rate in 2018, while other experts expect they will slow down.

1. The historically tight supply of single-family homes will tighten further in 2018 after hitting a record low in November 2017: On December 21, 2017, the National Association of Realtors announced that November 2017 remaining inventory of existing homes for sale hit a record low of 3.4 months, eclipsing the prior record of 3.5 months reached in both January 2005 and January 2017. Expect new lows to be recorded for December 2017 and January 2018. January is projected to come in at around three months.  This tight supply trend has been going on for more than five years.

2. The national home price boom that began in mid-2012, will continue, and given the unprecedented low levels of inventory, will even accelerate further: Expect year-over-year increases of 6.25% to 6.75%, up from about 6% to 6.5% in 2017. The substantial reduction in the utilization of the mortgage interest deduction and commensurate reduction in subsidies, will somewhat reduce upward pressure on home prices. Without the tax act, the prediction for 2018 home price increase would have been even higher: 6.75% to 7.25%.

3. First-time buyers will face even higher home price gains for entry level homes: Expect year-over-year gains for the bottom third of homes to come in at 10.5% to 11% for 2018, December 2018 over December 2017 based on 16 tiered HPI from CoreLogic Case Shiller. At current levels of wage growth, this boom in entry level home prices is ultimately unsustainable.

4. First-time buyers will continue take on even more leverage in an effort to keep up with the out-sized home price gains on entry level homes: The AEI First-Time Buyer National Mortgage Risk Index is expected to rise to 17.1% for September 2018 agency origination’s, up from to 16.4% for September 2017. Risk scores above 12% have a high risk of default under severe economic stress.

Source: housingwire.com ~ By Kelsey Ramirez

Comprehensive NAR Report on the Tax Cut Bill and Homeowners

Source: NAR

The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well to ensure as many real estate professionals as possible would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members, not only in the last three months, but over several years.

Introduction

While NAR remains concerned that the overall structure of the final bill diminishes the tax benefits of homeownership and will cause adverse impacts in some markets, the advocacy of NAR members, as well as consumers, helped NAR to gain some important improvements throughout the legislative process. The final legislation will benefit many homeowners, homebuyers, real estate investors, and NAR members as a result.

The final bill includes some big successes. NAR efforts helped save the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will see a significant deduction on that business income.

As a result of the changes made throughout the legislative process, NAR is now projecting slower growth in home prices of 1-3% in 2018 as low inventories continue to spur price gains. However, some local markets, particularly in high cost, higher tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes.

The following is a summary of provisions of interest to NAR and its members. NAR will be providing ongoing updates and guidance to members in the coming weeks, as well as working with Congress and the Administration to address additional concerns through future legislation and rulemaking. Lawmakers have already signaled a desire to fine tune elements of The Tax Cuts and Jobs Act as well as address additional tax provisions not included in this legislation in 2018, and REALTORS® will need to continue to be engaged in the process.

The examples provided are for illustrative purposes and based on a preliminary reading of the final legislation as of December 20, 2017. Individuals should consult a tax professional about their own personal situation.

All individual provisions are generally effective after December 31, 2017 for the 2018 tax filing year and expire on December 31, 2025 unless otherwise noted. The provisions do not affect tax filings for 2017 unless noted.

Major Provisions Affecting Current and Prospective Homeowners

Tax Rate Reductions

  • The new law provides generally lower tax rates for all individual tax filers. While this does not mean that every American will pay lower taxes under these changes, many will. The total size of the tax cut from the rate reductions equals more than $1.2 trillion over ten years.
  • The tax rate schedule retains seven brackets with slightly lower marginal rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
  • The final bill retains the current-law maximum rates on net capital gains (generally, 15% maximum rate but 20% for those in the highest tax bracket; 25% rate on “recapture” of depreciation from real property).

Tax Brackets for Ordinary Income Under Current Law and the Tax Cuts and Jobs Act (2018 Tax Year) Single Filer

Current Law Tax Cuts and Jobs Act
10% $0-$9,525 10% $0 – $9,525
15% $9,525 – $38,700 12% $9,525 – $38,700
25% $38,700 – $93,700 22% $38,700 – $82,500
28% $93,700 – $195,450 24% $82,500 – $157,500
33% $195,450 – $424,950 32% $157,500 – $200,000
35% $424,950 – $426,700 35% $200,000 – $500,000
39.6% $426,700+ 37% $500,000

Tax Brackets for Ordinary Income Under Current Law and the Tax Cuts and Jobs Act (2018 Tax Year) Married Filing Jointly

Current Law Tax Cuts and Jobs Act
10% $0 – $19,050 10% $0 – $19,050
15% $19,050 – $77,400 12% $19,050 – $77,400
25% $77,400 – $156,150 22% $77,400 – $165,000
28% $156,150 – $237,950 24% $165,000 – $315,000
33% $237,950 – $424,950 32% $315,000 – $400,000
35% $424,950 – $480,050 35% $400,000 – $600,000
39.6% $480,050+ 37% $600,000+

Exclusion of Gain on Sale of a Principal Residence

  • The final bill retains current law. A significant victory in the final bill that NAR achieved.
  • The Senate-passed bill would have changed the amount of time a homeowner must live in their home to qualify for the capital gains exclusion from 2 out of the past 5 years to 5 out of the past 8 years. The House bill would have made this same change as well as phased out the exclusion for taxpayers with incomes above $250,000 single/$500,000 married.

Mortgage Interest Deduction

  • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
  • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
  • The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
  • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
  • The House-passed bill would have capped the mortgage interest limit at $500,000 and eliminated the deduction for second homes.

Deduction for State and Local Taxes

  • The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
  • The final bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.
  • When House and Senate bills were first introduced, the deduction for state and local taxes would have been completely eliminated. The House and Senate passed bills would have allowed property taxes to be deducted up to $10,000. The final bill, while less beneficial than current law, represents a significant improvement over the original proposals.

Standard Deduction

  • The final bill provides a standard deduction of $12,000 for single individuals and $24,000 for joint returns. The new standard deduction is indexed for inflation.
  • By doubling the standard deduction, Congress has greatly reduced the value of the mortgage interest and property tax deductions as tax incentives for homeownership.Congressional estimates indicate that only 5-8% of filers will now be eligible to claim these deductions by itemizing, meaning there will be no tax differential between renting and owning for more than 90% of taxpayers.

Repeal of Personal Exemptions

  • Under the prior law, tax filers could deduct $4,150 in 2018 for the filer and his or her spouse, if any, and for each dependent. These exemptions have been repealed in the new law.
  • This change alone greatly mitigates (and in some cases entirely eliminates) the positive aspects of the higher standard deduction.

To illustrate how the above-listed changes can affect the tax incentives of owning a home for a first-time buyer and a middle-income family of five, please see these examples:

Mortgage Credit Certificates (MCCs)

  • The final bill retains current law.
  • The House-passed legislation would have repealed MCCs.

Deduction for Medical Expenses

  • The final bill retains the deduction for medical expenses (including decreasing the 10% floor to 7.5% floor for 2018).
  • The House bill would have eliminated the deduction for medical expenses.

Child Credit

  • The final bill increases the child tax credit to $2,000 from $1,000 and keeps the age limit at 16 and younger. The income phase-out to claim the child credit was increased significantly from ($55,000 single/$110,000 married) under current law to $500,000 for all filers in the final bill.

Student Loan Interest Deduction

  • The final bill retains current law, allowing deductibility of student loan debt up to $2,500, subject to income phase-outs.
  • The House bill would have eliminated the deduction for interest on student loans.

Deduction for Casualty Losses

  • The final bill provides a deduction only if a loss is attributable to a presidentially-declared disaster.
  • The House bill would have eliminated the deduction for casualty losses with limited exceptions.

Moving Expenses

  • The final bill repeals moving expense deduction and exclusion, except for members of the Armed Forces.
  • The House-introduced bill would have eliminated the moving expense deduction for all filers, including military.
  • (Taxpayers) or $315,000 (for couples filing jointly), then the personal service restriction will not apply.
  • Above this level of income, the benefit of the 20% deduction is phased out over an income range of $50,000 for singles and an income range of $100,000 for couples[2].
  • For those with non-personal service income above these thresholds, the bill provides a second exception that may still allow a full or limited 20% deduction. This second exception (the wage and capital limit exception)places a limit on the deduction of the greater of:
    • 50% of the W-2 wages paid by the business, or
    • The total of 25% of the W-2 wages paid by the business plus 2.5% of the cost basis of the tangible depreciable property of the business at the end of the year.

Examples of How The New Law Will Affect the Tax Incentives of Owning a Home

Example 1 – First-Time Homebuyer. To illustrate how the changes to the standard deduction, repeal of personal exemptions, mortgage interest and state and local taxes might affect a first-time homebuyer, consider the example of Barbara Buyer. Barbara, an accountant making $58,000 per year, is single and currently rents an apartment. She also pays state income tax of $2,900 and makes charitable contributions of $2,088, but the total of these is lower than the standard deduction, so she claims the standard.

Barbara’s tax liability for 2018 under the prior law is as follows:

Salary income $58,000
Standard deduction ($ 6,500)
Personal exemption ($ 4,150)
Taxable income $47,350
Tax $ 7,491

Under the new law, Barbara would get a tax cut, computed as follows:

Salary income $58,000
Standard deduction ($12,000)
Personal exemption ($ – 0 -)
Taxable income $46,000
Tax $ 6,060

Tax Difference Under New Law. Even though Barbara would not get the benefit of the personal exemption under the new law, her higher standard deduction would more than make up for the loss. In addition, the lower tax rates of the new law would help deliver the total tax cut of $1,431 ($7,491 – $6,060) as compared with the prior law.

However, let’s take a look at what happens to Barbara if she were to purchase the condo that she likes costing $205,000. She takes out a 30-year fixed rate mortgage at 4% interest, putting down 3.5%. Assuming she buys early in 2018, her first-year mortgage interest would total $7,856 and she would pay real property taxes of $2,050.

As a first-time homeowner, her tax liability under the prior law would be computed as follows:

Salary income $58,000
Mortgage interest $ 7,856
Real property tax (1%) $ 2,050
State income tax (5%) $ 2,900
Charitable contributions (3.6% of income) $ 2,088
Total itemized deductions ($14,894)
Personal exemption ($ 4,150)
Taxable income $38,956
Tax $ 5,393

Note. Under the prior law, Barbara would lower her tax liability for 2018 by $2,098 ($7,491 – $5,393) by purchasing the condo. This is the financial effect of the prior law’s tax benefits of buying a home. This amount effectively lowers her monthly mortgage payment by $175 per month.

Now, let’s take a look at what her tax situation would be under the new law as a first-time homebuyer:

Salary income $58,000
Mortgage interest $ 7,856
Real property tax (1%) $ 2,050
State income tax (5%) $ 2,900
Charitable contributions (3.6% of income) $ 2,088
Total itemized deductions ($14,894)
Personal exemption ($ – 0 -)
Taxable income $43,106
Tax $ 5,423

Tax Difference Under New Law. Even though Barbara would still be able to claim all of her itemized deductions under the new law, she would lose the benefit of her personal exemption. This would mean that her taxes would actually go up under the new law by $30 ($5,393 – $5,423). But far worse, look at the tax differential between renting and owning a home. This difference, which was $2,098 under the prior law, has now shrunk to just $637 ($6,060 – $5,423), or $53 per month. In other words, under the prior law, Barbara was given a strong incentive to move into the ranks of those who own their home. The new law still offers her an incentive, but it is a shadow of what it was, and is unlikely to be very compelling.

Example 2 – Middle-Income Family of Five:

To illustrate how the changes to the standard deduction, repeal of personal exemptions, mortgage interest and state and local tax deductions, and increase in the child credit might affect middle-income family of five, consider the example of Steve and Melinda. Steve is a store manager making $55,000 per year, while Melinda is a school principal, earning $65,000. They have three children, ages 17, 14, and 9. Steve and Melinda recently relocated from another city, and while they are getting to know their new community, they are leasing a home. But they would like to purchase as soon as they identify which area is the best fit for their family. As renters, they pay state income tax on their salaries, totaling $6,000, and also make some charitable contributions equaling $3,120. Since these itemized deductions do not reach the level of the standard deduction, they do not itemize, but they expect to do so when they purchase their home.

Here is a look at Steve and Melinda’s tax liability for 2018, computed under the prior law:

Salary income $120,000
Standard deduction ($ 13,000)
Personal exemptions (5 x $4,150) ($ 20,750)
Taxable income $ 86,250
Tax before credits $ 12,870
Child tax credits (2 x $1,000 less $500 phase-out) ($  1,500)
Net Tax $ 11,370

Under the new law, Steve and Melinda, as renters, would get a tax cut, computed as follows:

Salary income $120,000
Standard deduction ($ 24,000)
Personal exemption ($ – 0 -)
Taxable income $ 96,000
Tax before credits $ 12,999
Child tax credits (2 x $2,000) ($   4,000)
Net Tax $ 8,999

Tax Difference Under New Law As Renters. Steve and Melinda lose the big benefit of the personal and dependency exemptions for the two adults and three children. And the increase in the standard deduction is not enough to make up for this loss. However, the big increase in the child credit for the two younger children and the lower tax rate are enough to deliver them a tax cut of $2,371 ($11,370 – $8,999) as compared with the prior law.

Let’s now consider how Steve and Melinda’s tax situation changes if they were homeowners, rather than renters. Assume they find an ideal home in a nice neighborhood that costs $425,000, and after offering a 10% down payment, Steve and Melinda take out a 30-year fixed mortgage at a 4% rate. Let’s say that their real property tax for the year totals $4,250, which is just 1% of the home’s value.

Here is how their 2018 tax liability would be computed as homeowners, under the prior law:

Salary income $120,000
Mortgage interest $ 15,189
Real property tax (1%) $  4,250
State income tax (5%) $  6,000
Charitable contributions (2.6% of income) $  3,120
Total itemized deductions ($ 28,559)
Personal exemptions (5 x $4,150) ($ 20,750)
Taxable income $ 70,691
Tax before credits $  9,651
Child tax credits (2 x $1,000 less $500 phase-out) ($  1,500)
Net Tax $  8,151

Note. Under the prior law, Steve and Melinda would lower their tax liability for 2018 by $3,219 ($11,370 – $8,151) by purchasing their home instead of renting. This is the financial effect of the prior law’s tax benefits of buying a home. This amount effectively lowers their monthly mortgage payment by over $268 per month.

Now, let’s take a look at what her tax situation would be under the new law as a home-owning family instead of renters:

Salary income $120,000
Mortgage interest $ 15,189
Real property tax (1%) $   4,250
State income tax (5%) (limited by $10,000 cap) $   5,750
Charitable contributions (2.6% of income) $   3,120
Total itemized deductions ($ 28,309)
Personal exemptions ($ – 0 -)
Taxable income $ 91,691
Tax before credits $ 12,051
Child tax credits (2 x $2,000) ($  4,000)
Net Tax $  8,051

Tax Difference Under New Law As Homeowners. For Steve and Melinda, most of their itemized deductions from the prior law are preserved by the new law. They are limited slightly ($250) by the $10,000 limit on the deduction of state and local taxes. However, they lose big by the repeal of the personal and dependency exemptions, which equal $20,750 for this family. Even so, Steve and Melinda receive a small tax cut of $100 ($8,151 – $8,050) under the new law, thanks to the much larger child credit and lower tax rate. But as renters, they received a tax cut of almost $2,400. Thus, buying a home becomes a net tax change of almost $2,300.

What happened? What happened is that the new law is taking away most of the tax benefits of owning a home. Under the prior law, this benefit was $3,219 for Steve and Melinda. But under the new law, they enjoy only a benefit of $948 ($8,999 – $8,051). This gives them a benefit of just $79 per month, which is obviously a far weaker incentive to own.

[1] Meaning one does not have to itemize deductions in order to claim it.

[2] This means that for single individuals, the benefit of the deduction would be fully phased out for taxable income levels above $207,500 and for married couples filing joint returns, the benefit of the deduction would be fully phased out for taxable income levels above $415,000.

[3] With the exception of some restrictions on the deductibility of entertainment expenses, the normal business expenses of real estate professionals were not changed by the bill.

[4] The new law provides single individuals with a $12,000 standard deduction.

[5] The prior law provided a tax credit of $1,000 for each child.

[6] The new law increases the standard deduction for married taxpayers filing a joint return to $24,000. Since this is higher than Andy and Emma’s itemized deductions, they will claim the higher standard deduction.

[7] The new law doubles the child tax credit to $2,000 per child.

[8] At this income level, Bobbie and Emil’s personal exemptions would be phased out.

[9] At this income level, Bobbie and Emil’s itemized deductions are reduced by 3% of the excess of their AGI ($445,000) over the 2018 phaseout threshold of $320,000, or by $3,750. $28,000 – $3,750 = $24,250.

[10] The new law repeals the itemized deduction phaseout (so-called “Pease” provision).

[11] These are made up of mortgage interest, state and local taxes, and charitable contributions.

[12] At this income level, David and Valerie’s personal exemptions would be phased out.

[13] At this income level, David and Valerie’s itemized deductions are reduced by 3% of the excess of their AGI ($450,000) over the 2018 phaseout threshold of $320,000, or by $3,900. $35,000 – $3,900 = $31,100.

[14] The new law repeals the itemized deduction phaseout (so-called “Pease” provision).

For more information AND the entire article:  nar.realtor

Homeowners: Here’s what’s in the tax bill for you

That’s down from the current $1 million threshold, but higher than the $500,000 limit the House proposed in its tax overhaul in November.

Current homeowners would not be affected by the lower cap.

The deduction has helped make home buying more affordable for some homeowners. While the median home price nationwide is currently $254,000, buyers in some cities face much higher price tags.

The lower limit could make it harder for house hunters in expensive cities. For instance, in New York City, nearly 64% of mortgages on homes sold this year were over $750,000, according to data from ATTOM Data Solutions. And in San Francisco, 58% of home loans exceeded the new cap.

Some experts worry the increased threshold could keep people from selling their homes, which could squeeze the already short supply of housing.

“The mortgage interest deduction change will put downward pressure on prices as well as sales,” said Joe Kirchner, senior economist at Realtor.com.

Current homeowners might hesitate to trade up to a more expensive house if the price tag is too high to take full advantage of the deduction.

The new cap would also apply to mortgages on second homes. The original House bill wanted to eliminate the deduction on second homes.

Less reason to itemize

Homeowners must itemize their taxes if they want to claim the mortgage interest deduction. But since the final bill calls for nearly doubling the standard deduction, far fewer Americans are expected to itemize come April.

“In my generation, before we had a home we took the standard deduction, but as soon as we bought a home we started itemizing because that mortgage interest deduction was so significant,” said Kirchner. “Now with the higher standard deduction very few people will itemize. It will virtually eliminate the deduction on a practical level.”

The final tax bill also eliminates the deduction for interest on home equity loans. Currently that’s allowed on loans up to $100,000.

Limit on property tax deduction

Taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes.

Instead, the legislation allows individuals to deduct up to $10,000 in state and local income and property taxes or state and local property and sales taxes.

That means homeowners living in high-tax states like New York, California and New Jersey could see an increase in what they owe Uncle Sam in April.

Nationwide, 4.1 million Americans pay more than $10,000 in property taxes, according to data from ATTOM Data Solutions.

Tax break stays for home sellers

Both the House and Senate bills originally wanted to scale back a tax break for homeowners when they sell their home for a gain.

Taxpayers will still be able to exclude up to $500,000 (or $250,000 for single filers) from capital gains when they sell their primary home, as long as they’ve lived there for two of the past five years.

Earlier tax reform proposals would have increased the live-in requirement to five out of the last eight years.

Source: money.cnn.com ~By Kathryn Vasel, CNN’s Lauren Fox and Phil Mattingly contributed.