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13,808 Houses Sold Yesterday! Did Yours?

by Michel Delos Santos

13,808 Houses Sold Yesterday! Did Yours?

Posted: 29 Jan 2015 04:00 AM PST

 There are some homeowners that have been waiting for months to get a price they hoped for

when they originally listed their house for sale. The only thing they might want to consider is...

If it hasn't sold yet, maybe it's not priced properly.

After all 13,808 houses sold yesterday, 13,808 will sell today and 13,808 will sell tomorrow.

13,808!

That is the average number of homes that sell each and every day in this country according to

the National Association of Realtors’ (NAR) latestExisting Home Sales Report. NAR reported that

sales are at an annual rate of 5.04 million. Divide that number by 365 (days in a year) and we

can see that, on average, over 13,800 homes sell every day. The report from NAR also revealed

that there is currently only a 4.4 months supply of inventory available for sale,

(6 months inventory is considered ‘historically normal’). That means less competition for buyers who are out in the market now, but more houses will hit the market soon with spring right around the corner.

Bottom Line

We realize that you want to get the fair market value for your home. However, if it hasn't

sold in today's active real estate market, perhaps you should reconsider your current asking price.

The Two Things You Don't Need to Hear from Your Listing Agent

by Michel Delos Santos
   

 

Posted: 28 Jan 2015 04:00 AM PST

You’ve decided to sell your house. You begin to interview potential real estate agents

to help you through the process. You need someone you trust enough to:

  1. Set the market value on possibly the largest asset your family owns (your home)
  2. Set the time schedule for the successful liquidation of that asset
  3. Set the fee for the services required to liquidate that asset

An agent must be concerned first and foremost about you and your family

in order to garner that degree of trust. Make sure this is the case. 

Be careful if the agent you are interviewing begins the interview by:
  • Bragging about their success
  • Bragging about their company’s success

An agent’s success and the success of their company can be important considerations

when deciding on the right real estate professional to represent you in the sale of the house.

However, you first need to know they care about what you need and what you expect

from the sale. If the agent is not interested in first establishing your needs, how successful

they may seem is much less important. Look for someone with the ‘heart of a teacher’

who comes in prepared well enough to explain the current real estate market and

patient enough to take the time to show how it may impact the sale of your home. 

 Not someone only interested in trying to sell you on how great they are.

You have many agents from which to choose. Pick one who truly cares.

Why Have Interest Rates Dropped?

by Michel Delos Santos
 

Why Have Interest Rates Dropped?

Posted: 27 Jan 2015 04:00 AM PST

The headlines agree mortgage interest rates have dropped substantially below initial projections.

Many who are considering purchasing a home, or moving up to their dream home, might think

that they should wait to buy, because rates may continue to fall.

A recent article on the Economists’ Outlook blog by the National Association of REALTORS® (NAR)

provides insight into one major factor in the decline in interest rates, the crude oil price.

“As of January 5, 2015, the U.S. Energy Information Administration (EIA) reported that
the price of regular gasoline was $2.20/gallon, the lowest since gas prices peaked to about
$ 4/gallon in May 2011.”

You may have noticed that filling your gas tank has become substantially less expensive in recent

months. A welcome change from the close to $5 a gallon that many Americans were paying this

time last year. The average US household is projected to save around $550 in 2015.

So what does that have to do with Interest Rates?

NAR explains the correlation like this:
“Lower oil prices mean lower inflation rate, which pushes down mortgage rates.”

Based on Freddie Mac’s weekly mortgage survey as of January 22, 2015, the 30-year

fixed rate averaged 3.63% and the 15-year fixed rate averaged 2.93%.

“The decline in oil prices is generally positive to households by way
of the gas savings and lower mortgage payments. That savings
will boost consumer spending in other areas. But there may be some
layoffs in oil-producing states.”

How long will rates stay low?

No one really knows how long oil prices will continue to support low mortgage

rates. In a New York Times article, the author points to the fact that “adding

hundreds of billions of dollars to consumer spending” could start to have a 

 “counter effect” on rates as the economy continues to strengthen.

“If firms start hiring again, and wages increase — that’s when the level
of all interest rates in the U.S. would increase.” 

Don’t wait too long

The low interest rates we are currently experiencing are not going to stay around

forever. The current projections from Freddie Mac, Fannie Mae, NAR and the Mortgage

Bankers Association all agree that interest rates will increase to between 4.3-5.4% by the end of 2015.

Bottom Line

NAR reports: “At the median home price of $205,300, a 0.75 percentage point

drop in mortgage rates will yield savings of about $1,000 annually.”If you are in a position to buy

a home make sure that you meet with a local real estate professional with their finger on the pulse

of what’s going on in the market. Don’t let a delay in purchasing impact your family’s financial future.

Converting a Home to a Rental

by Michel Delos Santos

 

Converting a Home to a Rental

 

 

A simple decision to rent your current home instead of selling it when moving to a new home could have far reaching consequences.

 

If you have a considerable gain, in a principal residence and you rent it for more than three years, it can lose the principal residence status and the profit must be recognized.

Section 121 provides the exclusion of capital gain on a principal residence if you own and use it as such for two out of the last five years.  This would allow a temporary rental for up to three years before the exclusion is lost.

Let’s assume there is a $100,000 gain in your principal residence.  If it qualifies for the exclusion, no tax would be owed. If the property had been converted to a rental so that it didn’t qualify any longer, the gain would be taxed at the current 20% long-term capital gains rate and it may incur a 3.8% surcharge for higher tax brackets.  At least $20,000 in taxes could be avoided by selling it with the principal residence exclusion.

Depreciation, a tax benefit of income property, is determined by the improvement value at the time of purchase or at the conversion to a rental whichever is less.  If the seller sold the home and took the exclusion and then, bought an identical home for the same price, he would be able to have 60% more cost recovery and avoid long term capital gains tax.

 

It is always recommended that homeowners considering such a conversion get advice from their tax professional as to how this will specifically affect their individual situation.

Equity Report

by Michel Delos Santos

Attaining the American Dream: 5 Financial Reasons to Buy

by Michel Delos Santos

 

 


Attaining the American Dream: 5 Financial Reasons to Buy

 

                         

Posted: 21 Jan 2015 04:00 AM PST

 Heading into 2015 many people have their sights set on buying a home. The personal reasons differ for each buyer, with many basic similarities. Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper - The Dream Lives On: the Future of Homeownership in America. Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.

Get Ready to Garage Sale

by Michel Delos Santos

Get Ready to Garage Sale

 

 

A well-planned garage or yard sale can make room in your home, get rid of unused items and make some money but it needs some planning to be successful.

 

  • Start early to research and plan
  • Promotion is key
  • Display items attractively
  • Price items right
  • Organize checkout

Saturdays are generally the best day but there may be some exceptions.  Experienced garage-salers believe that a well-planned one-day event will do as well as a multi-day event.  Serious purchasers will look for the “new” sale and most people don’t come back multiple days.

Advertise in local newspapers and free online classified sites like craigslist.  If several families are going together for the sale, mention that in the ad; it will be a big draw.  Mention your bigger-ticket items like furniture, equipment and baby items.

Garage sale signs can be purchased or made at Staples, Fedex Office or Kwik Signs.  Signs need large lettering so they’re easy to read while people are driving. Most important info: Garage or Yard Sale, address, date and time.  Directional signs are also important.  Balloons and streamers to attract attention to the signs are very helpful.

Consider using the service Square so that you can take credit cards.  The cost is 2.75% per swipe and can be done on your smartphone or iPad.  You’ll need to sign up at least two weeks in advance to receive your reader.

Unless you’re having an estate sale, keep your home locked.  You don’t want people wandering through your home while you’re outside.  If you start to accumulate a lot of money, take some of it inside.  Don’t discuss how much money you’ve made during the sale or how successful it has been.

People will want to bargain; it’s the nature of the game.  Consider this strategy: less negotiations early in the sale and possibly, more toward the end of the sale.

ICE Can Save Lives

by Michel Delos Santos

ICE Can Save Lives

 

 

Everyone knows that ice can make a drink cool or reduce swelling, but if you put it on your cell phone, it might just save your life.

 

The concept is simple.  Make a contact record in your address book with the name “ICE”, which stands for In Case of Emergency.  In the note section of the record, you would list your name, blood type and medical conditions along with prescriptions and physicians.  You’d also list the people and their phone numbers that can be contacted in case of an emergency.

Several years ago, a British first responder came up with the idea when his emergency unit responded to a call where the victim was unable to communicate due to illness or trauma.  The victim’s wallet didn’t indicate specific persons to be notified in an emergency.  The fireman went through his cell phone to try to identify a relative and wasn’t successful.

That’s when he came up with the idea of a universal entry into the address book for ICE where the necessary parties and special information could be kept.  The story received a considerable amount of publicity and spread across the pond to the United States and into many other countries.

While it isn’t recognized everywhere, it is becoming increasingly more popular.  Even if emergency technicians didn’t find it, the slight possibility that they would find it and it would make a difference would justify the few minutes it will take to create it.  Click here to download a card to carry in your wallet or purse.

Talking Real Estate

by Michel Delos Santos

Downsizing Might Make Sense

by Michel Delos Santos

Downsizing Might Make Sense

 

 

With roughly 12.5% of the population over 65 years of age, it is understandable that some of them are thinking of downsizing because they may not need the amount of space they did in the past.  There is something to be said for the freedom acquired by divesting yourself of “things” that have been accumulated over the years but are no longer needed.

 

Moving to a less expensive home, could provide cash that could be invested for additional income or savings for unanticipated expenditures.

Savings can also be recognized in the lower utility costs associated with a smaller home, not to mention, the lower premiums for insurance and property taxes.

Going from the home where you reared your family to one of the new tiny homes may be a bit extreme but downsizing to 2/3 or 50% of your current home may certainly be reasonable.  In some situations, your interests may have changed so that a different area or city might be a possibility.

At one time, IRS had a once-in-a-lifetime exclusion of $125,000 of gain from a principal residence but it was changed so that homeowner’s are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven’t taken the exclusion in the previous 24 months.

Homeowners should consult their tax professionals to see how this may apply to their individual situation.

Displaying blog entries 1-10 of 14

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