Vancouver Wa Real Estate Blog

If the latest technology or entertainment options are important in your new home, add the following questions to your buyer’s checklist.

1. Are there enough jacks in every room for cable TV and high-speed Internet hookups?

2. Are there ample telephone extensions or jacks?

3. Is the home pre-wired for home theater or multiroom audio and video? Does it have in-wall speakers?

4. Does the home have a local area network (LAN) for linking computers?

5. Does the home already have wiring for DSL or another high-speed Internet connection?

6. Does the home have multizoning heating and cooling controls with programmable thermostats?

7. Does the home have multiroom lighting controls, window-covering controls, or other home automation features?

8. Is the home wired with multipurpose in-wall wiring that allows for reconfigurations to update services as technology changes?

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To attract buyers, sellers must up the ante to convince them that their property offers what many want most — top value for dollar expended. Here are eight fast fixes:

1. Buff up curb appeal. You’ve heard it before, but it’s critical to get buyers to want to look on the inside. Be objective. View listings from the street. Check the condition of the landscaping, paint, roof, shutters, front door, knocker, windows, house number, and even how window treatments look from the outside. Add something special — such as big flower pots or an antique bench — to help viewers remember house A from B.

2. Enrich with color. Paint’s cheap, but forget the adage that it must be white or neutral. Just don’t let sellers get too avant-garde with jarring pinks, oranges, and purples. Recommend soft colors that say “welcome,” lead the eye from room to room, and flatter skin tones. Think soft yellows and pale greens. Tint ceilings a lighter shade.

3. Upgrade the kitchen and bathroom. These make-or-break rooms can spur a sale. But besides making each squeaky clean and clutter-free, update the pulls, sinks, and faucets. In a kitchen, add one cool appliance, such as an espresso maker. In the bathroom, hang a flat-screen TV to mimic a hotel. Room service, anyone?

4. Add old-world patina. Make Andrea Palladio proud. Install crown molding at least six to nine inches in depth, proportional to the room’s size, and architecturally compatible. For ceilings nine feet high or higher, add dentil detailing, small tooth-shaped blocks used as a repeating ornament. It’s all in the details, after all.

5. Screen hardwood floors. Buyers favor wood over carpet, but refinishing is costly and time-consuming. Screening cuts dust, time, and expense. What it entails: a light sanding, not a full stripping of color or polyurethane, then a coat of finish.

6. Clean out, organize closets. Get sorting — organize your piles into “don’t need,” “haven’t worn,” and “keep.” Closets must be only half-full so buyers can visualize fitting their stuff in.

7. Update window treatments. Buyers want light and views, not dated, fancy-schmancy drapes that darken. To diffuse light and add privacy, consider energy-efficient shades and blinds.

8. Hire a home inspector. Do a preemptive strike, since busy home owners seek maintenance-free living. Fix problems before you list the home and then display receipts and wait for buyers to offer kudos to sellers for being so responsible.

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The way things used to work aren’t how things work nowadays. Congress scrapped the old rule that required you to reinvest the proceeds of the sale of your home in a new, more-expensive property in order to avoid taxes. The new rules don’t turn on whether you reinvest or not.

 Instead, the new rules require that you own and live in your home for a period of two years within the five years preceding its sale. If you meet the ownership-and-use test, you don’t have to buy a new home and you can exclude up to $250,000 in gain, or $500,000 in the case of a married couple that files a joint return.

In your case, unless the sale is motivated by special reasons, you would not be able to exclude from income the $40,000 in gain ($373,000 minus the $22,000 commission minus $16,000 in improvements minus $295,000 cost). Since you held the property for more than one year, you would pay long term capital gains tax of 15 percent or $6,000 in tax.

If you sell because of special reasons then you would get a partial exclusion.

Special reasons would be:

1. Job-related move
2. Health-related move, or
3. Unforeseen circumstances

The partial exclusion is the $250,000 (or $500,000) maximum exclusion multiplied by a fraction, the numerator of which is the number of months you met the ownership-and-use test and the denominator of which is 24 (the number of months in two years). In your case, if the sale was motivated by these special reasons, the available partial exclusion would be sufficient to eliminate your gain.

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The first step in getting yourself in financial shape to buy a home is to know exactly how much money comes in and how much goes out.

Use this worksheet to list your income and expenses below.

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• Make sure your home is priced right. Many real estate professionals think price, price, price is just as important as location, location, location.
• Take advantage of the lack of competition and work with your real estate agent to make sure your home makes a great first impression.
• Go the extra mile to make sure exterior landscapes are well maintained. Gardens tend to look a bit bare in the cooler months. Brighten up bare garden spots with seasonal plants. Rake leaves, prune back spent plants and shrubs and keep sidewalks and driveways clear of snow or ice.
• Check your heating system as part of your pre-sale inspection. Does it make strange noises, emit odd smells or simply not work very well? If you can’t afford to make repairs in advance, get written bids and share them with potential buyers. It takes away a lot of ‘unknowns’ about potential expenses.
• Repair or reinstall storm windows, if you have them. A warm house is a definite asset during the fall and winter.
• Don’t skimp on holiday decorations. Autumn wreaths and holiday lights make homes look great at this time of year.
• Bring in the light. Wash all windows, open drapes or blinds, and turn on lamps. Buyers are attracted to light-filled homes during the darker months.
• Keep small valuables out of sight, but don’t fret too much about holiday packages disappearing from under a Christmas tree. Agents keep a close eye on prospective buyers who tour homes. Their reputation hinges on keeping your home safe.

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Upgrades can usually be expressed at full value in newer homes since they required investing additional money onto the cost of building the home. On the other hand, the amount invested in upgrading or remodeling an older home is rarely reflected in full in the final appraisal. The reason is the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace.

These comparisons must be drawn from current market activity within the last six months. Some lenders may want to look at both closed and pending sales to see if there is any room for negotiation. This is a safeguard to prevent appraisers from over-valuing the home in question. It is further stated in the guidelines that appraisers can only place a value on homes that have closed escrow. However, when property values rapidly increase within a marketplace, appraisers are generally permitted to make concessions and put more weight on the evidence provided by comparisons to pending sales and listings. This allows for a “real time” appraisal.

Although there is no formal standard to speak of, most lenders give the appraiser a 5% margin of error. If the file is reviewed and the appraiser is off by 8%, there is a good chance the value will be cut by the full 8%. It is in the best interest of both the appraiser and the homeowner not to push the value up higher than the market will support, otherwise the property evaluation may be exposed to a strict appraisal review.

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Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

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1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.

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6 Tips for Home Owners Who Turn Into Landlords

Home owners who decide to rent out their properties have to stop thinking of themselves as home owners and instead consider themselves as running a small business, experts say.

Thinking like a businessperson means focusing on the monthly cost of maintenance, mortgage and taxes, as well as being aware of landlord-tenant regulations and avoiding liabilities.

Here are key issues to consider:

Set a fair rent. Setting the right price will make it more likely that a landlord will be able to keep the place rented.

Understand landlord-tenant rules. Running afoul of landlord-tenant regulations and rules regarding security deposits can be costly.

Screen applicants. Eliminating potential tenants who can’t pay or who won’t take care of the property is very important.

Lay out the rules in a lease. Widely available sample leases can help. If you have questions, ask an attorney.

Consider a property manager. Despite the expense, turning the job over to experts can help a landlord come out ahead.

Talk to the condo association. If the property is a condominium, be prepared to deal with a host of regulations.

via REALTOR® Magazine-Daily News-6 Tips for Home Owners Who Turn Into Landlords.

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Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. These factors will affect your score.

1. Your payment history. Whether you paid credit card obligations on time.

2. How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.

3. The length of your credit history. In general, the longer the better.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.

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