7 Reasons to Stop Renting

Owning a home is the American dream for many, giving people the satisfaction and pride of having a place to call their own. But that’s not the only reason to consider giving up your rented space. In addition to gaining more living space, homeowners enjoy the benefits of independence and a sense of achievement.

No question about it, homeownership is a big investment, but in the long run, it’s an investment that pays for itself many times over. Here’s how:

1. Homeownership often costs less per month. In some places, rent is still affordable, but in many places, it’s higher than a comparable mortgage, especially when you consider that mortgage interest and property taxes are tax deductible. There’s also less cost variability over time, as long as you take out a fixed-rate mortgage.

2. Homeownership offers more value for your money. While a rental property is an expense, a home you own is an investment. Homeownership allows you to build up equity over time, so even though up-front costs may seem higher, buying a home is a better value in the long run.

3. Homeownership adds stability to your living situation. As a renter, you’re subject not only to rising rents, but also to building sales and changes in renters’ rights laws. When you own, your home belongs to you until you decide you’re ready to move.

4. Homeownership allows you to benefit from mortgage interest. When you own your home, you can deduct mortgage interest from your income tax. That benefit goes to your landlord if you rent.

5. Homeownership allows you to deduct real estate taxes. Just like mortgage interest, real estate taxes are deductible if you own your home, while that benefit goes to your landlord if you rent. Local tax benefits are also available in many areas.

6. Homeownership gives you a better credit history. A major indicator of financial responsibility and stability, homeownership gives you the chance to build a strong credit history. Depending on your rental situation, your landlord may not report your on-time rent payments at all, meaning it won’t help you build good credit.

7. Homeownership helps you build a retirement nest egg. If you’re married and filing jointly, you can enjoy tax-free profits up to $500,000 from the sale of a primary residence that you have occupied for two of the last five years. If you’re single or married and filing separately, you can enjoy tax-free profits up to $250,000. When you’re ready to give up renting, a Certified Residential Specialist can help you achieve your dream of homeownership. With a mix of real world experience and advanced training, a CRS has the tools necessary to help you find the right home.

5 Mistakes to Avoid When Selling Your House

The home-selling process is a complex one, and can be full of opportunities for you to come out on top—or for buyers to score the upper-hand. While you can’t predict everything that could botch a sale, there are a few common mistakes you need to avoid.

Mistake #1: Overlooking repairs

Making repairs before selling is a must, or you are guaranteed to lose money. “Things that are safety issues or big-ticket items are always a focus,” says Amy Broghamer, a Certified Residential Specialist and owner of the Amy B. Sells Team with Keller Williams in Cincinnati, Ohio. These include electrical issues, water damage, rotten or chipped flooring, or a leaky roof. Broghamer recommends getting a pre-inspection to uncover necessary repairs that might spook buyers and cause them to lower their offer or back out of the deal.

Mistake #2: Overpricing your home

Buyers are going to compare a sale price to other homes in the area, so your home should be priced competitively. CRS REALTORS® can provide a comparative market analysis to help establish a competitive price. Experienced agents also have their own system for helping you price your home.

Mistake #3: Over-sharing with buyers

Another costly mistake is having too much communication with potential buyers, says Nancy Braam, CRS, with RE/MAX Whatcom County Inc. in Bellingham, Washington. If you are emotionally invested in your home, you may end up giving away too much information. Braam advises that you either make yourself scarce during showings or think carefully about what you disclose to buyers.

“Think of it this way: anything you disclose about your motivation is asking the buyer to offer less,” Braam advises. “Staying out of the way is the best way to preserve what negotiation advantage you have.”

Instead, have an experienced CRS agent there to represent your interests and negotiate for you.

Mistake #4: Poor staging

Both a cluttered home and an empty home will be unappealing to buyers, so proper staging and curb appeal are important. “Finishing off minor handyman items, like replacing rotten trim and adding a fresh coat of paint, go a long way toward a quick sale at the highest price possible,” says Danni Springfield, CRS, ABR, Lead Agent with The Springfield Group of Keller Williams Legacy in San Antonio, Texas.

A majority of buyers are shopping for homes online these days, so Springfield’s team brings in professional staging and photography services.

Mistake #5: The wrong attitude

This includes both patience and setting expectations too high. Not every prospective buyer will submit a bid—some are just window-shopping or are interested in a nearby home. Remembering that browsers are part of the home-selling process will help keep disappointment at bay.

It’s also important to remember that once you do receive an offer, you should take it seriously. “When we list the house, we should never think of it as a ‘first’ offer, but as potentially the only offer. That way we treat each offer with the respect it deserves,” says Kim Laforet, CRS, associate broker with Coldwell Banker Hubbell BriarWood in Lansing, Michigan.

Want to avoid these mistakes? Talk to a CRS agent when selling your house. Due to their advanced training, education and verified experience level, a CRS is truly the best real estate agent around.

Increase Your Home’s Value With These 4 Outdoor Improvements

A 2016 National Association of REALTORS® report on the impact of remodeling outdoors showed the importance the outdoors is playing in the way buyers see your home. According to the report, outdoor remodeling projects add value to a home on resale, while also making homeowners who plan to stay in their homes happier.

With outdoor fireplaces or fire pits and comfortable seating, small gathering spaces are poised to overtake larger backyards as the most sought-after way to spend time outside while staying at home.

Make Sure Your Outdoor Spaces Are Marketable

Because outdoor spaces have to be tailored to the needs of the buyer, it’s important to find out what the typical buyer in you area wants before opting for something that’s trendy, rather than useful, says Sharon Breslau, CRS, an associate broker with Westwood Metes & Bounds Realty, Ltd. in upstate New York.

Many buyers are going for the trendy intimate spaces, says Brad Allen, CRS, ABR, a managing partner with The Art of Real Estate in South Carolina, adding that this is particularly pronounced if they come with any kind of added entertainment area.

That can mean a deck with a great dining setup, or it could mean a pool, depending on the buyer, Sloan adds.

Bring the Outdoors Inside

The outdoor space itself isn’t the only way to experience the outdoors—how the inside interacts with the outside matters, too, Breslau says.

“Windows and doors are the eyes looking out of the house, so what do you see when you look out? Do you see a bush, or do you cut that bush down and suddenly you can see the yard and a nice hill or meadow?” Breslau says. She recommends giving thought to how the inside and the outside correspond, because a property holds more appeal if buyers like both.

Homeowner Test #1: —Can you walk all the way around your house without running into an obstacle? If so, great! This allows more light inside. If not, can the obstacle blocking your path be removed? Look for ways to open space directly around the house

Foster Year-round Outdoor Living

In warm climates, outdoor spaces can be used all year without issue. Allen currently is working with a new-construction buyer who plans to install a 14-foot-wide accordion-style sliding door that will open her basement recreation room straight onto her patio and pool.

And outdoor kitchens or fireplaces on porches are useful in all warmer-weather climates as long as they’re covered to protect from rain, Sloan says.If you’re a homeowner in the northern latitudes, you may have to think outside the box to get more use out of your outdoor spaces, Breslau says. Three-season screened-in porches allow people in colder-weather areas to enjoy the outdoors for at least a little longer in the spring and fall, but to make those spaces year-round, all you need is some insulation and a gas heater to bump up usage in the winter season.

Create a Private World

Outdoor areas are great for having fun and relaxing, but if neighbors are too close by, they can also invite unwanted guests into the activities.

Privacy concerns are leading some homeowners to find creative ways to keep their outdoor areas out of the public eye, especially in areas where zoning regulations restrict fencing.

“A lot of people use bushy trees like giant green arbor vitae or Leland cypress,” Allen says. “I have also seen sellers install lattice-style screens on the sides of their decks and porches.”

Breslau also suggests having landscapers plant anything that grows big, “things that are hedgy and easy to pop in that add a little more privacy,” including rose of Sharon or jasmine, or anything viney on a trellis that can shield the sight of any neighbors.

“Privacy means something different to every person who you ask,” Breslau says.

Homeowner Test #2: If you’re standing on your deck at your house, can you see the neighbors? Are they off in the distance, or are you totally alone and can’t see anyone at all?

Breslau also suggests using fountains to mute noises, especially a busy road in the distance. That adds another level of privacy.


HOW TO Recognize a Qualified Buyer

Offers can be exciting, but unless your potential buyer has the resources to qualify for a mortgage, you may not really have a sale. Your real estate professional will try to determine a buyer’s financial status before you sign the contract. But it’s good for you to know what buyers with follow-through potential looks like.

They are prequalified—or even better, preapproved—for a mortgage.
Such buyers will be in a much better position to obtain a mortgage promptly.

They have enough money to make a down payment and cover closing costs.
Ideally, buyers should have 20 percent of the home’s price as a down payment and between 2 percent and 7 percent of the price to cover closing costs. If they plan to make a smaller down payment, they will need to purchase mortgage insurance, through either a government guarantee program or a private mortgage insurer. Their ability to provide earnest money in a timely fashion will be an indicator of liquid reserves.

Their income is sufficient to afford the home over the long term, too.
Ideally, buyers should spend no more than 28 percent of their total income to cover the principal, interest, taxes, and insurance associated with the sale (often abbreviated as “PITI.”)

They have good credit, which they are monitoring and maintaining.
They will have recently reviewed their credit report and have actively worked to correct any blemishes or errors found.

They’re not managing too many other debts to take on a mortgage.
If buyers owes a great deal on car payments, credit cards, and other debts, they may not qualify for a mortgage.

QUESTIONS TO ASK – About Property Tax

It’s natural for the sale price of a home to loom large in your mind. But don’t forget to look at what your property tax bill might be.

What is the assessed value of the property?
Assessed value is generally less than market value. A recent copy of the seller’s tax bill will help you determine this information.

How often are properties reassessed in this area?
In general, this will happen annually, but properties in areas of slower growth may be reassessed less often.

When was the last reassessment done on this property?
Most significant tax increases on an individual property can be linked to when that property was last reassessed.

Will the sale of the property trigger a tax increase?
Depending upon where you live, the assessed value of a property may increase based on the amount you pay for it. And in some areas, such as California, taxes aren’t allowed to increase until the property in question is resold.

Is the tax bill comparable to other properties in the area?
If not, it might be possible to appeal the assessment and lower the rate.

Does the current tax bill reflect any special exemptions for which I might not qualify?
For example, many tax districts offer reductions to those individuals 65 and older.

WHAT TO KNOW…About the Home Inspection

Some items should always be examined.

Structure
The home’s “skeleton” should be able to stand up to weather, gravity, and the earth that surrounds it. Structural components include items such as the foundation and the framing.

Exterior
The inspector should look at sidewalks, driveways, steps, windows, doors, siding, trim, and surface drainage. They should also examine any attached porches, decks, and balconies.

Roofing
A good inspector will provide very important information about your roof, including its age, roof draining systems, buckled shingles, and loose gutters and downspouts. They should also inform you of the condition of any skylights and chimneys as well as the potential for pooling water.

Plumbing
They should thoroughly examine the water supply and drainage systems, water heating equipment, and fuel storage systems. Drainage pumps and sump pumps also fall under this category. Poor water pressure, banging pipes, rust spots, or corrosion can indicate larger problems.

Electrical
You should be informed of the condition of service entrance wires, service panels, breakers and fuses, and disconnects. Also take note of the number of outlets in each room.

Heating and air conditioning
The home’s vents, flues, and chimneys should be inspected. The inspector should be able to tell you the water heater’s age, its energy rating, and whether the size is adequate for the house. They should also describe and inspect all the central air and through-wall cooling equipment.

Interiors
Your inspector should take a close look at walls, ceilings and floors; steps, stairways, and railings; countertops and cabinets; and garage systems. These areas can reveal leaks, insect damage, rot, construction defects, and more.

Ventilation/insulation
Inspectors should check for adequate insulation and ventilation in the attic and in unfinished areas such as crawl spaces. Insulation should be appropriate for the climate. Without proper ventilation, excess moisture can lead to mold and water damage.

Fireplaces
They’re charming, but fireplaces can be dangerous if they’re not properly installed. Inspectors should examine the vent and flue, and describe solid fuel-burning appliances.

 

WHILE YOU’RE AWAY…

The holidays are an exciting time, especially if you plan on traveling. Whether you’re visiting family or going somewhere warm for the winter, it’s important to take security precautions when leaving your home unattended. The following are steps you can take to deter potential burglars from making your home a target this season:

Consider an upgrade. Locking your doors and windows is a good start, but if you don’t yet have a home security system, consider getting one. There are a variety of smart options out there now, from comprehensive systems to individual features, such as the Ring Video Doorbell, which detects motion and provides a view of your front door on your smartphone.

Put lights on a timer. A house that is constantly dark is a good sign to burglars that no one is home. Set indoor and patio lights on automatic timers. There are timers and smart light bulbs you can control via your smartphone, like the Philips Hue.

Combat the elements. If you live in an area where it snows during the winter months, hire someone to shovel and clear the sidewalks while you’re gone. This will keep snow from piling up if any falls while you’re away, which can fool potential thieves and make shoveling a less daunting task when you return.

Hold your mail. Another obvious sign that no one is home is when newspapers, packages and other mail pile up in your mailbox or at the front door. Put a hold on your mail or ask a neighbor to pick it up and keep it until you return from vacation. If you expect large packages to be delivered while you’re gone, consider having them sent to the store or an Amazon Locker.

Put social media on pause. You may want to post about your vacation plans or photos on social media, but wait until you’re back home. Letting everyone know before or during your travels is also letting them know that your house is empty.

How To Prepare to Finance a Home

Things to help you get ready to finance a home

Develop a budget: Instead of telling yourself what you’d like to spend, use receipts to create a budget that reflects your actual habits over the last several months. This approach will better factor in unexpected expenses alongside more predictable costs such as utility bills and groceries. You’ll probably spot some ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.

Reduce debt: Lenders generally look for a debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt—car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.

Increase your income: Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.

Save for a down payment: Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with 5 percent down or less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 percent down payment.

Keep your job: While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.

Establish a good credit history: Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off entire balances as promptly as possible.

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, which can average between 2 and 7 percent of the home price.

Obtain a copy of your credit report: Make sure it is accurate and correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

Decide what kind of mortgage you can afford: Generally, you want to look for homes valued between two and three times your gross income, but a financing professional can help determine the size of loan for which you’ll qualify. Find out what kind of mortgage (30-year or 15-year? Fixed or adjustable rate?) is best for you. Also, gather the documentation a lender will need to preapprove you for a loan, such as W-2s, pay stub copies, account numbers, and copies of two to four months of bank or credit union statements. Don’t forget property taxes, insurance, maintenance, utilities, and association fees, if applicable.

Seek down payment help: Check with your state and local government to find out whether you qualify for special mortgage or down payment assistance programs. If you have an IRA account, you can use the money you’ve saved to buy your first home without paying a penalty for early withdrawal.

Special! Winter Preparation….Stay Safe and Warm

 As winter is fast approaching, the following tips can help homeowners ensure their homes are well prepared and more energy-efficient throughout the coming months.

  • Inspect around windows and doors for cracks and seal any openings with caulk or weather stripping to prevent air and water from getting into your home.
  • Have a professional evaluate the amount of insulation in your home to ensure it is properly insulated and will keep your energy costs down.
  • Replace batteries in smoke alarms and carbon monoxide detectors to make sure they’re working properly.
  • Visibly check the fireplace opening for loose or missing bricks and have screens in place to protect against any embers that may escape.
  • Look for raised, loose or missing roof shingles and replace them, if needed, to prevent water from getting in and creating leaks.
  • Remove hoses from outside spigots and store them during the winter months.
  • Clean debris from gutters to prevent water from collecting and freezing.
  • Make sure all downspouts are pointed away from the foundation.
  • Have the HVAC units inspected and change furnace filters monthly for cleaner indoor air and maximum energy efficiency.
  • Program thermostats to lower temperatures while at work or sleeping.

These simple steps can help homeowners maintain the overall health and safety of their home during the winter season.

Turn It Down

If there’s one thing you can count on when you own a home, it’s the arrival of the energy bill each month. One homeowner’s energy costs will be higher or lower than the next, but there are easy ways to save a little money each month.

Use the dishwasher. Dishwashers, especially Energy Star appliances, are more efficient than washing dishes by hand. It’s also important to load your dishwasher as effectively as possible, so check your manual for the best way. If you don’t own a dishwasher, save water by turning the tap on only when you need to rinse.

Unplug idle electronics. Electronics and appliances still use standby energy even when not in use. Since unplugging every cord in your home is not feasible, consider using power strips with multiple plugs that you can turn off and on with the flip of a switch.

Circulate air with fans. Even with central air conditioning, it can be tricky to keep every room at a steady temperature on hot days. Position standing fans to circulate air throughout your home, rather than lowering the AC thermostat temperature. If you have ceiling fans, make sure they’re circulating in the correct direction: counter-clockwise during the summer—so air is being pushed down—and clockwise in the winter.

Measure laundry loads. Washing clothes in cold water instead of warm saves energy. And make sure there’s enough space inside the dryer for hot air to circulate, or you could end up running two cycles.

What To Know About Title Insurance

Title insurance protects your ownership right to your home, both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as misspellings of a person’s name or an inaccurate description of the property. In some states it is customary for the seller to purchase the policy on your behalf.

Your mortgage lender will require it.
Title insurance protects the lender (and the secondary markets to which they sell loans) from defects in the title to your home—which could include mistakes made in the local property office, forged documents, and claims from unknown parties. It ensures the validity and enforceability of the mortgage document. The amount of the policy is equal to the amount of your mortgage at its inception. The fee is typically a one-time payment rolled into closing costs.

There are two different policies to consider purchasing.
The first policy, the one your lender will require, protects the lenders investment. You may also purchase an owner’s policy that provides coverage up to the purchase price of the home you are buying.

You have the right to choose your provider.
You can shop around for a lower insurance premium rate at a wide variety of sites online. You should first request quotes from a few companies and then reach out and speak to them. Ask about hidden fees and charges that could make one quote seem more attractive than another. Also, find out if you’re eligible for any discounts. Discounts are sometimes available if the home has been bought within only a few years since the last purchase as not as much work is required to check the title. You can also ask your lender or real estate professional for advice or help with getting quotes. Make sure the title insurance company you choose has a favorable Financial Stability Rating with Demotech Inc.

Even new construction needs coverage.
Even if your home is brand-new, the land isn’t. There may be claims to the land or liens that were placed during construction that could negatively impact your title.

 

How To Lower Homeowners Insurance Costs

The first step is to shop around; quotes on the same home can vary significantly from company to company.

Review the Comprehensive Loss Underwriting Exchange report.
CLUE reports detail the property’s claims history for the last five years, which insurers may use to deny coverage. Make the sale contingent on a home inspection to ensure that problems identified in the CLUE report have been resolved.

Seek insurance coverage as soon as your offer is approved.
You must obtain insurance in order to buy your home. And you don’t want to find out at closing time that the insurer has denied you coverage.

Maintain good credit.
Insurers often use credit-based insurance scores to determine premiums.

Buy your homeowner’s and auto policies from the same company.
Companies will often offer a bundling discount. But make sure the discount really yields the lowest price.

Raise your deductible.
If you can afford to pay more toward a loss that occurs, your premiums will be lower. Also, avoid making claims for losses of less than $1,000.

Ask about other discounts.
For example, retirees who tend to be home more than full-time workers may qualify for a discount on theft insurance. You also may be able to obtain discounts for having smoke detectors, a security system, and high-quality locks.

Seek group discounts.
If you belong to any associations or alumni organizations, check to see if they offer deals on coverage.

Conduct an annual review.
Take a look at your policy limits and the value of your home and possessions every year. Some items depreciate and may not need as much coverage.

Investigate a government-backed insurance plan.
In some high-risk areas, the federal or state government may back plans to lower rates. Ask your agent what’s available.

Insure your house for the correct amount.
Remember, you’re covering replacement cost, not market value.