Thursday, February 15, 2018

Think about getting a home inspection before putting your home on the market

Pre-listing Inspection

In a typical real estate transaction, it is the buyer who arranges and pays for the home inspection. However, it can be to a seller’s advantage to pay to have an inspection done prior to placing their home on the market. A pre-listing inspection can provide them with valuable information about the condition of their property and an idea of repairs that they may (or may not) wish to have done. This information can help in negotiating the sales price of the home as well as avoid having these repair issues surface down the road at a less opportune time.  

Is there any difference between a pre-listing inspection and a buyer’s inspection?
The only difference is who (seller or buyer) is having the inspection done and the point in time when the inspection occurs. The scope of the inspection, whether done pre-listing or after the sales price and terms have been agreed upon, will essentially be the same focusing primarily on proper functionality of all major systems and components of the house: heating and cooling, electrical, plumbing, roof and structure, siding, doors, and windows.

Typically, how much does it cost for a pre-listing inspection?
The fee is usually the same as the buyer’s inspection, generally ranging from $350 to $500 for a qualified inspector who carries errors and omissions insurance. The price can vary based on location, square footage, age of the home, and any special conditions.

Why should a seller consider doing pre-listing inspection?
Keep in mind that whether a seller has a pre-listing inspection or not, the buyer may still choose to have their own inspection done. What a pre-listing inspection does is give the seller a chance to resolve any repair issues up front that are likely to surface in the buyer’s inspection or have them accounted for in the asking price. This not only places the seller in a better negotiating position but helps minimize the chance of having to deal with circumstances that may come up in the buyer’s inspection that is done after the sales price and terms have been negotiated.

What should the seller do if a pre-listing inspection uncovers major problems?
Generally, it is better to know about inspection issues early rather than to be blindsided at a later date. Once identified, they can be assessed for proper resolution. A seller shouldn’t automatically assume that everything needs to be fixed prior to placing the home on the market. A REALTOR® can advise them as to which repairs are likely to negatively affect the sale of their home.

If you’re looking for more information about buying or selling your home, Three Rivers Association of REALTORS® can help. Visit our website today to learn more and to find one of our members who can help you!

Thursday, January 11, 2018

How a Credit Freeze Affects Home Loans

Credit Freeze
For very little money, you can prevent identity thieves from opening accounts in your name by freezing your credit report. It’s understandable if you have questions and concerns regarding a security freeze. So let’s take a look at how you may be affected.

What Is a Credit Freeze?
A credit freeze limits who can see your credit report information. The goal is to prevent anyone from opening any new accounts. It doesn't damage your credit or stop your credit report from evolving by your own actions.

Your credit information will still be released to your existing creditors and any debt collectors who may come calling.

But, if you want to open new lines of credit, you'll need to lift the freeze first. This can be done temporarily, either for a set time or for a particular party, like a landlord or lender.
The costs to freeze and lift the freeze on your credit vary based on where you live and for each credit reporting agency, but commonly run about $10 per agency.

How Can It Affect Home Loans?
A credit freeze aims to block anyone from opening new accounts in your name. The catch is that the block applies to legit inquires, too. So it's not a great idea if you're shopping for a home or an auto loan. But when you're not looking to take out any loans or open any lines of credit, it can be a financial lifesaver.

One of the biggest problems with a credit freeze is it takes a lot longer to thaw credit than it does to freeze it. That could be a problem if you need credit in a hurry, such as a store credit card for an unexpected appliance purchase. 

Working with a REALTOR® provides clients with peace-of-mind that they will be receiving both professional and ethical service during the home buying or selling process. All of the members of Three Rivers Association of REALTORS® are REALTORS® as well as members of the Illinois REALTORS®and National Association of REALTORS®. Learn more about purchasing a home and find a REALTOR® to help by visiting Three Rivers Association of REALTORS® website, or calling 815-744-4520. 


Sources:

Wednesday, December 27, 2017

Tax Records: What to Save and for How Long

Curious about how long you should hold on to your tax records after filing? A Dona Dizube over at House Logic details why holding on to those pesky documents can save you from future headaches in her article below.
Tax Filings

How Long to Keep Tax Records
By Dona Dizube
The federal tax law signed by President Donald Trump Dec. 22, 2017, may affect home ownership tax benefits described in this article. The new law goes into effect for the 2018 tax year and generally doesn’t affect tax filings for the 2017 tax year. In 2018, HouseLogic will be providing information on the tax provisions affecting home ownership. In the meantime, here’s a detailed summary of the changes.
Unless you’re living in the 123-room Spelling Manor, you probably don’t have space to store massive amounts of tax and insurance paperwork, warranties, and repair receipts related to your home.
But you’ll definitely want your paperwork at hand if you have to prove you deserved a tax deduction, file an insurance claim, or figure out if your busted oven is still under warranty.
To help you prioritize your paperwork, we’ve created a hand “How Long to Keep It” home records checklist.

First, a little background on IRS rules, which informed some of our charts:
  • The IRS says you should keep tax returns and the paperwork supporting them for at least three years after you file the return — the amount of time the IRS has to audit you. So that’s how long we advise in our charts.
  • Check with your state about state income tax, though. Some make you keep tax records a really long time: In Ohio, it’s 10 years.
  • The IRS can also ask for records up to six years after a filing if they suspect someone failed to report 25% or more of his gross income. And the agency never closes the door on an audit if it suspects fraud. Just sayin’.

HOME SALE RECORDS
DocumentHow Long to Keep It
Home sale closing documents, including closing statementAs long as you own the property + 3 years
Deed to the house
As long as you own the property
Builder’s warranty or service contract for new home Until the warranty period ends
Community/condo association covenants, codes, restrictions (CC&Rs)As long as you own the property
Receipts for capital improvementsAs long as you own the property + 3 years
Section 1031 (like-kind exchange) sale records for both your old and new properties, including HUD-1 settlement sheetAs long as you own the property + 3 years
Mortgage payoff statements (certificate of satisfaction or lien release)Forever, just in case a lender says, “Hey, you still owe us money.”
Why you need these docs: You use home sale closing documents, receipts for capital improvements, and like-kind exchange records to calculate and document your profit (gain) when you sell your home. Your deed and mortgage payoff statements prove you own your home and have paid off your mortgage, respectively. Your builder’s warranty or contract is important if you file a claim. And sooner or later you’ll need to check the CC&R rules in your condo or community association.

ANNUAL TAX DEDUCTIONS
DocumentHow Long to Keep It
Property tax payment (tax bill + canceled check or bank statement showing check was cashed)3 years after the due date of the return showing the deduction
Year-end mortgage statements3 years after the due date of the return showing the deduction
PMI payment (monthly bills + canceled check or bank statements showing check was cashed)3 years after the due date of the return showing the deduction
Residential energy tax credit* receipts3 years after the due date of the return on which the credit is claimed (including carryforwards**)
Why you need these docs: To document you’re eligible for a deduction or tax credit.
*Energy tax credits ($500 lifetime cap) for such things as energy-efficient windows, doors, heating and cooling systems, insulation, and more.
**Tax credits that you carry forward from one year to a future year, such as when you don’t have enough tax liability to offset the entire amount of the credit. (You can’t deduct more than you earn.) Only certain tax credits can be carried forward. Check with your tax pro about your particular circumstances.

INSURANCE AND WARRANTIES
DocumentHow Long to Keep It
Home repair receiptsUntil warranty expires
Inventory of household possessionsForever (Remember to make updates.)
Homeowners insurance policiesUntil you receive the next year’s policy
Service contracts and warrantiesAs long as you have the item being warrantied
Why you need these docs: To file a claim or see what your policy or warranty covers.

INVESTMENT (LANDLORD) REAL ESTATE DEDUCTIONS
DocumentHow Long to Keep It
Appraisal or valuation used to calculate depreciationAs long as you own the property + 3 years
Receipts for capital expenses, such as an addition or improvementsAs long as you own the property + 3 years
Receipts for repairs and other expenses3 years after the due date of the return showing the deduction
Landlord’s insurance payment receipt (canceled check or bank statement showing check was cashed)3 years after the due date showing the deduction
Landlord’s insurance policyUntil you receive the next year’s policy
Partnership or LLC agreements for real estate investmentsAs long as the partnership or LLC exists
Landlord insurance receipts (canceled check or bank statement showing check was cashed)3 years after you deduct the expense
Why you need these docs: For the most part, to prove your eligibility to deduct the expense. You’ll also need receipts for capital expenditures to calculate your gain or loss when you sell the property. Landlord’s insurance and partnership agreements are important references.

MISCELLANEOUS RECORDS
DocumentHow Long to Keep It
Wills and property trustsUntil updated
Date-of-death home value record for inherited home, and any rules for heirs’ use of homeAs long as you or spouse owns the home + 3 years
Original owners’ purchase documents (sales contract, deed) for home given to you as a giftAs long as you or spouse owns the home + 3 years
Divorce decree with home sale clauseAs long as you or spouse owns the home + 3 years
Employment records for live-in help (W-2s, W-4s, pay and benefits statements)4 years after you make (or owe) payroll tax payments
Why you need these docs: Most are needed to calculate capital gains when you sell. Employment records help prove deductions.

Organizing Your Home Records

Because paper, such as receipts, fades with time and takes up space, consider scanning and storing your documents on a flash drive, an external hard drive, or a cloud-based remote server. Even better, save your documents to at least two of these places.
Digital copies are OK with the IRS as long as they’re identical to the originals and contain all the accurate information that was in the original receipts. You must be able to produce a hard copy if the IRS asks for one.
Tip: Tax season and year’s end are good times to purge files and toss what you no longer need; that’s often when the spirit of organization moves us.
When you do finally toss out your home-related paperwork, use a shredder. Throwing away intact documents with personal financial information puts you at risk for identity theft.
This article was written by Dona Dizube on behalf of House Logic. The article provides general information about tax laws and consequences, but isn’t intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. 
If you're looking for further advice or information when it comes to tax documentation as a home owner, Three Rivers Association of Realtors is here to help. Contact us today!

Friday, November 10, 2017

Study Finds Majority of Today's Home Buyers are Millennials

A report entitled “2017 National Association of REALTORS® Home Buyer and Seller Generational Trends” states that, over the past four years, one consistent finding has been that Millenials/Gen Y-ers or those age 36 and younger make up the largest share of home buyers at 34 percent. Half of them were first time buyers. The report showed that this group has been quite traditional in their buying habits opting for suburban detached single family homes.

millennial homebuyers

The next largest group was Gen Xers or those age 37 to 51 who make up 28 percent of home buyers. They are the most ethnically and racially diverse group as 21 percent identified their race as something other than White/Caucasian. And, because generally they are in their peak earning years, they purchased larger homes in terms of median square footage and number of bedrooms.

Baby Boomers were split into two groups due to differing demographics and buying behaviors. Younger baby boomers identified as those age 52 to 61 make up 16 percent of buyers and older baby boomers age 62 to 70 make up 14 percent. Younger baby boomers are most likely to buy a multi-generation home to take care of aging parents, for cost savings and because children over the age of 18 are moving back. The report also indicates that this group projects that they will remain in their home the longest at 20 years. Buyers 71 to 91, referred to in the report as the Silent Generation, represent the smallest share of home buyers at 8 percent. Nearly one quarter of these buyers purchased senior-related housing.

The study also revealed that 88 percent of all home buyers financed their home purchase… a share that decreases as the age of the buyer increases. Home ownership remains among life’s priorities for most Americans. For all three groups under the age of 61, the main reason given for purchasing was the desire to own a home of their own. The household composition for buyers in all age groups was primarily married couples followed by single females, single males, and unmarried couples.

The report also pointed out that it is a continued trend among all generations of buyers to consult a real estate agent or broker to help them buy or sell their home. Buyers need the help of a real estate professional to help them find the right home, negotiate terms of sale, and help with price negotiations. Sellers, as well, turn to professionals to help market their home to potential buyers, sell within a specific timeframe, and price their home competitively. To learn more, Three Rivers Association of Realtors is here to help. Visit our website or call us at 815-744-4520

Sources:
https://www.nar.realtor/sites/default/files/reports/2017/2017-home-buyer-and-seller-generational-trends-03-07-2017.pdf


Friday, October 13, 2017

The Equifax Data Breach: How to Protect Yourself


From May to July of 2017, Equifax, one of the three major credit reporting agencies in America, suffered a data breach that exposed the personal and financial information of over 143 million Americans. This sensitive information included Social Security numbers, addresses, birth dates, driver’s license numbers, and even credit card numbers.

The Bad News 
So what now? The bad news is, if you’ve ever used a credit card, applied for a loan, or basically done anything within the financing realm, there’s a chance you’re at risk of your information being exposed, and worse, used for unlawful purposes like identity theft. 

The Good News 
There are measures you can take to prevent your information from being used against you and severely disrupting your life. 

In an attempt at damage control, Equifax is offering free credit monitoring to the everyone, not just those affected by the breach. Free is free, and if it provides even the slightest chance of protecting yourself, you should seriously consider it. Visit equifaxsecurity2017.com to utilize this service.

What else can be done? According to The Consumer Financial Protection Bureau (CFPT), there are quite a few ways you can you protect yourself from the Equifax Breach. 

1. Review Your Credit Report: Everyone gets one free credit report per year from Equifax, Experian and TransUnion.
2. Security Freeze: According to CFPT, “A security freeze or credit freeze on your credit report restricts access to your credit file. Creditors typically won’t offer you credit if they can’t access your credit reporting file, so a freeze prevents you and others from opening new accounts in your name.” 
3. Set up Fraud Alert: This protects you by requiring any financial institution to verify your identity before creating changes on your account. This means no one can open a new account without your knowledge through extra identification steps taken by the institution.
5. Pay Attention to Your Bills: Random bill show up in your mail not addressed to you? It could mean someone is using your identity. Contact the institution immediately.  
7. Throw Away the Key and Change Your Passwords: This is easy and it’s effective. Make sure you change the passwords to all of your accounts and ensure they are strong.
Three Rivers Association of REALTORS® is a non-profit organization that services more than 1,000 REALTOR® and Affiliate members. Three Rivers Association of REALTORS® is affiliated with the Illinois REALTORS® and the National Association of REALTORS®, and works to provide our members with the tools and information they need to remain successful.  We strive to keep our membership informed as to the latest developments that affect housing and the real estate industry in general. The Multiple Listing Service, education programs and an extensive political action program are just a few of the services that Three Rivers Association of REALTORS® provides for its members.

Wednesday, September 6, 2017

REAL ESTATE MARKET SNAPSHOT: Housing Supply Continues to Drop; Prices are on the Rise

Three Rivers Real Estate

According to key indicators in a report provided by Midwest Real Estate Data LLC for Three Rivers Association of REALTORS®, it is predominantly a seller’s market in Will and Grundy Counties. Inventory levels fell 17.9 percent from 2,995 units to 2,459 units or a 3.1 month’s supply. Also on the downward slide is market time which is at 64 days compared to 70 days a year ago. The median sales price is now at $210,000 - up from $200,000 at this time a year ago. Multiple-offer situations over asking price are not uncommon in many communities. The report cites a favorable economy and the low unemployment rate as contributing factors toward these developments. Another reflection of the strong employment growth is the decreasing percentage of homes closed that are either foreclosures or short sales. Through July of this year, 9.5 percent or 87 out of 911 closed home sales fell into one of those categories. In 2016, it was 12.3 percent.

The effect of the shortage of new construction particularly in the median to upper median price range is being felt primarily among first-time buyers as the number of entry-level homes available is at a premium. Normally, new home development provides an important link in the chain that enables many home owners to move on, freeing up the supply of homes at every level. However, despite these circumstances, Three Rivers Association of REALTORS® leadership believes that it is still advantageous for buyers to pursue their dream of home ownership. Association President-elect Ken Pytlewski noted that lenders are also loosening up on mortgage qualification requirements as well as offering new loan Programs, giving buyers the ability to purchase with a minimal down payment.

The City of Joliet is having a Housing Expo on September 9th during which buyers can meet with
lenders and REALTORS® who can assist them in the home buying process. There will also be
information about money that is available to help you with your down payment.
You can get more information about the Expo by calling 815-722-0722, or visit the Three Rivers Association of Realtors website.