Some Things to Do Before Moving In

You know how the famous lyrics go: “Don’t it always seem to go, that you don’t know what you’ve got ‘till it’s gone?” While these are very true sentiments, we’d like to recommend a slight alteration: “Don’t it always seem to go, that you don’t know what you got ‘till you start to pack it all up?”

The more closets you go through and the more cabinets you attempt to organize, you might ask yourself, “Where did all this stuff come from? What am I supposed to do with all of this? Is this stuff I even really need?” These questions require even more urgent answers when you are packing and organizing for an exact purpose; specifically, when you are planning on moving.

And packing up your home is just one of many things that need to be crossed off your checklist when you are preparing for moving day. The process of switching residences can be overwhelming to say the least. But by planning ahead, you can be as prepared as possible for your upcoming move:

Here are a few things to keep in mind before moving into a new home:

Gather the Appropriate Supplies

Make sure you have plenty of boxes, bins, tape, labels, bubble wrap, and newspaper on hand in plenty of time before the big move so you can stay on top of packing. And don’t be afraid to give things away—if you are going through old drawers and closets and find things you don’t need, there is no need to bring them to the new house.

Transfer Your Utilities

Don’t assume that the gas, water, and electric will be set up for you on moving day. It’s important to take care of this with your utility company before moving day rather than afterward.

Change the Locks

Changing the locks is the simplest and quickest way to guarantee your safety in your new space.

Clean Up

Scrubbing every possible surface of your new house is much easier when they’re not covered with furniture! Thoroughly clean your home before moving day; it will save you significant time and trouble in the future.

Other things you may consider before moving in if possible include getting to know where the circuit breaker box is and the main water shut-off valve, make minor and major repairs, childproof your home if applicable, forward your mail and update your billing address.  It's also not a bad idea to consider getting a home warranty which would cover the cost of the repair or replacement of things like your furnace, air conditioner, water heater, appliances, plumbing and electric for at least a year. Experts say that basic coverage starts at about $300.  Proper planning can help minimize the challenges and stresses of transitioning to a new home making the move much more enjoyable.

For more information on what you can do to make your upcoming move easier, work with a member of Three Rivers Association of REALTORS®.  You can find them at www.trarealtors.net or call 815-744-4520.

Having a financial game plan for your home will give you peace of mind

Creating a financial plan for your home can help you feel more secure in budgeting for the future. A financial plan will spell out how much you need to pay and when, so you know exactly how much money is going toward your home. Without a plan, you could find yourself overwhelmed by unforeseen expenses like emergency repairs that you didn’t budget for, or unable to make updates to your home because of a lack of savings.

Luckily, you can create your own financial planning checklist to get a better look at your expenses and savings in the years ahead.  

Where to start

First, write down recurring expenses like your mortgage payment, taxes, and homeowner’s insurance. Note when each of these payments is due, and how much it is.

• Follow that list up with more occasional expenses like seasonal lawn care and maintenance or replacement dates for major appliances, plumbing fixtures, and the roof. Note that these dates don’t need to be exact, but searching for the average lifespan of a water heater, for example, will help you identify future expenses you’ll need to save for.
• Lastly, write down any voluntary expenses like adding a pool or finishing the basement. By listing the things you want to add to your home and estimating their cost, you’ll be able to see what is financially possible and when. 

Ways to save

With an idea of how much you need to spend in the short and long-term of your home, you’ll be able to turn your attention to places you might save money in order to be prepared for the future.

If you’re planning on staying in your current home forever, pay more than the minimum monthly mortgage payment. Paying more upfront means saving thousands in interest later down the line. Plus, it just feels better to pay down your home sooner.

Another oftentimes overlooked area to save is by checking with your insurance agent to make sure you are covered enough, but not too much. Over-insuring your home means you’re paying more than you need to on a policy that you’ll never see the full benefit from. Likewise, under-insuring your home will leave you paying out-of-pocket should you need to make a claim. Everyone has to pay property taxes.  However, you may be able to reduce your tax burden by getting a reassessment. Do your homework first: Are comparable homes taxed less than yours? If so, you can contact the local assessor, challenge the assessed value of your home and possibly reduce your taxes..

With a little planning, you’ll have peace-of-mind knowing that you’re in good financial shape, and the fear of surprise expenses will be greatly reduced.  If you’re looking for a new home, contact the Three Rivers Association of Realtors at 815-744-4520 to start your search today.

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.

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
Document	How Long to Keep It
Home sale closing documents, including closing statement	As 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 improvements	As 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 sheet	As 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
Document	How 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 statements	3 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* receipts	3 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
Document	How Long to Keep It
Home repair receipts	Until warranty expires
Inventory of household possessions	Forever (Remember to make updates.)
Homeowners insurance policies	Until you receive the next year’s policy
Service contracts and warranties	As 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
Document	How Long to Keep It
Appraisal or valuation used to calculate depreciation	As long as you own the property + 3 years
Receipts for capital expenses, such as an addition or improvements	As long as you own the property + 3 years
Receipts for repairs and other expenses	3 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 policy	Until you receive the next year’s policy
Partnership or LLC agreements for real estate investments	As 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
Document	How Long to Keep It
Wills and property trusts	Until updated
Date-of-death home value record for inherited home, and any rules for heirs’ use of home	As long as you or spouse owns the home + 3 years
Original owners’ purchase documents (sales contract, deed) for home given to you as a gift	As long as you or spouse owns the home + 3 years
Divorce decree with home sale clause	As 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!

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

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.

Helping Sellers Choose Between Multiple Offers

The housing market is hot and with limited inventory multiple offers is a common occurrence. It's a good problem to have if you're a seller. But how do you choose the best offer?

Start with Price and Terms

The offer with the highest price is going to get your attention, especially if it’s close to or above your asking price.  But, you will want to make sure that the buyer is qualified.  Those offering the most money might be stretching their finances and run into trouble before closing.  Also, asking for a sizeable earnest money deposit can help discern the seriousness of the buyer.  Pay attention to the amount that the buyer is planning as a down payment in the transaction.  A larger down payment means a lower home loan and may ease a closing. Your REALTOR® can help you look at all the details.

Contingencies

When buyers make an offer, they’ll often include a few conditions or contingencies that may allow them to cancel the deal or reduce the price. As a result, sellers may consider taking a lesser offer with fewer strings attached.  With so many issues today surrounding appraisals, waiving the appraisal contingency is a definite plus for sellers.  Normally, the house must appraise at the offer price.  If not, either the buyer would have to make up the difference or the sale price be reduced by the seller to match the appraisal.  When the appraisal contingency is waived, a low appraisal is not a deal breaker.  In any event, Looking for fewer contingencies in an offer may reduce the chances for difficulties toward closing the contract.

Mortgage Pre-Approval

Make sure that the buyer is preapproved for the home loan. An offer from a preapproved buyer usually is stronger than an offer from a buyer who hasn’t made any financing arrangements.

Closing Date 

If you’re reviewing similar offers and want to move soon, a quicker close can be a deciding factor. But if you’re not ready to move, you may be better off with a buyer who’s willing to wait for you to find another home.

Buyer ‘Extras’

Many times a buyer will send a personal letter to tug on your heartstrings and, if this is an emotional sale for you, it may pull your decision one way or another. If you’re considering several offers that have similar price and contingency terms, these kinds of sweeteners can tip the balance.

The Bottom Line

Getting multiple offers when you sell your home seems to be a great situation to be in, but it can be tricky.  Evaluate each offer fairly and consider advice from your REALTOR® to choose the best one. Ready to sell your house? Contact Three Rivers Association of REALTORS® for help finding a REALTOR® that can help meet your needs. 

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 also 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.

Understanding Your Homeowners’ Insurance



 

A homeowners insurance policy will protect you against certain losses and damage to your new home and is generally required by lenders prior to closing.  It is important to know what is covered and what is not.  All too often, it is only at the time a claim is filed that you discover that something you thought was covered is not.  

Typical Homeowners’ Coverage

 

• Your policy generally provides coverage for a sudden or accidental occurrence to your dwelling as well as attached and detached structures on your property. This includes damage to fixtures such as plumbing, electrical wiring, heating and permanently installed air-conditioning systems.
• Pays for damage to fences, tool sheds, freestanding garages, guest cottages and other structures not attached to your house.
• Reimburses you for the value of your possessions including furniture, electronics, appliances and clothing damaged or stolen even when they are not on your property.
• Pays for some of your additional living expenses while your home is being repaired and covers your financial loss if you are sued and found legally responsible for injuries or damages to someone else.
• Pays medical bills for people hurt on your property or possibly hurt by your pets.

What is typically NOT covered?

 

Claims related to dog bites, swimming pools or trampolines and operating a business from your home MAY NOT be covered. Common events you may be unaware of that your policy does not cover are identity theft, normal wear and tear, flooding, earthquakes, mudslides and sewer backups.

 

America’s sewer lines are aging and as more homes have been connected to these out-of-date lines, sewage backups have followed. Also, pipelines that handle both stormwater and raw sewage become overwhelmed in rainstorms or blockages from tree roots that work their way into sewer-line cracks can cause backups. Damage to floors, walls, furniture and electrical systems due to sewer backup are not covered. The Insurance Information Institute says sewer-backup damage often can be covered for an additional premium of just $40 to $50 per year.

 

According to The National Association of REALTORS®, policymakers in more than 22,000 communities nationwide rely on the National Flood Insurance Program (NFIP) to protect them from flood risks caused by torrential rain, swollen rivers and lakes, snow melt, failing infrastructure, storm surges and hurricanes. The NFIP expires on Sept 30th which could leave buyers unable to get a mortgage or protection from flooding as flood insurance is required for a mortgage in the 100-year floodplain. The National Association of REALTORS® is working with lawmakers to strengthen the program and also create a path for a private market to take hold ahead of the September 30 expiration date.

 

Limited Coverage Items

 

According to the Insurance Information Institute, jewelry, guns, electronics, collectibles, antiques and the costs of meeting updated electrical, fire, plumbing, building codes and mold may be limited. A breakout of mold on walls not only looks disgusting but also is a health risk that the Centers for Disease Control says can bring about symptoms similar to allergies or even breathing difficulties. A standard homeowners insurance policy generally either limits coverage for mold damage or outright excludes it.

Some insurers offer an endorsement to expand coverage limits for mold claims but only if you are willing to pay more for your insurance. The best cure for mold is to prevent it from growing in the first place, so eliminate the moisture promptly. The U.S. Environmental Protection Agency says homeowners generally can clean up mold themselves if the affected area is less than about 10 square feet. Otherwise, it is best to call in an expert.

Contact Three Rivers Association of REALTORS® for help finding an insurance agent in their affiliate directory that can help you with your insurance needs. Talk to your insurance agent about the property you want to protect and the hazards from which you would like to be insured. Your agent can review the coverage provided by your policy and discuss options specific to your situation. They will answer any important questions you may have.

 

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 also 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.

Why Should I work with a REALTOR®?

In the world of real estate, the words “REALTOR®” and “agent” are often used interchangeably. To some it might seem as though they are one in the same. However, choosing to work with an agent as opposed to a REALTOR® has several shortcomings that should not be overlooked in making this decision.

What is the difference?

Often these terms are used synonymously simply because people shorten phrase “real estate agent” and use REALTOR®, which they assume is a generic term. While both of these titles require the individual to be licensed with the Department of Professional Regulation, this is where the similarities end.

Real estate agent

A real estate agent is anyone who has a license to assist clients in the buying or selling of either commercial or residential property. This individual may perform this job as a sales representative, an associate real estate broker or a broker. To obtain a license, the agent must complete the required classroom training (typically between 30 and 90 hours) from an accredited real estate school and pass a state real estate examination that covers national, state and local real estate laws, standards and practices. In addition, an agent (as well as a REALTOR®) must pay a licensing fee as well as complete the required continuing education courses in order to renew his or her license every other year.

REALTOR®

REALTORS® aren’t just agents. They are professional members of the National Association of REALTORS® (NAR). In addition to completing all of the necessary requirements in order to sell real estate, a REALTOR® subscribes to a strict code of ethics which spells out specific practices and duties they must adhere to for the protection of their clients, customers and fellow REALTORS®. Real estate agents are not required to follow NAR’s Code of Ethics.

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®.