Buyers and Sellers

REALTOR® News and Views                                      

The decision to sell your home is a big one, and hiring a REALTOR® to navigate the process is a step in the right direction and can save you both time and money. According to the National Association of REALTORS®, the median selling price of an open-market for-sale-by-owner home in 2012 was $191,600, while the median price for agent-assisted sales was $215,000*. Here are a few things you can expect from your REALTOR® as they work to expedite your sale: 

·         Market Analysis and pricing Proper pricing is key to selling your property in the fastest amount of time possible and for the highest dollar. REALTORS® know the local market and trends, and have access to the latest statistics and sales, which they will analyze to come up with a list price that will get your home sold.

·         Preparing your home for sale REALTORS® know what appeals to buyers, and can help guide you through the process to get your home in show condition and highlight the best features of your home –from rearranging rooms to paint color and curb appeal.

·         Marketing  In order to sell your home, you need to get buyers in the door, and a properly executed marketing plan is key. REALTORS® have access to the Multiple Listing System, as well as a multitude of other web sites that your listing will appear on. Be it an open house, internet or print advertising, MLS, or word of mouth, REALTORS® know how to expose your property to the broadest audience of buyers possible.

·         Showings Selling a home is a full-time job, and your REALTOR® will set up all showings and make sure buyers are qualified and evaluated before allowing them into your home.

·         Negotiating on your behalf Don’t underestimate the importance of having a strong negotiator on your side. Negotiating a contract is not all about price, and an experienced REALTOR® knows what to look for in an offer and what pitfalls to avoid.

·         Navigating the process Your REALTOR® will walk you through the steps from listing to closing, including the required disclosures, inspections, appraisals and title work, to ensure the process is smooth as possible getting to the closing table.

A lot of factors go into a successful home sale. Having a REALTOR® on your side can not only net more money, but can make the difference between a smooth deal and one that never gets to the closing table.

Brought to you by the Greater Portland Board of REALTORS®                                             Article submitted by Heather Horlor,REALTOR®      

* 2012 NAR Profile of Home Buyers and Sellers:                         

REALTOR® News & Views

 

Submitted by Marc Chadbourne, Broker OceanGate Realty 151 Newbury St.Portland, ME04101

 

 

Open House Tips

 

Are you planning to visit some Open Houses this weekend? Here are some tips from your local real estate professionals to help make the visit useful and comfortable.

 

Just walk in. You don't have to knock or ring the doorbell.

 

As a courtesy to the seller please sign in so they know how many attended the Open House.

 

If you are a serious buyer and already have an agent, tell the agent hosting the open house. In fact, when you sign in, write the name of your agent next to your name.

 

Don't apologize if you are not a serious buyer. It's okay to look and often times this is the early part of the process when deciding to buy or sell.

 

Wear shoes that can easily be removed and do so if the situation warrants.

 

Feel free to look in every nook, cranny and cupboard. Turn on faucets, open windows. But please return things just as you found them.

 

You don't have to like the house and constructive comments are welcomed but keep unkind comments to yourself. Sometimes the owner is in the house!

 

Bring a camera, chances are it is O.K. to take pictures but ask the listing agent for permission before you do.

 

Remember, you are not just buying a house you are buying into a neighborhood. Check out the surroundings. Ask yourself if the house — no matter how nice or great a price — is really in the area you want to live.

 

Ask away! Information concerning comparable home sales in the neighborhood, homeowner association dues, utility bills, the school district or anything else that is important to you. That is why we are here!

 

Brought to you by the Greater Portland Board of REALTORS®

Submitted by Marc Chadbourne, Broker Ocean Gate Realty 151 Newbury St. Portland, ME 04101

Affordability

Casey Hamlin
Reliant Mortgage Co
e-mail Casey


Affordability:  that you have the financial means for.

Even though home prices have been rising, the National Association of Realtors (NAR) said this past week that 2012 appears primed to set a record for housing affordability.  With 11 months of data in, NAR's Housing Affordability Index was at 198.2 in November, higher than in November 2011.  When December data is compiled, NAR projects that the housing affordability index for 2012 will be a record high 194, up from 186 from 2011, the previous record year. 

The index is based on the relationship between median home price, median family income, and average mortgage interest rate.  An index of 100 is the point where a household with a median income for the local area has exactly enough income to qualify for the purchase of a median-priced single family home in that area.  The assumptions are the buyer has a 20 percent down payment and that the resulting mortgage payment would not exceed 25 percent of gross income. The higher the index, the greater the household purchasing power and buyers with small down payments, typical of first-time buyers, would have relatively lower affordability levels than those with larger down payments. 

In computing the index NAR used a national median home price of $180,600 and median income of $61,758.  The principal and interest payment would be $649 which represents 12.6% of household income.  Now consider standard underwriting practices of the secondary market typically allow a buyer to pay up to 29% of the monthly gross income and you can see why home buying affordability is considered so high.

In the Northeast the median home price was $230,000 and income was $71,066 resulting in an index of 180.1, up from 178.4 in October.  The Midwest had the highest index at 250.7, up 0.5 from October, based on a home price of $143,100 and income of $61,732.  In the South the median home was priced at $161,300 and the income was $56,821 for an index of 204.8, down from 210.6.  The West had the lowest affordability index of all regions at 145.8, down from 147.2.  The median home price in the west was $251,200 and the median income was 63,527.

Lawrence Yun, NAR chief economist, said home buyers are able to stay well within their means by saying "although 2012 was highest on record, the excessively tight underwriting precluded many would-be homebuyers from locking-in generational low interest rates," he said.  "Rising home prices and a gradual uptrend in mortgage interest rates will offset improvements in family income, but 2013 likely will be the third best on record in terms of household buying power.  A window of opportunity remains open for buyers who can qualify for a mortgage." 

According to the national mortgage professional website, “For the entire 2012 calendar year, the 30-year fixed rate mortgage averaged 3.66 percent, the lowest annual average in at least 65 years.” Freddie Mac.com reported the difference between interest rates between 2012 and 2011 was around .79%.  Using the average price of $230,000 after putting down 20% the average buyer would be financing $184,000 making the average difference in payments $83/month translating into $996/year comparing 2011 to 2012 from an interest rate perspective.

 

NAR projects the housing affordability index to average 160 during 2013, which means on a national basis that a median-income family would have 160 percent of the income needed to purchase a median-priced existing single-family home. 

Association President Gary Thomas said the minor erosion in affordability conditions moving forward could be mitigated by bank and regulatory policies.  "Clearer rules from the government regarding future lawsuits and buybacks of Fannie and Freddie loans could encourage banks to use their massive cash holdings to originate more loans. A more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10 to 15 percent," Thomas said.

Submitted by Casey Hamlin, Reliant Home Mortgage Company, LLC
Greater Portland Board Affiliate Member

Fire Prevention Tips in Your Home

REALTOR® News & Views

                                   

Fire Prevention Tips in Your Home

According to the National Fire Protection Association, in 2008 a home structure fire was reported every 82 seconds and most home fires are preventable.   There was one civilian fire death every 2.5 hrs.

The National Fire Protection Association (www.nfpa.gov) encourages everyone to review Home Fire Prevention Tips to see how safe your home is.  Don’t let your home become a statistic.   Here are just a few of many tips to a prevent fire in your home.

Smoke Detectors:

• Install a working smoke detector on every level of the home
• Test all smoke detectors monthly and change the batteries at least once a year

 Smoking Practices:

• Do not smoke in bed or while lying down.  Best practice is to smoke outside!
• Dispose of ashtrays contents in the trash only after wetting the ashes

Kitchen:

• Never leave cooking unattended   
• Make sure everyone knows how to put out a grease fire with a lid.  Never use water!
• Do not use the stovetop to store items

 Electrical:

• Plug large appliances directly into wall outlets.  Check the amperage to make sure you don’t overload the socket.
• Use extension cords sparingly and do not piggy-back the cords (one plugged into another)
• Repair loose or worn-out outlets, light fixtures, cords, fixtures, etc immediately upon discovery

 Heating:

• Inspect and clean all heating systems, including fireplaces prior to every heating season
• Keep all heating systems at least 3 ft away from flammable items
• Use portable space heaters sparingly and never leave them turned-on while unattended

 General Household:

• Keep matches and lighters out of reach of children
• Never leave candles burning while unattended
• Store paints and other flammables in approved containers outside or in a garage/shed
• Clean the clothes dryer lint screen frequently to keep the airway open.  If you use fabric softening sheets, scrub the lint screen with dish soap to remove the invisible residue at least twice a year
• Have an ABC fire extinguisher in your kitchen and garage for on-the-spot small fires only

Brought to you by the Greater Portland Board of REALTORS®

Submitted by Geoff MacLean, REALTOR® and Scarborough Fire Department Captain.

Fall is here…….again

 

 

By Kate Lowry

Here we are at the end and at the beginning of two glorious seasons in Maine.  The days still feel like summer and the evenings feel like fall.   It’s the time of year when we need our fleece and our shorts within the same day or even the same hour.  But don’t put away the gardening gloves just yet.  And hold on to any crazy notion of packing away those shorts.  This is the best time to prepare for spring believe it or not!

Weed the gardens now instead of waiting until you’re ready to plant flowers next year. Cleaning out all this debris from summer allows you to start fresh in the spring. 

Divide plants. Exchange them with others and add to your garden for little or no cost at all.

Plant your spring bulbs in the fall, but be careful about timing:  too early and they may flower before winter, too late and they may not survive the frost.

Fertilize and aerate the lawn. Nourish it before winter, and in the spring it will be all ready to soak up another season of heat and activity.

Wash porches and decks with natural, non-toxic products.  You can even make your own cleaning products.  Visit http://www.womensvoices.org for recipes.

Prepare summer clothes for donation or resale.  Resale shops only take seasonal clothing, so have them ready for when the daffodils pop up through the snow next year.  If you did this last April with your unwanted winter clothes, you’d be getting rid of them right now!

Find all the winter outerwear in your house that won’t be used again.  I can’t think of any clothing category more important for needy people in the Maine winter.

Touch-up window sills when the air-conditioners are out.  For those of us still burdened with removing those awful things, it’s important to clean and repair the surfaces they were on.

Make a list of rooms you’d like to paint or furniture you’d like to repair.  For those snowed-in days ahead, be productive. And have fun with projects that you can do yourself.

Prepare your home to sell. Even if you’re not moving right away, it is never too early to start.    Make lists of items earmarked for family, resale or donation.  But don’t get rid of them until you talk to your realtor or home stager, as they might be important in how well your home shows.

There is something about seasons ending and seasons beginning that make us motivated to create change and improvement in our lives and in our homes.  Take advantage of it.  We have a long winter for nesting!

Kate Lowry Designs, LLC is a full service design firm, specializing in Home Staging, Interior Redesign and Senior Downsizing. Kate is the Downsizing Specialist for several area retirement communities.  207-776-9558, info@katelowrydesigns.com, www.katelowrydesigns.com

REALTOR® News & Views

 

 

The Many Upsides to Downsizing

The word downsizing comes with a highly negative connotation.   When, in reality, it should be called smartsizing or rightsizing.  What could be smarter than living efficiently in a dwelling that fits your lifestyle and family’s needs perfectly?  Close your eyes and visualize this:  an efficient home where all space is used, all possessions have a home, and there are no dumping grounds of long forgotten “treasures” and unused furniture. Sound like your house?  Most likely not and you are not alone.  Understanding the benefits of downsizing is the easy part, committing to do it is the hard part.

The benefits of downsizing can not only affect your wallet, but your state of mind as well.  The two main areas of savings are money and time.

·       Saving on the green stuff ($$$):  In a nutshell, when you live in a smaller home, it costs less.  The mortgage is lower, the utilities are less, the cost to repair the roof is half as much, and it costs less to pay the kid next door to mow your lawn.

·       Saving on the daily purchases:  This is simple once you understand the concept and buy into it.  Because you live a smaller home, you need to have less stuff and it has to be organized.  Because you are organized, you know what you have and where it is.  The end result is a not buying more of what you already have and do not need.

·       Time Savings:  This is a biggy and should not be underestimated.  How many times have you said “If only I had more time”.  A smaller efficient and organized home is your ticket to more time.  You will put your hands on what you need, when you need it.  Furthermore, your house projects are more manageable because your dwelling is smaller.  From vacuuming to mowing the lawn, you will save a precious commodity, time. 

So, if downsizing is such a smart idea, what’s stopping you?

·       Probably not house shopping.  Looking for a new house is fun and invigorating.  Dream a little… what if you sold one of your cars and moved from the suburbs to in town?  What if?

·       As long as you are not under water with your current home, cost is not an issue.  Interest rates are the lowest they have been in years, now is clearly the time to look.

·       What about all the “STUFF” you have accumulated over the last 30 years?   Bingo !!  This is the number one reason folks cannot fathom downsizing.  The thought of going through and letting go of all your collected “treasures” is too overwhelming and emotional. 

 

Words of advice: 

 

·       Think of the whole process as liberating. 

·       Start the process early.  Talk to a real estate broker about the market. Talk with a mortgage broker.  Talk with your family. Bounce ideas around.  Change can be really fun.

·       Hire downsizing professionals to help you.  The process can be daunting and help is available.

 

Kim Dorsky, GPBR Affiliate member

 

 

 

SimplySized Home

Downsizing Made Easy

Yarmouth, ME 04096

207-358-0046

 

 

When your home becomes your business:

 

When Your Home Becomes Your Business:                                    

       Converting a Personal Residence to Rental Property

"There are many scenarios that could turn the family home into a rental property: new job, growing family, temporary re-location, etc."

What is the value of the property?

At the time when the property is converted to a rental, the owner needs to know both (1) the adjusted basis of the property (original cost, plus improvements, less any depreciation taken), and (2) the fair market value of the property.  Obtaining an appraisal when the property is converted to rental will help establish the fair market value for current and future use.  At a minimum, a REALTOR® market value assessment should be obtained to help substantiate fair market value. 

The property’s basis is important for two reasons.  First, it is used to determine the amount of depreciation expense that can be taken during the time the property is rented.  For purposes of calculating the annual depreciation allowance, the lower of (1) the adjusted basis on the date of conversion, or (2) the fair market value at the time of conversion is used. Secondly, it is used to determine the gain or loss when the property is eventually sold (discussed later).   

What expenses should be tracked?

A rental property is a business.  Expenses necessary for managing, conserving or maintaining your rental property are deductible expenses.  Some of the most common rental expenses are:

·         Advertising

·         Auto and travel expenses

·         Cleaning and maintenance

·         Rental commissions

·         Depreciation

·         Insurance

·         Legal and other professional fees

·         Management fees

·         Mortgage interest

·         Repairs

·         Taxes

·         Utilities

It is vital that records are kept to support all expenses claimed on the rental property.

What happens when the property is sold?

At the time of sale, a gain or loss on the sale is calculated.  If there is a gain on the sale, the adjusted basis of the property is used for the calculation.  If there is a loss, then the lower of adjusted basis or the fair market value of the property on the date of conversion is used in the calculation.

"As the owner of property that has been converted from a personal residence to a rental property, you may still be able to take advantage for the gain exclusion rules for a residence.  Please check with your tax professional on these exclusions.  It is important to note, however, that the amount of depreciation that was an allowable deduction during the rental period will not be excluded and will be taxed at sale."

It is important to note, however, that the amount of depreciation that was an allowable deduction during the rental period will not be excluded and will be taxed at sale.

Converting your personal residence to a rental property can be a reasonable solution in a variety of circumstances.  However, there are many factors to consider when making the decision, many of which can have current and future tax implications.  If you are considering converting your residence to a rental property, please consult your tax advisor to discuss your unique situation.

Submitted by: Mary Eshelman, CPA Swanson, Eshelman & Gamage LLC

IRS CIRCULAR 230 DISCLOSURE: Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter