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Should you sell or rent your home?

Should I Sell or Rent My Home? A Quiz to Help You Decide

sell or rent my home
To sell or to rent. It’s a tricky question, especially in a down market. If you are relocating or just ready to move on from your ball and chain of a house, renting might make more sense than selling. Here is a quiz to help you decide whether you should sell or rent your home.

Can You Afford to Sell Your Home?

Here’s an example of a situation where a couple had to examine how affordable it was for them to sell their house. The couple knew they wanted to move to a new home, but they live in an area of Florida where houses have halved in value since the peak in 2006 – the same year their house was purchased. As they debated whether to sell their home, they realized that if they chose to sell, they would be forced to take a $150,000 cash loss, not including closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home that then became their primary residence. When you rent, you may take a loss on a monthly basis, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit.

Can You Afford to Rent Your Home?

Research the going rents in your market using tools like the MLS listings and craigslist.org. Look for comparable properties in your neighborhood or similar neighborhoods to get sense for what your home might bring in as a rental. It is important to take features like square footage, number of rooms and upgrades such as granite kitchen counter tops, location and proximity to desirable schools into consideration while looking for comps. You can also talk to real estate agents and property managers to get their take on pricing. If it turns out that you can’t cover your mortgage with the projected rent, then calculate how much of a loss you can take to still be able to afford to rent the house.

Do You Need Tax Deductions?

You can often take losses and costs from rental properties as tax deductions. In addition to deducting the cost of your mortgage beyond the rental income, landlords can often deduct all expenses associated with the rental, including property management and maintenance fees. Consult your accountant to ensure that you know what the costs and benefits will be from a tax perspective before you make the decision to rent rather than sell your home.

Can Your Credit Take the Hit of a Short Sale?

If you don’t mind sacrificing your credit score for a few years, you can’t afford to rent and you really need to get out of your house, then a short sale is always an option. A short sale is a real estate transaction in which the bank agrees to accept less than the amount owed on the mortgage to release the owner from their financial obligation. For example, if the mortgage on a home is $200,000 and a buyer makes an offer for $150,000, the bank may accept this offer and forgive the additional debt. Besides mucking up your credit, a short sale can also contribute to your tax bill. Often, the forgiven amount (in this case, $50,000) can be added to your tax bill as taxable income. It is important to consult a lawyer or accountant so that you know the details of how a short sale will impact your taxes and your credit before you move ahead.

Should You Sell or Rent Your Home?

Depending on your immediate financial situation and long-term outlook, it can make more sense to rent rather than sell. In some cases, a short sale is the best remedy for escaping an underwater property and moving on with your life. Before you make any decision about renting or selling, be sure to consult a lawyer or accountant for customized consultation so that you fully understand the tax ramifications and benefits given your unique situation.

Everybody Wants to Know About Short Sales

What Does Short Sale Mean?

Buying Short Sales: What You Need to Know

As the real estate market remains volatile, one of the best options for many new homebuyers is purchasing a short sale home. But, what does ôshort saleö mean? A short sale is when lenders have the opportunity to sell a property before the bank forecloses on the home rather than after. While buying short sales creates the opportunity for real estate investors to pay well-below-average housing prices for properties within ideal locations, there are still drawbacks.

If you’re interested in buying short sales, here are a few things you need to be aware of:

Why Banks Short Sale Pre-Foreclosure Homes

The last thing a bank wants to do is own a property secured by the bank’s loans. When a property owner is in default and owes more than what the home is currently worth, the bank will work with the seller to offer the property for less than they owe on the mortgage loan.

How much money will banks take off? When buying short sales, how much should I expect prices to fluctuate? On average, banks estimate that holding on to the property after foreclosure will cost up to 18 percent of the home value to complete the inspection, appraisals, repair and maintenance. Instead, it is a much easier and financially sound decision for banks to sell the home ôas isö to avoid any third-party inspection process.

The Negative Side of Buying Short Sales

Buying short sales might seem like a good deal for the buyer, but that’s not always the case. Here are three major conflicts buyers and sellers face when a short sale, pre-foreclosed home is on the market:

  • Time: Don’t let the name fool you. Buying short sales takes a very long time. There’s a whole gambit of scenarios of why a short sale might be delayed, but many of the hurdles buyers have to overcome have to deal with secondary financing on the homeowner’s original mortgage, bank processing delays and private mortgage insurance policy breakdowns. Buying short sales is a very complex process, which can leave the short sell buyer in housing limbo for up to six months.
  • Condition: Short sale homes often need additional maintenance and repairs. When the current property owner is unable to pay the mortgage on the home, more often than not the condition of the property diminishes over time. Additionally, short sale homebuyers should take into account that the property will have had more than one previous owner, which adds to the wear and tear.
  • Lender Restrictions: Banks can renegotiate a short sale at the last second. If a new law passes, the market begins to change or the bank finds out more information about the property, they reserve the right to change the terms of the contract at any point in the process. Banks will also refuse to pay for extra services like seller closing costs or inspections. If you want something specific inspected on the property, you’re probably going to pay for it yourself.

 

Short sale homes are the real estate market’s diamond in the rough. It’s true that buying short sales can be a very tricky process, but for the flexible and patient homebuyer, the short sale home can be the dream house they’ve been searching for.

You need to read this to protect your credit!

Here’s breaking news you need to know…and you need to let all your family and friends know right away as well.

Having credit checked is an important and necessary step in the home buying process, as well as something that is done on a regular basis for any number of reasons — increasing a credit line on your Visa, applying for insurance, or buying a car. But very few people realize that each time their credit is checked, the “inquiry data” that the credit bureaus (Equifax, TransUnion, Innovis or Experian) has on file has now become a commodity. This information is being sold by the credit bureaus to other lenders…and also to companies that sell and resell the same names and personal information.

That’s right — the credit bureaus have found a way to increase their revenues at your expense…and without your permission. These “inquiry leads” include name, address, phone numbers (including unlisted), credit score, current debt and debt history, property information, age, gender and estimated income. They are selling your personal, confidential information to competing creditors…and making millions. Your privacy is being sold, not just once, but over and over again.
The good news is that you can make it stop, right away. The consumer credit reporting industry has provided a way to “opt out” and remove your name from these lists. You can contact them by phone at 1-888-567-8688 or online atwww.optoutprescreen.com . You must opt out at least 48 hours prior to having your credit checked to make sure it is processed in time. You can choose a five year or lifetime option, and the lifetime option does require a signed form. If a credit report needs to be run prior to the 48 hour waiting period — at least you are aware and informed, and can be on the lookout for suspicious phone calls or mailers from someone who has purchased your data.

Opting out will also protect you from “pre-approved credit offers” arriving via mail…one of the leading causes of identity theft in the US.

So take your privacy back. Take five minutes right now — opt out, and pass it on. Refuse to be a part of this system

ORGANIC BLUEBERRY COFFEE CAKE

It’s blueberry season again! Here is the latest recipe from my newsletter:

3 large organic eggs
1/2 c. fresh butter, softened
1 c. unsweetened orange juice
1/2 tsp. orange extract
2 1/2 c. organic all purpose flour
1 tsp. baking soda
2 tsp. baking powder
1 tsp. cinnamon
1/4 tsp. lemon rind
1 c. flaked coconut
1 c. fresh blueberries
1/3 c. flaked coconut (for topping)
Preheat oven to 350 degrees. Beat the eggs, butter, juice and extract together. Add the flour, soda, powder, cinnamon and lemon rind, beating well. Stir in blueberries. Spoon into an greased and floured 9×13 pan, spreading evenly. Sprinkle top of the batter with coconut and bake for 20-25 minutes. Cool. (Serves 8-10)

Client Appreciation Day

This is my year for giving back. My clients, friends and family are the backbone of my business and the structure of my life. I appreciate each and every person that has entered my life over the last 15+ years in the Real Estate field. This year I am excited to not only help with Keller Williams’ current Habitat for Humanity project, but also to host my Client Appreciation BBQ on site of this great project. Friday, September 9, 2011 I would like to invite everyone to join me and my team for a fun day at the site. For any who would like to participate in the home construction itself, there are many volunteer openings. But don’t worry if you can’t make it all day, everyone else is welcome to come by at 4:00pm for food, drinks, fun and a drawing for a Double Musky gift certificate!

Featured Chicken and Strawberry Salad will be served too!

Hello world!

I have finally entered the information age and have my very own blog!!!  Real Estate is exciting and dynamic right now and I hope to keep all my friends, family, and clients up-to-date on current events in the market.

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