For buying and selling purposes, appraisals are usually based on market value what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

Appraised value doesn’t consider special considerations, like the need to sell rapidly.

Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems(http://www.realestatechecklists.com).

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However, with interest rates as low as they have been in the last two years and the price of homes having come down considerably, it is possible that the standard deduction may be the better choice.

Each year, the taxpayer can compare the total of the itemized deductions to the standard deduction to select which method will result in the most benefits. The 2011 standard deduction is $11,600 for married couple filing jointly and $5,800 for single filers.

According to IRS Publication 936, “The term ‘points’ is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. A borrower is treated as paying any points that a home seller pays for the borrower’s mortgage.”

If you purchased a home in 2011, have your tax professional evaluate your closing statement to see if there are loan fees that may be used as a deduction on your tax return regardless of whether you or the seller paid them.

Refinancing a principal residence or purchasing an investment or income property require that points must be deducted ratably over the term of the mortgage rather than deducting them fully in the year paid. Borrowers in these situations should consider the benefits of lower interest rates from paying point to higher interest rates without points.

This article is meant to provide information that can be discussed with your tax professional about your specific situation and is not to be considered tax advice.

Finding a list of companies from a phone book doesn’t mean they’ll be reasonable and reliable, it just means they have a phone and are willing to pay for an ad.  Searching on the Internet may direct you to a website that appears to be a local company but really is a marketing company who will sell the lead to a repairman or company who will pay a referral fee.

There are consumer organizations like Angie’s list who rate repairmen and contractors but they usually require an annual membership fee to be able to access the information.  There are also services like Renovation Experts or Service Magic that are registries for contractors but they may not be the most competitively priced.  

Your best recommendations are going to come from friends, family and neighbors you trust who have actually used the repairmen before and would use them again.  The problem here is that you might have to make multiple calls before you can find a friend who can recommend the type contractor you need.

Repairs are a normal part of selling homes and we certainly come in contact with lots of contractors.  This experience leads us to understand who is reputable and reasonable as well as who to avoid.  As part of our commitment to helping you be a better homeowner from the time you buy your home until you sell it, we’re more than happy to make a recommendation of good repairmen or other professionals you might need.  Give us a call…we want to help.

Factors that increase the risk that the loan will be repaid will proportionately increase the interest rate charged to the borrower. If the risk becomes too high, the loan will not be approved.

• Loan amounts – conventional loans for more than the conforming limits set by Fannie Mae are considered jumbo loans and generally have a higher interest rate.
• FICO score – the lowest interest rate is reserved for the highest credit scores; the lower the score, the higher the rate borrower will pay.
• Occupancy – borrowers occupying a home as their principal residence are considered a better loan risk than second homes and investment properties.
• Loan purpose – purchase transactions generally have the lowest interest rate while refinancing a home is generally higher.
• Debt-to-Income ratio – a borrower’s monthly liabilities divided by their gross monthly income develops a ratio that helps lenders to assess the borrower’s ability to repay the mortgage.
• Loan-to-Value ratio – the lower the percentage of the loan to the appraised value of the property will generally lower the interest rate.

• Repairs you’ve requested have been made. Obtain copies of paid bills and any related warranties.
• All items that were included in the sale price draperies, lighting fixtures are still there.
• Screens and storm windows are in place or stored.
• All appliances are operating.
• Intercom, doorbell, and alarm are operational.
• Hot water heater is working.
• HVAC is working.
• No plants or shrubs have been removed from the yard.
• Garage door opener and other remotes are available.
• Instruction books and warranties on appliances and fixtures are there.
• All personal items of the sellers and all debris have been removed.

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Seller Services

Rest assured we will do everything we possibly can to sell your home as quickly as possible at your asking price. Our service include:

• Eye-catching “for sale” signs to ensure that your home is noticed no matter what the hour.
• Exterior flyers designed to capture the highlights of your property.
• Information and picture of your home added to the multiple Listing Service (MLS) program so Realtors throughout the country can find out particulars.

Pricing

This process generally begins with a determination of a reasonable asking price. The first step is to determine what is that price? What should you list your home for? Here’s where your agent can be invaluable because your agent has access to data on comparable homes in your neighborhood and can help you set the correct price. Your real estate agent can give you up-to-date information on what is happening in the marketplace and the price, financing, terms, and condition of competing properties These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

Get Ready, Get Set

When you put your house on the market, you want to be sure your house is in good condition and looks attractive to buyers. Doing any necessary repairs helps add to the attractiveness of your home and can substantially add to the price you can ask. Once you’re ready, your agent will list the house, bring you buyers and work together with you to get your house sold.

Letting REALTORS show the house as much as possible and staying flexible are important to selling your home. It may seem inconvenient to have people viewing your house right when you want to wash the dog or sit around in your nightgown, but it’s very necessary. Just remind yourself that you’re moving on and your job right now is to make your house available so that your agent can let as many potential buyers as possible look at it. Your agent’s job is to narrow down the people who are interested in the house, to bring you plenty of prospective buyers and to point out the features your house offers. Soon enough, you will have an offer on your house.

Marketing

The next step is a marketing plan. There is a lot more to selling your house than simply putting it on the market. Today, less than 5% of all property sales are a result of newspaper ads. You need a marketing plan – a strategy. The key to a successful sale is Exposure. We employ a wide range of marketing methods to provide maximum exposure for your property.

Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your agent acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc.

Spread the News

You can’t sell your house until buyers know it’s available. Your agent will help by listing the house on computerized services, putting up signage and connecting you with qualified buyers. In addition, you may choose to market your home by running ads in your local paper, advertising on the Web or asking for additional marketing suggestions from your agent.

Advertising is part of marketing. The choice of media and frequency of advertising depends a lot on the property and specific market. For example, in some areas, newspaper advertising generates phone calls to the real estate office but statistically has minimum effectiveness in selling a specific property. Overexposure of a property in any media may give a buyer the impression the property is distressed or the seller is desperate. Your real estate agent will know when, where and how to advertise your property.

There is a misconception that advertising sells real estate. The National Association of REALTORS studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends and family, and personal contacts.

Multiple Listing Service

Your home will also be visible through the Multiple Listing Service. This Listing is used daily not only by our Associates, but by realtors in the area, thus assuring maximum exposure for your home.

Security

When the property is marketed with an agent’s help, you do not have to allow strangers into your home. Agents will generally pre-screen and accompany qualified prospects through your property.

Negotiating

The negotiation process deals with much the same issues for both buyers and sellers, as noted above under the buying process. Your agent can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections, and financing — a lot of possible pitfalls. Your agent can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

Get It in Writing

All offers and contracts have to be made in writing. Verbal agreements are not legally binding. Once a buyer makes an offer for your house, you can accept it outright or make a counter offer. Your counter offer indicates that you are willing to negotiate, but that your terms haven’t been met by the first offer. The process of offers and counter offers may go back and forth a few times until you and the buyer agree on terms.

While you’re negotiating you can still accept offers from other buyers. You have no legal obligation to anyone until you agree in writing to their offer.

When you consider any offer, you need to figure out what your actual profit will be on the amount proposed. You have to deduct your current mortgage balance, the legal fees for the transactions and anything else you’ll be responsible for, like termite inspections, unpaid taxes on your property, etc. If the offer meets your expectations, you’re ready to make a deal.

Once you settle on an offer, the buyer is now legally obligated to purchase your house. There are some standard contingencies though. Typically, these include issues like the buyer not being able to get financing, or the house failing inspection. These contingencies protect both you and the buyer.

Monitoring, Renegotiating and Closing

Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your agent is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

Closing the Deal

Your buyers have their mortgage financing approved, the house has been inspected and the details have been worked out. Now all you have to do is read everything carefully and sign on the dotted line.

That’s what the closing is. At the closing you are actually transferring ownership of your house to the buyer. Now you’re done with selling your current home. If you’ve been looking for a new house at the same time, you’ll probably want to have your closings close on the same day so that the buyers can take possession and you can move to your new home.

How Do Real Estate Agents Get Paid?

Real estate agents or brokers are generally paid through the sales commission paid by the seller when a transaction closes. Agents have expenses and financial obligations just like you, so it will be to your mutual benefit if you choose a real estate agent and stick with that person. The agent will respect your loyalty and respond with a sincere commitment to you. Please keep in mind that sometimes the agent will collect his or her fee from the buyer. This usually occurs when no compensation is offered from the listing company or individual selling the property.

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 W-2 forms or business tax return forms if youre self-employed for the last two or three years for every person signing the loan.

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1. Investigate local, state, and national downpayment assistance programs. These programs give loans or grants to cover all or part of your required downpayment. National programs include the Nehemiah program (http://www.getdownpayment.com) and the American Dream Downpayment Fund from the U.S. Department of Housing and Urban Development (http://www.hud.gov).
2. Get the seller to provide financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you do a mortgage.
3. Consider a shared-appreciation, or shared equity, arrangement. Under this arrangement, your family, friends, or even a third-party may buy a portion ofthe home and thus share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and all maintenance costs, but all investors names are usually on the mortgage. There are companies that can help you find such an investor if your family cant participate.
4. Get help from your family. Perhaps a family member will loan you money for the downpayment and/or act as a cosigner for the mortgage. Lenders often like to have a cosigner if you have little credit history
5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save more toward your downpayment. And in many cases, owners will apply some of the rental amount toward the purchase price. You usually have to pay a small, nonrefundable option fee to the owner.
6. See if you can qualify for a short-term second mortgage to give you the money to make a higher downpayment. This may be possible if you have a good income and little other debt.

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