6 Little White Lies That Can Help You Buy a House

When you find a home you’re dying to own, you might assume that honesty is the best policy when dealing with the seller (or the listing agent). And it is … to a point. But keep in mind, buying a home is a high-stakes poker game—er, negotiation—where revealing exactly what’s going on in your head, heart, and bank account could cost you big-time.

Of course, you should never outright lie when you’re trying to buy a house. We’re on the record on that point, right? Good! But all that said, you might need to tiptoe around the truth sometimes.

So before you say something you’ll regret, here’s what info to gently spin so the ball stays in your court.

White lie No. 1: ‘I’d ideally like to move in by X date’

What you really mean: “I have to be out of my current place by X date! Help!”

Recently Bob Gordon, a Realtor® with Berkshire Hathaway in Boulder, CO, walked through an open house with a client who fell in love with the charming home—and excitedly approached the listing agent, announcing she was going to make an offer. Oh, and she had to be out of her current home in 30 days.

“That’s when I jumped in and took my client outside,” Gordon notes. The lesson he drove home to his client (and wants to pass on to others) is that if you absolutely have to move by a certain date, sellers will smell your desperation and play hardball. So it’s better to soft-pedal this info and pray they’re eager to move out quickly, too (as many sellers are).

White lie No. 2: ‘We’ve made every effort to get our finances in order’

What you really mean: “God, we hope we can afford this.”

You don’t want a seller to worry that your contract will fall through, so keep all money concerns (like fears about loan denials) to yourself.

“Most of these issues can be covered by generic financing contingencies,” assures Kyle Alfriend, managing partner for Alfriend Real Estate Group Re/Max Achievers in Dublin, OH. If not, you should probably wait to make an offer until your issues are resolved.

White lie No. 3: ‘We’re really excited about this house’

What you really mean:  “We must have this house! Seriously, we’ll do anything.”

Of course, homeowners will be flattered to know you love their home, but for your wallet’s sake, you need to play it cool, says Paul Silverman, a broker associate for Martha Turner Sotheby’s International Realty Circle of Excellence in Houston. “If sellers know that you’re absolutely in love with the home, they might not be as willing to negotiate.”

White lie No. 4: ‘We’re not sure yet what our top offer will be’

What you really mean: “The most we can possibly pay is ___.”

“You shouldn’t let the seller or seller’s agent know what you’re willing to pay, no matter how much you want the house,” advises Laura Usher, president of Cape Cod & Islands Association of Realtors and a Realtor for Kinlin Grover Real Estate in Brewster, MA. “Negotiation is part of the strategy in the home-buying process. It’s important not to show your hand.”

White lie No. 5: ‘We’re guessing there are other houses that also offer what we want’

What you really mean: “This is the only house that has the price point/pool/school district we want. Period.”

“Sellers must price their homes against the competition, and this is the greatest tool the buyer has,” says Alfriend. Because of that, try not to gush like a schoolgirl with a crush about any features that make the home unique.

Even “if this is the only home in your price point with a pool, walking distance to a school, three-car garage, or five bedrooms,” Alfriend says, “don’t let the sellers know that these are critical to your purchase decision.” If you do, they’ll know they have the upper hand.

White lie No. 6: ‘We have a few more questions’

What you really mean: “We’re getting cold feet.”

Freaking out a little about your decision? Please don’t express your jitters to the home sellers. Feeling nervous is entirely normal—or a sign that you should ask more questions to clear up any concerns.

For instance, if you’re wary of whether the pool and yard will require too much upkeep, go ahead and ask the sellers how many hours they spend on maintenance (or what they pay someone to do it for them). Or if you’re leery about neighborhood safety or wonder if there’s good access to public transit, there are plenty of ways to research the area online and get more info. Or, if you’ve truly got a case of cold feet, you may just need a reality check from a trusted friend or your real estate agent about how, say, you’ve looked at plenty of homes to make the right decision. But this sounding board should not be the home seller—unless you want some major drama on your hands.

Source: Realtor.com, Stephanie Booth
http://www.realtor.com/advice/buy/white-lies-that-can-help-you-buy-a-house/?iid=rdc_news_hp_carousel_theLatest

Silicon Valley homeownership: Pretty much forget it, if you’re a millennial

My advice to young people in the valley is that home ownership is still possible but they need to start saving early, go to college and then get that good paying tech job, of which there are plenty. Granted, buying their first home is not as easy for millennials as it was in my parents day, but IT IS STILL DOABLE! Also, keep in mind that it is still a hot market right now in the silicon valley, a real estate market that won't stay hot forever at which time prices will go down. 


Surprise, surprise.

Young people can’t afford to buy homes in Silicon Valley.

The folks at Earnest – the San Francisco-based lender – report that millennials in the San Francisco and San Jose metropolitan areas have the lowest rates of homeownership in the nation: 6 percent and 7 percent, respectively. The Los Angeles and New York metros follow at 8 percent in the analysis, based on data from Earnest’s loan applicants.

Compare those dreary numbers with other metros where millennials (ages 18-35) are faring better: Miami (where 16 percent own homes), Seattle (17 percent), Houston (27 percent), Salt Lake City (32 percent) and St. Louis (35 percent).

“The high cost of homeownership is delaying buying among those aged 25-35, the years when home buying accelerates,” Earnest tells us. The dismal San Francisco and San Jose ownership rates stand in contrast to another set of numbers: “These job hubs also have the highest median incomes in Earnest’s data-set for this age range: $81,000 in San Francisco and $86,000 in San Jose, as compared with $56,000 across the U.S. overall.”

To complete the picture, the analysis looked at the age threshold in each metro when 25 percent own their own home. Topping the list is San Jose, where it’s not until age 42.5 that 25 percent own homes; the metro (which includes Santa Clara and San Benito counties) also has the highest median home cost, $958,000, according to the Zillow Home Value Index. In San Francisco, 25 percent own homes by age 42, while the median home cost is $812,000. (The San Francisco metro includes San Francisco, San Mateo, Contra Costa, Alameda and Marin counties.)

You can look at various charts and read Earnest’s report here.

Sorry, but if you live in California, you just won’t feel encouraged by this national analysis: “Los Angeles, San Diego, Sacramento, and Riverside are also among the 15 least affordable metros, both by highest median home costs and by highest age when 25 percent own.”

Source: Silicon Beat, Richard Scheinin
http://www.siliconbeat.com/2016/08/29/silicon-valley-homeownership-pretty-much-forget-youre-millennial/

Housecalls: Absentee real estate investment

Dear Ms. Lank: My son is interested in renting out his home, as he received a job offer in another state. Three years ago I bought your book, “The Home Buyer’s Kit,” to help him. Does this book have current information for landlords, or do you have another that would guide us? — J. L.

Answer: Your note made my day! I am flattered that you want more advice.

If your son didn’t already own his home, would he buy it today with the intention of renting it out? Would he do so before leaving the state? I’ll bet not. So what makes it a good investment now, just the fact that he happens to own it? Has he already researched average rental figures in the neighborhood? Has he totaled his expenses — including some funds for unexpected emergencies?

With regard to renting out a property, I usually say that your first property investment should be located within a half-hour of your home. If your son rents out the house and moves away, who would manage the property?

Let’s assume that he (or you, perhaps) picks tenants carefully and is always mindful of state and federal fair-housing laws. He checks their credit — or has his lawyer or accountant do so — before negotiating a lease, so there’s no worry about prompt rent payments.

But is he ready to get a phone call at 7 o’clock in the morning because the water heater isn’t working? Or hold the house open so a plumber can make a quick repair? Or cope with neighbors’ complaints of loud music after midnight? Or receive a notification from the city that the lawn isn’t being mowed? Perhaps none of those troubles would arise, but if they did, someone would have to handle them. And it sounds as if that someone would be you.

Being a landlord requires skills; it involves a lot more than just collecting rent. Your son — and perhaps you — should go to the nearest library and find a book on the subject. And at least give some thought to my original advice, that one’s first real estate investment should be located not more than a half-hour away.

Refusing to inherit

Dear Edith: My parents are leaving their timeshare to me in their will. I do not want the headache of owning a timeshare. I cannot afford the fees. What can I do? Can I refuse to accept it after their death? — R. H.

Answer: Yes, in most situations you can refuse (disclaim) a bequest. Telling the executor won’t be enough, though. Each state has specific procedures, and there are time limits.

You cannot decide who will receive the timeshare instead. Once you disclaim, the law operates as if you were dead, and the bequest goes to the next heir. Assuming nobody wants it, the matter could end up being a bit of a mess for the lawyers to take care of.

Timeshare solution

Ms. Lank: You recently wrote about the difficulty of selling timeshares. I was recently president of a resort homeowners association that had increasing foreclosures. We devised a method to consolidate vacant weeks into whole units for sale, and this has solved the problem for the owners who want to vacate their timeshare and for the resort. — G. H.

Answer: Thanks for an interesting suggestion.

Source: The Pueblo Chieftain, Edith Lank
http://www.chieftain.com/business/realestate/5059092-120/investment-lank-timeshare-edith

AMERICAN DREAM OF HOME OWNERSHIP A COSTLY NIGHTMARE FOR STRUGGLING MILLENNIALS

This article was originally published on the Motley Fool.

The American Dream, defined as the ability of every U.S. citizen to achieve success and prosperity through hard work and determination, has always involved the pursuit of homeownership. Owning your own home has often been viewed as a sign of financial success, and quite a few families use the equity built in a primary residence over time to help fund retirement.

But the American Dream isn't the same for millennials as it was for their parents. The pursuit of homeownership in America is waning: Since the first quarter of 2009, homeownership rates for those younger than 35 have fallen from 39.8 percent to 34.2 percent in the first quarter of 2016, according to U.S. Census Bureau data via USA Today. And data released a week ago by real estate database company Zillow points to an even more frightening picture that could doom homeownership rates in America.

According to Zillow's latest report, 86 percent of current renters don't have the income to purchase a home, or a high enough credit score to obtain financing. Almost half of all survey-takers noted that they were already spending at least 30 percent of the pre-tax income on rent, making it nearly impossible to qualify for financing on a home.

This survey comes at a time when homeownership in the United States is down to 63.4 percent, a 48-year low, and a steady decline from the 69 percent homeownership rate hit 12 years ago. At the same time, we're also witnessing a near-40-year low in vacancy rates for rentals. Since 1995, monthly median asking rent for vacant units has doubled from about $425 to $850.

What's caused this precipitous decline in homeownership among millennials and Americans as a whole?

Part of the blame rests with weaker-than-expected wage growth. Nominal wages in the U.S. rose by 727 percent from 1964 to 2014 based on data from the Bureau of Labor Statistics via the Pew Research Center. However, inflation-adjusted real-wage growth in constant 2014 dollars grew only 7 percent over the same time span. In the meantime, numerous other costs have outpaced wage growth, such as medical costs, college tuition costs, and even, in some markets, home prices and rental inflation. Without real income growth, individuals and families are struggling to gather the income needed to afford homes.

Secondly, as Zillow's report points out, there are still quite a few people with subpar credit scores, which could keep them from getting loans, or even credit cards. Data from ValuePenguin, a website devoted to aiding consumers in making smart consumer spending decisions, shows that the average credit score in the U.S. in 2015 was 695, up modestly from 687 in 2009 and 2010. The credit score scale ranges from a low of 300 to a high of 850, with prime candidates being 680 and above, near-prime candidates hovering in the 620-680 range, and subprime candidates having a score under 620. As of 2014, just 48.9 percent of all Americans had prime credit scores, leaving the remainder of adults questionable when it comes to being able to secure home loans. It's also worth pointing out that people aged 39 and younger had nearly a 40 percent chance of a subprime credit score, compared to just 16 percent and 8 percent for those ages 60 to 69 and 70+, respectively.

Lastly, Americans are poor savers, and that's a problem when lenders typically require a sizable down payment in order to purchase a home. The June 2016 personal savings rate was just 5.3 percent, a far cry from what the citizens of other developed countries are socking away in savings. Furthermore, a GOBankingRates survey from March 2016 showed that 56 percent of Americans have less than $10,000 saved for retirement, including 33 percent with $0. For millennials, 42.2 percent had nothing in retirement savings, and another 29.8 percent had less than $10,000.

The biggest problems for millennials are a lack of wage growth, poor credit scores, and insufficient savings. Thus, the easiest way to homeownership is to tackle these problems head-on.

Strongly consider college

Millennials should strongly consider working in job fields that have strong long-term demand, as well as go to college to obtain at least a bachelor's degree. Millennials between the ages of 25 to 32 with a high school diploma earned a median of $28,000 in 2012 dollars according to Pew. By comparison, same-age millennials with at least a four-year bachelor's degree or higher earned a median of $45,500 per year in 2012 dollars. That can be a huge difference over one's lifetime.

Also, the individual with a degree would presumably have a better chance at business advancement over an individual without a degree, providing more opportunity for socioeconomic advancement. The key is in finding a college that gives you the best return on investment. College tuition price isn't necessarily indicative of return, so make sure you do your homework on colleges that fit your major of choice.

Source: Newsweek, Sean Williams
http://www.newsweek.com/home-ownership-unrealistic-millennials-492527

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INFO GRAPHIC: Time To Sell?

Realtor Behaving Badly - Texas real estate agent arrested after she had 'passionate rendezvous' in home she'd just sold

A Texas real estate agent was arrested Saturday in Friendswood after police found her and a man using a home she had just sold for a "passionate rendezvous," police say.

Kayla Seloff, 22, and Joshua Leal, 27, were arrested after a neighbor leaving for work noticed a couple with a flashlight entering the vacant home about 5 a.m., KTRK-TV (ABC 13) reports.

When police arrived, they saw a man and woman lying on the floor in a "passionate rendezvous," according to KXAN-TV. Police entered the home in the 200 block of East Castle Harbour Drive through an unlocked front door, and the couple initially hid. Seloff eventually told police she and Leal were married and had bought the home the day before.

But when police walked the couple to their car to get their identification, their car smelled of marijuana and police saw a glass pipe on the dashboard. Inside the car, police found a small bag of marijuana.

Seloff admitted that the drugs were hers and that she was the home's real estate agent, not the owner, authorities said.

Seloff and Leal are charged with criminal trespassing and are being held in jail with bail set at $1,000, according to KTRK.

Source: The Dallas Morning News, Elizabeth Djinis
http://www.dallasnews.com/news/crime/headlines/20160823-texas-real-estate-agent-arrested-after-she-had-passionate-rendezvous-in-home-she-d-just-sold.ece

Tiny Homes Are Making a Bigger Mark

Tiny houses are trending bigger nationwide. Interest in small-home living among the public has gained momentum since the recession, and made some Americans crave a simpler, less expensive way to live, according to U.S. News & World Report.

“I still consider it, frankly, a fringe movement, in the best possible way … but I think we just really hit a tipping point where it went into general public awareness,” Ryan Mitchell, creator of the tiny houses and simple-living blog The Tiny Life, told U.S. News & World Report.

These small homes, often built on a trailer and portable, tend to be under 700 square feet. They tend to cost a fraction of a typical home, as low as $10,000 or up to $100,000, depending on the size.

TV shows are giving viewers a peek at this new type of living, especially on networks that HGTV that have several shows featuring small-home living such as “Tiny House Hunters,” “Tiny House Nation,” and “Tiny House, Big Living.”

Dan Louche, founder of Tiny Home Builders, credits such national TV attention as growing the awareness of small homes and helping to expand this niche.

“Things have gotten easier because everybody knows about tiny houses, so now there’s a lot more companies trying to jump on that bandwagon – and not just tiny-house companies, but traditional financing like SunTrust and insurance companies,” Louche says.

Matt Parker, a real estate broker in Seattle, says some of his clients are finding such small spaces can even be more functional than a large floorplan that was built 30 years ago. However, zoning requirements are limiting new construction of smaller homes and still favoring larger bigger builds. He says supply may be the bigger issue with small-home living than demand.

“The demand is there [for tiny homes] … but the product is not there,” Parker says.

Source: Source: “The Big Impact of Tiny Homes: How Little Houses Are Changing Real Estate,” U.S. News & World Report (Aug. 5, 2016)

Tallying new apartment construction in Silicon Valley: Hope amid the housing crunch?

We’ve got jobs, jobs, jobs in the valley, but no place to put the workers when they clock out at night.

Maybe there’s a ray of hope. A new report from the RENTCafé apartment-search website says that intense renter demand is driving a wave of new construction in booming urban markets, including the San Jose metropolitan area.

RENTCafé compiled a list of the top 20 U.S. metros with the most apartments to be completed in 2016 — and San Jose cracked the list, barely. It sits in the No. 20 spot, but let’s call it progress: 5,866 new units are scheduled for completion this year in the metropolitan area, which includes Santa Clara and San Benito counties.

Compiling data from new large-scale projects (buildings with 50+ units), the report breaks down Silicon Valley construction like this: 4,077 units in San Jose; 445 in Santa Clara; 378 in Milpitas; 378 in Mountain View; 378 in Sunnyvale; 128 in Morgan Hill; and a measly 82 in Palo Alto. For many, Palo Alto still signifies “Silicon Valley,” but the city can’t seem to get off its duff when it comes to making decisions about housing.

Among the top 20 metros, Texas leads the pack with a combined 69,000 units projected for completion in Houston, Dallas-Fort Worth, Austin and San Antonio.

Houston sits in the No. 1 position on the Top 20 list; it has 25,935 units slated to come online in 2016. The rest of the Top 5, in order, is Dallas (23,159), New York (21,177), Los Angeles (20,205) and Washington, D.C. (18,027).

Here’s the full report.

As you can see, San Francisco is No. 12 with 9,362 new units — more than doubling the 4,144 units completed in 2015.

Whether all this construction will be enough to ease further Bay Area rent hikes remains to be seen. The region now has 746,100 technology jobs, according to an analysis by this newspaper published earlier this week. That tops the record set during the dot-com era by 21,000 jobs.

Where will all these people live, and how will they do it affordably? Good question.

A second-quarter report from Novato-based RealFacts showed rents continuing to climb across the region’s nine counties, though at a slower rate than the year before. The average Bay Area apartment rented for $2,526 in the second quarter, up 4.3 percent year over year. The average San Jose rent was $2,503, up 4.0 percent. In Oakland, the average was $2,959 up 5.4 percent, and even far-flung Concord saw a sharp increase of the average rent to $1,760, up 8.3 percent.

Those numbers don’t capture the mom-and-pop landlord rentals that tend to be less costly.

But they still are a good indicator of the region’s entrenched housing predicament — which drives thousands to commute long distances from more affordable communities to their jobs in the valley.

And incidentally, if you’re thinking of finding some relief by moving to Sacramento, think again. Among the top 5 markets for projected rent growth this year, according to RENTCafé, “Sacramento will have the smallest number of new apartments added to its inventory in 2016, an unimpressive 730 units in large-scale developments. This actually represents a 30% decrease compared to 2015 when 1,000 units hit the market.”

Source: Silicon Beat, Richard Scheinin
http://www.siliconbeat.com/2016/08/19/report-tallying-new-apartment-construction-silicon-valley/?_ga=1.22882299.1788795839.1424213200

Silicon Valley housing market is 'looney-tunes,' real estate broker says

Great article and video from CNBC about the craziness of the Silicon Valley housing market. As a Realtor, I have benefited from the hot housing market. The video below pretty much sums it up.

http://video.cnbc.com/gallery/?video=3000542782

The housing market in Silicon Valley is "looney-tunes," real estate broker Fred Glick said Friday.

That's because it's all about supply and demand, with people flooding to the area from around the world.

"We just keep adding people like crazy and we can't get enough supply. That's why people have to share houses. That's why renters know that they have to pay an exorbitant amount of money," the CEO of real estate brokerages Arriva and U S Spaces said in an interview with CNBC's "Closing Bell."

The median home price is $1.1 million in San Francisco and $2.5 million in Palo Alto, according to Zillow.

 Pro on housing costs: LA and SF are 'Looney Tunes' Pro on housing costs: LA and SF are 'Looney Tunes'
Friday, 12 Aug 2016 | 4:15 PM ET|03:40
The housing market in Silicon Valley is "looney-tunes," real estate broker Fred Glick said Friday.

That's because it's all about supply and demand, with people flooding to the area from around the world.

"We just keep adding people like crazy and we can't get enough supply. That's why people have to share houses. That's why renters know that they have to pay an exorbitant amount of money," the CEO of real estate brokerages Arriva and U S Spaces said in an interview with CNBC's "Closing Bell."

The median home price is $1.1 million in San Francisco and $2.5 million in Palo Alto, according to Zillow.

Kelly Porter Real Estate
Erin Lubin | Bloomberg | Getty Images
Things have gotten so pricey that this week alone two high-profile people have been driven out of the Bay Area. San Francisco Federal Credit Union CEO Steven Stapp said he's taken another job in Portland, in large part because his rent in San Francisco is too high.

And a member of Palo Alto's planning commission, Kate Vershov Downing, posted a public letter of resignation on Medium, saying she and her family can't afford the $6,200 rent of a house they share with another family.

Glick said the real estate market is a local issue, with different cities facing different conditions. In Philadelphia, for example, it is "generically busy," with houses in good areas with good prices being snapped up quickly. In Tuscan, Arizona, however, there is two to three months of inventory for houses under $300,000, he said. And Houston has an overbuilt luxury problem, he said.

"It depends on where you go," said Glick.

One thing that won't impact the market will be if mortgage rates rise, he said.

"Mortgage rates don't matter because the way it is, you are thrilled to be a mortgage," he said, noting that it is a nightmare getting mortgages approved.

"If the rates go up, people take a five-year ARM instead of a 30-year fixed," he said.

Source: CNBC, Michelle Fox
http://www.cnbc.com/2016/08/12/silicon-valley-housing-market-is-looney-tunes-real-estate-broker-says.html

Schools Rule

Milpitas council approves mixed-use condo development on Montague Expressway

After developers were told to go back to the drawing board earlier this year to improve the design and amenities of a proposed 216-unit condominium project with nearly 6,000 square feet of mixed-use retail for a parcel in southern Milpitas, city officials formally advanced the revised version of the development last week.

Milpitas City Council voted 4-0 Aug. 2, with Councilman Garry Barbadillo recusing himself, to approve 720 Montague. The project, located on a 2.35-acre site along Montague Expressway, South Milpitas Boulevard and Gladding Court, will be located near the planned Milpitas Bay Area Rapid Transit Station.

The project's proposed condos will include 15 junior one bedrooms units, 126 one bedroom units and 75 two bedroom units, which range in size from 690 square feet and 1,200 square feet. In addition, the project will feature two floors of below ground parking with 353 parking stalls, with 334 spots for residents and 19 for retail use. Additionally, the site will have 54 bicycle stalls and 17 short-term bike spots.

The project was previously reviewed by the Milpitas Planning Commission on April 13.

When asked by that panel about the intent of the retail space, Badru Valani, the property owner and developer, said he would like to include a cafe that provides breakfast, lunch and dinner, or something similar that can be available all day. Also at the April 13 meeting, Milpitas Unified Board of Education Vice President Bob Nunez said the school district supported the project.

Although well liked by planners, by the following month the city council took issue with 720 Montague's design.

On May 3, Mayor Jose Esteves told the developer the project lacked public amenities and added he was not "impressed" with its design. Ulitmately, the council voted 2-2, with Esteves and Vice Mayor Carmen Montano dissenting, to table the development for a future meeting. Barbadillo recused himself from the vote due to a conflict of interest.

But last week the city council offered a different reaction to the project as they expressed happiness with the changes made to its design as well as the amenities the city would get from this development. That included $60,000 to the city's general fund for community benefit; $70,000 to extend the city's recyclable water pipes; and $9 million in transit fees.

At the Aug. 2 meeting, the developer presented the changes that had been made to the design which included changing the material used for the facade of the four- to five-story building to wood composite panel, extending the balconies, adding architecture that defined the first-floor retail space and using more of the city's official tree -- the jacaranda -- on site.

At the same meeting, the council also approved an exemption to allow for a pool and spa to be built into the property as an amenity for the residents of the complex. The pools cannot be filled until the state lifts its drought restrictions. Other amenities include two interior courtyards, a connecting breezeway with seating options and an indoor Wi-Fi lounge and gym.

Resident Robert Marini took issue with additional housing units being built when residents are being asked to conserve water. The mayor disagreed.

"We have to balance growth with conservation. Not zero growth, I don't want to have to ask my kids to not have a kid, we have to accommodate growth, if you want to control housing development talk to the governor," Esteves said.


Source: The San Jose Mercury News, Aliyah Mohammed
http://www.mercurynews.com/milpitas/ci_30238503/milpitas-council-approves-mixed-use-condo-development-montague

Where Properties Sell the Fastest, Slowest

Nearly 50 percent of properties nationwide were on the market for less than a month before selling, according to the June 2016 REALTORS® Confidence Index Survey Report.

Only 11 percent of properties were on the market for six months or longer. Homes are tending to sell the fastest in the Midwest and Western regions of the U.S.

In June, properties typically were on the market for 34 days. Short sales were on the market the longest time at 156 days. On the other hand, foreclosed properties tended to stay on the market for about 49 days. Non-distressed properties had the shortest time on the market, averaging 30 days.

View the chart below to see the averages for your state.


Source: “In What States Did Properties Sell Quickly in April-June 2016?” National Association of REALTORS® Economists’ Outlook blog (Aug. 11, 2016)

Happy Varamaha Lakshmi!!!

Happy Varamaha Lakshmi!!!

It Pays to Own in an A-Plus School District—Here’s How Much

It’s well known that homes in good school districts sell for a premium—and are a good investment for buyers with or without children. But just how much can you expect to top up that listing price or bid? And what are the top school districts where people  are rushing to buy homes—regardless of the cost?

The economic research team at realtor.com® took up the challenge and dived into the data. The team compared homes in school districts rated 9 or 10, the highest score, by GreatSchools.org with homes in nearby districts rated 6 or less.

“It’s common knowledge that buyers are often willing to pay a premium for a home in a strong school district,” says Javier Vivas, research analyst for realtor.com. “Our analysis quantifies just how good it is to be a seller in these areas.”

It turns out, homes in the higher-rated public school districts are, on average, 49% more expensive—at $400,000—than the national median of $269,000, and 77% more expensive than schools located in lower-ranked districts in their own area, with a median of $225,000.

Plus, homes in higher-rated school districts sell an average of eight days faster than homes in below-average school districts, and four days faster than the national average.

People are more interested in homes in good school districts, too—they’re viewed 26% more, on average, than the average home on realtor.com, and 42% more than homes in areas with below-average schools.

Let’s check out the schools where you’ll shell out the most extra (or profit the most) for a quality public school education.

Top 10 school districts with the highest premium

1. Beverly Hills Unified School District, Los Angeles County, CA

Sixteen years after the hit teen show “Beverly Hills 90210” went off the air, the coveted ZIP code still has cachet. Homes in the top-rated Beverly Hills Unified School District (GreatSchools rating: 9) sell for an average 689% more (that’s $3.8 million) than other homes in Los Angeles County (a far more reasonable $550,000). BHUSD homes beat out those in nearby Santa Monica–Malibu Unified School District, which is rated 9 and has a median list price of $2.5 million, and more recently hip Culver City Unified School District, with a rating of 8 and a median list price of $975,000.

2. Highland Park Independent School District, Dallas County, TX

Homes in the Dallas-area Highland Park Independent School District (rated 10) carry an average 632% premium, at $1.8 million, over the median-price home in Dallas County (a mere $277,000). Buyers would get a relative bargain in the neighboring Coppell Independent School District, which has a rating of 9 and a median home price of $470,000.

3. Kenilworth School District No. 38, Cook County, IL

The Chicago area’s Kenilworth School District No. 38 ranked third in the nation with a home price premium of 606% compared with greater Cook County. Homes in the district alongside Lake Michigan (rating: 10) go for a median list price of $1.6 million. But just a bit southwest, Wilmette Public Schools District 39 has a rating of 10 and homes that go for $780,000.

Rounding out the top 10 school districts with the highest price premiums are:

4. Indian Hill Exempted Village School District, Hamilton County, OH

5. Winnetka School District 36, Cook County, IL

6. Manhattan Beach Unified School District, Los Angeles County, CA

7. Scarsdale Union Free School District, Westchester County, NY

8. Saddle River School District, Bergen County, NJ

9. San Marino Unified School District, Los Angeles County, CA

10. Mariemont City School District, Hamilton County, OH

———

But buyers aren’t necessarily rushing to pay the highest price possible for good schools. So we also looked at school districts with the highest demand from home buyers. How can we tell? By looking at listing views for that market on realtor.com, compared with the surrounding county.

“While highly ranked school districts in these markets have pushed home prices higher than their surrounding areas, the majority of these high-demand markets are relatively affordable when compared to the national median, which is a big factor contributing to their popularity,” Vivas says.

And it’s definitely a less glitzy list than the one above. The winner: Rocky River City School District in Cuyahoga, OH, rated 10, where listings within district boundaries receive 2.8 times more views than other areas in the county. Cuyahoga County schools are pretty popular, it seems, because Strongsville City School District also makes this list at No. 7.

Top 10 in-demand school districts

1. Rocky River City School District, Cuyahoga County, OH
2. Clear Creek Independent School District, Harris County, TX
3. School Town of Munster School District, Lake County, IN
4. Orange School District, New Haven County, CT
5. Etiwanda Elementary School District, San Bernardino County, CA
6. Longmeadow School District, Hampden County, MA
7. Strongsville City School District, Cuyahoga County, OH
8. Plymouth-Canton Community School, Wayne County, MI
9. Regional School District 05 School, New Haven County, CT
10. Trumbull School District, Fairfield County, CT

Source: Realtor.com, Cicely Wedgeworth
http://www.realtor.com/news/trends/top-school-districts-premium/?iid=rdc_news_hp_carousel_theLatest

Return of The Bidding War, But Only For Certain States

Wow! Ten of the top 30 cities are right here in the Bay Area.


Return of The Bidding War, But Only For Certain States

The phenomenon is very uneven geographically, but CoreLogic says that one factor behind the sustained pace of home price appreciation is the return of bidding wars.

The company's analysis is limited in that it was done on the city level in markets where there were a hundred or more closed home sale transactions in the second quarter - criteria that is in itself a bit self-defining.  They also included properties where the sale price was bid up by $5,000 or more above the list. The cities that emerged on top for bidding wars were no surprise; they were mostly in the West and primarily in California, but some of CoreLogic's findings were still interesting.



Seventeen of the top 30 cities where multiple offers are most frequently pushing home sale prices above list are in California, and eight are in Washington.  And where they are occurring, bidding wars are not an isolated occurrence.  Almost eight of ten properties sold in the second quarter in Santa Clara went above listing price; in two other California markets, Milpitas and Fremont, it was seven of ten.  In each city falling in the top half of the list a minimum of 60 percent of sales were above the listing price and for the entire list bidding affected at least half of closed sales.

On a percentage basis, the largest average increase over listing price was in San Francisco at 12.2 percent followed by San Mateo at 11.0 percent and Montclair, New Jersey (the only market east of Colorado) at 10.8 percent. The low (keeping in mind the $5000 analysis floor) was 3.3 percent in Maple Valley, Washington.  Given some already pricy markets, the extra dollars paid by buyers was impressive, ranging from a low of $12,500 in Thornton, Colorado to $232,000 in Los Altos, California.

CoreLogic Principal Economist Bin He, who wrote up the analysis for the company's Insights Blog said, "Let us pause for a moment and think about this: if you happen to get into a bidding war in San Francisco CA, which actually occurred in six out of ten closed sales in Q2 2016, you'd better be prepared to pay an additional $134,000 for your dream home."

So what is driving the bidding wars?  He says it is that old villain, tight inventories.  While they exist in much of the country, with an average of a 3.75-month supply of homes on the market nationwide, it follows that the inventory would likely be lower in those markets which also have the greatest demand.  In California and Washington, the inventory is 2.6 months and 2.04 months respectively.

We are generally told that inventory is lowest in the bottom tier of home prices.  It would be interesting to see CoreLogic repeat this analysis with a lower floor for the list price/ceiling price relationship.  It might add yet another layer to discussions about the missing first-time homebuyer.

Source: Mortgage News Daily, Jann Swanson
http://www.mortgagenewsdaily.com/08082016_home_prices.asp

The One Thing You Must Do Before Listing Your Home for Sale

Think you're ready to go on the market? If you haven't taken care of this task, you're not.

When it comes time to sell your home, you know you’ll need to spend some time cleaning the carpets, decluttering, and landscaping for maximum curb appeal. But there’s another key task to add to your to-do list: checking in with your local government to be sure it has accurate information about your home.

No matter the type or size of your home or where it is, your local municipality has documentation on it. Both the building department and the town assessor will have a record about your home. But those records may not match your home’s reality — and any issues you don’t resolve could hold up your sale or even kill the deal altogether.

What is the building department?
The town keeps records of every building constructed and every permit issued. It’s the job of the lead building inspector to be sure that any changes made to a home meet current codes, and that licensed contractors do the work.

Home health and safety issues are the primary concerns of the building department. Whenever someone applies for a permit, an inspector must be physically called out to approve and sign off on the work of the contractor, plumber or electrician.

Why should a seller care?
Once you make a deal with a buyer, they will go to the building department to do their due diligence. If there’s an open permit (meaning the permit was applied for, but the contractor never had the inspector sign off on the work to close the permit) or, worse, if there’s no record of your finished basement or newly renovated kitchen, they may not move ahead with the purchase.

Often, sellers find that somewhere along the line someone made a mistake — permits weren’t closed out properly when you assumed they were. These errors could have been the fault of a contractor, the previous owner, or even the building department directly.

Additionally, a homeowner may assume that the bathroom renovated by their Uncle Bob 15 years ago was up to code, but it may turn out that it’s not.

Both scenarios can pose a problem when selling. Once the home transfers, the new homeowner is on the hook for any illegal work, and no buyer wants to take on that liability.

What are assessor’s records?
The town assessor keeps tabs on the local real estate market to be certain that the town’s assessed value of your home (which affects property taxes) is in line with the market.

When the market slows down, she won’t proactively lower your assessed value, and most assessors regularly scrape the building department permits.

Why? Because if you’ve recently made a major improvement to your home, she will want to raise your assessed value, which means higher taxes.

It’s also very possible that your home is over- or under-assessed. If it’s the former, you want to attempt to grieve your assessment by providing the assessor some recent sale statistics and making sure that their records are accurate. Every municipality has a grieving process for homeowners.

Get ahead of any issues
Before listing, a seller should go to the town hall and check their property records. Most of the time, remedying issues like open permits or misinformation on a property is a quick fix. It’s better to get ahead of it than to have to react to a buyer’s concerns and jeopardize your deal.

If it’s a bigger issue, it’s better to hold off on listing your home for sale until you have resolved it. Getting your assessment down can impact your taxes, and that will be great news to your potential buyers.

Source: Zillow Pourchlight, Brendon DeSimone
http://www.zillow.com/blog/go-town-hall-listing-home-sale-202338/

How to Find Open Houses: A Guide for Home Buyers

Whether you’re intent on buying a home or just curious, hitting up open houses is probably the most fun part of house hunting. It can help you get the lay of the land, too.

Every weekend, hundreds of homes for sale open their doors so prospective buyers can pop in and check them out.

But how do you find them? And aside from ooohing and ahhing over backyard pools and walk-in closets, what should you do while there?

Keep these tips in mind to make the most of your open house visiting spree.

How to find open houses
Try any or all of these techniques to zero in on your dream home:

• Do an online search. We have to toot our own horn here! Not only can you peruse listings on realtor.com®, you can find info on upcoming open houses, too. Just click the “open house” box under the More Filters tab, where you can select the size and type of home you’d like to visit, and even whether it has a pool or other amenities you can’t do without.
• Find them on your phone. Yep, realtor.com has an app for that, too. Filter your search for open houses, and you’ll get an actual map of properties in your area with upcoming open houses. Tap on each one for times and other specifics.
• Use Instagram and other social media. Simply search #openhouse plus your city on Instagram, and you’ll find plenty of listings with gorgeous pictures. “I also like to keep an eye on Realtor® signs in my area and find their personal Instagram accounts,” says Alexander Ali, founder of The Society Group PR firm, who has put on some memorable open houses. “Most agents have personal accounts, and they’re great to use as a communication tool. Follow and direct message them! It’s faster than an email, and they check their social constantly.”
• Look for the signs. Even in today’s digital world, actual “open house” signs are still put up in front of properties for sale in hopes of attracting potential buyers. Try driving by or walking around a neighborhood you like, and see if there are signs or posters about upcoming open houses. Make a note of the date and time so you can plan your route. Also check your mail for open house mailers, and keep an eye out for fliers in local establishments.
• Visit local real estate offices. If you’re not ready to commit to working with one buyer’s agent, consider popping in to a few offices in your target area and asking what open houses they have coming up. It can be a great way to find listings and get a feel for which agent you might want to work with in the future.

How to make the most of open houses
It’s easy to wander aimlessly through home after home, but if you arrive at an open house with a game plan, you’ll get much more out of it. Here are some tips to help you make the most of your visits.

• Plan your path. Open houses tend to congregate on the weekend, so if you want to hit many of them or just cut down on running back and forth, it’s best to plot them out on a map, with the times they’re open, to visualize the best order to tackle them. If you’re walking from one to the other, be sure to wear comfortable shoes!
• Take photos. After seeing lots of houses, they might start to blur together. Therefore it’s a great idea to “chronicle” your open house journey with a series of photos from each house, plus notes, so when you’re reviewing them later you can remember what you liked and disliked about each property. At each house, start with a photo of the exterior and a flier, so you can identify it easily when you’re reviewing the pictures later.
• Think beyond the home you’re in. Chat with the Realtor® about the neighborhood, not just the house. “If the home isn’t something you like, they probably have others they could show you,” says Ali. “If you don’t like that house but you like the Realtor and aren’t working with anyone yet, tell them so and ask what else they have. Try not to leave an open house without at least one new phone number or listing idea, and soon you’ll find the right place for you.” But beware of engaging anyone as a dual agent.

Source: Realtor.com, Kimberly Dawn Neumann
http://www.realtor.com/advice/buy/how-to-find-open-houses/?iid=rdc_news_hp_carousel_theLatest

Identity Theft : Getting Mortgage-Approved When Your Credit Is Stolen

Lenders Have Rules In Place For Credit Theft Victims

If you’re an identity theft victim, getting a mortgage will be harder, but not impossible.

More than 17 million Americans -- seven percent of adults -- experienced at least one incident of identity theft in 2014, according to the U.S. Bureau of Justice Statistics. That number is sure to be higher today.

Identity theft is, unfortunately, a part of life in the information age. But mortgage lenders understand this fact and employ special guidelines in these situations.

Mortgage applicants do not have to forego homeownership plans due to wrecked credit, but proactive response to any incident is important.

Learn how lenders deal with identity theft, and know your options as you apply.

Report Identity Theft Immediately

To have any credibility as a victim, you have to report the incident to your local police and to the government.

For lenders to consider you an identity theft victim, you must:

Provide a copy of a police report
Complete an affidavit of identity theft available from the Federal Trade Commission
Write a letter of explanation
It’s also a good idea to send your documents to all three major credit bureaus -- Equifax, TransUnion and Experian -- and place a fraud alert on your reports.

Lenders must personally contact you to ensure you are the one applying for credit, when a fraud alert is in place.

Get Approved Via "Manual Underwriting"

Once you’ve established that you’re an identity theft victim, lenders can “manually underwrite” your loan file, rather than running it through a computerized automated underwriting system (AUS).

Manual underwriting means a human goes through your credit report and application line-by-line and applies “make sense” guidelines. For example, if your credit history has no major blemishes prior to the identity theft, it’s easier to make the case that you’re a good risk.

The AUS, though, may not issue an approval due to poor, albeit erroneous, information.

Manual underwriting by a human allows lenders to be more flexible when identity theft is involved, but manually-underwritten loans often have tighter eligibility criteria.

For instance, the lender may require lower debt-to-income ratios or larger downpayments than they would if underwriting a file via the computerized system.

Still, a human-generated approval could be a good solution for well-qualified applicants.

Getting Around Credit Score Minimums

Most mortgage programs have minimum credit score requirements, and if they don’t, the lender will impose them.

This can be a major problem: identity theft victims can see their credit scores plummet when the thief opens accounts and doesn’t pay them.

Fannie Mae, Freddie Mac, and government mortgage agencies have different ways of dealing with the credit score requirements.

FHA loans

The U.S. Department of Housing and Urban Development, the overseer of the FHA program, says that applicants must include identity theft affidavits or police reports to dispute fraudulent charges.

The fraudulent accounts can then be excluded from the application.

USDA home loans

Likewise, USDA loan guidelines state that lenders can exclude credit data that is “significantly inaccurate.”

The agency instructs its lenders: “If an applicant does not have a usable credit score in connection with their loan request, then the use of non-traditional credit references is acceptable.”

Non-traditional credit reports are built manually and can include history from utility companies, landlords and other accounts that may not normally be reported to credit bureaus.

VA mortgages

The Department of Veterans Affairs, administrators of the VA home loan program, do not state a minimum credit score for the program. This makes it easier for identity theft victims to get around an inaccurate score if their “real” credit history is acceptable.

However, most VA mortgage lenders impose minimum credit scores. You’ll need to prove you were a victim of credit theft and also work to remove the erroneous information.

Conventional loans

Conventional loan rule makers, Fannie Mae and Freddie Mac, also address identity theft situations.

Freddie Mac says, “For a FICO score to be usable, it must be based on sufficient, accurate information. Too little information, or information that is significantly inaccurate, make the FICO score unusable for mortgage underwriting.”

Fannie Mae’s position is similar: “Lenders are obligated to take action when contradictory, derogatory, or erroneous information would justify additional investigation or would provide grounds for a decision that is different from the recommendation DU delivers.” DU, or Desktop Underwriter, is Fannie Mae’s automated underwriting system.

Talk with your lender about your options based on the home loan for which you apply. There is a good chance there is a workaround available to you.

You Might Pay Higher Interest Rates

Identity theft victims can end up paying higher mortgage rates, unfortunately. That’s because for many programs, borrowers with better credit scores get discounted loan fees, while those with lower scores pay more.

Typically, government-backed mortgage programs are less likely to impose higher fees on lower-score applicants.

Applicants with diminished credit should try a process known as a rapid rescore, which can raise your credit score by more than 100 points in days, not months or years.

Use A Rapid Rescore To Delete Erroneous Credit

If you have written proof that your derogatory credit history is the result of identity theft, you can ask your lender to use a rapid rescore.

Rapid rescoring is a service available only through lenders -- you can’t initiate it on your own.

For $25 to $50 per account, a rescoring service will verify your accounts and remove inaccurate derogatory information, usually in just a few days.

You will need to gather all available documentation regarding the identity theft and submit it to your lender, who will then request the rescore for you.

Your cleaned-up report includes a score unaffected by the identity thief’s fraudulent accounts. If you need a mortgage in a hurry, and you have written proof that your bad credit history is invalid, this is probably the best way to get a mortgage after identity theft.

What Are Today’s Rates?

Mortgage rates are low, and it’s an ideal time to take advantage of low payments, even if you are a victim of credit-related crime. Today’s consumer protections make it easier than ever to qualify despite erroneous credit information.

Get a quote from a lender now. No social security number is required to start, and your information is transferred securely to a knowledgeable lender who can answer your questions.

Source: The Mortgage Reports, Gina Pogol
http://themortgagereports.com/21579/identity-theft-getting-mortgage-approved-credit-score

Survey: Save for 3 Years for a Down Payment

Home owners who had to save up to buy a home spent an average of three years shoring up their finances before they had enough for a down payment, according to a new survey of more than 2,000 Americans commissioned by NerdWallet and conducted by Harris Poll. 

One in four home owners overall say they saved money individually on a monthly basis to afford their down payment, which includes 42 percent of millennial home owners, ages 18 to 34, and 29 percent of Gen X home owners, ages 35 to 54, according to the survey.

"Home buyers should work closely with their real estate agent to find properties that aren't at the top of their budget to keep affordability in check," says Chris Ling, head of home buying and mortgages for NerdWallet. "Also, working on a consistent savings plan for a down payment and closing costs, as well as addressing any outstanding credit issues, will increase homebuyers' chances of qualifying for better mortgage rates."

The survey also found that about seven in 10 Americans — or 71 percent — have fears about buying a home. The top fears cited are home repairs (36%), the financial commitment of home ownership (35%), not having enough money for other expenses (35%), and the long-term commitment it means to their partner (9%).

Source: NAR via NerdWallet
https://www.nerdwallet.com/blog/mortgages/nearly-half-couples-split-home-down-payment-survey/

This flowchart could help you decide whether to buy or rent a home

Should you buy or rent a home?

The flowchart below may be able to help you decide.

Like with most money questions, there's no one universal answer. Instead, it depends on your own situation, from the state of your savings to whether you're willing to coordinate getting a leaky faucet fixed.

When going through the chart, keep in mind that your answer is just for now. If the chart says that you're better off renting, then it certainly doesn't mean that you have to rent forever.

In six months, a year, or even a matter of weeks, your situation could change and so could your answer.

For more insight into any of these questions, check out the explanation from financial experts.


Source: Business Insider, Libby Kane
http://www.businessinsider.com/buy-or-rent-a-home-flowchart-2016-7

Posted via Blogaway

UNDERSTANDING THE "TAX FREE" EXCHANGE

Residential homeowners have a number of tax benefits, the most important of which is the exclusion of up to $500,000 profit made on the sale of the principal residence.

But real estate investors -- large and small -- still have to pay capital gains tax when they sell their investments. And since most investors depreciated their properties over a number of years, they often have to "recapture" the depreciation, as well as paying a lot of capital gains tax.

There is a way of deferring payment of this tax, and it is known as a Like-Kind Exchange under Section 1031 of the Internal Revenue Code.

Keep in mind the exchange process is not a "tax free" device, although people refer to it as a "tax-free exchange." It is also called a "Starker exchange" or a "deferred exchange." It will not relieve you from the ultimate obligation to pay the capital gains tax. It will, however, allow you to defer paying that tax until you sell your last investment property..

The rules are complex, but here is a general overview of the process.

Section 1031 permits a delay (non-recognition) of gain only if the following conditions are met:

First, the property transferred (called "relinquished property") and the exchange property ("replacement property") must be "property held for productive use in trade, in business or for

investment." Neither property in this exchange can be your principal residence, unless you have abandoned it as your personal house.

Second, there must be an exchange; the IRS wants to ensure that a transaction that is called an exchange is not really a sale and a subsequent purchase.

Third, the replacement property must be of "like kind." The courts have given a very broad definition to this concept. As a general rule, all real estate is considered "like kind" with all other real estate. Thus, a condominium unit can be swapped for an office building, a single family home for raw land, or a farm for commercial or industrial property.

Once you meet these tests, it is important to determine the tax consequences. If you do a like-kind exchange, your profit will be deferred until you sell the replacement property. However, the cost basis of the new property in most cases will be the basis of the old property. Discuss this with your accountant to determine whether the savings by using the like-kind exchange will make up for the lower cost basis on your new property. Also, if you do not do an exchange, how much tax will you have to pay. Sometimes, its better to "bite the bullet" and pay the tax, rather than get involved with another rental, investment property.

The traditional, classic exchange (A and B swap properties) rarely works. Not everyone is able to find replacement property before they sell their own property. In a case involving a man named Mr. Starker, the court held that the exchange does not have to be simultaneous.

Congress did not like this open-ended interpretation, and in 1984, two major limitations were imposed on the Starker (non-simultaneous) exchange.

First, the replacement property must be identified before the 45th day after the day on which the original (relinquished) property is transferred.

Second, the replacement property must be purchased no later than 180 days after the taxpayer transfers his original property, or the due date (with any extension) of the taxpayer's return of the tax imposed for the year in which the transfer is made. These are very important time limitations, which should be noted on your calendar when you first enter into a 1031 exchange.They are literally carved in stone; they cannot be waived or modified.

In 1989, Congress added two additional technical restrictions. First, property located in the United States cannot be exchanged for property outside the United States.

Second, if property received in a like-kind exchange between related persons is disposed of within two years after the date of the last transfer, the original exchange will not qualify for non-recognition of gain. You must obtain legal advice on this very complex area of "related persons".

In May of 1991, the Internal Revenue Service adopted final regulations which clarified many of the issues. Here are some of the major highlights:

1. Identification of the replacement property within 45 days. According to the IRS, the taxpayer may identify more than one property as replacement property. However, the maximum number of replacement properties that the taxpayer may identify is either three properties of any fair market value, or any number of properties as long as their aggregate fair market value does not exceed 200% of the aggregate fair market value of all of the relinquished properties.
2. Who is the neutral party? Conceptually, the relinquished property is sold, and the sales proceeds are held in escrow by a neutral party, until the replacement property is obtained. Generally, an intermediary or escrow agent is involved in the transaction. In order to make absolutely sure the taxpayer does not have control or access to these funds during this interim period, the IRS requires that this agent cannot be the taxpayer or a related party. The holder of the escrow account can be an attorney or a broker engaged primarily to facilitate the exchange.
3. Interest on the exchange proceeds. One of the underlying concepts of a successful 1031 exchange is the absolute requirement that not one penny of the sales proceeds be available to the seller of the relinquished property under any circumstances unless the transactions do not take place.

Generally, the sales proceeds are placed in escrow with a neutral third party. Since these proceeds may not be used for the purchase of the replacement property for up to 180 days, the amount of interest earned can be significant. Or it used to be before banks started paying less then pennies on the dollar in interest accounts.

The IRS permits the taxpayer to earn interest -- referred to as "growth factor" -- on these escrowed funds. Any such interest to the taxpayer has to be reported as earned income. Once the replacement property is obtained by the exchanger, the interest can either be used for the purchase of that property, or paid directly to the exchanger.

The rules are quite complex, and you must seek both legal and tax accounting advice before you enter into any like-kind exchange tra

Source: RealtyTimes, Benny L. Kass
http://realtytimes.com/consumeradvice/sellersadvice1/item/46509-20160804-understanding-the-tax-free-exchange

HOW TO BEAT SELLERS' STRESS

Three things are certain in life: death, taxes ... and undue stress caused by moving. Whether or not you use the services of a Realtor to help you wade through the uncertain waters of the buy-and-sell process, moving is stressful, period. And there's not much you can do to avoid it. And we're not just talking about packing and paperwork. Moving is an emotional process. If your'e not calming down your nervous children, you're trying to reassure yourself that you'll meet people in your new neighborhood, that you bought the best house within your means, and that your kids' new schools will measure up.

It's easy to forget while we're dealing with all of these jitters that moving actually can represent an exciting adventure, a growth opportunity and the prospect of new beginnings. Once the dust settles after your move, you're entering one of the most memorable times of your life. With any luck, you've recruited a REALTOR® who's familiar with the obvious stresses as well as the insidious (and subsequently more detrimental) ones. Depending upon your relationship with your Realtor, you should be able to rely on him or her for more than just closing the deal. Your Realtor also should be able to calm your trepidations by giving you the support you need -- giving you the facts about that new school district, reassuring you that your jitters are perfectly normal, and giving you as much information about your new hometown as possible, increasing your familiarity with the previously unknown.

It's important to remember throughout the entire selling and buying process, however, to reserve time for yourself and your family. It's not a waste of time, but rather an insurance policy for your sanity and continued happiness. Stress is sneaky, as we've all discovered. It can eat away at us during what are supposed to be the happiest of times, because after all, any major change in life is stressful. If it's supressed, it can wreak havoc both emotionally and physically and spread throughout the family. And there's nothing worse than moving a grumpy family across the country. For the sake of your continued family unity, keep in mind the following stress-relieving measures:

First, remember that it's perfect normal to feel unsure of your decision right now. You've just made a major commitment, and all of us experience those last-second "What on earth did I just do" worries after signing contracts and making life-changing decisions. Instead of becoming overwhelmed with "what ifs" and dread, reframe this decision as a prime opportunity to begin your lives in a new environment. The old saying "When one door closes, another one opens" definitely applies here. Trust that your Realtor is looking out for your best interests, ask as many questions as you need to throughout the entire process (that's part of what your Realtor is paid for), and look forward to the adventure that lies ahead of you.

If you can, keep an emergency fund in case you run into any unexpected costs. One example: If your buyer comes forward after a home inspection is completed and requests a series of repairs prior to move-in, you'll be prepared. Chances are good that you won't necessarily agree with the buyer's requests, but at least you won't face the additional stress of being short the money for repairs if you plan ahead and save some extra cash (no set amount -- just as much as you can handle. A goal you might try to shoot for would be in the range of $2,500). It's probably in your best interests not to try to guess what the buyer will want to repair, and then fix it ahead of time. That's because buyers have a habit of isolating areas of your home that you never considered having repaired, and not even noticing the ones you expected them to pinpoint. So save yourself any expenses until you've determined their requests.

And while we're on the subject of finances, try to anticipate and prepare for the initial expenses you'll face upon move-in. Resign yourself to the fact that during the moving process, you're going to feel as if you're holding your wallet upside down, and everyone -- movers, contractors, buyer, etc. -- is sitting underneath, catching the windfall and demanding a larger share. Keep in mind that this is an investment for the good of your family, and that these costs are a one-time inevitability.

Remind yourself of why you're moving in the first place. A job transfer, or is it a voluntary choice? Obviously, whether or not you had some degree of control over the decision will affect your outlook. Regardless of your answer to that question, round up as much information as you can about your new hometown. What kinds of cultural offerings does the town/city offer? What are its landmarks and natural attractions? Research some possible day trips you might take with the family once you're settled. Is your new hometown near state borders, giving you the opportunity to explore different regions of the country without much effort?

Envision your new home. Where will you place the furniture? Remind yourself of the home's primary selling points. Will you have more space? More closets? A large backyard and/or swimming pool? What does your new streetlook like? Do a lot of young families reside there? If so, your children are likely to be reassured by that knowledge. As often as possible, try to picture yourself and your family fully adapted to your new environment.

Remember to have a little fun occasionally. You're still allowed, even if you feel as if you don't have a penny left to your name. Take the family out to dinner, to a movie or a picnic -- anything that gets all of you out of the house and away from boxes, paperwork, emotions and all of those pre-move concerns. Keep a regular "date" to get out together -- for example, every Friday night leading up to the move. Take your mind off your stress for a few hours, and remind yourself that your family members are experiencing many of the same emotions. Like misery, stress often loves company, so enjoy your time together and remember that this stress won't last forever. Regardless of what you're feeling now, the move will happen and everything will eventually fall into place. Journeying into the unknown is what makes life rewarding, so trust in your Realtor's expertise and in your family's resilience, and look forward to the journey ahead.

Source: RealtyTimes, RealtyTimes Staff
http://realtytimes.com/movingadvice1/item/46529-20160805-how-to-beat-sellers-stress