Capital Real Estate Update Montgomery Al June 2012

Pre-Approval Gives Everyone Confidence

The benefits of buyer's pre-approval are without question; it is good for the buyers, the sellers and the agents. It saves time, money and removes the uncertainty of knowing whether the buyer is qualified. The direct benefits include:

• Amount the buyer can borrow decreases as interest rates rise
• Looking at "Right" homes - price, size, amenities, location
• Find the best loan - rate, term, type
• Uncover credit issues early - time to cure possible problems
• Bargaining power - price, terms, & timing
• Close quicker - verifications have been made

There a big difference in sitting down with a trusted mortgage professional compared to going through calculators on a website. The cost of being pre-approved is a bargain and generally, limited to the cost of the credit report.

Even if you have been pre-approved, a suggestion that can't hurt but may help is to get a second opinion from a different lender. It will either verify that you have a good deal or you’ll discover that you can improve it. Either way, it works to your advantage. Contact me if you'd like a recommendation.

It's Worth Checking Out

"Anyone may arrange his affairs so that his taxes shall be as low as possible...for nobody owes any public duty to pay more than the law demands." 
Judge Learned Hand

This opinion refers to federal income tax but the logic and spirit can easily be applied to any tax including property tax. Most property tax is based on a valuation called an assessment placed on the property by a government taxing authority.

When property values rise due to appreciation, the assessments usually rise. However, when values decline as they have done in many areas in the past few years, the assessments should follow accordingly.

If you don’t believe your assessment reflects market value, put together proof to support your position. Recent comparable sales, similar in size, condition and location are very persuasive. Check to see if the square footage on the assessment is accurate. If the home is not in good condition, take pictures to show that.

As your real estate professional, I can supply the comparables, filing deadlines and other pertinent information needed to make a challenge. Lowering your assessment will result in lower property taxes and more money in your pocket.

Have You Backed Up Your Home?

Personal computers have been around long enough that everyone has experienced or knows someone who has lost their data due to a hard drive crash, accident or burglary. If they had a backup, the loss was inconvenient but not critical.

Do you have a backup for your personal belongings? Not that you need duplicates of all the items but do you have a journal listing of all the items with a description and their approximate values? That record becomes the backup that supports the claim for your insurance.

If a building sustains a total loss, the insurance company will usually pay the face amount of the policy. When it comes to personal property which might be 40% to 50% of the insured value of the dwelling, the insurance company is going to expect an accounting with receipts or at least, a relatively recent inventory.

The better your inventory, the less likely you'll have difficulty with the claim. Almost everyone has a digital camera that can take stills and probably even videos. The combination of the images as well as a written description will help you replace the belongings and serve as proof to the insurance company.

Once you've made the inventory, store it off site for safe keeping. Online storage in the "cloud" might be the best place to insure you'll always know where it is. Contact me for a free Home Inventory form; it's my way of helping you be a better homeowner.

Do This...Before You Call The Repairman

Have you ever had a service company to your home to repair something and find out that it really wasn't "broken"? It probably conjured up ambivalent feelings of joy that it wasn't something serious and frustration that you had to pay a service call for something so simple.

Before you call the repairman next time, keep these things in mind to see if it is something simple:

• Disposer not working - check to see if the reset button has been thrown. It is usually on the bottom of the disposer. If the disposer is making a humming sound, the blades may be stuck. While the disposer is turned off, use a wooden broom handle as a lever to gently rotate the blades. Remove the broom handle and turn on the disposer to see if it works properly.
• Air conditioner not working - check to see if a breaker has thrown on your electric panel. You might need to flip the breaker completely off and flip it back on.
• Electrical outlets not working - Electrical plugs in bathrooms or outside, especially on a porch or patio, are many times connected to a ground fault interrupter. The GFI will be a wall outlet and it may be located in the garage. Locate the outlet and reset the button that may have tripped.
• Clogged drain - a simple way to correct a slow or clogged drain is to use the water pressure from a garden hose. You'll need a helper to turn on the water full-blast once you have safely placed the hose in the drain and are holding a hand-towel around the hose to direct the water to the drain. Be prepared to tell your helper to turn off the water when needed.

Whether it's preparing a home to market or arranging repairs required by the sale, REALTORS® know reputable, reasonable and reliable service contractors. We're here to share our contacts with you to help make home ownership better.

Don't Miss The Recall

Occasionally, you hear about an important recall on a product you have and you take care of it immediately. However, if you were to miss such a notice, it could put you or your family in jeopardy.

You can subscribe to the U.S. government's service to notify the public when recalls are made on vehicles, tires and child restraints through the National Highway Traffic Safety Administration on their site called SaferCar.gov.

You'll receive a notification by email when there is a new recall based on the type you selected. You can change your selections or unsubscribe at any time by going back to their website in the "Manage Your Notifications" section.

We're committed to helping you be a better homeowner by providing information on items that can protect your home's value, reduce expenses, improve maintenance and increase the enjoyment of your home.

When Mortgage Debt Is Cancelled

The Mortgage Forgiveness Relief Act of 2007 was passed by Congress to avoid additional financial hardship that some homeowners might experience due to a foreclosure or short sale. The law affects mortgage relief that occurs from January 1, 2007 to December 31, 2012.

Normally, IRS considers partial or total debt forgiven by a lender to be treated as ordinary income. This not only affects foreclosures but even short sales where only part of the debt is forgiven would trigger additional taxes for the homeowner. There are exceptions that apply such as bankruptcy and insolvency.

The forgiveness is only applicable to taxpayers' principal residence and only acquisition debt used to buy, build or improve the home. The additional cash taken out when refinancing a home will not be eligible for the relief unless it is used for capital improvements.

The lender is required to submit a 1099 form to IRS and provide the homeowner a copy who will file the forgiven amount on Form 982 as part of their 1040 tax return. How this affects your individual situation may differ due to other circumstances and advice from a tax professional is recommended.