Your home is more than an investment and a place to live-it also can be a valuable source of tax deductions. For many homeowners, one of the biggest itemized deductions on Form 1040

is the one for qualified residence interest (commonly called the “mortgage interest deduction”). In the usual situation, you can write off all, or almost all, of the mortgage interest you’ve paid for the year.

Under current law, you may claim deductions for three basic types of mortgage interest, up to certain limits:

Acquisition Debt: This involves mortgage proceeds you use to buy, build, or substantially renovate a home. The loan must be secured by a qualified residence (either your principal residence or a second home such as a vacation home). Interest on such debt is deductible on amounts of up to $1 million. Acquisition debt often amounts to the lion’s share of your mortgage interest deduction.

Home Equity Debt: If it’s allowed by the laws of your state, you also may deduct the interest on home equity loans secured by a qualified residence, regardless of how you use the proceeds. But with home equity debt, deductions are limited to interest paid on loans of up to $100,000. In addition, the loan amount can‘t exceed your equity in the home.

Points:  Although points really aren’t mortgage interest, the tax law essentially treats them as if they were. These are the charges a lender may impose when you obtain a mortgage. (One point equals 1% of the amount you borrow.) You can deduct any points you paid for acquisition debt, but you’ll need to deduct charges for refinancing over the term of the loan. For instance, if you refinance a $200,000 mortgage with a 10-year loan and pay two points – or $4,000 – you may deduct $400 in points ($4,000 divided by 10) annually for 10 years.

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, House Closings, Kim Around the Web, Mortgage Information, Real Estate by Kim Bregman
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Buying a fixer upper  home comes with some unique advantages. For one, the price point for a fixer upper home  will be lower than a comparable home that is in excellent shape. By paying less for a fixer upper home, you can have more of an opportunity to customize and tailor it to fit your unique taste and personality. Indeed, many fixer upper homes are great investments for people willing to put in the time and effort to transform a house into a home. On the flip side, some fixer upper homes might turn out to be more of a cash pit than a profitable purchase. Before you start your search for a fixer upper property, here are a few questions to ask to ensure that you will get the right fixer upper home for your budget, abilities, and future goals.

Has a professional home inspector done a report on the house? 

It is essential that you use an Exclusive Buyer Agent that is working for you and not for themselves or the Sellers. They will be able to identify issues with the area and have resources for buyer oriented inspectors who will give a hard look at the property.

You should be prepared to pay for several inspections and secure cost estimates before you make a final decision on purchasing a fixer upper home.

Some problems in a fixer upper homes are obvious, while others might be hidden beneath the floorboards, walls, or surfaces. Having a professional home inspector check out the house before you buy will give you a realistic idea of what kind of condition the home is in and what repairs it needs.

How many repairs can you do on your own?

Minor aesthetic repairs, such as removing popcorn ceilings, painting the walls, or adding a backsplash to the kitchen can often be done on your own. Expensive repair bills come when there is damage to the structural integrity of the home. These types of repairs will likely require outside help to fix. For example, if the foundation of the home is warped or severely cracked, or if there is extensive termite damage, or the roof of the house needs to be replaced, you must hire an outside contractor. Without pricing these major repairs before buying the home, you could have a higher repair bill than you anticipate.

How much will each repair cost? 

Once you have your list of repairs, it’s time to dig in and start researching the price of each item to fix. For aesthetic repairs, visit your local home improvement store and speak with a sales associate about how much the supplies will cost. For any repair that requires an outside contractor, request bids from local shops. You want to get a realistic idea of what your home repairs will cost to make sure that you will not go over your budget.

Add 20% to your budget for all the unexpected costs that will come with any renovation project.

What expenses am I not considering?

You should take into consideration whether you will be planning to live on or off premises. It’s more economical to live on premises, but for those homes undergoing extensive remodels, this may be unpleasant or not even an option. But, if you do choose to live on the premises you will have to be prepared to live with dust – a lot of dust. Your home will be a construction zone for well up to a year or beyond.

If you plan on doing extensive renovations, then living in the home is not an option. You need to consider the costs of storing your belonging, cost of alternative housing, carrying the property while under renovation, etc.

How much value can you add to the home?

Ultimately, the goal of buying a fixer upper is to create a cozy place to live and to ensure that you will make a financially sound investment. If you find a fixer upper that you are interested in, talk to a reliable real estate agent or home appraiser about each major repair you’re planning to make so you can get a reasonable estimate of how much value you can actually add to the home. You can also take a look at other homes in the area that do not need repair to see what they’re selling for.

Fixer upper homes require you to do your due diligence before signing on the dotted line, and revamping a home can be an exciting experience under the right circumstances. With these tips, you can start your search for a home

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, Home Maintenance, Real Estate by Kim Bregman
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If you are hoping to become a homeowner, it is highly likely that you’ll need a mortgage. Before house-hunting ever begins, it is good to know just how much you can afford to borrow. All prospective homeowners must go through the process of getting pre-approved to see if they qualify for the loan and to determine how much you can afford to invest in a new home. New buyers can be understandably overwhelmed by mortgages in general, but knowing how to go about getting a mortgage before diving in is a good first step. Getting pre-approved is not as daunting a task as you might think.

Understanding your finances and the total cost of owning a home is key to determining your home budget. When figuring out what kind of mortgage payment one can afford, other factors such as taxes maintenance, insurance, and other expenses should be factored. Usually, lenders want borrowers having monthly payments exceeding more than 28% to 44% of the borrower’s monthly income. For those who have excellent credit, the lender may allow the payments to exceed 44%. There are many websites available to assist you in determining what the mortgage payment would be based on the amount borrowed and the interest rate. If you adjust the loan amounts and hit the search button, the monthly payment numbers will automatically update. Another factor in determining how much you can borrow is a direct function of how much cash you have to put down on the property.

Have you heard the terms “pre-qualified” or “pre-approved?” It’s important to know the difference. With a pre-qualification, the borrower and lender have discussed income, assets, and credit, but it is not formally verified. A pre-approval, however, is a formal review of the same things as a pre-qualification, as well as a review of the borrower’s full credit report. Having the pre-approval documentation is better because it is a true representation of the mortgage loan you are eligible for and is often required when submitting an offer on a home.

Through the credit report, lenders acquire the borrower’s credit score, also called the FICO score and this information can be acquired from the major credit bureaus TransUnion, Experian, and Equifax. The FICO score represents the statistical summary of data contained within the credit report. It includes bill payment history and the number of outstanding debts in comparison to the borrower’s income.

The higher the borrower’s credit score, the easier it is to obtain a loan or to pre-qualify for a mortgage. If the borrower routinely pays bills late, then a lower credit score is expected. A lower score may persuade the lender to reject the application, require a large down payment, or assess a high interest rate in order to reduce the risk they are taking on the borrower.

Many people have issues on their credit report, which they are unaware of. The first step in determining if you have any outstanding issues is to get a copy of your credit report. AnnualCreditReport.com allows you to see your credit reports from Experian, Equifax & TransUnion for free.

Next, it’s time for the paperwork. Gather and keep every piece of financial paper in the two months leading up to buying a house. That means pay stubs, bank statements for savings, checking and investment accounts, W-2s, tax returns for the previous two years, canceled rent checks and any mortgage or property tax statements for other property you own. Put these in PDF format to make it easier to send to your mortgage broker or bank.

In the months leading up to your home purchase, keep your hands off your finances. That includes moving money from a savings account into a certificate of deposit, or CD. It also means no cashing in investments from stocks, retirement accounts or CDs. Otherwise, you will create a huge headache for yourself as you try to show the bank the paper trail of where that money came from. In a similar vein, avoid paying off debts with savings because that could cause your lender to worry about how you will pay for closing costs.

Once you’re ready to start the pre-approval process, you’ll need to fill out the mortgage pre-approval application itself. Make sure you complete it as accurately as possible. The standard application asks for personal information such as financial account numbers and the desired borrowing amount, which is also called the target loan amount. It might seem unnerving to disclose your personal finance information and work history, but this is standard information that lenders use to assure you are financially responsible enough to undertake such a large loan. Working with a lender you trust will make sharing this information more comfortable. After you’ve completed and signed the forms, your lender will need to review and sign them and begin the loan approval process.

Once you get the Preapproval that means the lender will actually loan the money on a property based on your current financial situation after an appraisal of the property and a purchase contract and title report has been drawn up.

After you’ve finished your application and it is approved, you can begin to look for a home. Most mortgage pre-approvals are open for 60-90 days and after this time it expires. If your search extends beyond that, simply resubmit your application to refresh this term if you haven’t started the purchase process yet. Although getting a mortgage can sound like a lot of work, understanding what to do before starting your home search will only help ease the stress. The mortgage pre-approval may very well be the most important aspect of looking to purchase a home, as it helps define your price range. There are a few steps to the mortgage pre-approval process, so shopping around and working with a helpful lender you trust will only make the process easier and more productive for you.

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Florida Real Estate, Home Buyer Advice, Home Buyers, Home Financing, Mortgage Information, Real Estate by Kim Bregman
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Buying a house is a difficult process — there are large sums of money involved, the transaction costs and hassle of moving mean that you can’t just buy another house if you don’t like the one you end up with. The best you can do is to educate yourself in all aspects of the house hunt, keep a clear head, and buy a house that best fits your criteria.

There are plenty of articles full of useful tips for first-time homebuyers. I am not going to repeat them. Instead, I will list the lessons I have learned over the past 30 years of working exclusively with buyers that are not often covered.

Think long-term and think re-sale: Are you planning to have kids? Will you be taking care of elderly relatives? You might be planning to live in your first home for only a few years or plan on using it as an income producing property. In that case, who is your target audience when it comes time to sell or rent the house? If you buy a house in a very bad school district or a house with all the bedrooms upstairs when you are ready to sell the house, you will be narrowing the field of potential buyers.

Make a list of items to check when looking at properties: Home-buying is an emotional process. Ideally, you should set aside all your emotions when evaluating a house. Practically, that is impossible. Instead, make a checklist of your must-haves, nice-to-haves or absolutely nots. Then print copies of this checklist or keep it on your tablet. Every time you visit a house, take the checklist along with you; take photographs so you can cross each item off your list. If you fall in love with the house aesthetics but find your checklist shows that the house has none of your must-haves, it will at least make you pause and think.

All the old advice about buying your first home is true. Some examples — have an emergency fund, save for a down payment of 20 percent and closing costs, get your credit into a better shape, and don’t buy more than you can afford.  When budgeting for the house, don’t stop with principal, interest, taxes and insurance; add in utilities, cost of commuting and upgrades and replacement costs for aging roof or appliances. Ask the seller for copies of the utility bills and inquire of the utility companies about budget plans. Will the gas budget for your car go up if you are moving further away from the places you frequently visit? Budget all of these expenses and see if you can still afford the house.

Get Pre-approved:  Why would you want to waste time looking at houses you can’t afford?  Doing the pre-approval process ahead of time is vital. If there is something negative on your credit report, it’s best to find it early in the process, so you have time to correct it.

Ask for the homeowners and condo association documents before you make a decision: If your long- range plan is to rent out the house once you move, then you better insure that there are no rental restrictions that would preclude you from your desired goal. Thoroughly understand the Covenants and Restrictions of any area you are purchasing to ensure that they are in keeping with your lifestyle.

Be sure to read your contract before you sign it: A house is probably the largest purchase you will ever make in your life, so make sure you understand the terms of your contract. If you don’t understand any of the terms, ask your mortgage broker and your real estate agent. Either should be fully knowledgeable to address your contractual questions. I strongly advise that you retain an attorney to handle your closing, review title and loan documents, note title objections, and hold your deposit monies.

Learn about the neighborhood demographics: Do you have kids and are looking at homes without young families?  Are the majority of the residents renters and not homeowners? Define the type of neighborhood you want to live and make this one of your top priorities on your checklist.

Look beyond the staging: The psychology of staging does work; staged houses look far better than houses that are still being occupied. When you are considering a house, mentally try to remove the staging. Pay more attention to the layout of the house and the structure itself. Ugly wallpaper and paint can be easily fixed later.  Does your furniture fit the scale of the room?  Does the house have a functional kitchen?

Indecision:  Ever heard of the saying “Curiosity killed the cat”? Well, here’s another one, “Indecision killed the deal.” Not moving on a house fast enough and taking too much time to make a decision on buying the house is common as well. This indecision gives someone else the opportunity to scoop ups that home before you have a chance to make an offer.  A multiple offer situation is good for the seller, but not so much for the buyer. In this competitive real estate market with low inventory and high buyer turnout, you need to move quickly in order to get the house that you want.

Only checking online sources for mortgage rates and available homebuyer programs?  As much as everyone loves to do everything from their computer or smartphone today, this is one thing that should be done in person or with a phone call. It is always best to call a local mortgage lender and sit down in person with them to talk about the most current rates and programs available. Many of the lenders that you find online are not local and only have teaser rates on their websites. If you choose a mortgage lender that doesn’t have a local presence, a lot can change once they get the paperwork in front of them at the closing table. Insist of using an appraiser that is knowledgeable and does most of their work in area of the property.

Learn as much as you can about real estate, your budget, and your local housing market, but realize that buying a house is all about compromise, and a lot of doubt! No house is PERFECT but if you keep at it the odds are very good that you will find a house that suits your needs and will be a wonderful home for you and your family or your investment goals.

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, Real Estate, Relocation by Kim Bregman
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Lots of people these days are following that motto and trying to live a life of less; less junk, less clutter, less stress and less house. So how do you downsize your world when you’ve spent your life accumulating stuff?   Planning your space before you downsize is essential; downsizing requires some careful thought!

Whether you are a baby-boomer having to move your parents or a family who wants to downsize from the stress of a large home, to people wanting to plan a second home on a small scale, or even for people just wanting to have less to manage in their current home. Empty nesters and not-so-empty-nesters alike will find tried and true principles to get them through the challenges. Downsizing doesn’t have to mean losing your style either. In fact, when you do this right, you can end up with even more style with less stuff.

If downsizing is in the foreseeable future for you or a parent, here are seven ways to pare down the possessions. If downsizing seems daunting, remember this: if the home will be placed on the market, you’ll likely have to cut clutter nonetheless.

Plan backwards from moving day. If you have a clear idea when you (or a parent) are planning to move, start downsizing three months prior. It sounds taxing, but tackling every room (and/or garage, basement or attic) in one fell swoop is more challenging, if not impossible – especially for homeowners who’ve stayed put for years. Sorting through one room at a time is best.

Write a list of all the items you love and can’t live without; it will help you bid adieu to things that didn’t make the list. It’s hard to persuade people they can’t take everything with them, but by keeping what’s on your wish list, you won’t be upset about the things you can’t keep.

Stick to the OHIO rule. “Only handle it once.” Avoid placing items in “maybe” piles, particularly when helping a parent who may have a difficult time letting go. Ask yourself or your parent if they would replace the item if it disappeared – this will make the process feel much less like a trashing of beloved possessions.

Remember more isn’t always better. We all have items we’re saving “just in case” the original breaks. Don’t be afraid to purge duplicates. The same applies to clothing – avoid holding on to garments that no longer fit, but might “one day.”

Get a feel for the size of your new rooms by comparing them to rooms of similar dimensions in your present home. For instance, your living-room-to-be might be roughly the same size as your current bedroom. You may think you can squeeze in two sofas, but this kind of reality check could help you realize that only one will fit comfortably.

Get cash for your castoffs. Remember the three-month rule? If you’re planning to sell an item, start early – some things may not move as quickly as you’d like, and you don’t want to be stuck with items you no longer want come moving day. Keep in mind that eBay charges a selling fee, and items like shoes or books tend to languish on Craigslist.

Contact an auction house. If you or your parent has an assortment of valuable items, like antique furniture or artwork, coin and stamp collections, et. al. consider enlisting an auction house rather than an antique dealer – dealers want the most bang for their buck, not yours. Compile a large lot so the appraiser can assess items in one visit. An estate sales group can help facilitate the sale or auction of high-end belongings, too.

Donate as much as you can. Donating items to charitable organizations can make parting with possessions much more manageable. In many areas, the Salvation Army is available to transport big-ticket items like furniture or appliances. Other house wares in good condition can be donated to Goodwill or a local charity.

Filed under: Blog, Down Sizing, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, Kim Around the Web, Real Estate, Relocation by Kim Bregman
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If you’ve been thinking about replacing your water heater soon, you will want to read up on how the new water heater efficiency standards, effective April 16, 2015, will affect your options.

The U.S. Department of Energy recently mandated sweeping changes in the energy efficiency standards of this water-heating appliance. The new standards call for much higher Energy Factor (EF) ratings on all water heaters manufactured with larger than 55 gallons in capacity.

New water heater regulations mean huge changes in how larger capacity water heaters are manufactured, distributed and installed.

While the new mandates will add up to long term energy savings for all, the initial cost of replacing your old water heater may quickly become significantly more expensive.

For example, the average cost of conventional minimum-efficiency 60-gallon gas and electric water heaters is approximately $675 to $1,500 a unit. While in comparison, the new units manufactured after April 16 will cost anywhere from $1,200 to $2,450 each.

That’s not all. Water heaters manufactured after the new energy efficiency standards go live will require a different heat-pump design and will take up more space than your model now.

This means that if your current water heater is located in close quarters, like a 3 foot x 3 foot water closet or attic, you may be looking at a small home remodel to accommodate the larger units as well.

Water heaters contribute to a significant part of your monthly electric or gas bill. When replacing a water heater you should consider a tankless unit. These space saving units heat water on demand, only when you need it. The tankless technology offers endless hot water – you’ll never take a cold shower again! Because the water is only heated when it is being used, tankless water heaters are a great energy efficient solution for heating the water in your home. You’ll enjoy energy savings, better performance, extended life, fresh water, space savings and more capacity than traditional “tanked” water heaters.

If you are planning on purchasing a home or investment property that will need a new hot water heater, you should figure in these higher cost estimates in addition to the cost of retrofitting the space, if needed.

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, Home Maintenance, Real Estate, Uncategorized by Kim Bregman
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One of the costs of owning a home that buyers need to consider in their budgeting is the cost of insuring the home. A standard policy will cover exterior and interior damage from incidents like vandalism, fire, wind and lightning. It also covers loss of use expenses, damage to structures like sheds or gazebos, and liability and medical costs if someone is injured on your property.

Common exclusions are flood, hurricane and earthquake damage, but you may be able to buy additional coverage for these if desired or required.

Policies vary widely, but in general, homeowners insurance covers the following areas:

Your Structure – Your home itself is protected against damage from fire, wind, smoke, lightning, theft, vandalism and just about anything else that isn’t specifically excluded.

Your Possessions — Your belongings are also covered under your homeowners policy, including losses that happen away from home, for example, if your camera is stolen while on vacation. Keep an inventory everything you own so any claims can be handled accurately and efficiently. Write down serial numbers as well as the date of purchase and original cost of the items, or document on video. Keep the inventory in a fireproof safe or somewhere outside your home, where it can be accessed if your home should be destroyed.

Liability — This aspect of your homeowner’s insurance protects you against lawsuits arising from damage you, your family members or your pets may cause to other people. Liability coverage would pay not only for the actual damage, but also for the cost of defending you in court and for any court-ordered damage payments.

Replacement Cost Coverage – Your insurance would pay what it costs to replace the property with an identical or similar item. For example, if a bicycle was stolen from your garage, your insurance would pay to replace it with a new bicycle of the same or similar make and model (less your deductible).

Actual Cash Value – Your insurance would pay what it costs to replace the property with an identical or similar item, once that item has been devalued for deprecation. To continue the example above, instead of paying for a new bicycle, your insurance would give you the cash value of a used bicycle of the same make and model that was stolen (less your deductible).

Extended Replacement Cost — This type of coverage applies only to the structure of your home. Even though it has the word “replacement” in the name, you’re covered only up to set limits, which may not be enough to pay for the entire value of your home. If you want the assurance that the full replacement value of your home would be paid in the event of disaster, ask for “guaranteed replacement cost”.

If you’ve purchased a condo, or townhouse, ask your insurance agent about specific homeowner policies designed for these types of homes. You’ll want to purchase coverage above the association policy, but the additional coverage is usually very affordable.

Work with your insurance agent to determine how much and what type of coverage is right for your family and your new home. Be sure to ask what discounts may be available, such as rate reductions for smoke alarms, fire extinguishers, security systems and nonsmoking households.

After purchasing your homeowners insurance, make it a practice to review your coverage every year to be sure that it’s keeping up with increasing real estate values and any additions or improvements you may have made. Projects like building a porch or another bathroom can add significant value,  so you may need to adjust your policy if you’re planning to renovate your new home. Upgrades (like a new roof) can lead to discounts if they mitigate risks, but potentially hazardous features (like a pool) may require up to $500,000 in coverage.

It may seem costly, but protecting what’s likely the largest investment you’ll make in your lifetime is worth it – and peace of mind is priceless.

Filed under: Blog, Exclusive Buyer Agent, First Time Homebuyers, Home Buyer Advice, Home Buyers, Real Estate by Kim Bregman
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Moving into a new house is exciting, but the list of “to dos” can be overwhelming. You not only have to pack and prep the new house, but you have to tie up all the loose ends at the old place. Here are 10 tasks that are easily overlooked when moving into a new home – if you take care of these, you’ll have a leg up on moving day.

1. CHANGE THE EXTERIOR LOCKS: You really don’t know who else has keys to your home, so change the locks. That ensures you’re the only person who has access. Install new deadbolts yourself for as little as $10 per lock, or call a locksmith.

2. STEAM CLEAN CARPETS AND FLOORS: Do this before you move your furniture in, and your new home life will be off to a fresh start. You can pay a professional carpet cleaning service — you’ll pay about $50 per room; most services require a minimum of about $100 before they’ll come out — or you can rent a steam cleaner for about $30 per day and do the work yourself.

3. PAINT: It’s so much easier to paint an empty home than a full one. If you need to touch up paint, or want to change the wall color, do it before the moving trailer arrives with your furniture.

3. HAVE YOUR WINDOWS CLEANED INSIDE AND OUT: Your home will never be this empty again and it is the best time to start with a “clean slate”. Don’t forget the mirrors, baseboards, fans and windowsills while you are at it.

4. THOROUGHLY CLEAN ALL CABINETRY INSIDE AND OUT: Another no-brainer before you move in your dishes and bathroom supplies. Make sure to wipe inside and out, preferably with a non-toxic cleaner, and replace shelf and lining paper if necessary. Run a phantom load in the dishwasher and washing machine, clean out the oven if it needs it, and don’t forget the refrigerator and freezer. If possible, hire a cleaning service to help you get it all done. If you aren’t able to do the cleaning prior to unloading the moving van, hiring a cleaning service will be even more helpful.

 5.  INTRODUCE YOURSELF TO THE CIRCUIT BREAKER BOX AND MAIN WATER VALVE.

If the circuit box(s) are not already labeled, it’s a good idea to figure out which fuses control what parts of your house and label them accordingly. This will take two people: One to stand in the room where the power is supposed to go off, the other to trip the fuses and yell, “Did that work? How about now?”

You will also want to know how to turn off your main water valve if you have a plumbing emergency, if a hurricane or tornado is headed your way, or if you’re going out of town. Just locate the valve — it could be inside or outside your house — and turn the knob until it’s off. Test it by turning on any faucet in the house; no water should come out.

6. CHANGE ALL THE BATTERIES and CO2 IN YOUR SMOKE DETECTORS: No one will know when this was last done and it will be a good reminder that they need to be changed each your on the anniversary of purchasing your home.

7. GET A FRESH FIRE EXTINGUISHER FOR UNDER THE KITCHEN SINK and develop a family exit strategy in case of a fire. Rehearse this so that everyone is comfortable where all the new exits to the home are.

8. PROGRAM THE LOCAL POLICE AND FIRE DEPARTMENTS INTO YOUR PHONE.

9. INTRODUCE YOURSELF TO THE LOCAL MARKET: It’s a good idea to check out the local market and get a few staples. Between you, your family, the movers and any friends who are helping you, someone’s bound to get thirsty or hungry during the move. Why not be ready with a refrigerator full of cold beverages, sandwich supplies and other snacks? And don’t forget to grab some disposable plates, cups, and napkins, paper towels, trash bags and toilet paper while you’re at it.

10. DO SOME “YELPING” AROUND:Figure out what restaurants deliver because you are going to feel filthy and exhausted when moving day comes around.

Filed under: Blog, Home Buyer Advice, Home Buyers, Real Estate, Relocation by Kim Bregman
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ANY open permits and or code violations need to be fully addressed and resolved by the potential home buyer, prior to closing.  Failing to do so can be very costly for a homeowner.

Open permits remain with the property, despite any change in ownership.  Failure to uncover any open permits prior to closing means that these permits become the responsibility of the new owner.  Requirements to remedy an open permit can include fines, fees, and completion of pending work and removal of work that does not meet building requirements.  Open permits can be quite costly and time consuming.

Q. What is an open or expired permit?

 An open or expired permit is a permit which has been issued by a County or Municipal building department but has not been formally finalized in accordance with established guidelines, typically by means of a final inspection, within the time provided.  Once the time has lapsed for the permit to be closed by the issuing department it is referred to as open or expired.

Q. Why do I need an open permit search?

One of the biggest obstacles for home sellers these days is the issue of open permits.  Since many Counties have declared war on open permits, homeowners are finding themselves at the mercy of county inspectors when the time comes to close on the sale of their home.  Attorneys and title companies may recommend that buyers not close if a permit search reveals open permits

Q. Will title insurance cover open or expired permits?

A good title company or real estate closing attorney will take care of this for you but you have to ask for it because it normally is not done.  Title companies can close the sale on a property with an open permit on it, and most will never even conduct an open permit search; it’s not the same as a lien search.  You should order an Open Permit Search at the same time you schedule your inspection.

This is a service that I provide for my Buyers. I usually go to the Building Code department of the town or municipality where the home is located and pull the record on all permitted activity on the home.  If there is work that has been done that has not been permitted that is an issue that should be addressed by the home inspector.

Q. Will my closing agent check for open or expired permits?

Oftentimes the person selling the home or their listing agent has no idea about his or her own permit situation. They may have had some work done and their contractor told them everything was good to go and somewhere down the road they will find out that the permit is still open and if you are the new owner this is now your problem to deal with.  Sometimes work was done before the current owner bought the home and they have no idea anything could still be open.

The best way to protect yourself is to do an open permit search.  If you are selling your home it is a good idea to make sure your home has all of its permit issues in order because nothing can kill a deal faster than when a buyer finds out there are open permits  If you are the buyer, take care of it before you face a potential issue in the future.

Q. Who is responsible to close an open permit?

Open permits can be grounds for the title company to balk or the lender to renege on financing.  Uncovering open permits and closing them typically falls on the shoulders of the SELLER but may not be written in a standard contract. Every State or County’s standard contracts vary.  Make sure you understand the terms and conditions involving permits in whatever contract you are using. It often can be grounds for terminating a contract.

Q. Is it really that important? What is the worst that can happen?

If open and/or expired permits exist and are not closed prior to closing, these permits become the responsibility of the new homeowner. The new owner will be responsible for paying all fees and/or fines and will be forced to complete the pending work.  If the permit is not properly closed, the building department may be able to order the removal of the work on the property.

Q:  Found an open permit.  Now what?

If there are any open permits on your home the Building and Zoning Department can provide you with the name and contact information for whomever pulled the permits.  You can then contact the contractor to get the permit closed.

Q:  What if the contractor is no longer in business?

If your contractor is no longer in business, you have a couple of options:

You can close the permits yourself. This involves contacting the Building and Zoning Department; arranging for any missing inspections; following up with inspectors and the department to make sure that the permit is closed on the computer.  Or, you can contact a local permit expeditor to close the open permits for you.

Filed under: Blog, Home Buyer Advice, Home Buyers, House Closings, Real Estate by Kim Bregman
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Buying a home is probably the most important purchase you will ever make…  these ten tips will help you better understand what you can expect from contract to closing.

 1. Determine Your Needs

The process of purchasing a home can be especially daunting if you don’t take the time to determine your needs. A real estate professional will be able to best assist you if you are willing to answer a few important questions:

• What is your current lifestyle and how will that play into the neighborhood or community you choose? e.g. sports enthusiast that requires hiking trails within the neighborhood
• Size of home including bedrooms, bathrooms, and specialty rooms such as media or pool room.
• Style of home: Ranch vs. Two-Story and Tudor vs. Cape Cod
• Schools, Religious institutions, commute to work all influence the area you choose to focus on

2. Consider the Cost of Homeownership

There are various financial commitments to consider, most importantly how a new home will fit into your budget.

You need to ensure that you can afford the monthly mortgage payment, as well as any expenses including utilities, taxes, insurance, maintenance, and/or possible homeowner’s association fees.

3. Interview an Exclusive Buyer Agent
A Buyer’s Agent will share valuable and essential information with you, if known, such as:

• • The seller’s reason for selling and timetable
  • Length of time the home has been on the market
  • Previous offers and counter offers for the property
  • Strengths and weaknesses of the property
  • Determining an offer price based on past comparable sales
  • Locating suitable property not currently on the market

You owe it to yourself to be the most knowledgeable buyer you can be. You can ask a buyer’s agent for advice and assistance in setting your offering price and structuring the other terms of your offer. What’s more, you’ll have peace of mind knowing an advocate is working on your behalf to help you buy at the best possible terms. 

Ask for references and listen to what other people have to say about their experiences with a particular agent. Ultimately, you want to find someone that knows your area, has a good grasp on current market conditions and that you feel comfortable with.

4. Decide if You Will Build or Buy Resale

Are you going to buy an existing home or build something new? There are pros and cons to both, with each a reflection of your lifestyle and needs.

This calls for thorough research to identify which of the above is beneficial to you as an aspiring homeowner.

 5. Location, Location, Location

Location is one of the key factors to consider in any home purchase. Make sure that you buy a home in areas where the value of property is set to increase as opposed to those with low prices and high chances of stagnation.

 6. Understand Mortgage Options

Speak with a mortgage professional about your options and make sure to share details about your current financial situation, including your monthly budget for a new home. They will be able to offer guidance on which loan program will work best for you.

  7. The Benefits of a Home Inspection

A home inspector will inspect the home prior to purchase to examine for structural and safety issues. An inspection is not required, but a wise choice as it will determine if the home is structurally sound and wiring and pluming are up to code.

They will also check for safety hazards, including loose railings, rotted or damaged porch or entryway steps and broken windows.

 8. Get Everything in Writing

The best way to protect yourself is to ensure that every part of your transaction is captured in writing. An example of this would be repairs the seller agrees to make prior to closing.

Your real estate professional is there to make certain those repairs are added to an addendum which becomes a part of the purchase agreement. You do not want to have a casual conversation with the seller that could be left to interpretation when it comes to the largest purchase you will probably ever make.

9. Finalize the Purchase

To avoid problems at the closing table, make sure you have a clear understanding of what to expect. Go through your loan details one last time so there are no surprises when it comes to interest rate, loan amount or mortgage term.

There will be a substantial amount of paperwork to sign so give yourself plenty of time to adequately review the details.

10. Home Improvements

Your home is a valuable asset. Once you close, continue to put aside money on a monthly basis for any necessary repairs or maintenance.

It’s also important to note that certain upgrades may contribute to lower insurance premiums. This makes it important for you to stay in touch with your real estate professional. They can provide guidance on value boosting renovations.

Filed under: Blog, Exclusive Buyer Agent, Home Buyers, Home Financing, Real Estate by Kim Bregman
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