FREE Home Warranty !!


FREE Home Warranty!!

For a limited time, I am offering a free home warranty to any one who lists or buys with me and we have a closing before January 31, 2013!!

Sellers will have the added advantage of being able to have their home marketed with a home warranty.  Buyers will have the peace of mind knowing that many of the things that can go wrong with a home will be covered.

This offer is for a limited time only and has some restrictions.  Transactions must occr in my licensed area.  Contact me for details.  If you are thinking of selling or buying this is an excellent opportunity for you.

Appraisals Continue to Hamper Sales


Appraisals Continue to Hamper Sales

According to the National Association of REALTORS the real estate market is recovering but still faces hurdles. Real estate appraisals are one of the issues holding back home sales, according to survey findings by the National Association of REALTORS® (NAR).

Most appraisers are competent and provide good valuations that are compliant with the Uniform Standards of Professional Appraisal Practice. However, appraisals generally lag market conditions and some changes to the appraisal process have been causing problems in recent years, including the use of out-of-area valuators who lack local expertise, full access to local data, inappropriate comparisons, and excessive lender demands. In addition, before the beginning of last year, some lenders’ loan processors edited valuations, cutting them by a certain percentage.

Although 65 percent of REALTORS® surveyed in September report no contract problems relating to home appraisals over the past three months, 11 percent said a contract was cancelled because an appraised value came in below the price negotiated between the buyer and seller, 9 percent reported a contract was delayed, and 15 percent said a contract was renegotiated to a lower sales price as a result of a low valuation. These findings are notable given that homes in many areas are selling for less than replacement construction costs.

Lawrence Yun, NAR chief economist, said there has been a steady level of appraisal issues for quite some time. “Though the real estate recovery is taking place, the combined issues of stringent mortgage lending requirements and appraisal frictions are hampering otherwise qualified buyers from purchasing a home in a timely fashion, and in some cases are preventing them from buying at all,” he said.

Major problems reported by REALTORS® include:

· Appraisers using foreclosures, short sales, and run-down properties as comparable homes, and not making adjustments for market conditions or the condition of the property.

· Appraised values that do not reflect market conditions such as rising prices, multiple bids, and low inventory.

· Inconsistent and fluctuating valuations.

· Out-of-town appraisers who are not familiar with the area or local market conditions.

· Slow turnaround time by both appraisers and banks.

A large concern is that some appraisers working for an appraisal management company (AMC) are operating under strict and limited parameters due to bank lending criteria, which appear to be related to banking regulations or risk aversion on the part of the lender. Furthermore, unreasonable “put back” risks imposed by Fannie Mae and Freddie Mac could also cause banks to set unrealistic requirements for appraisers.

There is a clear difference between the value of distressed property and non-distressed homes, and some appraisers do not currently distinguish between these types of properties when making comparisons for valuation purposes. NAR data shows that the typical foreclosure is sold for an average discount of 20 percent relative to traditional homes in good condition, while the typical short sale is discounted by 15 percent.

NAR President Moe Veissi said some appraisal practices lack common sense. “Our long-standing policy is that all appraisals should be done by licensed or certified professionals with local expertise, which also is what Fannie Mae and Freddie Mac recommend, but clearly this isn’t practiced universally,” he said.

NAR has long advocated for an independent appraisal process and enhanced education requirements that allow appraisers to produce the most accurate reports possible. However, appraisers have faced undue pressure — whether from a lender or an AMC — to complete appraisals using distressed sales as comps, to complete an appraisal in an unacceptably short time frame, and to complete a scope of work that is not justified by the fee being offered.

In addition, some appraisers are required to provide as many as eight to 10 comparable sales, which almost guarantee the use of distressed properties as comps in many cases. Previously, three comparable homes were the norm for most appraisals. In many cases, there simply aren’t enough apples-to-apples comps to comply with the excessive demands by lenders, so discounted distressed homes are sometimes used in valuating traditional homes in good condition without appropriate adjustments.

“In short, there has been an inconsistent appraisal process leading to disruptive delays for home buyers and sellers,” Veissi said. “All home valuations should be made without undue pressure from any source. Even so, buyers, sellers and agents are free to ask appraisers to consider additional data and to correct errors, or discuss unique aspects of the home, the neighborhood or properties used as comps.”

The appraisal industry has made strides in adapting to market conditions, expanding education, and making appropriate adjustments for distressed homes that are used as comps. It appears many of the remaining problems are tied to appraisals made through AMCs.

Fortunately, the level of distressed sales is trending down — they accounted for about one-third of all sales in 2011, but have averaged roughly a quarter of sales in recent months. By 2013 NAR expects the distressed market share to decline to about 10 to 15 percent. As distressed inventory is cleared from the market over the next two years, it should help to correct ongoing problems.

“In the meantime, buyers, sellers and real estate agents need to be aware that there are problems with some real estate appraisals, but also be aware of their rights to communicate with appraisers and lenders about errors or concerns with individual valuations,” Veissi said. “In some cases, a second appraisal may be justified.”

If you are thinking of buying or selling, talk to a REALTOR who can get you the answers you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to give me a call or text me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland

source: National Association of REALTORS

 

There Is No Real Estate Transfer Tax Signed Into Law!!


There Is No Real Estate Transfer Tax Signed Into Law!!

Since the Health Care Reform Act was approved over two years ago, viral emails started circulating that claim it includes a tax on real estate sales. And now, with an election approaching, we are seeing a new version of this misinformation.

You may have received an email with language like this: “Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? …The National Association of Realtors is all over this and working to get it repealed, –before it takes effect.” Or maybe you read something similar in a Facebook post or saw it on a blog. It’s not true.

The tax is NOT a transfer tax on real estate sales and similar transactions.

It’s a tax on a very narrow band of investment income for high-wealth households (those who earn $250,000 in a joint return or $200,000 as an individual) that could come into play on the sale of a house if the sales gain is more than $500,000 for a married couple or $250,000 for an individual.

Even in the unlikely event the sales gain is more than that amount, the tax would only apply based on other considerations having to do with the household’s income and its tax situation.

Here are ten things you need to know about this legislation that was signed into law:

1) When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will NOT be subject to this tax.

2) The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchasea home or other investment property.

3) You’ll NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

4) If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

5) The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents afterexpenses).

6) The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

7) In any particular year, if you have NO income from capital gains, rents, interest or dividends, you’ll NEVER pay this tax, even if you have millions of dollars of other types of income.

8) The formula that determines the amount of 3.8% tax due will ALWAYS protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would NEVER be imposed on more than $1000.

9) It’s true that investment income from rents on an investment property couldbe subject to the 3.8% tax. BUT: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

10) The tax was enacted along with the health care legislation in 2010. It was added to the package just before it was voted on as part of a compromise.

If you have questions about your tax liability, talk to a tax professional.  If you are thinking of buying or selling real estate, talk to a REALTOR who can get you the answers you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland

source: National Association of REALTORS

What’s In A Name – In Real Estate, It Can Make A Big Difference !


What’s In A Name – In Real Estate, It Can Make A Bog Difference !

Houses that real-estate agents describe as “move-in condition” sell 12% faster than homes listed without those words. “Starter homes” sell 9% faster. But be careful: A house called a “handyman special” sells about 50% faster, but the final price is 30% lower than listings that lack those words.

For the past decade, Paul Anglin, associate professor of real estate at the University of Guelph in Ontario, has been studying the effect of certain words in house descriptions.

One of the worst offenders is “motivated” sellers, which both lowers the sell price and slows the sale. Oddly, frantic pleas of “must sell” have no effect on sell time or price, Prof. Anglin says.

In a 2005 National Bureau of Economic Research study, words that depict distinct attributes—”granite,” “maple” and “gourmet”—correspond with higher sale prices. Words deemed “superficially positive”—like “clean,” “quiet,” “fantastic” and “charming”—are either ineffective or even hurt prices.

In a separate study, words that describe specific attributes are more likely to boost the selling price: Mentioning “garage” increases the sale price by 9.8%, “fireplace” by 6.8% and “lake” by 5.6%, says Thomas Thomson, a professor of real estate and finance at the University of Texas at San Antonio who co-wrote “Real Estate Agent Remarks: Help or Hype?”

Don’t mention minor improvements without citing more substantial ones. Bragging about your home’s recently painted walls or new carpet may decrease the final sale price, Prof. Thomson adds. These phrases may lead buyers to form overblown expectations, and they are disappointed after actually viewing it.

“It’s like putting lipstick on a pig. If you put lipstick on a pig, it’s still a pig,” he says.

It’s also important to note that words can also get you in legal trouble if they show discrimination of any protected category.  An ad that may say “perfect for empty nesters” may result in serious legal issues.

If you are thinking of buying or selling, talk to a REALTOR who can guide you through this issues and get you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please don’t hesitate to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland

Source: Wall Street Journal and Tennessee Association of REALTORS