Monthly Archives: April 2014

5 Ways to Improve Your Homes Curb Appeal

“Nothing Quite sets the tone like good Curb Appeal when you are preparing to sell your home. This is one of the first things we work on with our Sellers. It’s all about getting that good first impression. Through a Buyers eyes, if you can’t take care of the exterior, how could you take care of the interior?”

DC Metro Realty Team – Denise Buck & Ed Johnson

House hunting is a little like speed dating. You only get a few minutes to make a great impression. That’s why curb appeal is so important.

“When potential buyers pull up to your house, they’re asking themselves: Is this place worth getting out of the car to look at?” says Kevin Kieffer, a real estate agent based in California’s East Bay area. “Your house needs to be framed up: It needs to look like a picture when people pull up. They expect to see tasteful paint colors, well-trimmed grass, new bark, fresh flowers — the whole deal.”

Real estate agents participating in Zillow’s 2014 Home-Selling Season Survey identified curb appeal as a key way to make a property more attractive to buyers. Kieffer says that, while it’s hard to quantify return on investment, curb appeal is the best way to get quick action and top dollar for your property.

“In a market like ours, if people can see that a property is turn-key and they’re not going to have to spend time resodding or painting, you’re more likely to get more interest,” he said. “If you end up with a multiple-offer situation, it’s typical for the price to go up by 3 percent per bidder — that can add up to $10,000 over asking price really quickly.”

The great news is that you don’t have to spend a lot to make big changes to your home’s exterior appearance. Start the makeover by cutting the grass, power washing the porch and walkway, and getting rid of clutter. Then, tackle one or all five of these perk-up projects to enhance your home’s curb appeal.

Hardware redo

House numbers, a wall-mounted mailbox and a porch light can add interest to your home’s exterior — unless they’re dated or dinged up. Ideally, all this hardware should match, both in style and finish. You’ll also want to choose hardware that coordinates with the style of your home. Sleek, brushed nickel house numbers, for instance, might look great on a contemporary home, but they’d probably be out of place on a log cabin.

Add a splash of color

You can buy a gallon of quality exterior paint for about $25. That should be enough to add new color to — or simple freshen up — your front door, shutters and trim. Don’t be afraid of bold colors; just make sure they complement the other shades on your house and in your landscape. Of course, if the rest of the house is peeling, you may need to outlay more cash and paint the whole thing — or, at the very least, the side that faces the street.

Go green

Plant some flowers along your front walkway or add planters by your front door to give your home a welcoming feel. You can purchase pre-planted containers from your local garden center or create your own with your favorite plants. Window boxes are another great way to add color and interest to your home’s exterior. Just be sure you tend to your flowers after you plant them. Dying geraniums will not enhance your curb appeal.

Manicure trees and shrubs

Your house may be gorgeous, but that won’t matter if no one can see it. When your home’s best features are obscured by overgrown branches and shrubs, it can make the house seem uninviting and unkempt. In addition to looking unappealing, trees that rub against your house can damage your siding and provide a direct pathway for squirrels and other rodents that want to get onto your roof or under your siding. Tame bushes and branches or hire someone to do the job for you.

Bring the indoors out

If your outdoor space allows it, add a comfortable place to sit. Use an outdoor rug to visually anchor a seating area and then add a loveseat or chair and small table. Colorful cushions and pillows in outdoor fabrics will add punch to the space; select cushions with removable covers so you can wash them or swap them out as seasons change. Choose all-weather art to add the finishing touches to your outdoor space. If you already have outdoor furniture, make sure it’s clean and cared for. Create a setting that’s so attractive prospective buyers can’t resist it.

Photos courtesy of Zillow Digs

Don’t Ignore Adjustable Rate Mortgages

“After everything that happened in the Market a few years ago, most people decided that ARMs (Adjustable Rate Mortgages) were just plain bad. That isn’t always the case. Don’t write them off until you’ve talked to a lender about all the options available to you. Depending on your situation it might just make sense.”

DC Metro Realty Team – Denise Buck & Ed Johnson

94% of purchasers last year opted for a fixed-rate mortgage at some of the lowest rates in home buying history. Yet, some of them will pay more in interest than necessary based on the time they’ll own the home.

If a person only plans to be in the home a few years, the adjustable-rate can offer significant savings.

Not only is the interest rate on the adjustable-rate lower than the fixed in the initial period, amortization on a lower interest rate amortizes faster than a higher interest rate.

In the example shown below, a $200,000 mortgage for 30 years is compared using a 4.25% fixed-rate to a 3.25% 5/1 FHA adjustable rate. The first five years of the ARM generates a $113.47 a month savings which accumulates to $6,808.20. In addition, due to faster amortization on lower interest rate loans, the unpaid balance at the end of five years will be $3,001 lower on the ARM for a total savings of $9,801.

Assuming the adjustable-rate mortgage was to escalate the maximum allowed at each period, the breakeven would occur in 8 years and 6 months. If a person were to sell the home prior to this point, the ARM would provide a lower cost of housing for the homeowner.

For some people, the uncertainty of how the interest rate may change is not acceptable. On the other hand, for the risk tolerant individual who may be more confident in financial matters or who may know when they’ll be moving next, the ARM can be a smart choice.

To make projections using your individual numbers, see the Adjustable Rate Comparison.

InTouch ARM.png

Investment Property Exchanges Save $’s

“Many of our clients become landlords by renting out their 1st home when buying a new one. The following article provides some information on benefits of using a Section 1031 when buying and selling your rental or investment properties.”

DC Metro Realty Team – Denise Buck & Ed Johnson

Section 1031 exchange for rental and investment real estate is a tool that allows investors to move the gain from one property to another without immediate income tax consequences.

An instant benefit is to postpone the tax due which gives the investor a larger amount of proceeds to invest. In the example shown, the investor has 21% more proceeds to invest and grow over time than if he had paid the taxes due instead of exchanging.

A legitimate long-term goal might be to make qualified exchanges from one property to another until the investor dies. The heirs would then receive a stepped-up basis on the property based on the market value at the time of the decedent’s death and possibly avoiding taxes altogether.

There are specific requirements to be met in order for the exchange to qualify. For more information on exchanges, see IRS publication 544. In addition to enlisting the services of a real estate professional familiar with investment property, seek the help of Qualified Intermediary to facilitate the intricacies of the exchange. Your real estate agent can help you locate one.

Smart Moves to Improve Your Credit Score

“Often when working with clients they are concerned about their credit score, as they should be. That’s because the higher your credit score, the better chance you have of securing the best loan terms. To find out how to improve your score before buying a home please read the following article.”

DC Metro Realty Team – Denise Buck & Ed Johnson

Is your credit score a mystery to you? Well, it may be time to demystify that three-digit number, since a good credit score is a key factor in getting a better interest rate on your mortgage.

“Your credit score is the foundation of your financial health,” says Anthony Sprauve, senior consumer credit specialist for Fair Isaac Corporation (FICO), an analytics software company and owner of the FICO Score. The FICO score is a standard for measuring credit risk in the credit card, banking, retail, and mortgage industries.

With a high credit score, you can secure more credit as well as a cheaper interest rate on a mortgage, says Sprauve. So, it’s worth investing the time and energy to improve it.

Read on for five little-known ways to improve your credit score and ultimately get you the best interest rate possible for a home loan.

Tip #1: Increase the limit on your credit cards

Let’s say you have four credit cards in your billfold. Each of them has only a $1,000 limit. If you ask your credit card companies to increase those limits, it could give a nice boost to your credit score, says Jim Garnett, CEO of AskMrG Consulting, a financial consulting company in Ankeny, Iowa. But here’s the catch: You’ll still need to keep your credit card balance low.

For example, if you have a credit card with a limit of $5,000, but only use $500 of that credit, it shows that you are responsible. You don’t go crazy and buy everything in sight, he explains. In a lender’s eyes, that means you can handle a home loan and pay it off responsibly.

But if you have a $1,000 limit and still have that same $500 balance, it makes you seem less responsible. It communicates that you wouldn’t be able to manage a mortgage and could be more of a risk, Garnett says.

He warns, however, to beware of high limits. “People who get $10,000 and $15,000 credit card limits seem to have a sense that they have money in the bank. That’s not true,” he says.

In order to avoid that temptation, you should contact your credit card companies once you’ve secured your mortgage and have those limits reduced back down, he advises.

[Shopping for a mortgage or looking to refinance? Click to find the right lender now.]

Tip #2: Only use 7 percent of your revolving credit

Credit scores run from 300 to 850. About 25 percent of people with credit scores – approximately more than 50 million individuals – have scores greater than 785, according to myFICO, a subsidiary of FICO.

So what can we learn from these high credit score achievers?

For starters, they have an average of four credit cards or loans with balances, notes myFICO. However, high credit achievers keep a low balance on those credit cards and loans.

In fact, high credit scorers only use an average of 7 percent of their available revolving credit. Revolving credit is a type of credit that has a predetermined credit or spending limit, like a credit card. And unlike a loan, a revolving account doesn’t automatically close once its balance reaches zero.

“While people with high FICO scores are not perfect, their consistently responsible financial behaviour pays off over time,” Sprauve says. “In a challenging economic period, the fact that we all have a chance to be high achievers is very good news. The lesson of these high achievers is that it’s never too late to rebuild and score high.”

Tip #3: Don’t cancel older credit cards

Credit cards that you have kept for years are like fine wine. They get better with age – as long as you pay your bills on time.

“If you had a particular card for 14 years, and you haven’t been late on a payment, that’s a good sign that you are responsible to the lenders,” Garnett says. If someone can responsibly pay their credit card bills on time, they’re probably more likely to pay their mortgage payments on time as well.

In fact, he adds, your credit cards don’t even need to have any balances on them to look good on paper, since they contribute to your overall available credit. On the other hand, closing old credit cards reduces your available credit and increases your balance-to-limit ratio. That’s a sign of risk that could lower your credit score and ultimately keep you from getting the best interest rate possible on your mortgage.

[Shopping for a mortgage or looking to refinance? Click to find the right lender now.]

Tip #4: Don’t apply for more than two credit cards each year

While keeping credit card accounts open can be a good thing, that doesn’t mean you should go and apply for a handful of credit cards at the same time, says Garnett. When you apply for a credit card, you authorize lenders to make an inquiry for a copy of your credit report from a credit bureau. And a large number of inquiries, especially within a short period of time, means greater risk to a lender, notes myFICO.

What kind of risk do lenders see? Well, statistically, people with six or more inquiries on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports, according to myFICO.

Garnett sees this problem a lot with college students who apply for multiple credit cards just to get that free umbrella or free hat.

Credit inquiries can look especially risky to lenders if they see that you applied and were denied for a line of credit, Garnett says. “They wonder why you applied for all this credit and never received it.”

Tip #5: Give yourself at least six months to review and fix your credit report

Like anything worthwhile, improving your credit score will take time to improve. But you can’t change your credit score if you don’t know that something is wrong. And if you give yourself enough time, you can correct any mistakes and change any bad habits, says Sprauve.

“We recommend that you do things a year in advance. Nothing is going to be fixed or changed overnight,” Sprauve says. “The minimum is six months to get things changed around. But give yourself a year.”

You can order a credit report for free once a year from all three nationwide consumer credit reporting companies at annualcreditreport.com. Or you can order one for a small cost at MyFICO.com, TransUnion.com, Experian.com, or Equifax.com.

Just keep in mind that the FICO score has a different name at each credit reporting agency. At Equifax it is called the BEACON® SCORE, while at TransUnion and Experian it is called Classic FICO® Risk Score.

Next, you’ll need to review the reason codes, which detail why you have a certain score, says Garnett. “It will tell you if you had too many late payments or other reasons,” he explains. “They have a road map on how to improve your score.”

Originally published on Yahoo Homes

By Lee NelsonApril 7, 2014 1:23 PM

Is the Window Closing on Low Interest Rates?

“We’ve been watch the fluctuation in the market over the past year and the general consensus is that rates are going up the rest of the year, along with the prices of homes. This means that buyers who wait will have less buying power”

DC Metro Realty Team – Denise Buck & Ed Johnson

With interest rates lower than they’ve been in over 40 years, it may be difficult to think of a “window of opportunity” closing. However, it isn’t difficult to understand that it may very probably cost more to live in a home in the near future due to rising interest rates and prices.

Zillow recently reported results from a nationwide study that home values are expected to appreciate by 4.5% through the end of the year. Coupled with Freddie Mac’s projection that rates are going up, the cost of housing for buyers by the end of the year will be higher than it is now.

While uncertainty of the future can stagnate some people, the fear of loss can be much more devastating when a person realizes that the amount they pay to live and enjoy a home could have been considerably lower had they acted when prices and mortgage rates were lower.

The following example considers a $250,000 purchase today with a FHA mortgage compared to what it might be at the end of the year with a higher price and interest rate as discussed earlier. The net effect is that it will cost $191.87 more each month to live in the very same home based on the cost of waiting to buy.

To see what the cost might be for your price range, use this Cost of Waiting to Buy spreadsheet.

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8 Spring Maintenance Projects To Save Money

“Now that the weather is finally starting to turn to Spring, it’s time to take a look around and see what might need to be done around your home. Most of the time we think about Spring Cleaning, but equally important is Spring Maintenance. Now is the perfect time to look for those things that went unnoticed because we were cocooning all Winter.”

DC Metro Realty Team – Denise Buck & Ed Johnson

When we talk about money-saving home maintenance projects, we often focus on winter. After all, heating a home is expensive, and we’ll do whatever we can to reduce the winter costs.

But many projects better suited for warmer weather can save you money, too. Here are eight projects to tackle this spring:

1. Clean the refrigerator and air conditioner coils. Your fridge and air conditioner work in nearly the same way – by exchanging heat through a system of coils. When those coils are dirty and dusty, they can’t exchange heat as efficiently, so the system has to run harder and longer to have the same cooling effect.

Luckily, cleaning these coils is simple. Just take a vacuum hose to the coils on the back of your fridge. For an outside air conditioner unit, you’ll need to disassemble the casing (making sure the power to the unit is off first), and clean using canned air and/or a stiff brush and spray bottle.

2. Schedule routine heating, ventilation and air conditioning maintenance. Yes, it costs money to get an HVAC professional to look over your system. But routine maintenance costs much less than major fixes down the road. So call and schedule your HVAC maintenance now. To save even more, check websites such as Groupon, Amazon Local and Angie’s List for deals with local HVAC companies.

3. Inspect and repair your roof. Spring is the time to get out on the roof to check for ice, hail or water damage from winter. Repairing minor damage can be a quick do-it-yourself fix, and staying on top of your roof’s condition (no pun intended) can save you money by avoiding water damage later on.

4. Clean gutters. This can be a Saturday-long spring chore for many, but it’s important, especially if you live in an area with April showers.

Water doesn’t properly pass through clogged gutters. And that means more water gets near the foundation of your home. This may not cause immediate problems, but over time, too much water near the foundation can cause damage and weakening, which are expensive problems to fix later.

5. Clean the dryer vent. Just like your refrigerator doesn’t work properly with dusty coils, your dryer is less efficient with a lint-filled vent. Even if you clean the lint trap before every load of laundry, you’ll still get some lint in the vent hose, which builds up over time.

To clean the vent, just remove the vent hose from the back of the dryer and vacuum it well. Then, remove the vent cover on the outside of your home, and vacuum it from that side, too.

6. Check the washing machine hoses. Over time, washing machine hoses can crack, which can cause leaks. Sometimes, these inconspicuous leaks go on for weeks or months unnoticed, usually because the washer is pushed back into a corner. This can cause mold problems, water damage and more.

So while you’ve got the dryer pulled out to clean the vent, pull out the washer, too. Check that the hoses are still flexible, and they show no signs of cracking. If they do look worn or cracked, just replace them. It’s an easy fix!

7. Re-caulk windows and doors. You might have caulked your doors and windows before the winter chill set in. Unfortunately, even the best caulk can harden, crack and shrink when it’s cold outside.

So check your windows and doors, and replace as needed. Keeping the hot air out during the summer is just as important as keeping it in during the winter.

8. Plant trees in strategic locations. As you think about landscaping this spring, consider planting a new tree or two. Mother Nature will certainly thank you, and your heating and cooling bills might, too.

If your house gets hit with a lot of sun during the day – which causes the inside to heat up – plant a fast-growing deciduous tree or two on the west, east or northwest side of your home for cooling shade.

And if you noticed wind whistling through the cracks of your home over the winter, an evergreen windbreak on the windiest side of your home might do the trick and block the wind.

Before you plant, make sure you understand how large a tree will grow when it reaches maturity, so you avoid potential costly issues from a tree planted too close to your home.

By Abby Hayes, March 21, 2014

Originally published in US News & World Report – Money

Which Tax Deduction is Best for You?

“Here are some basic tips on determining whether to itemize your deductions or to take a standard deduction on your taxes. There’s more to consider than just whether or not you have a mortgage.”

DC Metro Realty Team – Denise Buck & Ed Johnson

IRS allows taxpayers the option to take the standard deduction or the itemized deduction. The astute taxpayer will compare to see which one will result in the greatest deduction and the election can be made each year.

The 2013 standard deduction for a married couple filing jointly is $12,200 and $6,100 for a single taxpayer. It doesn’t require any proof of actual expense and has no requirement for home ownership.

Items that can be included on Schedule A for itemized deductions include:

Certain taxes paid for state and local income tax, general sales tax, real estate property taxes, personal property taxes or other taxes paid
Qualified home mortgage interest, investment interest or possibly, mortgage insurance premiums
Charitable contributions
Casualty or theft losses
Medical and dental expenses that exceed 7.5% of adjusted gross income if born before 1/2/49 or 10% if born after 1/2/49
Job expenses and other miscellaneous deductions that exceed 2% of adjusted gross income

A non-homeowner taxpayer who has been taking the standard deduction needs to consider that it isn’t just the ability to deduct the mortgage interest and property taxes.

While the standard deduction might be the obvious choice for a non-homeowner, the combination of the mortgage interest and the property taxes plus other allowable deductions not recognized previously such as charitable contributions, now makes taking the itemized deductions significantly more advantageous.

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Monthly Archives: April 2014