Understanding the Difference Municipal Tax vs. Township Tax in the Greater Cincinnati Area

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Most homeowners don’t realize this but you pay different taxes based on where you live and work. So to help you understand the difference between the various taxes you pay accordingly, I wanted to share some examples with you. That way the next time you move you can consult with me and get some additional insight as to what might save you money throughout the year, every year.

Sycamore, Anderson, Simms Township Residents Spared Additional Taxes

If you have established your residence in these townships you will not have to pay an additional city tax for living in the area. Despite working in another area – you are still not charged additional taxes. For example, if living in Blue Ash and working in Blue Ash you are paying a 1% Blue Ash tax. If you live in Blue Ash and work in Downtown, you are paying 2.1%.

Similarly, if you live in Anderson Township and you work in Anderson Township as well, you would not be responsible for any additional municipal taxes – rather you are simply paying federal and state taxes.

Working in a Municipality Will Not Eliminate Taxes

If you are working in a municipality but living Downtown you would still be responsible for the 2.1% tax since your place of work is located in a tax area that is subject to city tax.
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If you are considering a new home and have the flexibility to choose a township, it might be a good idea to consider one of these locales and consequently save money on taxes. This is particularly ideal for self-employed people, business owners or telecommuters that are looking to move.

I look forward to helping you with this or any of your real estate needs and welcome your inquires. Call me today!

Home Warranties Offer Peace of Mind to Existing Homeowners and Buyers Alike

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Most people have heard of home warranties being purchased at the time of sale but did you know that you could also obtain a consumer-direct home warranty? In fact, despite costing just a little bit more the benefits far outweigh the added cost over and beyond the standard buyer or seller policy. In the “few hundred dollar” range, these policies provide protection against major problems with appliances, systems or both – depending on the policy type.

Of course, as is with many insurance products, there are the typical policy exclusions so when you go to inquire about one of these products be sure to request a copy of all exclusions to understand exactly what coverage you will be getting.

If you would like to learn more about obtaining third-party underwritten insurance policies to cover your appliances and systems – we invite you to contact us today and we’ll be happy to share some of our recommended vendors. Since the insurance companies are part of a profit-generating industry, here are some tips for dealing with them:

1. Call during off-peak times. When filing a claim, set aside about a half hour to complete the telephone procedure and more if calling during the morning, lunchtime or late afternoon.

2. Keep track of everything. Document the name of everyone you speak with, the time and dates of each time called and the exact nature of the conversations.

3. If you feel you are not getting anything done or that progress is slow with your claim, ask to speak to the manager in charge when you call.

4. Choose to submit your claim on the telephone rather than via email for a faster response.

5. Keep your cool. If you end up dealing with an unresponsive or worse, rude customer service person – try to be calm but remain consistent.

6. Get creative when you need additional help. District managers of home warranty companies make themselves more accessible to real estate agents so if you need extra help, contact your agent.

Contractual Occupancy; When Can I Move In to My New Home?

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When we agents work on getting a contract together, one of the most important things to discuss is occupancy. When will the keys exchange hands? And believe it or not, the answer varies. Up until a while ago, in our area it was typical for us to offer a 30-day occupancy period after the closing. What that means is that the seller had about a month to move out and vacate the premises after closing.

However these days, the standard has changed. Now when you have a contract between buyer and seller the agreed upon date of possession for the buyer is usually the same as closing. In fact, relocation companies go as far as not even to allow their sellers to accept a contract unless occupancy is given at closing.

For buyers, clearly the last thing you want to do is to complete the process, own the property and be paying insurance on it – only to be restricted from accessing it for 30 days. Particularly since the buyer is financially responsible for the property from the moment closing is completed, immediate occupancy makes good sense.

So as you are preparing to accept an offer on your contract, or if you are making an offer on a property – be sure to address the date of occupancy and confirm with your agent that closing date possession for the buyer is the standard way to go.
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As always, please do not hesitate to contact me for further clarification on this or anything else you’d like to know about. And if you are looking to buy, sell or invest in a property – I look forward to helping you make your real estate goals a reality!

What Are Reverse Mortgages and What Are Their Benefits?

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As the name suggests, “reverse” mortgages work exactly the opposite from a "regular" mortgage. Instead of you making monthly payments to a lender, the lender pays you. And, generally speaking, you don’t have to repay it for as long as you live in your home. So, what does the lender get out of this bargain? Well, in return, he or she holds part or all of your home's equity.

Reverse Mortgage Advantages 

Home owners who are “house rich, but cash poor” can be beneficiaries of this type of mortgage. It allows them to stay in their homes and still meet their financial obligations. In addition, the proceeds of the loan are tax-free. Also, there are no minimum income requirements, and, for most reverse mortgages, the money can be used for any purpose you choose. 

Reverse Mortgage Disadvantages
Below is a list of the major disadvantages of such loans: 

1.) Reverse mortgages tend to be more costly than traditional loans because they are “rising-debt” loans. This means that the interest is added to the principal loan balance each month. Therefore, the total amount of interest owed increases significantly with time as the interest compounds. 

2.) Reverse mortgages also use up all or some of the equity in a home. This fact means that fewer assets are left for the homeowner and the heirs. 

3.) Lenders generally charge origination fees and closing costs; some charge servicing fees. It’s up to the individual lender as to how much the fees and costs are. 

4.) Interest on reverse mortgages isn't deductible on income tax returns until the loan is paid off in part or whole. 

5.) Because you retain title to your home, you remain responsible for taxes, insurance, fuel, maintenance, etc. 

6.) Scams are sometimes run by unethical lenders. Never accept a deal with door-to-door/home solicitation lenders. Reputable lenders have no need to go door-to-door in search of loans.

From all the disadvantages listed above, you can see that you need to understand exactly how they work and what responsibilities you’ll take on with such a loan. Below, I’ve provided you with basic knowledge on reverse mortgages so you have a foundation upon which to consider them. 

Types of Reverse Mortgages 

Reverse mortgages have several different forms: 

1.) Federally insured Home Equity Conversion Mortgages("HECM"). These are administered by the Department of Housing and Urban Development ("HUD") 

2.) Single-purpose reverse mortgages. These are usually offered by state or local government agencies for a specific reason 

3.) Proprietary reverse mortgages. These are offered by banks, mortgage companies, and other private lenders and backed by the companies that develop them.

Qualifying Factors 

You must be at least 62 years of age and have paid off all or most of your home mortgage. In general, income is not a factor, and no medical tests or medical histories are required. If you seek an HECM, you also must receive free mortgage counseling from an independent government-approved "housing agency." This may also be true of financial institutions offering proprietary reverse mortgages.

Loan Amount 

The mortgage loan amount depends on:

- Your age
- The equity in your home
- The value of your home
- The interest rate

If you choose an HECM, federal law limits the maximum amount that can be paid out. There are several ways in which you can be paid - in a lump sum, through monthly advances, through a line of credit, or a combination of all three. 

Recommendation

As with any mortgage, shop around and compare terms of reverse mortgages. In particular, check: 

1.) Annual percentage rate (APR). This is the yearly cost of credit 

2.) Type of interest rate. Check to see if it’s a fixed rate or an adjustable rate. 

3.) Number of points (fees paid to the lender for the loan) and other closing costs. In some cases, this can be costly so check closely.

4.) Total amount loan cost ("TALC") rates. The TALC rate is the projected annual average cost of a reverse mortgage, including all itemized costs. TALC shows what the single all-inclusive interest rate would be if the lender could charge only interest and no fees or other costs. More about it here!

5.) Payment terms, including acceleration clauses. These terms state when the lender can declare the entire loan due immediately. 

Remember: Under the federal Truth in Lending Act, lenders must disclose these terms and other information before you sign the loan. Also, on plans with adjustable rates, they must provide you with specific information about the variable rate feature. And, on plans with credit lines, they must inform you about appraisal or credit report charges, attorney's fees, or any other costs associated with opening and using the account. Make sure you understand these terms and costs. 

Finally, in most cases, you have at least three business days after signing a reverse mortgage contract to cancel it in writing! Want to learn more about reverse mortgages or any other kind of mortgage? Contact me immediately!

Super Low Interest Rates Make It a Great Real Estate Market for Buyers AND Sellers!

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Of course as a real estate agent, other than “hi, hello and how are you” the next most frequently asked thing we hear is “how’s the market doing these days?” That’s why for today’s video blog I wanted to talk about it.

Interest Rates Continue to Beat All Housing Industry Records

Throughout the past many months there has been one very consistent item of big news that seems to be controlling much of our market – and that is interest rates. Chances are you have already heard that interest rates are at their all time historic lows, making it more affordable than ever before to purchase and own a home. For homeowners with existing mortgages the low rates are facilitating significant savings when the mortgage is refinanced.

Buyers Can Afford A Lot More House for the Same Amount of Money

Another factor that low interest rates brings into play has to do with ‘how much house’ you can afford. What might have cost a monthly payment of $2500 just a few years ago may easily cost just $2000 depending on the property, terms and rates. With this added buying power, buyers are out there eager to lock in the amazing rates still available.

Sellers Enjoying Less Selling Competition on the Market

This is exactly what makes it a great time to sell. With so many buyers seeking the perfect home, particularly at the cusp of our 2012 holiday season, any inventory that is out there is scrutinized and often considered by buyers. Fewer available homes on the market make it very ideal for sellers since buyers want to get in before the holidays. Another phenomenon seen by sellers with show-ready homes that are priced right and in great locations and is one of multiple offers and even bidding wars.

Conditions Expected to Stay the Same for At Least a Few More Months

The news is that the government will hold the base rate down until at least the middle or end of 2013 – if not a bit longer. One school of thought is that the elections may have an adverse effect on our housing market but it is too soon to tell. It is important to note that even if there were a resultant outcome on the housing market from the election, the soonest we would see any of it materialize would be in the springtime of next year.

This is what makes now an excellent time to buy and also an excellent time to sell. Very rarely do we see a favorable market for both sides of the fence but today that is the case and it’s a great opportunity to pursue!
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If you’d like to explore your options in today’s real estate market, whether to list your home or find the perfect new home – I invite you to contact us today! We look forward to making your real estate goals become a reality!

An Inspection Contingency Can Change Everything With a Real Estate Transaction

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If you’re in the process of buying or selling a home, there’s a good chance you have implemented, seen or heard of an inspection contingency. This contingency is almost always offered at the time when a property goes under contract.

The Cincinnati Area Board of Realtors cites a specific time frame within which the buyer is allowed to show the property in question to professionals for the sake of inspecting it for defects. If during the inspection process anything is found to be unsatisfactory, defective or questionable, the buyer has a legal right to provide the seller written notice of this fact.

Furthermore, this added step in the home buying/selling process allows the buyer a chance to walk away from the transaction if they are not happy with something. This means they may change their mind if they are not satisfied with the property for any reason as a result of the inspections. The contingency in place allows them to be able to cancel the contract – regardless of the reason. In fact, the buyers do not even have to state a reason for changing their mind.

The Inspection Addendum is drafted on behalf of the buyer and presented to the seller, after which the seller may choose to do one of several things. They may opt to respond to any repairs the buyer may have requested to rectify specific problems. The sellers may choose to offer or accept the buyer’s request for financial concessions and therefore accommodate repairs needed as a result of the inspection. Or the seller may decide to review the terms and choose whether or not to accept them.

As you can see, the settlement period is virtually a second round of negotiations, centered on the findings of professionals hired to check the property in detail for defects or aspects that may be unacceptable to the buyer. Just as the buyer has the right to back out of the deal, so does the seller have the right not to agree to changes proposed by the buyer.

When going through a purchase or sale, it is important to keep in mind the inspection contingency, a very critical part of the contract.

For questions about this, or any other real estate related inquiries you may have – please do not hesitate to contact me today. I would be happy to assist you!

Home Maintenance Does More Than You Think

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For some, the phrase “home maintenance” might sound like a great way to spend a weekend, while to others it might seem like a dreaded, even avoided, task. However you view routine home maintenance, the fact of the matter is that this somewhat simple task, if done consistently, can increase your home’s value over time.

Increased Property Value

Benjamin Franklin once said, “An ounce of prevention is worth of a pound of cure.” This is certainly true when it comes to your home. In fact, proactive maintenance is essential to preserving the value of your home. If you ignore this important task, your home could actually lose 10% of its value over time.

There are a number of benefits you can expect from just making sure you home is kept in decent shape with occasional maintenance. For one, your curb appeal is improved by just simple acts of routine upkeep from time to time. Ultimately, your home reflects your attention to detail, or lack thereof.

Neglecting a home can greatly bring down the value of any property. Things like a house with chipped or fading paint, sagging gutters, or worn carpeting leads to a problem when it is time to sell. Not only does the work accumulate over time, so do the costs. A few simple fixes every year can add up to an increased home value over time.

Cost vs. Value

It’s easy to look at the cost of regular home repairs as a burden that might be able to be avoided. However, it is important to look at the value that you are placing in your home by performing the regular costs of upholding a well-built and maintained home.

A study out of the University of Connecticut and Syracuse University suggests that home maintenance can actually increase a home’s value by about 1% each year. Instead of viewing the routine tasks around a home as “chores,” these tasks should be looked at as a money maker. When you sell your home, you will reap their rewards.

Dr. John P. Harding, Professor of Finance and Real Estate at the University of Connecticut’s School of Business and an author of the study said, “It’s like going to the gym. You have to put in the effort to see the results. People and houses are somewhat similar – the older they are, the more work is needed.”

Some years what needs to be down may be more expensive than others, but it is the overall strategy to keep a “fit” home that should be the ultimate goal.

Proactive Maintenance Strategies

Budgeting for home repairs each year will prevent them from seeming like a burden each year. Knowing there will be a certain amount of money going to home repairs and upkeep makes them a regular part of your annual routine. They won’t be a source of financial devastation they can be for many families.

Other things to keep in mind to take the burden out of home maintenance include:

Play offense, not defense. Being proactive is vital in preventing a small problem becoming a mountain of problems. By having a regular inspections and creating a maintenance schedule, you are in control, for the most part, of home expenses, instead of the other way around.

Focus on a room a year. If you home is generally in good order, you may be at a loss of where to start. By targeting a room each year, you can inspect each and every item in that particular room and know where improvements can be made. This prevents an overwhelmed feeling with you looking at your entire house, scratching you head of where to start.

Keep track. Maintain a notebook or computer file to keep track of all of the maintenance and upgrades you perform is important. Also, either keep a physical file of paper receipts or a file on your computer where can put your scanned receipts. This helps you keep track of what you have done and also helps you prove to a potential buyer exactly what you have done to the home. It also shows you are a conscientious homeowner who has paid attention to the details of your home.

Home maintenance is an important task that should not be overlooked. Not only does it maintain a nice home while you live there, it also helps increase your home’s value when you are ready to sell.

For more on home maintenance visit Bob Vila's home maintenance checklist here!