Ann Lasker's Real Estate Talk

A tax test on canceled mortgage debt

2011-03-11T14:22:00.001-06:00

By Kenneth R. Harney

With hundreds of thousands of homeowners having negotiated loan modifications or short sales or been foreclosed upon during the past year, the Internal Revenue Service has issued fresh guidance on how to handle canceled mortgage debt in the upcoming tax season.

It's a huge issue, widely misunderstood by consumers, and involves potentially billions of dollars of tax liability.

When most debts are canceled by a creditor, such as unpaid balances on student loans or credit cards, the forgiven amounts are treated as ordinary, taxable income by the Internal Revenue Code. But under a special exemption adopted by Congress covering distressed home mortgages, many owners can escape the ultimate double-whammy: Getting kicked while you're down, hit with extra taxes because your mortgage went seriously delinquent or you lost your house.

In its latest guidance, the IRS focuses on several key points that owners -- and former owners -- need to know. Tops on the list: Just because a lender wrote off a portion of your mortgage debt, this doesn't mean you automatically qualify for special tax treatment. To the contrary, there are essential tests you need to pass to qualify: The debt your lender canceled must have been used by you "to buy, build or substantially improve your principal residence."

There's a lot packed into these words, so it's important to parse them carefully. Start with the house itself. It can't be your second home, an investment condo, a weekend retreat or a seasonal home you occupy for less than half the year. It can only be your main residence, and fully documentable as such.

Next, the unpaid mortgage balance your lender canceled as part of a modification, short sale or foreclosure cannot have been used for non-qualifying purposes, i.e., for something other than acquiring or constructing the house or making capital improvements to it. Refinanced mortgage debt used for kids' tuitions, vacations, buying cars or paying off credit card bills won't make the grade.

The IRS offers a hypothetical example of how borrowers can mess up their chances for tax relief. A taxpayer took out a first mortgage of $800,000 when he purchased his home years ago. Thanks to strong appreciation in property values, the house was soon worth $1 million and the owner refinanced the mortgage to $850,000. The loan balance at the time of the refi was down to $740,000, and the owner used the $110,000 in cash-out proceeds to buy a new car and pay off credit card debts.

Bad move. A year or two later -- presumably well into the recession and housing bust -- the home value had plunged to between $700,000 and $750,000. The owner then convinced his bank to allow a short sale for $735,000 and to cancel the remaining $115,000 of unpaid debt.

Does the owner get tax relief on the full $115,000 under Congress' special exemption? No way, according to the IRS. He only escapes income taxes on just $5,000 of the $115,000 because he spent the other $110,000 on a car and credit card balances -- neither of which counts as "qualified principal residence" debt.

Greg Rosica, a tax partner with accounting giant Ernst & Young, says misunderstandings of the rules about mortgage debt forgiveness are "commonplace." People often don't know that "the equity line [money] you used for vacations" and other purposes "just will not qualify" under IRS rules. Taxpayers who walk away from their houses may be liable for taxes, said Rosica in an interview, if at some point the property "no longer was their primary residence" -- say they rented it out for the period between their last payment and the foreclosure -- effectively converting the house into rental property, not their principal home.

The IRS highlighted some other key points in its guidance:

-- Mortgage cancellation relief is capped at $2 million for singles and married taxpayers, $1 million for married owners filing separately.

-- Anyone who's had mortgage debt cancellation as part of a loan modification or foreclosure should go to IRS.gov and download Form 982 and IRS Publication 4681 for additional filing details. Alternatively they can call 800-TAX-FORM to request copies. Lenders who write off unpaid mortgage balances typically provide borrowers with a year-end IRS form 1099-C cancelation of debt statement, including the amount of the loan forgiven and the fair market value of the property.

If you've had mortgage debt canceled but have never received a 1099-C from your lender, get in touch and request it if you want to avoid federal tax hassles.

Ken Harney is a real estate columnist with the Washington Post.

1 Minute House Marketing

2010-11-08T22:34:00.000-06:00

http://ListWithAnn.housingtrendsenewsletter.com

2010 Sales to Rise 15 Percent

2009-11-19T15:09:00.000-06:00

Home sales will increase 15 percent to about 5.7 million units and REALTOR® income will be up 20 percent in 2010, NAR Chief Economist Lawrence Yun told a packed room of REALTORS® today in a residential economic update at the 2009 NAR Conference & Expo.

Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn't have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households' fear over continuing price drops.

This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. “The key is stabilizing prices and preserving household wealth,” he says.

Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.

The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer.

“Then we’ll be set for a durable economic expansion,” he said.

New-home sales, which comprise about 10 percent of the market, will continue at suppressed levels--about 550,000 units, down from more than a million during the boom--mainly because builders have scaled projects way back, in part because financing isn't available.

"Weakness in new-home sales shouldn’t be viewed as tepid demand," he said.

Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the "Great Recession.”

For the longer term, the huge deficit run up by the federal government to shore up the economy remains the big question mark. Although the deficit is expected to improve each of the next three years, it will remain at historic highs. Unless the federal government releases a credible plan for shrinking it, investors will start to balk and interest rates will need to rise to bring them back. Should inflation be the result, the housing recovery will be set back.

Source: Robert Freedman, REALTOR® magazine

Best fix for a cracked patio

2009-04-28T13:25:00.000-05:00

Don't paint it, layer it
By Paul Bianchina, Inman News

Q: I enjoy your column and have a question for you. We built a=2 0home last year and have a concrete patio at the rear. It already has a crack in it (not very large) and it's starting to stain. I would like to improve the appearance. What would be the best choice? Paint it, carpet it (I do not like the look of the turf like outdoor carpeting), lay down a stone covering over it, or something else? It is fully exposed, and we live where the winters are not very cold but the summers can get very hot. There are few trees around it so leaf stains are not really an issue. We keep our grill, a few chairs and a patio table on it. It gets direct sun about half the day. Suggestions?

A: If the patio is low enough in relation to any doors so that adding a layer on top won't cause any height issues, my recommendation would be to add a new decorative layer of masonry on top of the concrete. This will add resale value, and also be easy to maintain. Depending on your preferences and what would go well with the house, you might consider bricks, tile (look for exterior floor tiles, also called paver tiles), flagstones or other materials. Lighter colors will reflect the sun to some degree, but be aware that any masonry surface will absorb heat, about to the same degree as the original concrete patio.
Again depending on the height in relation to doors, another thing to consider would be a layer of stamped, colored concrete on top of the old patio. A good concrete-stamping contractor can offer an amazing selection of col ors and patterns that look great and hold up very well.

BUY NEW OR IMPROVE?
Q: With so much inventory in the housing market for sale, is it better to build new, or buy and improve?

A: When you have a down market like this one, in my opinion it's the best time to buy and improve. You have a better chance of finding a good bargain on a fixer-upper, perhaps even a foreclosure, and with sweat equity you have a good chance of making a nice profit when it comes time to resell the house when the market picks up again.
If you decide to go this route, concentrate your remodeling efforts on rooms such as the kitchen and bathrooms, stay neutral with your color choices, and also look at the curb appeal aspects of the landscaping and exterior. I like to use a philosophy of quality over quantity: do good work; use good materials; always get the necessary building permits; and don't cut corners like you see on too many television "house flipping" programs.

Stimulus helps stimulate real estate

2009-03-17T14:44:00.000-05:00

By Matt Shaw | Daily Times Staff Writer

Thinking about buying a house this year?

No? Would an $8,000 tax break change your mind?

A new federal tax credit is luring people back into open houses around Wilson, real estate agents say.

"Everyone in my office is seeing more activity," said Angela Lane of Our Town Properties Inc.

Some agents are optimistic that they will sell as many properties by June as they sold in all of 2008, Lane said.

Ann Brice, a realtor with First Wilson Properties, recently showed houses to two clients who qualify for the tax credit. She believes the surge in interest will eventually lead to sales.

The tax credit for first-time homebuyers was created last month as part of the American Recovery and Reinvestment Act, the federal economic stimulus package fashioned by President Barack Obama and Congress.

The full effects of the ARRA, including a tax cut for most working people, won't be felt until later this year.

But the tax credit is bringing potential buyers out now because it can be claimed on this year's returns.

Here's how it works, according to the Internal Revenue Service:

* People who buy a home before Dec. 1, 2009, can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately, as a credit on either their 2008 or 2009 tax returns.

* To qualify, individuals must make less than $95,000 a year, couples less than $170,000.

* A first-time homebuyer is defined as anyone who has not owned any other home in the past three years before the purchase of the new home.

* You cannot acquire your home from any relative.

* The tax credit does not need to be repaid if the taxpayer keeps it as a primary residence for at least three years.

People who bought their first homes between April 8-Dec. 31, 2008 can also qualify for a tax credit -- 10 percent of the purchase price, up to $7,500 -- but it must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

"For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit," IRS Commissioner Doug Shulman said last month. "This important change gives qualifying homebuyers cash they do not have to pay back."

Unfortunately, the federal incentive can't help people come up with a down payment, Brice noted. Generally, perspective buyers need to be able to come up with at least 3 percent of the purchase price.

But for those who can qualify and buy a house, the tax credit can replenish savings, pay for renovations or buy furniture.

"I have never gotten a deal that good in my life," Brice said.

More information is available in IRS Form 5405, First-Time Homebuyer Credit. See www.irs.gov or call 1-800-829-1040 for more information.

More Tips for Picking a Domain Name for Your Real Estate Website

2008-07-18T22:19:00.001-05:00

By Kurt D. Lynn

RISMEDIA, July 16, 2008-On the Web, your name is everything; your domain is your brand.

Sure, it sounds easy-just pick a name and get your real estate website going-but it’s just not that simple. Choosing a domain name for your real estate website is one of the most important dynamics in your real estate business. Your domain name choice will be the foundation of all that you do over the Internet in the future. And in the future, the Internet will be very important in the real estate industry.

Before you sit down in front of your PC and start checking out names, here’s a few things to consider:

1) A brand is more than words. Your real estate brand is an image of who you are and what you offer-represented by words. Like any communication task, pick the wrong words and you may establish the wrong image. Often, it is more important that your brand be clear than it is that your brand be clever. A domain name choice of “chicagoproperty.com” might not be more clever than “landboutique.com” but it’s very clear what the name represents. Generally, your domain name-your brand on the Internet-should also address a “benefit” that is provided. In this vein, a domain name choice of “qualitychicagoproperty.com” might be much better than “susiesrealty.com.”

2) The idea of your real estate brand is to be memorable-to get the “mindshare” of your prospective visitor. To that end, it makes no real difference whether your name is long or short-both can be memorable. But it probably suggests that you do not add articles such as “the” or “a” to the name and that you do not include hyphens in the name unless that is accepted common usage for the terms you choose. If in doubt, take a poll of prospective customers and ask them about the memory “stickiness” of your proposed name.

3) Lastly, everybody wants the “.com” extension, but finding the right one can be difficult. Don’t discount extensions such as “.net”, “.info”, “.biz” and “.us”-they may make just as good sense also. Just make sure that when you include the extension as part of your “brand” that it all works together.

4) Getting multiple names-think forward to the future. You may want more than one domain name. Today you might just want to register “cosmoclevelandrealty.com” but tomorrow you might want “cosmocondos.com” and “cosmoindustrialproperty.com” as well. If you anticipate such a need, register the names now, while you still can. Tomorrow they may be gone.

Just remember that your domain name choice is your brand choice. You may be eager to get your presence established on the web, but take your time and find the name that will truly add-value to your real estate marketing presence rather than confuse it.

Kurt Lynn directs the marketing and communications activities at www.RealtySoft.com.

For more information, visit www.RealtySoft.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

The Ruby Hills Story: How to Attract Buyers to Homes in High Demand Areas

2008-07-18T22:16:00.000-05:00

By Craig Proctor

RISMEDIA, July 16, 2008-An agent approached me the other day with a problem. He wanted to work with buyers who were looking for homes in a highly desirable area of his marketplace. Most of us have such an area where the homes are worth more, and thus the commission earned is higher. In my marketplace, the areas are called Glenway, Stonehaven and College Manor. In this particular agent’s marketplace, the high demand area was called Ruby Hills.

Sensibly, this agent reasoned that his cut of the commission on a home sold in Ruby Hills would be worth 1-1/2 to 2 times what he was earning on homes in other areas. The problem was that he had no listings in Ruby Hills, and thus didn’t know how to attract buyers who were interested in this area.

You Don’t Need Listings to Attract Buyers

I explained to this agent that you don’t need listings to attract buyers for a certain area. In a mere couple of minutes on the phone together, we wrote the ad below. It hits the hot buttons that will attract buyers who want to purchase a home in Ruby Hills, and offers them an easy, free, non-threatening way of getting information on several homes for sale in that area.

RUBY HILLS - Luxury homes on huge lots, professionally landscaped, backing onto golf course, trees. Free computerized list of homes for sale in this prestigious area. Call 1-800-000-0000 ID#0000. <>

When you run an ad like the one above, a couple of important things happen:

1. You’ll get calls from buyers who are interested in purchasing a home in Ruby Hills.

When they call into your hotline to get the computerized list, your script will say something like: “Thank you for calling about the homes for sale in the prestigious Ruby Hills neighborhood. We know of several homes for sale in Ruby Hills that range in price from $500,000 to $600,000. All of these luxury homes sit on huge, professionally landscaped treed lots, and many back right onto the golf course. The homes in this exclusive area offer many elegant upgrades, such as gourmet kitchen, cathedral ceilings and stunning decor. To receive a free computerized list of current homes for sale in Ruby Hills, please leave your name . . .”

2. You WILL generate leads with this ad, and it will be easy enough for you to find and show them homes in Ruby Hills.

With these buyers in your database, you can now advertise to sellers that you have a large database of buyers who are interested in purchasing homes in their area (i.e. Ruby Hills). With this important leverage, you should be able to gain some listings in this area and build this momentum over time into good business activity in this area.

Importantly, because you’re not marketing a specific listing (at least initially), it’s impossible for the listing to sell. As a result, the relevance of this ad will never change and you can (and should) keep re-running it forever.

“Classified ads have the unique position to call out directly to the targeted person and have that prospect uniformly respond when and if you identify their dilemma and offer a solution. This process has a built-in qualifier because only the prospects meeting your criteria call,” said Lynn Horner-Baker, an agent in Marietta, Georgia. “And, as the ad writer, you do not need to be an expert or an area specialist. You simply need to provide what your targeted prospect wants and needs.”

She continued: “Selecting a target market is most successful when the statistics and the odds demonstrate a high percentage of need and activity. The level of return for each ad increases incrementally when there is a rush of demand and a supply equal to or slightly below the need. Target the emotional benefits of this specific area and offer exclusive and proprietary notification that no one else has. Then limit the number of prospects who can have access to your program either by number or by time of response. Prospects always want something of value more emphatically when they might not be able to have it.”

To find out more about how to write targeted classified ads that will compel the prospects you’re looking for to seek you out, you can visit http://www.hypertracker.com/go/cp/a22a080716/ where you can learn about my 3-day SuperConference where I train agents on inexpensive direct response marketing systems with proven results.

Billion Dollar AgentTM Craig Proctor has been in the top 10 for RE/MAX Worldwide for 15 years. To receive free training from Craig with no obligation, visit: http://www.hypertracker.com/go/cp/a22b080716/. These seminars are held year round in cities across the country.

Covering All Bases - The Importance of Dependability for Buyers, Sellers and Agents

2008-07-18T22:11:00.000-05:00

By Paige Tepping

RISMEDIA, July 16, 2008-”A home warranty is only as good as the backing company’s commitment to stand up to its claims,” says John Kersten, broker/owner of Century 21 Town and Country in Michigan. What began as a recommendation has grown into a working relationship, and Kersten and his agents feel confident in being able to offer every prospective home seller that walks through the door a home warranty backed by The Warranty Group.

“The Warranty Group was recommended to me by Realogy, and we have been building our relationship with them over the past two-and-a-half years,” says Kersten. “We spent a lot of time discussing what we were looking for from The Warranty Group when we first asked them to represent us. Our history of working with home warranties allowed us to know what we wanted, so it was easy to get started with The Warranty Group.”

Over the years, Kersten has seen the advantages of offering home warranties to his clients. Not only do home warranties make the property more marketable in the eyes of the consumer, they also reassure the consumer that if something goes wrong, they just might have coverage for the items that failed.

“The home buyer is making a huge investment,” he says. “Even with home inspections, there may be appliances in the home that are at the end of their life when the new buyer moves in, and these appliances may fail shortly after their arrival. A home warranty gives the buyer peace of mind in knowing that they won’t have to buy new appliances as soon as they move in.”

The home warranties that Century 21 Town and Country and The Warranty Group offer are beneficial to sellers and buyers and can be seen as an added advantage for Century 21 Town and Country as well.

“Knowing that The Warranty Group stands behind the home warranties that our agents are offering our clients is crucial in this industry,” says Kersten. “When our agents offer a prospective seller a home warranty, they know that there is a viable home warranty company behind the offer that can be depended on. The Warranty Group has always been there for us, and our relationship with them assures the buyer that their claims will be honored.”

Not only are home warranties important to prospective home buyers, but the agent is an important part of the process as well.

“The agent is the person who is selling the home warranty and establishing the relationship with the home seller, so it is important that we assure our agents that the home warranties they are offering our buyers are backed by a reliable company,” says Kersten. “Our marketing materials have proven beneficial in this aspect; they were produced to be easy for both the consumer and the agent to understand. If the agent doesn’t understand what they are selling the consumer, the information doesn’t get presented correctly, so the agent plays a crucial role in the warranty process as well.

“We don’t require that all of our home sellers purchase a home warranty, but we do require that it is presented to every home seller,” adds Kersten. “As a company, our main focus is to offer a service to the home seller, and the home warranties that we present in conjunction with The Warranty Group are offered as an added value.”

World's best places to invest in real estate

2008-07-16T20:51:00.000-05:00

Matt Woolsey
Forbes.com
Wednesday, July 16, 2008
With each passing day of bad market news, it's easy to see why there's so much skepticism about real estate investing. Despite banks' shareholders and equity investors tending to want less real estate in their portfolios, however, there are myriad growth opportunities in properties ranging from from apartments in Sydney to office buildings in Shanghai. And some investors are shopping aggressively.
While investors from pension funds in Paris to middle-class property speculators in Las Vegas have been stung by problems in the American residential real estate market, plenty of individual and institutional investors are gobbling up real estate in other sectors. Just last week, in fact, the government of Abu Dhabi bought a 90% stake in New York City's iconic Chrysler building for $800 million.
Though a skyscraper isn't quite in every investor's budget (or wildest dreams), the timing might be right to follow that lead and make significant investments in certain cities around the world.
The Association of Foreign Investors in Real Estate, a nonprofit research association, tracks where its member investors are finding the best opportunities around the world. AFIRE surveys its 200 members - who collectively hold $700 billion of cross-border real estate - about where they're finding the best opportunities for investment and appreciation. While these investors' primary holdings are in commercial real estate, residential, retail and industrial properties are also considered.
The opportunities vary from country to country, and at first glance, the U.S. and Britain would seem to be places to avoid investing. Both countries are facing an economic downturn and increasing price inflation. Because consumers are paying more for staple goods and have decreasing home equity, the amount they have to spend on discretionary items falls, and, in turn, so does the value of most retail property-making that retail property less attractive an investment.
Nevertheless, in times of global economic uncertainty, investors flock to markets that have proved stable in the long term. That's why New York and London occupy the top spots on AFIRE's list, with Washington, D.C. and Paris taking the next two spots.
Areas that have been largely unaffected by inflation and the subprime crisis, like Toyko, are also attracting investors' attention. Japan is one of the few countries to have inflation at 1%, and its local banks have stayed healthier than Western banks for largely avoiding toxic mortgage-backed securities.
The appeal of asia
When examining markets for large-scale real estate investment, traditional thinking about a homebuyer looking to own a single property doesn't apply. Investors can move money more seamlessly between countries than an individual, for starters, but investors also have a different way of calculating the long-term value of a particular property. Therein lies the appeal of investing in property in Asia.
While an individual buying a home is interested in price, appreciation and perceived value based on the location or the surrounding neighborhood, investors look more at capitalization rate, the interplay between how much property costs and how much it can be rented for.
For example, consider the differences between the Hong Kong and Shanghai residential markets. Hong Kong property is more valuable, going for $2,218 per square foot, according to Knight Frank, a London-based investment firm. Shanghai property sells for just $366 per square foot. If you own an apartment in each place, you're going to become richer selling in Hong Kong than in Shanghai.
However, when you factor in what those same properties can be rented for, investors have a lot more to like in Shanghai. Hong Kong residences can be rented for $6.10 per square foot per month, compared with $2.10 per square foot per month in Shanghai.
Now do the math. For every dollar it costs to buy a Hong Kong residence, you can recoup 3.3% a year in the rental market. In Shanghai, you can get a 6.9% return. Less money down to start coupled with a greater percentage return means investors rate Shanghai a better investment market.
Stick with office space
Investing in the Chinese residential market, however, has become a tricky proposition, as government restrictions on foreigners buying property present problems for residential investors. That makes the office sector in a city like Shanghai all the more attractive, especially as the International Monetary Fund forecasts a 9% rise in Chinese gross domestic product over the next year--which means more companies will have more money to spend on office space. For investors, that means taking money out of residential properties and moving it into office buildings.
"We believe investors will shy away from the residential sector on the mainland, as it is a major target of the ongoing tightening policy," says Xavier Wong, director of research at Knight Frank Hong Kong. "This will benefit the Grade-A office sales market."
That push-and-pull stands at the heart of global real estate investing, and is why investors change their opinions of real estate investment opportunities from year to year. In the early half of this decade, for example, investors flocked to developing markets such as Eastern Europe. But by the second half, and well into 2008, money has been moving out of that area, due to a general lack of transparency, ownership and title--commonplace issues in post-Soviet governments. For the moment, investors don't feel they're getting a good return for the risk they're taking on.
"Lots of people believe that there is a compression of yields around the world in some of these emerging countries," says Jim Fetgatter, chief executive of AFIRE. "You're better off going to one of the well-established, transparent markets than some other place that has a lot of risk, where you're not being compensated for that risk."
As markets change, whether because of economic slowdowns, rapid growth or government policy, the important thing is to keep money in growing sectors. And if things crash, as they have in many of America's residential real estate markets, that just means it's time for the bargain hunters and opportunity funds to have their day.

Relocation Services Guide

2008-07-14T12:19:00.001-05:00

Relocating to a new home can be an exhilarating yet stressful experience. However, there are a few key things that buyers and sellers can keep in mind to make the move smooth and easy. The first step is to locate all of your resources.

Online Relocation Services

One option is to go with relocation service. These companies offer assistance with everything from temporary housing to auto transport. However, packing, palletizing, and moving your items is their main function. Some companies will specialize in across-town moves, but if you're relocating to another state, you should look for an agency that specializes in cross-country moves.

Relocation services tend to range wildly in price, from the hundreds to thousands of dollars, depending on the distance and the amenities offered. If you're considering hiring a service to help you move, it's a good idea to go with a provider that has received high marks from an outside agency such as the Better Business Bureau. Your real estate agent will likely have some information on the best services for your specific needs.

If you want to handle the actual moving process yourself, a real estate agent is one of the best tools you can have. The assistance a good agent can provide often means the difference between a move that goes smoothly, and one that turns into a bad experience. Beyond connecting you with appraisers, movers, utilities, and school district information, local agents also know the best banks and financial resources.

Buyer's Guide

2008-07-14T12:18:00.000-05:00

The purchase of real estate is one of the most important transactions a person will ever make. The first step is pick out a specific areas to focus your search on. When looking at neighborhoods, check out the quality of schools, the average home prices, the major employers, and the nearby resources (fire station, library, grocery store, etc). After choosing the best area for your family, then it's time to start taking more proactive steps.

Resources for Buyers

A real estate agent will be your major resource for help and information. Your agent will be your access point for the MLS (Multiple Listing Service), which lists all available properties on the market. While many sites allow you to view the MLS, you will need an agent to actually tour the homes. Beyond simply finding you a home, your agent can often help you find a good source of financing.

Financing is a crucial step in the buying process. It's important to be pre-approved for a mortgage before looking seriously at homes. Pre-approval means that you have been fully screened by the lender and approved for a loan; this can be a huge help when the time comes to make an offer. Most sellers will go with candidates that are pre-approved, since there's less risk that the deal will fall through.

Your real estate agent will also be critical when it comes to negotiating and making your offer. The home buying process is long and involved, but with the right resources--namely, a good agent--it can be exciting and fun.

Seller's Guide

2008-07-14T12:17:00.001-05:00

Selling real estate is not something to take lightly. However, there are some easy steps that can help you get the maximum return on your home. The first step is to find a real estate agent to guide you through the process.

Get the Agent's Advantage

At some point in the selling process, most people consider selling the property themselves. While FSBO (For Sale By Owner) is not necessarily a bad way to go, homeowners typically do not get the same prices as professional agents. Even after factoring in an agent's fees, the amount of work it takes to sell a home tends to make an agent a worthwhile investment.

After finding a real estate agent you trust, the next critical step is pricing your home. Look around at similar houses for sale in your neighborhood and price yours in that range. Of course, the interior and exterior condition of your home will make a large difference. For example, if you've remodeled recently or have new appliances, the price will naturally increase. Your real estate agent will use the MLS (Multiple Listing Service) to come up with an appropriate price; however, this will simply be a suggested price. The final decision will be up to you, which is why it pays to do a bit of comparative research.

The next step is getting your home ready to show. Open houses are critical in stirring up interest in your home, but too few sellers really take the necessary steps to make their homes buyer-friendly. For example, repainting the exterior of your home is relatively inexpensive and offers huge results in terms of curb appeal. Inside, it's best to make your home as free of clutter as possible. You may even want to rent a storage space for extra furniture and items--even your closets should look spacious. The offer(s) on your home will most likely come from open house attendants. After that, your agent will be able to handle most of the details, though the final decisions on price and sale