Effective June 1, 2010 Fannie Mae is mandating a number of additional qualifications for each mortgage application. These additional mandates are intended to ensure that the information collected from buyers when they apply for a mortgage are the same as when they go to close. Fannie Mae is requiring lenders to re-verify a number of pieces of buyer data including their credit scores, employment, and making sure the borrowers are not on the ‘un-approved’ list maintained by the General Services Administration.
As a Cincinnati real estate agent I have a responsibility to guide buyers through the application process, ensuring that they provide accurate information on all of the documents. Because the lenders are re-checking the information if any of it changes it could cause the loan to go through another round of underwriting. To protect my buyers I am advising them to work very closely with their lenders to keep their information current.
Recently there has been speculation that there is now a Medicare tax on home sales as part of the new federal health care bill. That is not true!
According to the language in the law, as explained in this FactCheck.org article, the Medicare tax would be assessed only on proceeds from the sale of a home that are ALREADY SUBJECT TO TAXATION.
Every American who sells a home can earn up to $250,000 of proceeds tax free from the sale of the property. Couples that are married can earn $500,000 of proceeds before having to sell taxes. Proceeds are your profit – so if you purchased a home for $100,000 and sold it for $300,000 your proceeds are are only $200,000.
Moreover the medicare tax would only apply to high earning individuals with annual incomes of – $200,000 individuals and $250,000 couples. So in order to pay this tax a married couple would have to earn $250,000 in income and net over $500,000 in proceeds from the sale of their home. And the tax is only 3.8% on every dollar over $500,000.
Make sure that when you sell a property you always consult your tax professional for assistance in planning and recording for the IRS. The Government affairs office at the Cincinnati Area Board of Realtors provided additional information for this post.
If you are in the market for a condo, there are some critical pieces of information you should research with your real estate agent before making an offer.
1. Read Between the Lines
Take a look at the minutes of the condo association board meetings to see what the building-wide challenges are. Even if there aren’t any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex — projects the seller may have neglected to mention.
2. Who is Paying Their Bills?
Make sure the association is collecting the dues from everyone on time! . If people aren’t paying their association dues on time. Carefully consider buildings that are underfunded.
3. Planning for Repairs
Associations take on a lot of building maintenance so make sure the repair fund for the new roof, driveway, and exterior are well thought out and funded.
4. Insurance, Insurance, Insurance!
Gt a copy of the certificate of insurance, which is a summary of the association’s policy. First see if the replacement costs covered by the policy are an accurate estimate of the cost of rebuilding. Then make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for.
5. Legal Compliance
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, there’s so much more involved. Contact a local real estate lawyer and have him or her go over the bylaws of the association. Also see if there are any pending cases by any residents against the association.
6. Can I rent My Unit?
Certain associations have a limit on the number of units that can be rentals at any one time. If you plan on renting your out down the road make sure you know the rules and plan in advance.
7. Professional Management
If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly.
8. Read The Books
Read the condo documents for anything out of the ordinary and think in advance. Are there restriction on commercial vehicles, pets, loud music, or even placement of ‘Real Estate Signs’. Remember when you go to sell your condo you want to know you attract the next buyer.
A recent article in the Appraisal Journal Winter 2010 issue features a study that shows that Zillow Zestimate values are no more accurate than the homeowners’ estimates. The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest association of real estate appraisers.
“Zillow’s Estimates of Single-Family Housing Values,” by Daniel R. Hollas, Ph.D., Ronald C. Rutherford, Ph.D., and Thomas A. Thomson, Ph.D., examines how Zillow’s estimates of value, known as Zestimates, compare to actual sale prices. The study, which was conducted in Arlington, Texas compared the Zestimate prices, the home owner’s opinion of their homes value, and the final selling price. Zillow.com is an automated valuation model Web site. Zestimates use a combination of objective data points that include recent sales, tax records, and average home appreciation factors to come up with a suggested Zestimate. What Zillow can not do is account for the subjective elements that impact a final sale price such as condition of the home, occupancy, and the level of finishes. A kitchen renovation may not have an impact on a Zestimate score but it will impact the opinion of a real estate agent, appraiser, and a buyer!
The authors looked at home sales in Arlington, Texas, a location where Zillow has indicated its data has the highest accuracy level. Still 40% of the Zestimates were more than 10% higher than the sale prices. Independently, other studies have shown that homeowners’ overestimate the values of their homes by 5.1% and new owners
overvalue their homes by about 8.4%. While Zillow can provide a price estimates quickly, their accuracy is certainly suspect. The best way to evaluate your home’s market value is to call a real estate agent and schedule an appointment. an agent with local knowledge will provide you insight on your home compared to the homes currently listed, and that is the most accurate way to find the true market value of your home.
Every home buyer I work with has different criteria that defines what is ideal for them. I often hear phrases like ‘good school district’, ‘low taxes’, and ‘nice neighbors’.As a Cincinnati real estate agent licensed in Ohio, there are certain rules that govern how we present information to clients.
The challenge is defining what ‘good’ is. Families may define good in terms of test scores, athletics, number of extra curricular activities, or even college acceptance rate. As a Realtor the best service I can provide my clients is to point them to district information and let them decide what works best for them. I encourage my clients to consider the cost of private school and property taxes when they are considering areas to live. In some cases the comparative costs make a difference of where my clients choose to live.
I have compiled a relatively complete list of links to the various grade schools throughout Cincinnati. The list includes Public, Private, and Religious institutions. I have them listed on my Cincinnati Area School Information page in the Real Estate Resources section of this website.
Twitter has been getting a lot of media attention recently, but the reality is that Twitter can be a useful tool in real estate marketing. Most often I use Twitter to send out shot notes about property activity, primarily price changes and open houses. It is a great way for me to draw some attention to my website as well as make those who follow me aware of the trends and activity I see in the local Cincinnati real estate market.
The Honolulu Star Bulletin has a short article about another real estate agent in Hawaii who is using Twitter to build her personal brand as a real estate agent. What has become a real boost to the relevance of Twitter is the emergence of Twitter search engines like Topsy. You can follow me on Twitter too! My handle is @AlisonMossCincy
