Category: Real Estate

In the last few years, some people who were unable to sell their homes, rented them instead. The market has improved in most places and the home may easily sell now and possibly, for a higher price.

Even though the opportunity to sell in the near future might not change, there could be another opportunity that could quickly disappear for some homeowners.

Most homeowners are aware that there is a capital gain exclusion on the profits of a principal residence of up to $250,000 for single taxpayers and $500,000 for married taxpayers filing jointly. The rule requires that you must own and use the home as your principal residence for two out of the last five years.

A homeowner can rent their home for up to three years and still be eligible for the exclusion. As an example, if they had owned and lived in it for two years and then rented it for two and a half years, they would need to sell and close the transaction before the remaining six months expired.

If there was a $200,000 profit in the home that didn’t qualify for the exclusion, a 15% long-term capital gain tax of $30,000 could become due depending on the tax bracket of the owner. With some careful planning, the tax could be avoided. Awareness of the time frames and the right team of tax and real estate professionals could save a considerable amount of the homeowner’s equity.

Are YOU 1 of 7 Million that Could Save Money? – 5/16/2016

Did you know? It is estimated that seven million out of 50 million homeowners could save money by refinancing their existing mortgages. Obviously, if the replacement mortgage has a lower rate than your existing one, you will save money.

If you bought a home before 2011 and are paying mortgage insurance, you should investigate refinancing to eliminate that requirement. Even if you don’t get a lower interest rate, the savings could amount to hundreds of dollars a month.

If a home you purchased since 2011 has appreciated enough, it could easily justify refinancing to eliminate the required mortgage insurance. Most loans don’t require mortgage insurance if the loan-to-value is 80% or less. There are some programs for 90% mortgages that don’t require mortgage insurance. It is certainly worth investigating with a trusted mortgage professional.

Continuing to pay mortgage insurance that could be eliminated is like having a broken cell phone and continuing to make the monthly payments for something you can’t use and don’t need.

If your current mortgage is several years old, instead of getting a new 30 year mortgage, you might consider a 15-year term. The money you save with a lower interest rate could help you to retire your loan in a shorter time so that your home would be paid for.

If you need access to a trusted and qualified loan professional, please send me a note and I’ll be happy to refer you to someone who can answer these questions and who will look out for your best interests!

Thanks and much success!  Gary

You’ve saved the money and are ready to pay cash to build a new pool for your home.  However, that’s just the beginning of your soon to be increased expenses which will include maintenance, higher utilities, and higher taxes.

Homeowners obviously benefit by a larger equity when their home increases in value due to appreciation.   A not-so-obvious effect that will also more than likely take place is that their property taxes will increase.  In most cases, a property’s assessed value is generally tied to market value to calculate the property taxes based on the tax rate for that year.

Similarly, a homeowner can affect the value of their home by making capital improvements.  Some small items may never be recognized by the taxing authority but items that require a permit, certainly are brought to their attention.  Items such as a fence, roof, remodeling, windows, or new rooms can easily increase the assessed value of a property.

Utah has an established time frame in which to challenge the current tax assessment. This must be done on or before September 15th of each year.  The process is relatively simple and doesn’t require professional representation.  It generally involves showing that there is an error which has overstated the value or that current comparable sales indicate a lower value. I have the process outlined in a simple document – please send me a note or reply to this blog if you would like an emailed copy.

Also, If you’d like more information or need the comparable sales data, please let me know.  I would be happy to help you investigate the possibility of lowering your property taxes.

Much Success!  Gary

Three Concerns for today’s Real Estate Agent.

FIRST, don’t get FAKED OUT.

The news media frequently publish reports on “slumping housing markets,” “ mixed signs of a recovery,” “real recovery,” “fake recovery”, blah, blah, blah …, there’s so much confusion out there about “The Market” that I am certainly no longer looking to the news media for the answer.

Too many times we can get caught up in relying on the market for our successes or failures, but as my friend Bill Nasby says; “The market is between your ears” and he’s exactly right. Truth is, people always need to move and that means buying and selling. So just because prices slump, and/or the market is hurting doesn’t mean we have to starve to death while waiting for things to come around.

My best advice then, is to be ALERT and ACTIVE. Alert, as to new opportunities, buyer or seller incentives, new loan programs, new local programs etc., and active, in the form of PROSPECTING, yes I said it, prospecting. I know there are hundreds of new programs out there extolling the virtues of working only by referrals, or we’ll send you leads! – you don’t have to do any prospecting! – these are all preying upon the fear of prospecting and promise to keep you knee deep in new leads and transactions!

OK I’ve personally tried almost a dozen of these things, paid thousands of dollars, and kept coming back to the TRUTH, that there is no substitute for prospecting. So if this is something you don’t enjoy or can’t bring yourself to do – you might as well look for another job. But if you have the will and stamina you can be amazingly successful – even today. (I’ll say more on ways to prospect in another post)

SECOND, remain current with Technology.

This is another area where “old school” agents that refuse to adapt will at some point learn that the market has passed them by. With 90%+/- estimated numbers of new home buyers and sellers using the internet for their own real estate purposes, if you fail to keep up, you will be left far behind.

My advice stay up on current methods and resources, do some discovery of your own, become educated so that when clients talk about it – you are already ahead of them. Use the technology and let clients know that you understand how it all works.

THIRD, understand what you are worth.

OK, here’s one of the most asked questions from a potential seller to an agent: “So, are you willing to discount your commission?” I’ve heard this so much that I expect it and am ready for it every time I speak with a potential seller. There is so much caving in by agents out there that there are even companies forming that are specialize in discounts! This behavior is nonsensical! Don’t you believe that you are worth a full commission? I know I am worth it!

Here’s some good advice I learned from Floyd Wickman; Seller: “are you willing to discount your commission?” Agent: short laugh,” no.” Then move right past it.  I know how simple that sounds but it works. If you can’t even negotiate your own wage, how can you expect to protect your client’s fiduciary interests?

The real TRUTH, you must believe in yourself, that you do offer a valuable, professional service that is worth a full commission!, that this is a career and that you do take it seriously.  Otherwise you are only hurting the future of this business, and your potential for earning a living – so go out there and be worth something!

This is the greatest business ever! If you work it right you’ll love it!

Much success!