Real Estate Info

Reflecting on the 2015 Local Real Estate Market

HR.Donna_3144CroppedAs 2015 comes to an end, I started reflecting on the year and what I’ve observed. I thought it might be helpful for buyers and sellers if I shared a few thoughts. In no particular order, here are my words of wisdom!

  • Most buyers don’t want a project. They don’t have the inclination to fix up a house. Sellers need to repair/ update their homes in order to sell.
  • Sellers should disclose everything; good and bad. Not disclosing will end up costing you.
  • Location, location still holds true. Today’s buyers want to be near amenities and closer to town. Rural areas hold less appeal; targeting about 11% of the buyers.
  • Antique homes take longer to sell - only about 8% of the buyers are looking for one.
  • If you wait to find the “perfect” home to buy, you will never find a home.
  • Home prices have risen since 2013. You will end up paying more for a house the longer you wait to buy.

And lastly, it still is a good time to purchase a home. Low pricing, historically low rates, and good inventory combine to make perfect buying conditions. Thinking of buying or selling? Give me a call!  Donna Forest 603-526-4116, www.donnaforest.com, donna@donnaforest.com

You’ll be moving in the right direction with Coldwell Banker Milestone Real Estate.

Homeowners Insurance: Time for an Annual Checkup

It’s time for your annual check-up. The good news is that for this one, you won’t have to don one of those revealing hospital gowns — and you may walk away with a healthier pocketbook. We’re talking about a homeowners insurance check-up, a task you should complete once a year, ideally around renewal time. This will ensure your policy still provides the right level of coverage for your family, and your premium isn’t costing you more than it should. Remember, homeowners insurance is essential. The coverage is designed to protect your home and its contents, as well as shield you from liability for accidents and such on your property.

Block out an hour of your time, call an insurance agent, and get answers to these three important questions.
What type of coverage do I have? The most effective type of coverage is known as “replacement cost,” which covers, up to your policy limits, what it would take today to rebuild your house and restore your belongings, says Jerry Oshinsky, a partner at Jenner & Block in Los Angeles who has represented homeowners in litigation against insurers. “Extended” replacement cost coverage provides protection to your policy limit, say $500,000, and then perhaps another 20% of the cost after that. Percentages vary, but in this example you could recoup up to $600,000 on a $500,000 policy, assuming your losses reach that high. Extended coverage can compensate for any unanticipated expenses like spikes in construction costs between policy renewals. Now harder to find due to the industry shift toward extended replacement coverage, “full” or “guaranteed” replacement coverage covers an entire claim regardless of policy limits. A less attractive alternative is “actual cash value” coverage that usually takes into account depreciation, the decrease in value due to age and wear. With this type of policy, the $2,000 flat-screen TV you bought two years ago will be worth hundreds of dollars less today in the eyes of your claims adjuster. Kevin Foley, an independent insurance broker in Milltown, N.J., favors replacement cost coverage unless you can save at least 25% on the premium for going with actual cash value coverage instead. Even if you have replacement cost protection for your dwelling and personal property, don’t assume everything is covered. Structures other than your home on your property — such as a detached garage or swimming pool — require separate coverage. So too do luxury items like jewelry, watches, and furs if you want full replacement cost because reimbursement for those items is typically capped. How much coverage do I really need? OK, now that you’re clear on what type of policy you have, you need to figure out how much policy you truly require in dollar terms. Let’s say you purchased your home five years ago and insured it for $200,000. Today, it’s worth $225,000. Simply increasing your coverage to $225,000 may nonetheless leave you underinsured. Here’s why. The key to determining how much dwelling coverage you need isn’t the value of your home but the money you’d have to pay to rebuild it from scratch, says Carlos Aguirre, an agent for Liberty Mutual Insurance in Arlington, Texas. Call your local contractors’ or homebuilders’ association and inquire about the average per-square-foot construction cost in your area. If it’s $150 and your home is 2,000 square feet, then you should be insured for $300,000. There’s no rule of thumb for how much your homeowners insurance should cost. Insurers use numerous factors—age, education level, creditworthiness—to determine pricing, so the same policy could run you more than your neighbor. In recent years the average annual premium was $804. Oshinsky advises against scrimping on insurance because big increases in coverage probably cost less than you’d think. He recently purchased a liability policy that cost $250 for the first $1 million in coverage. Adding another $1 million increased his premiums only $12.50 more. How can I lower my premiums? The higher your deductible, the amount you pay out of pocket before coverage kicks in, the lower your premium. Landing on the appropriate deductible level requires remembering that insurance should cover major calamities, not minor incidents, says Foley, the independent insurance broker. Most homeowners should be able to absorb modest losses like a broken window pane or a hole in the drywall without filing claims. If you can, then you’re wasting money with a $250 deductible. Foley’s rule: If you’re a first-time homeowner and don’t have a lot of savings, moving up to a $500 deductible will probably stretch your budget. However, if you live in a ritzy home and drive an expensive car, then you should be able to afford a $1,000 deductible. In Milltown, N.J., for example, the premium for a $200,000 home with a $500 deductible would be $736, according to Foley; moving up to a $1,000 deductible drops the annual premium to $672. That’s $64 in savings. Every major insurer offers discounts to various groups, such as university employees or firefighters. Figure about 5%. Ask which affiliations would entitle you to a discount and how much. If an AARP membership would result in a $50 savings, pay the $16 dues and pocket the $36 difference. Many insurers also offer discounts ranging from 1% to 10% or more for installing protective devices like alarms and deadbolt locks, for going claim-free for an extended period, or for insuring both your car and your home with the same carrier.
Visit Houselogic.com for more articles like this.  Reprinted from Houselogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®

Looking to Close Your Home Quickly? New Time Clock for Closings

HR.Donna_3144CroppedA new rule from the Consumer Financial Protection Bureau went into effect Oct. 3 requiring lenders to give consumers more time to review their loan documents. Mortgagors must give borrowers the terms of their loan and final charges & fees at least 3 days before the closing (7 days if sent by mail). It is designed to protect you from surprises at the closing table. Sounds pretty simple, right? Well the reality is, it is a massive change in the way lenders do business from new forms to new timetables. The 3 day period is mandatory and this waiting period can start over again if one of 3 changes occur: 1) The annual percentage rate increased more than 1/8th; 2) The loan product changes like switching from a fixed rate to an adjustable; or 3) A pre-payment penalty is added. Other alterations don’t require a new 3-day review like revisions to taxes, utility prorations, etc. Until lenders have some time under their belt in dealing with these new regulations, buyers & sellers need to be prepared. 60 day closings may be the normal, last minute changes most likely will not be authorized, required paperwork will need to be completed earlier, and buyers & sellers should have a backup plan in the event something triggers a new 3-7 day waiting period and you can’t close as scheduled. Contact me if you are looking to work with a knowledgeable REALTOR® who can help you successfully navigate the buying or selling process!  Donna Forest, Broker Associate, 603-526-4116, www.DonnaForest.com, donna@donnaforest.com.

Known for service, trusted for results – Coldwell Banker Milestone Real Estate.

Waiting to Buy Could Cost You

HR.Donna_3144CroppedIf you’ve been on the fence about buying your first house or moving up to a larger one, waiting until next year may ultimately mean more money out of your pocket. Why? Not only are home prices rising, the interest rate you pay on a mortgage is also expected to increase. The higher the rate, the greater the payment will be.  Let’s look at an example of how this impacts a mortgage payment. Say you found your dream home today and are getting a loan for $250,000. Current mortgage rates are around 4% so the monthly payment is $1194 (principal and interest only). By this time next year, rates are projected to increase to around 5% and home prices are also expected to increase about 4.3%.   To buy that same house, you now are getting a loan for $260,750 and the monthly payment is $1400. The difference in payment is $206 more a month! Over the course of a year, that is $2472. Hmm, I’m sure you could think of plenty of things to do with that kind of extra money! Bottom line, if you seriously want to buy, waiting until next year does not make sense. Contact me if you want to take advantage of today’s rates and pricing to find your new home.  www.donnaforest.com, donna@donnaforest.com, 603-526-4116.

Real estate markets are local, and we have the real scoop on ours. Coldwell Banker Milestone Real Estate

Do This One Thing and Save Money

003EditedIf you want to save money and sell your house faster with less stress, then I highly recommend a pre-listing home inspection. Sellers usually wait for buyers to have inspections on their house and then cross their fingers, hoping for no surprises. More often than not, issues do come to light and sellers are left dealing with several factors in an already highly emotional situation. Buyers may feel a certain level of distrust, wondering why the sellers were not aware of the condition of their home. Time is spent getting 2nd and 3rd opinions on the cost to fix things and most likely, sellers will end up negotiating a lower selling price in order to resolve the problems. Or worst case, buyers cancel the contract and move on to another property. A pre-listing home inspection will make sellers better informed, give control on fixing problems and allows time to provide accurate repair costs upfront to buyers, if needed.  Spending a few hundred dollars in the beginning could save thousands in the end. Contact me if you would like an experienced agent help you navigate the complexities of selling.  603-526-4116; donna@donnaforest.com; www.donnaforest.com

Real estate markets are local, and we have the real scoop on ours. Coldwell Banker Milestone Real Estate

Dealing with a Low Appraisal

Donna and Maxi 044Despite the growing evidence the real estate market is on the upswing, within one week I heard about two sales in our office coming in with low appraisals.  Any time a lender is used in the purchase, it involves an appraisal.  The appraisal is how the lender ensures the size of the loan doesn't exceed the value of the house used for collateral.  Before throwing in the towel, here are some moves that may keep the sale alive.

  • Buyer requests a review of the appraisal or a second appraisal.  This is a long shot as the lender will need a compelling reason to doubt the appraisal.  It's worth combing through the appraisal for any missing information on upgrades, updated systems, added rooms, etc.  Make sure the comps used match the property.
  • Seller and buyer split the difference - buyer adds cash and seller reduces the price.
  • Buyer makes up the difference if they have enough cash on hand.
  • Seller reduces the purchase price to meet the appraised value.

It's a difficult and trying time.  Assess the facts, leave emotions aside and listen to your agent's advice.  Contact me if you want to work with a REALTOR® who knows how to problem solve your way to success.  603-526-4116, donna@donnaforest.com, www.donnaforest.com

Are "For Sale by Owners" Really Saving Money?

Donna and Maxi 044We all like to save money when we can thus it is enticing to try and sell your house as a For Sale by Owner (FSBO). However, before undertaking selling the largest asset you own, you might want to read on a bit more.

  • An agent-assisted home sale has a 13% higher sales price than a FSBO sale.
  • In 2014, only 9% of homes sales were FSBO. (Compared to 14% in 2003). Of the 9%, almost half were because the seller knew the buyer.
  • 88% of buyers used the internet and agent in their home search. Most agents have an internet strategy to provide better exposure and can put their listings in front of hundreds of other agents - who are working with buyers.
  • Agents are less inclined to show FSBOs since they will be doing twice the work.
  • Agents are more likely to close a deal as they are more skilled in negotiating and resolving issues.
  • 8 out of 10 FSBOs will end up listing their house with an agent.

Bottom line, before undertaking the complexity of selling your home, see what a real estate professional can offer you. Contact me and put my 20+ years of home selling experience to work for you.  603-526-4116, donna@donnaforest.com, www.donnaforest.comSource:  Statistics from the National Association of REALTORS® Profile of Home Buyers and Sellers 2014

Real estate markets are local, and we have the real scoop on ours. Coldwell Banker Milestone Real Estate

Are Mortgage Points Tax Deductible?

When you took out a mortgage to buy your home did you pay points?  You may be able to deduct that prepaid interest on your federal tax return--but only if you meet a long list of rules.

The points you paid when you signed a mortgage to buy your home may help cut your federal tax bill. With points, sometimes called loan origination points or discount points, you make an upfront payment to get a particular rate from the lender. Since mortgage interest is deductible, your points may be, too.
If you itemize your deductions on Schedule A of IRS Form 1040, you may be able to deduct all your points in the year you pay them. Some high-income taxpayers have their total itemized deductions limited, including points. You can read more about that in the instructions for Schedule A. Lucky for you, the IRS doesn’t care whether you or the homesellers paid the points. Either way, those points are your deduction, not the sellers’. Tip: Tax law treats home purchase mortgage points differently from refinance mortgage points. Refinance loan points get deducted over the life of your loan. So if you paid $1,000 in points for a 10-year refinance, you’re entitled to deduct $100 per year on your Schedule A. The Fine Print for Deducting Points The IRS rules for deducting purchase mortgage points are straightforward, but lengthy. You must meet each of these seven tests to deduct the points in the year you pay them. 1.  Your mortgage must be used to buy or build your primary residence, and the loan must be secured by that residence. Your primary home is the one you live in most of the time. As long as it has cooking equipment, a toilet, and you can sleep in it, your main residence can be a house, a trailer, or a boat. Points paid on a second home have to be deducted over the life of your loan. 2.  Paying points must be a customary business practice in your area. And the amount can’t exceed the percentage normally charged. If most people in your area pay one or two points, you can’t pay 10 points and then deduct them. 3.  Your points have to be legitimate. You can’t have your lender label other things on your settlement statement, like appraisal fees, inspection fees, title fees, attorney fees, service fees, or property taxes as “points” and deduct them. 4.  You have to use the cash method of accounting. That’s when you report your income to the IRS as it comes in and report your expenses when you pay them. Almost everybody uses this method for tax accounting. 5.  You must pay the points directly. That is, you can’t have borrowed the funds from your lender to pay them. Any points paid by the seller are treated as being paid directly by you. In addition, monies you pay, such as a downpayment or earnest money deposit, are considered monies out of your pocket that cover the points so long as they’re equal to or more than points.  Say you put $10,000 down and pay $1,000 in points. The downpayment exceeds the points, so your points are covered and therefore you can deduct them if you itemize. If you were to put nothing down but you paid one point, that $1,000 wouldn’t be deductible. 6.  Your points have to be calculated as a percentage of your mortgage. One point is 1% of your mortgage amount, so one point on a $100,000 mortgage is $1,000. 7.  The points have to show up on your settlement disclosure statement as “points.” They might be listed as loan origination points or discount points. Tip: You can also fully deduct points you pay (for the year paid) on a loan to improve your main home if you meet tests one through five above. Where to Deduct Points Figured out that your points are deductible? Here’s how you deduct them: Your lender will send you a Form 1098. Look in Box 2 to find the points paid for your loan. If you don’t get a Form 1098, look on the settlement disclosure you received at closing. The points will show up on that form in the sections detailing your costs or the sellers’ costs, depending on who paid the points. Report your points on Schedule A of IRS Form 1040. There are two things related to points that you can’t deduct: 1.  Interest buy-downs your builder paid Some builders put money in an escrow account (as a buyer incentive) that the lender taps each month to supplement your mortgage payment. Those aren’t considered points even though the money is used for an interest payment and it’s prepaid. You can’t deduct the money the builder put into that escrow account. 2.  Interest payments from government programs You can’t deduct points paid by a federal, state, or local program, such as the federal Hardest Hit Fund, to help you if you’re experiencing financial trouble. Source:  Visit Houselogic.com for more articles like this.  Reprinted from Houselogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.  

Looking Back on 2014 in Area Real Estate Sales

Donna and Maxi 044The good news for 2014 was that home prices rose and the average days on market dropped. The median and average sale prices were higher in 2014 for many of the local towns and nationally, the median price will most likely be up 5.6% from 2013. Nationwide, with one month of data left to be tabulated, existing home sales are expected to finish down 3% from 2013. In this area, New London is the only town exceeding 2013 sales. Newbury – 1/1 -12/31/14                         43 Solds                 153 Days on Market (DOM) $274,000 Median Sales Price 1/1-12/31/13                          46 Solds                  159 DOM     $251,500 Median SP New London – 1/1 -12/31/14                         89 Solds                  193 DOM     $386,000 Median SP 1/1-12/31/13                          69 Solds                  208 DOM     $350,000 Median SP Sunapee – 1/1 -12/31/14                         56 Solds                  201 DOM    $317,650 Median SP 1/1-12/31/13                          57 Solds                  218 DOM   $260,000 Median SP With a strengthening economy, solid job gains, and a healthy increase in home prices, existing home sales are forecast to rise about 7% in 2015. Contact me if you would like to know the statistics for your town and how it impacts buying and selling in this market.  Donna Forest, Broker Associate, 603-526-4116, www.donnaforest.com, donna@donnaforest.com Figures are based on information from the Northern New England Real Estate Network, Inc. for the period 1/1/13 thru 12/31/13 and 1/1/14 thru 12/31/14.

“Word of Mouth” is the best advertisement, and we love it when you refer your friends and family to Coldwell Banker Milestone Real Estate.

Know What's Happening in Our Real Estate Market?

As we are more than halfway through the year, it is a good time to take a look at where the market is heading.  Results of the latest Home Price Expectation Survey by Pulsenomics indicate the panel feels home values nationwide will appreciate by 4.6% this year with an average annual appreciation of 3.5% over the next 5 years.  Specific to our market area, we still have plenty of inventory and, in most towns, sales are lagging behind last year.  This will keep prices lower for the time being.  However, in the larger picture, we continue moving forward towards a healthy and balanced real estate market. Newbury – 77 Currently for Sale 1/1 -8/15/14                        16  Solds                 122 Days on Market (DOM) 1/1-8/15/13                         27 Solds                 144 DOM New London – 89 Currently for Sale 1/1 -8/15/14                        53 Solds                 156 DOM 1/1-8/15/13                         42 Solds                 159 DOM Sunapee – 80 Currently for Sale 1/1 -8/15/14                        27 Solds                 161 DOM 1/1-8/15/13                         32 Solds                 205 DOM Figures are based on information from the Northern New England Real Estate Network, Inc. for the period 1/1/13 thru 8/15/13 and 1/1/14 thru 8/15/14. 

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