Last year, we purchased a 1947 home. Since then, we’ve noticed a lot of new cracks in the plaster walls and some unevenness of the floors. Before buying the house, we had a home inspection, but our inspector did not check the foundation crawlspace. He said that he’d forgotten to bring his overalls and would have to forego that part of the inspection. Am I being overly paranoid or is there a potential foundation settlement problem that our inspector failed to see?

Inspection of the crawlspace is a vital aspect of a thorough home inspection. Your inspector’s omission of this procedure, on the slim excuse of forgotten overalls, begs for an appropriately outrageous analogy. He might have omitted the roof inspection because he’d forgotten to bring his ladder. He could have disclaimed poorly lighted areas because his flashlight batteries were dead. Lack of a screwdriver might have prevented inspection of the electric service panel. He could have declined to provide a written inspection report because he’d forgotten to bring a pen, or he could simply have explained that he wouldn’t be inspecting the house at all because he’d forgotten to get out of bed that morning. (more…)

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Have you been writing off your mortgage interest and real estate taxes correctly on your federal income tax filings? Or maybe not? Whatever your answer, an influential Capitol Hill committee believes tens of thousands of homeowners have been deducting a lot more than they should — to the tune of hundreds of millions of dollars a year. Now the nonpartisan congressional Joint Committee on Taxation has proposed to the Senate and the House that they consider plugging two revenue-losing loopholes in the system, and crack down on homeowners who are deducting too much.

Under current tax code rules, homeowners are permitted to write off local and state property taxes that are assessed on the basis of property valuations. But commonplace special levies and user fees — for governmental services that mainly benefit individual houses or neighborhoods rather than the entire municipality — are not deductible. Special parkland improvements, sewers, sidewalks, garbage collections, landscaping, tennis courts and a long list of others sometimes are funded by tax levies on the property owners directly benefited. Local governments typically include their special benefit levies in with their regular property tax bills when they send them to homeowners, but they do not report the itemized breakdowns to the federal government. (more…)

search for : mortgage interest, real estate taxes, homeowners, state property taxes

One of the many oddities of real estate investing is that the best time to plunge in is usually just when things are starting to go south - meaning now. While momentum is starting to carry the market down, home prices are still out of range for a lot of would-be buyers, which helps to buoy rents. Further burgeoning the tenant ranks are the thousands of homeowners selling now in the face of rising interest rates. According to the National Association of Realtors, rents nationwide are expected to jump an average of 5 percent by year’s end.

First, inventory is shrinking: Public universities have suffered from continual belt-tightening in recent years, leaving most without money to upgrade or build out dorms and other housing units. Second, demand is skyrocketing: Colleges are starting to see a surge in admissions, especially from so-called echo boomers, the children of baby boomers. For investors, that adds up to remarkably low vacancy rates near campuses. Prime Property owns 21 apartment buildings in five college towns in Florida and the Midwest, and Zaransky says “we are 100 percent occupied” - even during summer months. (more…)

search for : real estate investing, echo boomers, college towns

A great teacher taught me years ago that many of the nuances of real estate law only matter when it matters. How you hold title is one of those nuances and it really matters when it matters. Consider the case of one of our distraught readers whose significant other had placed both their names on the title in Joint Tenancy more than three years ago. Just a few months later, the relationship went south, and the significant other wanted to switch everything back the way it was before the Joint Tenancy agreement.

The problem was this reader pointed out that she had “made monetary contributions to ALL the upgrades done within the house, paying for 90 percent of the total renovations done which has increased the value of the property as well. I contributed to the household over the years I was there, but did not specify that these funds went to the mortgage, and these funds went to whatever. I just want to be fairly compensated for my “loss.” As a Joint Tenant, technically I am entitled to 50 percent of the equity, right? I am not on the loan. Help and fast. He sent me a letter from a lawyer and I want to make sure I know what I am talking about before I respond.” There are several ways of holding title to property and if what this person wrote is correct, asking for a quit claim deed is not one of the guaranteed 50 ways to leave this lover without an interest in the property, or at least a court appearance. (more…)

search for : real estate law, Joint Tenancy agreement, holding title to property, quit claim deed

As the housing market continues to cool, higher interest rates have increased the mortgage payments for homeowners who have adjustable rate loans, or ARMs, causing the number of them defaulting on their mortgages in default to rise. On The Early Show Thursday, money maven Ray Martin spelled out the problem, and offered advice to homeowners finding it harder and harder to make their mortgage payments:

According to Moody’s Economy.com, the percentage of mortgages with delinquent payments has risen nationally to 2.33 percent, the highest level since 2003. The metropolitan areas that saw the biggest increase in mortgage delinquencies include McAllen- Edinburg-Mission, Texas; Merced, Calif.; Fort Smith, Ark.-Okla.; and Las Vegas-Paradise, Nev. It’s expected that mortgage defaults — in which a borrower misses one or more payments on a loan — will increase when the economy weakens and job losses rise. Typically, higher job losses translate into a higher percentage of homeowners missing loan payments. At this time, the percentage of home loans in default at 2.33 percent is closer to the historical average. (more…)

search for : higher interest rates, mortgage payments, adjustable rate loans, ARM

I believe I spent about $6,000 over 14 years upgrading the electricity in the last house. I had an electrician who believed that if the squirrels hadn’t chewed the knob and tube to shreds, you blend it with the other generations of wiring, update and upgrade where needed, reorganize the box and work from there.

Test all smoke alarms at least once a month, following the manufacturer’s instructions, or push the “test button” on the face of the alarm cover. Put new batteries in your smoke alarms at least one time each year; sooner if the alarm makes a regular chirping signal, indicating low battery power. If smoke alarms are more than 10 years old, buy new smoke alarms. When possible, use interconnected smoke alarms. Hard-wired, interconnected alarms with battery back-up run on your household wiring and are tied in together so that if one alarm operates, they all signal together. Also, wireless technology is now available to enable homes to have an interconnected smoke alarm system that can be installed independent of household wiring. (more…)

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Real estate market downturn creates strange bedfellows as brokerage sleeps with the enemy. The U.S. real estate market may be running out of steam, but the downturn may be helping to clear the air of mistrust between traditional realtors and the Internet community as two realty firms announced groundbreaking deals with Google and Microsoft.

Late Thursday, Prudential California/Nevada/Texas Realty, one of the largest real estate brokerages in the United States, said it will make its property listings available for search on Google, a watershed move for a major player in an industry that jealously guards its listing data.

In another air-clearing announcement, John L. Scott Real Estate, a Pacific Northwest-based realty company, said it will expand its use of Virtual Earth, Microsoft’s satellite and aerial imagery service, to home shoppers in Portland, Oregon, and Vancouver, Washington. (more…)

search for : real estate market, realtors, Google, Microsoft, Virtual Earth

University life, for many traditional students, is one of few bills and responsibilities. However, every spring, new graduates enter the real world of full-time careers, families and mortgages. The average traditional student will first encounter mortgages in their first attempt to buy a home, without prior knowledge of what mortgage brokers are looking for and what they need in order to be able to approve them.

Lenders require a copy of one’s driver’s license and social security card. If loan seekers have been renting, they must bring in the contact information of their landlord. They must also bring the most recent two months of bank statements for all accounts including stocks, checking, savings and money market accounts as well as tax information for the past two years and pay stubs for the past 30 days. It is wise to contact the loan agent prior to your meeting in order to make sure that there are not other requirements for that individual lender. Once the loan seekers have made their appointment with a lender and have gathered all of the information that is, necessary there are four things that lenders look at in order to approve loans: credit worthiness, cash on hand, income/job stability and debt ratios. (more…)

search for : mortgage, mortgage brokers, loan agent, loan seekers, credit worthiness, debt ratio

Convenient access to a farm-fresh tomato is being used as a lure to get people to buy homes in North Carolina suburbia. Developers are toying with the idea of installing farm stands in subdivisions next to pools and neighborhood shopping centers. To use real estate lingo, they hope to turn produce into a “neighborhood amenity.”

Between 1994 and 2004, the number of farmers markets in the United States more than doubled to 3,706, according to the U.S. Department of Agriculture. Growing demand for fresh, local produce has probably boosted that number to 4,000 since then, according to Charlie Touchette, executive director of the North American Farmers’ Direct Marketing Association. In the Raleigh area, D.R. Bryan was one of the first developers to experiment with a neighborhood farmers market. His company added one to its Southern Village development in Chapel Hill two years ago and found that it helped make the new neighborhood feel more like a small town. (more…)

search for : farm-fresh tomato, North Carolina suburbia, subdivisions, neighborhood amenity

Everyone, no matter how rich or poor, enjoys saving money. For example, a few weeks ago a multimillionaire real estate investor friend took me to a lavish lunch, which must have cost him at least $100. As we were leaving the restaurant, he saw the city “meter maid” coming down the street. All of a sudden he sprinted to beat her to his Lexus with an expired parking meter so he wouldn’t get a $20 parking ticket.

A few years ago my insurance agent made a wise and profitable suggestion. He said I should cut my liability coverage on each of my properties to $300,000 and take out a $2 million “umbrella policy” to give me better coverage at lower cost. Don’t tell the insurer, but my $700 annual premium for $2 million excess liability coverage is a genuine bargain. If you have net worth over $1 million, you can probably save money by following the same strategy. Check with your current insurance agent, plus one or two others, to see if a similar tactic can save you insurance premium dollars and obtain better protection. Incidentally, my umbrella liability insurance policy not only provides excess coverage for insured property liability, but it also provides automobile liability coverage if I should be at fault in an auto accident. (more…)

search for : insurance agent, liability coverage, umbrella liability insurance policy