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Real Estate News Articles

Updated: Friday, January 19, 2018

End Of The Year Money Moves To Make In The Next Few Days

There are some pretty straight-forward money moves people make every year at this time to protect what they have and lower their tax obligation. Many of them are still in play, however, the new tax bill that was just signed has also complicated a few things.

"Add another item to your holiday shopping list: last-minute tax planning," said the Los Angeles Times. "Congress has passed the most sweeping overhaul of the federal tax code in three decades. The Republican legislationdelivers most of its benefits to corporations and the wealthy, but there are key changes that affect individuals. Unlike the corporate tax cuts, the revisions to the individual code are temporary and expire in 2026. Most of them kick in onJan. 1, and there are steps you could take in the coming days to maximize new advantages and minimize the potential hit from other changes."

Make an extra mortgage payment

With the new tax bill, standard deductions for those who dont itemize on their taxes will almost double next year, going "from 6,350 to 12,000 for individuals, and from 12,700 to 24,000 for couples," said the L.A. Times. "Taxpayers who anticipate itemizing on their 2017 returns might want to consider making their January mortgage payment before the end of the year. Doing so would allow you to deduct an extra month of mortgage interest that you might not be able to deduct on your 2018 return if you dont end up itemizing because of the higher standard deduction."

If possible, pay your 2018 property taxes early

"Taxpayers who itemize their deductions may want to consider prepaying their 2018 property taxes before Dec. 31," said CBS News. "Because the tax bill will cap the deduction for state and local taxes SALT at 10,000 starting next year, homeowners in high-tax regions like New York or New Jersey can maximize their SALT deductions in 2017 by prepaying next years property taxes before Dec. 31."

Beware of prepayment from an escrow account, however, as this could create "the potential for crossed wires with the bank."

Defer income until 2018

Many families will end up in a lower tax bracket next year, which should increase take-home pay. If you are expecting another paycheck or a bonus before the end of the year, delaying it until 2018 could mean more money in your pocket.

Give more to charity

Charitable contributions are not affected by the new tax bill per se, but because the number of itemizations is expected to drop sharply next year, there may be a reduced financial benefit to giving to charity in 2018. Loading up on charitable donations now will allow you to take advantage of the deduction before the new year, and do a good deed.

"This might be the year, if they can no longer itemize their charitable donations, to clean out the closet and donate to Goodwill or the Salvation Army or make that extra contribution to your church," Kathy Pickering, executive director of the Tax Institute at HR Block, which provides research and analysis to the companys tax preparers, told the L.A. Times.

Check your contribution limits

Contribution limits were unchanged by the new tax bill, but the importance of maximizing those contributions by the end of the year remains. "In 2017, people can choose to have 18,000 of their pre-tax income placed into their 401k accounts," said CheatSheet. "Participants aged 50 and older are allowed an additional 6,000 catch-up contribution. You may wish to check how much you have contributed to date in 2017 and increase contributions accordingly. If you have an Individual Retirement Account, or IRA, check to see if theres room there as well for last-minute savings. The 2017 limit for both Roth and traditional IRA accounts is 5,500."
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California Broker Associates Must Register As Such With The B.R.E.

Effective January 1, 2018, California Real Estate Brokers who are affiliated with a company other than themselves or their own, must notify the Bureau of Real Estate BRE of that affiliation. Such persons are commonly called "Broker Associates". In a recent Frequently Asked Questions FAQ post on the bureaus website, the BRE defines the term this way: "A broker-associate is an individual licensed as a real estate broker, but who works in the capacity of a salesperson for another responsible broker or corporation."

As the FAQ makes clear, an associate broker may also work as an independent broker. "[U]nder the Real Estate Law, a broker-associate can work in the capacity of a salesperson for another employing brokers and also work as an independent broker. However, an affiliation/employment agreement signed by the responsible broker and the broker-associate may prohibit such activity."

Those potential >The most significant purpose and effect of the new law is that it creates a means for consumers and others to learn any and all of the affiliations of an associate broker. Prior to this, a broker may have been legally functioning as a sales associate of a company other than his own, yet that information would not appear on the publicly-accessible BRE records. Neither would the record of the company show that he was employed there. The new law changes that.

The Bureau has created a new form RE 215 which can be used both for informing the Bureau of a new broker-associate affiliation or for the termination of an existing broker-associate affiliation. These forms are supposed to be submitted by January 1, but I suspect there will be some leeway granted on that.

Among the questions that may arise:

  • Can a broker-associate affiliate in a sales capacity with more than one company? Legally, yes, although one or more of the potential affiliate companies may choose to prohibit it contractually.
  • Can a broker function as a broker-associate while still maintaining an independent practice? Yes, though this too would be subject to the employment contract.
  • This new form RE 215 asks when the broker-associate affiliation began. In many cases that could be measured in years. Is this a problem? No, just enter the date the employment >

    Completing these new forms in a timely and effective manner is not rocket science. Nonetheless, I would advise anyone involved to check out the Frequently Asked Questions on the BRE website.

    Bob Hunt is a director of the California Association of Realtorsreg;. He is the author of Real Estate the Ethical Way. His email address is .
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    What To Consider When Downsizing From Your Current Home

    For people of a certain age, or those whose kids have flown the coop, downsizing may seem a logical next step. However, there are lots of things to consider before making the big move.

    First, what does downsizing mean to you? It doesnt always mean moving to a smaller home.

    "Downsizing takes on many looks and feels: some people living in large family homes still want a big home but with a more suitable floor plan," says sales representative Debra Feldman of Forest Hill Signature Real Estate in Toronto.

    Downsizing from four bedrooms to three bedrooms a master bedroom, an office and a guest room to be used for grandchildren sleepovers or a caregiver down the road may be preferred. However, these buyers may still want the same amount of space for general entertaining, she says.

    Some people may want to move from the suburbs to the city to have easier walking access to the local coffee shop, yoga and culture, while others may prefer to downsize in the neighbourhood they are most familiar with, Feldman says.

    "People need to wrap their minds around how they live now and how they see themselves living in the future. Will a formal living room get used? Might a more informal layout, such as a great room, suit ones day-to-day life>Feldman says downsizers should think about whether its necessary to have a dining room when there is a large eat-in kitchen. Would the dining room, which is often in a prime location in the home, be better converted to a room that will see more day-to-day use? Is the configuration of the home suitable for now and the future? Will long flights of stairs cause problems in the future? Is there a main-floor bathroom? Is there an elevator? Is there security if you plan to travel? Will that big lot be too much to maintain? How much will it cost to hire someone to do it for you?

    The biggest mistake people make when they decide to downsize their home is moving to too small a space, says Ira Jelinek, a sales representative with Harvey Kalles Real Estate in Toronto. Many times, "I have heard about people buying then realizing its not going to work. Then they have to rent or sell it."

    Jelinek says other common complaints include a lack of storage, and for those moving from a house to a condo, having to take elevators and park underground. "However, underground parking can be overlooked if the building has valet service," he says.

    One way to deal with lack of storage is to make the most of every inch of space, whether in a smaller home or condo. Space should be functional for everyday living and entertaining.

    Storage space is always a challenge in condos, so finding creative ways to add more is invaluable, says designer Sabrina Bitton.

    One of her tricks is sure to be a hit with downsizers. Bitton says to build a bar-height island on wheels to fit over the existing, fixed island. That way it doesnt take up additional floor space, but when entertaining, the top island can be wheeled out to provide separate dining space. Or it can be used as buffet space, a place to enjoy cocktails or additional work space. Downsizers who arent ready to give up their sit-down eating space find this a particularly welcome idea, she says.

    Choosing the right location is key. "Typically speaking, most downsizers move from a suburb of Toronto or a neighbourhood of Toronto to somewhere in the heart of the city," Jelinek says. The trend throughout the area is that "people from all walks of life want to be in the city now."

    Wherever you live, health care should be top of mind, says sales representative Leslie Eto of Re/Max Ultimate Realty in Toronto. "Do you need to have access to specialty hospitals? A friend of mine lives in a small town and travels almost two hours by train intoTorontofor her doctor appointments and treatments."

    Feldman says she finds the location is often dictated by where adult children and grandchildren live. Possible future >Some people chose to cash out their large urban home and head to a small town.

    "This has appeal for some -- less traffic, lower cost of living, easy access to nature and seasonal recreation, anticipating visits from friends and family where quality time can be enjoyed. Some also love the thought of making new friends and starting over, however for others this wouldnt be comfortable," Feldman says.

    She recommends making frequent scouting trips to the area in advance, ideally in different seasons, to "try on the experience. Does the community have a strong seasonal influx of tourists? Is that attractive to you?"

    Also ensure you speak to regional/municipal local representatives to learn about any significant development initiatives that could positively or negatively affect real estate values in the foreseeable future, Feldman says. "Finally, speak to an experienced Realtor in the area to become educated on the subtleties of the community, for example sewage handling, drinking water, lake quality and possible changes in transportation routes the could enhance or detract from your short and long-term enjoyment of your new home."

    Check the associated costs to ensure a smaller space will in fact be less expensive. Budget for the move and any work renovations, cleaning, painting or other improvements you want to make before you move in. Plan ahead and decide what you can/want to take with you. Give yourself plenty of time to pack. Its never too early to start downsizing your possessions.

    Remember, says Feldman, "Downsizing can be very liberating and an exciting time in ones life."
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    All Cash Offer May Be Questionable

    Qustion. I often see advertisements offering "all cash for your house or condo." Some of these ads offer to give monthly payments for equity. What type of guarantee is the seller offered so as to insure that he/she gets the full amount. Suppose the company goes bankrupt? How can these companies offer such benefits as "three times your equity"? Your response would be helpful.

    Answer. The moral of this column can best be summed up with the old adage "caveat emptor -- let the buyer beware."

    As with any transactions among strangers, most are legitimate, but many are fraught with problems, including fraud. You have sent me a newspaper clipping, whereby a promoter offers to buy any house -- often sight unseen -- and pay the seller on a monthly basis any equity that exists in the house.

    At first blush, this may be a good deal. You -- as seller -- will be able to sell your house, and take payments on an installment basis. If you will make a profit on the sale, and cannot take advantage of the up-to-500,000 exclusion of gain rules, the installment method will enable you to defer full payment of the capital gains tax until you are paid in full on your equity.

    Furthermore, by selling your house, you will be >But this is theory; in practice, there can be many problems.

    Let us look at some of the possible pitfalls:

    1. Buyer goes into bankruptcy. You raise the question of the possible bankruptcy of the purchaser. If the proper protections are taken at the time of settlement, the filing of bankruptcy will create a delay, but should not pose a major problem for you. If you take back a first deed of trust from your buyer for the amount of the equity you are lending, and if this deed of trust mortgage is properly recorded in the land records where your property is located, you will be a secured creditor. In the worst case, you will ultimately get the house back.

    But, if you already have a first mortgage on the property, and your buyer does not pay that off in full, you will only be able to obtain a second trust from your buyer. In this second-place position, you will be at greater risk. If the buyer does not pay you, I suspect the buyer will also not pay the first trust lender. The first trust lender can foreclose on the property and your second deed of trust may be wiped out.

    2. Due on Sale clause. Most mortgages contain what is known as a "due on sale" clause. This means that upon the sale of your property to a third party, your existing lender can call the entire unpaid balance of the mortgage due. While lenders do not often assert these clauses, the possibility remains. This is too great a risk, and I cannot recommend that you enter into such a sale without first obtaining your lenders approval of the transaction.

    3. Additional encumbrances. Even if you own your home free and clear, there is nothing to stop your buyer from taking out a new mortgage on "your" home after settlement. If that new lender does not receive the monthly payments on time, it can foreclose. This can cause you a lot of aggravation, as well as uncertainly and legal fees.

    4. Financial status of your buyer. Before entering into this kind of transaction, you must learn more about your buyer. Are there any tax liens against the buyer that could become a super-priority lien ahead of your deed of trust? Is your buyer judgment-proof -- i.e., you will not receive any money even after you successfully obtain a court judgment.

    5. Sales Price. What price are you willing to accept from this buyer? Clearly, that buyer is not a charitable organization; there is a profit motive behind the transaction. Why should this buyer offer you market price for your house, since when the house is ultimately resold, your buyer will not make any profit.

    6. Guarantees. You ask what guarantees your buyer can give that you will ultimately receive payment in full. The short answer is none. Unless your buyer pays you all cash, you face a serious risk -- on a monthly basis -- that you may not get paid in full. After all, you are dealing with a stranger -- and one who presumably is in the business of buying and selling houses. If there are any tricks -- and if the buyer is not completely reputable -- they will use every trick in the book to take advantage of you.

    My bottom line is to stay away from these types of transactions. While they appear attractive, there are too many pitfalls.

    If you are desperate -- and still want to go ahead with such a transaction -- please consult your legal and tax advisors before signing anything.
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    Tax Bill Causing A Year-End Frenzy To Pre-Pay 2018 Property Taxes

    The newly passed Republican tax bill is creating end-of-year confusion and anxiety for homeowners. With just a few days left in 2017, many are in a frenzy trying to figure out how they can pay some of their 2018 property taxes now to save money once the bill goes into effect on Jan. 1, 2018.

    The new tax bill caps the amount you can deduct for state, local, and property taxes at 10,000.nbsp; Thats going to hit hard in states such as California, Connecticut, New York and New Jersey - states where the average state and local deductions in 2015 all topped 17,000," said the Houston Chronicle. "In New Jersey, the average property tax bill alone was nearly 8,300 last year and there are scores of towns where the average bill is above the 10,000 threshold."

    Can you really pre-pay your 2018 taxes?

    In some jurisdictions, prepayment has been allowed for years, although, "Others are scrambling, working to ensure that those who want to pre-pay can mdash; even if the jurisdiction cant necessarily guarantee the pre-payment will be deductible, said CNN Money."

    Thats because the IRS has has not ruled on whether prepayments for 2018 taxes will be deductible on 2017 tax returns. But, that hasnt stopped some jurisdictions from trying to help.

    According to the Washington Post, "The Montgomery County Council broke its winter recess Tuesday to pass a bill allowing residents to prepay 2018 property taxes, a last-minute chance for homeowners in Marylands largest jurisdiction to mitigate the impact of a new federal cap on tax deductions."

    New York Governor Andrew Cuomo issued an executive order Friday "allowing for partial payments on 2018 property taxes, which could help some looking to at least pay off some of the 2018 bill in 2017," said the Democrat and Chronicle. "Theres a state law now that does not allow partial prepayment and we are going to suspend that law through the emergency executive order until Jan. 2," he said.

    The publication added that, "Counties and towns in New York are scrambling to get their property-tax bills out to give people a chance to pay before the new federal income-tax overhaul takes effect."

    Homeowners lining up

    Newsday reported that ldquo;Thousands of Long Island property owners are rushing to prepay their second-half school taxes, as well as their general taxes, before the year ends on Sunday.

    Similar trends are being seen across the country. In Minnesota," Counties throughout Southeast Minnesota are reporting a surge in early payments in an effort to cash in - for one final year - on a deduction that the coming federal tax overhaul will limit," said the Post Bulletin. While, in Tampa, the Florida Tax Collectors Association crushed homeowners dreams by issuing a memo that read, "No, 2018 taxes may not be prepaid in 2017 in Florida because prepaid installments may only be made once the current years tax roll is open for collection," said the Tampa Bay Times.

    In Contra Costa County, CA, "Some taxpayers have been disappointed that they cant make an even larger payment now on their 2018 bills in order to deduct more on their 2017 federal taxes," said The Mercury News. "But thats just not possible,"nbsp; officials around the region stress.nbsp; Russell Watts, treasurer-tax collector of the county told them that, "We couldnt magically create these 2018 bills so these people have a place to park their money.nbsp; Our system wouldnt be able to handle receiving these payments."

    California homeowners can, however, pay "the last installments of your 2017 taxes - which are not due until next year - before 2018. If you itemize, doing so could save you big money on your federal tax bill this year," said The Mercury News. "California taxpayers pay their property taxes in two installments, due in December and April. Conventional wisdom has long held that its better to wait to give your money to the taxman, and many people dont pay until the deadline. But thats not necessarily the best plan this year. Paying that second installment by Dec. 31 could make a substantial difference: If you own a 1 million home, for example, you could save more than 1,000. With a one percent property tax rate, you would owe 10,000 annually, or 5,000 due in April. If youre in a 25 percent tax bracket, that equals a 1,250 deduction that could be lost if you wait until 2018."

    So how do you know what you can do?

    You have a few days left to consult your tax professional to find out what the best strategies are for your financial situation and your location and make any potential moves before the New year.

    "Theres no one-size-fits-all strategy," Edward Arcara, a Buffalo accountant who heads the New York chapter of the National Association of Tax Professionals, told the Democrat and Chronicle. "Tax professionals have to look at everything on a case-by-case basis. It depends on what your situation is."

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    Why Banks Do Not Lend On Certain Loans That Appear Conservative

    Ever wonder why banks shy away from loans that appear to be >

There are numerous reasons banks avoid making loans that, in general, one would think have a high likelihood of paying back. According to a banker who works for a well known bank, during the mortgage crisis of almost a decade ago, one thread seem to run through all of the bad loans on the banks books; late payments on even the smallest of items, such as a department store credit card. This type of information led banks to steer away from otherwise good borrowers after the mortgage meltdown, since the banks did not want to have borrowers who tended to be late or default on mortgages. Thus, a borrower who never missed a mortgage payment but may have been late on a small credit card was seen as a bigger risk for a future default on a mortgage should there be instability in the economy.

Banks are not in the business of taking over property and do not want to be seen as predatory lenders. Even if a borrower has a "good story", banks would rather not even entertain a loan, which, on its surface, appeared to be more likely to fall into default. Banks are very cash flow oriented. They do not want to lend to borrowers where there may be a question of how a mortgage will be serviced. In commercial real estate loans, banks use a ratio called DSCR Debt Service Coverage Ratio. The DSCR is a measure of the cash flow available to pay current debt obligations principal and interest in cases of a mortgage. It shows the ability to produce enough cash to cover the mortgage payment. In previous years before 2007, most banks required a DSCR of at least 1.1.

For example, if the mortgage payment including principal and interest was 10,000 per month, the net cash flow after paying normal expenses and before the mortgage needed to be at least 11,000 per month. This was not usually an undue burden, as most real estate investors would have expected to have at least a break even cash flow after paying the mortgage. However, after 2007, almost every bank in the nation tightened up their standards to where they insisted on a DSCR of at least 1.25 and as high as 1.35. Although this may not seem excessive, the extra 15 to 25 basis point requirement seve>Another aspect that impacted banks ability to make loans to less than stellar borrowers is that they are similar to corporations in that they >Most banks work off of a fairly slim arbitrage due to competition, so it is not worth having loans in their portfolio that appear riskier. When a loan goes onto a "watch list" or goes into default, more of the banks resources are tied up and not available to be deployed into new loans. Loans that are put onto the "watch list" would be those loans in which the loan to value is not as strong as the bank had originally determined. Although the borrower may not be late on any mortgage payments, the value of the property may have declined to where bank auditors have determined that there is a more than likely potential default.

For example, if the bank made a loan on a property two years ago for 100,000 on a property that had a value of 150,000 at the time the loan was made 67, the bank would set aside a certain amount of reserves as prescribed by the FDIC. However, if the property declined in value to 117,000, the 100,000 loan presuming the loan was interest only now stood at over 85 LTV Loan to Value. Under this scenario, the bank would be required to set aside more reserves. This creates a problem for the bank in that this means less money for the bank to lend out, as the extra reserves ties up more of the banks capital and less is available to make loans. If the loan actually goes into default, substantially more reserves are needed to be set aside. After the mortgage crisis, stringent guidelines were handed down to banks, as the Federal Government did not want to bail more banks out. Thus, most banks found it was just not worth using their resources for potentially non-income earning activity.

There is a lot of activity in the lending arena as the economy has strengthened, and interest rates are still attractively low. With the numerous requests for loans, many banks are finding that they do not need to attract borrowers. They do not want to spend time having to explain to auditors or even bank board members why certain loans are being made when they have many "slam dunk" loans that are "cookie cutter". Banks are finding that they cannot charge enough to the borrower to justify the extra time, expense, and risk to make a typical "non-bank" loan.

An alternative to conventional financing can be found with private lending companies. Private lending companies do not have the same reserve requirements and will generally provide loans with much less hassle and more expediently. These private lending companies are more interested in "equity based" lending, meaning that they are more interested in how much equity is in the property at the time they make the loan as compared to the DSCR or credit issues of the borrower. This provides the private lending companies an opportunity to fill a gap where the banks have left off -- loans that are not generally considered risky but still need funding. However, the price of capital is higher because the private companies do not have the same access to capital that banks do.

They cannot provide FDIC insurance to their capital resources; thus, they have to pay a higher rate than depositors of banks. In conjunction with higher access to capital costs, these private lending companies must charge the borrowers a higher than bank rate for the money. The benefit to the borrower is the access to otherwise unavailable capital; in addition, the borrower usually does not have to jump through as many hoops as applying with a conventional bank and will almost certainly be able to borrow in a shorter time window. Many borrowers find borrowing from private lenders worth the extra cost.

Of course, if time is not of the essence, a borrower should first attempt to obtain funding from a conventional lender; however, borrowers should not be dismayed if they are turned down by banks. Alternative sources of capital are available for funding requested loans. One only need to do a little research. Many mortgage brokers, who deal with banks, also know of private lenders. If the borrower is able to go direct with a private lender, there may possibly be a cost saving to the borrower as there is one less mouth to feed; however, many times, the mortgage broker can assist the borrower with expertise as to the pricing of private loans and which companies are reputable and which are not.

In bring a deal to a private lender, the borrower should be careful not to do a shotgun approach, which is to say that it may hurt the borrower in the long run to try many brokers at the same time for the same request. One may think this is the best way to obtain financing at the best price due to attempting to force competition, but, many times, it backfires on the borrower, as some brokers broker to other brokers. What often happens in this scenario is that there may be a chain of brokers involved, all adding their fee into the loan. A two point deal may turn into a four point deal because, by the time the loan reaches the final funding so many brokers claim they had a hand in the deal and all want to get paid.

The borrower may find that a better plan of action is to find one good broker who is well connected with an array of lenders. Many times, this broker will know ahead of time what terms the borrower can expect and communicate this with the borrower, so there are no surprises. Some brokers specialize in construction loans as due some lenders; some will not touch personal residence loans due to the Dodd Frank regulations. It is best for a borrower to seek out a broker who is well versed in the type of loan that the borrower seeks.
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Does It Makes Sense To Buy A New House Before Selling The Old One?

Youre interested in moving. You need to sell your old house first before buying a new one, right? After all, you dont have enough of a down payment for the new house without selling the old one, and you are pretty certain your bank will not qualify you for two mortgages.

You are in a dilemma; houses in your area are currently receiving multiple offers. Inventory is low. Sure, you can sell your house under the same circumstances, but will you be able to identify a new house so that you can simultaneously move from the old house to the new one? Unlikely. Do you sell the current house, move to a rental [or hotel while you identify and try and close on the new house? Is the extra hassle of moving twice and the added stress of the inability to simultaneously close on the sale and purchase the new worth it? IF you could purchase a new house while still living in the old house, is it worth the added costs involved with having a second mortgage until you sell the old house? How much is "peace of mind" worth in not having the pressure of having to purchase a new house because you sold the old house too soon?

These questions are a reality in todays world in many parts of the country, specifically, the San Francisco Bay Area, because of the real estate rebound after the Great Recession. According to Jeff Stricker, a real estate professional with Alain Pinel Realtors specializing in the Silicon Valley in California, his clients are faced with these exact situations much of the time, as property is swooped up almost as soon as it hits the market, and, many times, with multiple, over asking prices. Jeff states that, although it is great for his clients as sellers, those same clients face challenging hurdles when buying a replacement property; competing against other buyers, some with cash only offers, who are willing to bid up a property far beyond the asking price in many circumstances. Some buyers are just so frustrated with the process of competing and getting outbid that they act in ways that they normally would never have thought. Overbidding. Settling for a house that they may not have originally envisioned. The list goes on.

Jeff, however, decided to think outside the box. What would happen if another house was purchased without the added pressure of "living out of a suitcase", if you will prior to the sale of the old house? Is it even possible with the banking regulations that were placed upon financial institutions as well as homeowners over the past decade due to the "mortgage meltdown" that happened in 2008 and on? Dodd Frank rules that placed inordinate restrictions on the ability of homeowners to obtain financing left many people unable to get loans in which they previously were easily able to qualify.

Jeff decided to come up with a spreadsheet wherein, if he plugged in some assumptions, he could figure out if it would make economic sense to acquire a new house before selling an old house. The other part of the equation was to find a lender who would allow for a homeowner to purchase a new home without first selling the old home; thus, carrying two mortgages at the same time. Since most conventional lenders would not touch this, Jeff had to look to alternative sources. He found a company called Pacific Private Money, in Novato, CA that specializes in such a product.

Pacific Private Money can lend enough to the borrower to purchase the new home if there is enough equity in the old home to justify a combined Loan to Value LTV of 70 or less. Sometimes, if there is not enough equity in the old home, the borrower needs to add cash to bring the LTV to 70, but, the ability to purchase a new home without having to sell the old one first can solve many issues for the homeowner. First, the new home can be identified without adding pressure since the homeowner is still living in the old house until the new house closes escrow. Second, the stress of moving twice is eliminated. Third, and probably the best and possibly most surprising is that this solution may actually cost LESS in terms of increasing net equity to the household than selling the old house and buying a new house with the proceeds from the old house and new mortgage in most circumstances wherein the new house is more expensive house than the old house.

In a rising market, the earlier the purchase of the more expensive new house and the delay of the sale of the old will increase the net equity to the homeowner more than the costs associated with carrying two mortgages.

For example, lets assume the old house is worth 1,000,000 and there is currently a 1st mortgage of 200,000. The homeowner desires to purchase a new home for 1,400,000 and has 100,000 in the bank that can be used for a down payment. We will look at two scenarios; the first is where the homeowner sells the current house, rents for a period of time, and then purchases a new home. The second scenario is where the homeowner borrows the money in order to secure the new home while owning the old home.

Obviously, there are many moving targets with both scenarios, such as how much it will cost to rent a place in the event of selling the old house first as well as how long it takes to identify and close on the new house, storage costs for belongings, the cost of obtaining a private loan, and the appreciation assumptions for both houses, just to name a few.

Here is a calculation making the following assumptions; it takes nine months to close on a new house after selling the old house; houses in the area both old and new houses are appreciating at 1 per month; interest earned on bank deposits are at 1 per annum; storage costs are 1,000 per month, a conventional bank loan is not available because the homeowner does not qualify and has to use a private loan company; the costs for the private loan are 9 plus 2 points; the interest rate on the old house is 3 per annum. Click Here to see 1 per month appreciation.

As you can see, in a rising market, where the new house is worth more than the old house, there is a significant benefit to using a private loan to purchase the new home and sell the old home at a later date. Waiting 9 months to eventually acquire the new house has tremendous opportunity costs, as compared to a net benefit of purchasing the new house right away and eventually selling the old house.

Although assuming a 1 per month appreciation of real estate may seem aggressive, the San Francisco Bay Area, and specifically the Silicon Valley, has experienced such growth. However, even if we lower the appreciation to .5 per month Click Here to see .5 per month appreciation, we still see a fairly significant benefit to purchasing the new house now rather than waiting to first sell the old house and then buy the new house.

Aside from the economic benefit, other factors need to be considered; the lack of stress of moving twice should the homeowner decide to sell the old house first and then purchase the new house; what if the homeowner finds the house of his/her dreams now and does not want to let the house slip away? In todays market, sellers are not willing to take contingent offers. Can the homeowner budget for both houses at the same time while waiting for the old house to sell? Is the market rising? Is the new house more expensive than the old house? How long will it take to sell the old house? These are just some of the issues to consider before deciding one way or the other; however, and this cant be stressed enough -- when a homeowner finds a house they like, they do not want to lose the opportunity of buying it. This means that they can start looking at new houses before putting their old house on the market. This also allows them time to make any repairs or fix up their old house so as to maximize its value prior to putting it on the market.

Once homeowners know that there is a potential to purchase a new house before selling their old house, they can be proactive in obtaining a commitment letter from the lender. Of course, homeowners should see if they qualify for a conventional loan for buying the new house owning two houses at once, but they should keep their minds open to procuring a private loan should the bank turn them down. Pacific Private Money is such a private loan company.

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PinRaise Agent of the Year: Dana Roberts

Earlier this year, PinRaise Inc. launched their innovative Agent with HeartTM Program, which connects real estate agents with local clients and nonprofits to help communities nationally. Despite being the inaugural year of this new program, PinRaise was able to assist hundreds of nonprofits by generating thousands of dollars in real estate donations thanks to the kindness and generosity of each and every Agent with Heart who dedicated themselves to giving a donation back to their clients nonprofit of choice after closing.

"When we began this program back in April of this year, I was immediately overwhelmed with the incredibly positive response we got from real estate agents who were ready to jump right in and start giving donations on each closing. Our Agents with Heart are each dedicated to making donations throughout the year, and thanks to them and their generosity, we have been able to assist nonprofits across the country. All of us at PinRaise are so very grateful to them for helping us realize our goal of assisting communities everywhere," said Mr. John Giaimo, President of PinRaise.

One agent in particular, Dana Roberts, is being honored as PinRaises Agent of the Year thanks to her 16 donations.

Recipients of Danas generosity include: SPEC-LA, Hope for Paws, St. Jude Childrens Research Hospital, Desert AIDS Project, American Cancer Society, Red Hill Lutheran Church School, Second Harvest Food Bank, CHOC Foundation, Make-A-Wish Foundation, Families Forward, American Red Cross Orange County to benefit Canyon 2 fire >"Dana has been an Agent with Heart with us from the very start of our program and truly epitomizes what our program is all about. We are deeply honored to be able to work with such a kind-hearted person who truly cares about paying it forward and making a difference in her community," said Mr. Giaimo.

"When it came time to choose our PinRaise Agent of the Year, it was a no-brainer that Dana would be the recipient. From the moment she joined our program we knew we had found an incredible partner in giving, and a person who would truly help us to propel the good that we envision our program doing," continues Mr. Giaimo. "All of us at PinRaise would like to congratulate Dana on her numerous donations, but I would like extend my most sincere gratitude and to personally thank her for her generosity and dedication to giving. Agents like Dana Roberts are far and few between, and we are so proud to count her among our Agents with Heart. No one deserves the Agent of the Year title more," concludes Mr. Giaimo.

To become an Agent with HeartTM and start paying it forward to your community, visit
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Thoughtful Hostess Gift Ideas You Wont Want To Forget This Holiday Season

Millions of people will be getting in a car or on a plane or train to travel to a loved ones home for the holidays in the next few days. Last year, that number was 103 million travelling between December 23 and January 2, according to USA Today. Thats a lot of road, rail, and air traffic, a lot of crowded kitchens, and a lot of hostess gifts to consider. After all, you dont want to show up empty-handed, right?

These eight ideas will give you options that are focused on making your hosts life easier during the holiday visit and on family traditions.

An assortment of socks and slippers

Some people insist on keeping shoes off in their house, and they might not love the idea of bare feet pitter-pattering all over the place. Head to Target, buy a bunch of socks and slippers, and bring them in a big basket so that everybody can have their own. Your host will su>

Kids activities

Take your pick from a wide array of available items that will keep the kids in your get-together happy and engaged. Holiday crafts like these peppermint ornaments or an assortment of coloring books, board games, and puzzles should do the trick.

Gifts for the family pet

Who is quite possibly the being who is most ignored and most grateful for a little attention during the busy holiday season? The family dog or cat. Show your host how thoughtful you are by thinking about the furriest member of the household. Dog treats, bones, balls, new kitty toys, or maybe even a colorful holiday bandana or sweater will give that good boy or girl a reason to love the holidays.

Wine charms

Is that my drink. Im pretty sure I left it here... but I was also in the living room, so...

You can eliminate that conversation with these cute, holiday-themed wine glass charms. Theyre 28 for a set of 12 on Amazon, and your host will think of you every year when the crowd arrives.

Cookie mix

If you dont have time to make your own mix and you dont want to show up with one of those refrigerated slabs of pre-made cookies, this Gingerbread Cookie Mix in a Mason Jar is a great choice. "These jars of pre-measured ingredients make the whole cookie-baking thing tres easy," said Good Housekeeping.

A framed photo

Phones take such great photos today, but how often do you actually print one out and display it? Have a picture of the entire family or a few key members? You can have it quickly and inexpensively printed out at a drugstore or Target and framed as a gift your host will su>

Holiday movies

Yes, its great to be able to order up a movie with a few clicks of your remote control. But theres something special about being able to go get a physical copy of Elf, A Christmas Story, or Home Alone and throw it in the DVD or Blue Ray player, or VCR if youre old school.

Coffee, tea, and hot chocolate assortment

Trying to accommodate a big group with varying beverage preferences can be challenging. Help your host out and make your loved ones happy by putting together a hot drink gift. Go for a couple of different coffee think regular and decaf and tea options, a package of hot chocolate or two, and extras like agave sweetener and marshmallows. Disposable hot cups are another useful idea so there is not a constant array of mugs to wash.

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Kitchen Trends With Staying Power

As a designer, I pay attention to trends that come and go in kitchen design. And there are a lot of new options to consider. But I tell my clients that the key is always to consider whether whats trending will actually function for your kitchen. So lets take a look at some of the current trends that I would argue are among the best options to incorporate into your kitchen remodel. Which ones would you love to have?

1. Fewer upper cabinets. The trend toward less wall cabinetry in the kitchen will continue. Its not that clients have less stuff to store, but rather that they desire less visual clutter and that feeling of openness that a lack of wall cabinets inspires. This means that clever storage solutions for both base and tall cabinets are even more important.

Glassware is commonly stored in the wall cabinet closest to the sink. With less upper cabinetry, the dilemma of where to put the glasses arises. Consider using a drawer or rollout shelf, as seen here. Drawers are overlooked when it comes to glass storage. To make it work, just line the bottom of each drawer or rollout with a nonslip rubber liner.

Photo by Divine DesignBuild - Browse kitchen ideas

Pantry pullouts are also a great source of storage when wall cabinetry is scarce. This tall, narrow pullout holds dishes, cups and glassware galore, as well as half a dozen stainless steel bowls.

Photo by Tara Bussema - Look for kitchen design inspiration

2. Comfortable seating areas. For years, islands have been considered the ideal gathering spot in the kitchen. But now theres a trend toward more comfort, and seating areas in kitchens are evolving accordingly. Clients want a place to kick off their shoes and >

Photo by EJ Interior Design, Eugenia Jesberg - Discover kitchen design inspiration

3. Steam convection ovens. My favorite kitchen appliance slowly gaining a foothold is the steam convection oven. Cooking with steam locks in nutrients and keeps foods moist. Unlike microwaves, steam ovens reheat leftovers without drying them out. As a bonus, theres a convection mode that bakes and roasts.

Photo by Spaces Renewed - More kitchen ideas

Will steam ovens replace microwaves? The answer probably depends on whom you ask. They still cant reheat beverages or pop popcorn, and for some thats a deal-breaker.

4. Induction cooktops. Induction cooking has been popular in Europe for many years, unlike here in the United States, where cooking with natural gas is preferred. With induction cooking, the energy is generated by a metal coil beneath the surface of the glass cooktop. When turned on, the coil produces an electromagnetic current only when it comes in contact with magnetic cookware. This current heats the bottom of the magnetic pan and cooks the food it contains. Induction is safe the cooktop is cool to the touch when the cookware is removed. Its also fast. Water boils in under two minutes.

Photo by Adelina Iliev Photography - Look for kitchen design inspiration

One way to introduce induction cooking into your kitchen is to add a burner or two. This kitchen has a gas range plus a small induction cooktop in the island.

5. Smart kitchen technology. Our homes are becoming ever more connected with our devices. Whether through voice activation, phone apps or computers, connectivity is here to stay, so it was only a matter of time before the advent of smart appliances.

Photo by Paul Craig Photography - Browse kitchen photos

Smart refrigerators. Ever get to the grocery store and discover youve forgotten your list? Of course you have A few of my trailblazing clients have purchased smart refrigerators equipped with an interior camera that takes a photo of the contents when the door is closed. This photo can be accessed while shopping from the corresponding app. Some refrigerators can determine when stocks are running low, make a list and even reorder.

Smart ovens and ranges. Imagine being able to control your oven or range remotely. Car stuck in traffic? Begin preheating your oven from your phone.

Photo by Studio Dearborn - Browse kitchen photos

6. Column refrigerators. Unlike traditional refrigerators with their predetermined refrigerator-freezer spaces, column refrigerators are full-sized single units that are either all refrigerator or all freezer. Theyre quickly becoming a client favorite due to the ability to customize chilling spaces based on ones needs and preferences.

Column refrigerators are available in sizes ranging from 18 to 36 inches wide, and they can be installed separately or combined side by side for a cohesive look. They can be paneled to blend seamlessly with the cabinetry or left stainless, as seen here.

Photo by Lonetree Kitchens and Bathrooms - Discover kitchen design inspiration

7. Servo drive cabinetry. A servo drive electrical system can open any cabinet with either a slight touch or a remote control. Though often found in more modern kitchens designed without hardware, this feature neednt be reserved for the modern aesthetic. Even traditional kitchens can benefit from a servo drive trash bin. Nudge the cabinet door with your knee and the receptacle magically appears.

8. Lighted interiors. Interior lighting is no longer limited to glass-front cabinets displaying lovely dishes. Pantry and base cabinets are often 24 inches deep with dark crevices, limiting the visibility of their contents and what isnt readily visible often doesnt get used. Consider lighting the interiors of your deeper cabinets not as a luxury but as a necessity, like the light in your bedroom closet.

Photo by Richelieu - Discover kitchen design inspiration

9. Touch faucets. Often found in public bathrooms, touch faucets are gaining popularity in kitchens, and they are very useful. When hands are full, or perhaps contaminated with raw chicken, touch the faucets body with an elbow or the back of your hand to turn it on. Touch it again and off it goes. Touch faucets make water more easily accessible for multitasking cooks.

Photo by Broedell Plumbing Supply, Inc. - Discover kitchen design inspiration

10. Working sinks. Many clients are requesting sinks that double as work stations. These working sinks can be as small as 36 inches wide and as large as 80. Fitted with accessories like cutting boards, colanders, bowls and drying racks, theyre designed to improve function in the kitchen.

Photo by The Kitchen Studio of Glen Ellyn - Browse kitchen ideas

11. Black stainless. Every few years, appliance manufacturers debut a new appliance finish in hopes of starting the next big trend. Stainless steel is currently king. Anyone remember oil-rubbed bronze appliances from a few years back? Nope, neither do I.

The latest entry vying for market share is black stainless. Its impervious to fingerprints, and that is a big, big selling point. Its main drawback is that when scratched and it will get scratched the underlying color is stainless, as in silver.

Ive specified black stainless appliances twice in the past six months. Will black stainless have staying power? Only time will tell.

Also See:

  • Shop Glassware Sets for Your Next Party
  • Add a Couch for Lounging in the Kitchen
  • Whats Trending in Kitchen Cabinets Today

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In Real Estate Everything Is Negotiable

Question. I am a first time home buyer, and have been pre-approved for a mortgage in the amount of 250,000. I have seen plenty of condominiums in the 300-375.000 range in good move in condition. My problem: where should I start my offer? My realtor is telling me that these prices are too high, and I should start low. What do you advise?

Answer. Real estate agents will tell you there are three magic words in real estate: location, location and location. I would like to add three additional words: negotiate, negotiate, negotiate.

In order to have a legal, binding contract, three elements are required. First, there must be an "offer." Generally, the buyer makes a written offer, spelling out all of the terms and conditions under which the buyer is prepared to purchase the house.

When a seller receives that offer, he or she has three choices; the offer can be accepted, it can be rejected, or it can be counter-offered. If the seller makes a counter-offer, the buyer then has the same three choices.

Ultimately, the parties will either reach agreement or there will be no deal. Thus, the second legal requirement for a binding contract is that there be "acceptance."

The third legal requirement is "consideration." Usually, this is in the form of money -- and is referred to as the earnest money deposit. This deposit is held in escrow by the broker -- or the settlement attorney -- until settlement takes place. However, the courts have also taken the position that consideration need not only be money. If, for example, the seller stops marketing the property once a contract is signed, this can also be considered "consideration" -- i.e., something for value.

When you are considering making an offer, the first thing you should do is determine exactly how much you can afford to pay for a new home. You have been approved for a mortgage in the amount of 250 ,000. If you plan to get a mortgage and put down 20 percent, which means that the price cannot exceed around 300.000.

But lets analyze this a little further:

Purchase price: 300.000
Less Mortgage: 250,000
Down Payment: 50,000

At the very least, you will need 50,000 to make up the difference between the loan and the purchase price. However, discuss closing costs such as title insurance, title search, appraisal fees, and recordation and transfer taxes with your REALTORreg;. In some jurisdictions, the law gives a bonus to a first time home buyer in the form of reduced recordation fees, but you should obtain a comprehensive list of all such costs before you make your offer.

You should also include in your calculations any moneys which the lender will require you to escrow for future real estate taxes and home owner insurance. If, for example, you are buying your house in Maryland -- where the real estate taxes have to be paid by September of each year ndash;depending on in what month you go to closing, your lender may require that you escrow 8, 9 or even 10 months of real estate taxes on the day of settlement.

Finally, keep in mind that when you obtain a loan whose ratio is more than 80 percent of the purchase price of the house, you will have to pay the lender the cost of private mortgage insurance. And there are loans you can get where you only have to put down 5 or 10 percent -- assuming you qualify for those kinds of loans.

Thus, as you can see, you must be fully prepared before you make your first offer. You do not want to find -- at the last minute at the settlement table -- that you just do not have enough money to close.

Once you have your numbers -- and know exactly how much you can afford to pay for your new house -- we then move to the next step: negotiation.

Let us assume you can easily qualify for a condo worth 300,000, and that the seller is asking 325,000. Ask yourself if you really want this particular property. If you like the condo but are prepared to lose it if you cannot reach an acceptable price, make a low offer -- for example 290,000. The worst the seller will do is reject you out of hand.

On the other hand, if you really have fallen in love with the place, you may want to offer 295,000 -- which gives you some but not much room for negotiation, again assuming you plan to put down 20 percent.

You should also understand there are factors other than price which may be important to a seller. For example, when will settlement take place? Your seller may want to move in 30 days, and will be willing to reduce the price considerably if you can close within that short period of time.

The bottom line is that absolutely everything in real estate except of course my legal fee is negotiable, and you should not be afraid to make any bona fide offer -- regardless of how low it is, and regardless of what others may tell you. A low offer may insult the seller; on the other hand, it may get you a condo at an affordable price.

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How To Winterize Your Patio Or Porch

You spent the spring getting your patio or porch looking great and the summer and early fall enjoying it. With winter on the horizon, its time to get your space ready for cold temperatures. Whether the climate is comfortable in February or not, here are a few tips to make sure everything survives the cold season.

While you may prefer to winterize your patio or porch yourself, hiring a professional is always an option. You can find reputable winter-prep services to get the work done for you at a site like HomeAdvisor.

Clean It All

Start by washing all the furniture on your patio. Clean the fabrics with a mild soap and warm water, then allow them to air-dry. Use Murphys Oil Soap, water, and a bristled brush to clean the wood. If you find some stains harder to clean than others, use a mixture of 1-part bleach to 2-parts water to take them out.

Use a soft-bristled brush to loosen any rust on metal furniture and then touch up the spots with appliance paint. When the paint is dry, protect the pieces by applying car wax to the metal surfaces.

If your area is prone to a lot of precipitation during the winter, you may want to store furniture and dcor indoors to avoid uneven weathering on wooden porch surfaces. If you choose to leave the furniture outdoors, cover it when not in use to protect it from harsh weather.

Next, store planters, pots, and containers. If you leave them outdoors, moisture may collect in them, resulting in mold, mildew, or decay. Also, store wicker and stone items indoors. The temperature extremes can cause the stone to crack, allowing water inside, which can lead to larger breaks.

Finally, sweep any leaves off the patio. Keep the surfaces clear of leaves, debris, and snow throughout the winter to keep them at their best and pest and rodent free. Use the appropriate cleaning solutions for the materials on your porch to be sure it is pristine before the snow falls.

Repair, Repaint, and Reseal

Stone and brick patios need special pre-winter care. Begin by checking for damage, like chips, cracks, or broken pieces. Repair or replace damaged stones or bricks. Be sure to check carefully between stones and slabs, as well. Repair any weak spots, and then apply a long-season weed killer to prevent encroaching weeds in early spring.

When everything has been repaired and, if needed, repainted, apply a water-repellent sealer to stones, bricks, and wood surfaces to keep them safe from cold rain, sleet, or snow.

Close the Screened Porch

There a few ways to seal a porch. An inexpensive solution may be to do it yourself. Protect your screened patio by enclosing it with clear vinyl sheets as an affordable, temporary solution. First, measure the width and length of each screen. Next, add 2 inches to each side and cut the vinyl. This leaves enough room for attaching the protective sheets to the porch frame.

Cut eight 12-inch Velcro strips. Attach one half of each piece to the corners and sides of the porch siding. Put the other half of each on the corresponding spots on the vinyl. Put the pieces together to hold the vinyl in place and keep rain and snow from blowing through the screens.

If you want the extra space all year round, consider converting your porch to a sunroom.

Warm It Up to Use It All Winter

Finally, winterize the
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The New Tax Plan: When It Comes To Real Estate, Who Wins And Who Loses?

We have all heard a lot about the new tax plan, which was approved and sent to President Trump to be signed on Wednesday, Dec. 20. Depending on where your politics lie and your individual financial situation, you may have a positive or negative take on the tax bill. But how does it impact real estate? That also depends on a few things, like where you are buying a house, how much money you have, and what you intend to do with it.

"The new tax plan has been framed as a deathblow to theAmerican dream by some real estate professionals and groups, who warn of falling home prices, a new generation trapped in renting, and an exodus of residents from the highest-cost cities and states," said "But are these fears surroundingthe new, lower cap onmortgage interest deduction - andthe incentive for taxpayers not to use it - overblown? Or are there indeed big repercussions to come? That all depends on whom you ask - and where they live."

Were breaking down the winners and losers as it >Everyone: Winners-ish

The mortgage deduction has been among the most talked-up portion of the tax bill, especially in >According to the Pew Charitable Trusts, most taxpayers - as many as two-thirds - dont itemize their tax bills anyway, which means they arent claiming the deductions that are available to them.

"On a scale of1 to 10 on if interest deductibility is going to have a big impact on housing, its a 2,"Ken Johnson, a real estate economist at Florida Atlantic University in Boca Raton, told"Its not clear that it will hurt housing. But itisclear that its not going to help."

According to the New York Times, "Today, a little under half of American homes are worth enough to justify itemizing mortgage interest and property taxes. Under the tax legislation, that figure would fall to close to 14 percent.

The new limit on property tax deductions makes the "to itemize or not to itemize" conversation even more muddy.

"Can I still deduct my state and local taxes? Up to a point, and youll have to make a choice," said CBS News. "Filers will be able to write off the cost of state and local taxes, up to 10,000. And they must choose from among sales, income and property taxes for the deduction, instead of being able to deduct all local taxes."

This is most >Luxury buyers: Could see a hit

At one point, there was talk that the bill was going to eliminate the mortgage interest deduction, sending industry experts into a what-if tailspin. The 750,000 cap - it was previously 1 million - on the mortgage interest deduction means luxury buyers could see a pinch.

"Under the new tax plan, the deduction would be limited to 750,000 of indebtedness starting with the 2018 tax year," said The Motley Fool. "However, filers who have mortgages issued before the Dec. 15, 2017, cutoff would be grandfathered in, and will still be able to deduct interest on up to 1 million of mortgage->First-time buyers: Mostly unaffected depending on price point

Those who are just buying a new home or who recently have may not feel any pain if their home price is under 750,000 - the cap for the home mortgage interest deduction on the new tax bill.

"The vast majority of new homeowners wont be affected, as the median home price is nowhere near 750,0000," said "The median list price is 270,000 nationally. Additionally, "Existing homeowners will be grandfathered into theprevious deduction limit. So the new cut is expected toaffect only about 1.3 of new mortgages. These are likely to be awarded to the wealthiest homeowners, who can at least theoretically afford the cuts, and those living in the most expensive parts of the country."

Home equity loan lovers - Losers unless you use the equity for your home

The tax bill will require greater scrutiny from homeowners looking to use their home equity. Gone is the ability to use it however how want it and get a write off - currently, you can deduct the interest on as much as 100,000. Use your home equity line of credit HELOC to finance a car or a vacation under the new plan, and you will no longer be able to deduct the interest.

Real estate investors: Winners

Some of the real winners of the new tax plan are investors, who are already able to write off "all the expenses of owning and running a rental because the properties are considered a business," said CNBC. "The interest on those mortgages, along with repair and management costs, are deducted from the income the property produces. Investors are only taxed on that income, so by reducing it, the investment acts as a tax shelter." This is unchanged by the new bill.

"The tax plan could, however, drive increased demand for single-family rentals because it will reduce the tax benefits of homeownership. The proposal could eliminate the deduction for property taxes as well as lower the limit on the mortgage interest deduction. That would hit all homeowners who itemize and especially those owners of higher-cost properties in expensive locations. That, in turn, would benefit landlords."

There will also be a benefit to investors of real-estate investment trusts, who "will have a smaller tax bill on dividends with the new Republican tax plan," said the The Wall Street Journal. "The tax plan features a deduction for pass-through businesses - income derived from commercial activities that their owners or shareholders pay on their personal income taxes. That deduction includes the income that flows to REIT investors through dividends - mainly from rent or mortgage interest - but not the capital gains secured when properties are sold."
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Many California Brokers Required To Provide Sexual Harassment Training

Americans have variously been entertained and/or disgusted during the past months, as each new news cycle seems to bring a new report of "inappropriate behavior" aka sexual harassment by some well-known public person. The revelations have tended to follow categories of occupation. First it was media, then came government figures. Recently they have moved into the judicial field. Certainly, higher education cant be far behind.

While they would certainly not be as newsworthy, we have to think that real estate firms, as well, might be ripe for their own MeToo attention.

Hence it might be a good time to remind California brokers of their workplace responsibilities in this regard. For some years now, laws on the books have required many brokers to provide periodic sexual harassment training to their supervisory personnel. It is a safe bet that quite a few California brokers and owners do not realize that they are required to provide such training. That is because the law Government Code 12950.1 applies to employers having fifty or more employees. While quite a few real estate companies have more than fifty agents, not many think of themselves as having more than fifty employees. A company with fifty agents could likely have fewer than ten who are actually on payroll.

But the law applies to more than payroll employees. It says, :For purposes of this section only, employer means any person regularly employing 50 or more persons or regularly receiving the services of 50 or more persons providing services pursuant to a contract ..." [my emphasis] Those would be independent contractor agents.

What does the law require? There is nothing better than quoting it.

12950.1.a An employer having 50 or more employees shall provide at least two hours of >An anti-bullying component was added to the law in 2014, but that is, perhaps, a topic for another day.

While the law does not apply to firms with less than fifty people, that fact does not, of course exempt them, from other laws that prohibit sexual harassment or bullying.

So there you have it. Have a great office Christmas party this year. But keep your hands and your comments where they belong.
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Picture Perfect Reserves In Your HOA

A reserve study identifies a homeowner associations future repairs and replacements like a snapshot in time. Imagine that you could picture the buildings and grounds as they would be in five, ten, even thirty years. A reserve study acts just like that by estimating the useful life of the common elements and the cost to replace them in the future based on current cost adjusted by inflation.

A reserve study uses a component inventory analysis of the HOAs common elements having useful lives of between 2 and 30 years to project scheduling coupled with a funding plan. Those components consist of the obvious, like roofing, painting, paving, fencing and the not-so-obvious like treework, landscape renovation and inspections elevator, fire sprinklers and alarms, tripping hazards.

Even the smallest HOAs have at least 15 items that should be included. Large HOAs can have hundreds. For a list, go to the Reserve Planning section of

Common elements deteriorate over time and as do the underlying assumptions of the reserve study. Reserve studies can be affected by new labor-saving techniques, building designs and materials that reduce projected costs or extend useful lives. As these changes take place, so should your reserve study.

Annual review and update of the reserve study confirm that the schedule and costs are still accurate. And its not always bad news that affects the review. Age, condition and rate of deterioration can be positively impacted by preventive maintenance implemented by the association which increases useful lives.

Changes in area inflation and the actual interest earned from invested reserves need to be revised as well. The good news is the annual review is a snap compared to the initial reserve study which requires significant field work to compile data.

Now that youre focused on reserves, its time to load the film and start shooting. Snapshot by snapshot, the results will develop picture perfect.

For more innovative homeowner association management strategies, see

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Pre-Listing Home Inspection: Key Driver For Home Sellers

Pre-listing home inspections are an important component in the real estate transaction, but are often overlooked by home-sellers.

If done properly, the pre-listing home inspection allows sellers to gain a clear understanding of the status of their property. They can then fix any issues before putting the home on the market, or properly set the asking price.

Real estate professionals often suggest sellers do a pre-listing home inspection to aid in the efficiency of the transaction process and reduce surprises that may arise from the inspection. Below are some key benefits:

Uncover Any Issues

A pre-listing home inspection will provide sellers a clear understanding of any issues there are in the home. The inspector will provide the seller a list of issues they can both address and fix prior to placing the home on the market or lay out the issues to potential buyers up front. This will result in saving the seller both time and money.

Save Money

Pre-listing home inspections generally cost the same as a standard home-inspection. The inspection can provide immense value. Instead of having only a few days to fix problems after a buyers home inspection, the pre-listing inspection will alert the seller of issues before the home is put on the market. This provides the sellers plenty of time to compare costs of repairs and negotiate prices without having a time constraint.

By providing full disclosure upfront, along with any repairs that were made, buyers will have acknowledged the existing condition of the home. This reduces the risk of buyers from coming back to the seller and asking for more money off the sale price.

Boost Marketability

Transparency is a key driver in the home-selling process. Having a pre-listing home inspection aids in disclosure to the potential buyers and will earn the sellers a higher level of trust. Having the information readily available will make the home more attractive to buyers and benefit the sellers by getting their home sold quickly.

Remember, the goal of a home inspection is to provide a true reflection of any issues concerning the home and offer guidance in solving the issues. Leveraging the knowledge and experience of professionals like WIN Home Inspection ensures important issues arent missed, reports are received in a timely fashion and sellers are enabled to move the home efficiently through the real estate transaction.

AUTHOR: Jeff Williams, Licensed Washington State Home Inspector 343 and owner of WIN Home Inspection Northeast Seattle and WIN Home Inspection Greenlake. WIN Home Inspection, is one of the leading franchised home inspection companies in the United States with more than 150 operators in 32 states.
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House Fires: Less Than Two Minutes To Survive

Have movies and super heroes lulled us into a false sense of security when it comes to house fires?

On screen, the good guys survive fires with ease and have time for dramatic rescues among the flames. In reality, between 2500 and 3000 Americans die in house fires every year mdash; a tremendous drop from the roughly 8000 who used to die annually, but this lower statistical plateau still represents too many unnecessary deaths.

"We continue to have fire problems for a number of reasons; first of all, the way we build our homes and the things we put in our homes are different today," said Lorraine Carli, vice president of Outreach and Advocacy for the National Fire Protection Association

"Because we have been so successful in reducing the number of fires, people often do not think they are going to be impacted by a fire. The level of complacency in the community means they may not be as careful as they should be. [Unattended] cooking is the leading cause of fires. Heating, electrical, smoking... what people do in their homes causes fires."

Fire deaths are also the result of what people dont do. The majority of deaths occur during fires where there were no smoke alarms or no working smoke alarms.

Quiz Question: How many minutes will you have to safely escape your home once a smoke alarm starts screaming?


While action movies and their Teflon super heroes may mislead us, the devastating California wildfires bring the real fire message home: fire travels very quickly mdash; usually too quickly for anyone but highly-trained professional fire fighters to safely react to it.

"Modern [largely-synthetic] home furnishings, along with the fact that newer homes tend to be built with more open spaces and unprotected lightweight construction, all contribute to an increased rate at which home fires burn," said Carli. "These factors make home escape planning and practice critical."

Evacuation mdash; in the form of a tried and tested Fire Escape Plan for Evacuation of My Home mdash; is the smartest reaction to fire for non-professionals like us. Have you and each family member practiced, in daylight and darkness, two ways to exit mdash; within two minutes mdash; each room on each floor in your home?

Less than half of Americans 48 percent know that an effective home fire escape plan includes working smoke alarms, two ways out of each room, and an outside meeting place a safe distance from the house.

Whats the big deal? Youve walked out the front and back doors countless times.

"Youd think that, but its a very different scenario when [your home] is dark, its filled with smoke, one of your main exits may be filled with smoke or fire, there are things blocking your escape route... it becomes a very dangerous scenario if there is an actual fire." said Carli. "Practice, so that if the smoke alarm sounds, everyone knows exactly what to do and how to use that [2 minutes] wisely."

Well-placed and fully-functional smoke alarms provide precious life-saving minutes when smoke reaches an alarm. Scrimping on the number of alarms, skipping monthly alarm tests, or failing to replace batteries

is dangerous and irresponsible.

Open concept living spaces allow fires to spread more quickly. Alarm placement is crucial to keep exits open. Think about where people sleep and how theyll exit your home to accurately calculate numbers and locations of alarms. Fully-functional fire alarms should be installed in every bedroom and outside each sleeping room as well as on every level including the basement. Read manufacturers instructions for placement details. Interconnecting the alarms increases effectiveness.

Local fire fighters may also be a resource.

Last Christmas Eve, a family of four died in a home fire. Their newly-renovated vacation home was known to have fully-functioning smoke alarms, but this was not enough to save the two children or the parents. The cause of the fire remains unknown although it started in the livingroom.

The two-storey cathedral ceiling in the livingroom did not cause the fire, but it is believed to be the culprit in accumulating life-threatening toxic smoke. As is all too common with vaulted ceilings, the peaks are too high to easily position and maintain smoke alarms. In this case, smoke from the livingroom fire accumulated in the cathedral ceiling before triggering smoke alarms in time to warn to the family.

"Fire does not discriminate from one individual to the next," said Operations Manager Scott Evenden, who led the investigation of the above-mentioned fire inspection for The Office of the Fire

Marshall and Emergency Management.

"Smoke will rise to the [cathedral] ceiling mdash; its like an upside down pool. Smoke will fill that void from the ceiling down... there were multiple smoke alarms in that home. Tragically though, they were placed in positions that did not incorporate a smoke alarm into the highest point in the cathedral ceiling.Therefore, it is our opinion that may have may have had an effect on the ability for the smoke to be detected in the home and the inability of the occupants to escape safely from the home. Well never know 100hellip;"

What do you know about home fire sprinklers that you are positive is true?

Hollywood has mislead us again. Weve seen movie heroes hold a flame to a sprinkler head to set off all the sprinklers on the floor or in the building. Big myth. Only the high temperature that results from a fire will activate a sprinkler, so fire near one will not set off all the sprinklers. Often one sprinkler head is enough to limit a fire or even put it out before the fire department arrives.

"The unfortunate reality is a number of jurisdictions have removed the provision for home fire sprinklers in their adoption process for their building code," said Carli.

"The model code is the minimum level of safety and a jurisdiction that decides to take that [sprinkler] requirement out is in fact allowing substandard homes to be built in that community."

NFPAs Fire Sprinkler Initiative is an excellent resource if youre building a new home or considering a significant renovation. Is your state a member of one of the 30 state coalitions intent on spreading knowledge and fire safety awareness regarding home fire sprinklers?

The majority of fire deaths happen at home. Because home is also where you feel safest, are you overlooking fire safety issues that may be staring you in the face?

Resource: PJs "Whats Your Point?"

Have a safe, happy Holiday Season.

All the Joy of the Season to you and your family

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The Gas Station And 6 Other Places To Make A Quick Stop For A Great Holiday Gift

Time is dwindling down, and now youve left yourself without a sufficient opening to shop for the holidays. Whats a procrastinator to do? Dont fret. Weve got tips for gifting from places you would never expect and may even need to go, anyway, so you can get yourself out of a bind and make a great impression

The supermarket

You have several good options here. The key is having some semblance of what you want before you walk in the door so you dont spend all your time aimlessly walking around.

1. The Cosmetics aisle - Didnt know the market had a cosmetics aisle? They sure do, and its filled with great gift ideas. There may be some pre - boxed makeup sets. Thats a good start, but itll make an even bigger impact if you thoughtfully package it with makeup wipes, Q - tips, and Kleenex. Now, put it all in the basket from the housewares or home deacute;cor aisle. You can pull off the same idea for men by choosing a shaving kit or razors, aftershave, face and/or hand lotion, etc.

2. Go to the kitchen aisle, where you should be able to find some pots and pans, dishes, and various kitchen items. Grab a large decorative bowl or a big pot. Line with a kitchen towel, and fill with small kitchen items like wooden spoons andnbsp;serving pieces.

3. Use the same idea with the pot or bowl but fill it with gourmet food. Grab good bottles of oil and vinegar, gourmet olives, pickles, exotic spices, and then head for the deli counter for gourmet cheese, lunch meat, and a good loaf of crusty bread. This will be especially appreciated by the person hosting a get - together because it makes an instant appetizer.

The drug store

This is a treasure trove of gifts. Lots of cosmetics here too, and some packaged holiday items you can grab and go. You know what else they have? Greeting cards. Pick a good one and you earn bonus points. Typically, they also have a Redbox outside. Go old school by picking out a couple of videos, and then go inside and get some microwave popcorn, favorite candy, and a bottle of wine, six - pack of beer, or soda.

The Dollar Store

There are some great finds at the Dollar Store and then there are some items that make it pretty obvious where they were purchased. Bypass all of it and head for the balloon counter. Mylar balloons here are one of the best deals youll find anywhere. And, at 1 apiece, you can buy a huge bouquet and make your giftees day.


Theres likely to be a Starbucks within a short distance from home. You could go pick up a gift card, which will always be appreciated. But, take the extra step and get a mug and a pound of brew, too, and youll score extra points.

The gas station

Pick a station that has a walk - in store and youll find all kinds of gift options. Overwhelmed or underwhelmed by the choices? Lottery tickets are a winning gift every time - as long as the person you are buying them for is of age

The car wash

We all need to wash our car from time to time, right? A pre - paid pack of washes, or, even better, a car detailing, might be perfect for your giftee.

The liquor store

Yes, you can grab a bottle of wine just about anywhere. The advantage to hitting a liquor store or wine store is being able to get recommendations, find a nice gift bag and maybe even a set of glasses.

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