Sell Your Home Now With These Tips

In a buyers’ market, selling your home can be a frustrating lesson, especially if you make costly mistakes that can slow your sales opportunities.

According to an article by Zillow, about 36 percent of homes nationwide sold for a loss in January. As spring rolls in and buyers head out to shop for their perfect home, they’re doing so with a critical eye because of the many choices due to excessive inventory.

If you avoid common seller mistakes, you can save yourself time and money. Let’s take a look at a few of these problem areas.

Sole-focused, comp-based pricing. Yes, recent sales count. Studying and understanding the comps in your area will give you an idea about how much buyers were willing to pay for homes in your neighborhood in the recent months, but relying strictly on the comps is a mistake.

Take a close look at the homes that are currently listed for sale. How does your home stack up? What are the benefits of buying your home compared to the others on the market? What makes your home stand out? Are you conveying this information to buyers?

When you do review the comps, see if you can notice any particular benefit listed for the sold homes that may have attracted buyers and ultimately caused the sale to close at a higher price. The typical advantages include: good schools, neighborhood parks, walking distance to retail stores, close access to freeways, quiet neighborhood, bright rooms, open floor plans, and new appliances. Now, take a look at your home from that buyer’s perspective and search for a few more unique features worth noting.

List your improvements and upgrades. If you’ve put in a tankless water heater for instance, be sure to mention it. While only so much can appear on the Multiple Listing Service, if you have plenty of additions to your home make a bullet-style list, print it out, make copies, and leave it for open house guests. This additional sheet will help buyers remember specific details about your property and it will help your home stand out from the dozens of others that they might be viewing.

Listing home for sale based on what you paid. Do you sell a car based on what you paid for it originally? Not typically. Yes, I understand cars depreciate but when it comes to real estate, many people, until recent years, had been trained to think that homes only appreciate. Well, houses most certainly can build equity, but there’s been a sharp lesson about how they can lose value too. Getting what you paid or more for or a home depends on many factors, including when you purchased it, current market conditions, economic factors, length of ownership, improvements, and how much time you have to sell.

Listing your home based on how much is still owed can cause a seller to list the home for too high of a price. This can quickly result in a painful cycle of price reductions signaling to buyers that there’s plenty of room to negotiate on price. In the last month, 23 percent of homes listed on Zillow had price reductions.

Not making curb appeal into web appeal is another mistake. Curb appeal is the art of making your home appeal to buyers from the moment they first see your home. Some sellers think of this in terms of making their home appealing when buyers come to an open house or drive by it. But these days, curb appeal must transfer to web appeal, too.

That means that any and all pictures of your home should create web appeal -- an instant attraction -- drawing the buyer into your home for an in-person look. If your photos or videos are not properly composed with pleasant lighting and free of clutter and distractions, they won’t appeal to buyers browsing the web. With so many of the searches for homes originating online, it’s worth it to invest in the best photos you can of your home. After all, a picture is worth a thousand words ... and a video of your home can be worth even more if it convinces the buyer to get in the car and make the drive to see the “real” thing!


Written by Phoebe Chongchua
April 15, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Homeownership and Taxes

Homeownership comes with a wonderful host of benefits. But did you know that it can also save you money on your taxes?

According to the National Association of Realtors, numerous deductions and credits are available for homeowners. These include capital gains and mortgage interest deductions, as well as credits for energy-efficienct upgrades.

To get the latest information on energy credits for this year's tax return, visitEnergyStar.gov. You may be able to deduct portions of improvements on everything from windows and doors to water heaters.

Why do homeowners get such special treatment? For starters, the NAR reports that "home owners pay 80-90 percent of all U.S. federal income taxes."

And the credits and deductions don't just benefit wealthy homeowners.

Ninety-one percent of home owners who claim the mortgage interest deduction earn less than $200,000 a year, and the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home in 2010 with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file this year. (NAR)

NAR President Ron Phipps says that homeownership has many positive impacts. "Recent proposals to reduce or eliminate the mortgage interest deduction and remove government support of the housing finance market could have disastrous consequences for the economy, not to mention making it harder or nearly impossible for millions of families to own their own homes. We believe America must continue to invest in home ownership, for the future of our families and our nation.”

Need some tips for this tax season? Take a trip over to houselogic.com, a free source of information from NAR, for the latest tips.


Written by Carla Hill
March 16, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Choosing Your Dream Home

There's a lot to think about when it comes to buying your dream home. Every decision, small to large, is important! Let's look at a list of common issues that buyers face.

1. Neighborhood: Deciding on what neighborhood you desire is tricky. You must consider your wants and needs. They vary by person. Do you have children and need to live within the boundaries of a specific school district? You might want a short commute, a neighborhood with historic homes, or homes that are near night life and restaurants.

2. Square footage: What size of home fits your needs? The average home in the United States is 2,195 square feet. Thirty years ago the average size was just 1,645. The trend has been for larger and larger homes, with special purpose spaces, such as exercise rooms, offices, studies, and media rooms. This trend is now receding.

3. Floorplan: Architectural styles offer a wide range of choices! Open floor plans might appeal to you, with their great flow for entertaining. Or you may have a more traditional aesthetic, preferring cozy rooms. Think about how you live your life and what style best fits your needs.

4. Finishes: There are different grades of homes. Take your kitchen, for example. You can find a wide range of beautiful laminate counters, just as you can find a wide range of beautiful granite ones. These choices dramatically affect price. Think carefully about what you want in your dream home. Do you want stone floors or will ceramic suffice? Are you looking for green building materials, such as zero-voc paint, bamboo floors, and recycled counters?

5. Amenities: Our homes extend past the borders of our property. We live in the parks, shopping, and restaurants that surround us. Be sure to think outside the "box" of your house when you buy.

6. Landscaping: A large yard can mean lots of entertaining potential, but it can also mean a lot of work. Be sure to consider your needs now and down the road when it comes to yard maintenance. Many buyers prefer a townhouse or condo as their "dream home". These options afford buyers with much less responsibility when it comes to upkeep!

Be sure to discuss all of these topics with your real estate agent. They can help you decide on a happy compromise among the long list of choices. They'll also help you know what items on your wish list you can get in your price range. Good luck on your dream home search!


Written by Carla Hill
April 14, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Unemployed Loan Program Now Available

It's here. Unemployed homeowners can now receive loans that will help them avoid foreclosure, thanks to a new program by the Obama administration.

After delays and efforts to terminate the program, the $1 billion Emergency Homeowners' Loan Program–established when the Dodd-Frank financial overhaul bill was enacted in the summer of 2010–is now ready to help unemployed homeowners to continue to make their mortgage payments.

The program will allow qualified unemployed homeowners to receive zero-interest loans of up to $50,000 and for up to two years. The loan can be forgiven if the homeowner stay in the house five years. Requirements include being at least three months behind on your payments but also having a reasonable ability to resume payments within the two-year period. Additionally, homeowners have to have had a 15% decrease in income. However, they must have been able to pay for their mortgage prior to the income drop. They can't own a second home and the property has to be their primary residence.

Included in this latest emergency relief effort are: Pennsylvania ($106 million), Maryland ($40 million), Connecticut ($33 million), Idaho ($13 million), and Delaware ($6 million).

Coming soon, nonprofit NeighborWorks America, is providing federal funding for loans in 27 other states that don't have a similar program. The Department of Housing and Urban Development expects some 30,000 homeowners to participate.

Other states such as California, Nevada, Michigan, and a few more are expecting to receive some aid through the Treasury Department, which has allotted $7.6 billion in assistance for hard-hit states.

Meanwhile, housing-market analysts are saying that for long-term real estate recovery to occur, live-in homebuyers are necessary. Experts acknowledge that markets such as Phoenix, Arizona were propped up by very low interest rates, investor demand, and some of the most affordable home prices ever seen.

But experts say that buyers who are purchasing to live in the home will help stimulate the housing recovery process. In some markets, like Phoenix, it's been a 50-50 split between live-ins and investors.

Some of the factors holding back traditional buyers from dominating the market are, of course, stricter requirements for lending, unemployment, or lack of sufficient work, and uncertain financial times.

Live-in homebuyers tend to come from one of two groups: first-time or move-up buyers. With the recent marketplace and economic conditions being so unstable, and a decline in home value, the move-up buyers have not been very active. But some real estate experts are seeing an emergence of a new buyer group: lower-income residents. This group can now afford to buy because the home prices, in some areas, have declined significantly. However, in many areas, home investors are vying for those same properties, creating competition.

In a perhaps surprising move, some home auctions, where investors can typically scoop up a great deal, are now excluding investors. A California-based firm is helping to get rid of all foreclosed Arizona homes for which the previous owners had U.S. Federal Housing Administration-backed loans. The U.S. Department of Housing and Urban Development's policy gives traditional buyers at least 30 days to bid on new listings first. Then the properties may be opened up to investors. Homes in the Phoenix area are being sold online at HudHomeStore.com.


Written by Phoebe Chongchua
April 8, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Choosing Your Dream Home

There's a lot to think about when it comes to buying your dream home. Every decision, small to large, is important! Let's look at a list of common issues that buyers face.

1. Neighborhood: Deciding on what neighborhood you desire is tricky. You must consider your wants and needs. They vary by person. Do you have children and need to live within the boundaries of a specific school district? You might want a short commute, a neighborhood with historic homes, or homes that are near night life and restaurants.

2. Square footage: What size of home fits your needs? The average home in the United States is 2,195 square feet. Thirty years ago the average size was just 1,645. The trend has been for larger and larger homes, with special purpose spaces, such as exercise rooms, offices, studies, and media rooms. This trend is now receding.

3. Floorplan: Architectural styles offer a wide range of choices! Open floor plans might appeal to you, with their great flow for entertaining. Or you may have a more traditional aesthetic, preferring cozy rooms. Think about how you live your life and what style best fits your needs.

4. Finishes: There are different grades of homes. Take your kitchen, for example. You can find a wide range of beautiful laminate counters, just as you can find a wide range of beautiful granite ones. These choices dramatically affect price. Think carefully about what you want in your dream home. Do you want stone floors or will ceramic suffice? Are you looking for green building materials, such as zero-voc paint, bamboo floors, and recycled counters?

5. Amenities: Our homes extend past the borders of our property. We live in the parks, shopping, and restaurants that surround us. Be sure to think outside the "box" of your house when you buy.

6. Landscaping: A large yard can mean lots of entertaining potential, but it can also mean a lot of work. Be sure to consider your needs now and down the road when it comes to yard maintenance. Many buyers prefer a townhouse or condo as their "dream home". These options afford buyers with much less responsibility when it comes to upkeep!

Be sure to discuss all of these topics with your real estate agent. They can help you decide on a happy compromise among the long list of choices. They'll also help you know what items on your wish list you can get in your price range. Good luck on your dream home search!


Written by Carla Hill
April 14, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Competitive Tips for Buyers

It can be a tricky question. How much home can you really afford? From employment status, to savings, downpayment, and even spending habits, there are a myriad of factors that come into play.

Here is a list of items to consider before settling on a budget.

1. Monthly Payment: Conventional wisdom tells us that your mortgage payment should be no more than 28 of your gross monthly income. This means that if you make $50,000 a year, the maximum amount you would safely want to pay each month is $1,166. How do you figure this for you own salary? Take ___ (salary) x .28 = total dollar amount for year. Then divide the total dollar amount by 12 (months in the year) and there you have it!

The National Association of Realtors also gives this simple equation for renters to use to figure out how much they can afford. Multiply your rent by 1.32 and that will equal your affordable mortgage payment.

2. Job Security: Have you just switched jobs? Is your company experiencing layoffs? In times of economic uncertainty, you may find it best to stay put. This is why many economic analysts keep saying that a housing recovery is dependent on a jobs recovery. When jobs return, so will the buyers.

3. Savings: The state of American savings is scary. According to Visual Economics.com, the average family has $117,951 worth of debt and only $3,800 in savings.

And a quarter of Americans have no savings at all! Half have nothing saved for retirement. Talk about crossing your fingers that social security will hold out for a while.

New grads are encountering an even scarier situation. The average college graduate has well over $20,000 in student loans to repay, and according to the New York Times, "Paying back student loans is likely to be especially difficult for recent graduates ... because the unemployment rate for college graduates ages 20 to 24 was 8.7 percent in 2009 — the highest annual rate on record and a substantial rise from 5.8 percent in 2008."

How does your debt-to-income ratio stack up? The Federal Reserve thinks debt adding up to more than 40% of your gross income could indicate financial distress.

The U.S. savings rate has risen steadily since the recession hit. It is now at 5.8 percent (American Express Spending & Saving Tracker). Hopefully, this rate will continue to be a trend.

4. Emergency Fund: Before you even begin to think about buying a house or moving, you must have an 8-month emergency fund in the bank. This means you need to add up your living expenses for a month. Include all the necessities and things that must be paid (rent or mortgage, car payments, insurance, food, gas money, electric, phone, tuition, day care, etc). Then multiply this number by 8. You must have this in case you or your spouse loses your job, gets sicks, or some other disaster hits your family.

5. Downpayment: This is savings in addition to your 8-month emergency fund. And a downpayment should be at least 20 percent of your purchase amount.

Look at it this way. If your monthly expenses are $2,000 a month and you want to buy a $100,000 house, you'll need a bare minimum of $36,000 in the bank to truly afford this move. That doesn't include cash needed for closing costs, repairs, moving expenses, and renovation.

6. Lifestyle and Extraneous Factors: Everyone has different wants and needs. You may be fine spending a little more for the house of your dreams in exchange for taking fewer vacations. Others abhor the statement, "house rich, cash poor," and instead would rather have funds for shopping, dining out, and travel. And don't forget about extraneous factors, such as aging parents, car repairs and maintenance. Things may come out of nowhere!

Buying a house is a fulfilling experience, but it comes with a lot of financial responsibility that shouldn't be taken lightly. Be sure to mull these items over when considering a buy.


Written by Carla Hill
April 7, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Power Saving For A Down Payment

Now more than ever, saving for a down payment is a crucial step to owning a home.

Right now on Capital Hill legislators, lobbyists, real estate industry experts and others are wrangling over Mortgage Reform and Anti-Predatory Lending Actprovisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Among the most discussed provisions is one that would create a Qualified Residential Mortgage (QRM), one that will be viewed as a loan offering a lower risk of default.

Because of the low risk, borrowers who qualify for a QRM will pay less than for a mortgage that is not designated as a QRM, but it won't be easy to land the loan.

According to the proposed definition borrowers would have to:

• Put at least 20 percent down to buy a home.

• Have at least 25 percent in equity to refinance.

• Have at least 30 percent equity to do a cash-out refinance.

• Have house payments that don't exceed 28 percent of before-tax income, and total monthly debt payments (house, credit cards, auto, student loans) couldn't exceed 36 percent of before-tax income.

• Not have been 60 days delinquent on any debt payments in the last two years.

For many borrowers, the 20 percent down payment alone could be insurmountable -- without solid saving habits.

First you'll have to change your thinking. A down payment is much more than a quickly gathered percentage of the purchase price. It should be money you extract from existing savings, investments, assets or other savings gathered over time.

Even after you put money down, the lender will want to see that you have enough cash on hand to pay for homeowners insurance, property taxes, homeowner association dues and other costs of owning a home.

Here are some solid strategies to get you started.

• Create a budget. A budget doesn't just reveal where your money goes. It lets you see where you can cut back and divert money into savings.

• Organize. That's right. Sell all that stuff you never use. Sell all that stuff that won't be a good fit for your new home. Clear the clutter. An organized home, with everything in its place, is a time-saving home and time is money.

• Follow a routine. If your money is spent before you get it, you will be less likely to save. Have money deducted from your income and deposited in a savings account with the highest possible interest rate. Don't show favorites because your checking is with one bank. Shop around for Federal Deposit Insurance Corporation (FDIC) insured savings, certificates of deposit (CDs), money market funds, and other savings or investment vehicles.

• Hoard windfalls. Stop spending tax refunds, holiday cash gifts, small lottery winnings and other forms of unexpected money. Save them.

• Withhold less. If you do get a tax refund, it may be time to adjust the money withheld from your paycheck. A tax refund is a free loan to the government. It costs you lost interest it could have earned in a savings account. Adjust your W-4 accurately to reflect your true tax liability. Use the Internal Revenue Service'swithholding calculator to get it right.

• Cut back. Some debts are fixed. Others, including groceries, clothing, gifts, gasoline and utilities, are not. Brew your own coffee. Stop eating out. Drive to save gas. Buy generic brands. Get a better cell phone and cable TV plan. The list is endless.

• Dump credit. Likewise, don't live beyond your means. Save credit for emergencies only. Pay off debt. Reducing credit debt gives you money to save and it can boost your credit score.

• Liquidate assets. Saving for a home may be just the reason you've been looking for to unload model train, Beanie Baby, comic book, stamp or coin collections. What's collecting dust in your safety deposit box?

• Get a second job. A few extra hours a day, can earn you a few hundred dollars a month. Consider overtime at your present gig, flipping burgers, working retail during the holidays, working at home or otherwise finding an additional source of income solely for the purpose of saving for that down payment.


Written by Broderick Perkins
April 7, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

The Numbers on Buying a House

It can be a tricky question. How much home can you really afford? From employment status, to savings, downpayment, and even spending habits, there are a myriad of factors that come into play.

Here is a list of items to consider before settling on a budget.

1. Monthly Payment: Conventional wisdom tells us that your mortgage payment should be no more than 28 of your gross monthly income. This means that if you make $50,000 a year, the maximum amount you would safely want to pay each month is $1,166. How do you figure this for you own salary? Take ___ (salary) x .28 = total dollar amount for year. Then divide the total dollar amount by 12 (months in the year) and there you have it!

The National Association of Realtors also gives this simple equation for renters to use to figure out how much they can afford. Multiply your rent by 1.32 and that will equal your affordable mortgage payment.

2. Job Security: Have you just switched jobs? Is your company experiencing layoffs? In times of economic uncertainty, you may find it best to stay put. This is why many economic analysts keep saying that a housing recovery is dependent on a jobs recovery. When jobs return, so will the buyers.

3. Savings: The state of American savings is scary. According to Visual Economics.com, the average family has $117,951 worth of debt and only $3,800 in savings.

And a quarter of Americans have no savings at all! Half have nothing saved for retirement. Talk about crossing your fingers that social security will hold out for a while.

New grads are encountering an even scarier situation. The average college graduate has well over $20,000 in student loans to repay, and according to the New York Times, "Paying back student loans is likely to be especially difficult for recent graduates ... because the unemployment rate for college graduates ages 20 to 24 was 8.7 percent in 2009 — the highest annual rate on record and a substantial rise from 5.8 percent in 2008."

How does your debt-to-income ratio stack up? The Federal Reserve thinks debt adding up to more than 40% of your gross income could indicate financial distress.

The U.S. savings rate has risen steadily since the recession hit. It is now at 5.8 percent (American Express Spending & Saving Tracker). Hopefully, this rate will continue to be a trend.

4. Emergency Fund: Before you even begin to think about buying a house or moving, you must have an 8-month emergency fund in the bank. This means you need to add up your living expenses for a month. Include all the necessities and things that must be paid (rent or mortgage, car payments, insurance, food, gas money, electric, phone, tuition, day care, etc). Then multiply this number by 8. You must have this in case you or your spouse loses your job, gets sicks, or some other disaster hits your family.

5. Downpayment: This is savings in addition to your 8-month emergency fund. And a downpayment should be at least 20 percent of your purchase amount.

Look at it this way. If your monthly expenses are $2,000 a month and you want to buy a $100,000 house, you'll need a bare minimum of $36,000 in the bank to truly afford this move. That doesn't include cash needed for closing costs, repairs, moving expenses, and renovation.

6. Lifestyle and Extraneous Factors: Everyone has different wants and needs. You may be fine spending a little more for the house of your dreams in exchange for taking fewer vacations. Others abhor the statement, "house rich, cash poor," and instead would rather have funds for shopping, dining out, and travel. And don't forget about extraneous factors, such as aging parents, car repairs and maintenance. Things may come out of nowhere!

Buying a house is a fulfilling experience, but it comes with a lot of financial responsibility that shouldn't be taken lightly. Be sure to mull these items over when considering a buy.


Written by Carla Hill
April 7, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Spring Market Conditions Bode Well For Discounted Home Prices

Optimism about the housing market isn't quite sweeping the nation, but Americans remain sold on the value of home ownership at a good time to be bullish about buying a home.

With home sales and prices still falling, the spring could shape up as an opportune time to make a deal.

The housing downturn hasn't shaken consumers' resolve to consider home ownership an integral part of an American Dream, even among home owners with homes that have lost value.

The eighth quarterly "Allstate-National Journal Heartland Monitor Poll: The American Dream" revealed that nearly nine out of 10 homeowners say they would buy their same homes again.

Among those with homes with lost value, the same percentage said they would buy their home again.

Also, seven of 10 Americans say they would advise a friend or family member to buy a home as a long-term asset.

The spring could be a good time to take that advice.

Existing-home sales, completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from 5.40 million in January. February 2010 sales were 2.8 percent below the pace in February 2010, according to the National Association of Realtors (NAR).

The slow sales pushed the median price down to $156,100, the lowest level since February 2002, setting the stage for spring bargains.

Some experts say the housing market is years away from a full blown recovery and the home buyer tax credit is kaput. However, improvements in employment and manufacturing and other economic sectors, bargain home prices and affordable interest rates could light a fire under buyers who've been sitting on the fence.

"Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers," said Lawrence Yun NAR chief economist.

The Allstate survey of 1,000 Americans also found.

• Buying a home was the best investment among 24 percent, behind "investing in retirement savings" (38 percent), but ahead of "saving money in the bank" (20 percent), and "investing in the stock market" (6 percent).

• A majority, 58 percent of those who believe the housing crisis will remain a serious problem would still recommend buying a home.

• Americans are evenly split on whether the federal government should continue policies to encourage home ownership at the same level (46 percent) or scale them back because they cost too much (46 percent).

• More than half of Americans (52 percent) blame the housing crisis on banks and lending institutions for misleading borrowers and approving bad loans, while 32 percent blame people who bought homes and took out mortgages they couldn't afford, and only 12 percent blame government policies that encouraged too many people to try to own their own homes.

"Owning a home continues to be the bedrock of the American Dream – even as incomes are down, jobs are scarce and families struggle to make ends meet," said Thomas J. Wilson , Allstate chairman, president and chief executive officer.

"Homeownership is viewed positively by the vast majority of Americans as both a place to raise a family and a sound investment," he added.


Written by Broderick Perkins
March 31, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Why Owning a Home Rocks

Homeownership has been part of the American Dream for centuries, and it's no wonder why. It rocks.

First, owning a home is an investment. No, it's not a sure-fire way to get rich-quick. It is a long-term investment. Over the course of many years, even through times of economic upheaval, you can build wealth over time.

An average appreciation rate during normal times is around 6.5 percent a year. That means if you buy a home for $100,000, in just ten years you will have a home that could feasibly sell for around $174,000.

During that time you build equity, as well. Equity is the value of your property minus what you owe. So even if you still owe $60,000 on your home after 10 years, you will now have $114,000 in equity. Many homeowners use this equity to take out loans to use for home improvement projects, such as adding on new additions.

Owning a home also comes with less tangible benefits. Studies have shown that it creates a sense of community, motivating community involvement. And family stability is manifested through higher graduation rates and lower crime rates.

When you own a home, you take control of the creation of your surroundings. You can paint, make updates, and style the home to your liking -- all things not possible with most rentals.

You have even further stability when you have a fixed-rate mortgage. A fixed-rate means your rate will never increase. This means you will know the cost of your mortgage for the life of the loan. There won't be any surprises, which is what caught many homeowners off guard during the sub-prime mess. And there aren't any worries about the cost of rent going up each year. You can budget for life!

Don't forget about those great tax breaks, such as deducting your mortgage interest, and tax credits, such as money back for making energy efficient upgrades!

And of course, just think of all the fun times you can have with your family and friends. Memories will be made that will last a lifetime!


Written by Carla Hill
March 29, 2011

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

HOA Know How

When you purchase a into a homeowner association (HOA), you automatically become a member and obligate yourself to financially support the operation and obey the rules. That said, few buyers take the time to examine the information to make an informed decision. Here are some of the basic "Know Hows".

HOA Fees. As a member of the HOA, you will pay fees to support management and maintenance. High rise condominiums and HOAs with clubhouses, pools and parks typically have higher fees than those with few common elements.

If the HOA does not have and fund a reserve study (30 year plan for major repairs and replacements) for common elements like roofing, painting, asphalt, decks and fences, a special assessment will be charged to each owner that can run into many thousands of dollars. Since boards of HOAs that don’t follow a reserve study tend to react rather than plan, these special assessment can happen with little notice and the financial obligation will fall on all owners, including new ones. hoa know how: Review and understand the current budget and reserve study. If you are considering buying into a HOA that does not have a reserve study, move on. It’s an accident waiting to happen.

Delinquencies. HOAs can be great when the finances are handled well. Sharing the cost of costly amenities makes them more affordable for all. However, when one or more owners do not pay their share, either the rest must make up the slack or services cut. There is no government bail-out for HOAs. All must pay or all must suffer the consequences. hoa know how: Ask for the current amount of delinquencies and number of owners that are delinquent. If the is over 5% of the annual budget, walk away.

HOA Rules. In addition to maintaining common elements, HOAs also have certain rules and regulations that must be followed. Those rules may include architectural and design restrictions which control the look of your unit or house or lifestyle rules that control pets, parking and other things. Failure to comply may result in fines or restriction from common element use (like the pool). hoa know how: Request copies of all rules and regulations before you buy to make sure there is nothing there you can’t live with.

Get the Big Picture. While the home or unit you are considering may be newly remodeled and picture perfect, as an HOA owner, you have an undivided financial interest in all common elements. hoa know how: Look at all the buildings and common elements, not just the unit you are interested in buying. Do you see deferred maintenance like peeling paint, dilapidated roofing and fences and broken up paving? If so, you are either buying into a soon-to-happen-special assessment or a board with its head in the sand which will fail to maintain your biggest investment. Either way, this is not good news for your property value. This is particularly important in common wall HOAs.

How the Board Does Business. Inquire how often the board meets (should be at least quarterly). Get copies of board meeting minutes for the past year and read them to determine the kinds of issues the board is dealing with. When you read the minutes, do you see evidence of board action to protect and maintain the common elements? If you see a board pattern of “does little” in the minutes, like Nero, the board is fiddling while the HOA burns. hoa know how: Walk away.

Professional Management? If the HOA is self managed, this is a BIG RED FLAG. This means the fate and maintenance of your largest investment is in the hands of untrained part time volunteers. hoa know how: If you are the kind of person that loves a challenge and willing to dedicate many hours of volunteer time to steer board business, this may be the place for you. If you are not, walk away.

Rental Restrictions. As lenders become more aggressive in setting rental limits to HOA loans, rental restrictions are becoming more common. They come in two flavors:

Limited Restrictions. Only a certain percentage or number of the homes or units can be rented. The board/manager must administrate this moving target.

Total Restriction. All owners are restricted from renting. While the most fair approach, a slow real estate market can force certain owners into a difficult position if they can’t sell or rent. hoa know how: If your objective is to buy and rent the home and there are rental restrictions, move on.

HOA Insurance Coverage. Investigate the specifics, particularly if you're in an area prone to flood, earthquake, tornado or hurricanes.

Consider the HOA Lifestyle. Do you hate being told what you can do with your property? hoa know how: If the HOA has extensive architectural and design control, walk away.

A homeowner association can be your best friend when it prevents your neighbor from painting her house neon pink, but your worst enemy when they fail to properly maintain the common property or impose overly restrictive rules. Make sure you know exactly what you are getting into before you sign the dotted line.

For more innovative homeowner association management strategies, seeRegenesis.net.


Written by Richard Thompson
March 30, 2011

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