At the beginning of the housing crisis, sellers turned to gimmicky tricks like YouTube love letters about their homes and burying St. Christopher’s figurines upside down in the front yard to try to move their homes off the market. These days, though, many sellers are getting smarter and more strategic, turning the transaction on its head to get buyers off the fence with a phenomenon called the reverse offer.

Usually, the buyer makes an offer for a certain price and on certain terms. A reverse offer goes in the opposite direction: from seller to buyer. In some cases, a seller whose home has been on the market for ages with lots of viewers, but no offers, may enlist their agent to go back and approach several or even all of the buyers who have come to see the property, and make an offer to the buyer. In other scenarios, the seller’s agent extends an offer to a particular buyer who has come to see the property multiple times and seems very interested, but has been hesitant to make an offer.

Reverse offers generally offer to sell the home at a price lower than the list price, and they often sweeten the pot by throwing in added incentives like paying some or all of the buyer’s closing costs, buying down the buyer’s interest rate, paying for HOA dues or fees or even throwing property like flat-screen TVs, cars or other valuables into the deal.

Here are 3 best practices for sellers making reverse offers:

• Give the buyers a short period of time to respond. The whole point of a reverse offer is to create urgency where the buyer currently feels none. Extend a reverse offer with the caveat that it is only good for a day or two, to push the buyers into moving quickly. Similarly, if you have extended the reverse offer to multiple buyers, let them all know that this is the case and that the first buyer to bite takes the house.

• Great candidates for reverse offers include sellers facing lots of competition. If your home is nearly identical to neighboring homes for sale at the same price, or you are struggling to position it competitively with foreclosures and short sales in the area, consider making a reverse offer. A proactive, reverse offer differentiates your house in the minds of home buyers and, again, creates urgency to act on the part of buyers who otherwise have so many homes to choose from that they feel they have all the time, choice and bargaining leverage in the world.

• If one buyer has viewed your home repeatedly, check in with their agent directly or via Trulia’s contact form before making a reverse offer. Ask your listing agent to contact the broker for any buyers who have made more than one visit to your home, to inquire into what is keeping them on the fence. This will boost the likelihood of making a successful reverse offer by making sure the offer addresses the issues that have made buyers hesitant to pull the trigger.

Critics of the reverse offer express a concern that it may make a seller seem desperate. If you’re worried, hop over to Trulia Voices and ask the real estate professionals for their thoughts. However, when you talk to home buyers on today’s market, their biggest beef is sellers who are unrealistic and inflexible, not sellers who seem overly motivated to sell.

No serious home buyer gets turned off by a seller who seems willing to go the extra mile to help them solve the problems that are stopping them from buying a home. Also, a reverse offer doesn’t have to chop tens of thousands off the home’s list price to work – a percentage point or two can often do the trick. In any event, sellers who extend a reverse offer don’t limit their options for responding to low-ball offers from the prospective buyer in any way; if the buyer senses desperation and comes back with a low ball offer, the seller can still take it, counter or leave it, just like they would have been able to do before making the reverse offer (but they end up with a buyer, which they didn’t have before the reverse offer).

Incoming search terms for the article:

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Home mortgage modification snags spark lawsuits

9/12/2010

By Stephanie Armour, USA TODAY

Anthony and April Soper’s financial troubles were only starting last October when they applied for a mortgage adjustment through the Obama administration’s ome Affordable Modification Program.Bank of America, their mortgage servicer, put them on a HAMP trial payment plan in December that cut their monthly payment by more than half from almost $4,000 to about $1,826.

They say they made their reduced monthly payments early and did everything else that was asked of them. But they didn’t get a permanent modification, and they say they don’t know why.

Instead, according to a lawsuit they’ve brought against Bank of America, they are now more than $8,000 behind on a mortgage that had been current 12 months ago. Each of their credit scores has dropped by nearly 100 points. And, they allege, Bank of America has threatened them with foreclosure.

“We jumped through all their hoops, and they did nothing but cause us heartache,” says April, 41. Whether the Lake Stevens, Wash., couple keep their home may hinge on the outcome of a legal strategy  that aims to join struggling homeowners with similar experiences in the HAMP program in a class-action lawsuit against the nation’s largest bank. On Sept. 30 in Nashville, a federal court hearing is scheduled to consider consolidating the Sopers’ case with more than a dozen others against Bank of America.

Similar lawsuits, also seeking class-action status, are pending against other major servicers such as JPMorgan Chase and Wells Fargo.

Anthony and April Soper of Lake Stevens, Wash., went on a trial plan that cut their monthly payment. But they didn’t get a permanent modification, and they say they don’t know why. Now, they’re suing Bank of America, their mortgage servicer. BofA is seeking a dismissal of the case.

AMP borrowers and HAMP’s modest results. Permanent modifications, which lower mortgage payments to 31% of a borrower’s pretax monthly income for five years, have been given to only about a third of the 1.3 million borrowers in trial plans since the program’s launch in April 2009.

Most of the lawsuits allege that the three- or four-month trial payment plans are contracts, and that Bank of America and other servicers broke them by not giving permanent modifications to homeowners who made their trial payments on time and provided the necessary documentation.

Servicers have asked courts to dismiss some of the cases, saying the trial plans are not contracts. Bank of America, which says it plans to seek dismissal of the Soper case, argues in a court filing in a similar case that it must consider borrowers for a HAMP modification, but that it has discretion in granting permanent modifications.

The bank also argues that homeowners have no case because courts have dismissed earlier HAMP-related lawsuits against mortgage servicers. Those cases claimed that in denying some homeowners modifications, the servicers had breached the contracts they made with the Treasury Department when they agreed to participate in HAMP. Courts said homeowners could not sue on those grounds because they weren’t parties to the contracts between the government and the servicers.

Lawyers for homeowners say they are now making a different legal argument: that Bank of America and others broke contracts made directly with homeowners.

“Borrowers have said we should be able to enforce the contract between Treasury and mortgage servicers, and many courts have rejected that. Our cases are the first filed that touch on a contract between servicers and borrowers,” says Kevin Costello, a lawyer with Roddy Klein & Ryan in Boston, which represents homeowners in cases against Bank of America, JPMorgan Chase and Wells Fargo.

“This litigation is spreading all across the country. People have been relying on a promise all along, and then they get a denial. Then they find themselves in that much worse of a hole,” he says.

Many homeowners could be affected: Nearly 620,000 trial modifications since spring 2009 have been canceled, according to an Aug. 20 Treasury report.

Chronicles of delays The lawsuits allege servicers are purposely denying permanent modifications and keeping loans in default so lenders can profit from heftier late fees and other charges. Court filings provide detailed chronologies of borrowers who allege that over periods of months, they repeatedly sent banks
requested documents that the banks said they didn’t receive, made inquiries that went unanswered, and received promises of help that were later contradicted or denied by other representatives.

“Bank of America has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted” billions of dollars in government bailout funds in 2008, the Sopers’ complaint alleges.

By failing to live up to its obligations, according to the court filing, “Bank of America has left thousands of borrowers in a state of limbo — often worse off than they were before they sought a modification from Bank of America.”

The Sopers’ complaint alleges that Bank of America customer service representatives are instructed to mislead homeowners who call to inquire about loan modifications they’ve applied for. The complaint, citing information provided by unnamed former employees, says “representatives regularly inform homeowners that modification documents were not received on time or not received at all when, in fact, all documents have been received.”

When homeowners are denied permanent modifications, even those who were current before going on reduced-payment trials are considered in default, and servicers tell them they must immediately pay the difference between their trial payments and their higher former payments to avoid foreclosure, according to the Sopers’ complaint and others.

Borrowers’ mortgage debt in default rises further the longer they stay in trial plans.By making trial payments during and after the plan’s scheduled end, the Sopers’ complaint alleges, they “forgo other remedies that might be pursued to save their homes” such as restructuring their debt by filing for bankruptcy, or pursuing other ways to deal with their default, such as selling their homes.

Foreclosure proceedings have started against some borrowers while they were on trial plans, violating a Treasury directive, according to the lawsuits. Homeowners’ credit scores have also been damaged when servicers cancel trial plans, then report the amounts in default to credit bureaus.

Some court filings claim bank employees have demanded upfront fees to start consideration of a modification — in violation of HAMP rules — or told homeowners to stop paying mortgages in order to start a trial modification. The Sopers’ complaint alleges an unnamed homeowner was illegally asked to pay $1,400 upfront to Bank of America to be considered for a modification.
In another case, Alex Lam of New York alleges he was told he could only be considered for a HAMP trial modification if he stopped paying his mortgage for several months, according to a lawsuit filed in U.S. District Court in Brooklyn against JPMorgan. He skipped two months of payments in 2009 and says he was denied a permanent modification. JPMorgan declined to comment.

Homeowners’ lawyers say there is no effective way to appeal mortgage servicers’ decisions because Treasury has no ability to overturn a decision.

Watchdogs’ criticisms Government watchdogs, too, have raised similar criticisms about the HAMP program, as well as about servicers’ performance and Treasury’s oversight.

The Congressional Oversight Panel, which oversees the government fund that pays for HAMP, said in an April report it “is deeply concerned about the unacceptable quality of the denial and cancellation reasons, and strongly urges Treasury to take swift action.”

A Government Accountability Office report in June found servicers were erroneously denying permanent modifications to some homeowners because servicers were inaccurately applying a formula used to determine if the value of modifying the mortgage was greater than the proceeds from foreclosing. The number of homeowners who had been wrongly denied could “range from a handful to thousands.”

When errors have been found, Treasury says, it has made servicers go back and fix problems, and re-do their work as a check on their decision-making. It also says that 45% of those who started trials but were ineligible for permanent adjustments received an alternative modification through their servicer. Fewer than 2% have gone to foreclosure sale, according to Treasury.

Some homeowners say they’ve already lost their homes to foreclosure because a permanent HAMP modification was denied to them. Wells Fargo approved her for a trial HAMP modification, which lowered her payments starting in December 2009, according to court filings in U.S. District Court in Massachusetts. Voltaire is a co-
plaintiff in the case.

But after making regular payments, Voltaire was told in May that she was being taken out of the HAMP program and was $40,000 in default, the lawsuit alleges. After she protested, Wells Fargo agreed to reconsider her for a HAMP modification, according to the complaint, but in July, the bank took possession of the home.

“I was literally crying my eyes out,” Voltaire says. “I put everything I have into this house, into getting my kids out of the projects. That’s the part that really hurts. My kids could look at me like I failed.”

Wells Fargo agreed not to sell her house pending further court action. Voltaire is still staying there and making her trial plan payments.

In its motion to dismiss the lawsuit brought by Voltaire and others, Wells Fargo said the plaintiffs have not adequately shown that their trial modifications were contracts to enter into permanent modifications. It says homeowners benefited from being able to make reduced monthly payments while staying in their homes.

Treasury Department officials say homeowners in HAMP trial plans are not promised permanent modifications.

But the Soper lawsuit and others quote language from some trial plan agreements that states: “If I am in compliance with this trial period plan and my representations … continue to be true in all material respects, then the servicer will provide me with a Home Affordable Modification Agreement … that would amend and supplement the mortgage on the property, and the note secured by the mortgage.”

“They get a letter from the bank that says, ‘If I comply, I’m entitled to a HAMP modification.’ That’s a contract. The bank has not performed under the contract,” says Steve Berman, a lawyer with Hagens Berman Sobol and Shapiro in Seattle, who represents the Sopers and other homeowners in HAMP cases.

Evolving rules

The Obama administration’s rapid launch of HAMP and its changing guidelines since then may have contributed to the program’s administrative confusion. When HAMP began in 2009, servicers enrolled borrowers in trial modifications without verifying income or financial hardship. That brought immediate financial relief to more people, but ineligible homeowners were not weeded out until they completed trial plans. In June, the government began requiring participating servicers to verify applicants’ income and financial hardship before starting trials. Treasury says that has improved the rate of conversions to permanent modifications.

“The HAMP program was an unprecedented response to an enormous crisis in this country’s housing market. The administration needed to act quickly.” says Phyllis Caldwell, Treasury’s chief of the homeownership preservation office.Meanwhile, the number of homeowners claiming improper denials of HAMP modifications is climbing.One is Peter Salinas, 52, who struggled to pay his mortgage after the economy collapsed and his wife developed cancer. He appealed to his lender for help.

Salinas says he felt elated last year when he received a HAMP trial modification slashing $500 off his monthly payments. But later, he was told he made too much money to qualify for permanently reduced payments, he says. Wells Fargo threatened foreclosure if he didn’t pay $9,000, the difference

between his original mortgage and what he paid during the trial.His servicer, Wells Fargo, declined to comment on his situation. Salinas is working with Gulfcoast Legal Services, a not-for-profit civil legal aid office, that says it is preparing a lawsuit against the lender.

“I was convinced I was doing everything right,” says Salinas, a reporter for an automotive trade publication who lives near Bradenton, Fla. “I wasn’t trying to walk away from this mortgage. It’s just infuriating.”

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HAVE YOU HAD DAMAGE DONE TO YOUR ROOF BY HAIL???

You may be eligible to receive a new roof for your home at no cost.   If you are trying to sell a house that has a damaged roof maybe be eligible for a new roof, adding 10-20% value to their home, and thus making it more apt to sell.   I also know of a roofing company that will pay up to $500 of the deductible and your insurance pays for the roof and labor.  The best part is that your insurance premiums will probably not go up because of this claim.

The process proceeds as follows….

You contact your insurance agent and the insurance agent sets a time to have an adjuster meet a roofing contractor.  At that time, the adjuster takes pictures of the damage and declares whether the roof needs replacing.  Your insurance company then issues a check for the intial purchase of the materials and upon the completion the insurance company issues a second check for the labor.

We as insurance customers pay premiums every month and rarely make a claim.  This is an opportunity to use a service that we pay for.

The roofing company that I mentioned above is highly mentioned with the BBB and is listed on Angies List. However, you can pick any roofing contractor.

Call me today to discuss this at (704)840-4137.

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• INSURANCE COMPANY BUY NEW ROOF

Home Prices Gain in 91 U.S. Cities in First Quarter
May 11, 2010, 12:00 PM EDT

By Kathleen M. Howley

May 11 (Bloomberg) — Home prices rose in 91 U.S. cities in the first quarter as states hard hit by foreclosures began to recover and a tax credit cut the number of properties for sale.

The median price of a single-family home sold in Saginaw, Michigan, doubled to $60,800, the Chicago-based National Association of Realtors said in a report today. Prices in Akron, Ohio, climbed 90 percent to $95,300 and Grand Rapids, Michigan, recorded a 26 percent increase to $90,700. Nationally, the median declined 0.7 percent.

Cities that led the nation in foreclosures a year earlier had the biggest price increases as a tax credit of as much as $8,000 boosted demand and drove the supply of unsold homes to a four-year low in January, according to Lawrence Yun, chief economist for the Realtors’ group. Brian Bethune, chief U.S. financial economist for IHS Global Insight, said an improving job market should sustain the fledgling rebound in real estate.

“In the second half of the year, employment growth and an improving economic situation should keep the housing recovery on track,” Bethune said in a telephone interview from his Lexington, Massachusetts, office.

Today’s report showed the recovery accelerating from the fourth quarter when 67 metropolitan areas reported price gains.

Peak to Trough

The U.S. median home price tumbled 29 percent over three and a half years as defaults among subprime borrowers flooded the housing market with cheaply priced foreclosures and Wall Street piled up $1.78 trillion in losses and asset writedowns.

The median prices of an existing U.S. home peaked at $230,300 in July of 2006 and hit a low of $164,600 in February, according to NAR data. The drop was 13 percent in 2009, outpacing 2008’s 9.5 percent decline.

This year, prices may increase 2.5 percent as the economy improves, according to the Realtors’ forecast.

The median price of a single-family home in the New York metropolitan area rose 1.8 percent to $380,400 in the three months ended March 31. The areas surrounding New Haven and Milford, Connecticut, gained 5.3 percent to $227,900.

The Edison, New Jersey, region had a 1.5 percent gain in the median price; and Hartford, Connecticut, posted a 1.6 percent increase to $225,900. Prices in the Boston metropolitan area increased 11 percent to $321,800.

Transactions Fall

In a separate report, NAR said U.S. sales dropped 14 percent in the first quarter from the prior period, mostly because buyers rushed to purchase homes in the fourth quarter when the tax credit for purchases was originally set to expire.

Congress ultimately extended and expanded the credit for purchase contracts signed by April 30.

South Dakota led the nationwide sales decline with transactions falling 33 percent in the first quarter. Sales in Pennsylvania and Idaho dropped 28 percent. Connecticut transactions decreased almost 15 percent and New York sales were down 9.4 percent, NAR said.

Nationally, home sales probably will rise 4.3 percent to 5.38 million this year and gain 5.1 percent to 5.66 million in 2011, according to a forecast posted on NAR’s website. In 2009, sales climbed for the first time in four years to 5.16 million.

To talk about the market call me today at (704)840-4137.

courtsey of Bloomberg.net

Here are the top 10 cities the magazine chose as the best places to buy right now.

Source: Forbes, Francesca Levy (01/21/2010)

Call Rod Potter at (704)840-4137 today to talk about why I feel that we are a great place to live!

Realtors Care Day pictures.

Area: 15.418 square miles

Population: 17,539

Population density:

Ballantyne:	1,138 people per square mile
Charlotte:	2,232 people per square mile

Median household income 2008:

Ballantyne:	$91,821
Charlotte:	$52,530

Median rent in 2008:

Ballantyne:	$978
Charlotte:	$680

Zip codes: 28134, 28277.

Males:	8,652
Females:	8,887

Median age:
Males:

This neighborhood:	31.6 years
Whole city:	32.7 years

Females:

This neighborhood:	31.7 years
Whole city:	33.9 years

Average household size:

Ballantyne:	2.6 people
Charlotte:	2.5 people

Average family size:

Ballantyne:	3.1 members
Charlotte:	3.1 members

Percentage of married-couple families (among all households):

Here:	64.8%
city:	43.6%

Percentage of married-couple families with children (among all households):

Ballantyne:	37.0%
Charlotte:	20.5%

Percentage of single-mother households (among all households):

This neighborhood:	3.8%
Charlotte:	9.8%

Percentage of never married males 15 years old and over:

Here:	10.3%
Charlotte:	17.3%

Percentage of never married females 15 years old and over:

Ballantyne:	10.7%
city:	15.4%

Percentage of people that speak English not well or not at all:

This neighborhood:	1.3%
Charlotte:	4.8%

Percentage of people born in this state:

Here:	28.2%
Charlotte:	46.3%

Percentage of people born in another U.S. state:

Ballantyne:	62.6%
Charlotte:	41.7%

Percentage of native residents but born outside the U.S.:

Here:	0.8%
city:	1.0%

Percentage of foreign born residents:

Here:	8.4%
Charlotte:	11.0%

Educational Attainment Less than high school High school or equiv. Less than 1 year of college 1 or more years of college Associate degree Bachelor’s degree Master’s degree Profess. school degree Doctorate degree Ballantyne Charlotte average

Rooms in owner-occupied houses/condos in Ballantyne:
1 room 2 rooms 3 rooms 4 rooms 5 rooms 6 rooms 7 rooms 8 rooms 9+ rooms	1 room: 0 2 rooms: 3 3 rooms: 69 4 rooms: 143 5 rooms: 505 6 rooms: 926 7 rooms: 813 8 rooms: 944 9+ rooms: 1,661
Ballantyne Charlotte average

Rooms in renter-occupied apartments in Ballantyne:
1 room 2 rooms 3 rooms 4 rooms 5 rooms 6 rooms 7 rooms 8 rooms 9+ rooms	1 room: 30 2 rooms: 150 3 rooms: 263 4 rooms: 390 5 rooms: 495 6 rooms: 178 7 rooms: 28 8 rooms: 15 9+ rooms: 23
Ballantyne Charlotte average

Bedrooms in owner-occupied houses and condos in Ballantyne:
no bedroom one bedroom two bedrooms three bedrooms four bedrooms five+ bedrooms	no bedroom: 0 1 bedroom: 11 2 bedrooms: 362 3 bedrooms: 2,095 4 bedrooms: 2,155 5+ bedrooms: 442
Ballantyne Charlotte average

Bedrooms in owner-occupied houses and condos in Ballantyne:
no bedroom one bedroom two bedrooms three bedrooms four bedrooms five+ bedrooms	no bedroom: 30 1 bedroom: 404 2 bedrooms: 803 3 bedrooms: 280 4 bedrooms: 46 5+ bedrooms: 9
Ballantyne Charlotte average

Average number of cars or other vehicles available in houses/condos:

This neighborhood:	2.0
Charlotte:	1.9

Average number of cars or other vehicles available in apartments:

Here:	1.6
city:	1.3

Percentage of units with a mortgage:

Ballantyne:	94.1%
Charlotte:	81.6%

Housing prices:

Average estimated value of detached houses in 2008 (68.6% of all units):

Ballantyne:	$418,405
Charlotte:	$301,689

Average estimated value of townhouses or other attached units in 2008 (5.9% of all units):

This neighborhood:	$154,109
city:	$139,926

Average estimated ‘08 value of housing units in 3-to-4-unit structures (1.6% of all units):

Ballantyne:	$306,115
city:	$168,171

Average estimated ‘08 value of housing units in 5-or-more-unit structures (21.2% of all units):

Ballantyne:	$429,802
Charlotte:	$274,354

Average estimated value of mobile home in 2008 (2.2% of all units):

Ballantyne:	$35,510
Charlotte:	$33,346

Year house built (%)

0

8

16

24

32

40

1999 to March 2000

1995 to 1998

1990 to 1994

1980 to 1989

1970 to 1979

1960 to 1969

1950 to 1959

1940 to 1949

1939 or earlier

	Ballantyne in Charlotte		city

City-data.com crime index for city in 2008 (higher means more crime):

City:	589.2
U.S. average:	293.0

Occupations of males:

Percentage of males in management occupations (except farmers):

Here:	24.5%
city:	13.4%

Percentage of males in business and financial operations occupations:

Here:	8.4%
city:	5.5%

Percentage of males in computer and mathematical occupations:

Here:	8.5%
city:	4.9%

Percentage of males in architecture and engineering occupations:

Here:	4.6%
city:	3.2%

Percentage of males in legal occupations:

Here:	1.3%
city:	1.4%

Percentage of males in education, training, and library occupations:

Here:	1.4%
city:	1.9%

Percentage of males in arts, design, entertainment, sports, and media occupations:

Here:	2.7%
city:	2.0%

Percentage of males in healthcare practitioners and technical occupations:

Here:	2.5%
city:	2.0%

Percentage of males in service occupations:

Here:	3.6%
city:	10.7%

Percentage of males in sales and office occupations:

Here:	27.6%
city:	22.5%

Percentage of males in construction, extraction, and maintenance occupations:

Here:	8.6%
city:	14.6%

Percentage of males in production occupations:

Here:	2.0%
city:	7.0%

Percentage of males in transportation and material moving occupations:

Here:	2.9%
city:	8.7%

Occupations of females:

Percentage of females in management occupations (except farmers):

Here:	16.1%
city:	8.9%

Percentage of females in business and financial operations occupations:

Here:	10.8%
city:	8.0%

Percentage of females in computer and mathematical occupations:

Here:	3.8%
city:	2.5%

Percentage of females in community and social services occupations:

Here:	1.5%
city:	2.2%

Percentage of females in legal occupations:

Here:	1.0%
city:	1.1%

Percentage of females in education, training, and library occupations:

Here:	7.5%
city:	8.3%

Percentage of females in arts, design, entertainment, sports, and media occupations:

Here:	2.1%
city:	2.2%

Percentage of females in healthcare practitioners and technical occupations:

Here:	7.5%
city:	5.7%

Percentage of females in service occupations:

Here:	10.1%
city:	15.0%

Percentage of females in sales and office occupations:

Here:	35.3%
city:	36.8%

Percentage of females in production occupations:

Here:	2.1%
city:	5.0%

Education in this neighborhood (subdivision or community):

Percentage of people 3 years and older in K-12 schools:

Ballantyne:	19.6%
Charlotte:	18.7%

Percentage of people 3 years and older in undgraduate colleges:

Ballantyne:	2.1%
Charlotte:	5.4%

Percentage of people 3 years and older in grad. or professional schools:

Ballantyne:	1.7%
Charlotte:	1.2%

Percentage of students K-12 enrolled in private schools:

Ballantyne:	24.2%
Charlotte:	13.9%

Percentage of population below poverty level:

Ballantyne:	3.7%
Charlotte:	10.6%

Median year owner moved in (as recorded in 2000):

Ballantyne:	1998
Charlotte:	1993

Median year renter moved in (as recorded in 2000):

Ballantyne:	1999
Charlotte:	1999

Percentage of married-couple families with both working:

Ballantyne:	68.4%
Charlotte:	65.7%

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• ballantyne demographics 2010
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Many of the advantages of home ownership are not immediately obvious. However, when you are weighing the pros and cons of buying over renting, understanding these advantages can definitely allow you to make a more educated decision.

For example, consider the down payment that most lenders require.  Unless you qualify for a special mortgage program or have an absolutely perfect credit history, most lenders will require that you make a down payment equal to 20% of the purchase price.  That down payment can be quite significant! If you are purchasing a home for $300,000, a 20% down payment amount will be $60,000.  The primary purpose of these funds is to provide a measure of security for the lender, but there is a secondary purpose that benefits the home buyer.

What is the benefit to the home buyer? The funds that you provide as a down payment actually serve as a high-performing investment vehicle that will help you to plan and save for your future. How?

How Is This Possible?
There is a simple calculation, but the answer is actually fairly complex. Homes generally appreciate in value at a rate of five percent per year.  Therefore, let´s assume that your home´s value will increase to $315,000 in just one year. This means that you´ll have earned $15,000 and the value of your initial investment has grown by 25% in only one year! What other investment mechanism do you know of that can provide that amount of security and be as enjoyable as owning your own home?

And there are additional benefits when you buy a home. Your savings actually continue when you purchase a home, because many tax deductions and benefits are available only to home owners.  You can deduct the interest that you pay on your mortgages at the end of every tax year ? and your property taxes are deductible too.  These deductions are used to lower your taxable income. With a $300,000 home, you can expect to reduce your taxable income during the first year alone by around $30,000.  This tax benefit is one of the best reasons to consider buying versus renting.  When you rent, you are not eligible for this reduction in taxable income.

These deductions create a fantastic advantage for buying over renting.  And, as if that weren´t enough, consider that you will have a stable and unchanging housing payment for the duration of your mortgage.  In contrast, rental prices increase frequently, usually every year.  With a mortgage payment that you can comfortably afford now, you will never again have to face the dreaded rent increase.

As you can see, there are many financial reasons to buy a home. But what about the logistics of your housing?  When you purchase a home, at least in most cases, you will have a lot more available space than you would in a rental.  Sure, there are private homes available for rent but most people opt to rent apartments. A purchase home definitely has more space than do most apartment rentals.

And speaking of space3; if you own your own home, then the space is yours to configure as you like.  If you decide that you would like a larger kitchen, for example, you are free to make your own renovation plans.  You can express your individual style and taste through the way that you choose to decorate and there are virtually no limits to the changes you can choose to make on your property.  Not so with a rental property.  Even houses that are rented usually need some type of reconfiguration to meet your particular needs, but when you are renting, you need to find ways to work around this, since you do not have the freedom to modify the property in the ways that you could if you owned the home.

When you rent, you are not able to install a swimming pool, hot tub or in some cases even a play set for your children.  Therefore, when living space and the freedom to personalize are important to you, buying your own home is a very good option.

Additional Advantages

Home Equity
Equity, when considered strategically, is practically an immediate return on your investment when it comes to buying a home.  As a home owner, your home´s equity begins to grow immediately, from the very first day that you are the owner.  In the future, as the value of your home increases and the amount of your mortgage decreases, you will be able to borrow against the accumulated equity for expenses like home improvements, weddings or your children´s education.  Or, you can use the equity to secure a future mortgage on a second home. The more equity in your home, the better the chance that you will earn a profit when you sell your home and decide to purchase a more expensive home.

Principal
Every single mortgage payment that you make will actually increase the amount of equity in your home while reducing the principal of your mortgage.

Credit Score
Home owners generally have higher credit scores than do non-owners.  Remember that a mortgage loan in good standing on your credit report shows responsible borrowing. In contrast, renting does not appear on your credit report at all.

Community
When you purchase a home, you are joining a neighborhood.  Most owners quickly realize the value of becoming part of a community and forming relationships with those who live around them.  In some cases, renting can provide this same benefit, but renters are often transient and the relationships formed while renting may or may not last.

Security: Home ownership provides the security of knowing that no one else has access to your home unless you specifically grant them access. It also gives you the security of knowing that you have a wonderful place to call home, and that no one can take it away from you.

Privacy
Owning a home will give you far more privacy than renting.  In addition, you will have more access to the private outdoor areas around your home.

In Conclusion
All of these advantages can and will be yours when you decide that it is time for you to purchase a home of your own.

But there is one more advantage that hasn´t been mentioned yet.  When you own your own home, you are realizing a large part of the American Dream.  Many people dream of owning their own home and are simply not at a stage in their lives where ownership is an option.  Fortunately, you can make the dream a reality by purchasing a home of your own.

Take some time to carefully consider the advantages of home ownership that are listed above, and also consider any possible detractors that you might encounter along the way.  Making an educated and well thought-out decision will make you a better buyer and a better home owner in the long run.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

Any homeowner knows that that the beginning of each new year represents a new tax season, and with each tax season come new opportunities to use your home as an excellent way to save money through valuable deductions.

Federal tax laws have made it advantageous to own a home. Federal tax credits have been issued to do two specific things: to offset the cost of owning a home and to motivate new buyers to keep the housing market hopping.

Just like other federal laws that benefit the populace, tax laws are never guaranteed for more than a few years.  Therefore, a wise home owner will take advantage of all the available tax benefits while they are still viable options.

This article presents a brief introduction to the most popular and lucrative tax benefits for homeowners.  This information should not be considered tax advice, and it is always a good idea to check with your federal taxing agency or even a tax professional to find out which options are applicable to your individual tax situation.

Deduct the Interest Paid on Mortgage Loans
This is perhaps the absolute best tax deduction that any homeowner could hope for.  Taking full advantage of this deduction can save you potentially thousands of dollars, depending on the principal and structure of your mortgage. Generally, as long as your mortgage is for less than one million dollars, you can deduct the interest.

During the first few years that you own your home, you will learn that most of your payment amount is used to pay down the interest rather than the principal.  Therefore, this tax break was designed to be most beneficial to new buyers.  Of course, as mentioned above, it really just depends on the type of loan you selected when you purchased your home.

Homebuyers who have opted for a balloon or interest-only mortgage may discover that this deduction makes owning a home much less expensive.
When you deduct the interest that you have paid, your taxable income is lowered, reducing the amount of tax that you owe. The mortgage interest deduction and any other deduction resulting from a home equity loan (see below) can be shared among filers who do not file jointly.
If you have borrowed a home-equity loan, it is important to realize that the interest is deductible. However, such deductions are almost always limited to loans of no more than $100,000, just as deductions are limited to standard mortgages of no more than one million dollars.  The amount that is deductible may actually be the fair market value of your home, rather than the $100,000. If you are considering deducting the interest paid on a mortgage or home-equity loan, consult with a tax professional for advice.

Deduct the Interest Paid on Home-Improvement Loans
The calculation of the deduction that corresponds to interest paid on a home-improvement loan differs from that of the other interest deductions described above.  The calculation is fairly complicated, but if you are using the loan proceeds to make improvements that will increase the home´s value, extend the life of the home, or adapt the home to meet changing needs (such as adaptations for the elderly or disabled), then you can probably deduct ALL of the interest paid on the loan.

Sometimes home-improvement loans are used to fund smaller projects, such as painting and minor updating.  In these cases, you can usually deduct some of the interest paid on the loan.  However, the largest tax benefits from repairs result when you sell your home.

Deduct The Points You Pay at Closing
A point represents one percent of the amount of the mortgage that you are borrowing.  In most cases, you pay points to the lender at the time of the closing.  Points are fully deductible, as is interest, during the year in which you purchase a home.

Points are deductible when you opt to refinance, too. The difference is that in order for points on refinancing loans to be deductible, they must be amortized over the life of the loan.  If you find it advantageous to refinance again in the future, you can immediately deduct the remaining points from the original refinance loan when the new points have been amortized over the life of the new loan.

Deduct Your Real-Estate or Property Taxes
When you pay real-estate and/or property taxes, you may deduct the amount from your federal taxes.  There is a caveat, however. If you receive any refund of your local or state property taxes, it will reduce the amount of your federal deduction eligibility by the same amount.  Find a tax professional to help you understand your eligibility for this tax deduction.

When You Sell, Take Advantage of the Capital Gains Exclusion
The Taxpayer Relief Act of 1997 gives real-estate investors the ability to retain the profit earned when their home sells.  The restriction is that the home owner must have lived in the property during two of the last five years that the property was owned. When taking advantage of this tax break, homeowners may retain up to $500,000 ? tax-free ? from the profit on the home sale. There is no restriction on how many times homeowners may use this tax benefit, so long as they qualify and meet the residency requirement.

Deduct Your Home Office
Many taxpayers do not realize that when some portion of the home is used exclusively as a home office for a business, a percentage of the costs associated with the home may be deducted.  A specific percentage of utility bills, painting fees, insurance premiums, and depreciation may be deducted by homeowners who use space in their home as an office.

This deduction is restricted if your home is partially owned by your business, and if any capital gains would be divided between you and your business. Again, work with a tax professional to understand the details.

Sellers´ Expenses Reduce Capital-Gains-Tax Liabilities
When you sell a home, you incur selling costs.  These costs include, but are not limited to, advertising, title insurance, inspections, painting, decorating, landscaping, legal fees and agent commissions.  As long as repair, painting and upgrade costs were incurred within 90 days of your home´s sale, they are deductible.

This deduction will reduce your amount of capital gain for tax purposes.  The way that this deduction is calculated will depend primarily on your home´s value.  Ask your realtor or a tax advisor for additional information about deducting sellers´ expenses.

Deduct Moving Costs When You are Relocating for Work
When you must move for your job, you can almost always deduct the moving costs that you incur.  You must meet certain criteria, including moving within one year of relocation to a new location at least 50 miles from your current home and working full-time at the new location for at least 39 weeks during the year following your move.  These deductible expenses can include travel costs, storage costs, hotel costs and mover costs.

Smart consumers make financial decisions by weighing the advantages and disadvantages of every possible option. Buying a home is no exception. Whether you already own your home, or are considering the purchase of a new home, you need to become familiar with the many tax deductions offered to homeowners. Your realtor is an excellent source of general information about local taxation, taxing authorities and possible tax deductions.  Begin your research by requesting general information from your realtor and then contact a tax professional or financial planner to learn about the best tax deductions for your particular situation.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137