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Should I Rent Or Buy?

Great question! In fact, it’s one I often answer for potential home buyers. And my answer usually comes down to this: It depends on you--your situation and your goals for the future.

Here are some questions you need to ask yourself: Do you think you’re ready to move into the world of homeownership? Does your job require you to relocate frequently? Are you ready to “settle down” and raise a family? Not sure what you want to do yet?

As a real estate professional, I do know that buying a home has real advantages in today’s market: Realtor.com reports that housing affordability is the best it’s been in nearly 30 years. Right now buyers can cash in on hefty price drops and rock-bottom mortgage interest rates--and many people don’t realize just how great the market is!

If you still need some help on making your decision on if you should continue to rent or make the plunge to buy, the Our Family Place Home Buyer’s Information Center lists some of the pros and cons noted below, and I’ve added some of my own:

Buying Advantages:

* You gain equity in your home through mortgage payments.
* Your home could be one of the best long-term investments you will ever make.
* You can decorate and remodel the way you want.
* You get homeowner tax breaks.
* You build your credit standing.
* You can improve your property using home equity loans.
* You gain independence and pride as a homeowner.
* You can transfer your property through your will.

Buying Disadvantages:

* Your costs are variable.
* Your equity may change due to market conditions.
* You usually must sell your home to move.
* You handle maintenance and upkeep.
* You usually need more cash to get in.

Renting Advantages:

* Your costs are fixed for the term of your rental.
* You don’t lose equity.
* You can move at the end of your lease term.
* You have fewer maintenance worries.
* You need less cash to get in.

Renting Disadvantages:

* You never get equity.
* You can’t always decorate or remodel the way you want.
* You don’t get any tax breaks.
* Your lease is for a limited time period determined by your landlord.
* Your rent may go up at the end of your lease and other terms may change.
* Your landlord may not fix problems or invest in routine property maintenance.
* You normally can’t transfer your lease without the landlord’s OK.
* You may face eviction if you and your landlord have a dispute.

That’s a lot to think about. To put these pros and cons into dollar terms, try out this rent v. buy calculator offered by the Federal Home Loan Mortgage Insurance Corporation (better known as Freddie Mac). Don’t be shy--check out different scenarios and see what they mean for your finances.

Yes, there are lots of variables to consider, and you’ll need to do your homework to decide what’s right for you. Working with a qualified real estate professional who can provide current market advice for your area can help.

I’m always ready to assist potential buyers debating the “rent v. buy” decision. Feel free to contact me and I’ll be happy to discuss your specific needs or answer any questions you might have about any aspect of real estate.

How to Look for the Most Affordable Mortgage

TODAY'S FEATURED PROPERTY

 

With lenders quoting a wide variety of interest rates and points, smart mortgage shoppers take a close look when comparing borrowing costs. Sometimes it turns out that the lowest interest rate isn’t necessarily the best buy. Here are some tips: Loupe

  • Compare borrowing costs.
  • Count the points.
  • The simplest way to compare borrowing costs is to ask the lender for the actual annual percentage rate (APR) – the true interest on the loan. The APR consists of the simple interest rate, plus all other charges imposed by the lender. It’s not at all unusual for the APR to be substantially higher than the rate quoted by the lender. What’s more, a simple rate quoted by one lender, although higher than another lender’s advertised simple interest rate, may turn out to have the lower APR. For the shopper who wants to take into account the cost of points (each point is equal to 1% of the loan amount), an simplified rule of thumb comes in handy: Each point is roughly equal to an interest rate increase of 1/8th of 1% over a payback period of 30 years. Thus, a lender offering a 10% rate with no extra points is offering a better deal than the lender offering, say, a loan at 9 7/8% plus two points. Which is best for you depends on how long you plan to live in the house.

Mortgage Workouts, Tax-Free for Many Homeowners

 There is now tax relief for struggling homeowners. If your mortgage debt is partly or entirely forgiven during 2007, 2008 or 2009 you may be able to claim special tax relief by filling out Form 982 and attaching it to your federal income tax return for that year.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from tax up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return.

Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. The debt must have been used to buy, build or substantially improve your principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. See Form 982 for details.

If your debt is reduced or eliminated you will receive a year-end statement (Form 1099-C) from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit the IRS Web site at IRS.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. This publication and Form 982 can be downloaded from IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is www.irs.gov.

This article is courtesy of the www.irs.gov.  Visit their website for more information.

Top Insider Secrets to Preparing Your House For Showing

 Presentation is everything. Home buyers are attracted to clean, spacious and attractive houses. Your goal is to dazzle buyers. Brighten up the house and remove all clutter from counter tops, tables and rooms. Clean the house from top to bottom and make it sparkle. Simple aesthetic improvements such as trimming trees, planting flowers, fixing broken tiles, cleaning rugs and carpets and even repainting a faded room will greatly enhance the appeal of your house. Also make sure your house smells good. Clean out the cat box and light some mildly scented candles. Invite a trusted friend or neighbour to walk through your house as a buyer would, and get their opinion.

In preparing your private property for sale, consider:

• how much should I spend?

• exterior and curb appeal

• preparing the interior

How much should I spend?

In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

The simplest way to think about how much to spend is to divide your spending into two categories:

• What things, if left unchanged, are going to bring the price down by more than it costs to fix or change them?

• What new changes can I make that will definitely increase the price by more than I pay for them?

The first category tends to be all your 'touch-ups' - fresh coats of paint etc. The second category requires careful thought before you spend - new bathrooms or kitchens or carports. You need to be convinced that (a) you will definitely get a significantly higher price for this effort, and (b) that you don't decrease the pool of people who are potential buyers. (In other words, not everyone wants a pizza oven in the back yard, so your potential buyers pool is decreased.)

Focus on curb appeal

The age-old observation that "you never get a second chance to make a first impression" certainly applies when it comes to attracting buyers to a for-sale home. Estate agents understand the power of 'curb appeal;' that initial impression a buyer gets driving up outside your property.

Ever noticed how, after living in a house for a while, you become 'blind' to those niggling details that other people see? To maximize curb appeal, you need to see the exterior of your property with 'fresh eyes;' perhaps ask a good friend for their opinion.

Tips to enhance your home's exterior and curb appeal:

• Keep the lawn edged, cut and watered regularly. (Buy 'Bounce Back' from your local nursery to apply it to make your lawn greener.)

• Trim hedges, weed lawns and flowerbeds, and prune trees regularly. Cut back overgrowth on pathways.

• Consider planting a few lavender bushes around the outside of your garden gate.

• During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance. (Two large pots either side of an entrance always looks good.)

• Basic intercom systems are pretty cheap nowadays; consider installing one at your gate if appropriate.

• Store toys, bicycles, roller-skates, gardening equipment and the like out of sight.

• Have at least the garden gate, the front of your house and the trim painted, if necessary.

• Check the foundation, steps, walkways, walls and patios for cracks and crumbling.

• Inspect doors and windows for peeling paint.

• Sweep the porch and the front walkway.

• Repair and replace loose or damaged roof tiles.

• Re-seal an asphalt driveway.

• Keep your garage door closed.

• Store old and beaten up cars elsewhere while the house is on the market.

All in all, your attention to curb and exterior appeal should translate into excited buyers by the time they enter your home. With no 'cringe factors' outside the house, they are in a great frame of mind entering the house and fully expect a positive experience.

Maximizing interior appeal

There is a lot that you can do to improve the impression the interior of your home gives potential buyers, without getting into major renovations. In general, don't underestimate the power of paint! While we all have different tastes, please be aware that if you have outlandish taste in interior colour, you will be decreasing the pool of potential buyers. In other words, this is not an exercise in expressing yourself creatively; rather it is an exercise in creating an interior that appeals to as many buyers as possible. If necessary, repaint dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.

Here are some of the other 'insider tips' that estate agents use:

Clear out the clutter

Real estate agents say buyers won't purchase a home they can't see. If your home has too much furniture, overflowing closets, crowded kitchen and bathroom countertops or lots of family photos or collectibles on display, potential buyers won't be able to see your home. Get rid of anything you don't need or use. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, and more spacious look.

Removing less frequently used items from kitchen counters, closets, and attics make these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.

Use your nose

Many people are oblivious to scents, but others are extremely sensitive to offensive odours. To eliminate bad smells, bathe your pets, freshen the cat litter box frequently, shampoo your carpets, dry clean your drapes, and empty trash cans, recycling bins and ash trays. Place open boxes of baking soda in smell-prone areas, and refrain from cooking fish or strong-smelling foods. Introduce pleasing smells by placing flowers or potpourri in your home and using air fresheners. Baking a fresh or frozen pie or some other fragrant treat is another common tactic when expecting buyers.

Make all necessary repairs

Buyers expect everything in their new home to operate safely and properly. Picky buyers definitely will notice - and likely magnify - minor maintenance problems you've ignored for months or even years. Leaky faucets, burned-out light bulbs, painted-shut or broken windows, inoperable appliances and the like should be fixed before you put your home on the market. These repairs may seem small, but left undone they can lead buyers to question whether you've taken good care of your home.

Here are a few examples:

• Check for cracks, leaks and signs of dampness in the attic and basement.

• Repair cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.

• Replace broken or cracked windowpanes, moldings, and other woodwork. Inspecting and repairing the plumbing, cooling, and alarm systems.

• Repair dripping taps and showerheads.

Keep it spotless

This is often a tricky point for estate agents to make - different people are comfortable living with different levels of cleanliness. To appeal to as many buyers as possible, it is imperative that every inch of your house is clean and grime-free. Giving every room in the house a thorough cleaning. Hiring a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.

Focus on the 'hotspots'

While all rooms in the home are important, estate agents know that kitchens, bathrooms and master bedrooms are the 'hotspots.' These rooms require special attention. Assuming that you don't do major renovations, here are some ideas:

• Kitchen cabinet and general cupboard doors can be spruced up with a paint technique and new handles.

• Repaint the kitchen and bathroom walls in neutral colour, if necessary.

• Clean all tiling grout using a grout cleaning product. (You can buy grout cleaner from your hardware store.) You'll be amazed how much better your tiles look!

• If your lights are dated, consider replacing them.

• Consider retiling your kitchen and bathroom, if appropriate.

• New curtains in these areas may be a worthwhile investment.Buy new towels for the bathroom, to be brought out only when prospective buyers are on the way.

Selling Your Home: 10 Tips for Choosing a Real Estate Agent

 Before you sell, it's a good idea to interview at least two or three different real estate agents. Meet with them individually, and handle each meeting as if you were conducting a job interview (selling your home is an important job, after all!). This checklist will help you evaluate and compare the agents you meet:

1 --Professional

Once you've established the basics (licensing status, etc.), look for other indications that the agent will handle your home sale professionally. Does he or she belong to any local real estate organizations? In Manhattan, for example, The Real Estate Board of New York (REBNY) tracks credentials and continuing education of its members, and provides many valuable resources for members, sellers, and home purchasers.

What sort of training did the sales agent receive? You'll find that this may range from the minimum required for licensing, to a full-time company training program of six weeks or more. Also ask if the agent has done any advanced training. Perhaps he or she has taken extra courses and exams to become a licensed broker, an accredited home-staging specialist, an appraiser, etc.

Do a bit of research, too, in order to learn as much as you can about the company the agent works for. Is it a company with a strong reputation in your area? Does it specialize in your neighborhood, or your type of property? Does the company provide its sales agents with the most up-to-date technology?

2 -- Knows the Market

In order to price and market your home effectively, your real estate agent will need to have a thorough understanding of your neighborhood in particular, and state of the real estate market in general. Expect to see "comps" (comparable properties) of similar homes that have sold recently, as well as those that are currently on the market. And find out what other techniques the agent will use to determine the best price -- and best marketing strategies -- for your home.

Has the agent sold in your neighborhood? Has he or she sold similar types of homes, perhaps in another neighborhood? Has the agent ever lived in your area? Is he or she familiar with the neighborhood schools? Restaurants? Museums? Ask lots of questions to find out how well the agent will be able to represent you, and your home, to prospective purchasers.

3 -- Accessible

Buyers will want to see your property at all times of day -- daytimes, evenings, and weekends. So be sure you hire an agent who is available full time, and accessible to you virtually around the clock to handle any questions you may have, or issues that may arise.

And remember, accessibility is a two-way street! Be sure to support your agent by making your home as accessible as possible for showings -- even when it feels a bit inconvenient to you.

4 -- Good Listener

When you interview real estate agents, give extra points to those who ask as many questions as you do. Did the agent arrive with a 'standard' presentation, or is he or she able to make -- or adjust -- his or her recommendations based on what comes up in your conversation?

How interested is the agent in learning your point of view? How many questions does he or she ask about your personal goals and needs? After all, pricing and sales strategies could vary substantially based on what you're looking to accomplish (for example, you may need to sell quickly to meet a job relocation deadline, need to work around an existing tenant, or simply want to make the most profit no matter what the timeline).

5 -- Tells the Truth (even when you don't want to hear it!)

Expect that a good real estate agent will challenge you once in a while, ask the tough questions, and yes, even disagree with you occasionally. When he or she makes a recommendation that seems off-base, give your agent the opportunity to give you the facts -- and share his or her knowledge and experience -- before making a final decision. Learn to trust your agent's intuition, insights, and perspectives; they'll often lead you in the right direction.

6 --Team Player

Your real estate agent should be able to recommend a great team of professionals to support your sale -- from mortgage brokers and appraisers, to cleaning services and real estate attorneys.

Be sure, also, that your real estate agent enlists the help of other agents in your area in order to bring you the best buyer. In Manhattan, for example, more than 95 percent of sales are co-broked (one sales agent representing the seller, another the buyer), so it's especially important to work with someone who actively markets to other agents, and other real estate companies.

7 -- Helps Prepare Your Home for the Sale

There are entire books written on how to get your home ready for a sale, so we won't go into great detail here. Be sure to ask your real estate agent whether renovations -- particularly to the kitchen or bathrooms -- make sense. Decide if any re-painting -- or paint touch-ups -- may be necessary to make your home more attractive to buyers.

However you decide to proceed, be sure to follow these four basic steps before inviting buyers in to see your home: 1) de-clutter, to make your rooms seem larger; 2) de-personalize, to keep prospective buyers' attention on your home, rather than on your 'stuff;' 3) repair everything that's not in good working order, from re-caulking to replacing light bulbs; and 4) clean, clean, clean -- until your home literally shines!

8 -- Buyer to Closing

Remember that finding an interested buyer is only the beginning. Be sure your real estate agent is well prepared to qualify the buyer, negotiate aggressively on your behalf, and assist the buyer in finding financing, if necessary. Your agent should be ready to follow through with banks and mortgage brokers, any other agents involved in the deal, and with the real estate attorneys, until the sale is complete.

And if you're selling a home in Manhattan, be sure you have a real estate agent who is adept at preparing the materials necessary for the board application package, following through with the management company, and if it's a co-op sale, preparing the buyer for the board interview.

9 -- Gives Timely Updates

Throughout the sales process, ask that your real estate agent stay in touch with you regularly, in the way that's most comfortable to you (in person, or by phone, email, or text messages). He or she should give you regular progress updates, and timely notice of any issues that may arise -- along with potential solutions, of course.

It's also likely that a good real estate agent will suggest changes to sales and marketing strategies along the way. These minor course corrections will help eliminate any less effective efforts, and capitalize on what's working best. The result? Finding the buyer you're looking for, more quickly.

10 -- The Relationship

Don't underestimate the importance of your real estate agent's personality when you choose your selling partner. You'll be spending a lot of time with them -- and entrusting them with one of the most important transactions of your life. So be sure to find someone you not only trust and respect, but also look forward to working with.

Chances are, your home represents the largest purchase you have ever made. What's more, your home is not just a financial investment, but an emotional investment as well. When you decide to sell, be sure to enlist the services of a real estate agent who has the knowledge, experience, and understanding that will be necessary to navigate you safely and securely through every aspect of the selling process.

The Best Gas Prices In Your Area

 

If you're trying to cut your gas expense, this site my help.

Just enter your zip code in the site below and it tells you which gas stations have the lowest and the highest gas prices in your zip code.  It will even give you a map to show where they are.
 

http://autos.msn.com/everyday/gasstations.aspx

Chicago Celebrates Earth Day April 22nd, 2008

 

 

I think we are all aware that the environment is becoming increasingly more fragile and we need to take the time to educate ourselves and our families about environmental issues and how we can do our part.

April 22nd is Earth Day and Chicago will be celebrating the environment with numerous events and activities. We encourage you take part in this celebration, with your families,  in an effort to recognize the importance of nature around us and preserving this wonderful planet for generations to come.

A few of the Chicago Earth Day celebrations include:

  • Tuesday, April 22 - Mayor's Office of Special Events - Earth Day Celebration
    Daley Plaza from 10am to 3pm.
  • Tuesday, April 22 - 2008 Alternative Fuel Vehicle Exposition
  • Tuesday, April 22 - Chicago History Museum - The Local Eating Option
  • Saturday, April 26 - Earth Fest - IL Tour of Earth-Sheltered Homes

  • Saturday, April 26 - Chicago Botanic Gardens - Earth Day Walk

I hope you and your families have a fabulous Earth Day. For more information regarding these events and other Earth Day information please visit the following links.

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