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Sales Tax on Real Estate?

by Allyson Hoffman

November mid-term elections are just around the corner and you may have seen the emails or the rumors that warns innocent homeowners and taxpayers of a possible 3.8% tax on real estate sales. If you are like most homeowners and potential home buyers you are in shock and may be confused about this.

Here are the facts:

1. Starting in 2013, not only will you pay the closing costs and real estate fee when you sell your house but you may be required to pay a 3.8% Sales Tax

2. You are only subject to the tax if you make over $200K a year, $250K married filing jointly.The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller’s "main home" for at least two years out of the five years prior to the sale.

3. If you are fortunate enough to bring in $200K, the tax still does NOT apply to the first $250,000 on profits ($500,000 if married)

4. This new tax was implemented under the new health care bill that was signed earlier this year

5. On the bright side, in today’s economy and with home values falling, you most likely will have no tax burden if you sell your home. A typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors.

If you’re still concerned about this possible tax, it is a good idea to check with your accountant if you are planning and selling your home and you think you will have a large profit.

 

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What You Should Know If Your Mortgage Loan Has Been Sold

by Allyson Hoffman

There has been many changes in the lending industry lately due to the economy and unstable real estate climate. As a result many lenders are selling their loans on the free market, similar to to how stocks and bonds are bought and sold.

When a mortgage is sold to another financial institution, it means that the servicing rights to the loan have been transferred to a new lender. So what does this mean to you the homeowner? Generally this mean that you will now be sending your payments to a new company. This transaction may be seamless or you may see changes, so you should have an understanding of what has happened and what your rights are.

If your loan has been sold or there is a possibility that it might be, you should have received a statement that there is an indication or some level of likelihood that your loan might be sold during its life to another lender. If that does happen, then federal mandates require both the seller and the buyer of your paper to notify you of the pending sale and the closed sale.

Your current lender must notify you, in writing, at least fifteen days before your next payment is due. The lender is also required to give you complete contact information – company name, physical address, phone number and account manager of the new servicer.

The servicer buying your loan is required to provide this information to you as well. They are required to provide a direct link to a person you can speak to – not just an automated system.

This helps to protect you from mortgage scams directing you to send payments to an unknown entity via P.O. Box or wire and gives you the right to ask questions about the status of your loan and receive prompt answers. In addition, you are protected from any delinquency status for 60 days during the transition.

If you are behind in payments, your loan will likely stay put, as most servicers aren’t interested in purchasing problem loans. If you have an application in for loan modification, your loan will probably not be sold as well. However, if it is sold after you have started the loan modification process, be prepared to provide additional paperwork or even start over with the new lender.

The Mortgage Bankers Association of America (MBAA) has a great consumer site – The Home Loan Learning Center. You can also contact them for more information via phone at (202) 557-2700.

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Celebrate Autumn In Northshore!

by Allyson Hoffman

Autumn in the Chicago area is spectacular with the changing leaves and the all the beauty of the changing seasons. The Northshore area has many fall festivals scheduled with events and fun for everyone to enjoy.

Celebrate this wonderful time of the year by making plans to attend one of our area's many events!

 

Oktoberfest
Oct. 1, 2010 - Oct. 2, 2010

Enjoy a Naper Settlement tradition! Oktoberfest to be held from 4 to 10 p.m. Friday, Oct. 1, and from 11 a.m. to 10 p.m. Saturday, Oct. 2. Join in the fun under a lively tent in the village. Hear live music as you enjoy authentic German cuisine at this fun salute to one of our community's ethnic heritages. Tickets are $10 per person at the gate or $8 in advance with on-line ticket purchase.  Naper Settlement, 523 S. Webster St., Naperville, IL 60540 For more information call 630-420-6010      


Scarecrow Festival
Oct. 8, 2010 - Oct. 11, 2010

Straw will fly in celebration of the 25th anniversary of the St. Charles Scarecrow Festival held on Oct. 8-10, 2010 in downtown St. Charles. Over 100 whimsical hand-crafted scarecrows will show-off their  stuff  in hopes of being chosen the  best  in the ever popular Scarecrow Contest. Entries are constructed with care by creative families, clubs, businesses and individuals for festival guests to view and vote for their favorites in seven categories. The festival activities include a huge riverside arts & craft show, live entertainment, lots of free kids activities, petting zoo, carnival and the popular  make-your-own scarecrow  where friends and families can make a scarecrow to take home. Join us in celebrating twenty five years of scarecrow fun with new events planned including an amazing indoor Lego Train exhibit featuring an  out of this world  Star Wars display . So much to do and see and the best part is that it is Free! For more information contact 800-777-4373.

Pumpkinfest
Saturday, October 2nd

Fall just is not complete without pumpkins! Make plans to visit pumpkinfest where there will be pumpkins of all sizes for purchase. There will be games, entertainment and a craft show. Prince of Peace Church, Elk Grove Village, Illinois For more information call (847) 439‑0668 or visit their website at www.princeofpeaceumc.org

Villa Park Autumn Festival

November 18th-21st, The Odeum Villa Park, Illinois
Voted one of the top 100 shows in the country by Sunshine Artists Magazine, Villa Park Autumn Festival is full of excitement! Over 500 artists and crafts booths from 30 states with Home Decor & Gifts - All Handcrafted & One-of-a-Kind.Entertainment & Plenty of Food & Drink. Register for $30 Gift Certificates -- Awarded Hourly. For more info call 402-331-2889 or visit their website at www.hpifestivals.com

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Interest Rates At Record Lows-Should You Refinance?

by Allyson Hoffman

Mortgage rates have plummeted over the past year, in fact, we have seen the lowest 30 year fixed mortgage rates in history – 4.5% or lower, with 15 year fixed at 3.9%. With these rates so low many homeowners are tempted to refinance. If you are considering refinancing your current mortgage, look a little closer and look at all the facts.

Many are unaware that the lowest of the low rates are reserved for premium borrowers – those with strong credit and a low debt-to-income ratio. Many homeowners won't be able to qualify for the lowest available rate so be sure to discuss that with your lender before starting the refinance process.

It is important to understand the refinancing process as well. There are significant costs, including application fees, appraisals, credit reports, inspections, insurance, title insurance, surveys, points and other fees specific to the lender. There may also be hidden costs, like prepayment penalties, that can wipe out the monthly savings gained.

Do you intend to stay in this home long enough to reap the rewards of the savings?  For example, if you are only saving $100 a month and you intend to sell your current home in 18 months, you probably won’t realize the actual savings after costs.

What about points? Lower points produce a higher interest rate. Again, it probably depends on how low you plan to stay in your current home. Balancing points vs. rates should be considered with how long you are giving yourself to recoup costs.

Start by doing your homework and shop around for current refinance packages from your lender and other lenders. Many may choose to offer special deals or no-cost packages, especially if you have not refinanced previously. Your put a lot of time and effort into purchasing your home – take the same care with your mortgage plan.

 

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Bathroom Remodels On The Rise

by Allyson Hoffman

Many homeowners are making the choice to remodel their existing home rather than purchase new homes as a result of the sluggish economy. In a recent survey by the National Association of Home Builders (NAHB) they report that respondents indicated that a bathroom remodel was one of their most common projects during the first half of this year. In fact, almost 61% percent of all remodels were done on bathrooms.

"While remodelers are continuing to struggle, we expect the rest of 2010 to be a period of stabilization for remodeling, with the first stages of recovery emerging by the end of the year, followed by a robust recovery beginning early next year," said NAHB Chief Economist David Crowe.

The popularity of bathroom remodeling may be attributed to the concept that it can be a very affordable means to make your master suite more comfortable and add value to your home when it’s time to sell.

If you are considering making some improvements to your bathroom, below are some tips to help give your bath a great lift:

Vanity Sinks: From artistic vessel sinks to furniture pieces that have been modified to accommodate plumbing, sinks can become a bathroom showpiece while keeping their functionality.

Countertops: Granite, ceramics, recycled glass and marble are all popular materials to consider if you want to update the counters of your existing vanity.

Showers: Open, walk-in showers are very popular right now and can be designed to accommodate more than one person.

Faucets: Old, polished brass fixtures really date your bathroom – check out new silhouettes and finishes for your faucets and cabinetry.

Lighting: Bathrooms that are well lit, especially with natural light sources look fresh and modern. Consider glass block windows and skylights to bring in natural light and create an open feeling.

Tile: Tile can be used creatively in the shower and wet areas as well as the floor and for backsplash.

Before starting a home improvement project, list your objectives, create a budget and do your homework before you select a contractor. The NAHB also offers a list of resources and reference guides to help make decisions and find qualified professionals.

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Photo of Allyson Hoffman & Paul Wells Real Estate
Allyson Hoffman & Paul Wells
RE/MAX of Barrington
306 W. Northwest Highway
Barrington IL 60010
Allyson: 847-310-5300
Paul: 847-913-6100

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RE/MAX of Barrington
306 W. Northwest Hwy.
Barrington, IL 60010

Allyson Hoffman
(847) 310-5300
[email protected]

Paul Wells
(847) 913-6100
[email protected]