Five Things to Know about Homeowner’s Insurance

1. Exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These types of coverage must be purchased separately. Costs vary depending on how much insurance is purchased, what it covers, and the property’s risk.

2. Dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.

3. Replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $250,000 and it costs $280,000 to replace it, you’ll only receive $250,000.

4. Actual cash value. The term “actual cash value” is not as easily defined. Some courts have interpreted the term to mean “fair market value,” which is the amount a buyer would pay a seller if neither were under undue time constraints. Most courts, however, have upheld the insurance industry’s traditional definition: the cost to replace with new property of like kind and quality, less depreciation. Courts have varied in their rulings as to whether or not depreciation includes obsolescence (loss of usefulness as a result of outmoded design, construction, etc.).

5. Liability. Any type of insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice, injury or negligence. Liability insurance policies cover both legal costs and any legal payouts for which the insured would be responsible if found legally liable. Intentional damage and contractual liabilities are typically not covered in these types of policies. There is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
www.Real1Smith.com

7 Reasons to Own Your Home (Buy vs. Rent)

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number ofU.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at http://www.real1smith.com/calculators.cfm?calculatortype=mortgageRentVsBuy

14 items Not to Overlook on a Final Walk-through

It’s guaranteed to be chaotic right before closing, but you should always make time for a final walk-through. Your goal is to make sure that your home is in the same condition you expected it would be. Ideally, the sellers already have moved out. This is your last chance to check that appliances are in working condition and that agreed-upon repairs have been made. Here’s a detailed list of what not to overlook for on your final walk-through.

1. Hot water heater is working.

2.Garage door opener and other remotes are available.

3.No plants or shrubs have been removed from the yard.

4. There are no major changes to the property since you last viewed it.

5. All items that were included in the sale price — draperies, lighting fixtures, etc. — are still there.

6. Screens and storm windows are in place or stored.

7.All appliances are operating, such as the dishwasher, washer and dryer, oven, etc.

8.Intercom, doorbell, and alarm are operational.

9. Hot water heater is working.

10. Heating and air conditioning system is working

11. Garage door opener and other remotes are available.

12. Instruction books and warranties on appliances and fixtures are available.

13.All personal items of the sellers and all debris have been removed. Check the basement, attic, and every room, closet, and crawlspace.

14. Repairs you’ve requested have been made. Obtain copies of paid bills and warranties

Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://real1smith.com/

Good News in the Ada County Real Estate Market.

July sales were 564 in Ada County, an increase of 42% compared to sales in July 2010…yep…that’s right 42%!

July sales were 564 in Ada County, an increase of 42% compared to sales in July 2010…yep…that’s right 42%!

Historically, July sales are 9.75% below June levels. July 2011 had 8.6% fewer sales than June 2011.

I am really happy to report that year-to-date 2011 sales, which total 3,580 are ahead of YTD 2010 sales; 3,524. As of the end of July we are 56 units ahead of year-to-date 2010! That’s a 1.5% increase.

Of our total sales in July… 42% were distressed….down 5% from June 2011. In January 2011 57% of our sales were distressed. (Short sales 15% and REO’s 27%). Distressed sales continue to cast a long shadow over the market, but they are no longer the “majority” of transactions!

For homes sold in July, the average number of “Days on Market” was 79. This is down from 89 days last year this time and down from 93 days in January 2011.

Pending sales at the end of July were 937; and decrease of 3% from the end of June. Looking back at pending sales from March 2011 to July 2011, we see an average near 1,000 at the end of each month. This is another sign of the long term recovery we are experiencing. The percentage of pending sales in distress was essentially unchanged from June, totaling 43% overall. We are now at four consecutive months below 50%.

July median home price held on to gains made in June. Overall median price was $152,750; down 6.6% from July 2010. This is the second highest median price we’ve had so far this year.

New Homes median price for June 2011 was $212,000; the same as June 2010.

The number of houses available for sale at the end of July stayed below 2,600 for the second month in a row. This is down 2% from June and 33% less than last year at this time. Currently available inventory compares to early 2006.

At the same time, the percentage of active inventory that is distressed dropped almost 1% from June to 33%. This is the fifth consecutive monthly decline and keeps us below the 40% levels set last spring….when we were on the increase.

In Ada County we have 4 months of inventory on hand…historically this number defines a strong “seller’s market”. The price category in shortest supply is <$119,000 with 2.8 months available. This is closely followed by the $200,000 to $249,000 with 4 months. Consumption of inventory is expanding to all price ranges. In the price ranges from $250,000 to $499,000 we have less than 6 months of available inventory. These are the lowest numbers in more than a year!

There is also positive news on some of the higher priced inventory; $500,000 to $699,999 inventory dropped for a third month in a row to 7.2!

We continue to “benefit” from inventory levels much lower than national average.

Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://www.real1smith.com/

Top 10 tax tips for home sellers, straight from the IRS

From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful. Last week the agency released “Ten Tax Tips for Individuals Selling Their Home,” (IRS Summertime Tax Tip 2011-15).

As a real estate agent it is not my job to give home sellers tax advice. Indeed, it is advisable not to, since I could end up getting sued if you give wrong advice.Instead, I sellers to this list of IRS tips. It’s a good starting place for them to begin to understand this often complex area of tax law.
Here are the IRS’s top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html

How to Raise Your Credit Score

How the Credit Score Model Works
The credit scoring model was created as a means to evaluate a consumer’s likelihood of repaying debts in a timely manner. Credit scores range from 350 on the low end up to a high score of 850. As you can imagine, the higher the score, the better it will be for you when qualifying for anything we discussed above.
The simple fact is that the higher your credit score, the lower your interest rate and the easier it will be for you to qualify. A lower interest rate can translate into a substantial savings over the life of the loan when you consider the interest and finance charges that you will pay.
If you’re feeling a little dismayed about your current credit score, understanding the statistics might offer a little perspective. Believe it or not, only one out of 1,300 people in the United States maintain a credit score above 800. So the odds are strong that you fall below an 800. If so, there are steps you can take to improve upon your current credit score.
How to Raise Your Credit Score
So, what can you do eliminate the negative impact certain derogatory marks have taken on your credit?

• If you don’t have a credit card, you need one. Maintaining a balance on a credit card will help establish positive credit over time by reporting to the major credit bureaus.
• The follow up to that is DO NOT max out any of your credit cards. While you need to maintain a balance, you must keep your credit balances to less than 30% of your credit limits to improve your credit score. (This means if you have a $5,000 limit your balance should stay below $1,500.)
• If you are in over your head due to credit card debt, begin by paying down those bills. Outstanding credit balances make up 30% of your overall credit score. A high balance can and will have a negative impact on your score. Those high monthly payments will also impact your ability to qualify for a mortgage.
• If you have no credit or past credit issues, apply for a secured credit card. If you are unable to get approved for a standard credit card, the secured version might be your only option. This works similar to a debit card where you will deposit money into an account with a lender and then your credit limit is typically equal to the deposit.

In the meantime, don’t be discouraged with a low score. You can build or reestablish your credit score over time with some work.
The great news is this: If you are able to increase your credit score from a 620 to a 720 or above, you could potentially save $601 per month on mortgage payments or $7,214 per year! That’s an overall savings of $216,000 over the life of the 30−year loan!
That should be inspiration enough to get started improving your credit score today!

Wow, 30 year fixed rates hit 3.96%!!!

Idaho Housing 100% financing rates hit historic low of 3.96%today! If you know anyone considering buying that has a 680 credit
score or above, they may qualify for this unbelievable rate and 100%
financing. If scores are below 680 they can still get this rate and
would just need to make a 3.5% down payment. Now is definitely the
time to buy if you know anyone sitting on the fence. Also a great
time to refinance if you are within 105% of the appraised value of
your home. Please let me know if you or any of your clients need a
free, no obligation pre-approval today.

Thank you,
Mortgage Loan Rates
August 09, 2011
30 YEAR FIXED
4.250% 4.363% APR*
15 YEAR FIXED
3.500% 3.692% APR*
30 YEAR FIXED FHA
4.125% 4.865% APR*
IDAHO HOUSING 100% Financing (FHA 1st, GCR 2nd)
3.960% 4.691% APR*
*APR = Annual Percentage Rate
Mortgage Rates may vary and are subject to credit approval.
Certain restrictions apply.
Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://www.real1smith.com/

How to Choose a Neighborhood

 

Narrow your home search by identifying neighborhoods that are right for you.

When evaluating a neighborhood you should investigate local conditions. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others:

• quality of schools
• property values
• traffic
• crime rate
• future construction
• proximity to schools, employment, hospitals, shops, public transportation, prisons, freeways, airports, beaches, parks, stadiums and cultural activities such as museums, concerts and theaters.

Neighborhood search strategies
If you’re a first time-buyer with limited financial resources, it’s wise to buy a home that meets your primary needs in the best neighborhood that fits within your price range. You can maximize your home purchase location by incorporating some of the following strategies into your neighborhood search:

• Look for communities that are likely to become “hot neighborhoods” in the coming years. They can often be discovered on the periphery of the most continuously desirable areas. Look for a home in a good neighborhood that is a bit farther out of the city. If commuting is a concern, purchase a home that is close to public transportation.
• Look at the neighborhood demand by asking your REALTOR® whether multiple offers are being made, whether the gap between the list price and sale price is decreasing, and whether there is active community involvement. You can also drive around neighborhoods and see how many “sale pending” and “sold” signs there are in a particular area.
• Look into purchasing a condominium or co-op, rather than a house, in a desirable neighborhood. This way you still may be able to purchase in a prime area that you otherwise could not afford.

Copyright © by Move, Inc.

 

30 year mortgage rates drop to historic low of 4.25% today!!!

Mortgage rates have dropped to their lowest level today since
October!!! If you know anyone looking at buying or refinancing, now
is definitely the time to move forward.  Most economists are still
predicting mortgage rates to rise over the next 6 months so this is a
small window to get the ball rolling now.  Please let me know if you
MORTGAGE LOAN RATES

(Effective Date)
August 02, 2011

  30 YEAR FIXED

4.250%              4.363% APR*

15 YEAR FIXED

3.500%              3.692% APR*

30 YEAR FIXED FHA
4.250%              4.990% APR*
IDAHO HOUSING 100% FINANCING (FHA 1ST, GCR 2ND)
4.250%              4.981% APR*
*APR = Annual Percentage Rate
Mortgage Rates may vary and are subject to credit approval.
Certain restrictions apply.
or any of your colleagues or clients need anything from me and have a
great week!

Nick Smith
Silvercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
www.Real1Smith.com