Waiting Might Cost MORE!

The housing market has been in a downward trend for four years. There is some speculation that inventories will not reduce any time soon which will be necessary for prices to rise. However, there are other factors that can increase the cost of housing, specifically mortgages. FHA accounts for a large percentage of the current housing loans and is expected to be even more prominent when the Qualified Residential Mortgage Guidelines go into effect next year.

1. Rising rates are almost certain, due to looming inflation fueled by higher gas and food prices and the enormous amount of deficit spending
2. FHA loan limits have been reduced – they are lower than conventional limits in most markets and FHA has suggested that they might be reduced further.
3. FHA might increase the down payment to 5% or higher in an effort to have a more secure loan that will have less likelihood of going to foreclosure.
4. FHA might decrease the amount of seller contributions in a similar move to require the buyer to have a larger investment in the home and therefore be a more “qualified” borrower.
5. Congress may decide to increase the up-front MIP to build up the FHA reserves. The annual MIP has been adjusted twice since October 2010 when the Up-Front MIP was actually reduced.
6. Due to tougher conventional requirements, demand for FHA loans could exceed maximum annual insurable limits. If Congress is having a hard time raising the limit on national debt, they might not even consider raising the limits for FHA.

In an effort to solidify the lending industry, qualifying is becoming harder for the buyer and more expensive at the same time. Many of the rules changes could go into effect next year. In addition, market factors could easily play a role in increasing buyer’s costs. Waiting will very probably require a larger up-front investment for buyers in the future.

Rentership Society

Check out this link, where a head US housing strategist discusses the future of home-ownership and renting in our society.  This is the forefront of the housing market!

http://speakingofrealestate.blogs.realtor.org/2011/10/31/morgan-stanley-u-s-becoming-rentership-society/#.TrlVutY1ycA.email

One Size Doesn't Fit All

Rarely, does one size fit everyone and the same goes for advice. The following suggestion is not right for everyone. 


However, for people with job security and who don't own a home; for people with good credit and enough savings for a down payment, there may never be a better time to buy a home.

Homes have had a significant price correction but in many markets, they have started to rise again. The lower prices combined with historically low interest rates make this an opportune time to buy a home if you can afford it.

One of the reasons homes are an attractive investment is the fact that you can use a small down payment and finance the balance for 30 years. The principle, called leverage, allows you to earn a return on the value of the home rather than the actual cash investment. Small appreciation can create a large rate of return on the initial investment of the down payment and closing costs.

The following example is a projection at the end of five years for a $175,000 home with 3% closing costs and a 5% interest rate for a 30 year term. The rate you see in each column is an annual rate of return based on the equity of the home at the end of the five year period due to both appreciation and amortization of the loan.

The nature of positive leverage will cause the returns to be higher with a smaller down payment. As you see in the table, the return is higher on the 3.5% down payment than with the 10% or 20% down payment.

If you're curious to see if this advice might fit your situation, you really need to sit down with a knowledgeable Triplett real estate professional who can help you assess your position. It's worth the time because there may never be a better opportunity than now.

Family and Friends' Mortgages

It all seems perfectly reasonable: one person is not satisfied with what he can earn currently in the market and another wants to find the most attractive mortgage to purchase their home. It can be a good match but the IRS has specific rules that govern the transaction.

The loan must be done in a business-like manner with a written note specifying the loan amount, interest rate, term and collateral. IRS requires that the mortgage be a recorded lien in order to allow the interest deduction.

Sometimes, these friends and family situations have a less than normal interest rate on the mortgage. However, the rate charged in the note is regulated by the minimum applicable federal rate which is published monthly by IRS according to current Treasury securities. For October 2011, the rate is 2.95% for terms over nine years.

The seller must report the interest paid to them along with the name, address and Social Security number on schedule B when the buyer uses the property as their principal residence.

A mortgage between family and friends can be good for both parties. It may allow the borrower a slightly lower rate without the expenses of a traditional lender while giving the note holder a higher rate than they can earn in available investments. Your tax professional can guide the transaction whether you're a buyer or seller, and your Triplett real estate professional can help arrange to have the documents drawn and filed.

Yours or Theirs

It takes money to buy a home: yours or theirs. If you're not going to pay cash for a home, you need to find out exactly what you can borrow and what it will cost before you start looking at homes.

The mortgage process is not as clear cut a path as it was a few years ago. It is certainly more complex, takes longer and assumes that you're credit worthy. If you have less than stellar credit, a trusted mortgage professional can advise you how to improve your individual situation.

You are entitled to a free credit report from each of the three major credit bureaus each year. Go to AnnualCreditReport.com to get a copy of each from TransUnion, Experian and Equifax. Read the reports to determine if they're accurate. Surprisingly, about 90% of all reports have errors.

You can try to correct them directly with the credit bureau, but a trusted mortgage professional can help you with this process too. They have tools that are not available to individuals. Some errors may not be serious but others will keep a person from qualifying.

Housing affordability is at a near record height due to the incredibly low interest rates and low home prices. Some areas are experiencing absorption of the inventories which could impact price. If you're going to use "their" money to buy a home, the first step is to talk to a trusted mortgage professional. Call us for the name of a trusted mortgage professional.

Sale by Surviving Spouse

The IRS has given special consideration regarding the sale of their jointly-owned principal residence after the death of a spouse. If the surviving spouse does not remarry prior to the sale of the home, they may qualify to exclude up to $500,000 of gain instead of the $250,000 exclusion for single people.

• The sale needs to take place after 2008 and no more than two years after the date of death of the spouse
• Surviving spouse must not have remarried
• Both spouses must have used the home as their principal residences for two of the last five years prior to the death
• Both spouses must have owned the home for two of the last five years prior to the death
• Neither spouse may have excluded gain from the sale of another principal residence during the last two years prior to the death

If you have been widowed in the last two years and have gain in your principal residence, it would be worth investigating the possibilities. Contact your tax professional for advice about your specific situation. Contact us to find out what your home is worth in today's market. See IRS Publication 523 - surviving spouse.

5 Ways to Know if a Home is "The One"

Ever wondered if a home was right for you?  Check out this great advice from Trulia's "Real Estate Realist", Tara-Nicholle Nelson of San Francisco!

http://bit.ly/oXLWeR

You Must Be This Tall to Ride

Do you remember going to the State Fair or Six Flags as a child? There was a terrific ride your older siblings were going on but there, at the entrance gate, was a sign that read "You must be this tall to ride."

After standing in line and thinking you had just about made it, you found out that you weren't tall enough. Not only was it disappointing, it was slightly embarrassing. You never want to go through that again.

It's remarkably similar when buying a home. You can go through the entire property search process to find the right home and negotiate the contract only to find out that you don't measure up "financially." It's something that no one wants to go through if they have a choice.

Regardless of what you think you know, if you're buying a home, you need to physically visit with a trusted mortgage professional before you get serious. You'll find out your credit score which will directly affect the mortgage rate you'll pay. You'll discover possible blemishes on your credit that may be able to be corrected. You'll even get a pre-approval letter that you can submit with an offer which could dramatically affect your negotiations.

Remember how some rides didn't turn out to be as good as you thought they were going to be? You certainly don't want that disappointment with a lender involving one of the biggest decisions of your life. Contact Triplett for a list of trusted mortgage professionals.

Keep Track of Improvements

People are staying longer in their homes according to the National Association of Realtors and the U.S. Census. Over time, even a modest appreciation could result in a significant gain and homeowners should have a strategy to minimize possible taxes.


Maintenance on a principal residence is not deductible but improvements can add to the basis which can reduce the gain in the sale. Improvements are easily identified if they add to the value of a home, prolong its useful life or adapt it to new uses.


Receipts and other proof, such as pictures, should be kept during ownership and for several years after the sale of the home. They can include the closing statements from the purchase and sale of the home and all receipts for improvements, additions or other items that affect the home's adjusted basis or cost.
For a principal residence, basis includes the price paid, plus certain acquisition costs and capital improvements made. When the property is sold for more than the basis, there is a gain. Currently, homeowners that meet the requirements can exclude up to $250,000 of gain if single or up to $500,000 if married filing jointly.


A simple strategy is to put documents that affect the basis of the home in one envelope. Any receipt for money spent on the home that isn't the house payment or utilities, goes into the envelope. Your tax advisor will be able to sort through them to determine the capital improvements.


For more information on determining basis or capital improvements, see IRS publication 523, Selling Your Home.

Home Energy Audit

With the exception of a mortgage payment or rent, the largest homeowner/tenant expense is utilities; and energy is the major component. There are lots of contributing factors such as air leaks, insulation, heating and cooling equipment, water heaters and lighting.

It's estimated that 75% of the electricity to power home electronics is consumed when the products are turned off. Computers, monitors, TVs, cable and satellite boxes, DVRs and power adaptors are spinning your electric meter even when they're not being used.

Unplugging devices can actually make a difference in the size of your electric bill. Plugging several of these offenders into a power strip with a single on/off switch may make the task easier. Most computers have options to put them into sleep mode or even turn off when not in use.

Take 3 1/2 minutes and watch Energy 101. Consider hiring a professional home energy auditor or do-it-yourself. The Department of Energy has a checklist with some valuable suggestions.

Converting a Home to a Rental

What's keeping you from taking advantage of the low prices and mortgage rates available today? Concerned that you may need to sell in a few years and won't be able to get your equity out of your home?

Suppose a buyer purchases a home and finds out that they need to move in two years. Instead of selling the home, they could convert it to a rental. It's possible that it could have a positive cash flow even with the small down payment. In most cases, the conversion would not accelerate the mortgage.

The price of homes and low interest rates combined with a very strong rental market in most areas has attracted a lot of investors. Non-owner occupied mortgages generally require 20-30% down payment compared to a 3.5% down payment for a FHA owner occupant.

The following example looks at a home that might have been purchased as a principal residence and then converted to a rental at the end of two years. There are certainly lots of variables to consider but the high indicated rate of return merits closer examination of the possibilities.

 For the buyer who has good credit and ample funds for down payment and acquisition costs, there may never be as good a time to buy a home as now. For the buyer who is concerned that they might have to move in the near future, converting it to a rental might make a great investment opportunity.

Competing with Cash

It's not fair! 29% of all sales made in June and July 2011 were cash. How does a buyer who needs a mortgage compete with a cash buyer?

You've been looking for a home for months after thinking about it for years. You've found the home you want and meets your family's needs. You write a contract but before it's even presented to the seller, another offer comes in. With all the homes on the market, you'd think you wouldn't have to deal with multiple offers but you'd be surprised how many times it does happen.

There are some proven strategies that can minimize the advantage of an all-cash buyer.

1. Get pre-approved and submit the letter from the lender with the offer
2. Move fast to minimize competing with other offers
3. Submit larger than normal earnest money to show your sincerity
4. Be flexible about closing and possession
5. Avoid unnecessary contingencies in the contract
6. Write a letter emotionalizing why you want the home

Are You Ready To Buy?

In most parts of the country, the housing market is good (or great!) for buyers right now - interest rates are bizarrely low, lots of inventory means lots to choose from, and the cost of renting has increased in a lot of markets. But just because the market’s good doesn’t mean it’s the right time for everyone to buy. The decision whether to buy a home is a very personal one; you need to carefully examine your own situation to determine whether it’s right for you.

So, what are the questions you need to answer in deciding whether you’re ready to buy? Here are some of the big ones:

1. Do I have enough money for a down payment?
And how much, exactly, is “enough?”  Today’s minimum down payment requirements range from 3.5 percent on an FHA loan to 10 or even 20 percent for conventional loans. That means coming up with anywhere from $7,000 to $40,000 on a typical $200,000 house. While there are still programs that can give you a down payment assist, much of the heavy lifting here will need to come from you - in the form of saving up your hard earned cash. And keep in mind there are also closing costs you’ll probably have to pay in cash, which can run as high as 3-4% of your total purchase price.

Talk with a real estate pro and a mortgage broker in your areas to start wrapping your head around how much “cash to close” (i.e., down payment + closing costs) will run, approximately, on a local property that would meet your needs. Can your savings cover this? If not, where will you get the money - what’s your plan for coming up with it?   Putting down as much as you can a) makes you more attractive to lenders, so you might qualify you for better loan terms and b) gives you additional purchasing power, either decreasing your monthly mortgage payment or increasing your purchase price limit for a home.

2. Can I handle the not-so-glamorous aspects of homeownership?
If you can’t even fathom the prospect of having a home maintenance crisis without having a landlord to call to fix it, you might want to reconsider homeownership - or at the very least, buy a lower maintenance condo or townhome in great condition, and make sure you get a home warranty!  As a home owner, after all, you essentially are your own landlord. Pipe bursts in the middle of the night? Guess who’ll be up fixing it or calling (and paying) the plumber? (Hint: you.)

There are also some less-than-glamorous bills you’ll have to deal with in your new role as a homeowner that you never laid eyes on as a renter: property taxes and hazard insurance, to name two. When you go from renter to owner, you also need to account for the cost of appliances and maintaining the property’s roof, windows, and landscaping, among other things.

3. How long do I intend to stay in the house?
If you think you might move out of the area next year, then you really shouldn’t be thinking about buying a house (unless of course, you want to play landlord and rent it out after you leave - a prospect which requires its own risk/rewards analysis). For your home purchase to pencil out as a good deal, financially, you’ll shouldn’t buy unless you’re comfortable staying in the house at least 5-7 years - even longer, if you’re buying a home in a foreclosure hot spot or an area with a sluggish job market.. This gives you some time to build up equity and make up for the costs of buying, selling and moving.

4. Are my job and finances stable?
Maybe you just went through a major career change and are in the process of working your way back up from the top. Or maybe you work in a field that has been hit really hard by layoffs and cutbacks. The worst case scenario is to find yourself in a spot with mortgage payment you have no way to make, when you could have avoided that by seeing the writing on the wall. If you feel like there’s a real chance you could lose your job or income tomorrow, you may want to hold off on buying a house - that has the added bonus of giving you the geographic freedom to move, if needed, to get a new job.

Is there really such a thing as 100 percent job security in today’s economy? Probably not. But the best practice is to be confident that your finances could handle a temporary loss of income and still make your mortgage payments, before you buy. One way to do this is to have enough money in the bank to cover 4-6 months’ worth of living expenses, calculating them to include your mortgage payment - before you deem yourself ready to buy. That way, even if you lose your job with no warning at all, you’ll at least have a reasonable window of time to find a new one without digging yourself into a hole - or worse, losing your home altogether.

5. What are my real reasons for buying?
Buying a home is a long-term commitment that will have massive impacts on your lifestyle, your family and your finances. In other words, don’t do it unless you’re really sure you want to and are ready for the lifestyle change - don’t let someone else talk you into it. Worthy reasons renters with homeowning readiness give for their decision to buy include some or all of the following:

• You want to build equity instead of paying a landlord. Fact is, if you get a fixed rate mortgage and make the payments for the full term of the loan, you'll eventually pay it off. That's not possible when you're renting.
• You want a place to call your own, where you can paint a wall purple, add a pottery spinning studio or build your dogs an obstacle course (oops - that's my reason for homeownership!), because it's your prerogative.
• You want the tax advantages of homeownership.
• You want a stable place you and your family can live for as long as you'd like.
  

Ask yourself these questions, and be honest with your answers. If you really want to buy, but your answers to these questions today don’t weigh in that direction, it doesn’t mean you’ll never own a home. It’s usually just a matter of strategically timing your purchase out a year or two when your savings, your career and your lifestyle are in alignment with the implications of ownership - consider working closely with Triplett to get an action plan in place and start working that plan.

The Silent Killer

Carbon monoxide is colorless, odorless and toxic. It's called the "silent killer" in homes because some victims are not even aware that the deadly condition exists.

Homeowners must be concerned about unmaintained furnaces, water heaters and appliances that can produce the deadly gas. Other sources could include leaking chimneys, unvented kerosene or gas space heaters and even exhaust from cars operating in an attached garage.

The Environmental Protection Agency suggests the following to reduce exposure in the home:

• Keep gas appliances properly adjusted
• Install and use an exhaust fan vented to the outdoors over gas stoves
• Open flues when fireplaces are in use
• Do not idle car inside garage
• Have a trained professional inspect, clean and tune-up central heating systems annually

There can be many symptoms of carbon monoxide poisoning that can resemble other types of poisoning. Headaches, nausea, vomiting, dizziness and feelings of weakness or fatigue are a few of the most common symptoms. Lower levels of exposure may be mistaken for the flu.

Roughly half the states have laws regarding carbon monoxide detectors in homes. Regardless of the requirements, what person would want to put their family, guests or themselves at risk for something so deadly? The devices can be purchased for as little as $20 and plugged into the wall like a night light.

Significant Problems

"The significant problems you face today cannot be solved at the same level of thinking you were at when you created them."

          - Albert Einstein

The housing market has definitely caused significant problems for some people but is also providing some amazing opportunities for others. Agents aren't like retailers who wake up one day realizing they have the wrong merchandise on the shelves.

Everyone needs a place to live and whether you rent or buy, you pay for the house you occupy. While the home for sale remains the same, the methods that produce results have to change.

Listing agents are diametrically opposed to the objectives of buyer's agents. This is not to say that there cannot be a win-win situation but each agent is trying to negotiate the best price and best terms for their client.

Financing can make listings more marketable and structure a transaction to provide the buyer with the cheapest cost of housing. Personal experience is a great teacher but a very expensive way to learn. An expert, like a Residential Finance Consultant can provide information and tools to make better decisions to be able to profit in the current market.

5 Insider Secrets for Coming Up with Cash for Down Payment

Most home buyer’s biggest hurdle is coming up with the cash for a sensible down payment.  Gone are the days of zero-down loans, so if that was your plan, you’re going to need a new one!  Coming up with a down payment for a home is a challenge because it’s not chump change we’re talking about, here.  The down payment on a $200,000 house, for example, will run you anwhere from $7,000 (on an FHA loan) to $40,000!

1.     The FHA Bridal Registry.  Yes - you read that right! The FHA Bridal Registry Program enables wanna-be home buyers to apply their families’ wedding gifts toward their down payments. And although it’s named a “bridal registry” program, you don’t have to be a prenuptial couple to use it. You could also use this program to collect gifts for graduation, the arrival of a baby or some other major life event in which people want to give you gifts. 

The FHA Bridal Registry works like a traditional registry, but is more flexible. The registrants visit their choice of FHA mortgage lenders and set up what essentially is a custodial savings account for the sole purpose of funding their down payment. The couple’s (or individual’s) family and friends can either deposit funds directly into the account or give the cash or check to the couple or individual, who then deposits it into the account. The account’s flexibility also goes beyond that of traditional down payment gift rules that are applicable to FHA loans, which are detailed below in insider secret #2. With the FHA Bridal Registry Program, the only gift documentation required is “lender and borrower certification of the funds.”

2.     Family gifts.  Most lenders will allow home buyers to apply gift money from family members toward their down payment - within guidelines, that is. First, the lender will require a letter from the giver verifying that it in fact is a gift and not a loan. (They generally frown upon it being a loan because it would add to the buyer’s debt and change their debt-to-income ratio.) And second, the person giving you the money must be a relative. The reasoning here is that a friend will most likely expect you to repay the money, whereas a relative won’t. 

FHA loans will allow the gift to make up any portion or all of the buyer’s down payment, many conventional (non-FHA) loan programs will restrict the proportion of a buyer’s down payment that can come from gift money.  The lender may also have specific ways they want to see the money go into and out of your accounts. Before you accept a gift toward your down payment, be sure to check with your mortgage broker or loan rep to be sure that you’re dotting all the right i's and crossing all the right t's.

3.     Your Employer.  Some companies offer assistance programs to employees. Most are government, university, large company and financial industry employers. One example is safety workers: n some areas, safety workers like firefighters and police can have access to down payment grants from their employers if they buy properties in the city where they are on-call as first responders. Also, many large colleges and universities, very large companies and banks and lending institutions offer down payment help and have below-market-rate mortgages set up for faculty members and staffers.  Check with your Human Resources department to see if any such program is available to you. 

4.     City/County/State Programs.  Some states, counties and cities still offer programs that lend or give home buyers some assistance for down payments. These programs vary widely in scope - for instance, many target buyers with low and moderate incomes, while some seek to help the buyers of foreclosed or fixer-upper type homes. Some don’t have to repaid - meaning they are given as grants and are forgiven entirely if the buyer lives in the property for 30 years, but must be repaid if the buyer sells or rents the home out before the 30 years elapses. The programs pretty much all have some sort of homeowner education component that requires applicants to take personal finance and homeownership preparedness classes before they can receive funds. To learn more, visit your city, county and state websites to learn about programs that might be able to help you.

5.     Your Retirement Funds.  Many financial advisors would advise against this, but if you have a 401K or Roth IRA account and some years to go before retirement, you might be able to tap into it or even borrow against your own funds for your down payment. Currently, you can take up to $10,000 out of your Traditional IRA with no penalty to put toward the purchase of your first home, but you will be taxed.  You can take as much as you want out of your Roth IRA contributions with no penalty or taxes, though, and as much as $10,000 from your earnings penalty-free for your down payment.  The rules get a little tricky, here, so definitely check in with your tax and financial advisors.

And while you can’t similarly draw from your 401K, many retirement and pension plans will allow you to borrow the money against your funds, then repay it to yourself – at interest. So the choice there comes down to paying your lender back with interest or paying yourself with interest. That choice should be you! But first, get some advice from your CPA or financial planner. This option might not make financial sense for your particular situation.

 

More To Sell

If you had a 3.5% mortgage on your current home and were buying another home, transferring your low interest rate mortgage would be ideal. Unfortunately, lenders don't allow that.

When buying a home today, it would be smart to think about selling it in the future. To have a good home with unique features makes it marketable. To have attractive financing that could be assumed would add to the salability.

Consider getting a FHA or VA loan to purchase your home. The present advantages are that these loans are priced competitively and a little easier to qualify for than conventional loans. The future advantage is that FHA and VA loans are assumable at the original note rate for qualifying buyers.

There's more to sell than the home itself when you have an assumable loan. The mortgage payment could lower the cost of housing significantly. A buyer may easily be willing to pay more for the home due to the attractive financing, especially if it helps their equity grow faster.

The Investment Alternative

To say the investment market is unsettling is an obvious understatement. The market is down 8% in the last ten days and the news doesn't give much hope that things are going to get better in the near term.

Preservation of capital is probably today's most important investment consideration and making a profit would be a bonus. Of all the conventional investment alternatives like stocks, bonds, mutual funds, gold, commodities, CDs and annuities, housing is the best asset class in America.

Homes have had a 30% to 40% price correction in the past four years. Mortgage rates are at near all-time low rates with 30 year terms available for investors. Rents have increased significantly over the past two years while vacancy rates have decreased. People will always need a place to live.

Five year certificates of deposits earn a little over 2% but rental properties are yielding eight to ten times more than that. Income properties are tangible assets that have benefitted dramatically in inflationary times. Cash assets can be devastated by inflation and diversifying into income properties can provide real protection.

Single family homes offer investors the opportunity to borrow large loan-to-value mortgages at fixed rates for long terms on appreciating assets with tax advantages and reasonable control. Investing in rentals can provide stability, safety and a higher rate of return.

Ten Tax Tips for Selling Your Home

The Internal Revenue Service has some important information to share with individuals who have sold or are about to sell their home. If you have a gain from the sale of your main home, you may qualify to exclude all or part of that gain from your income. Here are ten tips from the IRS to keep in mind when selling your home.

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.

For more information about selling your home, see IRS Publication 5223, Selling Your Home.  This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

iPad2 Drawing!

The results of the iPad2 drawing are in!  Congratulations to our winner, Eric Walsh!

Woulda - Coulda - Shoulda

It is the mantra of people who missed a great deal. It's the theme song of the procrastinator. It's the refrain that reminds us of the one that got away.

Some people are still beating themselves up because they didn't recognize the housing bubble was really going to burst. It is impossible to change the past but will they see the signs of the next housing trend?

In the past four years, prices have adjusted with 30% corrections nationally and much more in areas with high percentages of foreclosures. New homes are almost non-existent. Interest rates are slightly above record lows. Consumer goods are skyrocketing; our budget deficit and national debt are staggering and escalating inflation appears certain.

"Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing." states Shawn Tully, Senior Editor at-Large for Fortune magazine in a March 28, 2011 article.

"If I would have known that this was the best buyer's market ever, I could have taken advantage of the prices and interest rates; I should have fixed my cost of housing for years to come." Don't catch yourself saying this. You owe it to yourself and your family to get firsthand information to see what your options really are.  Come in to Triplett today to find out how you can take control of the housing market and take advantage of the great opportunities awaiting you!

Why Do I Need Renters Insurance?

National statistics show that if you rent, chances are good that you don't have renters insurance -- nearly 2/3 of renters don't.

Possibly the greatest misconception about insurance and renting is that the landlord or the managing agent of a rental property has insurance that will cover tenant property. Unfortunately, this just isn't true.  The homeowners insurance that a landowner carries protects only the property of the landlord (structure of the building, personal articles of the landowner stored in the building, etc.).  The insurance policy of a landlord cannot cover renter's belongings because of the far-reaching scope of such a policy.  The insurance companies just can't take on that much risk in one location.  In some ways, the idea of homeowners vs. renters insurance is similar to a computer network that is being protected by a firewall or other electronic barrier.  Although the network itself is protected in case something goes wrong, each individual computer needs to also have current virus protection and security measures in place to ensure the safety of files and documents.

If you are a renter and don't have renters insurance, you're leaving yourself completely unprotected against most dangers of renting.  For instance, if your apartment is burglarized, or if you find yourself the victim of a flood, fire or other natural disaster, you'll essentially be on your own.  Especially in Iowa, instances of flooding are extremely prevalent, even in brand new homes.

In a recent incident, two of our renters faced the need to replace belongings as a result of a disaster.  One renter had renters insurance and consequently had all of their belongings reclaimed/replaced, and was even put up in a hotel for 1 month and given monetary compensation to the amount of thousands of dollars.  However, the other renter didn't have renters insurance and lost everything.  It's unfortunate that disasters happen, but it's important to make sure that even if the unthinkable happens, you'll be prepared and protected.

Most renters insurance policies cost between $5-10/month and cover you up to $20,000 for personal property, will pay hotel and food expenses for up to 12 months, cover you in case you are sued for liability, can help with medical payments, and even cover you in case of identity theft!  (For more information, see this post.

In most cases your insurance agent (whoever you have your car insurance, etc. through) can add on a renters insurance policy for next to nothing.  This is because most insurance agencies offer a multi-policy discount that makes renters insurance nearly free!  We can't recommend it highly enough.  Our in-office staff are big believers that renters insurance can make the difference.  If $10/month can save everything you own and give you peace of mind if something ever happens, we think that's worth it.

Whether you get renters insurance from one of Triplett's knowledgable, powerhouse independent insurance agents or from another agency of your choice, it may just be the best decision you ever make, and in the words of one renter of ours, "...the best $10 I ever spent...".

Stay safe - come visit us in our office today to insure your life and belongings!

Note: If you're looking for more information about renters insurance, take the first step by starting with some of the following websites:
The Basics
General Information
Additional Information
Statistics

Drawing for a Free iPad2!

With the rental turnover season just behind us, Triplett Companies is excited to announce the previously advertised drawing date for the brand new Apple iPad2 (visit the apple website)!  Earlier this summer we announced that in the fall there would be a drawing to win, and now we’re happy to spread the news that the drawing will be held on Monday, August 15, 2011.

As mentioned previously, the way to enter to win is simple.  All you have to do is subscribe, follow us or like us on any of the following social sites:

                facebook
                twitter
                youtube

For each site you use to keep in touch with us (including this blog!) we’ll enter you into the drawing once.  That means you can have your name entered to win as many as 4 times!
Hope to see you around soon!  We’ll be announcing the winner of the iPad2 the afternoon of the 15^th!

The Power of Choice

Choice -- it’s something we take for granted -- the ability to determine what’s best for us.  Our needs, our life, our choice.  In fact, choice is something we can’t even imagine doing without.  And yet when it comes to something as important as protecting ourselves, our property, our families, some people surrender choice without even knowing it, because they don’t choose an independent insurance agent.

Independent insurance agents can help you through the process of insuring your life, and give you the choices you want.  Triplett’s independent insurance agents don’t just work for one insurance company like many other agents do.  That’s why we can offer you a wide variety of coverage options, policies and prices to make sure that you’re getting what you want out of your insurance.  Come experience the Triplett difference today!

Minimize the Risk of Owning a Home

Not so long ago, in a not-so-distant land, owning a home was thought of as the safest "investment" around. Fast forward to the present day, and home ownership seems super scary to many people who can afford homes, and would like to own them, but are paralyzed by the fear of buying a lemon, or having a mortgage catastrophe.  Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.

1.  Stick with a fixed-rate mortgage.  Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year.  This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms.  As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.

If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to 

a fixed-rate mortgage.  The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent. 

2.  Put - and keep - a home warranty in place.  One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular. 

A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters.  In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary.  I remember the home warranty company replacing a $900 water heater in my first home; what a godsend!

Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty.  Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.

3.  Get repair bids and estimates, not just inspections.  After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want.  Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it.  Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.  

But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost.  If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires.  That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.

4.  Buy on the 10-year plan.  Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."  The same advice is good for buying a home in today's real estate market.  Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.  

You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.

Note: This article copied from a trulia.com blog posting by Tara-Nicholle Nelson, a broker in San Francisco.
To read the whole article in original form, please visit their site.