FSBOBOLINKS

Home Equity Loan Tax Deduction

By Steven R. Shanin, Attorney at Law

You can deduct the interest you pay for your home equity loan, but there are certain limitations.

Generally, home mortgage interest is any interest you pay on a loan secured by your main home or even a second home and includes home equity loans.

These home equity loan tax deductions include home equity loans and home equity lines of credit.

The conditions that must be met for home equity loan tax deductions are:

1. You must file Form 1040;

2. You must itemize your deductions on Schedule A;

3. You must be legally liable for the loan and both you and the lender must intend for the loan to be repaid. In other words, the IRS wants to make sure that you are not trying to evade taxes, such as the gift tax, by using a home equity loan as a subterfuge in order to qualify for home equity loan tax deductions;

4. The debt must be secured by a mortgage, deed of trust or land contract. In other words you have put up your home as collateral in order to qualify for home equity loan tax deductions.

Although home equity loan tax deductions are for homes, in addition to your primary home, these can include a second home, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking and toilet facilities.

Remember: The above is a general overview of home equity loan tax deductions and is not intended to be legal advice. The IRS has additional regulations and limitations. We advise you to look up IRS Publication 936 as well as consulting your tax advisor before taking any home equity loan tax deductions.

© 2007 Complete Books Publishing, Inc. 

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Home Disclosures

Home Disclosures

 As a seller, you will need to fill out a home disclosure form in order to tell your potential buyers about the physical condition of your property. Because the law regarding home disclosures varies from state to state, we recommend you check with an escrow agent or someone else familiar with the specifics of your locale.

REMEMBER, you only have to disclose those things you have knowledge of.

If you had a problem, even once, such as your basement flooding, disclose it, but don’t forget to put in the fact it happened only once due to a Category 5 hurricane. If you did have a problem and corrected it, it is no longer a problem. Since it isn’t a problem any longer, there is nothing to disclose. BUT, always be honest when if asked a specific question.

Other Home Disclosures

You’ll also have to fill out a lead paint disclosure if your house was built before 1978. (Of course, if you have no knowledge as to whether there is lead paint, that is all you are required to say.)

You may also need a mold disclosure. (NOTE: This is new and is not required in all states.)

NEVER LIE. Honesty is the only policy. Just as we have all heard on TV courtroom dramas “Do you swear to tell the truth, the whole truth and nothing but the truth?” Even though you will not be under oath, everything you say or do, has to be the truth.

Some things that you do not have to disclose are how the area has changed or that the neighbor next door was arrested for counterfeiting.

REMEMBER: Home Disclosures are very important, are required by law and they have to be signed by both you the seller, and the buyer prior to closing or settlement.

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Mold-ABC's

Mold ABC’s-The Basics

Moisture leads to that big no-no of the new millennium: Mold. Almost every house, old or new, has some mildew; whether in the attic, where the bathroom fan was incorrectly vented into it instead of to the outside, or in that corner of the basement that has no airflow. Mold can also be found outside of the home. Shady spots or areas near the house that accumulate water or even piles of cut grass can be active breeding grounds for mold.

Mold thrives in warm and moist conditions. It spreads and generates by producing spores. Mold spores are hardy little creatures and can even survive in cool and dry places.

Many people are sensitive to mold. Common reactions to exposure to mold are nasal congestion, itchy eyes, wheezing and/or skin irritation. Less common are more severe reactions such as fever or trouble breathing.

Keeping Mold Away

Monitor the humidity level in your home. Between 40% and 60% is ideal.

Air conditioning is the enemy of mold. So is a dehumidifier.

Ventilation, including properly vented exhaust fans in high moisture areas such as bathrooms, helps.
When repainting, use mold inhibitors in the paint or primers specifically designed to inhibit mold.

Clean your kitchen and baths with products designed to kill mold.

Carpeting underfoot in bathrooms and basements looks and feels comfy, but can promote mold growth. Hard surfaces, like tile, are best for preventing mold from forming.

If carpeting, upholstery or wood gets soaked, consider replacing it.

There are many kinds of mold. Not all of it is dangerous, but no one wants it. If you have any question, you might consider getting an expert to give you an analysis.

Remember, as a for sale by owner seller: once you are aware of a problem you have to disclose it to your prospective buyer.  Therefore, we suggest you err on the safe side, and get rid of any mold before you list your house. If you get rid of any mold problems before you list the house, it will not become a deal-killing inspection issue.

This is the first in a continuing series on mold, including types of mold, what to do when you find it and legal issues as a for sale by owner seller or a buyer.

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Staging Your House to Sell ASAP

Staging Your House to Sell ASAP
No matter how dead the real estate market is, no matter how long you or your realtor has tried to sell your house, staging your house properly will help you sell it as soon as possible.
With today's slow real estate market, it is more important than ever to do everything possible to make yours the most attractive, appealing and next to sell house around.
Here's what we did to sell ours:

1. We got rid of most of the refrigerators from the porch. Naturally, we had to leave one smaller one, the Kelvinator, because it was a gift from my husband's first wife. I remember the day she dropped it off here. It was pouring rain when a wild woman in a pickup backed into the yard, got out, climbed into the back and kicked the fridge, the La-z-boy and several armloads of clothes onto what used to be grass before we started the compost heap. That was how I learned Bob's wife had found out about us.
2. We donated all of our unused vehicles to Goodwill. They even came and towed most of them away.

3. We fixed the septic tank so that when you flushed the toilet it went out instead.

4. We took Bob's wanted posters down. After all, we didn't want the place looking like a post office, plus folks want to be able to picture their own hanging there.

5. We repainted the walls a neutral shade after spackling over the birdshot holes from when Arnie was cleaning his shotgun.

Here's what I actually did:

I got in the car and took a ride around the neighborhood, noting the addresses along with a general description, of the other houses for sale. Then I drove up to my house and parked in front. I started a list of things that could be better, like the peeling paint over the garage door, the cracked walkway and so on. I even put down clearing off the driveway and trimming the front bushes.

Then I took walk around, writing down everything that could be better. I wrote down things that I had been meaning to fix up for years, though I didn't know if I even needed to repair them in order to sell my house.

Next I tried both screen doors, opened the front door and walked inside, noting that the key could have turn a bit more easily. Taking notes as I went from room to room and then into the basement, I accumulated a fairly lengthy list.

Paring the list to manageable size gave me some feeling of control, even though I hadn't started doing the work yet. It was important for me to know I was moving forward rather than simply waiting for buyers to come. Listing a house for sale in a slow or slowing market is not like the Field of Dreams: list it and they shall come. It's more about understanding what buyers are looking for and then making sure that it's your house.
That's where staging comes in and where FSBOComplete can help.

Martha

More information on staging your house for sale as quickly as possible and a look inside Get It Ready 

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Avoid Foreclosure with FSBOComplete

Avoid Foreclosure with FSBOComplete

You can avoid foreclosure! First we are going to go through some general information regarding how to avoid foreclosure and then focus in on how as a for sale by owner...

There are 3 additional reasons why selling your home by yourself is especially helpful when you are trying to avoid foreclosure:

1. Economists have shown that despite what the National Association of Realtors has said, FSBO'S get more money for their homes. Why? Because FSBO'S are more motivated than realtors to get that last $1,000 or $2,000 or even more. Realtors want the deal done and a certain X amount rather than hold out for that extra;

2. While real estate agents may have more experience selling houses than you do, they have no more experience selling your house than you do; and

3. Foreclosure is a scary place to be and it also undermines a person's confidence no matter how the threat of foreclosure came a bout. Wouldn't it be just great to be able to regain the control and confidence you deserve by taking the bull by the horns and avoiding foreclosure by selling your house by yourself.

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For Sale By Owner Signs

WHERE DO FSBO BUYERS COME FROM?

Buyers start out as prospects, and most prospects come from For Sale By Owner Signs.

For Sale By Owner Signs in front yards are powerful and effective marketing tools you can use in order to generate the kind of interest that will get you the buyer for your house. Over the years, national surveys have determined that the number one source of prospective buyers are the For Sale By Owner Signs in the yard.

People cruise around neighborhoods they are interested in living in. Studies have also shown that people calling for more information after seeing your FOR SALE BY OWNER SIGNS are far more likely to turn into buyers than people who call after seeing an ad in the newspaper. This makes sense since when people see your For Sale By Owner Signs, they already know the neighborhood, the exact location, the style of house and the all important curb appeal that has piqued their interest.

Therefore, if you are allowed to put up FOR SALE BY OWNER SIGNS, DO IT! Some communities limit or forbid the use of these signs, so if you never see one in your neighborhood, check before putting it up.

Sale.

What Kind of For Sale By Owner Signs Are Most Effective?

see For Sale By Owner Signs for additional information.

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Bridging Loans

Bridging Loans

Bridging Loan: Bridging loans or gap loans are loans used to bridge the gap between two transactions. Duh! Pretty simple, eh? Were it so. First of all, sellers would not be in a position to need bridging loans if everything they were planning had gone as they had wished. Second, bridging loans cost money, in the form of additional interest over and above that of a longer term loan and the balloon note of repayment sitting out there at the end of the loan.

Caution dictates that a seller should wait until his/her current home sells before buying another house. However, whether due to relocation, change in family or job-related circumstances, or simply a slowing market for home sales, people sometimes find themselves with two houses. These are typical situations where sellers will need bridging loans. Bridging loans enable a seller to borrow against the equity in his/her current home until it sells.

Bridging loans usually include a balloon note that has to be repaid at the end of loan period. This can be disastrous if the home used for equity does not sell or does not sell for as much as necessary. However, if that home sells fairly quickly or for the expected amount of money, the bridging loans can be rolled into the new home mortgages in order to satisfy the balloon repayments of the bridging loans.

Obviously, if the house you are selling has good contract on it to a seller who has a locked in mortgage from a solid mortgage company, then a bridging loan can be a lifesaver. However, with the failure of a number of so-called front-line mortgage companies, it is hard to justify the use of a bridging loan. In good times, people have used leverage to achieve great financial gains. Remember, however, leverage works both ways and so do bridging loans. In other words, instead of staving off the inevitable, bridging loans can accelerate it.

August 24, 2007
copyright 2007 complete books publishing, inc.

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RealtyTimes.com

Good morning!
We received an interesting email from Broderick Perkins this morning. Apparently, we have been violating his and other Realty Times copyrights by posting his complete articles on the blog rather than a short quote and then a link to the article. We have gone through the blog and removed the offending posts and apologized for any problems we may have caused.
That being said, we recommend you go to RealtyTimes.com on your own. They feature some wonderful  articles that may be useful to both FSBO's and any homeowner looking to sell or just to keep up with the market.
Bob

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Fast Relief For FSBO Headaches

Fast Relief For FSBO Headaches: 8 For Sale By Owner Guides: Between Contract & Closing

8 straightforward, easy to use guidebooks containing expert advice & answers for each step of the “for sale by owner” process from getting your house ready through closing. The book, Between Contract & Closing, guides the For Sale  By Owner seller through inspection, escrow and closing.

When For Sale By Owner (FSBO) sellers, Sharon and Steve Kay ran into inspection issues three days after they thought they had sold their Wheeling, Illinois house, they turned to Martha and Bob Bradford at http://www.fsbocomplete.com for help.

“Our buyer’s building inspector reported that our roof was a problem,” said Sharon.    “The buyers wanted us to replace it or they were walking away from the deal.” That’s when the Kay’s logged onto the For Sale By Owner Complete website and downloaded the Between Contract & Closing book.

“It was like having our own agent to guide us and tell us exactly what our options were and how to keep the deal together.” The Kay’s explained to their buyer that since the roof did not leak, it was in “working condition” which satisfied the terms of the contract. However, they offered to give the buyer an allowance because of the age of the roof. That was enough to keep the deal together and everyone satisfied.

“The Kay’s ran into a very common situation,” says Martha Bradford, a top real estate agent, who along with her attorney husband, Bob, are the authors of the best-selling For Sale By Owner reference books, the FSBOComplete series. “They thought they had a solid deal until the buyer’s inspection report came back.”

By contract, a buyer usually has a period of time after the acceptance of the contract (generally 3-5 working days) to have a professional home inspection, at the buyer’s expense. When the report came back with a couple of problems that needed to be addressed, the Kay’s, who were For Sale By Owner (FSBO) sellers, had no idea of how to keep the deal together without it costing them a great deal of money.

“Some problems the buyer is unhappy about may need to be corrected in order to satisfy the terms of the contract and keep the deal. These include any major component that is not in operating condition as well as anything that is a threat to health or safety,” Bob added. “Other issues can usually be accommodated by further negotiation.”

These additional negotiations may include:

1. A reduction in price;

2. Sellers agreeing pay the entire cost of repair, replacement, or a part of it;

3. Sellers refusing to pay for any repair or replacement; and/or

4. Some combination of the above, i.e., the seller will pay for this repair, but not for that one.

The kind of expert information and help previously offered only by realtors to their clients is now available instantly, when For Sale By Owner sellers need it. The series includes for sale by owner books on Getting Your House Ready, Pricing It Right, Finding Team Members, Marketing In A Buyers’ Market, What You Need To Know Before Your First Offer, Contract ABC’S, Negotiating Like A Pro, and Between Contract & Closing.

“Our goal is to put For Sale By Owner sellers on equal footing with realtors, to make the information and help available instantly and inexpensively,” said Martha.

Martha and Bob have also come up with two free and easy ways for homeowners to find out if selling their own houses, condo’s, or townhouses is for them. It’s their For Sale By Owner Evaluation and their Get Started Guide. Visitors to their website, http://www.fsbocomplete.com , can take the evaluation and download the guide for free.

“We have created the perfect ways for the homeowner who is thinking about becoming a For Sale By Owner seller to find out if it’s for her (or him),” says Martha. The FSBO Evaluation has sixteen For Sale By Owner questions for sellers to ask themselves. Each question focuses on a different aspect of selling by owner. The more positive responses one has, the more likely a seller is to succeed as a For Sale By Owner seller.

The Get Started Guide, which is  included with the FSBO Complete book, (also available in bookstores), is laid out in chronological, Step-By-Step order. It follows the Bradford’s proven 8 Steps To Success System and is designed to be both an introduction to home sales and a place where the seller can record the dates, documents, and substance of the negotiations.

The Bradford’s blog is at: http://www.fsbobolinks.typepad.com/

The FSBO Complete series of For Sale By Owner books is published by Complete Books Publishing, Inc., of Chicago

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For Sale By Owner Listing Sites

Six months or so ago, I had the notion of compiling a list of For Sale By Owner listing sites and then  ranking them, using criteria such as cost, ease of use, popularity, and so forth. 

There certainly are a lot of such sites, from forsalebyowner.com to owner.com to buyowner.com., etc. After analyzing those and many others, my overall conclusion is that it's hard to beat a sign in the front yard coupled with a classified ad in the local  paper, (one that offers linked ads on their web sites.)

In the coming days I will go into further detail.

Meanwhile, please drop me an email about your experiences using any of the fsbo listing sites. I suspect they are generating a great deal of heat without much light.

Bob,

bob@fsbocomplete.com